FEDERAL COURT OF AUSTRALIA ACCC v SIP Australia Pty Limited (No 2) [2000] FCA 1487 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v SIP AUSTRALIA PTY LIMITED & ORS (No 2) V 189 of 1999 GOLDBERG J 20 OCTOBER 2000 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 189 of 1999 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: SIP AUSTRALIA PTY LIMITED (ACN 003 458 884) First Respondent FILIPPO IPPASO Second Respondent JOHN EDWIN GATES Third Respondent BAKER BROS (AUST) PTY LTD (ACN 006 977 886) Fourth Respondent ANDREW CLIVE BAKER Fifth Respondent GUY EDWIN BAKER Sixth Respondent JUDGE: GOLDBERG J DATE: 20 OCTOBER 2000 PLACE: MELBOURNE RULING No 2 1 The trial of this proceeding commenced on Monday 16 October 2000. The applicant led its evidence and when it closed its case on 17 October 2000, counsel for the first, second and third respondents ("the respondents") indicated that the respondents wished to make a submission of no case to answer. He submitted that the respondents should not be put to their election as to whether they wished to call evidence before making the submission. 2 Counsel for the respondents submitted in the alternative that I should allow the respondents to make their submission without putting them to any election at this stage and that I should leave the question whether I would rule on the submission without requiring an election to be made until after I had heard the submission. He submitted that on this basis I should not rule on whether I would require the respondents to make an election as a prerequisite to making the submission. Counsel for the applicant submitted that I should put the respondents to their election. 3 I adopted the second course adverted to by Tadgell J in Protean (Holdings) Ltd (Receivers and Managers Appointed) v American Home Assurance Co [1985] VR 187 at 237, namely to allow the submission to be made without putting the respondents to their election at that time but leaving the issue as to whether I should rule on the submission without requiring the respondents to make an election until I had heard the submission and any response of the applicant to it. Accordingly, I heard submissions from the respondents and the applicant on 18 October 2000. 4 As I observed in my ruling on 18 October 2000: [2000] FCA 1476, I was not satisfied at that time that I had such a sufficient understanding as to the manner in which the respondents wished to put their submission of no case to answer that I should rule at that stage whether they should be put to an election. 5 Having heard those submissions I have concluded that I should require the respondents to make an election whether they will call any evidence as a prerequisite to my ruling on the submission that they have no case to answer. 6 As the submission made by the respondents developed it became apparent to me, and I reached the conclusion, that in order to rule on the submission I would be faced with a state of facts which was incomplete. Further, I concluded that I would be required to form a view on a state of facts, some of which invited or required explanation by the respondents in order for me to obtain a full understanding of all the facts. 7 The manner in which the submission of no case to answer developed led me to the conclusion that in order to consider and determine the issues raised in the submission I am required to have reference to the evidence but, not simply to establish an evidentiary hiatus or failure to adduce any evidence as to an essential element in the cause of action: cf Residues Treatment & Trading Co Ltd v Southern Resources Ltd (1989) 52 SASR 54. The submission requires me to draw inferences from the evidence and reach conclusions on the facts. 8 Although it is open to me on a submission of no case to answer to make such findings and draw such inferences as I consider appropriate: Rasomen Pty Ltd v Shell Co of Australia Ltd (1997) 75 FCR 216 at 228, in the circumstances of this case I do not consider it appropriate to make such findings and draw such inferences having regard to the incomplete state of the evidence unless I am satisfied that no further evidence will be called. There are a number of respects in which the nature of the evidence is such that it would be inappropriate for me to rule on the submission of no case to answer without knowing whether, in particular, Mr Ippaso and Mr Gates propose to give evidence. At this stage the submission of no case to answer requires me to reach factual conclusions and draw inferences on matters in respect of which the evidence of Mr Ippaso and Mr Gates is relevant. Some of those matters call for an explanation from Mr Ippaso and Mr Gates which has not yet been given. 9 In the course of the submission of no case to answer counsel for the respondents referred to documents prepared by Mr Ippaso which included references to a meeting and discussions with representatives of ABAC Aria Compressa SpA ("ABAC"). Counsel invited me to draw conclusions from these documents. It was said that reference to the documents was necessary in order to have an understanding of the background against which the agreement dated 24 March 1994 was entered into. 10 The determination of the issues raised on the submission of no case to answer does not depend on the construction of the agreement dated 24 March 1994 alone. It also requires reference to documents prepared by Mr Ippaso and their contents. The drafting of that agreement is such that it is necessary to have regard to the background to it and its surrounding circumstances in order to reach a conclusion on the submission of no case to answer. Particularly is this so with reference to the issue whether the substance of that agreement is that it records a vertical arrangement only between ABAC and the first respondent and Baker Bros (Aust) Pty Ltd ("Baker Bros") or, as well, a horizontal arrangement between the first respondent and Baker Bros . 11 Having regard to the issues in the case I do not consider it appropriate to reach conclusions in relation to the contents of these documents or draw inferences from them, and other evidence led, in the absence of knowing whether evidence will be called by the respondents, in particular from Mr Ippaso and Mr Gates. 12 There is another aspect which may give rise to concern if I were to rule on the submission of no case to answer without hearing evidence from Mr Ippaso and Mr Gates. If I were to reject the submission, having analysed the evidence at this stage and made findings on it, I might be placed in a potential situation of embarrassment if I then had to consider the evidence, supplemented by evidence of Mr Ippaso and Mr Gates. 13 I am supported in the conclusion which I have reached by the observations of Davies J in Trade Practices Commission v George Weston Foods Ltd (No 2) (1980) 43 FLR 55. His Honour said at 58‑59: "Generally, justice is not done by considering the state of the evidence before all the parties have closed their case. It is inconvenient to the judge to form conclusions of fact during the course of the trial; the drawing of inferences from sparse evidence is often a very difficult and fallible method of arriving at the truth of the matter, argument on the submission often delays the hearing and the consideration of the submission and perhaps appeal on the interlocutory order may further delay it. Generally, it is better that a judge should come to his conclusions of fact only at the close of the evidence and for the purpose of giving judgment. In those cases where the discretion not to put a defendant to an election has been exercised, there has generally been a sound reason why justice would best be done by considering the submission and, if allowing it, by bringing the action to a premature end. Such a case may arise where the issue does not depend on the resolution of a subtle state of facts or where the evidence for the plaintiff is so palpably inadequate that it would appear to be an unnecessary waste of time and money to continue the trial. There are other such cases where the discretion should be exercised. I do not wish to circumscribe the discretion. Nevertheless, the discretion should not be so exercised unless justice to the parties would thereby be achieved." 14 I also take into account the fact that a determination of the issues raised by the respondents' submission of no case to answer does not resolve all the issues raised in the proceeding. I refer, for example, to the allegations in par 11A of the amended statement of claim that in or about August 1994 the first respondent attempted to vary the agreement made on or about 24 March 1994; the allegations in par 56 that ABAC induced or attempted to induce Baker Bros to contravene s 48 of the Act; the allegations that the first and second respondents, aided, abetted counselled or procured ABAC to contravene s 48 of the Act. There is also the allegation that between November 1997 and February 1998 the first respondent and Baker Bros attempted to make a contract or arrangement or to arrive at an understanding in contravention of s 45(2)(a)(i) and s 45(2)(a)(ii) of the Act, and that the second and third respondents attempted to induce those contraventions: pars 42‑51. These issues would not be resolved by my determination of the issues raised by the submission of no case to answer. 15 If the submission had been confined to determining a question of law or an interpretation of provisions of the Act where either no reference to the evidence was required or the evidence was undisputed and was not susceptible of further elaboration or where reference to the evidence was only required to demonstrate that there was a gap in the evidence which could not be filled, I would have been disposed to have heard the submission of no case to answer and determined it without requiring the respondents to make an election whether to call evidence. However, that was not the manner in which the submission was developed. 16 I therefore rule that the respondents must make an election whether they wish to call any evidence as a prerequisite to my ruling upon and determining their submission that they have no case to answer consequent upon the closing of the applicant's case. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Ruling herein of the Honourable Justice Goldberg. Associate: Dated: 20 October 2000 Counsel for the Applicant: Mr J W K Burnside QC and Mr T J Ginnane Solicitor for the Applicant: Australian Government Solicitor Counsel for the First, Second & Third Respondents: Mr J R J Lockhart Solicitor for the First, Second & Third Respondents: Blake Dawson Waldron Date of Hearing: 16, 17 and 18 October 2000 Date of Judgment: 20 October 2000