Accc Admits Ignoring Promise To Pratt On Evidence

The Age

Wednesday December 10, 2008

LEONIE WOOD

THE Australian Competition and Consumer Commission's most senior executive has told a court he believed the regulator had promised Visy Industries' founder Richard Pratt that it would not exploit a document in which the billionaire box-maker admitted to illegal price-fixing.

But ACCC chief executive Brian Cassidy said that, earlier this year, after the ACCC received advice from the Commonwealth Director of Public Prosecutions about laying criminal charges against Pratt, he stopped believing the ACCC was bound by any undertaking.

Under cross-examination by Pratt's counsel, Robert Richter, QC, in the Federal Court, Mr Cassidy also denied ACCC executives had conspired to entrap Pratt.

The document at the centre of the controversy, titled a statement of agreed facts, is the focus of a dispute before Justice Donnell Ryan, who this week is considering if the Crown can use it against Pratt in a criminal case. Pratt is charged with allegedly giving false and misleading evidence to ACCC investigators in July 2005.

Yesterday, through his lawyers, Pratt pleaded not guilty. He was not in court.

Pratt's lawyers argue that the statement of agreed facts was formulated solely to settle a civil cartel case in October 2007, and that the ACCC cannot use it as evidence that Pratt lied to its investigators.

On Monday, the court heard stunning revelations that Pratt appeared ill or disengaged in September 2007 when, surrounded by lawyers and media advisers, he agreed to settle the civil case.

Crown prosecutor Mark Dean, QC, said former High Court judge Michael McHugh, QC, who chaired a mediation between Pratt and the ACCC on September 6, 2007, would draft a statement saying that Pratt was warned during the mediation that if he pressed ahead and defended the civil case, any evidence could be used against him by litigants in huge class actions. This caused Pratt particular concern.

Mr McHugh's evidence sheds new light on the circumstances of Pratt's decision to settle, and may weaken the Crown's use of the statement of agreed facts. But Mr Dean yesterday told the judge he was under instructions to proceed with the case.

Mr Cassidy revealed that, regardless of his belief that the ACCC was bound not to use the statement, he did not raise any concerns nor query the ACCC's plans to use it in a criminal case against Pratt.

Mr Cassidy said he did not recall exactly when he changed his mind about using the statement of agreed facts against Pratt, but suggested it was before April.

Mr Cassidy also revealed that one of the country's top spin-doctors, Ian Smith, head of Gavin Anderson & Co, became a high-level liaison for Pratt, who was his client, and the ACCC chairman Graeme Samuel. Mr Smith spoke by phone with Mr Samuel and Mr Cassidy on August 23, 2007, and relayed messages to Pratt, Mr Cassidy said. He said Mr Smith told Mr Samuel during the call that, in his view, Pratt should settle before trial to avoid adverse publicity.

© 2008 The Age

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