Case: Seven Network Ltd v Australian Competition and Consumer Commission [2004] FCAFC 267 ; (2004) 140 FCR 170
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 The correct starting point is to determine whether the matters identified in the Notices are incapable, after allowing for undiscovered facts, of constituting a contravention of s 45 of the Act by reference to the deeming provision of s 45A. As noted by Sackville and Emmett JJ in Seven Network [2004] FCAFC 267 ; 140 FCR 170 '[u]ltimately, the question is whether the matter identified in the Notices "may constitute" a contravention of the [Act]' (at 184). The substantial challenge to the decision to issue the Notices, and to the Notices themselves, seized upon this concept of 'matter'; specifically, Emirates argued that the Notices should be set aside because they: relate to, and purport to require [the applicants] to furnish information and produce documents relating to, matters that cannot constitute a contravention of s 45(2) of the [Act] . Those matters concern alleged agreements or understandings relating to the supply of air cargo services on routes into Australia and routes between two or more points outside Australia. Such services are not supplied in competition in a market in Australia. By virtue of s 45(3) and 4E of the [Act] , it is only services supplied in competition in a market in Australia that can possibly found a contravention of s 45(2). Singapore Airlines essentially made the same submission. It was accepted by Emirates and Singapore Airlines that the evidence adduced in these proceedings was not intended to, nor would it enable, the Court to conclude whether all international air cargo services are supplied in a single global market or in many different markets and the boundaries of those markets. It was said by Emirates, at least, that: (a) the Notices allege an arrangement containing provisions that fix the price of international air cargo services supplied by the parties throughout the world; (b) regardless of whether a conclusion is ultimately reached that international air cargo services are supplied in a single global market or many different markets, the supply of those services outside Australia to acquirers outside Australia cannot occur in a market in Australia within the meaning of the Act; (c) in so far as the alleged arrangement contained a provision fixing the price of international air cargo services supplied outside Australia to acquirers outside Australia, it does not satisfy the elements of s 45A; and (d) the conclusion in para (c) holds regardless of whether the parties to the arrangement also supply international air cargo services of the same kind in Australia to acquirers in Australia. It is important to recall that the Notices should not be read in an overly-technical way: they are to be 'reasonably, not preciously, construed': see Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3) [1980] FCA 94 ; (1980) 47 FLR 163 at 175-76 (per Brennan, Keely and Fisher JJ), and S A Brewing 23 FCR 357 at 369 (per Fisher and French JJ). In addition, regard may be had to the identity of, and the knowledge available to, the recipient of the notice: see Seven Network [2004] FCAFC 267 ; 140 FCR 170 , 189 at [75] (per Sackville and Emmett JJ). The applicants' evidence does not eliminate (as it must) any reasonable hypothesis which is inconsistent with the contention that the market is wholly outside Australia even if one focuses on the inbound services in isolation: see S A Brewing 23 FCR 357 at 370 and Seven Network [2004] FCAFC 267 ; 140 FCR 170 at [9] and [52]. There are many reasons for this, but I provide a non-exhaustive list: