m s ' Be ge ENT No. f C+ TCH .CRDS aver Trade Practices - secondary boycott - contractors previously engaged or nominated by water Pourd phased out as tie result of industrial pressure brought to bear on Board and i'inister by Union representing men employed in Board's cay labour force - Board « statutory body representing the Crown - whether the grant of ingunctive relief against the Union and its officials would nregudicially affect the Crown - Eradken Consolidated Linited v. 3..4.2.Co.Limited (1979) 53 a.L.c.n. 452 - Trade Practices Act 1974, ss.45D, 4(2). Crown - statutory body representing the Crown - whetner Metropolitan Vater Sewerege anu Drainage Hoard (I!.U.«.) an agency or emanation of the Crown - whether Trade Pr.ctices act 1974 binds Crowm in ri-nt of Stzte of New sout.. i-les - Metropolitan «water Sewerage ond Dreinere act 1024 (L.2...), particulerly ss.7(2) end 117(3) BP, SHARKEY & CCiPn..¥ PTY. LUUMTOD & CRE ve gOSEr2 FISHER " che. (xo.G 7G of 1986) SHErPaRD J. 26 November, 1980 Sydney IN THs PECDReaL CULKT OF -USTRaLLA KEW SCUTH w.L35 DISTRICT KEGISTRY No. G 79 of 1°66 GeNURsL DIVISION IN TH. UATTSR CF TL. Tal DR FRaACTICSS ACT 1974 F, SHARUEY & CcLPa.y Pry. LirItcr cq [o) an) te tT m nj Pp " Hoy 2) was ~ fa w cn nespcncerits ORD=RS JUDGE MAKING ORDER, SHEPPaRD J »HERE JADE: SYDNEY DATA OF ORDER: 31 October, i980 THD COUn? OkDenS THsT: i. The proceedings against fourtn and fifth respondents be set sside. licants pay the costs of the fourtn anc fifth i) e The apy "co resvondents of tae filins cf the conditiorci -presrence entered by ther end of tie notice of motion to set aside tue ~roceedings ?geinst *hem. beT > CF CRD A: 14 November, 1S58C Til, COURT Calms List: 1. The proceedings, insofar 4s they invoive a clain for ingunctive relief, against tae first, secona cr'. taird ce Ine applicents say tre co:ts of those respyondents io tds FSLERAL OcUrT uF »UsTR LIL. @ © WE cCUTH .+LLS DISTcICT keGISTHY , iio. G. 79 of 19 GaNiataL DIVISION Between > ore omRG O° rere Zeo0NS TCH CUDGMENT By their application filed on 14 October, 1¢aC, tne applicants souyht injunctive relief 2nd damapes on the -vrounds of alleged breecnes by the respondents of certain of the provisions of Part IV of the Trade Practices act 1974. The fourta cond fifth respondents who =re, respectively, the Yinister of state for Frublic 'orks anc rorts of tne 3st. te of New South Vales and the metropolitan water, Sewerage and Drainage Board, a statutory corporation conctitutec Ly the IHetronolit.n water, Sewerace «nd Dreincre nct 1924 of the said State, avneared conditionally. A notice of rotion to set aside the proceedings zyxainst trem was taxe. out. It was said that the Court had no gurisdiction to entertain the proceedings against them because the Trade Fractices Act did not bind the Crown in right of a State. It was said that the board was an agent or emanation of the Crown. I upheld these submissions in reasons for judgment published on 30 October, 1980. On 31 October, 1980, I made orders setting aside the proceedings against the fourth and fifth respondents and ordered the applicants to pay their costs. In making those orders I said: "In the reasons for judgment which I published yesterday I referred to the difference that there is between the parties as to the appropriate procedure by which the question of jurisdiction in this matter should be determined. I mentioned that the fourth and fifth responcents had taken out motions to set aside the proceedings, they having filed conditional appearances. I mentioned also that it was tne submission of counsel for the applicants that that was an inappropriate procedure to raise the cuestion and that it was more appropriately raised by the formulation of a question pursuant to Order 29 Rule 2. I must confess to having had some doubt as to the appropriate procedure to be followed but I have come to the conclusion that either procedure in the circumstances of this case is aveilable. Accordingly I propose to act pursuant to Order 9 Rule 7. The proceedings as against the fourth and fifth respondents are set aside," The remaining respondents raised further preliminary questions of law. After argument on these questions had proceeded on 31 October, 1980, and on 7 November, 1980, I determined that it was inappropriate for the points in question to be dealt with in the absence of the evidence to be relied upon by the parties in the proceedings. Counsel for the applicants then moved for interlocutory relief. after affidavits from both sides had been read and some documents tendered, there was discussion as to whether the hearing could not proceed as a final one, rather than on an interlocutory basis. Eventually it was agreed that the hearing would be a final hearing. Some of the evidence is hearsay, but no objection to 1t was taken on that ground. It was not thought necessary that there should be pleadings. Although other provisions of Part IV of the Act were mentioned in the application, the relief which the applicants claimed was based solely upon alleged breaches by the respondents of s.45D of the Act. The hearing concluded on 14 November last. I was then firmly of the opinion that the application must fail. The matter has a degree of urgency from the applicants' point of view. They have said, through their counsel, that tney may wish to test my decision on appeal. For thet reason I announced my conclusion, dismissed the proceedings and ordered the applicants to pay the costs of the first, second and third respondents. I said that I would publish my reasons for the decision at which I had arrived in due course. what follows are my reasons for that decision. The applicents are companies (in one instance a firm and in another an individual) who carry on the business of construction contractors. Their main business is the construction of sewerage and water mains, and ancillary work, for various developers, subdividers and governmental bodies. According to the evidence of Mr. Galloway who is a director of the first avolicant ard wnose evidence wes not the subject of any cnallenge, water and sewerage services had, prior to 1963, been provided by the Board in its area of operation free of charge to subdividers. In 1963 the Local Government act 1919 (N.S...) and the Metropolitan water Sewerage and Drainage act 1924 (N.5..u.) were amended, Thereafter 1t became usual for a sub- divider or developer to receive consent to nis subdivision conditionally, inter alia, upon his providing water and sewerage services at his own expense. Following negotistions between an associzetion known as the Urban Development Institute of australia and tne Metropoliten Water, Sewerage an. Dreinage Board a systent wes instituted whereby a Geveloper or subdivider was eble to enter into a contract with tne Board for the suoply of weter ana sewerage services for the nominal orice of one dollar. Tne sub- divider or developer would sub-contract the work to a private contractor. Tne contracts came to be known as "dollar contracts". Sometimes work is done, not for a developer or subdivider but for a government instrumentality. In such cases the Board contracts directly with the contractor who does tne work for 'ae Eo ish} rd which in turn charges the government instrumentality for 1%. The applicents have for many years been doing the contracting work waich I heve described. They have been retained either by developers who have entered into dollar contracts with the Boara, or by the Board itself. The work 18, for all practical purposes, the only work whicn the epplicants have, However, tney do not claim to be the only contractors to whom work of this kind 1s given. There are, apparently, many others as well. They have no long term contract or arrangement with the Board assuring then of a continuity of work, The Wages Division of tne water and Sewerage Employees' Union has as its nembers most, if not all, of wnat are known as the day labour employees of the Board. If, as sometimes occurs, the work is not sub-contracted 1n the way tnat I have described, it is carried out by the Board using its day labour employees. In such cases the developer or the government instrumentality pays to the Board the Board's costs of having the necessary work carried out. In past years the Eoard's day labour force has been engaged, for the most part, in extending water and sewerage reticulation in the metropolitan area of Sydney. That is work which the Boara itself funds. The current membership of the wages Division of the water and Sewerage Employees' Union is approximately 7,7CL. AS a result of the activities of the Foard over a number of years weter and sewerage reticulation has been supplied to over SO per cent of all homes in the metropolitan erea of Sydney. Thus,the amount of work rejuired to te carried 5. out has significantly diminished. Since 1976 the Board has permitted its labour work force to reduce in numbers. This has come about principaily ty failing to replace those who have retired or left tne Board's employ for other reasons. It is estimated that cince 1978 there nas ceen a decline in the vork force of some 2,400 employees. According to tne evidence of Mr, Fisher, who has been president of the wages Division of the Union since March 1979, the effect of "the shrinking availability of work for the Bosrd couplec with its continued utilisztion of private contractors for a nunber of projects, has adversely affected members of tne Union in their employtent in a number of ways." according to nis evidence a number of employees have been "regressed" into less remuneretive positions, also, onportunities to progress to higher classifications nave been reduced. About the middle of 1979 1t was deciced by the executive of the Union to endeavour to negotiate with the Board for the ultimate elimination cy the Board of the use of private contractors for the laying of pipes in connection with water and sewerage reticulation, These policies were endorsed, accordin- to fr. Fisher, by members of tne Union at meetings held on 23 and 25 October, 179. Mr. Fisher's evidence contirued: "Pursuant to the authorisation of tne said meetings, and for the sole purpose of ensur- ing the continued employment of members of the union at appropriate remuneration and classifications end conditions end fron time to time opportunities for improvement of the conditions of tne members of the union, I and the respondent, Sidney James Lake, signed and served on the secretary of the toard the notice dated 25 October, 1579 ....." The notice was addressed to the Board and to the Minister. It is lengthy and I do not set it out. In snort it threatened industriel action unless steps were taken to cease letting contracts of the kind usually carried out by the applicants to tnem or to other versons carrying on similar businesses, In February 1980 tnere was correspondence between the Board and tne Union. Cn 1 February, 1980, the Board wrote to the respondent, ir. Lake, ne being the secretary of the Union. The letter included the following paragraphs: " Further to our ciscussions held earlier today, I em pleased to say that I am now in 2 position after having conferred with tne Deputy Premier and Minister for rublic works and Ports to record that the Board will arrange witn State authorities involved with the development of land for Poard's forces to henceforth carry out all work associated with the provision of water and sewerage services in respect of new applications for services to subdivisions received by the Poard subseauent to the adoption by your Union of this approach, So far as the provision of water and sewerage services to land developed by private enterprise organisations is concerned, the Board will arrenge for a vrogressive involvement in this work. It 1s proposed, once advice is received fron the Union accepting tnis approach, tnat the board will arrange for its own workforce to undertake 30) of all such work (on the basis of the totsl number of lots to be developed) in respect of new applications for 34B subdivisions received by the Eoerd in the first "six months following the Union's acceptance of this proposal. In the subsequent six months, tne Board would earnerk 55% of new 34b sub- division lots to be serviced by the Board's workforce, and in the third six-monthly period, for 75,5 of lots to be serviced by Boerd's forces. Cn this basis, the Board st the expir- ation of some 18 months from the acceptance of the proposal by the Union would be earmarkinz e411 new 34B subdivision work as work to te undertaken by Board's forces. For the Board's part, every effort will be made to make this venture a success and I am conficent that the co-operation of the Union and its member- ship will be forthcoming." Cn 6 February, 1980, the Board wrote a further letter to Mr. Lake recordin: a variation of what was proposed in the earlier letter. It 1s unnecessary to refer to the detail of the letter of 6 Februsry, 1580, On 20 February, 1980, Mr. Lake wrote to the Bozrd, He said that he was pleased to advise that at meetings held on 19 and 20 February, 1980, the members of his union had accented tke "offer for the periodic phasing out of private contractors", The letter concluded with the following paragraoh: "Further, I wish to thank the New South wales Government and the Metropoliten water, Sewerage end Drainage Board for their co-operation in ensuring that an amicable agreement was reached to the satisfaction of all parties." The "varties" referred to were the Minister, the Eoard and the Union, al.sent from the negotiations, so fer as is revealed by the evidence, were the contractors end their employees, who are, apparently, for the most part menbers of the Australian workers' Union, Mr. Galloway said that the total value of sub-contracts and contracts placed with his company and the other applicants during the years 1976, 1977, 1978 and 1979 in accordance with the procedures and arrangements described in his evidence was approximately 335,CC0,C00. Such contracts and sub-contracts constituted approximately 95 per cent of his company's work, Representations were made by the applicants to the Minister and to the soard. Represen- tations were also made to other menbers of Parliament, Advice from counsel was sought on 19 Februery, 1980. The advice was that no action could te taxen -tecause at that time the epplicants had no proof "of any intention on the part of the Board to yield to pressure by the Union". Mr. Galloway said thet 1f tne phasing out rolicy continues to be enforced "my company will be destroyed". Mr. Galloway said thet his company had approximately 30 employees who would lose their gobs. The company's eculp- ment bought for approximately '3CO,COC and suitadle only for water ena sewerage and ancillary work woulc te elnost wortnless, He said that the applicants nad exhaustei every other avenue of seeking redress before resorting to court proceedings. Executives of the other applicents gave evidence to a similar effect. Mr. Galloway sougnt to illustrate the decline in work available in the following paragraphs of his affidevit: "4(a) From lst January, 1979 to 30th hoverber,1¢7¢ my company obtained contracts to the velue of .980,0C0 for development work. From 1st Decerber, 1°79 to Z0tn October,193 my company successfully tendered for wor« «orth °477,C0C. For the period fron Ist July,i9s0 to 20th "October, 1980 my company obteined work to the value of ',61,400. For the corresponding veriod of the previous year my company obtained work to the value of (593,CCG, On the present indication it appears tnat ny company will have to dismiss half of its worx- force and that the company will be out of business in the second half of 1981. (t) I am informed by william O'Donnell, a Director of J.f#..D. Constructions rty. Limited, one of the Applicants herein, and verily believe that for the period from lst May, 19738 to 30th November, 1¢79 that company tendered for 31,780,000 worth of work but for the period ist Decenber, 1979 to 30th Cctobter, 16350 that company submitted tenders for ».210,G00 worth of work, (c) I am informed by Thomas Gibsons, a Director of 11.2.0. Excavations rty. Limited, one of the Applicants herein, and verily celieve that his compeny has not been ziven the opportunity to tender for any work for tne last two (2) months anc that the work in progress will be completea by Christmas 1960, (d) I am informed by Patrick Joyce, a Director of Camdel Constructions Fty. Limited, one of the applicants herein, and verily believe thet before 26th October, 19795 his company averared about $30,000 per month of work. I am further informed that between lst July,1©¢80 to 30th September, 198C his company has received work to the value of only *44,c00. (e) I am informed by John Fanning, the Froprietor of John Fanning Flant Hire & Excavations, one of the Applicants herein, anc verily believe that ha normally nas 6-12 nonths work on hand and that at the present sll the work on hand will te completed by Christmas 1980." There was no challenge to the evicence of Mr. Galloway or that of the executives of the other companies, In those circumstances I have no hesitation in accenting it. waen announcing ty decision on 14 November last Ii said that the evidence revealed a serious ane an unfortun:ite 10. situation. If tne phasing out of which the applicsents complain continues, a number of small businesses are likely to te destroyed, the value of mucn expensive capitel eyguipnent will be lost and some nunareds of men will lose their gobs. If the phasing out is not con- tinued numbers of employees of the Board, althougn their gobs are not 1n jeopardy, will face regression to lower paid positions or will not advance in the Board's service as might otherwise have been the case. Cne must have sympathy for both sides. In those circumstances 1t seers a pity tnat the only public hearings whicn the problem ccn have is in proceedings which must necessarily be conducted, not with a view to attempting to tring ebout « settlement of the aispute upon its merits, but upon the besis oz whether the applicants ere etle to bring tnemselves witnin a section of tne Trade rractices act. Unfortunately tnere is no industrial tribunal, state or federal, whicn has jurisdiction in the matter. Otherwise I would have stronsly urged the parties (including the i.inister and the Board) to notify the dispute to an aopropriate tritunal. +S it was, I did say in the early steges of the heering that it was a case where attempts shoulu be made to settle tne problem otherwise than in proceedings of this kind. Those suggestions apparently fell on desf ears. whether the ears that dic not hear were those of all parties or of + one side or the other I co not know. All I sey is that ll. it is most unfortunate that something cannot be done. That is particularly so in the light of statements which appear in the evidence that the Eoard, by phasing out the contractors, will find itself paying more for work which was formerly done more efficiently and more cheaply by contractors. Likewise developers who have doller contracts with the Board will alsc, so it is claimed, vay more for such work. I have no evidence "nich would eneble me to cetermine wnetner tnese state- ments ere correct or not: and they have no relevance to the present problen,. But, bearing in mind the high cost of land in this community, it would te unfortunate if the course that 1s being followec led to a situation in which those members of the community wno bcuy vacant land had to pay even more for it tnan they new do, Certainly it 1s a matter wnich one would tnaink ought to be considered. However, none of the matters I nave mentioned 1s of relevance in determining the outcome of tne present pro- ceedings. I must have revard to the law ¢nd tne relevent evidence which governs this case, I turn to consider the relief wnicn was cleimed end tne provisions of the lesis- lation relied upon in order tc found that relief. During the course of the nearing leave wes granted tne applicants to ana adaitionel vorayers for relief to their aoplication, in the wsy that the matter developed the relief really sousht by them turnea out to ke that clained in paragrapns 2, 3, 4 and 5 contained in documents nanded up curins the hearing entitled "Crders sought" and "Froposed adcitional Order", It 1s convenient to deal first of all with the relief cleimed in peregreph 4 of those documents. It was a cleim for en orcer thet the first, second and third respondents be restrained from engaging in conduct in concert witn the Eoard which hinders or prevents the acquisition of services by developers and subdividers of land fron the applicants or any of tnem or the class of persons comprising the private contractors who have formerly carried out sewerege and drainage work for the Board or developers engagec by the Board. Rather than set out tne provisions of s.45D(1) in terms, it is useful, using a document provided by counsel for the applicants during tne nearing, to set out how it 1s alleged tne facts of the case fall within the section and gustify the conclusion that tne conduct descrited in the evidence emounts to a breach of tne section. It is said that there is a breach of the section because: a person (unionist and/or union) shall not, in concert with a second person (the Board) enzeze in conduct that hinders or prevents .... the acquisition of .... services by a third nerson (a developer) fron a fourth person (2 contractor) not being an employer of the first mentioned person where (b) the fourth person (contractor) 1s a corporation and the conduct is engaged 13. in for the purpose, and would be likely to have the effect, of ceusing:- (1) substantial loss or damage to the business of the fourth person (contractor)......3 or (ii) a substantial lessening of compet- ition in any market in which the fourth person (contractor)..... supplies ..... services." In considering the question whicn arises it is necessary to have regard to the definition of "engaging in conduct" in s.4(2) of the act. That section provides that a reference to engaging in concuct shall be reac, inter alia, as a reference to doin, or refusing to do any act, including the making of, or the giving effect to a provicion of, a con- tract or arranrenent or the arriving at, or the giving effect to a orovision of, an underst.nding. The conduct relied upon for the purpose of establishing « treacn of s.45D(1) of the act insofar as order 4 1s concerned is the meking ana the carrying into effect of the agreement whica Oy reached between tne Board and tne Union in tne letters 19] wa wnicn were written in February 196C to which I have earlier referred. Thus it 1s said that the Union and its members in concert with tne Board engeged 1n conduct that hindered or prevented the acjuisition of services by the aevelopers from the contractors. I should pause 2at this point to say two things. Firstly, tne orcer cought is anpropricte only in cases where developers or sutdividers were engezed by tne Board for tne 14, nominal sum of one dollar to carry out tne work and themselves engaged contractors to do it. The order sought has no relevance to cases where the Board engages the contractors directly. Thus the order deals with what have heen called the collar contracts. Seconciy, at the tite the relevant letters were written in February 1980 the form of s.45D was different. The section took its present form on 29 May, 1980, when Act No.73 of 1980 came into force, The engaging in con- duct relied upon Ly the applicants is both the entry into the arrangenent in Ffebruery 1950 anc the implementation of that arrenzement. Thus it is relevent to consider bot. tne previous and the present form of the section. But, as both counsel agreed, there 1s not, so far as the facts of this case are concerncd, any matericl difference btetween the tvo provisions. In my view the applicents' case for an order such as is claimed in paragraph 4 must fail. The position, in my Opinion, is governed by the decision of tne High Court in Pradxen Consolicated Linited v. Tne Broken Hill Froprietery Co, Limited (1979) 53 A.L.J.n. 452, In that case the appellants brought proceedinys against a number of r nH ur pon- dents of wnom the Commissioner for Ruilways of the State of xueensland was one. It was held that the act did not bind hin -ecsuse he was an agency of the Crown, But the cuestion 15. arose whether relief was nevertheless available against the other respondents. It was decided shat it was not. after pointing out that the injunctions souzht agzinst the other respondents would, if granted, affect the Comnissioner as much as the respondents, Gibdts J. (p.453) referred to a number of authorities enc concluded: "To hold that tne Trade rractices Act applies to transactions which the respondent companies have made with the Commissioner, £o as to frustrate those transactions, would be to give that Act an operation which would affect predud- icially the interests of the Crown. Since tne Trade Practices act does not bind the Crown, 1t does not have thet effect. For these reasons I consider that the relief sought upon the casis of the present points of claim must be refused." Stephen J. after concluding that the Commissioner for Railways was not tound by tne Act said (p.460): "Cnce this be concluded 1t follows that the act will not only not apply directiy to the Commissioner but will also not apply so as to prejudice its interests when in contractual relationship with parties to whom the .ct clearly apnlies or when otherwise interested in transactions affecting tnose parties;....." hE Mason and Jacobs JJ. in their joint judgment said (p.'163): "4... the aosence of an intention to bind the Crovn in rignt of wueensland will not only exonerate it fron the direct application of tne stetutory provisions but will also exonerate from the application of those pro- visions the contracts, arrangements or uncer- standings made by that Crown ana the other parties thereto as well". In each of tne gudgments there is reference to the decision of the Court of Appeal in Englarnc in re Telephone Apparatus Manufacturers' application (1963) 1 w.L.R.463. I do not refer to tne detail of the case. it is sufficient to refer to the judgments of Willmer L.v. (pp.474-475), Harman L.d. (p.477) 2nd Upjohn L.v. (as he was) (pp.482-483). ; Counsel for the zpplicants sou=ht to distinguish these cases upon two g¢rouncs. Firstly, he submitted that there was not here a contract as was the case in Bracken, Sut Mason and Jacobs JJ. refer, in the passage I nave cited fron their judement (p.463), to srrangenents and understandings as well as to contracts. Furthermore, I do not perceive why, in princivle, the ratic of Eraiken should be limited in this wey. my conclusion in that regard makes 1t unnecessary to consider, for the purpoce of resolvins the submission now under consicerstion, tne question, much discussed in argument, of whether there was in fact a contract contained in the Februery 1 wo ac correspondence, One of the matters relied upon for the proposition taat there was sas that tnere had teen mace, for vhe purposes of s.11 of the Industrial arbitration Act 1940 (N.S.%.), an 1andustrial asreement. Tnen it was sala that in each of tne vassarec from the gucerents in braaker which I have cited nm there was reference to possible nrejucdice to tne Crown. It was subnittec that nere tnere was no _recucice. Tne very reverse was true. The Board wes in fact being 17. hindered by tne conduct of the Union. An injunction restraining the Union and its officials from a contin-~ uation of this conduct would enable tne Bosra to act independently of union pressure end thus bring to bear on the »roblem an open mind enabling it to make a decision on the merits without the tnreat of industrial pressure and possible disruvtion of its activities. I reject this submission. in my onanion the Board, by entering into the arrangement 1n question, nas not suffered the xind of prejudice to wnich the gudges in Bradken were referring. Wnat I consider them to have meant is thet no relief will be granted esainst a party to a contract, arrangement or understending, to which the Crown or a body representing it is ¢lso a party, if such relief would affect the efficacy or operation of such agreement, arrangement or understanding. if at were to do so, tne Crown would be prejudiced beceuse cne of its acts would tnereby be affected. whilst all ver- sons have freedom to enter into such contracts, arrenze- ments or uncerst.ndings (unless they be pronibited ty lew) as they may choose to do, once any such contrect, arrenge- ment or understanding is entered into the freedom of such persons 15 affected. Taev are bound, legally or orally, to act within the terms of the contract, arrenge'ent or unuerstending which they have mede. To that extent tne very freedom which they had to contract, to mexe arren;: e- ments or to enter into understendings hes led to a 18. situation wnere tneir freedom to act Lecomes restricted. The restriction imposed by the contract, arranzenent or understandin,; into which they have entered affects that freedom. what would occur if I were to accede to the submission now made, would be thet an arranzvement entered into ty a tody representing the Crown would be impinged upon, That would affect the Crown's freedom and inaependence to enter into and to implenent such arranse- ments as it tninxs Tit. It 1s in a position, if it chocses to do so, at leist in legei theory, to withstand union or incustrizl pressure by fuilins to heec it or to teke positive stens to suppres: 1t. < is « matter for it 'hether it succumbs to 1t or not. My finding tazt the Board 1s an azency of the Crown mesns cnet tae Trace Practices Act nas no g0plicetion to it. It was thus fre to enter into and to implement the err-npement whicn 1s in question. To affect that errang-rent by the grentine of the injunctive relief whicn the applicants claim would be andirectly to affect tne freedom of the Crown to do what it nes aone, It as for that reason thet I consider the case indistinguishable from Bredxen end upon tnayv ground consicer that the applicints ere not entitled to 1) Pp bh T we fe) Iy ct as iD Po '* a fa et 5D ft] we 2) oO oO mn iw io} a ayiW)i.) "3 ow > ° Fly dt(0) documents to whica I ucve referred, The next order wita which 1 desi is thet fouruat b Na) . in paragrapn 2, The order claimed is an order that the first, second and third respondents be restrained from engeging in conauct which hinders or prevents tne acouisition of services ty tne Eoard from tn= applicants or any of tnem or tne class o* persons comprising private contractors who have formerly carried out sewerage anc drainage work for the Board or developers engaged by tne Board. The order is des2gned to cover cases wnere tne Board itself retained contract3rs to do work for it. sS earlier indicated, that work wouid usually nave teen done by the Eoerd on behelf of enother government instru- mentality. The soard would debit thet instrumentality with tne cost of it. The situction 1s ditferen tt from that wnicn prevails where a developer or subdivider under- takes for the nominal sum of one dollar to do the work. Tne way in wnich the applicants seek to fit this Claim into tne section 1s as follows: ".... a person (unionist) shall not, in concert with a second person (unionist or union) engegse in conduct that ninders or prevents .... the acuulsition of .... services by a thira person (Board) from a fourtn person (contractor) (not being an employer of the first mentioned person) where: —- (>) tne fourth verson (contractor) is a cor- poretion enc the conduct 1s engeged in for tne purnose, end would te likely to ka tae effect, of ceusing:- (1) substantial loss or camage to tne tusiness of the fourtn verson (con- tractor)......3 or (21) a substantiel lessening of competition 1m any market in whicn the fourth person (contractor)..... supplies ..... services," In this case the Board is not allegec to fe acting in concert with the Union. The persons actinz in concert are unionists or one or wore unicnists and the Union. Tne Boerd takes a passive role. It is the vody whicn is being prevented or hindered from acguiring services from the applicants. An analysis of the terms of the order sought in paragreph 2 must comnence with the words "engage in con- duct", Tnose words, as I have mentioned, are defined to include the making of, or the giving effect to a provision of, a contrect or arrangement, or tne arriving et, or the giving effect to a zrovision of, en underst:inding. Tae only relevant contract, errangevient or uncerstonéing 1s the agreement made between the Union and the Bosrd in tne letters wnicn passed between then in February 1¢80, Insofer as tne entry into anu implementation of the egreement is relied uron as "engaging in conduct" for the purposes of tne cleim mace for the order in paragraph 2, tne consider- ations which apply cen be no different from those +vhicn applied in relation to the claim made for the orcer in P a pn 4, Tie Board's passive position in the orcer ro) rapr claimed in paragraph 2 can make no difference to taat situetion, That 15 because the making of the order wilt affect, at leest incirectly, the agreenent "hich nas been made by the soared (and taus the Crown) ani vnach tae te fo} y il fon 1s at tne present time implementing. The restraint =) o us) Qo n oO A by an ingunction would have the effect, if not of restraining tne Foarn, then of affecting its evility or power to implement that which it has agreed umon, However, the entry anto the agreement 1s not the only conduct which the applicants seek to restrain. The definition of "engaging 1n conduct" is & wide one. It is to be read as a reference to doing or refusing to do any act. Thus any act which hinders or prevents tne acquisition of services 1s within s,45D(1). Upon tnis basis the applicants seek to restrain the Union and members of its executive from engeging in any concuct which will hinder or orevent the accuisition of services vy the Board fron then. But the evidence establishes tnat the Board, having reached its egreenent niin the Union in February last, has of 1ts own volition and as a matter of 1ts own policy, implemented the nhasing out which the agreenent provided for. Indeea there 15s evidence that such phasing out is proceeding at a rate faster than thet for whicn the egreerert provided. Importantly, the evicence does not cisclose eny act ty tne Union or any of its officials which could constitute the 1umposition of industrial pressure uson the Doard (or the Minister) since tne stop work meetings and the service of ti.e notice earlier referree to. Both those events occurred tefore the rebruary 1930 letters were written. Counsel for the applicants conceded tnat to be so. dowever, he submitted tnat I should infer from the evidence that 1f the Board were tc subtit to any pressure by the applicants to change its pnésing out policy in any way, there would very soon be further acts of industrial pressure, Tnet is an inference which I em prepared to draw. The Union has had its way. There is not, nor has there been since Fetruary, any occasion for the taking of further industrial action, But the reality of the matter is that, if the Board showed any sign of changing its policy, the Union would act agein, Thet conclusion 18 pleinly open upon tne basis of the tenor, if not the express words, of Nr, Fisner's evidence. That being the position, consideretion must be eiven to the grant of the relief soucnt uron a yuie timet basis. The applicants nave jurtifiatle and reasonable fears that 1f the Board denarts from its policy, furtner industrisl pressure will be brought to beer upon the Board by ta Union and its officials. The Boerd is taus not now, end will not in the future, te free from the tnreet of that pressure until the phasing out of contractors is complete. The shadow of that pressure, in the submission of the applicants, prevents, and ill continue to srevent, the koard fro: considering, in an independent way, sub- aissions made by them chet, naving resard to «11 the relevant interests, including that of the public, 1t should cnange 1ts mind and revert to the use of con- tractors. an initial difficulty about the submission 1s that it involves the applicents_in saying that tne under- lying threat of industrial pressure which I have found to exist 18, within the meaning of s.4(2) of the x#ct, the doing of an act. Only if it 1s will the Union and a member of its executive have engaged in conduct which hinders or prevents the acquisition of services by tz Boerd from tne applicants. I think that there is a substantial guestion as to wnether tiere 15 any relevant act on the part of the Union ane its officials. I do not think that that difficulty can te overcome by resort to the notion of an ettenot where provided for in s.cC(1)(e) of tne act. But assuming tnere to be a relevant act, tnere is the further difficulty thet the pressure which may be expected to te brought, if the Eoard aprears to ke giving consideretion to a change of mina or actually chenges its mind, will be pressure upon the Eoard to chanie the agree- ment wnicn nas elready teen made with the Union and «hich continues in force. Thus, the end recult of th? 1ngve.tion of the restraint which would Le imposed by an angunction kh of the kind which the applicents seek must ce to astfact both the e-greement whicn tne Foard has entered anto wath 24, the Union and the implementation of 1% by tne Hoard. For that reason the effect of granting tne 1angunction which tne applicants seek in paragraph 2 of tne docu- (Fy '4 ments to whicn I heave referred would avyain be to neve the indirect effect upon the actions of the Hoare (and thus the Crom) whicn the decision in Br-xdser does not permit. The matter may be testea in tnis way. Supvose that instead of th roceedings heving beer commenced th KS after the Eoard's policy had teen decided upon, proceec- ings nad seen comnencea snortly after the stop work meeting ana tne notice and tefore the February 1$¢0 letters, There sould te cleer evidence of industrial pressure being brouznt to bear upon the Lroerd in order to induce it to implemen* a phasing out policy. witnin th meaning of the opening words of s.45D(1) (assuming it to have been wordei sinilarly in 1979 as it 1s now) the Union would be a first person and a member of its executive a second person, Tney would te acting in concert to tw oO aa hinder or orevent the ac:uisition of services ty the zrom the applicants, But that conduct sould not be restrained because to do so would indirectly effect the Board's (the Crown's) freedom of action. It, uson tne ff principles establisned in tne Telephone sonaratus Manufacturers case and Bredken, oucnt to te frre to resist or succumb to industrial pressure as it sees fit. It is in effect the Crown, f it wisned to resist pressure it could act in its cepacity end with its powers as the Crown to resist it. But its decision whether to do so or not ou sht not to te hampered, even indirectly, by a restraint imposed upon those with whon it was dealing. To impose such a restraint 1oule be to impose a restraint upon the Crown itself. For thet reason I decided thet the clain for en order in terms of paragraph 2 of the documents should be rejected. The order sought in paragraph 3 of the <ocunents to which I have referred, like that soucnt in psragreph 4, is an order relating to the letting of collar contracts. But unlike the orders with wnich I have so far dealt, ch he alleged treach of the section unon wnich 1t is founded 1s one whica does not involve the Board bein z any of the persons referred to therein. aS applied to the facts of the case, tne relevant vrovisions of the section would read as follows: ". eee. a person (union) shall not, in concert with a second person (unionist or union) engage in conduct that hinders or prevents ..... the acquisition of ..... services by « third person {ceveloper) from a fourtn person (contractor) not being an employer of the first mentioned person), where:- eeeee (bd) the fourth person (contractor) is a cor- poration ana the conduct is engaged in for the purpose, and woul: be likely to nave the effoct, of causing:- "Cd substantial loss or Gamage to tne business of the fourth person (contractor)........; or (il) a substantial lessening of comvet- ition in eny market in whicn tne fourth person (contrector)..... supplies .#...... Services," Thus, those who are saia to act in concert to hinder or vrevent the acquisition of services are, as was the case in relation to paragraph 2, tre Union end a unionist, but the person froin whom, as a result of their corcuct, services might not be acqjuirec, was tne developer or sub- divider rather then tne Board, Taat was also the case in relation to tne order claimed in paragreps 4, Trere, ps however, the persons wno were said to Le acting in concert were tne Union end the Hoard itself. Leaving aside tne problen of whether there is evidence of the doing of any act, for the purposes of s.4(2) of the act, there 1s agein the question of wnether the zrant of tne relief claimed in paragraph 3 will, in tne sense in which the expression is used in tne gudgments in Sredken, pregucice tne Board, It is true thet the facts of the case can, subject to furtner submissions of the respondents, be fitted into the sub-section in the way that the applic.nts contend, But in my opinion the fact that the Bourc is not, for the purposes of the section, one of the four persons specified therein does not mean thst the crant of the relief claimed will not, at least indirectly, affect the freedom of the Board to act as it sees fit, whether or not what it does or does not do comes about wholely or in part as tne result of industrial action on tne part of two or more of the respondents, In tails respect I cannot distinguisn the bargaining strengtn und position of the Union in the present case from that of Broken Hill Proprietary Co. Limited in the Bradken case. Tne only difference, so it seens to me, is that in the one case that strength exists by reason of industrial consider- ations and in the otner by reason of commercial, and perhaps politicsul, ones, The Eoart? hese directed tnat developers must use its dey latour force, The the relief would tena to affect 1ts ability to continue to implement the decision 1t hes made in tnat respect. The fact that its decision was wade, partly et least, as tre result of industrial pressure is not to the roint. For that reason the apolicents! claim for the relief it seeks in paragraph 3 of the documents should fail. The order sought in paragraph 5 of the cocuments to which I have referred is in the following terms: "5. Order that the farst, seconde and third respondents ani their servants ena agents, be restrained from:- (a) by the express or implied threat of industrial action of any kind, persuading or attemoting to persuade the Metronoliten water Sewerage « Drainage Board ('tae Boird') or the sonoureble Leurie John Fer2zuson, the "minister for Public works * Ports, or eny officer of the said Eoard or of the Fublic "Service of New Soutn 'iales that tne Board snould ~ (i) desist from the practice of 'dollar contrects! referred to in the affidavit of Bruce william Galloway sworn 23rd September 1980, or (ii) cesist from permitting inéependent contractors to contract witn cevelorers to carry out works for the board, or (iii) desist from engaging indenendent contractors directly to carry out works for it or other instrumentalities of the State of New South wales, or (b) by the express or implied tnreat of industriel action of any kind, hinderinz preventing or ne) attempting to hinder or »revent the Soard from - (i) carrying out the practice of 'dollar contracts! referred to in tne seid affi- Gavit of Eruce william Galloway, or (ii) permitting incependent contractors to contract with developers to carry out works for tne Board, or (iii) engaging independent contrectors directly to carry out vorks for it or other instrurentalities of the State of New Soutn wales." In both paragraphs of the order there 1s involved 5 claim for a restraint which would indirectly affect the freedom of the Crown to act. Thus, as with the other claims for relief, the Crown is indirectly affected by what is proposed. For the reasons elready civen I am of opinion that the relief claimed is not avail.ble, It was for the reasons ziven that I was of opinion thet the claims made by the applicants for incgunctive reiief should be dismissed, J wien to make it clear taet u there has as yet been no attention .iven to their Cluims for damages; that was a natter whicn was specifically put aside at the reiuest of both counsel. In addition to relying on the matters upon which they nave been successful,-tne rercooncents alse relied upon a number of other submissions. They were as follows: i. This submission was based upon the rulings already Siven taat tne Trade rractices act does not aprly to the Crown in right of the State of New South wales. It was submitted tnat this conclusion wes errived at ty the application of e@ rule of construction, nemely that statutes ere not to be conrtruec @s bindings the Crown unless there sppears in the stetute 2 nl#in incic.tion of lesislctive intention tnat tae Crown should Le pound, The application of tnis rule to s.45D(1) wes seid to involve, aS a necessery consemience, that tne words "rirs person" were to be construed as not including the Crown in right of the State of New South wales (anc thus the Board). as tne "secona person" in s.45D(1) wes involved, if tnere were a breecn of the section, in actinz "an con- cert" with "the farst person", ana tnereby at least eaiding ana abettin_ tne first, "the second person" was also to be construed as not including; the Crown in ri_ht cf th: cStzte of New south «wcles. It followe., so 1t wee > submitted, tnat where tae word "person" was usec four times in the one sub-section in the space cf five lines, 1% should be given 2a consistent meening. That is, in each instance, it should ce construed as exclua- ing tne Crown unless there were a clear incicetion to the contrary in the lanzuage. The fact that the word "person" might include corporations or persons not being corporations (2s shown, for example, by s.45L0(1)(a)) was not to the point. If the submission were accepted the Board could neither be the third nor fourth person for the purposes of the provision. It must follow that tne Union end its officers could not be restreined fron any conduct "vis a vis the Board". 2. This submission was based upon the provisions of s.51(1)(b) of tre Act. It is as follows: "51(1) In determining wnether a contravention of a provision of tais Fart has been connitted, regarcé snall not be had - (b) in the case of acts or things cone in a State - except as provided by tne regulations, to any act or tning taat is, or 1s of a kind, specifically authorized or aprroved by, or by regu- lations under, an act massed by tne Perliament of that State; " It was firstly submitted thet the agreement reachea between the Board snd tue Union evidenced in the Frebruery 1980 corresp>.nuence was, as I aave mentioned, an incustricl agreement for the purposes of s.11 of the Industrial 31. arbitration act 1940 (N.d.4.). That agreement was not one whicn was required by the vrovisions of the section to be registered vith the Industrial Registrar. Counsel for the resconcents developed the sutmission in the following words: "Prom a policy point of view, and as a matter of construction of $.51(1) (v3 in its netural setting, 1t is clear tnat the Commonwealth Parliament envisaged that there would be fields in which State legislation or regulations would be expected to operate free from the reacn of the Trade Practices sct, unless the Commonwealth Parliament by regulation was to decide otherwise. Industrial agreements tetween a State union and its employees having no connection wnatsoever with interstate trace or commerce nignt te expected to ce an example of cuca a field. Section 11 of the Industrial arbitretion act 1940 (N.S.#.) sufficiently specifies the agreements whica come within its conpass, by, inter alia, the definition of tindustrial matter', It woulec be absura to treat the federal Parliament as envisaging that before che exerption in s.51(3)(>) applied, the Stete Parliament, by leyisletion or reguletion, would need specifically to authorise the individual agreement. Tne 'snecific authoris- ation' is in s.1l itself." Counsel referred to the decision of Franx1l dg. in rade Practices Comrission v. Lesion Cabs operative cociety Limited (1678) ».T.P.R. 40-092. de sub- mitted that the decision was distinguishactle from the present case. slternatively he submitted that, to the extent that this case wes covered by that one, it (Legion Cabs) was wrongly, cecided. 3. Then 1t was submitted py counsel for the respondents that no conduct by the Union, its officers or employees came within the expression, "engaged in conduct that hinders or prevents the supply or acquisition of coods or services" where used in s.455(1) of the «ct. The only conduct in whica the Union end its officers had engaged, apart from entering into tne agreement, arrange- ment or understanding contained in tne february 1960 correspondence, was tne holding of <¢ stop work meeting, at which resolutions were passed, end the service of a notice on the Board, Taose events ned both occurred prior to the February 1°80 letters, Tnere hac been no strike nor witharawal of services, Upon a >roper analysis what wes affecting the applicents wae tne policy ct of tne Board acting on the direction of the v'inister. That, and that alone, was the reason for tne predicament in which the applicents claimed to be. 4. heat it was submitted that the conduct enrared in by the Union and its officers wes not, within tie meening of s.45D(1) of the Act, engaged in "for the purpose ..... .. Of causing ..... Substantial loss or damsxe to the business" of the applicents. It was submitted th..t the word "purpose" in s.45L(1) referred to the subgective purpose which the officers of the Lnion, ane throush then, the Union had. Tne real reason tor servin,, the notice and entering into the arrangement contcined in the February 1980 corresnondence was Cenosecé to in the evicence z ve of Mr. Fisher. It was submitted that it was incorrect to ascribe the real reason, or one of tne real reesons (see s.45DB(2)) for the Union's concuct as the causing of damage to the applicants. It was submitted tnet the decision in wribass Pty. Limited v. Swallow (1979) 38 F.L.R. 92 was distinguishable or, 1f not, wronsly decided. Counsel placed reliance upon what had teen said by J.f.3weeney J. in his dissenting judgment in Ss) Transport workers' Union of sustrelia v. Leon Leidely Pty. Limited (1980) 28 =.L.R. 589 at p.598 in relation to s.45D(3). Counsel submitted tiet tae gudements of ture magorit:: did not purport finally to determine the guestion (see pp.594-595 and 6C0-602). 5. This submission was that tae person designete? as "a fourth person' in s.45L(1) of the +zct wust be a particular person (or a number of definite persons) so aq r »™ + a Ss whon the conduct couplained of is cirected. The clas re) of private contractors who have done work for the Eoard or micht do it in the future was not a close or ascer- tainable class of specific persons, The avplicants were no nore tnan members of this seneral class. On a prover construction of tne section one or more of the annlicents do not properly come within the expression "a fourth person", The difficulty nich confrontes tne 20plicants was highliznted by a consideration of tue form of relief sought in paragraphs 2, 3 and 4 of tne documents to which I have referred. Tne drattstan [21t it necessary to ancluae the words, "tne class of percons Criprising the private contractors who nave fornerly cerriea out ... ..s0rx" for the Board or for developers engagec vy the Board. In paragreoh 5 the problen ves even more eterkly raised because the restraint sousnt to te imposed in the order cleimed was to be for tne benefit of "incerenzent contractors" without nominating who they were. Counsel emphasised tnat the submission went, not to the avail- ability of relief Lo any nenber of tne oublic who ma_at complsin of a breach of a provision of tne act, put to the -vuestion of whether, bezring in mina the use of the exprescion "a fourtn person", toere was any evidence of a breech of the section ¢t all. Tt "+S sald cuet taere wes no evisuence that the applicants or any of then were rie subgect of any boycott by the Tnion or its officicais. In this respect the case was unlixe any yet cecrdea by CALS Sourt. 6, _ Reliance sas placed unon tae provisions of £.455(3) It was suid tist tee evidence vicinly esteb]isned unat Tue vommanunt vurpose Tor «nick the conduct was eng. sed in by uo Union an. its officials was substcntialiy reluted bo tne remuneration snd conditions of erployrent or persons e ployed ty tie Rol ra. Tue respondent, Mr, Fisner, is employed by the Board. again reference was mede to uribess' case énd the Laidely csse. S was subnitted that wnetever Gifficulties may exist in r2letion to the meaning of the expression "conditions of e ploy nent", tnose difficulties nid not spply in reintion to "remun- eration". It wes submitted that the evidence estaolisked tnat such action as the tnion took was in order to prevent employees of the Boarc who were its members teins "regressed" to lower paid positions or not Leing able to achieve cetter paid positicns by obtaining promotion. 7. Finally tne respondents submitted tnat s.,45D of tke act was "in wnole or in part invalica", This nsttar was not fully argued. It wes raised -t the end of the responcents' argument and caught counsel for the apolicents unprepared. I gave consideration as to ...ether I enculd now direct the service of noticee pursuant to ¢,783 of the Judiciary Act 1903. Ey that tame I had heerd full argument on all other juestions end had reeched the conclusion tnet the appiication snould te dismissed. 1 ennounced my conclusion to counsel who both subnitted that tnere was rot, 1s?) in that event, a cause pending involving a satter erising uncer tne Constitution or involving its interpretetion. I agree witn tnet view, out if the matter .oes on appeal tre necessary notice pursusent to s.753 will need to ce civen if tie respondents seek to uphold my decision on the grount of the invalidity of tne section. 36. Because I was of opinion tnat the proceedinys saould fail for the reasons I have earlier given 1t 1s unnecessary for me to come to conclusions uvon t's valence of tne submissions reliea upon ty tne responacnts. Because of my understancing tnat these reasons are urgently re.uired, I do not propose to express conclusions upon 'he various submissions that are in guestion, I an minded to take that course eélso because some of the submissions involve cnallenges to the correctness of dicta wnich appear in the gudgnents of other guages of this Court, sone in cases wnere they sat as sinsle judses ana another in a dissenting Judgment of @ gudge sitting as a member of a full court. But I snould express vy conclvsions on two fectual matters wnichn arise. In tne reasons I nave 1G) eerlier given I reached tre conclusion tnat tiere is a continuing, 12 underlying, tareat of industrzal action by tne Union, tne Union did no rore then hold the ston work meetings, pass the resolutions end send tne notice to whicn I have earlier referred, That was enoucsh to enadle it to achieve its purpose. The evidence, nowever, satizfies me tniat 1% tne Boare or the minister were to show any sizn of slowing down the phesins out of contractors or revertin_ to thel1r use, 'tnere vould soor be @ revivel of andustriel pressure. Tae ocher satter of evidence to waicu I should refer 1s tne juestion of wnether I saculd te satisfied concerning the "regression" of members of the Union és a result of the run down of work for the Board's dey labour force and also the feilure of members of the tnion to progress in the Board's service at the rate whica taey otherwise might nave done. The evidence of these matters 1S vague and unsatisfectory. but, having reflected upon it, I am satisfied by Mr. Fisher's evidence that at least some members of the Union (1 do not believe they were numerous) were put Gown to lower paid positions before the stop work meetings which were held ut tne end of 1979 took place. Furthernore, Er, Fisher's evidence satisfies me that 1% 1s his belief, and the belief of other officials of the Union, including lIr. Lake, thet if the phasing out policy inplementec by the Eoard had not been adooted, a substantrai nunber of other members of the Lnion would have been put down to lower paid positions and yet others would nave failed to obtain promotion tnat they would nave obtained in former years wnen the Board's day labour force wes engugec in tne generel vrovision of water and seweraze reticulation for tne netropolitan area of Sydney. OQ board. Oou3 2 2709 37 preceding pages ora a trae copy of the reasons for judgment herein of The Honourabie Mr Justice Sheppard ' Vas tin Associate ; eS Dated 2% Vovembes 1460 IN THE FEDERAL COURT OF AUSTRsLIA ) NEW SOUTH WALES DISTRICT REGISTRY No. G 79 of 1980 GENERAL DIVISICN IN THE MATTER OF Til) TRaDE PRACTICES F. SHARKEY x COMPANY pfY. LI-ITED & ORS, Apolicants and JOSEPH FISHER & ORS. Respondents CORAM: SHEPPARD J 30 October, 1980 JUDGMENT The applicants in this matter seek relief pursuant to the provisions of s.45D of the Trade Practices Act, 1974. The fourth respondent is the Minister of State for Fublic Works and Ports in the State of New South wales. The fifth respondent is a statutory corporation established by the Metropolitan water, Sewerage and Drainage Act, 1924, ("the Act") of the said State. The Minister for the time being administering the Act is tne fourth respondent. The fourth and fifth respondents, to whom I shall hereafter refer as the respondents, have appeared conditionally. Pursuant to Order 9 Rule 7 of the Rules they have moved to set aside the proceedings against them. The ground of the eoplication is that this Court has no jurisdiction to entertain the proceedings brought against them by the applicant. A question arises as to whether the course chosen by the respondents to test the question of jurisdiction is appropriate. It was the applicants' contention that the question of jurisaiction was more appropriately raised as a question of law pursuant to Order 29 Rule 2 of the Rules. In the upshot it was agreed tetween the parties that five questions of substance arise for determination. If these are answered favourably to the respondents, this court has no jurisdiction, In that event it was of no great conseg- uence whether the proceedings were set aside pursuant to Order 9, Rule 7 or dismissed for want of jurisdiction as the result of a decision on a question of law adverse to the applicants made pursuant to Order 29 Rule 2. The parties were agreed as to the form of the first three questions but not as to the form of the last two. It was decided that I should hear argument on the first three questions and announce my decision thereon. in one eventuality my decision on the remaining questions will not be required, The matter was stood over to 31 October ~- that 1s tomorrow - for such further argument as might be necessary in the light of my decision on the three yuestions which were argued. The three questions which now arise for determination are as follows: (1) Does s.45D of the Trade Practices Act, 1$74 bind the Crown in Right of the State of New South Wales and its instrumentalities? (2) If the answer to question (1) is no, is the Honourable Laurie John Ferguson, the Minister for Public sorks and Ports in and for the said State, entitled to the benefit of any such exemption? (3) If the answer to question (1) is no, is the Netropol- itan Water, Sewerage and Drainage Board entitled to the benefit of any such examption? It was conceded by counsel for the applicants that I was bound to answer the first two questions adversely to his clients, That wes because of tne decision of the High Court in Bracken Consolidated Limited v. Broken nil] Proprietary Co, Linited (197S) 53 A.L.J.R. 452. Counsel nevertheless formally submitted that the questions should be answered favourably to nis clients. That 1s not a course which, as he conceded, it is open to me to follow. They will accord- ingly be answered "No" and "Yes" respectively. The matter of substance raised by the third auestion is whether the respondent board is entitled to the shield of the Crown or, as it has been said, wnether it is an emanation or manifestation of the Crown. In order to deal with that submission, it 1s necessary to make reference to a number of provisions of the Act which creates it. Section 7 of the Act provides thet the autnority to carry out the provisions of the Act is, except where otherwise provided, the Metropolitan water, Sewerage and Drainage Board, to which I shall hereafter refer as "tne board", Section 7(2) provides that the board shall, in the 3. exercise and discnarge of its powers, authorities, duties and functions, be subject to the direction and control of the Minister. Section 8 provides that the board is to consist of eight members appointed by the Governor. Section 15 provides for the taking of oaths by members of the toard, one of which is the oath of allegiance, Section 17 provides that the office of any member of the board shall not for the purpose of any Act be deemed to be an office or place of profit under the Crown. By s.22 the board is declared to be a body corporate with perpetual succession and a common seal; it is entitled to sue and be sued in its corporate name, Section 23 provides that, for the purposes of and subject to the pro- visions of the Act, the board is to te capable of purchasing, holding, granting, demising, disposing of and alienating real and personal property and of doing and suffering all such other acts and things as bodies corporate may by law do and suffer. Section 24 provides that any moneys due to the board,whether for rates or otherwise, shall for the purposes of the recovery thereof, be deemed to be moneys due to His Majesty and may be sued for and recovered by the board. Section 30 provides for the general functions of the board. The most important of these are that the board is to be charged with the conservation, preservation and distribution of water for domestic ena other uses, the provision of reticulation and other means for the discharge am 7, of sewerage and its treatment and disposal, and the construction, control and management of such stormwater channels as from time to time are assigned to it by the Governor or are vested in it by the Act. Section 31 authorises the board to carry out construction works so that it may properly discharge its functions. Section 34 provides that the board may make and enter into con- tracts. Section 34(2) provides that all persons contract- ing with the board shall be deemed for tne purposes of the Constitution Act, 1902, to be public contractors. To be found in Divisions 4, 5 and 6 of Part IV of the Act are important provisions in relation to the water supply for tne metropolitan area of Sydney and for certain other areas, the sewerage services to be provided for such places, and drainage works to be provided therefor. It is unnecessary to make detailed reference to these provisions, but in passing I note that s.47 orovides that water available from works vrovided by or vested in the board snall be primarily usec and equitably distributed for domestic purposes, sewerage flushing and the maintenence of a suitatle pressure for fire extinguishing. Section 50 deals with the extinguishing of fires, s.51 witt, the board's duty to protect the water supply and s.55(2) with the proclamation of lands as a catchment area in connection with the supply of water by the board. The proclamations are to be by the Governor, Section 56 provides for the prevention of pollution of the water supply. De Finance is dealt with in Part V of the Act. Section 67 determines the capital indebtedness of the board to the State of New South Wales at the date the Act came into force. There is provision for the payment of interest by tne board to the State, Section 71 provides authority for the board to borrow money, but it is to be observed that any borrowing must be approved by the Governor. Section 71(2) provides that the Treasurer may advance sucn moneys to the board as the Governor may approve upon such terms and conditions for repayment and interest as may be agreed upon. Division 3 of Part V provides for revenu & There are extensive provisions in relation to rating, wnich I need not refer to in detail. Section 111 provides that the board shall cause an annual report of its operations and statements of accounts to be prepared. The board is to furnish a copy of the report and statements to the Minister and the council of each municipality and shire referred to in the second schedule to the Act. The report is to be laid before both houses of parliament. Finally, s.117(3) provides that, subject to the provisions of the Act, the board shall hold all lands and property acquired by or vested in it upon trust for His Magesty. The principal submissions which were made on behalf of the respondents were that the board was, if not the Crown, then a manifestation or emanation thereof, firstly because it was subject to direct ninisterial control (s.7(2)), secondly because the provision of water and sewerage facilities had always been ordinary functions of government in New South Wales (reference was made to the predecessor of the present board and to the previous Act in reletion to weter supply and sewerage (43 Vic., No.32)), and thirdly, because the moneys and property of the board were held or deemed to be held for the Crown. The principal submissions made on bekalf of the applicants were that, although the Crown had an overriding power through the Minister to give directions to the board or to veto its decisions, the board nevertheless, but subject to thet matter, had independent discretions and powers, It was also said that the matters of water, sewerage and drainage, whilst in one sense semi-government activities, were not inalienable functions of government. They were functions which might well be given, if Parliament thought fit, to a body which was not of the Crown. The whole question was whether the Act manifested an intention that the board should be an eiranation of the Crown. To say that tne supply of water anda the provision of sewerage and drainage facilities were ordinary functions of government was really to beg the question. For two principal reasons and one ancillary one, I con- sider thst the board 1s an emenation or agent of the Crown. My first reason 1s based upon the provisions of s.7(2) of the Act wnich provides tnat the board shall, in the exercise and discharge of its powers, authorities, duties and functions, be subject to the direction end control of the Minister. My second reascn is based upon the provisions of s.117(3) wnicn provides that, subgect to the provisions of the Act, the board snall hold all land and property acquired by or vested in it upon trust for his Majesty. My ancillary reason relates to the fact that until the passing of the present Act the functions of providing water supply and sewerage services had always been in New Soutn 'ales functions of government. I do not discern upon a reading of the whole of the Act any intention on the part of the legislature to change that situation. A number of authorities were referred to 1n argument. The question is one of legislative intention, but there are in some of the cases dicta which, in my opinion, support the conclusion to which I nave come. The most recent consideration of the problem ty the High Court 1s to be found in Superannuation Fund Investment Trust_v. Commissioner of Stamps (South australia) (1979) 26 wa. L.A. 99. The question for decision in that case was whether the Trust, which was a body corporate established by the Superannuation act 1976 (Commonwealth), was liable to pay South austrelian stamp duty upon three memoranda of transfer of land in South Australia. Tne Chief Justice and Mason J. were of tne opinion that the Trust was a mani- festation or emanation of the Crown in right of the Commonwealth. Stephen and Aickin JJ. expressed a contrary view. Murphy J. did not find it necessary to reach a con- clusion on that particular juestion, Each of the four gudges who dealt with the juestion of whether the Trust was in effect the Crown adverted to the principles which apply. Mason J., in whose reasons on this point Barwick C.J. agreed, said (26 «.i.R. at pp.116-117): "Although the Trust is a separate corporate entity, the control which the Crown has cver its membership and its activities shows tnat it is an alter ego of tne Crown. Thus the members are appointed as liable to removal by the executive governnent, it 1s bound to furnish information to the Treasurer at his request, and it must submit its annual report end financial statements to the Treasurer after they have been audited by tne Auditor-General. The Trust, in determining the investment policy which it will pursue witnin the prescribed investments wnich it is eutnorised to make (see s.42(2) and (4)), is free of directions by tne Treasurer and the Government, but this in itself does not show that it has been established as a body independ- ent of tne Crown. Altnou.h there are some differences between the scheme in this case anc the schere evrodied in tne Defence Forces etirerent Eenefits Act 1948 as amended, the decision in Goodfellow v. Federal Commissioner of Taxation (1977) 15 #.L.n. 203 Suggests that tne Trust 1s the Crown. The two cases have much in common and I quote wnat sickin J. said (13 «.L.k. at p.213): 'Tne Board performs what is plainly a governmental function in the administration of the Act, paynents under which form part of the terms of service of mnemvers of the Defence Forces. The considerations wnich led this court in Repatriation Commission v. Kirkland (1$23) 32 C.L.R.1, to nold that the Repetriacion — Commission under the /ustralian Soldiers' Repatriation Act 1520 was the Crown, notwithstand- ing taat 1t was given separate corporate personality, appear to me to leaa to the conclusion that tnis Boare is also the Crown, It is true thet the Renatriation act save to the Commission the cenersl administration ot the Act 'subszect to the controi ot the Minister' and tnet tnis feature was relied upon by the court, alon- with the general structure o1r tne act. in my opinion the absence of an express ge "provision to that effect in the present «ct does not require a different conclusion in view of the wholly governmental membership of the Board and the nature of its functions .....' ". The emphasis 1s mine, It is to be observed that one matter that guided his Honour in reaching his conclusion was the fact thet the Trust performed what to him was plainly a governmental function. Contrary to the view of Mason J. and the Chief Justice, Stephen J. reached his conclusion principally because of, "the entire independence of the nembers of the Trust in relation to their investment function". That appeared to him to be "of considerable importance" (26 #.L.a. at p.111). To Aickin J a significant consideration was the fact that the Trust did not nold its property as a bare trustee for the Crown. He said (26 A.L.R. at pp.123-124): "The nature of the trusts upon which the Trust holds its funds demonstrates that it 1s by no means a 'bare trustee! holding property to which some beneficiary is absolutely entitled in the sense that 1t may call for imrediate transfer of the funds. It nas been neld that a bare trustee who holds vroperty on trust for tne Crown is entitled to the same privileges and immunities as the Crown itself - see Grain Elevators Poard (Vi v. Dunmunkle Corporetizon (19 L , per Latham U.dJ.35 Although the Commonwealth is in a sense the principal beneficiery for wnom tne rund is held, it cannot be said to be absolutely entitled eitner now, or at any particular future time, althoush it will from time to time become so entitied to parts of the Fund upon occasions «hich are certain and to some extent predictable 6s tc time. as such events occur the Fund will continue to grow, or at least be replenished, as other elizible employees 10. "make contritutions to it. The Trust itself has active duties of nanagerent to perform in the interest of all wno may ultimately become entitled to any part or parts of the Fund, including the Commonwealth, end under the Act in its precent form those duties will continue indefinitely. In the absence of amendment of the Superannuation act the Fund will continue in existence so long as the Commonwealth and its Public Service exist, and during that period there will never be a time when any person or body politic will be absolutely entitled to the Fund." In the present case all the board's powers, authorities, duties and functions are subject to the jirection and control of the tiinister. It is not independent as to eny of them, Its property 1s held upon trust for tne Crown. what was said by each of the gudges to whose judgments 1 have referred, in Superannuation Fund Investment Trust v. Commissioner of Stamps provides, in my opinion, compelling reasons for the view that the board is an agent or a manifestation of the Crown, Furthermore, it is plainly established that the functions which the board now carries on were certainly the functions of government up to the time the Act came into force on 31 March, 1925 (see s.2(1)(c)). That appears from tne provisions of the Metropolitan ater and Sewerage Act of 1880 (43 Vic.No.32) and the amendments thereto, all of which the Act renealed (see s.5 and the First Schedule). Tne former legislation was considered by the High Court in Federated Engine Drivers and ee Firemen's association of vwustralasia v. =roken Hill Proprietar Co. Limitea (1911) 12 C.L.R. 398. In the view of Griffith C.d. (p.414), Burton J. (9.425) and C'Connor J (p.441) the then il. board was in effect the Crown. It was described as a department of the State Government. In Grain Elevators Soard of Victoria v. shire of Dunmunkle , referred to by Aickin Ju. in the passage from his gudsment cited above (26 a.L.R. at p.124), Latham C.J. said (p.75): "The fact that a function has been a traditional function of sovernment and tnat no intention of 'alienating' 1t appears 1s sufficient to answer the question in many cases." In Bradken decided a few months earlier than Superannuation Fund v. Commissioner of Stamps, Gibbs 4.C.J. said (53 A.L.J.n. at p.455): "It has always been recognised in Australia that the conduct of railways is a function of tne covernnents of ane States: see the Reilway Servents Case (1906), 4 C.L.R. 488 at pp.534-535; wynyard Investments Pty "Ltd, v. Commissioner for Railways (1955), 93 col. x Oo, at pp.2 and General Steel Industries Inc. v. Commissioner for Raltlways (. .ceu. » 112 c.L.n. 125, at p, its. Tha ac yy no means conclusive, for a body which discharces public functions 1s not necessarily an agent of the Crown, but it coes provide some assistance to the view that the Commissioner 15s acting on tehelf of the Crown. However, when all the matters which J nave mentioned are considered, there can be no doubt that tne Commissioner is an agent of the Crown in risht of the State of wueensland, and entitled to its privileges and immunities." In tne Federated Engine Drivers and Firemen's Case gust referr to, O'Connor J. said of the board's predecessor uncer the repealed legislation thet it carried on public services which had elways been regarded in australia as governmental functions (12 C.L.R. at o.441). Of course, the fact that that was once the situetion cannot be conclusive, as both 12. Latham C.J. and Gibbs J., in the cases I nave cited, point out. The whole matter is one of legislative intent, but the provision of a satisfactory water supply and of sewer- age and drainage services for a city the size of Sydney, taking it as it was in 1924, is unquestionably a public function of the utmost importence. That 1umportance is underlined by the provisions which are contained in Divisions 4, 5 and 6 of Part IV of the Act, to whicn I have referred. Notwithstanding these considerations the question remains whether there is revealed an intention to bring about a change in the previously exicting situation. Neither the provisions of s.7(2) nor those of s.117(3) would suggest that the legislature had any such intention, Other provisions of the Act lead to the same conclusion. Tne members of the board are apnointed by the Governor, Tney are tound to take an oath of allegiance, Tne boerd must report to the Linister and lay its report before both nouses of parliament. There are other provisions wnich favour the view tnat the board 1s the Crown or at least an enanation thereof. Others are equivocal and some tend the other way; but to my nind those which tend the otner way do not in the least outweigh those which support the view that there 1s revealed a plain intention that the toard, like its predcec- essor,was to be a manifestation or an agency of the Crown, Reference was made in thse argument to three rrovisions gnicn use tne word "deemed"; I nave earlier mentioned then. Section 17(3) provides that the office of any member of tne board shall not, for the purposes of any act, be deemed to be an office or place of profit under the Crown, In a sense that could be said to be a provision which favours the view that the board is the Crown; otherwise it would have been unnecessary to insert the provision. But I think a more appropriate way of looking at the section is to say that it was inserted to enable the Governor to appoint members of the board from all walks of life without the restreints that might otherwise be imposed upon them. Section 24, on the other nand, might be thousht to be a provision wnich favours the view that the board is not the Crown, It provides that any moneys due to the board, whether for rates or otherwise, shall for the purposes of the recovery thereof be deemed to be moneys due to His Majesty. In the submission of counsel for the applicants it would have been unnecessary to insert that provision if the board were in fact the Crown. Of course it is to be contrasted with the provisions of s.117(3) which do not use the word "deemed", but simply state that the board holds its property on trust for the Crown, Again I do not think the section 1s of any consequence in the overall resolution of the vrobler, It was inserted purely for the vurvose of giving the board a better riznt to sue. The considerations in relation to s.34(2) are siamilar and I need not fie-] in detail with the provisions of that section. 14, Then reference was made to s.4 which contains definitions. It defines "Crown" to include any statu- tory body representing the Crown. The term, "statutory body representing the Crown" is defined to mean any body defined by or proclaimed under the Local Government Act 1919, as amended by subsequent Acts, as a statutory body representing the Crown, The Local Government Act itself defines "statutory body" and "statutory body representing the Crown" to include the board and a number of other public authorities including the Hunter District Water Board, the Sydney Harbour Trust Commissioners, the Board of Fire Commissioners and the Railway Commissioners (s.4). The section is introduced by tne usual words, "In this act, unless inconsistent with the context or subject matter". Similar words ere used in the intro- duction to the definition section (s.4) of the Act under consideration. In my opinion those provisions nave been inserted to enable bodies such as the board to be treated, for the purposes of the Local Government Act and for the purposes of the Act under consideration, as the Crown, but I do not regard the provisions as indicating in themselves that for the purposes of this Act tne board is in fact the Crown, Indeed, I would think, insofar es the definition in the Local Government Act 1s picked up by the act under consid- eration, 1t 1s not picked up in so fer as it orovines that 15. the board itself shall be the Crown. Tlie provisions of the act in which the defined expressions are used or picked up (s.88) provides an example) are such as to indicate the contrery intention which is referred to in the opening words of the definition section. It will be rememtered that I said, when I commenced this discussion, that my principal reasons for concluding that the board is an emanation of the Crown are that it 1s subject to the direction and control of the Minister in the exercise of its powers, authorities, duties and functions, and that its property is held on trust for the Crown. ancillary to those reasons is the fact that it is carrying on what in New South Wales were regarded as the ordinary functions of government, and there is not, in my opinion, disclosed in the Act any intention to change the situation that existed prior to the Act coming into force. Indeed, the provisions to which I have referred are in my opinion plain indications of a contrery intention. Before concluding I should mention some further authorities which were cited in argument. Cne of these was Wynyard Investments Fty. Limited v. Commissioner for Reilways (!.S5."1.) (1955) 93 C.L.R. 376. The provisions of the Act in that case were different from those under con- sideration here and I do not regard tne case as of substanti2l assistance in resolving the present problem. Then there are a number of cases dealing with tne question of whether land of statutory corporations was rateable by local government authorities. One of those cases was Dunmunkle earlier referred to. One has to be careful, I think, in using such cases in the consideration of a problem of this kind. The cuestion is different fron that which arises therein, namely, are the lands sought to be rated lands of the Crown, But there are passages in the judgments of two of the cases, one of which is Dunmunkle, which I do think throw light on the question, In that case Latham C.u. said (73 C.L.R. at p.78): "Other provisions (of the legislaticn there in guestion) to which reference has already been made show that certain things can be done by the Board only with the approval of the Minister, so that the Minister has a veto. But there is no provision in the Act which entitles the tiinister to give directions to the Board in the performance of its statutory functions of storing grain. In performing its ordinary functions the Board acts at its own discretion." In my opinion that is not the case in relation to the doard with which this case is concerned. In City of Launceston v. The Hydro Electric Commission (1959) 100 C.L.R. 654 there are to be found passages (pp.661- 662) which I regard as supporting the view to which I have come in this case, notwithstanding the care which must, as I say, be used in using the rating cases when a problem of the kind here in question has to be considered, I do not find it necessary to set out what their Honours there said in that case. Finally, I should refer to State Hlectricity Commission 17. of Victoria v. City of South Melbourne (1968) 118 C.L.R. 504, a case which was very much relied on by counsel for the applicants. In my opinion the Court, in the goint jucgment which it pubiished, plainly distinguished the case from the tyve of case which is here under consider- ation. Counsel placed great reliance upon the decision because of the provisions of s.12 of the State flectricity Commission Act 1958 whicn was under consideration. 1% empowered the Commission to administer the act and exercise its statutory rights, powers anc authorities and discharge its statutory duties "subgect to the Minister". Thus the section was not dissimilar to s.7(2) of the act here 1n guestion which I have relied upon in the present case, But, after referring to s.12 and another proviszon, $.21, their Honours said (118 C.L.R. at p.50S): "The foregoin. provisions make it clear that the Commission, althougn a statutory corporation (see s.4), does have a special relationship 1th the Government of Victoria, In our opinion, nowever, it 1s not necessary to attempt here to exhaust the nature and significance of thet relctionship tor we find in the act itself provisions which we rererd as inconsistent with the submission that tne lands of tne Commission are 'tne vronerty of Her hagesty'," Upon that basis the case is plainly distinguishable from tne present, enc 1s not helpful in the reaching of a conclusion as to wnat the outcome should be. For tne reasons I have given, tne answer to question (3) 1s yes. Argument on tne matters propounded in questions (4) and (5) by each party will accordingly proceed tomorrow. 18.