Nella v Kingia Pty Ltd

[1989] FCA 142

JUDGMENT No. 1 !@.L&

COMMONWEALTH OF AUSTRALIA TRADE PRACTICES ACT, 1974

IN THE TRADE PRACTICES TRIBUNAL NSW 5 of 1987

RE: JOHN DEE (EXPORT) PTY.

LIMITED & ORS.

Applicants

RE: Application for a Review

of a Determination made by the Trade Practices Commission dated 1 October 1987

SUMMARY OF REASONS FOR DECISION

This is an application by John Dee (Export) Pty. Limited

and other companies, which	are meat processors in Queensland,
for a review by the Tribunal of a determination of	the Trade

Practices Commission which granted authorlzatlon to the

proposed Constitution and Accredltation Rules (except clause 6) of the Queensland Stock Agents' Association ("QSAA"),, a body in the process of formation, and to the giving effect to exclusionary provisions contained therein.

The Constitution provides for the maklng of

Accreditation Rules which in turn provide for concesslonal trading terms upon which accredited buyers at auctlon sales

of livestock in Queensland conducted by members of	the
Association may pay for thelr purchases.

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The applicants for authorization before the Commission

were the three Pastoral Houses, Edlers, Dalgetys and Primac together with a group of 39 stock and station agents who said

they intended to joln QSAA.	The Pastoral Houses and these
private agents together account for	over 90% of cattle

marketed In Queensland through stock agents. The appllcants for review of the Commlsslon's determinatlon are 21 meat processors who handle over 9 0 % of cattle slaughtered in Queensland abattoirs.

The question before the Tribunal is whether the proposed

Constitution and Accreditation Rules ofQSAA would constitute a contract, arrangement or understanding to the effect that members of QSAA would deal collectlvely for the purpose of accrediting purchasers of livestock at auction for slaughter and thus constitute an excluslonary provision or have the effect of substantially lessening competition in

breach of S. 45 of the Trade Practices Act	1 9 7 4 .
What 1s asserted in support of authorization is that the proposed system of	QSAA:

will not be dominated by the Pastoral Houses;

will be of equal beneflt to the Pastoral Houses and
independent agents alike;

will give rise to a better system of credlt control with bonris and guarantees being provided for the benefit of all members, not just the Pastoral Houses;

will reduce the del credere risk to agents;

will provlde lnformatlon to agents	whlch is not
presently available to Independent agents,	namely,

informatlon as to the financial stablllty of processors

and other purchasers of livestock;

wlll offer greater ablllty to monitor payment patterns

in accordance with concessional trading terms;

wlll not be inimical to competition OK result In

antl-competitive detriment.

In the Tribunal's oplnlon it is hard to imaglne an

industry which shows substantial credit risks than the sale of livestock. less