Metroplaza P/L v Girvan NSW P/L

[1993] FCA 1053

/OS3 43

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

CATCHWORDS

EVIDENCE - admissibility and relevancy - questions as to a witness's expectation of future conduct of other parties to alleged arrangement or understanding.

TRADE PRACTICES - restrictive trade practices - S 45 Trade

Practices Act 1974 (Cth) - "arrangement or understanding".

Trade Practices Act 1974 (Cth) - s 45

Newton v Federal Commissioner of Taxation (1958) 98 CLR 1
Trade Practices Commission v aholas Enterprises Ptv Limited

(NO. 21 (1979) 40 FLR 83

lie ~ritish ~ l a a Ltd Aareements [l9631 1 WLR 727

Top Performance Motors Ptv Ltd v Ira Berk (Oueensland) Ptv Ltd

(19751 24 FLR 286

~rade'practices Commission v Email Ltd (1980) 31 ALR 53

SYDNEY PRINCIPAL

METROPLAZA PTY LIMITED v GIRVAN NSW PTY LIMITED ( IN LIOUIDATION), C.C. (NEW SOUTH WALES) PTY LIMITED ( IN LIOUIDATION) formerlv known as CONCRETE CONSTRUCTIONS (NSW1 PTY LIMITED. LEIGHTON CONTRACTORS PTY LIMITED, HOLLAND STOLTE PTY LIMITED, THE MASTER BUILDERS ASSOCIATION OF NSW. AUSTRALIAN FEDERATION OF CONSTRUCTION CONTRACTORS. JOHN CUNNINGHAM, MULTIPLEX CONSTRUCTIONS PTY LIMITED

No. NG 5 of 1992

FOSTER J

2 9 AUG 1994

2 AUGUST	1993
IN THE FEDERAL COURT OF AUSTRALIA	)
)
NEW SOUTH WALES DISTRICT REGISTRY )	No. NG 5 of 1992

)

GENERAL DIVISION )

BETWEEN:  METROPLAZA PTY LIMITED

Applicant

AND :  GIRVAN NSW PTY LIMITED (IN
LIQUIDATION)

First Respondent

C.C. (NEW SOUTH WALES) PTY LIMITED (IN LIQUIDATION) formerly known as CONCRETE CONSTRUCTIONS (NSW) PTY LIMITED

Second Respondent

LEIGHTON CONTRACTORS PTY

LIMITED

Third Respondent

HOLLAND STOLTE PTY LIMITED

Fourth Respondent

THE MASTER BUILDERS

ASSOCIATION OF NSW

Fifth Respondent

AUSTRALIAN FEDERATION OF

CONSTRUCTION CONTRACTORS

Sixth Respondent

JOHN CUNNINGHAM

Seventh Respondent

MULTIPLEX CONSTRUCTIONS PTY

LIMITED

Cross-Respondent

CORAM:	FOSTER J
DATE :	2 AUGUST 1993
.-

REASONS FOR JUDGMENT
(Extempore)

has been taken to the last question asked of the present witness. The question was clearly inadmissible in form and I rejected it on that basis. Another basis of objection was, however, taken that the question was irrelevant as going to no issue in the case. In the absence of the witness, I have heard argument as to the admissibility of questions, proper in form and designed to elicit information as to the state of mind of the witness at the point of time when he left the meetings which are of critical importance.

Evidence is sought to be adduced on the topic whether the witness had a particular expectation that other tenderers present at the meeting would act in a certain way in relation to the tenders that they might make for the construction work required by the applicant.

The basis of the objection taken by Mr Hughes of
Queen's Counsel for the second respondent, and supported by

counsel for the other respondents, was that the state of the

witness's mind in this regard could not be relevant to	establish whether or not a relevant arrangement or
understanding had been entered into by the parties in contravention of s 45 of the Trade Practices Act 1974 (Cth).
I have been referred to a number of authorities by counsel and have considered them over the luncheon adjournment. I shall refer to some of them in the brief reasons which I now give.
The word "arrangement" has been the subject of judicial consideration in a number of cases, not all of which relate to the term as used in the Trade Practices Act. A number of relevant passages from decided cases are in fact collected in a convenient way in p 94 of Miller, Annotated Trade Practices Act, 14th ed. 1993. The learned author quotes a passage from the case of Newton v Federal Commissioner of Taxation (1958) 98 CLR 1 at 7. This is a well known passage which provides as follows:-

"[Tlhe word 'arrangement' is apt to describe something less than a binding contract or agreement, something in the nature of an understanding between two or more persons - a plan arranged between them which may not be enforceable at law."

The question of what an arrangement could consist of was also considered in Trade Pract~ces Commission v Nicholas Entervrises Ptv Limited (No. 2 ) (1979) 40 FLR 83, a case which I will refer to only insofar as it adopted a statement by Willmer LJ in Re British Slag Ltd Agreements [l9631 1 WLR 727. The passage from the judgment of Willmer LJ is as follows:-

everyone knows what is meant by arrangement between

"Although it may not be easy to put it into words,

two or more parties. If the arrangement is intended to be enforceable by legal proceedings, as in the case where it is made for good consideration, it may no doubt be properly described as an agreement. But the statute clearly contemplates that there may be arrangements which are not enforceable by legal proceedings, but which create only moral obligations binding in honour.. . For when two or more parties intentionally arouse in the others an expectation that he will act in a certain way, it seems to me that he incurs at least a moral obligation to do so. An arrangement is so defined as therefore something whereby the parties to it accept mutual rights and obligations."

This particular decision was referred to by Smithers J in Tor, Performance Motors Ptv Ltd v Ira Berk JOueensland) Ptv Ltd (1975) 24 FLR 286 at 290. His Honour, after indicating that what was being alleged in the case was really an arrangement or understanding rather than a binding contract, went on to consider the passage from Newton to which I have already made reference and also a passage from the judgment of Diplock LJ in the Basic Slaq case.

His Honour continued, however, at p 291:-

"Section 45 is not in the same terms as s 6 of the

R e s t r i c t i v e T r a d e P r a c t i c e s A c t 1956 which is the

section referred to in these remarks, but by parity of reasoning it would follow that the existence of an arrangement of the kind contemplated in S. 45 is conditional upon a meeting of the minds of the parties to the arrangement in which one of them is understood, by the other or others, and intends to be so understood, as undertaking, in the role of a reasonable and conscientious man, to regard himself as being in some degree under a duty, moral or legal, to conduct himself in some particular way, at any rate so long as the other party or parties conducted themselves in the way contemplated by the arrangement."

I think it of considerable significance in determining the question of admissibility which has been posed to have regard to the passage from the judgment of Willmer LJ, which I have set out above, where his Lordship refers to the intentional arousing in one party by another of an expectation that that party will act in a certain way.

It seems to me that, prima facie, evidence can be introduced in chief to establish through the mouth of the witness himself that he either had or did not have an

expectation that other parties to the arrangement sought to be proved would act in a particular way. It has been submitted that a passage from the judgment of Lockhart J in Trade Practices Commission v Email Ltd (1980) 31 ALR 53 at 56, must be regarded as an expression of a contrary view. That case, as indeed are most cases in this area, was a case dependent upon the adducing of circumstantial evidence in order to prove the existence of the arrangement relled upon.

In that context, his Honour said:-

"For there to be an arrangement or understanding there must be a meeting of the minds of those said to be parties to the arrangement or understanding. In some cases this may be inferred from circumstantial evidence. There must be a consensus as to what is to be done and not just a mere hope as to what might be done or happen. Independently held beliefs are not enough."

This passage is relied upon in opposition to the

admission of evidence upon the topic under consideration.

passage that I have just quoted from his Honour's judgment.	Particular reliance is placed upon the last sentence of the
I have had regard to the cases which his Honour cites at the conclusion of the quoted passage. In my view, what his Honour had in mind in the use of the words that he chose was to make a distinction between beliefs arrived at as a result of independent considerations on the part of the person holding them and beliefs which were induced by or

contributed to by activity or words on the part of some other person. My understanding of the import of his sentence is confirmed, in my view, by a consideration of the cases to which he makes reference. Indeed, those cases are posited in the discussion.

The question is whether, where oral evidence is given of the circumstances from which relevant agreement or understanding was to be reached, it would be proper for questions to be asked of witnesses giving such evidence as to what, in fact, their understanding was derived from the circumstances in whlch statements had been made to them.

I also asked myself the question whether in this case it would be appropriate for this witness to be asked in cross-examination whether after leaving the particular meeting and hearing what he had heard said by other parties, he had no view that he could reasonably expect that those parties were to take a particular line of conduct. If such questions could

be asked in cross-examination, I see no reason why the same	topic cannot be explored in evidence-in-chief. I have come to
the conclusion that I should allow questions on this general topic when put in admissible form. I so rule.

I certify that this and the preceding five

(5) pages are a true copy of the reasons

for judgment herein of the Honourable Mr

Justice M. L. Foster.

I

Associate:

Date:  2 AUGUST 1993

A P P E A R A N C E S

COUNSEL FOR THE APPLICANT:  MR J.M. SPENDER, QC

w i t h MR D.J. HAMMERSCHLAG

INSTRUCTED BY:  ROSENBLUM & PARTNERS

COUNSEL FOR THE SECOND RESPONDENT: THE HON. T.E.F. HUGHES, QC

w i t h MR R.E. DUBLER

INSTRUCTED BY:  CORRS CHAMBERS WESTGARTH

COUNSEL FOR THE THIRD RESPONDENT: MP. J.D. HEYDON, QC

w i t h MR C.P. C O W S

INSTRUCTED BY:  ROBIN MAXAM

COUNSEL FOR THE FOURTH RESPONDENT: MR M.R. ELLICOTT

INSTRUCTED BY:  ADDISONS

COUNSEL FOR THE FIFTH, SIXTH AND SEVENTH RESPONDENTS:

MR J.B. SIMPKINS

INSTRUCTED BY:  COLIN BIGGERS PAISLEY

COUNSEL FOR THE CROSS-RESPONDENT: MR B.W. WALKER

INSTRUCTED BY:	DUNHILL MADDEN BUTLER
DATE OF HEARING:	2 AUGUST 1993
DATE OF JUDGMENT:	2 AUGUST 1993