Pyneboard Pty Ltd & Ors v Trade Practices Commission & Anor [1982] FCA 18

Federal Court of Australia|1982-07-01|Before: Fox J, Fisher JJ

THAT there be substituted for the order of Fox J.

(i) Declaration that requirement 10(b) in Schedule I of the notice dated 21st August 1978 to Burnie Timber Pty. Ltd. over the hana

Order that, subject to (i) supra, the application be dismissed;

nine-tenths of the respondents' costs of the appeal.

If, on examination, of the terms of the notices, it does not appear that the information or documents sought by a particular requirement are information or documents relating to one or other of the above "matters", the requirement will, at least to the extent to which it would require the furnishing of such information or the production of such documents, be beyond the power conferred by s.155(1) of the Act. In this regard however, it should be stressed that the question whether a notice discloses the necessary relatedness between documents or information sought and the identified "matters" is, like the question whether the terms of the notice are sufficiently clear, not to be approached in an over-technical or hypercritical way. As was pointed out in

Melbourne Home of Ford Pty. Limited v. Trade Practices

Commission (No. 3) (supra, at pp.529-530), the power conferred by s.155(1) is an investigative power which authorises questions both wide in scope and unspecific in subject matter. The fact that the recipient of the notice is or will, in the event, be unable to supply relevant information or disclose relevant documents will not, in itself, preclude the validity of a requirement in a s.155 notice. The relevant question is whether the information or documents sought are capable, in a broad investigative context, of being properly regarded as related to any one of

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As has been mentioned, the suggested grounds of invalidity advanced by the appellants, in their attack on certain of the requirements which the notices contain, are uncertainty or ambiguity and the absence of the necessary element of relatedness between the information or documents sought and the "matters" that constitute, or may constitute, contraventions of the Act. It can be seen, from what has been said above, that we agree with the appellants that lack of clarity in the terms of a particular requirement or the absence of the requisite relatedness between the identified "matters" and the information or documents sought can result in the particular requirement being, at least to the extent

We turn to consider the related principle for which the appellants contend, namely, that if a requirement to furnish information or to produce documents is partly invalid by reason of uncertainty of the requirement or lack of relatedness of the information or documents, the recipient of a notice cannot properly be expected to reconstruct the requirement by severing what is valid from what is invalid. In this regard, it is relevant to note that the appellants did not contend that the invalidity, in whole or in part, of one question or requirement to produce documents in a notice

would lead to invalidity of other independent questions.

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-15- In Melbourne Steamship Co v. Moorehead ((1912) 15 C.L.R. 333 at p. 344), Griffiths C.J., when referring to a

notice under s.lL5B of the Australian Industries Preservation

",..-I am disposed to think that when a question demanding a categorical answer is put under sec.15B, being so framed as to include matters concerning which the questioner is not entitled, as well as matters concerning which he is entitled, to ask, the person to whom the question is put may refuse to answer it in that form, and

it within permitted limits". Subject to one possible qualification, we consider the tentative views expressed by Griffiths C.J. in the above passage to be correct and to be applicable to a question asked or a requirement to produce documents contained in a notice given pursuant to s.155(1) of the Act. The possible qualification is that we consider that the principle for which the appellants contend and which finds support in the comments of Griffiths C.J. should be confined to a case where a blue pencil deletion of what is invalid is not practicable

or where, if such deletion be practicable, it would result in

There remains to be considered the availability to the appellants of the srounds upon which they object to a particular requirement to produce documents, namely, that it

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The mere fact that compliance with a requirement to furnish information or to produce documents would be burdensome will not invalidate that requirement in a s.155 notice (see, Melbourne Home of Ford v. Trade Practices

Commission (No. 3) supra, Riley McKay Pty. Limited v.

Bannerman (1977) 31 F.L.R. 129 at p. 136). Nor will objective harshness, unreasonableness or oppressiveness of a requirement in such a notice constitute an independent ground ef invalidity. If invalidity by reference to these qualities is to be established, it must be by reference to the implied general limitation upon the power conferred by s.155(1) of the Act to which reference has already been made, namely, that it is a condition of a valid exercise of the power that it be used in good faith for the purpose for which it was conferred and with regard to the effect that the exercise of the power will have upon those affected thereby. It is only if the harshness, oppressiveness or unreasonableness of a requirement in a s.155 notice is, in all the circumstances, such as to warrant the conclusion that the requirement could not have been imposed in good faith or could only have been imposed to achieve a collateral purpose or without regard to the burden which it would impose upon the recipient, that

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In the light of what has been written above, we turn to a consideration of the particular requirements to furnish information and to produce documents whose validity has been attacked on the hearing of the appeals. The challenged requirements to furnish information and all but one of the challenged requirements to produce documents are those referred to in sub-paragraphs (a), (b), (c), (g), (¢h), (i), (3) and (k) of paragraph 6 of the notice of appeal filed on behalf of the appellant Panelboard Pty. Limited. The other challenged requirement to produce documents is that referred to in sub-paragraph (b) of paragraph 7 of that notice of appeal. We shall consider the appellants' objections to them by reference to those sub-paragraphs. At first instance, Fox J. held that all those reguirements - and

certain other requirements whose validity is no longer

The appellants submit that requirements 2(c) and (ad) in Schedule I and requirement 5(b) in Schedule II are invalid "because they may or do extend to rebates and credits and non-wholesale discounts and allowances". The suggested ground of invalidity is lack of the requisite "relatedness"

Requirement 2(c) and (d) in Schedule I require the recipient of the relevant notice to state whether any

representative of it has, since 1 December, 1977, attended

any meeting with any representative of any other manufacturer

in Australia of particleboard at which there were discussed:

"the discounts, allowances, rebates or credits" given or

allowed by the recipient or any other manufacturer in

relation to the supply of particleboard (requirement 2(c))

and any changes or proposed changes in such "discounts,

allowances, rebates or credits" (requirement 2(d)).

Requirement 5(b) in Schedule II requires the production of a

specimen of each price list or other document issued or used

by the recipient since 1 January, 1976, showing "discounts,

allowances, rebates or credits given or allowed in relation

necessary relatedness between the information and documents

sought and the matters specified in the s.155 notices is

founded, in part, on the fact that the agreements or

undertakings referred to in the various notices relate to

prices, discounts or allowances whereas the information and

documents sought extend, in addition, to "rebates or credits"

and, in part, on the fact that the specified agreements or

undertakings relate to "wholesale" prices, discounts or

allowances whereas the information and documents sought

extend to discounts, allowances, rebates or credits

generally. In our view, there is no substance in either limb

Information or documents concerning the fixing, controlling or maintenance of rebates or cre@its are plainly capable of being properly regarded as being related, in an investigative context, to a suggested arrangement or understanding concerning the fixing, controlling or maintenance of prices, discounts or allowances. Information or documents as to the fixing, controlling or maintenance of discounts, allowances, rebates or credits generally or of non-wholesale discounts, allowances, rebates or credits are, in an investigative context, plainly capable of being properly regarded as being related to an arrangement or understanding concerning the fixing, controlling or Maintenance of wholesale prices, discounts or allowances. In our view, the necessary element of relatedness exists between the matters specified in the notices and the information and documents sought in requirements 2(c) and (d) in Schedule I

Objection is taken to requirements (2), (8), (9) and (10)(d) in Schedule I and requirements (5) and (7) in Schedule II of the notices. The basis of the objection is that the information or documents sought in these requirements "may not be or are not restricted to prices for,

and discounts, allowances, rebates and credits in relation

to, particleboard supplied or to be supplied" by the recipient of the notice or other manufacturers of particleboard "in competition with each other within the meaning of s.45A of the Act". Again, the ground of attack

relied upon is an alleged lack of the necessary element of

Fox Jd., at first instance, dealt with the argument presently under consideration in the following passage of his

that, while it is most unlikely that there were meetings, such as those pointed to in question 2 of Schedule I, which were not between manufacturers actually or potentially in competition, and while his concern is with manufacturers who were, he is entitled to investigate for himself what the position was. For that reason he intended to ask questions and require production of documents by reference to manufacturers (as defined) whether or not, in the view of the recipient of the notice, they were in competition. This attitude is an understandable and, I believe, a permissible one. I am of the view that where "manufacturer" is used, without expressing a qualification about being "in competition" no such qualification should be implied. As I have indicated, the Commission, and Chairman, can validly ask the wider question".

We agree with the above comments of Fox J and with his Honour's conclusion that the appellants' attack on these

Requirement 3{d) in Schedule I of each notice requires the recipient to state in respect of any meeting of a particular nature between any representative of the recipient and any representative of any other manufacturer in Australia of particleboard what "the purpose of the meeting" was. Requirements 5(£)(i)(A) and 5(£)(ii)({A) require the recipient of the notice to state, in respect of any invitation received by a representative of it to a meeting of that nature, whether any communication passed between a representative of the recipient and a representative of any other manufacturer or the Australia Particleboard Manufacturers' Association relating to "the purpose of the meeting". It is submitted, on behalf of the appellants, that these requirements are invalid by reason of uncertainty. The cause of the suggested uncertainty is, in each case, said to

be the use of the words "the purpose of the meeting".

There is force in the argument that a reference to "the purpose" of a meeting is susceptible of ambiguity. As was pointed out on behalf of the appellants, the words "the purpose" can, depending upon context, denote a sole purpose, a dominant purpose, a substantial purpose, a significant purpose or any purpose whether significant or operative or

not. With due respect to those who might see the matter

~22- differently however, we are unpersuaded that, as a matter of ordinary language in the particular context of requirements 3

and 5 in Schedule I, the references to "the purpose of the

unnecessarily, provide that the singular includes the plural. The words "the purpose of the meeting" should not be construed as limited to a sole purpose. They should, in our view, be construed as referring to any purpose which was a significant or operative factor in the calling or occurrence of the meeting. In this regard, we agree with the conclusion of Fox J., at first instance, that the response to the requirements under consideration "should deal with all substantial or significant purposes, - so far as the company is capable of doing so. Reasonably immediate rather than remote purposes are what is in contemplation". In so far as compliance with requirement 3(d) will involve the expression of an opinion as to what the purpose or purposes of a meeting were, the relevant opinion will be the opinion of the officer

or officers of the recipient company who were involved in, or

concerned with, the meeting on the company's behalf.

Some of the requirements to furnish information and to produce documents (reguirements 3(h)(ii) and 7(£)(ii) in Schedule I and 1{b) and 3(b) in Schedule II) are said to be ebjectionably ambiguous by reason of the use of the words "directly or indirectly". The words are used in the relevant requirements as part of the descriptive designation of documents: documents which refer, directly or indirectly, to

In the course of argument on behalf of the appellants, three different illustrations were given of types of situations in which it might be said that a document indirectly referred to what was said or done or proposed to be said or done at a particular meeting. These three illustrations were then said to indicate alternative meanings of the word "indirectly". The result was said to be hopeless ambiguity. Without being unappreciative of the ingenuity of the argument, we find it quite unconvincing. The postulated situations appear to us to be illustrative of the possible scope of the words used rather than illustrative of

alternative meanings from which a single choice of meaning

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The use of the words "directly or indirectly" in the context of the relevant requirements may well result ina higher burden being cast upon the recipient of the notice since the words preclude a possible argument that regard need only be paid to documents containing a direct or express reference to the specified matter or matters. The wor@s do

not however, in our view, have the result that any of the

relevant reguirements fails to convey, with reasonable

clarity, to the recipient of the notice the information it is

required to furnish or the documents it is required to

It should be mentioned that it was also submitted that, if a wider meaning were given to the words "directly or indirectly", the relevant requirements would be invalid by reason of lack of the necessary element of relatedness. This submission was not developed in argument and it suffices to

say that we are not persuaded that any of the requirements in

Requirement 4 in the First Schedule requires the recipient of the notice to state "whether, since 1 December, 1977, any officer, employee or other representative of the

company has received any invitation to a meeting of the

"l25- nature referred to in (2) above". Requirement (2) (above) requires the recipient of the notice to state whether, since 1 December, 1977, any representative of it has attended any meeting as any representative of any other manufacturer of

particleboard in Australia at which any of a number of

It is argued on behalf of the appellants that requirement 4 is objectionably ambiguous by reason of the reference to "any invitation to a meeting of the nature referred to in (2) above". We are unpersuaded that any real ambiguity exists. Requirement 4, in our view, refers to a meeting between the persons indicated at which any of the

matters specified in requirement (2) was discussed.

Objection is taken to requirement 7(e) in Schedule I. That requirement requires the recipient of the notice to state, in respect of certain persons who took part in or were parties to a communication relating to particular matters, "the substance of what was written or said by that person". The effect of the requirement is, so it was argued, to require details to be given of everything that may have been said in a lengthy conversation regardless of whether the particular comments related to any of those matters. We do not accept this argument for the reason that we consider

that, in context, requirement 7{e) should be read as being

restricted to what was said or written by the person in

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Requirement l10(a) in Schedule I requires the recipient of the notice to state, in respect of certain increases in price, "the reason for the increase". It was argued that this requirement was invalid on the ground that it was objectionably ambiguous. The basis of the argument was the use of the word "reason" which, it was said, could have a variety of meanings. The objection was stated to be similar to the objection to the use of the word "purpose" to

In our view, the word "reason" in requirement 10(a) refers to any reason which was a significant and operative factor in the corporate decision to make the relevant increase in prices. It is true that the identification of significant and operative reasons may be difficult. It may well be that the recipient of the notice is unable to identify what those reasons were: if that be the case, it will not be capable of providing the information sought. It does not however seem to us that the use of the word "reason" results in a failure by the requirement to convey to the

recipient of the notice, with reasonable clarity, what

Requirement 10(b) in Schedule I requires the recipient of a notice to state, in respect of each increase since 1 December, 1977, in the wholesale price of particleboard sold by it, "particulars sufficient to identify any document which supports any reason stated in response to (a)", that is to say, what has been identified as the reason or the reasons for the relevant increase. The appellants submit that this requirement is objectionably ambiguous. We

A reading and rereading of requirement 10(b) leaves us quite uncertain as to whether the notice requires identification of any document which "supports" any reason in the sense of tending to establish that the reason was correct or whether what is required is identification of any document which "supports" a reason in the sense of confirming or corroborating its existence. Senior counsel for the Trade Practices Commission and its Chairman initially submitted that the requirement should be interpreted as referring to any document which supported the existence, as distinct from the correctness, of a reason. Subsequently, he abandoned this position and submitted that the requirement referred to any document that went to show that a reason was correct.

Thus, if a reason was that the recipient of the notice had

been trading at a loss, the recipient would, it was conceded, be required to identify not only any profit and loss account and balance sheet which recorded that fact but every primary record in its possession which underlay and supported the position shown by those secondary records.

The conclusion which we have reached is that reguirement 10(b) does fail to convey to the recipient of the notice, with reasonable clarity, what documents it is required by the notice to identify. It follows that, in our view, the imposition of requirement 10(b) was ultra vires and

It is submitted on behalf of the appellants that requirement 7 in Schedule II is invalid, in part, on the grounds that it is harsh, oppressive and unreasonable. As has been said, the objection to a requirement on those grounds will only be sustained if it appears that the requirement is so harsh, oppressive or unreasonable as to lead to the conclusion that the requirement could not have been imposed in good faith or could only have been imposed to achieve a collateral purpose or without regard to the burden

which it would impose upon the recipient of the notice.

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Requirement 7 in Schedule II requires the recipient of the notice to produce "copies of all invoices, statements and delivery dockets issued by or on behalf of the company in the period lst December, 1977 to 30th March, 1978 in connection with the supply of particleboard". The objection to the requirement was expressly confined, in so far as this Court is concerned, to so much of it as requires the production of delivery dockets. There is no evidence before the Court as to the extent of the burden upon any of the appellants which compliance with the requirement as to production of delivery dockets would involve or which would warrant the conclusion that the burden imposed upon any of the appellants by the requirement is such as to warrant the conclusion that the requirement as to production of delivery dockets either had not been imposed in good faith or had been

imposed for a collateral purpose or without regard to

relevant considerations. The challenge to the validity of

In the result, the appellants' attack on the s.155 notices fails except as regards the validity of requirement

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At first instance, Fox J. made an order dismissing each application. We would, in each case, modify that order by declaring that requirement 10(b) in Schedule I was ultra vires and invalid and ordering that, subject to that declaration, the application be dismissed. As regards costs, we consider that the appropriate course, in each case, is to order that the appellant pays nine-tenths of the respondents'

T ccrufy that this and the twenty-nine 0s) ploceding pages are a true copy of ine "ezsons for Judgment kerein of the

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At a glance

Court

Decision date

Before

Source

Judgment (113 paragraphs)

Cited By (3)