Cadbury Schweppes Pty Ltd v Amcor Limited
[2009] FCA 442
At a glance
Source factsCourt
Federal Court of Australia
Decision date
2009-05-05
Before
Gordon J
Source
Original judgment source is linked above.
Judgment (13 paragraphs)
INTRODUCTION 1 The Applicant ("Cadbury") seeks leave to amend its Statement of Claim to file a proposed Amended Statement of Claim in the form of the document served on the Respondents' solicitors on 28 April 2009 ("the PASOC"). That application is opposed. The respondents ("Amcor") and the Cross Respondents ("Visy") submit that I should not grant Cadbury the leave that is sought and that if, contrary to that primary submission, leave is granted, a very considerable adjournment of the trial of the proceedings will be necessary to meet the case as amended. 2 For the reasons that follow, I would grant Cadbury leave to file the PASOC.
CURRENT PLEADINGS 3 Before turning to the proposed amendments, it is necessary to say something about the history of these proceedings and the pleadings. This proceeding was commenced by Cadbury against Amcor on 15 December 2006. It raises serious allegations about the packaging industry from early 2000 and, in particular, Amcor and Visy's involvement in corrugated fibreboard products ("CFP"), aluminium cans ("Cans") and polyethylene teraphthalate ("PET"). 4 In general terms, as Amcor's Statement of Primary Issues in Contention dated 14 May 2008 ("Statement of Issues") explained, Cadbury's case has been and remains that: 1. Amcor and Visy made a "CFP market sharing arrangement" in the period January 2000 to April 2000 (or thereabouts) (para 32 of the Statement of Claim ("SOC")); 2. in the relevant periods, Amcor supplied CFP to Cadbury pursuant to certain agreements (see paras 34, 40, 44 and 65 of the SOC) on certain terms and conditions; 3. Amcor gave effect to the "CFP market sharing arrangement" by its conduct (see paras 45 to 49 and 53ff of the SOC); 4. Visy's offers to supply CFP to Cadbury were at higher or less commercially acceptable prices than the prices being offered by Amcor (see paras 48, 57 and 59 of the SOC); 5. in the absence of the "CFP market sharing arrangement", the average price per tonne of CFP in Australia would have been less and Cadbury has thereby suffered loss and damage (see paras 80 and 82 of the SOC); 6. it can be inferred from, inter alia, the "CFP market sharing arrangement" that Amcor and Visy also made an arrangement or understanding in relation to the provision of Cans and PET (see para 85 of the SOC). 5 Since the case was filed, one of the central paragraphs in Cadbury's claim has been and remains paragraph 32 of the SOC: In the period between January 2000 to April 2000 (or thereabouts) Amcor and Visy made an arrangement and/or arrived at an understanding: (a) that it would be detrimental to the profitability and long term viability of the packaging business conducted by each of Amcor and Visy in Australia if they were to compete freely and vigorously with each other to supply CFP to each of the significant packaging purchasers (defined in paragraph 69 below), including those with which the other had developed a relationship; (b) that it was in the best interests of each of Amcor and Visy to permit each other to continue to maintain approximately the shares of the CFP market (defined in paragraphs 66 and 67 below) which each then held; (c) that each of Amcor and Visy would not pursue contracts to sell CFP to those significant packaging purchasers who had previously purchased CFP from the other; (d) that Amcor, or alternatively Amcor Australia, would not offer to sell CFP to any purchaser or prospective purchaser of CFP at prices below approximately $1250 per tonne; (e) that Visy would not offer to sell CFP to any purchaser or prospective purchaser of CFP at prices below $1150 per tonne; (f) that Amcor and Visy would at all times co-operate with each other to achieve sales to the significant packaging purchasers of CFP on terms which continued the maintenance by each of Amcor and Visy of both the volume of sales which each was then making to the various significant packaging purchasers at prices which achieved approximately the gross margin then being achieved on those sales; ("CFP market sharing arrangement"). Particulars The CFP market sharing arrangement was partly oral, partly written and partly to be implied. A. Insofar as the CFP market sharing arrangement was oral, it was made or arrived at, in, or as a result of, conversations at meetings between Mr Debney and Mr Brown, each of which meetings was held in the period between January and April 2000 at Mr Brown's home at 11 Atkins Avenue, Glen Iris, Melbourne. During one or more of those meetings: (i) Mr Debney said to Mr Brown words to the effect that: (a) he believed it was not in Visy's interests to continue the price war with Amcor in respect of CFP; (b) Visy wanted to increase its CFP prices to more realistic levels; and (c) Debney wanted to forge a peace deal between Visy and Amcor whereby the intense competition between the companies ceased and each company could then sell CFP at sustainable price levels. B. At one meeting Mr Debney gave to Mr Brown a handwritten note, which note has since been destroyed (the "Debney note") containing words to the effect that: (a) each of Visy and Amcor would continue to enjoy approximately the current share they each had of the CFP market; (b) neither Visy nor Amcor would poach each other's CFP customers; (c) the underlying CFP minimum floor price for Amcor would be $1250 per tonne; and (d) CFP prices would be increased from their current unsustainable levels. C. At a meeting or meetings subsequent to the meeting at which the Debney note was discussed, Mr Debney said to Mr Brown words to the effect that: (a) the Debney note set out the basic principles which Visy and Amcor should agree to and abide by in conducting their respective CFP businesses; (b) Visy and Amcor should comply with the principles and not take any action that would precipitate a return to price war conditions between Visy and Amcor in the market for CFP; (c) Mr Debney intended to ensure that Visy abided by the principles set out in the Debney note; (d) the amount of $1250 per tonne was the indicative price for Amcor below which Amcor should not quote for CFP business; (e) the corresponding indicative price for Visy was $1150 per tonne having regard to Visy's different cost structure and different product mix; and (f) Visy would not quote for CFP business below $1150 per tonne. D. At a meeting or meetings subsequent to the meeting at which the Debney note was discussed: (a) Mr Brown said to Mr Debney words to the effect that Amcor would agree to act in accordance with the principles proposed by Mr Debney subject to Visy also agreeing to act in accordance with those principles; (b) Mr Debney said to Mr Brown words to the effect that Visy would act in accordance with the principles Mr Debney had agreed with Mr Brown; (c) Mr Debney said to Mr Brown words to the effect that he would appoint Mr Rod Carroll ("Mr Carroll") to be the Visy nominated contact person between Visy and Amcor on issues and matters arising from the implementation of the CFP market sharing arrangement; and (d) Mr Brown said to Mr Debney words to the effect that he would appoint Mr Laidlaw to be the Amcor nominated person between Visy and Amcor on issues and matters arising from the implementation of the Amcor/Visy market sharing arrangement. E. Insofar as the CFP market sharing arrangement was written, it was recorded in or evidenced by the Debney note. F. Insofar as the CFP market sharing arrangement was to be implied, it was implied from both matters set out in these particulars and the material facts pleaded in paragraphs 4, 5, 7, 12, 13, 18 to 22, 24 to 32, 35 to 37, 45 to 61, and 66 to 69. 6 The First Amcor Respondent denied paragraph 32. The Second Amcor Respondent did not admit paragraph 32. Amcor's Statement of Issues states that "Amcor does not admit that an arrangement or understanding of the type alleged was made". 7 From the outset, Cadbury sought to establish the alleged "CFP market sharing arrangement" pleaded in paragraph 32 by reference to oral conversations (see A-D of the particulars), by reference to a note described as the "Debney Note" which has allegedly been destroyed (see paras B and E of the particulars) and by implication. Insofar as the CFP market sharing arrangement was to be implied, the particulars referred to "the matters set out in … the material facts pleaded in paragraphs 4, 5, 7, 12, 13, 18 to 22, 24 to 32, 35 to 37, 45 to 61 and 66 to 69" of the SOC. Those paragraphs of the SOC could be divided into five groups (1) those that dealt with conduct of Amcor (paras 4, 5, 7, 12, 13, 18 to 22, 24 to 27); (2) those that dealt with conduct of Visy (paras 28 to 31); (3) those that involved both Amcor and Visy (para 32); (4) those involving Cadbury and Amcor or Cadbury and Visy (paras 35 to 37, 45 to 61) and (5) the market for CFP in Australia (paras 66 to 69). 8 In relation to the last category, the Amcor Respondents admitted that there was a market in Australia for CFP as pleaded in paragraph 66, admitted that there are a number of manufacturing companies which seek to purchase and have at all material times purchased in Australia significant quantities of CFP (defined as the "significant CFP purchasers") but denied that there was or is a market in Australia, within the meaning of s 4E of the Trade Practices Act 1974 (Cth), for the supply and purchase of CFP (defined as the "CFP Market" in para 67). 9 The only paragraphs of the SOC that pleaded facts, matters or conduct which involved both Amcor and Visy were 32 (as set out above) and paragraph 68 which provided: In the period January 2000 to date Amcor competed with Visy, or but for the CFP market sharing arrangement would at all relevant times have competed with Visy, to sell CFP in Australia. Particulars (i) Cadbury refers to and relies upon the matters set out in paragraphs 45 to 61 above. (ii) The respective shares of the total CFP market held by each of Visy and Amcor has been estimated by Industry Edge Pty Ltd (in the publication "The Pulp & Paper Edge Strategic Review") in the years 2004 to 2005 and by URS Forestry/Ausnewz Intelligence Service (in the publication "URS Forestry/Ausnewz Pulp & Paper Yearbook") in the years 1999 to 2003 to be: Year Visy market share Amcor market share 1999/2000 46.9% 50.3% 2000/2001 52% 46% 2002 47.2% 49.9% 2003 51% 46.5% 2004 52% 46% 2005 54% 43%