12 December 2017 –
What is a Section 51ADD Notice?
A Section 51ADD Notice is used by the ACCC to require the production and provision of certain documents. The notice is issued by the ACCC pursuant to the Competition and Consumer Act. In relation to the Horticulture Code of Conduct, the ACCC will use the notice to require the provision of Code documents, for example, Horticulture Produce Agreements in place, lists of growers, and the Terms of Trade of a business.
I have received one of these Notices. Do I have to comply?
Yes you should. There are several ways in which the ACCC can investigate compliance with the Code. A Section 51ADD Notice is one of them.
Note however that this is an administrative power only – it is a power to gather information; not a power to make a determination or decide whether the Code is being complied with. Generally, only a court can do that, although the ACCC could issue an Infringement Notice in exceptional cases. That will only be where there is systemic and substantial non-compliance with the Code and only after you have provided your response to the Notice. Even then, you can still dispute the Infringement Notice and require that the matter be dealt with by a court.
When do I have to comply?
Generally within 21 days of receiving the Notice. The ACCC will generally specify the date by which it requires the documents to be produced to it. That period will never be less than 21 days.
It is possible to seek an extension of time to comply with the Notice. However, you must have a good reason for doing so. Also, don’t leave a requested extension until the last minute – get in touch with the ACCC as soon as you can if you come to the view that you might not be able to produce the documents within the deadline.
What happens if I don’t comply with the Notice and do not produce the documents?
You won’t go to jail or be fined! However, the ACCC will have the right to seek a court order requiring you to produce the documents. Disobeying a court order is much more serious. If a court was satisfied that a wholesaler wilfully and deliberately disobeyed a court order, it can hold those responsible in contempt and fine them (or, in extreme cases, jail them).
Is there any other punishment I need to be aware of?
Although it is not an offence to not comply with a Notice, it is an offence to produce false or misleading information to the ACCC in response to a Notice. You could be fined substantial sums for doing that.
Although it is a defence if you could not reasonably have known that the documents you produced contained false or misleading information, you will have the onus of proving that you took reasonable steps to satisfy yourself that the documents were not false or misleading.
What enquiries are necessary to comply with the Notice?
Where the recipient of a Notice is a company, the knowledge and information of the company will be the knowledge and information of its directors and officers. In producing the documents required by the Notice, it will be necessary to make enquiries of the responsible officers of the company to obtain the requested material.
A “Document” is defined to include “a book, plan, paper parchment or other material on which there is writing or printing… or any disc, tape, paper or other device from which sounds or messages are capable of being reproduced”. In other words, this covers electronic documents (such as emails, spreadsheets and databases) together with, of course, hand-written notes and drafts, and documents in final form.
What about documents not in my possession?
It will still be necessary to produce documents caught by the Notice if those documents are under your “control” without being in your physical possession. “Control” means having the power to require the person who has possession of the documents to hand them over to you e.g. the relevant documents could be in the possession of your external accountant or other professional adviser.
What if I do not have all/any of the documents referred to in the Notice?
It is important to read the Notice carefully and produce only the documents that the ACCC has requested.
You are not obliged to produce any documents referred to in the Notice that are not within your “possession or control”. In that event, you would simply inform the ACCC in writing that you do not have any of the documents referred to in the Notice in your possession or control.
However, an inability to produce any or a substantial number of the documents requested in the Notice could be interpreted by the ACCC as evidence of significant non-compliance with the Code and result in further enquiries by the ACCC. In some circumstances, this could lead to the issue of an Infringement Notice and/or court action as mentioned above.
If you believe that what you have available to produce to the ACCC in response to the Notice falls well short of what is required for code compliance, you should consider engaging your solicitor to communicate with the ACCC on your behalf and reaffirm your intention to continue working towards code compliance.
What about legal professional privilege?
You do not have to produce confidential communications between you and your legal advisers where the dominant purpose of those communications was to seek or provide legal advice or for court proceedings.