Commonwealth Director of Public Prosecutions v Alkaloids of Australia Pty Ltd

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judgment Date: 29 November 2022
• Neutral Citation: [2022] FCA 1424
• Date: 29 November 2022

Federal Court of Australia

Commonwealth Director of Public Prosecutions v Alkaloids of Australia Pty Ltd [2022] FCA 1424

File number(s):	NSD 1196 of 2021
Judgment of:	ABRAHAM J
Date of judgment:	29 November 2022
Catchwords:	CRIMINAL LAW – sentencing – cartel conduct – corporate offender pleaded guilty to two offences of giving effect to a cartel provision and one offence of attempting to make a contract, arrangement or understanding containing a cartel provision – corporate offender admitted seven additional offences – where company generates revenue from sale of SNBB, hyoscine hydrobromide and Duboisia leaf
Legislation:	Competition and Consumer Act 2010 (Cth) ss 2, 44ZZRF(1), 44ZZRG(1), 45AF(1), 45AG(1), 79(1)(aa) Crimes Act 1914 (Cth) ss 15A(1), 16A, 16BA Trade Practices Act 1974 (Cth) ss 44ZZRF(1), 44ZZRG(1) Fines Act 1996 (NSW) s 10
Cases cited:	Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 175 ALD 383 Australian Competition and Consumer Commission (ACCC) v Cement Australia [2017] FCAFC 159; (2017) 258 FCR 312 Australian Competition and Consumer Commission (ACCC) v Leahy Petroleum Pty Ltd (No 3) [2005] FCA 265; (2005) 215 ALR 301 Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Limited [2016] FCA 1516; (2016) 118 ACSR 124 Australian Competition and Consumer Commission v Qantas Airways Ltd [2008] FCA 1976; (2008) 253 ALR 89 Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd (No 3) [2007] FCA 1617; (2007) 244 ALR 673 Bae v R [2020] NSWCCA 35 CEO Customs v Labrador Liquor Wholesale Pty Ltd [2006] QCA 558; (2006) 65 ATR 547 Chief Executive of Customs v Jing [2007] NSWSC 1354 Commonwealth Director of Public Prosecutions v Vina Money Transfer Pty Ltd [2022] FCA 665 Darter v Diden [2006] SASC 152; (2006) 94 SASR 505 Director of Public Prosecutions (Cth) v Kawasaki Kisen Kaisha Ltd [2019] FCA 1170; (2019) 137 ACSR 75 Director of Public Prosecutions (Cth) v Nippon Yusen Kabushiki Kaisha [2017] FCA 876; (2017) 254 FCR 235 Director of Public Prosecutions (Cth) v Wallenius Wilhelmsen Ocean AS [2021] FCA 52; (2021) 386 ALR 98 Director of Public Prosecutions (Cth) v Page [2006] VSCA 224 Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121 Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520 Houghton v Arms [2006] HCA 59; (2006) 225 CLR 553 Imbornone v R [2017] NSWCCA 144 Jahandideh v R [2014] NSWCCA 178 Khalid v R [2020] NSWCCA 73; (2020) 102 NSWLR 160 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 R v Jones [2004] VSCA 68 R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 R v Pham [2015] HCA 39; (2015) 256 CLR 550 R v Qutami [2001] NSWCCA 353; (2001) 127 A Crim R 369 Tesco Supermarkets Ltd v Nattrass [1972] AC 153 Tyler v The Queen [207] NSWCCA 247; (2007) 173 A Crim R 458 Weininger v The Queen [2003] HCA 14; (2003) 212 CLR 629 Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584
Division:	General Division
Registry:	New South Wales
National Practice Area:	Federal Crime and Related Proceedings
Number of paragraphs:	224
Date of last submission/s:	29 August 2022
Date of hearing:	5 September 2022
Counsel for the Prosecutor:	Ms G Wright SC with Mr R Yezerski and Mr C Tran
Solicitor for the Prosecutor:	Commonwealth Director of Public Prosecutions
Counsel for the Offender:	Mr C Bannan with Mr E Kerkyasharian
Solicitor for the Offender:	Ashurst

ORDERS

		NSD 1196 of 2021
BETWEEN:	COMMONWEALTH DIRECTOR OF PUBLIC PROSECUTIONS Prosecutor
AND:	ALKALOIDS OF AUSTRALIA PTY LTD Offender

order made by:	ABRAHAM J
DATE OF ORDER:	29 november 2022

THE COURT ORDERS THAT:

1. Alkaloids of Australia Pty Ltd is convicted of Charge 1, Charge 2 and Charge 3 of the indictment attached as Annexure A.

2. Alkaloids of Australia Pty Ltd in relation to Charge 1 is fined $1,500,000.

3. Alkaloids of Australia Pty Ltd in relation to Charge 2 is fined $375,000.

4. Alkaloids of Australia Pty Ltd in relation to Charge 3 is fined $112,500.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

ABRAHAM J:

1. Alkaloids of Australia Pty Ltd (AOA) is to be sentenced for two offences of giving effect to a cartel provision, contrary to s 44ZZRG(1) of the Trade Practices Act 1974 (Cth) (TPA) and Competition and Consumer Act 2010 (Cth) (CCA), and one offence of attempting to make a contract, arrangement or understanding (CAU) containing a cartel provision, contrary to s 44ZZRF(1) with s 79(1)(aa) of the CCA. AOA also admits seven additional offences under the TPA and CCA that are to be taken into account.

Background

2. AOA is an Australian company which produces scopolamine N-butylbromide (also known as hyoscine butylbromide) (SNBB) and hyoscine hydrobromide. SNBB is manufactured from the alkaloid scopolamine (also known as hyoscine), which is extracted from plants, including the native Duboisia plant. SNBB is the active pharmaceutical ingredient (API) in some medications used to treat abdominal pain, oesophageal spasms, renal colic and bladder spasms. SNBB is sold as the API of an antispasmodic medication under the brand name Buscopan and in generic antispasmodic and other medications.

3. Almost all of the SNBB manufactured by AOA is exported for manufacture into antispasmodic and other medications. From 24 July 2009 to 19 December 2018 (the Relevant Period), AOA sold approximately 29 tonnes of SNBB. Of this, approximately 6 kg of SNBB (0.02 percent) was sold by AOA to Australian customers, to a total value of $25,641. There is no material market for SNBB in Australia.

4. Medications containing SNBB (SNBB medications) are purchased in Australia. During the Relevant Period, SNBB was the API used in 33 medications approved by the Therapeutic Goods Administration for sale in Australia and registered on the Australian Register of Therapeutic Goods. During the periods in which AOA gave effect to the CAUs in relation to the supply of SNBB, the three major wholesalers sold $2,821,509.24 worth of generic SNBB medications (that is, excluding Buscopan) to Australian pharmacies.

5. During the Relevant Period Christopher Kenneth Joyce was AOA’s Export Manager.

6. From sometime prior to 24 July 2009, Mr Joyce, acting on behalf of AOA and at least one of its competitor SNBB suppliers, made or attempted to make CAUs, which variously had the purpose and/or effect of fixing the price for SNBB, limiting production, allocating supply contracts, or rigging...