JUDGMENT No. 4.07.7 68 CATCHWORDS TRADE PRACTICES - Acquisition by cattle abattoir operator of shares in competitor company - Such acquisition a contravention of s.50(1)(a} of Trade Practices Act 1974 - Nature of appropriate remedy - Form of undertaking offered as an alternative to an order for divestiture of the shares. Trade Practices Act 1974, ss.50, 81. NSW G.92 of 1988 TRADE PRACTICES COMMISSION v AUSTRALIA MEAT HOLDINGS PTY LIMITED & ORS -- SUPPLEMENTARY REASONS AND FINAL ORDERS Wilcox J Sydney 12 August 1988 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION BETWEEN: CORAM: WILCOX J PLACE: SYDNEY DATE: 31 AUGUST 1988 ) ) ) No. NSW G.92 of 1988 ) ) TRADE PRACTICES COMMISSION Applicant AUSTRALIA MEAT HOLDINGS PTY LIMITED First Respondent THOMAS BORTHWICK & SONS (PACIFIC HOLDINGS) LIMITED Second Respondent BORTHWICKS PLC Third Respondent THOMAS BORTHWICK & SONS (UK) LIMITED Fourth Respondent MINUTES OF ORDER THE COURT DECLARES THAT: A. The acquisition by the First Respondent of all of the issued shares in Thomas Borthwick & Sons (Australasia) Limited constitutes a contravention of s.50(1)(a) of the Trade Practices Act 1974. uw AND THE COURT ORDERS THAT: Under s.81(1) of the Trade Practices Act 1974, the First Respondent use its best endeavours to dispose of all the issued shares in Thomas Borthwick & Sons (Australasia) Limited to a suitable purchaser within the period of two months (or such further period as the Court or a Judge may allow) from the Operative Date AND THE COURT DIRECTS THAT in the event that the said shares are not disposed of within that period, the matter be relisted for the giving of further directions under s.81(1) of the Trade Practices Act 1974 as to the disposal of such shares. If the Court is satisfied that, on or prior to the Operative Date, the First Respondent: (a) has procured the disposal by Thomas Borthwick & Sons (Australisia) Limited of the two abattoirs owned by that company and situate respectively at Bowen and at Mackay to one or more suitable purchasers; or (b) (i) has procured the disposal by Thomas Borthwick & Sons (Australasia) Limited of the abattoir owned by that company and situate at Bowen to a suitable purchaser; and (ii) has itself disposed of the abattoirs owned by the First Respondent and situate respectively at Mareeba, Mt Isa, Cape River and Cairns to one or more suitable purchasers, being persons such that the Trade Practices Commission or the Court is satisfied that, during the foreseeable future, not less than three out of the said four abattoirs will be operated for the slaughter of cattle during normal working hours during the normal killing season in each year; Order 2 shall be discharged. 3. In the interpretation of orders (1) and (2) hereof: (a) a reference to a disposal of a particular abattoir means the transfer of the title to the lands upon which that abattoir (whether operational or not) is situated, any necessary consents to such transfer having first been obtained, together with all the buildings, plant and equipment now situated on those lands as well as all existing licences necessary to (b) operate the abattoir, but excluding any business names, trade marks, registered designs, logos or other product identification signs owned, used or applied by the person disposing of such abattoir in connection with that abattoir or the product thereof; the term "suitable purchaser" means a person: (i) (ii) other than Tancred Brothers Pty Limited, Elders IXL Limited, Metro Meat Limited or SCI Meat & Paper Pty Limited, or a corporation related to any of those companies within the meaning of s.7(5) of the Companies (New South Wales) Code, or any person associated with any of those companies within the meaning of 8.9(1) of the Code, at the date of the contract for sale of the abattoir in question; and who, in the opinion of the Trade Practices Commission or of the Court, is likely, after acquisition of the relevant abattoir or abattoirs to provide effective competition to the First Respondent in connection with the acquisition of fat cattle in that part of Queensland lying north of the city of Mackay; and (c) the term "Operative Date" shall mean 19 November, 1988 or such later date as the Court or a Judge may allow. The First Respondent pay to the Applicant its costs of this proceeding, such costs not to include the costs incurred by the Applicant during such portion of the hearing as was concerned with issues exclusively concerning the Second, Third and Fourth Respondents. The Applicant pay to the Second, Third and Fourth Respondents: (a) two thirds of their costs incurred during the hearing on and after 28 March, 1988 such costs being limited to: (i) refreshers for one Junior Counsel and the costs of attendance of one instructing solicitor on each day of the hearing on and after 28 March, 1988; and Note: (ii) one refresher for Senior Counsel; (b) one half of the costs of the attendance on Senior and Junior Counsel and one instructing solicitor to argue costs on 3 August, 1988; and (c) the costs of the attendance of one instructing solicitor attending without counsel upon the delivery of the supplementary reasons for judgment herein. Liberty be reserved to the Applicant and the First Respondent to apply in connection with any matter arising out of orders (1), (2) and (3) of these orders or release or modification of the undertaking given by the First Respondent on 25 January 1988. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. NSW G.92 of 1988 ) GENERAL DIVISION ) BETWEEN: TRADE PRACTICES COMMISSION Applicant AND: AUSTRALIA MEAT HOLDINGS PTY LIMITED First Respondent THOMAS BORTHWICK & SONS (PACIFIC HOLDINGS) LIMITED Second Respondent BORTHWICKS PLC Third Respondent THOMAS BORTHWICK & SONS v (UK) LIMITED Fourth Respondent CORAM : WILCOX J PLACE: SYDNEY DATE: 12 AUGUST 1988 SUPPLEMENTARY REASONS FOR JUDGMENT On 15 July 1988 I handed down reasons for judgment in this matter. At that time I left open two matters: the form of an undertaking appropriate to be given by AMH as an alternative to the making of an order against that respondent under s.81(1) of the Trade Practices Act and the appropriate orders for costs. I have now had the benefit of further submissions from counsel in relation to each of these matters. The form of the undertaking In my earlier reasons I discussed the question whether any undertaking to dispose of assets which might be given by AMH should extend to the Mackay abattoir. I took the view that, notwithstanding that this abattoir lay outside the boundaries of the northern region of Queensland, as they were Gefined by most of the witnesses, the acquisition by ANH of Mackay would assist AMH to dominate the northern market; accordingly, that it was appropriate that the undertaking include reference to the Mackay abattoir. In writing my earlier reasons I should, perhaps, have mentioned that during the course of his final address senior counsel for AMH informed me that, if his client had to divest itself of an abattoir other than Bowen, it would prefer to dispose of the Cape River abattoir. That preference came as no surprise. The Mackay abattoir has a much higher throughput than does Cape River. As shown in my earlier reasons, the Cape River throughput during recent years has been: 1985, 32,787 head; 1986, 53,442 head; 1987, 39,196 head; an average of 41,808 head per year. The Mackay figures were: 1986, 118,094 head; 1987, 117,971 head; an average of 118,032 head per year. Moreover the Mackay abattoir is located within one of the coastal pockets containing significant numbers of British and European breeds. The Mackay area turns off a significant proportion of Japanese ox, whereas Cape River is predominantly a manufacturing meat abattoir. And as I previously mentioned, Mackay has the advantage of a strong brand identity in Japan. The impression which I have gained from the evidence is that Mackay is one of the most desirable of all of the abattoirs in the part of Queensland comprising the City of Mackay and the areas to the north of that city. The disposal of Cape River would be a small price for AMH to pay for the advantage of retaining Mackay, assuming that it was otherwise appropriate that the company dispose of the latter facility. Conversely, the disposal of Cape River would do little to mitigate the increased dominance enjoyed by AMH as a result of the acquisition of Mackay. Because all of this seemed to me to be ebvious, I did not canvass the merit of the proposal in my earlier reasons. Although in my reasons of 15 July 1988 I indicated a view that AMH ought to dispose of Mackay, counsel for that company have now put to me a series of alternatives to that course. On behalf of their client, and without prejudice to its rights of appeal, they offer to dispose of Bowen and, in ascending order in lieu of Mackay, to dispose of Mt Isa and Mareeba; to dispose of Mt Isa, Mareeba and Cape River; and to dispose of Mt Isa, Mareeba, Cape River and Cairns. Counsel for the applicant object to the making of these offers. They say, correctly, that the direction made during the trial -- after hearing submissions from counsel as to the appropriate course -- was that all evidence relevant to the form of relief should be led during the case of the relevant party and that all submissions upon such matters should be put during final addresses, oral and written. It is improper, say counsel, for AMH now to put some other proposition which their client has not had the opportunity to examine. I have some sympathy for the reaction of counsel for the applicant. The alternative proposals come very late in the day. On the other hand, it is important to note that no application is made by AMH to re-open the evidence. Counsel for AMH invite me to consider the acceptability of their Proposals by reference to the existing body of evidence. They concede that, to the extent that such evidence is deficient in relevant respects, their client must suffer. No orders have yet been made. No undertakings have yet been formulated. No suggestion is made that the applicant, or the public interest, would be prejudiced by a consideration at this stage of the various alternatives put on behalf of AMH. No application is made on behalf of the applicant for further time to consider these alternatives. Counsel for the applicant have in fact addressed in relation to them. Under all of these circumstances, I think that the appropriate course is for me to address the various alternatives upon their merits. As pointed out in my earlier reasons, neither the Mt Isa nor the Mareeba abattoir operated during 1987. Neither has operated during 1988. Mareeba did not operate in either 1985 or 1986. There is no evidence as to the present physical condition of this abattoir. According to the LMAQ, the abattoir has a theoretical capacity of 88,000 head per year; but what work would be involved in fitting out the abattoir to achieve that capacity I do not know. Mt Isa abattoir operated in both the 1985 and 1986 seasons; achieving kills of 45,115 and 42,288 respectively. The closure of the abattoir in 1987 and 1988 is probably related to the lesser availability of stock in these years. However, I assume that the decision of AMH to close this plant, rather than some other plant, took into account, at least as one relevant factor, the physical condition of this abattoir. There is no evidence of that condition, or as to the capital expenditure that would be required for this abattoir to be re-opened. The theoretical capacity of Mt Isa is 56,000 head per year. The major importance of Mareeba and Mt Isa, in relation to AMH's capacity to dominate the north Queensland market, is the potential which they have to exert pressure upon an abattoir operator who might be disposed to compete vigorously with AMH in the purchase of cattle. I dealt with this matter in my earlier reasons, especially when considering the position of Vestey vis-a-vis AMH. The disposal by AMH of either Mareeba or Mt Isa would effect some diminution in the capacity of AMH to dominate the northern market. But even the disposal of both of the closed abattoirs would be less significant -- in terms of reduction of dominance -- than the disposal of Mackay. In terms of the public interest intended to be served by ss.50 and 81, AMH's first proposition is no substitute for the disposal of the Mackay abattoir. Proposition number two incorporates the terms of the first proposal but adds to it the disposal of Cape River. Cape River has operated in each of the years 1985 to 1987 inclusive. It is operating during the current year. I have already set out its throughput figures. Cape River's average throughput amounts to about 35% of the Mackay throughput. It is true that the difference between the two figures would be more than made up if both Mareeba and Mt Isa re-opened at levels approaching their notional capacity. But I have no information to assist me in gauging the chances of this event occurring. Although I regard the latent power of the closed abattoirs as a factor of some significance, it seems to me that even the addition of Cape River to the offer to dispose of Mareeba and Mt Isa does not go far enough to offset the increased dominance flowing to AMH from its acquisition of Mackay. The third alternative adds to the previous list of abattoirs that in Cairns. This abattoir is currently operating. Its throughput figures during the last three years have been: 1985, 54,654; 1986, 45,951; and 1987, 60,798; an average of 53,801 head per year. I have no information as to the type of cattle killed at Cairns. Being located on the coast, the abattoir may take significant quantities of Japanese ox but there is no evidence to this effect. It seems reasonable to suppose that it also draws from the Cape York peninsula where, I assume from the terrain, the emphasis is likely to be upon the production of manufacturing meat. The combined average kill of Cape River and Cairns, over the years 1985-1987, has been 95,609 head per year; a figure equal to 81% of the average Mackay kill. And, although I am not able to quantify the difference, it is apparent that the average quality of beasts slaughtered at Mackay will be higher than that at Cape River-Cairns combined. It is apparent that, in terms of profitability, AMH is likely to be better served by operating Mackay than by operating Cape River and Cairns. No doubt this is the reason why the company puts forward the present proposition. Profitability is relevant to market domination but it is not the only factor. As I have previously pointed out, unused capacity is also important. If one simply added the capacity of Mareeba, Mt Isa, Cape River and Cairns, the total would, of course, greatly exceed that of Mackay. But this would be to disregard the profitability factors associated with Mackay. It would be equally wrong to consider only profitability, overlooking unused capacity. The determination of the relative importance, in terms of market dominance, of Mackay, as against the aggregate of Mareeba, Mt Isa, Cape River and Cairns, must be an exercise of judgment made after considering both factors relating to profitability, such as throughput and cattle type, and factors relating to unused capacity. On the whole, and subject to one important qualification, it seems to me that the contribution to dominance of the northern cattle market likely to be made by AMH's acquisition of Mackay would be likely to be offset by the disposal of its abattoirs at Mareeba, Mt Isa, Cape River and Cairns. The qualification to which I refer is that, in making that judgment, it is essential that one assume that the number of cattle to be slaughtered at the alternative four abattoirs is not less than at Mackay. If the alternative abattoirs were disposed of to one or more persons who then killed at those abattoirs less stock than AMH was killing at Mackay, AMH would enjoy a greater market share than if it had been compelled to dispose of Mackay; for it is as certain as anything relating to primary production may be that Mackay will continue to operate, at least at about its present throughput, indefinitely. The various draft undertakings which were handed to me by senior counsel for AMH during the recent argument each provide for AMH to dispose of selected abattoirs within six months of what the draft calls the "Operative Date", or during such further period as the Court may allow. The "Operative Date" is defined as being 21 days from the date of the order, if no notice of appeal is filed, or the date of withdrawal or dismissal of any appeal or appeals; including any appeal in the High Court. Disposal is to be made to persons other than one of the shareholders in AMH or a corporation related to any of those shareholders. The term "disposal" is defined to mean the transfer of title to the lands on which the abattoir is situated. However, there is a proviso to the effect that, in the event that the transfer of the licence of any particular abattoir is not possible, AMH is to surrender the relevant licence to the LMAQ. There are a number of defects in this formulation. First, it is unsatisfactory that the surrender of a licence is seen as an alternative to the disposal of an abattoir toa person who will operate it as a going concern. As pointed out, if the alternative abattoirs were closed, their substitution for Mackay would not be a fair exchange. Moreover, there would be no guarantee that a surrendered licence would remain surrendered. There would seem to be nothing to preclude AMH -- whilst it retained ownership of the abattoir -- from subsequently applying to the LMAQ for the re-issue to it of the licence and, subject to cost factors, from re-opening any one of these abattoirs. Secondly, as the Tancred NQ and Innisfail abattoirs demonstrate, dominance does not depend upon actual ownership or a formal company relationship. A mechanism is needed to permit the Trade Practices Commission to screen potential purchasers so as to ensure that any particular purchaser is likely to provide effective competition to AMH in the northern cattle market. It would be desirable for AMH and the Commission themselves to 10. resolve any uncertainty on that score, in connection with a particular purchaser. But, if they are not able to do so, the Court could undertake that task, after receiving evidence. Thirdly, the concept of an operative date which is related to the ultimate disposal of any appeal, without any obligation upon AMH to expedite the appeal process, is unsatisfactory. There could be a delay of a year or more before the undertakings took effect. The unacceptability of such a delay is heightened by the final point, that the draft envisages an immediate release from the undertakings given by AMH on 25 January 1988, and which were designed to prevent the integration of the Bowen and Mackay abattoirs into AMH's general operations pending the final disposal of the matter. It seems to me that consideration of the appropriate form of undertaking should start from the position that, unless an appropriate undertaking is offered and its terms are fulfilled, an order for divestiture ought to be made pursuant to s.81(1) of the Act. Against that background, and only against that background, AMH should be given the opportunity to provide a solution to the problem of market dominance which does not involve divestiture of the shares in Borthwick acquired by it in contravention of s.50 of the Trade Practices Act. If a suitable undertaking can be framed regarding the disposal of Bowen and Mackay, this might be accepted. Alternatively, Mareeba, Mt Isa, Cape River and Cairns might be substituted for Mackay; providing that there is certainty that at least 11. three of those four abattoirs will be operated by the purchaser or purchasers during the foreseeable future. I specify only three out of the four abattoirs because, on past experience, the combined throughput of any three of these abattoirs would at least match that at Mackay. But it would take three of them to do so. An acceptable undertaking would have to provide for the screening of the proposed purchaser or purchasers and for strict time limits. It is highly desirable that any new operators be in control in sufficient time to organize a start up at the beginning of the 1989 killing season. In practice that means an assumption of control by about the end of this year. This requirement poses a problem concerning any appeal. If there is to be an appeal, it ought to be brought on for hearing at the earliest possible date. I do not know the practicality of a Full Court hearing before the end of this year but it ought to be a term of any undertaking that AMH will take all available steps to procure that result. To that end, I think that it is reasonable to require AMH to file any notice of appeal within a shorter period than would normally apply. The company has already had some weeks within which to consider my earlier reasons. I propose to allow one week from the date of these supplementary reasons until the day upon which formal orders will be made. I think that, under the circumstances, it is not unreasonable to require that any notice of appeal be filed within seven days of those orders and that, within a further three working days, AMH procure an appointment to settle the index of the appeal papers. 12. It is not appropriate for me to insist upon any particular form of undertaking. Ultimately, that is a matter for AMH. If the form of undertaking offered by AMH is not satisfactory, I will have to dispose of the matter in a different way. However, counsel for AMH have sought an indication of the form of undertaking that I would consider appropriate. As the most convenient method of so indicating, I annex a draft of possible orders, including an undertaking. It is intended only for consideration by the parties. The draft includes a declaration. This is inserted so as to obviate any problem which might arise if AMH had to appeal against its own undertaking. I do not propose to make any formal orders today. Upon the next occasion I will consider any undertaking that is proferred on behalf of AMH. If, after hearing counsel, I regard it as satisfactory, I will dispose of the matter accordingly. If not, I will make appropriate orders. Costs I turn to the question of costs. The applicant seeks an order for costs against AMH. Realistically, nothing has been put in opposition to this application. As between the applicant and AMH, the applicant has been wholly successful. The applicant should recover its costs, but in the calculation of those costs care should be taken to exclude the time occupied by the Court in dealing with issues lying solely 13. between the applicant and the Borthwick respondents. In default of agreement it will be for the taxing officer to apportion the time. As between the applicant and the Borthwick respondents, the position as to costs is more complex. By two Notices of Motion the Borthwick respondents raised an issue as to jurisdiction, upon which they failed. The usual course would be to order the Borthwick respondents to pay the applicant's costs of those motions. On the other hand the Borthwick respondents were successful in resisting any order against them in the principal proceeding. Although the Court has a discretion as to costs, the usual order, of course, is that a successful respondent recover its costs of the proceeding. The position is further complicated by other factors. Firstly, the determination of the notice of motion involved the taking of oral evidence and occupied some time: on 15 February, on 27 February and on 4 March; perhaps the equivalent of about 15 days hearing time. Secondly, when the motions were dismissed, the evidence taken on the motions was admitted in the principal proceeding, that evidence being supplemented by other evidence on 23, 24 and 25 March and on 28 April 1988. But, as a matter of convenience to witnesses, that evidence was interspersed with evidence involving AME. The Borthwick case probably occupied the equivalent of about one hearing day. In addition counsel for the Borthwick respondents prepared, and spoke briefly to, written 14. submissions upon the issues concerning their client in the principal proceeding. Those counsel did not take an active part in the major question in the case: whether there had been a contravention by AMH of s.50. In terms of effort actually expended by counsel for the Borthwick respondents, on the notices of motion and the principal proceeding respectively, the former probably exceeded the latter. However, and this is the third complication, counsel and instructing solicitors remained in attendance throughout the whole of the case. For some of the time the Borthwick respondents were represented by both senior and junior counsel; for some of the time by junior counsel only. The variation seems to have depended upon the availability of senior counsel rather than upon any apprehension that particular evidence would be led upon particular days. No attempt seems to have been made on either side to reach some agreement that evidence particularly involving the Borthwick respondents would be led at a particular time, so enabling counsel to be absent at other times. Had such an agreement been reached, and consistently with the attitude being taken by the Borthwick respondents, it seems to me that counsel could have been released for most of the time during which the contest raged between the applicant and AMH. [I speak ina practical sense. Most of the evidence led against AMH was also admitted against the Borthwick respondents; but those respondents did not seek to contest that evidence. ] 15. Finally, a most unusual feature of the case is that my conclusion that no order should be made against the Borthwick respondents depended in part on events which took place whilst the case was in progress. I refer to the second reason for refusing relief under s.81(1A), which may compendiously be described as futility. This reason included reference to Professor Crawford's view about the unenforceability of any order in the United Kingdom but the coup de grace, regarding this ground, was the order obtained by ple on 23 March 1988 under s.5(1) of the Protection of Trading Interests Act (1980) (UK), read with the resolutions of the boards of the three Borthwick respondents of 18 March 1988. Those events effectively destroyed any prospect of the enforcement of any order which this Court might make. Where a party fails in litigation by reason of some event which occurs during the course of the litigation, particularly where it involves a change in the relevant law, it may not be appropriate simply to apply the "loser pays" principle. On behalf of the Borthwick respondents it is said that, even so, the full position was known to the applicants by about 23 March 1988 and that, at least by that date, the applicant ought to have realised the futility of maintaining the proceeding as against the Borthwick respondents. On 23 March the solicitors for the Borthwick respondents wrote a letter to the solicitor for the applicant referring to the problem of enforceability of any order in England and suggesting that the proceeding should be discontinued against 16. their clients. Although there was no firm offer in the letter, the suggestion was made that the Borthwick respondents would, in that eventuality, bear their own costs incurred to that date. The solicitor for the applicant responded on the following day that the applicant thought that the matter should proceed. I think that it is unfortunate that the applicant did not accede to the suggestion made in this letter. The difficulties in obtaining any order against the Borthwick respondents were by that time obvious. The only effect of the continuance of the proceeding against those respondents was to increase costs. Moreover, I think that the suggestion as to costs made on behalf of the Borthwick respondents was realistic. It is my own judgment that, bearing in mind the matters to which I have referred, the parties were, in effect, "all-square" on costs by the time of the completion of the evidence led on behalf of the Borthwick respondents, that is by 25 March 1988. Reflecting that judgment, and allowing a reasonable opportunity for the applicant to digest the significance of the Ministerial order made in the United Kingdom on 23 March and the letter of the same date (Australian time) from the Borthwick respondents to which I have just referred, it seems to me that there ought to be no order for costs, either way, between the applicant and the Borthwick respondents for anything done up to the adjournment of the hearing on Friday 25 March 1988. 17. In relation to subsequent hearing days I think that an order for costs ought to be made. As I have said, a more reasonable response would have obviated the necessity for the Borthwick respondents to incur any such costs. Moreover, an understanding between counsel as to the time of tender of the material particularly relevant to the Borthwick respondents would have eliminated the necessity for counsel to be present during the vast majority of the subsequent hearing days. But apparently no offer was made by counsel for the applicant to enter into such an understanding. On the other hand, I do not think that the costs allowed in respect of the period after 25 March should extend to all of the costs incurred. The blame for the lack of an understanding does not rest only with the applicant; apparently no approach was made by counsel for the Borthwick respondents. This shared responsibility should be reflected by an award of only portion of the costs necessarily incurred. As to that matter, given the attitude adopted by those respondents, it seems to me that it was not necessary for those respondents to be represented subsequently by senior counsel except for one day for final submissions. All that was required was a watching brief. This function could have been -- and, on many days, was -- fulfilled by junior counsel with one instructing solicitor. The order I propose to make is that the applicant pay to the Borthwick respondents two-thirds of their costs incurred during the hearing on and after 28 March 1988, but 18. those costs to be limited to refreshers for junior counsel and to the costs of attendance of one instructing solicitor during each hearing day within that period together with one refresher for senior counsel to attend court in connection with submissions. The Borthwick respondents have had partial success on the issue of costs, so I think that they should recover one-half of the costs of attendance of senior and junior counsel and one instructing solicitor upon the occasion of the argument as to costs on 3 August 1988 and of junior counsel and one instructing solicitor upon the handing down of these supplementary reasons. FORM OF POSSIBLE ORDERS THE COURT: 1. DECLARES that the acquisition by the first respondent of all of the issued shares in Thomas Borthwick & Sons (Australasia) Limited constituted a contravention of s.50(1)(a) of the Trade Practices Act 1974. 2. NOTES that, in the interpretation of the undertaking set out in para.3 hereof: (a) a reference to a disposal of a particular abattoir means the transfer of the title to the lands upon which that abattoir (b) 19. (whether operational or not) is situated, any necessary consents to such transfer having first been obtained, together with all the buildings, plant and equipment now situated on those lands but excluding any business names, trade marks, registered designs, logos or other product identification signs owned, used or applied by the person disposing of such abattoir in connection with that abattoir or the product thereof; the term "suitable purchaser" means a person: (i) other than Tancred Brothers Pty Limited, Elders IXL Limited, Metro Meat Limited or SCI Meat & Paper Pty Limited, or a corporation related to any of those companies within the meaning of s.7(5) of the Companies (New South Wales) Code, or any person associated with any of those companies within the meaning of s.9(1) of the Code, at the date of the contract for sale of the abattoir in question; and 20. (ii) who, in the opinion of the Trade Practices Commission or of the Court, is likely, after acquisition of the relevant abattoir or abattoirs to provide effective competition to the first respondent in connection with the acquisition of fat cattle in that part of Queensland lying north of the City of Mackay. 3. NOTES AND ACCEPTS the following undertaking given to the Court on behalf of the first respondent: (1) That, within a period of three months from the date of this order or within such further period as the Court or a Judge may allow, the first respondent will: (a) cause Thomas Borthwick & Sons (Australasia) Limited to dispose of the two abattoirs owned by that company and situate respectively at Bowen and at Mackay to one or more suitable purchasers; or 21. (b) (i) cause Thomas Borthwick & Sons (Australasia) Limited to dispose of the abattoir owned by that company and situate at Bowen to a suitable purchaser; and (ii) itself dispose of the abattoirs owned by the first respondent and situate respectively at Mareeba, Mt Isa, Cape River and Cairns to one or more suitable purchasers, being persons who have first satisfied the Trade Practices Commission or the Court that, during the foreseable future, not less than three out of the said four abattoirs will be operated for the slaughter of cattle during normal working hours during the normal killing season in each year; and (2) That any appeal to be prosecuted by the first respondent against the judgment or orders made in this proceeding will be instituted and prosecuted with all possible expedition to the intent that, 22, subject to the commitments of the Court, the appeal will be heard before the end of 1988; and, in that regard, that any notice of appeal will be filed within seven days of the date of this order and that an appointment for the settling of an index to the appeal papers will be taken out within three working days thereafter. ORDERS that the first respondent pay to the applicant its costs of this proceeding, such costs not to include the costs incurred by the applicant during such portion of the hearing as was concerned with issues exclusively concerning the second, third and fourth respondents. ORDERS that the applicant pay to the second, third and fourth respondents: (a) two-thirds of their costs incurred during the hearing on and after 28 March 1988, such costs being limited to: (i) refreshers for one junior counsel and the costs of attendance of one instructing solicitor on each day of the hearing on and after 28 March 1988; and (b) (c) 23. (ii) one refresher for senior counsel; one-half of the costs of the attendance of senior and junior counsel and one instructing solicitor to argue costs on 3 August 1988; and one-half of the costs of the attendance of one junior counsel and one instructing solicitor upon the delivery of the supplementary reasons for judgment herein. RESERVES liberty to apply: (a) (b) (c) to the applicant and the first respondent in connection with any matter arising out of paragraphs 2 or 3 of these orders; to the applicant in relation to the making of an order under s.81(1) of the Trade Practices Act 1974 in the event of any failure by the first respondent to comply with any of the undertakings set out in para.3 hereof; and to the first respondent in connection with a release or modification of its undertaking given to the Court on 25 January 1988. ay rf 24. I certify the twenty-three (23) preceding pages to be a true copy of the Supplementary Reasons for Judgment of his Honour Justice Wilcox. Associate: oa Date: 12 AuglSt 1988 Date(s) of hearing: 3 and 4 August 1988