" JUDGMENT No. 14a 31 CATCHWORDS TRADE PRACTICES - Monopolization - Sole manufacturer of Y-bar for own purposes of manufacturing star picket fence posts - refusal or "constructive refusal" by manufacturer to supply Y-bar for similar use by appellant company - whether such refusal constitutes taking advantage of power in relation to a market for the purposes stated in s.46 Trade Practices Act 1974 - definition of "market" - whether a "market" in Y-bar exists - the use of United States authorities in construing s.46 - "essential facility" doctrine considered. Trade Practices Act 1974 (Cth), s.46. QUEENSLAND WIRE INDUSTRIES PTY. LIMITED v. THE BROKEN HILL PROPRIETARY CO. LIMITED & ANOR. QLD G173 OF 1987 Bowen C.J. Morling J. Gummow J. Brisbane 24 December 1987 - 4 JAN1988 FEDERAL COURT OF , } AUSTRALIA oof " PRINCIPAL _ oF REGISTRY . IN THE FEDERAL COURT OF AUSTRALIA) ) ) No. G 173 of 1987 ) ) QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION On appeal from a single Judge of the Federal Court of Australia BETWEEN: QUEENSLAND WIRE INDUSTRIES PTY. LIMITED Appellant AND: THE BROKEN HILL PROPRIETARY CO. LIMITED First Respondent AUSTRALIAN WIRE INDUSTRIES PROPRIETARY LIMITED Second Respondent COURT: BOWEN CJ, MORLING & GUMMOW JJ DATE: 24 DECEMBER 1987 PLACE: SYDNEY. MINUTE OF ORDER THE COURT ORDERS THAT: 1. The Appeal be dismissed with costs. 2. The Cross-Appeal be dismissed. Note Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA) ) ) No. G 173 of 1987 ) ) QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION On appeal from a single Judge of the Federal Court of Australia BETWEEN: QUEENSLAND WIRE INDUSTRIES PTY. LIMITED Appellant — AND: THE BROKEN HILL PROPRIETARY CO. LIMITED First Respondent AUSTRALIAN WIRE INDUSTRIES PROPRIETARY LIMITED Second Respondent COURT: BOWEN CJ, MORLING & GUMMOW JJ DATE: 24 December 1987 PLACE: BRISBANE REASONS FOR JUDGMENT THE COURT: The Facts This is an appeal from a decision of a Judge of this Court dismissing proceedings in which relief was sought in respect of alleged contravention by the respondents of s.46 of the Trade Practices Act 1974 ("the Act") by reason of their conduct in relation to the manufacture and supply of rural fencing materials. The second respondent ("AWI") was incorporated in 1921. Since 1925, it has been a wholly owned subsidiary, directly or indirectly, of the first respondent ("BHP"). Since the 1920's, BHP has manufactured a steel product described in the evidence as Y-bar. The Y-bar has been used in the manufacture of steel fence posts commonly called star picket posts. Star picket posts are by far the most popular kind of rural fencing post and sales of it have produced substantial profits. At Newcastle in New South Wales the star picket posts have been manufactured by AWI and at Hamilton in Queensland BHP itself has operated a fence post manufacturing plant. Both plants use Y-bar manufactured by BHP at Newcastle. Fence posts made from BHP Y-bar are also produced at Kwinana in Western Australia, at the plant of another wholly owned BHP subsidiary. Some quantities of Y-bar have been exported to a wholly owned BHP subsidiary in New Zealand, from which fence posts are then manufactured in that country. Also, small quantities have been exported to a New Guinea corporation in which BHP now has a 40% interest. The predecessor of this corporation was a wholly owned subsidiary of BHP. At all material times BHP has been the only manufacturer of yY-bar in Australia. Y-bar has not been imported into Australia in any significant quantities. The Y-bar manufactured by BHP has been used domestically only in the manner we have described. The events with which this case is concerned took place in 1981 and the years following. In the course of interlocutory proceedings in this case, the solicitors for BHP and AWI wrote to the solicitors for the appellant, Queensland 3. Wire Industries Pty. Ltd. ("QWI"), formally stating that: ". . . AWI's policy throughout that period was either to refuse supply of steel Y-bar or to offer to supply steel Y-bar at an uncompetitive price because it wished to preserve the business of the manufacture and wholesale sale of fence posts conducted by it in association with BHP, there being no market for the supply for any purpose of steel Y-bar to other manufacturers." It was against this background that his Honour found that the policy of BHP was not to distribute Y-bar domestically and to use these materials itself. In 1984, AWI indicated to QWI that it was prepared to sell y-bar to QWI, but this was at a price that was excessively high relative to other BHP products. His Honour treated this as a "constructive refusal" of supply. BHP manufactures a wide range of steel products. There was no evidence that any product of BHP's rolling milis, other than yY-bar, was unavailable for sale and his Honour held that BHP's conduct in withholding supplies of Y-bar was not in accordance with the general pattern of its commercial behaviour. In these circumstances, the complaint of QWI, put broadly, was that BHP and AWI, in refusing supplies of Y-bar, were taking advantage of power in relation to a market, in the sense described in s.46 of the Act, to effect one or more of the purposes proscribed by that section. Section 46 was amended during the period in respect of which QWI's complaint was made, but it is sufficient at this stage to deal with the provision in this summary form. BHP markets under the name "Waratah" a range of fencing products and in its advertising it stresses that 1t can supply "every part of the fence not just the wire". BHP commonly assembles complete truck loads of fencing material, including star picket posts, and sends them directly to end users. In the 1986/1987 year, more than 41% of the total tonnage of rural fencing sold by BHP consisted of combined loads of this type. QWI commenced operations some 20 years ago by making barbed wire. It has expanded its range of products as well as the volume of business. The principal business of QWI, to the extent of some three quarters of its turnover, is rural fencing. However, it does not make fence posts because it cannot obtain y-bar, the necessary "feed" from BHP. In June 1987, QWI opened a new wire-making plant and has become the only manufacturer of galvanised wire in Australia, apart from BHP. QWI is able to buy steel fence posts from BHP in accordance with BHP's published price list but cannot sell those posts profitably to the major pastoral houses, such as Dalgety's and Elder's. QWI has competed fairly effectively with BHP in relation to sales of wire, principally in Queensland and Northern New South Wales. Until June 1987, it made wire products from bulk galvanised wire supplied by BHP. In the new plant, it makes its own wire from rods supplied by BHP. Although BHP is much better established, QWI has obtained a significant part of the market for rural steel fencing in Queensland, between 27% and 28%. The rest of the market is held principally by BHP. The result is that nearly all rural steel fencing in Queensland is made by either BHP or the applicant. BHP also makes most of the rural fencing sold in all 5. the other States, except South Australia. BHP rural fencing sales turnover is about $80 million a year, of which about $33 million is received from the sale of fence posts. From the sale of fence posts, BHP derives as its profit about $4 million per annum. In addition, BHP also derives profits from its supply of bulk wire to the applicant and to Boral Cyclone Ltd. ("Boral"). Boral makes a full range of fencing products and sells both its fence posts and those made by BHP. The fence posts made by Boral have a different cross section to that of the Y-bar, and the latter is by far the more popular. The Boral post made without the Y-bar has only about 1% of the rural fence post market. The Contentions of the Parties His Honour found that the purpose of QWI in bringing the proceedings was to obtain from BHP not fence posts but Y-bar. No doubt, as his Honour found, QWI would in reality be satisfied if it were sold fence posts cheaply enough, but his Honour found that QWI was "quite genuine" in its desire to set up in business manufacturing fence posts using BHP Y-bar as "feed". It has never been the intention of QWI to become a "distributor" of any Y-bar which it acquired, by reselling it to third parties. On the other hand, on the appeal, senior counsel for BHP and AWI described his clients as a "vertically integrated manufacturer" which could not properly be compelled, by dint of s.46 of the Act, to supply an intermediate product, namely the Y-bar, to assist a competitor such as QWI to sell the end product, namely the star picket fence posts. It was submitted that it is not sufficiently to the point that BHP was a "monopolist" in relation to the sale of these fence posts. Counsel characterised the "true thrust" of QWI's case as one to force BHP and AWI to create a new market and to enter upon a business in which they had not previously engaged (the manufacture and sale of Y-bar rather than the manufacture and consumption of Y-bar); by this means QWI sought to establish itself in a business of completing the last stage of manufacture of the star picket posts. That, in senior counsel's submission, was not the purpose or effect of s.46 of the Act. It was not a case of an applicant seeking relief against a competitor from whom it had purchased an essential ingredient of its product, when the competitor had changed its trading terms to "squeeze" the applicant (e.g. MacLean v Shell Chemical (Australia) Pty. Ltd. [1984] ATPR 40-462). BHP had a long established practice of not supplying Y-bar at all. Section 46 In its original form, s.46 provided as follows: 46. (1) A corporation that is in a position substantially to control a market for goods or services shall not take advantage of the power in relation to that market that it has by virtue of being in that position - (a) to eliminate or substantially to damage a competitor in that market or in another market; (b) to prevent the entry of a person into that market or into another market; or (c) to deter or prevent a person from engaging in competitive behaviour in that market or in another market. (2) For the purposes of this section, a corporation shall be deemed to be in a position substantially to control a market for goods or services if that corporation and any related corporation or related corporations are together in a position substantially to control that market. (3) For the purposes of this section, a reference to a corporation being in a position substantially to control a market for goods or services includes a reference to a corporation which, by reason of its sHare of the market, or of its share of the market combined with availability of technical knowledge, raw materials or capital, has the power to determine the prices, or control the production or distribution, of a substantial part of the goods or services in that market. (4) This section does not prevent a corporation from - (a) engaging, during the period of 4 months immediately following the date fixed under sub-section 2(3), in conduct that is of a kind referred to in sub-section 45(2) or 47(1) but to which that sub-section does not apply by reason of the fact that the conduct is engaged in before the expiration of that period; Or (b) engaging, after the expiration of that period, in conduct that does not constitute a contravention of any of the following sections, namely, sections 45, 47 and 50, by reason that an authorization is in force in respect of the conduct or by reason of the operation of section 92, 93 or 94. It was with the Act in this original form that the Court was concerned in some of the decisions cited on the appeal, notably Top Performance Motors Pty. Ltd. v Ira Berk (Qld) Pty. Ltd. (1975) 24 FLR 286. As the Act originally stood, there was no definition of "market" and s.46 spoke simply of taking advantage of the power, in relation to the market concerned, to achieve one or other of the results set out in paras. (a), (b) and (c). The expression "for the purpose of" was introduced by the Trade Practices Amendment Act 1977. This came into effect on 1 July 1977. After the 1977 amendments, s.46 provided as follows: 46. (1) A corporation that is in a position sub- stantially to control a market for goods or services shall not take advantage of the power in relation to that market that it has by virtue of being in that position for the purpose of - (a) eliminating or substantially damaging a person, being a competitor in that market or in any other market of the corporation or of a body corporate related to the corporation; (b) preventing the entry of a person into that market or into any other market; or (c) deterring or preventing a person from engaging in competitive conduct in that market or in any other market. (2) If - (a) a body corporate that is related to a corporation is, or two or more bodies corporate each of which is related to the one corporation together are, ina position substantially to control a market for goods or services; or (b) a corporation, and a body corporate that is, or two or ~*more bodies corporate each of which is, related to that corporation, together are ina position substantially to control a market for goods or services, the corporation shall be deemed for the purposes of this section to be in a position substantially to control that market. (3) A reference in this section to a corporation or other body corporate being in a position substantially to control a market for goods or services includes a reference to a corporation or other body corporate, as the case may be, having, by reason of its share of the market, or its share of the market combined with the availability to it of technical knowledge, raw materials or capital, the power to determine the prices, or control the production or distribution, 9. of a substantial part of the goods or services in that market. (4) A reference in this section to substantially controlling a market for goods or services shall be construed as a reference to substantially controlling such a market either as a supplier or as an acquirer of goods or services in that market. (5) Without extending by implication the meaning of sub-section (1), a corporation shall not be taken to contravene that sub- section by reason only that it acquires plant or equipment. (6) This section does not prevent a corporation from engaging in conduct that does not constitute a contravention of any of the following sections, namely, sections 45, 45B, 47 and 50, by reason that an author- ization is in force or by reason of the operation of section 93. The Application in the present proceedings was filed on 2 November 1984, and damages were claimed in respect of the period commencing January 1984. Between the institution of the proceedings and the commencement of the hearing, on 3 August 1987, s.46 was further amended. This was by the Trade Practices Revision Act 1986, the relevant provisions of which commenced on 1 June 1986. As his Honour observed, the right of the applicants to an injunction depended upon the effect of s.46 in its current form: Trade Practices Commission v Milreis Pty. Ltd. (No. 2) (1978) 32 FLR 234 at 241. The 1986 amendments, inter alia, substituted for the introductory part of sub-s. (1) the following: "A corporation that has a substantial degree of power in a market shall not' take advantage of that power for the purpose of " Section 46 now provides: 46. (1) A corporation that has a substantial degree of power in a market shall not' take advantage of that power for the purpose of - (2) (3) (4) 10. (a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market; (b) preventing the entry of a person into that or any other market; or (c) deterring or preventing a person from engaging in competitive conduct in that or any other market. (a) a body corporate that is related to a corporation has, or 2 or more bodies corporate each of which is related to the one corporation together have, a substantial degree of power in a market; or (b) a corporation and a body corporate that is, or a corporation and 2 or more bodies corporate each of which is, related to that corporation, together have a substantial degree of power ina market, the corporation shall be taken for the purposes of this section to have a substantial degree of power in that market. In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the Court shall have regard to the extent to which the conduct of the body corporate or of any of those bodies corporate in that market is constrained by the conduct of ~- (a) competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or (b) persons to whom or from whom the body corporate or any of those _ bodies corporate supplies or acquires goods or services in that market. In this section - (a) a reference to power is a reference to market power; (5) (6) (7) ll. (b) a reference to a market is a reference to a market for goods or services; and (c) a reference to power in relation to, or to conduct in, a market is a reference to power, or to conduct, in that market either as a supplier or as an acquirer of goods or services in that market. Without extending by implication the meaning of sub-section (1), a corporation shall not be taken to contravene that sub-section by reason only that it acquires plant or equipment. This section does not prevent a corporation from engaging in conduct that does not constitute a contravention of any of the following sections, namely, sections 45, 45B, 47 and 50, by reason that an authorization is in force or by reason of the operation of section 93. Without. in any way limiting the manner in which the purpose of a person may be established for the purposes of any other provision of this Act, a corporation may be taken to have taken advantage of its power for a purpose referred to in sub-section (1) notwithstanding that, after all the evidence has been considered, the existence of that purpose is ascertainable only by inference from the conduct of the corporation or of any other person or from other relevant circumstances. We should refer also to s.4£ which provides: For the purpose of this Act, "market" means a market in Australia and, when used in relation to any goods or services, includes a market for those goods or services and other goods or services that are substitutable for, or otherwise competitive with, the first mentioned goods or services. This was introduced by the Trade Practices Amendment Act 1977. The Proceedings at First Instance In order to bring its claims of contravention of s.46 within the scope of that provision in its present form, it was necessary for QWI to show (to adopt the approach of French J. 12. in Od Transport Pty. Ltd. v Western Australian Government Railways Commission (1986) 13 FCR 270 at 279) that: 1. BHP and AWI were corporations within the meaning of the statute. 2. They were suppliers of goods in a market for those goods. 3. They possessed a substantial degree of power in that market. 4. QWI was a competitor of BHP and AWI in that market or in any other market. 5. BHP and AWI had taken advantage of that power for the purpose of (i) preventing the entry of QWI into that, or any other, market or (ii) deterring or preventing QWI from engaging in competitive conduct in that, or any other, market. Corresponding issues arose, mutatis mutandis, under the Act in its pre-1986 form. In the present proceedings, his Honour held that BHP refused the supply of Y-bar to QWI for the purpose (at least) of preventing QWI from competing with it in the market for star picket rural fencing. However, his Honour held that whilst QWI had satisfied him of the presence of all other elements of its claim, it had not done so in respect of the requirement that it had "taken advantage" within the meaning of s.46. As to this, his Honour said: ",.. BHP has not in this case used its monopoly in a way which would ordinarily be regarded as reprehensible; in particular, its refusal to supply a competitor with Y-bar to enable the latter to compete more effectively would not, I think, be regarded in commerce as deserving of criticism. 13. I have regarded the whole of the circumstances set out above as relevant to the "taking advantage point" including the protection available to B.H.P. under the Steel Industry Plan, the special advantages accruing to it as the the sole domestic supplier and the fact that other products of its rolling mills are_ sold. But the presence of these factors is not quite enough, in my view, to enable one to describe B.H.P.'s policy of turning nearly all of a particular product it makes into another product, rather than selling the former product, as predatory or unfair The central point which has impressed me is that it is doing no more than declining to sell a product it has not previously sold and which it desires to keep for further processing. It wants to sell only the completed posts, rather than the material from which it makes them." Accordingly, his Honour dismissed the proceedings. We should add that the reference to the Steel Industry Plan is to a programme announced by the Australian Government with effect from 1984 whereby bounty payments were made upon a selected range of steel products with the object of ensuring that the share of the market for steel products in Australia held by Australian producers did not fall below 80%. We should comment also upon the distinct corporate identities of BHP and AWI. In the course of argument before his Honour, counsel for BHP and AWI submitted that for most purposes concerning s.46 both companies should be considered as one. His Honour held there was no need to reach a conclusion on that point, but that it would be convenient generally to use the expression "BHP" as referring to both respondents. On the other hand, in dealing with the facts, we have referred distinctly to BHP and AWI. Nevertheless, in dealing with the application of s.46 to the facts, we accept the submission that 14. the two respondents may be considered as one. No contrary view was urged upon us. Conclusions As we have indicated, his Honour held that there was a market in the statutory sense for star picket rural fencing and that BHP had acted as it had in denying supplies of Y-bar for the purposes of preventing QWI from competing with it in that market. However, anterior issues were whether BHP had a substantial degree of power in a market (whether or not QWI was a competitor in that market) of which power it had taken advantage for a proscribed purpose. Thus, a corporation X may take advantage of a substantial degree of power in market A (in which corporation Y does not compete) for the purpose of preventing corporation ¥ competing with it in market B. In submissions, counsel referred to the definition of "market" inserted in the Act in 1977 and to the discussion of that term in Trade Practices Commission v Ansett Transport Industries (Operations) Pty. Ltd. (1978) 32 FLR 305 at 312, and Outboard Marine Australia Pty. Ltd. v Hecar Investments No. 6 Pty. Ltd. (1982) 66 FLR 120 at 123-124. In our view, in defining the market or markets involved in a particular dispute, one should begin with the problem at hand and ask what identification of market best assists in analysing the processes of competition, or lack of competition, with which the case is concerned (cf. Norman and Williams, "The Analysis of Market and Competition Under the Trade Practices Act: Towards the Resolution of Some Hitherto Unresolved Issues" (1983) 11 Australian Business Law Review, 396 at 400). 15. As we have said, the evidence showed there was a market for the star picket fencing and that BHP acted with the purpose of preventing QWI competing with it in that market. BHP did so by denying to QWI the "feed" for manufacture of star picket fencing, namely Y-bar. The question for the purposes of s.46 then becomes whether, in so denying supply, BHP was taking advantage of power in relation to a market in the Y-bar. The Y-bar was sui generis. Without it, the star picket fencing could not be manufactured. But was there a market in Australia (as s.4E requires) for Y-bar? If there were such a market, then it would not matter that QWI was not a competitor in it, if the conduct of BHP had the necessary purpose in relation to the star picket fencing market. But was there, in the sense of the authorities to which we have referred, a trade or traffic between buyers and sellers, or, indeed between any buyer and arms-length seller, of Y-bar as an article of commerce? As Williams v Papersave Pty. Ltd. [1987] ATPR 40-818 strikingly illustrates, s.46 is not contravened if the 'conduct of the respondent cannot be characterised as taking advantage of power which it has in relation to a market. In our view, there has never been a market for Y-bar so as to attract s.46 of the Act. The findings of fact by his Honour indicate this to be so and we shall not repeat what we have earlier said as to the facts. In response, senior counsel for QWI submitted that there was at least a "potential" market, which QWI sought to open up by these proceedings. But this rather serves to emphasise the case made by BHP and AWI. In essence, the submissions of BHP and AWI fix upon the absence of a market in y-bar as the footing for the argument that what QWI 16. seeks by these proceedings is to force BHP, by injunctive remedy or otherwise, to enter into a fresh business with the sale of Y-bar. We agree that the mere fact that BHP might be described as a monopolist in relation to the manufacture of Y-bar and the subsequent use of it by BHP in the production of star picket fencing, does not offend s.46 whether in its pre-1986 form or in its present form; the question is whether there has been a use of power in the circumstances spelled out in s.46. Accordingly, we hold that the proceedings properly were dismissed. We do so without finding it necessary to embark upon the issue upon which his Honour dismissed the proceedings, namely whether power is relevantly "taken advantage of" only if the conduct complained of warrants some epithet such as "predatory" or "unfair". Another view would be that, whatever was previously the position, since the 1977 amendments to s.46, the presence of the necessary "purpose" of acting to the detriment of the interests of the other corporation, gives, on the face of the section itself, sufficient content and force to the concept of the respondent corporation taking advantage of its power. As we have indicated, in this case his Honour, in dismissing the applicant's claim, took the first view (cf. Mark Lyons Pty. Ltd. v Bursill Sportsgear Pty. Ltd. [1987] ATPR 40,809 at 48,799, 48,802). The United States Authorities We have reached our conclusions by application of the terms of the Act. However, we should say something as to the 17. authorities cited to us as to the interpretation of s.2 of the Sherman Act and Article 86 of the Treaty of Rome. The United States authorities do have particular significance. It lies in the circumstance that the course of decision concerning offences of "monopolisation" and "attempted monopolisation" provided a fund of experience upon which the Australian Parliament has drawn in drawing and redrawing s.46 of the Act. Thus, the dictum in United States v Griffith 334 US 100 at 107 (1948) that the use of monopoly power, however lawfully acquired "to foreclose competition, to gain a competitive advantage, or to destroy a competitor, is unlawful" has some affinity with the terms of paras. (a) (b) and (c) of sub-s. 46 (1). However, it must be borne in mind that much of the judicial exegesis in the United States upon "monopolisation" and "attempted monopolisation" has been made necessary by the terse but broad language of s.2 of the Sherman Act. Section 2 provides: "Every person who shall monopolize or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanour .. ." There is in that provision none of the elaboration in s.46 as to the nature of the power that 1s wrongfully exercised, the concept of a market, the manner of its exercise, the intent (or otherwise) with which it is or may be exercised, or the consequences or apprehended consequences of that exercise. The appellant urged upon us a series of United States decisions commencing with United States v Terminal Railroad 18. Association of St. Louis 224 US 383 (1912), including Otter Tail Power Co. v United States 410 US 366 (1973) and ending with two 1986 decisions of the Court of Appeals for the Seventh Circuit, Olympia Equipment Leasing Co. v Western Union Telegraph Company 797 F2d 370 (1986) and Fishman v Wirtz (1986) 807 F2d (1986). In the Olympia Equipment Case, Posner J. observed (at 375): "Opinion about the offense of monopolization has undergone an evolution. Forty years ago it was thought that even a firm with a lawful monopoly (there is no suggestion that Western Union's monopoly of telex service is unlawful) could not be allowed to defend its monopoly against would-be competitors by tactics otherwise legitimate; it had to exercise special restraint - perhaps, indeed, had to hold its prices high, to encourage new entry. So Alcoa was condemned as a monopolist because it had assiduously created enough productive capacity to supply all new increments of demand for aluminum; it would not have been condemned if by keeping its prices high it had kept demand down to a level that it could supply without increasing its capacity. See United States v Aluminum Co. of America, 148 F.2d 416, 430-31 (2d Cir. 1945) (L. Hand, J. '. Later, as the emphasis of antitrust policy shifted from the protection of competition as a process of rivalry to the protection of competition as a means of promoting economic efficiency . . . it became recognized that the lawful monopolist should be free to compete like everyone else; otherwise the anti-trust laws would be holding an umbrella over inefficient competitors. "A monopolist, no less than any other competitor, is permitted and indeed encouraged to compete aggressively on the merits..." Foremost Pro Color, Inc. Eastman Kodak Co. 703 F. 20 534, 544 T3th Cir. 1983). . . Today it is clear that a firm with lawful monopoly power has no general duty to help its competitors, whether by holding a price umbrella over their heads or by otherwise pulling its competitive punches." 19. The meaning to be given to "intent" and "specific intent" as elements in the concept of "monopolization" and "attempted monopolization"™ under s.2 of the Sherman Act has varied with the course of judicial decision: Areeda and Turner, "Antitrust Law" §626a. One mitigation of or qualification to the requirement of intent by monopolists who refuse to deal may have been in the development of the so called "essential facilities doctrine", beginning with United States v Terminal Railroad Association of St. Louis 224 US 383 (1912). This was the view expressed by the Court of Appeals (Sixth Circuit) in Byars v Bluff City News Co. Inc. 609 F 2d 843 at 855-857 (1979); see also "Refusals to Deal by Vertically Integrated Monopolists", (1974) 87 Harv. L. Rev. 1720 at 1723-1752. This is important for the present case because QWI relied upon these authorities for the proposition that whilst as a general rule a monopolist may deal or refuse to deal with whom he pleases, this is not so where he controls an "essential facility". If he does control such a facility he is, QWI submitted, under a duty to give access to that facility to competitors and BHP's control of Y-bar is to be likened to control of an essential facility. We do not accept this submission. First, it 1s not readily accommodated to the terms of s.46 itself, and it is those terms that govern this case. Secondly, as we have mentioned, the "essential facility" doctrine evolved as a gloss upon the succinct terms of the Sherman Act. Thirdly, we have some difficulty, at least in cases where a monopoly of electric power, transport, communications or some other "essential 20. service" is not involved, in seeing the limits of the concept of "essential facility"; in Fishman v Wirtz (supra), it was a sports stadium in Chicago. Fourthly, even if there be such a doctrine, there is a particular difficulty where the aid of the Courts is sought to oblige the respondent to accept the applicant as a customer. We were referred to Otter Tail Power Co. v United States (supra). A wholesale supplier of electricity had refused to supply electric power to an electric utility corporation which competed with it in the retail power market and which had no other source of supply. The Supreme Court held the supplier had contravened s.2 of the Sherman Act. But there is some force in BHP's submission to us that the existence of a federal regulatory authority may have made all the difference in that case in working out the effects of the decision of the Supreme Court. In any event, the case has attracted forceful criticism in the United States: Areeda and Turner, "Antitrust Law" §729e. Fifthly, in applying the "essential facility" doctrine, there would appear to be a need to consider the impact upon it of another "doctrine", that of upholding conduct engaged in for a "legitimate business purpose" (see Byars v Bluff City News Co. Inc. (supra) at 862-863; Areeda, 1982 supplement to Areeda and Turner, "Antitrust Law" §729.2). Finally, there also is force in BHP's submission that the "essential facility" cases involved discriminatory refusals to deal rather than, as in the present case, a "vertically integrated" monopolist who had refused to deal at all in an intermediate product and committed it solely to its own manufacturing operations. In the United States, this has been described as "a largely unexplored topic" 21. ("Refusals to Deal by Vertically Integrated Monopolists", (supra at 1758); see also Byars v Bluff City News Co. Inc. (supra) at 863-864). For these reasons, whilst we have derived assistance from the United States authorities by way of comparison with and contrast to s.46 of the Act, we do not find in them any compelling guidance as to the construction of that provision. The same is true of the authorities upon s.86 of the Treaty of Rome, to which we were referred, notably GVL v EC Commission (1983] 3 CMLR 645. Costs As we have indicated, BHP and AWI succeeded below; however, costs did not simply follow that event. After hearing argument, his Honour delivered ex tempore reasons and ordered that QWI pay 70% of the taxed costs of BHP and AWI. That is to say, although successful in the proceedings, BHP and AWI were left to bear 30% of their taxed costs. BHP and AWI brought a cross-appeal seeking an order that all the taxed costs be paid by QWI. In reaching his decision, his Honour was exercising the discretion as to award of costs vested in him by s.43 of the Federal Court of Australia Act 1976. He had had the conduct of the trial and thus had a grasp of the issues as they emerged and an appreciation of the manner in which they were handled by the parties that put him in a special position. In giving his reasons, his Honour referred to the judgment of Toohey J. in Hughes v Western Australian Cricket Association (Inc.) [1986] ATPR 40-748 at 48-136, which summarizes the well 22. known guide-lines within which the discretion as to costs is exercised. The result may have been unusual, but we are not satisfied that his Honour's exercise of discretion miscarried and that there is any case for appellate intervention. In particular, within the sense of House v The King, (1936) 55 CLR 499 at 507, there was no case made out for this Court to exercise its own discretion in substitution for that of his Honour. The appeal and cross-appeal should be dismissed. Having regard to the minimal time occupied in hearing the cross-appeal, the appropriate order for costs is that the appellant should pay the costs of the appeal and there should be no order as to the costs of the cross-appeal. I certify that this and the preceding twenty-one (21) pages are a true copy of the Reasons for Judgment herein of the Court. Wher Tale ly agbockate Dated: 24 December 1987 Counsel and Solicitors for Mr D.P. Drummond Q.C. with the Appellant: Mr D.R. Gore instructed by Messrs. Hawthorn, Cuppaidge and Badgery. Counsel and Solicitors for Mr J.H. Byrne Q.C. with the Respondents: Mr P.A. Keane instructed by Messrs. Chambers, McNab, Tully and Wilson. Dates of hearing: 30 November and 1 December, Date of Judgment: 24 December 1987.