Case: Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2004] FCA 1678 (2004) 141 FCR 183
Outcome: cited
The starting point for determining the meaning of statutory provisions must be those provisions themselves. Previous authorities, in which the courts have pronounced upon the meanings of particular provisions, may be binding, and are often helpful. Sometimes, however, those pronouncements are made in the context of the resolution of particular issues, which may differ from those raised in a current case. As Merkel J recognised in Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2004] FCA 1678 (2004) 141 FCR 183 (' the Ballarat case ') at [57], previous statements of principle can be difficult to apply in a case that raises different issues. As his Honour said, it is necessary to return to the words of the statute. 24 Section 45(2)(a) of the Trade Practices Act uses the terms 'contract', 'arrangement' and 'understanding'. These are plainly intended to represent a spectrum of consensual dealings. The words of the statute themselves so demonstrate. They provide that a corporation is not to 'make' a contract or arrangement, or to 'arrive at' an understanding, if the contract, arrangement or understanding has a specified content. A corporation cannot 'make' a contract or arrangement, or 'arrive at' an understanding, without there being at least one other party to the contract, arrangement or understanding. The other party must also participate in the making, or the arriving at, before there can be a contract, arrangement or understanding. Clearly, it is not possible to 'make' something, or to 'arrive at' something, unless what is made or arrived at exists at the end of the process of making or arriving at. What must exist for s 45(2)(a) to apply is one of the three forms of consensual dealing. 25 The term 'contract' is well understood by lawyers. A contract is the result of the acceptance by one party of an offer made by another, resulting in the minds of the two parties being at one as to the agreement they have made. It must be supported by good consideration, have sufficient certainty of terms that it be possible to determine what has been agreed, and be accompanied by an intention on the part of the parties that a legally binding relationship should be established by it. In ordinary circumstances, the obligations created by a contract are enforceable in a court, but their enforceability is subject to the possibility of defences arising from the nature of the contract itself, or from external circumstances. One defence arising from the nature of the contract itself results from the illegality of its purpose. In using the word 'contract' in s 45(2)(a) of the Trade Practices Act , Parliament must have intended to refer to a consensual dealing having the fundamental characteristics of a contract, but not necessarily being enforceable in a court of law, because s 45(2)(a) would itself give rise to the defence of illegality, and thereby prevent enforcement. Thus, the word 'contract' for the purposes of s 45(2)(a) describes a consensual dealing with a high degree of formality. 61 On 17 December 2004, Merkel J delivered judgment in the Ballarat case , to which I have referred in [23], in a proceeding in which the ACCC alleged the existence of an arrangement or understanding to fix the prices of petrol in the City of Ballarat and its surrounding area. Among those found to be parties to the Ballarat arrangement or understanding was Brumar. Merkel J also found that Brumar had given effect to that arrangement or understanding on some 53 occasions. See the Ballarat case at [382]. On 17 March 2005, his Honour imposed a pecuniary penalty of $4 000 000 on Brumar in respect of those contraventions. See Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254 at [42] . By that date, Brumar was already in liquidation, consequent upon a creditors' meeting on 17 February 2005. Earlier, Brumar had sold its business assets for a sum exceeding $26 000 000. Settlement of the sale occurred on 26 July 2003. After satisfaction of secured and other creditors out of the proceeds of sale, Brumar was left with $994 400. By the time of the liquidation, Brumar was said to have had total assets of $50 000 and creditors totalling $400. After investigation by the liquidator, on 18 May 2005, the liquidator expressed the view that a distribution to creditors of close to 100c in the dollar would be likely, subject to the resolution of a dispute as to whether any debt in respect of the costs awarded against Brumar by Merkel J on 17 March 2005 was provable in the liquidation. The liquidator contended that such a debt could not be proved in the liquidation. For practical purposes, any surplus of assets over liabilities of Brumar would be more than exhausted by the payment of the penalty imposed by Merkel J and the payment of any costs ordered by his Honour. The prospect of the ACCC recovering any pecuniary penalty from Brumar appears to be non-existent. Accordingly, for reasons similar to those I have given with respect to Leahy in [58], I also refused the ACCC's application, pursuant to s 500(2) of the Corporations Act , for leave to proceed against Brumar. 191 Shortly before Easter 2000, a petrol retailer in Ballarat rang a Melbourne radio station and made public the petrol price-fixing practices in Ballarat, which Merkel J subsequently found to have existed in the Ballarat case . The ACCC then announced that it would conduct an investigation into petrol pricing in Ballarat. Leahy was one of the corporations investigated in respect of its activities in Ballarat. Although he was not involved with the setting of prices for the Leahy outlets in Ballarat, Mr Carmichael became aware of a notice to Leahy under s 155 of the Trade Practices Act in relation to its Ballarat activities. He thereby became aware, about the middle of 2000, that the ACCC was using telephone call records to prove its case in Ballarat. 192 The initial announcement of the ACCC investigation in Ballarat made Ian Carmichael and Peter Anderson reluctant to discuss petrol prices on the telephone. They were not sure that the ACCC was not listening to their telephone calls. They began visiting each other's offices and talking in person about price movements. After a time, Mr Carmichael became 'a little bit cocky'. While he was keen on communications other than by telephone, there were occasions when Mr Carmichael would arrange to meet either Graeme Chisholm or Darren Campigli in the car park between Leahy's depot and the Caltex depot, where Mr Chisholm and Mr Campigli worked. 193 Fear of being detected by telephone bugging also led Mr Carmichael to invent a code, by which he hoped to communicate prices and times to those to whom he spoke. He would ring up and announce to the recipient of the call (Peter Anderson, Darren Campigli, Colin Williamson or Phil Carmichael) that an aeroplane of a particular model (eg a 939, representing 93.9c per litre) was due to land at Avalon Airport at a particular time, with a specified number of passengers (which represented the price of liquefied petroleum gas). The first time Mr Carmichael used this device, the recipient of the call did not understand it.