Reddy Cut Garments Pty Ltd & the Trustees of the sisters of St Joseph v Housewives United Buyers Co-Op

l .

THE

FEDERAL

COURT

O F

A U S T R A L I A )

NEW SOUTH

WALES

D I S T R I C T

R E G I S T R Y j

No.

G 7 4 of

1979

GENERAL

D I V I S I O N

)

BETWEEN:

HOUSEWIVES

UNITED

BUYERS

C O - O P E R A T I V E

L I M I T E D

P l a i n t i f f

AND :

REDDY

CUT

GARMENTS

P T Y .

L I M I T E D

F i r s t n a m e d

D e f e n d a n t

AND :

T H E

T R U S T E E S

S I S T E R S

O F

ST.

J O S E P H

S e c o n d n a m e d

D e f e n d a n t

CORAM:

Bowen

C . J .

F e b r u a r y

1980.

REASONS

FOR

JUDGMENT

BOWEN C .J. :

This

is a m a t t e r i n w h l c h the par t les requi re an

u r g e n t dec is ion .

propose

to g lve m y decis lon i m m e d l a t e l y .

The

proceedings

w e r e

commenced

the

H o u s e w i v e s

U n l t e d

buyers

C o - o p e r a t i v e

L i m i t e d

- I

sha l l refer t o t h e m as Housewives

CO-operatlve

aga ins t R e d d y C u t G a r m e n t s P t y .

L l m i t e d -

shal l

r e f e r t o

t h e m

R e d d y

C u t

and the T r u s t e e s of

the Sisters of

- 2 -

St.

Joseph

- I shall

refer

them

St.

Josephs

- by

application accompanied by a statement of claim, which was later

amended, seeking an order restralning

the

respondents from

carrying out or acting In accordance with the terms

of a certain

contract, arrangement or understanding asklng for

damages, and,

also asking for an order restraining St. Josephs from allowing

permitting the use	of its premises for the sale	of school
uniforms.

It was alleged in the amended statement of claim that in 1978

St. Josephs, at schools which it operated at Revesby and Mllperra, entered into a contract, arrangement or understanding with Reddy

Cut whereby Reddy Cut would supply school uniforms

to pupils and

parents

pupils at the said schools through school shops

conducted on behalf

St. Josephs. It was also said that the

contract, arrangement or understandlng in question had the

purpose and effect of substantially lessening competition.

There was an addition in the amended statement

of claim to

the effect that St. Josephs, being a corporation, was In a

position as operator of schools at Revesby and Mllperra

substantially to control

a market for school uniforms and in the

years 1978 and 1979 took advantage

of the power in relation to

that market for the purpose

of eliminatlng or substantially

damaging the Housewives CO-operatlve, being a competltor in that

market.

By a letter dated 11 February

1980,

the

Housewlves

Co-operative gave particulars

of the matters alleged in its

amended statement of

clam at the request of St. Josephs. In

, *

- 3 -

this letter it alleged an arrangement between St. Josephs and

Reddy Cut, which it said should be inferred. The substance

the terms

of this arrangement was set forth in ten numbered

paragraphs in the letter. Particulars were also glven alleglng that the market in question was the market in school uniforms

prescribed for the schools conducted by St. Josephs

at Revesby

and Milperra and covering an area in which parents and puplls

were to be found.

Particulars were also given that the whole arrangement had

the purpose or effect

of substantially lessening competitlon, and

it was said that the Housewives Co-operative relied upon the

inherent tendency of the provisions of the alleged arrangement

set forth in the particulars as having that purpose and effect.

In relatlon to the claim

of monopolisation, which was added

the

amended

statement

of claim, it

was

alleged

in the

particulars that St. Josephs was in a position substantially to

control the market which had been referred to by reason of the

fact that through their control of the nature of the product,

that is the items

of school uniforms, they controlled the ease

with which firms might enter the market,

as It was the threat

entry of a new firm lnto a market which operated as an ultimate

regulator of competitive conduct. It was sald that in addition

the economics of running a cupboard or shop at the school, the

advertising in school bulletins and other material and the

differentlal treatment accorded to suppllers of the school shop

as against other suppliers	of	school uniforms were also other
factors.

. I

- 4 -

The

p a r t i c u l a r s

s a l d

t h a t

the

act

mlssion

which

was

a l l e g e d

t o

c o n s t i t u t e

t a k i n g

a d v a n t a g e

o f

monopoly

p o s i t i o n

cons is ted

o f

the

changes

uniforms a t S t . Lukes,

Revesby

i n

approximately March 1979	and	a t Mount	S t .	J o s e p h s	i n	r e l a t i o n	t o
school shorts,

The

ma t t e r

be fo re

m e

today

m o t i o n

f o r

l n t e r l o c u t o r y

r e l i e f .

I n

i t s form amended

du r ing the proceedlngs,

it seeks

f i rs t

a n

o r d e r

r e s t r a i n i n g

Reddy

C u t

and

S t .

Josephs

from

c a r r y i n g

o u t

a c t i n g

i n

a c c o r d a n c e

w i t h

t h e

terms

any

cont rac t ,

a r rangement

under s t and ing

r e l a t ing

t o

t h e

s a l e

school

uniforms

a t

schools

conducted

S t .

J o s e p h s

a t

Revesby

and

Milperra.

I t

also

s e e k s

a n

o r d e r

r e s t r a i n i n g

S t .

J o s e p h s

from

allowing

p e r m i t t i n g

t h e

u s e of

t h e i r premlses

a t Revesby

and

Milperra

for t h e sale of

school

unlforms

and

order

r e s t r a i n i n g S t . J o s e p h s

from

changing

items of

school

uniforms

a t

Revesby

and

Milperra

w i t h o u t

n o t i c e

t o

Housewives

Co-operative

and

from

a d v e r t i s i n g i n

i t s

school

b u l l e t i n s

elsewhere without

i nc lud ing

r e fe rence

t o

the

a v a i l a b i l i t y

u n i f o r m s

a t

the

shop

of	the Fousewives Co-operative.

determlnlng

what

should

done

upon

t h i s motion

for

i n t e r l o c u t o r y

r e l i e f ,

t h e

p r i n c i p l e s

which

a m bound

t o

a p p l y

a r e t h a t

the Housewives

CO-operatlve,

t o succeed,

m u s t make

o u t a

c a s e

f o r

the r e l i e f , and

i n

d o l n g

so, a t l eas t

e s t a b l i s h a

prlma

f a c i e

c a s e

i n

the

sense

which

r e f e r r e d

t o

i n

Beecham Group

L m i t e d

v .

B r i s t o l

L a b o r a t o r i e s

P t y .

L i m i t e d

(1968)

1 1 A

C . L . R .

618.

I f

c o n s l d e r

t h a t

p r i m a

f a c i e

c a s e

i n

t h i s

e n s e

h a s

- 5 -

been established, I then have to consider whether,

on the balance

of	convenience between the parties, I should grant the relief

which is sought.

Having heard the evidence tendered on this motlon

I find that

am not satisfied that the Housewives Co-operative

has

establlshed a prima facie case in the relevant sense. In view

the fact that the matter will have

to go to

a final hearing it

1 s

undesirable that I should discuss the evidence

in detail.

Indeed, the evidence tendered at that hearing may not be

precisely the same as it is before	me:	it may be	added to or
subtracted from.

However, I think I should make some comment

a general

character.

So far as the alleged arrangement is concerned, there

1s no direct evidence that such an arrangement was made between

Reddy Cut and St. Josephs. The evidence which

has been given

does not, to

my mind, enable

me, or lead me, to infer the

arrangement which

1 s

alleged by the Housewives Co-operative.

Indeed, if one looks at the ten paragraphs of the particulars,

the evidence would lead me to infer in respect to some

of those

allegations

that no arrangement

was

fact

made

those

particular aspects between St. Josephs and Reddy Cut.

So far as monopolisation is concerned, there

1 s before me no

evidence from which

I would infer the existence

of the purpose

which is required by s.46

of the Trade Practices Act 1974. The

purpose which is required to be establlshed before that section

operates is that a corporation that is in a position to

substantially control a market shall not take advantage

- 6 -

relation

that

market

for

the

purpose

of elimlnating or

substantially damaging	a person being a competitor in the market:
I am summarising it.	It does not appear to me on the evidence

before me I have a basis

on which to draw that inference.

I leave to one side the question whether

on the evidence so

far given any conclusion should be drawn that St. Josephs 1s a trading corporation within the meaning of the Trade Practlces

Act.

Certainly, the decision in The Queen v. Trade Practices

Tribunal:

Ex parte St. George County Council (1974) 130 C.L.R.

533, raises the serious question

as to whether they should

classified in some way other than as a tradlng

corporation,

notwithstanding it may be said that they trade. I also leave

one side the question

of the nature

of the market and

competitlon In the market.

In vlew of the conclusions which I

have expressed, it follows

that I am bound to dismiss the motion for interlocutory relief.

It IS, therefore,	unnecessary	to	deal	wlth	the	balance	of
convenience.

I will, however, on this aspect

of the matter say that an

early hearing is practlcable if the parties are able to prepare

themselves for it. It is practicable

far as thls Court is

concerned and I am not persuaded that

on an application for

interlocutory relief the balance

convenience would be in

favour of actually interfering, in the sense of stopplng, the present method of dealing with school uniforms and substituting another method before there has been an ultimate trlal of the

- 7 -

issues.

I think the balance of convenience rather leans towards

having an early hearing,

so the matter can

be finally determined,

and in the meantime not dlsturbing the system which	has	been
operating for some considerable perlod.

The order I make is that the motion for interlocutory rellef

is dismissed and costs are reserved. I make an order for return

of the only exhibit.

IN THE FEDERAL COURT

OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No. G74 of 1979

)

DIVISION

GENERAL

BETWEEN:

HOUSEWIVES UNITED BUYERS

CO-OPERATIVE LIMITED

Plaintiff

REDDY CUT GARMENTS PTY. LIMITED

Firstnamed Cefendant

AND :

THE TRUSTEES OF

THE SISTERS OF ST.

JOSEPH

Secondnaned Defendant

CORAM: Bowen C.J.

1 5 February 1980.

REASONS FOR JUDGMENT

BOWEN C.J. :

This is

a matter in which the partles require an

urgent decision. I propose to give my declsion immediately.

The proceedings were commenced

the Housewives United

buyers Co-operative Limited

- I shall refer

to them as Housewives

Co-operative - agalnst Reddy Cut Garments Pty. Limited

- I shall

refer to them as Reddy Cut - and the Trustees of the Sisters of

- 2 -

St.

Joseph - I shall

refer to them

St.

Josephs

- by

application accompanied by a statement of claim, which was later

amended, seeking an order restraining

the respondents from

carrying out or acting in accordance with the terms

of a certain

contract, arrangement or understanding asklng for damages,

and,

also asking for an order restralning St. Josephs from allowing

permitting the use	of its premises	for the sale	of school
uniforms.

It was alleged in the amended statement

of claim that in

1978

St. Josephs, at schools which it operated at Revesby and Milperra,

entered into a contract, arrangement

or understanding with Reddy

Cut whereby Reddy Cut would supply school uniforms

to pupils and

parents

pupils at the said schools through school shops

conducted on behalf of St. Josephs. It

was also said that the

contract, arrangement or understanding In question

had the

purpose and effect

of substantially lessening competition.

There was an addition in the amended statement of clalm

the effect that St.

Josephs, being a corporation, was

in a

position as operator

of schools at Revesby

and Milperra

substantially to control a market for school uniforms

and in the

years 1978 and 1979 took advantage of the power in relation to

that market for the purpose

elimlnatlng o r

substantlally

damaging the Housewives Co-operative, being a competitor in that

market.

By a letter dated 11 February 1980. the

Housewives

Co-operative gave particulars

of the matters alleged in its

amended statement

of claim at the request of St. Josephs. In

- 3 -

this letter it alleged an arrangement between

St.

Josephs

and

Reddy Cut, which it said should be inferred. The substance

the terms of this arrangement was set forth

ten numbered

paragraphs in the letter. Particulars were

also given alleging

that the market In question was the market in school uniforms

prescribed for the schools conducted by St. Josephs at Revesby

and Milperra and covering an area in whlch parents and pupils

were to be found.

Particulars were also given that the whole arrangement had

a	the purpose cm effect of substantially lessening competition, and it was said that the Housewives Co-operative relied upon the inherent tendency of the provisions of the alleged arrangement set forth in the particulars as having that purpose and effect.

In relation to the claim of monopolisatlon, which was added

the

amended

statement

claim, it

was

alleged

the

particulars that St. Josephs was in a positlon substantially to

control the market which had been referred to by reason of the

fact that through their control of the nature of the product,

that is the items of school uniforms, they controlled the ease

with which firms might enter the market,

as It was the threat

entry of a new firm into a market which operated as an ultimate

regulator of competitive conduct. It was said that in additlon

the economics of running a cupboard or shop at the school, the

advertising in school bulletins and other material and the

dlfferential treatment accorded to suppliers of the school shop

as against other suppliers

school uniforms were also other

factors.

- 4 -

The particulars sald that the act

omission whlch was

alleged to constitute taking advantage

of a monopoly posltlon

consrsted of the changes of uniforms at St.

Lukes, Revesby in

approximately March 1979 and at Mount St. Josephs in relatlon to

school shorts.

The matter before me today is a motlon for interlocutory

relief.

In its form amended during the proceedings, it seeks

flrst an order

restraining

Reddy

Cut

and

St.

Josephs

from

carrying out or acting in accordance with

the terms of any

contract, arrangement or understanding relatlng

to the sale

school uniforms at schools conducted by St. Josephs

at Revesby

and Milperra.

It also seeks an order restraining St. Josephs

from allowing or permitting the use

of their premises at Revesby

and Milperra

for

the sale

school uniforms and an order

restraining St. Josephs from changing items of school uniforms at

Revesby and Milperra without notice

to Housewives Co-operative

and from advertlsing in its school

bulletins or elsewhere without

including reference to the availability of uniforms at the shop

of the Housewives Co-operative.

In determining what should be done upon this

motlon

for

lnterlocutory relief, the principles which I am bound

to apply

are that the Housewives Co-operative,

to succeed, must make

out a

case for the relief, and in doing

so, at least establlsh

a prima

facie case in the sense whlch is referred

in Beecham Group

Lmited

Bristol Laboratories Pty. Llmited (1968) l18 C.L.R.

618.

I consider that a prima facie case in this sense has

- 5 -

been e s t ab l i shed ,

then have

t o

conslder whether , on

the

balance

convenience

between

the

par t ies ,

s h o u l d

g r a n t

h e

r e l i e f

which is sought.

Having

heard

the

evidence

tendered on

this

mot ion

f l n d t h a t

n o t

s a t i s f i e d

t h a t

t h e

H o u s e w l v e s

C o - o p e r a t i v e

h a s

e s t a b l l s h e d

pr ima

fac ie

case i n

t h e

r e l e v a n t

s e n s e .

I n v i e w

t h e f a c t t h a t

the ma t t e r

w i l l have

t o go t o a

f i n a l h e a r i n g

i t

i s

u n d e s i r a b l e

t h a t

s h o u l d

d i s c u s s

t h e

e v i d e n c e

i n

d e t a i l .

I n d e e d ,

t he

e v i d e n c e

t e n d e r e d

a t

h a t

h e a r i n g

may

n o t

b e

p r e c i s e l y

t h e

same a s it is b e f o r e me:

it may be

added

t o or

s u b t r a c t e d

from.

However, I t h i n k I should make some comment of a gene ra l

c h a r a c t e r .

far a s

t he

a l l eged

a r r angemen t

i s

concerned ,

there

i s no direct evidence

that

such

arrangement

was made between

Reddy C u t and S t . Josephs.

The

evidence which has

been

g iven

d o e s n o t , arrangement

mind,

enable

m e ,

o r

l e a d

m e ,

t o

i n f e r

the

whlch

i s

alleged

the

Housewives

Co-operative.

I n d e e d ,

i f

o n e

l o o k s

a t

the

ten

paragraphs

the

p a r t i c u l a r s ,

the

ev idence

would

l ead

m e

t o

i n f e r

I n

r e s p e c t

t o

some

o f

t hose

a l l e g a t i o n s

t h a t

arrangement

was

i n

f a c t

made

t h o s e

p a r t i c u l a r a s p e c t s

be tween

S t .

Josephs

and

Reddy

C u t .

f a r

monopo l i sa t ion

concerned,

there

i s

b e f o r e

m e

evldence

from

which

would

i n f e r

t h e

e x l s t e n c e

o f

the

purpose

which is required

s.46

the

Trade

Prac t ices

Act

1974.

The

purpose

which

i s

r e q u i r e d

t o

e s t a b l i s h e d

b e f o r e

t h a t

s e c t l o n

o p e r a t e s

t h a t

c o r p o r a t i o n

t h a t

i s

i n

p o s l t i o n

t o

s u b s t a n t l a l l y

c o n t r o l

marke t

sha l l

no t

t ake

advan tage

i n

- 6 -

relation

that

market

for

the

purpose

of eliminatlng

substantially damaging a person being a competitor in the market:

I am summarising it. It does not appear

to me on the evidence

before me I have a basis

on which to draw that inference.

I leave to one side the question whether on the evidence far given any conclusion should be drawn that St. Josephs 1s a trading corporation within the meaning of the Trade Practices

Act. Certainly, the decision in

The Queen v. Trade Practices

Tribunal:

Ex parte St. George County Council (1974)

130 C.L.R.

533,

raises the serious question

as to whether they should

classlfled in some way other than as

trading corporation,

notwithstanding it may be said that they trade. I also leave to

one slde the question

the nature of the market and of

competition in the market.

In vlew of the conclusions which

I have expressed, It follows

that I am bound to dismiss the motion for Interlocutory relief.

is,

therefore,

unnecessary to deal with the balance

convenience.

I will, however, on this aspect

of the matter say that an

early hearlng is practicable if the parties are able

to prepare

themselves for it. It is practicable

so far as this Court is

concerned and

I am not persuaded that

on an application for

interlocutory relief the balance of convenience would be in

favour of actually interfering, in the sense of stopping, the

present method of dealing with school uniforms and substltutlng

another method before there has been an ultimate trlal of the

- 7 -

i s s u e s .

t h i n k the balance

convenience

ra ther

leans

towards

having an ear ly hear ing ,

t h e m a t t e r c a n

f i n a l l y d e t e r m l n e d ,

and

i n

t h e

meantlme

n o t

d i s turb ing

the

sys tem

which

been

o p e r a t i n g f o r

some

cons lde rab le pe r iod .

The

o rde r I make

is t h a t the mot ion

fo r

l n t e r locu to ry

re l lef

d ismissed

and

cos ts

a re

reserved .

I make

o rder

for

r e t u r n

o f

the

o n l y e x h i b i t .

[1980] FCA 23

15 Feb 1980