Blackberry Hill (Tas) Pty Ltd v Roberts Ltd
[2009] FMCA 546
•19 May 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BLACKBERRY HILL (TAS) PTY LTD & ANOR v ROBERTS LTD | [2009] FMCA 546 |
| TRADE PRACTICES – Whether exclusion from cattle sales unconscionable conduct – whether serious issue to be tried – whether mandatory interlocutory injunction should be ordered. |
| Trade Practices Act 1974 (Cth), ss.51AC, 80 Workplace Health and Safety Act 1995 (Tas) |
| Coarse Grains Pool Pty Ltd v Barley Marketing Board of Queensland (1983) 57 ALJR 425 Qantas Airways v Cameron (1996) 66 FCR 246 Hurley v McDonalds Australia Ltd (1999) FCA 1728 Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) 148 FCR 132 |
| First Applicant: | BLACKBERRY HILL (TAS) PTY LTD |
| Second Applicant: | FRANCIS BRITT |
| Respondent: | ROBERTS LTD |
| File Number: | LNG 9 of 2009 |
| Judgment of: | Phipps FM |
| Hearing date: | 15 May 2009 |
| Date of Last Submission: | 19 May 2009 |
| Delivered at: | Dandenong |
| Delivered on: | 19 May 2009 |
REPRESENTATION
| Counsel for the Applicants: | Mr BR McTaggart |
| Solicitors for the Applicants: | McGrath & Co. |
| Counsel for the Respondent: | Mr S Katdare |
| Solicitors for the Respondent: | Johnson Winter & Slattery |
ORDERS
Upon the applicants by their counsel undertaking;
(a)to submit to such order (if any) as the Court may consider to be just for the payment of compensation, to be assessed by the Court or as it may direct, to any person, whether or not a party, adversely affected by the operation of the interlocutory order or the undertaking or any continuation (with or without variation) thereof; and
(b)to pay the compensation referred to in (a) to the person there referred to:
ORDERS
That until the hearing and determination of this proceeding or further order the respondent:
(a)permit the second applicant, on his own behalf and on behalf of the first applicant, to attend at the respondent's cattle sale yards in the State of Tasmania at;
(i) Smithton Sale Yards, Bass Highway, Smithton;
(ii) Quoiba Sale Yards, Saleyard Road, Quoiba;
(iii) Powranna Sale Yards, Powranna Road, Powranna;
(iv)Bridgewater Sale Yards, Midlands Highway, Bridgewater;
(v) Scottsdale Sale Yards, William Street, Scottsdale;
on sale days;
(vi) for the purpose of selling and purchasing cattle;
(vii)for the purpose of delivering cattle for sale or collecting cattle after purchase or non sale:
(b)permit the applicants or either of them to purchase cattle pursuant to the ordinary rules of sale by auction at the said cattle sale yards and at the yards operated by the respondent at Kilfaddy Sale Yards, Kilfaddy Road, St Leonards on sale days on financial terms of cash on sale or lodged in advance for each sale day payable by legal tender or bank cheque.
That until the hearing and determination of this proceeding or further order the second applicant, while attending any of the said sale yards on sale days, is restrained from directly or indirectly threatening, harassing or abusing any other person attending at the sale yards including any employee or officer of the respondent or any of its related bodies corporate.
The applicants file and serve a statement of claim by 4.00pm on 1 June 2009.
The respondent file and serve a defence and if applicable, any cross-claim, by 4.00pm on 15 June 2009.
The proceeding be the subject of a mediation by a registrar of the Court to be completed by 17 July 2009.
The applicants file and serve affidavits of evidence in chief by 4.00pm on 13 August 2009.
The respondents file and serve affidavits of evidence in chief by 4.00pm on 27 August 2009.
The application is fixed for hearing on the 10 and 11 September 2009.
Both parties are at liberty to apply on reasonable notice to the other party, and in particular in relation to the question of discovery.
The cost of both parties are reserved.
The Court certifies that it was reasonable for both parties to employ an advocate.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DANDENONG |
LNG 9 of 2009
| BLACKBERRY HILL (TAS) PTY LTD & FRANCIS BRITT |
Applicants
And
| ROBERTS LTD |
Respondent
REASONS FOR JUDGMENT
(Revised from Transcript)
The applicants apply for an interlocutory injunction. The first applicant, Blackberry Hill (Tas) Pty. Ltd., is a cattle trader. The second applicant, Mr Britt, is the principal of that firm. Roberts Ltd., the respondent, is the major livestock agent in Tasmania. According to the affidavit of Ms O'Reilly, general counsel and company secretary of the respondent, it markets approximately 150,000 cattle yearly and owns and operates cattleyards in Tasmania located at Bridgewater, Bothwell, Powranna, Quoiba, Scottsdale and Smithton.
The applicant's business is buying and selling cattle, sometimes on a fairly short turnaround. The applicants are not cattle breeders.
The applicants have dealt with the respondent for a number of years which has included buying and selling cattle through the respondent's cattle saleyards. What has brought about these proceedings is that the respondent, for what it puts as good reason, has refused to deal with the second applicant or permit the second applicant to buy and sell cattle at its saleyards except through an agent. It has prohibited Mr Britt from attending at any of its premises. Events which occurred in March 2009 but commenced in November 2008 brought this about. The respondent is a subsidiary of Realco Holdings Ltd., a publicly listed company that operates a number of rural businesses. The respondent itself, as well as the cattle sales, operates an agricultural and real estate business.
The second applicant, Mr Britt, engaged the respondent as an estate agent to sell a piece of land. According to his affidavit, Mr Britt became dissatisfied with the manner in which the respondent or the respondent's employees were pursuing that sale and that led to an incident in March of this year. According to Mr Britt, he expressed his dissatisfaction with what had occurred. He says he had become very dissatisfied with Danny Newman, a staff member of Roberts Real Estate in the way he dealt with selling the piece of land. In December 2008 he had a discussion with Mr Newman's supervisor at the Burnie office. He said he explained that he was dissatisfied. The property had been on the market for 30 days and it was not sold, and he was told that if it was sold within 90 days, he would still have to pay commission, and he was dissatisfied about that.
He also deposes to having discussions with Mr Tony Roberts about the commercial terms on which he could purchase cattle.
On 17 March, Mr Tony Roberts on behalf of the respondent wrote to Mr Britt. The letter says:
Please be advised that after your recent verbal threat against a member of the staff of Roberts Ltd, Roberts Ltd will no longer trade with you, your family members or any businesses or companies with which you operate or are associated with. You should not enter the carpark or premises of any Roberts Ltd business in the future, including any saleyards owned by Roberts Ltd. Should you do so, this will be considered trespass and the police will be called.
That led to a letter from the applicants' solicitor, McGrath and Co, which says that Mr Britt denies the verbal threat and alleges that what the respondent was doing was a breach of s.51AC of the Trade Practices Act 1974 (Cth), that is, it was unconscionable conduct.
A reply from the respondent came from Ms O'Reilly on 3 April 2009. It refers to long term harassment and bullying of numerous staff. It referred to the company's obligations under the Workplace Health and Safety Act 1995 (Tas) and then said that the terms of Mr Roberts' letter of 17 March 2009 stand with one exception, being that an agent may attend Roberts' premises to undertake transactions on behalf of Mr Britt. This proceeding was then commenced.
The applicants claim that there has been a breach by the respondent of s.51AC of the Trade Practices Act 1975. Section 51AC provides that:
(1) A corporation must not, in trade or commerce, in connection with:
(a)the supply or possible supply of goods or services to a person (other than a listed public company); or
(b)the acquisition or possible acquisition of goods or services from a person (other than a listed public company);
engage in conduct that is, in all the circumstances, unconscionable.
(2) A person must not, in trade or commerce, in connection with:
(a) the supply or possible supply of goods or services to a corporation (other than a listed public company); or
(b)the acquisition or possible acquisition of goods or services from a corporation (other than a listed public company);
engage in conduct that is, in all the circumstances, unconscionable.
There is a limitation of $3 million on the value of the goods or services. That limitation does not apply here. Subsection (3) sets out a number of non exclusive matters that the court may have regard to in determining whether there has been unconscionable conduct.
The applicant alleges that there is unconscionable conduct and so applies for a mandatory injunction under s.80 of the Trade Practices Act 1975 (Cth).
The terms of the injunction which are sought in the application itself are very wide. Mr McTaggart for the applicant, at least by inference, concedes they are too wide for a mandatory injunction and he proposed a more restrictive formulation. In the course of argument I proposed another formulation.
I have referred to Mr Britt's version of the disagreement he had about the sale of land and the performance of the respondent as an estate agent. The affidavit of Ms O'Reilly sets out what the respondent alleges occurred. Ms O'Reilly's affidavit is based on information and belief but permissible in an interlocutory application. She gives some detail of what occurred. She says that on 13 November 2008 the second applicant, that is Mr Britt, and the respondent executed an agency agreement, pursuant to which the second applicant appointed Danny Laurence Newman as agent to sell land at Teena Road, Highclere, in Tasmania. She says that Mr Newman is a sales consultant to the respondent's real estate agency in Burnie.
She says that on 13 December the second applicant attended the respondent's office. The circumstances under which a commission could be charged for the sale of property were discussed. The respondent's position was that commission is to be paid to the respondent if during the course of the agency, the respondent introduces a person to the owner and the property is subsequently sold to that person during the period of the agency. As is stated in his affidavit, Mr Britt was dissatisfied with those circumstances.
It is then alleged that Mr Britt became upset and said words to the following effect, "If I come across Danny again and if I come across him on my property, I'll shoot him," that being a reference to Mr Newman. It is then alleged that Mr Britt attended at the Burnie offices of the respondent on a number of occasions and it is alleged that on at least two further occasions in March 2009, Mr Britt said to personnel of the respondent words to the effect of, "I'll shoot him," that being a reference to Mr Newman.
Ms O'Reilly sets out some discussion and correspondence internal to the respondent about the commercial terms which prior to March 2009 had taken place about the commercial terms on which the respondent would deal with the applicants. There had been in the past, which Mr Britt acknowledges, at least by inference, some problems in payment by the applicants to the respondent.
The internal discussions involving Ms O'Reilly and Mr Roberts ended with the terms which would be put to Mr Britt. The commercial terms were not pursued following the letter saying that Mr Britt could not attend at the premises,. The terms which Ms O'Reilly was proposing should be put to the applicants was that Roberts Ltd. would trade with the applicants on finance conditions of cash on sale or credit on account.
The applicants' case is that it is not feasible or realistic for them to purchase cattle or trade at the respondent's cattle saleyards using an agent. The second affidavit by Mr Britt says that his is a small operation in which he trades cattle. He works on the basis of attending at saleyards, inspecting what is on offer for sale, assessing prices and terms in the market and making decisions on the day. It is not feasible for him to give an agent instructions such that the agent would understand sufficiently the nature of the applicants' business and be able to make the necessary commercial decisions. There is also the problem of the cost of payment to the agent.
In determining whether to grant an interlocutory injunction the considerations are, first, there must be a serious issue to be tried and, second, the court must consider the balance of convenience. (Coarse Grains Pool Pty Ltd v Barley Marketing Board of Queensland (1983) 57 ALJR 425).
The application is for a mandatory injunction. Section 80 of the Trade Practices Act1974 (Cth) permits the granting of a mandatory injunction. The circumstances in which a mandatory injunction will be granted are limited. Firstly, the court has to be satisfied that it is an injunction which can be enforced if necessary and, secondly, the court needs to be satisfied that the mandatory injunction is appropriate in the circumstances.
The question whether Mr Britt threatened to shoot an employee or a consultant of the respondent and made that threat to other employees of the respondent or whether he expressed his displeasure at the manner in which he was being dealt with is in itself a serious issue to be tried. It is not something which can be resolved on an interlocutory application.
Next is the issue of whether what the applicant alleges can constitute unconscionable conduct under s.51AC. Mr Katdare for the respondent submits that there is no cause of action, that this is a proceeding which should be summarily dismissed. He made application for summary dismissal. He submits that there is no cause of action, even assuming what the applicant says is correct. Whether a cause of action exists is part of the question whether there is a serious issue to be tried.
The applicants’ put their case under s.51AC this way. They allege that the respondent owns or operates all of the cattle saleyards in northern Tasmania except for one. The respondent says there are two. One is a saleyard which is operated by Elders but the applicant says that is only twice a year. The other saleyard which the respondent says is available to the applicant is owned by Launceston Council but it is one at which the respondent, as well as other stock and station agents, conduct cattle sales. So part of the applicants' case is that it and he cannot operate their cattle trading business if they cannot buy and sell cattle through the respondent's saleyards.
Several cases have looked at the meaning of unconscionable conduct. In Qantas Airways v Cameron (1996) 66 FCR 246 the court relied on the Shorter Oxford Dictionary definition of "Showing no regard for conscience; irreconcilable with what is right or reasonable
In Hurley v McDonalds Australia Ltd (1999) FCA 1728, the Full Court said:
For conduct to be regarded as unconscionable, serious misconduct or something clearly unfair or unreasonable, must be demonstrated - Cameron v Qantas Airways Ltd (1994) 55 FCR 147 at 179. Whatever "unconscionable" means in sections 51AB and 51AC, the term carries the meaning given by the Shorter Oxford English Dictionary, namely, actions showing no regard for conscience, or that are irreconcilable with what is right or reasonable - Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 262. The various synonyms used in relation to the term "unconscionable" import a pejorative moral judgment - Qantas Airways Ltd v Cameron (1996) 66 FCR 246 at 283-4 and 298.
McDonalds conducted a competition based on the Monopoly board game. To win, a number of board cards, all the same colour, had to be collected. The first prize was a motor vehicle. The case concerned the 1999 Monopoly competition conducted by McDonalds. They had conducted a similar competition in 1998 and 1998 tokens had been distributed or mixed up with the 1999 tokens. A large number of people had qualified to win a motor vehicle if they could use the 1998 tokens something like a thousand, whereas the competition terms itself provided for eight motor vehicles. The Full Court said this was not unconscionable conduct.
In Australian Securities and Investments Commission v National Exchange Pty Ltd (2005) 148 FCR 132, the Court said:
"Unconscionable conduct" on its ordinary and natural interpretation, means doing what should not be done in good conscience. In a case where the discrepancy and price and value is great, as in the present case, and the conduct is systematically and directly focused on vulnerable but unnamed members, some of whom who can be expected to accept the offers, such conduct can reasonably be described as against good conscience. The targeted offerees in this case would reasonably be expected to include persons who are unacquainted with share values, inexperienced in trading their interests, lacking in commercial experience and some of whom act inadvertently and are elderly.
The respondent offered to purchase shares at well below market value in circumstances where sellers might think the proposal reasonable.
These cases are all different to the present one. Mr Katdare submits that what is alleged here cannot possibly amount to unconscionable conduct.
Under s.51AC sub-s.3, two of the matters that the court may have regard to are the relative strength of the bargaining positions of the supplier and the business consumer; and whether as a result of conduct engaged in by the supplier, the business consumer was required to comply with conditions that are not reasonably necessary for the protection of the legitimate interests of the supplier. They are the relevant considerations in this case.
Because of its position in the market and because of the small size of the applicants' business, the applicant has very little bargaining strength against the respondent. The second of the matters is whether the conditions are reasonably necessary for the protection of the respondent’s legitimate interests. The applicant argues that a complete prohibition on him attending at the applicants' premises, or permitting him to attend only by an agent, which the applicant alleges amounts to the same thing as total prohibition, is far beyond what is necessary to protect the respondent's business in the circumstances which the applicant alleges in this case.
There is no issue that the respondent is a supplier and that the applicant is a business consumer. The respondent here is a supplier of cattle sales and the respondent is a consumer of that service supplied by the respondent, and has been over a number of years.
I consider that there is a serious issue to be tried whether, assuming what the applicants allege is true; the respondent's conduct amounts to unconscionable conduct. The applicants say that the events which occurred in November 2008 and March of this year, and particularly in March, give no cause for any concern by the respondent. All Mr Britt did, according to him, was express dissatisfaction with the service being provided to him by the sales consultant and by the respondent generally in relation to one transaction, selling one piece of land. The applicants allege that given the position of the respondent in the cattle sales market and their position as traders largely reliant on the respondent's business to carry on his business, all those circumstances put together, they have an argument that it constitutes unconscionable conduct. I consider that that is correct. I consider that there is a serious question to be tried, whether what the applicant alleges is or is not unconscionable conduct within the meaning of s.51AC of the Trade Practices Act 1975 (Cth).
Overall that means that on all of the contentious issues in this case, there are serious issues to be tried.
That leads to the balance of convenience. The detriment the applicants suffer if the injunction is not granted is that they cannot carry on business. They cannot earn a living. They cannot maintain their properties. They cannot buy and sell cattle. Orders can be drafted in such a way that the only potential detriment to the respondent is the risk to its business that Mr Britt's presence on its premises might bring about. The risk is there might be threats by Mr Britt to employees, and even if there are not threats, apprehension by the employees because of Mr Britt's presence and because of their knowledge that he is alleged to have threatened to shoot one of their fellow employees or workers within the respondent's businesses.
To carry on business Mr Britt needs to be able to attend at the saleyards for three purposes, to purchase cattle, to deliver cattle for sale and to collect cattle after sale, or if cattle he has delivered for sale have not been sold. An order in these terms does not restrict the respondent in the operation of its business. It does not compel the respondent to deal with the applicants on anything other than its normal trading conditions. For instance, it is common ground that the cattle are all sold by auction. That means that the only way Mr Britt can purchase cattle is by bidding in the normal way at each auction. If there was a dispute about the sale process, the normal sale terms and conditions and practices of the saleyards would apply. The auctioneer would not be restricted in any way from exercising the power he has to determine disputes which may occur in the course of an auction. If that meant that the applicants did not buy cattle which they may allege they had successfully bid for, but about which there was a dispute, that would not in any way constitute a breach of a properly worded injunction and would not prevent the respondent from carrying on its business in its normal way.
Similarly, if the applicants attempted to deliver cattle which were unsuitable for sale, possibly diseased or in such condition that they were not suitable for sale or did not comply with livestock regulations, a properly worded injunction would not prevent the respondent from carrying on its business in accordance with its normal terms and conditions and refusing to accept those cattle for sale.
Similarly, if collecting cattle, if the applicants arrived with a vehicle which the respondent's employees, in applying the normal rules, considered was unsuitable, that would not inhibit the respondent in taking the appropriate action in the circumstances.
The orders I propose are that until the hearing and determination of this proceeding the respondent
a)permit the second applicant on his own behalf and on behalf of the first applicant to attend at the respondent's cattle saleyards;
i)for the purpose of selling and purchasing cattle;
ii)for the purpose of delivering cattle for sale or collecting cattle after purchase or non-sale;
iii)permit the applicants or either of them to purchase cattle at the said cattle saleyards on sale days on finance terms of cash on sale, payable by legal tender or bank cheque or credit on account.
Then I propose as part of the exercise of the discretion on what should be done on the balance of convenience to order that the second-named applicant, while attending any of the said saleyards on sale days is restrained from threatening, harassing or abusing any other person attending at the saleyards. I also, subject to any argument, reserve the costs and certify for advocacy.
(The hearing was adjourned to 18 May on the question of an undertaking as to damages and further adjourned to 19 May for submissions on the form of order).
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Phipps FM
Associate: Paul Moss
Date: 12 June 2009
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