IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY No. G.55 of 1984 GENERAL DIVISION BETWEEN WILLIAMS & HODGSON TRANSPORT PrY. LIMITED Applicant AND: CASTLEMAINE TOOHEYS LIMITED Respondent CORRIGENDA Amendment to the Reasons for Judgment of Wilcox J. delivered 9 August 1985: Page 9 line 2, substitute "applicant" for "respondent". Yvonne. A- Metter ¥Y. Hilton Associate to Mr Justice Wilcox Date: 11 September 1985 3 95, CATCHWORDS TRADE PRACTICES - Exclusive dealing - Supply of beer by corporation to retailers - Sale pursuant to c.i.f. contract - Whether supply on condition that retailers acquire transport services of a particular person - Significance of fact that corporation offers to supply relevant retailers only pursuant to "package" consisting of beer and transport and insurance services - Meaning of "acquire" services - Whether necessity for contractual relationship between transport company and retailer - Assessment of damages. Re Ku-ring-qai Co-operative Building Society (No 12) Limited and Dee Why Do-operative Building Society (No 29) Limited (1978) 36 F.L.R. 134, Enzed Holdings Limited v Wynthea Pty Limited (1984) 57 A.L.R. 167 applied. S.W.B. Family Credit Union Limited v Parramatta Tourist Services Pty Limited (1980) 48 F.L.R. 445, Chaplin v Hicks £1911] 2 K.B. 786, Biaqgin & Co Limited v Permanite Limited £19514 1 K.B. 422, Callaghan v William C Lynch Pty Limited £19623 N.S.W.R. 871 referred to. Trade Practices Act 1974 ss.4, 4A, 47, 82 QLD G.55 of 1984 WILLIAMS & HODGSON TRANSPORT PTY LIMITED v_ CASTLEMAINE TOOHEYS LIMITED Wilcox J. Svdney 9 August 1985 a IN THE FEDERAL COURT OF AUSTRALTA) GENERAL DIVISION RETWEER : AND: WILLIAMS z Pry. LI Applicant CASTLEMAINE TOOHEVS LIMITED Respondent COPAM: WILCOX v. DATE: 16 August 1985 PLACE: Sydney MINUDE OF ORDERS THE COURT ORDERS THAT: 1. The respondent 1ts servants and agents be restraineé in trade or commerce, from supolying, of fram offering to supply, beer to any person, other than a body corocrats (within the w NOTE: The respondent its servants and agents be restrained in trade of commerce, from refusing to supply beer to anv person, other than a body corporate related (within the meaning of s.4A(5) of the Trade Practicss Act 1974) to the ressondent, for the reason that that person has not acquired, or has not agreed to acquire, the services, in . ond " . . relation to the transport and insurance of the said beer, of Queensland Railfast Express. judgment for damages be entered in favour of the applicant against the respondent in the sum of twenty thousand dollars ($20,900). The »respondent pay to the applicant its costs of the proceeding, including all cesecved costs. { Settlement and entry of orders is dealt with in Crder 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISTON No. G.55 of 1984 BETWEEN : WILLIAMS & HODGSON TRANSPORT PTY LIMITED Applicant AND: CASTLEMAINE TOOHEYS LIMITED Respondent CORAM: WILCOX J. DATE: 9 AUGUST 1985 PLACE: SYDNEY REASONS FOR JUDGMENT This case concerns a matter of some moment in Queensland: the distribution of "Fourex" beer. "Fourex" 1s brewed by Castlemaine Perkins, a division of Castlemaine Tooheys Limited, the respondent, only at its brewery in Milton, a suburb of Brisbane. Some of the beer 1s sold as "packaged" beer, that is in bottles, stubbies or cans. Some of the beer 1s "bulk" beer, distributed to retail outlets such as hotels, restaurants and clubs in 18 gallon kilderkins; often called "kegs". Both packaged and bulk beer are distributed throughout Queensland. The applicant contends that the current arrangements in respect of part of the distribution system -- notably those applying in north Queensland -- constitute the practice of exclusive dealing, in contravention of 5.47 of the Trade Practices Act 1974. It seeks an injunction restraining the continuation of that practice and damages in respect of the loss claimed to have been suffered by it to date, as a result of the conduct of the respondent. The evidence indicates a diversity of methods of delivering "Fourex" beer to Queensland retail outlets. Within the Brisbane metropolitan area the company delivers to licensed outlets free of charge to the retailer. In relation to the coastal areas immediately north and south of Brisbane, that is from a point near Gympie down to the New South Wales border, Castlemaine Perkins delivers free of charge to any depot maintained by the retailer in the Brisbane metropolitan area. Alternatively, the retailer may arrange his own transport to take delivery of his order from the brewery at Milton. A similar position applies to the area west of Brisbane, except that many of those retailers in that area prefer to use rail transport. Where rail is used the respondent delivers to the railways' freight depot at Roma Street free of charge. The retailer bears all responsibility, and the cost of delivery, from that point. In each of the districts of Gympie and Maryborough the respondent sells only to appointed distributors, who wholesale to the retailers in their respective districts. There are no direct sales by Castlemaine Perkins to retailers, The respondent maintains a regional warehouse at Bundaberg, from which it sells to retailers. Alternatively, retailers may order direct from Brisbane. In the latter case the respondent sells c.i.f., that is a contract covering the cost of the goods, insurance and freight, using the services of a carrier known as North Queensland Express -- commonly NQX -- to deliver to the retail outlet. The area known to the respondent, for distribution purposes, as "north Queensland" is the area north of a line running approximately westerly from a place on the coast known as Agnes Waters -- and which lies between Gladstone and Bundaberg -- to a point on the Northern Territory border south west of Mount Isa. I say "approximately" because the line is irregular, going south as far as Mungungo and Tambo and reaching as far north as Moranbah. Within that area, which I likewise will call "north Queensland", the respondent maintains four regional depots, at Rockhampton, Mackay, Townsville and Cairns. In each case the depot lies within, or proximate to, the depot of a transport company which is associated with NOX and which is known as Queensland Railfast Express or ORX. The respondent describes QRX as its "preferred carrier" to north Queensland. It uses that company 4. to carry beer from the brewery 1n Brisbane to each of its four regional depots. Delivery 1s made in containers carried by truck to and from the railhead but, for the long haul, by rail trucks loaded by QRX, pursuant to arrangements between that company and the Commissioner for Railways. Castlemaine Perkins also uses QRX as its only carrier in respect of c.i.f. deliveries from Brisbane to north Queensland outlets. Retailers in north Queensland are free to purchase from a regional depot and many do. However, there is a disadvantage in taking that course. Licence fees in Queensland are calculated as a percentage of the cost to the licensee of purchasing the liquor which is retailed. Ifa retailer purchases beer from the respondent's depot at, say, Townsville, his or her license fee is calculated by reference to the cost of that purchase; which cost reflects the fact that the respondent has incurred expense in transporting the beer from Brisbane to Townsville. If, on the other hand, the licensee purchases ex Brisbane, the licence fee is calculated upon the basis of the Brisbane price; the costs of freight and insurance being disregarded, apparently on the basis that those are delivery costs rather than part of the cost of the beer itself. As may be supposed, the cost of transporting beer from Brisbane to north Queensland -- and especially to the far north -- is considerable; so that purchase at a regional depot significantly increases the licence fee to be paid at the end of the year. In the result, it appears, the 5. practice of large volume retailers is to resort to a regional depot only at times of emergency. In the case of retailers with small turnovers the situation is a little different. For them, the convenience of being able to take small deliveries from a nearby depot as supplies are required may outweigh the disadvantage of an increased licence fee. The respondent follows a policy, subject to some exceptions, that retailers in north Queensland who wish to purchase ex Brisbane ~~ and thereby to minimise their licence fee -- must do so pursuant to a c.i.f. contract. This means that, irrespective of any preference that a particular retailer may have, his or her order is handled by QRX. The geographical exceptions to this policy are quite minor. There are four small towns in the mid-west of the State -- Longreach, Barcaldine, Blackall and Winton -~- in relation to each of which there is a longstanding arrangement with a local carrier to act as a distributor. In these cases the distributor purchases ex Brisbane and wholesales to the local retailers. In the case of Blackall the beer is carried from Brisbane by the distributor. In the cases of the other three towns 1t is dispatched by rail. There are four small towns on the Flinders Highway -- Pentland, Prair1re, Richmond and Julia Creek -- and also Kynuna to the south of Julia Creek, in relation to which the respondent will supply retailers f.o.b. Brisbane, the retailers making their own transport arrangements and paying the carrier direct. QRX has no depot capable of serving these towns. The same situation applied to two small coastal towns, St. Lawrence and Ogmore. The final exception relates to a small area on the coast, south of Mackay and including the towns of Sarina and Koumala. The retailers within that area have for many years used a local carrier, Campion Carriers. As QRX could not itself service this area the respondent has been prepared to sell beer f.0.b. Brisbane to retailers in this area, they using Campion Carriers; or in one case a firm named Jack Webb Transport. In all of the remainder of north Queensland, the respondent insists that all purchases of bulk beer ex Brisbane be made by c.1.f. contract. In the case of a large part of north Queensland -- which part was defined in the evidence as being the areas of Rockhampton, Mackay, Proserpine, Shute Harbour, Airlie Beach, Bowen, Collinsville, Ingham, Tully, Mareeba and Atherton -- the respondent applies the same policy in relation to packaged beer. Williams & Hodgson Transport Pty Limited, the applicant in this proceeding, is a transport company operating only in Queensland. The company is based in Brisbane. It runs a fleet of about 40 trucks, ranging in capacity from five tonnes to 22 tonnes, but their operations are supplemented by 7. the use of rail transport. In August 1983 the Commissioner for Railways appointed the applicant as a contract carrier to operate from Brisbane to nine centres on the north Queensland coast. The applicant had already arranged to purchase steel containers suitable for use on both rail and road trucks. The Commissioner agreed to provide container rail trucks to allow the transmission of these containers by rail, together with box wagons for general merchandise and open wagons for steel. In August 1983 the company already had a depot in one of the nine centres, Townsville. It opened depots in two more of the nominated centres, Mackay and Cairns. It has not yet opened depots in any of the other six towns, and is currently under pressure from the Commissioner to do so. According to Mr H J Hodgson, a director of the applicant, the company's failure to open the other six depots is related to its failure to obtain a share of the deliveries of bulk beer to north Queensland. Mr Hodgson described the proposed service in this way: "A. ... Our company vehicles pick up the product from the supplier; it is taken to our own rail sidings where it is loaded onto rail wagons by our staff; the loads are secured, tied, and despatched to our sidings in those destinations, such as Mackay, Townsville, and Cairns. On arrival the product 1s unloaded and delivered to the clients, so 1t 1s basically a door to door service engaging the expertise of the transport companies and the cheaper method of line haul supplied by a large hauling unit such as a train. Q. Your company is free to determine its own rates for carriage of goods for the road/rail method? A. It is." The company pays the railways for the use of the wagon, the minimum fee covering the first 29 tonnes with an excess charge for loads exceeding 29 tonnes but being less than 36 tonnes. For loads between 36 and 42 tonnes -- the capacity of the wagons -- the charge is the same as for 36 tonnes. From the contractor's point of view it is desirable to take advantage of this concession by obtaining loads of maximum weight. Such loads can only be obtained by transporting dense materials, of which beer -- in bulk or packaged -- is a prominent example. Indeed, according to Mr Hodgson, alcoholic liquors are a major component of inward freight to each of the six towns in which his company has yet to open its promised depot. None of them is an industrial centre. Mr Hodgson estimates that about 60% of the total imports to those towns consists of food and drinks, of which about half -- the heavier half -- consists of beer, wine and spirits. Without a share of that latter half it is difficult to obtain sufficient volume to provide a satisfactory service to the local grocers; and without a share of that heavier material it is difficult to make the most economical use of the rail contract. With these matters in mind, the company commenced to solicit business from liquor outlets in north Queensland. It offered freight rates lower than those charged by ORK to the respondent and passed on by it, without addition or subtraction, to its retailer customers. The respondent obtained some orders for the carriage of beers produced by the opposition brewery, Carlton and United Breweries, at its premises in Fortitude Valley in Brisbane. The applicant has been able, and continues to be able, to fulfil these orders. In addition the company has carried some Fourex packaged beer to towns outside the area in respect of which the respondent limits sale of packaged beer to c.i.f. transactions. However, as Mr Hodgson put it, it was necessary to "convince the hotel to have two accounts". In response to the applicant's canvassing, some publicans in north Queensland placed orders for the delivery of loads which included bulk beer. But the respondent refused delivery at the brewery. On 8 March 1984, Mr Hodgson telephoned Mr G E Nolan, the General Sales Manager of Castlemaine Perkins, and enquired why his company was not permitted to carry beer to independent hotels in Mackay. Mr Nolan replied: "Castlemaine Tooheys has the right to send by whoever they choose". After further conversation -- according to Mr Hodgson -- Mr Nolan told Mr Hodgson that Williams & Hodgson could write in and request to be preferred carriers but he added: "We will only have one carrier. Others, Total and Brambles, have failed". Total and Brambles are the two other transport companies operating 10. a raill/road service to north Queensland. Mr Nolan admits to the substance of this conversation, although he denies the references to Total and to Brambles. On each of 29 March 1983 and 4 April 1984 Mr Brad Jackson, Manager of the Mackay Hotel, Mackay, placed orders with the applicant to deliver to the hotel a mixed load of bulk and packaged beer. The orders were transmitted to the respondent, but it refused to permit the applicant to take delivery of the goods. Instead it dispatched the order to Me Jackson via ORX. By letter dated 5 April 1984 Mr Jackson protested. He asked that all future orders be forwarded via the applicant. On 11 April Mr GA Northcott, Assistant General Manager (Marketing) of Castiemaine Perkins, replied to that letter stating: "It will not be convenient for our Company to accept orders from you on the basis set out in your letter under reply. Castlemaine Perkins will, however, be happy to consider orders Placed on a c.i.f. basis." On 29 March Mr Brian Bevan, of the Freshwater Hotel at Freshwater near Cairns, ordered from the respondent 12 kegs of beer and directed that 1t be forwarded using the applicant as carrier. He was told that the beer would be supplied "if stocks were available", an answer he had never previously received. In fact the beer was delivered by ORX. Mr Bevan wrote a letter of protest dated 3 April in which he 1i. sought an acknowledgement that all future orders would be sent through the applicant. Mr Northcott replied in terms identical to his letter to Mr Jackson. Mr Patrick Thrupp, the then licensee of the Greyhound Hotel, Mackay, lodged an order on 3 April for a mixed load of bulk and packaged beer to be dispatched to him via the applicant. It was delivered by QRX. The respondent frankly concedes its unwillingness to allow delivery within north Queensland -- other than within the small areas noted above -- except by c.1.f. contracts under which QRX is the carrier. In response to the affidavits of Mr Jackson and Mr Bevan, respectively setting out the matters summarized above, Mr Nolan has sworn an affidavit in which he says that sales of bulk beer by the respondent to each of their hotels "are made under c.1.f. contracts and in accordance with such contracts the engagement of the carrier and the transport of the bulk beer are arranged by the respondent. The said hotel has not been required by the respondent to engage the services of a carrier". In an answer to an interrogatory administered to it by the applicant the respondent stated that, as at 19 March 1984, it "would only sell bulk and packaged beer supplied directly from its Brisbane premises to a person in the wee we ee 12. Mackay area wishing to purchase such product on a c.i.f. basis on the condition that such product as was purchased was carried by a carrier engaged for that purpose by the respondent". In response to a further interrogatory the respondent said that ~- as from 1 January 1981, in the case of the Mackay and Rockhampton districts, and as from later dates, in respect of other areas in north Queensland, and to the date of swearing the answers (26 April 1985) -- 1t had "followed the practice of not accepting any offer from a person" in north Queensland "who wishes to purchase bulk beer from its brewery in Brisbane and either who nominates the carrier it has engaged to carry the purchased product to it or requires the respondent to engage a carrier nominated by it". These answers were tendered by the applicant and admitted into evidence. In his evidence before me Mr Nolan made clear that the company continued to maintain the practice referred to in the answers to interrogatories which I have set out. He said that if a north Queensland hotelier came to the brewery at Milton with a truck seeking a load of bulk beer to be paid for at Brisbane prices he would be refused delivery. As Mr Nolan pointed out, any order would have to be placed in the name of a licensed outlet; if that outlet was in the c.i.f. area there would be no delivery even though no contract service was to be involved. 13. Section 47 of the Trade Practices Act, insofar as it 1s presently relevant, reads as follows: "47.(1) Subject to this section, a corporation shall not, in trade or commerce, engage in the practice of exclusive dealing. (2) ..- (3) ... (4)... (5) ... (6) A corporation also engages in the practice of exclusive dealing if the corporation -- (a) supplies, or offers to supply, goods or services; {b) supplies, or offers to supply, goods or services at a particular price; or (c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation, on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services ... will acquire goods or services of a particular kind or description directly or indirectly from another person. (7) A corporation also engages in the practice of exclusive dealing if the corporation refuses -- {a} to supply goods or services toa person; (b) to supply goods or services at a particular price to a person; or (c) to give or allow a discount, allowance, rebate or credit in relation to the supply of goods or services to a person, 14, for the reason that the person ... has not acquired, or has not agreed to acquire, goods or services of a particular kind or description directly or indirectly from another person. (8) ..- (9) ... (10) Sub-section (1) does not apply to the practice of exclusive dealing constituted by a corporation engaging in conduct of a kind referred to in sub-sections (2), (3), (4) or (5) or paragraphs (8) (a) or (Db) or (9) (a), (b) or (c) unless -- (a) the engaging by the corporation in that conduct has the purpose, or has or is likely to have the effect, of substantially lessening competition; or {b) the engaging by the corporaion in that conduct, and the engaging by the corporation, or by a body corporate related to the corporation, in other conduct of the same or a similar kind, together have or are likely to have the effect of substantially lessening competition. (11) ... (12) Sub-section (1) does not apply with respect to any conduct engaged in by a body corporate by way of restricting dealings by another body corporate if those bodies corporate are related to each other. (13) In this section -- (a) a veference to a condition shail be read as a reference to any condition, whether direct or indirect and whether having legal or equitable force or not, and includes a reference to a condition the existence or nature of which is ascertainable only by inference from the conduct of persons or from other relevant circumstances; 15. (b) ..- (c) ..." Two preliminary comments should be made about the application of s.47. The first is that, if the conduct of the respondent is caught by the provisions of either subs.(6) or subs.(7), it is no answer to say that the conduct does not lessen competition. By virtue of subs.(10) the effect upon competition is relevant to the question whether the conduct described in other sub-sections of s.47 constitutes exclusive dealing, but subs.(10) makes no reference to either subs.(6) or subs.(7). In fact, the respondent does not contend that its conduct does not have the effect of substantially lessening competition; nor, upon the evidence, could it do so. The respondent did, however, lead some evidence as to the reasons for its policy. They were related to the minimization of congestion at Milton and to the more expeditious return of empty kegs. Matters of convenience such as those -- although, in an extreme case, perhaps relevant to the exercise of the Court's discretion to grant an injunction -- furnish no answer to an allegation of exclusive dealing. The second comment relates to subs.(12), which permits a body corporate to restrict the dealings of a related body corporate. This sub-section would permit the respondent to impose purchasing restrictions -- being 16. restrictions otherwise in contravention of 3.47 -~- upon any company which might operate a licensed outlet and to which it was related, within the meaning of s.4A(5) of the Act. There is no evidence of the existence of any such company but the provision is relevant to the form of any injunction which might be granted. The question in the case is whether the conduct of the respondent falls within either of the descriptions contained in subs.(6) or subs.(7). The applicant argues, using the language of subs.(6), that the respondent supplies, or offers to supply, the relevant beer on the condition that the person to whom it supplies, or offers to supply, the beer -- that 1s the retailer -- will acquire services of a particular kind -- that is transport services -- directly or indirectly from a particular other person -- that is QORX. Alternatively, turning to subs.(7), the applicant says that the respondent refuses to supply beer to retailers who have not agreed to acquire transport services directly or indirectly from QRX. Counsel are agreed that little turns upon the distinction between subs.(6) and subs.(7) but there is no evidence that the respondent has refused to supply beer to any retailer because of his unwillingness to accept QRX. Mr Nolan made it clear that, if a retailer pressed his objection to QRX or his preference for some other carrier to 17. the point that he would refuse to accept delivery by QRX, the respondent would "reluctantly" -- as he put it -- refuse to supply. But that has not yet happened. What the respondent has done is to annex a condition to its supply of beer ~- and to its offer to supply beer -- in the relevant areas that the beer be delivered by QRX. The-respondent's conduct so far falls to be determined under subs.(6); the question being whether the condition regarding ORX is one requiring the retailer to acquire transport services directly or indirectly from QRX. Before turning to the argument it is desirable to set out in more detail the system of supply applied by the respondent. That system was described in a circular letter of 19 June 1980 sent by Mr Northcott to customers in the Rockhampton and Mackay districts: "However, the main thrust of our sales in the area will be the supply of Castlemaine Fourex products direct from our Milton Brewery to your outlets. We will offer you a landed price into your store, identifying both the F.0.B. Brisbane price and freight and handling components separately in our invoices. We understand that the licence fee payable by you on each purchase will be based on the Brisbane F.O.B. price." The way in which this system works is that retailers in north Queensland order beer from the respondent, either directly -- by a communication to the brewery in Milton or to a regional depot -- or indirectly -- by an order left with QRX. QRX regularly transports beer, 18. packed 1n its various forms, to its north Queensland depots. The beer is, at that stage, not allocated to any particular customer. Upon receipt of an order from a retailer the respondent supplies the beer by having QRX allocate the order out of the stock held at its nearest depot. QRX delivers to the retailer's premises. The respondent pays to QORX the cost of freight, from Brisbane to the customer's premises, calculated at previously agreed rates. The respondent invoices the retailer, the invoice separately showing the cost of the beer -- which figure is then used for licence fee purposes -- and freight. The freight cost apparently includes insurance. At no stage is there any contractual relationship between ORX and the retailer but there is a direct relationship between the lodgment, and content, of an order and the services supplied, and revenue earned, by QRX. It being clear that the respondent gives the retailers affected by its c.i.f. policy no choice other than to accept this system, the question is whether it is accurate to describe the requirement of the respondent as being a requirement that the retailer "acquire" directly or indirectly the services of ORX. The respondent offers two answers to the claim of the applicant. First, it denies that, in any relevant sense, it "supplies, or offers to supply" bulk beer in north Queensland -- or, in some parts, packaged beer -- simpliciter. It says that, on the contrary, it supplies 19. such beer only as part of a package of goods and services consisting of the beer itself, the transportation of the beer from Brisbane to the premises of the person supplied and insurance en route. Sub-section (6), according to the argument of the respondent, may only operate in a case where the supplier does in fact supply the relevant goods or services simpliciter and seeks, in the particular case, to attach a proscribed condition. It seems to me that there are two problems about this response. In the first place it is the fact that the respondent supplies beer simpliciter to a considerable number of its customers. The evidence does not disclose the relevant figures but it is a fair inference from the population pattern in Queensland and the evidence of distribution in various parts of the State that a high proportion of the respondent's beer is sold f.0.b. Brisbane. Beer, and only beer, is supplied. No services, such as transport or insurance, are included in the sale. But, in any event, this circumstance does not matter. The whole purpose of subs.(6) is to prevent a supplier forcing onto a purchaser, who wishes to acquire particular goods or services, a "package" containing those goods and services and an obligation to acquire goods or services of a particular kind or description from some other person. The purpose of the sub-section would be entirely frustrated if the reference to a corporation supplying, or offering to 20. supply, goods or services were to be interpreted in such a Manner as to exclude the conduct of a corporation who supplies only in a package containing the proscribed condition. For example in Re Ku-ring-gai Co-operative Building Society (No 12) Limited and Dee Why Co-operative Building Society (No 29) Limited (1978) 36 F.L.R. 134 it appeared that each of the two societies followed a practice of granting housing loans to members only upon the condition that the member would insure the property with a nominated insurer. Upon the approach suggested in the present case, it might have been said that neither society was in the business of supplying, or offering to supply, loans simpliciter but only loans in conjunction with insurance, effected by the member, with a particular insurer. Of course, in any case in which a corporation supplies a composite of goods, or of services, or of goods and ~ services, the question may remain whether the "package" includes a proscribed requirement but, if so, it cannot be an answer that the supplier habitually includes, or insists upon including, that requirement. The second answer of the respondent is that its requirement that relevant retailers purchase by c.i.f. contract does not constitute a condition that those retailers acquire transport services from QRX. The respondent says that the absence of any contractual relationship between QORX and the retailer is fatal to the 21. applicant's case. The argument is that the retailer acquires no services from QRX; the retailer merely acquires beer on a c.i.f. contract under which the obligation rests with the vendor, the respondent, to transport the beer to the premises of the purchaser. According to the respondent the relevant acquisition of services is by itself, in order that it may perform the obligation of delivery cast upon it by the contract. : The description in the sub-section itself of the condition proscribed by s.47(6) does not include any requirement that there be created a contractual relationship between the person to be supplied with goods or services and the person whose services are to be acquired. Nor can this be implied. One may "acquire" goods or services from another person other than pursuant to a contract with that person. Moreover, s.4 defines the word "acquire", where used in the Act in relation to services and subject to any indication of a contrary intention -- of which there is none in s.47 -- so as to include "accept". One may "accept" services not merely without contracting to receive them but even without taking any positive action in advance. In Ku-ring-qai Co-operative Building Society the Full Court dealt with the matter upon the basis of the facts in the stated case; relevantly that the two societies required their members to contract with the two particular 22. \ insurers. However, Deane J. pointed out that the requirement of the rules of each society was that the society itself should effect the insurance and that the member should reimburse the society for the premium paid. After holding that the practice actually adopted by each society fell within the description of exclusive dealing contained in s.47(6), Deane J., with whom in this respect Brennan J. agreed, said at pp.170-171: "I have given consideration to the question whether the position would be any different if the practice in which the applicants engaged were the supply upon the condition as to insurance contained in their respective rules, namely, that the relevant applicant would itself effect the insurance in the joint names of the applicant and the borrowing member on the basis that the member would reimburse the society for the premium within fourteen days of its payment by the society. In my view, supply upon that condition would likewise constitute exclusive dealing for the purposes of s.47 of the Act. The fact that the policy of insurance was to be effected by the relevant applicant in the joint names of itself and the borrowing member would, in my view, not alter the fact that the member was himself acquiring services, through the applicant as his agent, for the purposes of $.47(6) of the Act. The position may well be different if the obligation as to insurance was restricted to insurance of the society's interest and provision were made to enable, as ' distinct from compel, the member to join in that insurance." That passage is, of course, consistent only with the view that it is not a necessary ingredient of the conduct described by s.47(6) that there be a contractual relationship between the person who acquires the services -- in that case the member -- and the person by whom they are acquired. 23. The term "services" is defined by s.4 -- again subject to any contrary intention -- as including "any rights ... benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce". Without limiting the generality of that description, the definition goes on specifically to include the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under a contract for, or in relation to, the performance of work. [It is not a requirement of this part of the definition that -- ina contractual sense -- the work be performed on behalf of, or for the benefit of, any particular person. The critical question in this case may be paraphrased as asking: does the respondent supply, or offer to supply, beer on the condition that the relevant retailer will accept transport services directly or indirectly from QRX? It appears to me that this question must be answered in the affirmative. The relevant services are benefits provided, or to be provided, under a contract made between the respondent and QRX for, or in relation to, the performance of work. As is graphically illustrated by Mr Nolan's attitude to a possible request by a customer to take delivery at the brewery on his own truck of a load of beer intended for retail sale in north Queensland, the respondent insists, as a condition of the supply of beer to north 24. Queensland retailers, that those retailers accept the benefits of the work done by QRX under that contract. Looking at the opening words of the definition of "services", those are also "benefits ... granted or conferred in trade or commerce". And they are services to be provided by a particular person. This is not a case where the relevant condition requires the acquisition of services from somebody, but from nobody in particular: cf S.W.B. Family Credit Union Limited v Parramatta Tourist Services Pty Limited (1980) 48 F.L.R. 445 per Smithers J. at pp.457-458. In my view the applicant has established that the conduct of the respondent falls within the description of exclusive dealing contained in s.47(6) and is entitled to relief accordingly. The respondent maintains -- and, unless restrained by the Court, will continue to maintain -- that conduct. It is not suggested on behalf of the respondent that there exists any consideration, in relation to the exercise of the Court's discretion, by virtue of which injunctive relief should be withheld and I therefore propose to make an order based upon s.47(6) restraining the respondent from supplying, or offering to supply, beer to any person other than a body corporate related to the respondent, on the condition that that person will accept the services, in relation to transport and insurance, of QRX. There has not yet been a refusal to supply a person 25. unwilling to accept the services of QRX but only because no customer of the respondent has pressed the matter to that point. In view of the respondent's expressed attitude that it would prefer to refuse to supply than to permit a customer to arrange his or her own transport there is, in my view, a threat to contravene s.47(7) and there ought also to be an order restraining the respondent from refusing to supply beer to any person, other than a body corporate related to the respondent, for the reason that that person has not acquired, or has not agreed to acquire, the services, in relation to transport and insurance, of QRX. The applicant's claim for damages raises difficulties of assessment. The applicant is entitled to recover from the respondent the amount of the loss or damage which it has suffered by virtue of the respondent's contravention of s.47(6): see s.82 of the Act. Reference has already been made to certain specific orders of three publicans, Messrs Jackson, Bevan and Thrupp, to be dispatched by the respondent via the applicant. Those orders were in the nature of trial shipments but each of those witnesses indicated in his evidence that, if a trial proved satisfactory, he would be disposed regularly to use the applicant's services. Neither Mr Jackson nor Mr Thrupp expressed any dissatisfaction with the services of QRK. They were each attracted to the applicant because the rates which it quoted were cheaper than those of ORX. Mr Bevan 26. did complain about QORX; in particular, its failure consistently to accede to his request to deliver outside the trading hours of the hotel. However, it was when he received a quotation from the applicant at rates lower than those of QRX that he decided that he would like to use the services of the applicant if, upon trial, they were satisfactory. His position at the hearing was that he remained dissatisfied with the service rendered by QRX. He said that he still wished to engage the applicant, or indeed any other carrier, to transport his orders. Mr Hodgson gave evidence that the profit margin available to his company upon a shipment of beer from Brisbane to north Queensland -- it seems not to make much difference whether bulk beer or packaged beer or whether to Rockhampton or to Cairns -- was within the range of $15 - $20 per tonne. He described the method of caiculation and this was not contested. Upon this basis the profit which would have been earned from the trial orders of Messrs Jackson, Bevan and Thrupp was agreed to be $382. But the applicant says that this is only the beginning of the claim. It appears that the combined average weekly turnover of the hotels operated by these three gentlemen amounts of 27.5 tonnes. At $15 per tonne this would yield a weekly profit from their business of $412.50 ($21,450 per annum) or, at $20 per tonne, $550.00 ($28,600 per annum). Given their willingness to try the applicant's service, their protests 27. ~- in the cases of Messrs Jackson and Bevan -- about their orders being sent by QORX, and their readiness to swear affidavits in support of the applicant's case, it is submitted that the Court should find that, upon the probabilities and in the absence of the course of exclusive dealing engaged in by the respondent, the applicant would have been likely to obtain their regular work and to have earned profits from them at this annual rate. Calculated over the period of 16-17 months since the trial orders were lodged, this would have involved profits in the range of about $28,000 - $38,000. In addition, the applicant says that it has been deprived of the chance of acquiring the business of other liquor retailers in north Queensland. The applicant concedes that it would have had to compete for such business not only with QRX, which had the advantage of incumbency, but also with Brambles and Total. The applicant is not able to put before the Court any figures by virtue of which a calculation may be made as to the business which it would have attracted or the profits lost to it by the respondent's refusal to allow it into the market. It says, however, that it should be compensated for the loss of the chance to acquire such business. The respondent submits that to allow any figure beyond the agreed $382 would he to engage in speculation, that it cannot be said, upon the probabilities, that the applicant would have been successful in gaining repeat 28. orders from Messrs Jackson, Bevan or Thrupp and a fortiori in relation to the possibility of attracting orders from other hoteliers. It is well established that a person who has suffered loss or damage is entitled to be compensated for that loss or damage notwithstanding that it is not possible for the court precisely to calculate its extent: see Chaplin v Hicks £1911] 2 K.B. 786, Biggin & Co Limited v Permanite Limited £19511] 1 K.B. 422 and Callaghan v William C Lynch Pty Limited [19621] N.S.W.R. 871. In Enzed Holdings Limited v Wynthea Pty Limited (1984) 57 A.L.R. 167 at p.183 a Full Court of this Court said: "The principle is clear. If the court finds damage has occurred it must do its best to quantify the loss even if a degree of speculation and guess work is involved. Furthermore, if actual damage is suffered, the award must be for more than nominal damages. We should add that we can see no reason why this principle should not apply in cases under the Trade Practices Act as well as in cases at common law. We emphasize, however, that the principle applies only when the court finds that loss or damage has occurred. It is not enough for a plaintiff merely to show wrongful conduct by the defendant." In applying this principle a distinction may properly be made between the prospects of the applicant in obtaining regular business from Messrs Jackson, Bevan and Thrupp, on the one hand, and its prospects of obtaining orders from other liquor retailers. In relation to these three particular hoteliers, the evidence demonstrates an 29. existing willingness to make a change. I accept the evidence of these witnesses that they would have given the applicant their regular business if its services had proved to be satisfactory. There is no reason to believe that the service would not have proved to be satisfactory. The applicant is an experienced and profitable transport operator. In his conversation with Mr Hodgson of 8 March 1984, Mr Nolan conceded that the applicant could be expected to be efficient in relation to the return of empty kegs. I think that there existed, in early 1984, an excellent chance that the applicant would have earned the regular patronage of the hotels managed by each of Mr Jackson, Mr Bevan and Mr Thrupp. Of course, there was no certainty. It would be wrong to assess damages as if there were some assurance that the applicant would have had ail of this work. If the respondent had dropped its insistence upon transport by QRX, the way would have been open for Brambles and Total to compete with the applicant. QRX may have lowered its prices in an attempt to retain the business, although I think that, even so, it might have had difficulty in retaining that of Mr Bevan. Nonetheless the applicant had made an impact with these particular hoteliers. [It had a considerable initial advantage over the other companies. I take the mean figure of the range $28,000 - $38,000, that is $33,000, and estimate that, upon the probabilities, the applicant has lost business equal to one half of that amount, that is $16,500. 30. In relation to the possibility of attracting business from other retailers, it is impossible even to attempt a calculation. Mr Jackson's hotel is only one of 23 hotels in Mackay; its liquor sales being about the fourth or fifth largest. In addition there are some 30-50 licensed restaurants. There are 17 hotels in Cairns and about 90 licensed restaurants. Mr Bevan's liquor volume is about the seventh largest in the Cairns area. I have no information about Townsville, Rockhampton or the numerous smaller centres in relation to which the respondent's policy operates but it seems likely that the total profit available from the transport of Fourex beer to north Queensland runs into millions of dollars each year. A very considerable volume of business was denied to the applicant by the respondent's policy. It is more than speculation to say that, in a free market situation, the applicant would -- upon the probabilities -- have won some of that business; but how much it is impossible to say. I propose to take this element into account but, in the absence of firm evidence, to allow only a token amount. I round the figures previously mentioned -- $3982 and $16,500 -- up to a total figure for damages of $20,000. There will be judgment for the applicant in that sum. The respondent must pay the applicant's costs of the proceeding including all reserved costs. I certify that the thirty (30) 31. preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Wilcox. Associate: Date: 9 August 1985 Counsel for the applicant: Solicitors for the applicant: Counsel for the respondent: Solicitors for the respondent: Date(s) of hearing: C/U OLE A ti tLPop Mr I McG Wylie QC and Mr R V Hanson Messrs Ryan & Archer Coutts Mr D F Jackson OC and Mr N F McLaughlan Messrs Flower & Hart 4, 5 July 1985