Burswood Management Ltd v Attorney-General (Cth)

Re: D. and R. BYRNES (NOMINEES) PTY LIMITED
And: THE CENTRAL QUEENSLAND MEAT EXPORT COMPANY PROPRIETARY LIMITED
No. QLD G38 of 1990
FED No. 203
Injunction
(1990) ATPR para 41-028

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.(1)

CATCHWORDS

Injunction - mandatory interlocutory - applicant meat company seeking to compel respondent meat company to continue supplying it with meat products - alleged that the respondent discontinued supply to the applicant when the applicant re-supplied the products to a competitor of a company associated with the respondent - whether there is a serious question to be tried as to the application of ss. 46 or 47 Trade Practices Act 1974 - balance of convenience.

Trade Practices Act 1974 ss. 46, 47.

HEARING

BRISBANE

#DATE 4:5:1990

Counsel for applicant: Mr. P. Baston
instructed by: Primrose Couper Cronin Rudkin

Counsel for respondent: Mr. J. Muir QC and Mr. P. Dutney
instructed by: McCullough Robertson

ORDER

1. The respondent shall not until the trial

of this action or earlier order:

(a) refuse to deal with the Applicant and in particular refuse to supply the Applicant with primal meat product other than in the ordinary course of the respondent's business, provided that the respondent shall not be obliged to extend credit to the applicant;

2. The costs of the interlocutory application be

reserved;

3. Each party have liberty to apply upon the

giving of three days' written notice to the other.

Note: Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules.

JUDGE1

This is an application for an interlocutory injunction.

The applicant, D. and R. Byrnes (Nominees) Pty Limited, operates a meat wholesaling and retailing business trading under the business name of "Byrnes Wholesale Meats" from premises at 160-162 Mayers Street, Cairns. The respondent, The Central Queensland Meat Export Company Proprietary Limited (CQME) trades as a member of "The Angliss Group". It operates an abattoir and meat wholesaling business from premises in Rockhampton. "The Angliss Group" is a registered business name and the persons carrying on business under that name include W. Angliss and Co (Australia) Pty Ltd, the respondent CQME, and Queensland Meat Export Company Pty Ltd (QME).
The interlocutory injunction seeks to require the respondent, pending the trial, from "continuing with the conduct complained of and set out in the accompanying Affidavits". I take this to be an injunction the effect of which is to require the respondent to supply the applicant with meat products on the same basis that existed before the respondent decided to refuse to sell meat products to the applicant.
The applicant says that the refusal by the respondent to supply meat to it was because the applicant had supplied meat to a company having some connexion with the applicant, which company was, and continues to be, in direct competition with a company associated with the respondent. The applicant claims that the refusal to supply is in breach of ss. 46, 47(3) and 48 of the Trade Practices Act 1974, although reliance on s. 48 was not pressed at the hearing.
For the purposes of this interlocutory proceedings, the facts, while in no sense being finally determined, are as follows:
Raylee Frances Byrnes, the Managing Director of the applicant, is engaged full-time in the Mayers Street operation. She and her husband, D'Arcy Thomas Byrnes, have operated various businesses in the meat industry since 1961. They initially purchased a small butcher shop in Atherton and in 1963 they purchased a small slaughter yard some 13 kilometres from Atherton at Tolga. That was upgraded in the years following to abattoir status and in about August 1980 Mr. and Mrs. Byrnes opened the processing plant and meat hall at the Mayers Street site in Cairns. She has worked full-time since then in the operation of that business. In 1984 the Tolga abattoir was transferred to Victor Byrnes, the son of Mr. and Mrs. Byrnes. The Tolga abattoir does not have export status. The achieving of that status is said by Mrs. Byrnes to involve capital expenditure of $1-2m.
The applicant from the Mayers Street site in Cairns conducts a large wholesale operation and also operates a small retail outlet. It acquires the entire chilled beef, veal and pig carcasses produced by the Tolga abattoir, but the volume from that abattoir is insufficient to satisfy all the applicant's requirements and, in particular, the need for high quality primal cuts. The bulk of these cuts is purchased from other abattoirs, wholesalers or brokers. The applicant supplies meat on a wholesale basis to butcher shops, meathalls, supermarkets, restaurants, hotels and motels, tourist resorts, the Navy and other government and institutional bodies and takeaway food outlets. It competes with other meat wholesalers in Cairns for this custom and, in particular, the tourist and hospitality trade.
Approximately 72% of a bullock consists of meat product; 40% of that meat product constitutes primal cuts, which is meat taken from the beast which forms the table cuts such as rump, cube-rolls (rib fillet), striploins (sirloin) and tenderloins (eye fillet). More than 90% of the requirements of the tourist and hospitality trade are primal cuts. The rest of the meat product from the carcass is marketed by the applicant through its own retail outlet and to butcher shops. The applicant says that approximately half of its total meat purchases consists of primal cuts received in cartons.
There are four major meat processers in north Queensland. They are Tancreds, A.M.H. Limited (AMH), Borthwicks, and The Angliss Group, which is also known as the Vestey Group. Each of these concerns is involved in the abattoir and wholesale distribution of meat throughout Queensland.
The applicant says that the north Queensland meat market is largely serviced by wholesalers operating from Townsville and each of the four groups has a presence in Townsville and compete for the wholesale meat trade. The Angliss Group is represented in Townsville by QME and in Rockhampton by CQME, the respondent. Each of the four groups, except The Angliss Group, is represented in Cairns. The Angliss Group entity nearest to Cairns is QME in Townsville.
QME has a small number of customers in the Cairns area. Prior to 29 January 1990, the transport company owned and operated by Uncle D'Arcy Pty Ltd and known as North Coast Frig Lines transported QME product from Townsville to Cairns and distributed that product on a weekly basis. Since 29 January 1990, however, there has been no contact between QME and the transport company. The managing director of Uncle D'Arcy Pty Ltd is Mr. D'Arcy Thomas Byrnes, the husband of Raylee Frances Byrnes.
Tancreds, who have a wholesale outlet in Cairns, sell directly to the tourist and hospitality industry and to butcher shops, in direct competition with the applicant. Borthwicks do not have a wholesale outlet in Cairns, but competes with the applicant by means of a weekly delivery service from their abattoir in Bowen by means of large refrigerated transport. It supplies a full range of meat products for supply directly to the market; Borthwicks has a sales representative operating out of Cairns, and customers in the Cairns area can also place orders with Borthwicks in Bowen.
AMH sells lot fed beef from their "Beef City" operation in Toowoomba into the Cairns market. In or about 1987-88, AMH opened a depot in Cairns in direct competition with the applicant. The applicant is thus in direct competition with three of the four major participants in the meat processing industry servicing north Queensland, and as a result it claims that it is virtually impossible to buy product in the Cairns area to wholesale on terms which would allow the applicant to operate competitively. The applicant says that since its entry into the wholesale market in Cairns, there has been an increase in competition and currently there is fierce competition between the applicant and the other wholesalers to maintain market share. The annual gross turnover of the Cairns operation of the applicant increased from $2.8m in the financial year 1982-83 to $7.3m in the financial year 1988-89.
From about 1982 the applicant has had an extensive association with the respondent, CQME. It is the circumstances attending the termination of this association which gives rise to these proceedings.
In 1982-83, Mr. and Mrs. Byrnes had dealings with Peter Cobb, who was then working in the sales department of the respondent. Mr. Cobb told the Byrnes that the respondent's Rockhampton meatworks would be able to maintain the applicant with a continuous supply of first class quality product and from that time until 29 January 1990 the applicant has purchased supplies of individually wrapped and vacuum packed rumps, vacuum packed cube-rolls, striploins and tenderloins from the respondent. In addition, lesser cuts have been purchased when these could not be supplied through the Tolga abattoir. Initially the applicant's requirements for primal cuts were partially met from other sources as well as CQME, but for more than five years the applicant has been dealing almost exclusively with the respondent in respect of primal cuts, except that grain fed meat, which is not able to be obtained from CQME, has been obtained from a supplier in New South Wales.
The applicant says that, by the end of 1989, 80% of the applicant's primal cut requirements was being obtained from the respondent, the balance being obtained from the Tolga abattoir. The applicant says that in about 1988 Mr. Cobb informed them that their purchases had just then exceeded the million dollar mark and that there were only one or two other customers who purchased more product from CQME than the applicant. For the period 8 September 1989 to 25 January 1990, approximately $550,000.00 worth of product from CQME was purchased by the applicant, the drop being attributed to the pilots' dispute.
The product from CQME is colour coded, some of the rumps being marked with a blue spot and others with a green spot. According to the applicant this is a quality differentiation; the blue spot being of better quality than green spot. This is disputed by the respondent, who says that the colour coding is not based on quality per se, but is a denotation of the type of animal from which the meat product comes; the blue marking indicating that the meat product is from a steer, the green spot that it is from a cow, or an orange spot if it is young beef. Mr. Cobb says that the blue spot is a better quality than the green spot, but only for the reason that meat from a steer is generally of better quality than meat from a cow. He says that the quality of cattle generally increases as one goes south. The colour coding developed by The Angliss Group has no reference to geographical origin; it applies throughout The Angliss Group. It is a marketing system for the convenience of customers, indicating the type of beast from which the meat product comes rather than necessarily being an indication of quality. Mr. Cobb says that, by and large, good quality meat product from export abattoirs is interchangable with the Angliss product or, in particular, the meat product from the CQME abattoir at Rockhampton.
However, the applicant says that it has created a demand amongst its customers for the product from CQME, saying that its customers place orders using the description "blue spot" or "green spot". As indicated, however, the respondent says such a labelling is not distinctive of the CQME product.
The other major factual circumstance attending the refusal by the respondent to supply meat product to the applicant arises out of the wholesale operations conducted by Uncle D'Arcy Pty Ltd from premises in Townsville.
Mr. and Mrs. Byrnes for some time have owned a commercial property in Townsville fitted with cold rooms and suitable for use as a meat wholesale operation. Since 1984 these premises had been let to a meat wholesaler known as Gilbertsons, which is a large meat producer and wholesaler based in Victoria. In or about early 1989 Gilbertsons ceased operations in north Queensland and vacated the Townsville premises. Shortly thereafter, Uncle D'Arcy Pty Ltd commenced trading from the Townsville premises as a meat wholesaler, under the business name "Uncle D'Arcy Wholesale". The wholesaling under that business name was in direct competition with QME of The Angliss Group. Uncle D'Arcy Wholesale in Townsville is managed by a Mr. Rod Sinclair. The applicant supplied Uncle D'Arcy Wholesale with meat product from the respondent, also a member of The Angliss Group.
Shortly after Uncle D'Arcy Wholesale commenced operations in Townsville, Mr. Byrnes was contacted by Mr. Cobb on behalf of CQME by telephone and told by him that, if the applicant continued to supply CQME product to Uncle D'Arcy Wholesale for wholesaling or retailing in the Townsville area, all supplies of the CQME product to the applicant would cease. Mr. Sinclair had also been contacted by a representative of CQME and told that if sales of the CQME product in Townsville by Uncle D'Arcy Wholesale continued, supply of the CQME product to the applicant would cease. Subsequent to that conversation, Uncle D'Arcy Wholesale ceased to wholesale or retail CQME product supplied to it by the respondent in the immediate Townsville area.
It seems at the very least arguable that this tri-partite arrangement or understanding contains an exclusionary provision within the meaning of that term in s. 4D of the Act, and that the parties to the arrangement or understanding contravened s. 45(2) of the Act.
I am satisfied that the respondent, CQME, made it plain to the applicant and to Uncle D'Arcy Wholesale that it would refuse to supply CQME product to the applicant except on condition that the applicant would not supply CQME product to Uncle D'Arcy Wholesale for sale in the Townsville area. As a consequence of this stipulation by CQME, the applicant supplied CQME product to Uncle D'Arcy Wholesale but Uncle D'Arcy Wholesale in Townsville did not supply any CQME product in the Townsville area. The refusal to supply except on this basis was to protect the Townsville outlet of The Angliss Group, QME, from competition by Uncle D'Arcy Wholesale.
However, it is not that arrangement which is the subject of this litigation. In January, 1990, as a result of a request from Mr. D'Arcy Byrnes, the applicant supplied a small quantity of CQME product to Uncle D'Arcy Wholesale for the purpose of the wholesaling of that product by Uncle D'Arcy Wholesale to a customer in Charters Towers, which is some 150 kms. west of Townsville.
On a Friday late in January 1990 and prior to 29 January 1990, Mrs. Byrnes received a telephone call at the Cairns premises from a sales representative employed by the respondent at Rockhampton, who complained of the activities of Uncle D'Arcy Wholesale and, in particular, the sale by Uncle D'Arcy Wholesale of CQME product in Charters Towers. Mrs. Byrnes indicated that this conduct was not in breach of the requirement from The Angliss Group in respect of the wholesaling of CQME product in the Townsville area. The sales representative, a Mr. Davies, indicated that the call had been prompted by complaints received from QME in Townsville. Mrs. Byrnes asked why the prohibition applying to the wholesaling of CQME meat by Uncle D'Arcy Wholesale in the Townsville area had been extended to include Charters Towers. Mr. Davies indicated that that aspect should be discussed with the sales manager, Mr. Cobb, when he returned to the CQME Rockhampton office.
On Monday 29 January, an order was placed by the applicant with the respondent by telephone, and later that afternoon Mr. Byrnes received a telephone call at the applicant's Cairns premises from Mr. Cobb, who informed Mr. Byrnes that The Angliss Group would no longer supply the applicant with meat product. A further order was placed on 6 February and subsequently Mr. Davies telephoned Mrs. Byrnes to inform her that the respondent would not deal with the applicant. On the following day, a further order was placed, which was followed by a telephone call from Mr. Cobb, the sales manager of CQME. Mr. Cobb told Mrs. Byrnes that the respondent would not deal with the applicant, and that this was the result of a directive received from The Angliss Group head office. He said that she should forget about CQME, QME or any other Angliss Group company as a supplier, as they would never deal with the applicant again and she should just get on with her business and try to find alternative suppliers.
On 12 February 1990, an order was faxed to CQME at 10.54 a.m. and a fax in reply was received at 2.29 p.m. from CQME in Rockhampton, returning that order with the notation "the status quo remains".
Since the respondent has refused to supply the CQME product to the applicant, the applicant says that it has endeavoured to find an alternative product. Mrs. Byrnes says that she has been unable to supply the "blue spot" product, on which the applicant had established a market, and thus has had to supply, where possible, alternatives which she says "have not been acceptable to customers". She says that she is having difficulty finding a suitable product. She has resorted to a supplier in New South Wales but claims that this is more expensive and that the applicant is finding it difficult to retain custom. She says that during the five months period 8 September 1989 to 29 January 1990, the applicant purchased on average approximately $28,000.00 worth of product from the respondent. Since 29 January 1990 to 27 March 1990, the applicant had purchased approximately $8,000.00 per week worth of alternative product.
On 20 February 1990 (although the date is incorrectly recorded on the facsimile message) Mrs. Byrnes communicated with Mr. Cobb in the following terms:

"Peter is the Company still keeping us on the Black Ban List? Surely selling some cartons of your meat into Charters Towers wasn't exactly crime of the Century? Surely a little of the old forgive and forget could be applied. After all you did say we were one of your better payers and hadn't we reached the million dollar mark? The Company's Black Ban is really hurting us because after all we did tend to put all of your meat in our Basket so to speak. Anyhow if you're allowed could you please send the following:-

1 Pallet Blue cor Rump 1 pallet Green cor Rump Can add to the list if you're selling. Kind Regards"

On 5 March 1990, Mr. Cobb wrote to Mr. and Mrs. Byrnes. The letter is important not least for indicating the nature of the relationship that existed prior to the events of January 1990, but also indicating that the reason for the refusal to supply was the view by the respondent that, in supplying the applicant with CQME product, it was supporting a major competitor of its associate, QME . The letter is in the following terms:
"Dear Darcy and Raylee,

Sorry I did not reply to your fax,

however I have been interstate and felt I should

write to you personally.

I am afraid the situation of supply

remains a negative issue and product from

Rockhampton is still not available to ship north.

I suppose in hindsight the transition could have

been handled in a more diplomatic fashion, however

if QME in Townsville view you as a major

competitor then one could accept that Byrnes

Wholesale Meats has been an effective force in the

North.

Over the years, I, personally have viewed

our relationship as more than just one of a

business nature. The openness and trust by

yourselves had created a friendly atmosphere where

everyone was working towards a common goal.

Whilst you were marketing in Cairns, the

company tolerated the situation but when you moved

into Townsville it 'was considered that Rockhampton

was supporting a major competitor, thefore

politically, we were seen to be operating against

company policy.

The pressure to cease trading became

overwhelming. Darcy and Raylee, I feel a deep

sense of loss and sorrow that our relationship has

ended this way, however I will always value your

friendship and if and when I next visit Cairns, I

trust that I may call to say hello.

All the best for the future"

A postscript to that letter was in these terms:

"Darcy, please address the outstanding balance on your a/c."

In this respect it should be said that the applicant was always a good customer of the respondent in terms of its financial obligations and that, while an amount is outstanding on that account, non-payment of that amount is not a basis for the refusal to supply. Further, the applicant, through its counsel, has undertaken to pay any outstanding balance prior to the resumption of supplies to the applicant from the respondent.

It does not seem to be in dispute that when Uncle D'Arcy Wholesale opened a wholesaling business in Townsville, the respondent stipulated that the applicant would not be supplied with CQME product in Cairns, if Uncle D'Arcy Wholesale competed with QME in Townsville by wholesaling in that area CQME product obtained from the applicant. For present purposes I am satisfied that the supply by Uncle D'Arcy Wholesale to Charters Towers was seen as a breach of this arrangement and subsequently the respondent has refused to supply the applicant in Cairns with any CQME product.
The question is whether in those circumstances there is a serious question to be tried as to the application of ss. 46 or 47 of the Trade Practices Act 1974, and, if so, whether the balance of convenience lies in favour of the grant of an interlocutory injunction, which is in the nature of a mandatory injunction requiring the performance of positive services.
Section 46(1) of the Trade Practices Act 1974 provides:

"A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of -

(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."

Section 47(3)(a) and (f) of the Act relevantly provides:

"A corporation also engages in the practice of exclusive dealing if the corporation refuses -

(a) to supply goods or services to a person; ...

for the reason that the person or, if the person is a body corporate, a body corporate related to that body corporate -

...

(f) in the case of a refusal in relation to the supply or proposed supply of goods, has re-supplied, or has not agreed not to re-supply, goods,...acquired from the corporation to any person,..."

The application is based on ss. 46 or 47 of the Trade Practices Act 1974 but the operation of s. 45 in the circumstances revealed by the material appears to me to be possible of application. It was not however the applicant's case and, in those circumstances, it would be inappropriate to consider any order based on that provision. If there is a supply of goods on condition that there will not be a re-supply of a particular kind, (that kind of re-supply being a source of competition to an associated company of the first supplier), it could be an interesting question whether the cessation of supply for breach of the stipulation would constitute a "giving effect" to the original exclusionary arrangement.
So far as s. 46 is concerned, it is necessary to define the market in which the defendant is thought to have a substantial degree of power. In Queensland Wire Industries Pty Ltd v. Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 at 187, Mason C.J. and Wilson J. said:

"The analysis of a s. 46 claim necessarily begins with a description of the market in which the defendant is thought to have a substantial degree of power. In identifying the relevant market, it must be borne in mind that the object is to discover the degree of the defendant's market power. Defining the market and evaluating the degree of power in that market are part of the same process, and it is for the sake of simplicity of analysis that the two are separated."

Deane J. said at 195:

"Section 46(4) provides that a reference in s. 46 to a market is a reference to a market for goods or services. The Act does not otherwise seek to define what is meant by the word 'market'. That is not surprising since the word is not susceptible of precise comprehensive definition when used as an abstract noun in an economic context. The most that can be said is that 'market' should, in the context of the Act, be understood in the sense of an area of potential close competition in particular goods and/or services and their substitutes (cf Re G. and M. Stephens Cartage Contractors Pty Ltd (1977) ATPR 17, 445 at p 17,460."

By s. 4E the substitutability of one product for another has to be taken into account.
Dawson J. at 199 said:

"A market is an area in which the exchange of goods or services between buyer and seller is negotiated. It is sometimes referred to as the sphere within which price is determined..."

He later observed:

"The basic test involves the ascertainment of the cross-elasticities of both supply and demand, that is to say, the extent to which the supply of or demand for a product responds to a change in the price of another product."

It seems to me that, at best for the applicant, the market is to be identified as the market for primal cuts of beef in Queensland, excluding western Queensland. In respect of this issue, the applicant has been buying from central Queensland and New South Wales and, while the applicant says that consistent supplies of high quality primal cuts of meat can be obtained only from large abattoirs, about 20% of its primal cuts have been obtained from the Tolga abattoir. Borthwicks, one of the significant entities, supplies wholesalers in Cairns from its Bowen abattoir, and AMH supplies wholesalers from meatworks in Townsville and Toowoomba and has closed its meatworks in Cairns and Mareeba. Further, the zonal system which previously effected the geographical limits of supply, was removed in 1985.
On the material in this case, I am not satisfied that there is a north Queensland market in respect of the wholesale supply of meat. The primary complaint concerns the supply of meat from central Queensland to Cairns.
Mr. Cobb, who gave oral evidence before me and who, on that appearance and on the material deposed to by him, impresses me as a decent and honest man, indicated that there were at least twenty export abattoirs in Queensland from which the applicant could obtain supplies and, in addition, there are export abattoirs in New South Wales. He asserted that the price would not differ materially between abattoirs whether in Queensland or New South Wales and that, while the respondent is principally engaged in export, it also sells to customers throughout Australia, including Western Australia and the Northern Territory.
More importantly, in relation to the question of whether there is a substantial degree of power in the market however defined, the evidence is that the respondent's share of the processing of primal meats in Queensland is only from 7-8% and only about 15% when added to other members of The Angliss Group. I accept that there is a degree of interchangeability of meat from one abattoir to another, although the evidence clearly suggests that there is a general improvement in the quality of beef as one goes south.
On the evidence then it seems to me that no substantial degree of power has been established in respect of what I find to be a market at least as broad as coastal Queensland. In my opinion, a 7% share of a competitive market, or even a 15% share, indicates that the respondent lacks an essential element of s. 46, viz. that the respondent has a substantial degree of market power.
In the light of the degree of market share and, correspondingly, the degree of power of the respondent in the market for wholesale primal cuts, I am unable to conclude that there is an arguable question as to the application of s. 46.
As to s. 47, it is at least seriously arguable that the respondent has engaged in the practice of exclusive dealing as defined in s. 47(3) of the Act. Relevantly, within the provisions of that sub-section, it is arguable that the respondent has refused to supply goods to the applicant for the reason that the applicant has re-supplied goods acquired from the respondent to Uncle D'Arcy Pty Ltd trading as "Uncle D'Arcy Wholesale" in Townsville. Alternatively, it is at least a serious question to be tried whether the respondent has refused to supply goods to the applicant for the reason that the applicant has not agreed not to re-supply goods acquired from the respondent to Uncle D'Arcy Pty Ltd. The affidavit evidence from Mr. Byrnes and Mr. Sinclair and the correspondence of Mr. Cobb, to which reference has been earlier made, points strongly towards this conclusion.
It was said on behalf of the respondent, however, that there is no actionable conduct under s. 47 because of the provisions of sub-section (10). Sub-section 10 provides:

"Sub-section (1) does not apply to the practice of exclusive dealing constituted by a corporation engaging in conduct of a kind referred to in sub-section (3)...unless

(a) the engaging by the corporation in that conduct has the purpose or has or is likely to have the effect of substantially lessening competition; ..."

It was submitted that the conduct of the respondent neither had the purpose nor the likely effect of lessening competition in the relevant market. The extent of the market and the respondent's comparatively minor place in it, and the availability of the product from other sources, was said to show that the conduct is not likely to lead to a lessening of competition and the respondent had no relevant purpose.
I am satisfied that the reason for the refusal of supply to the applicant by QCME was to protect the Townsville outlet of The Angliss Group from competition from Uncle D'Arcy Wholesale. The fact that a corporation thinks that conduct of that kind will have that effect is some evidence that the company had the capacity, by the adoption of that course, to effect that consequence. I am satisfied that there is a serious question to be tried as to whether the purpose of the conduct of the respondent was the purpose of substantially lessening competition for QME.
As to the balance of convenience, it was said on the respondent's behalf that it was at present unable to supply the applicant because it was, due to climatic conditions, behind in supplying its existing export customers. It was further submitted that any order which might be made would require constant supervision by the court, including supervising real difficulties in relation to price and availability of the product. The financial impecuniosity of the respondent and those behind it not being in issue, it was submitted that damages would be an adequate remedy.
The assessment of damages often presents difficulties, but the problem seems accentuated in the present case. The difficulties in securing compliance with any order are not to be discounted, but the basic fact is that all the applicant is seeking is the return to the significant and apparently successful commercial relationship that had, until 29 January 1990, been on foot for more than five years. If the preservation of the "status quo" pending trial is the appropriate order, I am of the opinion that that object calls for the restitution of the relationship that existed prior to the decision of the respondent to alter it by refusing to supply.
As to the suggestion that there has been delay in the application, it was said that supply had ceased from the end of January. Having regard to the fax of 20 February and the response in the letter of 5 March, I am not satisfied that there is any substance in this complaint. The commercial fact is that for more than five years the applicant has been a good and valued customer of the respondent. I acknowledge there are inherent difficulties associated with the grant of a mandatory injunction, particularly in a commercial area. However, such is my view of Mr. Cobb that I am of the opinion that a commercial relationship on the same straightforward and fair basis as previously existed between the respondent and applicant would be the consequence of a mandatory interlocutory injunction to restore supply by the respondent to the applicant on the same basis as existed prior to the cessation of supply at the end of January 1990.
It was submitted on behalf of the respondent that because the relief being sought was in effect a mandatory injunction, a much higher degree of proof is required of an applicant than for a prohibitory injunction. Reliance was placed on the observations in Midland Milk Pty Ltd v. Victorian Dairy Industry Authority (1988) 82 ALR 279 where the observations of Megarry J. in Shepherd Homes Ltd v. Sandham (1971) 1 Ch 340 at 351, (which were approved by Gibbs C.J. in State of Queensland v. Australian Telecommunications Commission (1985) 59 ALR 243 at 245) were noted by Foster J.. The views expressed by Gibbs C.J. in the State of Queensland v. Australian Telecommunications Commission Case, were considered by Gummow J. in Businessworld Computers Pty Ltd v. Australian Telecommunications Commission (1988) 82 ALR 499, where his Honour concluded that he was not bound by the judgment of Gibbs C.J. I repeat my respectful agreement with the observation of Gummow J. in that case, as I expressed in Carson v. The Minister of Education (1989) 88 ALR 467 at 478-480.
There is in this case a public interest element. The provisions of the Trade Practices Act 1974, speaking generally, do not address merely the interests of commercial rivals.
In all the circumstances, I think the balance of convenience favours the grant of interlocutory relief. I recognize the difficulties that attend the definition and supervision of an order of the court to that effect, but this strikes me as a strong case and it is not to be presumed that the respondent will attempt to flout the order of the court by a policy of deliberate obstruction or non-cooperation. I will, of course, require the usual undertaking as to damages. The liquidation of the presently outstanding account between the applicant and the respondent as a pre-condition of the grant of relief is also necessary. I have earlier expressed my confidence in the sales manager of the respondent, Mr. Peter Cobb.
I invite the parties to bring short minutes of orders to give effect to my view that, pending the determination at the trial or earlier order, the respondent ought forthwith, on the conditions earlier indicated being satisfied, supply meat product from its abattoir in Rockhampton to the applicant on the same basis or in the same manner as it had prior to 29 January 1990.
I reserve the costs of the interlocutory application.

[1990] FCA 203

04 MAY 1990