CATCHWORODS Trade Practices - Proceedings for alleged contravention of ss.46(1) and 52 - Application for interlocutory relief - Whether prima facie case established - Balance of convenience. Trade Practices Act, 1974 (Cth.) ss.46, 80. TAVERNSTOCK PTY. LIMITED v. JOHN WALKER & SONS LIMITED No. G92 of 1980. FRANKI J. 13 November 1980. SYDNEY. IN THE FEDERAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) No. G.92 of 1980. GENERAL DIVISION ) BETWEEN: TAVERNSTOCK PTY. LIMITED Applicant. AND: JOHN WALKER & SONS LIMITED Respondent. ORDER JUDGE MAKING ORDER : FRANKI J. DATE OF ORDER: 13 NOVEMBER 1980. WHERE MADE SYDNEY. THE COURT ORDERS THAT: 1. The application for interlocutory relief is dismissed. 2. The costs of the application be costs in the cause. IN THE FEDRRAL COURT OF AUSTRALIA) NEW SOUTH WALES DISTRICT REGISTRY) No. G. 92 of 1980. GENERAL DIVISION ) BETWEEN: TAVERNSTOCK PTY. LIMLTED Applicant AND: JOHN WALKER & SONS LIMITED Respondent CORAM: FRANKI J. 13 November 1980. REASONS FOR JUDGMENT I think it is desirable for me to give my judgment orally now rather than to reserve it and deliver a judgment later with reasons more fully expressed. The applicant is a liquor wholesaler which commenced business in July 1980. What I might loosely call its predecessor, Heritage Liquor Company Pty. Limited, went into voluntary Liquidation on 19 August 1980. The respondent was a large unsecured creditor of that company. The respondent is the sole producer and head distributor of Johnnie Walker Scotch whisky which 1s bottled in Australia and when I refer to Johnnie Walker Scotch whisky I am referring to the red label whisky which is bottled in Australia. The respondent sells mainly to wholesalers but also sells to retailers. There was evidence that the applicant sought supply of Johnnie Walker Scotch whisky from the respondent in August 1980 and after some discussions had taken place the promotion manager of the respondent said to Mr. Bundy, a director of the apvlicant, that "we have decided not to supply Tavernstock". Mr. Bundy later on the same day, which was 21 October 1980, spoke to Mr. Ritchie, the general manager of the respondent, and Mr. Ritchie said words to this effect - and I stop here to point out, as I will be mentioning later, that I am only finding these facts ina prima facie way to the extent that it is necessary for me to deal with this matter and that anything I say as to the evidence is not intended to be a conclusive determination of the position. So there was evidence that Mr. Ritchie said words to the effect: "It is purely a commercial decision since they (and it 1s said that means the respondent) +--could not believe that a company with a small capital could operate in this market. Even though a bank cheque afforded protection we cannot take 0.1 per cent chance that remained even on acceptance of a bank cheque. The decision was made by a consensus of the executives of Johnnie Walker and since I believe in democratic management I will abide with the decision. It 1s useless pursuing the issue." There 1s evidence that Mr. Ritchie further said: "There is no suggestion that the decision was motivated by any feeling that money was stolen from Heritage and 1s being used by Tavernstock." There is also evidence from Mr. Bundy that on 21 October 1980 he spoke again to Mr. Ritchie, the general manager of the respondent, and Mr Bundy says he said: Mr. Mr. Mr. Mr. Mr. "Is there anything that I can do or any concession that I can make that will allow you to supply this company." Ritchie said: "No, I do not think so. I discussed the matter here this morning and we agreed that you will inevitably seek credit and there is no way we will give it." Bundy said: "But we are offering trade on a cash basis." Ritchie said: "We do not believe that that would be practical." Bundy said: "If that is your final decision I will ask you to see me with my solicitor in your office today." Ritchie said: "I am afraid that I will not be able to do that since I will be tied up all day today and tomorrow." The applicant ultimately offered to do business on the basis of paying cash for supplies of whisky. The appolicant seeks an interlocutory injunction under s.80 of the Trade Practices Act 1974 based on a contravention of sub-section 46(1)(a) and (c) of that Act. It is necessary in these proceedings for the applicant to make out what is called a prima facie case and I got together some cases which dealt with that question in the case of McDonald Systems of Australia Pty. Limited v. McWilliams Wines Pty. Limited which is reported in 2 A.T.P.R. at p.18103, and perhaps the most important case to which I would refer is World Series Cricket Pty. Ltd. v. Parish in 1 A.T.P.R. p.17422, and I would refer in particular to that part of the judgment of the Chief Judge at p.17426 which deals with this question and at the bottom of the page I quote the words: "However, where the facts are seriously in dispute, the court will not undertake a preliminary trial of the action in order to forecast a probable result, but rather, if the plaintiff has a fair chance of success (and what will be required will vary according to the nature of the case), the court will proceed to look to the balance of convenience." The case was presented on the basis that the first market referred to in s.46 is the market of Johnny Walker Scotch whisky only and does not include any other whisky. It seems to me that s.4E must be considered and this was not enacted when the judgment was given in Top Performance Motors Pty. Limited v. Ira Berk (Qld) Pty. Limited 1 A.T.P.R. 17113. It is very undesirable in interlocutory proceedings of this nature, where of necessity evidence is limited, to express any firm views on questions of fact or indeed of law, particularly in a field such as this. Is s.4E to be read as extending the definition of market so as to include in the market of Johnny Walker Scotch whisky whiskies which are "substitutable for or otherwise competitive with" that whisky? There 1s some evidence in what are substantially proforma affidavits from eight liquor wholesalers which seeks to establish that the relevant market is only that of Johnny Walker Scotch whisky. I will examine the evidence and s.46, assuming but not deciding against the respondent, the relevant market is in Johnny Walker Scotch whisky. It seems probable since the respondent is the sole producer and head distributor of Johnny Walker Scotch whisky 1t is in a position "substantially to control" the market for that whisky. I do not read s.46 as requiring a trader to supply goods to a purchaser , that 1s provided there is no breach of that section, and it was submitted by the respondent that no Australian case goes that far. Indeed, in Top Performance Motors to which I have referred it was said that a dealership in Datsun cars could be terminated without a breach of s.46 where termination 1s pursuant to the terms of the dealership agreement. The question is then, has it been shown that if the evidence remains the same as it 1s before me, the applicant has a fair chance of establishing that the respondent has taken advantage of the power for the purpose of eliminating or substantially damaging the applicant being a competitor in a relevant market or deterring or preventing the applicant from engaging in competitive conduct in a relevant market. I do not think there is any significant evidence that the respondent has taken advantage of its power. The onus lies on the applicant to establish that. The applicant can obtain Johnny Walker Scotch whisky from another source. I consider there 1s no satisfactory evidence that the respondent had a purpose which fell within s.46(1)(a) or that any such purpose can reasonably be inferred. Nor do I think there is any satisfactory evidence that the respondent had any purpose which fell within s.46(1)(c). I do not consider that there is any significant evidence that any purpose of the respondent had been to prevent or deter the applicant from engaging in competitive conduct or that such a purpose can reasonably be inferred. I am of the opinion that if the evidence remains the same the applicant would not have a fair chance of success in the proceedings. Ha@ I felt that a prima facie case had heen established,there would still be many matters to consider before granting an injunction. I am really asked to grant the equivalent of a mandatory injunction and there may indeed be some question of this court's jurisdiction to grant such relief. However, because of the view I have taken and I suppose because of the view I will express in a moment, it is not necessary for me to consider that question. Apart from this, however, the balance of convenience 1s in my opinion strongly against granting any relief. It is now 13 November 1980 and the Court can now offer time to hear the proceedings early in February. Indeed, I would be prepared to commence the hearing of this application on Tuesday, 3 February 1981. So I am only concerned with a period which may not exceed three to four months. The applicant 1s able to obtain supplies of Johnny Walker Scotch whisky from at least one supplier other than the respondent by sharing the discount which the respondent allows with that other supplier. This appears to be an amount of about $1.75 per case. In October the applicant sent circulars to 600 retailers who had dealt with Heritage Liquor Company Pty. Limited, (which I have called very loosely its predecessor) on a cash basis, and as a result of this by 30 October 1980 orders for 250 cases of Johnny Walker Scotch whisky had been received, according to the evidence here and it has not been attacked. At present therefore it seems to me that the amount involved is less than $500. The applicant estimates that if available it would be likely to sell to retailers 5,000 to 10,000 cases of Johnny Walker Scotch whisky over the next 12 months. Looking at the matter in any light it seems the extra cost of obtaining supplies before the matter could be determined by this court is not likely to be very significant. It seems to me to be a serious matter to force the respondent to commence dealing with the applicant against its will. It is not a question of preserving an existing status quo. It appears likely that the applicant will be somewhat disadvantaged by having to obtain its supplies from another source. Perhaps its major problem could be that its suppliers all require it to pay cash. I do not consider that the public or any section of it is likely to be affected in any significant way, if at all, by the inability of the applicant to obtain supplies from the respondent pending the determination of the action. I refuse any interlocutory relief. I think it is appropriate to add that Mr Biscoe has presented a very careful argument and has left no stone unturned in his client's interest. On the question of costs, I do not know whether anybody wishes to address me on that, but I would be inclined to do what was done in other cases and that 1s to make costs costs in the cause. Alright, I will make the order that the costs of these proceedings be costs in the cause. IT certify that this and the 7 preceding pages are a true copy of the Reasons for Judgment herein cf his Honour Mr. Justice FRAN tz { 4) - Aa y~ Oe Assoctate J patea: /2 Neeser EO