Od Transport Pty Ltd v The W.A. Government Railways Commission

[1986] FCA 652

CATCHWOR :DS -

TRADE PRACTICES - s . 4 6 T r a d e P r a c t l c e s Act - a p p l i c a t i o n f o r

i n t e r l o c u t o r y i n ~ u n c t l o n - R a l l w a y s C o m m l s s l o n w i t h e f f e c t i v e

s t a t u t o r y m o n o p o l y t r a n s p o r t f o r g o o f d s i n r e g u l a t e d

g e o g r a p h l c a l a r eas - T r a n s p o r t Act 1966 - price c o m p e t i t l o n b y

Commiss ion In non- regu la t ed areas - p r e d a t o r y p r i c i n g - a b u s e O E

monopoly - - - power - w h e t h e r Crown i n s t r u m e n t a l i t y - w h e t h e r t h r e s h o l d

q u e s t l o n - e x t e n t of M l n l s t e r i a l con t ro l - Government R a i l w a y s Act

( w A ) 1 9 0 4 - 1 9 8 2 - s e r i o u s q u e s t i o n t o be t r i e d - ba lance of

c o n v e n l e n c e - t h i r d p a r t y r i g h t s .

T r a d e P r a c t l c e s A c t 1974 s .46

T r a n s p o r t Act 1966 (V7A)

Government Railways Act 1904 (WA)

B u l l o c k v T h e F e d e r a t e d F u r n i s h l n g T r a d e s S o c i e t y o f Australasia

( 1 9 8 5 ) 5 FCR 464 a t 472

Bradken Conso l ida t ed L i m i t e d v The Broken H i l l P r o p r i e t a r y Company

L i m i t e d ( 1 9 7 9 ) 1 4 5 CLR 107

Hughes v	Western	A u s t r a l i a n	C r i c k e t	Association	( Inc)	[ l9861 ATPR
40-676

Murphy V Lush ( 1 9 8 6 ) 60 ALJR 523

Crouch v Commissioner for Railways (Qld) (1985) 62 ALR 1

T o w n s v i l l e Hospitals Board v C o u n c i l of t h e C i t y of T o w n s v i l l e

( 1 9 8 2 ) 1 4 9 CLR 282, 288

Re A u s t r a l i a n P e r f o r m i n g R i g h t Association L i m i t e d ' s R e f e r e n c e : R e

A u s t r a l l a n Broadcas t lng commlss lon (1982) 45 ALR 153, 158

S p r i n g d a l e Comfort P t y L t d v Electr ical T r a d e s U n i o n of Workers

(WA B r a n c h ) P e r t h [ l 9 8 6 1 ATPR 40-694 a t 47,623

R e	Queensland	Co-operative	M i l l i n g Association L imi t ed	(1976)	25
FLR	169

R e T o o t h & C o . L i m l t e d and Tooheys L imi ted (1979) 39 FLR 1 a t 39

WAG 126 OF 1986

OD TRANSPORT	PTY	LTD	V 'THE WESTERN	AUSTRALIAN	GOVERNMENT	RAILWAYS
COMMISSION
FRENCH J.
P E RTH

24 DECEMBER 1986

IN THE FEDEl74J. CfI11R'T	)
OF AUSTRALIA	)
WESTERN AUSTRALIA	)
DISTRICT REGISTRY	)
GENERAL DIVISION	) NO. WAG 126 Of 1986

B E T W E E N : OD TRANSPORT PTY LTD

Applicant

and

THE WESTERN AUSTRALIAN

GOVERNMENT RAILWAYS COMMISSION

Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER: FRENCH J.

DATE OF ORDER:	24 December 1986
WHERE MADE:	Perth

THE COURT ORDERS THAT:

1. The motion for interlocutory relief is dismissed.

2 . Costs of the motion be reserved with liberty to the Respondent to apply for a flnal order as to the costs of the motlon.

Note: Settlement and entry of orders is dealt

with in Order 36 of the Federal Court Rules.

(See also Order 37 rule 2 ( 3 ) . )

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1.

I

I N THE F DERAL COURT )

AUSTRALIA OF 1

! WESTERN AUST ALIA 1

!	DISTRICT REGISTRY	)
GENERAL DIVISION	) NO. WAG 126 or 1986

B E T W E E N : OD TRANSPORT PTY LTD

Applicant

and

THE WESTERN AUSTRALIAN

GOVERNMENT RAILWAYS COMMISSION

RESPONDENT

CORAM: FRENCH J .

24 DECEMBER 1986

REASONS FOR JUDGMENT

OD T r a n s p o r t P t y L t d ( t h e a p p l i c a n t ) is a company which,

among o t h e r t h i n g s , ca r r ies on the b u s i n e s s of t r a n s p o r t i n g g r a i n

t o ports f o r e x p o r t .

I t h a s c a r r i e d on t h i s a c t i v i t y , w h i c h c o m p r i s e s by f a r

t h e g rea te r proportion o f i t s b u s i n e s s , f o r some t w e n t y y e a r s .

T h e p r o v i s i o n o f services f o r t h e t r a n s p o r t of g o o d s i n

Western A u s t r a l i a is c o n d u c t e d w i t h i n a r e q u l a t o r y f r a m e w o r k

c r e a t e d by t h e p rov i s ions of t h e T r a n s p o r t Act 1966 ( W A ) . The

nature o f t h a t r e g u l a t o r y f r a m e w o r k w i l l b e l a b o r a t e d l a t e r i n

t h e s e reasons.

I n or a b o u t S e p t e m b e r 1 9 8 6 , t e n d e r s h a v i n g b e e n c a l l e d

b y t h e Minister for Transpor t , t h e a p p l i c a n t won a cont rac t fo r

8'

E

2 .

t h e t r a n s p o r t of b u l k g r a l n by road From c e r t a i n o m i n a t e d

r e c e l v a l p o l n t s o p e r a t e d by Co-opera t ive B u l k H a n d l i n g L i m i t e d t o

Albany and Esperance .

O n e of t h e u n s u c c e s s f u l t e n d e r e r s was t h e Western

A u s t r a l l a n G o v e r n m e n t R a i l w a y s C o m m i s s i o n , t h e r e s p o n d e n t i n t h e s e

p r o c e e d i n g s .

T h e r e s p o n d e n t i s s a l d t o h a v e w h a t a m o u n t s t o a

s t a t u t o r y m o n o p o l y f o r t h e t r a n s p o r t of g r a i n i n cer ta in areas of

t h e S t a t e d e s i g n a t e d b y t h e a p p l i c a n t as " t h e r e g u l a t e d areas".

Th i s monopo ly does n o t e x i s t i n o t h e r areas which are

r e f e r r e d t o by t h e a p p l i c a n t as t h e "deregulated areas".

The pa r t s of t h e s o u t h west of t h e S t a t e t o b e s e r v i c e d

b y t h e a p p l i c a n t u n d e r its c o n t r a c t are a l l w i t h i n d e r e g u l a t e d

I

areas and are r e f e r r e d t o as " t h e c o n t r a c t areas".

. T h e r e s p o n d e n t h a s r i s e n t o t h e c h a l l e n g e p o s e d by its

d e f e a t i n t h e t e n d e r process by o f f e r i n g t o f a r m e r s i n t h e

I	c o n t r a c t a r eas	a	c o m p l e t e	p a d d o c k	t o p o r t	r o a d	a n d	r a i l	g r a i n
t r a n s p o r t s e r v i c e .
I

I t h a s p r l c e d t h e t o t a l s e r v i c e so o f f e r e d a t l e v e l s

w h i c h e f f e c t i v e l y u n d e r c u t t h e a p p l i c a n t ' s p r i c e s .

3 .

The applicant says that the prlces u I C e r e d do [lot

reflect fair competltlve activity on the part of the respondent.

l	It says that the prlce of the respondent’s service 1s so low that
!
I	it must be intending to operate the farm to rail head, i.e. the
I	road component, of Its service at a loss.
l l

This, it contends, amounts to an abuse of market power

by the respondent and	a contravention of s.46 of the Trade
Practices Act.

I The applicant has in tituted application an this t

court under the provisions of the Trade Practices Act in which it

!

I	clams injunctions and damages against the respondent.
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l	The application and a supporting affidavit were filed in this Court on the afternoon of Monday, 2 2 December 1986 and a
claim for interlocutory relief, included in the application, was

l

listed for hearing at 3 p.m. on that day. The respondent had on 1

i

the afternoon of Friday, 19 December, been given a draft of the

affidavit to be relied upon by the applicant.

Argument on the claim for interlocutory relief proceeded at 3 pm, by which tlme the respondent had secured representation through the office of the State Crown Solicitor.

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Argument continued on 2 3 December from 11 a.m. until

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3.45 pm.	Durlng that time a second affidavit was tendered by the
applicant.

..

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4 .

I	At the conclusion of the argument I lndlcated that I
I

I would consider the matter overnlght and glve a declslon on 2 4

December at 3 pm. My decision and the reasons €or it were

dellvered orally on 2 4 December Erom a	draft whlch, subject	to
minor correctlons, I now publlsh.

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The application ralses important questlons of law and

difficult questions of fact.

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In the circumstances it is no criticism of counsel and

had the degree of comprehensive argument which they plainly

deserve.

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solicitors for the parties to say that the matters of law have not

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Nor in the circumstances can it be said, that they have

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I	received the careful and extended consideration that their final
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i	determination in this court will require.
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As to the questions of fact, the evidentiary material

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is, as so often is the case in clalms for interlocutory relief,

scanty and Incomplete.

It is for such reasons that the court has on previous occasions said that In hearing claims for interlocutory relief it does not declde finally any issue In the case. The vlews which are expressed at this stage of the proceedlngs are expressed only

l	for the purpose of declding the motion.
l	I
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l	I
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5 .

T h e a d m i s s 1 hi 1 1 ty of ev~dence a t t h e final hearing 1 s

regulated by rules which are not the same as those appllcable at the interlocutory stage. What is accepted then as evldence before the court may be different from that whlch is admltted for the purposes of these proceedings - CO-Operative Bulk Handling Limited

v Waterside Workers Federation of Australia (1983) 51 ALR 79, 87

per Lockhart J., Barneys Blu-Crete Pty Ltd v Australian Workers

Union (1979) 43 FLR 463, 465-66 per Northrop J.

It is now well established that an applicant for

Interlocutory relief must satisfy the court that there is a serious question to be tried and that the balance of convenience

i	favours the grant of the relief - Epitoma Pty Ltd v Australasian
i	Meat Industry Employees' Union (No.2) (1984) 54 ALR 730 at 734 in
the judgment of the Full Court. See also Australian Coarse Grain
i -
!	Pool Pty Ltd v Barley Marketing Board of Queensland-(l982) 57 ALJR
i	425 (Glbbs CJII Tableland Peanuts Pty Ltd v Peanut Marketing Board
I	I	(1984) 58 ALJR 283 at 284 (Brennan J.II State of Queensland v
i	I
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I	Australian Telecommunications Commission (1985) 59 ALR 243 -at 244
I	(Gibbs CJ) and Castlemaine Tooheys Limited v State of South

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Australia (High Court Unreported Decision of Mason ACJ. delivered

3 October 1986).

It is also I think, appropriate to say that the two necessary condltlons for the grant of interlocutory relief are not lndependent of each other:-

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6.

"...an apparently strong clalm may lead a court more readlly to grant an ln-~unctlon when the balance of

convenlence 1 s fairly even. A more doubtful clalm

(whlch nevertheless ralses "a serious questlon to be tried") may still attract lnterlocutory relief if there 1s a marked balance of convenlence I n favour of It."

- Bullock v The Federated Furnlshlng Trades Society of

Australasla (1985) 5 FCR 4 6 4 at 472 per Woodward J.,

Smlthers and Sweeney JJ agreeing.

Counsel for the respondent raised at the outset what he

described as a threshold questlon, a question, he said, which went

to the ~urisdlction of the court to entertain this application.

It was his submission that the respondent 1s a servant or agent of the Crown in right of the State of Western Australia.

If that characterisation be correct in relation to the

conduct complained of, then the Trade Practices Act has no

application to the respondent for it does not bind the Crown -in right of the State - Bradken Consolidated Limited v The Broken Hill Proprietary Company Limited (1979) 145 CLR 107.

It. was further submitted for the respondent that the .

court could not, on a claim for interlocutory relief, deal with the jurisdictional issue as It would deal with the other questions before it in such a case.

The Court, it was sald, is obliged to resolve the

jurisdictional issue at this stage of the proceedlngs and cannot limit itself to a conslderation whether a serious questlon of law arises In that regard.

!

I l .

As a proposltlon of unrversal appllcatlon that 1s not

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correct.

Some questions whlch go to the ~urlsdiction of the Court may require extensive factual enquiry before they are resolved.

Accordlng to the clrcumstances of the case it may be a

desirable and practical course to adjudicate at the outset upon a

jurisidictional question as a preliminary issue, but that is not

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the only way in which'jurisdiction may be determined.

In Hughes v Western Australian Cricket Association (Inc) [l9861 ATPR 40-676, the applicant instituted proceedings against

I

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the Western Australian Cricket Association (Inc) and a number of

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district cricket clubs together with the Cricket Councll of

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I	Western Australia. The application invoked the jurisdiction of this Court under s.86 of the Trade Practices Act and alleged a
I
l	contravention by the respondents of s.45 of that Act.
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The contravention was said to have been associated with

i \

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a decision to prevent the applicant from playing in grade cricket

i

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matches.

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An interlocutory Injunction was granted restraining the

respondents from taking actlon to interfere with the eligibility

of Hughes for selectlon in certaln grade matches.

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8.

Upon an appllcatlon for extenslon of thc in~unctlon it

was contended for the respondents that they were not corporations

In the constitutional sense necessary to attract the applicatlon

of the Trade Practices Act and that there was therefore no

jurisdiction in the Federal Court to deal with any part of the

applicant's claim.

Although the application for an extension of the injunction was refused, the refusal was based upon the futility of continuing such relief by reason of factors which are not material for present purposes.

Toohey J. did however hold that there was a serious question to be tried. The jurisdictional and constitutional issue of the proper characterisation of the respondents was part of that question.

In refusing to grant the injunction his Honour said at

47,471:-

"In summary then I accept that the causes of action pleaded ralse a serious question to be tried. However I

am of opinion that an extension of the in~unction should

be refused. Because I am of that view, I think it undesirable to express views about complex questions of law and fact, which views are more approprlately expressed in the context of a substantive hearing."

It may be that In some cases the question of jurisdictlon 1s predominantly one of law.

9 .

Certalnly as put by counsel € O K the respondent, the character of the respondent is a matter to be determlned entirely by reference to the statute by whlch It is established, namely the Government Railways Act 1904.

It can be accepted that where a straight forward

question of law arlses at an interlocutory stage, it wlll in most

cases, be proper to declde it then and there.

In fact it has been said to be a general rule that such questions should be so decided - Karaguleski v Vasil Bros. & Co. Pty Ltd (1981) 1 NSWLR 267.

Where however time does not permit a proper

consideration of questions of law at the interlocutory stage, then the court should not decide them - Hortico (Australia) v Energy Equipment Co. (Australia) (1985) 1 NSWLR 345.

- . . .

In Murphy v Lush (1986) 60 ALJR 523 the High Court held,

I -

inter alia, that a serious question arose as to .the' validity -of the Parliamentary Commission of Enquiry Act 1986 but on the balance of convenience would not grant an interlocutory injunction restraining the Commission from proceeding with its enquiry into the conduct of his Honour the late Mr Justice Murphy.

Determination of the character of a public corporation

as an agent or servant	of	the Crown may in some cases be	a
straightforward process.

1 0 .

T h e L l ldLdcLet lsdL lo I1 oC the Cornmissluner t o r Rallways 01

the State of Queensland whlch was raised in Bradken Consolidated Limlted v Broken Hill Proprietary Company Llmlted (supra) was such

a case. Indeed his character as an agent of the Crown was

conceded. A powerful factor in favour of that characterisation and the concession was the language of s.8 of the Railways Act 1914-1976 (Qld) which provided:-

"The Commissioner, representing the Crown, shall be a corporatlon sole by the name of "The Commissioner of Railways" and by that name shall have perpetual succession and an officlal seal which shall be judicially noticed, and shall be capable in law of suing and being sued, and shall have power to take, purchase,

sell, exchange, lease,	and hold	land, goods, chattels
and other property.

The Commissioner, as such corporation, for all the purposes of any act, shall have and may exercise all the powers, privileges, rights, and remedies of the Crown."

The nature of the Commissioner as an instrumentality of

the Crown in right of the State of Queensland was reinforced b y . the decision of the High Court in Crouch v Commissioner €or Railways (Old) (1985) 62 ALR 1, a case which was not cited in

argument nor referred to in the oral delivery of these reasons.

The provision in the Government Railways Act 1904 ( W . A . )

by which the Respondent is established, provides inter alia:-

"8(1) For the purposes of this Act there shall be

constltuted a Commisslon under the name of The Western

Australian Government Railways COINnlSSiOn.

11.

(2) The C o m m l s s l o n s h a l l be t h e p e r m a n e n t h e a d o f t h e

D e p a r t m e n t , a n d , s u b ~ e c t t o t h e M i n i s t e r e x c e p t a s

p r o v i d e d I n s ec t ion 73 of t h i s Act, s h a l l be r e s p o n s l b l e

f o r t h e a d m i n i s t r a t i o n o f t h l s Act.

( 3 ) T h e C o m m l s s l o n s h a l l c o n s i s t o f one p e r s o n

a p p o i n t e d by t h e G o v e r n o r a s Commissloner of t h e Western

A u s t r a l i a n G o v e r n m e n t R a i l w a y s . "

T h e r e is, i n t h e Act, n o e x p r e s s l e g i s l a t i v e s t a t e m e n t

of t h e s t a t u s of t h e r e s p o n d e n t a s a n a g e n t of t h e Crown.

Counse l f o r t h e r e s p o n d e n t n e v e r t h e l e s s c o n t e n d s t h a t b y

r e a s o n of v a r i o u s f a c t o r s w h i c h d b e a n t e r m i n e d u p o n a

e x a m i n a t i o n o f t h e Act, i t is p l a i n t h a t t h e r e s p o n d e n t is a n

a g e n t or s e r v a n t of t h e Crown.

T h e r e s p o n d e n t is s u b j e c t t o e x t e n s i v e m i n i s t e r i a l

c o n t r o l	i n	many	o f	i t s	a c t i v i t i e s .	E x a m p l e s	of	t h i s	c o n t r o l
i nc lude : -

1. T h a t it is r e s p o n s i b l e f o r t h e a d m i n i s t r a t i o n of

t h e A c t s u b j e c t t o t h e M i n i s t e r ( s . 8 ( 2 ) 1 . .-

2. T h a t i t may w i t h t h e a p p r o v a l o f t h e M i n i s t e r make

a d d i t i o n s a n d i m p r o v e m e n t s t o a n y r a i l w a y ( s . 1 4 ) .

3 . T h a t it may w i t h t h e a p p r o v a l o f t h e M i n i s t e r from

t i m e t o time f i x sca les o f c h a r g e s r e l a t i n g t o

v a r i o u s e r v i c e s i n c l u d i n g carriage of goods and

p a s s e n g e r s (s.22).

4 . C e r t a i n c lasses o f c o n t r a c t t h e p e r f o r m a n c e o f

w h i c h i s l i k e l y t o e x t e n d o v e r 20 y e a r s m u s t be

r a t i f i e d b y t h e M l n l s t e r b e f o r e t h e y c a n t a k e -

e f f e c t (sub-s.28(2)).

1%.

I n P a r t I V of t h e Act r e l a t l n g to f l n a n c e a n d a c c o u n t s

t h e r e a r e a number of provisions r e l i e d upon by t h e r e s p o n d e n t as

i n d l c a t l v e of its s t a t u s a s a n a g e n t o f t h e C r o w n .

I ts g e n e r a l b o r r o w i n g p o w e r s are s u b ~ e c t t o t h e a p p r o v a l

o f t h e Minister. ( s .54B)

Where money s tanding to t h e c r e d i t of t h e r e s p o n d e n t is

i n s u f f i c i e n t a t a n y time t o meet e x p e n d i t u r e i n c u r r e d or p r o p o s e d

t o b e i n c u r r e d b y i t i n t h e p e r f o r m a n c e of i t s f u n c t i o n s , t h e

T r e a s u r e r o f t h e S t a t e is empowered t o a p p r o v e b o r r o w i n g s b y t h e

r e s p o n d e n t from t h e P u b l i c A c c o u n t of s u c h a m o u n t s as t h e

T r e a s u r e r a p p r o v e s o n s u c h c o n d i t i o n s as t o repayment and payment

of i n t e r e s t as he imposes.

T h e p o w e r o f t h e r e s p o n d e n t t o b o r r o w - m o n e y s b y t h e

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i s s u e a n d i n s c r i b e d s t o c k sa le o f d e b e n t u r e s or b y t h e c r e a t i o n i s s u e a n d s a l e of

is s u b j e c t t o t h e a p p r o v a l o f t h e G o v e r n o r . ( s . 5 4 F . )

. \. >-.-

A l l m o n e y s r e c e i v e d b y t h e r e s p o n d e n t . b y way o f r e n t s

t o l l s f a r e s f r e i g h t s c a r r i age f i n e o r p e n a l t i e s or o t h e r w i s e

a c c r u i n g f r o m a r a i l w a y are to b e p a i d i n t o t h e P u b l i c A c c o u n t a n d

form part o f C o n s o l i d a t e d R e v e n u e (s.60).

A p o w e r t o l e a s e r a i l w a y p r o p e r t y is c o n f e r r e d b y s.62

b u t c a n o n l y b e exerclsed w l t h t h e a p p r o v a l of t h e G o v e r n o r .

The leasing of unused land or bulldlngs is sublect to

mlnlsterlal approval.

The extent of potential Mlnisterlal control over the respondent in relation to the conduct complained of by the

applicant, cannot be readily ascertalned on the materials

presently before the Court.

The exercise by the respondent of its power to cause

goods for conveyance by railway to be collected from places

outside the limits of a railway (para. 28(l)(a)) and its power to

enter into and perform contracts-for that purpose (para. 28(l)(e))

is not necessarily subject to such control.

Subsection 28(2) of the Government Railways Act

provides:-

“ N o contract made by the Commission pursuant to the powers conferred by subsection (1) of this section, the

l performance of which appears likely at the time of the execution of the contract to extend over a-period of more than five years shall take or have effect unless-

(a) being a contract the performance of which appears I

to be likely to extend for a period of twenty years

or less, it is ratified by the Minister; or

(b)	in any other case, it is laid before each House of Parliament as though it were in fact a regulation
to which the provislons of section 36 of the

Interpretation Act 1918, applied and neither House -

of Parllament passes a resolution disallowing the

contract, of which resolution notice is given,

wlthin 14 sitting days (whether or not those days or some of them, do not occur in the same session of Parliament or during the same Parliament as that

in which the contract is laid before such House).“

1 4 .

Thcre 1s nothlnq to suggest that the contracts In thls case are of the class contemplated by sub-s.(2).

Minlsterial control of the scales of charges made by the

respondent 1s provlded for In s.22 as already noted but is subject

to the following provlso as set out In that section:-

"Provided, however, that the Commlsslon, or any officer of the department duly authorised by the Commission, may from time to time fix speclal scales of charges to be paid In lieu of the ordinary charges upon special

occasions, or for such times and in respect of such

railways or parts of a railway as it thinks fit:

Provided also that the powers conferred upon the Commission by this section may, from time to time, be exercised by the Governor, and any charges, conditions,

and regulations fixed or imposed by the Governor shall supersede the charges, conditions or regulations fixed or imposed by the Commission."

It does not appear from the materials before the Court nor has the Court been informed whether in fixing the prices it

I

has for the provision of farm to port grain transport services in

1

the deregulated areas, the respondent has exercised an independent

! discretion or acted under a Ministerial or gubernatorial approval..

The answer to that question may be a matter of some

significance to the determination of the jurlsdictional point made

by the respondent.

For a 2ubllc corporation may be given the immunities and

privileges of the Crown for one purpose and not for another. -

15.

'Iownsvllle i l o s p i t a l s Rnard v Collncll of the City of Townsvllle (1982) 149 CLR 282, 288 per Gibbs CJ, Elurphy, Wilson and Brennan

JJ. agreelng. If the respondent were, in the Impugned conduct,

exercising an Independent discretion not subject to Mlnlsterial control then It may not have been acting as an agent of the Crown.

It was submitted for the applicant that there is in the

I	Government Railways Act no express statement that the respondent
I	is the agent of or represents the Crown in right of the State of
I	Western Australia.
I I
That this is a relevant factor i n the determination of the characterisation of a public corporation is borne out by the judgment in the Townsville Hospital Board case at 291 where it was said by the Chief Justice:-

"It has more than once been said in this Court that

"there is evidence of a strong tendency to regard a

statutory corporation formed to carry on public

functions as distinct from the Crown unless Parliament

has by express provision given It the character of a

servant of the Crown":. Launceston Corporation v Hydro

Elqctrlc Commission (1959) 100 CLR 654 at 662; State

Electricity Commission (Vict) v City of South Melbourne

(1968) 118 CLR 504 at 510. All persons should prima

facie be regarded as equal before the law, and no

I

statutory body should be accorded special privileges and immunities unless it clearly appears that it was the intention of the legislature to confer them. It is not difficult for the legislature to provide in express

terms that a corporation shall have the privileges and immunities of the Crown, and where it does not do so it should not be readily concluded that it had that intentlon."

!

16.

I

In the case of the Townsville Hospltal Board, the Board was subject to Ministerlal approval In relation to the borrowlng

I

l	of money or the making of financial arrangements for the purposes
!	of proposed works but was not sublect to such controls in respect of the conduct of the works. In this regard Gibbs CJ. sald at 291:-

"The fact that a number of ministerial approvals must be obtained if the Board needs to borrow or raise money or make financial arrangements for the purposes of a proposed work does not indicate that the Board in *

carrying out the work is acting for the Crown. The

Board cannot be directed to do the work, and if it does borrow or raise money for the purpose the Board and not the Crown is liable in case of default. Although in

some respects a Hospital's Board is subject to stricter controls than those whlch governed the statutory bodies in Metropolitan Meat Industry Board v Sheedy (1972) AC 899: Grain Elevators Board (Vict) v Dunmunkle Corporation (1946) 73 CLR 70 and the Gladstone Town .

Council v Gladstone Harbour Board (1964) Qd.R. 505,

there is in my opinion no ground of distinction between	-
the present case and those cases."

!

In Re Australian Performing Right Association Limited -

Reference: Re Australian Broadcasting Commission (1982) 45 ALR 153, Sheppard J. said that the question whether the Australian.

I	Broadcasting Commission was an instrumentality or agency of the
Crown was to be decided by a consideration of the relevant .
statutory provisions with a view to determining Parliament's
i
intention as to what the positlon was to be. While assistance could be found in a multipliclty of cases decided In Australia and in England, in the end it was a matter of looking to the words which Parliament had used.

1 7 .

A S hls aonour sald at 167:-

"The authoritles do provlde lndlcations of the type of

I consideration which will polnt, or not point, to a partlcular body belng the Crown or one of its agencies. But because each. case depends on lts clrcumstances, there is no clear guidlng prlnclple or rule."

In my oplnlon it would be quite inappropriate for the

I

I	Court on the materials presently before it and wlthin the present time constraints to attempt definitively to resolve the question
i	of the proper characterisation of the respondent in relation to the conduct complained of by the applicant. In my opinion there is, in connection with the status of the respondent in solicitlng and entering into the relevant contracts, a serious question to be
I
I	tried as to whether or not it acted as an agent of the Crown in
!
' _
!	right of the State in so doing.
l
I
l

With regard to the alleged contravention of s.46 of the

I

i Trade Practices Act it is necessary first to mention the

J 1

i	regulatory framework relating to the transport for reward of goods
I
within the State of Wes,tern Australia.

The Transport Act 1966 provides a scheme for the

licencing of "commerclal goods vehicles". A commercial goods

vehicle is deflned in sub-s.4(1) of the Act as follows:-

"Commercial Goods Vehicle" means a vehicle other than a vehicle propelled by animal or human power, only, operating or used o r Intended to be used, on roads or streets for the transport of goods and Includes any such

1-3 .

vehlcle so used or operated or used or lntended to be

used by or on behalf of the Crown for the carrlage of

goods for hlre or reward and whether In connection with

a rallway or not."

The llcensing authorlty 1s the Commissloner for Transport constituted under the Act.

Hls licensing powers with respect to commercial vehicles and the matters that he 1s required to take into account in the grant of such llcences are set out in s s . 33 to 4 2 of the Act.

It is not appropriate at this stage for the Court to

embark upon a detailed analysis of the provisions of the Act under-

whlch the operations of commercial goods vehicles	are limited and
regulated.

i

I

i It 1s sufficient to say that the applicant contends and:

I	it is not contested for present purposes, that the licensing
!	provisions have been so implemented as to give'effect to a policy
i
i
!
i
of regulation which confers an effective monopoly on the

! !

I	respondent in the transport of grain in certain areas designated	!
as the "regulated areas".

Mr H. Croxon a dlrector of the applicant, in an

affidavit sworn and filed on	22 December 1986 outlined	the
framework In the following terms:-

I

i

!	(a) The State is notionally dlvided into two areas one
I I
i

. .

19.

i n w h i c h g r a i n m u s t b e t r a n s p o r t o d b y r a i l i n

a c c o r d a n c e w l t h t h e p o l i c y O E t h e D e p a r t m e n t of

T r a n s p o r t u n d e r t h e T r a n s p o r t C o - o r d i n a t i o n Act

1966 a s a m e n d e d . T h i s i s a n a r e a i n w h l c h r a l l

t r a n s p o r t i s a v a i l a b l e . T h i s a r e a i s commonly

known i n t h e i n d u s t r y as t h e " R e g u l a t e d A r e a " . I n

t h e s e c o n d a r e a known a s t h e " D e r e g u l a t e d Area"

t h e D e p a r t m e n t of T r a n s p o r t i s s u e s l i c e n c e s f o r

t r a n s p o r t t o anybody who w i s h e s t o t r a n s p o r t g r a i n .

( b )	I n R e g u l a t e d	a r e a s	g r a i n	may	o n l y	be	t r a n s p o r t e d	t o
p o r t s :

( i ) from t h e [arm t o t h e p o r t b y a f a r m e r ' s own

v e h i c l e : or

( i i ) f r o m t h e f a r m to a " r a i l b i n " o p e r a t e d b y

Co-ope ra t ive Bu lk Hand l lng L i m i t e d ( " C B H " ) by

a farmer's own v e h i c l e or c o n t r a c t o r ' s v e h i c l e

( r a i l b i n s are b l n s w h l c h a l t h o u g h n o t o n a

r a l l h e a c l a r e r o u t e d t o r a i l ) and then by

c o n t r a c t o r s e m p l o y e d b y t h e R e s p o n d e n t

("Westrail") t o a	r a i l h e a d .and by	r a i l t o
ports ;

( i i i l f rom t h e f a r m to a r a i l h e a d by a L a m e r ' s own

v e h i c l e or contractor 's v e h i c l e a n d t h e n by

r a i l t o a p o r t .

( T h e v a s t m a j o r i t y of g r a i n s h i f t e d E r o n f a r m t o

t h e r a i l h e a d is v l a t h e f a r m e r ' s o v n v e h i c l e . )

(c) I n D e r e g u l a t e d areas , g r a i n may b e t r a n s p o r t e d : -

( i ) by a f a r m e r o r c o n t r a c t o r ;

( i i ) by a f a r m e r t o a n "off r a i l " r o a d b i n o p e r a t e d

by CBH and thence t o t h e p o r t s by a contractor

u n d e r a c o n t r a c t w i t h CBH. ( T h l s is t h e

!

s e r v i c e w h i c h OD p r o v i d e s ) ."

Mr Croxon w e n t o n t o s a y t h a t t h e D e p a r t m e n t of

T r a n s p o r t of Western A u s t r a l i a p e r i o d i c a l l y i n v i t e s tenders f rom

I

cont rac tors f o r t h e haulage o f g r a i n i n d e r e g u l a t e d a r e a s b y road

f r o m t h e o f f r a i l r o a d b l n s o p e r a t e d b y CBI3 t o t h e p o r t s . I n

S e p t e m b e r 1 9 3 6 t h e a p p l i c a n t t e n d e r e d for contracts t o h a u l g r a i n

f r o m a number of o f f r o a d r a i l b i n s i n d e r e g u l a t e d a r e a s n e a r t h e

20.

south eaqt coast of Western Australla between the ports of Albany

and Esperance.

Although the affldavlt indicated that the tenders are

lnvlted on behalf of CO-Operatlve Bulk Handling Limited the

Condltlons of Tender and Condltions of Contract embodled In them suggest that the contracts entered into by the applicant were

contracts with the Minlster for Transport for	the State of Western
Australia.

The applicant affirmed its acceptance of the contracts

on 10 October 1986. Their period depended upon the area to be

served and varied from two to five years.

Following information given to the applicant on Friday, 12 December 1986 it made enquiries which led to the discovery that the respondent was approachlng farmers in the deregulated- areas offering to haul grain from their farms to po-rts- at ‘rates only marginally higher than rates charged by the respondent to haul

grain by rail from the nearest railhead to those ports. I . The respondent publishes a newsletter or journal known _ -

i

as “The Monthly Notice”. In the November edition of The Monthly

Notlce was an artlcle entitled “Round One to OD	- But Its Not Over
Yet“. In that article It was said:-

!	“Westrail is “fightlng back“ to win new grain tonnages
in areas where a trucking company has won all
1
I

< . .

21.

the contracts to haul graln from offrall hlns.

The OD Transport company's contract covers the entire

Lakes Distrlct and Great Southern.

Westrall has now Initiated a m a ~ o r campalgn In these

areas to transport grain from paddock to port.

Westrail Managing Director Bruce Sutherland, said the grain would normally be road hauled to Esperance or

Albany from the bins won by OD Transport.

"It is our intention to transport the graln by road and rail from the growers' paddocks to the port at Albany", Mr Sutherland said.

"We expect some 40,000 tonnes of additional grain this year. A team of Westrail salespeople and operations officers has canvassed every.farmer in the target areas. There is strong support for this novel scheme. We wlll win the tonnage by going into the paddocks at harvest time and by passing the off rail bins. Farmers see the

scheme as an attractive alternative.	Our rates will be
highly competitive", he said.

As pointed out in the October Monthly Notice, the OD contract has great implications for Westrail's grain business everywhere.

OD submitted rates between 15% and 20% below the freight rates which applied during the 1985/1986 grain season."

According to Croxon's affidavit, in addition to 0-ffering its paddock to port service, the respondent's prices for transportlng grain from railbins in those parts of the regulated areas which are adjacent to deregulated areas containing CBI3 "off rail" bins served by the applicant are significantly lower than prices charged by it for a similar service in other parts of the regulated areas.

In a supplementary affidavit filed on 23 December 1986

Croxon spoke of enquiries which had been made by a Mr Gillespie,

.I

2 2 .

the !manager of t h e appllcant's Esperancc branch on the evening of 22 December. Ilr Glllesple had telephoned a number of farmers in

the deregulated area to ascertain the prices whlch the

respondent's agents had quoted for transportlng grain from thelr farms to port by road and rall by passing the off rail road blns. Some four prices were obtained in this way, giving the rate per tonne of grain for transport from the farms to Albany. This was set out in tabular form In the affidavit and compared with the rail to port rate published by the respondent In the Government Gazette of 5 December 1986.

r

Such publication, it will be recalled, is required under s.22 of the Government Railways Act 1904.

- For completeness the respondent's rates for cartage from off rail bin to port are also set out in the table.

.!

!

NO Farmer Distance Paddock to Published Applicant's

Farm to Rail Port Rate Railhead Rate from

Head ( km) Quoted to rate normal Off

Farmer by	($/tonne)	rail road bin
Respondent	to Port

! -+$/tonne 1

1 .	AW & D.M. 50	$17.50	$15.97	$19.81
Fretwell	(Lake Varley)

2. J.R. & G. 30 $17.50 $15.97 $17.88

Garlick (Lake King)

I

I

!	3 .	EG & AJ 58	$17.50	5 97	$20 .l5
Richardson	Mount Sheridan

4 .	R L L	30	$17 .l0	$15.97	$20.15
Porter	(provided	Mount Sheridan
all grain from farmer's carthead

2 3 .

On thls basis. according to Croxon, the cartage which 1s

being charged b y the respondent for transport from the farm to the

railheads is $1.53 per tonne. He expressed the view, based he

said on 17 years experience In the grain cartlng industry and his

knowledge of current operating costs, that this rate is well below

the actual cost to cart grarn by road over the distances

specified.

Further information supplied to Croxon by the manager of the appllcant's Albany branch after telephoning farmers and ascertaining rates offered by the respondent for its paddock to port service yielded further information as to the respondent's

rates which was also embodied in a table.-

No. Farmer Distance Paddock to Published Applicant's

Farm to	Port Rate Railhead Rate from
Railhead	Quoted to Rate Normal off

Farmer (km) by ($/tonne) rail road bin

Respondent	to port.
($/tonne)

1.	JG & GC	l a	$14.99	$12.34	$13.00
Smith

2.	M K & M	.
Solley	48 $13 .OO $12.34 $14.99

3. P. Shiner 60 $13.00 $12.34 $14.99

4.	RA	80	$13.50	$12.34	$16.63
5.	RH

Townsend 85 $16.63 $12.34 $13.50

In addition to offering the paddock to port service, the

respondent's prices for transporting grain from rallbins in those

I

2-1.

I

parts o f t h e re~ulated a reas ad~accnt to the deregulated areas

I

contalning CBH "off rall" bins served by the applicant, are said

by Croxon to be slgniflcantly lower than prlces charged by the

respondent for a similar servlce in other parts O E the regulated

areas. A chart was produced to illustrate the point.

A copy of that chart which was exhibit "HWJC7" to

,	Croxon's affidavit is annexed to these reasons. Prima facie the
I

i

I	chart	does	indicate generally lower rates charged	by	the	L
I

respondent for the transport of grain from railbins in those parts 1;

I

of the regulated areas adjacent to deregulated areas containing 1

I

offrail bins served by the applicant. 1

l Caution has to be exercised in drawing inferences from

I	E
r

! -	the global price charged by the respondent for its paddock to port
!
service where those inferences relate to the apportionment of a : i
i	part of that price to the farm to railhead segment of the journey.

I	I
I

Prlma facie it is the whole journey w h i c h has to be

considered rather than particular components of it and it may be

!

l

l	the	case that the respondent is subsidising the road component
I

from proflts made on the rail component. That is presently a

I

matter of speculation in the absence of any evidence on the point. 1

It is however a matter to be borne in mind in considering the 1

-

allegation that the respondent is engaging in what amounts to

predatory prlclng of the road component of the service that it i

! f

offers to farmers. i

I	I
P
i
F

. .

25.

T h e preced~ng n a r r a t l v c 1s by way of €actual background

to the applicant's contention that the respondent is engaglng in

conduct in contravention of s.46 of the Trade Practlces Act.

In the parts whlch are material for present purposes

s.46 provides:-

"46(1) A corporation that has a substantial degree of power In a market shall not take advantage of that power for the purpose of -

(a)	eliminating or substantlally damaging a competitor of the corporation or of a body corporate that 1s related to the corporatlon in that or any other market:
(b)	preventing the entry of a person into that

or any other market: or

(c) deterring or preventing a person from engaging in competitive conduct in that or any other market.

In determining for the purposes of this section the degree of power that a body corporate or bodles corporate has or have in a market, the Court shall have regard to the extent to which the conduct of the body corporate or of any of those bodies corporate in that

( 3 )

I market is constrained by the conduct of - -

(a) competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or

(b) persons to whom or from whom the body

corporate or any of those bodies corporate

supplies or requires goods or services in that

market.

(4) In this section -

(a) a reference to "power" is a reference to market power;

213.

a r e f e r e n c e to a " n a r k s t " 1 s a r e f e r e n c e t o

a m a r k e t f o r g o o d s o r s e r v l c e s ; a n d

a r e f e r e n c e t o " p o w e r " I n r e l a t l o n t o , or t o

c o n d u c t i n , a market 1s a r e f e r e n c e t o power,

or to c o n d u c t , l n t h a t m a r k e t e l t h e r as a

s u p p l i e r or a s n c q u i r e r of goods or

s e r v l c e s I n t h a t market.

( 7 ) W i t h o u t i n a n y way l l m l t l n g t h e m a n n e r i n w h l c h

t h e p u r p o s e o f a p e r s o n may be e s t a b l i s h e d f o r t h e

p u r p o s e s a n y o f t h e r p r o v i s i o n t h i s o f Act, a

c o r p o r a t i o n may be t a k e n t o h a v e t a k e n a d v a n t a g e o f its

p o w e r f o r a p u r p o s e r e f e r r e d t o i n s u b s e c t i o n (1)

n o t w i t h s t a n d i n g t h a t , a f t e r a l l t h e v i d e n c e h a s b e e n

c o n s i d e r e d , t h e existence p u r p o s e t h a t o f is

a s c e r t a i n a b l e o n l y by i n f e r e n c e from t h e c o n d u c t o f t h e

c o r p o r a t i o n or o f an; o t h e r p e r s o n or from o t h e r

r e l e v a n t c i r c u m s t a n c e s .

T h i s sect ion i n i ts p r e s e n t f o r m , r e f l e c t i n g s i g n i f i c a n t

a m e n d m e n t s i m p l e m e n t e d b y t h e T r a d e P r a c t i c e s R e v i s i o n Act 1986 ,

h a s n o t y e t b e e n t h e s u b j e c t of e x t e n s i v e j u d i c i a l e x e g e s i s

a l t h o u g h some d i s c u s s i o n o f it a p p e a r s i n t h e j u d g m e n t of Wilcox

J. i n Warman I n t e r n a t i o n a l v E n v i r o t e c h A u s t r a l i a P t y L t d 119861

ATPR 40-714. I t h e r e f o r e limit m y s e l f t o c o n s i d e r i n g w h e t h e r or ,_

not a s e r i o u s q u e s t i o n arises i n r e l a t i o n t o t h e a l l e g a t i o n - t h a t

t h e r e s p o n d e n t h a s e n g a g e d i n c o n d u c t i n c o n t r a v e n t i o n of t h e

s e c t i o n .

For a s e r i o u s q u e s t i o n t o b e r a i s e d t h e r e m u s t b e some

e v i d e n c e g o i n g t o e a c h of t h e e l e m e n t s m a k i n g u p a c a u s e of a c t i o n

u n d e r t h e s e c t i o n - See S p r i n g d a l e C o m f o r t P t y L t d v Electr ical

T r a d e s U n l o n o f Workers (WA B r a n c h ) P e r t h 119861 ATPR 40-694 a t

47 ,623 per Toohey	J . ,	F lower Dav ies	Wemco	P t y	L t d	v	T h e A u s t r a l i a n	3
I

27.

Bullders' Labourers F ~ d e r a t ~ r l Ilnlon of Workers ( N A Branch)

(unreported French J. 3/12/1986).	Those elements are for present
purposes:-

1.   The characterisation of the respondent as a corporatlon.

2.   The characterisatlon of the respondent as a

supplier of services in a market for those

services.

3 . The possession by the respondent of a substantial degree of power in that market.

4.   The characterisation of the applicant as a competitor of the respondent in that or any other market.

5. The taking advantage by the respondent of that power for the purpose of eliminating or substantially damaging the applicant in that or any other market.

I

As to the first element, I have already taken the view

that there is a serious question to be tried.

The second element requires the definition of a relevant

market for the provision of services. In this regard I refer to - the approach to market definition expounded by the Trade Practices

Trlbunal in Re : Queensland Co-operative Milling Association I

Limited (1976) 2 5 FLR 169. At 190 the Tribunal said:-

"We take the concept of a market to be basically a very simple idea. A market is the area of close competition

between firms or, putting it a little differently, the

field of rivalry between them. (If there is no close competition there is of course a monopolistic market). Within the bounds of a market there is substitution - substitution between one product and another, and

I	. .
i

2 3 .

hrtween one source of supply and another, ln response to changlng prlces. So a market is the fleld of actual and potential transactlons between buyers and sellers amongst whom there can be strong substitution, at least In the long run, I€ glven a sufficient prlce incentive. Let us suppose that the prlce of one supplier goes up. Then on the demand side buyers may swltch their patronage from thls flrm's product to another or from this geographlc source of supply to another. As well, on the supply side, sellers can adjust their productlon plans, substitutlng one product for another in their output mix, or substituting one geographic source of supply for another. Whether such substitution is feasible or likely depends ultimately on customer attitudes, technology, distance and cost and price incentives.

It 1s the possibilities of such substitution whlch set

the limits upon a firm's ability to "give less and

charge more". Accordingly, in determinlng the outer boundaries of the market we ask a quite simple but fundamental question: If the firm were to "give less and charge more" would there be, to put the matter

I

!

colloquially, much of a reaction? And if so, from whom?

I

in the language of economics the question is this: From

I

which products and which activities could we expect a

relatively high demand or supply response to price

change, i.e. a relatively high cross elasticity of

l -

demand or cross elasticity of supply?"

l

i

In Re Howard Smith Industries Pty Ltd (1977) 28 FLR 385

i	I	at 394 the Tribunal said In connection with a market for services
!
in relation to s.50 of the 1974 Act:-
i

"From the point of view of buyers, a market represents a range of goods or services which are good substitutes for one another in satisfying the buyers requirements of a particular type. If there is a variation in the relative prices of the goods or services offered for sale in a given market, then buyers can be expected readily to switch their custom from one seller to

another or from one product to another."

1 The princlples enunciated in these two decisions were

I

adopted by Northrop J. ln Trade Practices Commission v Ansett

I

I

I

l	I
I
I

. .

29.

Transport Industries (Operations) Pty Ltd (1978) 3 2 r L R 3 0 5 at

312.

In Re Tooth & Co. Limlted and Tooheys Llmlted (1979) 39

FLR 1 at 39 the Trade Practlces Tribunal chaired by Iteely J. set

I	out six prlnciples to be taken Into account in approaching the
l	I	task of market delineation.
I

1.	Identification of the area or areas of close	i
competition of relevance for the appllcations.
2 .	Recognition of the fact that such competition may proceed through substitution in demand or supply and that the market should comprehend the maximum range of business activlties and the widest geographic area within which if given a sufficient economic incentive, buyers can switch to a substantial extent from one source of supply to

another and sellers can switch to a substantial

extent from one production plan to. another.

3.	Market definltion should be basically concerned	-
with substitution possibilities in the longer run,

!

the market being the field of actual or potential

rivalry between firms.

4 . Recognitlon of the fact in defining the outer -

boundaries of the market that at its extremities

I	there is such a break in substi-tution possibil.ities that firms within its boundaries would collectively
possess substantial market power.' - ,

5. Recognition that the field of substitution is not necessarily homogeneous but may contain within its

I

sub-markets wherein competition is especially close

or especially immediate.

6. In defining the market reference should be made to the relevant product or service, the appropriate functional levels and the geographic scope of the market In recognitlon of its multidimensional character.

I

. .

I .

33.

I n t h e p r e s e n t case t h e applicant c o n t e n d s t h a t t h e

m a r k e t I n w h l c h t h e r e s p o n d e n t h a s a s u b s t a n t l a l d e g r e e o f p o w e r

i s d e f i n e d g e o g r a p h l c a l l y by r e f e r e n c e t o t h e r e g u l a t e d areas i n

whlch i t h a s a s t a t u t o r y m o n o p o l y . I t 1s s a l d t o b e p r o ~ e c t i n g

~ t s p o w e r I n t o t h e d e r e g u l a t e d a r e a s f o r t h e p u r p o s e o f

e l i r n l n a t i n g or s u b s t a n t l a l l y d a m a g l n g t h e a p p l l c a n t , w h l c h 1s its

competitor i n t h e m a r k e t d e f i n e d by r e f e r e n c e t o t h o s e areas. I t

may be t h a t i n t h e e n d t h e a p p r o p r i a t e m a r k e t will be de f ined by

r e f e r e n c e t o t h e m a r k e t f o r t h e t r a n s p o r t o f g r a l n w i t h i n

g e o g r a p h l c a l b o u n d a r i e s e n c o m p a s s i n g b o t h t h e r e g u l a t e d a n d

d e r e g u l a t e d a r e a s .

In t h a t respect Mr Croxon i n h i s a f f i d a v i t d e p o s e d t h a t

Westrail's s h a r e o f t h e m a r k e t o f t r a n s p o r t i n g g r a i n i n W e s t e r n

A u s t r a l i a is a p p r o x i m a t e l y 73%. P r e s u m a b l y , a l t h o u g h it was n o t

made c lear , t h a t is a r e f e r e n c e t o t h e p e r c e n t a g e b y w e i g h t of a l l

g r a i n t r a n s p o r t e d i n W e s t e r n A u s t r a l i a t h a t is t r a n s p o r t e d b y

Westrai l . I n f u r t h e r c l a r i f i c a t i o n of t h e p o s i t i o n of t h e

a p p l i c a n t i n t h e d e r e g u l a t e d areas, Mr Croxon said:-

\

" T r a d l t l o n a l l y t h e d e r e g u l a t e d m a r k e t f o r t h e t r a n s p o r t

o f g r a i n t o p o r t s h a s b e e n d i v i d e d i n t o t h r e e s e c t i o n s : -

( i )	t r a n s p o r t	o	f	g r a i n	f r o m	f a r m s	t o CBH	o f f r a i l
b i n s :

( i i )	t r a n s p o r t	of	g r a i n	f r o m f a r m s	t o	p o r t s	d i rect
by road:

(111) t h e t r a n s p o r t o f g r a i n from CBH o f f r a l l b i n s

t o p o r t s . "

!

3i.

He s a l e t h a t t h e a ? p l l c a n t h a d won by c o r n p e t l t i v c t ende r

t h e e n t l r e b u s i n e s s r e p r e s e n t e d i n p a r a g r a p h (111). T h l s

c o n s t l t u t e s approximately 45% of t h e market o f t r a n s p o r t i n g g r a l n

i n t h e d e r e g u l a t e d a r e a s . T h e a p p l l c a n t c o m p e t e s w l t h o t h e r

c a r r i e r s for t h e r e m a i n l n g b u s i n e s s t h r o u g h t h e c a t e g o r i e s

mentloned i n p a r a g r a p h s ( i ) and ( i i ) . T h e r e are a p p r o x i m a t e l y s 1 x

principal car r ie rs and a v a r y i n g u k b e r o f small carrlers

c o m p e t i n g f o r t h a t b u s l n e s s . T h e a p p l i c a n t ' s h a r e of t h a t

b u s i n e s s is u s u a l l y l ess t h a n 50%.

I n my o p l n i o n t h e r e is e v l d e n c e t h a t t h e r e s p o n d e n t h a s

a s u b s t a n t i a l d e g r e e o f p o w e r I n a m a r k e t f o r t h e p r o v i s i o n of

s e r v i c e s f o r t h e t r a n s p o r t of g r a l n t o ports, w h e t h e r t h a t m a r k e t

b e d e f i n e d o n l y b y r e f e r e n c e t o t h e r e g u l a t e d a r e a s o r by

r e f e r e n c e t o t h e r e g u l a t e d a n d ' d e r e g u l a t e d areas . G i v e n t h e

u n c e r t a i n t y

as

t o

t h e

n a t u r e

o f

t h e

c o n t r a c t s

e n t e r e d

i n t o

b y

t h e

i

I

j

a p p l i c a n t p u r s u a n t to t h e t e n d e r , t h e r e is c o r r e s p o n d i n g l y some .

u n c e r t a i n t y	a s	t o	t h e	f u n c t i o n a 1 . d e f i n i t l o n	o f	t h e	market	i n	w h i c h	I
i

it o p e r a t e s .

l

A c c e p t i n g h o w e v e r t h a t t h e a p p l i c a n t is- a c o m p e t i t o r f 1

t h e r e s p o n d e n t i n t h e d e r e g u l a t e d a r e a s , t h e q u e s t i o n f o l l o w s

w h e t h e r t h e r e s p o n d e n t h a s t a k e n a d v a n t a g e of its marke t power fo r

t h e p u r p o s e of e l i m i n a t l n g or s u b s t a n t i a l l y d a m a g i n g t h e a p p l i c a n t

e i t h e r i n t h e m a r k e t d e f i n e d g e o g r a p h i c a l l y by r e f e r e n c e t o t h e

S t a t e o f W e s t e r n A u s t r a l i a o r by r e f e r e n c e t o t h e d e r e g u l a t e d

areas. T h e a p p l l c a n t c o n t e n d s t h a t i t h a s , i n a way a n a l o g o u s t o

t h e c o n d u c t o f t h e V l c t o r i a n Egg M a r k e t l n g B o a r d I n V i c t o r i a n Egg

Market ing Board v Parkwood Eggs P t y L td (1978) 20 ALR 129.

!

I	.. .
I

I 3 2 .

T h e c v l d o n c e :ha: the ronr iuct cnmplaznpc! of c n n s t 1 t u t . e ~

a t a k i n g a d v a n t a g e by t h e r e s p o n d e n t o f I ts market power 1s r a t h e r

s c a n t y . S u c h a n inference may d e p e n d u p o n f u r t h e r e v i d e n c e a s t o

w h e t h e r t h e p r l c i n g s t r u c t u r e a d o p t e d b y W e s t r a i l i n i ts paddock

t o p o r t s e r v l c e i n t h e d e r e g u l a t e d areas, i s somehow s u p p o r t e d by

l t s m o n o p o l y p o s i t i o n i n t h e r e g u l a t e d areas. I n my o p i n i o n t h e

most t h a t c a n b e s a ld o n t h e e v i d e n c e b e f o r e me a t t h i s p o i n t 1s

t h a t s u c h a n i n f e r e n c e IS o p e n o n t h e e v i d e n c e b u t i t is n o t t h e

I	o n l y	~ n f e r e n c e .	I t may	b e	t h e	case	f o r	e x a m p l e	t h a t	t h e
i

r e s p o n d e n t is s i m p l y s u b s i d i s i n g t h e road component of its package

!

o f f e r e d t o f a r m e r s o u t o f p r o f i t s e a r n e d o n t h e r a i l component.

Such a s i t u a t i o n c o u l d wel l cast its c o n d u c t i n a l i g h t d i f f e r e n t

f r o m t h a t f o r w h i c h t h e a p p l i c a n t c o n t e n d s . As t o t h e p u r p o s e of

i ts c o n d u c t , it is p l a i n e n o u g h t h a t t h e r e s p o n d e n t i n t e n d s t o win

I

I -

from t h e a p p l i c a n t a t l ea s t a p r o p o r t i o n of its - m a r k e t s h a r e i n

t h e d e r e g u l a t e d area.

l !

On t h e e v i d e n c e a s i t p r e s e n t l y s t a n d s . h o w e v e r , it is ,

I

q u e s t i o n a b l e w h e t h e r it is a p u r p o s e of t h e r e s p o n d e n t t o

! . .

e l i m i n a t e o r s u b s t a n t i a l l y damage t h e a p p l i c a n t .

I .

On t h e i s s u e of b a l a n c e of c o n v e n i e n c e , t h e a p p l i c a n t

I

c o n t e n d s t h a t t h e g r a i n h a r v e s t is a b o u t t o b e g l n i n t h e c o n t r a c t '

! a r eas . I t 1s p o i n t e d o u t h a t h e r e s p o n d e n t ' s t a t e d i n t e n t i o n

is to w i n b u s i n e s s h a u l i n g u p t o 40 ,000 t o n n e s o f g r a i n i n t h e s e

I

I

I

I a r eas w h l c h would r e s u l t i n a d i r ec t loss t o t h e a p p l i c a n t . A t a

c o n s e r v a t i v e es t imate i t is s a i d t h e l o s s o f r e v e n u e w o u l d

.. 0

3 3 .

a@proxlmatP $400,000.00 for the present grain harvest. 'Ihe future

ramiflcatlons for the appllcant's buslness and the farmlng

community are sald to be serious. If the respondent 1s allowed to

pursue ~ t s pollcles then, says the applicant, it wlll eventually

elimlnate competltion by road haulage contractors in the

I

deregulated areas and extend the area of its monopoly. The

!

application is said to be one of extreme urgency because farmers

are currently making their final preparations for the grain

harvest and any delay in obtalning the relief sought from the

court, will enable the respondent to continue its heavily promoted

campaign to solicit business away from the applicant.

The Court was however informed by counsel for the

respondent that the soliciting phase of the respondent's campaign

i

was over and that contracts had been entered into and cartage was

I

!	to commence.
1
I
i	l

The applicant seeks interlocutory relief restraining the

I	respondent until the hearing of the substantive proceedings or
I
I
i	until further order of the Court, from supplying 'or offerlng to
I
supply transport services at prices lower than a level calculated by reference to inter alia, the sum of the actual cost of transporting grain from farms to railheads and the prices charged
by the respondent as published in the Government Gazette of
Western Australia on 5 December 1986 for transporting grain from railheads to ports.
l
i
I	I

i

3.;.

I n m y oplnlon the rjrant of the lnterlocutory relief sought would effect a substantial dlsruptlon ln exlstlng arrangements between the respondent and those farmers with whom It has contracted. It would result in those €armers havlng to pay a higher prlce than is presently the case for the transport of their

i grain to port.

i

On the other hand as the applicant conceded, it is able to be compensated by damages in the event that the interlocutory	i I.
h
relief is not granted and it succeeds on the substantive hearing.	1

!	In considering whether or not in this	case	to grant the	f
!f

interlocutory relief sought, it is necessary to bear in mind not	1:
only the interests of the parties to the application but also the
"
adverse impact upon third parties and the public interest.	i
:f
f
It is plain that there would be an immediate adverse impact on third parties if the interlocutory relief were granted.	.i
-'
>
I

Adopting as I do the approach enunciated by Woodward J.	L
t

in Bulflock v The Federated Furnishing Trades Society of 1 ?

Australasia (1985) 5 FCR 4 6 4 at 4 7 2 , I am of the opinion that f

- i

although the applicant has raised serlous questions to be tried,

its case is, on the evidence presently before me, not one that	1
could be described as strong.	-

F

.,

In the circumstances I would require a marked balance	of	' 4
t,
I-.
t.

convenience In favour of the applicant before granting the	3
L
r;

3 5 .

l n t u r l o c u t o c y r e l l e f t h a t 1s s o u g h t . . T h a t n a r k o d b a l a n c e of

c o n v e n l e n c e d o e s n o t e x l s t . I n d e e d I n my o p l n l o n , t h e b a l a n c e of

conven lence i n t h i s case l l e s a g a l n s t t h e a p p l l c a n t when r e g a r d 1s

had no t on ly t o t h e p o s l t i o n of t h e r e s p o n d e n t b u t a l so t o t h a t of

t h i r d p a r t l e s l l k e l y t o be e f f e c t e d by t h e res t ra ln ts s o u g h t . I n

t h e c l r c u m s t a n c e s I w l l l d i s m l s s t h e m o t i o n f o r l n t e r l o c u t o r y

r e l i e f .

I

I c e r t i f y t h i s a n d t h e t h i r t y f o u r

( 3 4 ) p r e c e d i n g p a g e s t o be a t r u e copy of

I

t h e Reasons f o r J u d g m e n t of H i s Honour

-

Mr Just ice French .

Associate :

Date : "-24 December 1986

C o u n s e l fo r t h e A p p l i c a n t : N. McKerracher

i n s t r u c t e d by Robinson Cox

I

C o u n s e l f o r t h e R e s p o n d e n t : Mr G. T a n n i n

i n s t r u c t e d by t h e S t a t e Crown S o l i c i t o r

Dates o f h e a r i n g : 2 2 , 23 and 24 December 1 9 8 6

I

F. ,.

!

I