Hubbards Pty Ltd v Simpson Ltd

[1982] FCA 82

Re: HUBBARDS PTY. LIMITED
And: SIMPSON LIMITED (1982) 60 FLR 430
No. G20 of 1980
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
Lockhart J.(1)

CATCHWORDS

Trade Practices - damages - respondent supplies electrical goods to distributors and retailers - applicant conducts discount retail shops - applicant seeks damages pursuant to s. 82 of the Act based on Simpson having engaged in the practice of resale price maintenance contrary to s. 48 of the Act - whether casual connection required between the conduct constituting the contravention and the loss or damage - whether to apply principles of tort or of contract in assessing damages - whether Court has power to award interest in respect of damages as part of the judgment.

Trade Practices Act 1974 (Cth.) ss. 48, 82

Supreme Court Act 1935 (S.A.) s. 30 C

Trade Practices - Resale price maintenance - Loss or damage - Loss of sales of respondent's products - Other products - Assessment - Whether applicable principles contract or tort - Interest on damages - Effect of accelerated tax losses on damages - Trade Practices Act 1974 (Cth), ss. 48, 82, 83 - Judiciary Act 1903 (Cth), s. 79.

HEADNOTE

The applicant was a discount retailer selling a wide range of goods including electrical goods supplied by the respondent. The applicant traded continuously with the respondent on a large scale for many years until the respondent unilaterally closed the account. The Trade Practices Commission brought proceedings in the Federal Court of Australia alleging that the respondent had engaged in the practice of resale price maintenance contrary to the Trade Practices Act 1974, s. 48. The court found that the respondent had contravened s. 48 and imposed a pecuniary penalty. The applicant then brought proceedings pursuant to s. 82 alleging that it had suffered loss or damage by the conduct of the respondent and sought to recover such loss or damage from the respondent.

Held: (1) Although there is considerable force in the view that the claim has a close analogy to damages for breach of contract, the preferable approach to the assessment of loss or damage is on the footing that the claim is more akin to tort.

Brown v. Jam Factory Pty. Ltd. (1981), 53 FLR 340; Mister Figgins Pty. Ltd. v. Centrepoint Freeholds Pty. Ltd. (1981), 36 ALR 23, referred to.

(2) The correct way to consider the assessment of damages in the instant case is to compare the position in which the applicant might have been expected to be if the contravention of s. 48 had not occurred with the position it was in as a result of the contravention.

(3) In order to determine the loss or damage caused to the applicant by the contravention of s. 48, the appropriate method is to use the lost sales of the respondent's products.

Eastern Fire Proofing Co. Inc. v. US Gypsum Co.,(1970) Trade Cases 73-342; Locklin v. Day-Glo Colour Corp., (1970) Trade Cases 73-241, referred to.

(4) A claim for loss of profits on sales of products other than the respondent's products is essentially different from a claim for loss of profits on sales of the respondent's products. Accordingly, a claim may properly be made for loss of profits on sales of products other than the respondent's products which the applicant would have sold if the respondent's products had been on display.

(5) Section 79 of the Judiciary Act 1903 does not operate to pick up and apply in proceedings in the Federal Court a provision such as s. 30 of the Supreme Court Act, 1935 (S.A.), which confers power on the Supreme Court of South Australia to award interest in respect of damages as part of the judgment. Australian National Airlines Commission v. Commonwealth (1975), 132 CLR 582; 49 ALJR 338, applied.

(6) It is probable that the amount of any loss or damage recovered by the applicant from the respondent would be assessable income in the hands of the applicant. Where the applicant has utilized tax losses to extinguish its taxable income in respect of the two fiscal years in which the lost sales would have been made, the effect of the applicant obtaining an award of damages for such lost sales is to accelerate the consumption of its tax losses and produce a taxable income for those fiscal years. Accordingly the recoverable loss and damage is to be discounted by the tax payable on such taxable income.

(7) There is no proposition of law or equity that a wrongdoer may be heard to say that it should have been restrained from doing the very thing which it is proscribed by law from doing and that failure of the victim of the wrongdoer to seek to restrain it from continuing its wrongdoing prevents him from recovering loss or damage.

(8) The applicant had established its claim for loss or damage against the respondent based on loss of profits on the sale of the respondent's products, and loss of profits on the sale of products other than the respondent's products, less a discount for income tax.

HEARING

Adelaide, 1982, March 29-31; April 1, 20, 23. #DATE 23:4:1982

APPLICATION.

Application pursuant to s. 82 of the Trade Practices Act 1974 to recover loss or damage.

The facts appear in the judgment.

R. D. Lawson, for the applicant.

D. E. Clayton, for the respondent.

Cur. adv. vult.

Solicitors for the applicant: Fisher Jeffries & Co.

Solicitors for the respondent: Finlaysons.

H. W. FRASER

ORDER

1. There be judgment for Hubbards Pty. Limited in the sum of fifty-two thousand three hundred and seventy-three dollars ($52,373.00)

2. Simpson Limited pay the costs of Hubbards Pty. Limited of this proceeding. Judgment for the applicant in the sum of $52.373. Respondent to pay the applicant's costs.

JUDGE1

The applicant, Hubbards Pty. Limited ("Hubbards") sues the respondent Simpson Limited ("Simpson) for damages pursuant to s. 82 of the Trade Practices Act 1974 ("the Act") based on Simpson having engaged in the practice of resale price maintenance contrary to s. 48 of the Act.

Simpson is a large supplier of electrical goods to distributors and retailers in various States of Australia.

Hubbards is a discounter conducting six retail shops in South Australia. Hubbards is advertised as "The Discount King". It sells a wide range of goods to the public including electrical goods and furniture. The case concerns electrical goods which are known in the trade as white goods - in particular washing machines, clothes dryers, ranges (stoves, cook tops and wall ovens) and dishwashers.

Hubbards purchases its white goods from various manufacturers and distributors including Simpson. Simpson is a market leader in South Australia in the sale of washing machines, clothes dryers and ranges, but not dishwashers.

Hubbards was formed in 1927 by three men whose descendants are the present shareholders. Hubbards first traded with Simpson in 1946 but not, it seems, for very long and it reopened its account with Simpson in 1952. Hubbards then traded continuously with Simpson on a large scale until late 1978 when Simpson unilaterally closed the account.

The circumstances in which the account was closed and the relevant events leading up to the closure are set out in the reasons for judgment of Franki J. in Trade Practices Commission v. Simpson Pope Limited (as Simpson was then known) 1980 A.T.P.R. 40-169. In that action, the Commission sued Simpson alleging that it contravened s. 48 of the Act by doing certain acts in relation to Hubbards, Parry's Department Store (W.A.) Pty. Limited, and John Finns Discount Stores Pty. Limited.

Franki J. held that Simpson had contravened s. 48 of the Act in certain respects to which I shall refer in a moment.

It is common ground that Franki J. made findings of fact which are prima facie evidence in the proceeding before me, and that those findings are to be treated as having been proved for the purposes of s. 83 of the Act which provides:-
"83. In a proceeding against a person under section 82 or in an application under sub-section 87 (1A) for an order against a person, a finding of any fact by a court made in proceedings under section 77, 80, 80A or 81, or for an offence against section 79, in which that person has been found to have contravened, or to have been involved in a contravention of, a provision of Part IV or V is prima facie evidence of that fact and the finding may be proved by production of a document under the seal of the court from which the finding appears."

Before turning to the relevant portions of Franki J.'s judgment it is necessary that I set out the sections of the Act and the paragraphs of the amended statement of claim in the proceedings before Franki J. which are referred to by his Honour in his findings.

Section 96 (3) sets out the acts which constitute resale price maintenance. Section 96 (3) (a),(b),(d) and (f) provide :-
"(3) The acts referred to in sub-sections (1) and (2) are the following:

(a) the supplier making it known to a second person that the supplier will not supply goods to the second person unless the second person agrees not to sell those goods at a price less than a price specified by the supplier;

(b) the supplier inducing, or attempting to induce, a second person not to sell, at a price less than a price specified by the supplier, goods supplied to the second person by the supplier or by a third person who, directly or indirectly, has obtained the goods from the supplier;

(d) the supplier withholding the supply of goods to a second person for the reason that the second person -

(i) has not agreed as mentioned in paragraph (a); or

(ii) has sold, or is likely to sell, goods supplied to him by the supplier, or goods supplied to him by a third person who, directly or indirectly, has obtained the goods from the supplier, at a price less than a price specified by the supplier as the price below which the goods are not to be sold;

(f) the supplier using, in relation to any goods supplied, or that may be supplied, by the supplier to a second person, a statement of a price that is likely to be understood by that person as the price below which the goods are not to be sold."

Section 96 (6) provides:
"(6) For the purposes of sub-section (3), anything done by a person acting on behalf of, or by arrangement with, the supplier shall be deemed to have been done by the supplier."

Section 96 (7) provides:-
"(7) A reference in any of paragraphs (3) (a) to (e), inclusive, including a reference in negative form, to the selling of goods at a price less than a price specified by the supplier shall be construed as including references to -

(a) the advertising of goods for sale at a price less than a price specified by the supplier as the price below which the goods are not to be advertised for sale;

(b) . . .

(c) . . .

and a reference in paragraph (3) (d), (e) or (f) to a price below which the goods are not to be sold shall be construed as including a reference to the price below which the goods are not to be advertised for sale, to the price below which the goods are not to be displayed for sale and to the price below which the goods are not to be offered for sale."

Section 4F (b) provides:-

"4F. For the purposes of this Act -
(a). . .

(b) a person shall be deemed to have engaged or to engage in conduct for a particular purpose or a particular reason if -

(i) the person engaged or engages in the conduct for purposes that included or include that purpose or for reasons that included or include that reason, as the case may be; and

(ii) that purpose or reasons was or is a substantial purpose or reason."

Paragraphs 18 to 24 inclusive of the amended statement of claim in the proceedings before Franki J. provide as follows:-
"18. In and between the months of December 1977 and March 1978 the defendant through its servants or agents aforesaid C.J. Wiles and W. D. Marshall respectively made it known to Hubbards through its servants or agents Peter Lochhead Reid and Jack Raymond Hubbard that the defendant would not supply Simpson products to Hubbards unless Hubbards agreed not to sell such products at prices less than prices specified by the defendant.

19. On or about 27 February 1978 the defendant through its servants or agents aforesaid Christopher Noel Acton and C.J. Wiles attempted to induce Hubbards through its servants or agents Peter Lochhead Reid and Jack Raymond Hubbard not to sell one of the range of Simpson products, namely washing machines described as "model 23-124", at prices less than a price specified by the defendant.

20. Further to paragraph 19 hereof, on or about 27 February 1978 the defendant through its servants or agents aforesaid, Christopher Noel Acton and C.J. Wiles, used in relation to one of the range of Simpson products, namely washing machines described as "model 23-124", a statement of price that was likely to be understood by Hubbards through its servants or agents, Peter Lochhead Reid and Jack Raymond Hubbard as the price below which such Simpson products were not to be sold.
21. On or about 6 March 1978 the defendant through its servants or agents aforesaid, Christopher Noel Acton and C. J. Wiles attempted to induce Hubbards through its servants or agents Peter Lochhead Reid and Jack Raymond Hubbard not to advertise and sell certain Simpson products, namely, respectively, clothes dryers and washing machines, at prices less than the prices specified by the defendant.
22. Further to paragraph 21 hereof, on or about 6 March 1978 the defendant through its servants or agents, Christopher Noel Acton and C. J. Wiles used in relation to certain Simpson products, namely, respectively, clothes dryers and washing machines, statements of prices that were likely to be understood by Hubbards through its servants or agents, Peter Lochhead Reid and Jack Raymond Hubbard as the prices below which such Simpson products were not to be respectively advertised for sale and sold.
23. From on or about 1 December 1978 the defendant has withheld the supply of Simpson products to Hubbards for the reason that Hubbards had not and has not agreed not to advertise and sell Simpson products at prices less than prices specified by the defendant.

24. Further to paragraph 23 hereof, from on or about 1 December 1978 the defendant has withheld the supply of Simpson products to Hubbards for the reason that Hubbards had advertised and sold or was likely to advertise and sell Simpson products at prices less than prices specified by the defendant."

I turn now to his Honour's findings; and shall set out such of them as are relevant to the proceeding before me including his findings of fact.
"I will be referring to the following persons who, at various relevant times, occupied positions with Simpson. Mr. Uhrig joined Simpson in 1974 and has been Managing Director since June 1975. Mr. Maddigan became General Manager of the appliance division, apparently for the whole of Australia, some time before November 1978 and he had previously been in another position with Simpson. Mr. Marshall, at the relevant time, was General Manager of the marketing side of that part of Simpson's business which dealt with appliances and as such he was the man in charge of the marketing of electrical appliances. Mr. Marshall left Simpson in about November 1978. Mr. Acton appears to have been, at one time, the National Sales Manager under Mr. Marshall and in November 1978 he was the Branch Manager for South Australia and apparently also for Western Australia. Mr. Wheatley was immediately responsible to Mr. Acton in relation to the state (sic) of Western Australia only. He held the position of Sales Manager of the appliance division for that state (sic). He was dismissed by Simpson. Mr. Wiles, who is now retired, was Sales Manager for South Australia. Mr. Wright was an officer involved in product management and at one time was manager in Sydney. Mr. Hemmer was a representative of Simpson in New South Wales. Mr. Rayner was an officer of the company who was said to be responsible, inter alia, for advising the sales staff about the Act. . . .

In relation to Hubbards, acts by Wiles and Marshall in and between the months of December 1977 and March 1978 are alleged in par. 18, acts on or about 27 February 1978 by Acton and Wiles are alleged in pars. 19 and 20 and acts on or about 6 March 1978 by Acton and Wiles are alleged in pars. 21 and 22 and the withholding of the supply of Simpson products from on or about 1 December 1978 is alleged in pars. 23 and 24 and all are alleged to be in contravention of the Act. . .

It was common ground that, at least at some time in the past, a policy known as the 'minimum advertised price' policy ('M.A.P.') prevailed in certain sections of the trade in relation to white goods. This policy was one whereby efforts were made to ensure that retailers did not advertise goods below a specified price. I am satisfied that this policy was one adhered to by many of the senior executives of Simpson for a considerable period. For example, in an inter-office memorandum dated 27 January 1977, from Mr. Wright to all area managers a complaint was made about the advertising of a retailer and the memorandum dealt with the subject 'Price Point Advertising Policy' and read:

'The first customer to break our price point policy was Norman Ross Discounts (see attached ad, - Sunday Telegraph January 23rd.).

As a consequence we have withdrawn our advertising support and strategic allowances for February as we promised all key customers, and we should take advantage of this by informing all key customers of the action we have taken; at the same time re-inforcing our story and our determination to succeed in achieving higher retail prices and higher retail margins on our products.

Please ensure that you carry out this informing process as promptly as possible.'
It appears that there were about twenty to twenty-five Area Managers.
On 2 September 1977, another inter-office memorandum was issued by Mr. Acton to Area Managers. It set out certain recommended prices which were said to be 'the lowest acceptable retailer advertised prices'. The memorandum included the following:

'I would like you to be fully aware that if any retailer advertises under the following prices, then he automatically does not get advertising subsidy or any special benefits he may be entitled to. . .

Would you all ensure that your retailers are aware of these prices and exert any influence you can without compromising yourself, or the company, to ensuring these types of prices so that we can put profitability into the Simpson Brand."

On 17 October 1977 Mr. Acton again issued a circular to the State Sales Managers referring to recommended advertised prices for retailers which followed discussions with the Executive of N.A.R.T.A. an organisation of certain buyers. It included the following:
'Would you keep me informed of any disruptive activity and action taken so that I am able to keep the Executive fully informed'.

Mr. Uhrig in evidence accepted that it was inconceivable that Mr. Marshall did not know about M.A.P. at around this time. . .

I pass now to consider the allegations in relation to Hubbards. Just before Christmas in 1977 Mr. Wiles said to Mr. Reid, the General Manager of Hubbards, ". . . we are about to walk away from you. It is just not good enough. What are you going to do about your prices? They are too low". I am satisfied that in its context this conversation was within s. 96 (3) (a) as extended by s. 96 (7) as alleged in par. 18.

On 27 February 1978, Mr. Wiles said to Mr. Hubbard and Mr. Reid in the presence of Mr. Acton, "Your prices are too low. We want you to lift them to the going price in the market place". Mr. Wiles then specified a particular price which he wanted Hubbards to charge for a particular model. Mr. Acton mentioned that Simpson was rationalising its distribution system in accordance with certain criteria and when Mr. Hubbard said that he hoped Hubbards satisfied that criteria Mr. Acton said "Hubbards fit the profile". Again Mr. Wiles was not called. I am satisfied that this conversation was within s. 96 (3) (b) as alleged in par. 19 of the statement of claim because it was an attempt to induce Hubbards not to sell certain machines at a price less than that specified by Simpson. I am also satisfied that this statement was within s. 96 (3) (f), as alleged in par. 20 of the statement of claim.

On 6 March 1978 Mr. Acton, in the presence of Mr. Wiles, made a request to Mr. Hubbard and Mr. Reid that Hubbards lift their prices to those which he alleged were operating in the market place at that particular time. He asked that the advertised price for dryers be raised to a price specified by Simpson. I am satisfied that this was an attempt to induce Hubbards not to advertise or sell Simpson products at prices less than those specified by Simpson as alleged in par. 21 of the statement of claim and that it was within s. 96 (3) (b) as extended by s. 96 (7).

I am also of the opinion that this request was within s. 96 (3) (f) as extended by s. 96 (7) as alleged in par. 22.

On 10 March 1978 Mr. Marshall met Mr. Hubbard and Mr. Marshall said that he should warn Mr. Hubbard that Simpson was about ready to walk away from it and that it had been causing Simpson a lot of concern in the market place, and that they were getting a bit tired of Hubbards not listening to them regarding price. Mr. Marshall also said that he had heard that, at a 'manufacturer's product night', Mr. Reid had made statements that Hubbards would sell at whatever price Hubbards liked. Mr. Marshall said that '. . . if that report was true then these were pretty ill advised and dangerous statements to make in view of the current strained relationship between Hubbards and Simpson'.

In August 1978 the Commission served a notice under s. 155 of the Act upon Simpson. On 28 November 1978 Mr. Acton, as Branch Manager for South Australia, on behalf of Simpson, sent a letter to Hubbards saying, inter alia, 'We advise that as from 1 December 1978 we will no longer have an Appliance Trading Account for your Company'. It was also said that this was part of a programme of 'national distribution rationalisation . . . in order to bring about economies in our selling and distribution expenses'. The letter also stated that Simpson appliances could be obtained through a could be obtained through a named wholesale distributor. In response to this letter Mr. Hubbard wrote to Mr. Uhrig, and also to the Chairman of Simpson. In the letter to the Chairman Mr. Hubbard said 'It is obvious that we will be disadvantaged and may have a prima facie case under the resale price maintenance section of the Trade Practices Act'. No satisfactory reply was received to either letter. The letter of 29 November 1978 from Mr. Hubbard to Mr. Uhrig contained a paragraph 'In view of our two companies long association I feel that a better explanation should be forthcoming or I shall be forced to the conclusion that your company's objective is control of the market place and the level of selling price on your products.'

It was said by Mr. Uhrig in evidence that the letter of 28 November 1978 implemented a decision which he had made upon the recommendation of a committee headed by Mr. Maddigan. As with Parrys, the argument was advanced that the decision was made by Mr. Uhrig and was not based upon any consideration of resale price maintenance. Hubbards, at the relevant time, was a large retailer and again I am satisfied that the withholding of supply was the result of a decision either by Mr. Maddigan or, if Mr. Uhrig's evidence is accepted, of a decision by Mr. Uhrig, based on a recommendation by Mr. Maddigan. However, I find it impossible to accept the evidence of Mr. Uhrig, whom I do not regard as an entirely satisfactory witness, in relation to this matter which took place some months after the notice which had been received from the Trade Practices Commission had come to his attention. Mr. Uhrig said that Mr. Rayner had the responsibility for preparing material in answer to the notice under s. 155. Mr. Uhrig's evidence did not disclose when he first knew that resale price maintenance existed in the Company. However, it appears from his evidence that prior to December 1978 Mr. Rayner had told him that he was 'concerned about what he was finding and . . . there appeared to have been statements made to retailers verbal and in writing, that were counter to our policy'. Mr. Uhrig said that he was not certain but he thought it probable that he knew of Mr. Rayner's concern before 28 November 1978. Prior to that date, Mr. Maddigan had, Mr. Uhrig said, asked for approval for the termination of the account and told him that a complaint to the Commission could be expected. Notwithstanding this, Mr. Uhrig made only a cursory enquiry of Mr. Maddigan whether any question of resale price maintenance was in fact involved and, upon receiving the answer that it was not, took no further steps to ascertain the position, notwithstanding the statement by Mr. Hubbard in his letter of 29 November 1978.

It is also remarkable that Mr. Uhrig said that he had not made any specific complaint to either Mr. Marshall or Mr. Acton when he ascertained the true state of affairs that existed in relation to resale price maintenance other than anything said by him in any general discussions which took place with officers of the Company. I am satisfied that the withholding of supply to Hubbards was for a reason which included as a substantial reason that Hubbards was likely to advertise and sell Simpson products at prices less than those specified by Simpson as alleged in par. 24 of the statement of claim and that Mr. Uhrig was aware of this when he was a party to Hubbards' account being closed. I am also satisfied that par. 23 of the statement of claim has been made out. . .

It is likely that some loss or damage was suffered by Parrys and Hubbards as a result of the acts of Simpson. So far no proceedings have been instituted by either of these companies under s. 82 of the Act for damages or under s. 80 seeking an injunction. It is also probable that some members of the public paid more for certain of Simpson's products because of the act of that company than they otherwise would have done, and it is probable that the public has suffered some monetary loss. There is no suggestion that any proceedings under Part VI have been taken previously against Simpson. I have had regard to the nature and extent of those acts alleged in the statement of claim which I have found to have been established and to all relevant matters. . . .

I consider that at all relevant times resale price maintenance was a well established policy of many of the executive staff of Simpson. I consider the breaches of s. 48 serious breaches which were not of an isolated nature. The withholding of supply to Parrys and Hubbards were very serious contraventions of the Act and I have had particular regard to this in the penalties which I have fixed. . .

Hubbards is at present obtaining supplies of Simpson goods pursuant to an arrangement which it has with another retailer in Adelaide and there is no evidence that this is unsatisfactory."

Franki J. ordered that Simpson pay to the Commonwealth by way of penalty in respect of the contraventions of s. 48:-

(a) $30,000.00 in respect of the contraventions in relation to Parry's Department Store (W.A.) Pty. Limited;

(b) $30,000.00 in relation to Hubbards Pty. Limited; an
(c) $5,000.00 in relation to John Finns Discount Stores Pty. Limited.

It is in these circumstances that Hubbards seeks to recover from Simpson under s. 82 the amount of the loss or damage which it asserts it suffered by the conduct of Simpson.

The only witness who gave evidence before me was Jack Raymond Hubbard, the managing director of Hubbards. Mr. Hubbard has worked for Hubbards since 1949 and has been managing director since 1961. He was in the witness box for over two and a half days. His credibility was not challenged by the respondent; although his reliability was questioned as to a few matters. Mr. Hubbard impressed me as a truthful and reliable witness and I accept his evidence.

Hubbards claims that it suffered four heads of loss or damage by the conduct of Simpson that contravened s. 48. Although the section does not in terms require causal connection between the conduct constituting the contravention and the loss or damage, I agree with Fox J. in Brown v. Jam Factory Pty. Limited (1981) 35 A.L.R. 79 and Northrop J. in Mister Figgins Pty. Limited v. Centrepoint Freehold Pty. Limited (1981) 36 A.L.R. 23 that there must be some causal connection between the two.

The Jam Factory and Mister Figgins were cases based on contraventions of s. 52 of the Act. Both Fox J. and Northrop J. held that the correct way to approach the assessment of damages in claims under s. 82 based on contraventions of s. 52 is to apply the principles affecting torts. Northrop J. likened such claims to actions for deceit; hence the preference for assessing damages based on the principles of tort rather than contract.

The present case is not necessarily of the same character. The contravention by Simpson was that it engaged in the practice of resale price maintenance, and the primary act which constituted that contravention was the closure of Hubbards' account. Whether the claim by Hubbards under s. 82 is akin to tort or contract is not an easy question; but it is common ground that this does not matter here as the damages claimed by Hubbards would fall within the tests applicable to either tort or contract.

Although I see considerable force in the view that the claim in the present case has close analogy to damages for breach of contract, I prefer to follow Fox J. and Northrop J. and approach the assessment on the footing that the claim is more akin to tort. In my opinion the correct way to consider the assessment of damages in this case is to compare the position in which Hubbards might have been expected to be if the contravention of s. 48 had not occurred with the position it was in as a result of the contravention.

(a) Loss of profits on sale of Simpson products

The primary claim of Hubbards is that, during the period about 1 December 1978 until about 31 December 1979, it suffered loss of profits from the sale of Simpson products which it would have made if the respondent had not committed the contravention of s. 48.

The method adopted by Hubbards to compute itsclaim for loss was the use of lost sales of Simpson products. In my opinion, the use of this method to determine loss or damage caused by the contravention of s. 48 is appropriate in the present case. Hubbards presented its case by estimating the sales of Simpson white goods which it would have made during the calendar year 1979; multiplying those sales in each category of goods (e.g. washing machines) by the estimated average gross selling price during that year; then taking its profit margin of 10% of the figures thus produced. This approach was not challenged in principle by Simpson; but it did challenge the appropriateness of applying the particular rate of 10% and various details of the claim to which I will refer later.

No Australian case bears directly on the problem; but the correctness of the approach adopted by Hubbards in calculating its claim finds general support from two American cases to which I was referred by counsel for Hubbards namely, Eastern Fire Proofing Co. Inc. v. U. S. Gypsum Co. 1970 Trade Cases 73-342 and Locklin v. Day-Glo Color Corp. 1970 Trade Cases 73-241.

Hubbards based its claim on Simpson's own sales figures. First, washing machines. Radio Rentals Limited, ("Radio Rentals") a competitor of Hubbards, sold 1929 Simpson machines in 1978 and 4081 in 1979, an increase of 2,152. John Martin & Co. Limited ("John Martin") sold 1476 Simpson machines in 1978 and 1566 in 1979, an increase of 90. Saverys Pty. Limited ("Saverys"), also a competitor, sold 548 Simpson machines in 1978 and 1069 in 1979, an increase of 521. Hubbards sold 790 Simpson machines in 1978 but only 100 in 1979, a fall of 690.

It is interesting to note that the total number of Simpson washing machines sold in South Australia in 1978 was 12,162 and in 1979 14,362, an increase of 2,200. Throughout the industry generally in South Australia, there were sales of washing machines of all brands in 1978 of 26,160 and in 1979 28,349, an increase of 2,189. The sales of Simpson washing machines in South Australia increased by 2,200 in 1979 over 1978; but Hubbards' competitors, Radio Rentals, John Martin and Saverys, managed to gather between them 2,763 increased sales, so that more than the whole of the increase in the sale of Simpson washing machines in that year was taken up by those three companies. Hubbards was denied the opportunity to participate in what was obviously a boom year for the other three companies in the sale of Simpson washing machines. It is plain from the evidence that those three companies were concentrating heavily on the sale of Simpson brand white goods in 1979.

Hubbards is, and has been since 1968, a member of a buying group called "National Associated Retail Traders of Australia Pty. Limited ("N.A.R.T.A."). N.A.R.T.A.'s function is to act as a buying group and to negotiate on behalf of its members. There are over thirty members in Australia of whom four are in South Australia namely, Hubbards, Saverys, John Martin and Radio Rentals. Saverys conducts a number of chain stores in the metropolitan area of Adelaide and sells electrical goods and furniture. John Martin conducts department stores in Adelaide and in its suburbs. Radio Rentals conducts a chain of electrical stores.

Other buying groups similar to N.A.R.T.A. are Retrovision and United Buyers' Association. Hubbards is not a member of either of those buying groups. The advantage of belonging to N.A.R.T.A. for Hubbards was that generally it was able to buy products from manufacturers at about 1% less than members of other buying groups were able to buy the same products.

Turning to clothes dryers. Radio Rentals sold 1430 Simpson dryers in 1978 and 1948 in 1979, an increase of 518. John Martin sold 1320 in 1978 and 1824 in 1979, an increase of 504. Saverys sold 291 in 1978 and 989 in 1979, an increase of 698. Hubbards sold 1260 in 1978 and only 47 in 1979, a fall of 1213. The total number of Simpson clothes dryers sold in South Australia was 10,589 in 1978 and 11,328 in 1979, an increase of 739. Yet the three members of N.A.R.T.A. in South Australia other than Hubbards were able to increase their sales by 1720, against confirming other evidence that N.A.R.T.A. members were concentrating on the Simpson brand very heavily in 1979; although it must be remembered that the fall in the Hubbard figures, because of the denial of supply, accounted to some extent for the increase in the sales figures of the other three N.A.R.T.A. members.

As to Simpson ranges, Radio Rentals sold 325 in 1978 and 648 in 1979, an increase of 323. John Martin sold 377 in 1978 and 430 in 1979, an increase of 53. Saverys sold 164 in 1978 and 183 in 1979, an increase of 19. Hubbards sold 502 in 1978 and 133 in 1979, a fall of 369. The total number of Simpson ranges sold in South Australia was 9,360 in 1978 and 5,914 in 1979 a fall of 3,446; yet the N.A.R.T.A. members were able to increase their sales of ranges in 1979 in what was apparently a diminishing market. In 1978 Hubbards was the biggest seller of Simpson ranges of all the South Australian members of N.A.R.T.A.

As to dishwashers, Radio Rentals and Saverys were not large sellers of Simpson dishwashers. Radio Rentals sold none in 1978 and 2 in 1979, an increase of two. John Martin sold 92 in 1978 and 123 in 1979, an increase of 31. Saverys sold 7 in 1978 and 13 in 1979, an increase of six. Hubbards sold 120 in 1978 and none in 1979, a fall of 120.

The total number of Simpson dishwashers sold in South Australia was 684 in 1978 and 759 in 1979, an increase of 75. Simpson was not a market leader in the sale of dishwashers in South Australia.

As I said earlier, Simpson does not challenge in principle the calculation of Hubbards' loss of profits by multiplying the number of lost units by the gross selling price. However, Simpson does challenge both the number of lost units and the gross selling price adopted by Hubbards. Simpson conceded that the actual formula was one which had logical merit and that it was a permissible way to determine loss of profits, although it submitted that an alternative method was to look in more general terms at the turnover of Hubbards from year to year.

Simpson contended that the figure of 690 Simpson washing machines said to represent sales lost to Hubbards was "a little high". I do not agree.

As to clothes dryers, Mr. Hubbard gave evidence that he was able to substitute 300 Kelvinator clothes dryers during 1979 for lost Simpson dryers, so the claim for lost sales of Simpson clothes dryers was 913 not 1213. Simpson contended that the figure of 913 clothes dryers was "improbably high". It was said that, as Hubbards obtained 300 dryers from an alternative source, it may have been able to obtain more if it had required them. As to this last point, I am not satisfied that Hubbards would have been able to obtain more from an alternative source than the 300 which it did obtain from Kelvinator.

Simpson pointed to the fact that Hubbards sold 1,617 clothes dryers (that is of all brands including Simpson) in 1977, 2,113 in 1978, 1,471 in 1979 and 1,640 in 1980. It was submitted that if Hubbards was able to sell an additional 913 dryers in 1979, it would have brought its total sales of dryers for that year to 2,384, being 271 units higher than the highest of the four years 1977 to 1980, that is the year 1978 when 2,113 were sold. It was said that there was nothing in the evidence to suggest that Hubbards would have sold more dryers in 1979 than it sold in 1978. It was said that the proper approach was to accept 1978 as a reasonable figure and to deduct the actual 1979 sales from the actual 1978 sales, making a total of 642 sales of clothes dryers lost by reason of non-supply from Simpson. I do not accept this submission. The claim propounded by Hubbards is legitimate. In my view it is likely that Hubbards would have sold more dryers in 1979 than it sold in 1978.

As to ranges, Simpson submitted that the figure of 369, said by Hubbards to be the number of sales of Simpson ranges lost to Hubbards, should be reduced by 32 to 337. During 1979 Hubbards returned to Simpson 32 cook tops on the ground that they were of no commercial use to Hubbards because there were no corresponding Simpson wall ovens notwithstanding that those ovens had been ordered by Hubbards from Simpson in 1978. Simpson submitted that the ovens would have eventually been delivered to Hubbards during 1979 and that Hubbards should have waited for them. The fact is that the ovens were not delivered to Hubbards in 1978 or January 1979. I accept Mr. Hubbard's evidence as to the commercial necessity to return the cook tops in all the circumstances. I do not deduct the 32 ranges from Hubbards' claim.

As to dishwashers, Simpson said it would accept 60 lost sales of Simpson dishwashers as a reasonable figure. It submitted that in 1980 only 118 Simpson dishwashers were sold by Hubbards when supply was not restricted, so it is unlikely that it would have sold 120 in 1979. I reject this submission. It seems to me that if 120 Simpson dishwashers out of a total of 364 dishwashers of all brands, including Simpson, were sold by Hubbards in 1978 and if in 1980 it sold 118 Simpson dishwashers, it is quite reasonable to claim that 120 would have been sold in 1979.

Overall, I am satisfied that the number of sales which Hubbards claims it lost by reason of Simpson's contravention is a reasonable calculation. It is based essentially upon the 1978 sales, and I see no reason to challenge that as a proper base from which to measure lost sales. Indeed, there is much to be said for the view that Hubbards has been conservative in adopting this approach because it has not taken into account, at least to any great extent, the fact that in 1979 the other three South Australian members of N.A.R.T.A. were heavily promoting the sale of Simpson products and this is reflected in their sales figures which I mentioned earlier.

I turn now to the multiplier adopted by Hubbards, namely, the average selling price of the relevant units. Hubbards totalled the value of the sales of each of the four classes of Simpson units for each of the financial years ended 30 June 1978, 1979 and 1980 and divided each total by the number of units sold. The average prices for each year thus obtained were then averaged over the three years. In the result, the average selling price for washing machines was $331.00, for clothes dryers $132.00, for ranges $300.00 and for dishwashers $350.00.

Simpson at first challenged the multiplier on the basis that it would be more accurate to take the actual selling price of Simpson products by Hubbards in the calendar year 1979 on the ground that it would avoid the problems brought about by inflation or different market trends in other years.

Hubbards submitted that it is inaccurate to adopt this approach because Hubbards' sales of Simpson products in 1979 were during an abnormal year. Hubbards was selling only small numbers of Simpson products due to the withholding of supply, and it was a year in which Simpson products were really being "cleared out". I accept this submission. I prefer the approach adopted by Hubbards. Simpson finally did not press this challenge to the multiplier; but conceded the correctness of a similar approach to the Hubbards' approach mentioned earlier; indeed one approved of by Mr. Hubbard himself in evidence namely, to total the value of the sales in each of the four classes of Simpson units over the three year period 1 July 1977 to 30 June 1980 and divide each result by the total number of units sold in the relevant class over the same period to obtain an average selling price. In the result, the average selling price for washing machines was $325.00, for clothes dryers $131.00, for ranges $300.00 and for dishwashers $350.00.

I prefer this lastmentioned approach and shall adopt it.

Thus the calculation of loss is as follows:-
Washing machines 690 x $325.00 = $224,250.00
Clothes dryers 913 x $131.00 = $119,603.00
Ranges 369 x $300.00 = $110,700.00
Dishwashers 120 x $350.00 = $42,000.00

---------- $496,553.00 ----------

To calculate its loss of profits, Hubbards claimed 10% of the total of the figures resulting from the calculations. As the total resulting from the approach I adopt is $496,553.00, the loss under this head is $49,655.00. Ten percent was the gross profit of Hubbards in 1979 throughout the whole range of its products. It was achieved by a mark-up of 11.5% for the express purpose of achieving a profit of 10%.

Hubbards' claim that its loss of profits is 10% of the value of lost sales assumes that there would have been no increase in its expenses for the calendar year 1979 notwithstanding that 2092 additional Simpson units would have been sold (i.e. the sum of 690 washing machines, 913 clothes dryers, 369 ranges and 120 dishwashers).

Although prima facie an extra 2092 units would not sell themselves, Hubbards points to its profit and loss statements and other evidence relating to the calendar years 1978, 1979 and 1980. They show that in 1978, 5,868 washing machines, clothes dryers, ranges and dishwashers were sold by Hubbards (that is all brands including Simpson) and that the expenses involved in selling them and the many other products of various descriptions sold by Hubbards totalled $1,100,571.00. I need not set out all the heads of expense but they include among the major items; staff costs, advertising, insurance, interest, light and power, computer services, rates and taxes, rent, telephone, and Bankcard charges.

In 1979, 3,898 units of the four categories of goods in question were sold and the overall expenses were $1,029,716.00. In 1980, Hubbards sold 5,531 such units and the overall expenses were $1,024,499.00.

The expenses in 1980 of selling about 1600 more units than were sold in 1979 were marginally less than the expenses of 1979, notwithstanding inflation. In 1978 a substantially larger number of units was sold than in 1979 (5868 in 1978 and 3898 in 1979). Yet the expenses in those years were approximately the same.

This, together with other evidence, including the evidence of Mr. Hubbard, establishes to my satisfaction that the number of units sold has no necessary bearing on the expenses incurred in selling them.

Thus, if 2092 more Simpson units had been sold by Hubbards in 1979, it does not follow that the expenses would have increased either proportionately or at all.

However Hubbards does not dispute that there would have been an increase in bank charges occasioned by the additional sales. At the relevant time, Bankcard charges were 2% of the selling price of Hubbards' goods and Bankcard accounted for 18% of sales. Hence the sum of $496,553.00 should be reduced by $1,788.00.

Although Simpson suggested that there should be a further deduction in a small sum by reason of increased insurance that would have been payable with increased sales, I am not satisfied that it has been established that there would have been such an increase. In any event, it would have been only a nominal figure namely, $204.00.

It was submitted by Simpson that the correct approach was not to allow a profit margin of 10% to Hubbards as the measure of its loss, but rather to apply a percentage in the order of 3% or 4% because there must have been additional expenses that would have been incurred in selling the additional Simpson goods in 1979. I need not set out all the particular items that were referred to in argument except to say that I am not satisfied that any case has been made out by Simpson that there would have been any increase in the expenses of Hubbards in selling the additional Simpson goods except those to which I have specifically referred.

Simpson finally submitted that the appropriate method of calculating the profit margin was to take the increase in operating profit before tax over the financial years ending 30 June 1980 and 30 June 1981 respectively and express that figure as a percentage of the increase in sales over the same period - this calculation yielding a profit margin in the range of 3% to 4%.

Simpson pointed to the fact that there was an increase in volume from the 1980 fiscal year to the 1981 fiscal year of about $2 million which yielded an increase in profit of only about $70,000.00. Simpson therefore challenged the assertion by Hubbards that it could have made another $50,000.00 profit on sales of about $5,000,000 in 1979. This is capable of a number of explanations, including the fact that tight financial controls were exercised by Hubbards throughout the relevant period; indeed, despite increased sales and volume, the major item of costs, namely, staff costs, in fact decreased.

I prefer the approach adopted by Hubbards in calculating its loss.

Thus Hubbards' loss under this head is $49,477.00. This is the result of deducting the allowance for Bankcard charges of $1788.00 from $496,553.00 and taking 10% of the figure thus calculated (10% of $494,765.00) namely $49,477.00.

(b) Loss of profits on sale of products other than Simpson

Hubbards claims that during the period from about 1 December 1978 until about 31 December 1979 it would also have sold additional washing machines and ranges of brands other than Simpson if Simpson products had been on display for sale that year. Hubbards claims that it suffered a general loss of business and loss of profits in consequence of the fact that it was unable to have Simpson products displayed for sale at its retail stores.

This claim is difficult to establish by its very nature. I am satisfied that with a business such as Hubbards, "The Discount King", it must have been placed in a disadvantageous position compared with its competitors in 1979 when throughout most of that year it did not have Simpson white goods available to it; and it must be remembered that Simpson was a market leader except in dishwashers.

Mr. Hubbard gave evidence, which I accept, to the effect that sales of washing machines were lower in 1979 than in 1978 by 775, of which 690 were Simpson washing machines, that is there was a loss of 85 washing machines of other brands. He attributed the fall in the sales of brands other than Simpson to ". . . not having a wide enough assortment on the floor and customers therefore seeking to go elsewhere where they could see a full range and therefore compare different features".

The evidence establishes that the average price for which washing machines, other than the Simpson brand, would have been sold in 1979 was $423.00.

As to ranges, Mr. Hubbard gave evidence that Hubbards could have sold 311 additional ranges of brands other than Simpson, in particular the brands Malleys, Westinghouse and Chef. The evidence establishes that the average price for which ranges, other than the Simpson brand, would have been sold in 1979 was $313.00.

No claim is made under this head in respect of clothes dryers or dishwashers because Hubbards could have substituted to some extent with other brands of dryers and because the calculations of loss under (a) in respect of dishwashers was made on the basis that the loss could be made good entirely by Simpson.

Therefore the claim for loss of profits under this head is:
Washing machines 85 x $423.00 = $35,955.00
Ranges 311 x $313.00 = $97,343.00

----------- $133,298.00 -----------

The loss of profit was 10% as it was under claim (a). Therefore the loss which I allow under this head is $13,330.00.

Simpson sought to answer this claim on the basis that the loss was reflected in the loss claim under (a). I reject this submission. The loss claimed under this head is essentially different from the claim under (a).

Counsel for Simpson submitted that "the sale of washers was 85 others to 690 Simpson or about one-eighth in very rough terms. The sale of other ranges is alleged to be 311, which compares with 369 Simpson ranges. The evidence is that the market share that Simpson had of washers was higher than the market share they had of ranges, so that 311 cannot be correct. 85 is the correct figure for washers."

I am satisfied from Mr. Hubbard's evidence that it is likely that Hubbards would have sold 311 ranges of other brands notwithstanding the point relied on by Simpson. Hence, Hubbards has established its claim under (b).

(c) Loss of advertising subsidies

This claim is made on the basis that during 1979 Hubbards suffered loss because it did not obtain advertising subsidies from Simpson which would have been paid to Hubbards if Simpson had not withheld the supply of goods.

Hubbards submits that if it had been able to purchase Simpson products from Simpson in 1979 in the quantities mentioned under claim (a), Simpson would have paid Hubbards advertising subsidies of about $14,000.00.

During 1978 the ratio in which Hubbard's advertising was subsidised by Simpson was $3.00 paid by Simpson for each $1.00 paid by Hubbards.

Therefore, so the argument goes, if Hubbards had received $14,000.00 in subsidies from Simpson in 1979, Hubbards would have expended one third of that amount namely, $4,667.00 from its own funds. Hubbards' net loss is estimated at $14,000.00 less $4,667.00 namely, $9,333.00.

Simpson submits that this argument is misconceived because the $9,333.00 would have been spent by Hubbards in advertising products. I accept this submission of Simpson and reject this claim of Hubbards.

Hubbards puts this claim on an alternative basis namely, if it had sold Simpson products in 1979 in the quantities mentioned in claim (a), it would not only have made further profits, and obtained the advertising allowances themselves which would have been paid by Simpson to Hubbards; but Hubbards would have placed more advertisements in the press of Simpson and other products and would thus have enabled Hubbards to put its name further before the public and sell not only Simpson products but other products including white goods. Mr. Hubbard gave evidence that subsidised advertising did constitute a commercial advantage to Hubbards.

The principal difficulty I feel about this claim is that there is no reliable material before me on which I can compute damages. Indeed, it is conceded by Hubbards that even if a figure could be ascertained it would not be large in amount. The claim is too imprecise and general to enable an amount to be allowed and I think in all the circumstances there should be no damages awarded to Hubbards under this head.

(d) Diminution in the value of Hubbards' business

The value of Hubbards' business is said to have been diminished in consequence of the conduct of Simpson.

It was conceded by counsel for Hubbards that if it is entitled to recover under (a) it cannot recover under (d). In view of my findings under (a) there is nothing that can be recovered under (d).

(e) Interest

Hubbards propounded a claim for interest on the amount of damages to be awarded under s. 82.

The claim is based on s. 30C of the Supreme Court Act 1935 (S.A.) (as amended) which confers power on the Supreme Court of South Australia to award interest in respect of damages as part of the judgment. It is said that this power is applicable to these proceedings by virtue of s. 79 of the Judiciary Act 1908 (as amended).

In Australian National Airlines Commission v. The Commonwealth of Australia & Anor. (1975) 49 A.L.J.R. 338, Mason J. held that s. 94 of the Supreme Court Act 1970 (N.S.W.) did not apply to the proceedings before his Honour, being an action commenced in the High Court in its original jurisdiction, so as to empower the High Court to award interest in respect of damages as part of the judgment, primarily because in his Honour's view at p. 340:-
". . . s. 79 does not operate to pick up and apply in proceedings in the High Court a provision such as s. 94 which is contained in a statute designed to define and regulate the powers and procedure of the Supreme Court and which confers power on that Court to order interest on damages in judgments entered by that Court in proceedings before it. No matter how widely it may travel in some respects s. 79 does not in my view pick up and apply in this Court a provision which empowers a particular court of a State to make orders and enter judgments in proceedings in that court. The relevant powers of this Court are conferred by the Judiciary Act and the High Court Procedure Act 1903-1966, as amended; as I see it they are not to be supplemented by the operation of s. 79 of the Judiciary Act in the manner suggested. Section 26A of the High Court Procedure Act, which provides that judgments of the Court shall carry interest, should be regarded as a comprehensive expression of the entitlement in this Court of a litigant to interest on damages to the exclusion of any provision in State law which would otherwise be made applicable by virtue of s. 79."

Notwithstanding that this Court's jurisdiction is conferred by specific Statutes such as the Trade Practices Act 1974 and the Bankruptcy Act 1966 and that its relevant powers are conferred essentially by the Federal Court of Australia Act 1976, I see no valid ground of distinction between the powers of the High Court and those of this Court in relation to interest on damages up to the date of judgment. In my opinion what Mason J. said about the High Court applies also to this Court.

If I had a discretion to make an order applying the provisions of s. 30C to this proceeding I should not exercise the discretion so as to make such an order. Counsel for Hubbards informed me that it is the practice in the Supreme Court of South Australia not to claim specifically interest in the initiating process or to give notice to the defendant of the intention to make such a claim. Doubtless this is because everyone knows that, if damages are awarded by the Supreme Court of South Australia in favour of a plaintiff, the power to award interest conferred by s. 30C is a well established head of power and it may be assumed that generally plaintiffs will ask the Court to award interest where it is appropriate to do so. Even if this Court had power to award interest as claimed by Hubbards I would not, in all the circumstances, award it in the absence of notice first having been given to Simpson as it is, so far as I know, the first time such an order has been sought from this Court based on s. 30C.

The claim for interest is rejected.

Simpson submitted that a further deduction should be made because certain tax losses which were available to Hubbards would have been consumed earlier than they were in fact consumed if the amount of loss or damage suffered by Hubbards is recovered by it.

In my opinion it is probable that the amount of any loss or damage recovered by Hubbards from Simpson in this case would be assessable income in the hands of Hubbards; it would constitute income according to ordinary concepts within s. 25 of the Income Tax Assessment Act 1936. At the end of the 1979 year of income Hubbards had available tax losses of $96,232.00 which it carried forward to the 1980 year of income. At the end of that year of income, tax losses of $47,950.00 were available to be carried forward, and at the end of the 1981 year of income the tax losses available to be carried forward to the 1982 year of income were $40,125.00. The sum of $62,807.00 represents the damages which I would award Hubbards without taking into account this question of tax losses. The damages would have constituted assessable income in the hands of Hubbards for the years ended 30 June 1979 and 1980 because that sum probably would have been received by it during the calendar year 1979 and perhaps the first month or two of 1980. I have no reliable way of determining what proportion of $62,807.00 would have been received in each of the two fiscal years, so I will proceed on what seems to me to be a sensible basis namely, that the whole of $62,807.00 would have been received in the 1980 fiscal year. In the result Hubbards would have used all its tax losses of $47,950.00 and left a taxable income of $14,857.00.

As there would have been no losses available to be carried forward to the 1981 fiscal year, Hubbards would have had a taxable income for 1981 of $7,825.00.

The evidence does not enable me to say what Hubbards' tax liability would be in the current fiscal year or any later years.

Thus the effect of Hubbards obtaining an award of damages of $62,807.00 is to accelerate the consumption of its tax losses and to produce a taxable income for the 1980 year of $14,857.00 and for the 1981 of $7825.00. The effective rate of tax was 46 cents in the dollar. So I discount the award of damages by $10,434.00. I realise that this approach has some logical difficulties and is not entirely satisfactory; but no other approach is any better; and my approach appears to be fair.

Mitigation of loss

Simpson submitted that the claim of Hubbards should be rejected in its entirety because Hubbards had failed to mitigate its loss. It is common ground that Hubbards was bound to mitigate its loss and that Simpson bore the onus of establishing that Hubbards did not mitigate its loss. As to this, see McGregor on Damages 14th ed. para. 215 and the cases there cited.

Simpson submitted that Hubbards should have sued Simpson for interlocutory injunctive relief to restrain it from contravening s.48 and that, if it had done so, it would have succeeded and thus ensured the resumption of supply of Simpson products and prevented further loss.

Counsel for Simpson described this submission as novel. Counsel for Hubbards described it as extraordinary. I prefer to describe it as wrong. The proposition amounts to this, that a wrong doer may be heard to say in this Court that he should be restrained from doing the very thing which he is prohibited by law from doing and that failure by the victim of the wrong-doer to seek to restrain him from continuing his wrong-doing prevents him from recovering loss or damage. The proposition has only to be stated to be rejected.

However, even if it were sustainable in law, it could not succeed on the facts of this case. Mr. Hubbard tried to have the supply of Simpson products resumed immediately he received the letter of 28 November 1978 by discussing the matters with officers of Simpson on at least two occasions. Also, Hubbards was in constant touch with the Trade Practices Commission which told Hubbards that it was preparing a case against Simpson. In fact it later sued Simpson in the proceedings heard by Franki J.

When asked in cross-examination "Your company took no steps to obtain an interlocutory injunction against Simpson following the letter of 28 November", Mr Hubbard replied:
"No, because in discussions with the Trade Practices we felt not only would it be an expensive exercise for us to pursue that matter on an individual basis, but it would also be fairly lengthy. The Trade Practices were probably already further along the road and would get there quicker". (p. 161).

In my opinion Hubbards' conduct was reasonable and understandable. I should add that, even if Hubbards had sued Simpson and sought interlocutory injunctions, I cannot say with any degree of certainty what the outcome would have been as interlocutory injunctive relief is essentially discretionary.

Then Simpson submitted that Hubbards should have mitigated its loss by purchasing Simpson goods from some source other than Simpson itself during the calendar year 1979. The letter of 28 November 1978 which gave notice of the closure of Hubbards' account from 1 December 1978 said in the final paragraph:
"Gerard and Goodman have been appointed as the wholesale distributor for Simpson appliances in South Australia".

Hubbards never bought any goods from that source. It is said that Hubbards could have acted jointly with other retailers such as Keith Bowden Electrical Sales and Service to purchase Simpson goods in 1979 as in fact it did in December 1979 when its orders for Simpson goods were added to those of Keith Bowden Electrical Sales and Services'.

I do not accept this submission. Mr. Hubbard gave evidence explaining why Hubbards did not purchase Simpson products in 1979 from other retailers. He said that Hubbards' employees had discussions with Gerard & Goodman Pty. Limited in early December 1978 to see on what terms Hubbards could purchase Simpson products from it. They did not purchase any such goods from that source because:
"We ascertained that no N.A.R.T.A. rebate would be applicable to any purchases from Gerard & Goodman" (p. 39).
When asked what effect the "non-allowance of that rebate" would have on Hubbards he said:
"It would have meant that we were buying them at a price that was round about 11% dearer than we had previously been buying, which was the total of the N.A.R.T.A. rebates, and that we would not have been able to sell them competitively and make a profit . . . the general mark up is round about 11.5%"

(that is the general mark up of Hubbards).

In other words Hubbards, by purchasing through N.A.R.T.A., was able to gain a price advantage of 11% which would have been lost if it had bought through Gerard & Goodman Pty. Limited. Hubbards marked up its goods about 11.5% so that it could obtain a 10% profit. If it had purchased Simpson goods from Gerard & Goodman Pty. Limited, obviously it would have had to pass on higher prices to the consumer. Plainly this would have been detrimental to Hubbards, a large discounter and might have done considerable, if not irreparable, harm to its business.

As to purchasing goods jointly with other retailers, when asked in cross-examination by counsel for Simpson:
"Why should they" (Simpson) "object to you buying goods from Keith Bowden or in conjunction with Keith Bowden if his was an operating account?"

Mr. Hubbard replied:

"If as was proved in the other case" (i.e. the case before Franki J.) "they" (Simpson) "were concerned about resale price maintenance, they may not have been too happy to see it on our floor, because I thought that is why they closed the account".

Plainly, if Hubbards had purchased goods in 1979 through other retailers direct from Simpson it is unlikely that it could have done so except by paying a higher price to those retailers than they themselves paid Simpson for the goods, something which understandably would have been unacceptable to "The Discount King".

The critical point, however, is that it is for Simpson to discharge the onus of proving that Hubbards failed to mitigate its loss. It was for Simpson to establish that Simpson products could have been obtained from some other source than Simpson at competitive prices. Yet no evidence was led by Simpson to establish that there was any source from which Hubbards could have obtained supplies of Simpson goods in the calendar year 1979 at competitive prices. That is sufficient to dispose of this point.

Reliance was placed by Simpson upon the fact that in December 1979 Hubbards had made arrangements with Bowdens to purchase some Simpson products direct from Simpson. But that was a purchase of a small number of Simpson products on 5 and 17 December 1979, shortly before Christmas. Mr. Hubbard's evidence was that Hubbards adopted this course because:
". . that small amount we bought in December 1979, was to get a flying start at the arrangement that was to commence in 1980 when the Simpson rebate policy altered. It was at my request, because my understanding was that the air was cleared or that there was a different ball park from 1 January 1980, and I asked would it be all right to get a few products in December 1979, merely to get them on the floor, and apparently after some consideration - and Mr. Bowden had to find out from the Simpson hierarchy - he said yes, on that basis it would be all right. That is not the same as me being able to get supplies from him right through 1979".

It was the altered rebate policy of Simpson that operated from about the beginning of 1980 that made it financially worthwhile for Hubbards to join with other retailers in purchasing jointly from Simpson. All that was achieved by Hubbards purchasing with Bowdens in December 1979 was, as Mr. Hubbard explained, that Hubbards was enabled to get into a position where the product could be displayed on the floor:
"Some of the product was only coming in in mid December and a lot of that product was just to get stock onto the floor and get our salesman reoriented in product knowledge".

In other words, the reasons for purchasing a small quantity of goods through Bowdens in December 1979 was to meet a very special situation. It in no way supports an argument that it would have been commercially feasible for Hubbards to have adopted the same course throughout 1979.

The arguments advanced by Simpson in relation to mitigation of loss are rejected.

In the result, Hubbards has established its claim for loss or damage against Simpson under s. 82 based on paragraphs (a) and (b) of its claim namely $49,477.00 and $13,330.00 respectively, a total of $62,807.00, less a discount of $10434.00 for income tax. The figure thus produced is $52,373.00

There will be judgment for Hubbards in the sum of $52,373.00 The Court orders Simpson to pay Hubbards' costs of this proceeding.