FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Pratt (No 2) [2008] FCA 1833 AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v RICHARD PRATT VID 443 of 2008 RYAN J 2 DECEMBER 2008 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 443 of 2008 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Prosecutor AND: RICHARD PRATT Defendant JUDGE: RYAN J DATE OF ORDER: 2 DECEMBER 2008 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: A. Pursuant to s 189 of the Evidence Act 1995 (Cth) ("the Evidence Act") and O 29 of the Rules of this Court the following questions be decided after a hearing to commence on 8 December 2008 separately from any other question and before any trial in the proceedings herein; (1) Are any and which of the Revised Form of Proposed Order, the Penalty Statement, the relevant paragraphs of the Agreed Statement of Facts and the relevant paragraphs of the Further Amended Defence admissible as evidence in these proceedings pursuant to any of ss 81, 82(b), 87 or 88 of the Evidence Act? (2) If yes to (1), in respect of any of the Revised Form of Proposed Order, the Penalty Statement, the relevant paragraphs of the Agreed Statement of Facts and the relevant paragraphs of the Further Amended Defence (which are hereinafter collectively called "the prima facie admissible documents") are any and which of the prima facie admissible documents inadmissible in these proceedings by reason of; (a) s 85(2) of the Evidence Act; or (b) s 137 of the Evidence Act? (3) If (2) be answered no in respect of any of the prima facie admissible documents; (a) will the Court refuse to admit such document as evidence in these proceedings in the exercise of the discretion conferred by; (i) s 90 of the Evidence Act; (ii) s 135 of the Evidence Act? (b) is such prima facie admissible document by reason of s 138 of the Evidence Act not to be admitted as evidence in these proceedings? B. The costs of both parties of the hearing on 10 November 2008 be reserved. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 443 of 2008 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Prosecutor AND: RICHARD PRATT Defendant JUDGE: RYAN J DATE: 2 DECEMBER 2008 PLACE: MELBOURNE REASONS FOR FORMULATION OF QUESTIONS FOR SEPARATE RESOLUTION PURSUANT TO O 29 1 In reasons for judgment published on 9 September 2008 (ACCC v Pratt [2008] FCA 1373) ("the earlier reasons"), I described the summons issued out of this Court by the prosecutor ("the ACCC") against the defendant ("Pratt") and the particulars appended to the statements of charges set forth in the summons. The present reasons should be read in conjunction with the earlier reasons. 2 On 24 October 2008, I directed that the ACCC and Pratt respectively bring in to Court a statement of the questions or issues which it or he contended should be resolved pursuant to O 29 of the Rules of this Court separately from any other question or issue in the proceedings. On the same day, I also gave directions for the filing and service of written submissions in support of the formulation of the separate questions for which each party contended. There was a degree of unanimity that some questions were suitable for separate resolution although differences emerged as to how those questions should be formulated. It is appropriate, therefore, to identify first those matters in respect of which there was common ground as to the questions to be posed and to formulate those questions to which submissions should be directed at the hearing to commence on 8 December 2008. Questions related to the four documents 3 In a "Prosecution Case Statement" filed on 21 July 2008, the ACCC has indicated that it proposes to rely on, amongst other things, four documents to prove that Pratt, in the course of his examination pursuant to s 155 of the TPA on 26 July 2005 knowingly gave false or misleading evidence as alleged in the four counts reproduced at [1] of the earlier reasons. 4 The four documents (hereafter collectively called "the four documents") were respectively identified as follows in [8] of the Prosecution Case Statement; '(c) admissions made in a document entitled "Revised Form of Proposed Order – Pratt" that was signed on the Defendant's behalf by Mr Kaye, Visy General Counsel, and witnessed by Mr Michael McHugh QC on 6 September 2007; (Brief of Evidence, Tab 8 and Exhibit W);' [I shall refer to this document as "the Revised Form of Proposed Order"] '(d) admissions made in a document entitled "Penalty Statement" that was signed on the Defendant's behalf by Mr Leon Zwier, the solicitor for the Defendant, on 17 September 2007; (Brief of Evidence, Tab 8, Exhibit X)' [I shall refer to this document as "the Penalty Statement"] '(e) admissions made in paragraphs 72, 96 and 375 of the Agreed Statement of Facts between the Applicant and the First to Sixth Respondents that was agreed on 6 October 2007 and filed in Court in Proceeding VID 1650 of 2005 on 16 October 2007, that statement of facts having been signed on the Defendant's behalf by Mr Robert Heathcote, the solicitor for the Defendant; (Brief of Evidence, Tab 8, Exhibit Z and Tab 17).' [I shall refer to this document as "the relevant paragraphs of the Agreed Statement of Facts"]. '(g) admissions made in paragraphs 19 and 23 of the Further Amended Defence of the Fourth Respondent (i.e. the Defendant) in proceeding VID 1650 of 2005 filed in Court on 16 October 2007; (Brief of Evidence, Tab 8, Exhibit BB and Tab 16).' [I shall refer to this document as "relevant paragraphs of the Further Amended Defence"]. 5 The ACCC apparently relies variously on ss 81, 82(b), 87 and 88 of the Evidence Act 1995 (Cth) ("the Evidence Act") as establishing the admissibility in these proceedings of each of the Revised Form of Proposed Order, the Penalty Statement, the relevant paragraphs of the Agreed Statement of Facts and the relevant paragraphs of the Further Amended Defence. Pratt, on the other hand, does not concede that any of the four documents is admissible under any of those provisions and contends, in the alternative, that one or more of the four documents is inadmissible by reason of s 85(2) of the Evidence Act. Sub-sections (1) and (2) of that section provide; '(1) This section applies only in a criminal proceeding and only to evidence of an admission made by a defendant: (a) in the course of official questioning; or (b) as a result of an act of another person who is capable of influencing the decision whether a prosecution of the defendant should be brought or should be continued. (2) Evidence of the admission is not admissible unless the circumstances in which the admission was made were such as to make it unlikely that the truth of the admission was adversely affected.' 6 Pratt also intends to invoke the exercise of the Court's discretion pursuant to s 90 of the Evidence Act to refuse to admit into evidence each of the four documents. That section provides; 'In a criminal proceeding, the court may refuse to admit evidence of an admission, or refuse to admit the evidence to prove a particular fact, if: (a) the evidence is adduced by the prosecution; and (b) having regard to the circumstances in which the admission was made, it would be unfair to a defendant to use the evidence.' 7 As I understand it, Counsel for Pratt intend to point to paragraph 378 of the Agreed Statement of Facts as one of the circumstances demonstrating that the use of the relevant paragraphs of the Agreed Statement of Facts would be unfair to Pratt in the sense contemplated by s 90. Paragraph 378 of the Agreed Statement of Facts recited; 'The first to sixth respondents agree the facts contained herein pursuant to s 191 of the Evidence Act 105 (Cth) for the purposes of this proceeding only. This agreement is not to be taken as an admission to these facts outside that context.' 8 As well, I infer that circumstances attending its bringing into existence will similarly be instanced as demonstrating the requisite unfairness to Pratt of the use of each of the other four documents and, perhaps, also of the relevant paragraphs of the Agreed Statement of Facts. It is also intended on behalf of Pratt to invoke the exercise in his favour of the general discretion conferred by s 135 of the Evidence Act. That section provides; 'The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party; or (b) be misleading or confusing; or (c) cause or result in undue waste of time.' 9 As I perceive it, this argument will depend in part on demonstrating the danger instanced in paragraph (a) of s 135 and will be substantially the same as, or overlap with, the argument advanced under s 90 relying on the same allegedly unfair circumstances as constituting a danger of prejudice to Pratt which substantially outweighs the probative value of each of the four documents. I do not understand it to be suggested that the admission into evidence of any of the four documents might be misleading or confusing or cause, or result in, undue waste of time. However, in formulating what has become question 3(a)(i), I have predicated it on s 90 as a whole and not merely on the danger identified in paragraph (a) of that section. 10 Counsel for Pratt also seek to have the Court refuse to admit, pursuant to s 137 of the Evidence Act, each of the four documents. Section 137 provides; 'In a criminal proceeding, the court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant.' 11 That section substantially mirrors the language of s 135(a). However, a refusal to admit the evidence in question is mandatory in a criminal proceeding like the present once the court concludes that the probative value of the evidence is outweighed, apparently to any extent, by the danger of unfair prejudice to the defendant. It seems, therefore, that a resolution of the applicability of s 137 to any of the four documents will make it unnecessary to consider, in respect of the same document, the exercise of the general discretion conferred by s 135. For that reason, I have placed the sub-question about the applicability of s 137 ahead of that directed to s 135. However, consistently with what is said at [9] above, I have preserved the opportunity for Pratt, if so advised, to press the application of s 135 to any of the four documents which is not excluded pursuant to s 137. 12 The final question which Pratt seeks to agitate in relation to each of the four documents is its admissibility in the light of s 138 of the Evidence Act. Subsection (1) of that section provides; 'Evidence that was obtained: (a) improperly or in contravention of an Australian law; or (b) in consequence of an impropriety or of a contravention of an Australian law; is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained.' 13 Sub-section (2) of s 138 is directed to evidence of an admission that was made during, or in consequence of, questioning. I do not apprehend that any of the alleged admissions contained in any of the four documents were obtained in that way. However, s 138(3) directs the court in conducting the balancing exercise ordained by sub-section (1) to take into account a non-exhaustive list of eight matters. Sub-section (3) is in these terms; '(3) Without limiting the matters that the court may take into account under subsection (1), it is to take into account: (a) the probative value of the evidence; and (b) the importance of the evidence in the proceeding; and (c) the nature of the relevant offence, cause of action or defence and the nature of the subject matter of the proceeding; and (d) the gravity of the impropriety or contravention; and (e) whether the impropriety or contravention was deliberate or reckless; and (f) whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights; and (g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention; and (h) the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law.' 14 On its face, none of the four documents was "obtained" improperly or in contravention of an Australian law or in consequence of an impropriety or a contravention of an Australian law, if "obtained" in s 138 is synonymous with "brought into existence." I perceive it to be common ground that each of the four documents was brought into existence consensually to further or facilitate the settlement of the civil proceedings described at [10] of the earlier reasons. However, I infer that Counsel for Pratt wish to argue, if necessary, that "obtained" in s 138 is capable of meaning "obtained by the prosecution for use in the proceedings in which the evidence is sought to be tendered." If that argument be accepted, the balancing exercise required by s 138(1), including the taking into account of the considerations enumerated in s 138(3), will require evaluation of many of the same matters as will be relevant to the exercise of the discretion conferred by s 90 or to striking the balance required by s 137. Nevertheless, to preserve Pratt's right to rely separately on s 138, I have formulated a separate sub-question directed to the applicability of that section. Questions going to matters of law, prosecutorial duty or public policy 15 In their proposed formulation of the questions related to the four documents, Counsel for Pratt suggested that the following question be directed separately to the Agreed Statement of Facts on the one hand, and to each of the Revised Form of Proposed Order, the Penalty Statement and the relevant paragraphs of the Further Amended Defence on the other; 'Does the agreement by the prosecutor to the matters set out in paragraph 378 of the Agreed Statement of Facts preclude the prosecutor from adducing in evidence in this proceeding [the relevant documents]: (i) as a matter of law; (ii) by reason of the prosecutor's duties to act fairly, honourably and without deception or misrepresentation; or (iii) as a matter of public policy?' 16 These proposed questions have been criticised by Counsel for the ACCC in their written submissions on the basis "that the legal issue purportedly raised by these questions is not apparent." No specific source of law, prosecutorial duty or public policy has been articulated in support of the proposed inclusion of these questions. I have assumed that the matters sought to be relied on in suggesting answers to these questions will all be canvassed in arguments addressed to the interpretation of relevant sections of the Evidence Act, the concepts of "fairness" or "unfairness" variously erected by ss 90, 135, 136 and 137 and the notions of illegality or impropriety to be found in s 138. Accordingly, I have declined to formulate separate questions directed to matters of law, prosecutorial duty or public policy which may arise from the ACCC's agreement to what is recited in paragraph 378 of the Agreed Statement of Facts or the circumstances surrounding any of the admission said to be contained in any of the four documents. Additional documents on which the ACCC seeks a ruling as to admissibility 17 As well as joining with Pratt in seeking a ruling as to the admissibility of the four documents, the ACCC seeks a similar ruling in respect of two further admissions described as; 'the admissions made in a letter sent under the Defendant's name to Visy's staff and customers on or about 8 October 2007;' and 'the admissions made by Senior Counsel for the Defendant in open court in proceeding number VID 1650 of 2005 on 16 October 2007;' 18 It is apparent from the description of those further alleged admissions that they each occurred after agreement had been reached on 6 October 2007 with the ACCC for settlement of the civil proceedings described at [10] of the earlier reasons. The letter said to have been sent to Visy's staff and customers was presumably composed in the light of that agreement and with a view to its being used in support of a plea in mitigation of the penalty to be imposed by Heerey J. Likewise, I infer that the alleged admissions attributed to Senior Counsel for Pratt were made in the course of a plea of that kind or, at least, in presenting to the Court the Agreed Statement of Facts which had been finalised on 6 October 2007. Both further sets of alleged admissions postdate the agreement on which the admissibility of the four documents is said to turn. It is therefore likely that further or different legal or discretionary considerations may govern the admissibility of these further admissions and I have concluded that a ruling as to that admissibility, if necessary at all, should await the resolution of the separate questions which I have been persuaded to formulate. Accordingly, in the order reflecting these reasons, I have not formulated questions directed to the further alleged admissions raised by the ACCC. Corroboration 19 The ACCC has sought the inclusion in the proposed questions for separate resolution of the following additional questions; '8. Is there a rule of law that requires corroboration with respect to the evidence relied upon to prove an offence against s 155(5) of the Trade Practices Act 1974 (Cth). 9. If the answer to question 8 is "yes", is that rule abolished by s 164(1) of the Evidence Act?' 20 In support of the inclusion of those further questions, Counsel for the ACCC have identified a controversy between the ACCC and Pratt as to the need for corroboration of evidence, presumably that to be given by Mr Jones as to what was communicated in his conversation with Pratt at the All Nations Hotel on 21 May 2001. 21 This controversy arises from the terms of s 164(1) and (2) of the Evidence Act which provides; '(1) It is not necessary that evidence on which a party relies be corroborated. (2) Subsection (1) does not affect the operation of a rule of law that requires corroboration with respect to the offence of perjury or a similar or related offence.' 22 The ACCC contends that s 164 does not create an affirmative requirement of corroboration but simply preserves any existing common law requirement, if there be one, for perjury or "similar or related offences" within the meaning of s 164(2). The ACCC has also foreshadowed an argument that s 155 of the TPA does not create a "similar or related offence" to perjury which is to be understood in the narrow sense of giving false evidence in the course of judicial proceedings. Counsel for Pratt have apparently indicated that each of these contentions will be contested. The ACCC has therefore submitted that the resultant dispute "can be appropriately and conveniently resolved as a preliminary issue" and, as it turns on two narrow questions of law, could be resolved without significantly prolonging the hearing of the preliminary questions. 23 I do not consider it appropriate to include in the current set of questions for separate resolution any question directed to this issue of corroboration. The issue is quite distinct from those which are raised by the evidentiary questions which it is agreed should be resolved. Depending on the answer to those questions it may not even arise. Moreover, its resolution would not quell the ultimate controversy between the parties unless the ACCC were to concede that there is no corroboration of the requisite kind or unless it were accompanied by a ruling that corroboration is needed in the present proceedings and that each item of evidence identified by the ACCC is incapable of constituting such corroboration. For these reasons, the present set of preliminary questions will not be extended to the issue of corroboration. Conclusion 24 In the course of submissions during the hearing on 10 November 2008, Mr Richter QC, leading Counsel for Pratt pointed out that s 189 of the Evidence Act provides its own self-contained machinery for resolving on a voir dire preliminary questions including those as to the admissibility of admissions or evidence generally. The section also contains special provisions in sub-ss (3) and (5)(c) for the resolution of certain of such preliminary questions in criminal proceedings. I have therefore prefaced the questions which I have formulated with a reference to s 189 as well as to O 29 of the Rules of this Court. That is to make clear that s 189 will be applied, as far as appropriate, in resolving the separate questions which I have formulated. 25 For the reasons which I have endeavoured to explain, there will be an order in the following terms; "Pursuant to s 189 of the Evidence Act 1995 (Cth) ("the Evidence Act") and O 29 of the Rules of this Court the following questions be decided after a hearing to commence on 8 December 2008 separately from any other question and before any trial in the proceedings herein; (1) Are any and which of the Revised Form of Proposed Order, the Penalty Statement, the relevant paragraphs of the Agreed Statement of Facts and the relevant paragraphs of the Further Amended Defence admissible as evidence in these proceedings pursuant to any of ss 81, 82(b), 87 or 88 of the Evidence Act? (2) If yes to (1), in respect of any of the Revised Form of Proposed Order, the Penalty Statement, the relevant paragraphs of the Agreed Statement of Facts and the relevant paragraphs of the Further Amended Defence (which are hereinafter collectively called "the prima facie admissible documents") are any and which of the prima facie admissible documents inadmissible in these proceedings by reason of; (a) s 85(2) of the Evidence Act; or (b) s 137 of the Evidence Act? (3) If (2) be answered no in respect of any of the prima facie admissible documents; (a) will the Court refuse to admit such document as evidence in these proceedings in the exercise of the discretion conferred by; (i) s 90 of the Evidence Act; (ii) s 135 of the Evidence Act? (b) is such prima facie admissible document by reason of s 138 of the Evidence Act not to be admitted as evidence in these proceedings?" 26 I shall also order that the costs of both parties of the hearing on 10 November 2008 be reserved. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 2 December 2008 Counsel for the Prosecutor CDPP: Mr M Dean SC with Dr S Donaghue Solicitor for the Prosecutor CDPP: Office of the Commonwealth Director of Public Prosecutions Counsel for the Defendant: Mr R Richter QC with Mr N Clelland SC, Dr S McNicol and Ms L K Walker Solicitor for the Defendant: Arnold Bloch Leibler Dates of Hearing: 10 November 2008 Date of Judgment: 2 December 2008