ACCC Vs Australian Egg Corporation Limited: Case Of Corporation Act And Consumer Law In Australia

Write to present the following part of the IRAC method as listed below (I= issues and facts; Relevant laws and principles; A= Arguments of the parties and Analysis, C= conclusion and court outcome).

1: Issues and Relevant law,
2: Arguments raised by parties and Analysis
3: Conclusion, Court outcome and Role of relevant court)

The Allegations by ACCC Against the Respondents

This is a case of the Federal Court of Australia between the Australian Competition and Consumer Commission and Australian Egg Corporation Limited. This is a case of corporation act and consumer law of Australia. In this case the respondents have background of egg industry. ACCC made some allegation against six respondents for the provocation to 19 egg producers where they make the limitation of producing the eggs and they failed to attempt a cartel arrangement. The Federal Court of Australia has also found that the managing director of Australian Egg Corporation Limited, James Kellaway and director Jeffrey Ironside and Twelve Oaks Poultry are also involved in the failing to induce egg producers in the cartel conducts.

The respondents are the Australian Egg Corporation Limited along with other five corporate with another individual respondent was alleged by the Australian Competition and Consumer Commission. The main allegation ACCC had arose against the respondent that they have involved in the conduct the dissemination of information to all of the egg producers for the invention of eggs and coordinated and consolidated action to reduce the supply of eggs. They mentioned it is a crime and they must pay the penalties. In this case the parties are:

• Australian Egg Corporation Limited which is also recognized as a public company and related with the distribution of eggs in various industries and represents the Egg Industry Services Provision Act 2002 (Cth) (the EISP Act) as per the rules of the Commonwealth Government.
• Mr Kellaway who is the Managing Director of Australian Egg Corporation Limited and recognize as a witness.
• Farm Pride Foods Ltd (Farm Pride) who is also the respondent in this case. This is a company which is one of the largest egg producers of Australia who produces eggs and distributes their production in Victoria and New South Wales. Mr Lendich, and a Mr Bell. Mr Lendich who are the part of the Australian Egg Corporation Limited and caries the position of directors in both sectors.
• Ironside Management Services Pty Ltd is a company which uses the trademarks of Twelve Oaks Poultry (IMS) who are also the egg producer in the Queensland.
• Mr Ironside is also another respondent in this case who also hold the position of director in the Ironside Management Services Pty Ltd and as well as chairman of the Board of Director of Australian Egg Corporation Limited.

As per the case facts, Australian Competition and Consumer Commission and Mr. Lendich had been made an agreement where it is mentioned that to encourage egg producers to enter into an arrangement, or to arrive at an understanding, containing a provision with the purpose of preventing, restricting or limiting the production or supply of eggs and he also agreed with the agreement the purpose of preventing, restricting or limiting the production or supply of eggs. Therefore the issue has been arises as per the allegation by the Australian Competition and Consumer Commission to this six respondent for the oversupply of eggs and its effect on prices. The respondents took action to address these concerns by encouraging certain egg producers to make an arrangement or arrive at an understanding to limit their production. The issues has been found in this case:

• As per the fact is the Competition and Consumer Act 2010 will be applicable in this case to the AECL Mr Kellaway.
• Whether each of the respondent are involved with the attempt to induce the making of a proscribed arrangement and there is any limitation of the production of eggs.

As per the case facts and the claims of the Australian Competition and Consumer Commission it has been found that as per the Section 44ZZRJ of the Competition and Consumer Act 2010 defines the provision of contract making in trade practice. The Norcast S.ár.L v Bradken Limited (No 2) (Yuile and Star 2016) is one the relevant case with the case above case facts in the trade practice. In this case the Justice Gordon has mentioned about the bid-rigging and ordered of the penalty amount of US$22.4 million which was not held according to the Bid Rigging Arrangement which also made the contradiction with the section of 44ZZRJ and 44ZZRK of the Competition and Consumer Act 2010 (Cth) (Parker 2013).

The Parties Involved

However, ACCC filed an appeal from the Federal Court’s decision dismissing the ACCC’s proceedings against the Australian Egg Corporation and other respondents in the egg cartel case. The Federal Court was not satisfied that this amounted to an attempt to induce an ‘arrangement or understanding (Parker and De Costa 2015). They also mentioned about the breach of the above mentioned sections by the respondents and the 19 egg supplier has involved in the crisis management for the supply of the eggs. The section 44ZZRJ of the Competition and Consumer Act 2010 stated that the corporation contravenes always makes the arrangements for understanding the agreement and always explain the cartel provision. In the cartel provision it has also mentioned about the sections of 44ZZRJ which was briefly described in the section 44ZZRD give the conditions of the provision of a contract, arrangement or understanding is a cartel provision. Whereas, Section 44ZZRD (9) defines the considering related provisions which have purpose condition of a contract, arrangement or understanding of the consideration.

However, as per the Federal Court decision they have mentioned about the limitation o egg cartel as per the Australian law which always provide the arrangements for the establishment of cartel conduct and anti-competitive agreements. Therefore when the court was colleting the evidences from the resident in this case, the agreement between Mr. Lendich, he was involved with the court making decision. However, the court has not concern with the declaration. In the case of Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2007] (Yuile and Star 2016) court has found that the position of the evidence by Australian Competition and Consumer Commission better than the respondents. In another famous case, Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2007] court has been decided to form the declaration as per the evidences of the allegation party.

In the case of Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2002] and Australian Competition and Consumer Commission v Flight Centre Ltd cases, it was found that the contravene of section 44ZZRJ of Competition and Consumer Act 2010 and Australian Competition and Consumer Commission has successfully establish the conducts of elements of attempt to induce by threats or promises or other means and the positive conduct directed to the party for the object of the inducement whereas the no promise or threat can be  an attempt to induce in the case of Heating Centre Pty Ltd v Trade Practice Commission (1986) .In another case Trade Practices Commission v Tubemakers of Australia Ltd (1983) (Yuile and Star 2016) it was found that the conducts for constitute the attempt to convey the potential for an arrangement or an understanding (Parker and De Costa 2015).

Relevant Case Laws Surrounding the Case

The Australian Egg Industry is one of the largest egg producers in the world where they are involved with the production and distribution of the hen eggs to various markets in the Australia. They have severed the fresh eggs in the market and also involved with the product of the eggs. They mainly hatcheries the eggs and look after the chickens who are 16-18 weeks old and able to lay eggs (Lythgo-Marshall 2016). They are productive until those chickens are become 84 weeks old. The egg producer and distributors are then goes direct to the market and they use several process of farming systems like cage, barn laid and free range. There are almost 323 commercial egg producers in Australia, almost 10 hatcheries and approximately 109 commercial egg producers were members of Australian Egg Corporation Limited. They are mainly situated in all States and Territories of Australia and commercial hatcheries are stayed in different places in Australia (Parker and De Costa 2015).

As per the claim of Australian Competition and Consumer Commission they have alleged Australian Egg Corporation Limited along with other five corporate with another individual respondent Australian Egg Corporation Limited, Mr Kellaway, Farm Pride Foods Ltd, Mr Lendich, Ironside Management Services Pty Ltd and Mr Ironside involved in the failing to induce egg producers in the cartel conducts. Australian Competition and Consumer Commission it has been found that as per the Section 44ZZRJ of the Competition and Consumer Act 2010 the respondents has breach the provision of contract making in trade practice. The section 44ZZRJ of the Competition and Consumer Act 2010 (Yuile and Star 2016) stated that the corporation contravenes always makes the arrangements for understanding the agreement and always explain the cartel provision (Parker 2013). In the cartel provision it has also mentioned about the sections of 44ZZRJ which was briefly described in the section 44ZZRD give the conditions of the provision of a contract, arrangement or understanding is a cartel provision. Whereas, Section 44ZZRD (9) defines the considering related provisions which have purpose condition of a contract, arrangement or understanding of the consideration (Lythgo-Marshall 2016).

In the section of 44ZZRD of Competition and Consumer Act 2010 always give the understanding of the arrangement which is the part of the binding contract or agreement. In the case of Gordon J in Norcast S.ár.L v Bradken Ltd (No 2) [2013] (Yuile and Star 2016) it was found that proscribe arrangements or understanding where the evidence was required for the meeting of the minds of parties and assurance the obligations of the assurance as per the enforceable in the law. The assurance of the understanding always undertakes the condition of the parties for the arrangements in a proper way.

In the case of Australian Competition and Consumer Commission and Australian Egg Corporation Limited allegation to the each respondent for the contravene of the section 44ZZRJ of egg productions. Therefore, it can also be sated that the allegations are made for the attempts of induce, so the Australian Competition and Consumer Commission are not liable to establishes the facts of contravened by the respondents of section 44ZZRJ of Competition and Consumer Act 2010 (Lythgo-Marshall 2016). The Australian Competition and Consumer Commission is also not entitled to make any facts which shows the inducing to enter in any arrangement or understanding the breach of section 44ZZRJ of Competition and Consumer Act 2010. Therefore, it is found that the respondents’ attempt that the attempt may not have succeeded.

Trade Practices Commission v Parkfield Operations Pty Ltd (1985) (Yuile and Star 2016) case, it was found that one attempt which was involved with various steps with the unlawful act and connected with the preparatory of the related acts of section 44ZZRJ of Competition and Consumer Act 2010. Therefore in this case it can be stated that Australian Competition and Consumer Commission can make the conduct of connected with the inducing of the respondents who are involved with the egg producers and did the contravene the section 44ZZRJ of Competition and Consumer Act 2010 (Parker and De Costa 2015).

It was also included that as per the Australian Competition and Consumer Commission allegations has been made for the decision by the Australian Egg Corporation Limited board and they have published their decisions on the Egg Corp Eggs Press (Lythgo-Marshall 2016) and confirmed the omission of the Messrs Kellaway, Lendich, and Ironside for the limitation of the production of eggs. Australian Competition and Consumer Commission also stated in their claim against Messrs Lendich and Bell for dissociation with Farm Pride and Mr Ironside dissociation to IMS as per their decisions (Parker 2013). Here, it can be stated that the respondents were wanted to constitute their attempts for the inducement of the contravention of Sec- 44ZZRJ of Competition and Consumer Act 2010 is not identical.

Conclusion, Court Outcome and Role of Relevant Court 

As per the case study, the ACCC has provide the proper documents in the court and those all documents indicates every facts related with the respondents and useful to proceed the trials. Court has collected every evidences from the respondents and used proper witnesses for the relevant facts. The Egg Industry Services Provision (Transitional and Consequential Provisions) Act 2002 (Cth) (the Transitional Act) has been applied for the enactment of the EISP Act which help the court to court make the connection of conduct of inducing the egg supply (Lythgo-Marshall 2016).

The Court found that while the ACCC had established that the respondents intended that egg producers should take action to address and correct an oversupply of eggs, it did not establish that this action was intended to be pursuant to an agreement or understanding involving reciprocal obligations by competing producers. Therefore, the court has dismissed the claim Of the Australian Competition and Consumer Commission against the respondents.

Reference 

ACCC v Australian Egg Corporation Limited [2016] FCA 69 (10 February 2016)

Australian Competition and Consumer Commission v Flight Centre Ltd (No 2) [2013] FCA 1313, (2013) 307 ALR 209 at [155]

Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 794; (2007) 160 FCR 321.

Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2007] FCA 794; (2007) 160 FCR 321.

Australian Competition and Consumer Commission v SIP Australia Pty Ltd [2002] FCA 824 at [112]

Beaton-Wells, C., 2015. Private Enforcement of Competition Law in Australia-Inching Forwards. Melb. UL Rev., 39, p.681.

Gordon J in Norcast S.ár.L v Bradken Ltd (No 2) [2013] FCA 235; (2013) 219 FCR 14 at [263]

Heating Centre Pty Ltd v Trade Practice Commission (1986) 9 FCR 153 at 164.

Krishnan, A., 2015. The Excel Crop Case and Relevant Turnover in the Competition Act 2002. Nat'l L. Sch. India Rev., 27, p.125.

Lythgo-Marshall, P., 2016. The Australian Competition and Consumer Commission Immunity Policy for Cartel Conduct: A Critical Legal Analysis.

Norcast S.ár.L v Bradken Limited (No 2) [2013] FCA 235 (19 March 2013)

Parker, C. and De Costa, J., 2015. Misleading the ethical consumer: The regulation of free-range egg labelling. Melb. UL Rev., 39, p.895.

Parker, C., 2013. Voting with your fork? Industrial free-range eggs and the regulatory construction of consumer choice. The Annals of the American Academy of Political and Social Science, 649(1), pp.52-73.

Trade Practices Commission v Parkfield Operations Pty Ltd (1985) 7 FCR 534 at 538-9

Trade Practices Commission v Tubemakers of Australia Ltd (1983) 47 ALR 719 at 736

Yuile, A. and Star, D., 2016. Case notes: High and federal court. LSJ: Law Society of NSW Journal, (21), p.93.