FEDERAL COURT OF AUSTRALIA Le Ro Char Enterprises Pty Ltd v Can Recycling (SA) Pty Ltd [1999] FCA 711 TRADE PRACTICES – secondary boycott – interlocutory injunction – allegation of acting in concert – common directorship and shareholding not evidence of concert Trade Practices Act 1974 (Cth) s 45D(1) Environment Protection Act 1993 (SA) s 71 LE RO CHAR ENTERPRISES PTY LTD V CAN RECYCLING (SA) (TRADING AS STATEWIDE RECYCLING) NO V 194 of 1999 FINKELSTEIN J MELBOURNE 7 MAY 1999 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 194 OF 1999 BETWEEN: LE RO CHAR ENTERPRISES PTY LTD Applicant AND: CAN RECYCLING (SA) PTY LTD trading as STATEWIDE RECYCLING, COCA-COLA AMATIL (AUST) PTY LTD and CADBURY SCHWEPPES PTY LTD Respondents JUDGE: FINKELSTEIN J DATE OF ORDER: 7 MAY 1999 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The motion for interlocutory relief be dismissed. 2. The Respondents' taxed costs of the motion be paid by the Applicant. AND THE COURT DIRECTS THAT: 1. The Respondents file and serve any Request for Further and Better Particulars of the Applicant's Statement of Claim by 4.15 pm on 14 May 1999. 2. The Applicant file and serve Further and Better Particulars of its Statement of Claim pursuant to any request by 4.15 pm on 28 May 1999. 3. Any motion to be made by any Respondent to strike-out the Statement of Claim or to have the proceedings dismissed be issued by 4.15 pm on 4 June 1999 and be served, together with any affidavits in support of that motion by 4.15 pm on 7 June 1999. 4. If no Respondent files and serves a motion pursuant to order 3 hereof, each Respondent is to file and deliver its Defence by 4.15 pm on 4 June 1999. 5. If no Respondent files and serves a motion pursuant to order 3 hereof, each party is to file and serve a List of Discoverable Documents by 4.15 pm on 25 June 1999. 6. The Directions Hearing is otherwise adjourned until 9.30 am on 23 July 1999. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V 194 OF 1999 BETWEEN: LE RO CHAR ENTERPRISES PTY LTD Applicant AND: CAN RECYCLING (SA) PTY LTD trading as STATEWIDE RECYCLING, COCA-COLA AMATIL (AUST) PTY LTD and CADBURY SCHWEPPES PTY LTD Respondents JUDGE: FINKELSTEIN J DATE: 7 MAY 1999 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 7 May 1999 the applicant moved for a mandatory interlocutory injunction requiring each respondent to procure the first respondent (Statewide) to take all such steps as are necessary to direct certain collection depots in South Australia to accept from the applicant deliveries of refundable bottles and to refund the amount payable on them. At the conclusion of the hearing I dismissed the motion and indicated that I would provide my reasons in due course. What now follows are my reasons for that decision. 2 In South Australia a retailer who sells a beverage in a Category A container of a particular class must not refuse or fail to accept delivery of empty containers of that class or, in respect of each such container, pay the refund amount: see s 70 of the Environment Protection Act 1993 (SA) and the definitions of "Category A container" and "refund amount" in s 65. Further, a person operating a collection depot must not refuse or fail to accept delivery of empty Category B containers of a class for which the collection depot is approved or in respect of each such container pay the refund amount: see s 71 of the Environment Protection Act and the definition of "Category B container" in s 65. 3 The applicant conducts business both in Victoria and South Australia collecting Category B containers (refundable bottles) for the purpose of delivery to collection depots in South Australia. The refund amount payable on each refundable bottle is $0.05: see Schedule 1 of the Environment Protection (Beverage Container) Regulations 1995 (SA). The applicant conducts its business each day of the week and earns approximately $3,000 net profit each day. 4 Statewide has entered into agreements with a number of the operators of collection depots to the effect that, in substance, the collection depot will collect refundable bottles on behalf of Statewide. In return the operator is entitled to be paid a handling fee and is also entitled to receive reimbursement of the refund amount paid for the refundable bottles. 5 Statewide has also entered into agreements with soft drink manufacturers pursuant to which it has agreed to collect refundable bottles for those manufacturers. The manufacturers have agreed to pay Statewide for the service it provides at a particular rate which is dependent upon the type of refundable bottle that is collected. 6 Two manufacturers with whom such agreements have been made are the second respondent (Coca-Cola) and the third respondent (Cadbury Schweppes). Each of those companies holds fifty per cent of the capital of Statewide and has nominee directors on its board. 7 In January 1999 Statewide became aware of the fact that collection depots were accepting delivery of and paying refunds on refundable bottles that had been transported from Victoria to South Australia. According to Mr Tony Spadevecchia, the manager of Statewide, as a result of Statewide receiving this information it informed the operators of the collection depots with whom it had agreements that Statewide was not obliged under those agreements to reimburse the operators the refund amount paid on refundable bottles unless they had originally been sold in South Australia. Mr Spadevecchia said that he did this because he was genuinely of the view that his company was not contractually bound to refund deposits on containers that had not been sold in South Australia. 8 It is possible, indeed likely, that Statewide went further in the statements it made to the collection depot operators than has been conceded by Mr Spadevecchia. When the applicant attempted to deliver refundable bottles to the collection depots it was informed that no refundable bottles would be accepted from it. That is, no distinction was drawn between bottles that had been sold in South Australia and bottles that had been brought into that State from some other State. As the evidence presently stands, it is reasonable to infer that the collection depots had been told that they should not receive any refundable bottles from the applicant and that if they did Statewide would not pay the operator in respect of those bottles. 9 The precise scope of the obligation that s 71 imposes on a person in charge of a collection depot is not at all clear. Read literally, the section requires the person to accept delivery of all empty Category B containers whether those containers were originally sold in South Australia or in another State. It may be, however, that on the proper construction of the section, it should be read down so that the obligation is confined to containers sold in South Australia. 10 Be that as it may, it seems, prima facie at least, that Statewide has, by the threat of refusing to make payments under its agreements, induced operators of collection depots to act in contravention of s 71 at least in the case of refundable bottles that originated in South Australia. Further, it appears that the threat to withhold payments was unlawful in the sense that Statewide is obliged to make the payments that it informed the operators it would not make. 11 Conversely, if s 71 requires the operator of a collection depot to accept only South Australian containers, Statewide does not appear to be under any obligation to make payments to the operator in respect of those containers. I will not set out the particular provisions of the agreements between Statewide and the operators which limit the obligations of Statewide in this way. The applicant did not suggest that the position was otherwise than I have expressed it. 12 The only basis upon which the applicants sought a mandatory interlocutory injunction against the respondents was in reliance on an alleged contravention by them of s 45D(1) of the Trade Practices Act 1974 (Cth). That subsection provides: "(1) In the circumstances specified in subsection (3) or (4), a person must not, in concert with a second person, engage in conduct: (a) that hinders or prevents: (i) a third person supplying goods or services to a fourth person (who is not an employer of the first person or the second person); or (ii) a third person acquiring goods or services from a fourth person (who is not an employer of the first person or the second person); and (b) that is engaged in for the purpose, and would have or be likely to have the effect, of causing substantial loss or damage to the business of the fourth person." 13 It was alleged that the evidence disclosed, prima facie at least, that Coca-Cola and Cadbury Schweppes had, in concert with Statewide, engaged in conduct (the threats made to the collection depot operators) that prevented the supply of goods (refundable bottles) by the applicant to the collection depot operators being conduct that had the likely effect of causing substantial loss or damage to the business of the applicant. 14 As I mentioned during the course of argument, the evidence failed to support one significant element that must be established in order to show that there has been a contravention of s 45D(1). What is missing is evidence that establishes, to the extent necessary for an interlocutory injunction, that Coca-Cola and Cadbury Schweppes had acted in concert with Statewide to bring about the refusal by the collection depot operators of accepting refundable bottles from the applicant. 15 The applicant submitted that I should infer that the respondents had acted in concert by reason of the fact that Coca-Cola and Cadbury Schweppes held all of the shares in Statewide and had nominee directors on its board. That is not a sufficient basis from which to draw the inference even for the purposes of an interlocutory application where I only need be satisfied that a serious case has been advanced. 16 I was also taken to the transcript of a tape-recorded conversation between Mr Leigh Charlesworth, the managing director of the applicant, and Mr Spadevecchia where it was said that Mr Spadevecchia had conceded that Statewide had been acting in concert with Coca-Cola and Cadbury Schweppes. I will not set out the transcript. It is sufficient if I say that, to my mind, there is nothing in it which supports the proposition that the respondents had been acting in concert in any way whatsoever. 17 Accordingly, the applicant has not been able to establish a serious case that there has been a contravention of s 45D(1). It follows that it is not entitled to the relief sought. 18 Notwithstanding the fact that I have refused to grant the applicant interlocutory relief, I do not wish it to be thought that I am of the view, on the evidence that has thus far been presented, that the applicant is not entitled to some relief against Statewide or against the operators of the collection depots if they were made parties to a properly constituted proceeding. That is to say, my finding that the applicant has not made out a case based on an alleged contravention of s 45D(1), should not be taken as an indication that I am of the view there is no other cause of action upon which the applicant could rely to obtain the relief that it seeks. 19 The respondents are entitled to orders that the motion be dismissed with costs. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. Associate: Dated: 7 May 1999 Appearing for the Applicant: Mr P Finkelstein Solicitor for the Applicant: FLA Partners Counsel for the First Respondent: Mr C Kourakis QC Mr M Hutton Solicitor for the First Respondent: Lynch & Meyer Counsel for the Second Respondent: Mr A Archibald QC Mr L Glick Solicitor for the Second Respondent: Clayton Utz Counsel for the Third Respondent: Mr P Hayes QC Mr K McMillan Solicitor for the Third Respondent: Arthur Robinson & Hedderwicks Date of Hearing: 7 May 1999 Date of Judgment: 7 May 1999