Pratt's defence fails to hold water Adam Schwab writes:
Newspaper columnists across the country have rushed to canonise the gravely ill billionaire, Richard Pratt, with Federal Court judge, Donnell Ryan, ruling that a Statement of Agreed Facts could not be used in a subsequent criminal proceeding against the cardboard magnate. Pratt’s lawyer, Mark Leibler, claimed that Pratt will "at least pass into the next world knowing that he has been vindicated, and he is innocent." While newspaper columnists may know no better, as one of Australia's foremost lawyers, Leibler would be aware that there is a difference between not being deemed ‘not guilty’ and outright innocence.
Regardless of Ryan's decision, there is little dispute that Richard Pratt was untruthful in his evidence to the ACCC when he claimed to have had no knowledge of a meeting with Amcor CEO, Russell Jones. Less than two years later, Pratt admitted to meeting with Jones at the All Nations Hotel in Richmond in the Statement of Agreed Facts tendered to settle civil claims. The Statement of Agreed Facts conceded that Visy had engaged in alleged conduct in contravention of the Trade Practice Act. The decision of Justice Ryan bore no judgment on Pratt’s honesty or involvement in the cartel, but rather, whether the Statement of Agreed Facts could be used as evidence in a subsequent criminal case against him. That Justice Ryan deemed the Statement could not be used in a subsequent criminal prosecution does not cleanse Pratt’s prior behaviour and create some sort of cloak of innocence.
It must not be forgotten that in delivering the civil judgment against Pratt in 2007, Federal Court judge Peter Heerey found that the cartel operated by Visy was "calculated and premeditated" and the case was the "worst ... to come before the court in the 30-plus years since cartel behaviour has been illegal" in Australia and:
"There cannot be any doubt that Mr Pratt also knew…that the cartel, to which he gave his approval, and in which he has admitted to be knowingly concerned, was seriously unlawful."
There is also the factor that the cartel was to operate for Mr Pratt's personal benefit, via his ownership, or part ownership, of Visy. This was not the case of any employee action out of some misguided sense of corporate loyalty.
Further, while the decision of the Federal Court yesterday could have proved fatal to a subsequent prosecution of Pratt, as Stephen Bartholomeusz noted in Business Spectator today, the ACCC and DPP could have still relied on the evidence of former Amcor CEO, Russell Jones or comments made by Pratt to The Australian newspaper. Pratt also told reporters back in 2005 that he was "confident that the evidence will show that I had no part in any market sharing agreement or understanding with my competitors. I can't say any more today." Those claims were later contradicted by the Statement of Agreed Facts.
The decision of Justice Ryan is reminiscent of the finding of Victorian Supreme Court Judge, Justice Frank Vincent, in the infamous Elders prosecutions. In that case, Vincent, a well known libertarian and alleged critic of the National Crime Authority, deemed that evidence obtained by the NCA could not be used in the criminal prosecution of Elliott and alleged co-conspirators, Peter Scanlon, Ken Biggs and Peter Camm. Vincent essentially found that the NCA had acted outside its terms of reference and that the evidence obtained was ‘poisonous fruit’.
Elliott was free -- and was not afraid to tell the world, gloating of his victory over the NCA and initiating costly (and utterly unsuccessful) defamation proceedings against the regulator. However, not long after Elliott's so-called vindication, the Supreme Court of Victoria delivered a damning finding, noting that "the decision [by Justice Vincent] concerning how the matter referred is to be ascertained [is] clearly erroneous." The Full Court then proceeded to overturn virtually every finding in law made by Justice Vincent in relation to the matter. Elliott was never cleared of the charges brought against him by a jury of his peers based on the evidence presented -- rather he was exonerated by the erroneous decision of a single judge of the Supreme Court based on a technicality.
While Pratt appears to have had a stronger defense than Elliott, it is not without irony that Elliott was well represented in that case by Leon Zwier and Robert Richter -- the same counsel who acted for Pratt in the price-fixing case and subsequent criminal prosecution.
That Pratt evaded criminal sanction is no surprise. This column last August suggested that "regardless of his guilt. With a barrister like Richter and a frail body, there appears less chance of Pratt being convicted than of his believed Carlton winning this year’s AFL premiership."
Regardless of yesterday’s Federal Court decision, Richard Pratt admitted to running a cartel with his major competitor over a lengthy period. Pratt personally benefited from the cartel, so while he will never be found guilty of the crime of perjury, by his own confessions, his actions were not those of an innocent man.
