Case: Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9 ; (1982) 57 FLR 368
Outcome: followed
is also now an extensive body of judicial consideration on the scope and requirements of s 155 notices, but it is convenient to refer to the decision of the Full Federal Court in Seven Network Ltd v Australian Competition and Consumer Commission [2004] FCAFC 267 ; (2004) 140 FCR 170. In that case Sackville and Emmett JJ set out the process for construing notices against the s 155 requirements, and stated (at 182-83): The authorities have established a number of propositions concerning the interpretation of s 155(1) of the TP Act. They include the following: (i) In a context where refusal or failure to comply with a s 155 notice is punishable by imprisonment or fine, the notice must: (a) convey with reasonable clarity to the recipient the information that must be furnished; and (b) disclose that the ACCC is entitled to require the recipient to furnish the specified information: Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9 ; (1982) 57 FLR 368 at 374, per curiam. (ii) The second of these requirements will not be satisfied unless it appears from the notice that the information sought is information "relating" to one or more "matters" of a kind described in s 155(1): Pyneboard v TPC at 375 ; SA Brewing v Baxt at 369-70 ; Bannerman v Mildura Fruit Juices Pty Ltd [1984] FCA 156 ; (1984) 2 FCR 581 at 584, per Bowen CJ and Neaves J. However, the question whether a notice discloses the necessary "relatedness" is not to be approached in an "over-technical or hypercritical way": Pyneboard v TPC at 376. Moreover, the "relatedness" is to a proper inquiry into the suspected offences: Panelboard Pty Ltd v Trade Practices Commission [1981] FCA 98 ; (1981) 59 FLR 395 at 407, per Fox J. (iii) Section 155(1) does not require the Chairperson of the ACCC to have "reason to believe" that a specified matter constitutes or may constitute a contravention of the TP Act. The Chairperson must, however, have reason to believe that the relevant person is capable of furnishing information relating to the matter specified in the notice: WA Pines v Bannerman at 179, per Brennan J (with whom Bowen CJ agreed); TNT Australia Pty Ltd v Fels [1992] HCA 55 ; [1992] ATPR 40 ,595 (41-190) at 40,598-40,599, per Gummow J. It follows that the Chairperson or other officer must believe that the person to whom the notice is directed is capable of furnishing information relating to the facts known or suspected: WA Pines v Bannerman at 180. In addition, there must be facts in existence which are sufficient to induce that belief in a reasonable person: George v Rockett at 112. (iv) The word "matter" in s 155(1) is to be construed in its ordinary sense of an affair or thing: Melbourne Home of Ford Pty Ltd v Trade Practices Commission [1979] FCA 15 ; (1979) 36 FLR 450 at 474, per Franki and Northrop JJ; SA Brewing v Baxt at 369. It refers to a body of facts which constitutes or may constitute a contravention of the TP Act. Whether or not the relevant body of facts constitutes a contravention is a matter of law and does not turn on the perception or knowledge of the ACCC or its officers: WA Pines v Bannerman at 179. (v) When s 155(1) speaks of a matter which may constitute a contravention, it refers to a body of facts not fully known and which may, when fully known, reveal themselves as constituting a contravention: WA Pines v Bannerman at 179. The words "may constitute" enable a court to judge from the material in the notice whether, if other facts which may or may not have occurred come to light, the whole body of facts would constitute a contravention: SA Brewing v Baxt at 370. It is not necessary for the Court to determine whether a contravention has occurred; but equally it will not "idly speculate" or "draw on improbable circumstances" to uphold a notice: SA Brewing v Baxt at 370. An alternative formulation is that the Court can take account of facts which may "reasonably be suspected" to have occurred: WA Pines v Bannerman at 179. (vi) Where the matter referred to in the notice, after allowing for undiscovered facts, is incapable of amounting to a contravention, the issue of the notice is not a valid exercise of the power conferred by s 155(1): SA Brewing v Baxt at 371-72. (vii) In view of the principle that a court should not adopt an "over-technical or hypercritical approach" to the construction of a notice, there is no requirement that the notice "plead" all the facts necessary to constitute a contravention or possible contravention of the TP Act: SA Brewing v Baxt at 370. (viii) Information which tends to negative a suspected contravention or liability to conviction or which tends to exculpate a person suspected to be a party to a contravention, is within the ambit of s 155(1). It follows that an inquiry under s 155 may relate to a defence or possible defence available to the suspected person: WA Pines v Bannerman at 180. This conclusion derives from the principles referred to in Seven Network [2004] FCAFC 267 ; 140 FCR 170 , and accords with the reasoning of Bowen CJ and Neaves J (at 586-87) and Davies J (at 590-91) in Bannerman v Mildura Fruit Juices Pty Ltd [1984] FCA 156 ; (1984) 2 FCR 581 , the views expressed by the Full Court (Northrop, Deane and Fisher JJ) in Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9 ; (1982) 57 FLR 368 at 373-74 If the Notices were properly framed and only referred to services in relation to outbound routes, then on the applicants' case, the fact that there may be acquirers of those services outside Australia would not affect the validity of the Notices on this primary ground of attack. It would be accepted there is a market in Australia. No suggestion would be made that the Notices are enquiring into a matter not the subject of the Notice in reliance of the principles outlined in Bannerman [1984] FCA 156 ; 2 FCR 581 , Pyneboard [1983] HCA 9 ; 57 FLR 368 and Melbourne Steamship Co Ltd [1912] HCA 69 ; 15 CLR 333. It then remains to address the application of the principles enunciated in Pyneboard [1983] HCA 9 ; 57 FLR 368 . Northrop, Deane and Fisher JJ there observed (at 377-8): There remains to be considered the availability to the appellants of the grounds upon which they object to a particular requirement to produce documents, namely, that it is harsh, oppressive and unreasonable. 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) ; Riley McKay Pty Ltd v Bannerman ). Nor will objective harshness, unreasonableness or oppressiveness of a requirement in such a notice constitute an independent ground of 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 harshness, oppressiveness or unreasonableness will result in invalidity. (Emphasis added, citations omitted.) I have already concluded that Mr Samuel had regard to the burden imposed on the applicants. It now remains to consider the question of good faith, and a possible separate issue of unreasonableness. To a certain extent, the issues of failing to take into account the burden, good faith and unreasonableness overlap. Obviously, a requirement may be harsh, unreasonable and oppressive, and still not result in invalidity. As observed by Gibbs CJ in Pioneer Concrete (Vic) Pty Ltd v Trade Practices Commission [1982] HCA 65 ; (1982) 152 CLR 460 , '[t]he power [under s 155] is a drastic power and is capable of abuse and must be exercised with care' (at 468). The time for compliance has statutory significance. The recipient is obliged to furnish the information sought within the time specified in the notice, and must produce the documents sought in accordance with the notice: subs 155(1). It is an offence to fail to comply: subs 155(5) and (6A). These are matters that needed to be considered by Mr Samuel, as they undoubtedly were, as part of the statutory context of issuing the Notices and as part of the consequences of non-compliance. Once one reaches the conclusion that the decision to issue the Notices was exercised with care, took into account the relevant considerations, and was not to be impugned on the basis of the principles in Pyneboard [1983] HCA 9 ; 57 FLR 368 , then the reference to the statutory significance of compliance takes the argument no further. I now turn to the separate ground relied upon of unreasonableness. It may be that the concept of unreasonableness is caught within the principles of Pyneboard [1983] HCA 9 ; 57 FLR 368. Nevertheless, I do not consider that approaching the matter on the basis of unreasonableness, even if a separate ground to consider apart from the approach taken in Pyneboard , further advances the arguments of the applicants in support of their applications.