BROMWICH J:
1 This is an adjudication of a dispute as to an aspect of the evidence that the prosecutor is proposing to continue to lead in relation to one of the proposed parties to the alleged arrangement or understanding as part of the proof of the purpose/effect condition in s 44ZZRD(2) of the Competition and Consumer Act 2010 (Cth) for the purposes of charges 1 to 3 in the indictment. The dispute arises because the prosecutor is no longer proposing to lead evidence in relation to the same proposed party as part of the proof of the competition condition in s 44ZZRD(4). Rather than refer to the purpose/effect condition in this ruling, it is more accurate to refer to the likely effect condition because charges 1 to 3 involve allegations of attempting to induce entry into an arrangement or understanding containing a cartel provision, going only to the question of effect and not purpose. The dispute arises from a late amendment of the notice of the prosecution case which is required to be given in accordance with ss 23CD(1)(a) and 23CE(a) of the Federal Court of Australia Act 1976 (Cth) (Notice), which revealed this change in approach.
2 The relevant requirement for the Notice in s 23CE(a) is to provide "an outline of the prosecution's case that sets out the facts, matters and circumstances on which the prosecution's case is based", if ordered to do so under s 23CD(1)(a), and in accordance with any timetable ordered by the Court. Such orders were made by Wigney J on 19 March 2019. In this case, his Honour also made orders imposing an obligation upon each of the accused to give a notice of their response, and an obligation imposed on the prosecutor to give a response to the responses of the accused. His Honour also ordered that there be ongoing disclosure by the prosecutor and the accused in accordance with ss 23CD(1)(d) and 23CH. However, that obligation is confined to the response to the Notice by each of the accused, and the prosecutor's response to that response.
3 By 28 August 2020, the Notice was in its third amended version (August 2020 Notice), given by the prosecutor in accordance with further orders that I made after becoming the docket judge. At that time the trial was scheduled to commence on 1 March 2021.
4 By an email sent at 5:36 pm on Wednesday, 24 February 2021, the prosecutor provided advice to the accused on three topics in relation to its case. By that time, the start date for the trial had been delayed to commence on 9 March 2021.
5 On 5 March 2021, the start of the trial was further delayed to 15 March 2021. The jury was empanelled that day. The present dispute was argued after the jury left at the end of that first trial day.
6 The first topic in the 24 February 2021 email was that the prosecutor proposed to focus on a list of geographic locations in order to establish the competition condition in s 44ZZRD(4). That was followed by a list of 10 geographic locations. In relation to that topic, the prosecutor indicated certain paragraphs of Schedule 6 of the August 2020 Notice that it either intended not to rely upon at all, or only intended to rely upon in accordance with that geographic list. There is no issue raised in relation to that change per se.
7 The second topic in the 24 February 2021 email, being the topic giving rise to this dispute, was stated in the following terms:
Second, the prosecution proposes not to rely on competition by or with Hospital at Home Moorebank, Mobility 2 You or Omni Healthcare in order to establish the 'competition condition' forming part of the 'circumstance element' of charges 1 to 3 in relation to any of the geographic locations noted above.
8 The third topic in the 24 February 2021 email provided further particulars as to the facts relied on by the prosecutor to establish the allegations regarding the likely effect condition, which again is not part of this dispute per se.
9 As may be seen from the paragraph from the 24 February 2021 email reproduced above, the advice given by the prosecutor was that three entities, Hospital-at-Home Moorebank, Mobility 2 You and Omni Healthcare, were no longer going to be relied upon by the prosecutor in relation to the competition condition. The 24 February 2021 email was brought to my attention in court on 3 March 2021. Concerns were expressed by the accused about the precise content of the changes described, asserting that a new version of Schedule 6 to the August 2020 Notice would be needed for their consideration. I asked the prosecutor to identify the changes that would be brought about to Schedule 6 to the August 2020 Notice by mark-up. This would make clear what the changes were. The prosecutor agreed to do this, but indicated that it would require some work.
10 On 10 March 2021 at 4.35 pm, the prosecutor sent an email, attaching a mark-up of amendments to the August 2020 Notice. That mark-up document was provided to the Court during the course of the legal argument in relation to this dispute. It matters not whether this document is described as a refinement of the August 2020 Notice, as the prosecutor would have it, or an effective fourth amended notice as it is described by the solicitors for the first and second accused in further email exchanges since the 24 February 2021 email.
11 The approach taken by the prosecutor to communicate aspects of the changes to the August 2020 Notice was to create a replica of Schedule 6 as a new Schedule 7. With this approach:
(1) Schedule 6 was then described in its heading as being further particulars relating to the satisfaction of s 44ZZRD(2) and (4) for charges 1, 2 and 3, "other than in relation to the circumstance element" - in effect being directed to proof of the fault element; and
(2) the new Schedule 7 was described in its heading as being further particulars relating to the satisfaction of s 44ZZRD(2) and (4) for charges 1, 2 and 3, "in relation to the circumstance element".
12 Thus Schedule 7 was designed to identify the prosecution case in relation to the likely effect condition in s 44ZZRD(2) and the competition condition in s 44ZZRD(4). The evidence in relation to the likely effect condition is dealt with under a heading referring to the supply of assistive technology products (including tender goods) to the general public. The evidence in relation to the competition condition is dealt with under a heading referring to competition among The Country Care Group Pty Ltd and Country Care Group members, grouped by reference to the geographic locations in which this competition is said to have occurred or been likely to occur.
13 In relation to the competition condition, as foreshadowed in the impugned part of the 24 February 2021 email reproduced above, references to the three entities identified were deleted at [97(b)] for Omni Healthcare and at [102(a)] for both Mobility 2 You and Hospital-at-Home Moorebank. Thus the changes identified in the new Schedule 7 reflected the impugned paragraph of the 24 February 2021 email reproduced above, in that reliance on those three entities in relation to the competition condition was expressly abandoned by deleting reference to them in those paragraphs.
14 In relation to two of those three entities, Omni Healthcare and Mobility 2 You, the changes went further than foreshadowed by the 24 February 2021 email by also deleting references to them in the earlier part of Schedule 7 going to the likely effect condition. These changes were the deletion of the heading and the following paragraphs 27-30 for Omni Healthcare, and deletion of the heading and the following paragraphs 82-85 for Mobility 2 You. That additional step was not taken for Hospital-at-Home Moorebank, with neither the heading nor the following paragraphs 72-75 being deleted in the part of Schedule 7 going to the likely effect condition.
15 The substance of the objection by all three accused is in relation to the retention of [72]-[75] in Schedule 7 in relation to Hospital-at-Home Moorebank as evidence that the prosecution intends to rely upon to prove the likely effect condition. For completeness, the same evidence, identified in parallel in Schedule 6 to the 10 March 2021 iteration of the notice of the prosecution case (and being in the same terms as Schedule 6 to the August 2020 Notice) is, in any event, to be adduced without objection in relation to the fault element.
16 The first accused, The Country Care Group Pty Ltd, objects upon a legal basis as to the permissibility of what is proposed, having regard to the terms of s 44ZZRD(2)(a) and (c) and the terms of s 44ZZRD(4)(a) and (c) relied upon by the prosecutor. The question raised is whether the two or more parties to the alleged arrangement or understanding relied upon for the purposes of proving the competition condition must also be among the parties relied upon for the purposes of proving the likely effect condition. This objection was argued upon the basis of the cross-reference in s 44ZZRD(4)(c) to s 44ZZRD(2)(c), reproduced below, asserting this is necessary to maintain the coherence of the operation of the two provisions.
17 It is not altogether clear whether acceptance of Country Care's argument would result in the prosecutor deciding to also delete [72]-[75] in Schedule 7 in relation to Hospital-at-Home Moorebank (so as to no longer be evidence that the prosecutor intends to rely upon to prove the likely effect condition) or instead would result in the prosecutor deciding to withdraw the deletion of references to Hospital-at-Home Moorebank at [102(a)] in Schedule 7 (so as to reinstate that as part of the evidence to prove the competition condition). The prosecutor seemed to suggest that the latter would be a natural consequence of such an outcome, while the accused made clear that what they sought was the complete removal of Hospital-at-Home from the likely effect section of Schedule 7. This identifies the practical scope of outcomes that might flow from a ruling either way.
18 The second accused, Mr Hogan, joins in Country Care's objection, but made his primary objection the question of fairness to the accused, even assuming such a change is legally permissible, of identifying this change so close to the commencement of the trial, including making clear the precise nature and extent of that change only a matter of days before the trial commenced.
19 The third accused, Mr Harrison, joins in both objections.
20 The resolution of the legal issue raised turns on the language of the particular parts of s 44ZZRD(2) and (4) relied upon by the prosecution, in the context of competition law and concepts more generally. The relevant parts of those provisions are as follows:
(1) s 44ZZRD(2)(a) and (c):
The purpose/effect condition is satisfied if the provision has the purpose, or has or is likely to have the effect, of directly or indirectly:
…
(a) fixing, controlling or maintaining; …
the price for, or a discount, allowance, rebate or credit in relation to:
(c) goods or services supplied, or likely to be supplied, by any or all of the parties to the contract, arrangement or understanding; …
(2) s 44ZZRD(4)(a) and (c):
The competition condition is satisfied if at least 2 of the parties to the contract, arrangement or understanding:
(a) are or are likely to be; …
in competition with each other in relation to:
(c) if paragraph (2)(c) or (3)(b) applies in relation to a supply, or likely supply, of goods or services - the supply of those goods or services; …
21 In this case, the role of s 44ZZRD(2)(a) and (c) is to identify the effect that the provision allegedly sought to be entered into by way of an arrangement or understanding must be shown to have been likely to produce in relation to the price of the relevant goods supplied or likely to be supplied, namely the maintenance of the prices for those goods. Section 44ZZRD(2)(a) and (c) therefore define the restraint characteristics that the alleged provision must be shown to possess. However, that is not enough for the provision to be a cartel provision.
22 The competition condition, which must also be proved, is tied not just to the same goods, but to the supply (or likely supply) of those goods, as made clear from the wording of s 44ZZRD(4)(c). This has the effect of requiring also that the restraint take place in the context of competition, but not necessarily competition as between all parties (or in this case, proposed parties) to the arrangement or understanding. Viewed in the abstract, the language used might be interpreted to suggest that the proof of the likely effect condition and the proof of the competition condition can take place by reference to mutually exclusive parties to the alleged arrangement or understanding. Or it might be interpreted to suggest that there must be complete identity as to the parties relied upon for both. On careful reflection, I am satisfied that neither stance would be correct, when the legislated interaction between the likely effect condition and the competition condition is construed not just by the words deployed, but their enactment in the context of broader competition law concepts, principles and authority.
23 Viewed in that context, and as described by reference to authority discussed below, the restraining effect of the provision identified in s 44ZZRD(2)(a) and (c), in the present case the maintenance of the price of the relevant goods supplied or likely to be supplied, must take place in the context of competition between two or more of the parties to the arrangement or understanding, in accordance with the cross-reference in s 44ZZRD(4)(c) to s 44ZZRD(2)(c). Although the words do not on their own and read literally require that conclusion, in the context of competition law principles discussed below, that interpretation not only denies that proof of the two conditions can be by reference to evidence of likely supplies of the relevant goods that are mutually exclusive as between the two conditions, but also denies that there must be complete identity between evidence relied upon for each condition. Conceptualised as a Venn diagram, two circles representing the body of evidence relied upon for each condition must overlap in relation to the supplies or likely supplies, and therefore suppliers, in question. They cannot be entirely separate circles, but nor are they required to be the same (although they might well be in a given case), because that is going further than the legislation, properly understood, requires. They must at least overlap.
24 As Beach J relevantly pointed out in relation to the operation of s 44ZZRD(4) in Australian Competition and Consumer Commission v Olex Australia Pty Ltd [2017] FCA 222; ATPR 42-540 at [488], what is required is that at least two or more of the parties to an alleged contract, arrangement or understanding, compete to supply the goods the subject of the restraint: citing the Full Court decision News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 at 560 and the decision of Finn J in South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 1541; 177 ALR 611 at [195]-[198]. As Beach J further pointed out in Olex in the immediately following [489]-[490] as applicable to the present context, to be competitors, parties must be rivals or constrain each other in respect of the relevant supply of goods; and it is sufficient that any two of the parties in contemplation are actual or likely competitors.
25 The conclusion I draw from Olex, and from the passages of the authority cited by Beach J, consistently with the above analysis, is that among the two or more suppliers or potential suppliers relied upon by the prosecutor to prove the competition condition, at least one of them must be shown to have been the subject of the restraint relied upon to prove the likely effect condition. Without that overlap, the restraint is not accompanied by the existence of the necessary competition. And without that competition an essential conceptual feature of a cartel is missing. Such a conclusion would simply not make sense.
26 The prosecution case is not that narrowly cast, in that there is a more substantial overlap. Indeed there is apparently a high degree of identity of suppliers and thus relevant supplies, albeit carved up into different geographic regions. However, Hospital-at-Home Moorebank is no longer proposed to be relied upon in proof of that overlap.
27 With the above framework in mind, I turn to the competing arguments.
28 The prosecution argues that there does not have to be an identity between the parties for the purpose of the effect condition in s 44ZZRD(2) and the parties for the purpose of the competition condition in s 44ZZRD(4). If this is a submission that there does not have to be any cross-over or commonality at all between the parties for the proof of each condition, then that cannot be accepted for the reasons outlined above. If, however, as seems more likely, that is only a submission that the parties for each need not be identical, with some degree of difference being permissible provided that there is the necessary overlap, then that can be accepted. What is required is proven competition in relation to at least some of the supplies of the relevant goods (and thus between suppliers) giving rise to proof of the likely effect condition. The restraint must take place in the context of proven competition between at least two of the parties to the proposed arrangement or understanding, including at least one of the parties relied upon to prove the likely effect condition.
29 Contrary to that conclusion, the three accused (via the arguments advanced primarily by Country Care) argue that a split between reliance on a supply, and thus supplier, of relevant goods for the purposes of the likely effect condition in s 44ZZRD(2) and a supply, and thus supplier, for the purpose of the competition condition in s 44ZZRD(4), may not occur in relation to even a single supplier. The complaint is that the prosecution have split this evidentiary purpose only in relation to one entity (that is, one Country Care Group member), being Hospital-at-Home Moorebank. It is argued that this is not permissible because, in effect, there must be a complete identity between the supplies and thus suppliers relied upon for the purposes of the effect condition in s 44ZZRD(2) and relied upon for the purposes of the competition condition in s 44ZZRD(4). Country Care goes so far as to resist the proposition that the supply, and thus suppliers, for the purpose of the competition condition in s 44ZZRD(4) could even be a subset of the supply, and thus suppliers, for the purpose of the likely effect condition in s 44ZZRD(2), contending that there had to be a correlation between the two. In context, this argument suggests that the correlation had to be a complete identity of suppliers of the relevant goods for the two conditions. It is argued that there cannot be a single supply or likely supply, and thus supplier, relied upon for the proof of the competition condition in s 44ZZRD(4) that is not also relied upon for the proof of the likely effect condition in s 44ZZRD(2).
30 This restrictive view of the interaction between operation of ss 44ZZRD(2) and (4) is said to be supported by [46] and [113] of the Full Court's decision in Country Care Group Pty Ltd v Commonwealth Director of Public Prosecutions [2020] FCAFC 30; 275 FCR 342. However, that submission overstates what the Full Court was there considering. At [46], the Full Court was acknowledging the cross-over with s 44ZZRD(2) required by s 44ZZRD(4), but this paragraph does not address the extent of the cross-over required, doubtless because that degree of granular detail was not a live issue on the appeal. Similarly, at [113] the Full Court was emphasising that, in order to satisfy both conditions, the goods alleged to be the subject of competition between the two or more parties must be goods the price of which was likely to have been maintained by the alleged cartel provision, again not addressing the degree of overlap required. Moreover, other paragraphs in the Full Court's reasons cast doubt on the need for absolute identity argued for by the accused. The Full Court repeatedly used words to the effect that proof is required that the provision had the likely effect of maintaining prices of specified goods that were the subject of competition between at least two Country Care Group members who were proposed parties to the relevant arrangement or understanding, or between at least one of those members and Country Care: see, e.g., [63], [67] and [139]-[143] (especially [141]). The need for a nexus is clear enough, but the need for the complete identity contended for by the accused is absent from the Full Court's reasoning.
31 A further reason why the absolute argument by the accused cannot be accepted is that the condition contained in s 44ZZRD(2) may be established by any or all of the parties to the alleged arrangement or understanding. In this context "any" permits it to be a single supplier of relevant goods shown to be subject to the restraint among those who are parties, noting that this is not the present case. By contrast, s 44ZZRD(4) requires two or more parties to the arrangement or understanding being in competition. Of course, if there was only a single supplier relied upon for the purposes of proving the likely effect condition, that single supplier would have to be one of those relied upon also to prove the competition condition in order to give the necessary overlap between the two conditions, and thereby the necessary competition in relation to the restraint; but the other one of two would have to be a different supplier. This makes it difficult to accept there must be an identity, rather than an overlap, between the supplies and thus suppliers relied upon for the purposes of ss 44ZZRD(2) and (4).
32 It follows that I am not satisfied that there is anything legally or conceptually wrong with the prosecutor continuing to rely upon Hospital-at-Home Moorebank as a supplier of the relevant goods in aid of the proof of the likely effect condition, while abandoning reliance upon that party to the proposed arrangement or understanding as part of the proof of the competition condition. In context, this change is a relatively slight one, especially as it was always open for the jury to find the two conditions met by the overlap already identified, falling short of the identity contended as being necessary.
33 In relation to the fairness objection advanced by Mr Hogan and adopted by Mr Harrison, the above analysis demonstrates that the prosecutor's proposed change may properly and fairly be regarded as a narrowing of its case. This could well have arisen during the course of the trial, perhaps as late as during the defence case. It is not a change of the prosecutor's case in an objectionable way to narrow that case and abandon reliance on aspects of the case as originally foreshadowed, even if it may introduce some degree of additional complexity. It is not uncommon for a prosecutor's case to conclude on a narrower basis than it opened by reason of the way in which the evidence unfolded. If the prosecutor's case is weakened in some respect in relation to the evidence that it had proposed to rely upon to prove the competition condition, as could well be exposed in cross-examination or in some other way, then there would be nothing wrong or unfair with the prosecutor relying upon a narrower evidentiary case that remains, provided that does not result in a material and unfair change in the substance of the prosecution case. There can be no material difference between the prosecutor relying on evidence that emerges to be weaker than initially hoped and thereby insufficient for its evidentiary purpose and choosing not to rely on that evidence at all. Given that practical reality, I am unable to discern any unfairness in this abandonment taking place not during or late in the trial, but rather before any evidence has been called.
34 Rather than this late change exposing a weakness in the disclosure regime required by this Court, as provided for by the provisions of the Federal Court of Australia Act identified at the beginning of these reasons, it demonstrates a natural strength. The prosecutor, by being required to identify the facts, matters and circumstances on which the prosecution's case is based has very limited scope to broaden that case, especially close to or during a trial. However, the prosecutor retains the capacity to narrow the prosecution case and has the ready means, through the Notice, to identify with some specificity what evidence is no longer pressed, or relied upon in a particular way.
35 I do not accept that the contested aspect of the change identified by the prosecutor and discussed in these reasons has, by nuance or otherwise, materially increased the complexity of the case to be met by the accused, nor otherwise changed it in any fundamental way. I therefore reject the contention by the accused that the prosecutor must abandon reliance on [72]-[75] of Schedule 7 to the most recent iteration of the notice of its case, so as to abandon reliance on evidence in relation to Hospital-at-Home Moorebank to prove the likely effect condition.
36 For the above reasons, the objection by all three accused to the prosecution continuing to rely upon the evidence described in [72]-[75] of Schedule 7 to the 10 March 2021 iteration of the notice of the prosecution case, as part of the evidence to be adduced in proof of the likely effect condition in s 44ZZRD(2), is rejected.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Ruling of the Honourable Justice Bromwich.