Bray v F. Hoffman-La Roche Ltd

Introduction 1 During the 1990's certain companies in the Hoffman-La Roche, Aventis, and BASF groups of companies entered into and carried into effect an international price fixing and market sharing arrangement ("the cartel arrangement") in respect of vitamin products manufactured and sold by them or their subsidiaries. The cartel arrangement gave rise to prosecutions against companies in the three groups in the United States, Canada, Europe and Australia. A number of the companies pleaded guilty to the charges. 2 The applicant commenced a representative proceeding under Pt IVA of the Federal Court Act 1976 (Cth) claiming damages in respect of the cartel arrangement. The proceeding was brought on behalf of group members, who were defined as: "…persons who between 5 March 1992 and 5 July 1999 purchased in Australia all or some of vitamins A, B1, B2, B5 (Pantothenic Acid), B6, B9 (folic acid), B12, C, E, Beta Carotene, Canthaxanthin, Astaxanthin …, either directly or indirectly by way of the purchase of foods, beverages, vitamin pills or capsules or other products which contained one or more class vitamins supplied by one or more of the respondents…" 3 The definition of the group members was amended to exclude any persons who are judges of the Federal Court of Australia or the High Court of Australia. 4 The applicant claimed that, as a consequence of the cartel arrangement, the respondents contravened s 45 of the Trade Practices Act 1974 (Cth) ("the TPA") by: (a) making contracts, arrangements, and arriving at understandings (that is, the cartel arrangement) that contained an exclusionary provision (as defined in s 4D) and other provisions which had the purpose, or would have or be likely to have the effect, of substantially lessening competition in a market in Australia (ss 45(2)(a) and 45A); (b) giving effect to such provisions (s 45(2)(b)); (c) aiding, abetting, counselling, or procuring the contraventions, being directly or indirectly, knowingly concerned in, or party to, the contraventions and conspiring with others to effect the contraventions (s 75B). 5 The applicant alleged that the cartel arrangement had the purpose and effect of: · fixing, controlling or maintaining the prices for the vitamins described above ("the class action vitamins") in Australia; · allocating particular purchasers in Australia of class action vitamins to particular suppliers within the three groups; · preventing, restricting or limiting supply of the class action vitamins to purchasers in Australia. 6 The applicant claimed declaratory relief, payment of damages to group members and injunctions in respect of the alleged contraventions. The damages and injunctions, which are the main forms of relief claimed, are claimed under Pt VI of the TPA (ss 82 and 80). The declarations are claimed under Pt XII of the TPA (s 163A). 7 The first respondent ("HLR Europe"), the fourth respondent ("HLR Asia Pacific"), the sixth respondent ("A Europe"), the eighth respondent ("AAN Europe"), the ninth respondent ("AAN Asia Pacific"), the tenth respondent ("BASF Europe"), the twelfth respondent ("BASF South East Asia") and the thirteenth respondent ("BASF East Asia") are foreign corporations that could not be served with the originating process in the Commonwealth of Australia. Accordingly, the applicant was required to obtain an order under O 8 r 2(2) of the Federal Court Rules giving leave to serve the Amended Application ("the application") and the Amended Statement of Claim ("the statement of claim") on the foreign respondents outside of the Commonwealth. The foreign respondents were duly served outside of the Commonwealth pursuant to the leave given under O 8 r 2(2) on ex parte applications made by the applicant on 30 June 2000 and 20 July 2001. 8 Several of the foreign respondents filed conditional appearances. All of the foreign respondents have applied to the Court under O 9 r 7 to set aside service of the originating process upon them, alternatively to discharge the order giving leave to serve that process. The orders have been sought on the ground that the requirements of O 8 r 2(2) have not been satisfied. Relevantly, the rule provides that leave to serve originating process outside of the Commonwealth can be given "…if the Court is satisfied that: (a) the Court has jurisdiction in the proceeding; (b) rule 1 applies to the proceeding; (c) the party seeking leave has a prima facie case for the relief sought by the party in the proceeding." 9 The applicant and the foreign respondents were in dispute as to whether: · the applicant had a "prima facie case for the relief sought" against the foreign respondents; · the Court "has jurisdiction in the proceeding" in respect of the claims against the foreign respondents. 10 If sub-paras (a) and (c) of O 8 r 2(2) are satisfied little difficulty arises in respect of sub-para (b) as O 8 r 1 provides for originating process to be served outside of the Commonwealth, inter alia: "(c) where the proceeding is founded on a breach, wherever occurring, of an Act, and is brought in respect of, or for the recovery of, damage suffered wholly or partly in the Commonwealth;" 11 The applicant's proceeding is founded on a breach of s 45 of the TPA and is brought in respect of, and for the recovery of, damage suffered by the group members in the Commonwealth. 12 HLR Europe, HLR Asia Pacific, BASF Europe, BASF South East Asia and BASF East Asia ("the HLR and the BASF foreign respondents") have also applied under O 9 r 7 to set aside the originating process in so far as it relates to them. The HLR and BASF foreign respondents claim that the proceeding should be struck out or dismissed under O 9 r 7 as the Court has no jurisdiction in the matter in so far as it concerns claims made under the TPA in relation to those respondents. 13 The remaining respondents are Australian subsidiaries, within the three groups, which were involved in the sale and distribution of the class action vitamins in Australia. The Australian subsidiaries, the second and third respondents ("HLR Australia"), the seventh respondent ("AAN Australia") and the eleventh respondent ("BASF Australia"), have not yet made any application to the Court concerning the proceeding. The applicant discontinued the proceeding against the Fifth respondent, Roche Australia Pty Ltd. 14 The Australian Competition and Consumer Commission ("the ACCC"), which also has a proceeding pending in the Court in relation to the cartel arrangement, applied to be joined as an intervener pursuant to s 163A of the Act on the ground that the applicant sought a declaration pursuant to s 163A of the TPA that "the respondents have contravened s 45". In the alternative the ACCC applied to be added as a party to the proceeding pursuant to O 6 r 8. The foreign respondents disputed the entitlement of the ACCC to intervene or be added as a party but did not oppose it making submissions of law in respect of the issues arising on the present application. On that basis, I permitted the ACCC to make submissions on questions of law notwithstanding the divergence of views within the Court on the entitlement of the ACCC to intervene under s 163A in a proceeding such as the present (see for example O'Keefe Nominees Pty Limited v BP Australia Limited (1992) 38 FCR 85 at 88-93 in favour of a right of intervention cf Westpac Banking Corporation v Northern Metals Pty Ltd (1989) ATPR 50,407 at 50,417). In these circumstances it is preferable to defer over to another occasion a decision that might resolve this issue. 15 The main legal issue arising under the TPA concerned s 5(1), which provides that s 45 extends: "to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia." 16 The foreign corporations contended that, as they were not incorporated in Australia and did not carry on business in Australia, the Court had no jurisdiction under the TPA in relation to the claims against them, and the applicant, necessarily, had failed to satisfy the Court that it had jurisdiction in the proceeding or that it has a prima facie case for the relief sought in respect of a contravention of s 45 of the TPA. 17 The HLR and BASF foreign respondents also contended that the application to set aside the proceeding on the ground of absence of jurisdiction was required to be heard and determined by the Court forthwith as a final, rather than an interlocutory, application. Accordingly, so it was argued, the extensive hearsay evidence relied upon by the applicant (which included statements of agreed facts in the United States, Canadian and Australian prosecutions) was inadmissible. Numerous other objections were taken by the foreign respondents to the admissibility of the applicant's evidence. I propose to deal with those objections, to the extent they relate to the evidence upon which I propose to rely, in the course of these reasons for judgment. 18 The applications of the foreign respondents raise a number of difficult issues concerning O 8 r 2(2), s 5(1) of the TPA, and the jurisdiction of the Court in relation to the claims against the foreign respondents. No issues were raised concerning Pt IVA of the Federal Court of Australia Act 1976 (Cth) or as to whether any of the claims were precluded by any limitation of action provisions in the TPA. The applicant's claims 19 The applicant's claims under s 45(2)(a) of the Act are based upon an alleged market in Australia in which each of the respondents engaged in the conduct alleged against them in the course of the supply in Australia of the class action vitamins in competition with each other (paras 17, 18, 19 and 43 of the statement of claim). The statement of claim alleges that each of the foreign respondents engaged in the supply of the class action vitamins in Australia by itself, or by the Australian subsidiaries and the other foreign respondents in its group acting as its agent (paras 20(f), 23, 25, 26(b), 27, 30(d), 32, 34, 36, 39, 41 and 41B). 20 The supply by the foreign respondents of the class action vitamins in Australia and the control and direction they were alleged to have exercised over their Australian subsidiaries, were pleaded to have also had the consequence that the foreign respondents carried on business in Australia within the meaning of s 5(1) of the Act (para 42). 21 The contravention of s 45(2)(a) (in respect of which reliance was placed on s 45A) was alleged to have arisen by reason of the making of the cartel arrangement to fix prices and allocate market shares throughout the world, including Australia, by HLR Europe, A Europe and BASF Europe (paras 45, 46 and 47). The arrangement was alleged to contain an exclusionary provision (as defined in s 4D of the TPA) and other provisions that had the proscribed anti-competitive purpose and effect (paras 48, 49 and 50). 22 The contravention of s 45(2)(b) (in respect of which reliance was also placed on s 45A) was alleged to have arisen by reason of each of the respondents giving effect to the contravening provisions by fixing prices and market allocations in the Australian market (para 51). 23 The particulars given in respect of the communications forming part of the conduct relied on as constituting the making of, and giving effect to, the alleged contravening provisions of the cartel arrangement did not specify where the communications took place. 24 In summary, the applicant alleges breaches of s 45(2)(a) and (b) by each of the respondents (para 52), alternatively breaches of s 45(2)(b) by the Australian subsidiaries giving effect to the cartel arrangement on the instructions of HLR Europe, A Europe, and BASF Europe (para 53 and 54). An alternative cause of action pleaded against the Australian subsidiaries, in reliance on s 75B, is that they were involved in the contraventions of s 45(2) by HLR Europe, A Europe, and BASF Europe (paras 55, 56 and 57). A claim is also made, in reliance on s 75B, that HLR Europe, A Europe, and BASF Europe were involved in the contraventions of s 45 by the Australian subsidiaries (paras 59, 60 and 61). 25 The s 45 and s 75B claims against the foreign respondents relate to conduct allegedly engaged in within and outside of Australia between "at least 5 March 1992 and 5 July 1999". In so far as the claims are based upon conduct by the foreign respondents within Australia the issue of the extra-territorial operation of the TPA under s 5(1) does not arise. However, in so far as the claims are based upon conduct by the foreign respondents outside of Australia an issue arises as to the operation of s 5(1) and, in particular, whether the foreign respondents carried on business in Australia and, as a consequence, were subject to the extra-territorial operation of Pt IV of the TPA. 26 It is in that context that the prima facie case and jurisdictional requirements of O 8 r 2(2) arise for consideration. Order 8 Rule 2(2) 27 The character of the inquiry required under O 8 r 2(2)(c) was described by the Full Court in Caterpillar Inc v John Deere Ltd (1999) 48 IPR 1 ("John Deere") at 8-9 as follows: "The requirement to show a 'prima facie case for the relief sought' was considered in Sydbank Soenderjylland A/S v Bannerton Holdings Pty Ltd (1996) 68 FCR 539 at 549. The full court said: In addition to bringing a case within one of the paragraphs of r 1, an applicant must show a 'prima facie case for the relief which he seeks'. In Merpro Montassa Ltd v Conoco Specialty Products Inc (1991) 28 FCR 387 at 390, in a passage which has been cited with approval on many occasions, Heerey J said: '…the requirement of O 8, r 2(2)(c) has to be met at the outset of the proceedings. It does not suggest the kind of scrutiny that would occur in a submission of no case to answer following the closure of an applicant's case at trial … It may be therefore that a court at this stage might draw inferences more readily in favour of an applicant, bearing in mind, among other things, that the applicant will not have had the advantage of discovery, subpoena and other procedural aids to the making out of a prima facie case at trial.' In Western Australia v Vetter Trittler Pty Ltd (in liq) (1991) 30 FCR 102 at 110, after setting out this passage, French J said that 'a prima facie case is made out if, on the material before the court, inferences are open which if translated into findings of fact, would support the relief claimed'. In WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 at 476 Beaumont J said: 'Such a preliminary question [… whether a prima facie case exists] should not call for a substantial inquiry. The kind of evidence adduced on a preliminary inquiry of this kind should be in proportion to the nature of such an interlocutory issue … [The] purpose is to determine by way of a mini rather than a mega trial whether the applicant has a prima facie case.'" 28 The Full Court, citing Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 ("Cell Tech") at 373, also observed at 13-14 that it is sufficient if a prima facie case for relief is made out on one (and not necessarily all) of the causes of action relied upon; cf Tycoon Holdings Ltd v Trencor Jetco Inc (1992) 34 FCR 31 ("Tycoon Holdings") at 35. In Cell Tech (at 373-374) Lindgren J pointed out that although the statement of claim is useful as a statement of facts and causes of action relied upon, whether a prima facie case is made out on any of the causes of action is to be determined on the basis of the evidence. Thus, a prima facie case for relief may be made out which does not strictly conform to the case pleaded. 29 The prima facie case sought to be made out by the applicant was based primarily on hearsay evidence. Hearsay evidence may be admissible if the motions of the foreign respondents are interlocutory proceedings: see s 75 of the Evidence Act 1995 (Cth) ("Evidence Act"). See also O 33 r 3. Further, a court may be more inclined to exercise its discretion to admit evidence that is not in dispute under O 33 r 3(a) in an interlocutory proceeding. 30 Although the character of the inquiry under O 8 r 2(2) suggests it is interlocutory in nature, the nature of the applications of the respondents is to be determined by reference to the kind of relief they seek: see Allstate Life Insurance Co v ANZ Banking Group Ltd (No 3) (1996) 64 FCR 55 at 58. The relief sought by all of the foreign respondents under O 9 r 7 is to set aside service. The additional relief sought by the HLR and BASF foreign respondents is to set aside or dismiss the proceeding on the ground the Court has no jurisdiction in the matter the subject of the proceeding. 31 An order in a proceeding that does not determine or finally dispose of the rights and liabilities in issue between the parties in the proceeding will usually be an interlocutory, rather than a final, order: see Licul v Corney (1976) 180 CLR 213 at 225 and Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246 at 248. An order setting aside service does not prevent the applicant from re-applying for leave to serve the originating process out of the jurisdiction under O 8, as no rights or liabilities in issue between the parties in the proceeding have been finally determined. Thus, an application to set aside service out of the jurisdiction of an originating process is a proceeding that is interlocutory in character: see Victorian Broadcasting Network Ltd v Whitlam (1980) 31 ALR 184 at 185, Contender 1 Ltd v Lep International Pty Ltd (1988) 82 ALR 394 ("Contender 1") at 397 per Wilson, Dawson, Toohey and Gaudron JJ, cf Brennan J at 399, WSGAL Pty Ltd v Trade Practices Commission (1992) 39 FCR 472 at 475-476 per Beaumont J and Anderson and Co (A Firm) v GPA Group PLC (Unreported, Federal Court of Australia, Spender, Drummond and Sundberg JJ, 13 November 1998). 32 In Trade Practices Commission v Australian Iron and Steel Pty Limited & Ors (Unreported, Federal Court of Australia, Lockhart J, 29 September 1989) ("Australian Iron and Steel (1989)") Lockhart J considered whether the requirements of O 8 r 2(2) had been met in respect of a claim under Pt IV of the TPA. His Honour set aside service outside of the jurisdiction of an originating process on the ground that, on the "meagre" material before the Court, he was not positively satisfied the Court had jurisdiction against the foreign respondents. His Honour said (at 3-4): "I am not satisfied that this proceeding is one in which the court has jurisdiction, as against the fourth and fifth respondents - which, in my opinion, is the relevant consideration. The questions of law that are involved are of considerable importance and of some difficulty. I do not say that I am positively satisfied that the Court does not have jurisdiction; I simply say I am not satisfied at this stage on the evidence presently adduced that the Court does have jurisdiction. Though substantial argument has taken place, it does so in a proceeding which is in its early days and has, as I say, not even reached the stage of the completion of pleadings. The evidence adduced by the applicant in support of its motion - I do not say this at all critically - is meagre and contributes to my state of not being satisfied of jurisdiction. Whether it is possible for these questions of law to be argued prior to the final hearing by, for example, preliminary questions of law, or indeed, a stated case pursuant to order 29, is matter on which I need not say anything at this stage except that I think it is desirable that the questions of law going to the extra territorial operation of the relevant sections under the Trade Practices Act should be disposed of as early as possible and preferably before the final hearing. The applicant would then know whether or not it is proper to involve the fourth and fifth respondents by obtaining leave to serve out of the jurisdiction. If that leave were to be granted the case would then proceed to a final hearing which will involve lengthy and complicated evidence with those parties before the Court." 33 His Honour concluded (at 5): "It is, of course, always open to the applicant to move again for an order obtaining leave to serve the process upon the fourth and fifth respondents with evidence that is of more probative value. Accordingly, the Court declines to order that the service effected upon the fourth and fifth respondents in New Zealand be confirmed and sets aside that service." 34 In Contender 1 at 399 Brennan J (in his dissenting judgment) observed that the order in that case, made under the Rules of the New South Wales Supreme Court, granting leave to serve the originating process out of the jurisdiction "concluded against the appellant the question of its immunity from the jurisdiction of the Supreme Court of New South Wales". His Honour was referring to the Court's assumption of jurisdiction over the appellant, rather than its jurisdiction in the proceeding. Nonetheless the majority, after observing (at 397) that the decision whether to set aside orders granting leave is a decision on a matter of practice and procedure, referred to the statement of the Court of Appeal (as a reason for refusing leave to appeal) that the court will be in a better position to deal with any relevant legal principles where the facts have been fully heard at trial, and stated at 398: "Returning to the statement made by the Court of Appeal when refusing leave, we do not believe that this Court should be zealous to discern a failure on the part of that court to fulfil its duty. The task confronting an applicant for leave is well known. Both parties were represented by counsel and a statement of the reasons why leave should be given had been filed. It is inconceivable that in those circumstances the court was not fully apprised of all the material considerations. If their Honours took the view, as we have demonstrated they may well have done, that there was no injustice to the appellant in allowing complex questions of disputed fact to go to trial, then in our opinion they were entitled in refusing leave to say that the court was not of the opinion that it was a matter suitable for leave. By adding the words that the court 'believes it will be in a better position to deal with any relevant legal principles when the facts have been fully heard at the trial', it is not to be assumed that the court was thereby abdicating its responsibility to determine the application for leave to appeal according to law. Implicit in this statement is a recognition that at trial the evidence may not be limited to the evidence placed before Clarke J. From what was said in this court by counsel for the respondent, it seems that there may be further evidence relating to the circumstances in which the charter was entered into, a consideration relevant to the position of the appellant under the charter-party. As we have said, the real question is whether the appellant has shown error on the part of the Court of Appeal in dealing with the application for leave to appeal. We do not think that the appellant has done so; we would therefore dismiss the appeal." 35 The passages in Australian Iron and Steel and in Contender 1, to which I have referred, reflect the interlocutory character of an application to set aside service out of the jurisdiction. The fact that a refusal to set aside service will subject the foreign respondents to the exercise of the Court's jurisdiction and the fact that one of the criteria for such service in respect of a proceeding in the Federal Court is that the Court is to be satisfied that it has jurisdiction in the proceeding, does not affect the interlocutory character of the application. 36 An order striking out a statement of claim, or setting aside a proceeding on the ground that it does not disclose a reasonable cause of action, is also interlocutory rather than final: see Weatherall v Satellite Receiving Symptoms (Australia) Pty Ltd (1999) 30 ACSR 698, Minogue v Williams (2000) 60 ALD 366 at 371 and Yap Cheng See v Granich & Associates [2001] FCA 1735 at [5]. 37 Thus, in so far as the relief sought in the motions by the respondents under O 9 r 7 relates to whether the requirements in O 8 r 2(2) have been satisfied or whether the proceeding should be set aside as no reasonable cause of action is disclosed, the relief is interlocutory in character with the consequence that the notices of motion seeking that relief are interlocutory proceedings. Accordingly, the hearsay rule does not apply to the evidence adduced in relation to the issues arising under O 8 r 2(2) if the party who adduces it also adduces evidence of its source: see s 75 of the Evidence Act. 38 However, in so far as the HLR and the BASF foreign respondents are applying to set aside the proceeding on the ground that the Court does not have jurisdiction in the matter the subject of the proceeding, that aspect of their application is final, rather than interlocutory, in character: see Lloyd Werft Bremerhaven GmbH v Owners of Ship "Zoya Kosmodemyanskaya" (1997) 79 FCR 71 ("Bremerhaven") at 93. I will return to this aspect of the application later in these reasons. 39 It follows from the foregoing that the issues arising under O 8 r 2(2)(a), (b) and (c) are to be determined in an interlocutory proceeding with the consequence that a finding that, for the purpose of the rule, the Court is, or is not, "satisfied" that there is a prima facie case for the relief sought or that the Court has jurisdiction in the proceeding to grant the relief sought on the basis of that prima facie case, is not a finding that finally determines any of the rights in issue in the proceeding, including the jurisdiction of the Court to grant the relief sought under the TPA. The finding will be no more than that the Court on the evidence before it at this interlocutory stage is, or is not, satisfied that the requirements of O 8 r 2(2) have been met. 40 On the proper construction of O 8 r 2(2), the questions raised by the present application are whether, on the evidence before it, the Court is satisfied that: · the applicant has made out a prima facie case for the relief sought on the basis of any of the causes of action relied upon by the applicant against each of the foreign respondents; · the Court has jurisdiction in the proceeding, in the sense that it has jurisdiction to grant any of the relief sought under the TPA in relation to the cause of action in respect of which a prima facie case has been made out. 41 I have formulated the issue of jurisdiction by reference to the relief granted as, as I later explain, under s 86 of the TPA the claim for relief illuminates the scope of the controversy that constitutes a matter: see Australian Securities and Investments Commission v Edensor Nominees Pty Ltd (2001) 177 ALR 329 ("Edensor") at 348. 42 It was contended on behalf of the HLR and BASF foreign respondents that the above approach to O 8 r 2(2) gives primacy to the prima facie case requirement over the jurisdictional requirement. I do not agree. In the context of O 8 r 2(2), which comes into operation on an ex parte application prior to service on a respondent, the jurisdictional requirement can only, relevantly, be considered in the context of and by reference to the "prima facie case" made out by the applicant. Any other approach would involve the Court in considering the issue of jurisdiction on a hypothetical basis. 43 I propose, in the first instance, to consider whether I am satisfied that the requirements of O 8 r 2(2) have been met and to consider, as a discrete matter, the application of the HLR and the BASF foreign respondents to have the proceeding set aside on the ground of want of jurisdiction. A prima facie case 44 The evidence clearly establishes a prima facie case of contravention of s 45 of the TPA. The question, for present purposes, is whether I am satisfied that a prima facie case has been made out against any of the foreign respondents. As I later explain, it appears that most, if not all, of the foreign respondents were involved in the making of, or giving effect to, the cartel arrangement that resulted, prima facie, in contraventions by their Australian subsidiaries of s 45 of the TPA in respect of the supply of the class vitamins in Australia. The issues are whether the conduct constituting that involvement was engaged in: · outside of Australia, in which event the extra territorial operation of the TPA provided for in s 5(1) arises for consideration; · within Australia, in which event s 45 can apply without resort to s 5(1). (a) Section 5 - Conduct outside of Australia 45 Section 45 of the TPA prescribes the relevant norm of conduct for the purposes of the present case, and other provisions of the TPA (ss 80, 82 and 163A) provide remedies for a contravention of s 45. Section 45 is silent on whether the conduct proscribed by the section is limited to conduct within Australia. 46 Section 5, however, expressly provides, subject to certain conditions, for extra-territorial operation of certain parts of the Act. The section provides: "(1) Part IV, Part IVA, Part V (other than Division 1AA), Part VB extend to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia or by Australian citizens or persons ordinarily resident within Australia. (1A) In addition to the extended operation that section 46A has by virtue of subsection (1), that section extends to the engaging in conduct outside Australia by: (a) New Zealand and New Zealand Crown corporations; or (b) bodies corporate carrying on business within New Zealand; or (c) persons ordinarily resident within New Zealand. (2) In addition to the extended operation that sections 47 and 48 have by virtue of subsection (1), those sections extend to the engaging in conduct outside Australia by any persons in relation to the supply by those persons of goods or services to persons within Australia. (3) Where a claim under section 82 is made in a proceeding, a person is not entitled to rely at a hearing in respect of that proceeding on conduct to which a provision of this Act extends by virtue of subsection (1) or (2) of this section except with the consent in writing of the Minister. (4) A person other than the Minister or the Commission is not entitled to make an application to the Court for an order under subsection 87(1) or (1A) in a proceeding in respect of conduct to which a provision of this Act extends by virtue of subsection (1) or (2) of this section except with the consent in writing of the Minister. (5) The Minister shall give a consent under subsection (3) or (4) in respect of a proceeding unless, in the opinion of the Minister: (a) the law of the country in which the conduct concerned was engaged in required or specifically authorised the engaging in of the conduct; and (b) it is not in the national interest that the consent be given." 47 There is a general canon of construction that an enactment will not be construed as applying to foreigners in respect of acts done by them outside the dominions of the sovereign power enacting. The canon, which is subject to a contrary intention appearing, was explained by Lord Russell CJ in R v Jameson [1896] 2 Q.B. 425 at 430 as: "a rule based on international law by which one sovereign power is bound to respect the subjects and the rights of all other sovereign powers outside its own territory." 48 There is some dispute over the extent to which the canon applies to acts carried out outside the jurisdiction but intended to have, and actually having, adverse effects upon the country concerned: see Meyer Heine Proprietary Limited v The China Navigation Company Limited (1966) 115 CLR 10 ("Meyer Heine") at 23 per Kitto J, at 31 per Taylor J and at 38-39 per Menzies J cf at 43 per Windeyer J. In an era of e-commerce, electronic fund transfers, internet trading and information technology there may be much to be said for the view that, absent a contrary statutory intention, the time might have come to move to the "effects" doctrine of jurisdiction developed in the United States which was considered in Trade Practices Commission v Australian Iron and Steel Pty Ltd (1990) 22 FCR 305 ("Australian Iron Steel (1990)") at 319. 49 Meyer Heine concerned the extra-territorial operation of s 4(1) of the Australian Industries Preservation Act 1906-1950 (Cth) which created an offence if a person enters into a contract or engages in a combination to restrain trade or commerce, or destroys or injures by means of unfair competition any Australian industry. The section, which was expressed in general terms, was silent on extra-territorial operation. However s 9(b), which concerns conduct aiding or abetting a contravention of other sections of the Act, expressly provided for conduct outside of Australia to constitute aiding and abetting in certain circumstances. Kitto J at 24 (with whom McTiernan J at 20 and Windeyer J, relevantly, at 43 agreed) stated that on the proper construction of the Act the presence of s 9(b) is to be "accounted for only on the basis that the Act as a whole, including s 9 itself, has been framed in reliance upon its being taken for granted by everyone that when conduct is made an offence it is only in Australia that is meant": see also Taylor J at 31-33 cf Menzies J at 38-39. As s 9(b) was found to evince an intention that, save as therein provided, the other provisions did not have extra-territorial operation there was no need to have resort to the cannon of construction: see Kitto J at 23. 50 Whether a statutory provision has extra-territorial operation is a question of construction of the Act as a whole. With the TPA, as in Meyer Heine, it is not necessary to rely on any canon of construction in respect of s 5 as s 5(1) has provided for extra-territorial operation of the provisions of Parts IV, IVA, V (other than Division 1AA), VB subject to certain conditions. As with s 9(b) of the Australian Industries Preservation Act 1906-1950 (Cth), s 5 of the TPA is to be accounted for only on the basis that the Act as a whole, including s 5 itself, has been framed on the assumption that when conduct is made a contravention of the Act it is only conduct in Australia that is meant unless the conditions set out in s 5 apply. 51 The view that s 5(1) is the repository of the extra-territorial operation of the Act is also supported by ss 5(1A), 5(2), (3), (4) and (5) which are concerned with, or lay down, particular requirements in relation to the extra-territorial operation of Pts IV, IVA, V and VB. It is clear from those sub-sections that, unless expressly provided otherwise, the legislature intended that the Act is only to apply to extra-territorial conduct in the circumstances and subject to the conditions laid down in s 5. 52 Further, there is nothing in the provisions of the TPA not mentioned in s 5(1) that implies that they are to operate extra-territorially, or that those parts mentioned in s 5(1) operate extraterritorially other than as provided in s 5. This construction, that the extra-territorial operation of the TPA is only as provided for in s 5, accords with cl 87 of the Explanatory Memorandum of the Trade Practices Bill 1974 which stated "[t]he extent to which the legislation will operate extra-territorially is indicated in clause 5". The construction also accords with the case law on s 5(1): see Australian Iron and Steel (1990) at 319-320 per Lockhart J and Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) 83 ALR 299 ("Australia Meat Holdings") at 353-356 per Wilcox J. 53 The applicant has also made claims, in reliance on s 75B of the TPA, that the foreign respondents were persons involved in the contraventions of s 45 by the Australian subsidiaries. Section 75B is within Pt VI of the Act which is concerned with "Enforcement and Remedies". Section 75B(1) provides: "(1) A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB or V, or of section 75AU or 75AYA, shall be read as a reference to a person who: (a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention." 54 Part VI is not a Part of the TPA to which the extended application of the TPA provided for in s 5(1) applies. Although the Court may make orders under ss 80 and 82 against persons contravening s 45, and against persons involved in the contravention as set out in s 75B, ss 45 and 75B are not to be regarded as equivalent 'types' of provision. As was explained by Fisher J in Yorke v Ross Lucas Pty Ltd (1983) 46 ALR 319 at 321: "…neither s 75B nor s 82 deem the accessor to have committed a contravention, but rather proceed on the basis that in one or other of the specified ways he was 'involved' in the commission of the primary offence. Section 75B it can be said is procedural in the sense that it merely purports to indicate the various ways in which one person can be involved in the commission of a contravention by another to such an extent as to render it just that he contribute to recoupment of the loss suffered by others in consequence of the contravention." 55 Thus, a person involved in a contravention, although liable under Pt VI to pay damages (s 82) or to an injunction (s 80) does not contravene the Act. In those circumstances, the extended operation of the Act under s 5(1) only relates to persons who have contravened or are bound by a provision of the Parts referred to in s 5(1). Accordingly, as the extended application of the Act under s 5 does not apply to Pt VI, for the reasons set out above, s 75B is to be construed as only being applicable to conduct in Australia. In Australia Meat Holdings at 355 Wilcox J arrived at a similar conclusion. 56 It is not readily apparent why the legislature has excluded extra-territorial conduct of a foreign corporation, that is intended to have and has anti-competitive consequences in Australia, from the ambit of s 75B even if the corporation carries on business in Australia. The omission might have arisen from the fact that s 75B was enacted after s 5(1) and the legislature did not turn its mind to this issue. Whatever might be the explanation the omission is a matter for the legislature rather than the Court. 57 Accordingly, in so far as the claims against the foreign respondents in reliance on s 45 of the TPA are based on conduct outside of Australia, those claims are only maintainable if those respondents were "carrying on business within Australia". There is a question as to whether that requirement is to be satisfied at the date of the alleged contravention or when the proceeding is commenced. In the context of s 5(1) of the TPA, which is not directly or indirectly concerned with the time of service but is, rather, concerned with extending the range of conduct that contravenes the TPA, the relevant date appears to be the date of the alleged contravention. 58 There is an additional question as to whether the requirement that the foreign respondents carry on business in Australia is a matter upon which the Court's jurisdiction depends or merely a matter that must be established for a contravention of s 45 to be found. I have also not found it necessary to resolve that question for the purposes of determining the issues arising under O 8 r 2(2) as, if the applicant fails to satisfy me that she has a prima facie case that the foreign respondents carried on business in Australia, she must fail under O 8 r 2(2)(c) in so far as her case is based on extra-territorial conduct. Conversely, if she satisfies me that the respondents have carried on business in Australia that element of the cause of action will have been made out by the applicant for the purposes of O 8 r 2(2)(c). It will not add anything if, on the same findings, the applicant must also fail or succeed (as the case may be) under O 8 r 2(2)(a). Of course, the question of whether the s 5(1) requirement of carrying on business is a jurisdictional requirement also arises on the application of HLR and BASF foreign respondents that the proceeding be dismissed or set aside on the ground of want of jurisdiction. That issue is dealt with later in these reasons. 59 I turn to consider whether the foreign respondents carried on business in Australia. The applicant and the ACCC submitted that the expression "carrying on business in Australia" should be broadly interpreted so as to enable the TPA to apply to conduct that is intended to have, and has, an adverse effect on competition in Australia. Such an approach, so it is said, gives effect to the object of the TPA to enhance the welfare of Australians, inter alia, through the promotion of competition and fair trading: see s 2. 60 The expression "carrying on business" is not defined although s 4(1) defines "business" as including a business not carried on for profit. As was pointed out by Gibbs J in Luckins v Highway Motel (Carnarvon) Pty Ltd (1975) 133 CLR 164 ("Luckins") at 178 the expression "may have different meanings in different contexts". The present context is s 5(1), which gives effect to the legislature's view that comity, for the purposes of the TPA, requires that a particular nexus with Australia exist (ie citizenship or residence by a person or incorporation or the carrying on of business in the case of a body corporate) if certain Parts of the TPA are to apply to conduct engaged in outside of Australia by those persons or bodies corporate. As is clear from the judgments in Meyer Heine it was open to the legislature, as a matter of power and comity, to impose a lesser nexus requirement (eg intended and actual anti-competitive consequences in Australia) but it chose not to do so. In that context the expression should be given its ordinary or usual meaning. 61 The expression has often been considered in the context of service of process on, or enforcement of a foreign judgment against, a company which has a presence in or is carrying on business within the jurisdiction. Understandably, in those contexts the courts have attached importance to the defendant's presence, in the sense of a place of business (and therefore, a place for service), in the jurisdiction. Thus, it has been stated that a foreign company can only be served if it is carrying on business at a place of business within the jurisdiction: see La Bourgogne [1899] AC 431, Okura & Co, Limited v Forsbacka Jernwerks Aktiebolag [1914] 1 KB 715 at 718 and The "Theodohos" (1977) 2 Lloyd's Rep 428 at 431. The foreign respondents relied on such cases to contend that in order to carry on business within the jurisdiction the foreign respondents must have a presence (ie place of business) within the jurisdiction. It was then contended that as the foreign respondents have no such presence, in the sense of a place of business, in Australia they do not carry on business in Australia. 62 Whether a corporation is carrying on business within Australia is very much a question of fact: see Luckins at 186 per Stephen J and Saccharin Corporation Limited v Chemische Fabrick von Heyden Aktiengesellschaft [1911] 2 K.B. 516 at 521, 524 and 526. Carrying on business will usually involve "a series or repetition of acts": see Thiel v Federal Commissioner of Taxation (1990) 171 CLR 338 at 350 per Dawson J. The Full Court of the Supreme Court of Victoria in Pioneer Concrete Services Ltd v Galli [1985] VR 675 at 705 stated: "The word 'business' frequently poses difficulties for the courts. As Lord Diplock said in Town Investments Ltd. v. Department of the Environment [1978] A.C. 359, at p. 383: 'The word 'business' is an etymological chameleon; it suits its meaning to the context in which it is found. It is not a term of legal art and its dictionary meanings, as Lindley L.J. pointed out in Rolls v. Miller (1884) 27 Ch. D. 71, at p. 88 embrace 'almost anything which is an occupation, as distinguished from a pleasure - anything which is an occupation or duty which requires attention is a business'.' Recently Mason J. attempted to define the word 'business' in its ordinary or popular meaning for the purpose of certain rating sections in the Local Government Act 1919 (N.S.W.). In Hope v. Bathurst City Council (1980) 144 C.L.R. 1, at pp. 8-9; 29 A.L.R. 577, at pp. 582-3, in a judgment which was concurred in by Gibbs, Stephen and Aickin JJ., Mason J. accepted meaning No. 19 from the Shorter Oxford Dictionary: 'A commercial enterprise as a going concern', as the definition which came closest to the popular meaning, although he considered that: 'it is the words 'carrying on' which imply the repetition of acts (Smith v. Anderson (1880) 15 Ch. D. 247, at pp. 277-8) and activities which possess something of a permanent character'. Referring to the particular activities in question he said that the word 'business' denoted 'activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis'." 63 While the purpose of profit is unnecessary in the present context (by reason of the definition of business in s 4(1)), the definition set out above can otherwise be adopted as sufficient for present purposes without adopting it as a definition which is necessarily applicable in all cases. In the context of s 5(1) I see no reason, however, for importing the additional requirement that to carry on business in the jurisdiction the foreign company must also have a place of business in the jurisdiction. A place of business is not a requirement of comity. Further, importing such a requirement will impermissibly supplement the corporate requirement of carrying on business with the additional requirement of corporate presence or residence. In any event it is clear that the requirement of a place of business in the jurisdiction relied upon by the foreign respondents does not apply where the contention is that the foreign corporation carried on business by an agent acting on its behalf. In such cases it is of no significance that the foreign company has no fixed place of business in the jurisdiction provided the agent acting on its behalf carried on its business from some fixed place in the jurisdiction: see Adams v Cape (1990) 1 Ch 433 ("Adams v Cape") at 525 and 529-531. 64 Plainly, at all material times the Australian subsidiaries carried on business in Australia. Thus, the question in the present case is not whether a business was carried on within the jurisdiction. Rather, the question is whether that business was carried on by the Australian subsidiaries on their own account or on the account, or on behalf of, the European or the regional parent. 65 In The Albazero [1977] AC 774 at 807 Roskill LJ observed: "…each company in a group of companies (a relatively modern concept) is a separate legal entity possessed of separate legal rights and liabilities so that the rights of one company in a group cannot be exercised by another company in that group even though the ultimate benefit of the exercise of those rights would enure beneficially to the same person or corporate body irrespective of the person or body in whom those rights were vested in law. It is perhaps permissible under modern commercial conditions to regret the existence of these principles. But it is impossible to deny, ignore or disobey them." 66 The applicant did not query the independent corporate personality of the subsidiaries in accordance with the principle in Saloman v Saloman [1897] AC 22 to which Roskill LJ was referring. Rather, the applicant relied on the statement in Inland Revenue Commissioners v Sansom [1921] 2 KB 492 at 503 by Lord Sterndale that: "There may,…be a position such that although there is a legal entity within the principle of Salomon v Salomon & Co, that legal entity may be acting as the agent of an individual and may really be doing his business and not its own at all. Apart from the technical question of agency it is difficult to see how that could be, but it is conceivable. Therefore the mere fact that the case is one which falls within Salomon v Salomon & Co is not of itself conclusive. It goes some considerable way, but it is not conclusive." 67 The above passage was quoted with approval by Atkinson J in Smith, Stone & Knight v Birmingham Corporation [1939] 4 All ER 116 ("Smith, Stone") at 120-121 with the observation: "It seems therefore be a question of fact in each case, and [the] cases indicate that the question is whether the subsidiary was carrying on the business as the company's business or as its own." 68 In Smith, Stone the subsidiary was found to be operating not on its own behalf but on behalf of the parent. In arriving at that conclusion (at 121-122) Atkinson J answered the following questions in favour of the parent company: "The first point was: Were the profits treated as the profits of the [parent] company? - … secondly, were the persons conducting the business appointed by the parent company? Thirdly was the company the head and the brain of the trading venture? Fourthly, did the company govern the adventure, decide what should be done and what capital should be embarked on the venture? Fifthly, did the company make the profits by its skill and direction? Sixthly, was the company in effectual and constant control?" See also Spreag v Paeson Pty Ltd (1990) 94 ALR 679 ("Spreag v Paeson") at 711-712. 69 Cases such as Smith, Stone and Spreag v Paeson can be explained on the basis that the subsidiary was not maintained as a distinct and separate entity because the parent had disregarded the corporate boundaries. 70 In determining whether the Australian subsidiaries or the overseas parent companies are carrying on business in Australia the question might be asked: "is the person [or corporation] in question doing his business or doing the absent corporation's business? Conversely are they doing business through him or by him": see Vogel v Kohnstamm [1973] QB 133 ("Vogel") at 143 per Ashworth J. In determining the answer to that question a court would be required to investigate the functions which the subsidiary has been performing and all aspects of the relationship between it and the overseas corporation: see Adams v Cape at 530. Byrne J observed in Commonwealth Bank of Australia v White [1999] 2 VR 681 at 691 that the authorities establish that in resolving the question of whether the subsidiary is in truth carrying on the parent's business the court must examine "the totality of the relationship between the principal and the agent in the light of the nature of the company's business and that of the agent". In Wilson v Servier Canada Inc (2000) 50 O.R. (3d) 219 at 228 Cumming J stated that a "stringent test must be satisfied before one may pierce the corporate veil of a subsidiary corporation and impose liability upon a parent corporation on the basis of an asserted agency relationship". 71 In Adams v Cape at 530-531 a number of questions were considered to be likely to be relevant. They include: (a) whether the fixed place of business from which the subsidiary operates was originally acquired for the overseas corporation; (b) what other contributions, if any, the overseas corporation makes to the financing of the subsidiary; (c) what degree of control the overseas corporation is entitled to exercise and does exercise over the running of the business conducted by the subsidiary; (d) whether the subsidiary reserves part of its premises or staff for the work of the overseas corporation; (e) whether the subsidiary displays the overseas corporation's name at its premises or on its stationery in such a way as to indicate it represents the overseas corporation; (f) what business the subsidiary transacts exclusively on its own behalf; (g) whether the subsidiary makes contracts with customers or other parties in the names of the overseas corporation or otherwise in such manner as to bind it; (h) if so, whether the representative requires specified authority in advance before binding the overseas corporation to contractual obligations. 72 The applicant and the ACCC submitted that where a global enterprise exists comprising corporations located in many jurisdictions; that enterprise has established mechanisms by which it supplies its products in many jurisdictions; and the subsidiary carries on business in Australia in a manner which indicates that it is an integrated part of that global enterprise; then the subsidiary, which is subjected to the exercise of control or influence of its parent, should be viewed as carrying on business in Australia as agent of the parent. The difficulty with the sweeping assertion that the Australian subsidiaries, being directed and controlled by an overseas parent as part of the parent's global enterprise, carried on the business of the parent, is that that alone is not sufficient to pierce the corporate veil. Factors of the kind adverted to in Smith, Stone and Adams v Cape would usually be considered before a conclusion is arrived at that the subsidiary's business, assets and contracts are those of the parent. In Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 at 577 Rogers A-JA observed that a proposition similar to that put forward by the applicant and the ACCC is "too simplistic". 73 The applicant and the ACCC relied upon the reasoning of Wilcox J in Amalgamated Wireless (Australia) Ltd v McDonnell Douglas Corp (1987) 16 FCR 238 ("Amalgamated Wireless") and Tycoon Holdings to contend that the degree of control and its exercise are the critical criteria. The decisions were criticised by the foreign respondents as adopting an incorrect approach to determining when the corporate veil between companies in a large international group may be lifted. 74 In Amalgamated Wireless, Wilcox J, approaching the issue as one of degree, found that a United States company, which did not, "as such and in person, carry on business in Australia", did carry on business in Australia through its agent, an Australian subsidiary. In his Honour's view (at 240-241): "…the degree of involvement of the United States parent is so great that it is impossible to characterise this as being merely a case where a company purchases shares in another company and leaves that other company to carry on its own business on its own account. McDonnell Douglas Corp is more than an investor in the Australian subsidiary; it is concerned to use the Australian subsidiary as part of a world-wide information systems enterprise. The local company has apparently been set up to run its business as part of the world-wide McDonnell Douglas organisation; and ultimately on behalf of the parent company in America." 75 Subsequently, in Tycoon Holdings Wilcox J (at 39) referred to the question posed by Ashworth J as to whether a subsidiary was carrying on its own business or the absent corporation's business. His Honour said of his decision in Amalgamated Wireless: "I think that one needs to look at the whole of the evidence and determine whether the relevant activities are those of the agent, even though the company benefits, or whether they are truly those of the company, though effected by a different legal person. The question will usually be one of degree, the answer depending upon the nature of the agent's activities and the degree of domination of those activities by the company. Where the agent's only activities are related to the products or services of the company, this may indicate that the company is carrying on business by the agent. If it should happen that the agent is owned or otherwise legally controlled by the company, that conclusion may be strengthened." 76 A difficulty with the approach of Wilcox J is that he may have conflated the Adams v Cape criteria for piercing the corporate veil (which include control and its exercise) with the separate Adams v Cape criteria for agency. For example, his Honour did not appear to take into account the legal requirement that in this context agency connotes a relationship which exists where one person has an authority or capacity to create legal relations between a person occupying the position of principal and third parties: see Adams v Cape 529-530. That conflation may have resulted in an inconsistency between his Honour's finding in Amalgamated Wireless (at 240) that the subsidiary, rather than its US parent, was the contracting entity with third parties and his later conclusion as to the existence of agency. While there may be some dispute as to whether Wilcox J arrived at the correct conclusion on the facts in Amalgamated Wireless I do not take his Honour to be stating principles that differ from those suggested in Smith, Stone or in Adams v Cape, the many cases that have cited those decisions, or the other decisions to which I have referred. Rather, in Amalgamated Wireless his Honour made a finding of agency based on his view of the facts in the particular case. 77 In the present matter the Australian subsidiaries, in conducting their business activities in Australia, held their assets (including bank accounts) in their own names and employed employees and purchased and sold products in their own names. Their businesses were not confined to the class vitamins or to products supplied by other companies in the respective groups. The accounts of each of the subsidiaries were included in the Consolidated group accounts but that is commonplace with subsidiaries and accords with established accounting and regulatory requirements: see for example Industrial Equity v Blackburn (1977) 137 CLR 567 at 577. There may be some overlapping board appointments in respect of the subsidiaries and the regional or parent companies in the three groups but, for the most part, the subsidiaries had different boards to the European or regional parent. The evidence does not suggest that the Australian subsidiaries were not maintained as distinct or separate entities or that the parents have disregarded corporate boundaries. 78 The European and regional parents did not appear to hold assets in Australia save for intellectual property rights and shares in the Australian subsidiaries, had no premises, offices or employees in Australia and, in general, did not purport to engage in business activities in Australia. Of course, as I later explain in some detail, the European or regional parents were extensively involved in the implementation of the cartel arrangement in Australia. That involvement, however, related to the cartel arrangement and not to the manner in which the Australian subsidiaries generally carried on their businesses. It follows that subject to the question of foreign direction and control, the applicant has little to point to in respect of the matters suggested in Adams v Cape or Smith, Stone in relation to piercing the corporate veil or agency that assist her s 5(1) case. 79 For present purposes, I am prepared to accept that, directly or indirectly, the parent or regional parent companies in each group may have the ultimate legal entitlement, as shareholders, to elect the boards of the subsidiaries and therefore, in a practical and commercial sense, have a general capacity to direct and control their commercial operations. The evidence, at this stage, is extremely vague and uncertain as to whether, and if so to what extent, that capacity was exercised other than in the course of implementing the cartel arrangement. Of course, that implementation involved the parents, directly or indirectly, in supplying and fixing prices for the class vitamins. However, putting to one side any alleged illegality attending the implementation of the cartel arrangement, the situation described above reflects a quite unexceptional commercial and legal relationship which commonly exists between overseas parent and regional companies and their Australian subsidiaries in a vertically integrated worldwide group of companies. 80 In my view something more than the indirect legal and commercial capacity of the parent companies to control and direct the subsidiaries, plus the parent's involvement in implementing the cartel arrangement, is required to lift the corporate veil between the subsidiaries and their parents or to find that each of the subsidiaries is carrying on its business as agent for the parent. That is particularly so where it is contended (as it is in the present case) that the parent, rather than the subsidiary, is carrying on business in Australia or, put another way, the subsidiary is engaging in all of its commercial activities on behalf of, and therefore as agent for, the parent. 81 At this stage, I am not satisfied that the evidence establishes that the foreign respondents carried on business in Australia through their subsidiaries or that those subsidiaries conducted their businesses as agents for their parents. It may well be that after further investigation this matter may require reconsideration. For example, the applicant might be able to establish that some of the foreign respondents engaged in sufficient business activity in Australia in their own right (eg by supplying group products to an Australian subsidiary) or that the parent's involvement in the implementation of the cartel arrangement in Australia was sufficient to constitute carrying on business in Australia. That, however, is of no assistance to the applicant at this stage. 82 Accordingly, if the applicant is to uphold its service on the foreign respondents out of the jurisdiction it must be on the basis of conduct by those respondents within Australia. (b) Sections 45 and 75B - Conduct within Australia 83 The alternative case of the applicant under ss 45 and 75B of the TPA is that the foreign respondents, by their own conduct and acting by their Australian subsidiaries, gave effect to or were persons involved in the cartel arrangement in Australia. The evidence relied upon includes: · the plea agreements entered into by HLR Europe and BASF Europe with the United States of America ("the U.S. plea agreements"); · the Agreed Statements of Facts entered into between HLR Europe, BASF Europe and Rhone-Poulence S.A. (ie A Europe) and the Attorney-General of Canada ("the Canadian plea agreements"); · the Statement of Agreed Facts and Admissions of Contraventions by the Australian subsidiaries, the third respondent ("HLR Australia"), the seventh respondent ("AAN Australia") and the eleventh respondent ("BASF Australia") ("the Australian plea agreements"); · the Report of the New Zealand Commerce Commission in relation to its Vitamin Investigation ("the NZ Commission report"); · a press release of the European Commission concerning the imposition of fines under HLR Europe, BASF Europe and A Europe. 84 By the HLR Europe U.S. plea agreement, HLR Europe pleaded guilty to: "…participating in a conspiracy to suppress and eliminate competition by fixing, increasing, and maintaining the price and allocating the volume of certain vitamins sold in the United States and elsewhere, and allocating among corporate conspirators certain contracts for vitamin premixes for customers located throughout the United States through the submission of rigged and non-competitive bids for such contracts, beginning in part at least as early as January 1990 and continuing in part in February 1999, in violation of the Sherman Antitrust Act, 15 U.S.C. s 1." [Emphasis added] 85 Section 1 of the Sherman Antitrust Act declares as illegal, inter alia, every contract, combination or conspiracy in restraint or trade or commerce among the States or with foreign nations. The U.S. plea agreements specifically detail conduct of the accused in the United States. Accordingly, the issue of the extra-territorial operation of s1 did not appear to arise as an issue. 86 The plea was made on the basis of the following factual admissions: "(a) For purposes of this Plea Agreement, the 'relevant period' is that period beginning as early as January 1990 and continuing into February 1999. Throughout the relevant period, Roche was a corporation organized and existing under the laws of Switzerland. During the relevant period, Roche was a manufacturer of various vitamins used to enrich human food, pharmaceutical products, and animal feed in the United States and elsewhere. During the relevant period, Roche was engaged in the sale of these vitamins to the United States and elsewhere. (b) During the relevant period, Roche, through several of its executives, officers, and employees, participated in a conspiracy with other vitamin manufacturers, the primary purpose of which was to fix, increase, and maintain the price and allocate the volume of, certain vitamins sold in the United States and elsewhere, and to allocate customers in the United States. In furtherance of the conspiracy, Roche, through a number of its executives, officers and employees, engaged in conversations and attended meetings with representatives of other vitamin manufacturers. During such meetings and conversations, agreements were reached as to the prices at which the conspirators could sell certain vitamins and the timing of price increases, and the volumes of certain vitamins they would sell in the United States and elsewhere. Further, agreements were reached as to the submission of rigged bids for the award and performance of contracts to supply certain vitamin premixes to customers located throughout the United States. (c) During the relevant period, vitamins that were the subject of this conspiracy and sold by one or more of the conspirator firms, and equipment and supplies necessary to the production and distribution thereof, as well as payments therefor, travelled in interstate and foreign commerce. The business activities of Roche and its co-conspirators, in connection with the production and sale of the vitamins affected by this conspiracy, were within the flow of, and substantially affected, interstate and foreign trade and commerce." [Emphasis added] 87 Pursuant to the plea agreement HLR Europe agreed to pay a fine of US$500 million. The BASF Europe U.S. plea agreement was, substantially in the same form, save that the agreed fine was US$225 million. 88 The NZ Commission report explains the origin of the United States proceedings and the absence of charges against Rhone-Poulenc SA (A Europe) in the United States as follows: "53. The USDJ became aware of the conspiracy when [Rhone-Poulenc SA] turned state evidence as a result of a pending $US22 billion merger with another drug company, which would need approval from competition law authorities in the US and Europe. 54. As a result of providing the information to the USDJ, [Rhone-Poulenc SA] escaped prosecution while Roche Swiss and BASF AG agreed to pay record criminal anti-trust fines of $US500 million and $US 225 million respectively." 89 Each of the Canadian plea agreements was, substantially, in the same form. The agreements state that the Canadian subsidiaries of the parent companies in each of the three groups were not implicated in or charged with the offences to which the parent companies pleaded guilty. HLR Europe agreed to being a party to a conspiracy involving a number of companies, including BASF Europe and A Europe. The agreement was based upon certain facts, including: "2. Throughout the relevant time period, the accused was engaged in the manufacture abroad and the sale of bulk vitamins and related products (including vitamins A, B2, B5, C and E, as well as betacarotene and vitamin premixes, referred to, herein, as 'bulk vitamins') in Canada and elsewhere. … … 12. The bulk vitamins affected by these conspiracies that were sold in Canada and elsewhere are the following: Vitamin A January 1990 to February 1999; Vitamin E January 1990 to February 1999; Vitamin B2 (Riboflavin) July 1991 to the Fall 1995; Vitamin B5 (Calpan) January 1991 to December 1998; Vitamin C January 1991 to the Fall 1995 Betacarotene Fall 1991 to December 1998; Vitamin premixes 1991 to December 1997. As more fully described in paragraph 15, the above dates represent the duration of the agreement for each product that constitutes the offence. 13. The producers identified above manufactured the substantial majority of the supply of the above listed products during the period of the offence. Vitamin products were sold in Canada by the participants in the illegal agreements through wholly owned subsidiaries or through distributors, but no subsidiary or distributor of Roche is implicated in or charged with an offence herein. 14. … 15. For each of the vitamin products listed herein and during the time period stated above, senior executives and employees of Roche engaged in conversations and attended meetings with other senior executives and employees of the other major bulk vitamin producing companies named herein. In these conversations and meetings, unlawful agreements were reached: 1) to allocate the market share or to set specific volumes of certain bulk vitamins that each company would supply for the world, by region, which included Canada; 2) to fix, increase and maintain prices and to coordinate the price increases for the world, by region, which included Canada, at which each company would sell bulk vitamins to customers. The agreements for each specific product may be summarized as follows: Vitamin A (a) The agreements on vitamin A involved Roche, BASF and Rhone-Poulenc and existed from January, 1990 to February, 1999. At the outset, senior executives from each firm met and agreed to allocate market shares or volume of sales for the world, by region, which included Canada. Over the period of the conspiracy, yearly meetings among senior executives were held to agree on a 'budget' for the following year, to agree on an estimate of future demand for the world, by region, which included Canada, based on sales information exchanged during quarterly meetings of lower level employees of each firm. At the meetings, the participants also agreed to fix, increase and maintain the prices at which vitamin A would be sold for the world, by region, which included Canada. Vitamin E (b) The parties to the conspiracy on vitamin E were Roche, BASF, Rhone-Poulenc and Eisai. The agreement of vitamin E among the European producers operated from January, 1990 to February 1999, but the participation of Eisai was confirmed only in late 1990. The nature of the agreement on vitamin E was essentially the same as vitamin A, as both products were discussed, at least among the European manufacturers, at the same meetings. In late 1990, a senior executive of Eisai met separately with senior executives of BASF, Roche and Rhone-Poulenc and confirmed that it would participate in the vitamin E agreement. Eisai representatives subsequently met bilaterally on a continuing basis, with Roche representatives to exchange information prior to or following the trilateral meetings of the European producers and to confirm its continuing agreement." [Emphasis added] 90 HLR Europe agreed that analogous arrangements were made in respect of other vitamins, although the dates and details differ for each group of vitamins. 91 The guilty plea was as follows: "27. Roche acknowledges that with respect to the agreements alleged in each count of the Indictment, all the constituent elements of an indictable offence under subsection 45(1)(c) of the Competition Act have been established." 92 Section 45(1)(c) of the Competition Act RSC 1985 c C-34 makes unlawful arrangements made in order to, inter alia, prevent or lessen, unduly, competition in the manufacture, purchase, sale or supply of a product. The Canadian plea agreements specifically state that the "accused" were engaged in the sale of the relevant products "in Canada and elsewhere". Consequently, the issue of the extra-territorial operation of s 45(1)(c) did not appear to arise as an issue. 93 The HLR Europe and the BASF Europe Canadian plea agreements stated that the parties to the agreements were HLR Europe, BASF Europe and A Europe. The A Europe Canadian plea agreement contained substantially the same admission, save that it defined A Europe as A Europe and its "affiliates which manufacture and supply, for the purpose of animal feed, vitamins A and E around the world". 94 The Australian plea agreement of Roche Vitamins Australia Pty Ltd summarised the contravening conduct as follows: "1. The anti-competitive conduct the subject of this proceeding affected the supply in Australia of vitamins A and E (and pre-mix containing such vitamins) for animal nutrition and health ('ANH') purposes by the Respondent, Roche Vitamins Australia Pty Limited ('RVA'), and two other Australian companies, BASF Australia Ltd. ('BASF Australia') and Aventis Animal Nutrition Pty. Ltd. (formerly known as Rhone-Poulenc Animal Nutrition Pty. Ltd. ('Aventis Australia'). This conduct derived from arrangements entered into prior to 1994 by F. Hoffmann-La Roche Limited ('FHLR'), a related corporation of the Respondent, BASF Aktiengesellschaft ('BASF AG'), a related corporation of BASF Australia and Aventis Animal Nutrition SA (then called Rhone-Poulenc Animal Nutrition SA) ('Aventis'), a related corporation of Aventis Australia, to share markets and fix prices for the supply of a range of vitamins including ANH vitamins A and E in various parts of the world. The arrangements entered into between FHLR, BASF AG and Aventis continued, in part, in places outside Australia, until early 1999. In accordance with these arrangements, ANH vitamins A and E and pre-mix containing those vitamins were supplied in Australia by RVA, BASF Australia and Aventis Australia from prior to 1994 until late 1996 and thereafter by RVA and BASF Australia until mid-1998 when the conduct ceased in Australia. 2. The relevant periods of contravening conduct for each of RVA, BASF Australia and Aventis Australia for the purposes of section 76 of the Trade Practices Act 1974 ('the Act') were as follows: RVA August 1994 - mid 1998 inclusive BASF Australia August 1994 - mid 1998 inclusive Aventis Australia August 1994 - 1996 inclusive"