Paul Dainty Corporation Pty Ltd & Anor v The National Tennis Centre Trust

[1990] HCATrans 217

Al!t. -!) AUSTRALIA & -'>>-»))'\.~«-«.<-<-(!

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Melbourne No Ml7 of 1990

B e t w e e n -

PAUL DAINTY CORPORATION PTY
LTD and PAUL DAINTY PRODUCTIONS

PTY LTD

Applicants

and

NATIONAL TENNIS CENTRE TRUST,
VICTORIAN ARTS CENTRE TRUST and

OLYMPIC PARK MANAGEMENT

Respondents

Application for special leave

to appeal

DAWSON J TOOHEY J McHUGH J

Dainty 1 7/9/90

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 7 SEPTEMBER 1990, AT 9.30 AM

Copyright in the High Court of Australia

MR R. MERKEL, OC: If the Court pleases, I appear with my

learned friend, MR D. SHAVIN, on behalf of the

applicants. (instructed by Mark G. Caldwell)

MR R.C. MACAW, QC:  If the Court pleases, I appear with my

learned friend, MR G.S. CLARKE, on behalf of the
first-named respondent, the National Tennis Centre

Trust. (instructed by Freehill Hollingdale & Page)

MR K.M. HAYNE, QC: If the Court pleases, I appear with my

learned friends, MR J.W.K. BURNSIDE, OC, and

MR D.G. ROBERTSON, on behalf of the second-named

respondent, the Art Centre Trust. (instructed by

Arthur Robinson & Hedderwicks)

DAWSON J:	Mr Merkel.
MR MERKEL:	If the Court pleases, we propose to proceed with our submissions in two.parts; first to seek to
identify the error in the Full Court judgment and,
secondly, to indicate to the Court the importance
of the issues arising on the appeal if leave is
granted.  The case involves the two - - -
DAWSON J:	Mr Merkel, there are two points, are there not, involving two sections. The second one in the
judgment is section 51 but if you were to fail on
that, fail to convince us on that one, that would
be the end of the matter, would it not?

MR MERKEL: With respect not, Your Honour, because the

issues on section 51 themselves arise in two parts:

one is whether the provision of section 51 can be

retrospective so that an approval after the date an

offence has been committed can retrospectively, in

effect, eliminate the offence. If that is not so,

if the Full Court was wrong in its approach to

retrospectivity, and we say that raises a very

important question on the proper construction of
section 51, then by the time the Victorian Act was
passed, the contraventions of Part IV which founded

the proceedings had already been committed.

The second aspect, Your Honours, is that as is

clear from the respondents' affidavit, the

contractual provisions with which this case is

concerned are standard throughout Australia so that

if there is substance in the third line forcing

allegations of the applicant, then those

allegations are Australia wide, in effect, the

provision of ticketing services - - -

DAWSON J: Well, that may be so but if you did not get up on

the section 51 point, then you would be unlikely to

be given special leave, would you? At all events,

would it be inconvenient for you to turn your

attention to that point first of all?

Dainty 2 7/9/90

MR MERKEL:  No, Your Honour, it would not be inconvenient.

I will deal with that first if I might.

DAWSON J: Very well.

MR MERKEL:  In respect of the section 51 point, Your Honour,

that is founded firstly on the Tennis Centre/BASS

agreement which appears at page 33 of the appeal

book, and the critical clause of that contract is

at page 34 and under that provision which is

clause 2 it says:

The NTCT hereby appoints Bass as its exclusive

Agent to sell on behalf of the NTCT tickets to

all events held at the Tennis Centre in

accordance with the terms -

of the contract. That agreement was the subject of

specific approval and the Full Court dealt with

that at page 141 of the appeal book by an Act which

approved the entering into of that agreement.

Now, there are three points, we say, in

response to the holding of the Full Court. The

first is that dealing with clause 2 at page 34,

when the Tennis Centre enters into a hiring

agreement to a promoter in respect of its venue it

has two options or two paths it can follow.	One is
to hire the venue and the other is to hire a
ticketed venue.	What we say clause 2 deals with is

only the circumstance where it hires a ticketed

venue, and by "a ticketed venue" I mean the hiring

of a venue when it reserves unto itself the right

to sell the tickets on behalf of the promoter so that the promoter cannot itself print, issue and sell tickets and we say that that is squarely in line with the decision in Ku-ring-gai of

Mr Justice Brennan and Mr Justice Deane when in the

Federal Court, where Their Honours said in respect of an insured mortgage that the regulation that authorized the building society to determine

whether as a matter of discretion it would require

mortgagors to effect insurance with a nominated

insurer, that was not authorized by section 51

because the building society had a discretion

whether to, in effect, require insurance or not

require insurance.

We say, parallel with that here, the venue is

under no obligation in hiring the venue to any

promoter to ensure that the promoter's tickets are

sold by the venue. It has an option to hire the

venue as was traditionally done with Paul Dainty in Victoria where it had its own ticketing service, in which event there is no ticket to be sold on behalf

of the Tennis Centre. So, we say it is a fairly

critical point at the outset because clause 2 only

Dainty 3 7/9/90

operates in a situation where the venue has

reserved unto itself exclusively the right to sell

tickets and then, when it does so, it has

undertaken to confer the benefit of that exclusive

right on BASS. But there is nothing in clause 2

which requires the venue, as a term of its

contract, to reserve unto itself the right to sell

the tickets. So that it is there we draw a

distinction between the hiring of a venue with the

promoter being entitled to sell tickets, leaving

nothing for clause 2 to operate on or what has been

referred to in the Full Court as the hiring of a

ticketed venue, meaning that the licensor, being
the venue, reserves unto itself the right to sell

tickets and it then has said, "When we have the

right to sell tickets, BASS is to sell any tickets

on behalf of the NTCT."

If it is merely a hiring of a venue, then the

Centre itself has no role to play in respect of the

sale of tickets at all. So that we say that the

appointment itself is not an authorization of the
decision which is the first step in the third line
forcing, namely the imposition within the contract

of an obligation on the promoter hiring the venue

to confer the right to sell tickets on the venue

rather than have the right on itself and we say

that the reasoning of Mr Justice Deane and

Mr Justice Brennan in Ku-ring-gai where

Their Honours said the authorization which gives

you a choice whether to engage in the conduct in

question or not is not an authorization governed by

section 51.

Now., if that is correct, we say that the Act

authorizes only conduct which flows from a contract

where the venue has reserved unto itself the right

to sell tickets but it does not authorize the right

of the venue to require promoters to appoint the

venue as their agent to sell tickets. Now, we say

that that is the first flaw. So, it is not a

breach of this agreement for the venue to, in

effect, hire the venue without what is, in effect,

Part 9 of the hiring agreement and Part 9 is the

critical clause, and if I can just make good that

point by reference to Part 9 which appears at

page 11 of the application book.

Just by way of introduction: under Part 2

which is at page 7, the contract provides for the

hiring of the venue to the promoter. That is

Part 2.1. And the venue, I should indicate, is

defined as including the seats.	The licence there
is:

to use the Centre and the Centre Facilities -

Dainty 4 7/9/90

which include the seating areas in the venue to, in

effect, stage the performances. Part 3 at page 8

provides for a hiring fee. And just stopping

there, the venue is granting the licence to use the venue and the seats to the promoter so the promoter

can sell tickets to the public for the event and

make its profit. It is Part 9 that brings into

this contract, and it is only Part 9 which brings

into the contract restrictions on the hirer's right
to issue and print tickets, and 9.1 says:

The Hirer acknowledges that the Trust is responsible for all ticketing arrangements -

and 9.2 says:

The Hirer agrees that:-

(!) it will not issue any tickets;

(2) the Trust will print supply and sell or

arrange for the printing supply and sale of

all tickets.

Now, our point is a simple one: that if Part 9

which is the stepping stone to the third line
forcing were removed from this contract, then there

would be no basis at all for this contract to

confer any right on the venue to sell tickets and

whether Part 9 is in this contract or not is a

matter of discretion for the venue and what we say

is that the provisions of the agreement approved by

the State Parliament only come into effect when

there is an agreement with Part 9 in it but they do
not authorize or require Part 9 to be in this

contract.

DAWSON J:  Where do I find the section again, what page is

that?

MR MERKEL:  The section, Your Honour, is set out at page 141

of the application book. At 5100 it says that "The

Agreements" - and it is not.the hiring agreement

that is authorized. If the hiring agreement itself

was authorized then that may be a different matter

but what is authorized are:

The Agreements referred to in the

Schedule ..... between Olympic Park Management

and -

BASS, and we say that in authorizing the exclusive

agreements, the Parliament has not authorized the

third line forcing and the third line forcing

arises not under the exclusive agreement, it arises

by reason of the venues having firstly taken unto

themselves the right to sell tickets and then in a

later clause said, "We can appoint a nominated

Dainty 7/9/90

subcontractor" and then going along to the

promoters and saying, "We will not hire this venue

to you unless you accept ticketing services from

BASS." Now, that is not authorized by this Act of

Parliament.

So that the first point we make, Your Honour,

is that as in Ku-ring-gai where there is a

discretion as to the imposition of a clause such as

9 or not in the hiring agreement, there is nothing

for the Act to operate on to authorize specific

conduct. The second point, Your Honour - - -

DAWSON J:  Just stop there. The agreement with BASS is one

which gives BASS an exclusive right to sell

tickets, is that right?

MR MERKEL: We say, with respect, not, Your Honour. It only

gives BASS the exclusive right to sell tickets

which are to be sold on behalf of the Tennis

Centre. What Your Honour has put to me would require clause 2 to be read not as it states - this

is at page 34:

The NTCT hereby appoints Bass as its exclusive

Agent to sell on behalf of the NTCT tickets to

all events -

What Your Honour has put to me would read out of

that clause the words "on behalf of the Tennis

Centre". What this does not say is that the Tennis

Centre appoints BASS as its exclusive agent to sell

tickets to all events at the Tennis Centre. That

is not what it says, and we say to give it any

meaning wider than "on behalf of the Tennis Centre"

is to not properly construe this clause. So that

this has nothing to operate on when the tickets are

sold by the promoter and not by the Tennis Centre,

therefore, Part 9 which I took you to in the hiring

agreement is entirely discretionary. And that is

exactly what happened in Ku-ring-gai, while there

was a power to require, under the regulations,

mortgagors to use a nominated - - -

DAWSON J: But that depends how you construe clause 2, does

it not? If BASS is appointed to sell tickets to

all events held at the Tennis Centre and to sell

them on behalf of NTCT, then that would mean that

it was an obligation in relation to all events that

were held at the Tennis Centre.

MR MERKEL:  Yes, that is so, Your Honour, but Your Honour

has had to add, "sell on behalf of NTCT". We say

that it is the words "on behalf of NTCT" which

really are the issue here because that obligation

assumes that tickets can only be sold on behalf of

the Tennis Centre and there is no such obligation

Dainty 6 7/9/90

on the Tennis Centre to contract that it will only

hire the venue to promoters who appoint it to sell

tickets.

TOOHEY J:  The way the Full Court approached it, Mr Merkel,

was to say that if your client was allowed to sell tickets to any future event, that would constitute

a breach of the agreement with BASS.

MR MERKEL:  Yes, that is so, Your Honour. That is how the

Full Court treated that clause but we say in doing so they read out of the clause the words "on behalf of the NTCT".

McHUGH J:  You cannot read clause 2 without bearing in mind

recital C and D, can you?

MR MERKEL:  We say you can, Your Honour, because recital C

and D can be no more than a statement of past fact

and if they were intended to be contractual then

merely a statement of fact does not have promissory

effect. What one would have expected if that were

so in this agreement, Your Honour, is to have a

clause saying that NTCT presently requires, in

effect under Part 9, all promoters to use it as its

ticketing agent and then in contractual terms would require it to continue to so require Part 9 to be a

term of all hiring agreements. It is that silence

in this agreement, we say, that is a deficiency.

In other words, one cannot recite a statement of

past fact and convert it into a statement of

promise for the future.

McHUGH J: But it does give colour to what is meant in

clause 2, does it not? It assumes that NTCT does

print a·nd sell tickets for every event held at the

Tennis Centre and read against that background,

clause 2 has the meaning the Full Court put on it

rather than the meaning that you sought to put on

it.

MR MERKEL: Well, Your Honour, if recital C was promissory,

we would understand that that clause should be

explain why they only turned their mind to this	there but it is not and we say whilst it might
situation, it does not mean that what they did not turn their mind to can be imported into the contract and we say that it is not really a problem
requires you to determine whether you read out of clause 2 the words "on behalf of the Tennis
of construction of clause 2 because it really out, and if they are read out then the exclusivity
that Your Honour is putting to me, we say, is
granted. But if they are there we say that there
is no contractual obligation to continue what I
might call the status quo as recited.

Dainty 7/9/90

McHUGH J: But if you know that the Tennis Centre is going

to print all tickets or is going to be responsible

for the sale of all tickets, then the words "on
behalf of NTCT" mean simply that BASS is the
exclusive agent for the sale of all tickets sold at

the Tennis Centre.

MR MERKEL:  We would say that would be so, Your Honour, if

there was some obligation arising extraneously to
the contract on the Tennis Centre to continue to

contract on the terms of Part 9 but there is no

such obligation. At the time this contract was

entered into it had a discretion but no financial interest or inducement to delete Part 9. Now, we

say that if this agreement was intended to maintain

Part 9 as a term of all hiring agreements, it could

have said so. It did not, and we say by failing to

do so there is no need or requirement to read into
it an obligation as to the future.

We would turn the recital around, Your Honour,

and say the fact that the parties were aware of the
importance of this situation by reciting it but

failed to provide for it in terms of the contract

would lead a court not to construe the contract in

a way that imported an obligation that they had

turned their mind to and elected not to introduce

into the contract because they have not done so.

I should add that is not our only point on

section 51. We say that by leaving or retaining

the option for the venue to hire without Part 9, one does not get to the first base of section 51 because that leaves this case in the situation of

Ku-ring-gai. But the second aspect of the Act is

that it merely authorized the entering into of the

agreements.

Mr Justice Sweeney, the trial judge, referred

to the bill which both authorized and approved the
entering into and the carrying into effect of the

agreements and when the Act was passed, the

carrying into effect was deleted. The Full Court

indicated it would be a pointless exercise to

authorize agreements to be entered into and not

authorize them to be carried into effect. Now, one

might understand that to a degree but we say that

there is nothing that says this Act was designed to

stymie this litigation. This was an Act passed

authorizing two agreements.

Under section 45 of the Trade Practices Act it

is a breach to enter into an agreement that is

anticompetitive, and it may be viewed that this

agreement is anticompetitive, and it is also a

breach to carry into effect agreement that are

anticompetitive~ So, the Trade Practices Act

Dainty 8 7/9/90

itself draws distinctions between the offence of

entering into an agreement or a contravention of

entering into an agreement and a contravention

involved in carrying it into effect. And we say

that where you have a section such as section 51
that removes from the ambit of an Act so

fundamentally based on public policy conduct

specifically authorized, then we say the preferred

way to approach section 51 is that of

Mr Justice Deane and Mr Justice Brennan in

Ku-ring-gai to give it a narrow operation because

it is exculpatory and not what the Full Court did,
a generous operation, and we say that in the

Full Court's judgment the approach to section 51

denied the underlying public interest involved in

Part 4 of the Act and there is nothing inherent in

State authorities or State approved conduct that of

itself should say that is a higher public interest.

It gives the Victorian Parliament an option to

specifically authorize actual conduct which

contravenes the Act.

If it wanted to authorize the third line

forcing we are complaining of, it should have done

so because the third line forcing we are

complaining of is not the BASS/NTCT agreement, it

is not the hiring agreement, it is the condition

imposed under section 47(13) from the circumstances

that makes this a supply of services on a

condition; the condition arising from the
circumstances being all of the events that we have

identified but, in particular, the day that the

Tennis Centre representatives and the OPM

representatives went to Paul Dainty and said, "You

are not able to hire our venues unless you accept

BASS's ticketing services." That is the condition.

Now, if the Victorian Parliament was to specifically authorize that conduct which is the

conduct contravening the Act, it should have said

so and we say it should not be for the courts to

lean generously in favour of exculpatory provisions

because in Ku-ring-gai Mr Justice Deane and
Mr Justice Brennan did exactly the opposite.	They

lent very strictly to construing such provisions in saying, "They must authorize the conduct complained of• II

So that we say that the failure to authorize the conduct and merely to approve the entering into

without the carrying into effect should not make

this Court ignore what really was the critical

event, namely the representatives of the venues

saying to Dainty, "You cannot have our venues

unless you use BASS." Why they said it is

irrelevant. We do not - - -

Dainty 9 7/9/90

McHUGH J: It is question of construing the Victorian Act

and the Act is passed after the making of the

agreements. It uses the words of section 51 of the

Trade Practices Act and specifically authorizes and

approves the agreements. Surely it is obvious as

the Full Court said that the Victorian Parliament

was intending to authorize both these agreements

and their execution.

MR MERKEL:  Well, Your Honour, if it were not for the fact

that, say, in section 45(2) where they are separate

offences to make an agreement and to give effect to

a provision of an agreement, and if it were not for

the fact that the Act does not expressly deal with

"exclusive dealing" or "this action", we say why

should the Court infer or conclude conclusively

against the applicants that it was section 47(8)

and (9) that was being targeted rather than

section 45. I do not know what the legislature had

in mind but what we say is that section 45 creates

two separate contraventions. So that it is, we say

with respect to the Full Court, not right to say -

it is pointless to authorize entering into an

agreement if you do not authorize its carrying into

effect because section 45(2), for example, deals

with entering into agreements and section 45(2)(b)

giving effect to them.

We say that ultimately it comes down to a very important policy point: does the Court lean

favourably or generously as the Full Court said to

trying to, in effect, widen exculpatory provisions

under section 51 or should the Court say quite

clearly that if the legislature wants to authorize

conduct which is a breach of the Act it should

expressly do so. It would have been very easily

able to do so but it desisted from going to the
stage of authorizing the giving effect to the

agreements, and we say that the court should not,

as a matter of policy, lean generously in favour of

construing Acts to, in effect, make lawful what is

really intended to be per se, unlawful.	And I say
"per se, unlawful" because third line forcing is

treated in this Act as not even requiring an

anticompetitive effect.

So we say that that is a second aspect of the Full Court's decision that we would, with respect,

say is in error. And if there is this ambiguity,

then it is legitimate to look at the legislative

history to assist. We do not disagree with the

Full Court in saying you do not interpret the bill to interpret the Act but if the Act throws up the

kind of problem that Your Honour has put to me,

then it is legitimate and, indeed, one would be
required to look at the bill to see if this was an

accidental omission. But when one goes to the bill

Dainty 10 7/9/90

one finds what was authorized was the entering into

and carrying into effect of the agreements. So,

that, if anything, would lean strongly in favour of
giving it an interpretation wider than that which

the clear words mean.

So, they are the reasons why we say that the

Act does not save the conduct which we complain of but there is a third very important reason and it is this: the conduct which was complained of all

occurred before the passing of the Act and -

McHUGH J: But assuming you are right and it was not

intended to ratify what had occurred before, you

still would not be entitled to a declaration or an

injunction, would you?

MR MERKEL:  No, if I was wrong on points 1 and 2, we would

not get a declaration or an injunction. We would

get substantial damages and that may not be a case

for this Court if this case stood alone. But can I

refer Your Honour to what is said at page 177 of

the application book? This case does not stand

alone and we say we do not understate the position

when I state that the competitive state of the

ticketing services and venue industry throughout

Australia is fundamentally going to be determined

by this decision because at paragraph 4 - and this

is not our affidavit, this is our opponent's

affidavit - and I start at the second sentence:

On the contrary, the licence agreements used

by other major venues in Australia typically

contained provisions (comparable to

Clauses 9.1 and 9.2 of the NTCT agreement)

reserving to the venue operator the right to

provide the tickets for all performances at

its venue. Accordingly, consistently with the

provisions of the NTCT agreement, venues

typically provided not simply the use of a

venue, but a ticketed venue.

None of the major venues, in the evidence of

this case, have their own ticketing services built
in.	The decision in this case and the Full Court's

imprimatur, if we are right on our third line

forcing, is laying down a standard for the industry

throughout Australia. There are major ticketing

services in each State akin to BASS. BASS entered

into this arrangement by giving a rebate on booking

fees which are paid by the public. The monopoly

rent we say they are extracting is extracted not

from the promoter, not from the venue, but from the

public who have to pay the higher charges. That

will become the standard throughout Australia.

Clause 9 is a standard and the question in this

case is not whether Dainty can get damages if I am

Dainty 11 7/9/90

wrong on my first and second points on section 51,

the question in this case is whether the decision

of the Full Court will lay down an industry-wide

standard because what Mr Kewley says -

McHUGH J:	You are talking about the section 47 point?
MR MERKEL:	Yes, Your Honour, but there are no section 51

issues in respect of ticketing agencies in other

States.

McHUGH J:  I know, and if section 51 did not arise in this

case then, speaking only for myself, I think, this

may well be a case for special leave but

section 51 is a problem in your particular case, is

it not?

MR MERKEL:  I appreciate the force of what Your Honour puts

to me but we say, as a matter of logic, if the

issue is important because of its effect on

section 47 as a section of the Act - that is the

third line forcing provisions - and if its

importance is that this is not just a one-off

contract, then we say that that would not be why

Your Honour has indicated it may be important.

This is an industry-wide contract. The Full Court

has now said that the conduct engaged in is lawful.

DAWSON J: Well, what you are saying is if you are weak on

the section 51 point, you are strong on the
section 47 point? That is really what you are

saying, is it not?

MR MERKEL:  Yes, Your Honour, but the strength on the

section 47 point is Australia wide.

DAWSON J: Well, you are very strong on the section 47 point

in relation to special leave.	If you would turn to
the other point now, Mr Merkel.

MR MERKEL:	Your Honour, dealing
DAWSON J: Perhaps we might call on your opponent then,

Mr Merkel, at this stage.

MR MERKEL: If the Court pleases.

DAWSON J:	Mr Macaw.
MR MACAW:	If the Court pleases, does the Court wish me to

address only the question of section 51?

DAWSON J: Both points, I think. Well, you can choose

whatever order you want but perhaps the section 51

point first. That might be more convenient.

Dainty 12 7/9/90

MR MACAW:  If Your Honour pleases. Your Honours, we would

say that the question of section 47 is, indeed,
academic unless there is some realistic prospect of

success on the section 51 point. There is, in our submission, no question of a discretion such as my

learned friend contended for. It is plain from the

language on page 34 of the application book that

BASS is being appointed as agent to sell tickets at

all events held at the Tennis Centre and we adopt,

with respect, what Your Honour Mr Justice McHugh

put to my learned friend, that is to say, by

reference to recital C and D of the agreement.

One should also bear in mind, in our

submission, that this is a case, after all, of a

venue operator reserving to itself the right to control admission to its own land and it is not

surprising, even in the absence of recital C and D,

therefore, that what it is saying is, "You, BASS,

can sell all tickets to all performances that

involve the entering of persons on to our land." So

that our first proposition is that there is no

discretion such as was contended for. In any

event, we would say, that it is merely a matter of

the construction of a particular contract and in

itself could not provide a special leave point.

The next proposition my learned friend put was

that the Act merely authorized the entry into of the agreements and not their implementation. We

can do no better than adopt what the Full Court

said about that at page 144 of the application

book which, in our submission, is plainly correct.

At the middle of the page:

It is also, in our respectful opinion,

wrong to say that the Victorian Act authorised

the making of the agreements but not their

execution. This would have been a pointless

exercise on the part of the Victorian

Parliament, which should not be attributed to

it.

And we say that it would indeed be extraordinary

that the Parliament intended to authorize the entry

into of an agreement and yet leave open to attack

its implementation. Again, we would submit that in

any event, it is again a question merely of the

construction of an Act of very limited application.

If I could turn then to section 47. Our

submission is, in the way that the matter has been

approached in Mr Caldwell's affidavit in support of

the application for special leave, the only issue before the Court is as to the proper construction of the agreements, that is to say, the agreement

for hire of the Centre and the agreement for the

Dainty 13 7/9/90

appointment of BASS as an agent, to find the true

relationship between the venue owner, the promoter,

Paul Dainty, and BASS. And, of course, what the

trial judge and the Full Court held was that in

performing the ticketing function reserved to it

under the hiring agreement the venue owner was

acting in its own right and not as an agent for

Paul Dainty. It followed that there was no

agreement between Paul Dainty and BASS and no

services rendered by or acquired by Paul Dainty

from BASS.

DAWSON J:  Why should that necessarily take you outside the exclusive dealing provisions?

MR MACAW: Well, because it puts one on all fours with

Castlemaine Tooheys.

McHUGH J:  I know, but it seems remarkable that if the

vendor says, "I will lease you my venue but you

must accept the ticketing services of X", there is

a breach of section 47. But if he says, "I will

lease you a ticketed venue", there is no breach.

DAWSON J:  It offers an easy way to get around the

provisions, does it not?

MR MACAW: Well, that is the way it has been approached,

Your Honour, in the affidavit, as though this is a

device. It is an odd way to approach the matter in

circumstances where it was expressly conceded at

the trial that these agreements were in no sense a

sham and as the Full Federal Court held, there is

nothing contrived about the arrangement. That is

because,.principally, of the circumstance that I

have already adverted to, namely, that what the

venue operator is doing is reserving to itself the

right which would ordinarily exist to control

admission to its own land. It is saying in the

agreements, "We wish specifically to reserve the

right to control that function." And one can

imagine in a case where there was something

contrived or artificial about the arrangement why a

court might come to the conclusion that it is, in

effect, forcing on the hirer the services of a

third party as opposed to insisting that the hirer

take the ticketing services of the venue operator.

But there is no question in this case of artificiality or sham or contrived arrangements

and - - -

DAWSON J: Well, when you say there is no suggestion of a

contrived arrangement, why is it not contrived? no competitor of BASS sells tickets in relation to

this Centre?

Dainty 14 7/9/90

MR MACAW:  Your Honour, it is not contrived because there

are perfectly sensible - - -

DAWSON J:  "Contrived" is a pejorative word, it is "so

arranged", if you like.

MR MACAW:  Yes.

It stems from the perfectly sensible desire to protect the venue operators own interest to

control admission to its own land. There was a

great deal of evidence at the trial - - -

DAWSON J: Well, presumably, selling tickets is a profitable

enterprise, I suppose.	BASS aims to be a
profitable enterprise.

MR MACAW:  It certainly aims to be, yes, Your Honour.

DAWSON J: Yes, and it is an arrangement which ensures that

without competition profits are ensured so far as

BASS is concerned in relation to these centres.

MR MACAW:	Yes.
DAWSON J:	In other words, it is enabled to make its profits

without competition which is something, of course,

that the Act is directed against.

MR MACAW:  Yes. Well, Your Honour, we would take in these

steps, if we may: this case, if we are correct on

the construction and if the Full Federal Court is

correct on the construction of the agreements, is

on all fours with Castlemaine Tooheys. Castlemaine

Tooheys was a case where the reasoning in relation

to the meaning of the acquisition of services in
section 47 was unanimous. In each case the court

held that where the arrangement was such that the provider of the primary goods or services himself

provided the secondary goods or services, if you

like, by means of the employment of an agent, then
the other party to the contract did not acquire

those services, the secondacy services, from the

third party.

DAWSON J: But in the particular factual setting of that

case, was it laid down anywhere as a general

proposition wherever the contract is between the

provider of the services and the second party, that

there cannot be exclusive dealing within the

meaning of the section? I mean, it is one thing to

have regard to the supply of beer and its provision

through a carrier and an arrangement such as this.

You may be able to point to a section in the

judgment which does lay down the proposition with

the generality that you claim.

MR MACAW:  Does the Court have a copy of Castlemaine

Tooheys?

Dainty 15 7/9/90

McHUGH J: Well, there are a large extracts of it referred

to in the judgment of Mr Justice Sweeney, I think.

MR MACAW:  Yes, there are, indeed. My learned friend had

copies that he had apparently desired to hand up.

I ask the Court to turn to page 400. The Court

will be familiar with the facts,that QRX was the

preferred carrier who had been engaged by

Castlemaine Tooheys to cart its beer to northern
depots. At about point 7 of the page - this is

just before the end of the paragraph concluding at

about point 7:

However, when a retailer wished to have the

beer delivered from the brewery, the appellant

required, as a prerequisite to granting

supply, that the appellant itself should

arrange delivery. The appellant supplied the

beer on that condition.

However, the condition was not that the

retailer should accept the services of QRX.

The condition was that the appellant should

arrange the carriage of the beer and should
deliver it to the retailer, not at the

brewery, but at the retailer's premises or

some other place in North Queensland. In

other words the condition was that the

appellant would deliver the beer which it sold

to its destination in North Queensland. It

was of course clear that if the appellant had

itself carried the beer there would have been

no exclusive dealing withins. 47. The

position was not altered when the appellant

arranged for a third person to carry on its

behalf. In those circumstances the services

were acquired by the appellant and not by the

retailer. No doubt in a loose sense the

retailer received a benefit from the services,
but .in truth what the retailer acquired was

the beer and not the services of the carrier.

And that was because, Your Honours, the

arrangements between Castlemaine Tooheys and its

purchaser were such that it contracted for the

supply by it of the delivery of the beer.

There was a separate point in this case about whether there were services acquired by the

purchaser in any event, but leaving aside that
point, the reason why, in the judgment of

Chief Justice Gibbs, there was no contravention of section 47 was because the brewer, having

contracted to supply the delivery service and

having engaged the carrier to do it on its behalf,

there could not be any relationship between the

carrier and the third party which could enable the

Dainty 16 7/9/90

third party to be said to acquire the services of

the carrier.

DAWSON J: But that was because in that setting the carrier

was a mere, as it were, extension of the arm of the

brewer. But can you say that in this case?

MR MACAW:  Your Honour, one starts with the proposition that

its is, we would submit, a perfectly sensible

desire for a venue operator to wish to retain
control of admission by members of the public to

its land. It is a function which it is sensible

also to have performed by somebody with relevant

expertise. If it performed the function itself

there could be no complaint and, in just the same

way as Castlemaine Tooheys did not itself have a

fleet of delivery vans which provided the facility

and expertise to perform that service and used a

preferred carrier, so, in this case, the expertise

is more sensibly provided by the agent BASS.

TOOHEY J: But there is a difference, is there not, between

the two cases? In Castlemaine Tooheys the

obligation was to supply beer and that was done by

the supplier providing its own cartage. Where is
the analogy between that situation and the one in

the present case?

MR MACAW:  The analogy is close, in our respectful

submission, because what the contract provides in reserving to the venue operator the ticketing and

catering and, indeed, other functions that might be

thought to be central to the sensible management of

the venue - what it means by reserving those

functions is that it contracts to provide a

ticketed venue, a ticketed catered secured venue,

if it matters.

TOOHEY J: But in a sense that really begs the question,

does it not? I mean, you start by saying - by
focusing on the arrangement as an arrangement to

provide a ticketed venue. It might well be said

the arrangement is to provide a venue.

MR MACAW:	In just the same way, with respect, Your Honour, one could say that it begs the question to describe
the effect of the arrangement in Castlemaine
Tooheys as a contract to provide delivered beer.

DAWSON J: It was to provide beer.

MR MACAW:  It was to provide beer and specified that the

brewer should deliver it. And, of course, when you

saw the invoice it separately invoiced the cartage

charges and the goods component. To compendiously describe the arrangement in Castlemaine Tooheys as one to supply delivered beer is at least as

Dainty 17 7/9/90

accurate or inaccurate as to describe the

arrangement here as one to provide a ticketed
venue. There is no relevant distinction, in our

submission.

DAWSON J: Well, the point is clear and that is the point,

is it not?

MR MACAW:  Indeed, Your Honour. Well, the Court is

familiar, no doubt, with the way in which the other

members of the Court in Castlemaine Tooheys

approached the matter but, in our submission, it

does very plainly stand for the proposition that

there must be - and this is leaving aside any

question of a contrived or artificial arrangement;

I will come to that in a second - there must be in

a situation like Castlemaine Tooheys or the present

case a relationship between the third party and the

second contracting party in order for it to be said

that the second contracting party is acquiring

services from the third party because otherwise if

there is not such a relationship the services

provided by the third party are provided as agent
to the first party and the only services being
acquired by the second party are those provided by

the first.

DAWSON J: Well, I think we have that point.

MR MACAW:  Yes, indeed, Your Honour. And that is why, of

course, our learned friends have had to try to

contend that, in truth, the venue operator is

contracting under the hiring agreement as agent for

the promoter when it engages BASS to perform the

ticketing services because it accepts that it needs

to establish a contractual relationship by some

such technique between BASS and Paul Dainty.	We
would say that quite apart from being plainly

wrong, that is merely a matter of construction of

these particular agreements which would not found a

special leave application.

DAWSON J: Thank you, Mr Macaw.

MR MACAW:  May I add one thing, Your Honour: my learned

friend's position is rendered still more difficult,

in our submission, by the proposition that one has

to look, it seems, outside the terms alone of the

agreements to find in the factual matrix some

warrant for concluding that the venue operator is

acting in engaging BASS as the agent for the

promoter. Not only is there no foundation in the

judgments or the evidence for a factual matrix
which would be of assistance in that respect, but

it emphasizes the point still further that the

matter is one depending upon its special

Dainty 18 7/9/90

circumstances which would not warrant special

leave.

DAWSON J: Thank you. Mr Hayne?

MR HAYNE:  If the Court pleases, we adopt what my learned friend, Mr Macaw, has said. We do not seek to

repeat those matters and we shall confine ourselves

to stating our point shortly.

Might I deal first with the section 47 point?

We say that the true principle is to be found in

the judgment of Justice Brennan in Castlemaine

Tooheys at page 405 at about point 5 of the page where His Honour said that:

Section 47(6) applies only when there are

two contracts or arrangements -

and His Honour there describes the two contracts or

arrangements that must be found.

We say that the central question presented by

the statute by section 47 is whether there is an

acquisition of services by the party who is forced

from the third party. Thus the central question

debated in this case below was whether BASS

provided services to Dainty. If it did then

section 47 was met and everything else fell into

place, and the questions of section 51 and the

shield of the Crown and related corporations points

were then enlivened.

Dainty sought below and on appeal to say that

BASS provided it, Dainty, with services because
BASS was selling its, that is, Dainty's tickets to

Dainty's - - -

DAWSON J: Well, it is understandable why they said that

because they are confronted by propositions such as

the one you point to in Mr Justice Brennan's

judgment.	But may he not be stating it too widely,
that is the point?

MR HAYNE: With respect, no, Your Honour, for that is the

question - - -

DAWSON J: Well, can I put to you again what Justice McHugh

put a moment or so ago; it seems very odd that if

this had been done another way, in other words, if

the venue had insisted that Paul Dainty enter into

a contract with BASS, you would fall fairly and

squarely within section 47 but if you do it this

way, which really makes no difference, you escape

section 47.

McHUGH J: It is a triumph of form over substance.

Dainty 19 7/9/90

MR HAYNE:  With respect, if I can take His Honour

Justice Dawson's question first and then deal with

Your Honour Justice McHugh's comment. Your Honour,

it is not identical, for the obligations owed by

one party to another are very different. Dainty's

obligations and rights are as against the venue, it

has no obligations to or rights as against BASS.

What happens if there is not enough money in the

till to pay out Dainty whatever profit it make seek

to have from its promotion of Mick Jagger's

concert? To whom does it look? It looks to the

venue. It does not look to BASS. It cannot look

to BASS. So, with respect, Your Honour, what

Your Honour Justice Dawson said of identity between

the two arrangements is, we would say, wrong.

Your Honour Justice McHugh said, "form over

substance", Your Honours, we would say that the
question presented by the statute is first catch

the acquisition of services of the kind described

by the statute - - -

DAWSON J:  I suppose you would say contracts are a matter of

form?

MR HAYNE: And substance, yes, Your Honour. That is why so much of the debate below was what is the nature of

the relationship that exists between these three

players on the board. But if you begin from

the - - -

McHUGH J: Yes, but that may be an invitation to error, may

it not? It is understandable that the parties,

particularly from a forensic point of view, would

concentrate on the individual relationships and the

rights of the parties between themselves but what

the section talks about is a corporation which
grants a licence in respect of land on condition

that another party to the licence will acquire

goods or services from X, from a third party.

MR HAYNE:	Yes, Your Honour.
McHUGH J: Well, you have got to apply that to the

arrangement looked at as a whole to see whether it

is within the section.

MR HAYNE:  Yes, is there an acquisition by the licensee from

the third party, and that was the whole focus of

debate below. Your Honours have read the judgments.

I do not wish to rehearse what is there.	The
arguments are there set out.	We say that Their

Honours in the Full Court were right in the

conclusion they reached. They addressed the

correct question and answered it, we say, correctly

and consistently with what had been decided in

Castlemaine Tooheys, namely, was there in

Dainty 20 7/9/90

Castlemaine Tooheys' case an acquisition of a

· service by the hotelier from the transport company?

The answer in Castlemaine Tooheys was no; the answer here we say is no.

Your Honours, the points have been exposed. I

do not stay further on them. Might I turn to

section 51? Might I make these points about it?

The point which my learned friend seeks to identify

as the special leave point in relation to

section 51 is, in effect, whether the State

Parliament may cure that which was a contravention

and which occurred before the passing of the State

Act. It is important to understand the point at

which that problem or point emerges in this case.

McHUGH J: It is not so much a special leave point, it is

really a question of whether it is a bar to him

getting here to litigate the important section 47

point.

MR HAYNE:  Your Honours, I will adopt that formulation for

it is as convenient as that which I have put to

Your Honours.

DAWSON J:  The point becomes academic if the section 51

point is a good one.

MR HAYNE:  Yes, it does, Your Honour. My learned friend

must begin this part of the argument from the

construction of the BASS/Tennis Centre agreement

that he first took Your Honours to. He must begin

by getting home a construction of that agreement

that flies in the face of its words, that is, he

must establish that the .Tennis Centre is free to

choose to employ BASS or not free. That is not

what the agreement says.	We say clause 2 does not
say that.	Recital C and D emphasize that that is

not what clause 2 says.

The argument then assumes that in the present

case, in the circumstances of this case on the
contracts as they existed between the parties in

this case, the ticketing for the concerts in

question was in fact done on behalf of Dainty.

That is the argument next assumes the section 47

point as we have put it, namely, it assumes that

there was an acquisition of services by Dainty from

BASS. We say that assumption is wrong.

The problem then emerges as what is it that

the Victorian Act authorizes: execution of the

contract or performance? My learned friend says

execution only, thus the Victorian Parliament was saying, "You were correct in executing it but you

must breach the agreement or commit a contravention

of section 47", a quaint exercise for Parliament to

Dainty 21 7/9/90

engage in. And it is then only, after answering

those three matters favourably to the applicant,

that one comes to the point of at which time does

the amending Act speak? Does it speak, does it

apply to litigation concerning acts done in

performance of agreements before passing of the

amending legislation? The plaintiff says no; we

say, yes it does; the Full Court said, yes it

does. But even if the plaintiff is right,

then - - -

McHUGH J: It does not matter much.

MR HAYNE: Well, no declaration, no injunction. And then my

learned friend went off to say, "Well, leave aside

section 51, we've got a terribly good section 47

case."	We say that is no answer to the section 51
case.	We say that the section 51 point is a bar to
the grant of leave in this case.	We would submit

that leave ought be refused. If Your Honours

please.

DAWSON J:  Thank you, Mr Hayne. Mr Merkel.

MR MERKEL:  Just one or two short points, Your Honour. Can

I deal in reverse order with the section 51 point

first? The submissions put on section 51 do ignore

two quite important provisions of the Act; the

first in respect of exclusive dealing is that the

service can be directly or indirectly acquired,
just dealing with section 47(8)(c), from another

person and the condition is defined in section 13

and it is the imposition of the condition which is
complained of as a condition, whether direct or

indirect, whether having legal or equitable force

or not, and includes a reference to a condition,
the existence or nature of which is ascertainable

only by inference from the conduct of persons or

from other relevant circumstances. What we say

Ku-ring-gai establishes, that the Act authorizing

the contravention must authorize that condition

referred to in section 47(13). And we say that

that is not the BASS/NTCT agreement and probably

the clearest exposition of how the condition came
to be imposed and what it is appears at page 50 of
the application book and if I can take the Court

just briefly to it. At page 49, Your Honours, in

the middle of the page, Mr Justice Sweeney set out

what was an agreed chronology presented by the

parties and over at page 50 there are two events

which we say found the condition under

section 47(13).	The second paragraph, late in
1987:

Nicholson -

who is the manager of the National Tennis Centre -

Dainty 22 7/9/90

tells Dainty that PDC would be required to

sell its tickets at the NTC through BASS

Victoria.

And then done on the 5/1/1988, Olympic Park

Management wrote -

to PDC -

that is Paul Dainty

confirming that Olympic Park Management had

entered into a contract with Bass Victoria

whereby tickets for all performances at

Olympic Park and the -

Tennis Centre -

must be sold through Bass -

but allowed them to continue to sell these other

tickets. We say that it is the conduct of

requiring promoters to use BASS, which is the
condition under section 47(13). That conduct has

never been authorized by that Act which was

approved by the Victorian Parliament and we say

that it takes a far too narrow a view of
section 47(13) and far too expansive a view of

section 51 to come to the conclusion that a

condition in terms of section 47(13) has been
authorized by the State Parliament. It just simply

did not do so and we say that even if we are wrong

in that point, for the reasons that we have
indicated, emphasis should be given not generously

to the words "specifically authorized". It must be

that condition that is specifically authorized by

the State Act and it has not been.

Other than that, I do not think I would be

doing any more than repeating the earlier argument

we had put in respect of the State Act but we do

emphasize that if the Federal Court's decision is

left standing, that becomes a warrant for this

conduct throughout the country and we say that is

an important matter. And we only add that it is

only academic under section 51 if the Court

concludes that the Act has retrospective effect

because there is a substantial damages claim and we

say that that would not make the special leave

application academic both in determining the issue

of importance and determining the rights as between

the parties even if our submissions on the Act were

rejected and it was held sufficient to deny us

declaratory or injunctive relief.

McHUGH J: Could I just get your assistance on this point,

Mr Merkel? What section 51 says is that:

Dainty 23 7/9/90

regard shall not be had -

(a) to any act or thing that

is ..... specifically authorized or approved -

so that means that you cannot have regard to the

terms of the agreement, does it not? You have got

to take that out of the factual matrix. Now, once

you take that out, how does your argument stand?

MR MERKEL:  We say that we do not need to go to it at all,

Your Honour, because we are not concerned with the

source of the obligation to use BASS. We are

concerned with the imposition of an obligation to

use BASS'S services, or put more correctly, the

imposition of the consequence that we accept BASS's

services. Where it stems from is irrelevant to the

proof of our case.

Your Honours, just on that last point, it is

our submission that the point that Your Honour

Mr Justice McHugh raised to me that regard shall

not be had, does not mean that merely authorizing

the agreement authorizes any conduct or, more

importantly, the effect of conduct that is taken as

a consequence or as a result of the agreement and

we say that we do not need to turn to that

agreement to prove our case at all. We can ignore

that agreement and we can establish that the

evidence that we can identify and, most

importantly, the end result is that we have been

required to enter into a series of contractual

arrangements which require us and, in fact, lead to

us accepting the services of someone who is imposed

upon us and that is a supply of service upon a

condition. That is the end result, so when tickets

are sold those services are services we are

directly or indirectly accepting including the

holding of the moneys pending the staging of the

show which are then to be disbursed to us and,

indeed, the earning of interest, the investment and

earning of interest of those moneys is something

that PDP is the beneficiary of.

We say those services can be established as having been required to be accepted by us and

actually having been accepted by us without resort

to the agreement at all. If the Court pleases.

DAWSON J: Thank you, Mr Merkel.

We do not think that there is any sufficient

reason to doubt the conclusion which the Full Court
of the Federal Court reached upon the construction
of the agreements in question and upon the
application of section 51 of the Trade Practices

Act. That being so, the applicants do not reach

Dainty 7/9/90

the point which they seek to raise under section 47

of the Act. Special leave will be refused.

MR HAYNE:	We ask for costs, if Your Honour pleases.
MR MACAW:	we, likewise, Your Honour.
MR MERKEL:	I cannot resist that, Your Honour.

DAWSON J: With costs.

AT 10.37 AM THE MATTER WAS ADJOURNED SINE DIE

Dainty 25 7/9/90