The prosecution of Country Care is the first to prosecute an Australian company and individuals. The progress of the case throws up procedural challenges unique to the new criminal cartel jurisdiction.
The prosecution of Country Care represents a number of firsts for the ACCC and the CDPP.
Country Care, an Australian supplier of mobility aids, home care products and rehabilitation equipment, is the first Australian corporation to be prosecuted under the criminal cartel provisions of the Competition and Consumer Act 2010 (the CCA), with the ACCC alleging that it breached the price fixing provisions in the CCA. The case also represents the first time individuals have been prosecuted under these provisions, with two employees of Country Care charged with being knowingly concerned in respect of the alleged conduct. Most recently, the case was the first to be committed to trial, after the completion of pre-committal steps and a hearing in the Victorian Magistrates’ Court on 8 March 2019.
The matter has now been filed in the Federal Court of Australia, and was listed before Justice Wigney in Sydney this week for its first case management hearing. At this hearing, the case was set down for a four to six week trial in October 2019.
While there are a total of 140 charges against Country Care and the individuals, the prosecution intends to significantly reduce the number of charges in its indictment, which is scheduled to be filed by 14 May 2019.
The case management hearing outlined a number of procedural questions, including some which concerned state-based criminal law coming up against the federal criminal jurisdiction. These procedural questions will continue to be of interest given the ACCC’s commitment to bringing two or three new criminal cartel cases per year.
The location of the trial
The prosecution commenced in the Victorian Magistrates’ Court in Mildura, but was listed in Sydney for its first case management hearing in the Federal Court. The application of section 80 of the Constitution and section 70 of the Judiciary Act 1903 was therefore actively considered, given the alleged conduct primarily occurred in Victoria, but had a continuing nexus with New South Wales. Ultimately, the Court resolved to decide the point once the prosecution narrowed the charges in the indictment.
With the regulator’s increased focused on digital technology and other areas where operations naturally may span across multiple jurisdictions, the Court’s decision is this regard may give insight into this element of the Court’s procedure in the context of criminal cartel matters.
The objectives of the committal process
As the committal phase of criminal cartel prosecutions takes place in the state and territory courts, procedures differ depending on where the CDPP brings a prosecution.
The objective of committal hearings and the local court process was raised during the hearing. The Federal Court suggested that the theory of committal hearings is to “iron issues out”,but that it was unclear the extent to which this had occurred in the year that the matter has progressed through the Victorian Magistrates’ Court. For example, the parties were yet to engage in any exercise to narrow the issues in dispute, including the preparation of any agreed statement of facts, for example.
Differences in criminal procedure between states adds to the complexity. For a start, it means that there is no consistency in the pre-committal stage for Federal offences, as the path towards a hearing in the Federal Court varies from case to case. So, although the Country Care prosecution involved a committal hearing proceedings in New South Wales, for example, will be subject to an entirely separate process. This is because New South Wales abolished committal hearings in 2017, instead replacing it with a procedure involving a charge certificate and case conference.
Given that criminal cartel prosecutions are relatively novel and often involve complicated questions of law, it remains to be seen whether local or magistrates’ courts have the resources or the specialism to ensure that the process does result in a narrowing of issues in dispute ahead of the matter proceeding to trial.
Undertakings as to bail
Counsel for the individuals made an bail application in the Federal Court (as it had been made in the Victorian Magistrates’ Court). Counsel for Country Care noted that there is a “general entitlement to bail” in criminal cartel cases, and the Crown did not oppose the grant of bail. The Court granted the bail undertaking on two conditions: that the accused attend the trial, and that the accused maintain residence at the place of residence nominated to the Victorian Magistrates’ Court.
The matter is set to return to the Court on 2 July 2019. By that time, a clearer view of the precise scope of the charges brought by the CDPP is expected.
More than 100 years after the Coal Vend case brought criminal cartel conduct before the High Court under the Industry Preservation Act 1906, the ACCC now has three criminal cartel cases on foot, is awaiting sentence in another and has secured a fine of $25 million against yet another.
With the promise of more to come, Rod Sims has vowed to criminally prosecute cartels; Country Care is one of the first of many.