John S Hayes & Associates v Kimberly-Clark Australia P/L

[1993] FCA 686

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JUDGMENT No. ........ ........ .. ..,........ .

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NEW SOUTH WALES DISTRICT REGISTRY ) No NG231 of 1992

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GENERAL DIVISION )

BETWEEN:	JOHN S HAYES & ASSOCIATES
Applicant
KIMBERLY-CLARK AUSTRALIA PTY LIMITED
Respondent
KIMBERLY-CLARK AUSTRALIA PTY LIMITED

-1 OCT 1993

FEDERAL COURT OF Cross-Claimant

AUSTRALIA

PRINCIPAL

REQISTRY JOHN S HAYES & ASSOCIATES PTY
LIMITED

.-

Cross-Respondent

CORAM:	HILL J
PLACE :	SYDNEY
DATED :	22 JULY 1993

EX TEMPORE REASONS FOR JUDGMENT

Objection is taken by the respondent to what is essentially the whole of the substantive evidence adduced by Mr R Watters, an accounts manager of the applicant, in an affidavit of 10 November 1992. That evidence is to the effect that Mr Watters had been an employee with the respondent whose employment was ultimately terminated in December 1990 because, so it is said, of an alleged conflict of interest which Mr Watters had. That conflict of interest arose because Mr Watters' father was concerned with the sale of competing

products manufactured by a company referred to as ABC Tissues.

It is said that this evidence is irrelevant to the issues of the case for a number of reasons. First it is said that the events in question occurred some considerable time before the purported termination by the respondent of arrangements between it and the applicant in mid-1992. Secondly, it is said that to the extent to which it is suggested that the evidence of Mr Watters raises similar facts, that submission must be rejected because there is not the necessary similarity involved. In particular, the case before me is concerned with the termination by the respondent of arrangements with a distributor. It is not concerned with the termination of a full time employee's employment. Finally, it is said that to the extent to which Mr Watter's evidence is relied upon as producing an admission on the part of Mr G Bennett, a sales manager of the respondent, Mr Bennett had no authority to make admissions binding upon the company.

For the applicant it is submitted that the major exclusive dealing within s.47 of the Trade Practices Act 1974 issues in the present case are whether there has been	("the Act"), or abuse of market power within s.46 of the Act
in the refusal by the respondent to deal with the applicant, brought about, so it is alleged, because of the relationship between the applicant on the one hand and a competitor, ABC Tissues.
In opening it has been suggested that the period in the mid-1980s was a period of environmental consciousness where the popularity of recycled paper products increased. This popularity became a source of concern, it is said, to the respondent, which mounted to fever pitch in 1991, culminating, so it is said, in mid-1992.
Further, it is said that Mr Bennett, who is the national sales manager of the respondent's washroom systems division, was one of two persons who made the decision to terminate the distrlbutorship arrangements with the applicant. So it is said that the evidence of Mr Watters is relevant both to the acts of Mr Bennett but more particularly to Mr Bennett's state of mind in relation to those who are associated with competitive products.
Although I do not think that at the end of the day the evidence of Mr Watters will be ultimately determinative of
any issue, I do not think that it can be said that his evidence raises an issue which is truly collateral.
Ultimately, the applicant must prove that the respondent engaged in a course of conduct for a purpose proscribed by ss.46 and 47. That purpose must, of necessity, be a purpose inferred from the acts of officers of the respondent. The closer those acts are to the events complained of, of course the more cogent they will be, the further away they are, the less cogent they will be. Certainly, the applicant could not rely upon nor does it seek to rely upon some doctrine of similar fact evidence.
But the affidavit of Mr Watters does, if the evidence be accepted, permit some inferences to be drawn about the conduct engaged in by the respondent in the perlod at the end of 1990, which is not so far removed from the period in question as to be totally irrelevant, and as to the motivation for taking certain action. For this purpose I do not think that the evidence is inadmissible, although its weight may well not be very great. I propose to admit the paragraphs objected to in the affidavit.
I certify that thls and the
preceding three (3) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justlce Hill.
Associate: T < [ ~ + A W ; h'
Date:  3-4- SePT q3

Counsel and Solicitors	CD Curtis & SC Burley
for Applicant:	instructed by Hunt & Hunt
Counsel and Solicitors	RV Gyles QC & CC Hodgekiss
for Respondent:	instructed by Sly & Weigall
Date of Hearing:	22 July 1993
Date Judgment Delivered:	22 July 1993