FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Air New Zealand Limited (No 2) [2012] FCA 1363 Citation: Australian Competition and Consumer Commission v Air New Zealand Limited (No 2) [2012] FCA 1363 Parties: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v AIR NEW ZEALAND LIMITED (ARBN 000 312 685) AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v P.T. GARUDA INDONESIA LTD (ARBN 000 861 165) File numbers: NSD 534 of 2010 NSD 955 of 2009 Judge: PERRAM J Date of judgment: 30 November 2012 Catchwords: EVIDENCE – Admissibility – relevance – whether evidence of matters that pre-date and post-date the matters pleaded are nonetheless relevant to proving pleaded matters – whether evidence of matters that occurred in markets other than the markets pleaded are nonetheless relevant to proving the matters pleaded EVIDENCE – Admissibility – hearsay – whether perceptions of perceptions are admissible – whether question arises EVIDENCE – Admissibility – hearsay – whether documents relevant for a non-hearsay purpose EVIDENCE – Admissibility – relevance – documents of uncertain status – whether relevant EVIDENCE – Admissibility – draft and non-final documents – whether admissible Legislation: Evidence Act 1995 (Cth) ss 55, 57, 69, 136 Cases cited: Australian Competition and Consumer Commission v Air New Zealand Limited (No 1) [2012] FCA 1355 applied Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 followed Date of hearing: 30 November 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 30 Counsel for the Applicant: J Halley SC, E Collins SC, J Clarke, C Arnott, J Clark, N Shaw, V Bosnjak, T Dinh Solicitor for the Applicant: Australian Government Solicitor Counsel for Air New Zealand: RM Smith SC, NJ Owens, RA Yezerski Solicitor for Air New Zealand: Corrs Chambers Westgarth Counsel for Garuda: M Leeming SC, T Brennan Solicitor for Garuda: Norton White IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 534 of 2010 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: AIR NEW ZEALAND LIMITED (ARBN 000 312 685) Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 955 of 2009 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION Applicant AND: P.T. GARUDA INDONESIA LTD (ARBN 000 861 165) Respondent JUDGE: PERRAM J DATE: 30 NOVEMBER 2012 PLACE: SYDNEY REASONS FOR JUDGMENT Rulings on objections to market evidence First objection: markets not pleaded 1 Objection is taken by Garuda and Air New Zealand ('AirNZ'), on grounds of relevance, to a quantity of materials referred to by Mr Halley SC in his opening of the Commission's market case. These materials consist, in the main, of documents which tend to suggest particular market structures in markets ranging beyond those which are pleaded by the Commission. 2 The Commission, in effect, pleads markets at three levels as against AirNZ: (i) markets out of Hong Kong and Singapore to anywhere in the world; (ii) markets out of Hong Kong and Singapore to Australia; and (iii) markets out of Hong Kong and Singapore to identified ports in Australia. 3 The Commission seeks to obtain from the materials objected to certain propositions about the relationships between carriers, freight forwarders, integrators and shippers. The opening indicated that the relations between those four sets of entities is complicated and depends upon a number of factors, including but not limited to the size of the shippers, the sophistication of the freight forwarders and the comparative strength in each port of the carriers. 4 The material proposed to be relied upon by the Commission not only extends beyond the markets which it has pleaded – such as where the origin is in New Zealand and the destination is in Hong Kong – but extends also to market materials which lie outside the temporal range of the markets which have been pleaded by the Commission – that is, some of the materials pre-date 2002 and some of them post-date 2006. 5 These matters of geographical disconsonance and temporal incongruity formed the basis of the submissions made by AirNZ and Garuda that the material ought not to be received. Mr Owens (for AirNZ) and Mr Brennan (for Garuda) submitted that what happened in markets and at times beyond those pleaded by the Commission was not capable of being probative of anything about the markets which the Commission did allege. 6 In response, Mr Halley submitted that the material which went to the structure of these markets would be probative to the extent that it could be established that there were similarities between the markets. He submitted that the degree to which the material would be useful or of weight would ultimately depend upon the extent of the similarity between the markets. Viewed from that perspective, he was prepared to accept that that might mean that the evidence was contingently relevant in the sense used in s 57 of the Evidence Act 1995 (Cth). 7 Alternatively, he submitted that resort to the latest version of the Statement of Claim in each proceeding revealed that the Commission had made a series of allegations in which it set out what it said were the structures of the relevant markets. Here, the point which he sought to develop was that the way those pleadings had operated was not one which had tied the allegations as to structure to any particular markets. Quite apart from reasoning based on similarity, therefore, he submitted that the materials which had been referred to in his opening went directly to a pleaded case. 8 The relevance test is set out in s 55(1) of the Evidence Act and is as follows: The evidence that is relevant in a proceeding is evidence that, if it were accepted, could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding. 9 I accept that evidence as to the structure and operation of markets other than those relied upon by the Commission in its case are relevant in that sense, although the weight they will ultimately be given will depend upon the extent of the similarity which is established. 10 I accept, as Mr Owens submitted, that – at least as we speak at the moment – there is no evidence of a similarity. But I do not accept that the Commission is required to lead such evidence. Ultimately, it will be possible, in my opinion, to come to a view as to the similarities between the markets for present purposes by an examination of those markets themselves. 11 I do accept that, because I have accepted what Mr Owens submits, an order under s 57 is required. 12 There is one aspect of the objection which I would uphold. In relation to those materials which post-date the allegations in the Commission's case, it seems to me – and it appeared to be accepted at the Bar table – that they could be divided into two categories. Into the first category would fall those documents which, although post-dating the Commission's allegations, nevertheless, were backward-looking in time. The second category would consist of those which post-dated the case and which either spoke to or looked at the present, or perhaps were even future-looking. 13 It seems to me that the second category can be of no assistance, but the first category can. This will mean that I do not accept the objection made by Garuda and AirNZ other than in relation to post-dating materials which are either present-looking or forward-looking. They will be admissible if they are backward-looking into the relevant period. The present-looking and forward-looking documents are, however, inadmissible. Second objection: perceptions of perceptions 14 Objection is taken to [ACCC.006.026.0156], which is a series of what appear to be PowerPoint slides prepared by a Mr Pradeep Kumar, who is said to be the Vice President of Revenue Optimisation at Emirates. The slides are said to contain Mr Kumar's description of the perceptions and motivations of shippers. 15 The objection taken is that its admission would be contrary to a number of statements made by the Full Court of this Court in Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313, particularly at 354-357. As Mr Brennan put it, the document contains 'Emirates' perceptions of someone else's perceptions, and that's what Arnotts says can't go in'. 16 I do not think that that decision is germane for present purposes. The collection of PowerPoint slides prepared by Mr Kumar are, subject to one matter to which I will return, business records within the meaning of s 69. It is apparent that they form part of the records of Emirates for the purposes of s 69(1) and, indeed, I did not apprehend the contrary to be submitted. 17 There is a question in my mind as to whether every representation contained in the PowerPoint slides necessarily relates to a representation as to fact within the meaning of s 69(2). Indeed, I am satisfied that the contents of Page Four of the document, which begins with the words 'Is there a future....??', does not involve a representation of fact made by a person who might be expected to have personal knowledge of the matter. This is because that page is apparently a quotation from a person who has not been identified and about whom nothing is known. 18 Leaving that matter to one side, I am satisfied that the opinions which are contained in that document are all matters which would be within the ordinary purview of the Vice President of Revenue Optimisation. 19 So far as the document contains what appear to be statements of expert opinion, the course I will take with those is that I will direct, pursuant to s 136, that statements of opinion appearing in that document are not to be used for any other purpose beyond establishing that Mr Kumar held those opinions. In particular, they are not to be evidence that the opinions are true. Third objection: trade magazines 20 Objection was also taken by both airlines to a number of trade magazines which were opened on by Mr Halley. These magazines appear to have been produced for the cargo industry. At the rear of some of the publications there are distribution figures, which are broken down in such a way as to indicate, if one accepted the statements contained on those pages, that the recipients include both shippers and freight forwarders. 21 Mr Owens submitted that it was not possible to conclude from those statements who the recipients of the magazines were or what the distribution to those persons was because that would involve a hearsay use of the statements. I think this is correct. 22 Accordingly, the mere fact that the magazine is produced by the Commission does not result in it having been demonstrated that the magazine was sent to or was a species of marketing towards shippers or freight forwarders. 23 When this point was made, Mr Halley indicated that, if that point was taken against the Commission, it would, in due course – perhaps not in the very distant future – seek to lead further evidence to demonstrate that these cargo magazines were in fact sent to shippers and freight forwarders. 24 I accept that if that evidence is led, this will demonstrate that these magazines are relevant for the non-hearsay purpose of demonstrating that the airlines in question marketed their services to shippers and to freight forwarders. I accept also, and I did not really apprehend it to be in dispute, that that is a relevant issue in these proceedings. 25 I propose, in those circumstances, to allow the tender of the magazines for that non-hearsay purpose, pursuant to s 57 of the Evidence Act, on the basis that I can reasonably anticipate that the Commission will seek to prove who the magazines were distributed to. 26 I do not, at this juncture, decide whether I should make an order pursuant to s 136 limiting the use to which the magazines may be put to that non-hearsay purpose only. Fourth objection: documents of uncertain status 27 Objection is taken to [ACCC.002.027.032.0101] as an example of a category of documents that are said to be of uncertain status. 28 For reasons I have previously given, I am entitled to examine the document to see what inferences may be drawn from it: Australian Competition and Consumer Commission v Air New Zealand Limited (No 1) [2012] FCA 1355 at [89]-[107]. I infer that it involves email correspondence between a man from British Airways and a man, who works for a shipper, called 'Bob'. The document, if one draws that inference, is capable of showing the kind of and extent of communications between shippers and carriers. I admit the document. Fifth objection: non-final documents 29 Objection is taken to [ACCC.002.018.025.0098] and also [ACCC.002.024.033.0176]. 30 These documents may compendiously be described as materials which have passed between various parties and which are, to a smaller or larger extent, in draft. Mr Owens drew my attention to what fell from the Full Court in Arnotts at 357-358. There the Full Court remarked that documents which may be prepared in draft or be of that kind may have very little weight. However, at the same page, the Court accepted that they were admissible. I propose to take the same course. The documents will be admitted. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. Associate: Dated: 6 December 2012