~~ IN THE FIDER VS COUNT OF AUSTPALTA Ce ee .. _OENERAD Leeeesevees DIVISION BETWETL AND JUDGE(S) wvaING ORDER : FRANKI J. DATE OF ONDER : 6 July 1977 WHERE MADS : Sydney T™HE COURT ORD YS THAT: 1,. The Order Nis2 be dismissed. 2. Applicant to vay the respondent's if not agreed. 3. Date Entered: No. G.f 1D... of 1977 AUSFINLD PTY, LIVITED ' erecese eo ed eeecsene aacee See er er ceceeeseras LEYLAND MOTOR CORPORATICH «OF. AUSTPALTA LINITYD. 0... eevee neces ececse se RESONANT |, costs; costs to be taxed Pek A anaes aD kiana phelalaliee eee . Neh ali sms or meets a, mathe tnn AAD vn BA tna tacos Albi a Meveeh at LIE tan DIE a OIA. Ne a un OA RIOD Se etn Rb Yack. Ranke ae CATCH ACR DS Trade Fractices Act 1974-1976 - angunction - Section 60 - Section 45(2) ~ Section 51(2)(a) - interpretation of s.51(2)(a) - meaning of "employees" ~ Seccion 46(1) - taking advantage of pover. Ausfield Pty. Limited Vv. Leyland Motor Corporation Of Australia Limited G. No. 40 of 1977 Eefore Franki J. Sydney 6 July 1977. % aay ee ee ee some wave ane at Bd et LOU ON BU. ie aA GLNTFRAL DIVICTON No. G-40 of 1977. Betvcen AUSPIELD PTY. LIMITED Applicant And esponcenl REASONS POR JUDGE NT FRANRK™ ELIVeh=D: 6 July 1977. The applicant, Ausfieid Pty. Limited seeke injgunctrios under the provisions of s.@0 of the Trade Fractices Act 1O74~=1S7€ ("the Act") restraining the respondent, Leyvlend Mctoi Corporation of Australia Limited, trom engaging in conduse cr alleged to be contrary to the provisions of ss.f& and "6 of +1 wy Act. The applicant's only business is that of cisetribvior 3n New South Wales of automotive parts and accessories obtained frat the respondent. The applicant is a wnotiy owned subsidiary cf LNC Industries Limited. The respondent 1s the only initial source of such parts and accessories in New South Waies. The applicant is not the only channel by which such parts and accessories are distributed in New South Wales from the responcent. Dealers may purchase parts and accessories direct from the respondent's retail dealer Givasion called "Leyperts" and, ir addition, there is at least one other dz:strabutor for the respondent from whom certain parts and accessorics may be on veine' in Kew South wales. The epplacant erplioys about lil percons, and of trese, about 33 are storem 1 and about 21 are memb-i6 2o ee en. a ee ee the Federated Storemen and Fackers Union of Australia ("the Union"), The evidence did not establish whether the responcent employed any members of whe Union. 'The respondent called no evidence. In evidence, ir. Hatton, the manarer or the applicant, estimated that the approxanate sheres of the "arket in New South wales ot parts and accessorzec dictributed vy the respenic:t in the year ending 70 June 1975 were, the resnondenk Ay', anotier ant gi company 5%, the epplic 2 and for the year ending 279 June 4) Need 1977, the respondent 19$/, another conpsny 5%, the epplicant 7Ot!. Mr. Quinn, the personne? maneger of the group of comianes of which tre epplicant is part, said 3n evidence, that on & Jure 1977 an organiser of the New South Vales Dranch cof the Union toid hin that the members ot the Union employed by the appolicany ana that although the members would return to work the next day, certain bans would be placed on the anvlicant and certain other il the cenanes were ct conpanies, and the tens woulic continue un resolved, On 9 June 1977 the men returned to work but the Gispute as to wages and other matters had not been settled at the date of the hcaring. On 9 June 1977 employees of the respondent refused to deliver parts and accessories to the applicant's driver .hen he called at the responcent's preaises to collect parts and eccessories in the usual ywry. On 9 June 1977, Mr. Donaldson, a director of the apnlicant, and the managinn director of LNC Industries Limited, teiephoned the managing direstor of the respondent, Mr. Andrev, to discuss the situatron which had erisen. Mr. Donaldson's cvidence of the conversat:on was te tne following effe oO '{f said to An@rew: "We ave been told that your pervie at Liverpool are not pupnlvaing us on your nersonal instructions. Is that true?" Andrew said to me: "Yes, I'm sorry aodout tnat. we've done a deai with the Union." T said to Andrew: "What do you mean." Andrew said to me: We kave had to eccept the Unron's oposal it th lift the bans on our containers provided we dontt sz mad only the LIIC Companies, and I can give it to you in writin: if you like." I said to Andrew: } £ "Your word is good enough for me, Frank, J's have vs take legal action." Andrew said to me: "Just a minute, our solicitor 18 here. I'll check with him." (after a pause) "Yes, you can take out a sunrions. You might as well join the queue."! Mr. Donaldson was not cross-examined. A driver employed by the applicant swore that he haa attended at the respondent's premises for the purpose of tak delivery of parts and accessories on 10, 14, 145, 15, 20 and June 1977, both in the morning and tne afternoon on each day on tne morning of 22 June 1977, but on no occasion vas he av to get delivery of any parts or accessurics. On the afterno of 20 June 1977, an employee of the respondent had said to h "We have instructions not to de:iver anytuing for Ausfieid, we have 11 trackloads of parts ready for delivery when this troubJe is over." Qn 20 June 1977. the manager of the app1ice wrote a letler to the munazing director of the resyondeny vh inc.uded the foilowing neaverreuns:- ins 2. and en in, but ane he st ee ee aoe) "You will be aware that for some Littic time this company hes been in dispute with the Federated Storemen and Packers' Union of Australia concerning certain wage claims which tnis coupeny is resisting. You will further be avare thac the Union has sought to strengthen its demends by placing certain bans unon the delivery of autonmolive spare parts and accessories to you for purposes of fuifiliing erders placcd upon you by us. On 9th June, 1977, in a telephone conversation with Mr. Di. Donaldson, the Managing Director of LivC Industries Lamited, wn2ch as you know is our parent compatyy, you acvised Nr. Donaidsen and a that your company would no longer suppsy spare part ' accessories to us as a result of an arrangenent which your compen; had formed with the Union. Tnat arrangement, as it. 3a understood, is one whereby your company will continue to receive ¢elivery of spare parts and accessories icr 1ts ow business on the condition that it supplies none of these goods to us. This state of affairs was contirned in a telechone conversetion on pen 14th June, 1977, between hr. 3, Heaven of your company and mc and, as a result of tnis arrangement, we have been unable to iece-ve any supplies from you since Sth June, 1977. This situation has s continued despite the regular ily attendance at your Liver poe warehouse of trucxs from our compeny calling to take delzvery cf supplies on order. The consequence of the arrangenent to whicn IJ have referred is that wé are unable to carry on our business in a norma] manner and are in imminent danzer of having to stend down rersonrel, In addition, supplies which we held prior to the cessation of delivery to uc are aickly duinminsshirag and within days we sha..l be =) in a position whore serious Carnage 1.211 be incurred tr us." On 21 Sume 1977, the Jctter of 20 June 1977 uwas anewered by a letter from Mr. Peaven, the Director of the Parts and ante + Se oe tema, ad ree 5. Accessories Division of the respondent. That letter, omatcing formal parts, was as follows:~ "TI refer to your letter of June 20 last, addressed to Mr. F.F. Andrew, regarding the unfortnate situation which has arisen jn relation to an industrial dispute between your cc: oeny and the Federated Storemen and Fackers' Union. Firstly, I nust agree that tne position 1s, broadly speakine, os you have set it out in your Istter. 'The telenhone convrrsations cr between Lecsrs, Doraldson and sandrew, and betecen the writer anc yourself, certainly took place, and the subsequent failure of this corpany to suoply goods in accordance witn your orders 16 admitted. : iowever, it is not agreed that the actions of tnis company ruse from an "arrangement" with the Union concerned. 'vhe Fact is ther the Federal Storemen and Packers! Union, apparently in furtrercesce of their dispute with your company, placed a ben on the hundzane of all goods of Leyland Australia at the Chullera container derov. This ban fy5ze not only the supply of spore parts, buc all C.4.D, vehicles passing through the devot. The result of such woulda have been the standing-down of envloyeec at our assem y plants, as well as at our Spare Parts dcpots, and the compiecs failure of supply of parts to Leyland distributors and dealers throughout Australia, In an endeavour to prevent such results, which would have hac Pp on) far-reaching and serious financ1 fects both on this con sear and a large number of other tasinesses, an eppreach: vas made tu the Union. They indicated that, if Leyland Australia would suppiy ne parts to your company, they woula pernit all goods for cc.ivery to leyland Australia to pass throvgh tie Chultora ceyot. in view or tne situation facing this co wmany sf the ban co omisnuc: we were forced to accede to the denancs of the Unton. Those was no free or voluntary entry into an anresunt, dus rathesc e eee nee sone Rr ae ce NE er ene genne coe te ame wee, pooner ee re yielcing to duress as the only means of ensuring the concinu of suvply of venicle pucks and partes. In view of the invoiuntary nature oF our action, we strongly deny any breacn of Sections 45 and 46 of the Trade Practice. We feel we are the innocent victims of a dispute in \naich we ne part. Therefore, whilst srecvuly regreviing the pusition which we have been forced, we see uo alternetive to refusiny comply with the request for the sspply to you of paris as se in your netter, unis such time as your Ccrsepute with the Unic is resolved. Mr. Jiatton,in cross-exaination,estimated that the applicant 2G act. heve rca tt 6 OVE ne normelly received autouotive orcrts each montn from tne resvonctentr cf the approximate value of $300,000 to O400,00 The refes of the respondent to supply parts nad resauitved in tne appl2 being unable to supply certain parts to nearly 100% of its Gealer customers and, where this had occurred, the envlicany told tne dealer customers that the parts were not available it hud offered to telephone tre order throurh to the Levpurt él cone "ed divaston of the resnondent if,as mr. Hatton pub it, "they ere in e predicament," In the present case, the gurisdiction to grant an injunction under s.80 is to restrain a person from enraging conduct that constitutes or weuld constitute a contravention q "4 a land 8.45 or s.46. Bothss.45 and 46 were repealed and revleced py different sections on 1 July 1977. I heard this matter ane reserved my decision on 23 Jue 1977, but both the awplicany eat! the respondent yoined in submitting that I should not have regaia to tne changes in the Jaw to becone <«ffective on 1 Juiy 1977 and in view of 3.8 of the Acts Intermctalion Act and the conclus:ons I have reached, 1 nave noc ccalt with tne amend Lo the Act. - sows pian ters) 7. I consider first the position in relation to s.45. S.45(2) provided:- "(2) A corvoration shall not - (a) make a contract or arrangement, or» enter into an c or comneree. oT Cu uncerctandins, wun restroint of tra (b) give effect to a contract, arrangement or understand to the extent that it 1s in restraint of trade or commerce, whetaer the concrect or arrungeneny Wus made or the understanding, vas entered into before or after the cormencenent of this sub-section." S.45(4) provided:- "(4) A contract, arrengement or undeilstending That ts uot of the kind referred to in sub-cecticn (3) 1s not in restraint of tiade or commerce for the curooses of this Act unless the restraint has or 15 iinely te have a significant efiecu on competition Letween we parties to tne cuntract, arrangement, or understanding 'or on competition pveti.cen those parties or ary ot them and other persons. " Section 51(2)(a) provided for certain exceptions wnicn were to apply in determining whether a contravention of Pert IV had Loen committed and it read:- "(2) In determining wnether a contravention of a vrovision oF vhis Part other than section 48 has been committed, regard shall not be had- (a) to any act done, or to any provicion of a coutrach, relation tc the remuneration, conditions of empioyinent, hours of work or working conditions of employees, or to any act done by employees cr by an organization of emis yoes not beens an ect done in the course of the carrying or 71 a business of the employer of these employves or of a business of that organization." Q ad eee ke I consicer that s.51(2}(a) should te reed as folLows:- In deoterninuys victher a contravention of a provig.on of this part other than s.48 has been committed, regard shall not be had ~ (i) to any act done in relation to the remuneration, conditions of empleyment, hours of work or workin; conditions of employees; contract in relation to the re (ii) to any provis:on cf remuneration, conditions of emplioyrent, hours of work or working conditions of emolovens; (i212) to any act done by ormlovees not being en ect done in the course of the carry in en of a business at the employer of those employees; (iv) to any act done by an o7jranisaticn of employecs not being an act cons in the cours? of the carryiar on of a bus ss of that organisation. It is not entirely clear from the evidence whether the "approach" veferred to in kr, Heaven's setter as neving been made to tne Union was inade to tne Federal organisation, or to the New South wales Branch, or to some person or persons prrporiing to act on behalf of the Union. It is also net clear with who: the "deal" mentioned by Iir. Andrew to Ilr. Donaldson was made, but I consider that, apart frum the effect of s.51(2)(a) tne "deal" constituted an arrangement mede or an understanding entered a into between the resvondent and the mion, or ats New South valies Branch, or some person or persons purporting 19 acv. 61 hehasl of employees of the applicent who were rempers of the Union. I do not think it would serve any useful purpoce in this case to t discuss the meaning of ". .make a contract or arriy cr inco én underetacduy,..." other tnan 4. mote thak rho vord s.45(2) differ in a signaficent manner from those of s.G of tne United Kingden restrictive trace Practicec Act of 1956 and ihos a en Sn ae should be borne in mind in considcrins cases Cecsced under ~ ee Act. Applying this anterpretccion of s.5L(2)(a) to the ficts rr in relation to s.45(2)(a), I consider that so far as concerns the Union, the Hew South Jales Lranch, or anyone purporting to ect on behalf of ciuployces of the applicart vho were nembers of ine Union, the act of "euing an arrangemcene. or entering into an understanding was an act done in reletion 13 the remuneration of employees of the anpiicant. I find s.51(2)(a) dalficult to construe and limited ioas were made concernins its construccion. It wes elisa i or n sub anended on 1 July 1977. In deciding whether a comtraventien of ¢.%5(2)(a) has keen stavlisned, I must consider the provisions i1:.5i(2)(a) that regard shall not be had to any act done in relation to the remuneration of employees. There is nothing in s.5l or else ere in the Act which defines or specifically limits the werd ot ct ne errangenen. "employees", As I have said, I consicer tha which was mace or the understanding 'f1ich was entered inlo wiw: the respondent, was in relation to the remuneration of employee: of the applicant and, whether or not the word "onployees" an s.51(2)(a) should be qualified at all, I consider thet a sufficient nexus, at least in this case, is providee ny the feow that the applicant employed menbers of the Union in respect ci which the srrangement was made or the undersiandiug ontered inte. > If I give the words of s.5:(2)(a) waat I corasifer te ve thear crass meaning, then I am not to have regard to the act of the organisation ,or the New South Wales branch, or of those actin: °C vet oS c = iv) tA va th in jis narc, or in the nawe of N Yranch, in deciding whether there has becn a co.travention ot 5.%5(2) Ce), Since I am not tu have regard to this act, 1 consider that 2% has not Leen estabiashed that the responient made an arrerecnent or ertered into an understandine an contravention of Sof OOO a) tt —— toe ame 10. requires the act of tvo parties to rele an arron, cent or enter into an understanding. I also consicer that the provisicns of s.45(2)(%) are not applicaple because in view of tie provisions of s.51(2)(a) it has not been established that there was any arrangement or undertaking to which tne respontent was prohibited from giving effect and no conduct whic. has coustatucce or would constitute a contravention of s.45(2)(b) has beea established. It is therefore unnecessary to consider Whevsir eny understanding or arrangenent was in restraint of trade o1 commerce. I pass now to consider the effcct of the anniicatren inzor.. as it is based on a contravencion of s.4f, s.46(1) provided:- "(1) A corporation that is in a position substantieliy to control a meri:et for gocds or services srall not take advantege of the power in relation to that Imarket that it hus by virtue of being in vhat position- (a) to elLininate or subdsvantially to damage <¢ competitor in that marxet or in another market: (ob) to prevent the entry of a person into that market or into another market; or (c) to deter or prevent a person from engaging 3n competitive behaviour in that market or in another marke." Without so deciding, but uron the assumption that the act of the respondent has the effect of substantially danaging a compe*itor in the relevani market, or preventicg the applicant from engaging in competitive behavicur yan the relevent market, JT consider that it has not seen show thre the respondent taox advestaze of any power uf hua substartsally to control a marr di. for goods by refusing to deliver perts and eccessomies to tle applicant. in view o1 the very limiced arsunent addressed 19 me concerning the internretation of this section I do not with to express any views nct strictly necessary for the deterrinnticn + 4 of the matter before me. I consider that the evicence in tiese ial G 3G proceedings Goes, not estabdlisn that 'he resnondent took advantare of any pover substentrasly to contrcl a market to tl substantially demese the anplicant or to prevent che avplicvi.e or to prevent it from engaging in conmetiblive pehaviour. 'tris respondent was concerned te avoid interference by @ Unitun wi its existing business activity. The applicant therefore has failed to make out any cose tor relief and 1 dismiss tne erder nisl. ' - wee - a 7 . "lL oS ath ; mee ea a trae conv of the t ~ -. t for 22 ist eet Us de teamel mas Men ry | i . ' 1 Jo Cuctice win le. } H | H { ' | Avcoe1 she : i 7 H 1 Pa } mt Fs 7, 7," Miler " ee 8 ce i ' .