Devenish & Ors v Jewel Food Stores Pty Limited

[1990] HCATrans 66

IN THE'HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No Sl52 of 1989

B e t w e e n -

MICHAEL GERARD DEVENISH & ORS

and AM.ALGAMATED MILK VENDORS

ASSOCIATION INC.

Applicants

and

JEWEL FOOD STORES PTY LI~I~ED

Respondent

Application for special

leave to appeal

BRENNAN J
DEANE J

McHUGH J

Devenish

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 6 APRIL 1990, AT 11.52 AM

Copyright in the High Court of Australia

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

the applicant with my learned friend, MR P. GRAY.

(instructed by Sly & Weigall)

MR F.M. DOUGLAS, QC:  May it please the Court, I appear for the

respondent with my learned friend, MRS S.R.W. EMMETT.

(instructed by Hunt & Hunt)

BRENNAN J:  Mr Williamson, without giving you too much

encouragement, the Court might be assisted if we were

to hear first from Mr Douglas.

MR WILLIAMSON:  I never seek to push against an open door,

Your Honour.

MR DOUGLAS:  If the Court pleases, the decision sought to be

appealed against raises a question of the proper

construction of section 45B of the TRADE PRACTICES ACT.

Our basis submission is that the construction adopted

by the majority in the court below is clearly correct

and that special leave ought not to be granted.

DEANE J: That is a little bit difficult when it is two all, is

it not?

MR DOUGLAS:  When it is two - I am talking about the majority

in the Full Court.

DEANE J: Yes, but is there not equal division among judges of

the Federal Court?

MR DOUGLAS:  Yes, there is equal division amongst judges of the

Federal Court and so I face that hurdle. But we

would say it is really a very clear question of

construction. Could we just go to the Act. My learned

friend prepared a bundle of material which is perhaps useful. I am not sure that that has been distributed

to the Court or not. I have a copy.

MR WILLIAMSON:

May we hand up some materials which have been

prepared consisting of extracts from the various

amending Acts, plus the explanatory memorandum of

the 1977 amendments.

BRENNAN J: Yes, thank you.

MR DOUGLAS:  If Your Honours please, the way in which the section

originally appeared in the TRADE PRACTICES ACT is set

out on page 15 of that bundle. It was really a

simpler provision in those days and what is

subsection (1) of section 45D is in fact what is

subparagraph (b) of subsection (1) at the present time.

What it provided was that:

a person shall not, in concert with another

person -

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there is no dispute about that -

engage in conduct that hinders or prevents -

and this appeal is concerned with the meaning of

the words "hinders or prevents" -

the supply of goods or services by a
third person to a corporation ..... or the

acquisition of goods or services by a

third person from a corporation ..... where

the conduct is engaged in for the purpose,

and would have or be likely to have the

effect, of causing -

(a) substantial loss or damage to the
business of the corporation or of a body
corporate that is related to the
corporation -

As we understand the grounds of appeal which were formulated, this appeal is concerned with whether,

on the particular facts of this case, it could be
said the conduct engaged in by the milk vendors

amounted to conduct that hindered or prevented the

supply of New South Wales pasteurized milk to Jewel

Food Stores.

The background of the dispute was that Jewel Food

Stores was bringing in Victorian milk from Victoria,

something which in modern history, at least, was

unprecedented. That milk was being sold at a discount

in New South Wales stores of Jewel Food Stores.

BRENNAN J: Did you say that you understood it to be the

hindering or preventing of the supply of milk to

Jewel Food Stores?

MR DOUGLAS:  The supply of New South Wales pasteurized milk -

sorry, it was the hindering or preventing of the

acquisition by the customers of Jewel Food Stores of
New South Wales pasteurized milk.	The background, as I

said, was the introduction of Victorian milk into

the New South Wales market pursuant to agreements

which had been entered into between the stores and a

Victorian supplier. Against that background, you also had the fact that the distribution of milk in the New

South Wales metropolitan market at that time was

zonally oriented in the sense that each milk vendor

had a specific area within which he would supply

New South Wales pasteurized milk and that milk would

be obtained from local depots which in turn would be
obtained from companies such as Dairy Farmers and

other companies of which Your Honours are no doubt

familiar.

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The argument which my learned friend seeks to

put is basically this, that it would have been
prohibited by the Act for the vendors to have stopped

one of their number from supplying milk to Jewel Food

Stores. That is something which is prohibited by the

Act. It would also have been prohibited by the Act

for the vendors to have picketed the stores and thereby

prevented the acquisition of New South Wales milk by

customers of Jewel but because they simply refused

individually, as His Honour Mr Justice Burchett found,

whilst acting in concert to supply Jewel Food Stores

with their milk, the cutting off of supplies cannot

be considered under the Act as amounting to hinderance

or prevention of the acquisition by customers of that

milk - of the acquisition of that milk.

We would say, as a simply matter of construction,

it clearly falls within the section, as the majority of

the Full Court have determined; that there is no

sanction in the section for saying that what is called

in the judgments "an indirect interruption" or "a direct interference with supply giving rise to an

indirect interference with acquisition" not being caught

by the section as a matter of policy and a matter of its

correct interpretation.

Now, some reliance was placed by my learned friend

down below on the provisions relating to primary

boycotts and what is said in the explanatory

memorandum to be a primary boycott and a secondary

boycott. The explanatory memorandum is in the bundle

of material which the Court has at page 24 and under

the heading "Boycotts" it says:

The Bill contains special provisions

seeks to restrict the dealings of the parties with the target person) -

for the prohibition of collective boycotts.

Now, that provision finds its - that finds its place

in the Act at the present time firstly in section 4D,

that is at page 4 of the bundle of materials that

Your Honours have. And so a primary boycott is:

a contract, arrangement or understanding -

if one reads section 4D(l), going down to

paragraph (a),"arrived at between"competitors, which

(b) ..... has the purpose of preventing,

restricting or limiting -

so it addresses itself only to purpose and not to both

purpose and effect as section 45D does. It relates

to "preventing, restricting or limiting" as distinct

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from11preventing and hindering 11 as 45D does, and it

relates to an agreement between competitors which

this is not, because none of the milk vendors were

in competition with each other. So what that

provision relating to primary boycotts is aimed at

is an agreement or arrangement or understanding

between competitors which has a particular purpose

but which may have no effect, the purpose being that

of ...

preventing, restricting or limiting -

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

the acquisition of goods or services from,

particular persons or classes of persons;

One argument which has been put against the
construction which we seek to put upon section 45D
is that in fact what we have here is a primary boycott,
but we would say when one looks at the provisions
relating to primary boycotts under the Act, this is

not a primary boycott; it is four square within the

proper construction of section 45D and it is a

secondary boycott as defined by or as elucidated by

the explanatory memorandum, going back to page 24,

that being a -

Collective secondary boycotts (where the boycott

seeks to restrict the dealings of persons, other

than the parties -

to the boycott. So reading that, it is for dealings

of customers of Jewel other than the parties, who

are the milk vendors, with the target person, which

is Jewel. And clearly, the conduct which was engaged

in by the milk vendor on this particular occasion was

in fact to target Jewel to prevent it from having

supplies of New South Wales milk and so its customers

could not acquire it. So we simply cannot see this

distinction which is sought to be drawn between an

interference, if one can say that, with supply at

the back door of a shop which necessarily leads to
an inability of customers to acquire.	And yet it

would have to be conceded by my learned friend that

if the milk vendors had ganged up at the front door

and picketed the store that would be caught by the

section.

BRENNAN J: If there was something inside to acquire.

MR DOUGLAS:  If there was something inside to acquire, which is a

matter of fact and not a question of construction.

So we would say the distinction which is sought to

be drawn in this case seeks to rely upon implication

and a suggested reference to the distinctions between

primary boycotts and secondary boycotts. If this

exception is to be engrafted upon the plain words of

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a section, it will lead to a corruption of what

is otherwise a very plain and meaningful provision

and that when one looks at the provisions relating

to primary boycotts, they are clearly directed to a

different end and that even with the construction

which has been placed upon the Act, so far as

section 45B is concerned, the two provisions live
together. There may be cases in which something is
a primary boycott and may also be caught under the

secondray boycott provisions, but it is not true to

say that by reason of the construction which has

been placed upon 45D by the two judges who constituted

the majority in the Full Court that every primary

boycott, for example, as one commentator has said,

thereby becomes a secondary boycott.

The only other matter I would wish to put is this, Your Honours, and that is that the dispute has

now largely, so far as the parties are concerned,

passed us by. It is largely a question of costs.

Whatever importance the case has relates to the law

generally and not to the particular circumstances of

this case.

BRENNAN J:  Thank you, Mr Douglas.

We need not trouble you, Mr Williamson. In

this case special leave to appeal will be granted.

MR WILLIAMSON:  If the Court pleases, we would ask for costs.

BRENNAN J: That will follow in the usual course, to be

determined on the hearing of the appeal, not that

costs will follow the event but the question of

costs will follow the event.

AT 12.05 THE MATTER WAS ADJOURNED SINE DIE

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