FEDERAL COURT OF AUSTRALIA Caltex Petroleum Pty Ltd v Australian Competition and Consumer Commission [2001] FCA 1503 PRACTICE AND PROCEDURE –injunction granted by Australian Industrial Court in 1974 – application to rescind the injunction made 27 years later – whether Federal Court has jurisdiction and power to rescind the injunction. Restrictive Trade Practices Act 1971 (Cth), ss 5, 22, 102 Trade Practices Act 1974 (Cth), ss 3, 6A, 80, 86, 147(2), 169 Competition Policy Reform Act 1995 (Cth), ss 39, 69, 92(2) Trade Practices Amendment Act 1976 (Cth), s3 Federal Court of Australia (Consequential Provisions) Act 1976 (Cth), s 3 Competition Policy Reform (Transitional Provisions) Regulations 1995 (Cth), reg 18 Commissioner of Trade Practices v Caltex Oil (Australia) Pty Ltd (1974) 4 ALR 133, referred to. QDSV Holdings Pty Ltd v Trade Practices Commission (1995) 59 FCR 301, cited. Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767, cited. Ladner v Siegel 298 Pa 58 487; 148A 699 (1930), cited. United States v Swift & Co 286 US 106 (1932), cited. Systems Federation No 91, Railway Employees' Department, ACL-C10 v Wright 364 US 643 (1960), cited. CALTEX PETROLEUM PTY LTD v AUSTRALIAN COMPETITION AND CONSUMER COMMISSION N 856 OF 2001 SACKVILLE J SYDNEY 29 OCTOBER 2001 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 856 OF 2001 BETWEEN: CALTEX PETROLEUM PTY LTD APPLICANT AND: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION RESPONDENT JUDGE: SACKVILLE J. DATE OF ORDER: 29 OCTOBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The injunction granted by the Australian Industrial Court on 12 September 1974 in proceedings B32 of 1974 in the following terms "that the Respondent, Caltex Oil (Australia) Pty Limited be, and is hereby restrained, from engaging in the practice of resale price maintenance in respect of the motor spirit marketed by it under the brandname Caltex" be rescinded. 2. The applicant pay the respondent's costs of and incidental to this application. Note: 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 N 856 OF 2001 BETWEEN: CALTEX PETROLEUM PTY LTD APPLICANT AND: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION RESPONDENT JUDGE: SACKVILLE J. DATE: 29 OCTOBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT THE PROCEEDINGS 1 On 12 September 1974, the Australian Industrial Court (the "Industrial Court") made an order pursuant to s 102 of the Restrictive Trade Practices 1971 (Cth) ("RTP Act") against Caltex Oil (Australia) Pty Ltd, now known as Caltex Petroleum Pty Ltd ("the applicant"). The order, insofar as relevant, was in the following terms: "that the Respondent, Caltex Oil (Australia) Pty Limited be, and is hereby restrained, from engaging in the practice of resale price maintenance in respect of the motor spirit marketed by it under the brandname Caltex." 2 The Industrial Court made the order on the application of the Commissioner of Trade Practices, an office created by s 22 of the RTP Act. The Court found, after a hearing lasting ten days, that the applicant had engaged in the practice of resale price maintenance, in contravention of s 66(1) of the RTP Act. The Court also found that the applicant's attitude had been "to tolerate, without safeguards, a situation in which retail price pressures by its field officers…were more than probable": Commissioner of Trade Practices v Caltex Oil (Australia) Pty Ltd (1974) 4 ALR 133, at 161, per Smithers J, with whom Spicer CJ agreed. 3 The applicant now applies to this Court, twenty-seven years later, for an order rescinding the order made by the Australian Industrial Court. It has named as the respondent the Australian Competition and Consumer Commission ("ACCC"), a body created by s 6A of the Trade Practices Act 1974 (Cth) ("TP Act") (inserted by the Competition Policy Reform Act 1995 (Cth) ("CPR Act"), s 39). The application has been made in separate proceedings instituted in this Court. 4 The application does not identify the statutory provision under which the order for rescission is sought. The applicant's written submissions, however, identify s 80(3) of the Trade Practices Act 1974 (Cth) ("TP Act") as the source of the Court's power to make the order. Section 80(3) of the TP Act empowers the Court to rescind any injunction granted pursuant to s 80(1) of the Act. 5 The applicant relies on evidence establishing, inter alia, that since 1974 it has never been prosecuted for resale price maintenance and that it has adopted detailed procedures designed to ensure that no contravention of the resale price maintenance provisions of the TP Act occur in the future. The ACCC does not dispute this evidence and consents to the making of the order sought by the applicant. 6 When the matter first came on for directions, on 5 July 2001, I raised the question of whether this Court had jurisdiction and power to entertain the application. The question had not entirely escaped the attention of the legal representatives, but I thought it appropriate to direct the parties to file written submissions identifying · the source of the Court's jurisdiction and power to grant the relief sought in the application; · the basis on which the ACCC was the appropriate party to consent to the application; and · the reasons why the Court should exercise any discretion in favour of the applicant. The parties duly filed written submissions which were substantially to the same effect, namely that the Court had jurisdiction and power to grant the relief sought and should do so. THE QUESTION OF JURISDICTION AND POWER 7 In order to address the first question I have identified it is necessary to trace briefly some legislative history. 8 As I have noted, the Australian Industrial Court made orders against the applicant pursuant to s 102 of the RTP Act. Section 102 provided as follows: "102(1) Where a person has engaged in the practice of resale price maintenance, the Court may, on application by- (a) …; (b) the Commissioner; or (c) … grant an injunction restraining the first-mentioned person from engaging in the practice of resale price maintenance in respect of such goods as are specified in the order. (2) The Court may rescind or vary an order made under the last preceding sub-section. (3) Proceedings for contempt of court in respect of an injunction granted under this section may be brought by a person referred to in any of the paragraphs of sub-section (1) of this section." "The Court" was defined in s 5 to mean the Commonwealth Industrial Court. 9 Plainly the applicant could have applied under s 102(2) to the Industrial Court to rescind the injunction granted on 12 September 1974. The RTP Act was, however, repealed by s 3 of the Trade Practices Act 1974 (Cth) ("TP Act") as from 1 October 1974. Section 147(2) of the TP Act provided as follows: "(2) Any proceedings instituted by the Commissioner of Trade Practices before the commencing date under section 102 of the Restrictive Trade Practices Act 1971-1973 have effect as if they had been instituted by the Commission under section 80 of this Act on that date and everything done in relation to those proceedings before that date has effect as if it had been done under this Act or the regulations, as the case requires." 10 Section 80(1) of the TP Act empowered the Court on the application, inter alia, of the Trade Practices Commission ("TPC") (a new body established under s 7(1) of the TP Act) to grant an injunction restraining a person engaging in conduct that constituted or would constitute a contravention of Part IV of the Act, including the prohibition in s 48 on resale price maintenance. Section 80(3) of the TP Act, to which I have referred, is in these terms: "(3) The Court may rescind or vary an injunction granted under subsection (1)…". 11 Jurisdiction was conferred on the Court to hear and determine actions under Part VI of the TP Act (including s 80): TP Act, s 86. 12 The "Court" was originally defined in the TP Act to mean the Superior Court of Australia (a body that was never created). Section 169 provided, however, that if before the commencing date of the TP Act the Superior Court of Australia had not been established, any proceeding under the Act could be instituted in the Industrial Court as if references in the Act to the Superior Court were references to the Industrial Court (see also Trade Practices Amendment Act 1976 (Cth), s 3). Subsequently the definition of "Court" in s 4 of the TP Act was amended to mean the Federal Court of Australia: see Federal Court of Australia (Consequential Provisions) Act 1976 (Cth), s 3. 13 The position following this amendment was that the Federal Court had jurisdiction and power to rescind injunctions that had been granted by the Industrial Court under s 102 of the RTP Act. The injunction had effect, by reason of s 147(2) of the TP Act, as if it had been granted under s 80 of the TP Act. The Federal Court could therefore rescind the injunction pursuant to the powers conferred by s 80(3) of the TP Act. It had jurisdiction to do so by virtue of s 86 of the TP Act. 14 The CPR Act created the ACCC and repealed the provisions relating to the TPC. It also repealed s 147(2) of the TP Act: CPR Act, s 69. However, the CPR Act authorised regulations prescribing matters of a transitional or savings nature arising out of the amendments (s 92(2)). The Competition Policy Reform (Transitional Provisions) Regulations 1995 (Cth) ("CPR Regulations"), reg 18, provides as follows: "(1) If, immediately before the commencement date, TPC was a party to proceedings that were pending or existing at that date, then, on and after that date, ACCC is substituted for TPC in those proceedings and has the same rights and obligations in the proceedings as TPC had. (2) In subregulation (1) 'proceedings" includes (without limiting the meaning of the term) proceedings in any court or tribunal…". 15 Immediately before the commencement date referred to in reg 18(1) (6 November 1995), s 147(2) of the TP Act deemed the proceedings instituted against the applicant in the Industrial Court to have the same effect as if they had been instituted by the TPC under s 80 of the TP Act. The injunction issued by the Industrial Court was deemed to have the same effect as if it had been issued under the TP Act. It follows that it was open to the applicant, prior to the enactment of the CPR Act, to apply to the Federal Court pursuant to s 80(3) of the TP Act to rescind the injunction granted by the Industrial Court. The Federal Court had jurisdiction to entertain the application pursuant to s 86 of the TP Act. The TPC, as the successor to the Commissioner of Trade Practices in the proceedings, was the appropriate party against whom the rescission order could be sought. 16 On the assumption that the TPC could be said to be a party to proceedings that were "pending" or "existing" immediately before the commencement date, the effect of reg 18(1) of the CPR Regulations was to substitute the ACCC for the TPC in the proceedings and to provide, inter alia, that the ACCC was to have "the same rights and obligations in the proceedings" as the TPC had. The first question is whether the proceedings determined by the Industrial Court were "pending" or "existing" immediately before the commencement date, for the purposes of reg 18(1). 17 Regulation 18(1) of the CPR Regulations draws a distinction between "pending" and "existing" proceedings. In my opinion, the words should not be regarded as co-extensive; otherwise the word "existing" would be surplusage. It follows that the expression "proceedings that were existing" is not necessarily confined to proceedings that can be said to be pending at a particular date (although it must be said that it is difficult to think of "pending" proceedings that are not "existing"). 18 In my opinion, proceedings in which the Court has granted an injunction against a party, but in which the Court has power under statute to rescind the injunction, are aptly described as "existing" proceedings for the purposes of reg 18. It is implicit in s 80(3) of the TP Act that the party subject to the injunction is entitled to apply for its rescission and that the making of such an application will enliven the Court's power to rescind the injunction. It also seems to me that s 80(3) of the TP Act contemplates, at least in the ordinary case, that an application for rescission of an injunction will be made in the proceedings in which the injunction was granted. 19 The general principle is that a court granting a permanent injunction has jurisdiction to dissolve the injunction in circumstances warranting that course of action, for example, where legislation has removed the foundation for the grant of the injunction: see QDSV Holdings Pty Ltd v Trade Practices Commission (1995) 59 FCR 301, at 315, per Sackville J (and see cases cited there). This is so notwithstanding that a permanent injunction is classified as a final order: Computer Edge Pty Ltd v Apple Computer Inc (1984) 54 ALR 767 (HCt). It is not necessary to consider for the purposes of this case the consequences of the Court's non-statutory jurisdiction to dissolve a permanent injunction, although there is American authority to the effect that a permanent "preventive" injunction continues the life of the proceedings in which the injunction was granted for the purposes both of execution of the order and any relief (including rescission) that the court may grant in relation to the injunction: Ladner v Siegel 298 Pa 58 487; 148A 699 (1930), cited with approval in United States v Swift & Co 286 US 106 (1932), at 114, per Cardozo J and Systems Federation No 91, Railway Employees' Department, AFL-C10 v Wright 364 US 643 (1960), at 647, per Harlan J. In the present case, the TP Act, like its predecessor, the RTP Act, specifically empowers the Court to rescind an injunction it has granted. The case for holding that the Industrial Court proceedings were "existing" at the commencement date is stronger than if reliance were placed solely on the general jurisdiction of the Court to rescind a permanent injunction. 20 The conclusion that the Industrial Court proceedings were existing immediately before the commencement date of the CPR Act does not of itself produce the result that the Federal Court now has power to rescind the injunction granted by the Industrial Court in 1974. Regulation 18(1) provides that if the TPC was a party to existing proceedings, then the ACCC is substituted for the TPC in those proceedings and the ACCC has the same rights and obligations in the proceedings the TPC had. The second question that must be addressed is whether this language confers power on the Federal Court to rescind the injunction. 21 In my view, the substitution of the ACCC for the TPC in the proceedings to which the TPC was deemed (by s 147(2) of the TP Act) to be a party is intended to have the consequence that the proceedings should continue as if the TPC had remained a party. Had this been the position, the present applicant could have made an application, naming the TPC as a party, seeking rescission of the injunction pursuant to s 80(3) of the TP Act. In my view, the statutory substitution of the ACCC as a party permits the applicant to seek a rescission order and to do so by naming the ACCC as the opponent to the application. 22 I do not think that the concluding words of reg 18(1) are intended to be words of limitation. In particular, reg 18(1) is not confined to the case where the TPC, immediately prior to the commencement date, was subject in the proceedings to some identifiable "obligation". Rather, the concluding words, although perhaps less broad than might have been used, are intended to assimilate the position of the ACCC in the pending or existing proceedings to that of the TPC immediately before the commencement date. Regulation 18(1) is framed on the assumption that further steps will or might be taken in the proceedings. If they are, the ACCC is to be in the same position in the proceedings as its predecessor would have been. 23 This construction accords with the evident purpose of reg 18(1), namely to ensure continuity in relation to "pending" or "existing" proceedings to which the TPC was (or was deemed to be) a party immediately prior to the CPR Act coming into force. It would be curious indeed if a party subject to an injunction granted at the suit of the TPC lost its entitlement to apply for rescission of the injunction simply because the ACCC replaced the TPC as the regulatory authority responsible for the conduct of the proceedings. 24 For these reasons, I am satisfied that the Court has jurisdiction, pursuant to s 86 of the TP Act and power pursuant to s 80(3) and reg 18 of the CPR Regulations, to entertain Caltex's application to rescind the injunction granted by the Industrial Court in 1974. a procedural issue 25 It will be recalled that the present application was made in separate proceedings instituted in this Court. Strictly speaking, it may be that the application should have been brought in the original Industrial Court proceedings, although any attempt to do this may have encountered practical obstacles. If there is any formal defect, I do not think that it affects the jurisdiction of the Court or the efficacy of the orders I propose to make. the injunction should be rescinded 26 In view of the evidence adduced by Caltex and the ACCC's consent to the application, I think it appropriate to exercise my discretion in favour of Caltex and to make an order rescinding the injunction. The applicant has agreed that it should pay the ACCC's costs in any event. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. Associate: Dated: 29 October 2001 Solicitor for the Applicant: Mr R R Nathans appeared for Deacons Lawyers Solicitor for the Respondent: Mr I MacNeilly appeared for the Australian Government Solicitor Date of Hearing: 25 October 2001 Date of Judgment: 29 October 2001