Pluteus (No 8) Pty Ltd v G.J. Coles & Co Ltd

[1983] FCA 217

CATCHWORDS

I Trade Practices - Circular letter alleged to be contract,

arrangement or understanding substantially lessening

competition - Conduct alleged to constitute exclusive dealing.

Practice - Application seeking dismissal of proceedings on

the ground that they disclose no cause of action - proceedings

alleged to be frivolous and vexatious - Jurisdiction to dis-

miss or stay proceedings - Consideration of principles applic-

able in exercise of ~urisdiction.

I

Trade Practices Act, 1974 s s . 45 and 47

Federal Court Rules Order 20 Rule 2

PLUTEUS (NO. 8) PTY. LIMITED V. G.J. COLES & COY. LIMITED;

JOSEPH P. MONAHAN JR; DENNIS OWEN;

JOHN DAVIDSON

No. G 145 of 1983

Beaumont, J.

Sydney

26 -1983.

AUGUST.

IN THE FEDERAL COURT	OF AUSTRALIA	)
1

NEW SOUTH WALES DISTRICT REGISTRY	)
1
GENERAL DIVISION	) No. G145 of 1983

BETWEEN :	PLUTEUS (NO. 8) PTY. LIMITED Applicant
-	AND :	G.J.
First Respondent

COLES & COY. LIMITED

JOSEPH P. MONAHAN JR.

Second Respondent

DENNIS OWEN

Third Respondent

JOHN DAVIDSON

Fourth Respondent

ORDER

Judge making order:	Beaumont, J.
Date of order:	26 August, 1983.
Where made:	Sydney.

THE COURT ORDERS THAT:

1. I order that the appllcation be dlsmxsed.

2.	I order that the costs of the application be reserved.
3.	I f l x 2 September, 1983 as the date wthin twenty one

days after whxh any notice of appeal shall be flled and

served for the purposes of Order 52 Rule 15(l)(a)(iii).

.

IN THE FEDERAL COURT OF AUSTRALIA )

NEW SOUTH WALES DISTRICT REGISTRY	)
1

GENERAL DIVISION No. G145 of 1983

BETWEEN :

PLUTEUS (NO. 8 ) PTY. LIMITED

Applicant

AND :

-

First Respondent

G.J. COLES & COY. LIMITED

JOSEPH P. MONAHAN JR.

Second Respondent

DENNIS OWEN

Thlrd Respondent

JOHN DAVIDSON

Fourth Respondent

CORAM:	Beaumont, J.
DATED :

REASONS FOR JUDGMENT

Introduction

This is an application by the respondents to these

proceedings seeking, in essence, that the proceedlngs and

the application for interlocutory relief be dismissed on the

ground that they disclose no cause of action and are there-

fore frivolous and vexatious. The inherent ]ur~sdlction and

the jurlsdictlon of the Court under	0.20 r.2 are sought to be
invoked.

c

- 2 -

The proceedings are brought by the applicant (''Pluteus")

as the vehicle, for that purpose, of the Australian Sales

Promotion Association. The respondents are G.J. Coles & Coy.

Limited ("Coles") and three of its executives.

The application for interlocutory relief

In Its application, Pluteus seeks both permanent relief

and interlocutory relief until further order as follows:

1. An injunction restraining Coles from imposing a con-

dition on the acquisition of goods or on offers to acquire

goods that the packaging of the goods does not contain promo-

tional material of any of the followmg kinds:

(a) Promotions offering cash refunds to participants who

collect single or multiple labels/packs.

(b)	Competitions which have a large number of prizes com-
prising merchandise sold by Coles e.g. first prize

100 BMX bikes.

(C)

Promotions which involEthe participant sending money

to the promoter or manufacturer.

(d) Promotions which carry no retail support funds.

(e)

Bonus packs which offer as an attachment or refund,

merchandlse sold by Coles unless appropriate l o s s

of profit is allowed over and above normal level of

support funds related to the promotion.

2. An injunction restralnlng Coles from making or giving

effect to any contract or arrangement, or arrlving at or glvlng

effect to any understanding whereby the acquisition of goods is

sub~ect to a condition that the packaglng of goods does not

contain promotional materlal of any of the foregolng kmds.

F

- 3 -

3 . An order restraining Coles from further publishing the

circular letter which is annexed to the statement of claim

(see below).

I

4 . Consequential relief.

In order that the parties and the Court could better

understand the nature of the claims made, Pluteus filed a

statement of clalm which is appended to these reasons. In addition, further and better particulars of the claims were sought and, to some extent, supplied.

Central to the case sought to be made by Pluteus is

the circular letter from Coles annexed to the statement	of
claim as follows:

"This is to advise that effective forthwith, we are

reducing support for certain types of 'on-pack' com-

petitlons and promotions.

Our intention is to curtall activity which merely moves the'sales dollar from one brand to another and to en- courage activity which assists our company to increase market share, or increase the total market segment.

The categories which will be rejected by us are as follows:

-

Promotions offering cash refunds to participants who

collect single or multiple labels/packs.

- Competitions which have a large number of prizes

comprising merchandlse we sell in our retail outlets,

e.g. first prize 1 0 0 BMX bikes.

-

Promotions which lnvolve the partlcipant sending

money to the promoter or manufacturer.

- 4 -

-

Promotions which carry no retall support funds.

-

Bonus packs which offer as an attachment or refund,

merchandise we sell in our retail outlets unless

appropriate loss of profit is allowed over and above

normal level of support funds related to the

promotlon.

Our buyers and promotlons personnel would be happy to

discuss alternate activity which could reflect a value-

for-money profile compared to the gimmick image of

some 'on-pack' promotions.

Consumer promotlons already approved by this office will be honoured with our.usual support.

Separate entry forms are still unacceptable at fixture

level and/or at the check-out. We do permit approved

entry forms to be used in off-location displays in our

stores if organised through (a) our state promotions

department for Supermarkets, (b) the appropriate buyer

in Head Office Melbourne for Variety Stores and K marts.

All promotions will still be assessed on merit and are stlll to be submitted to our head office, well in ad- vance of the launch, preferably prior to final prlnting of entry forms or packaging. Such submissions should

be made to Mr. J. Davidson in supermarket division for supermarket promotions or the appropriate buyer, general

merchandise division for Variety and K mart promotions.

(Sgd.) D. Owen (Sgd. ) J. Monahan Jnr.

D. hen, J. Monahan Jnr.

General Manager Merchandlse, Director,

SUPERMARXET & FOODSERVICE	GENERAL	MERCHANDISE	DIVISION"
DIVISION

In support of its application for mterlocutory relief,

Pluteus relles prlncipally upon an affidavit sworn by lts

solxitor, Mr. Anisimoff. He there gives evldence of a con-

versation on 31 May, 1983 with Mr. Davldson, the fourth res- pondent and the person referred to In the clrcular letter as follows:

U

- 5 -

"Mr. Davidson then sald to me 'Coles are not

interested in promotlons which merely encourage

the consumer to purchase a product and do not

encourage the consumer to purchase it at Coles. Ne wish to have promotions which are exclusive to us. Traditional sales promotion techniques

generally do not benefit us and in most cases take sales away from more profitable lines which

are not runnlng a sales promotion. Unless a

satisfactory arrangement as to profit sharing

and/or other retail contribution is arrived at

a product which carries the promotional techniques

referred to m the letter (meaning the aforesaid

circular letter) will not be accepted by us'."

Mr. Anisimoff gives evidence in his affidavit of a

later conversation as follows:

"On Thursday, June 9, 1983 I contacted Mr. Davidson

again, by telephone, and to the best of my recollec-

tion, the following conversation took place:

I said: 'We met last Tuesday week. I would like,

if possible, to confirm again the policy of Coles

in relation to sales promotions. You know I act for

many of your suppliers and sales promotlon companies

and they are very concerned about your policy. Some

do not believe the policy is as strict as you say and

they have specifically asked	me to clarify it	with
you. ' IIr. Davidson replied: 'Yes.'

I said: 'Could you please make sure I have it

stralght? As I understand it you wlsh all suppliers

to submit to you as early as posslble, sales

promotional offers. If they submit finished pro-

motional product without having received this prior

approval and product falls within the categories of

the letter you have just sent out, you won't stock

that product.'

Mr. Davidson replied: 'That's right.'

I said: 'If it is a $2.00 refund offer on that pack, would you run that pack?'

Mr. Davidson replied: 'No.'

- 6 -

I said: 'What if suppliers supplied Coles wlth

plain packs and other retailers with promotional

packs? '

Mr. Davidson replled: 'Ne would expect them to

give us some incentlve to want to stock that product

before we would support that product otherwise we

would support somebody else's product.'

I said: 'AS well as supporting somebody else's product, would you delist the product?'

Mr. Davidson replied: 'It could be delisted or

they could may be redeslgn their pack promoting

their product.'

I said: 'Could it possibly be delisted?'

Mr. Davidson replied: 'We would treat each one on its own merit.'

I said: 'The five categories in the letter, are they

strict? Can they be negotiated at all?'

Mr. Davidson replied: 'Each one is treated on its

own merit. If they come in In advance there may be

only a couple of minor changes.'

I said:'What type of things are you looking for to get these things through? Are there any type of criteria that my clients should look for?'

Mr. Davidson replied: 'If they come down to see

me m initial planning stages there 1s no hassles.

They could be ironed out before they go to print

and they could extract retall support you see.

Cadburys are giving away couple of stereos and

2000 records. We are not allowlng thls promotlon.

If they were giving away say 100 records, maybe. we could have sold to potential customers.'

I said: 'What about Category 1, promotions offering cash refunds?'

Mr. Davidson replied: 'In the case of $2.00 refund,

I have just knocked one back, they must give us plain

stock only. You see they should give us a 10% reduc-

tion on product plus $10,000-$12,000 and we will give

them display space for a sale in Coles.'

I said: 'You would not run the cash refund offer?'

Mr. Davidson replled: 'NO.'

- 7 -

I sald: 'What would be the sltuatlon If they

tried to offer other retailers the promotlonal

pack and gave you the plain pack? Would that

be a problem?'

Mr. Davidson replled: 'Yes. This disadvantages

us by having a $2.00 refund in Woolies. We feel

a cash refund is of no benefit to the consumer

because redemption rate is o low. It is taking

sales away from products which may be givlng us

more productivity.'

I said: 'It curtails your productivlty?'

Mr. Davidson replied: 'Yes.'

I said: 'But it also reduces competition between

products.'

Mr. Davidson replied: 'Yes. I know. But cash

refunds create problems for us. No way can we run

these promotions. In the case a guy wants to give

$2.00 to charity we will go along with that or a

community type charity.'

I said: 'What about self-liquidating offers?'

Mr. Davidson replled: 'No way.'

I said: 'NO way? I

Mr. Davidson replied: 'No way. With the exception

of Kelloggs who have a promotion in	con~unction
with the Olympic Games.

I said: 'Would there be a cllent of mine whose

promotion has been knocked back?'

Mr. Davidson replied: 'Napisan - Milton.'

I said: 'No that's not one of mine.'"

Pluteus also rehes upon some dealings between Coles

and Cadbury Schweppes Pty. Ltd. ("Cadbury") In respect of a

promotion known as "Cadbury Crack the Crunchie Sound". As

part of the promotlon, Cadbury offered "consolation" prizes

of 250 long playing records drawn every week for elght weeks

- 8 -

from 27 June to 15 August, 1983. In response to this promotion,

Mr. Davldson wrote to Cadbury on 10 June, 1983 saying:

"We confirm our telephone conversation of June 9, 1983,

regarding the above promotion and advise that this

promotion is unacceptable to Coles in the area of 'com-

petitions which have a large number of prizes comprising

merchandise which we sell in our outlets' e.g. L.P.

records.

We wlll be advising our states of our decision."

Mr. Anisimoff was not cross-examined. Coles called no

evidence.

The present application

The proceedings having only just commenced and a hearing

date having been fixed for the application for interlocutory

relief, Coles took the somewhat unusual course of moving immed-

iately for dismlssal of the proceedmgs as a whole, essentially

on the basis that no cause of action was disclosed. Coles was

not content to wait until the application for interlocutory

relief was made and then to resist it. Rather, mainly with the

hope of avoiding the expense of lengthy hearings, at both the

interlocutory and final stages of the proceedings, Coles elected

to seek the immediate dismlssal or at least the permanent stay

of the proceedings, including the application for interlocutory

relief.

c

- 9 -

The very nature of such an application whlch, If successful, would stifle the litigation at its inceptlon, indlcates that "a case must be very clear indeed to justify

the summary intervention of the Court to prevent a plaintiff submitting hls case for determination In the appointed

manner by the Court ..." (Dey v. Victorian Rallways -

Commissioners (1949) 78 C.L.R. 62 at p.91 per Dixon, J.).

Thus, as Dixon, J. says (at p.91), once it appears that there

is !'a real question" to be determined, whether of fact or of

law and that the rights of the parties depend upon it, then

it is not competent for the Court to dismlss the action as

frivolous and vexatious and an abuse of process.

The test to be applled in this connection was also

discussed by Barwlck, C.J. in General Steel Industries Inc.

v. Commissioner for Railways (N.S.W.) (1964) 112 C.L.R. 125

at pp.129-130. The Chief Justice, after referrmg to the

reasons of Dixon, J. in Dey's case, concluded as follows

(at p.	130):
"Although I can agree with Latham C.J. in the same

case when he said that the defendant should be

saved from the vexation of the contlnuance of

useless and futile proceedings (1949) 7 8 C.L.R. at

p.841, in my opinion great care must be exercised

to ensure that under the gulse of achieving

expeditious finality a plalntiff is not improperly

deprlved of his opportunity for the trial of his

case by the appointed trlbunal. On the other hand,

I do not think that the exercise of the ~uris-

diction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of

an extensive klnd, may be necessary to demonstrate

that the case of the plaintlff is so clearly

untenable that it cannot possibly succeed."

- 10 -

The case sought to be made by Pluteus

Pluteus put its case in a number of ways. In the first

pliers, will be capable of constltuting a contract, arrangement or

understanding of the antl-competltive type prohibited by s.45. If

necessary, Pluteus also relles upon s.45A in this connection.

place, It says that the circular letter, if accepted by the sup- conduct lndlcated in the views attributed to Mr. Davidson con- stitute or would, if implemented, constitute the practlce of ex- clusive dealing outlawed by s.47.

On each of its arguments, Pluteus refers to the evidence

of Mr. Davldson as an indication that Coles is attempting to

eliminate the relected type of promotions not only in its case

but also in the case of other retailers.

The fate of the present applicatlon

Coles assumes a heavy onus lndeed in seeking the summary

dismissal of proceedings of this klnd. One can appreclate that

lt may well be approprlate to conslder, and lf ecessary, strlke

out, proceedings where the whole argument in the case turns upon

a bare legal question such as that of statutory construction.

-	Dey and General Steel provide examples of thls type of case.
However, in the present case, no such legal Issue really emerged in any isolated form although the argument In the applicatlon occupied some days. Many of the questions debated before me indlcated that, when the matter proceeds to trial, a number of

- 11 -

factual issues will need to be resolved.

It is true that the jurisdlction, mherent and statutory,

to stay or dismiss proceedings as an abuse of process may be

exercised if the dispute centres only	on an issue of fact. Cox
v. Journeaux (No. 2) (1935) 52 C.L.R.	713 IS a striking

illustration. There, Dixon, J. made it clear (at p.720) that

the ~urisdiction is not limited to cases where there is no dispute

of fact but emphasised (ibid-)that "the principle, in general

paramount, that a clalm honestly made by a suitor for judicial

relief must be investigated and declded in the manner appomted,

must be observed. A litigant is entitled to submit for deter-

rninatlon according to the due course of procedure a claim which

he believes he can establish, although its foundation may in

fact be slender. "

In the present case, it is possible to isolate three maln

areas of contentlon between the partles. Flrst, an issue arises

as to the proper construction of the circular letter and, possibly,

the conduct of Coles and its suppllers in that regard. Whether

these clrcumstances reveal the requisite consensus so as to throw

up a contract, arrangement or understanding of the type outlawed

by s.45 will in the end, I think, fall to be resolved as a questlon

of fact (see Trade Practices Commisslon v. Email Ltd.	(1980) 31
A.L.R. 53 at p.56.).

- 12 -

Secondly, a similar question, also ultimately of fact,

arises in the context of s.47. In particular, an issue arises

between the parties as to whether the condition,alleged to arise

from the terms of the circular, and possibly, any related con-

duct,imports the requisite degree of obligatlon contemplated by

s.47 (see SWB Family Credit Union Ltd. v Parramatta Tourist

Services Pty. Ltd.(1980) 32 B.L.R. 365). In the end, I appre-

hend that the determination of this question will turn, to a

substantial degree, upon the intentions of those parties in

that behalf.

Thirdly, and most importantly, an issue arises whether

the conduct complained of has the necessary anti-competitlve

element. Here, a question of principle does arise. Coles argues

that because its sole activity is that of a retaller of goods,

it can never be said to be in competitlon with its suppliers

who operate in a dlfferent market, that of the wholesale of goods.

Pluteus, on the other hand, submits that the conduct of Coles

now challenged has an impact upon competitlon at several

levels: for one thing, as Mr. Davidson acknowledged, to

inhibit the marketing methods of a particular supplier to Coles

could readily affect that supplier's ability to compete in the

wholesale market with other suppliers of that product or of

similar products; a fortlori when the ban extends beyond Coles

to other retailers. For another, the Cadbury example and the

case of Coles' house brands show that the oblectlve sought to

be achieved by Coles, as indicated In Its circular letter and

otherwise, is to improve the sales of products marketed by

Coles at the expense of products marketed elsewhere. Whether

- 13 -

the latter examples Indicate a breach of s .45 or s.47 is very

much an open question. The propositions advanced by Pluteus

in this behalf are novel and the arguments to the contrary

are formidable. In partlcular, I was much impressed wlth the

submission put by Coles that,since It could never be said that

Cadbury was engaged in the retail sale or wholesale of long

playing records, it must follow that Cadbury was never op ratmg

as a competitor in either of those markets. Therefore, Coles

says, steps taken to prevent Cadbury from offering long playing

records to purchasers of its products can have no bearing upon

competition in those markets for the purposes of s.45 or s.47.

Whatever may be the ultlmate merits of the respectlve

arguments, at present I find myself unable to reject

either branch of the argument advanced by Pluteus as raising

no "real question" of fact or of law. The former aspect of

the argument certainly raises such a question. Wlth some hesit-

ation, I am of the view that the latter aspect does so a well.

In Its appllcation, Coles seeks, in the flrst instance,

to strike out the whole of the statement of claim. In a

modern system of pleadmgs upon an appllcation to strike out

a statement of clalm as dlscloslng no reasonable cause of action,

the question is whether It would be open to the plaintiff upon

the pleadings to prove facts at the trial which would constitute

a cause of action (see Mutual Llfe and Citizens' Assurance

Co. Ltd. v. Evatt [197q A.C. 793 at p.801 citlng Dorset Yacht

-

Co. Ltd. v. Home Office	'1970:'	A.C.	1004).	For this purpose,
- -

Coles must, and dld, accept that the allegatlons of fact made

in the statement of claim are to be assumed to be correct.

- l4 -

Alternatively, Coles seeks the summary dlsmlssal of the applic-

atlon for interlocutory rellef. So far as the evidence 1s

concerned, Coles is again placed in the difflcult position, in

this application, of not belng able to demonstrate what further evidence, if any, Pluteus may seek to adduce in support of its

claim for an interim injunction. No directions have, as yec,

been given as to the manner in whlch that evrdence is to b

adduced. At the moment, it 1s slmply not posslble for Coles

or the Court to indicate what will be the evidence to be relled

upon by Pluteus when the applicatlons	for Interim and final
relief are made.

When it is appreciated that questions of fact, rncludrng

questions of an economic nature, lie at the heart of the contest

between these partles, the weight of the onus CO be dlscharged by

Coles in this appllcatlon becomes clear. It 1 s possrble, no

doubt, to conceive of a successful applicatlon to strike cut

proceedings of this kind where the key issue in the litrgatlon

consists of a dispute as to the economlc effect, In terms of

competition in a market, of the conduct under challenge. But the very nature of the enqulry to be undertaken suggests that such a successful applicatron must be a rara avls Indeed.

In the result, I am not persuaded that, on the materral

before me, Pluteus has failed to tender an rssue whlch raises

a real qUeStlOn of fact or of law. The appllcatlon must be

---

refused.

i I c e r z l f y that c h l s and the 1 a - ,

precedlngpages are a crue copyofzhe

Reasons f o r J-adgmenr. h e r e m of hls Bocour

BETWEEN: PLUTEUS ( N O . 8 ) 1 T Y . LIMITED

Applicant

AND : G. J. COLES & COY. LIMITED

F i r s t R e s p o n d e n t

JOSEPH P. MQNAHAN J R .

Second Ftespondent

DENNIS OWEX

Thlrd Respondent

JOHN DAVIDSON

Fourth Respondent

STATEMENT OF C L A I X

1. The a p p l l c a n t is a company d u l y i n c o r p o r a t e d and ab le t o

s u e i n and by Its s a l d c o r p o r a t e name and s t y l e .

2 . The f i r s t r e s p o n d e n t 1s and was a t a l l materla1 tlmes

a t r a d i n g c o r p o r a t i o n w l t h i n the meaning of t h e T r a d e

Pract ices Act, 1974 ( h e r e i n a f t e r " t h e A C E " ) and l i a j i e

t o be sued i n and by Its s a l d corporate name and s t y l e .

3 . Durlng 1983 the Elrst r e s p o n d e n t c a r r i e d on b u s l n e s s ,

I n t e r a l l a , as a r e t a l l e r sf mapufactured goods i n ev3ry

s c a t e a n d t e r r i t o r y ln A u s t r a l l a .

4 . Dur ing 1983 t he f i r s t r e sponden t was t h e l a r g e s t

r e t a i l e r i n te rms of sales revenue i n t h e Commonwealth

of A u s t r a l i a .

PARTICULARS

I n t h e y e a r e n d e d 3 0 t h June , 1982, the r e t a i l sales of t h e

f i r s t r e s p o n d e n t e x c e e d e d $ 4 , 0 0 0 , 0 0 0 , 0 0 0 . It was t h e o n l y

r e t a i l e r i n A u s t r a l i a whose s a l e s e x c e e d e d t h i s f i g u r e . I t

is b e l i e v e d t h a t t h i s is s t i l l t h e c a s e .

5 . A t a l l material times t h e F i r s t Responden t pu rchased

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

i t , including goods which are manufactured and packaged

e x p r e s s l y to s p e c i f l c a t i o n s o f t h e F i r s t Respondent and

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

c a l l e d " t h e h o u s e b r a n d s " ) .

P a r t i c u l a r s of House S r a n d s

The F i r s t Responden t d l s t r lbu te s goods unde r the house

brands "Plain Wrap", "Farmland" and "Embassy".

6 . On or about the 23rd May, 1 9 8 3 , t h e f i r s t r e s p o n d e n t

s e n t a c i r c u l a r l e t t e r , i n the form of t h e l e t t e r

annexed to t h i s s t a t e m e n t o f claim ( " t h e c i r c u l a r

l e t t e r " ) , t o a l a r g e number of pe r sons who s u p p l l e d

goods t o it € o r r e t a i l t r a d e .

r

,

PARTICULARS OF R E C I P I E N T S

The a p p l i c a n t will s u p p l y f u l l d e t a l l s o f t h e recipients

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

They inc luded Kel logg ( A u s t . ) P ty . L iml ted , Unc le B e n s

o f A u s t r a l i a P t y . L t d . , K r a f t L t d . , W e l l a ( A u s t r a l i a )

Pty. Ltd. , Richardson Vicks Pty. Ltd. , Cadbury Schweppes

Ltd. and Cottees General Foods Ltd.

7 . I n sending t h e s a l d l e t t e r t h e f i r s t r e s p o n d e n t was

a t t e m p t l n g t o make w i t h t h e r e c i p i e n t s c o n t r a c t s or

a r rangements or a r r i v e a t u n d e r s t a n d i n g s o n e p r o v l s 10 n

of which had t h e purpose o r had or was l i k e l y t o have

t h e e f f e c t of s u b s t a n t l a l l y l e s s e n i n g c o m p e t i t i o n .

PARTICULARS OF ATTEMPTED CONTRACTS ARRANGEMENTS OR

UNDERSTANDINGS

The a t t e m p t e d c o n t r a c t s a r r a n g e m e n t s or u n d e r s t a n d i n g s

were t h a t s u p p l i e r s of goods would not package thelr

g o o d s f o r g e n e r a l s u p p l y or f o r s u p p l y t o t h e f lrst

re sponen t so a t to con ta in p romot iona l ma te r i a l o f t h e

k i n d s r e f e r r e d to i n t h e l e t t e r .

PARTICULARS OF SUBSTANTIAL LESSENING OF COMPETITION

( a ) The e f f e c t o f t h e a t t e m p t e d c o n t r a c t s a r r a n g e m e n t s

o r u n d e r s t a n d i n g s would be s u b s t a n t l a l l y to

3

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

t h e f i r s t r e s p o n d e n t i n t e r se and between the

f i r s t r e s p o n d e n t a s a s u p p l i e r o f t h e house b rands

and t h e i r s u p p l l e r o f g o o d s by reducing In each

c a s e t h e s c o p e o f s a l e s p r o m o t i o n .

( b ) The p r o v i s i o n had t h e p u r p o s e o r had o r was

l i k e l y to h a v e t h e e f f e c t of c o n t r o l l l n g or

m a i n t a i n i n g o r p r o v l d i n g f o r t h e c o n t r o l l l n g or

m a i n t a i n i n g o f d l s c o u n t s a l l o w a n c e s r e b a t e s or

c r e d i t s ( i n s o f a r a s t h e p r o m o t l o n s o f f e r e d t h e s e

i t e m s ) i n r e l a t i o n t o g o o d s s u p p l l e r or t o be

s u p p l i e d by t h e p r o p o s e d p a r t i e s t o t h e p r o p o s e d

c o n t r a c t a r r a n g e m e n t o r u n d e r s t a n d i n g .

8. Pu r suan t to t h e s a i d l e t t e r t h e f l r s t r e s p o n d e n t made

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

a r r i v e d a t unders tandlngs one p rovis lon of which had t h e

pu rpose o r had o r was l i k e l y t o h a v e t h e e f f e c t o f

s u b s t a n t i a l l y l e s s e n i n g c o m p e t i t l o n .

PARTICULARS OF NATURE OF CONTRACTS ARRANGEMENTS OR

UNDERSTANDINGS

The c o n t r a c t s a r r a n g e m e n t s o r u n d e r s t a n d i n g s w e r e t h a t

s u p p l l e r s o f g o o d s would n o t package t he i r goods for

g e n e r a l s u p p l y o r f o r s u p p l y t o t h e f l r s t r e sponden t t o

4

L ”

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

to i n t h e l e t t e r .

PARTICULARS OF SUBSTANTIAL LESSENING OF COMPETITION

( a ) The e f f e c t o f t h e c o n t r a c t s a r r a n g e m e n t s o r

u n d e r s t a n d i n g s was s u b s t a n t i a l l y t o l e s s e n

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

f i r s t r e s p o n d e n t a n d b e t w e e n t h e f i r s t r e s p o n d e n t

a s a s u p p l i e r of t h e h o u s e b r a n d s a n d t h e i r

suppl iers of goods by r e d u c i n g i n each case t h e

scope o f s a l e s p romot ion .

( b ) The p r o v i s i o n had the purpose o r had or was l i k e l y

t o h a v e t h e e f f e c t of c o n t r o l l i n g or m a i n t a i n i n g

or p r o v i d i n g f o r t h e c o n t r o l l i n g or m a i n t a l n i n g of

d i s c o u n t s a l l o w a n c e s r e b a t e s or c r e d i t ( i n s o f a r a s

t h e p r o m o t i o n s o f f e r e d t h e s e items) i n r e l a t i o n t o

g o o d s s u p p l i e s o r t o b e s u p p l i e d by the p roposed

p a r t i e s to t h e p r o p o s e d c o n t r a c t a r r a n g e m e n t o r

u n d e r s t a n d i n g .

PARTICULARS OF CONTRACTS ARRANGE[-1ENTS OR UNDERSTANDINGS

( a ) The f l r s t r e s p o n d e n t h a s made a c o n t r a c t o r

a r r angemen t o r en t e red i n t o an unders tanding wi th

K e l l o g g ( A u s t . ) P t y . L t d . , t h a t , i n c o n s i d e r a t i o n

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

5

L Q

a c q u i r l n g b r e a k f a s t cereals from it , t h a t company

would no t engage in a free f i l m processing

promotion.

( b ) The f l r s t r e s p o n d e n t h a s made a c o n t r a c t or

a r rangement or e n t e r e d l n t o a n u n d e r s t a n d i n g w i t h

Ne l l a ( A u s t r a l i a ) P t y . L t d . t h a t , I n c o n s i d e r a t l o n

of t h e f i r s t r e s p o n d e n t c o n t i n u i n g to a c q u i r e

shampoo from i t , t h a t company would n o t e n g a g e i n

a c a s h r e f u n d promotion.

( c ) The f i r s t r e s p o n d e n t h a s made a c o n t r a c t or

a r rangement or e n t e r e d l n t o an unde r s t and ing w i th

X i c h a r d s o n V l c k s P t y . L t d . t h a t , i n c o n s i d e r a t i o n

of t h e f irst r e s p o n d e n t c o n t i n u l n g to a c q u i r e

n a p p y d e t e r g e n t from i t , t h a t company would n o t

engage i n a two d o l l a r c a s h r e f u n d promotion.

( d ) The f l r s t r e s p o n d e n t h a s made a c o n t r a c t or

a r rangement or e n t e r e d I n t o a n u n d e r s t a n d i n g w l t h

Cadbury Schweppes L td . t ha t , i n cons ide ra t ion of

t h e f i r s t r e s p o n d e n t c o n t i n u i n g to a c q u i r e

c o n f e c t l o n e r y from I t , t h a t company would n o t

engage i n a sweepsakes lo t ce ry p romot lon wi th

2 , 0 0 0 r e c o r d s as p r i z e s .

( e ) The f i r s t r e sponden t has made a contract or

a r rangement or e n t e r e d I n t o a n u n d e r s t a n d l n g w i t h

6

K r a f t L t d . t h a t , i n c o n s i d e r a t i o n of t h e f i r s t

r e s p o n d e n t c o n t i n u i n g to a c q u i r e f o o d p r o d u c t s

from I t , t h a t company would n o t engage i n a

sweeps takes l o t t e r promotion w l t h p r i z e s .

Par t icu lars of f u r t h e r c o n t r a c t s a r r a n g e m e n t s or

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

n a t u r e p u r s u a n t t o t h e c i rcu lar l e t t e r w i l l be

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

( f ) The First Respondent has made a c o n t r a c t o r

a r rangements or e n t e r e d i n t o a n unde r s t and ing w i t h

Nestle A u s t r a l l a L t d . t h a t i n c o n s i d e r a t i o n o f t h e

F i r s t Respondent cont inuing to a c q u i r e or

a c q u i r l n g c o f f e e s u b s t i t u t e s from I t , t h a t company

would n o t e n g a g e i n a $ 1 . 5 0 cash back promotlon of

"ECCO" c o f f e e s u b s t i t u t e .

9. The f i r s t r e sponden t h a s d u r i n g 1983 o f f e r e d to a c q u l r e

goods o n t h e c o n d i t l o n t h a t t h e person f6bm whom it

o f f e r e d t o a c q u i r e them would n o t supply goods or

s e r v i c e s of a p a r t i c u l a r k i n d o r d e s c r l p t l o n t o a n y

p e r s o n o r	t o	the	following	p a r t l c u l a r classes of
p e r s o n s .

r e t a i l e r s . ( a )

7

( b ) c u s t o m e r s o f o t h e r retailers who migh t acqu i r e

from them goods with t h e sub jec t p romot lons .

( c ) customers o f t h e f l r s t r e s p o n d e n t who mlght

acquire such goods f rom i t .

PARTICULARS

( a ) The s a i d c i r c u l a r l e t t e r

( b ) The r e f u s a l of p e r s o n s named i n t h a t c l r c u l a r

l e t t e r t o pe rmi t t he goods to be packaged w i t h

p r o m o t i o n s f o r o t h e r r e t a i l e r s and without

p r o m o t i o n s f o r t h e f i r s t r e s p o n d e n t .

( c ) The r e f u s a l o f t h o s e p e r s o n s to perml t he goods

t o be packaged w i t h p r o m o t i o n s f o r t h e f i r s t

r e sponden t .

( d ) The e f f e c t o f t h e condition would be to prevent

*

s u p p l i e r s s u p p l y l n g t h e g o o d s and s e r v i c e s

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

1 0 . The f i r s t r e s p o n d e n t h a s d u r i n g 1983 acqui red goods o n

t h e c o n d i t i o n t h a t the person f rom whom it acqu i red them

would n o t s u p p l y g o o d s o r s e r v l c e s o f a p a r t i c u l a r k l n d

or d e s c r i p t i o n t o a n y p e r s o n o r t o che fo l lowing

p a r t i c u l a r c l a s s e s of persons : -

a

r e t a i l e r s ,	( a )
( b ) cus tomers of o t h e r r e t a l l e r s who migh t r equ i r e

from them goods w i t h t h e s u b j e c t p r o m o t i o n s ,

( c ) c u s t o m e r s o f t h e f i rs t respondent who might

require such goods f rom it .

PARTICULARS

The a p p l i c a n t r e p e a t s t h e p a r t i c u l a r s s e t o u t a f t e r

pa rag raphs 7 , 8 and 9 above.

11. The conduct re fer red t o i n paragraph 9 and 1 0 hereof h a s

t h e p u r p o s e o r h a s o r is l i k e l y t o h a v e t h e e f f e c t o f

s u b s t a n t i a l l y l e s s e n i n g c o m p e t i t i o n .

1 2 . By r e a s o n o f t h e f a c t s and m a t t e r s r e f e r r e d t o I n

pa rag raphs 6 t o 8 hereof the f i r s t respondent has made a

c o n t r a c t o r a r r a n g e m e n t o r a r r i v e d a t a n u n d e r s t a n d i n g

c o n t r a r y t o t h e p r o v i s i o n s o f s u b - s e c t i o n 45(2) of the

Act o r a l t e r n a t i v e l y a t t e m p t e d t o c o n t r a v e n e t h e s a l d

p r o v i s i o n s .

13. By r e a s o n o f t h e f a c t s and m a t t e r s r e f e r r e d t o I n

pa rag raphs 9 t o 1 1 hereof the f i r s t respondent has

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

9

t h e p r o v i s i o n s o f s u b - s e c t i o n 4 7 ( 1 ) of t h e Act or

a l t e r n a t i v e l y h a s	a t t e m p t e d	to	engage	i n t h e	s a l d
p r a c t i c e .

1 4 . A t a l l m a t e r i a l times t h e s e c o n d , t h i r d a n d f o u r t h

r e sponden t s were employees o f t he f i r s t r e sponden t .

15.	A t a l l material	times	the	s e c o n d ,	t h i r d	a n d	f o u r t h
r e sponden t s

( a ) i d e d and a b e t t e d ,

( b ) c o u n s e l l e d or p r e v a i l e d ,

( c ) i n d u c e d , or

( d ) were knowingly concerned i n o r p a r t y to t h e

c o n t r a v e n t l o n s by t h e f i r s t r e s p o n d e n t o f t h e

p r o v i s l o n s	r e f e r r e d	t o	in p a r a g r a p h s 1 2 and	13
h e r e o f .

DATED J u n e 2q , 1 9 8 3

...... P ........ ........ ....

S o l l c b k d f o r t h e A p p l l c a n t

G . J COLES & CO' 'f LIMITED

4mmmo..tr.a ,n ,ICIO,I.l