The Federal Court today dismissed an application by Korean Air Lines Co Ltd challenging a statutory demand for information and documents issued by the ACCC under the Trade Practices Act 1974.
The demand upon KAL was made as part of the ACCC's investigation into alleged cartel activity on the part of a large number of international airlines.
On 31 October 2007 the ACCC issued a notice under s 155 of the Act requiring KAL to provide information and documents to assist the ACCC's air cargo investigation. In proceedings taken in the Federal Court, KAL challenged the ACCC's power to issue the notice .
KAL asserted that because the ACCC or its staff had already made a decision to institute proceedings against KAL, the ACCC was no longer permitted to issue such a notice. It also asserted that the ACCC was misusing its powers under section 155 of the Act as it was seeking information to assist in determining the possible penalty it might seek against KAL.
Justice Jacobson rejected all KAL's arguments. He found that no decision had been made by the ACCC to commence proceedings against KAL, that the notice had been issued for the performance of the ACCC's administrative function, that the power to issue the notice had not ceased and that it had not been issued for an improper purpose.
In particular he stated: "The short answer to KAL's submission is that the evidence before me demonstrates that the purpose of the ACCC in deciding to issue the Notice was to obtain evidence of the extent of any contraventions by KAL and evidence going to the quantum of any penalty. All of this might ultimately be used in the event that the ACCC decides to commence proceedings. This purpose falls squarely within the Act."
ACCC Chairman, Mr Graeme Samuel, said that the ACCC's powers under section 155 are very important tools in assisting the ACCC investigate alleged breaches of the Act. The finding by the court that the ACCC was very clearly within its rights to issue the notice against KAL is an important one and will help to clarify the circumstances under which the ACCC can use these powers.