Section 44ZZRO
Joint Ventures - prosecution

(1) Sections 44ZZRF and 44ZZRG do not apply in relation to a contract containing a cartel provision if:

(a) the cartel provision is for the purposes of a joint venture; and

(b) the joint venture is for the production and/or supply of goods or services; and

(c) in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the contract; and

(d) in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the contract for the purpose of enabling those parties to carry on the activity mentioned in paragraph (b) jointly by means of:

(i) their joint control; or

(ii) their ownership of shares in the capital;

of that body corporate.

Note 1: A defendant bears an evidential burden in relation to the matter in subsection (1) (see subsection 13.3(3) of the Criminal Code).

Note 2: For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(1A) Section 44ZZRF does not apply in relation

(a) the arrangement or understanding is not a contract; and

(b) when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

(i) intended the arrangement or understanding to be a contract; and

(ii) reasonably believed that the arrangement or understanding was a contract; and

(c) the cartel provision is for the purposes of a joint venture; and

(d) the joint venture is for the production and/or supply of goods or services; and

(e) in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

(f) in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (d) jointly by means of:

(i) their joint control; or

(ii) their ownership of shares in the capital;

of that body corporate.

Note 1: A defendant bears an evidential burden in relation to the matter in subsection (1A) (see subsection 13.3(3) of the Criminal Code).

Note 2: For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

(1B) Section 44ZZRG does not apply in relation to giving effect to a cartel provision contained in an arrangement or

(a) the arrangement or understanding is not a contract; and

(b) when the arrangement was made, or the understanding was arrived at, each party to the arrangement or understanding:

(i) intended the arrangement or understanding to be a contract; and

(ii) reasonably believed that the arrangement or understanding was a contract; and

(c) when the cartel provision was given effect to, each party to the arrangement or understanding reasonably believed that the arrangement or understanding was a contract; and

(d) the cartel provision is for the purposes of a joint venture; and

(e) the joint venture is for the production and/or supply of goods or services; and

(f) in a case where subparagraph 4J(a)(i) applies to the joint venture—the joint venture is carried on jointly by the parties to the arrangement or understanding; and

(g) in a case where subparagraph 4J(a)(ii) applies to the joint venture—the joint venture is carried on by a body corporate formed by the parties to the arrangement or understanding for the purpose of enabling those parties to carry on the activity mentioned in paragraph (e) jointly by means of:

(i) their joint control; or

(ii) their ownership of shares in the capital;

of that body corporate.

Note 1: A defendant bears an evidential burden in relation to the matter in subsection (1B) (see subsection 13.3(3) of the Criminal Code).

Note 2: For example, if a joint venture formed for the purpose of research and development provides the results of its research and development to participants in the joint venture, it may be a joint venture for the supply of services.

Notice to prosecutor

(2) A person is not entitled to rely on subsection (1), (1A) or (1B) in a trial for an offence unless, within 28 days after the day on which the person is committed for trial, the person gives

(a) a written notice setting out:

(i) the facts on which the person proposes to rely for the purpose of discharging the evidential burden borne by the person in relation to the matter in subsection (1), (1A) or (1B), as the case may be; and

(ii) the names and address of any witnesses whom the person proposes to call for the purpose of discharging the evidential burden borne by the person in relation to the matter in subsection (1), (1A) or (1B), as the case may be; and

(b) certified copies of any documents which the person proposes to adduce or point to for the purpose of discharging the evidential burden borne by the person in relation to the matter in subsection (1), (1A) or (1B), as the case may be.

(3) If the trial of a person for an offence is

(a) exempt the person from compliance with subsection (2); or

(b) extend the time within which the person is required to comply with subsection (2).

(4) For the purposes of paragraph (2)(b), a certified copy of a document is a copy of the document certified to be a true copy by:

(a) a Justice of the Peace; or

(b) a commissioner for taking affidavits.

Introduced by Trade Practices Amendment (Cartel Conduct and Other Measures) Act 2009

Operative: 24 July 2009

The insertion of this provision was part of the package of reforms introducing criminal penalties for cartel conduct. The reforms also created a parallel civil cartel prohibition, replacing the former s 45A which dealt directly with price-fixing.

The reforms were initially recommend by the Dawson Committee as part of its 2002-2003 inquiry into the Competition Law provisions of the Trade Practices Act.

The scope of the joint venture 'defence' (which replaces the former s 76D which operated in relation to price fixing under s 45A) has been the subject of considerable debate. See, for example:

• Brent Fisse, The Contract Requirement for the Joint Venture Exceptions Under Sections 44ZZRO and 44ZZRP of the Cartel Bill (June 2009)
• Frank Zumbo, Criminalisation of Cartels: A Critique of the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 (Cth), (2009) 17 Trade Practices Law Journal 123 from p 126

See further information and resources on the cartel page.