Queensland Aggregates Pty Ltd v Trade Practices Commission

[1981] FCA 153

Re: QUEENSLAND AGGREGATES PTY. LTD (G28) and BRIAN WHITE (G27)
And: TRADE PRACTICES COMMISSION (1981) 57 FLR 314
Nos. Qld. G27 and G28 of 1981
Trade Practices Act

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Bowen C.J.(1), Deane(1) and Lockhart(1) JJ.

CATCHWORDS

Trade Practices Act - Preliminary point of law - Interpretation of ss.47(1) and 47(6) - Company offering opportunity of work to cartage contractors if they purchased Ford truck from nominated company - Offeror company supplying services within s.47(6) of the Trade Practices Act.

Trade Practices Act - ss.4(1), 47(1), 47(6).

Trade Practices - Preliminary point of law - Company offering opportunity of work to contractors if contractors purchased Ford truck from nominated company - Whether actions of company constituted "an offer to supply services" - Meaning of "services" - Trade Practices Act 1974 (Cth), ss. 4 (1), 47 (1), (6).

HEADNOTE

In proceedings brought by the Trade Practices Commission it was alleged that the first appellant and its manager the second appellant committed several breaches of s. 47 of the Trade Practices Act 1974 (the Act) by offering to supply work as a cartage contractor to various persons on condition that they acquired a Ford truck from a particular Ford dealer. In further particulars the Commission alleged that the offer made by the first appellant was of the opportunity to earn income in return for work to be performed as cartage contractor on condition that a particular truck was acquired. Upon a hearing pursuant to O. 29, r. 2 of the Federal Court Rules of a preliminary point of law, it was held that the conduct alleged in the amended statement of claim could constitute a contravention of s. 47 (6) of the Act.

On appeal,

Held: (1) "Services" within s. 4 of the Act should not be construed in an expansive way: the supply of goods and the payment of money ordinarily would not be considered as services, even though such activities could, on a strict construction, come within the statutory definition.

(2) In the present case, however, the offer to supply work on condition that a vehicle was purchased from another company was, even on a restricted meaning of the word "services", an offer to supply a "benefit" or "privilege" within the meaning of those words and thereby constituted "services" within s. 4 of the Act.

(3) Appeal dismissed.

HEARING

Sydney, 1981, September 16, 22. #DATE 22:9:1981

APPEAL.

Appeal to the Full Federal Court from a decision of a single judge (Sheppard J.) on a preliminary point of law raised for determination pursuant to O. 29, r. 2 of the Federal Court Rules.

The facts are set out in the judgment.

G. L. Davies Q.C. and P. A. Keane, for the first appellant.

D. P. Drummond, for the second appellant.

B. H. McPherson Q.C. and R. E. Cooper, for the respondent.

Cur. adv. vult.

Solicitors for the first appellant: Morris Fletcher & Cross.

Solicitors for the second appellant: McNab & Co.

Solicitor for the respondent: B. J. O'Donovan, Commonwealth Crown Solicitor.

D. LEVIN

ORDER

THE COURT ORDERS THAT the appeals be dismissed with costs.

JUDGE1

These are appeals by Queensland Aggregates Pty. Ltd. ("the first appellant") and Brian White, its manager ("the second appellant") from the determination of a single Judge of this Court (Sheppard J.) of a question of law which was argued and determined as a preliminary point pursuant to an order made under O.29 r.2 of the Rules of this Court.

The respondent, Trade Practices Commission ("the Commission") is suing the appellants in relation to a number of alleged breaches of s.47 of the Trade Practices Act 1974 ("the Act") and is seeking the payment to the Commonwealth of pecuniary penalties and injunctions.

Sub-section 47(1) prohibits the practice of exclusive dealing. Other sub-sections of s.47 define the various forms of exclusive dealing which are prohibited. The preliminary question of law concerns sub-section (6) which provides: -

"(6) A corporation also engages in the practice of exclusive dealing if the corporation -

(a) supplies, or offers to supply, goods or services;

(b) supplies, or offers to supply, goods or services at a particular price; or

(c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation,

on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services, or, if that person is a body corporate, a body corporate related to that body corporate will acquire goods or services of a particular kind or description directly or indirectly from another person."

The amended statement of claim (paragraphs 4-14 inclusive) alleges the making by the first appellant of a number of offers each of which is said to constitute exclusive dealing. The only difference between each paragraph is that the offers are said to have been made at different times to different persons. Sheppard J. selected paragraph 4 as a representative paragraph. It provides:

"4. In or about May, 1979 the first respondent offered to supply work as a cartage contractor to Gordon Ashburn Ahlquist on condition that he acquire a Ford Louisville truck from Denmac Ford Pty. Ltd.

PARTICULARS

The said offer was made at Brisbane in the State of Queensland to the said Gordon Ashburn Ahlquist orally by the second respondent as the servant or agent on behalf of the first respondent."

Additional particulars were filed, the relevant particulars being:

"1. As to paragraphs 4 to 14 inclusive of the Amended Statement of Claim, particulars of the full terms of each offer therein referred to are as follows:

(a) Each offer was of the opportunity to earn income from First Respondent in return for work to be performed by the offeree or offerees as cartage contractor for the First Respondent, on condition that the offeree or offerees acquired a Ford Louisville truck from Denmac Ford Pty Ltd (or in the case of one Lachlan Matthew Hogan or alternatively he and Jane Joanna Hogan a Ford truck from Denmac Ford Pty Ltd)."

Paragraph 2(d) of the amended defence of the first appellant says that the first appellant objects in point of law to the allegations made in paragraphs of the amended statement of claim, including paragraph 4, on the ground that the conduct alleged in paragraphs 4-14 inclusive would not fall within any of the descriptions given in sub-s.47(6) of the Act.

A similar point is raised by the second appellant in his defence.

It is necessary to refer to the definition of "services" and "supply" in s.4 of the Act and to paragraph 47(13)(a) thereof to understand the question of law.

"Services" is defined as follows:

"includes any rights (including rights in relation to, and interests, in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under - -

(a) a contract for or in relation to -

(i) the performance of work (including work of a professional nature), whether with or without the supply of goods;

(ii) the provision of, or of the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or

(iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction;

(b) a contract of insurance;

(c) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or

(d) any contract for or in relation to the lending of moneys,

but does not include rights or benefits being the supply of goods or the performance of work under a contract of service;"

"Supply" is defined as follows:

"when used as a verb, includes -

(a) in relation to goods - supply (including resupply) by way of sale, exchange, lease, hire or hire-purchase; and

(b) in relation to services - provide, grant or confer,

and, when used as a noun, has a corresponding meaning, and 'supplied' and 'supplier' have corresponding meanings;"

Paragraph 47(13)(a) provides:

"(13) In this section -

(a) a reference to a condition shall be read as a reference to any condition, whether direct or indirect and 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;"

It is argued on behalf of the appellants that the conduct alleged in paragraphs 4 to 14 inclusive of the amended statement of claim as particularized in sub-paragraph 1(a) of the further and better particulars would, if established, constitute not an offer to supply services within the meaning of sub-section 47(6) of the Act but either an offer to make a subsequent offer or offers to enter into a contract with the offeree, Mr. Ahlquist, for the supply by him of services to the first appellant or an offer to pay money as consideration for services performed pursuant to any contract or contracts made on Mr. Ahlquist's acceptance of such subsequent offer or offers.

It is said that if such offers constitute supply then it would follow, logically, that in every contract for supply of services or sale of goods the customer supplies a service. He contracts to pay and he pays. It would make "supply" and "acquire" interchangeable. It is contended that this could not have been the legislative intention and that the definitions should in some way be read down. No particular formulation is put forward indicating how this might be done.

For the Commission, it is argued that, if the allegations in the amended statement of claim, as pleaded and particularized, were established, the conduct of the first appellant would constitute an offer to supply services to Mr. Ahlquist on the consideration that he acquire goods (a Ford truck) from another person (Denmac Ford Pty. Limited). In particular, it is argued that the opportunity to earn income from the first appellant which is specifically particularized as having been offered to Mr. Ahlquist was an offer of a "benefit" or "privilege" within the meaning of those words as used in the definition of "services" in s.4 of the Act. In this regard, senior Counsel for the Commission placed particular reliance upon the decision of the Court of Appeal in Chaplin v. Hicks ((1911) 2 K.B. 786).

There is plainly considerable force in the arguments advanced on behalf of each side of the contest. As a matter of literal construction, the alleged offer, as pleaded and particularized, would, if it were established, prima facie constitute an offer of services - "benefits", "privileges" - within the definition of services contained in s.4 of the Act. On the other hand, the repeated use, in the operative sections of the Act, of the words "goods or services", the content of operative sections of the Act and the ordinary meaning of the word "services", combine to raise real doubt as to whether it was the legislative intent, to be derived from the Statute, that the word should be given the full extended meaning which the definition contained in s.4 of the Act would prima facie ascribe to it.

Sheppard J. reached the conclusion that the alleged offer, as pleaded and particularized, would, if established, constitute an offer of services in the defined sense. His Honour considered that what was alleged to have been offered came, prima facie, within the word "benefits" as used in the definition of "services" and that there was no warrant for reading down the effect of that definition to the extent necessary to exclude the subject of the alleged offer from the defined meaning of the word.

In the view we take, the sweepingly general provisions of the definition of services contained in s.4 of the Act should not be given an expansive construction. Thus, for example, we would, in the context of the repeated use in the Act of the words "goods or services", exclude from references to the supply of "services" in the defined sense, the supply of goods even though the supply of goods would ordinarily involve the granting of "rights in relation to, and interests in, . . . personal property". Again, as at present advised, we would exclude from the scope of the words "supply of services", a simple payment of money even though, in one sense, money might be regarded as coming within the word "benefits". Even accepting that the definition of "services" should not be given an expansive construction however, we are unable to discern any valid or logical basis on which the definition can properly be constricted so as to exclude the subject matter of the alleged offer in the present case. In our view, the subject matter of the alleged offer constituted "benefits" or "privileges" within the meaning of those words as used in the definition of services. It follows that, substantially for the reasons which he gave, we agree with the conclusion of Sheppard J. that the point of law which was argued as a preliminary point should be decided adversely to the appellants.

It must be stressed that the views we have expressed are based on the assumption, inherent in an argument on a preliminary point of law, that what is relevant is an offer to the precise effect of the offer pleaded and particularized. In this regard, it should be mentioned that no criticism was advanced, on the appeal, of the meaning which Sheppard J. gave to the word "work" as used in the statement of claim. Ultimately, it may be established on the trial that there was an offer which, by reason of differences in terms or the effect of context, varies from the offer pleaded and particularized to an extent which would make inapplicable the conclusions which we have stated. The desirability of giving an immediate decision and the range of possible findings of fact within the general area of the amended statement of claim have led us, however, to conclude that, as this appeal involves a preliminary question of law only, we should not endeavour to state or develop broad principles or guidelines which would cover variations from the precise offer which has been pleaded and particularized.

In the result, the appeals should be dismissed with costs.