Devenish & Ors v Jewel Food Stores Pty Limited

[1990] HCATrans 202

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IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S57 of 1990

B e t w e e n -

MICHAEL GERARD DEVENISH & ORS

First Appellants

and

AMALGAMATED MILK VENDORS

ASSOCIATION INC

Second Appellant

and

JEWEL FOOD STORES PTY LIMITED

Respondent

MASON CJ
BRENNAN J
DEANE J
DAWSON J

Devenish(4) 1 30/8/90

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON THURSDAY, 30 AUGUST 1990, AT 10.19 AM

Copyright in the High Court of Australia

MR D. WILLIAMSON, QC:  May it please the Court, I appear

with my learned friend, MR D. SHAVIN, for the
various appellants described as the first

appellants and the second appellant. (instructed

by Sly and Weigall)

MR F. DQUGLAS, QC:  May it please the Court, I appear with

my learned	friend, MRS S. EMMETT, for the
respondent	to the appeal. (instructed by Hunt &
Hunt)

MASON CJ:	Mr Williamson?
MR WILLIAMSON:	May it please the Court, this is an appeal

from a decision of the Full Court of the Federal Court of Australia. The point that is raised is

one under the Trade Practices Act 1974 and it

relates particularly to the proper interpretation

of section 45D of the Act and especially the

relationship between 45D and section 4D, put in

short terms, the relationship between the

provisions for secondary boycotts and the

provisions for primary boycotts. The point is very

short but, we would submit, of importance.

MASON CJ: Well, I think you have already established that.

We have granted special leave so I think you might come directly to the argument on the issue because we are familiar with the history of the case, we

have read the judgments in the courts below.

MR WILLIAMSON: If Your Honour pleases. Well then, might we

hand up to Your Honours our short notes of

submissions.

MASON CJ:	I think you have already done that.
MR WILLIAMSON:	I note you have got them, yes.
MASON CJ:	I have a document entitled "Outline of

Appellants' Submissions".

MR WILLIAMSON:  Yes, Your Honour. That is the document,

Your Honour, and there is also a book which is

entitled "Reference materials" provided by the

appellants.

MASON CJ: Yes, we have that as well.

MR WILLIAMSON: That consists principally of extracts from

the relevant legislation together with
parliamentary explanatory memoranda and second

reading speeches and the legislation covers the

1974 Act, the 1977 Act in which the provisions of

section 4D and 45D were introduced and the 1980
legislation in which there was amendment to

section 45D. There is other material there for the

Devenish(4) 2 30/8/90

sake of completeness as to the legislation but it

is unlikely that we need trouble Your Honours with

it.

May I just say this about the history of the

proceedings. The original application started off

on the basis of a claim against a number of dairy

companies who were listed as respondents one to
five, and they were what might be called producers

of milk if one overlooks what the cows do. The sixth respondent or respondents were a group of milk vendors. These were people who distributed

milk, principally in the Sydney area but also some

other areas in New South Wales. The seventh

respondent, which was added a little later on, was

the Amalgamated Milk Vendors Association which is
the association of those milk vendors. Now, along
the way the proceedings against the milk companies

were dropped and the appellants, therefore, come

forward as the group of milk vendors and their

association.

Now, the grounds upon which the proceedings

had been based have also changed as time has gone

by. Initially, the claim was put on the basis of

section 45D, on the basis of section 45 generally,

on the basis of section 47. By amendment, the

application was narrowed down prior to hearing to

five ways in which conduct of the appellants was

attacked under section 45D(l) of the Act and also

there was an attack under section 45D(lA) which is

the subsection which talks about interference with

interstate trade.

By the time the matter came on for hearing the five bases under 45D(l) had shrunk to three and the

judgment at the hearing, by His Honour

Mr Justice Burchett, deals with the three ways in

which that claim was put. His Honour dismissed

each of those approaches and also the approach
based on 45D(l)(a) in that case, not because the

requirements of (l)(a) were not made out but

because the defence in (l)(b) was made out, that is

the conduct related to preserving the business of
the milk vendors.

Now, when the matter went on appeal from His Honour Mr Justice Burchett to the Full Court,

Jewel proceeded on one basis only, that was one of

the ways of approaching 45D(l) and that was through
45D(l)(b), which is the provision which prohibits

concerted conduct which hinders the acquisition of

goods by a third person - in this case, Jewel's

customers - from a fourth person - in this case,

Jewel - Jewel being a chain of supermarkets.

Devenish(4) 30/8/90

Now, on appeal the majority of the Full Court

upheld the application on that ground with the
majority consisting of Justices Sheppard and

Wilcox.

MASON CJ:  Mr Williamson, we are familiar with the history

of the matter. I think you should direct your

attention specifically to the point.

MR WILLIAMSON: Well, Your Honour, that brings us to the

practical issue which is raised and that is whether

a primary boycott of a corporation - in this case,

Jewel - by its suppliers - in this case the milk vendors - becomes a secondary boycott by those

suppliers within the meaning of section 45D(l) if
the customers of the corporation are thereby

hindered in acquiring goods from the corporation.

So, what happened here was the milk vendors ceased

to supply their milk to the Jewel supermarkets.	As
a consequence of that Jewel's customers were not
able to buy that milk from the Jewel stores.

What they were able to do, of course, was to

get other milk from Jewel stores because Jewel was
being supplied with Victorian milk, and that is

what gave rise to the problem in the first place, and the customers, of course, could get New South

Wales milk which is what the vendors were selling

from any other retailer other than Jewel stores.

But that is beside the point, of course, because

45D(l)(b) is concerned with whether, in this case,

the vendors were hindering an acquisition by the

third person from the particular fourth person - in

this case, Jewel.

In our submis'sion, the conduct that was

engaged in by the milk vendors in concert was a

classic collective primary boycott. It was not

caught by section 4D of the Act and thus,

section 45 and prohibited per seas an exclusionary

provision for one reason only, and that is that the

milk vendors were not in competition or in precise

terms of 4D, not competitive with each other.

That came about because there is an elaborate

scheme of statutory regulation in New South

Wales - - -

MASON CJ:	It is a zonal scheme so - - -
MR WILLIAMSON:	A zone scheme, which meant that each vendor

had an allotted territory; the price was controlled

and that meant, of course, that in this case,

Jewel, the stores or whoever their purchasers are

from the vendors, had to buy from those vendors so

if one described it unkindly, one might say it is a

Devenish(4) 30/8/90

little series of statutory monopolies because of

the zoning scheme.

Now, as the vendors were the only ones who

could distribute New South Wales' milk in that way,

it meant that if those vendors did not supply

Jewel, Jewel would not be able to get

New South Wales' milk; there was nowhere else to

turn to within that zone.

What Jewel could do and was doing and had been

doing for some time prior to this was bringing in
milk from Victoria and, because of both the nature

of the industry and conditions in Victoria and the bringing in the Victorian milk, of course, was
nature of regulation in New South Wales, the

reducing the sales of the New South Wales' vendors

because each, with his own little fixed territory,

if milk was being sold within his territory from

Victoria, then pro tanto his own sales were

reduced.

So, the cessation of supply to Jewel to try to

persuade it not to sell Victorian milk meant that

Jewel was in the position where it could still sell

Victorian milk but it could not sell

New South Wales' milk. Now, Jewel had a problem

because it could not get quite enough Victorian

milk to meet its usual requirements and that, of

course, was the pressure point.

So, for the reason that the milk vendors were

licensed in this way and had their allocated

territories, they were taken not to be competitive

with each other as required by 4D and although they

were engaging in the - let us assume, that is

assumed; it was established and accepted that they

were acting in concert through their Association.

Every aspect of 4D was satisfied except the

one and, therefore, their conduct could not be

prohibited under section 45 by reason of
section 4D.	No proceedings went on under 45

generally in terms of effect on competition in the

market.

So what happened then was that Jewel went

through the exercise of trying to stretch

section 45D in all sorts of ways to somehow make

this conduct fit into section 45D as a secondary

boycott.

BRENNAN J:	Why do you say "as a secondary boycott"?
MR WILLIAMSON:	In the sense, Your Honour, that that is a

description of what section 45D encompasses.

Devenish(4)	30/8/90
BRENNAN J: Is it a statutory description?

MR WILLIAMSON: Leaving aside a side-note which so described

it in the 1977 Act, Your Honour, no but, in further

answer to Your Honour's question, it is a

convenient label which is customarily given to the

provisions in section 450, was so given in the

parliamentary explanatory papers, the speeches and

so on and has been so described in the courts,

including this Court and that would include, as I

recall, Your Honour The Chief Justice so described

it in Fontana Films' case, when the section was

being looked at in a constitutional context

exercising corporations power, and it was so

described by His Honour Mr Justice Gibbs in an

earlier case, one involving Seamans Union a year or

so earlier.

So the terminology is used, we would submit,

for this reason, Your Honour, that the classic

secondary boycott situation is one in which several

parties, let us call them one and two, agree to

attack a particular target, but it is not done

directly. It is done by hindering dealings between

someone else and that target, the someone else

being person three and the ultimate target being
four, and the concept of four persons is what one

sees in section 450(1).

BRENNAN J: Well I understand the notion. I was just

wondering whether you sought to construe

section 450 by reference to an assumption that it

is limited to secondary boycotts?

MR WILLIAMSON: Secondary boycotts of the description set

out in the section. By that I mean the section

requires one to go on and find certain other

things, the purpose and effect that is referred to.

So it is certainly not a section which prohibits

all secondary boycotts, but those secondary

boycotts which satisfy the further criteria of the

purpose and effect of harming the business of the

fourth person, the ultimate target; or

alternatively substantially lessening competition

in the market of the fourth person.

BRENNAN J: It is not quite the point I was seeking to

direct to, Mr Williamson. The question is really

if conduct falls within 450, does it matter that on

one view it is not a secondary boycott?

MR WILLIAMSON:  In our submission, yes, in the case of a

primary boycott if that is the conduct to which

Your Honour refers; or to be more accurate,

conduct which involves three persons and not four. primary boycott is where persons one and two agree

Oevenish(4) 6 30/8/90

that they are not going to deal with three.	Now,
we say - - -

BRENNAN J: 

I do not understand why it is that one construes

the language of 45D by reference to an assumption
as to what the classical case is that falls within

it.

MR WILLIAMSON:  I appreciate Your Honour's point. What I am

seeking to put, Your Honour, is that 45D requires
the involvement of four people, or classes of
people, in the manner described in the section. If

the relationships are not as described, then

plainly, I suppose, the section does not cover a
relationship that is not as described.

The relationship that is described in section 4D is not one that is described in section 45D, the difference being that section 4D

refers to persons one and two not dealing with

person three with the purpose, and so on, that is

prescribed, whereas section 45D refers to one and

two interfering with three in three's dealings with

four.

I do not know whether that answers

Your Honour's question about whether section 45D

does not apply to primary boycotts. What I am

saying to Your Honour is that section 45D does not apply to conduct which falls within the tripartite

relationship set out in section 4D because the Act

is so structured, and I say that, Your Honour,

because in 1977 a scheme was brought into the Act

where section 4D was intended to deal with what

were described as primary boycotts, and section 45D

was intended to deal with what was described as

secondary boycotts.

What that really means, of course, one sees by going to the sections, but as a matter of

legislative intention and policy one sees the words

reflecting that intention and policy, in our - - -

DAWSON J:	You say the two sections are mutually exclusive.
MR WILLIAMSON:	Yes, Your Honour.
MASON CJ:	Mr Williamson, had you not better commence on

that argument? After all it does seem that

section 45D(l), according to its literal

interpretation, if you did not have regard to the factors that you are referring to, would apply to this case as the majority have found that it did.

Now, it seems to me that you would be well advised

now to embark on an argument which identifies the

various factors which, in your submission, indicate

Devenish(4) 7 30/8/90

that section 45D(l) should not be given this

literal application?

MR WILLIAMSON:  Yes, Your Honour. May I take Your Honours

first to the 1977 legislation which Your Honours

will find in the reference materials commencing at

page 23.

MR WILLIAMSON:  At page 24, section 6 of the amending Act

commences and then at page 25 it introduces

section 4D in terms with which Your Honours will be

familiar:

4D(l) A provision ..... shall be taken to be an

exclusionary provision for the purposes of

this Act if -

(a) the contract or arrangement was

made ..... between persons any 2 or more of whom

are competitive with each other; and

(b) the provision has the purpose of preventing, restricting or limiting -

(i)    the supply of goods or services to, or

acquisition of goods or services from,

particular persons -

later on amended to include "classes of persons".

That is the basis for the proposition that 4D is

aimed at, persons one and two, not dealing with or

impeding in some way their relationships with

person three - three, of course, being the

"particular person" referred to there.

It might be noted in passing that it was the

1977 Act that section 4F was introduced as to the

requirement for substantial purpose but, as we will

see with section 45D, 4F does not apply.

If one goes to page 27 of the materials, at

the bottom, section 25 of the amending Act, one

finds there amendments to section 45 which

introduce the concept of exclusionary provision as

something prohibited by section 45 on a per se

basis, that is, it is not subject to the

requirement of:

the purpose, or has or is likely to have the

effect, of substantially lessening competition

in the market. Then, if one proceeds to page 31 of

the materials, one sees there the introduction of

section 45D, the side-note to which, in the

Commonwealth Act, is that of:

Devenish(4) 30/8/90

Secondary boycotts.

There, one sees that:

Subject to this section, a person -

that is (1) -

shall not, in concert with another person -

that is (2) -

engage in conduct that hinders or prevents the

supply of goods or services by a third person

to a corporation -

corporation is (4). Now, this is 45D in its

original form, but that:

corporation (not being an employer of the

first-mentioned person) -

or, in a corresponding provision, relating to:

acquisition of goods or services by a third

person from a corporation.

Now, that is 45D(l). Later, in 1980, 45D(l) was amended to split it into subsections (l)(a) and

(l)(b), (l)(b) dealing with the situation - this

provision became (b) and (l)(a) was inserted to
deal with the situation where the target fourth

person is not a corporation but Your Honours see

there, there is introduced what is described as a

"secondary boycott" concept involving those four

persons.

Might I take Your Honours through to page 36

of the materials where one finds a passage referred

to in several of the judgments taken from the

explanatory memorandum that accompanied the Trade

Pr~ctices (Amendment) Act 1977 and circulated by

the Minister for Business and Consumer Affairs,

the Honourable John Howard, and at page 36 at

paragraph 10, one sees the reference to boycotts

and it is a reference to the introduction of both

4D and 45D:

The Bill contains special provisions for the prohibition of collective boycotts.

Collective primary boycotts (where the boycott

seeks to restrict the dealings of ..... parties

that is (1) and (2) -

with the target person) -

Devenish(4) 9 30/8/90

that is (3) -

are prohibited -

as exclusionary provisions in the -

new section 45D.

It is in that sense, Your Honours, that I say

that what was introduced was a scheme of

legislation to deal with what are conveniently
described as primary boycotts, exclusionary
provisions or conduct which gives rise to an

exclusionary provision and the secondary boycotts.

And the matter hardly needs elaboration, I suppose,

but on page 39 is the second reading speech by the

minister. At the bottom left of page 39 there is a

reference to boycotts, and the last four or five lines on the bottom left-hand corner of 39 says:

Accordingly, the Bill prohibits collective

primary boycotts where they have the purpose

of restricting or limiting the trade of

particular persons. Collective secondary

boycotts are prohibited where they have both

the purpose and effect of either substantially

damaging a particular business or

substantially lessening competition in a

market.

And at the end of that paragraph it is noted:

Primary boycotts by employees are not, of course, dealt with by this Act.

That means that they are not dealt with by

section 4D because employees, ordinarily, would not

be competitive with each other and one sees that,
by reason of the reference to the fourth person in

45D not being an employer, it is intended that a

secondary boycott by employees which is aimed at

th~ employer as the ultimate target is also not

dealt with by 45D.

Might I take Your Honours then to page 50 of

the materials and there is set out extracts from

the Amendment Act of 1980, and at the bottom of

page 50 there is an amendment relating to boycotts: Section 45D of the Principal Act is amended by omitting sub-section (1) and inserting -

a new 45D(l). And there Your Honours will see that

the original 45D(l) has been pushed down to where

you see it in the middle of the page as 45D(l)(b),

that is where the fourth person is a corporation

and so on. Whereas, what has been inserted is

Devenish(4) 10 30/8/90

subparagraph (a) above it to deal with a situation

where the fourth person is not a corporation.

Now, it reads rather oddly at first when one

sees that it commences by talking about the third

person being a corporation but the requirement for

the third person to be a corporation was the device

adopted to give constitutional validity to the

provision where it is really aimed at catching

boycotts directed at a fourth person who is not a

corporation, and that has got round by making a

third person a corporation and requiring that a

likely effect of the conduct would be to cause

damage to the business of the third person or a

substantial lessening of competition in a market in

which the third person conducts business.

So, there is the constitutional device of requiring a third person to be a corporation and in

the prescribed way to be affected. But, again, the

real target is still the fourth person which now

need not be a corporation. But the substance of

the conduct dealt with by 45D remain the same after

the 1980 amendment as it was under the 1977

amendment, that is, you still have this

juxtaposition of one and two doing something to
hinder three's dealings with four, where three is
either supplying the goods or services to four or

is requiring goods or services from four.

This was the objective of the amendment of

1980 as pointed up by the explanatory paper which

Your Honours find at page 57. It so happens we

have put in the paper for the Senate, but there the

Attorney-General, the Honourable Senator Peter

Durack, was saying at page 57, half-way down the

page, that:

Clause 4 extends sub-section 45D(l) to

cover, so far as is constitutionally possible,

situations in which the "target" of a

secondary boycott is not a corporation. repeated references to the fourth person as the

So, through that material one finds these

target, and the conduct encompassed by 45D as being

a secondary boycott of the type described.

Perhaps, to come back to Your Honour

Mr Justice Brennan's questioning before, if there

is a form of secondary boycott not caught up by

45D, then, of course, the agreement which would

underlie the conduct of the parties may - may not

be, but may be caught by section 45 generally,

depending on whether there is a relevant impact

upon competition in the market just as conduct

which is not caught up by these full terms of

section 4D may be caught up by section 45 if there

Devenish(4) 11 30/8/90

is the relevant impact upon competition in the

relevant matter. But, if conduct does not fall

into any of those categories then it is simply

conduct that the legislation does not address.

TOOHEY J:	In the present case, Mr Williamson, how did the court identify the goods, the acquisition of which
was said to be hindered? Was is New South Wales'
milk?  Was it milk at large, as it were?

MR WILLIAMSON: There is some flexibility about that,

Your Honour. The Full Court, looking at the facts

as found, referred to milk, and then said, "Well,

perhaps pasteurized milk". The way the

applications were framed, and I would suggest the

way that the Court dealt with it is that one was

looking at pasteurized milk, that is milk for human

consumption, as distinct from what might be called

- I think it is called manufacturing milk, milk

from which the various milk products are made. And

what the vendors were selling here was pasteurized

milk; or what was in issue in this case was

pasteurized milk, at all events.

DEANE J: But on your argument, if the section be confined

to secondary boycotts, the relevant product would

have been Victorian pasteurized milk, because the

whole purpose of what was done was to stop

New South Wales' consumers buying Victorian

pasteurized milk.

MR WILLIAMSON: Well, Your Honour, we would respectfully

submit that that is a step - even one more step

remote from that which we say is already too

remote.

DEANE J: Well, except that is what is was all about.

MR WILLIAMSON:  If one is talking about ultimate purposes

and objectives in hitting the target, Jewel, then

that -

DEANE J: Well, it is not ultimate. What was, in effect,

done was, by action, it was said to Jewel, "If you

sell Victorian milk to you consumers, you will not

get any New South Wales' milk".

MR WILLIAMSON:  If one chases the matter down the line logically, yes, Your Honour, certainly.

DEANE J: Well now, if that is so, why is not - and I

appreciate your answer will be, "Well, nobody has

suggested or held it", but, putting that to one

side, why is that not a classic secondary boycott?

If you look at the section as set out on page 63 of

the appeal book, you have got "a person" being a

"milk vendor" in concert with a "second person"

Devenish(4) 12 30/8/90

being "other milk vendor and the Association"

engaging:

in conduct that hinders or prevents the
acquisition of -

Victorian milk by New South Wales' consumers, being the "third" person, from Jewel being the "fourth person", where Jewel:

is a corporation and the conduct 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 -

Jewel, thereby forcing it to cease to sell

Victorian milk. I would have thought that was the

classic case of a secondary boycott.

MR WILLIAMSON: Well, if the findings, Your Honour, that

what was hindered was the acquisition of milk, or

pasteurized milk, by the customers from Jewel that,

of course, encompasses what Your Honour was saying,

in any event.

DEANE J:  But, it must be, Mr Williamson, must it not, that

if A says to B, "If you sell the product of C to D,

I won't let you have any of my products"; that, for the purposes of trade practices law, A is hindering

the supply of the other product. In other words,

he is putting a disadvantage on supply.

MR WILLIAMSON: Well, I am not sure that the evidence would,

in fact, support the proposition, Your Honour,

because - I am not sure it is reflected here - but boycott, not diminished but, of course, the answer
the evidence would show that the supply of

to that is, "Oh yes, well, that's because the

boycott was cut off after a week by an injunction".

If it had gone on, the prospects that Your Honour

referred to would come about but - - -

DEANE J: But even if the supply is not diminished, if A

says to B, "If you sell somebody's else's product

you can't have any of mine", he is hindering the

supply and acquisition of that other product by

attaching a disadvantageous consequence to it.

MR WILLIAMSON:  Yes. Your Honour, I do not seek to argue

against the proposition that if there is a

hindering of the customers at all, it extends to Victorian milk as well as New South Wales' milk.

Our argument is that there was no hindering at all,

whatever the source of the milk.

Devenish(4) 13 30/8/90

DEANE J: But, the whole purpose of this was to stop

New South Wales' customers getting Victorian milk.

MR WILLIAMSON: Well, that raises the question of

characterization of what the conduct was, the

conduct in concert was, Your Honour, and in our

submission that is the difference between two of
the Federal Court judges and the other two of the

Federal Court judges in that - - -

DEANE J: 

Well, I appreciate that it has not been put

against you apparently and no one had held in terms
of what I am suggesting but it seems to me it is
difficult to deal with this case in terms of the

grounds of appeal and the findings below if,

rightly or wrongly when one looks at it, one's
first impression is that this is a classic case of

secondary boycott but that is not the case you have

been required to meet or that has been found

against you.

MR WILLIAMSON: 

Your Honour, our submission is that it is

not the classic case of secondary boycott,

whichever milk one looks at, for the reason that

the concerted conduct was not directed to the

customers at all nor was there any finding of fact

that the conduct was directed to the customers at

all except in the sense that if the milk was not

there, be it New South Wales' milk now, or

ultimately, Victorian milk later, that was a

consequence and ultimate effect of the boycott but

the conduct is properly characterized, in our

submission, as conduct which is directed to Jewel

and not to the customers so that it is conduct

aimed directly at what has been described as the

fourth person but, in reality, is a third person.

There was no - - -

DEANE J: But is that not the whole point of the secondary

aspect, in that your Association did not care

whether customers bought milk from Jewel or anybody

else. All it cared about was that New South Wales

consumers did not get Victorian milk, because if

they did they would not buy New South Wales' milk

or milk produced within the relevant New South

Wales zonal area. And that was what it was all

about; to make sure that New South Wales consumers

did not drink outside milk, but bought local milk

from it mattered not to the Association which,

whether it was Jewel, Woolworths, Coles or who it

was.

MR WILLIAMSON: Well, Your Honours, the discussion could be,

perhaps, turned another way: one could ask whether
the conduct was directed to hindering the supply of

Victorian milk to Jewel by Victorian suppliers, but

whatever possibility or combination one takes - - -

Devenish 14 30/8/90

DEANE J: But that would not have mattered. I mean, if

Jewel simply bought the milk and let it all go bad

it would not have concerned your clients at all.

What concerned them was that New South Wales

consumers were buying Victorian milk instead of

their milk.

MR WILLIAMSON: That follows, Your Honour. It is plain that

that is what gave rise to the boycott in the first

place, that because Victorian milk was being sold within the allocated area, the local vendors were

selling less milk or at least faced the prospect

and in the judgments below that is recognized

clearly.

TOOHEY J:  Mr Williamson, in relation to section 45D(l) you have used the expression "directed to". What is

the source of that notion as an ingredient of

section 45(1)?

MR WILLIAMSON:  One does not find the words in the section,

Your Honour, no, but it is a question of what was

the concerted conduct and this comes back to the

principal point that was supported by

Mr Justice Burchett and Mr Justice Spender, that

the concerted conduct was the hindering of supply

of milk by the vendors themselves to Jewel.	It is
incorrect to characterize that conduct as a

hindering of the acquisition of the milk by Jewel's

customers from Jewel. The contrast can be made, of

course, if the milk vendors had set up a picket

outside Jewel stores and stopped or hindered

customers from going in, well it would not be too

difficult in the right circumstances to

characterize that as a hindering by the milk

vendors of the acquisition of milk by the

customers.

TOOHEY J: But if the concerted conduct has one of the

consequences referred to in section 45D(l), does it

matter whether the concerted conduct is directed to

th~t consequence or not?

MR WILLIAMSON:  In our submission yes, Your Honour. The key

is consequence in the sense that it is something

that happens downstream, and it is not the matter

to which the concerted conduct was directed.

TOOHEY J: Yes, I know you say that

MR WILLIAMSON:  I am using the word directed in the sense of

direction and not - - -

TOOHEY J:  You insert a word into the section that is not

there. Now, it may be that on a proper

construction of the section that argument is

sustainable, but it is not sustainable simply by

Devenish(4) 15 30/8/90

inserting a word into the section that is not

there.

MR WILLIAMSON:  I certainly do not seek to do merely the

latter, Your Honour, but we do say that as a matter

of construction, having regard to the scheme of the

Act, or at least the juxtaposition of 4D and 45D,

that what 4D is concerned with is some conduct

which is related in a direct sense to preventing

the third person from dealing with the fourth, and

not conduct which as an ultimate and inevitable

consequence brings about or results in some such

hindrance.

If it be accepted that many corporations have

customers to whom they supply goods and services,

then in many a case, perhaps most cases, a classic
primary boycott must inevitably have the

consequence or effect or end result of the

customers of the corporation being affected in the

sense which Your Honour Mr Justice Toohey raises.

But does that mean, and I ask this

rhetorically, that every primary boycott becomes a

secondary boycott merely because the target has

customers who ultimately will be affected if the

boycotted goods do not flow through, or some other

goods do not result because the boycotted goods are

part of the materials that make up the end

products?

It must be, we would suggest, that in many a

case and most cases a primary boycott will become a

secondary boycott for that reason only, and we

submit that is not the intention of the

legislation. It would make the 4D provisions quite

redundant if a run of the mill case becomes a 45D

case.

BRENNAN J:  Mr Williamson, if one compares 4D with 45D one

sees that in 4D what is requisite is that the

provision should have the purpose of restricting

the supply or acquisition of goods or services.
That is 4D(l)(b).	The provision has a purpose and

the purpose is the restriction relevantly of the

supply or acquisition of goods or services. The

purpose in 45D is quite different. The purpose is

relevantly causing damage to business, and the

acquisition or supply of goods or services is not a

purpose, but a consequence of conduct, whether

purposed or not. That rather marks a significant

difference between 4D and 45D, a difference which

is not to be explained in terms of primary and

secondary boycott simpliciter in the sense of three

persons in 4D and four in 45D.

Devenish(4) 16 30/8/90

What element in the present case is missing

from 45D in the facts of this case? What element

is not fulfilled or satisfied?

MR WILLIAMSON:  Well, Your Honour, we come back to the

point, the fundamental element of what was the

concerted conduct.

BRENNAN J:  Well, the concerted conduct was the non-supply

of milk.

MR WILLIAMSON:	To Jewel.
BRENNAN J:	To Jewel.
MR WILLIAMSON:	Yes.

BRENNAN J:  Well then what was the effect of it? Did it

have the effect of hindering or preventing the

acquisition of goods or services by Jewel's

customers from Jewel?

MR WILLIAMSON:  Your Honour, might I, to answer

Your Honour's question, in part at least, take you to the summary of submissions where, at

paragraph 4, we have listed a number of sections in

the Act, provisions in sections 45, 47 and SO,

where one finds a distinction drawn in the Act

between direct and indirect conduct. Now, it is

appreciated that there are limits to where one can take the expressio unius concept, but it does seem

that the legislature in this Act has been very much alive to circumstances where it is desired to catch

up conduct which might be described as indirect.

Now, one does not find that terminology in relation to the hindrance in section 45D. We would

respectfully submit that the learned trial judge,

and Mr Justice Burchett on appeal, were correct

when they characterized the conduct of the milk

vendors in this case as being only an indirect

effect or hindrance upon the customers. There was

a direct hindering of the supply to Jewel because

they themselves were doing it. It would have been

a direct hindering of the customers if a picket had

been set up outside the front door and there was

milk inside, but as the two learned judges put it,

one finds a hindering of the customers in this case

only in that consequential but indirect sense.

There is no finding that the vendors went out

and did something to the customers. There is the

impact upon the customers ultimately but, in our

submission, one can characterize that as a

hindering of the customers only in an indirect

sense.

Devenish(4) 17 30/8/90

MASON CJ:	What is the basis for this, a series of provisions which the statute refers to, or uses the
words "directly or indirectly"?

MR WILLIAMSON:  Yes, Your Honour. To take section 50, a

familiar example, an acquisition of shares or

assets directly or indirectly which is likely to

put the acquirer in a position of dominance.

MASON CJ:  And this leads to an implication, does it, that

when there is a reference to hinder or prevent the

reference must be to directly hinder or directly

prevent?

MR WILLIAMSON:  Yes, Your Honour, and that is consonant, in

our submission, with the scheme of the Act with

respect to collective boycotts. The legislature,

in our submission, intended that conduct which can

be described as a primary boycott be dealt with

under section 4D and that conduct which is commonly

described as secondary boycotts involving the four

people be dealt with under section 45D; but here,

if you have a situation which so far as the conduct

is concerned is plainly a section 4D situation,

then, in our submission, it is not the intention of
the legislature looking at the legislation as a

whole that the direct hindering of the fourth

person be treated as a hindering of the third

person by some indirect means, the indirect nature

of it coming from the mere fact that it is a

consequence.

BRENNAN J:  Mr Williamson, you do not challenge that there

was hindering, is that the situation?	Do you
challenge that there was hindering?

MR WILLIAMSON:	Of Jewel?
BRENNAN J:	Of the acquisition of supplies by the customers

from Jewel?

MR WILLIAMSON:  Yes, Your Honour, in the sense that it was

not a hindering in the relevantly sense. It is

perfectly plain that the customers were unable to

get New South Wales milk from Jewel and taking up

Mr Justice Deane's point, well, that means that

they were unable to get milk unhindered. The

ultimate conclusion may be that they are unable, in

the end, to get Victorian milk. But whilst it is

accepted that if Jewel's did not have the milk

obviously the customers could not get it from Jewel
- they could get it elsewhere but that does not
matter - if they could not get it from Jewel then

they are hindered in that sense. But our

submission is that on its proper construction in

context, that is not the sense addressed by

section 45D.

Devenish(4) 18 30/8/90

DAWSON J: Well, you really say you cannot hinder someone

from acquiring something which is not there to be

acquired.

BRENNAN J: That is the point.

MR WILLIAMSON:	That is the difference between the milk being in the shop and the picket line outside and
the milk not being in the shop at all. The milk
was not in the shop as a result of a primary
boycott. But as Mr Justice Burchett put it, and I
am referring to page 46 of the appeal book,
His Honour put this matter in these terms:

To treat the actions of the milk vendors as conduct that hindered or prevented the

acquisition of milk by customers of Jewel

stores is to look beyond the direct effect of

those actions upon supply to the stores, and

to take account of an indirect or ultimate

effect upon the availability of milk to the

customers of the store.

And then there is a reference to the expressio

unius argument. And then His Honour goes on to say

there is some force in that submission, the

expressio unius:

But, to my mind, there is even greater force in the further consideration that

section 45D(l) deals separately with supply of

goods or services to a "fourth person" and

acquisition of goods or services from a

"fourth person". It would be inconsistent
with the structure and evident intent of the

provision to treat an interference with supply

to the applicant -

that is to Jewel by the vendors -

not under that part of the provision which

deals with supply to it, but as an indirect

interference with acquisition from it.

Now, there was no argument about it; it was

clear that there was no interference by the vendors

to anybody supplying milk to Jewel other than

themselves, which does not fit with 45D. The only

hindrance of supply to Jewel was that of the

vendors themselves so the provisions in 45D as to

supply to the target were not applicable and

His Honour is making that point and he says:

It would be inconsistent ..... to treat an interference with supply to the applicant, not

under that part of the provision which deals

with supply to it -

Devenish(4) 19 30/8/90

because it did not fit in it -

but as an indirect interference with

acquisition from it. But it would be quite anomalous if such an approach could lead to

liability for the indirect effect -

that is, upon acquisition by customers from Jewel -

in a case (such as the present) where the

terms of the legislation exclude liability for
the direct effect.

That is, of non-supply to Jewel. Section 45D says nothing about the vendors non-supply to Jewel.

Now, His Honour is saying it would be anomalous,

then, if that wing of 45D not being applicable,

that indirectly the conduct should be caught up by

the other wing which concerns the acquisition of

goods from Jewel, in this case, by the customers.

His Honour was saying that:

S.45D(l) contemplates two levels of activity,

supply to a corporation of its requirements,

and supply by it to its customers;

and separate provisions made and, in His Honour's

opinion:

In neither case, does that provision extend to

indirect consequences at the other level.

Now, His Honour Mr Justice Burchett accepted

that line of reasoning, adopted it on appeal but,

on appeal, Their Honours Justices Sheppard

and Wilcox rejected it by coming back to the

argument which has been put to me this morning,

"Well, there is the plain meaning".

DEANE J: But, did not Justice Burchett accept the

prqposition that the real sting in your client's

conduct was that by withholding New South Wales

milk, they would create a situation where Jewel's

customers could not buy New South Wales milk with

the result that those customers who wanted

New South Wales milk would probably go elsewhere?

MR WILLIAMSON:	It is probably fair to say that all of Their Honours accepted that as a proposition and
that therein lay the damage that was done to the
business of Jewel; the fact that -

DEANE J:  Which does take it on though. If you do not read

section 45D down to secondary boycotts, it does

carry it all on to the acquisition by the customer

because it was by preventing or hindering

Devenish(4) 20 30/8/90

acquisition of New South Wales milk by the

customers that Jewel's real damage would result.

MR WILLIAMSON: Yes. Well, I think, Your Honour, that was

accepted by Mr Justice Burchett, perhaps not put as

clearly as one might wish because His Honour did

not get to a close consideration of the damage
aspect because of the view taken about the
hindrance, but the Full Court read into the
findings of fact that there was both the purpose

and effect of substantial damage to the business of

Jewel to be found and, of course, no point as to

that is raised on this appeal. The appeal is

confined; no point is raised as to what the

vendors' purpose was nor as to the extent of the

damage. The appeal is confined to the single issue

but whilst His Honour Mr Justice Burchett accepted

that there is an effect down the line, His Honour

was not prepared to accept that that meant that the

conduct constituted a hindrance of the customers at

the relevant point.

The findings of fact were these, if one put

them very shortly, that the councilors at a meeting
of the Association were unanimously in favour of

concerted termination by the milk vendors of the

supply of their New South Wales milk to Jewel
supermarkets. Then that view being formed, other

milk vendors outside the council joined in

voluntarily, it was found, so that there was no

question of another vendor being a coerced third

person who does not supply, that is not raised, but

the other vendors joined in and, as a result, the

milk supplies were cut off from most of Jewel's

stores for a week and then resumed when an

interlocutory injunction was obtained.

Now, it is our submission that that course of

conduct amounted to a boycott of Jewel itself by

milk not being delivered to Jewel, but there was no

finding of fact that any conduct in concert was

directed, if I use it in the sense of direction, to	Jewel's customers and it is because the impact on	the customers arose as a simple downstream, maybe
inevitable consequence of the direct boycott of
Jewel that the argument arises as to whether there has been an interference with acquisition by the
customers, but it comes to this, Your Honours, yes, customers are impeded in acquiring the milk, but not by the concerted conduct of the vendors, unless
one accepts that the section is aimed at this
ultimate effect and attributes to it by this indirect means the quality of an interference with
the customers themselves.
Now if we are wrong about this and the majority is right, it simply means that, assuming

Devenish(4) 21 30/8/90

that a target of a primary boycott has customers, in most cases the primary boycott provisions will

become redundant, because the - - -

MASON CJ: But you are introducing some complexity and

obscurity into the argument, are you not, when you

use the words "target" and "directed at"? Basically

your submission appears to be that to constitute a

hindering or prevention, that hindering or
prevention must occur in the course of the dealing

or the transaction between Jewel and Jewel's

customers. It is not enough that what is relied

upon occurs at an earlier time in the chain so as

to deny Jewel the goods which otherwise it would

supply and the customer would acquire. That really

is your point, is it not?

MR WILLIAMSON: Yes, Your Honour. In our submission an

explanation of the difference which emerged between

the opinions of Their Honours Justice Burchett

and Spender, on the one hand and

Their Honours Sheppard and Wilcox on the other, is that Their Honours who form the majority in the

Full Court focused narrowly, if one may be

permitted to put it this way, upon the precise

words in section 45D(l)(b) or the introductory words in section 45D(l), without regard to the

overall scheme which I have been describing. On

the other hand, Justices Burchett and Spender took precisely the opposite tack; they did look at the

overall scheme and came to the conclusion, which I

have been expounding.

It is our submission that the learned judges

of the majority in the Full Court adopted an

interpretative approach which was not appropriate

in the circumstances and the other two judges did.

It so happens that in this case, this conduct was

not caught by section 4D, but that is a bit of a

fluke.

BRENNAN J: _Or 47(3).

MR WILLIAMSON: Originally, 47 was pleaded but not proceeded

with but 47(3) involves substantial lessening of

competition in the market, I think, does it,

Your Honour?

BRENNAN J: Yes.

MR WILLIAMSON:  Yes, so that was the problem there, but the

point which we are making - of course we make it on behalf of the appellants in this case but, we would

submit, that from the Court's point of view the

question is a wider one. Let it be assumed that

the conduct in this matter would be caught by 4D.

Is it appropriate to interpret section 45D in such

Devenish(4) 22 30/8/90

a way that conduct which does fit fairly and

squarely within 4D and would be prohibited by it,

by satisfying all the elements in it, whether that

conduct should be dealt with under section 45D?

It is plain that there are a considerable

number of differences between the provisions of 4D and 45D, the elements which need to be established

in order for the conduct to be prohibited. True it

is that 4D talks about a provision but a provision

comes about as a result of conduct so, in

principle, that is not the difference between the

two. Each section has its own criteria to be

satisfied which, we would submit, indicates that

the legislature thought hard about the

circumstances in which particular types of conduct

would be prohibited and, in our submission, it is

not appropriate to attribute to section 45D a

meaning which would have the effect of exposing

truly section 4D conduct to the criteria of

section 45D which are quite different. It means

you get a different result according to which

section is proceeded with or applied.

A point has been drawn to my attention which I

would like to make. If one looks at 45D(l)(b), the

purpose that is referred to in those circumstances

is the purpose:

of causing -

(i) substantial loss or damage to the

business of the fourth person.

That purpose is to be achieved by a hindering of

supply or acquisition by the third person.

Here, in the circumstances of this case, we

have the vendors themselves directly hindering

Jewel, but their purpose is achieved by hindering

Jewel from selling milk rather than being directed

to preventing their customers from acquiring milk,	and this is another way of making the point, in our	submission, that their conduct and their purpose is
not directed to stopping the customers from buying the milk, but it is relevantly directed to stopping
Jewel from selling it.

Given that the conduct is a direct inhibition

upon activity by Jewel, it is more appropriately

characterized as a primary boycott under 4D, than

as a secondary boycott under 45D. We would submit

that here there is, in the terms of 45D, no third

person. You have got one and two hindering four.

Or, to describe it another way, what would

otherwise be four, is in fact, three. Jewel is

Devenish(4) 23 30/8/90

three and there is no four.	But there is no one,
two, three, four.

Now, if some conduct which might otherwise be

a primary boycott is not caught by 4D, there is

still the availability of section 45 generally to
deal with that conduct, if there be the relevant

effect upon competition in the market. It is not

as if one is driven to say, "Well, something that

ought to be caught by 4D is not, and therefore it

should be caught by 45D". Similarly, if conduct

which is ordinarily a collective secondary boycott,

is not caught by 45D because of some missing
element as to damage and so on, then that conduct
might be examined under 45 generally but, in our

submission, it is consonant with the scheme of the

Act to take something out of 4D and put it into

45D, when its true characteristic is that of 4D

conduct, involving three parties, and turning it

into something under 45D with four parties, when in

reality the conduct is not conduct which is

directed to the hindering of the third person at

all.

Now, in saying that, I am not seeking to read

something into the Act that one does not find there

in the sense that it is not expressed but, in our

submission, the scheme of the Act is such that

under 45D the conduct complained of has to be aimed

at the customers in some way - the third person in

some way, and that is the missing element here and

the omission is not cured, in our submission, by

simply saying that it is enough, as the learned

majority did - they said, "It is enough if there is

the ultimate consequence".

MASON CJ: Well, I think you have made that point plain,

Mr Williamson.

MR WILLIAMSON:  Yes. May it please Your Honours.

MASON CJ: yes, Mr Douglas.
MR DOUGLAS:	Your Honours, I hand up copies of our

submissions, together with two texts which we did

not include in our list of authorities and to which

we may refer. Your Honours, there is also a slight

point in the evidence which was referred to in the

majority judgment we wish to correct, about the

availability of supplies from Victoria.

If it please the Court, the way in which the

submission is put against us basically is that the

hindrance or prevention has to be in the actual

transaction of supply or acquisition. We would say

that that is an unduly narrow and restrictive

interpretation of the expression "hinder or

Devenish(4) 24 30/8/90

prevent" and that, in fact, the words are intended to have and do, in fact, have a wider meaning than

that.

It is plain when one looks at the

interpretation of section 45D that it is intended to be a section of wide ambit. For example, when

one comes to the question of purpose the normal

provision which relates to purpose which is

section 4F requires that a purpose of any

particular conduct proscribed by the Act be a

substantial purpose. But when, in fact, they came

to section 45D they were careful to exclude that.

And if one looks at 45D(2) you will see that

section 4F(b) does not apply in relation to

subsection (1) or (lA) of this section -

but a person shall be deemed to engage in
conduct for a purpose mentioned in that
sub-section if he engages in that conduct for

purposes that include that purpose.

So in other words, in contradistinction to other

provisions of the Act, this is a section where you

do not have to have a substantial purpose, but

rather it just has to be an inclusive purpose.

The way in which the section deals with the otherwise Draconic effects of the prescription of

conduct by virtue of subsections (1) and (lA) is by

the giving of certain defences. For example, in

relation to interstate trade and commerce there is,

in fact, under subsection (1B) a defence

that the dominant purpose for which the

defendant engaged in the conduct concerned was

to preserve or further a business carried on

by him -

and as the Court would be well aware in relation to

actions which are brought against trade unions or

me~ers of trade unions under subsection (3) there

is a defence provided for in that regard.

One could imagine circumstances on the supply

side of section 45D where such a restrictive

interpretation as my learned friend propounds would

unduly hamper the application of the section. If,

for example, you had two or more persons who had

the exclusive ability to manufacture a particular

component which was inserted into, let us say, a

motor vehicle, and they refused to make that component available to a supplier of a motor

vehicle to the target corporation for the purposes

of damaging the target corporation or effecting its

ability to compete in the market-place, that would

be a hindrance or prevention which did not arise in

Devenish(4) 25 30/8/90

the transaction of supply in that case but, none the less, it would in a very real way hinder the supplier of the motor vehicle from supplying the

target person with that motor vehicle and so we

would say that, in fact, the Act does intend to and

does in fact refer to conduct which affects or

which does not take place in the actual transaction

of supply or acquisition but which, none the less,

looking at it objectively, hinders or prevents

either supply or acquisition as the case may be.

In this particular case there is no doubt, as

Mr Justice Deane has pointed out, that the ultimate

objective of the milk vendors was to prevent the

supply of Victorian milk to Jewel Food Stores.	The
means they adopted to effect that ultimate objective was to deny to Jewel Food Stores the supplies of New South Wales' milk which were usually made to them.

There is just a small aspect of the majority decision that I wish to correct because there is

some speculation there as to the availability of other suppliers and it is not a matter which has

been raised by my friend but I think the Court

should have the full picture before it and that is

this: that one can imagine circumstances in which

a denial of supplies of, let us say, milk in
another market, other than a New South Wales'

market as it existed at that time, would not hinder or prevent necessarily the acquisition by customers

of milk from Jewel because Jewel may have been able

to go out and obtain milk from elsewhere

immediately.

In this particular case, the evidence

established that they could not. They could not

obtain it from other milk vendors because the other

milk vendors in New South Wales were only licensed

to supply particular stores.

DEANE J: H£ Douglas, has not the document you have handed

up on this got it back to front?

MR DOUGLAS: It may have, Your Honour.

DEANE J: It says:

Evidence which established that the Applicant

was the only alternative supplier to the Sixth

Respondents -

Should it not be that the sixth respondents were

the only alternative? The applicant did not supply

the sixth respondents, did it?

Devenish(4) 26 30/8/90

MR DOUGLAS:  Yes, that is true, Your Honour, it is quite -

could I correct that?

DEANE J: Yes.

MR DOUGLAS:  Your Honour, the way it goes is this: of

course, Midland Milk was the actual supplier of the

milk and really, "applicant" there is intended to

refer to Midland Milk which was - - -

DEANE J: So, if I cross out "applicant" and put "Midland

Milk" - - -

MR DOUGLAS:  Yes, Your Honour, that makes it much more

intelligible.

DEANE J:	I follow, thank you.
MR DOUGLAS:	And, Midland Milk, as the evidence bore out,

was the only Victorian supplier which was supplying

milk at that time into the Sydney metropolitan

market. There has always been what they called a

cross-border market in the Riverina districts of

New South Wales where a number of Victorian dairies

had supplied milk but Midland Milk, at that stage,

was the only one which was brave enough to seek to

break down the otherwise exclusive market which

New South Wales' milk enjoyed in the Sydney

metropolitan market.

As the evidence which I have attached to that

submission points out, Mr Fleming and Mr Kent gave

evidence that there were no alternative suppliers.

If you go to the last page, Mr Fleming was

managing director of the applicant company and I

asked him:

Mr Fleming, a question has been raised in

these proceedings concerning the availability of milk from other interstate suppliers. Has

your company made inquiries as to the

possibility of obtaining supplies of milk from

interstate, whether from Victoria or

elsewhere?

He said:

Yes, we have. It is not available.

And the evidence of Mr Kent, which is attached, was

much the same. It also established that Midland's

capacity to supply milk was in the order of

80,000 litres per week, and that before supplies of

Victorian milk commenced, Midland was in fact

selling, approximately, 150,000 to 160,000 litres

of milk and that after supplies commenced its

Devenish(4) 27 30/8/90

actual sales to customers increased to about

215,000 litres.

I just wish to refer that to the Court because

the majority in the Court of Appeal, at page 68 of

the appeal book, speculated:

For all that we know it may have been possible

for the appellant to obtain the balance of its

needs from elsewhere; perhaps from some other

State or New Zealand.

And that was just some speculation by the majority,

it has never been the subject of, as I understand

it, any dispute before the Court and I just wish to

correct that just in case the error which had crept

in there, in some way, infected the reasons for

decision of this Court. It does not affect the the facts, there was a hindrance of the appellant
reasons for decision of a majority in the Full

supplying its customers.

Mr Justice Deane has raised a point concerning

the fact that it is a classical 45D case if one has

regard to the hindrance of the supply by Midland

Milk and David Holdings to Jewel Food Stores,

brought about by the fact that the milk vendors are

essentially saying to Jewel, "If you sell Victorian

milk we will not supply you with New South Wales'
milk", and that is placing a hindrance upon the

supplier, by Midland Milk and David Holdings to

Jewel, of Victorian milk.

DEANE J: What I had more in mind was the supply of

Victorian milk by Jewel to New South Wales' consumers.

MR DOUGLAS:  Yes, Your Honour. I am sorry, yes, and putting

it that way, Your Honour, we accept that that is

another way in which the argument could have been

put. It is not a way in which it has been put

below.	If it were open to us to put it we would
seek to put it here;	we would say that it really

does not depend upon any other facts which would

require to be found.

DAWSON J:  The true situation is that Jewel Stores were

placed in a dilemma, were they not, they either
restricted the supply of New South Wales' milk or

Victorian milk to their customers, and according to

how they solved that dilemma so the customers

either did not get New South Wales' milk or

Victorian milk.

Devenish(4) 28 30/8/90

MR DOUGLAS: With one correction, with respect Your Honour,

and that is this: that there was not enough

Victorian milk to supply them.

DAWSON J: Yes.

MR DOUGLAS:  Because the evidence was they could only get

about 80,000 litres of Victorian milk, and so some

of their customers would effectively have been

unable to obtain any milk from them.	And they were
in a dilemma, as Your Honour says.

DAWSON J: Looking at the dilemma it might either hinder the

acquisition of New South Wales' milk or Victorian

milk according to which way the store jumped.

MR DOUGLAS:  Yes, Your Honour, the matter can be put in

either way and we accept we have not put it in one

way and put it in the other way. But the fact that

we have not put it in the two ways in which it

could be successful should not deny us our right to

succeed on the basis on which we put it, or for

that matter to put the alternative submission now

if in fact the Court will entertain it.

BRENNAN J:  Mr Douglas, the real problem is whether or

not 45D(l)(b) on which you rely is intended to

operate in a case of cessation of supplies which

prevented the trade happening between the third and

fourth persons and does 45D(l)(b) operate on the

assumption that there is trade which will in the

ordinary course of events occur between the third

and fourth persons and which conduct prevents or
inhibits or does it go to the extent of saying that

where the trade in question depends upon supplies,
then the non-provision of supplies or the

withholding of supplies comes within the section.

MR DOUGLAS:  We would say the latter, Your Honour.

BRENNAN J: Yes, but that is really the problem we have got,

because 47 and other sections of it deal with the

MR DOUGLAS: Well, section 47, though, has many other	supply of goods for trading purposes exclusively?
elements which were not present in this case. I
mean, it has to be a corporation which denies
supply. You have the question of whether it
affects competition in the market-place. There are
problems, as we see it, in looking at each of the
sections within Part IV of the Act and seeking to, in effect, define an exclusive territory for each
section and say that because a particular section
deals with it in one way, then section 45D could not have been intended to deal with it in another
way. That is brought out quite usefully by
Mr Heyden in the passage from his service, which I

Devenish(4) 29 30/8/90

have handed up to the Court. In paragraph 10.50 on

page 5013, you will see the comment is made that:

In a number of respects section 45D

stands alone in Part IV of the Act. Liability

depends on a certain purpose and effect; other

parts of the legislation depend on purpose

alone ..... purpose or effect ..... It brings

within the Act the behaviour of trade unions,

which is normally excluded from antitrust

legislation. It has unusually wide vicarious liability provisions. The causing of loss to an individual suffices for liability.

Like section 96(2), which relates to resale price maintenance, section 45D(l)(b)(i)

has a different constitutional basis from the

rest of the Act. It does not apply in terms

to corporations who act; it applies to those

who act to injure corporations. This led to a

constitutional challenge which failed. The

different constitutional basis was

necessitated by the fact that trade unions and

their members, the prime though not exclusive

objects of section 45D, are not "corporations"

as defined in the Act.

Then he goes on to deal with its origins and its

relationship with economic torts. Also, if one

leafs over to paragraph 10.530, you will see that

the concluding provision of section 45D(7):

provides that nothing in section 45D affects

the operation of any other provision of

Part IV. This means that any conduct falling within section 45D may also be examined in the

light of the other provisions of Part IV, and

if it infringes them, the special safeguards of section 45D(6) and section 76(2) will not

apply. If conduct falls both within

section 45D and section 45, is it then open to

the plaintiff to evade the protection of

section 45D(6) and section 76(2) by proceeding
under section 45.	Can the general words and

the general remedies arising under section 45

apply despite the special defence under

section 45D? The answer might be: "Yes". The

basis would be that the special defences of

section 45D only apply to the special

liability imposed under it. If the defendant

infringes not only the Draconian standards of

section 45D but also the less plaintiff-

oriented provisions of section 45, there is no

reason for special defences to apply.

I just refer to those provisions to bear out the submission that this is an Act in which

Devenish(4) 30 30/8/90

section 45D is a rather different provision than

many of the other provisions which appear there.

If one reads what was in the Swanson Committee

Report, I think there was considerable

consideration given to whether in fact it should be

in the Industrial Conciliation and Arbitration Act

at that time, or whether in fact it should be in

the Trade Practices Act. There was even

consideration given to whether in fact a separate

tribunal, other than a federal court, should

determine disputes which arise under section 45D.

So it is a rather unique provision which we would

say should not be considered in the light of the

other provisions in the Act and which really should

be interpreted in accordance with its terms, having

regard to its literal interpretation. We would say

that when you do that there is no obvious reason

why one would exclude from its operations the most

effective way of hindering or preventing customers

of a corporation from acquiring goods from it and

that is by not supplying goods to it.

The only reason why this did not fall within,

milk vendors did anything to hinder or prevent any of their brothers, if I could put it
if I could put it that way, the supply side of the the individual
equation in section 45D, was because

that way, supplying milk to Jewel. If they had it

would have fallen within the provision, so far as

supply was concerned. That finding has not been

attacked in this appeal, that he found that there

was a concert, but what he said was that the

concert, as a matter of fact, did not hinder or

prevent any of the other milk vendors from

supplying because they each made their own

individual decision. We would say that there is no

obvious reason why this section should be conceived

as being one which is only concerned with, for

example, picketing stores where goods are already

in them, as distinct from prescribing conduct of

two or more persons in refusing to supply a store

and thereby most effectively preventing or

hindering the acquisition of goods by the customers

of that corporation.

Considerable emphasis has been placed in the

submissions made by my learned friend on the

interrelationship between so-called primary

boycotts and secondary boycotts and sections 45D

and section 4D, which has to be read with

section 45. It is misleading to refer to targets,

primary boycotts, secondary boycotts and we are

guilty of that sin also in our submissions. But a

collective secondary boycott has been referred to

in the explanatory memorandum as being one which

seeks to restrict the dealings of parties other

Devenish(4) 31 30/8/90

than the parties with the target person. Now if

that be, and on leaving the matrix of the Act, and

I do not wish to do that, otherwise and

argumentatively, because we say that one should

always go back to the actual text of a section, we

find some difficulty in seeing why this is not a

collective secondary boycott, because it seeks to

restrict for dealings of the customers of Jewel who

are not parties - let me put it again. It is

paragraph 5 of our submissions. It is a collective

secondary boycott in that it seeks to restrict the

dealings of parties - sorry, it should be the
dealings of persons, that is a problem there; that

is a typographical error - that is, the customers

of Jewel, other than the parties - that is the

milk vendors and the Association - with the target

person.

So, when one looks at it in that way, it is

clearly a secondary boycott. What section 4D is

concerned with are agreements - if one turns up the

section - contracts, arrangements or

understandings. Well, in 45D you have to have a

concert, which is a different thing. Some concerts

may be concerts, arrangements or understandings,

but not necessarily all concerts are contracts,

arrangements or understandings.	It has to be of a
proposed contract and it:

shall be taken to be an exclusionary provision

for the purposes of this Act if -

it is made between two or more persons who are:

competitive with each other.

Well, we do not have competitors in this case for the reasons outlined by my learned friend, because of the regionalization of milk supply in New South
Wales. But it is related to a provision of a

contract. Here we are conc~rned with conduct,

conduct of persons.

DAWSON J: If you go back to paragraph 5 of your outline,

this is the	very thing that does not happen here,
is it not?	There is no attempt to restrict the
dealings of	the customers with Jewel stores.

MR DOUGLAS:  No. So far as 4D is concerned, Your Honour,

yes. We would say that 4D has really no

application. Let me put it again. You have two or

more persons who are milk vendors. If they were

competitive with each other, there would have to be

a contract, arrangement or understanding between

them, which has the purpose - only the purpose - of

preventing, restricting or limiting the supply of

goods to Jewel. So far as acquisition is concerned

Devenish(4) 32 30/8/90

in 4D, our interpretation of that is that it

relates to acquisition of goods or services by the

target person from the persons who are parties to
the contract, arrangement or understanding, and

does not relate to subsequent acquisitions, that

is, from the target person.

So, just getting back to the actual text of the section: it is concerned with contracts,

arrangements or understandings, made between

competitors. It is concerned with a provision of

that contract, arrangement or understanding which

prevents, restricts or limits:

supply of goods or services to, or the acquisition of goods or services from,

particular persons or classes of persons -

There is no such limitation in 45D as to

"particular persons or classes of persons" and, in
fact, before amendment that subsection used to only

refer to "particular persons" and there was no

reference to classes of persons in it.

As we see it, it is conceivable that in some

circumstances what is referred to as a primary
boycott, under 4D, could also be characterized as a

secondary boycott under 45D. But there are a

number of different tests, both in the text which I
have referred to there, and secondly, one never

gets to the question as to whether the purpose was

to injure the target person - or damage of the

target person - and one never gets to the question

whether the purpose was so substantially lessen

competition in the market in which that target

person participates.

There is no reference in section 4D to effect,

so when you come to 45D you have to establish both

the purpose and the effect or likely effect of a

conduct. There is no reference to effect in 4D, so

you can just have a combination between competitors

which has the purpose of preventing, restricting,

or limiting supply or acquisition, and that is it,

the section attaches, but in many respects there

are many other aspects of 45D which require to be

satisfied, and it is both a more complex section,

and a very different section, and aimed at a very

different subject-matter. If there are

circumstances in which one can, having regard to

the total factual matrix which applies, find that

the conduct infringes both section, this would not

be the only example in this particular Act where

one can do that.

There are many provisions which overlap and we

would say that you must then come back to the

Devenish(4) 33 30/8/90

normal principles of interpretation and the literal

interpretation of section 45D: have regard to the

decisions of this Court, such as K & S Lake City

Freighters Pty Limited v Gordon and Gotch and

Cooper Brookes, both of which are referred to in

paragraph 9 of our submissions. We place emphasis

upon the fact that section 45D is, in many respect,

a somewhat unique provision, and we have made

reference to Mr Haydon's service and we would say

when you apply those decisions and the normal

principles of interpretation of statutes, it is
quite clear that this is a case in which the

literal interpretation of section 45D is the one

which should apply in this particular case, and

there can be no doubt that on the facts there has

been a breach of section 45D in one or two

respects, and that we are entitled to the relief

which we obtained.

BRENNAN J: Mr Douglas, take the first day of the boycott

and there has been a carry over of the previous

day's milk supplies; so, they are on the shelves of

the Jewel Stores; the conduct has been engaged in.

What effect has that conduct had upon the

acquisition of milk by the customers of Jewel?

MR DOUGLAS: At that stage?

BRENNAN J: Yes.

MR DOUGLAS:  So, milk is still available to be purchased?

BRENNAN J: Milk is available.

MR DOUGLAS:  Well, in a narrow sense, there has, at that

stage, been no hindrance or prevention but if one

has regard to matters such as those referred to by

Mr Justice Deane as to what the conduct may

ultimately lead to - - -

BRENNAN J: Well, we are not concerned here, are we, with

pu;pose. We are concerned with effect.

MR DOUGLAS: Effect, yes.

BRENNAN J: And, let us assume, to take it a bit further, that Jewel, to keep their customers, send their staff around to the shop next door to buy cartons,

one at a time, or their executives order a crate at

home and bring it in?

MR DOUGLAS: Well, there may be a hindrance arising out of

the fact that they have got to undertake those

extreme steps for the purpose of ensuring that

their customers acquire the milk.

Devenish(4) 30/8/90

BRENNAN J: Well, to ensure that they have a supply of milk

which their customers can acquire but is there any

evidence - - -

MR DOUGLAS:  Yes - in other words, the milk is brought into

the store?

BRENNAN J: Yes.

MR DOUGLAS:	Yes, Your Honour.
DAWSON J:	No hindrance to the customer.
BRENNAN J:	No hindrance -
MR DOUGLAS:	Not at that stage.

BRENNAN J: But is that not the very point that you have to

make: that there has been conduct which prevents

or interferes with the acquisition by the

customers?

MR DOUGLAS:  But there was no doubt about that in this

particular case, Your Honour.

DAWSON J: That is not the test. You see, I was trying - I

did not think I make myself at all clear - to bring

you back to what you say in paragraph 5 of your

outline - - -

MR DOUGLAS: Yes, Your Honour.

DAWSON J:  I am sorry, it is not yours. I withdraw that.

But, I could make the same point; that what you are
looking·at is the - I am repeating what has been
said before - you are looking at the dealings of

the customers with the fourth party; that is, with

Jewel Stores and there is no affect on their

dealings.	They are free to deal with Jewel Stores
as much as they like.	The fact that Jewel Stores

may or may not have milk does not really affect

their freedom to deal.

MR DOUGLAS: Well, it hindered - one must go back to the

words of the section; the question is whether the

customers have been hindered or prevented from

acquiring milk from Jewel and if there is - - -

DAWSON J:  It is the same thing as I put to Mr Williamson;

you cannot be hindered from acquiring something

which is not there to be acquired and it is tested

in the way that Justice Brennan put it to you.

Once there is something to be acquired, they are

free to acquire it. There is no hindrance.

MR DOUGLAS: Well, if one then goes back to the example

which I gave before, let us - because if that is

Devenish(4) 35 30/8/90

right on the acquisition aspect of it, it is right

on the supply side of it as well - you have to look

at the question as to whether there has been a

hindrance or prevention of supply and I put the

example: you could have two persons who are not

the supplier but they are the manufacturers of a

component which the supplier needs to make the

product which is supplied to a target corporation
and, for the purpose of damaging the target

corporation, they refused to supply the component

to the supplier.

Now, because the component has not been

supplied, the supplier does not have a product to

supply to the target corporation so he does not

have goods to supply which is exactly the case

which Your Honour puts to me and if the argument

against me is right, it means in those

circumstances that two or more persons have not

hindered or prevented supply.

DAWSON J: That is right. They have not hindered or

prevented the acquisition.

MR DOUGLAS: Well, I am dealing with the question of supply

at the moment because the section deals with that.

But they have not hindered or prevented supply

because there are no goods to supply because the

essential component has not been provided.

Now, that would be an extraordinarily narrow

interpretation, we would submit, to give to this

particular section which is - - -

TOOHEY J:  Mr Douglas, how do you identify the goods that

are said to fall within section 45? Is it milk at

large? Is it New South Wales milk, or what is it?

MR DOUGLAS:  Your Honour, ultimately we came down to

pasteurized milk for this reason.

TOOHEY J: xou mean without drawing any distinction between

New South Wales and Victorian milk?

MR DOUGLAS: Well, the matter was put alternatively,

Your Honour, but it can be put generally as

pasteurized milk, especially if one adopts the

arguments of Mr Justice Deane.

TOOHEY J:  I asked that because Justice Sheppard and

Justice Wilcox seemed to have approached the matter

in terms of New South Wales milk.

MR DOUGLAS:	Yes, Your Honour, but -
TOOHEY J:	It may be taking the passage out of context, but

at the top of page 66 they say:

Devenish(4) 36 30/8/90

Either they -

being the customers -

went without New South Wales milk or they were

forced to obtain supplies of it elsewhere.

MR DOUGLAS:  Yes, I think the order which was ultimately

made was one just in terms of pasteurized milk,

Your Honour. Of course, one can actually go into

it more deeply than that because what, in fact, was

being supplied by Victoria was pasteurized milk in

2-litre containers which was entitled "No name

milk". What was being supplied by the milk vendors

was, in fact, mostly pasteurized milk, but not

necessarily limited to 2-litre containers, and also

with some variations on that theme such as products

for those of us who do not like to have full cream

milk such as HiLo and some other dairy products,

all of which were refused.

But ultimately the case was concentrated upon

the refusal to supply pasteurized milk, primarily,

I suppose, New South Wales pasteurized milk, but it

does really come down to pasteurized milk generally

especially if you accept the way in which

Mr Justice Deane suggested the case could have been

put.

TOOHEY J: Well, the order made by the Full Court was one

that restrained the then respondents from conduct

that hinders the acquisition of pasteurized milk

from the appellant by customers of the appellant.

MR DOUGLAS:	Yes, Your Honour.
TOOHEY J:	So it is hindering not preventing and pasteurized

milk generally?

MR DOUGLAS: Well, that court found hindering, Your Honour,

and that is as far as we need to take it, but for

the reasons which I have advanced elsewhere in

relation to the evidence, there was clearly also a

prevention because there was no New South Wales
milk available, and there was not sufficient

Victorian milk to make up the difference.

DAWSON J:	Mr Douglas, could I take you back to an example which you gave taking it from the acquisition side
to the supply side.  I am not sure I appreciate
it. Would you repeat your for example? You have a
firm which - - -

MR DOUGLAS:  The example which I gave was this: that you

have two or more persons because you would need a

concert, who are effectively - let us put it - the

exclusive manufacturers, not necessarily pursuant

Devenish(4) 37 30/8/90

to any industrial property rights because that

gives rise to different questions - the exclusive manufacturers of a particular component part of a particular product, and they supply those

components to a supplier, to a target corporation.

Now, for the purposes of damaging, within the

meaning of section 45D, for target corporation,

they refused to supply the component part to the

supplier.

DAWSON J:  But you would have to have a very extraordinary

set of circumstances, would you not? The

manufacturer would have to be the exclusive

manufacturer and the target corporation - well,

that would be enough, the target corporation would

have to have no other source of supply at all.

MR DOUGLAS:  Well, Your Honour, that is a bit like this

case in many respects because we had no other

sources of supply either and I really put that

example for the reason that - I wish to highlight

the difficulty which would be hindrance, or

impossibility which would be prevention, of

obtaining alternative supplies of component parts,

if we assume that as a fact, because the section

should be able to deal with the unusual as well as

the usual.

DAWSON J:  Except the manufacturer would have many other

customers, would not it?	I mean, you would very
rarely have a manufacturer	with just one customer,
as it were.

MR DOUGLAS:  Well, the supplier may have other customers

but, on the other hand - - -

DAWSON J:  And if the manufacturer had many other customers

it would be very rare for the manufacturer of the

component just to harm one customer who was going

to prevent the manufacture by the manufacture of

his product.

MR DOUGLAS:  Well, we have to think of a retailing

corporation, that is the first thing, and a

supplier to that retailing corporation, and a
particular product, and the supplier needs a

component part for his product to be able to supply

it to the retailer. Now, for reasons which I do

not think we need to explore because purpose is not

relevant, the two suppliers of the component parts

to the supplier refused to supply to the supplier

for the purpose of harming the target retail

corporation.

DAWSON J:  But it is a different situation because the

target company is the ultimate customer.

Devenish(4) 38 30/8/90

MR DOUGLAS:  No, because it has got customers from itself,

Your Honour.

DAWSON J: But in that situation it is the purchaser of the

product.

MR DOUGLAS:	Yes.
DAWSON J:	Yes. Well, you see, here the target company is

not that; it is the man in the middle.

MR DOUGLAS:  But Your Honour, the section deals with supply

to a corporation and acquisition from a

corporation. If it be the situation that for the

purpose of effecting a hindrance or prevention to

an acquisition there has to be something in the

shops the acquisition of which is hindered or

prevented. It must be so also that if there is to

be a hindrance or prevention of supply to a

corporation there must be something to supply.

DAWSON J:	True.
MR DOUGLAS:	Now if, in fact, you cannot get something to

supply - - -

DAWSON J:  And the corollary is, if there is to be a

hindrance to acquisition, there must be something

to be acquired.

MR DOUGLAS:  I am sorry, Your Honour, I was putting the

argument that is put against me in relation to the

section in so far as it deals with supply and I am

seeking to develop the view that hindrances or
preventions of supply are not merely blockades, are
not merely pickets, are not merely letting down the

tyres of a truck, but they can also be matters

exterior to that, prior to transportation.

DAWSON J:	Yes, I follow.
MR DOUGLAS:-	So if Your Honour is going to say, or if the

Court were to interpret the section in relation to

acquisition so as to say there's got to be a direct

act, effectively, between a good which is capable

of being supplied by the target corporation and for

customer, then the section would also have to be so

limited in so far as it deals with supply.

DAWSON J: That is right, and you would have to say that in

your example there was no hindrance of supply from

the manufacturer who did not get the component to

the purchaser from the manufacturer if you were to

apply to same argument as has been put against you

here.

Devenish(4) 39 30/8/90

MR DOUGLAS:  Yes, applying the same analogy, there is no

hindrance of supply because the goods have not been

made because the components have not been

available. Likewise, if you have got wheat being

transported on a truck, if a farmer has refused to

supply the wheat, there is no actual hindrance of

supply of the wheat to the wheat board but, none

the less, one would have thought there is a

prevention or a hindrance.

DAWSON J: Yes, I see, I follow the argument.

MR DOUGLAS:	So, by so interpreting the section, one would be limiting it in a way which would be quite
extreme, one would have thought, and which would
have quite unforeseeable consequences so far as the
ambit of the section is - - -

BRENNAN J: Well, is that quite right? If one thinks in

terms of a trading business, that is, a trading
business of the target corporation, there are two
things that that business must be able to do. It

must be able to be supplied with goods for sale and it must be able to sell the goods to its consumers.

Now, one part of 45D deals with supply to the

target corporation. Another part deals with the

next stage of the trade and that is the sale by the
target corporation. Because one can see that very

clearly 45D deals with the supply of goods for the

purposes of its trade non constat that the non-

supply affects the acquisition by its consumers.

MR DOUGLAS:  Yes. Your Honour, in a sense I am looking at

the section in two different ways. What that

argument really does is to say this, it really goes

back to what Mr Justice Burchett said in his

judgment:  "Well, if it is effectively an

interference to supply then I am not going to look

at it. If it is a hindrance or prevention of

supply then I am not going to look at it as a

hindrance or prev~ntion of acquisition". So, in

otber words, if it is a supply situation you have

got to look at it exclusively in those

circumstances.

Now, when one goes to the construction of the

section they are true alternatives, the word "or"

is used, and it does not seek to make these such

mutually exclusive categories. Normally, in the

supply situation in a trade union case one has two

or more persons who hinder or prevent a third

person from supplying the target corporation. That

is your classical trade union case. In this

particular case, His Honour has found that the
individual members of the Association made their

own individual decision not to supply and did not

Devenish(4) 40 30/8/90

hinder or prevent any other of their members from

supplying. But none the less -

DAWSON J:  Why cannot you say, "I do not have to hinder or

prevent your acquisition because I have effectively

prevented supply" .

MR DOUGLAS:  Your Honour, that really comes down to a

question as to what the section is intended to

embrace.

DAWSON J:	Of course that is the question.
MR DOUGLAS:	But we would say that that is a very narrow view of the section, because what it really does is
- what the section asks you to do is to say, "Did
the conduct hinder or prevent acquisition?". Now,
in this case it both hindered or prevented supply
and it hindered or prevented acquisition. And we
would say that, in those circumstances, there is
simply no legislative warrant - - -
DAWSON J:	We come back to the same question.

MR DOUGLAS:  We come down to the same question. I think I

have put what I can in relation to the matter and
we would say that our arguments are clearly the

correct ones, and those are the reasons which we

would seek to advance.

MASON CJ: Yes, thank you, Mr Douglas. Yes, Mr Williamson.

MR WILLIAMSON:  We have nothing to add, Your Honour.

MASON CJ:  Very well. The Court will consider its decision

in this matter and adjourn until .10.15 am tomorrow.

AT 12.29 PM THE MATTER WAS ADJOURNED SINE DIE

Devenish(4) 41 30/8/90