20 September 2011

Miller's gambit fails

The Tribunal has dismissed Paramount Mills' gambit to have the case brought against it by the Commission for alleged cartel conduct thrown out.

In a technical judgment that carefully navigates through adverse precedent set by higher courts, the Tribunal rejected Paramount's argument that the Commission's referral document failed to show any clear evidence that Paramount had engaged in prohibited conduct, and that the referral was therefore procedurally defective on the basis that it was unintelligible as to the case Paramount was required to meet.

The Tribunal found that provided Paramount is able to understand the charges and plead to them, the referral meets the level of precision required. In this case, Paramount had already pleaded its defence before raising its procedural point, so it cannot be that it cannot make out the case it has to answer. Whether the Commission has a strong enough case on the facts can be decided at the hearing of the matter - if the facts are insufficient or wrong, then Paramount will be found not guilty. Alternatively, Paramount would be entitled to request further particulars or note an exception, thus giving the Commission an opportunity to rectify any defect in the pleadings. The Tribunal stated that to simply throw the case out at this stage would be to impose a standard of legality that is higher even than that applying to criminal proceedings.

In addition to its point on the deficiency of the referral, Paramount also argued that the case against it has prescribed. The Act provides that a complaint cannot be initiated more than three years after conduct has ceased. In this case, the only conduct alleged by the Commission against Paramount took place in 2006, more than three years before the complaint initiation in 2009. Although the Tribunal did not rule on the specific issue, holding this over until the trial, its statements in this regard are rather worrying, as it suggests that there is an onus on respondents to prove that conduct has ceased, even if the Commission has no evidence that it is ongoing. That the Commission might simply allege that conduct is ongoing without any evidence of this, and for the respondent to bear the onus to prove otherwise, would appear to be at odds with both evidentiary practice and the very notion of a statutory time-bar.

Nick Altini, Director, Competition

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