Australian Competition and Consumer Commission v Australian Egg Corporation Limited

REASONS FOR JUDGMENT Introduction [1] The parties [7] Agreement between the ACCC and Mr Lendich [14] The Australian egg industry [28] Overview of the ACCC claims [33] The impugned conduct [58] Statutory provisions [59] Relevant principles [65] The evidence in the trial [82] The principal issues [87] Does the CC Act apply to AECL? [88] Is AECL an agent or emanation of the Crown? [97] AECL's origins [102] The EISP Act [109] AECL's Constitution and functions [113] AECL's relationships with the Australian Government [122] The funding of AECL's activities [132] Determination of whether AECL is an agency or emanation of the Crown [139] Is AECL an "authority of the Commonwealth"? [158] Was AECL carrying on a business? [168] Summary [182] The Summit [183] The course of events at the Summit [186] Mr Kellaway's presentation [195] Mr Quirke's presentation [210] The general discussion [217] Mr Ironside's opening remarks [239] An attempt to induce [245] The atmosphere of crisis [248] AECL custom and practice [257] The calling of the Summit [263] The contemporaneous statements of purpose [265] The reference to an 'independent auditor' [280] Other events at the Summit [308] A disclaimer by Mr Ironside? [313] Post meeting matters [338] Communication management [350] The explanation for the Summit [361] Consideration of the circumstantial case [379] Is the conduct of Mr Bell to be attributed to Farm Pride? [410] Summary [427]

Introduction 1 Corporations must not make arrangements or enter into understandings which contain a "cartel provision": Competition and Consumer Act 2010 (Cth) (the CC Act) s 44ZZRJ. Persons who attempt to induce another to do so are liable to the imposition of a penalty (s 76(1)) and to restraint by injunction (s 80). 2 A cartel provision includes (relevantly) a provision in an arrangement or understanding which has the purpose of restricting or limiting the production or supply of goods by some or all of the parties to the arrangement or understanding, in circumstances in which at least two of the parties are, or are likely to be, in competition with one another. 3 The Australian Competition and Consumer Commission (the ACCC) alleges that each of the six respondents attempted to induce the 19 egg producers represented at a meeting on 8 February 2012, all of whom were in competition with at least one other, to make an arrangement, or to enter into an understanding, to limit the supply of eggs, which would contravene s 44ZZRJ. It contends that the conduct constituting the attempt commenced on 19 January 2012 and concluded at the meeting on 8 February 2012, and was directed to eliminating an oversupply of eggs causing downwards pressure on prices. The ACCC alleges that the respondents' conduct went beyond the dissemination of information to egg producers as to egg inventory levels and called for a form of coordinated and consolidated action to reduce the supply of eggs. It seeks declarations as to the respondents' conduct, the imposition of penalties, the issue of injunctions and other relief. 4 The Court ordered that the issues of liability be determined separately from the issues of relief. 5 Shortly before the trial, the fourth respondent, Mr Lendich, reached agreement with the ACCC which involved an admission by him that he had made an attempt of the kind alleged. 6 For the reasons which follow, I find that the ACCC has not established its allegations against the remaining respondents.

The parties 7 The first respondent (AECL) is an unlisted public company limited by guarantee. It does not itself engage in the production, distribution or marketing of eggs but operates as an industry body. It is the "industry services body" for the purposes of the Egg Industry Services Provision Act 2002 (Cth) (the EISP Act) and, as such, receives funding from the Commonwealth Government. That funding is to be expended for defined purposes, including research and development (R&D) and promotion. 8 The AECL operates as an industry representative body in many senses but is prohibited by its constitution and by the Statutory Funding Agreements (the SFAs) into which it has entered with the Commonwealth from engaging in agri-political activities. 9 The AECL provides information to its members, and others, by three publications. The first is a fortnightly email update entitled "EggCorp EggsPress". The second is a quarterly magazine entitled "Eggstra! Eggstra!". In addition to being sent to egg producers, these publications are also sent to Government ministers, Commonwealth and State departments and others with some involvement or interest in the egg industry. The third is a monthly publication called the "Layer and Egg Supply Forecast Report" (the Forecast Report) which is sent only to subscribers. Not all egg producers are subscribers. 10 It will be necessary to consider the functions and objects of the AECL more closely but, for the present, it is sufficient to note that a principal function is the collection, analysis and communication of information relating to the egg industry, including crisis and issue management. 11 The second respondent, Mr Kellaway, is (and was at relevant times) the Managing Director of AECL. Mr Kellaway gave evidence in the trial. 12 The third respondent, Farm Pride Foods Ltd (Farm Pride), carries on business as an egg producer and distributor in Victoria and New South Wales. It is said to be the third largest egg producer in Australia. Farm Pride's directors at relevant times included Mr Lendich, and a Mr Bell. Mr Lendich was also a director of AECL. The ACCC case relied on the conduct of each. Mr Lendich ceased as Managing Director of Farm Pride on 30 April 2014 and by the time of trial had also ceased to be a director of AECL. 13 The fifth respondent, Ironside Management Services Pty Ltd which trades as Twelve Oaks Poultry (IMS), is an egg producer based in Queensland. The sixth respondent, Mr Ironside, is one of its directors and at relevant times was also chairman of the Board of Directors of AECL. IMS is described as a medium sized egg producer.

Agreement between the ACCC and Mr Lendich 14 As already noted, shortly before the commencement of the trial on the liability issues on 20 April 2015, the fourth respondent, Mr Lendich, agreed with the ACCC that in the period between 19 January and 8 February 2012 he had attempted to encourage egg producers to enter into an arrangement, or to arrive at an understanding, containing a provision with the purpose of preventing, restricting or limiting the production or supply of eggs. Mr Lendich also agreed that at the time of his attempt the egg producers were corporations at least two of whom were in competition with each other in relation to the production and supply of eggs. The ACCC and Mr Lendich agreed on certain facts relating to his conduct, the orders to be made in respect of the conduct, and on submissions to be made jointly in support of the Court making the agreed orders. 15 The initial "preference" of the ACCC and Mr Lendich, announced at the commencement of the trial, was that the proceedings concerning Mr Lendich be heard and determined before the trial concerning the remaining respondents. Counsel contemplated that this would have the effect that the trial against the remaining respondents would be delayed while this occurred. 16 However, counsel for the ACCC also recognised the potential for that course of action to compromise my ability to be the trial Judge and suggested that it may be preferable for another Judge to hear that part of the proceedings which concerns Mr Lendich. 17 Mr Lendich sought to have the proceedings against him heard and determined as soon as practicable, having regard, amongst other things, to his medical condition. He sought a separate hearing and determination of the proceedings insofar as they concerned him. Ultimately the ACCC supported that position. 18 Counsel for the ACCC and Mr Lendich emphasised a number of matters in support of this approach. These included the potential unfairness to Mr Lendich if, having agreed facts with the ACCC, the Court may not be willing to act on those facts, wholly or partially, by reason of the evidence it hears in relation to the remaining respondents and, more generally, the reduced attractiveness for one of several respondents in an action of the present kind to reach a settlement with the regulator if effect may not be given to that settlement and, instead, its fate depend on the outcome of the trial concerning the remaining respondents. Counsel also referred to the potential need for a party in this circumstance to remain in the trial in order to safeguard his or her own interests. 19 The other respondents all submitted that the hearing and determination of the proceedings against Mr Lendich should be deferred until after the hearing and determination of the liability aspects of the ACCC claims against them. They referred, variously, to the interests of the administration of justice in trial judges avoiding creating circumstances in which they may have to disqualify themselves and to the avoidance of the potential for inconsistent verdicts. 20 I ruled that I would hear the submissions concerning the agreement between the ACCC and Mr Lendich after the determination of the liability aspects against the remaining respondents. My reasons were as follows. 21 The proceedings had been commenced on 26 May 2014 and, on 18 September 2014, had been listed for trial to commence on 20 April 2015 with 10 days set aside. The ACCC and Mr Lendich reached their agreement on 17 April, just before the scheduled commencement of the trial. Given the arrangements for the trial, I considered it inappropriate for its commencement to be delayed by reason of the relatively late agreement between the ACCC and Mr Lendich. 22 I also considered severance of the ACCC claims against Mr Lendich to be inappropriate. First, I was not confident that such a severance was practical. However, even if it was, the course proposed by the ACCC and Mr Lendich involved the prospect of there being inconsistent verdicts. That is especially so as it was plain that the ACCC relied on conduct of Mr Lendich in relation to the allegations which it made against AECL and Farm Pride. 23 Secondly, the proposed agreement between the ACCC and Mr Lendich involves the Court making declarations. The Court will have to consider whether or not those declarations are appropriate, notwithstanding the consent of the ACCC and Mr Lendich: Australian Competition and Consumer Commission v Real Estate Institute of Western Australian Inc [1999] FCA 18; (1999) 161 ALR 79 at [1], [20]-[21]. The Court will be in a better position to make that assessment once it has heard the evidence to be presented by the ACCC against the remaining respondents. There is at least one instance of the Court declining to make the declarations agreed upon by some parties after hearing the evidence in the trial of the allegations against other parties: Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 794; (2007) 160 FCR 321. 24 Thirdly, there is the public interest in the efficient use of judicial resources. It was apparent that the parties proposed tendering a significant amount of evidence, both oral and documentary. In the event that the matter was severed and the proceedings against Mr Lendich referred to another Judge, it may not have been necessary for that Judge to receive all the same material but I thought it likely that the Judge would require at least a significant portion of it. The time and distraction from other work which would be involved in another Judge absorbing this material could be avoided if all aspects of the matter remained before me. 25 I recognised of course Mr Lendich's personal interest in having the proceedings against him finalised as soon as practical. However, I did not think that that outweighed the public interest to which I have just referred. 26 For these reasons, the Court directed that it would hear the submissions of Mr Lendich and the ACCC regarding these matters after it had delivered judgment on the trial of the liability issues involving the remaining respondents. Mr Lendich was then excused and took no further part in the trial. 27 The ACCC did not seek to adduce evidence of Mr Lendich's admissions in the trial. Nor did it call him to give evidence in the trial. It was common ground that the admissions by Mr Lendich in his agreement with the ACCC were not evidence against any other respondent.

The Australian egg industry 28 The Australian egg industry to which these proceedings relate is concerned with the production and distribution of hen eggs to market. Most are sold as fresh eggs but there is a portion of the market concerned with the pulping and processing of eggs. 29 The principal participants in the industry are hatcheries and egg producers. Hatcheries are engaged in the production of day-old chicks and, in some instances, the rearing of those chicks to laying age (approximately 16-18 weeks). Egg producers either rear their own chicks or acquire them from specialist pullet rearers who develop the day-old chicks to the point-of-lay age. Hens are productive until they are about 84 weeks, although there is some decline in productivity from about the age of 75 weeks. 30 Egg producers produce eggs from layer hens and supply those eggs to distributors or direct to market. There are three main layer farming systems used by egg producers, termed "cage", "barn laid", and "free range". 31 During 2011 and in early 2012, there were approximately 323 commercial egg producers in Australia and approximately 10 hatcheries. Of the commercial egg producers, approximately 109 were members of AECL. The number of layer hens during 2011 and early 2012 exceeded 15 million at any one point in time. 32 Egg producers are located in all States and Territories of Australia other than the Australian Capital Territory. The commercial hatcheries are also located at various places around Australia.

Overview of the ACCC claims 33 The ACCC claim is that throughout most of 2011 and early 2012, the respondents, and in particular the AECL, were concerned about the oversupply of eggs and its effect on prices. The ACCC alleges that between 19 January and 8 February 2012, the respondents took action to address these concerns by encouraging certain egg producers to make an arrangement or arrive at an understanding to limit their production. 34 I make the following findings of fact by way of overview of the ACCC claims. For the most part, the matters I record in this section of the reasons were uncontroversial. 35 AECL monitors both egg production and the demand for eggs in Australia. Since 2003, it has engaged International Economics Pty Ltd, trading as The Centre for International Economics (CIE), to provide it periodically with reports regarding, amongst other things, levels of egg production, analyses of egg production and distribution markets in Australia, and forecasts of the demand for, and the supply of, eggs in Australia. Mr Quirke was the principal person within CIE providing the reports, analyses and forecasts to AECL. 36 The Board of AECL usually meets monthly. During 2011 and the early part of 2012, a standing item on the agendas for its meetings was "Egg Industry KPIs". Mr Kellaway said that the KPIs on which he reported under this agenda item were chick orders/placements, egg production, egg consumption, national egg inventory levels, retail sales for the three types of eggs (cage, barn laid and free range), and the return on the promotion levy investment by reference to retail egg sales. In addition, the directors received reports from time to time from CIE and discussed matters relevant to the supply and demand, and forecast supply and demand, of eggs. 37 Throughout most of 2011, the information provided to the Board of AECL indicated that the supply of eggs was exceeding, and was likely to continue to exceed, demand. A recurrent theme at the Board meetings was the addressing of the oversupply. 38 The following are extracts from the Minutes of the Directors' Meetings relating to the agenda item "Egg Industry KPIs" which indicate the increasing concern of directors about the oversupply. There was no suggestion that the Minutes were not an accurate record of the matters discussed by the directors. 23 March 2011 Directors discussed the methodology used in calculating the total egg sales figures and requested the clarification of what is included in these figures and how the figures are extrapolated. Directors also discussed the quantity of eggs currently going to egg product and the camouflage effect that this is having on the current inventory levels. Egg product inventory levels are high with reduced avenues of disposal particularly as large amounts of egg product are being imported and sold at less than Australian manufacturers can produce it at. It was agreed that an article should be included in EggCorp Eggs Press highlighting the effect on inventory levels of the processing of egg product. Directors further discussed the need for the education of egg producers on how to manage their production levels and agreed that a meeting should be convened prior to the 15th AECL Forum at which Derek Quirke be invited to speak. 21 April 2011 The Managing Director advised that he is seeking clarification on the methodology used in calculating the total egg sales figures. It was agreed that the 20 largest egg producers should be asked to provide their chick placement data for the next three years to CIE in order to minimise the large "peaks" and "troughs" in hatchings and hence placements. Derek Quirke will present at the 15th AECL Industry Forum and will focus on the oversupply issue and how it can be managed. 4 August 2011 The Managing Director commented on the chick placement figures which show a 2.5% average month on month growth since Company operations began. The directors expressed concern at the early warning signs of an oversupply in Spring 2011. It was suggested that the issue be addressed at the planned workshops to discuss the Quality Assurance program. 1 September 2011 It was noted that September chick orders were revised down approximately 13% compared to the previous report. The Managing Director commented this might be due to the cancellation or postponement of orders. 18 September 2011 It was noted that September chick orders were revised down again while October orders increased on the previous report. The Managing Director commented this is due to the cancellation or postponement of orders. An update on the egg inventory over the Spring period was provided and to date this year, inventory increases are the steepest they have been for some time. 27 October 2011 The Managing Director noted that 213 eggs per capita is the current level of consumption for October. In October, a record high was reached in inventory levels, coinciding with a record high in production. August also saw the highest ever record in both the volume and dollar value of free range eggs mainly due to the lower retail price point. 23 November 2011 The Managing Director noted that egg inventories remain at an all-time high level. The volume of free-range eggs sales in September reached another all-time record high, although due to a decrease in the unit price the sales value was lower. 22 December 2011 The Managing Director noted that egg inventories have declined slightly but remain very high. The volume of free-range egg sales in October reached another all-time record high, while the unit cost for the same fell to the lowest since July 2006. 19 January 2012 The Managing Director noted that egg production and chick placement orders are at an all time high. AECL directors found these over supply figures disturbing and expressed the need to tackle the issue with some urgency. They identified three solutions to the problem of oversupply: firstly, to discourage backyard egg production, secondly, to set up promotion to increase demand, and most urgently to invite the top 25 egg producers to a meeting to encourage destocking and egg disposal. (Emphasis added) 39 The ACCC's submissions emphasised the italicised portions and, in particular, the solution identified at the meeting on 19 January 2012 of holding a meeting "to encourage destocking and egg disposal". 40 The Board action sheet prepared in respect of the meeting of 22 December 2011, showed against the agenda item 2.1 "Egg industry KPIs" the following action: Alert notice to reduce stock levels to be sent to all egg producers. 41 The action sheet shows that Mr Kellaway was to take this action. Mr Kellaway deposed that he could not recall whether he had sent an alert notice, and the extensive documentary evidence in the trial did not include a copy of any such notice. However, I think it likely that Mr Kellaway did send the notice. It is improbable that he would not have acted in accordance with the identified action as the Board action sheet shows that the action was to be completed in January 2012. AECL did issue alert notices from time to time, as Mr Kellaway said that he had sent between three and five alert notices during his time as Managing Director. 42 During 2011, the AECL had held two industry forums: the first on 26 May 2011 and the second on 24 November 2011 at which, amongst other things, forecasts of egg supplies had been presented to those attending who were, in the main, egg producers. 43 At the industry forum held in Melbourne on 26 May 2011, Mr Quirke made a presentation on, amongst other things, "layer and egg supply forecast". In that presentation, Mr Quirke reported on a 8.3% increase in egg production in 2011 as well as presenting a projection of the impact this would have on prices "without continued action by industry". 44 Mr Quirke also made a presentation at the AECL Industry Forum held in Launceston on 24 November 2011, entitled "layer and egg supply forecasting update", but the evidence did not indicate the content of his presentation. 45 The Annual General Meeting of AECL was held on 24 November 2011. The issue of egg oversupply was raised at that meeting also. Under the agenda item "Other business" the minutes record: Mr James Kellaway proposed that more be done to manage the annual market oversupply by convening a meeting for all egg producers prior to spring each year. 46 As noted earlier, at their meeting on 19 January 2012, the directors of AECL identified as one of the means of addressing the oversupply problem the inviting (urgently) of the top 25 egg producers to a meeting "to encourage destocking and egg disposal". Although the minutes do not record a resolution by the directors to act in accordance with that alternative, it can be inferred that they did so. It was customary for the Board to reach decisions by consensus and I am satisfied that it did so on this occasion. 47 The Board action sheet in respect of the meeting contained the following entry: Hold EP 25 Summit in early February on over production. EP was an abbreviation for "egg producers" and the number 25 a reference to the top 25 egg producers. 48 On the following day (20 January), the AECL by Mr Kellaway sent an email to 25 egg producers with the subject heading "Egg oversupply (crisis) meeting". The substantive content of the email was as follows: Dear egg producer, In light of record levels of production (and increasing) and records levels of egg inventory, the AECL Board has considered it necessary to urgently convene a meeting to: • Review the current oversupply situation (please see attached); • Its impact on producer returns; • The likely supply scenario for the remainder of 2012; and • How to resolve the current crisis for the betterment of the egg industry. In so doing, we are inviting the top 25 egg producers to attend a meeting which will be held in Sydney during the afternoon of either: • Wednesday 8 February • Thursday 9 February AECL apologises for the short notice but we consider it CRITICAL that all major egg producers are present to help resolve the current crisis. Please let me know your preferred date by return e-mail by Wednesday next week after which, I will let you know of the venue. Please consider attending this meeting a priority in our diary. Kind regards James Kellaway Managing Director. (Emphasis in the original) 49 Mr Kellaway confirmed the arrangements for the meeting in an email from AECL on 27 January 2012 under the subject heading "Egg oversupply (crisis) meeting confirmed …". The substance of the email was as follows: Dear egg producer Thank you to those who responded to my e-mail late last week. Please be advised of the meeting as outlined below: When: Wednesday 8 February, 2012 @ 1:00pm Where: Mercure Sydney Airport, 20 Levey Street, Wolli Creek I envisage the meeting to conclude at 3.30pm after which afternoon tea/coffee will be made available. My apologies for those who nominated the alternate day as their preferred time but I have had to accommodate the majority. It is pleasing to note that we will have most of the 25 egg producers present and some additional producers who wish to attend and contribute to the current industry oversupply challenge. The agenda for the meeting will to: • Review the current oversupply situation; • Its impact on producer returns; • The likely supply scenario for the remainder of 2012; and • How to resolve the current crisis for the betterment of the egg industry. Kind regards, James Kellaway Managing Director The ACCC emphasised the content of the fourth dot point in each of the emails of 20 and 27 January. 50 Mr Kellaway sent a further email to the top 25 egg producers and one or two others on 31 January 2012. This email also had the subject heading "Egg oversupply (crisis) meeting confirmed …". The substance of the email was as follows: Dear egg producer, Thank you for those who have shown interest in attending this meeting and I look forward to seeing you on Wednesday 8 February @ 1:00pm at the Mercure Sydney Airport Hotel. Please see attached agenda. 51 The attached agenda was as follows: AUSTRALIAN EGG CORPORATION LIMITED EP25 Summit Egg oversupply (crisis) meeting Wednesday 8 February, 2012 Commencing at 1.00pm Mercure Hotel, Sydney Airport 20 Levey Street, Wolli Creek AGENDA 1. Welcome & introductions 2. Purpose of the summit 3. Status of the current egg supply situation 4. Impact on producer returns (discussion) 5. Likely supply scenario for the remainder of 2012 6. How to resolve the current crisis 7. Other business 8. Next meeting 9. Close 52 Mr Kellaway also wrote about the foreshadowed meeting in the edition of EggCorp EggsPress distributed on 25 January 2012. He said: Dear Egg Producer, Given the significant and now record levels of egg production and egg inventory, AECL has requested a meeting of the top 25 egg producers to seek a "path forward" for the egg industry in a coordinated and consolidated fashion to ensure its profitable sustainability, a key part of the egg industry's vision. All other egg producers are welcome to join the meeting that will take place in Sydney during early February. If you wish to attend the summit meeting, please contact me on [phone number] or [email address]. Sincerely, James Kellaway Managing Director. (Emphasis added) 53 In another section of the same EggCorp EggsPress, producers were informed of the increasing surplus of eggs in the market. The entry was as follows: Layer & Supply Forecast Report - January The Forecast Report for January has been distributed to all egg producer subscribers to the service. It paints a daunting picture of record and increasing egg supplies in the market given the chicks that have already been placed and those now on order. Production is now projected to reach 34 million dozen in July this year. Action is needed by all egg producers to control the oversupply and surplus. The best indicator is your cool room and the increasing stocks in inventory. The inventory report suggests that inventory levels are now at record volumes, in excess of 5 million dozen. For further information, please contact James Kellaway on [telephone number] or [email address]. (Emphasis added) 54 On 30 January 2012, Mr Kellaway participated in an interview on ABC Radio in which he said that 400,000 to 500,000 birds may need to be culled. Mr Kellaway went on to say: The margins in this industry, like other fresh perishable type industries, are squeezed. They are low, the margins are not significant. To that extent, any supply or any small chink in the market, can have significant ramifications if it's sustained over the longer term. 55 The term "egg oversupply crisis meeting" appears to have been first used in the email from Mr Kellaway on 20 January. Thereafter Mr Kellaway used the term in the documents confirming the arrangements for the meeting and in the circulated agenda for the meeting. The ACCC attached some significance to the term. In order to be a little more neutral, I will use the term "Summit" which was used in the Board Action Sheet. 56 Some 22 persons (other than Mr Kellaway and Mr Quirke) attended the Summit (the Attendees). They represented 19 egg producers from all States and Territories other than the Australian Capital Territory. The precise capacity in which Mr Lendich, Mr Bell and Mr Ironside attended was an issue in the proceedings. 57 Mr Ironside chaired the Summit and made some opening remarks. Each of Mr Kellaway and Mr Quirke made PowerPoint presentations. Although some witnesses were uncertain as to the sequence in which the presentations were made, I am satisfied that Mr Kellaway made his first. I will make detailed findings about events at the Summit later.

The impugned conduct 58 Subject to some qualifications, the conduct upon which the ACCC relies for its allegations is the decision of the Board of AECL on 19 January 2012 to convene the Summit, the convening of that meeting, the edition of EggCorp EggsPress of 25 January 2012, the statements and presentations made at the Summit, and conduct, said to be conduct by omission, of Messrs Kellaway, Lendich, and Ironside in failing to dissociate themselves or AECL from the suggestion that the Attendees should agree upon a limitation on their production. The ACCC also relies on the respective failures of Messrs Lendich and Bell to dissociate Farm Pride, and of Mr Ironside to dissociate IMS, from the same suggestion. The conduct of the respondents said to constitute their respective attempts to induce the contravention of s 44ZZRJ is not identical.

Statutory provisions 59 Section 44ZZRJ of the CC Act provides: 44ZZRJ Making a contract etc. containing a cartel provision A corporation contravenes this section if: (a) the corporation makes a contract or arrangement, or arrives at an understanding; and (b) the contract, arrangement or understanding contains a cartel provision. 60 The "cartel provision" to which s 44ZZRJ refers is defined in s 44ZZRD. By subs (1), a provision of a contract, arrangement or understanding is a cartel provision if (relevantly) the "purpose condition" set out in subs (3) and the "competition condition" set out in subs (4) are satisfied in relation to the provision. Section 44ZZRD(3) provides (relevantly): (3) The purpose condition is satisfied if the provision has the purpose of directly or indirectly: (a) preventing, restricting or limiting: (i) the production, or likely production, of goods by any or all of the parties to the contract, arrangement or understanding; or … (iii) the supply or likely supply, of goods or services to persons or classes of persons by any or all of the parties to the contract, arrangement or understanding; or … 61 By subs (4), the competition condition is satisfied if (relevantly) at least two of the parties to the arrangement or understanding are, or are likely to be, in competition with each other in relation to the production of the goods or the supply of those goods or services, as the case may be. In this case, each respondent admitted that each of the Attendees at the Summit was in competition with at least one other in relation to the production and supply of eggs. Accordingly, this element does not need to be considered further. 62 Section 44ZZRD(9) provides: Considering related provisions - purpose condition (9) For the purposes of this Division, a provision of a contract, arrangement or understanding is taken to have the purpose mentioned in a paragraph of subsection (3) if the provision, when considered together with any or all of the following provisions: (a) the other provisions of the contract, arrangement or understanding; (b) the provisions of another contract, arrangement or understanding, if the parties to that other contract, arrangement or understanding consist of or include at least one of the parties to the first-mentioned contract, arrangement or understanding; has that purpose. 63 Section 76(1), which is the source of the Court's power to impose a penalty, provides (relevantly): (1) If the Court is satisfied that a person: … (d) has induced, or attempted to induce, a person, whether by threats or promises or otherwise, to contravene such a provision; or … the Court may order the person to pay to the Commonwealth such pecuniary penalty, in respect of each act or omission by the person to which this section applies, as the Court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission and of any loss or damage suffered as a result of the act or omission, the circumstances in which the act or omission took place and whether the person has previously been found by the Court in proceedings under this Part or Part XIB to have engaged in any similar conduct. 64 The Court may issue an injunction if satisfied that a person has engaged, or is proposing to engage, in conduct which would constitute "inducing, or attempting to induce, whether by threats, promises or otherwise, a person to contravene [an identified] provision" (s 80(1)(d)).

Relevant principles 65 The arrangement or understanding contemplated by s 44ZZRD is something less than a binding contract or agreement. The elements of the proscribed arrangement or understanding (as opposed to the elements of attempting to induce a person to enter into such an arrangement or understanding) were summarised by Gordon J in Norcast S.ár.L v Bradken Ltd (No 2) [2013] FCA 235; (2013) 219 FCR 14 at [263]. Usually evidence is required of a consensus or meeting of the minds of parties under which one party or both assumes an obligation or gives an assurance or undertaking that it will act in a certain way which may not be enforceable at law. A hope or mere expectation that, as a matter of fact, a party will act in a certain way is not sufficient to establish an arrangement or understanding, even if it has been engendered by that party. The necessary consensus or meeting of minds need not involve, although it commonly will, a reciprocity of obligations. An arrangement may be informal and unenforceable, as the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it. 66 As already noted, the ACCC allegation is that each respondent attempted to induce egg producers to contravene s 44ZZRJ. Because the allegations are of attempts to induce only, it is not necessary for the ACCC to establish that the respondents themselves contravened, or attempted to contravene s 44ZZRJ. Nor is it necessary for the ACCC to show that any of the respondents succeeded in inducing another to enter into an arrangement or understanding which contravened s 44ZZRJ. It is in the very nature of a case founded on an attempt that the attempt may not have succeeded. 67 For conduct to amount to an attempt, it must involve one or more steps towards the commission of the unlawful act and be immediately, and not merely remotely, connected or preparatory to the commission of the act: Trade Practices Commission v Parkfield Operations Pty Ltd (1985) 7 FCR 534 at 538-9. In the present case, the ACCC must establish conduct which is immediately connected with the inducing of the egg producers to contravene s 44ZZRJ. 68 Proof of an attempt to induce a contravention of s 44ZZRJ requires that the ACCC establish both a physical and mental element. As s 76(1)(d) and s 80(1)(d) make plain, the attempt to induce may be made by threats or promises or other means. However, in whatever form it takes, an inducement requires that there be "an affirmative or positive act or course of conduct directed to the person who is said to be the object of the inducement": Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2002] FCA 824 at [112]; Australian Competition and Consumer Commission v Flight Centre Ltd (No 2) [2013] FCA 1313, (2013) 307 ALR 209 at [155]. Mere persuasion, with no promise or threat, may also be an attempt to induce: Heating Centre Pty Ltd v Trade Practice Commission (1986) 9 FCR 153 at 164. 69 When the conduct said to constitute the attempt is comprised of words, those words must be so framed as to be persuasive and to convey the potential for an arrangement or an understanding: Trade Practices Commission v Tubemakers of Australia Ltd (1983) 47 ALR 719 at 736. Toohey J went on in Tubemakers to say: A statement made quite unilaterally of intention to do something or to refrain from doing something, with no suggestion express or implied that others might act in the same way, is hard to visualise as an attempt to make an arrangement or arrive at an understanding … 70 In relation to the conduct of the corporate respondents, the ACCC relies upon s 84(2) of the CC Act, which provides: (2) Any conduct engaged in on behalf of a body corporate: (a) by a director, employee or agent of the body corporate within the scope of the person's actual or apparent authority; or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of a director, employee or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the director, employee or agent; shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate. 71 As can be seen, it is critical to the application of subs (2) that the conduct of an individual have been engaged in "on behalf of" the relevant corporate respondent. The phrase "on behalf of" does not have a strict legal meaning: R v Toohey; Ex parte Attorney-General (NT) (1980) 145 CLR 374 at 386. In NMFM Property Pty Ltd v Citibank Ltd [2000] FCA 1558; (2000) 107 FCR 270, Lindgren J reviewed several of the authorities and concluded: [1244] It seems to me that an act is done "on behalf of" a corporation for the purpose of subs 84(2) if either one of two conditions is satisfied: that the actor engaged in the conduct intending to do so "as representative of" or "for" the corporation, or that the actor engaged in the conduct in the course of the corporation's business, affairs or activities. This view accords with what Kiefel J said in Lisciandro v Official Trustee in Bankruptcy (1995) ATPR 41-436 at 40,903-40,904. 72 When making the assessment of whether conduct was engaged in on behalf of a corporation, both subjective and objective assessments may be appropriate: Bennett v Elysium Noosa Pty Ltd [2012] FCA 211; (2012) 202 FCR 72 at [207]. 73 The mental element requires the ACCC to prove an intention to bring about an arrangement or understanding with the proscribed qualities. In this respect, Toohey J said in Trade Practices Commission v Mobil Oil Australia Ltd (1984) 3 FCR 168 at 183: Where an attempt to induce is alleged, the submission was that there must be an intention to bring about the required result. I accept that, in the case of attempt, there must be an intention to bring about the prohibited result. I refer to my decision in Trade Practices Commission v Tubemakers of Australia Ltd (supra) in particular at 737 where I said: "In ordinary parlance, to say that a person has attempted to do something means that he has acted with the purpose of bringing about that which he is said to have attempted. Questions may arise as to what precisely must be proved to establish attempt to commit an offence, but the principle that proof of intent is necessary is well established …" See also Trade Practices Commission v Service Station Association Ltd (1992) 109 ALR 465 at 486, 488; Australian Competition and Consumer Commission v Visy Paper Pty Ltd [2000] FCA 1640, (2000) 186 ALR 731 at [164]. 74 In the case of the personal respondents, the ACCC is required to establish that each, subjectively, intended to bring about an arrangement or understanding having the proscribed qualities. In relation to the corporate respondents, the ACCC relies again on provisions in s 84 of the CC Act: (1) If, in: (a) … (b) a proceeding under this Part in respect of conduct engaged in by a body corporate, being conduct in relation to which section 44ZZRJ, 44ZZRK, 46 or 46A or Part IVB applies; it is necessary to establish the state of mind of the body corporate, it is sufficient to show that: (c) a director, employee or agent of the body corporate engaged in that conduct; and (d) the director, employee or agent was, in engaging in that conduct, acting within the scope of his or her actual or apparent authority; and (e) the director, employee or agent had that state of mind. … (5) A reference in this section to the state of mind of a person includes a reference to the knowledge, intention, opinion, belief or purpose of the person and the person's reasons for the person's intention, opinion, belief or purpose. 75 Section 84(1) has the effect that the ACCC must not only establish that the particular directors of the corporate respondents had the requisite intention but, in addition, at the time of engaging in the impugned conduct, were acting within the scope of their actual or apparent authority. 76 Some of the submissions of the respondents were to the effect that it was necessary for the ACCC to adduce evidence, with some particularity, of the proscribed arrangement which it was said that they had attempted to induce. AECL and Mr Kellaway submitted that there must be some evidence of, and particularity as to, what the proscribed arrangement would be. Counsel referred to Tubemakers at 733-5; to Service Station Association at 483-4; and to Australian Competition and Consumer Commission v Mobil Oil Australia Ltd (1997) ATPR 41-568. The respondents submitted that the ACCC had failed to provide evidence with the requisite level of particularity. IMS and Mr Ironside submitted that this lack of precision was fatal to the ACCC case in the sense that it made its allegations unprovable. 77 In my opinion, none of the authorities stands for the proposition for which counsel contended, and I do not accept it. 78 In those cases in which the ACCC alleges that an arrangement or understanding had been reached, there must be evidence of a meeting of minds between the parties under which at least one of them assumes an obligation or undertakes to act in a certain way. However, in the case of an alleged attempt, what must be established, relevantly, is that the respondents engaged in conduct (took a step towards) inducing others to reach an agreement or understanding that at least one or more would limit their production or supply. Liability under s 76(1)(b) is established if the respondent engaged in conduct directed towards inducing another to reach an agreement or understanding which has the proscribed qualities. Section 76(1)(d) will be engaged if a respondent has engaged in the requisite conduct with the particular intention, even if the form of the proposed agreement or understanding is unparticularised, undeveloped and inchoate. It is not necessary for the ACCC to establish in addition that the agreement or understanding was to take a particular form or to have a particular content or would involve, as in this case, only particular egg producers. 79 The approach just outlined is supported by the reasons of the Full Court in Parkfield Operations at 539-40: Finally, his Honour thought that there could be no attempt to induce XL to make an arrangement of the kind alleged if there was no arrangement which was in place or could readily be effected. He thought that the evidence established no more than that there was an invitation "to start to see if an arrangement can be made". We do not think that it was necessary for any arrangement to be in place, or readily able to be effected, with the other retailers. It was sufficient that the respondents sought to persuade XL to enter into an arrangement to increase prices. As was said in Yorke v Lucas (1983) 49 ALR 672 at 681 (affirmed by the High Court, (1985) 59 ALJR 776): "Inducing a contravention in the context of s 75B(b) connotes, in our view, some act of compulsion by force or threat of force or some act of persuasion or stimulation aimed at ensuring that an act is committed which constitutes a contravention. The word 'incite' is akin to 'induce', though induce probably covers a wider field." We therefore cannot agree with the reasons which led his Honour to the conclusion that the Commission had not established a case against the respondents. 80 I observe that this passage was applied by Logan J in Flight Centre Ltd (No 2) at [154]. 81 I accept however, the submission of Mr Doyle SC, counsel for AECL and Mr Kellaway, that the uncertain and general nature of the putative arrangement makes the pinpointing of conduct or words referrable to such an arrangement difficult, and that account should be taken of this in the assessment of the evidence.

The evidence in the trial 82 The ACCC case was entirely documentary. It tendered a substantial volume of documents. The ACCC also provided, helpfully, a document indicating the particular respondents against whom it submitted each document could be used. This had been agreed with the respondents before the trial. 83 The Court heard oral evidence from five witnesses. AECL led evidence from Mr Ware, one of its directors, and from its Managing Director, Mr Kellaway. Farm Pride led evidence from its director, Mr Bell. IMS led evidence from Mr Ironside. In addition, Mr Gray QC, who appeared for IMS and Mr Ironside, led evidence from a Mr Powter, an attendee at the Summit. Mr Gray said that this evidence was led only in relation to the case against Mr Ironside personally. Given the view which I take of Mr Powter's evidence, to which I will refer later, it is not necessary to address the significance of this purported limitation. 84 As a general observation, I consider that the evidence of each of the witnesses was given through, and to an extent affected by, the prism of hindsight. With the exception of Mr Powter and Mr Bell to a certain extent, each of the witnesses had an understanding of the principal issues in the trial and, accordingly, an understanding of where their interests, or the interests of the respondent by whom they were called, lay. This resulted in some evidence which was not reliable or, at least, not wholly reliable. This was particularly so in the case of Mr Ware and Mr Ironside. That is not to say that the evidence was given dishonestly, as it may well have been a consequence of a retrospective rationalisation of the witnesses' own conduct. I also considered that there was an unusual level of inability to recall by several of the witnesses. My overall impression was that the respondents' evidence provided the Court with an incomplete, and possibly sanitized, account of what had occurred. 85 The considerations just mentioned meant that some care has been necessary in determining the evidence which may be accepted. 86 In assessing the evidence and the matters to be proved by the ACCC, I keep in mind s 140 of the Evidence Act 1995 (Cth) and the Briginshaw principles.

The principal issues 87 The principal issues to be addressed in these reasons are: (a) Does the CC Act apply to the conduct of AECL and Mr Kellaway at all? (b) Did the conduct of each respondent constitute an attempt to induce the making of a proscribed arrangement? (c) If so, did each respondent have the purpose or intention to limit the production or supply of eggs?

Does the CC Act apply to AECL? 88 AECL and Mr Kellaway contend that the ACCC claim against them must fail because the CC Act has no application to AECL. 89 They commenced by referring to the principle that legislation is presumed not to bind the Crown, or its agents or emanations unless it provides, expressly or by necessary implication, to the contrary: Bradken Consolidated Ltd v Broken Hill Propriety Co Ltd (1979) 145 CLR 107 at 123, 129 and 136; Bropho v Western Australia (1990) 171 CLR 1 at 19-22. However, the application of this principle in a given case is usually a matter of construction of the relevant statute: Bropho at 19; NT Power Generation Pty Ltd v Power and Water Authority [2004] HCA 48, (2004) 219 CLR 90. 90 AECL and Mr Kellaway contend that s 2A of the CC Act confirms, by implication, the existence of the general Crown immunity but abrogates its application to an extent. 91 Section 2A provides: 2A Application of Act to Commonwealth and Commonwealth authorities (1) Subject to this section and sections 44AC, 44E and 95D, this Act binds the Crown in right of the Commonwealth in so far as the Crown in right of the Commonwealth carries on a business, either directly or by an authority of the Commonwealth. (2) Subject to the succeeding provisions of this section, this Act applies as if: (a) the Commonwealth, in so far as it carries on a business otherwise than by an authority of the Commonwealth; and (b) each authority of the Commonwealth (whether or not acting as an agent of the Crown in right of the Commonwealth) in so far as it carries on a business; were a corporation. (3) Nothing in this Act makes the Crown in right of the Commonwealth liable to a pecuniary penalty or to be prosecuted for an offence. (3A) The protection in subsection (3) does not apply to an authority of the Commonwealth. (4) Part IV does not apply in relation to the business carried on by the Commonwealth in developing, and disposing of interests in, land in the Australian Capital Territory. 92 As can be seen, s 2A provides that the CC Act binds the Crown in right of the Commonwealth so far as the Crown (including its agents and emanations) carries on a business, whether directly or by an authority of the Commonwealth. 93 AECL contends that it is an agent or emanation of the Crown in right of the Commonwealth or, in the terminology used in NT Power at [149], is part of "the Crown as executive". It contends therefore that, in accordance with the principle stated in Bradken Consolidated and Bropho it is not bound by the CC Act. 94 I am content to proceed on the basis that the effect of s 2A is to confirm, by implication, the application of the general Crown immunity, but to provide for its partial abrogation insofar as the Crown carries on business, either directly or by an "authority of the Commonwealth". 95 The submission of AECL and Mr Kellaway raises three subsidiary issues: (a) Is AECL an agent or emanation of the Crown in the conventional sense? (b) Alternatively, is AECL a body corporate established for a purpose of the Commonwealth by or under a law of the Commonwealth? (c) If yes in either case, does AECL carry on a business in the sense contemplated by s 2A(2)? 96 It is convenient to consider each of these sub-issues in turn.

Is AECL an agent or emanation of the Crown? 97 The determination of whether an entity is part of the Crown as executive is to be made by reference to the legislation by which the body is established or governed and, in particular, the legislative intention, the activities which it undertakes and the nature and extent of the governmental or ministerial control over the body. In Inglis v Commonwealth Trading Bank (1969) 119 CLR 334, Kitto J said at 338: The question is … what intention appears from the provisions relating to the respondent in the relevant statute: is it, on the one hand, an intention that the Commonwealth shall operate in a particular field through a corporation created for the purpose; or is it, on the other hand, an intention to put into the field a corporation to perform its functions independently of the Commonwealth, that is to say otherwise than as a Commonwealth instrument, so that the concept of a Commonwealth activity cannot realistically be applied to that which the corporation does? 98 The Full Court in Re Burgundy Royale Investments Pty Ltd [1987] FCA 454 at [19] referred to the importance of the extent of Commonwealth control of the entity and its activities It is well settled that an important question in this enquiry is whether the body whose status is in question is subject to direct ministerial control or is independent of the government and has discretionary powers of its own … 99 Finkelstein J also emphasised the element of control in NT Power Generation Pty Ltd v Power & Water Authority [2002] FCAFC 302; (2002) 122 FCR 399 at [126]: … The better approach is to examine the relationship between the corporation and the Crown. If the Crown is able to control the activities of the corporation (whether directly, by instruction or direction, or indirectly, pursuant to a power to remove those in control of its operations otherwise than for misconduct or incapacity) the corporation will usually be the alter ego of the Crown. So in every case where the question arises it is necessary to examine the nature and degree of control that the Crown exercises over the corporation. If the corporation is subject to the same control as a governmental department it is likely to be the alter ego of the Crown. … 100 Regard must also be had to the observations of Gibbs CJ in the judgment of the Court in Townsville Hospitals Board v Council of the City of Townsville (1982) 149 CLR 282 at 291: It has more than once been said in the Court that "there is evidence of a strong tendency to regard a statutory corporation formed to carry on public functions as distinct from the Crown unless parliament has by express provision given it the character of a servant of the Crown" … All persons should prima facie be regarded as equal before the law, and no statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to confer them. It is not typical for the legislature to provide in express terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not be readily concluded that it had that intention. 101 In order to apply those principles, it is necessary to make some findings regarding AECL's origins, constitution, functions and the extent to which it is subject to governmental control.

AECL's origins 102 Until the late 1980's, the egg industry in Australia was regulated under State and Territory legislation and usually by statutory boards. In general, these boards regulated the production, supply and price of eggs. Research and development activities were undertaken primarily by the respective State Departments of Agriculture. 103 In the late 1980's, the industry was largely deregulated but some State Governments continued research and development activities. 104 The Commonwealth Government undertook a more extensive role following the enactment of the Primary Industries Research and Development Act 1989 (Cth) (the PIRD Act). The effect was that from 1989 until 2003, matters of R&D, promotion and provision of services in the Australian egg industry were undertaken by the Rural Industries Research and Development Corporation (the RIRDC) established under the PIRD Act. It had an "egg sub-program" relating to R&D in the egg industry. In addition, some R&D was carried out by private industry. 105 In addition to establishing the RIRDC, the PIRD Act provided for the establishment by regulation of research and development corporations (Statutory RDCs) in respect of particlar primary industries or classes of primary industries (s 8). Statutory RDCs have functions which are similar to those of AECL to which I will refer shortly. Their directors were appointed by the Minister. The funding of the Statutory RDCs was by levies imposed on participants in the particular primary industry which were collected by the Commonwealth and by appropriations from general revenue. 106 AECL has never been a Statutory RDC and a Statutory RDC was never established under the PIRD Act in relation to the egg industry. As noted, it was the RIRDC itself which undertook R&D and promotion in relation to the Australian egg industry. 107 In 2002, the Australian Egg Industry Association proposed that a company be established to undertake the generic promotion, R&D and service provision to the egg industry. The Australian Government agreed to that proposal and, in particular, that R&D in the egg industry should become the responsibility of the new company. 108 The new company was AECL. It was incorporated under the Corporations Act 2001 (Cth) on 18 November 2002 as a company limited by guarantee. It is described as an "industry-owned", rather than Government-owned, corporation.

The EISP Act 109 By s 6 of the EISP Act, the Minister may declare an "eligible body" to be the "industry services body" for the Australian egg industry if satisfied that the declared body will comply with obligations under the "funding contract" contemplated by s 7, and the Commonwealth and the eligible body have entered into such a contract. Section 7 of the EISP Act provides in relation to funding contracts (relevantly): (1) The Minister may, on behalf of the Commonwealth, enter into a contract for the purposes of this subsection with an eligible body that provides for the Commonwealth to make payments of the following kinds to the body if the body is declared to be the industry services body: (a) payments referred to as promotion payments; (b) payments referred to as R&D payments; (c) payments made in respect of particular financial years, referred to as matching payments. (2) Before entering into a contract for the purposes of subsection (1), the Minister must be satisfied that the terms of the contract make adequate provision to ensure that: (a) promotion payments are spent by the body on all or any of the following for the benefit of the Australian egg industry: (i) the marketing of eggs and egg products; (ii) the promotion of eggs and egg products; (iii) the provision of industry services; and (b) R&D payments are spent by the body on research and development activities for the benefit of the Australian egg industry; and (c) matching payments are spent by the body on: (i) research and development activities for the benefit of the Australian egg industry and the Australian community generally; and (ii) making payments to the Commonwealth under subsection 8(3). … 110 At the same time as enacting the EISP Act, the Parliament also enacted the Egg Industry Services Provision (Transitional and Consequential Provisions) Act 2002 (Cth) (the Transitional Act). The principal purpose of that Act was to provide for the transition of the provision of services to the egg industry by the RIRDC to the body declared as the industry services body under the EISP Act. Amongst other things, the Transition Act provided for the Minister to declare that certain assets of the RIRDC used in connection with functions related to the Australian egg industry were to be assets of the entity declared to be the industry services body under the EISP Act. Similarly, the Transition Act provided for a means of transfer of certain liabilities of the RIRDC to the new entity. 111 The EISP Act itself provides for only a limited form of direct supervision by the Minister. Section 9 permits the Minister to give a written direction to the declared industry services body in only limited circumstances, one of the necessary circumstances being that the direction is in Australia's national interest because of "exceptional and urgent circumstances". There was no suggestion in the evidence that the Minister had ever given such a direction. 112 Section 9 provides expressly that the Minister is not to be taken to be a director of the declared body for the purposes of the Corporations Act 2001 (Cth) merely because of the power it confers on the Minister (subs (5)) and, further, that the Commonwealth is not to be taken to be in a position to exercise control over the declared body merely because of the power it confers on the Minister (subs (6)).

AECL's Constitution and functions 113 AECL's original Constitution was replaced by a revised Constitution on 1 July 2007. It is sufficient for present purposes to refer to the revised Constitution. 114 Clause 2(a) of the Constitution sets out the objectives of AECL, as follows: (i) to provide leadership on Industry Service Provision including, Promotion and R&D services that advance the interests of the Australian Egg Industry; (ii) to receive funds from the Commonwealth of Australia comprising proceeds from the Egg Promotion Levy and Egg R&D Levy and contributions by the Government to R&D in relation to the Australian Egg Industry and account to Members, Government and Parliament of the Commonwealth of Australia for the expenditure of such funds; (iii) to seek funds from other persons for Promotion, R&D, innovation and other activities; (iv) to manage funds the Company receives and risks related to the Company's ongoing expenditure and funding; (v) to investigate and evaluate the requirements for Industry Service Provision including, Promotion, R&D and innovation in relation to the Australian Egg Industry; (vi) to provide funds for or carrying out Industry Service Provision including, Promotion, R&D and innovation in relation to the Australian Egg Industry; (vii) to provide cost-effective services that enhance the competitiveness of the Australian Egg Industry throughout the Australian Egg Industry's supply chain; (viii) to facilitate the dissemination, adoption and commercialisation of the results of Promotion, R&D and innovation in relation to the Australian Egg Industry; (ix) to manage, develop and exploit intellectual property from Promotion and R&D activities, and to receive the proceeds of such development and exploitation; (x) to provide services to Australian egg producers; and (xi) to engage in any other activities in the interests of the Australian Egg Industry, in each case for the benefit of the Australian Egg Industry. 115 The "Industry Service Provision" referred to in objects (i), (v) and (vi) is defined in cl 1.4 as follows: Industry Service Provision (as well as including the Promotion and R&D activities defined below) means: (a) collection of information from a range of sources (including consultation within the Australian Egg Industry, and with other industries, Government, other stakeholders and the public); (b) the balanced analysis of information in the context of the Australian Egg Industry Environment; (c) communication of information (including within the Australian Egg Industry and of other industries, Government, other stakeholders and the public); and, (d) collaborating with Federal and State Governments and their relevant departments and agencies and other organisations in relation to: (i) animal health and welfare, crisis and issues management and regulatory activities; and (ii) other activities that may be necessary or convenient for the improvement of the productivity or performance of the Australian Egg Industry. As can be seen, the principal elements of the "Industry Service Provision" are the collection, analysis and communication of information within the Australian egg industry and collaboration with Federal and State Governments and their agencies in relation to activities which are necessary or appropriate for the improvement of the productivity or performance of the industry. 116 The term "Australian Egg Industry" used throughout cl 2(a) of the Constitution is defined to mean the "Australian hen egg (including eggs and other egg products) industry". 117 The "Egg R&D Levy" (to which reference is made in cl 2(a)(ii)) is defined in cl 1.4 to mean "that part of the laying chickens levy imposed by sub-clause 3(1) of Sch 16 to the Primary Industries (Excise) Levies Act 1999 (the Levies Act) that is referred to at sub-clause 4(a) of that Schedule". The "Egg Promotion Levy" is defined to mean "the Egg Levy as per Sch 27 of the Primary Industries (Excise) Levies Regulations 1999" (the Levies Regulations). 118 Persons who carry on the business of producing hen eggs in Australia for sale and who are a "Levy Payer" are eligible for membership of AECL providing that they were the owner, at the end of the previous financial year, of laying hens aged over 18 weeks. A "Levy Payer" is a person who is required to pay promotion and/or R&D amounts as defined in the Levies Act and the Primary Industries Levies and Charges Collection Act 1999 (Cth) (the Levies Collection Act). Applications for membership are made to the Board which, once satisfied that an applicant is eligible to be a member of the company, must admit the person as a member. 119 The Board of AECL also has a discretion to admit persons with a relationship with the Australian Egg Industry as associate members. 120 Clause 7 provides for members to have voting rights determined by the number of laying hens over the age of 18 weeks owned by each member. For that purpose, members must provide AECL with a registration form stating the number of laying hens over the age of 18 weeks owned by that member at the end of the previous financial year. As well as enabling AECL to determine the voting entitlements of its members, these returns give AECL information as to the number of laying hens in the industry (at least those owned by its members) at the end of each financial year. 121 The Constitution of AECL provides for directors of two kinds: elected directors and specialist directors. Elected directors are elected by the members at the Annual General Meeting and normally serve a term of two years. Specialist directors are appointed by the Board, although the appointment is subject to ratification at the next Annual General Meeting. Specialist directors also usually serve terms of two years. The Commonwealth does not appoint any of the directors of AECL.

AECL's relationships with the Australian Government 122 AECL has a number of significant relationships with the Australian Government. 123 In early 2003, the Minister declared, pursuant to s 6 of the EISP Act, AECL to be the "industry services body" for the Australian egg industry. Before AECL was so declared, it entered into a Statutory Funding Agreement (SFA) with the Commonwealth. This had a four year term and was replaced by another agreement in 2007. The second SFA was in force at the times relevant to these proceedings. 124 The establishment of AECL was one step in an integrated sequence of events. The Egg Industry Services Provision Bill 2002 was introduced into the Australian Parliament and read a second time in August 2002. AECL was incorporated on 18 November 2002. The EISP Act came into operation on 2 December 2002 and, on 2 January 2003, AECL entered into the first of its SFAs with the Commonwealth. On 16 January 2003, AECL was declared as the "industry services body" for the Australian egg industry. 125 Under the SFAs, the Commonwealth makes payments of three kinds to AECL: "Promotion payments", "R&D payments", and "Matching payments". The SFAs bind AECL to spend the Promotion payments on the marketing and promotion of eggs and egg products and the provision of industry services; to spend the R&D payments on research and development activities for the benefit of the Australian egg industry; and, subject to one qualification, to spend the Matching payments on R&D. 126 The terms of the SFAs permit the Commonwealth to exercise oversight of AECL's activities. 127 The principal elements of the first SFA were: (a) AECL was required to develop and adopt a rolling three year strategic plan [cll 9.1-9.3]; (b) AECL was required to develop and adopt annual operating plans [cll 9.4-9.5]; (c) AECL was required to submit its strategic and operational plans to the Commonwealth within seven days of their adoption [cl 9.6]; (d) The Commonwealth would pay to AECL the Promotion payments, R&D payments and the Matching payments [cl 4.1]; (e) AECL was to expend the funds provided by the Commonwealth only on approved activities (broadly speaking promotion and R&D) and in accordance with the strategic plan and the operating plan, as well as guidelines provided by the Commonwealth to AECL [cl 5.1]; (f) AECL was prohibited from spending any of the funds on "Agri-Political activity", being activity intended by AECL to exert political influence on Government or to advantage one political party or political candidate over another [cll 5.9, 8.2]; (g) AECL was, at the end of reach six month period, to provide the Commonwealth with a statement of its financial performance and a statement of its financial position [cl 11.2]; (h) The chairperson of AECL or the Managing Director was to meet with the Minister or the Minister's authorised representative at not less than six monthly intervals [cl 11.6]; (i) AECL was to undergo a three yearly performance review, with a copy of the report of the independent reviewer provided to the Commonwealth [cl 12.4-12.6]; (j) The Commonwealth could from time to time conduct its own performance review of AECL, and AECL was to provide reasonable assistance with respect to such review [cl 12.7]; (k) AECL agreed to permit the Commonwealth to monitor its compliance with the terms of the SFA including by providing such access and such information as the Commonwealth reasonably required in that respect [cl 13]; (l) The parties agreed that the SFA did not create a relationship of employment, agency or partnership between them [cl 21]. 128 In addition, a schedule to the SFA contained requirements as to the content of the AECL Constitution, including requirements with respect to membership and directorships. 129 AECL and the Commonwealth entered into the second SFA in 2007, relating to the four year period between 2007 and 2011. This SFA continues in force presently. The second SFA includes many of the terms found in the first but required, in addition, that in preparing the strategic plan, AECL was to consult also with the Minister [cl 7.4]. Clause 9 of the second SFA required reporting by the AECL to the Commonwealth in a number of ways: providing a copy of the annual report to the Minister [cl 9.1]; providing financial information at six monthly intervals to the Commonwealth [cl 9.2]; providing the Commonwealth with any other report which the Commonwealth may require from time to time [cl 9.5]; and the AECL chairperson or his or her nominee meeting with the Minister's nominee at not more than six monthly intervals [cl 9.6]. In addition, cl 10 required AECL to provide all reasonable assistance requested by the Commonwealth in respect of any evaluation or enquiry concerning its performance under the SFA and to obtain an independent performance review of its activities by March 2011 [cl 10]. 130 The three yearly performance reviews contemplated by the SFAs were carried out in October 2006 and May 2011. The review in October 2006 described AECL as "a small autonomous industry service provider". The review also noted that AECL "has represented egg producers with Federal and State Governments in relation to animal health and welfare, crisis and issues management and regulatory activities". 131 Mr Kellaway's evidence (which on this topic I accept) indicates that the AECL has complied, and continues to comply, with its obligations under the SFAs. It has prepared strategic and operating plans which it submits to the Department of Agriculture Fisheries and Forestry (DAFF) for review and comment; it provides financial reports to DAFF every six months as well as providing its annual report; Mr Kellaway and Mr Ironside attend meetings with the Minister's nominee twice yearly (in fact it is customary for between five to eight DAFF representatives to attend); the agenda for the six monthly meetings is set by DAFF in consultation with AECL; AECL has commissioned the independent performance reviews and liaises with DAFF regarding amendments to its Constitution.

The funding of AECL's activities 132 The principal sources of funding for AECL are the statutory levies collected and paid to by the Australian Government. AECL receives the "Laying Chicken levy" which is payable by proprietors of hatcheries under Sch 16 to the Levies Act at the rate set out in Sch 16 of the Levies Regulations and the "Egg Promotion levy" payable by producers of eggs under Sch 27 to the Levies Act at the rate set out in Pt 4 of Sch 27 of the Levies Regulations. The Egg Promotion Levy is presently 32.5 cents per chick purchased. It is paid by the hatcheries who deliver chicks to the egg producers. 133 Because the Laying Chicken levy is largely invested in R&D related programs, it is sometimes referred to as the R&D levy. The Egg Promotion levy is largely invested in marketing programs and promotional campaigns. 134 In addition to these statutory levies, AECL receives Matching payments from the Australian Government to be applied to R&D activities in agreed program areas. The R&D levy is presently 7.2 cents per chick. It is matched dollar for dollar by the Australian Government up to 0.5% of the gross value of egg production in Australia. Matching payments are based on expenditure for R&D rather than on income received from the payment of levies. 135 The statutory levies and Matching payments account for some 93% of AECL's annual budget. The remaining 7% is derived from interest, fees for associate membership, particular Government grants, sponsorship of AECL events and royalties flowing from the commercialisation of intellectual property. 136 A general indication of the revenue and activities of AECL is seen in the notes to the financial statements which form part of its 2011-2012 annual report. Revenue was shown as follows: 30 June 2011 30 June 2012 Promotion Levies $4,340,828 $4,327,833 R&D Levies $1,581,138 $1,893,646 Government Contributions $1,581,139 $1,893,646 Other Revenue $328,857 $517,674 Total $7,831,962 $8,632,799

The "other revenue" was derived from associate memberships, co-funder payments, interest, royalties, training, functions, licence fees and "other" sources. 137 The same financial report indicates AECL's principal areas of expenditure as follows: 30 June 2011 30 June 2012 Market awareness $1,621,337 $3,498,863 Market education $1,010,719 $976,958 Supply chain enhancement $211,072 $387,294 On-farm innovation and efficiency $1,799,807 $1,978,729 Public affairs and stakeholder relations $1,123,659 $1,827,057

138 The AECL Annual Report for the 2011-2012 financial year also gives an indication of its activities. Mr Kellaway reported on the market awareness and market education programs commissioned by AECL directed to the promotion of the consumption of eggs. These campaigns have been successful as reported by Mr Ironside in his chairman's message: Egg consumption has grown since February from 165 eggs per capita to 214 eggs per capita, an increase of 30%. This had been achieved through an increase in egg production of 48% despite the Australian population growing by only 14% over the same period. Mr Kellaway also reported on action taken to improve the productivity, efficiency and sustainability of the egg industry supply chain and on steps being taken to develop and maintain methods of egg carton labelling to promote the integrity of that labelling, education programs with respect to its labelling guides, the provision of the layer and egg supply forecasts, research projects commissioned to the Poultry Cooperative Research Centre (CRC) as well as "cross-industry joint investments".

Determination of whether AECL is an agency or emanation of the Crown 139 There is no legislation which governs AECL expressly. However, it is appropriate to have regard to the EISP Act and the Transition Act as they were enacted to facilitate the establishment of an egg industry services provider. AECL is the only entity declared under s 6 of the EISP Act to be that provider and it is apparent that the EISP Act was enacted so that AECL could be so declared. 140 As noted earlier, the SFAs provide for the Commonwealth to make Promotion payments, R&D payments and Matching payments to the AECL and to ensure that those payments are used for promotion, R&D and other specified purposes. 141 Apart from requiring a SFA to specify the payments to be made by the Commonwealth, the purposes for which those payments may be used, and provisions with respect to assets and liabilities transferred to AECL under the Transition Act, the EISP Act is otherwise silent upon the terms of the contemplated SFAs. Further, as noted earlier, the EISP Act provides for ministerial direction to AECL in only limited circumstances, one of the necessary circumstances being the Minister's satisfaction that the direction is in Australia's national interest "because of exceptional and urgent circumstances". 142 Mr Doyle SC, counsel for the AECL and Mr Kellaway, emphasised that, although AECL was incorporated under the Corporations Act, as a matter of substance it owes its existence to, and exists to fulfil, its role as the body declared by the Minister under s 6 of the EISP Act as the industry services body for the Australian egg industry. He submitted that this meant that it was in substance the same as, or at least closely analogous to, a body created under purpose specific legislation. Mr Doyle emphasised in this respect that AECL had, in effect, taken over the egg sub-program of the RIRDC, itself a statutory authority giving effect to Government policies and priorities. 143 Mr Doyle also emphasised the reliance by AECL on the funding which it received from the Commonwealth Government, albeit that most of that funding is derived from levies charged to participants in the egg industry. 144 Finally, Mr Doyle emphasised the control exercised by the Australian Government over AECL's activities. The SFAs are the means by which that control is imposed. In addition to the matters to which reference has already been made, I note that AECL is a regular participant in hearings of the Senate Estimates Committee at which it is questioned about aspects of its activities. 145 I accept that there are a number of close ties between AECL and the Australian Government. However, in my opinion, these matters, even when considered in combination, are not sufficient to warrant the characterisation of AECL as an agent or emanation of the Crown. 146 In the first place, AECL is not a statutory corporation. Although its establishment (or a company like it) was contemplated by the EISP Act, it was not established under that Act. As noted, AECL was incorporated under the Corporations Act. The EISP Act does not provide for any aspect of AECL's establishment, functions or management. 147 The ability of the Australian Government to exercise direct control over AECL's activities is limited. Neither the EISP Act nor AECL's own Constitution makes provision for the appointment of any representative of the Australian Government as a director or for the control by the Australian Government of the appointment of directors. Each of the AECL's directors have been individuals acting in a private capacity and not as representatives of the Commonwealth. The Australian Government could revoke its declaration of AECL as the industry services body in which case AECL would no doubt have to function very differently. But many entities are licensed or authorised in one way or another by Government without thereby becoming an agency or emanation of the Crown in the relevant sense. 148 It is true that the SFAs do provide for monitoring and review by the Australian Government of AECL's activities. However, this is to be expected given the payment to AECL of significant sums collected by the Commonwealth by way of levies or by way of appropriation from general revenue. The Commonwealth supervision does not seem to extend beyond the requirements for ensuring adequate accountability by AECL for the funds it receives. Moreover, the evidence does not suggest that the Commonwealth exercises control or direction over particular decisions or activities of AECL. In many respects it would be surprising if it did. It is not to be expected, for example, that the Australian Government would wish to involve itself in the decisions by AECL as to particular forms of promotional and marketing activities, let alone the content of the promotional campaigns. 149 The ACCC emphasised that AECL had voluntarily entered into the two SFAs following an arms-length negotiation of its terms. I do not attach much significance to this circumstance, given that s 6 of the EISP Act made the entry by AECL into a funding agreement a condition of the Minister's declaration of it as the industry services body. 150 However, the significance of cll 19 and 21 of the respective SFAs is not to be overlooked: they provide expressly that the SFAs do not constitute AECL as an agent of the Commonwealth. Provisions of this kind are not conclusive of the nature of the relationship but they are relevant to its proper characterisation. 151 I also observe that AECL itself emphasises its separation from the Australian Government. In June 2010, AECL made a submission to the Productivity Commission in which it referred to the "benefits of [an] industry-owned corporation model". The AECL submission stated: 6.3 AECL believes the Industry-Owned Corporation (IOC) model strikes an appropriate balance between ensuring accountability to Government while protecting the independence of the organisation. As an IOC, AECL is subject to a [SFA] with Government which includes rigorous reporting and accountability requirements. AECL believes that the IOC model provides an extra level of accountability and governance due to its reporting under the SFA and also the Corporations Act 2001 administered by ASIC. AECL's status as an IOC enables it to maintain a degree of separation from Government and can deliver open, frank and independent feedback to Government on a range of issues. It also enables AECL to provide public comments about relevant issues, which is an integral part of the role of an industry organisation. A statutory body is not in a position to do this. Ultimately, open and frank feedback is necessary for good public policy outcomes. The current status of AECL ensures efficiencies levels are high and the ability to promote innovation within the egg industry is, by and large, not limited in any way. It's highly unlikely this would be the case if there was a move away from IOCs and towards statutory authorities. (Emphasis added) 152 The independence from Government to which the submission to the Productivity Commission spoke is also reflected in the Minister's Second Reading Speech when introducing the Egg Industry Service Provision Bill 2002. The Minister said: These new arrangements will allow a more coordinated and commercial approach to the delivery of services to the egg industry. Importantly, it will ensure that, for the first time, all egg producers can be directly involved in the application of their levies to best effect. … In 2001 the industry came to government with a proposal to establish a new promotional levy, and to use the money generated to fund generic promotion. In addition, they wanted to establish a single industry owned company to manage promotion and industry R&D. The industry strongly argued that a national generic promotion campaign was needed to boost flagging egg consumption. … There are a number of benefits associated with the new arrangements. More than ever before, levy payers will have a direct influence on the way in which their industry levies are utilised. Through their voting rights, members will hold the company's board accountable to the way in which they deliver industry service arrangements. … While the model allows the industry to have a greater say in the management of its affairs, there will also be increased responsibilities. The distancing of government means the industry accepting responsibility for its activities and appreciating that there is no automatic recourse to government assistance when the going gets tough. In short, the industry will be responsible for planning its own future, strategically seeking priority outcomes, and managing for risk. (Emphasis added) 153 It is true that AECL has many functions which are the same as, or similar to, those of the RDCs established as statutory corporations under the PIRD Act. However, the position of the RDCs contrasts with that of AECL. As noted, s 8 of the PIRD Act provides for the establishment by regulation of an RDC in respect of a primary industry or a class of primary industry. By s 17 of the PIRD Act, the directors of an RDC (other than the executive director) are appointed by the Minister. Persons in the applicable primary industry paying levies are entitled to attend the general meeting, to consider the annual report of the RDC, to hear an address by the chairperson of the RDC and to question directors about any aspect of the RDC's activities. In addition, they may debate and vote upon certain motions relating to a matter within the RDC's responsibilities. Significantly however, the levy payers have no power to vote upon the appointment of directors (s 60). Further still, by s 143, the Minister may give an RDC written directions as to the performance of its functions and the exercise of its powers. AECL as a corporation established under the Corporations Act is much more independent than such a statutory RDC. It is not readily to be supposed that the independently owned and managed entities such as AECL are part of the Crown as executive as may be the case with the statutory RDCs. 154 Mr Kellaway described AECL as a non-for-profit organisation and as being exempt from income tax. Mr Doyle SC noted that AECL has recently been exempted in New South Wales from the liability to pay payroll tax. These matters were said to evidence AECL's public role. I do not regard them as being particularly significant in a consideration of whether AECL is an agency or emanation of Crown. These circumstances no doubt reflect AECL's purpose but say very little, in my opinion, about its relationship with the Crown. 155 AECL emphasised the "public" nature of its activities, namely, that it functions at the industry wide level and not for the benefit of any individual egg producers. It referred also to its role in ensuring the sustainability, viability and profitability of the industry generally, not only for the benefit of egg producers, but also for the benefit of the Australian community. 156 I accept that these features are pertinent but do not regard them as persuasive. They are outweighed by AECL's general independence from Government. As Latham CJ observed in Grain Elevators Board (Victoria) v President, Councillors and Ratepayers of the Shire of Dunmunkle (1946) 73 CLR 70 at 75 "the fact that an authority discharges public functions and makes no private profit is not sufficient to identify it with the Crown". 157 For these reasons, I conclude that AECL is not an agency or emanation of the Crown in the conventional sense.

Is AECL an "authority of the Commonwealth"? 158 AECL's alternative submission was that it is "an authority of the Commonwealth" by which the Commonwealth carries on a business so that s 2A of the CC Act is applicable. 159 The expression "authority of the Commonwealth" appearing in s 2A(1) of the CC Act is defined in s 4(1) as follows: authority of the Commonwealth means: (a) a body corporate established for a purpose of the Commonwealth by or under a law of the Commonwealth or a law of a Territory; or (b) an incorporated company in which the Commonwealth, or a body corporate referred to in paragraph (a), has a controlling interest. 160 AECL submitted that it came within each of the alternate limbs of this definition. 161 In relation to subpar (a) AECL submitted that a body is established by or under a law of the Commonwealth if the body owes its existence and status to such a law and is, for all intents and purposes, defined by that law. 162 As can be seen, subpar (a) requires satisfaction of two elements: that the body corporate be established for "a purpose of the Commonwealth"; and that it be established (relevantly) "by or under a law of the Commonwealth". 163 AECL was incorporated pursuant to the Corporations Act, which is a law of the Commonwealth. In a very general sense, it can be said to have been established "under" a law of the Commonwealth. However, in my opinion, the expression established "under a law of the Commonwealth" in subpar (a) of the definition is not referring to incorporation of this kind. 164 First, I consider that there is an inference to be drawn from the different terms used in subpars (a) and (b). The former refers to "a body corporate" whereas the latter to "an incorporated company". The latter term is a more natural reference to companies incorporated under the Corporations Act. That suggests that the term "a body corporate" used in subpar (a) is referring to different kinds of entities. 165 Secondly, the phrase "established for a purpose of the Commonwealth by or under a law of the Commonwealth" should be read as a composite expression. The composite expression suggests that the reference is to body corporates which are not only created by, or under, a law of the Commonwealth but whose purposes, functions and management are established by the law of the Commonwealth by which they are created. Understood in this way, the word "established" is not to be regarded as a synonym for "incorporated". Alternatively, the term "under a law of the Commonwealth" may naturally be understood as a reference to entities established pursuant to delegated legislation under an enactment of the Commonwealth Parliament or, perhaps, established by an entity which was itself brought into existence by a law of the Commonwealth. Whichever of these views be correct, AECL does not satisfy either description. 166 AECL does not come within subpar (b) of the definition of "authority of the Commonwealth". The meaning of the term "controlling interest" is, in my opinion, informed by the subject of subpar (b), i.e., "an incorporated company". That suggests that subpar (b) is referring to a controlling shareholding in a company established under the Corporations Act, or, at least, to control of the board of directors of the company. AECL does not satisfy that description. 167 Accordingly, this alternative submission of AECL fails.

Was AECL carrying on a business? 168 Had AECL been an agency or emanation of the Crown or an authority of the Commonwealth, it would have been necessary for the Court to be satisfied that the alleged contraventions occurred in the course of its carrying on of the identified business: NT Power at [48] and [74]. However, the Court would not need to be satisfied that the contravening conduct was itself the business in which AECL engaged: NT Power at [67]. 169 Given the above conclusions, it is not necessary, strictly speaking, to consider the submission of AECL and Mr Kellaway that AECL was not carrying on a business at relevant times. I will however, state my conclusions briefly. 170 The term "business" is defined in s 4 of the CC Act to include a business not carried on for profit. 171 Finn J summarised some of the relevant propositions in Village Building Co Ltd v Canberra International Airport Pty Ltd (No 2) [2004] FCA 133; (2004) 134 FCR 422 at [90]: … (1) The Act applies to the Commonwealth only "insofar as" the Commonwealth carries on a business either directly or by an authority of the Commonwealth: s 2A. Where particular activities undertaken by the Commonwealth or an authority constitute the carrying on of a business, the ambit of those activities must be examined to see whether the impugned conduct was engaged in as part of, or in the course of, the carrying on of that business: J S McMillan Pty Ltd v The Commonwealth (1997) 77 FCR 337; NT Power Generation v Power and Water Authority (2002) 122 FCR 399. The business in question may relate to only a part, even a small part, of activities of the Commonwealth or the authority which, when considered as a whole, are plainly the provision of government services and not a business: State of New South Wales v RT & YE Falls Investments Pty Ltd (2003) 57 NSWLR 1 at [130]. (2) The "carrying on of a business" that will bring the Commonwealth under the Act refers to activities undertaken in a commercial enterprise or as a going concern: Corrections Corporation of Australia Pty Ltd v Commonwealth (2000) 104 FCR 448 at 451; NT Power Generation at [85], [88]. (3) While the term "business" ordinarily connotes activities engaged in for the purpose of profit on a continuous and repetitive basis: Hope v Bathurst City Council (1980) 144 CLR 1 at 8; a "business" for the purposes of the Act includes a business not carried on for profit: the Act, s 4. However, this does not mean that all non-profit activities constitute a business or that the existence or absence of a profit-making purpose is not a relevant factor in determining whether there is a business activity: Plimer v Roberts (1997) 80 FCR 303 at 305. Equally, the provision of services for remuneration may constitute the carrying on of a business irrespective of the commercial adequacy of the remuneration: J S McMillan at 355. (4) While repetition, systems and regularity are indicia of carrying on a business, they are not on their own sufficient to compel a conclusion that such is the case: Sirway Asia Pacific Pty Ltd v Commonwealth of Australia [2002] ATPR (Digest) 46-226 at [60]. There must be present some element of commerce or trade such as a private citizen or trader might undertake: RT & YE Falls Investments at [131]. (5) A business activity is an activity which takes place in a business context and which, of itself, bears a business character: Paramedical Services Pty Ltd v Ambulance Service (NSW) [1999] FCA 548 at [86], [88]; Plimer at 308. Where an activity is engaged in by the Commonwealth or a Commonwealth authority the purpose of the activity will be a relevant consideration: RT & YE Falls at [129]. An activity is unlikely to be characterised as having a business character, or to take place in a commercial context, where it involves the carrying out of a regulatory or governmental function in the interests of the community or the performance of a statutory duty in respect of which fees are charged: Mid Density Development Pty Ltd v Rockdale Municipal Council (1992) 39 FCR 579; Paramedical Services at [89]; J S McMillan at 355; Saitta Pty Ltd v Commonwealth (2001) 162 FLR 35 at 40; RT & YE Falls at [134]. 172 These propositions indicate the difference between services or activities which have a governmental, public or regulatory flavour, on the one hand, and services or activities involving some element of commerce such that private persons might otherwise undertake them, on the other. The circumstance that AECL is a non-for-profit organisation does not mean that it may not be held to be carrying on a business. That is a relevant factor, but only one relevant factor. 173 Having regard to the considerations to which the plurality referred in NT Power at [17]-[29] and at [66], it would be inappropriate to construe narrowly the term "carries on a business" as used in s 2A of the CC Act. 174 In my opinion, AECL does carry on a business in the requisite sense, namely, the business of promoting the Australian egg industry. The commercial nature of a number of AECL's activities indicate that this is so. These include its research and development activities, its marketing and promotional activities directed at increasing the sales of hen eggs to consumers, its provision of quality assurance and accreditation, and its collection analysis and dissemination of information concerning the production and consumption of eggs. 175 The report of Mr Ironside and Mr Kellaway at AECL's six monthly meeting with representatives of DAFF on 20 January 2012 is pertinent in this respect. They informed the DAFF officers that AECL's three most important objectives, as perceived by its members, were promoting eggs and raising egg consumption, representing the egg industry in the community and promoting the egg industry and egg producers. 176 An illustration of the commercial nature of AECL's promotional activities was the decision of the Board on 25 February 2012, to expend a further $500,000 of unbudgeted funds on egg promotion in an attempt to alleviate the impact of the oversupply. I agree with the ACCC that the fact that activities of this kind were carried on with funds provided by the Commonwealth Government is immaterial. 177 Other pertinent considerations include AECL's commissioning of CIE on a commercial basis to carry out analysis of egg production for dissemination to its members. AECL did not rely only on the income derived from the two forms of levy and the matching payments made by the Commonwealth Government. It obtained some income, admittedly modest, from the membership fees of non-egg producers and from advertising fees. 178 Mr Doyle SC likened the position of AECL to that of the New South Wales Department of Agriculture considered by Wilcox J in McMullin v ICI Australia Operations Pty Ltd [1997] FCA 541; (1997) 72 FCR 1 at 101-2. Wilcox J considered whether a representation said to have been made by the Department concerning the suitability of certain feed and water for consumption by cattle was a misleading or deceptive statement made in trade or commerce for the purposes of the Fair Trading Act 1987 (NSW). That Act was stated to bind the Crown in right of the State of New South Wales insofar as it "carries on a business, whether directly or by an authority of the State". His Honour rejected the claim that the representations had been made as part of the carrying on of a business, saying: These were activities undertaken by a Department of State for the benefit of the farmers and public generally. Australian governments have long provided advice and support to members of the rural community. They have not done so as a business venture, but because this has been thought a necessary community service. Traditionally, also, Australian governments have assisted in times of drought, both with advice and material assistance. Far from this being done for profit, it has often involved considerable cost. 179 Mr Doyle SC contrasted the activities described by Wilcox J with the sale of data by a Queensland Department, considered in RP Data Ltd v State of Queensland [2007] FCA 1639; (2007) 221 FCR 392 which was held to amount to the carrying on of a business. 180 In my opinion, the analogy which AECL and Mr Kellaway sought to draw between AECL's activities, on the one hand, and those of the New South Wales Department of Agriculture considered in McMullin is not appropriate. The position of AECL is materially different from a government department. AECL is a corporation established under the Corporations Act and it operates in a commercial manner independently of government. It is not to the point that it does so without a view to making a profit. Its activities are not directed to the public good in the same way as the activities of the Department as described by Wilcox J. I accept the ACCC's submission that research and development and promotion of the interests of a particular primary industry is not exclusively, or essentially, a governmental function. These matters can be carried out by private corporations as much as by government. 181 Had it been necessary to do so, I would, as indicated, have concluded that AECL does carry on a business so that, for this reason also, s 2A of the CC Act abrogates the immunity even if it was otherwise applicable.

Summary 182 For these reasons, I consider that the CC Act does apply to the activities of AECL in January and February 2012.

The Summit 183 The ACCC case was that the attempt it alleged reached its culmination at the Summit. 184 The evidence upon which the ACCC relied for the decision of the Board on 19 January 2012 and the subsequent communications by AECL was, in the main, documentary. Although there was some documentary evidence about events at the Summit, much of the oral evidence adduced by the respondents was directed to what occurred at it. 185 Four of the Attendees at the Summit gave evidence. They were Mr Kellaway, Mr Bell, Mr Ironside and Mr Powter.

The course of events at the Summit 186 The agenda indicated that the Summit was to commence at 1 pm. The time at which the Summit commenced assumed some significance in the trial having regard to evidence that AECL had received some legal advice about what could appropriately be said and as to whether Mr Ironside had made a disclaimer in accordance with that advice. I will return to that evidence later. 187 Mr Kellaway and Mr Ironside travelled to the Mercure Hotel together by taxi. They arrived at 12.50 pm. However, the commencement of the meeting was delayed because Mr Ironside and Mr Kellaway thought it appropriate to await the arrival of Mr Quirke, who was late. 188 In his evidence in chief, Mr Kellaway said that he could not remember how late the meeting had started. He confirmed this in cross-examination by counsel for IMS and Mr Ironside, saying that he could not "recollect if it was 10, 15, 30, 40 - 40 minutes". In cross-examination by counsel for the ACCC, Mr Kellaway said that the meeting started soon after 1 pm and that he did not think that it had started either 30 or 40 minutes late. 189 Mr Ironside said that he could recall how late the meeting had started but continued "I do know it was an extended period in my - you know, foggy thoughts. It was probably - it could have been an hour. I - I can't swear to it, but it was certainly a large period of time". I had the firm impression that this evidence of Mr Ironside was affected by a process of rationalisation and by his awareness of the significance of the time at which the meeting commenced to other evidence he was giving. I did not regard his evidence on this topic as reliable. 190 Mr Powter did not give any evidence on this topic. 191 Although Mr Bell did not have a recollection of the meeting commencing late, he did say that he had had to leave the Summit at various times to make and receive a series of telephone calls concerning operational issues at a hatchery in Perth. His telephone records showed that he had received the first call at 1.33 pm. From this it can be inferred that the Summit had commenced, at the latest, by 1.33 pm with the consequence that Mr Bell had had to leave the meeting in order to take that call. 192 I also consider it implausible that the Summit would have started as much as an hour late. One would have expected a delay of that magnitude to have caused concern, if not irritation, to those Attendees who had return flights the same day and for such a delay to have been better remembered by the witnesses. 193 I find that the commencement of the meeting was delayed but think it probable (and so find) that it was by no more than 15-30 minutes. 194 The meeting went for approximately 80-90 minutes.

Mr Kellaway's presentation 195 Mr Ironside chaired the meeting and opened it by welcoming all Attendees. I will refer later to the evidence concerning Mr Ironside's opening statements. 196 Mr Kellaway spoke next, making his PowerPoint presentation. He was uncertain how long that took but thought about 20 minutes. I am satisfied that Mr Kellaway's oral presentation was in accordance with the slides in his PowerPoint presentation. 197 The introductory slide had the title "Egg oversupply (crisis) meeting" and the subtitle "James Kellaway Managing Director, AECL". Each of his slides contained the AECL name and logo. 198 Mr Kellaway's initial slides (with the heading "Purpose") identified the purpose of the meeting: • To review the current egg oversupply situation: • Inventory stocks are now at record levels (5.4 million dozen, up by 2.1 million dozen on this time last year). • Egg production is also at record levels (392 million dozen in 2011, up by 10% on 2010 levels and well ahead of egg sales). • Since 2008, egg production has increased by 7.3% each year while egg sales have only increased by 6.5% each year. • To assess the oversupply's impact on producer returns: • Wholesale egg prices have dropped "through the floor" and are yet to stabilise ($16-22 per box not uncommon with some valued even lower). • To project the likely supply scenario for the remainder of 2012: • Egg production is not forecast to ease moving forward with production peaking in July '12 at 34 million! • To consider options to resolve the current crisis for the betterment of the egg industry. 199 The ACCC emphasised the fourth of these purposes. The respondents emphasised the first three purposes. 200 Mr Kellaway then presented a number of graphs and charts illustrating movements in egg inventory levels, egg production and retail sales trends, and egg production and sales growth. 201 One of Mr Kellaway's slides compared egg production with the volume of retail sales. It indicated that, in 2011, egg production had increased by 9.6% while retail sales had increased by 4.8%. The slide then continued with these dot points: • Did all egg producers grow by 9.6% in 2011 or achieve average growth greater than of 6.7% each year over the last three years? • No, some producers are growing faster than others … 202 Mr Kellaway then presented a chart entitled "Top 25 egg producer growth". It compared the average annual growth in production over the three years (2009-2011) of the top 25 egg producers with the percentage sales growth in the same period. The chart indicated that the production of all but three producers had increased over the three year period (but no data was provided in respect of a further two producers). Some 11 (unidentified) producers were shown to have had production increases of more than 10%, several dramatically so. 203 Mr Kellaway then presented a slide headed "Solutions" with the following content: • Short term: • Dispose of eggs by either donating eggs to one or many charity groups or dumping/burying eggs. • Reduce the number of laying hens by culling birds (there is currently capacity with the major processors). Use of an independent auditor? • Increase demand? (AECL has invested $1 million above budget to assist 'move' volume). • Medium term: • Implore Government to enforce current caged legislation (higher stocking densities and caged design). There is projected to be the capacity to house 700,000 hens in 30 non-complying facilities. • 'Attack' backyard production … • Increase demand … • Long term: • Voluntary or regulated increases in stocking densities in cages, in the hen house or on the range. • Increase demand … 204 Again, the ACCC emphasised the second of the proffered short term solutions, namely, the culling of hens. 205 Mr Kellaway then presented some information about FoodBank, a body which receives, stores and distributes food to welfare agencies throughout Australia. He noted that the advantages of donations of eggs to FoodBank included resolution of the oversupply, assistance in restoring the egg price, and good industry public relations. 206 In a slide headed "Media" Mr Kellaway reported on two recent media stories concerning egg production, being backyard egg production and egg oversupply. In relation to the latter, the slide included the following entry: Egg oversupply was 'leaked' to the media - industrial sabotage - by an egg producer. 207 In a slide headed "Conclusion" Mr Kellaway said: • It is now up to those represented in the room who constitute 68% of total egg production. • DISCUSSION … 208 Mr Kellaway said that his "overall intention" when presenting the slides with the heading "Solutions" was: A: [T]hese would have been [the] solutions that were discussed at the Board meeting. And it was considered appropriate at that Board meeting to put these type of solutions forward. Q: [W]hat was your purpose in putting forward this information in relation to solutions? A: My purpose was to provide those present with some options that they may wish to consider in addressing the suggested situation at the time which had been expressed to me by my directors and had been reflected in the type of reports that I was looking at - that there [were] significant increases in production. … Q: Do you remember now anything you said at the 8 February meeting in relation to these solution slides? And in particular, how they should be interpreted or understood? A: No. Look, I would have gone through these as they're worded. I probably would not have - it's not in my character. I would not have read them out word for word but I would have broadly summarised each point. Q: Are you able to now recall what in particular you said about any of these solutions? A: That they may wish to consider these as options to address the current solution. 209 I regarded this statement of intention as unduly benign. Mr Kellaway was doing more than presenting information and options. He was encouraging the Attendees to take action to address the crisis he identified. However, that is not a finding that he was proposing action which would contravene s 44ZZRJ.

Mr Quirke's presentation 210 Mr Quirke's presentation involved 16 slides. The face page slide indicated that the presentation was by CIE and was entitled: Layer and egg supply forecasting update Current over supply 211 Mr Quirke provided data as to chick numbers and production, noting that the production of marketable eggs was up by 8.7% from 2010 and that this had caused "the impact on prices". His slides contained forecasts of chick orders and placements to March 2012. He noted that eggs in stock were at record levels and comprised about 15% of monthly production. 212 A slide entitled "Higher production resulting in downward pressure on box prices" illustrated, in graphical form, the downward trend of prices for eggs since September 2010. 213 Mr Quirke noted that the market was following a similar trend to that observed in recent years and stated: Industry needs to consider how to better align production and demand - To smooth market impacts especially over spring 214 Mr Quirke's penultimate slide was as follows: Restraint on capacity required • Production increased by 8.5% in 2011. - Now looks like a 2% increase in 2012 - That's an average of 5.25% over two years. • There [has] been considerable expansion in capacity for some producers but not for others - I would suggest a target production growth of around 4%. Are there egg producers growing above this suggested trend? - Also smoothing out the expansion and placements would significantly benefit the industry. 215 Mr Quirke had provided his proposed slides to Mr Kellaway before 8 February for Mr Kellaway's review. Mr Kellaway suggested to Mr Quirke that he include the words "Are there egg producers growing above this suggested trend?", and Mr Quirke did so. 216 Mr Kellaway said (and I accept) that Mr Quirke's oral presentation followed closely the content of his slides. Each of he and Mr Quirke made their presentations without interruption.

The general discussion 217 Mr Kellaway said that at the conclusion of Mr Quirke's presentation, Mr Ironside said words to the effect of "there's the information" and then went "around the room" to see if there were any questions or any matters which the Attendees wished to raise. He did not follow the agenda sequence. Some discussion then ensued with contributions by some of the Attendees. 218 Mr Ironside's evidence, on the other hand, was that once Mr Kellaway and Mr Quirke had completed their presentation, it was Mr Kellaway who had called for discussion and "virtually everybody [had] … nothing to say". He said that it was Mr Kellaway who had then closed the meeting. I consider that account to be implausible and do not accept it. It is inconsistent with the role which Mr Ironside had as chairperson of the meeting, inconsistent with Mr Kellaway's evidence, inconsistent with the inferences to be drawn from Mr Kellaway's handwritten notes, and inconsistent with the inherent probabilities of the situation. This was one of several matters which caused me to doubt the reliability of Mr Ironside's evidence more generally. 219 Mr Kellaway made some contemporaneous notes in point form during the meeting. Given their importance, it is appropriate to quote them verbatim. I have numbered the points for ease of later reference. 1. Egg exchange on the AECL website! 2. Imported powder displacement 3. Cull of birds 4. Egg donations 5. Lower stocking densities in cages 6. Prices are dropping with no reduction being passed on! 7. Growth above 4% then you need to cull! 8. Hens to be culled 6-8 weeks earlier! 9. Donation of eggs today to FoodBank! 10. Lower stocking densities! (longer term) 11. If the cool room is building in stock, cull the flock! 12. Imported powder/pulp! To pay the levy. 220 It is probable, and I so find, that Mr Kellaway made these notes as he listened to others. It follows that the notes are not of Mr Kellaway's own remarks. Mr Kellaway said that the matters which he noted may have been stated by Mr Ironside, Mr Quirke or by Attendees, and may even have been matters which occurred to him as he listened to the discussion. 221 Mr Kellaway could not recall any discussion on Item 1 at the Summit but noted that the AECL Board had previously discussed providing a facility on its website by which those egg producers with a surplus could be put in touch with any egg producers seeking more eggs. It was not suggested that anything turned on that entry in the present case. 222 Mr Kellaway could not recall what was said on the topic of "Imported powder displacement" in Item 2, but it was not suggested that anything turned on that for present purposes. 223 Item 3 was the first of five notes made by Mr Kellaway concerning the reduction of hen numbers (Items 3, 5, 7, 8, 10 and 11). 224 In relation to Item 3 "Cull of birds", Mr Kellaway said that he could not recall what had led him to write that note but raised the possibility that it arose out of Mr Quirke's presentation. I think that unlikely as Mr Quirke's slides make no reference at all to the cull of birds. Mr Quirke's slides indicate that his presentation was factual, that is, reporting on the statistics and forecasts only. The fact that Item 3 appears after Items 1 and 2, which were matters not addressed by Mr Quirke at all, confirms that it was not Mr Quirke who had suggested the culling of birds. It is much more likely to have been an attendee or a note by Mr Kellaway of his own appreciation of what should occur. 225 In relation to Item 5 "Lower stocking densities in cages", Mr Kellaway said that that note probably arose from a comment made by Mr Lendich at the Summit. 226 In relation to Item 7 "Growth above 4% then you need to cull", Mr Kellaway said that it would have been a statement by Mr Quirke or a comment made by others at the meeting which led him to make the note. Again, for the reasons given earlier, I do not accept that Mr Quirke made such a statement. It is true that, in one of his slides, Mr Quirke suggested "target production growth of around 4%" but there is no indication that Mr Quirke gave any advice, or made any recommendation, as to the means by which that should be achieved. I find that Mr Kellaway was recording either a statement made by an attendee, or his own assessment of what should occur. 227 In relation to Item 8 "Hens to be culled 6-8 weeks earlier", Mr Kellaway said in cross-examination that it was "likely" that it was Mr Ironside who had made that statement. Mr Powter on the other hand said that the statement about birds being retired 6-8 weeks earlier had come "from the floor". I attach less weight to Mr Powter's evidence. His recall of the meeting was quite limited. The few matters which he said he could remember were confined to matters which were exculpatory of Mr Ironside, by whom he was called. 228 Although Mr Kellaway's memory of what was said at the meeting was also incomplete in some respects, I thought that he was much more reliable than Mr Powter. Nevertheless, I am not willing to conclude that it was Mr Ironside, and not any other attendee at the meeting, who raised the prospect of birds being retired 6-8 weeks earlier than would normally be the case. Mr Kellaway's evidence in the passages upon which the ACCC relied on this topic was, to my mind, somewhat equivocal; Mr Ironside himself denied making the statement; and a statement of that kind does not seem consistent with the more neutral role which, as chairperson of the meeting, Mr Ironside appears to have adopted. 229 Nevertheless, I regard Mr Kellaway's note that hens be culled 6-8 weeks earlier than planned to be significant. In context, it suggests that at least one attendee at the meeting considered this to be an appropriate course of action. AECL had previously recommended that egg producers bring forward the planned culling of spent hens, but never by as much as 6-8 weeks. The suggestion was therefore for an unusual course of action. The unusual nature of the action, and the fact that the suggestion was made at the Summit, is a matter which to my mind, is capable of supporting the ACCC case that a form of collective action was proposed. 230 As to Item 10 "Lower stocking densities - longer term", Mr Kellaway said that again he was "probably" reflecting a statement made by Mr Lendich. 231 In relation to Item 11 "if the cool room is building in stock, cull the flock", Mr Kellaway could not recall what led him to make that note but said that he did recall Mr Pace saying at previous Board meetings that the levels of eggs in cool rooms were a good indicator of whether the market was oversupplied or not. As it happened, for reasons to be explained shortly, Mr Pace was not present at the Summit. I consider it improbable that Mr Kellaway would have made this note as a means of recording something said by Mr Pace at an earlier time. It is much more probable, and I find, that Item 11 reflected a statement made by someone at the meeting. 232 Mr Kellaway said that Mr Lendich spoke during the general discussion about "a policy decision of taking … one bird out of a cage as something that the industry should consider" but was unable to recall anything else Mr Lendich said. He recalled Mr Bell saying words to the effect of "we do what we think is appropriate in the West" and a Mr Adams saying words to the effect of "that's interesting information". 233 I had the impression that Mr Kellaway was guarded in his cross-examination when questioned about Mr Lendich's suggestion that one bird be taken out of each cage. He said only that "if he [Mr Lendich] went beyond … what I can recollect him saying in terms of a bird out of a cage, I would suggest he said that - or echoed the type of comments that were discussed at the Board meeting". Mr Kellaway said that he had not understood Mr Lendich to be proposing literally a formula for reducing hen numbers but instead that stock density could be reduced. He also said that he could not recall any of the responses to Mr Lendich's suggestion about lowering flock density. Earlier, Mr Kellaway said when cross-examined by Mr Star, counsel for Farm Pride, that he had understood Mr Lendich to be raising a "welfare benefit or animal welfare policy as related to cage production". In the context of an urgently called meeting concerning egg oversupply, I regard that understanding as implausible and do not accept it. 234 Mr Ironside said that Mr Lendich "could have" suggested taking a bird from each cage but that he could not be "sure" of that. 235 The only other witness who gave evidence concerning Mr Lendich's statement on the topic of reducing flock density in cages was Mr Bell. In the affidavit containing his evidence in chief he deposed as follows: [51] As far as I can recall, Mr Lendich did make some comments at the Meeting after the presentations by Mr Kellaway and Mr Quirke. The comments that I recall were made by Mr Lendich were to the effect that over time the industry would increasingly have to deal with a proportionately greater demand for free range eggs and proportionately less demand for caged eggs. He said words to the effect that in the future there will be too much cage capacity and options to address this would be to remove cages and convert to barn systems. Mr Lendich suggested, to the best of my recollection, that alternatives in the future would be to decommission sheds or reduce the number of birds in cages. 236 Mr Bell maintained this account in his cross-examination. While I accept Mr Bell's evidence that Mr Lendich may have made some statements to this effect, I do not consider that it was all that Mr Lendich said on this topic. That is because the principal purpose of the meeting was to address an "oversupply crisis" and not long term trends in the egg industry. I consider that the probable explanation is that Mr Bell did not hear the whole of Mr Lendich's contributions to the meeting. As already seen, the possibility of lowering stocking densities appears twice in Mr Kellaway's notes (Items 5 and 10). Mr Kellaway noted that Item 10 related to the longer term, but he made no such note in relation to Item 5. To my mind, that suggests that the statement which led to Mr Kellaway noting Item 5 related to the immediate problem which the industry was facing, whereas it was the longer term strategic issue which led him to note Item 10. By reason of his intermittent absences from the meeting, Mr Bell did not hear Mr Lendich's first contribution, which I find did include the suggested short term measure of reducing cage densities. I am satisfied that it was Mr Lendich who spoke on each topic, and that he did so separately. 237 I am satisfied that Mr Lendich did make the statements which Mr Kellaway attributed to him and, in particular find that, at the least, he made the statements which led Mr Kellaway to record Items 5 and 10 in his notes. 238 At the completion of the general discussion, Mr Ironside closed the meeting.

Mr Ironside's opening remarks 239 The evidence from the witnesses about what Mr Ironside said at the opening of the meeting and at its closing was marked by guardedness and apparent lack of memory. I had the distinct impression that the Court was not being informed fully of what had occurred. The following passage of Mr Kellaway in cross-examination was marked, in my opinion, by an unwillingness to commit to detail: Q: And did he [Mr Ironside] explain the purpose of the meeting? A: I believe so. Q: Yes. And what was the effect of what he said about that? A: Basically that there is a situation in - in the industry that had been considered at the board meeting and it was appropriate that we all come together to - to look at the situation as presented by Mr Quirke, principally, and that we should take note of this information. Q: And did he? A: Words to that effect. Q: Sure. He - and he referred to a situation - words to this - I'm asking words to the effect. Did he say anything about what type of situation he was talking about? A: I think it was an oversupply. Q: And did he say that? A: I - I can't recall, but it - but he probably did. Q: Yes. And did he say anything about the nature of the concern to the industry as a result of the oversupply? A: I believe he may have. Q: Yes. What did he say about that? A: That it was - that it was a concern to the industry. Sorry. I can't recollect what his words were, but its … words to the effect of, and my mind was really focused elsewhere at this time. 240 I regarded this evidence as unconvincing. The non-committal way in which Mr Kellaway answered these questions added to the implausibility of his answers. 241 Mr Ironside's own evidence indicated that he had no doubt about the purpose of the Summit. He said in evidence in chief: [T]he purposes of the meeting [were] to encourage the producers to - yes, have - have some action about reducing the surplus. We wanted to instigate some action, or some - some consideration of that, because - because somebody had to be in surplus because of what was happening in the industry. 242 Mr Ironside's evidence in chief about what occurred at the commencement of the meeting was as follows: I - as chair, I called the meeting to order, welcomed all the - the farmers, and - and - and I do recall reading the statement. I don't recall the exact words that it - that it contained, but words to the effect that - you know - "we're all aware that there's a crisis in the industry as - you know - egg surpluses were concerned". Purpose of this meeting is for you to absorb the information that is to be presented, and go away and make up your own mind, what you're going to do about it. That is the thrust of - to me - what was said. 243 Mr Bell said that he could not recall what Mr Ironside said, saying, in effect, that it was indistinguishable from what Mr Ironside had said at numerous other meetings he had attended. 244 It is much more plausible, and I find it to have been the fact, that Mr Ironside's introductory remarks reminded attendees about the reasons why the meeting had been called and that a principal purpose was to consider action which could be taken to alleviate the situation of oversupply. That is not a finding that Mr Ironside's opening remarks suggested that egg producers agree upon a course of action, or arrive at an understanding, to reduce egg production. I will return to that question later.

An attempt to induce 245 I referred earlier to the authorities and principles bearing upon the elements of an attempt to induce an agreement or understanding to which s 44ZZRJ refers. 246 The ACCC presented a circumstantial case. It alleged that the respondents attempted to induce those present at the Summit to make an agreement, or to arrive at an understanding, to limit, by some means, the production of eggs for supply, or the supply of eggs. The evidence indicated alternative means by which these objects could be achieved: destocking by reducing hen density; culling by bringing forward the date of disposal of hens; the donation of eggs to FoodBank; or some combination of these alternatives. 247 It is convenient first to make findings about the elements of the ACCC case against the respondents generally rather than addressing the case against each individual respondent.

The atmosphere of crisis 248 The first element in the ACCC circumstantial case was the existence of an atmosphere of crisis. This emerged at the AECL Board meeting on 19 January 2012 and was maintained until the Summit. There is no difficulty in finding that such an atmosphere existed at material times. As already noted, at the meeting on 19 January, the directors of AECL regarded as "disturbing" the news that egg production and chick placement orders were at an "all time high". They recognised that there was an oversupply of eggs and expressed the need to "tackle" the issue with "some urgency". The third of the solutions identified by the directors was to invite the top 25 producers to a meeting "most urgently". 249 I am satisfied that the Board minutes from which the matters just quoted were taken are somewhat understated. Mr Kellaway, who, on my assessment, is not a person given to overstatement, said that the oversupply was raised at the meeting in "fairly expressive language, and fairly heightened tone of voice". He identified Mr Lendich and Mr Pace as being the directors who had raised the issue. Mr Kellaway said that the discussion in relation to oversupply had been "fairly passionate" and that he had not previously seen at a Board meeting the type of language and tone of voice used by Mr Lendich and Mr Pace. Although Mr Kellaway could not remember the precise words, he said that Mr Lendich and Mr Pace had used words to the effect that the situation was a "disaster" and "a huge threat to the industry" and, in the case of Mr Pace, that there was a "crisis". Again, in an understated way, Mr Kellaway said that he had a different appreciation of the situation when leaving the meeting than he had had when entering it. I accept Mr Kellaway's evidence about these matters. 250 Mr Ware, one of the specialist directors on the Board of AECL, said that the discussion in the Board meeting had "revolved around" an egg glut and an oversupply leading to a collapse of egg prices. He said that Mr Kellaway had expressed a concern at the meeting that the message about oversupply "was not getting through to producers as to the seriousness of the situation" and that, if no "action" was taken, there may not continue to be a viable market. I have some reservations about the reliability of Mr Ware's account of the 19 January meeting as he had no recollection of some matters which I am satisfied did occur (for example, Mr Lendich and Mr Pace being animated). Nevertheless, I accept Mr Ware's evidence about the matters just summarised. 251 The atmosphere of crisis is evident in the term "summit" used by Mr Kellaway in the Action Sheet relating to the Board meeting on 19 January. That term was apt to connote (and I find that it did connote) a meeting to address a critical situation. Mr Kellaway's repeated use of the description "oversupply crisis meeting" to describe the Summit conveyed the sense of the crisis and urgency even more explicitly. So also did Mr Kellaway's statement in the letter to egg producers on 20 January that the Board considered it necessary to convene a meeting "urgently" and his statements in his emails to producers on 20 and 27 January, and again in the Agenda of 8 February, that the meeting would address resolution of "the current crisis". 252 In his evidence in chief, Mr Kellaway said (and I accept) that the term "Egg oversupply crisis meeting" were his words and that his choice of that term had been "flavoured" by the discussion at the Board meeting on the previous day. 253 I am satisfied that AECL had good cause to be concerned. Egg inventory levels at the time exceeded 4.7 million dozen and were rising. The Forecast Report for January 2012 (which was before the Board at its meeting on 19 January) included the following statement: The sum difference in chick orders/placements over the Oct '11 to Feb '12 period has resulted in a massive net increase of 11% for 431,599 day-olds being placed or ordered compared to the levels depicted in the December report with average monthly chick placements/orders over the 18 months plotted totalling 1.191 million chicks which is up on the previous report. (Emphasis added) 254 Mr Kellaway described the state of oversupply in one of his slides at the Summit by saying that inventory stocks were then at record levels, up by 2 million dozen on the same time in the previous year; egg production was at record levels and well ahead of egg sales; and that, while egg production had increased by 7.3% each year since 2008, egg sales had increased by only 6.5% each year. In the same slides, Mr Kellaway also described the effect of the oversupply, namely, that wholesale egg prices had "dropped through the floor" and had not yet stabilised. I am satisfied that Mr Kellaway was describing the situation accurately. 255 In his evidence, Mr Kellaway said that having just on 5 million dozen eggs in storage was the highest on record. Eggs, being a perishable item, cannot be held indefinitely as they deteriorate after approximately four weeks of cool room storage. In addition to the high inventory level, an additional 430,000 chicks were on order. I accept Mr Kellaway's evidence about these matters. 256 The ACCC submitted that the creation of the atmosphere of crisis was significant as it supported a conclusion that the contemporaneous conduct of the respondents was directed towards a call to action by egg producers. I accept that submission

AECL custom and practice 257 The next element in the ACCC circumstantial case was what it described as "the culture" of AECL. AECL was accustomed to using the quarterly magazine Eggstra Eggstra and its fortnightly email EggCorp EggsPress to provide firm advice and encouragement to egg producers, from time to time, to reduce egg production for the betterment of the industry as a whole. The ACCC submitted that this went beyond keeping participants in the industry informed of hen numbers and egg supply and providing producers with some analysis of trends. Examples of AECL's firm advice or encouragement to egg producers to reduce production to avoid oversupply include: 26 November 2010 - EggCorp EggsPress Egg production at CRITICAL levels According to Derek Quirke at the Centre for International Economics (CIE), Australian egg production is at CRITICAL levels. AECL has been forecasting egg production to peak in March 2011 at nearly 34 million dozen eggs. Since June 2010, egg production has reached new record highs each month and AECL forecasts this will peak in March 2011 prior to production easing albeit still at record levels. According to CIE, the egg industry can only advert a catastrophic result by culling birds 14 days earlier than their expected disposal date out to April 2011. 5 April 2011 - EggCorp EggsPress Egg inventory stocks have now increased significantly beyond levels recorded this time last year with the marginal difference being in excess of 1.8 million dozen a week. It is now crunch time where inventory levels must be carefully managed so as to not oversupply the market. September 2011 - Eggstra Eggstra Mr Kellaway's report: While a competitive egg market is healthy, I wish to impress on all egg producers to fully utilise the layer and egg supply forecast reports published on a monthly basis. These reports are distributed to all those who wish to seek further information to assist them make appropriate business decisions pertaining to egg production. They provide a vivid and realistic picture of egg supply out six months given the chicks that have been placed and the hens already in production. If an oversupply is forecast, abnormal action may be taken by egg producers to cull birds earlier than planned which will result in the forecast levels in the report not eventuating. If you are not already a subscriber, please contact AECL accordingly. 6 September 2011 -EggCorp EggsPress Mr Kellaway: Egg inventory levels are now climbing at a rapid rate … This rate of increase and overall level of inventory stocks is unsustainable and AECL highly advises egg producers to take action now to curtail ongoing egg production over the next 2-3 months. This can be achieved by bringing the planned disposal date of spent hens forward by 2-4 weeks. This action is critical if we are to preserve a viable market. 4 October 2011 - EggCorp EggsPress Mr Kellaway: Egg inventory over recent weeks has increased to levels that are now rivalling past record stock levels … Action is now needed by all egg producers to closely monitor egg levels in all cool rooms and where necessary, by bringing forward the planned cull date for spent hens by at least 2 weeks. 24 November 2011 - Annual General Meeting Mr James Kellaway proposed that more be done to manage the annual market oversupply by convening a meeting for all egg producers prior to spring each year. 13 December 2011 - EggCorp EggsPress At its peak, inventory was recorded at 4.603 million dozen representing 14% of egg production at this time. While inventory levels over recent weeks have declined, they still remain 4 million dozen. Action must be taken to reduce egg production over the short term. 11 January 2012 - EggCorp EggsPress Egg Producers must take action to reduce egg production when inventory levels are above the "ideal" level. (Bold emphasis in the original, italicised emphasis added) 258 In relation at least to the ACCC case against Mr Ironside and the AECL, Mr Ironside's statement in his s 155 examination that AECL used the CIE forecast reports "to try and keep the price up" is pertinent. Similarly, Mr Kellaway's statement in a letter dated 1 July 2011 to the Forecast Report subscribers that the reports are "considered a vital part of ensuring the egg market is "in balance" on a continual basis by highlighting early warning signs of potential over/under supply issues that [have] an impact on the dollar returns to egg producers" is pertinent. 259 I accept the ACCC submission that it is very evident that AECL regarded an oversupply of eggs as a problem for the egg industry and that it considered it to be part of its role to prevent or correct an oversupply. In the discharge of that perceived role, the AECL not only provided egg producers with information about current and forecast egg supply but called on them, from time to time, to reduce supply in the interests of the egg industry as a whole. Further, AECL was accustomed to informing egg producers that a means of reducing egg supply was by culling hens earlier than planned. 260 It is convenient at this point to refer to some evidence from Mr Ware, one of AECL's specialist directors. In his evidence in chief, Mr Ware deposed that he had not understood AECL to have a role in encouraging egg producers to modify production according to forecast egg supply. Whether or not Mr Ware did have that understanding, it is plain that AECL did, from time to time, encourage egg producers to reduce supply. Mr Ware acknowledged that AECL's actions in that respect were inconsistent with his understanding. He also acknowledged that, although he read EggCorp EggsPress and Eggstra Eggstra, he had done nothing to stop those actions of AECL. 261 The ACCC submitted that the practice of AECL of encouraging and promoting reductions in the supply of eggs in situations of oversupply for the betterment of the industry as a whole made it more plausible, and probable, that the respondents had attempted in the period between 19 January and 8 February 2012 to encourage egg producers to take a form of collective action. 262 I find that AECL was accustomed to providing direct and firm advice to egg producers in relation to reducing egg supply, including by telling egg producers the way by which that could be achieved. I accept the ACCC submission that, given that AECL perceived its role in that way, it is more plausible that it did, after 19 January 2012, promote "co-ordinated and consolidated" action by egg producers to reduce supply.

The calling of the Summit 263 Next, the ACCC emphasised matters relating to the calling of the Summit. These were that it was a decision of the AECL Board itself to call the meeting; that the Summit was called at short notice even though attendance would be a matter of some expense and inconvenience for many egg producers; that the holding of a special meeting was a departure from the methods which AECL had previously adopted in relation to an oversupply of eggs; and that the meeting was not a general meeting of AECL but instead one at which the principal invitees were the top 25 egg producers. The evidence indicated that these 25 egg producers accounted for some 68% of the production of hen eggs in Australia. Mr Kellaway said that he determined the figure of 68% by assessing the number of laying hens of the invitees compared with the total Australian flock. AECL had not previously called a special meeting of only the major egg producers. 264 I accept the ACCC submission about these matters. I regard it as significant that the convening of the Summit went beyond the steps previously adopted by AECL in circumstances of oversupply. In making that finding, I am not overlooking that Mr Kellaway's letter published in the 25 January 2012 edition of EggCorp EggsPress indicated that egg producers other than the top 25 producers were also welcome to join the meeting.

The contemporaneous statements of purpose 265 Next, the ACCC emphasised the contemporaneous statements of AECL as to the purpose of the meeting. Recurring themes in those statements were that the meeting would be directed to "resolving" the crisis by "action". Mr Kellaway's email of 20 January listed four purposes for the meeting, the fourth of which was "how to resolve the current crisis for the betterment of the egg industry". Later in the same email, Mr Kellaway said that AECL considered it "critical" that all major egg producers be present "to help resolve the current crisis". 266 Mr Kellaway repeated this statement of purpose in his email of 27 January and again in the circulated agenda for the Summit. 267 In his letter to egg producers published in the edition of EggCorp EggsPress on 25 January 2012, Mr Kellaway told readers that AECL had requested the meeting "to seek a 'path forward' for the egg industry in a co-ordinated and consolidated fashion to ensure its profitable sustainability". 268 The same edition of EggCorp EggsPress also included the statement that "action" was needed by all egg producers to control the oversupply surplus. 269 As already noted, Mr Ironside's evidence was that the purpose of the Summit was "to encourage the producers to … have some action about reducing the surplus. We wanted to instigate some action, or … some consideration of that, … because somebody had to be in surplus because of what was happening in the industry". 270 The ACCC submitted that Mr Kellaway's statement on 25 January 2012 that AECL had requested the meeting "to seek a 'path forward' … in a co-ordinated and consolidated fashion" to ensure the profitable sustainability of the egg industry was suggestive of an intention that those present at the meeting be asked to agree upon collective action of an agreed kind. 271 Mr Kellaway said that the expressions "seek a 'path forward'" and "a co-ordinated and consolidated fashion" had not been used at the Board meeting. He said that they were instead his "interpretation of what the Board was seeking me to do". 272 Mr Kellaway went onto say that he had intended these terms to mean that egg producers would at the meeting get "a mutual understanding of the situation … in terms of what the current status of the market was". Later Mr Kellaway said that he had intended by these expressions to convey that the meeting would seek a "mutual understanding of the information that was to be provided and the options that were put forward as ways that [egg producers] may wish to deal with it if they so wish". This was a more benign intention than that for which the ACCC contended. 273 In relation to his statement that a purpose of the Summit was "to resolve the current crisis for the betterment of the egg industry", Mr Kellaway said that he had not chosen that language carefully. He said that his intention had really been to have egg producers "look at how we could sustain the industry moving forward" because he had thought that a role of AECL was to provide information to egg producers to assist them "to resolve anything that they so wished to do as a result of that knowledge". 274 I had the firm impression that these parts of Mr Kellaway's evidence were affected by his recognition of the potentially incriminating effect of his statements and, possibly, by a process of retrospective rationalisation. To my mind, Mr Kellaway's reference to AECL seeking "a 'path forward' … in a co-ordinated and consolidated fashion" suggests something much more positive than the mere development of an understanding. Mr Kellaway is well able to express himself, and I think it improbable that he would have used the quoted words if he had intended only that egg producers would develop some form of common understanding of the information to be provided to them. In reaching this conclusion, I am not overlooking the submission of Mr Doyle SC that the term "a co-ordinated and consolidated fashion" may simply have been a form of jargon. I agree that such a construction is open but, to my mind, the context suggests strongly that Mr Kellaway was contemplating at the time that the Summit would address courses of action to tackle the oversupply. 275 For these reasons I do not accept Mr Kellaway's evidence about the meaning which he intended these terms to convey. Nor do I consider that egg producers would have understood Mr Kellaway's statements in the way he stated in his evidence. 276 I do, however, accept Mr Kellaway's evidence that his statement that AECL was holding the meeting "to seek a 'path forward' in a co-ordinated and consolidated fashion" reflected his understanding of the Board decision. 277 Another indication of AECL's purpose can be gleaned from statements which Mr Kellaway made to an ABC reporter on 30 January 2012, which were included in an ABC Rural report concerning the Summit. The complete report was as follows: The egg industry is concerned that an oversupply of eggs could send farmers broke. The Egg Corporation has done the numbers, and says by July there'll be more than 1 million eggs per day too many. A surplus of eggs could reduce prices paid to farmers by about 30 to 50 cents a dozen, wiping out their profit. Egg production has increased by more than 20 per cent since 2009, but the retail price hasn't moved. The Egg Corporation, which represents 400 commercial egg farmers, has invited the top 25 producers to Sydney to work out what needs to be done. Chief Executive James Kellaway says 400 to 500 thousand birds may need to be culled. "The margins in this industry, like the other fresh perishable type industries, are squeezed," he says. "They are low, the margins are not significant." "To that extent, any oversupply or any small chink in the market, can have significant ramifications if it's sustained over the longer term." (Emphasis added) Although Mr Kellaway could not recollect making the statement in the emphasised portion of this report, he agreed that it was likely that the reporter had obtained the statement from him. I find that he did so. 278 To my mind, these statements are significant in the present context. They indicate that Mr Kellaway contemplated that a substantial number of hens may need to be culled. This suggests that Mr Kellaway appreciated at the time that the culling of such a large number of hens would require action of a "co-ordinated and consolidated" kind. In this way, I regard Mr Kellaway's statement to ABC Rural as confirmatory of the purpose alleged by the ACCC. 279 I will return later to the significance which the respondents attached to Mr Kellaway's willingness to speak publicly about the Summit.

The reference to an 'independent auditor' 280 In support of the contention that the respondents intended that the meeting reach an agreement or understanding concerning a form of action, the ACCC also emphasised the evidence indicating that the respondents had contemplated the retention of an "independent auditor". It submitted that the inference should be drawn that the respondents contemplated an auditor being retained to monitor compliance by each egg producer with its commitments or expectations under an agreement or understanding concerning reduction of hen numbers. This was an important element in the ACCC circumstantial case, and it is appropriate to make detailed findings concerning it. 281 The evidence indicated that, while egg producers had much in common, they were competitors and would take advantage of opportunities to intrude into, and possibly capture, the markets of others. This meant that many producers were reluctant to reduce their production because of the potential that a competitor might at the same time maintain, or even increase, its production and move into that producer's market. Mr Bell, to whom I will return later, said that, for this reason, when he reduced his flock numbers in times of oversupply, he did so quietly in order not to provide a signal to his competitors. Several of the other witnesses spoke of the mistrust in the industry arising from the concern that a fellow producer may take advantage of another's reduction in supply. 282 The ACCC case was that the use of an independent auditor was seen as a means of addressing this mistrust and thereby removing a disincentive for egg producers to reach an understanding about a mutual reduction of egg production. 283 Mr Kellaway said that the distrust of egg producers of their competitors had been raised at Board meetings but he was unable to say whether that was part of the discussion at the meeting on 19 January 2012. 284 Earlier in these reasons, I set out the content of the two slides headed "Solutions" presented by Mr Kellaway to the Summit. Mr Kellaway listed various alternatives under the headings "short term", "medium term" and "long term". The second of the possible short term solutions was "Reduce the number of laying hens by culling birds (there is currently capacity with the major process orders). Use of an independent auditor?". 285 Mr Kellaway said that he could not recall clearly what he had said at the Summit when presenting the slide containing the reference to an independent auditor. The cross-examination did not challenge that answer directly, but did so indirectly by questions about Mr Kellaway's purpose in including the reference to an independent auditor in the slide. 286 Mr Kellaway said that the suggestion that an independent auditor be used had been raised by Mr Lendich at the Board meeting on 19 January. Initially, his evidence seemed to be that Mr Lendich had suggested the use of an independent auditor as a means of verifying the reliability of the reports of the numbers of hens in production. In this respect, Mr Kellaway said that he had understood at the time of the Board meeting that Mr Lendich was seeking to address concerns of "second tier egg producers" as to how the Forecast Reports were compiled and to address concerns about the "certainty or clarity of the actual numbers". Mr Kellaway went onto say that he had thought that the independent auditor may be able to provide "more clarity in terms of actual hen numbers and production". 287 The Court heard evidence from three of the Attendees at the Board meeting on 19 January: Mr Kellaway, Mr Ware and Mr Ironside. Mr Ware said that he did not recall any discussion about an independent auditor at all at the Board meeting, nor did he recall any suggestion of some means of verification of what producers were being asked to do being raised at the Board meeting. Given my reservations about the completeness of Mr Ware's recollection of the meeting on 19 January, I do not regard his evidence as undermining Mr Kellaway's evidence that the use of an independent auditor had been raised at the Board meeting. 288 Mr Ironside recalled Mr Lendich making a comment about an independent auditor at one Board meeting. He could not say whether Mr Lendich had referred to an independent auditor for the first time at the meeting on 19 January. Mr Ironside said that he had not known at the Summit, what Mr Kellaway had in mind, by the reference to an independent auditor in his slide presentation: There's confusion in mind as to what the auditor was for. … I really don't know where he was going with it, or who was - you know, why it was suggested. I really don't know. 289 I did not regard this evidence of Mr Ironside as plausible and do not accept it. 290 Mr Kellaway gave the following explanation for his inclusion of the reference to an independent auditor in the slide headed "Solutions" which he presented at the Summit: … [T]hat was what was raised at the board meeting. I felt as though my directors wished me to present that and put that forward … my understanding … one of the two key reasons as I saw it for having an independent auditor, which to me made sense in terms of trying to engage how many hens were in production. 291 However, a somewhat different picture emerged in Mr Kellaway's cross-examination. 292 In cross-examination by counsel for Farm Pride, Mr Kellaway gave the following evidence: Q: But you do remember the words or the concept of "independent auditor" being raised on 19 January 2012 at the AECL board meeting? A: That's correct. Q: Mr Lendich did not say anything about using an independent auditor to check how many people were culling birds. That's not what you remember? A: No, I don't remember that. Q: Mr Lendich did not say anything about using an independent auditor to verify how many birds were being culled by egg producers, did he? A: He may have, and I would not be surprised if he did. Q: Well, I'm asking what you remember, not what may have happened. I'm putting to you for you to accept, reject or tell us if you don't know, that Mr Lendich did not say these words or words to the effect that an independent auditor be used to check how many birds were being culled by egg producers? A: I cannot guarantee that he did not say those words. Q: Mr Kellaway, do you recall him saying those words at the meeting? A: Those exact words? No, I do not. Q: And I'm also putting to you, in fairness to tell the Court, sitting here today in the witness box. In substance, Mr Lendich did not say anything at this board meeting about using an independent auditor to check how many birds were being culled by egg producers? A: No, I cannot agree with that because that was one of my understandings of what an independent auditor would be used for. And that understanding did not come from me, it came from board directors. And there were two board directors that were extremely verbose at that time. It was Mr Lendich and Mr Pace. And I do recall Mr Lendich talking about an independent auditor. Q: What did he say about an independent auditor, Mr Kellaway? A: He said that an independent auditor could be used or is an option to be used to see how many … birds are currently in production. Q: Is that your understanding or is that what you can recall him saying? A: That was my understanding. (Emphasis added) 293 As can be seen, in this passage, Mr Kellaway gave apparently conflicting answers. At one stage, he said that he had had an understanding, derived from what Mr Lendich and Mr Pace had said, that an independent auditor could be used to check the number of birds being culled by egg producers and, at another stage, he said that he had an understanding that the independent auditor could be used to check the number of birds currently in production. Those two understandings were not of course mutually exclusive. 294 Mr Kellaway expanded on his understanding of the potential use of an independent auditor in the cross-examination by Mr Duggan SC, for the ACCC. After some evidence about the mutual mistrust between egg producers concerning removing birds from production, Mr Kellaway was then asked: Q: And the reason you were saying that is because that was the purpose of an independent auditor, wasn't it? To allay that concern that if one person culled their birds that they wouldn't be left to lose their market share. Do you agree with that? A: Yes. One of the purposes of the independent auditor in terms of my understanding was to survey individual egg producers to see what they may have done as a result of the forecast reports, as a result of the meeting, being an option that was provided that they may wish to do - may wish to consider, being removal of birds. (Emphasis added) 295 Mr Duggan SC then asked about whether Mr Quirke had been suggested as the independent auditor. The following cross-examination occurred: Q: [C]an I suggest a more express purpose for an auditor, and that is to count how many birds have been disposed of. Do you agree with that as a purpose? A: Yes. That - well, that - that could be a purpose. Yes. Q: Well, it was the purpose, as at 8 February when you were presenting at the meeting. In your slideshow - you refer to an independent auditor there, don't you? A: That - I do recall that. Yes. Q: Yes. And the purpose then was to count the amount of birds that had been disposed of; do you agree with that? A: Disposed of or that remain in the system. Yes. Q: Well, much easier to count the disposal of hens that to count those that remain in the system, isn't it? A: I could - I could - well, sorry. The counting, I would assume, the auditor would ask the egg producer either, "how many birds have you disposed of?" or "how many birds do you have remaining?" You're saying he would get to the same result. Q: Yes? A: I don't think the purpose - this was my understanding - I don't think the purpose was for the independent auditor to go out there and count every chicken. (Emphasis added) 296 As can be seen, in this evidence Mr Kellaway indicated that he contemplated the independent auditor as an option to check how many hens had been culled or, in the alternative, how many hens remained. He regarded these as two sides of the same coin. 297 Later, however, in the same cross-examination, Mr Kellaway referred again to the purpose of the auditor as being, in effect, to authenticate the reliability of the numbers in the Forecast Reports provided to AECL by CIE. 298 The closeness of these two positions is revealed by the following evidence from Mr Kellaway in further cross-examination: Q: Well, there's difference between using an independent auditor to assess how many birds are in the system and using one to count birds that have been culled, isn't there? A: Well, I - well, I think you will probably get to the same result, so it's either/or, but certainly, you - you would know. And I have no doubt that he may have - he or she, sorry - could have gone out there and - and asked the question. … Q: And I suggest that the reason an independent auditor was needed was because of a mutual distrust in the industry, namely, that without it there was a concern that no one would act. Can I ask for your comment in response to that? A: I would agree there's - there's - I can understand there would be mutual distrust. Yes. Q: Yes. I mean, you said it yesterday, didn't you. In the context of appointing an independent auditor, the reason is because it was discussed in the context of there being a mutual distrust between producers? A: I can understand that. Yes. Q: Yes. And I suggest there's no other possible explanation as to why else you would put the words "independent auditor" there, immediately after the second dot point; what do you say to that? A: Yes, that would make sense. … Q: … What I'm suggesting is that the purpose of this was to ensure compliance with some form of arrangement with the producers; do you agree with that? A: No. No. I don't agree with that. Q: And that it had nothing to do with an independent auditor counting hens in the system. Do you agree with that, that the independent auditor had no such function? A: No. I don't agree with that. Q: That's taking those words out of context, because the second dot point is talking about culling birds; it has nothing to do with counting birds in the system. What do you say to that? A: Well, it would be - it would be - in these words, it would be looking at how many birds may have been removed from the system. I can see that. I can see that. Q: Yes? A: But it would also allow us to determine how many birds were left in the system. (Emphasis added) 299 Mr Kellaway amplified this evidence in later cross-examination: Q: … And why is that you consider it relevant in the context of an independent auditor to mention the fact that there was mutual distrust between the producers? A: That's my understanding after speaking with directors, that people have a mutual distrust. Q: And how does the appointment of an independent auditor resolve that problem? A: May be an egg producer will trust someone who's not a competitor. Q: Sorry, just expand on that point? A: Sorry, maybe an egg producer who was asked, "Well, how many birds have you removed?" or, "How many birds do you have?", whatever the question might be, would trust that person more so than an egg producer, another egg producer. Q: Yes, but the concept you're talking about is a concern of a producer culling birds and having situation where they don't want to do that because another producer doesn't, correct? A: Yes, that would make sense. … Q: And did you see an independent auditor as overcoming that problem? A: Certainly assisting. Q: Yes. And how would they assist in overcoming that problem of mutual distrust? A: Because there's some independence there as relates to the person that may be appointed. (Emphasis added) 300 Of the four witnesses who had attended the Summit, only Mr Bell could remember the term "independent auditor" being used, but he could not recall anything further about it. Mr Kellaway, Mr Ironside and Mr Powter could not recall anything said at the Summit about the use of an independent auditor. 301 In my opinion, Mr Kellaway's intention in referring to the use of an independent auditor can be discerned reliably from the context in which the reference was made. Mr Kellaway's slide indicates that context: Reduce the number of laying hens by culling birds (there is currently capacity with the major processors). Use of an independent auditor? The "major processors" to whom Mr Kellaway referred are those who process culled hens into meat. Mr Kellaway was telling Attendees that they would be able to dispose of culled hens by sending them to the processors. This was significant information because experience indicated that producers often had to make bookings with processors well in advance in order for them to take culled hens. I am satisfied that Mr Kellaway's report that the major processors had current capacity indicates that either he himself had made the enquiry of those processors or that it had been reported to him by others that the processors had current capacity to deal with birds culled as part of action taken to reduce the supply of eggs. 302 In context, the inference arising from Mr Kellaway's linking of the potential use of an independent auditor with the option of culling hens is strong. I am satisfied that, despite those parts of Mr Kellaway's evidence which are to the contrary, he was contemplating (and informing the Attendees) that an independent auditor might be used in conjunction with a planned reduction in hen numbers by culling. The auditor would be able to monitor, and to report upon, the extent to which egg producers had culled their flocks. 303 In my opinion, it is appropriate to draw the inference that Mr Kellaway contemplated that the use of an independent auditor might overcome the misgivings of egg producers arising from their distrust of their competitors. The independent auditor would be a means of checking that all egg producers were taking like action. It would be a form of assurance to egg producers and the removal of a disincentive to engage in culling action. 304 An alternative would have been for AECL to leave it to individual egg producers to report to it the extent of their culling of birds. The suggested use of an independent auditor is a step beyond that in that it would seem to involve the auditor verifying that the egg producers had taken culling action of the kind contemplated. 305 To the extent that Mr Kellaway suggested in his evidence some other use for an independent auditor, I do not accept that evidence. I had the strong impression that Mr Kellaway was discomforted in his cross-examination by his use of the term independent auditor because he recognised its potential incriminatory effect. 306 I accept, however, Mr Kellaway's evidence that he made the reference to an independent auditor in his slide presentation because of the discussion at the Board meeting on 19 January. He was giving effect to what had been said at that meeting. I am satisfied that, at the 19 January Board meeting, Mr Lendich had suggested the use of an independent auditor in order to overcome a perceived impediment to one of the options for reducing the egg supply and that that purpose was known by all directors. Accordingly, I do not accept the evidence of Mr Ware and Mr Ironside on this topic. 307 I think it likely, and so find, that Mr Kellaway explained to the Attendees at the Summit how an independent auditor could be used in accordance with these findings.

Other events at the Summit 308 The ACCC emphasised that portion of Mr Kellaway's opening slide which identified a purpose of the Summit as being to consider "options to resolve the current crisis for the betterment of the egg industry". It submitted that it was reasonable to infer that, given that this was an express purpose of the Summit, the meeting had addressed that issue. 309 The ACCC submitted that Mr Kellaway's contemporaneous notes made it obvious that the culling of hens had been the principal option discussed at the Summit. It submitted that the Court should be satisfied that Mr Kellaway had noted the key matters raised at the Summit. As already seen, five of the 12 notes made by Mr Kellaway referred, in one way or another, to a culling of hens or to a reduction of hen numbers. 310 The ACCC emphasised Mr Kellaway's evidence that Mr Lendich had made an express suggestion to the meeting that hen numbers be reduced by taking one bird from each cage. 311 The ACCC also emphasised evidence indicating that attempts at applying moral pressure to some producers had been made at the Summit. It referred in this respect to Mr Kellaway's slide comparing the growth in egg production (9.6%) with the increase in retail sales (4.8%) which included the following question and answer: • Did all egg producers grow by 9.6% in 2011 or achieve average growth greater than 6.7% each year over the last three years? • No, some producers are growing faster than others … . It also referred to Mr Kellaway's suggested addition to Mr Quirke's slide "Are there egg producers growing above this suggested trend [4%]?" and to Mr Kellaway's contemporaneous note "growth above 4% then you need to cull". 312 I accept the ACCC submission that these were overt statements of moral pressure being brought to bear on producers at the Summit. They are consistent with, and supportive of, the ACCC case that at least some producers were being asked to limit egg production.

A disclaimer by Mr Ironside? 313 Mr Ironside said that Mr Kellaway had passed onto him, shortly before the commencement of the Summit, advice that he should at the meeting's outset make a statement to the effect that AECL's purpose was only to present information for the Attendees' consideration, and that it was for each of them individually to decide how to respond to that information. He said that he had agreed to make such a statement. He could not recall whether he had asked Mr Kellaway to write out the terms of the statement, or whether he had written them down himself. Mr Ironside said that he recalled reading a statement to the meeting after his initial welcome with words to the effect: We're all aware that there's a crisis in the industry as - you know - egg surpluses were concerned. [The] purpose of this meeting is for you to absorb the information that is to be presented, and go away and make up your own mind, what you're going to do about it. 314 Mr Powter, who was called by Mr Ironside, said that he recalled Mr Ironside making a statement to the effect that everyone had "to go away and make up their own minds about what to do". He could not recall whether Mr Ironside made this statement at the commencement or conclusion of the meeting. Neither Mr Kellaway nor Mr Bell could recall whether Mr Ironside had made a statement to the effect he claimed although each thought it possible that he had. 315 The respondents relied on Mr Ironside's evidence concerning his statement, and other evidence relating to it, as indicating that they did not have the purpose alleged by the ACCC. 316 For the reasons which follow, I do not accept that Mr Ironside made the statement claimed at the commencement of the meeting. It is possible that Mr Ironside did make such a statement at the meeting's conclusion. Mr Powter's evidence that Mr Ironside had said that attendees should "go away" and consider the position is consistent with that position. However, by that time it must have been apparent that, even if originally contemplated, no collective agreement or understanding would eventuate and I would not regard the making of the statement at that time as inconsistent with the ACCC case. 317 AECL and Mr Kellaway led evidence suggesting that AECL had received legal advice shortly before the Summit on 8 February that it would be appropriate to make a statement to the meeting to the effect that AECL was merely providing information so that each producer could make its own decision and, explicitly, that AECL was not promoting the reaching of an agreement or understanding by egg producers to limit production. 318 Part of the background to this evidence was the evidence that Mr Pace had telephoned Mr Kellaway some time before 8 February 2012 and told him that he had received advice not to attend the Summit and that he would not be attending. Although Mr Pace did not say so, Mr Kellaway inferred at the time that he meant legal advice. Mr Pace told Mr Kellaway that he had also informed Mr Ironside that he would not be attending the Summit. 319 Mr Kellaway said that he reflected on Mr Pace's decision, bearing in mind that Mr Pace had been passionate about the oversupply situation at the Board meeting on 19 January and had wanted the Summit to go ahead. On the same day, or the following day, Mr Kellaway said that he had telephoned Mr Ironside and had asked him whether there was any issue about which they should be aware and whether the meeting should go ahead. Mr Ironside responded with words to the effect of "we're doing nothing wrong" and that "the meeting should proceed". 320 Subsequently, Mr Ianssen, AECL's Communication Manager, suggested to Mr Kellaway that AECL obtain legal advice. Mr Kellaway authorised Mr Ianssen to obtain such advice from the commercial solicitor from whom AECL was accustomed to obtain advice generally, Mr John Bamford, as to whether AECL should proceed with the meeting. Mr Kellaway could not recall when he gave that authorisation. For reasons which will become apparent, I find that it must have been on 8 February itself. 321 Mr Kellaway said that Mr Ianssen reported back to him on 8 February and said that that was "a day or two, maybe more" after the request to Mr Bamford. Mr Ianssen's report came in a telephone call to Mr Kellaway as he and Mr Ironside were travelling in the taxi to the Mercure Hotel. Mr Kellaway said that Mr Ianssen reported that Mr Bamford advised that a statement be made at the commencement of the meeting to the effect: We're here to provide information, not to come to any collective understanding or arrangement or agreement, and that egg producers should take the information and do with it as they so wish. Mr Kellaway said that he relayed that advice to Mr Ironside while they were still in the taxi. 322 Rather curiously, Mr Kellaway could not recall whether Mr Ironside had in fact made a statement of the kind said to have been recommended by Mr Bamford. That circumstance by itself made me doubt that Mr Ironside had made the statement he claimed. 323 Mr Ironside said that while they were travelling in the taxi to the Mercure Hotel, Mr Kellaway had received a telephone call. Mr Kellaway told him that the call was from Mr Ianssen who advised that "if we were going to go ahead with the meeting, [we should] make a statement before the meeting commenced". Mr Ironside said that he understood that AECL's lawyer had advised the reading out of a statement and that he had asked Mr Kellaway to write down for him what he should say. He also said that Mr Kellaway had conveyed the contents of Mr Ianssen's call to him while they were in the meeting room of the hotel, and not while they were in the taxi. 324 The principal difficulty in accepting this evidence of Mr Kellaway and Mr Ironside is that it is not consistent with objective evidence in the form of an exchange of emails on 8 February, and is not supported by other evidence which it was open to the respondents to adduce. 325 The exchange commences with an email from Mr Ianssen to Mr Kellaway at 11.39 am on 8 February by which Mr Ianssen gave Mr Kellaway a copy of the letter to egg producers which he had published in EggCorp EggsPress on 25 January. Mr Kellaway's evidence was that Mr Ianssen had provided a copy of this email to him in connection with a concern expressed by Mr Lendich that details of the Summit had been "leaked" to the media. I accept that that may have been so. 326 The next email is from Mr Ianssen to Mr Bamford at 1.17 pm on 8 February with the subject line "Legal advice". Mr Ianssen referred Mr Bamford to the outline of the Summit contained in Mr Kellaway's letter of 25 February published in EggCorp EggsPress and continued: Can you call me asap with your advice on the legality of the meeting. 327 Mr Bamford responded with an email at 1.36 pm which did no more than attach, without any commentary, a copy of s 44ZZRD of the CC Act. The copy of this email in evidence contained the website address for each of the numerous hyperlinked terms in the electronic version of S44ZZRD. The evidence did not indicate whether the email when received by Mr Ianssen contained the same website addresses. If it did, it would have been very difficult for Mr Ianssen to have made sense of the email. There is in any event no evidence that Mr Ianssen passed on the content of this email to Mr Kellaway. 328 Mr Ianssen later sent two emails to Mr Kellaway. The substance of the first, sent at 1.47 pm, was: John says: It is critical that you only provide information about market conditions so that they can go away and make their own separate decisions, rather than reaching a joint agreement or understanding. In the second, sent at 1.52 pm, Mr Ianssen said: It might be worth saying: We're just providing this market info so you can make your own separate decisions. We are not here to reach an agreement or understanding. You should make your own separate business decisions. 329 The chain of emails indicated, first, that Mr Bamford was asked to provide legal advice in relation to the Summit at 1.17 pm on 8 February 2012. It is possible that Mr Ianssen had spoken to Mr Bamford by telephone before 1.17 pm but there is no evidence about that. Even if Mr Ianssen had provided Mr Bamford with some forewarning by telephone, I infer that the email at 1.17 pm was the first request by AECL for advice. Accordingly, Mr Kellaway's evidence that advice had been sought from Mr Bamford some days previously must be rejected. 330 It is also to be observed that, on my findings, the Summit had either already commenced by 1.17 pm when the request was made to Mr Bamford, or commenced only a few minutes later. 331 The content of Mr Ianssen's emails of 1.47 pm and 1.52 pm is, in my opinion, inconsistent with Mr Ianssen having conveyed to Mr Kellaway, shortly before 12.50 pm, advice of the kind claimed by Mr Kellaway. The emails do not appear to be confirmatory of advice already given by Mr Ianssen, but instead appear to be the initial passing on of advice. 332 By 1.47 pm and 1.52 pm, the Summit was well underway. By that time Mr Kellaway must have completed or nearly completed his presentation. It was not possible for Mr Kellaway therefore to have conveyed the advice communicated by Mr Ianssen to Mr Ironside in order for him to make the statement at the commencement of the meeting of the kind outlined earlier. I reject the evidence of Mr Kellaway and Mr Ironside to the contrary. 333 It is possible that, prior to the exchange of emails between Mr Ianssen and Mr Bamford, there had been telephone exchanges in which Mr Bamford had conveyed oral advice of a preliminary kind and that Mr Ianssen had, in turn, passed on that advice to Mr Kellaway. However, AECL and Mr Kellaway did not lead any evidence that that had occurred. If this was the sequence, evidence confirming it must have been readily available to them. Mr Ianssen is still employed AECL and there is no reason to suppose that Mr Bamford does not continue to be available. AECL and Mr Kellaway did not even tender the mobile phone records of either Mr Ianssen or Mr Kellaway which might at least have confirmed that there had been communications of some kind at relevant times. Similarly, Mr Bamford's file records, time costing records or telephone records may have established that there had been communications of at least some kind at relevant times. 334 Further again, none of the respondents tendered the written statement said to have been read by Mr Ironside. 335 AECL, Mr Kellaway and Mr Ironside did not provide any explanation for not adducing evidence of these kinds. In these circumstances, I consider it appropriate to draw the inferences discussed in Jones v Dunkel (1959) 101 CLR 298 at 308, 312, 320-1, namely, that the unexplained failure by a party to adduce evidence may support an inference that the uncalled evidence would not have assisted the party's case and may also permit the Court to draw, with greater confidence, any inference unfavourable to the party failing to call the witness. See also Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11, (2011) 243 CLR 361 at [63]-[64]; Australian Securities and Investments Commission v Hellicar [2012] HCA 17, (2012) 247 CLR 345 at [165]-[167]. 336 I conclude therefore that the first request by AECL for legal advice was made by Mr Ianssen by email to Mr Bamford at 1.17 pm and that the first communications to Mr Kellaway of advice from Mr Bamford occurred at 1.47 pm and 1.52 pm, well after the Summit had commenced. It follows that I do not accept Mr Kellaway's evidence about his receipt of advice from Mr Ianssen while he was in the taxi travelling to the Mercure Hotel, do not accept his evidence that he conveyed that advice to Mr Ironside, and do not accept Mr Ironside's evidence that he made a statement at the commencement of the meeting to the effect which he claimed in order to give effect to the legal advice conveyed to him. Further still, I do not accept that any legal advice communicated to Mr Kellaway by Mr Ianssen had the effect of influencing what was said by Mr Kellaway or Mr Ironside in the meeting. 337 On the contrary, despite the warning bell sounded by the late decision of Mr Pace not to attend the meeting, the respondents appeared to have been oblivious to the potential for their conduct at the meeting to contravene s 44ZZRJ of the CC Act.

Post meeting matters 338 The ACCC relied upon three communications sent after the Summit as evidence of what had occurred at the Summit and as evidence of Mr Kellaway's state of mind. 339 The first was a letter from Mr Kellaway in the EggCorp EggsPress emailed to egg producers at 6.09 pm on 8 February. In that letter Mr Kellaway said: Dear Egg Producer, I want to alert you to the fact that the most recent inventory stocks of eggs have reached new ground to 5.4 million dozen as at early February. This is up by over 2 million dozen on the same time last year and while the volume of graded eggs in store is high, ungraded eggs [have] reached 2.8 million dozen. With no short term 'lull' in production forecast, egg producers will need to intervene and reduce production ahead of their planned schedule as a matter of urgency in the short term. Action is needed now. … James Kellaway Managing Director (Emphasis added) 340 In his evidence, Mr Kellaway said that he did not know whether he had prepared that letter before or after the Summit but presumed that he had done so afterwards. The letter is significant in that it indicated that Mr Kellaway considered it appropriate that AECL not only inform egg producers of the market situation, but also to give firm advice on the action to be taken to address the situation. 341 The second communication was an email which Mr Kellaway sent to the Attendees (and to Mr F Pace and to Paul Pace at Pace Farms) at 5.48 pm on Thursday, 9 February 2012. The email had the subject line "Egg oversupply (crisis) meeting outcomes" and was marked as having "high" importance. Mr Kellaway attached the February 2012 Supply Forecast Report. The substance of the email was as follows: Dear egg producer, Just a short note to thank you for those who attended the meeting yesterday at the Mercure Sydney Airport Hotel to discuss the current oversupply of eggs. Outcomes of the meeting included: • Egg sales have been growing by 6.7% on average each year over the last three years and by 4.8% in 2011. • Egg production has been growing by 7% on average each year over the last three years and by 9.6% in 2011. • As a result, the growth in egg production each year is exceeding the growth in egg sales each year with production growth above sales growth in 2011 by 4.8%. • If any egg producer has grown their production by more than 5% any year over the last three, then you are contributing to the oversupply. • Action can be taken by: • 'retiring' birds 6-8 weeks earlier over your planned rotation for the remainder of 2012. • donating eggs immediately to FoodBank Australia. Please see attached just released Layer & Egg Supply Forecast Report for February. Thank you for your time yesterday… … James Kellaway Managing Director (Emphasis in the original) 342 One of the ACCC submissions was to the effect that, by his use of the word "outcomes" in this email, Mr Kellaway had been summarising matters agreed or settled upon at the Summit. I think that unlikely and instead accept Mr Kellaway's evidence that he was summarising matters discussed or stated at the Summit. 343 I do, however, accept the ACCC submission that this email also indicates that Mr Kellaway considered it appropriate at the time for AECL to go beyond merely providing information to egg producers. First, he made an implicit criticism of those producers who had grown their production by more than 5% in any year over the last three years. At the very least, this appears to have been a continuation of the moral pressure which had been applied at the Summit. Secondly, Mr Kellaway informed recipients of means by which the supply of eggs to the market could be reduced, that is, by the earlier retirement of birds and the donation of the eggs to FoodBank. I accept that these were matters which had been proposed at the Summit. Mr Powter's evidence confirmed that that was so. 344 The third communication upon which the ACCC relied was an email circulated by Ian Blyth, the Manager of the Chicken Meat Group of the Victorian Farmers' Federation (the VFF) at 1.56 pm on 9 February 2012 under the subject line "Urgent Update - EGGS OVERSUPPLY". Mr Blyth attached an "Urgent Update" from Brian Ahmed, the President of the VFF Egg Group. Mr Ahmed had been an attendee at the Summit. Under the bold heading "Urgent Action Required", Mr Ahmed said: A special meeting was held in Sydney last week to discuss the current oversupply and the forecasted supply over 2012. It was agreed by all producers that the situation is critical and immediate and long term action is required. What could not be agreed on was, who was responsible and how we got ourselves in such an oversupply position. The facts are as follows: 1. Egg Consumption has been growing at an average of approximately 6% annually over the past 5 years. 2. Production has grown more than twice that rate. 3. Over the last couple of years we have had disease issues or natural disasters that have the balanced the scales. 4. Backyard production continues to grow. 5. Which producers have taken 15% of their birds out from September to February to compensate for lower retail sales over this period? Some of us are more to blame for the situation than others but all of us have added to the situation therefore we all have a responsibility to act. In conclusion. We can take action now and remain profitable or we can take action six months later when we will be forced financially to make the decision. I urge all producers to assist at this time, firstly to help your personal business and secondly the long term viability of your industry. I am not asking for you to get rid of birds if your supply meets your demand, I am asking you to make decisions that will benefit your personal businesses long term, we have all invested large sums of money in this industry and it is not unreasonable to expect a return on your investment. I trust that you will all make the right decision and thank you all for your ongoing support of the VFF Egg Group. Brian Ahmed President VFF Egg Group (Emphasis in the original) 345 It can be inferred from this letter, as the ACCC submitted, that there had been some disharmony at the Summit, and in particular, some "finger pointing" at those who had increased their production significantly. 346 The ACCC emphasised the statement in the second paragraph by Mr Ahmed as to what had been agreed at the Summit. Counsel for AECL and Mr Kellaway submitted that this statement should not be understood literally and was just as consistent with Mr Ahmed reporting that information had been conveyed at the meeting and understood by those attending. He submitted that it was also consistent with information having been presented which was not challenged at the meeting. 347 I agree with the ACCC that Mr Ahmed's message is consistent with a call to urgent action having been made the Summit and consistent with pressure having been applied, in particular to those whose production had increased at a rate faster than the rate of increase in demand for eggs. However, I consider it inappropriate to attach any greater weight to this communication as it may well reflect only Mr Ahmed's "take" on the situation. Plainly, Mr Ahmed felt strongly about the oversupply and considered that all egg producers should take some action to address the problem, both in their own interests and in the interests of the industry as a whole. However, in my opinion, Mr Ahmed's message cannot reasonably be construed as a proposal for some form of cartel action, let alone as indicating that some such proposal had been made at the Summit. 348 AECL and Mr Kellaway also referred to the absence of any evidence after 8 February to the effect that an attempt to have egg producers reach some arrangement or understanding at the Summit had failed. In particular, there was no evidence to the effect that AECL's objectives at the Summit had not been achieved. 349 I accept that this is the effect of the evidence but do not regard it as a significant matter. By the time of the Board meeting of 25 February 2012 to which AECL and Mr Kellaway referred in support of this submission, AECL had received the advice from Mr Bamford. That advice may well have influenced the way in which the Directors of AECL reported on the Summit.

Communication management 350 The respondents emphasised, in answer to the ACCC case, that unlike the circumstances of many cartel cases, the conduct alleged against them had not been covert or clandestine. 351 I accept that that was so. At their scheduled meeting on 20 January 2012, Mr Kellaway and Mr Ironside informed the DAFF representatives of AECL's intention to call a meeting to address the egg oversupply. Mr Kellaway had referred to the oversupply crisis meeting in EggCorp EggsPress on 25 January and its circulation was not confined to egg producers. It was available to anyone with an interest in the egg industry. 352 In addition, Mr Kellaway had participated in the interview broadcast by ABC Rural on 30 January 2012 in which he had referred to the oversupply and to the fact that AECL had "invited the top 25 producers to Sydney to work out what needs to be done". Further still, the "crisis meeting" had been the subject of a short article in the Sydney Morning Herald published on 7 February 2012. 353 The ACCC referred, however, to attempts within AECL to limit references to the "oversupply crisis meeting". It referred first to the inclusion by Mr Kellaway on his slide headed "Media": Egg oversupply was "leaked" to the media - industrial sabotage - by an egg producer. 354 Next, the ACCC referred to an exchange of emails between Mr Lendich and Mr Kellaway on 9 and 10 February 2012. On 9 February, Mr Lendich responded to Mr Kellaway's email summarising the "outcomes" of the Summit saying: James, Given the recent media interest it would be prudent to not put these things in writing. Don't keep referring to it as an "oversupply crisis meeting" and please don't put anything at all in any newsletters. 355 Mr Kellaway responded to Mr Lendich on the following day saying: Dear Zelko, Thank you for your e-mail and yes, this is salient advice. This is why I have not broadcast this message wider than the people who were invited to the meeting. Unlike the first correspondence that was also in EggCorp EggsPress which is where I believe the "leak" came from. 356 I am satisfied that the correspondence in EggCorp EggsPress to which Mr Kellaway referred was his letter published in the edition of 25 January 2012. 357 It is possible to speculate that by 9 February 2012, Mr Lendich at least had become aware from Mr Pace of the possible characterisation of the respondents' conduct as cartel conduct and that it was this concern which underpinned his email of 9 February to Mr Kellaway. However, the absence of evidence from Mr Lendich and Mr Pace means that must remain speculation. 358 Instead, I accept Mr Kellaway's evidence that Mr Lendich was concerned that the existence of an oversupply of eggs be not broadcast too widely because of its potential to weaken Farm Pride's negotiating position with its customers. I reject the ACCC submission that the statement at the Summit and the exchange of emails between Mr Kellaway and Mr Lendich should be regarded as evidence of consciousness of a form of wrongdoing, at least by Mr Lendich and Mr Kellaway. 359 At the same time, I do not regard the circumstance that the respondents' conduct was not covert as being particularly significant. That is because, on my assessment, the respondents appear to have been oblivious to the potential for their conduct to be regarded as unlawful. The evidence indicates that, until Mr Bamford provided his advice on 8 February after the Summit's commencement, the respondents were not conscious that their conduct may contravene the law. I will refer shortly to evidence that, at the Board meeting on 19 February, Mr Ware had cautioned only against price fixing. The respondents did not believe that they were doing anything wrong. Because of that belief, there had been no need for them to keep their conduct covert. 360 Accordingly, I regard AECL's communication management as a neutral consideration for present purposes.

The explanation for the Summit 361 The ACCC submitted, next, that the Summit did not have an "innocent" explanation. It submitted in this respect that the explanations proffered by the respondents in their evidence should be rejected. 362 The respondents' evidence was to the effect that the Summit had been called solely for the purpose of making egg producers aware of the extent of the oversupply and of the need for them, in their own businesses, to consider ameliorative action. Thus, Mr Kellaway said that at the end of the 19 January Board meeting, he had understood the purpose of the proposed meeting to make egg producers "aware of the situation as the Board had seen it, [to] give them information as it relate[d] to the criticality of action that would be required, … given the numbers that the Board was looking at". Mr Kellaway said that his intention when making his slide presentation was to "provide information to the attendees as relate[d] to the numbers that we saw based principally on the forecast report, but also some new ways of looking at that information, that the attendees might be interested in looking at and being aware of". It was for this reason, he said, that his concluding slide had stated that it was now up to those represented in the room to make their own decisions as to what to do in the circumstances. 363 As noted earlier, Mr Kellaway said in cross-examination that his intention had been to have the egg producers "coming together so they could get a mutual understanding of what the numbers were saying and the information to be presented at the meeting". 364 Mr Ware, who did not attend the Summit, said that he had understood the purpose of the meeting being "to inform the industry of an impending oversupply of eggs … to bring home to producers the gravity of the oversupply situation … to educate and communicate information to the industry". Earlier Mr Ware had deposed: [92] I understood the purpose of the meeting was to inform the industry of information AECL had relating to the forecast egg supply, and particularly to alert producers to the looming oversupply. I recall a concern expressed by some directors present that simply recording the information in a publication or on the website would not be sufficient to inform producers, as many did not appear to read the publications or consult the website. I understood that the content of the publication was to be that, based on charts developed by CIE, the AECL was aware of a serious oversupply situation developing. 365 Mr Ironside gave evidence to similar effect: [63] I also recall from discussions during AECL Board meetings that the members of the Board were all concerned to ensure that egg producers around the country were made aware of the significant over-supply situation that was developing. [64] For my part, I was concerned to ensure that such information was distributed to egg producers because I thought it might impact on how they operated their businesses and their business planning. 366 In support of their assertions that the Summit had, in effect, been called for information dissemination purposes only, the respondents referred to evidence of advice which the Board had received from Mr Ware at the Board meeting on 19 January. Mr Ware is a qualified lawyer and, between 1973 and 1987 practiced in commercial law. Since then he has acted principally as a consultant to businesses and as a director of one or more public companies in Australia. 367 Mr Kellaway deposed that Mr Pace had asked Mr Ware at the Board meeting on 19 January whether there would be anything wrong in the AECL Board calling the Summit, and that Mr Ware had responded: His answer was that as long as there is no agreement or understanding or consisten[t] message of what prices should be in the market, then - then it should - should be fine. 368 Neither Mr Ware nor Mr Ironside gave evidence about this statement. This was puzzling, particularly in the case of Mr Ware whose evidence, on my assessment, had a defensive quality about it. I thought it surprising, in that circumstance, that he did not mention the statement. 369 Mr Kellaway's evidence about this question from Mr Pace and Mr Ware's answer was not challenged. I accept therefore that Mr Ware did make the statement to which Mr Kellaway deposed. 370 However, Mr Ware's advice seems to have been confined to avoidance of any form of price fixing. It did not extend to avoiding the promotion of any agreement or understanding with respect to the reduction of the supply of eggs. That being so, Mr Ware's advice may possibly have provided a form of reassurance to the other AECL directors that each of the options they proposed taking to the Summit was legitimate. This may explain why the respondents, ultimately, did not place much weight on it. 371 The difficulty in accepting the statements, made retrospectively, by Mr Kellaway, Mr Ware and Mr Ironside as to the purpose of the Summit is that they are either inconsistent with, or not supported by, the numerous contemporaneous statements as to its purpose set out earlier in these reasons. It can be accepted that a purpose of the Summit was to impart information to the Attendees. However, the repeated contemporaneous statements indicating that the Summit was a call to action are inconsistent with the provision of information being its dominant purpose. 372 The rejection of the evidence at trial by Mr Kellaway, Mr Ware and Mr Ironside as to the purpose of the Summit does not of course make out the ACCC case. It is the ACCC which carries the onus. 373 Earlier I set out the contents of [92] of Mr Ware's affidavit. In the second sentence of that paragraph, Mr Ware deposed to an expression of concern by some directors about the extent to which producers read materials published by AECL. My lack of confidence in the reliability of Mr Ware's evidence as set out in [92] was increased by the fact that Mr Ware was unable, at the time of giving his oral evidence, to recall that concern having been expressed at the 19 January Board meeting. That was surprising as Mr Ware gave his oral evidence only two months after having made his affidavit. 374 I also observe that, if the respondents did have the concern to which Mr Ware deposed, namely, that the egg producers were not reading the information contained in EggCorp EggsPress and Eggstra Eggstra, they could have adopted the same means of communication which they did adopt in relation to the calling of the Summit itself, namely, an email to each of the top 25 egg producers. The circumstance that the respondents chose instead to call a Summit is, to my mind, inconsistent with it being held for information sharing purposes only. 375 I also consider that the content of the agenda circulated by Mr Kellaway for the Summit is inconsistent with a contemplation that the meeting would only be for the purpose of disseminating information. It contemplated that there would be discussion on the impact of the oversupply on producer returns and of means to "resolve the current crisis". 376 I accept that it was appropriate for AECL to provide egg producers with information and forecasts regarding egg production and the demand for eggs. Obviously enough, information of this kind would be useful to the individual egg producers because it would assist them to make more informed business decisions. However, as indicated, the evidence already summarised indicates that AECL went beyond merely providing useful information. 377 It is also pertinent, in my opinion, that none of the contemporaneous documents contained a statement to the effect that information was being provided to the egg producers for information purposes or for them to use as they saw fit in their own businesses. On the contrary, the tenor of the AECL documents was to the effect that the oversupply crisis was an industry problem to be tackled by those producers who had the majority of the market. 378 For these reasons, I do not accept the respondents' submissions to the effect that the Summit was for information dissemination or information sharing purposes only. It was essentially a call to action with the information being provided in support of that call. That conclusion does not by itself determine the question of whether the respondents, or any of them, proposed a form of proscribed collective action with the proscribed intention.

Consideration of the circumstantial case 379 The circumstantial nature of the ACCC case requires that each of the elements to which the ACCC referred be considered collectively. It is their combined effect which must be assessed. Considered in that way, the ACCC case has some force. I consider that the ACCC has established conduct which, looked at generally, could be characterised as a form of affirmative action directed towards the inducement it alleges. 380 However, the case also has some limitations and in my opinion does not establish the attempt alleged by the ACCC. In particular, the evidence does not warrant a finding that the respondents who participated in the trial had the intention of inducing a proscribed arrangement or that any conveyed to the Attendees the potential for such an arrangement or understanding. 381 There is a distinction between a circumstance in which industry participants are brought to an appreciation that it is in their interests, independently of what others are doing, to act in a certain way, on the one hand, and a circumstance in which industry participants are invited to agree to act in a certain way in the expectation of reciprocal conduct by others, on the other. Conduct of the former kind does not contravene s 44ZZRJ. The respondents submitted that the evidence supported only this alternative. 382 Mr Doyle SC, for AECL and Mr Kellaway, summarised the respondents' position on this topic by contending that the evidence was "perfectly consistent with the outcome being, "We want everybody to think harder about their own circumstances and what they can do to solve the problem which is, in part, theirs and, in part, the industry's". In my opinion, that is an appropriate characterisation of the evidence received in the trial, noting that suggestions and recommendations as to particular conduct which producers could take were also made. I also note again that the admissions by Mr Lendich in his agreement with the ACCC were not put into evidence against the remaining respondents. 383 The evidence warrants a finding that the means by which egg production could be reduced (removing one hen from each cage and bringing forward the disposal of hens by 6-8 weeks) were canvassed at the Summit, but there is insufficient evidence to warrant the conclusion that these options were propounded as a form of collective action involving reciprocal obligations or understandings by the egg producers. It is one thing to conclude that suggestions, even firmly expressed suggestions, were made that removing a hen from a cage and bringing forward hen disposal were forms of action which producers, making independent judgments about their own commercial interests, could (or even should) adopt: it is another thing to conclude that the respondents were proposing that producers agree that each would pursue either or both of these options on the understanding that their competitors would do likewise. There is no persuasive evidence that a proposal to that effect was articulated. 384 It is pertinent to this consideration that a considerable focus at the Summit was on those producers who had increased their production rapidly, and in excess of the general increase in demand for eggs. By a number of means, moral pressure was brought to bear on those (unidentified) producers. To my mind, the highlighting by Mr Kellaway of the fact that some producers were more responsible for the oversupply than others is inconsistent with an attempt, at least by him, to induce all producers, including the "innocent" producers, to agree to action to address a problem created by others. 385 I refer in this respect to Mr Kellaway's evidence that the Attendees were informed for the first time that some of their number had increased their production very rapidly, despite the warnings about oversupply. Their particular responsibility for the oversupply of eggs was highlighted in the PowerPoint slides for all to see. By this means moral pressure was brought to bear on those "culpable" producers. Those "innocent" attendees who had not increased their production, or had increased it by modest amounts only, were unlikely to be receptive to the notion that they should reduce their production in order to address the problem caused by the "culpable" producers. For them, the more obvious solution was for the "culpable" producers to bring their egg production back to levels which were sustainable. In this respect, the inference arising from Mr Ahmed's email of 9 February that there had been some disharmony, and possibly "finger pointing", at the Summit arising from a recognition that some were more responsible than others for the industry's predicament is pertinent. 386 To my mind, the fact that Mr Kellaway chose to highlight for the Attendees that some of their members were particularly responsible for the oversupply is inconsistent with him having had an intention to induce all of the Attendees to agree upon a form of mutual and reciprocal action. 387 The ACCC case placed considerable reliance on Mr Kellaway's reference to "a path forward in a co-ordinated and consolidated fashion". I agree that that expression is capable of a sinister connotation in the context of s 44ZZRJ as it may connote co-ordinated action by agreement by the various producers. However, in context it is also readily capable of an innocent explanation. In his slides headed "Solutions", Mr Kellaway suggested short, medium and long term solutions. Under the heading of short term solutions, he suggested the alternatives of action to reduce production of eggs by the culling of hens, action to increase consumer demand for eggs, and action to reduce the existing inventory of eggs by donations to FoodBank or dumping. These were not mutually exclusive options as each could be pursued simultaneously and in a co-ordinated way. I consider that Mr Kellaway's reference to "co-ordinated and consolidated" action is capable of referring to the adoption simultaneously of each of these different strategies in a planned way and accordingly does not necessarily have the sinister connotation for which the ACCC contended. At the least, the ACCC case has not negatived this as a reasonable understanding, and it is consistent with Mr Kellaway's evidence. 388 I agree with the ACCC that the reference in Mr Kellaway's slide to an independent auditor is particularly significant. I have already made findings about that. However, the retention of an independent auditor for the identified purpose may also have an "innocent" explanation. The reports of an independent auditor would have provided a means by which AECL, and through it egg producers, would know whether each producer was heeding the AECL's warnings and whether each was, by voluntary and independent action, reducing its hen numbers. In this way, the proposed retention of an independent auditor does not point persuasively to an intention that producers enter into an agreement or understanding with respect to reduction of hen numbers. 389 The respondents emphasised the evidence indicating the competitive nature of the egg industry. I have already referred to some of that evidence. The respondents submitted that, given the competitive nature of the industry, it was inherently unlikely that egg producers would co-operate with one another and, accordingly, unlikely that AECL would have expected them to do so. 390 AECL and Mr Kellaway, in particular, submitted that this was an important aspect of the factual matrix against which the contemporaneous statements relied upon by the ACCC were to be assessed. This provided an explanation, they submitted, for the absence of statements by Mr Kellaway or others to the effect that AECL expected the Attendees would act on the information only when it was in their own individual commercial interest to do so. Such statements were unnecessary given what was known to all at the Summit about the nature of the industry. Similarly, this knowledge made it unlikely that AECL or Mr Kellaway would have been proposing some form of collective action. 391 I accept that the egg industry is generally of a competitive kind and that it was likely that individual egg producers would take action only if they perceived it to be in their own individual interest to do so, and practical for them to do so. Accordingly, this submission has some force but its significance should not be overstated. It is very apparent that AECL was making an appeal to the individual interests of the egg producers, by particular reference to the decline in egg prices. The slide presentations of Mr Kellaway and Mr Quirke pointed out in graphic terms the effect on returns to egg producers of the oversupply. This was the same circumstance about which Mr Lendich and Mr Pace had spoken passionately at the Board meeting on 19 January. In my opinion, the evidence shows that AECL was making an appeal by reference not only to the interests of the industry as a whole, but to the interests of each individual egg producer. 392 The respondents submitted that the circumstance that several short term solutions to the egg oversupply were proposed also made it inappropriate to conclude that anyone could have expected, let alone intended, that the requisite degree of mutuality or reciprocity could be achieved. They noted that one egg producer may, for example, choose to make donations to FoodBank, another to cull hens, and another to cancel or reduce its orders for new hens, and so on. They submitted that AECL's intention did not go beyond explaining to the selected members the full nature and extent of the oversupply problem and the various actions which AECL itself considered might be undertaken by producers individually, but not collectively, to address the problem. 393 I agree that these are relevant considerations. The egg producers represented by the Attendees had operations in different parts of Australia and, although the evidence on this topic is limited, it is reasonable to infer that many had their own market or markets which did not coincide fully, or at all, with the market or markets of others. In particular, the evidence does not support a conclusion that there is a single Australian egg market. These circumstances made it likely that the oversupply affected some more than others. Some producers may have had a market for all the eggs they were producing. Twelve Oaks, operated by IMS, provides an example as its operations had been significantly damaged by Cyclone Yasi. I accept Mr Ironside's evidence that Twelve Oaks was still seeking to return to its pre-cyclone levels of production. Circumstances of these general kinds must have been known to AECL and Mr Kellaway, and to my mind militate against them having sought to induce an agreement or understanding of a proscribed kind amongst the Attendees generally. 394 It is true that an attempt to induce a contravention of s 44ZZRJ does not require that a single form of action be proposed. A contravention could occur if one producer agreed on one course of action (earlier culling of hens) and another producer on a different course of action (donation of eggs already produced to FoodBank). However, an agreement or understanding of this kind would be unusual and in the practical context of a meeting such as the Summit, one which would be difficult to achieve. This counts against the respondents having attempted to achieve an agreement or understanding for individual producers to take different forms of action. 395 The respondents emphasised that there was no evidence of any proposal having been put to a vote at the Summit, nor any evidence of a call for an indicative show of support. 396 I accept that that is so, while keeping in mind that the ACCC case turns very much on the inferences said to arise from the written material. The absence of evidence of the kind to which the respondents refer is not so significant in that context. If there was more detailed direct evidence of what had occurred at the Summit, the absence of evidence of a particular proposal being formulated and put to the meeting would be more significant. In this regard, the evidence concerning Mr Lendich's suggestion that one bird be removed from each cage is pertinent. The oral evidence from the Attendees at the Summit did not indicate what, if any, response was made this suggestion. It is possible, as Mr Ironside said in his evidence, that Mr Lendich's suggestion was not regarded as practical, or as favouring unduly those who produced barn laid or free range eggs over cage egg producers. 397 AECL and Mr Kellaway emphasised that AECL was not an industry participant and not an industry representative body. They submitted that AECL had nothing to gain by suggesting or encouraging collective action. In addition, AECL and Mr Kellaway submitted, that while it may be natural to infer some intention and expectation of reciprocity or mutuality in the case of suggested solutions to industry problems made solely by industry participants, such an inference did not arise in the case of communications from a non-participant such as AECL. It is more natural to expect that it would encourage action in accordance with the interests of the individual participants and circumstances and without any expectation of reciprocity or mutuality between them. These submissions were part of the wider submission of AECL and Mr Kellaway to the effect that the fact that individual action by multiple egg producers may have more general benefits for the industry did not mean that those individual actions acquired a collective character. 398 I accept that AECL was not an industry participant in the sense that it was not an egg producer. However, that does not mean that AECL was not a participant in the egg industry at all. The evidence already summarised indicates that AECL was, in a particular way, a participant in the Australian egg industry. One could hardly give an accurate description of the Australian egg industry without including a summary of the activities of AECL. 399 The question of whether AECL is an "industry representative body" involves definitional issues which, to my mind, it is unnecessary to address as I consider that the evidence already summarised indicates that AECL does, in some respects, act as an entity representing the Australian egg industry. 400 I accept, nevertheless, the respondents' submission that the role and character of AECL is important. In particular, I accept the submission made by reference to Trade Practices Commission v Service Station Association Ltd [1993] FCA 405; (1993) 44 FCR 206, that trade associations and their officers may legitimately encourage their members to examine their profitability and to make production and pricing decisions in order to maintain profitability. Conduct of that kind, at least when directed to the decisions of industry participants in their own businesses and without any suggestion of cooperative action, does not amount to cartel conduct, or even an attempt to induce cartel conduct. 401 The respondents also emphasised that the ACCC pleaded case did not include a contention as to the precise form of the alleged intended arrangement or understanding. Earlier in these reasons, I indicated that I did not regard this consideration as being fatal to the ACCC case. I accept however, the respondents' submission that this makes it more difficult to be satisfied that the respondents did seek to induce an agreement or understanding which contravened s 44ZZRJ. 402 Finally, I note again that the acknowledgement by Mr Lendich of his contravention does not bind any of the other respondents. Despite the ACCC having reached an agreement with Mr Lendich, it did not seek to adduce any evidence from him in the trial. It is not possible to conclude, on the basis only of the evidence received in the trial, that Mr Lendich had the requisite intention. 403 As already indicated, I consider that the ACCC evidence does establish conduct by the respondents which could constitute an attempt in the requisite sense. However, in my opinion, the ACCC case falls short of establishing that the respondents who participated in the trial had an intention to bring about an arrangement or understanding with the proscribed qualities and that any proposed an arrangement or understanding between producers for the reduction of the supply of eggs. It does establish that these respondents intended that the Attendees should take action to address and correct the oversupply of eggs but not (to the requisite degree of persuasion) that this action should be pursuant to an agreement or understanding involving reciprocal obligations. 404 The ACCC case, as presented and on my findings, was strongest as against AECL and Mr Kellaway. Although I consider that that case has some force, I am not satisfied, to the requisite degree of persuasion, that AECL and Mr Kellaway took the action they did with the intention of inducing Attendees to reach an agreement or understanding for a form of collective action. The case against them fails. 405 Although I regarded a number of the aspects of the evidence of Mr Ironside as unreliable, I am not persuaded that the ACCC has established the attempt by him and IMS which it alleges. It has not established particular conduct of Mr Ironside which would warrant a finding that he had made such an attempt or that he had the requisite intention. 406 I reach the same conclusion with respect to Farm Pride, although in its case, I have made findings about conduct by Mr Lendich at the 19 January Board meeting and at the Summit. I am not satisfied that these findings, by themselves, warrant the finding of the alleged attempt. 407 This conclusion is not inconsistent with the Court acting in due course on the agreement reached between the ACCC and Mr Lendich. In the case against Mr Lendich, the Court can rely on the additional material comprised in his admissions. 408 In these circumstances, it is unnecessary to consider the ACCC submission that conduct constituting an attempt could be constituted, at least in part, by an omission by a respondent to disassociate himself from statements or conduct of another. 409 Having regard to this conclusion, it is not necessary to consider whether conduct of Mr Lendich and Mr Ironside is to be attributed to Farm Pride and IMS respectively. However, in case the matter goes further, I set out in the next section my conclusions concerning the ACCC claim that Mr Bell's conduct should be attributed to Farm Pride. I add that, had it been necessary to do so, I would have found that Mr Lendich's conduct was to be attributed to both AECL and Farm Pride and Mr Ironside's conduct to both AECL and IMS.

Is the conduct of Mr Bell to be attributed to Farm Pride? 410 I am satisfied that, although Mr Bell was a director of Farm Pride at relevant times, he did not attend, or participate in, the 8 February Meeting in that capacity. In the language of s 84(2)(a), Mr Bell was not, in attending and speaking at the meeting, acting within the scope of his actual or apparent authority as a non-executive director of Farm Pride. Consequently his conduct at the meeting cannot be attributed to Farm Pride. 411 Quite apart from that consideration, I do not consider that the conduct of Mr Bell on which the ACCC relies can reasonably be characterised as an attempt to induce the egg producers present at the 8 February Meeting to enter into an agreement or understanding with the proscribed qualities. 412 My reasons for these conclusions follow. 413 Mr Bell lives in Western Australia. Since March 1998, he has been the Managing Director of AAA Egg Company Pty Ltd, a company involved in egg production and other hen related businesses. He is also a director of Altona Hatchery Pty Ltd, a company in Western Australia involved in the production of chicks and the rearing of pullets. In addition, Mr Bell is a director of companies in South Australia (Days Eggs Pty Ltd) and Tasmania (Pure Foods Eggs Pty Ltd) which are involved in the production and/or marketing of eggs. 414 Mr Bell received Mr Kellaway's email of 20 January 2012 inviting him to attend an oversupply crisis meeting. That was the first he had heard of the proposed meeting. Mr Bell had not had any discussions with Mr Lendich about a meeting to address issues of oversupply and it had not been discussed at any Farm Pride Board meeting. 415 On 23 January 2012, Mr Bell responded to Mr Kellaway's email saying: Thank you for [the] advice of the producer meeting to be held on either 8th or 9th February. I have made a diary note of this and will await further confirmation. I would think I would be able to attend or have a proxy to attend. My associated companies have always had the policy of turning off the tap when the tank is full. We realised many years ago that the bottom line was always better in depleting flocks instead of forcing eggs into the market. This has worked well for us but has cost us some market share over the years. We also do not make a noise about it as competitors take this as a signal that they shouldn't take any action. 416 Mr Kellaway's response to Mr Bell on 24 January 2012 was as follows: Dear Peter, thank you for this and I will firm up the meeting date in the next 36 hours. 417 Despite the terms of his email of 23 January 2012, Mr Bell deposed that initially he had been inclined not to attend the meeting. He considered that he already had a sufficient understanding of the issues involved. However, at the Board meeting of AAA Egg Company on 27 January 2012, the Chairman suggested that he should attend "to be updated on industry statistics in relation to supply". Mr Bell deposed that he had raised the proposed meeting at the AAA Egg Company Board meeting because he considered that he had been invited in his capacity as Managing Director of that company, rather than in any other capacity. 418 I accept Mr Bell's evidence about these matters. It is confirmed by the contemporaneous documents. On 27 January 2012, Mr Bell sent an email to Mr Jones, the Managing Director of Pure Foods. Mr Jones had informed Mr Bell that the proposed meeting dates of 8 and 9 February did not suit him. Mr Bell's email to Mr Jones said (relevantly): [A]s we already quit birds as needed it is irrelevant for AAA to attend. However I probably will go to show my concerns. Have been to these before and are meant to be a forum to air the issue. 419 Mr Bell sent a further email to Mr Jones on 30 January 2012 which said (relevantly): Reference the meeting for AECL to be held in Sydney on Wednesday 8th February. I note you won't be attending … As you know I think my presence at the AECL meeting would be redundant but the chairman told me I should be there. Waffle waffle. Let me know your thoughts. I consider that these emails confirm Mr Bell's understanding at the time was that he was being invited in his capacity as Managing Director of AAA Egg Company. They are also inconsistent with Mr Bell having, at the time, the purpose or intention of encouraging those at the meeting to enter into an agreement or understanding to limit supply. 420 Mr Bell deposed, and I accept, that he did not discuss his attendance at the 8 February Meeting at any Board meeting of Farm Pride, and that his attendance was not the subject of any approval by Farm Pride. The costs of his attendance were paid by AAA Egg Company and not Farm Pride. It is not plausible that Mr Bell was invited in his capacity as a non-executive director of Farm Pride. I note in this respect that none of the other non-executive directors of Farm Pride were invited. Mr Bell did not report to Farm Pride on the 8 February Meeting but did report to the next meeting of the directors of AAA Egg Company. 421 There is no suggestion in the evidence that Mr Bell said anything at the 8 February Meeting which indicated that he was there as a representative of Farm Pride. 422 It is pertinent, but not conclusive, that Farm Pride does not assert that Mr Bell attended the 8 February Meeting as its representative. 423 Given these matters, it cannot reasonably be held that Mr Bell attended the 8 February Meeting in his capacity as director of Farm Pride. In these circumstances, his conduct (whether by omission or otherwise) cannot be attributed to Farm Pride. 424 Further, the evidence does not indicate any conduct by Mr Bell which could reasonably be regarded as encouragement to those at the meeting to enter into an agreement to limit the supply of eggs. In assessing the evidence on this topic, I take into account that Mr Bell was a recipient of Mr Kellaway's emails of 20, 27 and 31 January 2012 and a likely recipient of the EggCorp EggsPress distributed on 25 January 2012, and was also a recipient of the Forecast Reports. 425 Mr Bell said that he did not speak at the 8 February Meeting other than for the purpose of introducing himself. However, Mr Kellaway said that Mr Bell had spoken briefly, saying words to the effect of "we do what we think is appropriate in the West". The tenor of that statement is, in my opinion, consistent with Mr Bell's statement to Mr Kellaway in the email of 23 January about the policy of his company when faced with oversupply. That is to say, it reduces its own production but does so discretely so as not to give a signal to its competitors. 426 I am inclined to think that Mr Kellaway is more likely to be correct in his recollection of what Mr Bell said, as it is unlikely to be something which he has misremembered or reconstructed. However, the words which Mr Kellaway attributes to Mr Bell cannot reasonably be regarded as an attempt to induce an understanding of the kind alleged by the ACCC.

Summary 427 For the reasons given above, the ACCC claims against AECL, Mr Kellaway, Farm Pride, IMS and Mr Ironside are dismissed. I will hear from the parties as to costs and any other matters. The ACCC claim against Mr Lendich will be listed for further hearing having regard to the agreement it reached with Mr Lendich and his admissions. I certify that the preceding four hundred and twenty-seven (427) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White.

SCHEDULE OF PARTIES SAD 121 of 2014 Respondents Second Respondent: JAMES DALE KELLAWAY Third Respondent FARM PRIDE FOODS LTD Fourth Respondent ZELKO LENDICH Fifth Respondent: IRONSIDE MANAGEMENT SERVICES PTY LTD Sixth Respondent: JEFFREY WILLIAM IRONSIDE