R v Associated Northern Collieries

[1911] HCA 73

14 CLR 387

THE KING AND THE ATTORNEY-GENERAL

OF THE COMMONWEALTH

THE ASSOCIATED NORTHERN COLLIERIES

AND OTHERS Trusts and monopolies-Inter-State trade-Contract in restraint of-Combination

in restraint of-Detriment to public-Monopoly-Proof of conspiracy or combination-Penalties-Injunction-Australian Industries Preservation Act 1906-1910 (No. 9 of 1906), (No. 29 of 1910), secs. 4, 7, 9, 10, 14a, 14c,

(A). COMMON LAW RULES OF EVIDENCE. At common law and apart from any statutory provisions-

14 CLR 388

towards one obvious purpose, and they are seen through a continued por- lion of time taking steps that lead to one end, it is for the jury to say whether those persons had not combined together to bring about that end which their conduct appears SO obviously adapted to effectuate.

(4) Once the combination and its purposes are proved, the acts of any party to it in furtherance of those purposes are attributable to all, as being within the scope and in execution of their common agreement. No act which is not done in furtherance of the common purpose comes within that principle of admissibility.

(B.) STATUTORY RULES OF EVIDENCE. Secs. 14c and 14D of the Australian Industries Preservation Act 1906- 1910 which make certain minutes, records, books, letters, documents, etc., evidence against defendants in proceedings for an offence against Part II. of the Act are procedure provisions and are applicable to the trial of proceedings instituted before the passing of those sections by the legislature in 1910.

The sections referred to do not create any new liability or lessen an old one. They leave the rights and liabilities of the parties exactly where they were; but they lay down rules respecting the mode of proof

The said sections apply to offences originally created under Part II. of the Principal Act of 1906 although material alterations with respect to such offences are made by the Act of 1910, and the sections apply as to the proof to be given as to such original offences as well as to the new offences created by the Act of 1910.

Semble, that sec. 15A of the Act which provides that in any proceeding for an offence against Part II. of the Act, any indictment, etc., shall suffice if the offence is set forth as nearly as may be in the words of the

Sec. 15A is a stringent provision casting the initial burden of proof upon the defendants in certain cases, but nothing more. It still leaves it to the judicial tribunal to determine on recognized principles the issue of guilt or innocence having regard to any evidence that may be adduced. It is not applicable where the affirmative evidence covers the whole ground.

(c). DISTINCTION BETWEEN CONTRACT AND COMBINATION. The offence under sec. 4 of the Act of making or entering into a con- tract in relation to trade or commerce with other countries or among the States with intent to restrain trade or commerce to the detriment of the public is complete at the moment the contract is formed. The offence, however, under the same section, of being or continuing to be a member of or engaging in any combination for a similar purpose continues so long as the combination exists. The combination may be the pure result

14 CLR 389

of the contract, or may exist without any contract at all, or may originate in a contract and afterwards seriously depart from its terms and take on a new or modified purpose or method of action sanctioned by the conduct or acquiescence of the parties.

Qucere, whether sec. 14 D does anything more than formulate a rule of common law leaving the effect of the document made evidence there- under, when admitted, exactly what it would be apart from the Statute. MONWEALTH

The intent necessary for the commission of an offence under sec. 4 must be real and not merely imputed. It must be the actual intent of the defendant, and not that which might, without regard to the true condition of his mind, be deduced simply from the construction of his words used perhaps for another purpose. It is not the intent expressed in a contract to restrain trade or commerce to the detriment of the public to which the defendant is alleged to be a party-if such contract be the act complained of-but the actual intent of the defendant, of which the contract may, however, be evidence. To ascertain the defendant's intent, the Court may go behind the contract altogether, and in cases where the defendant's alleged connection with a combination to SO restrain trade or commerce is complained of the Court may, by every lawful kind of testimony, search out the true state of the defendant's mind. Such intent, in the absence of direct evidence given by the defend- ant, may be proved from his declarations or conduet.

(E). TEST OF OFFENCE. It is the duty of the Court under sec. 4 to enquire by a course as direct as circumstances will permit as to whether a contract in restraint of trade is to the detriment of the public and not to substitute an enquiry as to whether the contract is unreasonable as between the parties as an equiva- lent test of legality. The aim of the Statute is to protect the public at large and to give the public the power to prevent injury to the body politic by individual members of the community, and not to protect private individuals from unreasonable contracts into which they have voluntarily entered and which they may lawfully decline to fulfil or from equally unreasonable combinations from which they can at any moment retire without legislative or judicial assistance.

(F). TEST OF REASONABLENESS. The reasonableness essential at common law to the validity of a con- tract, which is in fact in restraint of trade, is reasonableness as regards both the private interests of the parties and the interests to the public outside those private interests, but affected by their individual arrange- ments. If unreasonable towards the party bound, the contract is void but, even if not so, yet if it results in a pernicious monopoly, which is unreasonable toward the public, it is equally void, unless the objectionable part is severable from the rest.

14 CLR 390

(G). PUBLIC DETRIMENT. Detriment to the public" consists in whatever is to its loss or dis- advantage or prejudice or puts it in a worse position, e.g., a higher price, a worse quality, a restriction in choice, a more precarious supply or delay in delivery of a commodity or commodities.

The question of detriment under the Act must not be determined upon any narrow grounds. The mere fact that prices are raised, though prima facie a detriment, is by no means conclusive, and may be shown by other NORTHERN COLLIERIES.

Prices may be reduced SO low as to work injury to Australian industries by unfair competition and a combination to restore to a fair level prices that had been reduced to a dangerous limit would not for that reason be regarded as contravening the law.

The real substantial effect upon the public must be considered. That which appears at first sight and standing alone to be a prejudice may when considered in conjunction with other circumstances prove to be the means, and the only means, of ultimate and lasting benefit. An apparent advantage may, when properly examined, be seen to be merely temporary and the prelude to severe public loss. Competition un- restrained may drive fair-minded and useful servants of the public off the field, bringing disorganization of labour in its train, and leaving the community at the mercy of those who risk a passing concession for a permanent control.

The Court, having regard to such considerations, must look beyond the surface and investigate causes and effects; it must regard not merely one or more isolated incidents, but the combined circumstances of the situation so far as they are ascertainable before it can pronounce whether upon the whole detriment has arisen, or is likely to arise, and whether the intention to which the law attaches culpability was present in the minds of those charged with contravention. The various parts of the contract or combination when considered separately may be lawful; but the scheme when examined as a whole may be found unlawful.

The public may justly be called upon to pay for a commodity whatever price is necessary to provide an adequate remuneration to both employer and employé; but where the employés wages are justifiably increased, the employer is not justified, when raising the price, in adding to such increase of wages a further bonus for himself at the expense of the public, where he is already receiving not only a fair, but a good profit, and a custom to partition the sale price of the commodity between the employer and employé is no excuse for the employer demanding such extra bonus for himself from the public.

No rigid standard can be adopted by the Court in determining what is a reasonable price but, having regard to all the circumstances, it is

14 CLR 391

the function of the Court to guard the community from the artificial maleficence of combination or monopoly. Profit is one practical con- sideration in the calculation of a reasonable price, but is not the sole or governing test. The nature and extent of the competition, actual and possible, in the business are also material factors in the problem.

(H). MONOPOLY. The Act does not strike at monopoly of production, but at monopolisa- So long as a trader increases his business by legitimate means and in COLLIERIES. the ordinary course of business, even although he may attract the whole of the trade in any particular direction, he does not offend against the law of monopoly contained in sec. 7 of the Act. When, however, he forsakes his quality of competitor and sets himself to stifle or strike down effective competition, which stands as a commercial protection between himself and the community at large, so as to substantially gather into his own hands the power of dictating the terms upon which the public needs may be satisfied, he does, within the meaning of the section, monopo- lise or attempt to monopolise. The mere fact of his allowing some other people to come into the arrangement does not take the transaction out of

The prevention or destruction of all reasonable and effective competi- tion-the natural commercial safeguard of the public-is at the root of the conception of monopoly within the meaning of the Statute.

Under secs. 4 and 7 of the Act as originally enacted one penalty only is enforceable against each defendant for a continuing offence. Each defendant convicted of a joint offence under the Act is also liable to a separate penalty.

(J). FINDINGS AND JUDGMENT. Held, first, that inasmuch as the affirmative evidence covered the whole ground of complaint, sec. 15 (A) was unnecessary and was not to be applied, and then on the facts so affirmatively appearing, held that the defendants had made and entered into a contract and were and continued to be members of and were engaged in a combination with intent to restrain the inter-State trade and commerce in Newcastle coal to the detriment of the public and that they had also monopolised and combined or con- spired to monopolise the said trade with intent to restrain to the detri- ment of the public the supply and price of the said commodity within the provisions of secs. 4 and 7 of the Act and that the defendants had aided and abetted one another under sec. 9 in the commission of the said offences and penalties inflicted on the individual defendants and an injunction granted against the further carrying out of the unlawful

14 CLR 392

SYNOPSIS TO JUDGMENT. Common Law Principles of Evidence as to Combination Statutory Provisions as to Evidence Validity of Sec. 15 (a) Section 15 (a) not Applied where Affirmative Evidence Covers the Membership of Colliery Group of Defendants Membership of Shipping Group of Defendants Contract Charged Originally Made in 1906 and Continued to End of Contract Renewed in 1908, 1909 and 1910 History, Formation and Objects of Coal Vend Beginning of Combination Charged Concealment by Defendants of Fact of Combination Replies to Scott Fell &Co.'s Requests for Coal Combined Objects of Defendants to exclude Scott Fell &Co. from Defendants' Reasons for Secrecy Connexion of Melbourne Steamship Co. and James Paterson &Co. Various Classes of Detriment Relied on by the Crown Facts Relating to Detriment as to Price Intention and Effect of Provision for Mutual Exclusion of Outside Increased Prices to the Public Actually Charged by Shipping Com-

panies after Defendants' Combined Agreement Effect of Non-production of Further Contracts and Dealings by Defend- Defendants' Suggestion of Prior Ruinous Competition as Justification

for Advanced Prices, Etc. Provision in Vend Agreement for Penalties and Compensation Defendants' Suggestion as to Foreign Trade Prices for Vend Coal as Defendants' Suggestion as to Advance in Miners' Wages as Justification

14 CLR 393

PAGE Defendants' Suggestion as to Recoupment for Past Losses as Justifica- Conduct of Defendants indicating f.o.b. Price for 1907 Unnecessarily Agreement of November 19, 1909 General Conclusions as to pre-Vend Price Effect of Combination on Prices in Australia by Excluding Competiti- Responsibility of Shipping Companies for Exorbitancy of Vend Prices Shipping Companies' Additional Excessive Charges and Advantages Pre-Combination Freights Early Combination Freights Inferences from Shipping Defendants' Contracts Lane's Testimony as to Freights Cant's Testimony as to Freights Some of Defendants' Freight Calculations Contrast Between Shipping Companies' Business and that of Kethel Difficulties of Delivery Difficulties of Supply Arising through the Combination Question of Fair Freight if Yardage were Allowed Summary of Shipping Companies' Allowable Deductions for Costs and Crosby's Guarantee to Kethel &Co. Excessive Prices Charged by Shipping Companies Total Yearly Over-Charges Conclusions as to Public Detriment with Respect to Prices Public Detriment from Restriction upon Choice of Coal Public Detriment Arising from Shortage of Supply Shipping Companies' Admissions of Public Injury from Short Supply Vend's Own Recognition of Injury from Shortage Public Detriment Arising from Inferiority of Coal Other Coals Potentially Competitive New South Wales Railways Prevented from Getting Metropolitan Coal Short Summary of Detriment Already Dealt With Public Detriment from Arbitrary Discrimination of Prices Intent Inferrable from Conduct during Combination as--

(a) Victorian Railways Contract 1906

14 CLR 394

(b). New Zealand Business (c). South Australian Railway Contract 1908 (d). Vend Complicity in Haynes' Artieles (e). Form of Sydney Contracts (f). Repression of Kethel &Co. (g). Suggestion in Correspondence as to Increased Expenses (h). Sham Tenders 3. Conduct Towards Non-Vend Collieries Law as to Monopoly Actual Intent to Monopolise Effect of Defendants' Silence Formal Findings on Statement of Claim Decision on Findings Injunction

TRIAL of action.

An action was brought in the High Court by His Majesty the King and the Attorney-General of the Commonwealth against the Associated Northern Collieries, which was an association of a number of companies and individuals carrying on the business of colliery proprietors in the Newcastle and Maitland districts of New South Wales; those companies and individuals; certain individuals who were the representatives of those companies on the board of members of the Associated Northern Collieries; four companies carrying on the business of shipowners; the Associated Steamship Companies being an association composed of those four companies and the four managing directors of those four companies. By the statement of claim the plaintiffs claimed :-

3An injunction restraining the defendants and each and every 14 CLR 395

OF AUSTRALIA of them and their servants and agents from repeating or continuing such offences or any of them.

(4) A declaration that the defendants and each and every of them, after the commencement of the Australian Industries Preservation Act 1906, had made and entered into a contract or contracts, which were specified, which was or were in restraint of trade and com- merce among the States to the detriment of the public, and had since carried out and were then carrying out such contract or contracts.

(5) A declaration that the defendants and each and every of them, after the commencement of the Australian Industries Preserva- tion Act 1906, formed and entered into and engaged in a combina- tion or combinations, which were specified, which was or were in restraint of trade and commerce among the States to the detriment of the public, and had since carried out and were then carrying out such combination or combinations.

(6) An injunction restraining the defendants and each and every of them from carrying out the contract or contracts and com- bination or combinations referred to in the last two preceding paragraphs.

(7) Such other declarations, orders and injunctions as might be necessary or proper.

The defences of all the defendants were, SO far as is material, a general denial of the facts alleged in the statement of claim.

The facts are fully stated in the judgment hereunder. The action came on for hearing before Isaacs J. Wise K.C., Shand K.C., Starke and Bavin, for the plaintiffs. Knox K.C., Lamb K.C., and H. Milner Stephen, for the defendants the Associated Northern Collieries, the colliery proprietors and their representatives on the board of members of the Associated Northern Collieries.

Mitchell K.C., Broomfield, and Ham, for the defendants the com- panies carrying on the business of shipowners and their managing directors.

14 CLR 396

J. L. Campbell K.C. and Blacket, for the defendants J. &A. Brown and John Brown.

Cur. adv. vult.

ISAACS J. read the following judgment:

PARTIES AND NATURE OF ACTION. NORTHERN

This action has been instituted by the King and the Attorney- COLLIERIES.

General of the Commonwealth against forty defendants of whom sixteen are individuals, twenty-two are ordinary corporations, and two are named as commercial trusts within the meaning of the Australian Industries Preservation Act 1906-9.

The action is brought for various alleged violations of that Statute between 24th September 1906, when it commenced, up to 4th June 1910 when the writ was issued.

The defendants consist of two main groups, colliery defendants and shipping defendants. The first group comprises substan- tially all the proprietors of coal mines in the Newcastle and Mait- land districts of New South Wales, together with persons who are directors or otherwise are charged as having taken an active and representative part in the transactions which are said to involve the corporations. The Associated Northern Collieries is the concrete body formed by the Association of the colliery proprietors. The defendants in this group besides the Associated Northern Collieries, are :-Corporations Abermain Colliery Company Limited, Aus- tralian Agricultural Company, Caledonian Coal Company Limited, Central Greta Colliery Limited, Dudley Coal Company Limited, East Greta Coal Mining Company Limited, Heddon Greta Coal Company Limited, Hetton Coal Company Limited, Lymington Collieries Limited, Newcastle Coal Mining Company Limited, New Lambton Land and Coal Company Limited, Pacific Coal Company Limited, Scottish Australian Mining Company Limited, Seaham Colliery Company Limited, South Greta Colliery No Liability, Stockton Borehole Collieries Limited, Wickham and Bullock Island Coal Company Limited and William Laidley &Company Limited. Individuals J. &A. Brown, Isaac Chapman, Henry Frederick Chilcott, Frederick R. Croft, George Frederick Earp, Henry Skinner

14 CLR 397

Forsyth, Frederick Livingston Learmonth, Leslie Herbert Lewing- H. C. OF ton, Frederick William Newman, James Ruttley, Francis Sneddon and Daniel Sneddon.

The second group, besides what is called the Associated Steam- ship Companies, comprises four shipping companies and their respective managing directors.

These are Adelaide Steamship Company Limited and Edward Northcote its managing director, Howard Smith Company Limited and Charles Morton Newman its managing director, Huddart Parker &Company Limited and William Thomas Appleton its managing director, and McIlwraith McEacharn &Company Pro- prietary Limited and David Hunter its managing director.

The charges laid against all the defendants conjunctively number nearly thirty, and each set of defendants namely, colliery pro- prietors, shipping companies and the individuals are separately charged with aiding and abetting.

The multiplicity of charges arises from the endeavour to exhibit the facts SO as to satisfy the varied language of the statutory descrip- tion of offences, and for the present I shall not do more than state in general terms the nature and substance of what is alleged as contraventions of the Act.

Sec. 4 provides that: " Any person, who, either as principal or agent, makes or enters into any contract, or is or continues to be a member of, or engages in any combination in relation to trade or commerce with other countries or among the States (a) with intent to restrain trade or commerce to the detriment of the public is guilty of an offence."

Sec. 7 is in these terms: "Any person, who, monopolizes or attempts to monopolize, or combines or conspires with any other person to monopolize, any part of the trade or commerce with other countries or among the States, with intent to control, to the detri- ment of the public, the supply or price of any service, merchandise, or commodity is guilty of an offence

Sec. 9 provides "Whoever aids, abets, counsels, or procures, or by act or omission, is in any way, directly or indirectly, know- ingly concerned in or privy to (a) the commission of any offence

14 CLR 398

against this Part of this Act

shall be deemed to have committed the offence."

Now, broadly speaking, the allegations against the defendants amount to this: First that very shortly after the Act came into operation a complete express contract was entered into between the

MONWEALTH collieries owners of the first part, and the shipowners of the second

part, in relation to Inter-State trade and commerce in Newcastle and Maitland coal, that this contract was renewed and continued to exist and operate with some intermediate modifications down to the commencement of this action, and was then still in force, and that it was entered into and at all events was renewed with intent to restrain that trade and commerce to the detriment of the public. In other words the contract itself is relied on as constituting an offence against sec. 4.

Next, it is said that there existed during the period mentioned a combination between the two sets of proprietors-coal and ship- ping-created by the conduct of the parties, that conduct consisting of concerted business action carried on upon certain recognised lines laid down probably by some contract in the nature of that already referred to, or, if not, then by some understanding or practice of a similar tendency and effect and that during the greater part of that period two other shipping firms, not defendants, were added to the combination, the Melbourne Steamship Co. and James Paterson &Co. This combination, it is averred, was maintained with the like intent to restrain the Inter-State trade and com- merce in Newcastle and Maitland coal to the detriment of the public.

The defendants concerned are said to come within the ambit of sec. 4 as to combinations-in three different ways-inasmuch as each of them was, and continued to be, and was engaged in the combination.

Next, it is charged that the business conduct of the defendants and their established relations with each other amounted to monopolizing or attempting to monopolize, and to a combination and conspiracy to monopolize the trade and commerce in Newcastle and Maitland coal, with intent to control to the detriment of the public the supply and price of the coal.

14 CLR 399

And lastly as to those who might be considered as merely assist- ing others to effect the prohibited acts, it is charged that they come within the provisions of sec. 9 as aiding, abetting, counselling or procuring and are therefore to be deemed to have committed the principal offences.

The detriment to the public which is alleged to have arisen and to have been intended, as a result of the matters complained of, consists in the practical and persistent annihilation of competi- tion on land and sea, excessive, arbitrary and capricious prices charged to consumers, restriction of their opportunities of choice, difficulties in obtaining particular classes or grade of coal desired, substitution really compulsory of other coal for coal preferred, and delays in obtaining delivery.

The defence is in effect a denial of all that is charged by the plaintiffs. An objection raised on the ground of the Statute of Limitations (31 Eliz. c. 5) has not been persisted in, and need not be considered.

The trial lasted seventy-three days, and besides its duration, was exceptional in its character, partaking necessarily to a great extent of the nature of an investigation.

All the defendants named were represented, except three col- liery defendants, namely, the South Greta Colliery No Liability, Central Greta Colliery Limited and Lymington Collieries Limited, the action being discontinued as against them, and except one ship- ping defendant, namely, the Associated Steamship Companies.

COMMON Law PRINCIPLES OF EVIDENCE AS TO COMBINATION. It is proper before entering upon a discussion of the facts to state some legal principles by which I am guided with respect to the evidence on the subject of combination. The first is a common law principle. In support of the case as to combination, evidence was in many instances given and admitted which primarily and taken by itself affected only one or some of the defendants, and then the Crown tendered it or argued or assumed its admissibility as against the other defendants, relying on the ordinary practice and rules relating to common law cases of conspiracy. Authorities were cited and arguments advanced on both sides, the discussion of which

14 CLR 400

will be found in the official record of the proceedings. I shall here

merely state the rule which in my opinion is the law applicable to this question.

Two things must be carefully kept distinct, viz., the fact of com- bination, and acts done in pursuance of the combination. There is

MONWEALTH a tendency to confuse the two, because in many instances acts of

individual defendants may be regarded as evidence of the first as well as of the second.

But it is an error to say that acts of one defendant, however numerous, and however pointedly in furtherance of the prohibited purpose, are necessarily admissible as overt acts of offence against a co-defendant charged with conspiring with the first. They are not SO admissible unless the two defendants are shown to be associ- ated for that purpose, SO as to make the purpose common to both.

Community of purpose may be proved by independent facts, but it need not be. If the other defendant is shown to be commit- ting other acts, tending to the same end, then though primarily each set of acts is attributable to the person whose acts they are, and to him alone, there may be such a concurrence of time, char- acter, direction and result as naturally to lead to the inference that these separate acts were the outcome of pre-concert, or some mutual contemporaneous engagement, or that they were themselves the manifestations of mutual consent to carry out a common purpose, thus forming as well as evidencing a combination to effect the one object towards which the separate acts are found to converge.

For instance, the Crown relies upon the contract alleged, as both an independent ground of offence, and as evidence of the com- bination.

In the latter aspect, if it be established, then separate acts of the several defendants in furtherance of those purposes of the con- tract which are part of the common plan may affect the liability of the other parties to the contract; but if it be not established then those separate acts may have first to be examined in order to deter- mine whether they indicate or form a combination, before the acts of one person can be allowed to affect another.

Then I wish to say a few words with regard to the manner in which I propose to regard these separate acts as bearing on the

14 CLR 401

common purpose. The Judges in advising the House of Lords in H. C. OF Mulcahy v. The Queen 1, say :-" And SO far as proof goes, con- spiracy, as Grose J. said in R. v. Bussac (2), is generally ' matter THE of inference deduced from certain criminal acts of the parties accused, done in pursuance of an apparent criminal purpose in common between them.' The number and the compact give weight, and

cause danger." Both the passage quoted and the added words are valuable guides here.

I quote as apposite to the present circumstances, and as expres- sing my opinion on arguments addressed to the Court, a passage from Russell on Crimes, 7th ed., vol. I., p. 191.

"The evidence in support of an indictment for a conspiracy is generally circumstantial and it is not necessary to prove any direct concert, or even any meeting of the conspirators, as the actual fact of conspiracy may be collected from the collateral circumstances of the case. Although the common design is the root of the charge it is not necessary to prove that the defendants came together, and actually agreed in terms to have the common design, and to pursue it by common means, and SO to carry it into execution, for in many cases of the most clearly established conspiracies there are no means of proving any such thing. If, therefore, two persons pursue by their acts the same object, often by the same means, one performing one part of an act, and the other another part of the same act, SO as to complete it, with a view to the attainment of a common object they are pursuing, the jury are free to infer that they have been engaged in a conspiracy to effect that object. It is not necessary to prove the existence of a conspiracy before giving in evi- dence of the acts of the alleged conspirators, and isolated acts may be proved as steps by which the conspiracy itself may be established. In R. v. Duffield (3), Erle J. directed the jury that it does not hap- pen once in a thousand times when the offence of conspiracy is tried that anybody comes before the jury to say that he was present at the time when the parties did conspire together, and when they agreed to carry out their unlawful purposes; that species of evidence is hardly ever to be adduced before a jury; but the unlawful con-

1L.R. 3 H.L., 306, at p. 317. 14 CLR 402

spiracy is to be inferred from the conduct of the parties; and if

several men are seen taking several steps, all tending towards one obvious purpose, and they are seen through a continued portion of time taking steps that lead to one end, it is for the jury to say whether those persons had not combined together to bring about that end, which their conduct appears SO obviously adapted to effectuate."

Once the combination and its purposes are proved, the acts of any party to it in furtherance of those purposes are attributable to all, as being within the scope and in execution of their common agreement. And no act which is not done in furtherance of the common purpose comes within that principle of admissibility. The case of R. v. Blake (1), exemplifies this point.

STATUTORY PROVISIONS AS TO EVIDENCE. The next is a statutory matter, and I repeat what I definitely stated toward the close of the argument namely, that, after consul- tation with the learned Chief Justice, I hold that secs. 14 (c) and 14 (d) of the Act are procedure provisions and as such are applicable to this case, notwithstanding the fact that the action was instituted before those sections were enacted.

They do not create any new liability or lessen an old one, thev leave the rights and liabilities of the parties exactly where they were, but they lay down rules respecting the mode of proof at the trial.

This is undoubtedly procedure. See Lord Halsbury's Laws of England, vol. XIII., p. 419, par. 581, and the Colonial Sugar Refin- ing Co. v. Irving (2). Those sections then are not to be rejected for retrospectivity. Then it was said they are expressly made to apply only to a proceeding for "an offence against this part of the Act" that is Part II. of the Act; and as the Act of 1910, in which they are found, altered secs. 4 and 7 of the Principal Act by materi- ally modifying the description of the offence, the old offences with which the defendants are charged were not any longer offences against Part II. of the Act. I can only say, if they are not, they are no offences at all. They are not, and never were, offences

(2) (1906) A.C., 360,

14 CLR 403

against any other Act or Part of an Act; and, if they were imme- diately before the 1910 Act offences against Part II. of the Principal Act, the mere fact that subsequent conduct may be more stringently visited does not destroy the character of the former conduct or efface the fact that an offence against Part II. of the Act had been committed.

It is quite true that if no statutory provision were made for punishment, a difficulty might arise, but that is met by sec. 8 of the Acts Interpretation Act (No. 2 of 1901). The legislature there- fore intended that offences already committed against Part II. should remain offences against that Part; that, for the future, certain conduct not previously amounting to an offence against that Part should be such an offence; that an offence against that Part, whether committed before or after the new Act, should be proceeded for: that when any such offence came to be tried, a further rule of evidence should prevail; and, to make it quite clear that no dis- crimination in this respect was to be made between the old offence and the new, the later procedure rule was inserted as part of the old Statute. No satisfactory reason can be imagined why a simpler method of proof introduced, as we must assume, because Parliament thought it conduced to the elucidation of truth and the effectuation of justice, should be excluded where the case is more difficult to prove and apply only where the means of proof are comparatively light.

The argument may be further tested by having regard to sec. 14 (a) which provides that in any proceeding for an offence against this Part of this Act" the process shall suffice if the offence is set forth as nearly as may be in the words of this Act. If then the day after the Act was passed a document was drawn describing in the terms permitted by that section an offence committed a week before, could it be maintained that the process was not protected ?

I should say clearly not, and, if not, the same result must flow from 14 (c) and 14 (d).

The fallacy of the defendants' position really is that it assumes any proceeding for an offence against this Part " means "any proceeding for a future offence, &." whereas, being procedure, it applies to any such offence whether committed before or after 25th November 1910 for which a proceeding is on foot.

14 CLR 404

These sections are consequently applicable to this case. The Crown however has contended that its case has been proved by ordinary common law methods, and without the necessity of resort to those sections at all, and has strenuously pressed that view upon

I have accordingly considered the facts, first altogether independ- ently of those sections, and next with their aid, and will state the conclusions to which the separate methods of approach have led me.

VALIDITY OF SEC. 15 (a).

I have not acted upon sec. 15 (a) at all, and will shortly state my reasons. So far as its validity is concerned, though not finding it necessary to decide, or to invite the Full Court to decide the question, it is desirable to state that I do not abstain from acting upon it, from any present doubt as to its constitutionality. It is a stringent provision casting the initial burden of proof upon the defendants in certain cases, but as I read the section that is all. It still leaves it to the judicial tribunal to determine on recognised prin- ciples the issue of guilt or innocence upon any evidence that may be adduced. Indeed I am acting in the present instance upon the basis of that interpretation, by disregarding the provisions of the section altogether.

Similar enactments have been held valid in America as for instance by Marshall C.J., in the case of " The Thomas and Henry" V. U.S. 1, and by Gray C.J., in Holmes v. Hunt 2, where a number of authorities are collected. See also Li Sing v. United States 3, citing with approval Holmes v. Hunt 4 and applying the rule of competency to a very strongly worded section and again Ah How v. U.S. (5), see also Craies on Statutory Law, 2nd ed., p. 471, and Cooley's Constitutional Limitations, 6th ed., p. 452.

My experience in this case has convinced me that justice might often be frustrated in the absence of such a provision to meet a condition of affairs where it was morally certain that, at least, a prima tacie contravention of the Statute had occurred, but had been

11 Brock., 367, No. 13919 Fed. 2122 Mass., 505, at p. 519. 3180 U.S., 486. Cas., vol. 23, at p. 990. 4122 U.S., 505. 14 CLR 405

so carefully masked that tangible proof of a strict character was H. C. unavailable.

SECTION 15 (a) NOT APPLIED WHERE AFFIRMATIVE EVIDENCE THE KING

COVERS THE WHOLE GROUND. Two considerations however appeal to me in this connection. The first is, that the section itself applies the presumption only in the absence of proof to the contrary and it is immaterial by whom that contrary proof is supplied. The plaintiff may fur- nish it in his own case, and the defendants contend that has happened here. The other is, that once there is actual affirmative evidence covering the whole ground it is, to say the least, more satisfactory to the Court to deal with the case irrespectively of any presumptions which might otherwise be necessary to start it. I find that the evidence before me, to whatever conclusions it may justly lead, whether upon the whole it establishes the guilt or manifests the innocence of the defendants, does in effect cover the entire ground of complaînt and therefore I concern myself only with the facts as they have been proved directly or by inference, and not with the statutory presumptions arising under sec. 15 (a) which accordingly

I lay aside as unnecessary.

MEMBERSHIP OF COLLIERY GROUP OF DEFENDANTS.

I proceed now to examine the facts. Whether we regard the con- tract or the combination as the cause of the offence, the primary step is to ascertain the constituent membership of the two groups who form the respective parties.

As to the colliery group-the body styled the Associated Nor- thern Collieries is avowedly an entity it has appeared, its exist- ence has been acknowledged, and its ownership of minute books and its employment of a secretary formally admitted by all the defend- ants.

As to its membership, I should have thought no time would have been wasted over that. And yet an extraordinary position exists with reference to this apparently simple matter. The minute books, admittedly the property of the Association-or Vend as it is usually termed-disclose the names of its members; those names correspond-with perhaps some immaterial exceptions-with the

14 CLR 406

names of the defendant colliery owners, it is not suggested that any error has arisen in the repeated references to its members, the same learned counsel appear for the Vend and its alleged members-except J. &A. Brown-and yet from beginning to end the defendants have contested the colliery owners' membership of the Association, and raised objections of the most technical character, necessitating the wasteful consumption of hours and days in argument and the laborious piecing together of detached fragments of evidence in order to meet the requirements of technical proof as to this elemental fact.

I have, of course, to be careful to see that even the most technical rules are satisfied, and to refuse to be judicially convinced of any contested fact that is not SO established. But I feel bound to say that the defendants' attitude in persistently denying the Vend mem- bership, and in insisting that the Crown at a great cost of time, money and energy, should pursue with necessary minuteness the multitude of documents and circumstances requisite to connect the various colliery owners with that Association admits of no reason- able excuse.

The Crown, however, has succeeded in connecting all the colliery defendants with the Vend. With regard to some of the defend- ants, the evidence is voluminous, as to others it is less abundant, but as to all it is clear and unmistakeable, and, as none of them has given a syllable of evidence in negation, there is not the least doubt that every one of them was a member or the active representative of a member of the Vend.

The Vend minutes begin 5th January 1906 and immediately before the first page of the minutes are seventeen names corres- ponding to seventeen of the colliery defendants. Other defendants appear later on in the records of the Vend. But, as was argued, and I agree with the argument as a legal proposition, the mere fact that these names appear in the minute book and correspond with defendants' names is not at common law any evidence against the defendants. In the list there are other names, including the Walls- end Coal Company, its named representative being John Wheeler. Mr. Wheeler related the genesis of the Association. At present I refer only to his testimony in relationship to membership. He said, at the first meeting of the proprietors there were present Mr. Lear

14 CLR 407

month, Mr. Brown, Mr. Keightly (since dead), and one or two others, and at a later meeting there were pretty well all the colliery pro- prietors. Coming to particulars, he named specifically as present at meetings, Mr. Learmonth of the Australian Agricultural Co., Mr. Brown of J. &A. Brown, Mr. Chilcott of the Scottish Australian Mining Company, Mr. Keightley of the Newcastle Company, Mr. Chapman of the Seaham Company, the Caledonian Company by various representatives, including Mr. Newman, the Pacific Com- pany and the Co-operative Company by their representatives, the East Greta Company by Mr. Earp, the Wickham Company-he thought about 30 companies in all. He recollected Mr. Simpson, the representative of the Pacific Company and afterwards one of the Vend's solicitors, producing at a meeting about the end of March 1906 a document similar to Ex. S. which was printed and that it was discussed as the proposed Vend agreement. Reference to that Exhibit shows that 16 of the defendants are named as members.

The minutes of 30th March (Ex. F., p. 37) contain the actual signatures to a resolution of ten of the defendants, seven being coal proprietors, and three being representatives. On April 24th 1906 a written agreement was entered into with reference to the tenders called by the South Australian Government Railways, and it recited the contemplated formation of the Associated Northern Collieries. By this agreement a number of collieries-twelve of which are defendants-guarantee some of their number in respect of the supply of coal under those tenders at prices determined. The agreement has importance in another direction, but its materiality now is as to the parties and signatures. By October 1906 the As- sociation had been formed, and in that month a regular account in the name of the Associated Northern Collieries was opened with the Union Bank of Australia at Newcastle where Mr. Ford was manager. He produced a copy of that account extending from October 19th 1906 to 25th April 1911 and various authorities in connection with it.

These are Exhibit C.

An authority dated 31st October 1906 is signed by Learmonth, Keightly, John Brown, Chapman and Forsyth, all of whom are described as the Committee of Management, and by Lewington as Secretary. Another document appended dated 13th March 1907 was on letter paper with printed heading "Associ-

14 CLR 408

ated Northern Collieries," and signed by Learmonth as Chairman, sending forward the signature of the Secretary, A. R. Cant. Another

THE KING

document is attached, dated 16th December 1909 signed by Lear- ATTORNEY-

month as Chairman, and forwarding Lewington's signature. A

GENERAL OF large number of vouchers for debits and credits in connection with

MONWEALTH the banking account are contained in Exhibit E. Everyone of the

ASSOCIATED colliery defendants-except Chilcott, Earp, Newman, and Stockton NORTHERN COLLIERIES.

Borehole Company-is brought into direct connection with the Associated Northern Collieries by means of the very practical test of receipts or payments or both evidenced by these documents, and the bank account of which they are the vouchers. The Aber- main Company paid moneys to the Association twice in 1906, six times in 1907, and once in 1908. The Australian Agricultural Com- pany paid twice in 1906, ten times in 1907 and once in 1908, and received moneys from the Association three times in 1907, three times in 1908, twice in 1909, six times in 1910, one of those occasions being before the date of the writ, and the others evidencing intention to continue, and once in 1911. Brown paid to the Association twice in 1906, nine times in 1907, once in 1908, once in 1909 and twice in 1910, once before and once after the writ, and received once in 1907. The Caledonian Company paid once in 1906, ten or eleven times in 1907, once or twice in 1908, once in 1909 and twice in 1910, once before and once after the writ, and received three times in 1907, once or twice in 1910 after writ and once in 1911. Chapman was a member of the Committee of Management and as such signed cheques. Croft paid once in 1906, eight times in 1907, twice in 1908, and once in 1909, and received once in 1910 after the writ. The Dudley Colliery Company paid twice in 1906, eight times in 1907, twice in 1908, and received once in 1906, five times in 1907, twice in 1908 and once in 1909. The East Greta Company paid twice in 1906, nine times in 1907, and once in 1908, and received once in 1908, once in 1909 and once after writ in 1910. Forsyth was a member of the committee and signed cheques. The Heddon Greta Co. paid twice in 1906, nine times in 1907 and once in 1908, and received once in 1908, once in 1909, and once in 1910, after the writ. The Hetton paid twice in 1906, eight or nine times in 1907, twice in 1908 and once in 1909. Learmonth was Chairman and &member of

14 CLR 409

Committee and signed cheques and moneys were frequently paid into a Learmonth trust account. Lewington was for a time Secre- tary and was a member of Committee and signed cheques. He also received moneys as on 29th January 1908, 13th January 1909 and 24th February 1910. The Newcastle Co. paid three times in 1906, eight or nine times in 1907, once in 1908, once in 1909 and MONWEALTH once in 1910, and received once in 1906, six times in 1907 and four times in 1908. The New Lambton Co. paid twice in 1906, four times in 1907, twice in 1908 and once in 1909, and received once after writ in 1910. The Pacific Co. paid twice in 1906, nine times in 1907, twice in 1908, once in 1909, and received once in 1909, and once after writ in 1910. Ruttley paid twice in 1906, four times in 1907, once in 1908, once in 1909 and once in 1910, and received once in 1908. The Scottish Australian Mining Co. paid twice in 1906, eight or nine times in 1907, twice in 1908, once in 1909 and once in 1910, and received once in 1906, five times in 1907, and twice in 1908. The Seaham Colliery Co. paid twice in 1906, and ten or eleven times in 1907, once in 1908 and once in 1910, and received once in 1906, four times in 1907, once in 1908, once in 1909, and once in 1910. Sneddons paid twice in 1906, nine times in 1907 and twice in 1908, and received once in 1910 after the writ. The Wickham and Bullock Island Co. paid once or twice in 1907 and once in 1908. William Laidley &Co. paid twice or more in 1906, nine times or more in 1907, twice in 1908 and once in 1909, and received once in 1906, three times in 1907, twice in 1909 and twice in 1910 after writ.

The nature of the Association as appears from its minutes- admitted on all hands-is such as to preclude any idea of these pay- ments and receipts being otherwise than as by and to the members of the Association itself.

With regard to Chilcott, lie assisted, as Wheeler has stated, at the early meetings held to form the Vend, he as manager of the Scottish Australian Mining Co. signed the minutes of 30th March 1906 and the guarantee agreement of 24th April 1906 and the letter of the next day, Ex. B5, to Scott Fell declining to supply coal for the South Australian Railway requirements. It is also admitted (Ex. V5), that he has been continuing since 24th September 1906

14 CLR 410

the Sydney manager of the company, and the person appointed by

the company to carry on its business in New South Wales. G. F Earp signed the resolutions of 30th March 1906 for the East Greta and Heddon companies, and in the same capacity signed the guar- antee of 24th April. He is admitted (Ex. V5) to have been

MONWEALTH continuing since 24th September 1906 the manager of the East

Greta Co., and three letters in Ex. X, viz., two of March 18th 1907, and one of 6th September 1907 with its enclosure, are evidence that he on behalf of Heddon Greta Co. was acting as a member of the Association. F. W. Newman, as appears from Wheeler's evidence, attended meetings of the projected Association as repre- sentative of the Caledonian Co., it is admitted (Ex. V5) that he has since 24th September 1906 continuously been manager of that company, and as coal manager of the company he endorsed for the company the only two cheques to order paid by the Association to it, as already mentioned, namely, those dated 9th May 1907 and 24th July 1907. He also for Howard Smith signed the letter dated 12th December 1908 on behalf of the Caledonian Co., addressed to the Secretary of the Association (Ex. U). The Stockton Bore- hole Collieries Limited was formed about 1909 (see letter 24th March 1909 in Ex. U) to open up the Borehole Colliery at Teralba, formerly worked by the old Stockton Company and by that letter the new company asked Huddart Parker &Co. to list their coal so as to get a proportionate part of the railway trade in Victoria and South Australia, as well as of the general trade (see also p. 219 of the proceedings). The Vend, by letter of 6th April 1909 (Ex. U), permitted this request to be acceded to. The common law evidence as to this company is more slender than in the case of the others, arising largely from the lateness of the formation of the new com- pany. But in the absence of any contradiction which would have been the work of a few minutes, I am satisfied this company from April 1909 was a member of the Vend, just as its predecessor clearly

Besides these evidences of connection there is in most cases abundant proof of other kinds that the defendant colliery owners were the constituent members of the Vend. Thus in the case of the Australian Agricultural Co. there are the letter of 30th March 1907

14 CLR 411

(Ex. 01), the telegrams of 15th and 16th May 1907 and the letter of 16th May (Ex. X), and the correspondence contained in Ex. Z6 between that company and Kethel &Co., in which I do not include the document dated 19th June.

Brown's continued connection is also shown for instance by their letter of 17th August 1908 (Ex. U), and their telegram of 6th MONWEALTH November 1908 (Ex. 08). As to the Caledonian Co. there are the letters of 27th November 1906 (Ex. X); Newman's latter of 12th December 1908 already mentioned and Howell's letter of 10th March 1909 (Ex. 01). Chapman appears constantly in the corre- spondence and notably the part he took in the Haynes' article. With respect to the Dudley Co., there are also the letters of 26th and 28th May 1908 (Ex. U), and that of November 22nd 1907 (Ex. 01). Forsyth is continually a party to the correspondence. The Heddon Greta Co. expressly admits its connection in the letter of 12th August 1907 (Ex. X). As to the Hetton Coal Co. there is the letter of 23rd December 1907 (Ex. X); Learmonth, like Forsyth, is visible throughout and Lewington frequently SO. The Pacific Co. wrote the letters of 22nd and 25th February 1907 (Ex. 01); the Seaham Co. is affected by the letters of 20th, 22nd. 23rd and 26th November 1906 (Ex. X) and 31st March 1908 (Ex. 01); William Laidley &Co. wrote the letters of 5th April 1906 (Ex. T4) and of 25th March 1907 and 10th December 1907 (Ex. 01), and there is the correspondence of 22nd and 23rd April 1908 (Ex. U. p. 6), and also the letter of 7th October 1909 (Ex. S).

MEMBERSHIP OF SHIPPING GROUP OF DEFENDANTS. Besides direct evidence which impliedly recognises the existence of the Vend, and its connection with the shipping defendants' affairs, the correspondence of the shipping companies enumerates several defendant colliery companies in a way which indicates the shipping companies' knowledge and recognition of these coal com- panies being members of the Vend.

Howard Smith &Co. by C. M. Newman, its managing director, signed on behalf of the Caledonian Co. the guarantee of April 24th 1906. On 29th January 1907 it wrote by C. M. Newman to Chap- man as the acting-Secretary of the Vend, on 4th March 1907 a

14 CLR 412

similar letter to Murrell as Secretary of the Vend (Ex. 01), on

23rd April to Cant as Secretary of the Vend (Ex. X). The last- mentioned Exhibit contains constant instances of recognition of the Vend and members of the Vend, and particularly the letter of 9th August 1907, which refers to a printed agreement containing a list

MONWEALTH of the members. On 29th June 1908 they paid (Ex. E) to the

Vend £3,132 11s. 3d.

As to Huddart Parker-the guarantee of 24th April 1906 was on the basis of this company and the Adelaide Steamship Co. receiving the quotations agreed on, and becoming the contractors to the South Australian Government and this happened. By letter of 21st May 1906 (Ex. 01), these two shipping companies acknow- ledged the guarantee arrangement and the acceptance of their tenders. On 31st August 1907 they paid into the Vend £44 14s. (Ex. E). Finally Appleton's letter of 21st January 1908 (Ex. U) contains a list of pits.

As to McIlwraith McEacharn &Co. reference may be made to the letter of November 1906 to Chapman as Secretary of the Vend enumerating the pits (Ex. 01) and the company's letter to Chapman of 9th January 1907 (Ex. X).

The various tenders and contracts in evidence and the general method of dealing together with what I have specifically mentioned leave no shadow of doubt that the shipping defendant companies and individuals had the most complete acquaintance with the membership of the Vend and knew that this embraced the defendant colliery proprietors.

Viewing this issue, from the strictest aspect of common law requirements, the proof of the Crown's allegation as to membership of the Vend is overwhelming, and leaves no shred of justification for the deplorable waste of time the persistent denial has occasioned.

I have been greatly tempted to deal with the issue by dismiss- ing it as too absurd for serious treatment in the face of the evidence poured upon it, and the knowledge of the truth that the defendants one and all undoubtedly possessed. But as it was solemnly main- tained to the end, as if it were a real and substantial contest, I have felt it my duty after all to treat it seriously.

Calling in aid sec. 14 (c) the matter is much simplified. The

14 CLR 413

minute books of the Vend disclose the presence of the defendant H. C. collieries, communications to them and the presence on various occasions of representatives of the shipping defendants. The issue

I have just dealt with is a signal proof of the value of such a provision in the interests of justice and economy.

DISTINCTION BETWEEN CONTRACT AND COMBINATION. Having identified the personnel of the two groups, the next issue NORTHERN is as to the alleged contract between them. "Contract" and "combination' in sec. 4 are alike in having agreement as their basis. But an important distinction exists. The offence which one commits who makes or enters into any contract, etc., is complete at the moment the contract is formed. That definitely ends the con- travention, and the act constituting the offence cannot be prolonged beyond that point. But the offence which a person commits, who, " is or continues to be a member or engaged in any combination' has no definite stopping place short of the termination of the com- bination itself, or his connexion with it, and SO long as the objects are persevered in and its purposes are adhered to the persons associated are and always continue to be members of and engaged in the com- bination. The combination may be the pure result of the contract- it may exist without any contract at all, it may originate in a con- tract, and yet seriously depart from its terms and take on a new or modified purpose or method of action sanctioned by the conduct or acquiescence of the parties.

DEFENDANTS' SILENCE AS TO EXISTENCE OF CONTRACT. First

to the contract. Ordinarily, when litigation brings into controversy the existence of an alleged bargain, its nature and terms, and the circumstances leading to its adoption or indicat- ing intention or effect, the parties themselves offer direct evidence. Here the position is different. The defendants are the only persons who could furnish direct and absolute testimony and they have advisedly abstained from doing so. I do not doubt they have been well advised in adopting that course, but it carries with it certain consequences. Two reasons were advanced by the learned counsel for this abstention. One is the insufficiency of the Crown's evidence to make a prima facie case. That, if sound, would of course end the

14 CLR 414

whole matter. The other is, that it would have occupied much time and involved considerable expense. This, in the view of the issues involved, their pecuniary importance to the defendants, the signifi- cance of some of the evidence touching the honor and probity of the defendants or some of them and the course pursued at the trial,

MONWEALTH strikes me as a reason without any reality behind it. In the first

place if the evidence, however lengthy, sustained the innocence of the defendants, it is not they, but the Crown, that, in the absence of special circumstances, would have to bear the cost of its produc- tion, as well as the rest of the costs of these proceedings.

CONTRACT CHARGED ORIGINALLY MADE IN 1906 AND CONTINUED

TO END OF 1907. The agreement alleged in par. 41 of the statement of claim is substantially founded on the authenticity of a document part of Ex. S. That document was produced on 9th June 1910 to Mr. Hudson, Customs Officer by Mr. A. R. Cant, the Secretary of the Vend, as a fair copy of the agreement between the Associated Nor- thern Collieries and the Shipping Association under a demand upon him as such Secretary. As Cant was clearly for this purpose the representative of the then existing members of the Vend, sec. 14 (d) in itself would make that document admissible as evidence against all the defendant colliery owners, and by connection with them the colliery managers would be affected. But even that section would not carry the evidentiary effect of the documents SO far as to reach the shipping defendants. And, although it is not necessary to decide it, it may be that sec. 14 (d) does nothing more than formulate a rule of common law and leave the effect of the document, when admitted, exactly what it would be apart from the Statute. At all events, I shall deal with this matter outside the statutory force of sec. 14 (d). Cant was the Secretary of the Vend and the natural custodian of its papers, was found in official pos- session of them, and delivered them up in pursuance of a lawful demand upon him as representative of the Vend, made under a statutory power. On the occasion when production took place Mr. Rankin the Vend's solicitor was present, and the occasion was a continuation of the original demand of 18th May, when

14 CLR 415

Messrs. Forsyth and Learmonth were present and when Forsyth H. said "Mr. Cant will offer no factious opposition to your demand for documents but we must protect ourselves before answers are given." Learmonth also said "Yes." By protecting themselves they meant consulting Rankin, which they did. The production was in the strictest sense official and representative by the Secretary MONWEALTH with the sanction of two members of the Executive Committee, one ASSOCIATED being Chapman, and under the guidance of the Vend's solicitor.

The presumption then is that the document was not held by Cant otherwise than as such representative. It is the same as if found in and produced from the actual possession of all who con- stituted the Vend at the time. These, as already stated, were the defendant colliery owners. In the natural course of affairs such a document in the mature condition of Ex. S. would be the product of previous discussion among the colliery proprietors, and of negotia- tions with the persons therein described as the other contracting party, and this is confirmed by the minutes of the Vend. Conse- quently, as against all the colliery defendants, I take it, that Ex.

S is prima facie proof that negotiations between them and the ship- ping defendants had reached a certain stage-namely, that embodied in the document, which was preserved unaltered in the condition in which it was found. It presents all the form and substance of a definite agreement and accords with the surrounding circumstances.

If it bore signatures it would of course be complete and definite and the proof would be direct. But it is not signed and consequently the mutual assent of the separate groups is open to dispute, and has been disputed. The want of formal signature is in itself a circum- stance in favor of the defendants, and tends SO far to show the negotiations stopped short of contractual relationship.

There is, however, other evidence having an opposite tendency either as explaining the absence of signature consistently with assent otherwise given, or as affording circumstantial proof of assent in some way communicated. This evidence is of more or less con- vincing force in proportion to the strength of probability of the subordinate facts to which it is directly applicable being more or less likely to exist in the presence or absence of assent.

When the negotiations started between the two groups in the

14 CLR 416

early part of 1906 there were no statutory impediments to a bargain

of the nature herein complained of, and had the law remained so, the want of signature to a document apparently intended to be signed would be a more formidable obstacle than it is. The Principal Act however was assented to on 24th September 1906 and it may be

MONWEALTH assumed that, for some days before that date, the passage of the Bill

through both Houses had actually occurred or was or to be reason- COLLIERIES

ably anticipated or apprehended as a matter of common interest and what is more of special interest to the parties in negotiation. There appears on the Vend minutes of 13th September 1906 (Ex.

F, pp. 140, 141), a relevant and significant entry. The passage is as follows :- Agreement. Mr. Simpson pointed out that any agree- ment that might be signed would bring the proprietors under the provisions of the Australian Industries Preservation Act 1906, and in his opinion it would be more advisable to carry on our operations on the lines of the agreement already decided upon but without any signed document."

I agree with the suggestion that this refers directly to the Vend agreement, and not to the combined agreement. But if danger was apprehended from the formal signing of the first to which the collieries alone were parties, and if prudence dictated assent by "understanding" without visible evidence of the fact, there is nothing surprising to find the same policy extended to the wider and infinitely more questionable arrangements in which both collieries and shipping companies were included, and which were proceeding concurrently with the Vend agreement.

Thus we find in the minutes of September 25th 1906, the day after the Act came into operation (Ex I, p. 1), the following entry :-"S.S. Owners' agreement. Mr. Simpson reported that he had gone through this in Melbourne with the S.S. Owners and there were a few matters that still required to be settled as follows-Right of S.S. Owners to take 180,000 tons per annum Southern coal, this must be the total quantity including bunker coal. Right to take Brisbane coal up to 200,000 tons per annum. The quantity taken from Wallarah not to exceed that purchased during 1905. A fair copy of the agreement when finally settled to be handed to the members for guidance."

14 CLR 417

I have then to look at the surrounding circumstances for enlight- ment as to the fact and time of assent. With regard to the colliery defendants there is very distinct testimony. The colliery pro- prietors adopted temporarily on 3rd April (F. pp. 49 to 51), ATTORNEY- a scheme which included the following :-" That no coal will be sold by the Association in the Commonwealth (New South Wales ex- MONWEALTH cepted) except to the steamship companies, set forth in the proposed ASSOCIATED agreement for carriage."

It is to be noted that Captain Webb and Appleton were present, and that Appleton was in the Chair. Wheeler (at p. 327) proves that on 12th April 1906 (F. 57), there was a meeting of the colliery proprietors at which " the proposed agreement between the Associated Northern Collieries and Steamship Owners' Association was read by the Acting-Secretary, the clauses discussed seriatim, and that amendments were noted by Mr. Rankin for reference to the Steamship Owners' Association." On the same page of the evidence Wheeler proved the accuracy of the minutes of 24th April 1906 (F. 65). These minutes are of extreme importance respecting several matters, but on the present point it may be observed that amendments in what is called the Steamship Owners' agreement were considered and the terms apparently settled. The full person- nel of the contracting parties for the shipping side was left in doubt and the following resolution was passed (see at p. 69) Resolved, that in connection with the admission of James Paterson &Co. and the Melbourne Steamship Company into the agreement with the steamship owners the contract with the coal proprietors shall be signed by all the steamship companies including the Melbourne Steamship Company and James Paterson &Co. and Mr. Hunter gives his undertaking that immediately on his return to Melbourne he will endeavour to make arrangements with the companies men- tioned, and in the meantime the Association proceeds to complete its scheme of amalgamation, it being understood that, if the Mel- bourne Steamship Company and James Paterson &Co. will not accept the proposals submitted by Mr. Hunter to give them at least the trade which they had before retiring from the Steamship Owners' Association, then the coal proprietors will enter into agreement with

14 CLR 418

the four steamship companies alone, subject also to a proper agree-

ment being entered into with Mr. John Brown."

The whole course of conduct of both sets of defendants indubitably establishes that in the latter part of 1906, in 1907, and in 1908,

OF I defer 1909 and 1910 for the present, they were working together

MONWEALTH under some agreement of the nature of the copy agreement con-

tained in Ex. S and having terms apparently well defined. regards the colliery defendants, the evidence teems with unquestion- able proof of this.

Frequent references to an existing combined agreement are made in the correspondence for instance by Newman on 18th December 1906 (X. p. 18), where he says :- The steamship companies' agreement with the collieries further protects both parties in this direction;" by Chapman on 9th January 1907 (X. 23); 16th January 1907 (X.31); Cant 1st August 1907 (X. 124); Cant on 16th April 1908 to Appleton (U. 66), where it is styled a "com- pact," and on 10th June 1909 (U. 135), where it is referred to as "the general arrangement between us." These the very many references to a well recognised agreement between the two sets of defendants. No formulation of terms was suggested other than the copy in S-except Y, which was, as I find, an earlier draft, and superseded by S. I have therefore to inquire on the "contract" charge, whether the evidence shows to my satisfaction that the agreement which the parties recognised and acted on is correctly represented by the unsigned but carefully preserved docu- ment in Ex. S.

The Newman and Appleton correspondence (Exs. X and U) are highly important. From the Vend's standpoint it needs no further consideration to affect the defendants. The letters were in every case by or to the Vend Secretary or Acting-Secretary, SO inferences may as legitimately be drawn against the colliery defend- ants as in the case of mutual correspondence found in an ordinary merchant's office.

But as regards the shipping defendants, further considerations

necessary. First as to Newman and Appleton themselves, of course they are affected, each by his own correspondence, and it is admitted that the shipping companies are equally affected by

14 CLR 419

whatever affects their respective managers. Consequently Ex. X is evidence against C. M. Newman and Howard Smith Co. and Ex. U against Appleton and Huddart Parker &Co. Nevertheless it was not admitted-but on the contrary strenuously denied- that Newman or Appleton respectively was in any way shown to have had authority to represent the three shipping companies other than the one of which he was manager. The facts however ASSOCIATED leave me in no doubt at all that as a medium of written communica- tion with the Vend Newman first and Appleton afterwards were the duly authorised representatives of all four defendant shipping com- panies, and I am constrained with regard to the objections raised in respect of their representative character, and the wasteful con- sumption of time and money in contesting what is almost a patent fact, to make the same condemnatory observation as I have applied to denial of membership of the Vend. At the same time, Mr. Mitchell, so far as his clients were concerned, stated that he did not dispute that in 1907 and 1908 there was an arrangement that the shipping companies should carry exclusively and deal exclusively subject to the modifications for Southern and other coal, and that they did that. He also admitted that the four defendant shipping companies were in the arrangement from the first, and the other two, either at the same time or afterwards.

An admission was made by Mr. Mitchell (p. 187) with respect to Newman upon which the Crown is as a matter of strict right entitled to rest for reasons I gave during the course of the trial (see also Sarai Chunder Dey v. Gopal Chunder Laha 1. But though that is so, yet in view of the way in which the admission was made, and of the application to withdraw it, I prefer, SO far as I am con- cerned, to examine the evidence apart from that admission, and my conclusions are reached as if it had never been made. The resolution of 24th April above quoted formally recognised a Steam- ship Owners' Association from which two companies had withdrawn. Then a mass of business operations extending over two years, which will be more appropriately detailed at a later stage, lead me unhesi- tatingly to the inference that the shipping companies were SO far acting in concert with one another and with the Vend, that some

1L.R. 19 I.A., 203. 14 CLR 420

single channel of communication was as a matter of business neces-

sary or in the highest degree convenient. And when we find that men like Newman and Appleton-not together but in regular sequence-themselves managers of companies concerned, take upon themselves to conduct lengthy and continuous correspondence, on the

MONWEALTH basis of being duly authorised representatives of all four companies,

in close business interest with each other, when they assert that these four companies are in association for the purpose, and when they purport to convey information to and fro on that basis it would be imputing to them gross dishonesty and wilful deception both towards the other shipping companies and to the collieries to believe they were not really in the position they assumed. I do not believe they were saying and acting thus contrary to what they considered was the truth. That strictly speaking does not make their actions evidence against the other companies; these business men acting successively as the sole channel of communication between two huge groups of business operators, when some such channel was obviously necessary, still leaves open the technical objection that their actions may have been the result of fraud, negligence, or error, long con- tinued, systematically pursued and wholly unexplained. Error and negligence SO profound and extensive and unnatural are to me incredible fraud would there have been SO comprehensive and yet

SO senseless, useless and disloyal to all concerned that I decline to entertain it. The objection is left SO frail that it needs but the slightest touch to overturn it. The repeated movements of all the companies in accordance with the statements in the corre- spondence, and often with no other rationally assignable cause or source of activity than the correspondence itself, are in the circumstances sufficient, and as I consider solid and satisfactory indications of connection-particularly in the absence of contrary evidence, where explanation, if possible at all, would have been SO easy. It is incredible that the Vend could have been deluded so long and SO successfully by any false pretence of Newman's or Appleton's authority, or that they could as late as 5th December 1907 (X. 194) have addressed Newman as "The Chairman, Inter-State Steamship Companies' Association," and that several letters would have followed on that footing unless the fact were

14 CLR 421

so. And if some other channel of communication had ever been provided, that fact is one not likely to have been concealed from the Court.

Where for instance the medium of communication changed ATTORNEY- from Newman to Appleton that fact is shown. Appleton took up the correspondence substantially where Newman left it. Newman's letter of 31st December 1907 (X. 210), there is a state- ment We confirm wires exchange &." Appleton, on 20th Janu- ary 1908 (U 30), refers to this as our offer of 31st December." He conducted exactly the same class of correspondence and what is important is that SO far as the evidence discloses no one else did. As before, the conduct of both sets of defendants where it can be traced answers the course of the correspondence down to the end of the chapter. Looking at the objection from a legal standpoint and as a part of these proceedings the obstruction to the recognition of Newman's and Appleton's representative character as amanuenses of the four shipping companies in the correspondence with the Vend must be designated as frivolous in the extreme, and as delaying and impeding and obscuring the consideration of the real merits. Whether it was worthy of the defendants having regard to their actual relations to the community, and the nature of the charge they have been called upon to meet, is beyond my province to in- quire. I take the correspondence contained in Exs. X and U as being communications between the associated collieries on the one side and the associated shipping companies on the other, and as being together with the proved acts of the parties proper materials by which to ascertain by common law rules of evidence whether there was an agreement between the two groups and whether that agreement is correctly represented by the document part of Exhibit S.

There was undoubtedly an association of shipping companies in connection with the inter-State coal trade, and the four defend- ant shipping companies were members of that association, and Newman and Appleton were. successively not only the media of communication with the Vend, but were naturally the custodians of records of the association in relation to its common business. These records, unless communicated to or acknowledged by the

14 CLR 422

Vend, I do not on common law principles read SO as to affect the

latter body, any more than I would affect the shipping companies with purely Vend records.

As to the shipping association records, there is for instance pro- duced by Newman a document headed (Exhibit X, p. 100 and fol- lowing pages) "Precis of meeting of the representatives of the New- castle Vend and shipowners held at the offices of the A.S.O.A. Melbourne on Tuesday 23rd July 1907." There were present- Hunter, Northcote, Appleton, H. B. Howard Smith and Hamilton- these represented all the four defendant shipping companies. The Vend representatives were Forsyth and Howell. Without descend- ing to particularities in this connection, excepting in one instance, it is sufficient to say that the whole line of discussion recorded would be inconceivable and absurd unless underlying the proceedings there was some definite arrangement in the nature of a contract. That exception is the passage on page 110 as follows Discussion here ensued regarding construction to be placed on a section of the agree- ment." Hunter's letter of 25th July 1907 addressed to Forsyth and Howell (Ex. X, p. 114 and U, p. 19) confirms the understanding verbally arrived at at that meeting and records in formal terms the views there expressed. That letter corresponds to the expressed expectation of Forsyth at the end of the conference. Cant's letter of 1st August 1907 addressed H. B. Howard Smith Esq., The Howard Smith Company Limited," refers to the conference. The correspondence after 13th April 1907 was SO addressed in pursuance of Newman's letter of that date (Ex X 62), in which he stated that during his absence in England "the correspondence as between the Associated Steamship Companies and the Associated Northern Collieries will continue to be conducted from this office." I refer also to Ex. X, p. 86 (6th July 1907), Ex. X, p. 94 (15th July 1907), Ex. X, p. 95 (16th July 1907), Ex. X. 198 (9th December 1907). The last-mentioned letter merits special reference because it is headed "Associated Northern Collieries," signed A. R. Cant Secretary," and addressed to Newman Esq. Chairman Inter- State Steamship Owners' Association," and contains the following passage :-" These rates will of course be subject to the terms of the agreement between your Association as the purchasing agents

14 CLR 423

and my Association as the Vendors." It enclosed a resolution of the Vend continuing their arrangement with the shipping com- panies during 1908. It is acknowledged with thanks on 12th December

(X 201). I refer also to X 205 27th December 1907,

216 and U 149 headed "Minutes of Meeting held at Offices of the Australasian Steamship Owners' Federation, Steamship MONWEALTH Buildings 509 Collins Street Melbourne on Friday 23rd April 1909." It was called for the purpose of considering the suggested allotment proposed by the colliery proprietors of coal for the steamship com- panies' requirements 1909. Appleton was in the Chair. As to this conference, see with regard to the Vend their Minutes of 5th May 1909 in Ex. J, at p. 215. The correspondence, negotia- tions, and the course of business in 1910 lead me to the inference the agreement was in substance renewed in and for that year. This will be more particularly considered presently.

Then as to the identity of the terms of the agreement with those in S, which was modified as to some of the parties after being drawn up, see Cant's letter of 12th August 1907 (Ex. X, p. 235) and Ex. I, pp. 49 and 79). Clause 1 of that document says :- " The vendors agree to sell to the purchasing agents the whole of the coal which may be required by the purchasing agents to supply the trade of the States of Victoria, South Australia, Western Australia, and Queensland. Such coal shall be gotten from the collieries mentioned in the Schedule hereto or from some of them, and shall be of the quality obtained from such collieries respectively."

And clause 2 (c) provides that the "purchasing agents' representa- tive shall where practicable at least once a week before the beginning of each month during the continuance of this agreement intimate to the vendors' representatives the approximate quantity of coal and the particular class of coal which the purchasing agents shall require during the ensuing month, and the vendors' representatives shall arrange to supply to the purchasing agents suitable coal in fulfilment of the purchasing agents' requisition" &.

Competition itself connotes attraction of trade, and SO long as it remains legitimate the law, as I read it, does not reprove it simply because it attains its necessary object.

When however a trader forsakes his quality of competitor, and becomes an engrosser, when he sets himself to stifle or strike down effective competition which stands as a commercial protection between himself and the community at large, and SO substantially to gather into his own hands the power of dictating the terms upon which the public needs may be satisfied he offends against the

1(1909) A.C., 330, at pp. 338-40; and see p. 344. 14 CLR 654

OF enactment. Nor is the offence less that two or even twenty traders

combine to effect this object.

The most recent application of these principles to the correspond- ing American enactments was in the Tobacco Company's Case above quoted. There the learned Chief Justice White said 1, the history of the combination the Court had to deal with was "demonstrative of the existence from the beginning of a purpose to acquire dominion and control of the tobacco trade, not by the mere exertion of the ordinary right to contract and to trade, but by methods devised in order to monopolise the trade by driving competitors out of business, which were ruthlessly carried out upon the assumption that to work upon the fears or play upon the cupidity of competitors would make success possible." This conclusion said the learned Chief Justice was reached by certain considerations which included acts justifying " the inference that the intention existed to use the power of the combination as a vantage ground to further monopolise the trade in tobacco by means of trade conflicts designed to injure others, either by driving competitors out of the business or compelling them to become parties to a combination."

In my opinion the prevention or destruction of all reasonable and effective competition-the natural commercial safeguard of the public-is at the root of the conception of monopoly within the meaning of the Statute.

ACTUAL INTENT TO MONOPOLISE.

I have no doubt, and I cannot imagine any doubt existing, that the intention of the defendants was to monopolise in the sense in which I have explained that term. They intended to efface com- petition in every form-competition of production which is only material here as bearing on the inter-State trade in the Article when produced, and competition of carriage. They intended to grasp into one huge hand the whole inter-State supply of Newcastle coal.

I have had some argument as to whether that was their main intention or whether it was only an object incidental secondary and subordinate to a scheme, the main object of which was merely to preserve a sinking industry.

1221 U.S., 106, at p. 181 ; 31 S.C.R., 632, at p. 649. 14 CLR 655

I have no hesitation in concluding that the elimination of com- petition was the main and the central object of the whole combina- tion complained of.

Whatever might be said of isolated parts of the Vend scheme, or even of some detached clauses of the combined agreement, yet taken as a whole the conclusions as to intention which I deduced from the consideration of the scheme as an entirety are supported and supple- mented by the whole trend and significance of the events which formed the course of business.

I fully recognise and appreciate the difference between an indirect and subordinate injurious result from a primarily innocent scheme see Russell v. Amalgamated Society of Carpenters 1; such conse- quences are sometimes inevitable, but there is no possibility upon the facts that such a fortuitous calamity has occurred in the present case. From first to last the path of the defendants has been marked by demands as high as the public could bear, tempered only by such gleams of competition as appear from time to time, and accom- panied by determined and on the whole successful efforts to remove or nullify that competition.

EFFECT OF DEFENDANTS' SILENCE. The evidence has now been reviewed in I think all of its important features. The mass of facts and figures marshalled on the various points of attack and defence show how little substance there is in the defendants' contention that there is no evidence against them. The testimony adduced on behalf of the Crown, when arranged in order and considered in proper sequence and relation, coheres into a solid bank of proof which, unanswered by opposing facts and un- qualified by explanatory circumstances has forced my mind to the view that the case as presented by the plaintiffs is correct. And why has there been neither answer or explanation by the defendants themselves ? People, if they have a fair case in reply to an attack upon their pockets, especially if it be a serious attack, do not usually fail to prove it. Silence in such a situation can scarcely be regarded as golden and when, as in the present instance, the attack is made on grounds of injury to the general community, it is still more difficult to understand.

1(1910) 1 K.B., 506. 14 CLR 656

Add to that, as here, open charges of oppression and fraud made incidentally but directly, backed by evidence strongly tending to establish the correctness of those charges, and the question becomes still more pressing why the defendants were not roused to some plain personal denial or explanation. Instead of that they left

MONWEALTH their extrication to the fertility of counsels' forensic resources.

These have been great, and have required of me careful and detailed examination. I cannot think that the defendants were actuated to maintain silence by mere disdain of consequences-the com- parative triviality of the suggestion of not risking the expense of a few days cross-examination is proof to the contrary--nor can I imagine it was simply defiance of the opinion or power of the com- munity. If these were their motives, their silence would not affect the matter. But if these were not their motives, I cannot but regard it-not of course as additional evidence-but as confirming the credit to be attached to the facts proved and the inferences they prima facie afford.

FORMAL FINDINGS ON STATEMENT OF CLAIM.

I am now in a position to deal with the statement of claim as a whole. Paragraphs 1, 2, 3 and 4 are true. Paragraph 5 is true, except that the Stockton Borehole Collieries Limited dates from 2nd July 1909, the Central Greta Colliery Co. Limited from 15th Febru- ary 1910, and the Lymington Collieries Limited from 14th October 1907 to January 1910. As to paragraph 6 it is true that the business of the colliery proprietors consists among other things of winning coal from collieries owned and worked by them respectively and in selling the same. As to the method of such sale, it was normally, that is independent of the contract and combination complained of, either direct or through agents in the ordinary sense to purchasers in one or more of the other States of the Commonwealth of Aus- tralia for transportation and for consumption in such other States, and the defendants proceeded against, and each of them respectively, are now and subject to the dates specially mentioned have been at all times material to this action engaged in trade and commerce in coal among the States.

Paragraph 7 is true subject to the dates specially mentioned.

14 CLR 657

Paragraphs 8, 9 and 10 are true; but as to these my findings are only for the purpose of dealing with the questions of the combined agreement and the combination. As to paragraph 11, for reasons already given I pass it by without any finding. Paragraph 12 is ATTORNEY- true. Paragraph 13 is true altering the word Superintendent' " to

Agent." The defendant Forsyth has been and is also a director of the New Lambton Land and Coal Co. Limited. Paragraphs 14, ASSOCIATED 15, 16, 17, 18, 19, are true. Paragraphs 20 and 21, 22 and 23 are true, but with the qualification that Queensland is to be excepted. This again must be understood of the business of each of the com- panies concerned, considered apart from the combination. Para- graph 24 is true. Paragraph 25 is true. This also is found to be true merely with reference to the combined agreement and com- bination for reasons already given. As to paragraph 26 I have not sufficient evidence to come to any conclusion upon it. Paragraph 27 I pass by as immaterial, paragraphs 28, 29, 30, 31, are true. Indeed the truth is much understated-see Ex. Y9. As to para- graph 34, Newcastle coal is as I have stated undoubtedly better for household and gas-making purposes. For steam production there is not much difference; one or the other may be superior according to the conditions under which it is used. For those undertakings equipped for Newcastle coal, it is distinctly disadvan- tageous to use Southern coal mechanical alterations would often be necessary and expensive even were other coal easily procurable. In short, Newcastle coal may truly be said to have qualities which render it especially useful for use in the manufacture of coal gas, and also for the purposes of domestic use, and under certain cir- cumstances for the purposes of steam production; and in that sense coal possessing similar qualities is practically unobtainable in Aus- tralia, except from Newcastle and Maitland district, New South Wales.

As to paragraph 35 it is true. As to paragraph 36, it is true that the defendant shipping companies with J. &A. Brown in 1906 sub- stantially controlled about 80 per cent. of the whole carrying trade in coal between New South Wales and the other States of the Commonwealth. In the same year, the Melbourne Steamship Co. Limited and James Paterson together controlled about 12 per cent.

14 CLR 658

The same figures apply to paragraph 37. Paragraph 38 is true.

What has been called an actual monopoly of the carrying trade was up to the combined agreement a matter of free choice as to every transaction. Paragraph 39 is true. It is admitted there was

OF competition but, I have indicated that, though the shipping com-

MONWEALTH panies prior to 24th September 1906 were not parties to any treatv

of alliance, there certainly existed among themselves something in the nature of an entente cordiale. Paragraph 40 is true. As paragraphs 41 and 42 I have already stated that the allegations of the statement of claim are established SO far as concerns the actual making of the contracts therein referred to, with the qualification that the modifications in the contract were introduced before 1909.

I now add that the rest of the allegations in those paragraphs are true and I explicitly state that I mean the contract was made and entered into by the defendants with intent to restrain trade and commerce to the detriment of the public. Paragraphs 43, 44 and 45 are severally fully proved as to the whole of the periods respect- lively mentioned. Then as to paragraph 46. With regard to sub- paragraph 8a relating to supply and carriage of coal from New South Wales to Tasmania, I do not find that proved. With regard to sub-paragraphs 10a, 10b, 10c, 10d, except SO far as prevention re- ferred to is included in the general stipulation expressed or implied not to carry any but Vend coal, there is no proof of the allegations. With respect to the rest of paragraph 46, I find that the defendant colliery proprietors and the Associated Northern Collieries and the shipping companies were in combination between themselves and the Melbourne Steamship Co. and James Paterson &Co. in relation to trade and commerce in coal between the State of New South Wales and the States of Victoria, South Australia, Western Australia and Queensland, and that the nature purposes and effect of the combination were as alleged, in various sub-paragraphs subject to qualification I have mentioned.

I find the allegations in paragraphs 47, 48, 49, 50, 51, 52, 53, 54, 55, 55a, to be true. I find paragraph 55a to be true to the extent mentioned with respect to paragraph 46. In all the paragraphs up to 55a inclusive as well as in the subsequent paragraphs, I find the intent alleged to be proved. In relation to the dates, such as with respect

14 CLR 659

OF AUSTRALIA to Stockton Borehole Collieries Limited, my finding of course takes H. effect as to the collieries that came in later only as from the dates previously mentioned, when they joined the Vend. I find paragraph 56 to be proved.

I find the following paragraphs relating to monopoly to be proved, namely, 57, 58, 58a, 59, 59a, as to Newcastle Wallsend Co., A. Kethel &Co. Limited and Lymington Collieries Limited., 60, 60a, as ASSOCIATED to the same collieries mentioned in connection with 59a. I except from these findings the words "others to the plaintiffs unknown." As to paragraphs 61, 62 and 63 which relate to combination and conspiracy to monopolise, these I find proved except the words

others to the plaintiffs unknown." As to paragraphs 64, 65, 66, 67, 68 and 68a, SO far as these may be considered a repetition of previous paragraphs they are found to be proved to the same extent, but, if they are meant, as I rather think they are, to charge a con- spiracy by the shipping companies among themselves only, as the main charge and then incidentally and in point of law superfluously introducing the collieries and similarly but conversely with regard to the Vend, I can only say that no such case was fought or in my opinion established, the contract and the combination and conspiracy relied on as substantive offences was the composite one of collieries on the one side and the shipping companies on the other. Of course in a sense the shipping companies did combine with each other and the collieries did combine with each other and each did combine with the rest, but it was in the way in which I have ex- plained in the beginning of this judgment. If in law, contrary to my opinion, the paragraphs referred to should be held to have been proved, the facts speak for themselves, and afford the means of cor- rection. As to paragraph 69, the defendants, who were not principals and including the defendant the Associated Northern Collieries, did abet, counsel and procure the several contraventions which I find the principals committed. I cannot however see how the principals, that is the collieries, and the shipping companies themselves can be said to have aided, abetted, counselled and procured the offences they primarily committed. Paragraphs 71, 72, 73, 74, 75, are sub- stantially proved. As for paragraph 76 I have had no evidence directly substantiating the allegations in that paragraph. It is left

14 CLR 660

to inference whether the increased price of coal increases the price

of secondary production. Of course it naturally would, but whether it did in any particular case there is nothing to show. There is some evidence that in certain industries such as gas there was no increase

GENERAL OF of price. As to paragraph 77 the averments in my opinion are cor-

MONWEALTH rect. There has been no undertaking by the defendants or any

ASSOCIATED of them that they would abstain from pursuing the same course in

future. It has been rather the other way, their attitude seemed to me to be in effect one of resolve now to test the right to do what they have done in the past. Paragraph 77 is therefore correct.

DECISION ON FINDINGS. The plaintiffs claim a declaration that the defendants and each and every of them have been guilty of the offences charged or some of them and that they be convicted accordingly. They also claim a declaration that the defendants made the contract or contracts charged and have carried out and are still carrying out such contract or contracts. They also claim a declaration that the defendants formed and entered into and engaged in the combination or com- binations. So far as such declarations are necessary I make them first as to each and every one of the offences severally which I have found to have been committed, and as to the contract made and renewed from time to time, its modifications of the same as stated, and as to the combination formed and continued as above stated.

I convict the defendants, and each and every of them, of the several offences severally found against them respectively as above stated.

Then comes the question of penalty. The law under which these proceedings were instituted provided that the penalty should be "Five hundred pounds."

Mr. Wise has argued that there should be a penalty for every " offence," that is, for making the contract, for being a member of the combination, that is from the first day of joining it, also for con- tinuing to be a member of it, and for engaging in the combination which is rather using combination" in an abstract sense, the earlier use being rather in a concrete sense, the word being properly used in either sense. "Combination means either the abstract act of

14 CLR 661

combining, the banding together of persons for a common object, or the concrete body or association SO combined or formed.

Mr. Wise claimed that there might and in this case there should be a penalty for every day from 25th September 1906 to the com- mencement of the action. He cited White v. The King 1; The Apothecaries Co. v. Jones 2 Allen v. Worthy 3 R. v. Water- MONWEALTH house 4, and Garrett v. Messenger 5, and City of Atlanta v. Chat- tanooga Foundry 6 Jackson v. The Blanche 7.

Mr. Mitchell opposed this view and cited Milnes v. Bale (8). In my opinion that contention of the Crown cannot be sustained. Though I have convicted each of the defendants of the various several offences, yet it must be clearly understood that that is SO because what is substantially for the present purpose the one set of facts in this case collected between the date of commencement of the combination and the date of the writ fits linguistically the several statutory descriptions of those offences. That does not alter the actual conduct of the defendants or multiply their con- traventions. Any one of those charges might have been selected by the Crown and prosecuted to conviction. If so, no further proceedings could have been taken on the same facts merely because they answered another stated offence, and I must not treat the defendants more harshly because all possible forms of contravention are set out in the same statement of claim.

The substance of the matter as the Crown has charged it in the statement of claim is that in 1906 a contract in violation of the Act was made and thereby or by means of conduct on the lines of its terms an illegal combination arose, which by various prolongations was continued down to the commencement of the action. Possibly each renewal of the contract might have been shaped as a new con- tract entered into, the original contract being in 1906, the first renewal in 1907, the next in 1908 and SO on. But though in technical strictness that might apply and probably would fit some of the words of sec. 4 yet I hesitate to think it would be within its spirit, in the circumstances of this case. I can quite conceive a case where the

14 C.L.R. 152. 2(1893) 1 Q.B., 89. Trust Decisions, p. 299. 3L.R. 5 Q.B., 163. 4L.R. 7 Q.B., 545. (S) L.R. 10 C.P.,, 591. 5L.R. 2 C.P., 583. 6127 Fed. Rptr., 23 ; 2 Fed. Anti- 7(1908) A.C., 126. 14 CLR 662

renewal of an expiring contract would be within both the letter and the spirit of the law and constitute a new offence as contemplated by Parliament. And the action if commenced earlier might have given a new starting point, a new offence beginning if further continuance of the combination were persevered in. But looking the facts here I am not satisfied that the rule of renewed contract being a distinct and separate offence was meant to apply to such a case as the present. The contract was but the means of creating or helping to create or bring about a combination, its renewal being more like a new link in the same chain, and where there is a com- bination it is that which makes the public danger, because the mere making of the contract is not SO important as the action taken under it, and that in this case was by the combination. The sub- stantial facts were the creation and continuance of a combination. or in the abstract sense the combination of the defendants. And Parliament appears to have SO considered the subject in the amend- ing Act, because it imposes a daily penalty and in some cases im- prisonment for a continuing offence which is specially appropriate to a combination. That is the serious fact, and the Crown has rightly in my opinion, taken that view in framing the Statement of Claim. Paragraph 41 alleges the original making of the contract. Para- graph 42 speaks of another contract after January 1909 with modi- fications. I have found that, as a fact-as steps in the proof-the original contract as modified in 1907 was renewed in 1908 and 1909, and this is legitimate as evidence of conduct relating to the charge of combination but the idea of paragraph 42 was apparently newly modified contract, and that did not take place, and whatever opinion I form of the conduct of the defendants, I do not fell justi- fied in looking at the charge in paragraph 42 in a light different from that in which it was on the whole presented to them. This view is strongly supported by the next paragraph 43, which charges a com- bination-one and the same combination-between 1st October 1906 and 1st January 1910. Now if paragraph 42 were understood to mean that there was a distinct contractual break at the end of 1908, and a fresh and distinct start in 1909 of a new contract as a substantive offence, the combination would have been similarly charged in paragraph 43. So I do not think paragraph 42 was so intended. Again paragraphs 48, 50, 52 and 54 charge a continuance

14 CLR 663

from 2nd January 1907 to 31st December 1907, and again in 2nd H. January 1908 to 31st December 1908, and again from 2nd January 1910 to 4th June 1910, of the combination mentioned in paragraph 46 which is there alleged to have been in existence on 1st January 1907. These considerations do not of course exclude the effect of the unlawful intent arising either at the beginning or at any other point of time during the existence and continuance of the combination. That principle has full play and has been SO treated during the case. Then again in paragraph 57 it is charged that the defendants monopo- lised trade in and between October 1906 and June 1910 by making and entering into what is termed " An agreement or an arrangement between themselves, &." and then the substance of the agreement and arrangement is described as previously mentioned. The point of the matter is that that agreement or arrangement-in other words, the contract or the combination-is spoken of as if it were one continuous thing, susceptible it is true as an arrangement or a combination of the accompaniment of unlawful intent at any stage of its career. So in paragraph 58, which charges the attempt to monopolise, and similarly in paragraphs 58a, 59, 59a, 60 and 60a. In paragraphs 61 to 65 and paragraphs 67 and 68a the same course is followed with regard to the charge of combining and conspiring, which being continuous might become unlawful at any point. A separate penalty for each year would still in my opinion be in- adequate to meet the merits or rather the demerits of this gigantic conspiracy, but justice is to be measured as Sir Edward Coke said by "The golden and straight metwand of the law and not the un- certain and crooked cord of discretion." And " 'the metwand of the law here requires me to measure the offences by a fair and reason- able interpretation of the real intention of the legislature as applied to the facts of the case and the intention of those who framed the Statement of Claim, which in this instance are in my opinion sub- stantially the same. So reading it the defendants' behaviour resolves itself into one accumulated, though sometimes varying, mass of conduct, and one only, extended over a considerable period of time and in the course of that time touching the law at many points, and wearing many legal aspects; I am therefore not justified in awarding penalties according to the number of aspects, or other- wise than according to the practically united mass of conduct

14 CLR 664

charged. Still less ought I to inflict more than one penalty for

contract, and only one for combination. I do not agree with the view presented by the Crown that "continuing" is to be treated for the purpose of penalties as separate from "being" and that every day of continuance is a new offence. The case of Apothecaries Company v. Jones 1 is opposed to that view. In that case a Statute

ASSOCIATED provided that any person who should act or practise as an Apothe- COLLIERIES. cary without a certificate should be liable to a penalty for every

such offence. The defendant practised as an Apothecary without a certificate and treated three different persons at three different times on the same day. He was sued for three penalties. It was held that he was liable for only one penalty because the word "practise" implied continuity. At p. 96, the Court in effect con- strued the Act as implying that the penalty was imposed for practising on any day in the week." Then came the principle of continuity which applied during the whole of the day. Hawkins J. said 2, that the principle was :- That the offence created by the Statute can alone be made the subject of conviction-the overt acts done in the commission of that offence are but SO many pieces of evidence." In the present case the word "continues" cannot be restricted to one day, and therefore it must have its natural significa- tion which I have described in the earlier part of this judgment.

I have dealt with the section as if it stood unaltered because Mr. Wise argued on that basis but it has been amended and it seems to me that Parliament has put an interpretation on the words which leaves no doubt whatever. The Act of 1910, No. 29, provides that sec. 4 of the Principal Act is amended by inserting after the words "Five hundred pounds' the words "or in the case of a continuing offence Five hundred pounds for each day during which the offence continues"; and a similar amendment is made as to sec. 7 which inter alia increases the punishment. I can only say the defendants are fortunate that the amending Statute was not in force prior to the institution of this action.

Then Mr. Mitchell argued that there could not be more than one penalty of £500 for all the defendants jointly. In other words that the defendants were not severally liable to penalties. The conse-

1(1893) 1 Q.B., 89. 2(1893) 1 Q,B., 89, at p. 96. 14 CLR 665

quence of such a doctrine would be alarming. Two individuals H. C. might each have to pay £250 for an injurious but comparatively innocuous contract in restraint of trade, whereas 50 powerful monopolists would get off with £10 each. I am satisfied that SO unexpected and destructive an interpretation should not be adopted without clear coercive authority.

Mr. Mitchell cited a case of great authority, Del Campo v. The Queen 1. There it was held by the Judicial Committee that the receiving goods on board a slave ship was the joint act of the owner and the master of the vessel, and that two penalties could not be awarded, but only a joint penalty against both. But when the case is carefully looked at it is seen that the ratio decidendi is against the defendants' contention. Lord Brougham, who delivered the judg- ment said :- " The single offence of shipping or receiving goods on board is made a joint offence the words are, 'in every case the persons so offending,' not every person SO offending, and though, as was observed by Lord Mansfield in Rex v. Clark (2), ' where the offence is in its nature several, and every person concerned may be separ- ately guilty, there each offender is separately liable to the penalties,' it has been decided in Hardyman v. Whitaker 3, that where the offence is made a joint offence by Statute, the parties concerned are liable to but one forfeiture; this has been followed in Barnard V. Gostling (4). Looking to the words of the Act, and these author- ities, their Lordships are of opinion that the separate penalties of £10,000 against Del Campo and Riera must be remitted."

In the present case the offence is not made a joint offence. The words pointed to by Lord Brougham as words which would have involved separate penalties namely " every person SO offending" are practically in the Statute, which says :-" Any person who, &., is guilty of an offence." That is each and every person doing the forbidden act is guilty and is liable to the penalty. I may here quote some observations from Maxwell on Statutes, 4th ed., p. 298, which seem to me entirely convincing, speaking of the case of R. V. Clark (5), above-mentioned, it said - The question whether the offence was joint or several evidently arose not from the nature

12 Moore P.C.C., 15. 3Bull. N.P. 189. 14 CLR 666

of the offence, but from the nature of the penalty. If the penalty

had been corporal instead of pecuniary, the distinction between joint and several offences could hardly have occurred for it would have been found difficult to apply the rule of one joint penalty to two offenders sentenced to five weeks imprisonment or twenty-five

MONWEALTH lashes. It would seem that the question whether the penalty is to

ASSOCIATED be understood as separate or joint, where the Act is not explicit,

would be better governed by the consideration whether the penalty was intended as compensation for a private wrong, or as a punish- ment for an offence against public justice."

If on conviction for a second offence the Court under sec. 13 impose a term of imprisonment, would the defendants share it numerically ?

The argument is untenable, and I hold that each and every defendant is liable to a penalty not exceeding £500. From what I have already said it will have been gathered that my opinion is that the full amount is not too much for the least of the offences proved, and accordingly I impose a penalty of £500 on each and every defendant proceeded against, except the defendant called the Associated Northern Collieries. I except this defendant be- cause though in a sense it is a separate organisation and has appeared as such, yet in effect all its members are fined to the statutory limit, and it would be unfair, and a virtual excess of Parliament's intention to fine them again indirectly through this Association. The defend- ants, Frances and Daniel Sneddon to pay one penalty jointly.

An injunction is claimed in the Statement of Claim and is now asked for at the bar by learned counsel on behalf of the Attorney- General under sub-section 2 of section 10 of the Act which is in these terms :-" " On the conviction of any person for an offence under this Part of this Act the justice before whom the trial takes place shall, upon application by or on behalf of the Attorney-General or any person thereto authorised by him, grant an injunction, restraining the convicted person and his servants and agents from the repetition or continuance of the offence of which he has been convicted."

This subsection makes it a matter of right to obtain the particular

14 CLR 667

OF AUSTRALIA, remedy and leaves no discretion to the Court. If it were a matter of discretion the circumstances are such that I should have no hesita- tion in granting it. I say this because it may be that subsec. 1 of sec. 10 also could be relied on to support the claim for an injunc- tion. My own view expressed on the application for discovery was and is that the claim for injunction was closely connected with sub- sec. 2 and the issues involved in the claim for penalties rather than with subsec. 1, and I could not limit it to paragraph 56. But, I may COLLIERIES. be mistaken, and I was then carefully guarding the defendants from discovery by what might have been regarded as a side wind. It may be that now it is to be supported under paragraph 56 alone. Consequently, I think it right to state that if the grant of an injunc- tion depends on discretion I exercise it by granting the injunction restraining the defendants, their servants and agents from the repetition or continuance of the several offences of which they have respectively been convicted.

The practical importance of the matter is that if the claim falls within subsec. 1, there is no need to trouble about intent. It is sufficient to establish a contract or combination in actual restraint of trade or commerce to the detriment of the public.

There is really no other method than injunction to protect the public, who are the complaining parties in this case. Ordinarily Court has to consider whether in the circumstances, damages will be sufficient or whether convenience points rather to withholding than to granting the injunction. But here everything points to the absolute necessity of granting it if any relief is to be given at all.

I need hardly say that the injunction in no way affects per se any agreement other than the combined agreement and the com- bination charged.

The defendants must pay the plaintiffs' costs.

Declaration accordingly. Penalties imposed

injunction granted. Solicitor, for plaintiffs, Powers, Commonwealth Crown Solicitor. Solicitors, for defendants, Minter Simpson &Co., Sparke &Millard and Malleson, Stewart, Stawell &Nankivell.