Australian Competition and Consumer Commission v P. T. Garuda Indonesia Ltd

REASONS FOR JUDGMENT 1 On 13 December 2012, following argument between the Commission and Air New Zealand ('AirNZ'), I admitted into evidence certain answers of Mr Reissig given during cross-examination: see Australian Competition and Consumer Commission v Air New Zealand Limited (No 6) [2012] FCA 1480 ('AirNZ (No 6)'). I did not, however, deal at the time with Garuda's position. It wished to contend that, even if Mr Reissig's material was subject to the limitation I ordered on 13 December 2012 in the case against AirNZ, it should not be so limited in the case against Garuda. There were two elements to this. First, it was said that the Garuda pleadings were materially different to those of AirNZ (which I considered in AirNZ (No 6) at [9]-[19]) with the consequence that a different result should obtain. Secondly, it was not appropriate to make a direction under s 136 of the Evidence Act 1995 (Cth). The better course was to wait and see if a problem arose and to address questions of prejudice at that time. 2 I do not accept the first argument. I do not think that paragraph 38 of Garuda's amended defence is materially different to paragraph 38 of AirNZ's defence. For the reasons I have given in AirNZ (No 6) at [9]-[14], a pleading in that form is insufficient to signal a defence that the market is not as the Commission alleges but rather composed of sub-segments (like express services). 3 Nor do I accept that Garuda has pleaded a case that it does not compete in the market for express services because it only flies indirectly. Such a proposition is a substantive economic proposition which must be pleaded sufficiently to put the Commission on notice: r 16.08, Federal Court Rules 2011. I do not regard paragraphs 19, 21A, 29 or 45 as doing this. 4 As to the second point, Mr Leeming SC submitted that it was too early to know whether prejudice within the meaning of s 136 had arisen. I do not agree. If the evidence is not limited in the fashion sought by the Commission, then it will be exposed to the risk that the case has been conducted dehors the pleadings and it may have to meet a case it presently has no procedural obligation to counter: see Australian Competition and Consumer Commission v Air New Zealand Limited (No 1) [2012] FCA 1355 at [13]-[19]. This is sufficient prejudice for the purposes of s 136. 5 Accordingly, Mr Reissig's evidence against Garuda will be admitted on the same basis it was against AirNZ, namely with a direction pursuant to s 136 that it not be used: (a) to establish that the markets alleged by the Commission did not exist because they were further subdivided into markets such as the market for express cargo services; or (b) to prove that Garuda did not compete in the relevant market for express services. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.