REASONS FOR JUDGMENT
1 On 31 October 2013, oral submissions were heard in support of written submissions of the parties directed to the forms of order to be made arising out of publication of the judgment in the principal proceeding on 10 September 2013: Australian Competition and Consumer Commission v Cement Australia Pty Ltd [2013] FCA 909. On that day, the Court published reasons for judgment in the principal proceeding and made a number of declarations and orders. The declarations were described as interim declarations and the orders were directed to the preparation and submission of formal orders for the consideration of the Court arising out of an analysis by the parties of the reasons for judgment identifying the various findings on the various contended contraventions. The interim declarations and orders made on 10 September 2013 were in these terms:
THE COURT MAKES THE FOLLOWING INTERIM DECLARATIONS:
1. Entry into the Original Millmerran Contract by Pozzolanic Enterprises Pty Ltd ("Pozzolanic"), Pozzolanic Industries Limited and Millmerran Power Partners dated 30 September 2002 does not engage a contravention of s 46 of the Trade Practices Act 1974 (Cth) (the "Act").
2. Entry into the Amended Millmerran Contract on 28 July 2004 does not engage a contravention of s 46 of the Act.
3. The conduct in relation to the second election to proceed by electing in March and April 2005 to deploy the capital for the purpose of installing processing facilities at Millmerran does not engage a contravention of s 46 of the Act.
4. Entry into the Original Millmerran Contract engages a contravention of s 45(2)(a)(ii) of the Act on the part of Pozzolanic and a contravention of s 45(2)(b)(ii) of the Act on the part of Pozzolanic and Queensland Cement Limited ("QCL").
5. To the extent that the identified provisions of the Original Millmerran Contract had the effect or likely effect of substantially lessening competition in the relevant market upon inclusion of the pleaded provisions in making the contract, that effect or likely effect became dissipated by the end of 2003 with the result that any effect or likely effect upon competition was then attributable to the compromised quality of the Millmerran flyash rather than the effect or likely effect of the identified provisions.
6. Entry into the Amended Millmerran Contract engages a contravention of s 45(2)(a)(ii), as a substantial purpose, among other purposes, of entry into the amended provisions and the continuing affirmation of the Original Millmerran Contract provisions, as amended, was to prevent a rival of Pozzolanic and Cement Australia Pty Ltd from securing access to Millmerran unprocessed flyash and to prevent a rival from entering the South East Queensland concrete grade flyash with processed Millmerran flyash.
7. The conduct in relation to the second election to proceed in March and April 2005 does not engage a contravention of s 45 of the Act.
8. Entry into the Fly Ash Agreement between Tarong Energy Corporation Limited ("TEC") and Pozzolanic of 26 February 2003 engages a contravention of s 45(2)(a)(ii) of the Act on the part of Pozzolanic and a contravention of s 45(2)(b)(ii) of the Act on the part of QCL.
9. Pozzolanic and Cement Australia contravened s 45(2)(b)(ii) of the Act by giving effect to the pleaded provisions of the Fly Ash Agreement between TEC and Pozzolanic of 26 February 2003 in relation to both the Tarong Power Station and the Tarong North Power Station.
10. Entry into the arrangements by Pozzolanic and Cement Australia to construct a classifier at the Tarong North Power Station does not engage a contravention of s 45 of the Act.
11. Pozzolanic and QCL contravened s 45(2)(b)(ii) of the Act by giving effect to the pleaded provisions of the Swanbank Contract of 1993 as amended by the letter of 9 September 1998 and the subject of the Agreement of 30 September 1998, in the period, relevantly for these proceedings, from the beginning of 2001 to 31 May 2003.
12. Pozzolanic and Cement Australia contravened s 45(2)(b)(ii) of the Act by giving effect to the pleaded provisions of the Swanbank Contract of 1993 as amended by the letter of 9 September 1998 and the subject of the Agreement of 30 September 1998, in the period, relevantly for these proceedings, from 1 June 2003 to 31 December 2004 and then from 31 December 2004 until 30 June 2005.
13. Pozzolanic and Cement Australia contravened s 45(2)(a)(ii) by entering into the extension arrangements until 30 June 2005 in relation to the Swanbank Contract.
14. The contentions that Mr Leon was knowingly concerned in particular contraventions of the Act are not made out.
15. The contention that Mr White was knowingly concerned in a contravention of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Act in relation to aspects of the Swanbank contractual arrangements is made out.
16. The contention that Mr White was otherwise knowingly concerned in contraventions of the Act is not made out.
THE COURT ORDERS THAT:
1. The parties are directed to prepare and submit formal orders for the consideration of the Court.
2. The costs of the proceeding are reserved.
3. The parties consider the extent to which any information contained in the reasons for judgment is confidential to a party or otherwise falls within orders for the preservation of confidentiality.
4. The parties are directed to confer concerning the matters at Order 3 with a view to enabling the matter to be re-listed to hear submissions concerning the question of the extent to which the reasons for judgment ought to be redacted or orders for confidentiality otherwise be addressed.
2 Other orders relating to the confidentiality of the information of Sunstate Cement Ltd contained within particular paragraphs of the reasons for judgment were made on 31 October 2013. Further orders were made on 14 November 2013 concerning the confidentiality of the information of Cement Australia Pty Ltd recited in particular paragraphs of the reasons. The orders of 14 November 2013 also dealt with other matters. In making the orders of 14 November 2013, the Court, relevantly for present purposes, noted these matters:
A. On 10 September 2013, the Court published, confidentially to the parties to the proceeding, Interim Declarations and further orders together with Reasons for Judgment.
B. The Reasons for Judgment were published to the parties on a confidential basis to enable the parties to advise the Court, having regard to protocols adopted for that purpose, of any confidential information contained in the Reasons for Judgment that ought to be the subject of any order for restriction of disclosure of that information by the wider publication of the Reasons for Judgment.
C. The further orders made on 10 September 2013 directed the parties to prepare and submit proposed formal orders for the consideration of the Court.
D. The parties requested the hearing of oral submissions, in support of written submissions, in relation to the precise content of the proposed orders to be made arising out of the publication to the parties of the Reasons for Judgment on the substantive causes of action in suit, subject to the determination of any matter, question or claim for further relief remaining to be addressed in the proceeding.
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F. The framing of the final form of the orders as to the matters addressed in the Reasons for Judgment is reserved for determination by the Court having regard to the oral and written submissions made by the parties addressing the various contentions.
G. The question of whether and to what extent a pecuniary penalty is to be imposed upon any one or more of the respondents (and any claim for further final relief) is to be the subject of a separate hearing and later determination.
H. A directions hearing as to the matters referred to at para G and especially as to the pecuniary penalty question is to be conducted on a date to be fixed by the Court.
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3 The purpose to be served by the Court making the declarations and orders on 10 September 2013 needs to be made clear or put in context.
4 In delivering judgment on 10 September 2013, the Court could have simply elected to publish the reasons for judgment and make orders requiring the parties to submit formal orders for the consideration of the Court with nothing more being said about any aspect of the disposition of the proceeding after a very lengthy trial. Alternatively, the Court could have published the reasons for judgment and made an order of the kind just described, but coupled with that order, narrative observations not forming any part of any orders to the effect that the Commission had been unsuccessful in establishing the contended contraventions of s 46 of the Trade Practices Act 1974 (Cth) (the "Act"), as the Australian Competition and Consumer Act 2010 (Cth) was then known, but had been successful in a number of respects in establishing particular contraventions of s 45 of the Act.
5 In publishing the reasons for judgment, the Court sought to communicate some explanatory context to the outcome of the proceedings. However, the interim declarations were deliberately framed at a high level without attempting to comprehensively frame the ultimate declarations to be made in the precise terms in which they ought be made after thoughtful and careful analysis of the lengthy reasons by the parties. In the course of oral submissions, counsel for the Commission identified the basis upon which the Commission's submissions were framed as to the final forms of order, in these terms (T, p 20, lns 43-45):
The submissions we've made are on the basis that the interim declarations were designed to inform the public of the essence of the judgment in circumstances where the reasons remain confidential.
6 In order to avoid any lengthy debate about the scope and purpose of the interim declarations and orders, the Court made this observation at T, p 21, lns 1-5:
Well, I will tell you precisely what they were [that is, what was intended by the interim declarations, T, p 20, ln 42]. They were conclusionary shorthand interim statements of the outcome. They were not the formulation of the declarations according to the appropriate, precise, thoughtful content of the scope of the declarations as a court would frame them in a final sense.
7 I mention these matters because the written and oral submissions of the respondents take the position that, fundamentally, the final form of the declarations should be configured in a form, and limited to, the way in which the interim declarations have been framed. However, the task given to the parties by the operation of Order 1 of the orders made on 10 September 2013 was to examine carefully the detailed reasons with a view to framing the precise scope of the formal final declarations having regard to the various findings of fact and law about each of the various claims made in the proceeding. The second aspect of that task contemplated the parties caucusing about the formulation of the declarations with a view, hopefully, to reaching a common position which might be recommended to the Court for consideration in the exercise of the discretion.
8 Although the respondents have proposed a formulation of the declarations they believe ought be made, and the applicant has also formulated proposed declarations, the parties have been unable to agree about aspects of that matter.
9 One further matter should be noted about the declarations made on 10 September 2013.
10 The declarations are described as interim declarations. They were made as explanatory declarations in the sense described above pending the submission of proposed final declarations by the parties for the consideration of the Court. They are "interim declarations" in the sense that they are designed to operate pending only the resolution of any question about the final formulation of the declarations (and orders), recognising of course that there is also to be a pecuniary penalty hearing as soon as reasonably possible.
11 However, the declarations are not "interim" in any sense in which lawyers or the Court would understand them to have an "interlocutory" function pending trial. They were short-form declarations made after a trial of the principal controversy. They were made pending the final formulation of the declarations and orders which would emerge from careful consideration by the parties of the reasons for judgment. They are not otherwise interlocutory. The law simply does not recognise, unlike an injunction, an interim or interlocutory declaration as to a state of affairs pending the trial of the very matter to be determined at trial and the subject of the particular controversy. There should be no confusion in the use of the term interim so far as the declarations made on 10 September 2013 are concerned.
12 The role and purpose of final declarations is to declare the state of affairs, on questions of fact and law, as determined by reason of the trial of the action reflected in the findings.
13 The question to be determined then is what declarations ought be made in the exercise of the discretion and how ought those declarations be framed?
14 Some matters of principle need to be noted.
15 By s 19 of the Federal Court of Australia Act 1976 (the "Federal Court Act"), the Federal Court has such original jurisdiction as is vested in it by laws made by the Commonwealth Parliament. Apart from the transactional investiture of jurisdiction by particular Commonwealth Acts, the Federal Court has, by s 39B(1A)(c) of the Judiciary Act 1903 (Cth), a broadly-based civil jurisdiction in any matter arising under laws made by the Commonwealth Parliament. For present purposes however, the Federal Court is invested with jurisdiction in any matter arising under the Competition and Consumer Act 2010 (Cth) ("C&C Act") in respect of which a civil proceeding has, whether before or after the commencement of s 86 of that Act, been instituted under Part VI of that Act. The Trade Practices Act 1974 (Cth) was re-titled as the Competition and Consumer Act 2010 (Cth) from 1 January 2011. Significant amendments, of course, were made to Australian competition and consumer law in conjunction with participating States and Territories by other amendments introduced into the C&C Act.
16 By s 23 of the Federal Court Act, the Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue, of writs of such kinds as the Court thinks appropriate. By s 21 of the Federal Court Act, the Court may, in civil proceedings in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed, and, moreover, a suit is not open to objection on the ground that a declaratory order only is sought. In these proceedings, the Commission seeks the imposition of a pecuniary penalty in relation to proven contraventions of the Act in addition to declarations as to the relevant contraventions. By r 1.32 of the Federal Court Rules 2011, the Court may make any order the Court "considers appropriate in the interests of justice". In adopting the Federal Court Rules 2011, the Judges of the Court observe, by operation of a note to r 1.32, that the rule is made in furtherance of s 23 of the Federal Court Act and, so far as orders in the exercise of the appellate jurisdiction are concerned, the rule relies upon s 28 of the Federal Court Act.
17 Apart from express reference to a power to grant declaratory relief in respect of matters in which the Court has jurisdiction, all superior Courts have "inherent power" (Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582), subject to a notion mentioned below, to make a declaration which may be of fact or law or mixed fact and law. A declaratory judgment is a "formal statement by a Court pronouncing upon the existence or non-existence of a legal state of affairs" and one which "pronounces upon a legal relationship" (Zamir & Woolf, "The Declaratory Judgment", Lord Woolf and Jeremy Woolf, Sweet & Maxwell, 4th Edition at para 1.02) and "is as old as judicial history" (Borchard, Declaratory Judgments, 2nd Edition, Cleveland USA: Banks-Baldwin Law Publishing Co, 1941, p 87 and following).
18 The power, whether express or inherent, is a discretionary power to be exercised according to settled principle. The exercise of the power must be directed to the determination of a legal controversy (representing aspects of the final relief) and the party seeking the relief must have a real interest to pursue in seeking the declaration. Plainly, there is no question in these proceedings of a party seeking a declaration in answer to a purely hypothetical question. Although superior Courts have an inherent power to make a declaration, the source of the power must be, in the case of federal Courts, statutory. For the Federal Court, the power lies in ss 21 and 23 of the Federal Court Act, although where there is no express power to make a declaration, the better view now is that the power to make a declaratory order is regarded as an "implied incidental power" of the general statutory power to make orders quelling a controversy, such as the power conferred under s 32 of the Judiciary Act.
19 It is important to remember that the making of a declaration is a formal exercise of discretionary power to make an order in the exercise of the Court's invested jurisdiction, which is the "authority to decide" or the adjudication function in the quelling of a controversy. This distinction between jurisdiction and power is not merely an abstracted theoretical distinction because the adjudication function itself results in formally expressed passages in the reasons for judgment containing findings of fact or law or determining that a right, duty or liability does, or does not, subsist or that particular conduct is, or is not, lawful. As Chief Justice French has observed writing extra-judicially in 2009, "there is little doubt" that the making of a declaration is regarded at law as something more than that, even though the terms of the declaration may replicate some things stated in the Court's reasons for judgment (French CJ, "Declarations: Homer Simpson's Remedy - Is There Anything They Cannot Do?", Perspectives on Declaratory Relief, K Dharmananda and A Papamatheos at pp 48 and 49).
20 Moreover, at p 49, the Chief Justice said this:
… it is reasonable to conclude that the making of a declaration is properly the exercise of a power and not merely an extract from the process of adjudication. Regardless of any question about the logic that underpins that view, it is firmly entrenched in history.
21 It follows that if a declaration is to be made in exercise of the discretionary power, it must recite the rights of the parties with respect to the final resolution of the matter in controversy with precision rather than represent some form of shorthand summary of the outcome of the controversy such as reciting that a party contravened s 45(2)(a)(ii) of the Act or s 45(2)(b)(ii), or that a party did not contravene s 46 of the Act. In principle, the formulation of the declaration ought properly reflect the essence of the conduct constituting the declared state of affairs and not simply be framed in terms of the language of the section itself which begs the question of the conduct (Rural Press Ltd v ACCC (2003) 216 CLR 53 at p 91 [90], Gummow, Hayne and Heydon JJ). However, the potential utility of a "formal declaration" can be a means of the Court marking its disapproval of the conduct in question. In Rural Press at [95], Gummow, Hayne and Heydon JJ said this:
… There is some utility in the particular circumstances of these appeals in making the declarations to which the parties consent. The degree to which the Commission succeeded has changed from stage to stage of these proceedings, and it is convenient to have set out in the declarations not only the basis for the primary liability and accessorial liability found, but also the basis for the penalties ordered as it must now be understood.
22 The utility in making declarations at the suit of the Commission in respect of contraventions of Part IV and Part V of the Act include these: the declarations are an appropriate vehicle to record the Court's disapproval of the contravening conduct; they serve to vindicate the Commission's claim that the relevant respondents contravened the Act; they may be of assistance to the Commission in the future in carrying out duties conferred upon it by the Act; declarations are of assistance in clarifying the law; declarations may deter corporations from contravening the Act (ACCC v Kokos International Pty Ltd (No 2) [2008] FCA 5; (2008) ATPR 42-212 at p 48, 812, French J at [48] (and the authorities cited in the relevant passage)). In ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248, Lockhart J at 255 said this, in the context of the exercise of the discretion to grant injunctions, about Parts IV and V of the Trade Practices Act:
Parts IV and V of the Act involve matters of high public policy. Parts IV and V relate to practices and conduct that legislatures throughout the world in different forms and to different degrees, have decided are contrary to the public interest … These are legislative enactments of matters vital to the presence of free competition and enterprise in a just society.
23 Against the background of all of these considerations informing the exercise of the discretion, it seems to me that the appropriate way to approach the making of the final declarations and orders as to this aspect of the matter (recognising that a pecuniary penalty hearing is yet to be heard and determined) is this.
24 First, the interim declarations are to be discharged and dissolved.
25 Second, it is inappropriate to make final declarations as to non-contravention. That follows because the framing of the declaration in order to be accurate and precise would need to make clear that the respondents did not engage in a contravention of s 46, for example, because there was no "taking advantage" of market power. Where the non-contravention involves consideration of a section of the Act that contains a number of integers and non-contravention flows from the Commission's failure to establish one of those integers, a declaration that recites non-contravention would not convey the relevant conduct with precision. Similarly, simply declaring non-contravention itself might be apt to mislead as to the actual conduct finding.
26 In the end result, the ultimate outcome of that part of the proceeding was that the Commission failed to establish a contravention on the part of any of the respondents of s 46 of the Act.
27 The most effective way of dealing dispositively and clearly with that question is simply to make orders that make it plain that the proceedings so far as they relate to contended contraventions of s 46 of the Act on the part of any of the respondents are dismissed as against those respondents. That principle applies to Orders 2, 3, 4, 5 and 29 of the orders. Those orders make it plain that the relevant aspects of the claims which were unsuccessful are dismissed.
28 The conduct which the Commission has established as contravening conduct ought to be the subject of the declarations, and declarations have been framed in relation to the relevant matters concerning the Original Millmerran Contract, the Amended Millmerran Contract, the Tarong Contract, the Swanbank Contract and the particular conduct concerning Mr Christopher Stephen White.
29 In the course of the submissions of the parties, references are made to particular paragraphs of the reasons for judgment which support, or are said to support, the contraventions upon which the declarations are based. Only a few of the paragraphs in the reasons have been identified in that regard. I do not propose to recite, in these reasons, each of the many paragraphs which contain findings which ultimately go to the making of the declarations as framed.
30 Third, it seems to me appropriate to formulate the declarations discretely in the sense that each particular category of conduct should be the subject of a particular or "stand alone" declaration. Therefore, I have separated out aspects of the conduct and framed the declarations accordingly.
31 Fourth, the contraventions, the subject of the declarations, are directed to the principal actors which I regard as Pozzolanic; QCL up to 31 May 2003 (and thereafter in the sense of continuing to operate as a treasury vehicle); Cement Australia from 1 June 2003; and Pozzolanic Industries. Mr White, of course, is relevant in relation to the matters the subject of the conduct identified in respect of his engagement in the relevant events as framed by the declarations.
32 I am not presently satisfied that it is appropriate, in the exercise of the discretion, to make any orders in relation to Cement Australia Holdings Pty Ltd ("CAH"). However, I propose to leave open for further argument the question of whether the reasons for judgment support a contravention on the part of CAH and whether any further order ought to be made. That matter can be addressed, as an additional matter reserved for further consideration, at the same time as the pecuniary penalty hearing. Further orders have been made concerning the reservation of the costs and the requirement of the parties to propose directions for the conduct of a pecuniary penalty hearing.
I certify that the preceding thirty-two
(32) numbered paragraphs are a true
copy of the Reasons for Judgment herein
of the Honourable Justice Greenwood.