The Hospitality Group Pty Limited & Anor v Ausn Rugby Union

[2002] HCATrans 214

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S186 of 2001

B e t w e e n -

THE HOSPITALITY GROUP PTY LIMITED

First Applicant

ICM (MARKETING) PTY LIMITED

Second Applicant

and

AUSTRALIAN RUGBY UNION LIMITED

Respondent

Application for special leave to appeal

GLEESON CJ
McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 31 MAY 2002, AT 9.31 AM

Copyright in the High Court of Australia

MR R.J. ELLICOTT, QC:   Your Honours, I appear with MR W.G. MUDDLE, for the applicant.  (instructed by Hunt & Hunt)

MR J.T. GLEESON, SC:   May it please the Court, I appear with MR R.A. DICK, for the respondent.  (instructed by Freehills)

GLEESON CJ:   Yes, Mr Ellicott.

MR ELLICOTT:   Your Honours, there are four matters of principle which are lurking in this application.  One is what are the indicia for what is called a sub‑market?  It is really a market within a market.  The other is, we say, that on analysis, the evidence before the trial judge and before the Full Court established that there was a market for hospitality packages for international rugby union matches and there is much to be said for the view that the courts below are clearly wrong.

There is a line of authority which my friend relies on in the Federal Court which says that a sub‑market is only a tool for analysis.

GLEESON CJ:   Professor Brunt said that, I think, earlier on in an article ‑ ‑ ‑

MR ELLICOTT:   Yes, and that would, we say, raise a very important matter which is relevant to this case.  The other matter is the application ‑ ‑ ‑

GLEESON CJ:   The other matter, Mr Ellicott, that goes right back to the QCMA Case as I recollect it.

MR ELLICOTT:   Yes, your Honour, but it cuts across Queensland Wire which I hesitate to remind your Honour of.

McHUGH J:   We have been reminded of it for two days last week or the week before last in the Boral Case.

MR ELLICOTT:   Yes, your Honour.  Then there is the point in relation to Jones v Dunkel.  Your Honours, this was really one of those “however” judgments which all of us are used to.  We sit in court and we listen to the judge deliver an extempore judgment and we think is in favour and then all of a sudden he says “however” and that is precisely what happened here.  Your Honours, there are several points of principle which I hesitate to remind your Honours of, particularly having regard to that recent case, but one overall market may clearly contain other markets.  There can be a market for steel products and yet there can be a market for Y‑bar.  There can be market for hot beverages yet there can be a market for coffee and tea, et cetera.  Here, if there is a market for hospitality packages overall, there can be a market for hospitality packages for rugby union.

GLEESON CJ:   You say the market is a market for taking people to watch the football?

MR ELLICOTT:   I am sorry, your Honour.

GLEESON CJ:   The market is a market for taking people to watch international rugby matches?

MR ELLICOTT:   The market is a market for entertaining people.

GLEESON CJ:   Yes.

MR ELLICOTT:   And that entertainment includes rugby union but it also includes other forms of hospitality and they are well known and, of course, in the context of the World Rugby Cup, they will be very, very well known and very important in the commercial community.

Another aspect which has been acknowledged is the unique character of major organised professional sports to form the basis of a market, like college football in the United States, et cetera.  There is no reason ‑ ‑ ‑

McHUGH J:   Mr Ellicott, what do you say that, first of all, in the courts below the applicable principles concerning market definition are common ground was a question of the application of those principles to the facts of the case and the principle authority on which you now rely are Brown Shoes v United States was not even cited in any of the courts below.  This is now a new case you are seeking to construct, is it not?

MR ELLICOTT:   No, it is not, your Honour.  Your Honour, the concept of Brown Shoe is in the judgment, for instance, of Justice Deane in the BHP Case.  He talks about markets within markets, and Justice Toohey and the Chief Justice similarly.  There is nothing strange about Brown Shoe, it has been there for a long time but it did not have to be mentioned in an Australian context.  What was clear, we say, is that, yes, their Honours seem to have acknowledged the relevant principles but misapplied them.

McHUGH J:   That is not a special point, is it?

MR ELLICOTT:   I beg your Honour’s pardon?

McHUGH J:   It is not a special leave point, misapplying principle.

MR ELLICOTT:   It is, your Honour, when, as we would submit, you find here that the trial judge has found everything in our favour to establish what would be the market we contend for but yet, at the end of the day, has said “however” and applied a Jones v Dunkel point which the Full Court said was not warranted.

GLEESON CJ:   The Full Court did not apply that, did they?

MR ELLICOTT:   They did not apply that and they disagreed with the judge’s application of it and for that reason we say ‑ for instance, if I can take your Honours to the trial judge’s reasons, particularly, because we do not have time to read them all, naturally ‑ and your Honours presumably have read them.

McHUGH J:   We have read them.

GLEESON CJ:   We have read them all.

MR ELLICOTT:   If your Honours go to page 44 of the application book, line 41:

Taking all of this into consideration, there is much to be said for the view that there is no close substitute for international rugby union test match hospitality.  It is unique in its appeal to a significant number of consumers, primary –

and that is important:

and secondary.  This conclusion is assisted by considering whether a monopolist in the provision of international rugby test match hospitality packages could extract a super profit or monopoly rent, which is the other, and business end of the test of price sensitivity.  If the cross‑elasticity of demand is not high enough, and substitutability not close enough, then price competition will only be partially successful (if at all) in restraining the price the monopolist can charge.  This, of course, does not mean –

et cetera.  Now, the next paragraph:

The conclusion is open that if the ARU were able to control all international rugby union test match hospitality packages it would be able to extract a significant monopoly profit compared with that which would prevail if there were competition from other providers of international rugby test match hospitality packages.  Put another way, the existence in the market of competitors such as THG is likely to affect prices of packages.

In other words, price sensitivity.  Before this he had said there is no real price sensitivity in that wider market, that is, between hospitality packages for opera, ballet, rugby union, rugby league, and the like, and it is very doubtful whether there is a market there because people are discerning and look at other aspects.  It is not price sensitive, but here he is saying, it is.

GLEESON CJ:   What about the passage on page 110, in paragraph 60 of the reasoning of the majority, of the reasoning of the joint judgment in the Full Court?

MR ELLICOTT:   Would your Honour mind if I just finish and I will come to that immediately.

GLEESON CJ:   Right…..

MR ELLICOTT:   Yes, your Honour.

Indeed, this perception may be a significant reason for the desire of the ARU to stamp out what it calls “pirate operators”.  I have set out in the account of the facts some of the material which points in that direction, including the undertaking in the tender material by the ARU to take the very action that has been taken here against external operators.

In other words, in those two paragraphs there is a section 46 case, in our submission.  When he gets to “However, THG has called no evidence” at line 31, he goes into the Jones v Dunkel point and that is the only thing that weighed in his Honour’s mind against it, in our submission.

GLEESON CJ:   Mr Ellicott, how many of these international rugby matches are played each year in Sydney?

MR ELLICOTT:   That will depend.  I do not know there would be many more than three or four.

GLEESON CJ:   It is a fairly specialised market.

MR ELLICOTT:   It is, in that sense in numbers, but it is a very, very hotly contested set of seats that are involved, particularly now with Stadium Australia being able to have crowds of 80,000 and with the need to give people premium seats.  Of course, we have the World Cup coming up, that is next year, and there will be plenty of opportunities for hospitality packages in the World Cup.

McHUGH J:   …..itself operated in a much wider hospitality market.  I mean you sold tickets for rugby league matches, Australian rules matches, Melbourne Cup, for instance.

MR ELLICOTT:   Yes, your Honour, but that does not affect ‑ in that market we do not have people telling us that you cannot use our tickets for commercial purposes and here we are shut out now of the rugby union market, we cannot get into it, and that is the basis of our complaint and we say it is just not a single product situation.  The ARU has actually gone into the market and appointed agents to sell and those agents sell under their conditions and the ARU is able to extract whatever profit it can out of that situation.  There is no competition because it dictates the whole area.  It has chosen a market, in a sense.

That passage at page 110 that Your Honour the Chief Justice – this passage:

It is obvious that there is plainly substitutability between hospitality packages for elite (or international) rugby union matches and other events –

Now, that is in the teeth of his Honour’s finding.  His Honour found that there was no interchangeability and that ‑ ‑ ‑

GLEESON CJ:   I thought what he said was that some people who are entertained by this hospitality are particularly keen on rugby and other people who are entertained are particularly keen on being entertained.

MR ELLICOTT:   At page 43, for instance, line 38:

Furthermore, there was no statistically significant evidence that demand would be transferred to any of the four alternatives, namely –

and he names the others:

These alternatives were chosen as being likely to be close substitutes.

The evidence was all the other way and the findings of his Honour were all the other way.  At page 40, line 24, he says:

There is no reliable evidence of customers moving from event to event because of the price.

So, the passage at page 110, we say that second sentence is in the teeth of what his Honour’s finding were.  But it goes on:

The fact that some purchasers in the market might only purchase hospitality packages for international rugby union matches does not prove the existence of a separate market in hospitality packages for such matches.

We may not disagree with that:

It would be necessary to show that this was the case for a quite substantial number of purchasers of packages.  This, the evidence does not show.

Now, his Honour at page 44 at the bottom– I have just read this – says:

Taking all of this into consideration, there is much to be said for the view that there is no close substitute for international rugby union test match hospitality.  It is unique in its appeal to a significant number of consumers, primary and secondary.

And their Honours have said:

This, the evidence does not show.

And they use the expression “a quite substantial number of purchasers of packages”.  His Honour uses the expression “significant”.  And at page 22, at line 30, he says:

Indeed, it is fair to say that the evidence supports the conclusion that, whilst many people interested in rugby may also be interested in, say, horse racing . . . there is a substantial body of people with an interest in rugby to the exclusion of, or which is greater than, other sports and entertainment.  In other words, there is a substantial hard core of fans of international rugby matches.  The characteristics of many of them means that they are in the target audience for invitation to corporate hospitality.  The “demographic” of the rugby fan –

et cetera, and he describes that:

This conclusion is drawn from my consideration of much of the evidence, including the ARU internal material and the oral evidence of primary consumers –

Those primary consumers were witnesses.  They were the primary consumers of the ARU, who bought packages from them and they were people that we called to give evidence over his Honour’s initial ruling that we should not be entitled to call these people but finally allowed, I think it was four people, who gave evidence.  He has used their evidence to draw conclusions in our favour.

Your Honours, there is another passage at page 112, in the Full Court and they say:

However, in the circumstances of this case, we do not think that the references to Jones v Dunkel result in any error which assists the appellants.  We have read the evidence before his Honour.  It suffices to say that on that evidence, and without the drawing of any inference that evidence which the appellants failed to call would not have assisted their case, the appellants had not made out their case that the relevant market to be considered was a market in hospitality packages for international rugby union matches, whether that market was geographically limited to Sydney or not.  Ultimately, this was the basis of his Honour’s decision and with it on this point, we agree.

Now, with very great respect, their Honours have not given any reasons.  They have not analysed the evidence.  That passage there seems to be saying, “We agree with his Honour.”  Our attack on his Honour is that everything he had said up to the “however” was in our client’s favour and one can say that ‑ for instance, there was some evidence from a Professor Bewley.  Professor Bewley, he said at page 41, at line 30:

There is a separate market for hospitality during 1999 for the two matches . . . ARU and THG are in direct competition –

At paragraph 6.5:

will have the effect in the Hospitality Market of increasing profits . . . increasing price to the consumer and/or decreasing the availability –

Paragraph 6.7:

The ARU is exercising monopolistic power –

et cetera.

McHUGH J:   You say that in the United Brands Case, hospitality is the fruit and hospitality for rugby union is the bananas and there is a special market.

MR ELLICOTT:   Yes, and it is the same as tea or coffee, and if it is college football it is the same as college football, and if it is travel

arrangements for the World Cup Soccer as was held in that European case that Justice Gyles refers to, it is that type of case as well, and we would submit that this is an appropriate case in which to grant special leave, if your Honours please.

GLEESON CJ:   Thank you, Mr Ellicott.  Yes, Mr Gleeson.

MR GLEESON:   Your Honours, the first issue sought to be raised is the sub‑market.  We would submit that that is a red herring in the way the case was pleaded and run below.

GLEESON CJ:   The Trade Practices Act does not talk about sub‑markets, does it?

MR GLEESON:   No.

GLEESON CJ:   The question is whether there is a market and the definition of “the market”?

MR GLEESON:   Yes.  If you do not have a market you do not get to stage one.  If you have a market and you are then analysing subsequent questions such as market power, use of market power, some commentators suggest that looking back to see whether there are sub‑markets within the market might tell you something useful in that question.  But, in our submission, there is nothing in Australian law or in any suggestion from the academic commentators which would say that at the stage of market, if you have failed to prove a market within the meaning of section 4(e), you can overcome that problem by pointing to a hot spot within it and then saying that the hot spot is your criterion for liability.  Your Honours, that is all we propose to say on that.

In the bundle that we have given to the Court we have simply given some of the authorities which are all to that effect.  There is a bundle of respondent’s authorities.  The first case is ACCC v Universal Music Pty Ltd where Justice Hill, at paragraph 350, has, we submit, accurately stated the Australian law.

GLEESON CJ:   Yes, that decision in QCMA was in 1976.

MR GLEESON:   Yes.

GLEESON CJ:   And Tooth was a case about whether there was a market in beer or whether the market was wider.

MR GLEESON:   Yes, and, your Honour, the only other authorities we have in there are all to the same effect.  Justice French, in the Singapore Airlines Case at page 180, analysed Brown Shoe Case and indicated that to take the concept of sub‑market from the Clayton Act, as there used, and to substitute that for concept of market in our Act, would be in error.

GLEESON CJ:   Tooth was a good example because there was a sub‑market in bulk beer and the question was what consequence that had for the purpose of looking at market dominance in relation to beer.

MR GLEESON:   Yes.  Indeed, your Honours ‑ ‑ ‑

McHUGH J:   The same in the Singapore Case.  The trial judge’s reverse was not in the Singapore Case.  He held that the relevant market was tourists in the Maldives and he said it was much wider.

MR GLEESON:   Yes.  Indeed, your Honours, to the extent there is more recent thinking on the topic in America, at tab 3, Mr Turner, he expresses the view very bluntly that even under American law to talk about sub‑markets is, in fact, a distraction from the relevant question and he says that much of American law has got into a problem because juries are instructed on markets, sub‑markets, sub‑sub‑markets, and that really takes them away from the crucial question of substitutability at the margin.  The most recent edition of Areeda and Hovenkamp is very strongly to the same effect and urges that the concept of sub‑market be eradicated from American thinking and they cite a number of cases in the last 10 years which have taken that view in America.

McHUGH J:   I have to say, uninstructed by the evidence, I would have thought that there was a discrete market for rugby union hospitality but there are concurrent findings of fact to the opposite conclusion.

MR GLEESON:   Your Honour, Mr Ellicott has put it this morning that this is a “however” case in the sense that nothing, up until paragraph 84 and 85, pointed towards the market being broader.  That submission is in error.  If I could give one illustration of that.  If your Honours could go to page 30 of the application book, between pages 30 and 39, his Honour quoted from the affidavits of a number of people who were suppliers in the broader market and each of those persons gave affidavit evidence to the effect that they considered themselves under competitive constraint in the broader market, that is, across all hospitality packages.

Those people commenced with the IMG Corporate Hospitality Manager and he made the point fairly clearly and what is significant is that none of these witnesses were even cross‑examined on.  They were followed by Mr Mannion, at the foot of page 31, who gave very clear evidence that he perceived there to be competition in respect of both quality and price.  It then went to Mr Read who, for example, on page 33 at line 30, said that when he is “setting his ticket prices for golf”, he looks at the prices for other hospitality, for “golf, rugby, AFL, tennis, grand prix”.  It then went to ‑ ‑ ‑

McHUGH J:   Yes, but despite the fact that there may be some interchangeability, it is hard to escape the conclusion that the ARU, by controlling all international rugby union test match hospitality packages, must be able to extract some degree of monopoly profit.  I mean it is just common sense.

MR GLEESON:   Your Honour, that is where, as I am saying, there is both evidence here and there are concurrent findings of fact of both courts applying the correct principle and the essential question is these are not tickets being sold for $50 or $100, these are packages being sold for $1,000 a head.  If the price of that goes up or if the quality goes down, and QCMA says you must look at substitutability in terms of price and quality, if the price goes up or the quality goes down, companies who are spending $1,000 a head are not going to spend that money year after year in the medium term, which is what one looks to in the market, at the rugby.  They will start to say, “Can I get better value for my entertainment dollar by spending $1,000 a head on the AFL, on the tennis, on the cricket?”  That is the proposition, of looking at it in the medium term, looking at price and quality.  If the Wallabies lose 70‑nil, or 50‑nil or even 30‑nil, and they start doing that repeatedly, the attraction of spending $1,000 a head on taking 10 people to a table there, starts to diminish, and what this evidence showed was ‑ ‑ ‑

McHUGH J:   Yes, but that is not necessarily because of competition from other forms of hospitality, it is because they are selling an inferior product.  Assume the opposite hypothesis, that the standard of rugby remains the same, or high, why cannot they extract significant monopoly profits in those circumstances?

MR GLEESON:   Because on the findings of the court below the appellant had failed to establish that there were a sufficient number of buyers of this product, companies which buy this product, who were determined that they had to have rugby corporate hospitality so significantly that they would continue to spend their dollar on the rugby corporate hospitality notwithstanding either price increases or quality decreases over the medium term.

What the Full Court did was, applying the correct principles. to go back and review the entirety of the evidence that was before the trial judge.  The appeal went for some days and they gave Mr Palmer, who appeared for THG on the appeal, the opportunity to take them back to every piece of evidence on the market, which they did at great length, and they reviewed all that.  For instance, in the paragraph at page 110 which your Honour the Chief Justice referred to, one of the things that the Full Court then goes on to deal with in paragraph 61 is some of this evidence from the suppliers in the market that I have taken your Honours to, that is, the IMG Manager and then Mr Mannion and there are further examples in the trial judge’s decision.  So, it was based on that entire review of the evidence and applying the correct principle, that the Full Court affirmed the decision of fact of the trial judge.

GLEESON CJ:   That evidence at page 33, line 32, in the subparagraph 9, is interesting.  What is interesting about it is what is not there, I mean, what kind of sporting events are not there?

MR GLEESON:   That is a group that he, from his golf perspective, thinks that people who will pay big money for the golf package might be also keen to entertain clients for some of these others matters.

GLEESON CJ:   Not including rugby league.

MR GLEESON:   That seems to be so over the page, your Honour, although ‑ ‑ ‑

GLEESON CJ:   Or soccer.

MR GLEESON:   The perceptions differ slightly.  On page 34, Mr Donaldson from SOCOG, when he was setting his SOCOG prices, he would look at the concert events such as the Three Tenors and Barbra Streisand as being relevantly competitive matters, including the rugby as well.  One sees further over on page 36 his competitive events.  He would look at some in Australia, some outside Australia.  He would put “New Years Eve at the Opera House” as something to consider and on page 37, at line 44, he looks at the “Bledisloe Cup”.  He does not look at the league.  He does look at the “Formula One Grand Prix”.  He looks at the “Australian Open Tennis”.

GLEESON CJ:   As I understand it, the Jones v Dunkel point that impressed Justice Gyles was that the applicants did not give any evidence of what they look at when they set their prices.

MR GLEESON:   Yes.  If the applicants’ case was correct, it had this rather extraordinary consequence that the applicant, being probably one of the largest suppliers of corporate hospitality across the entire world, is operating in 20 or 30 or 40 different markets.  If it were correct, the applicants could have come forward and said this, “When I set my rugby prices, unlike all of these people here, I look only at what the other rugby corporate hospitality people are charging.  I do not look at what people are charging for golf, including myself.  I do not look at what people are charging for the league or the tennis, including myself.”  Now, his Honour, we would submit, viewing as an onus matter, quite properly said, “Is it a plausible case to bring forward, to suggest that THG operates in 25 or 30 different markets every day of the week?  Am I satisfied of that?  No, I am not satisfied of that.”  Looking at the evidence called on both sides and looking at the fact that that evidence, which really should have been called to counter this evidence that I am going to at pages 30 to 39, because these are suppliers in the market saying, “We do look at competition across the broader market.” 

Now, THG could have come forward and said, “Certainly, in our case, that is not true.  We look just at rugby, today.  We look just at tennis, tomorrow.”  They did not call that evidence and we would submit that in assessing the plausibility of this case his Honour was not in error in the end in saying, “I do not have evidence from THG which answers what Mr Mannion, Mr Read, the man from IMG, Mr Donaldson, and the like, have put before me.”

GLEESON CJ:   What did the Full Court say was wrong about that?

MR GLEESON:   The Full Court said that certainly, so far as concerned THG’s officers, they were people for whom a Jones v Dunkel inference might be available in the appropriate case.  They were people who you could expect to call.  They thought that when it got to the stage of THG’s customers there may be a question whether they are people who you should regard as being sufficiently closely in the camp.  But in relation to the officers, they then said, “We are not exactly quite sure what is the inference that could be drawn more comfortably in the absence of the officers.”  Once one sees that not only do they bear the onus but we had led evidence from other suppliers in the broader market.

GLEESON CJ:   Who are THG’s competitors.

MR GLEESON:   Who are THG’s competitors saying, “We do not have blinkers on, we look at all of corporate hospitality, the whole time we are trying to set a price and a quality which will give us an edge.”

McHUGH J:   Yes, but the evidenced itself shows the wide variety of pricing depending upon the quality of the spectacle.  It seems to me the corollary of your case was that the spectacle is of rather minor importance and it is the hospitality that is central.  But is it not easy, is it, to compare the Wimbledon or the US Open or the US Masters or a National Basketball Association play off with a rugby league or a rugby union match?

MR GLEESON:   Your Honour, we have never said and we do not say that the quality of the spectacle is unimportant.  Corporate hospitality is a bundled product.  It depends upon having a top quality spectacle, whether it is Barbra Streisand, the Three Tenors, the AFL grand final, the rugby league, the grand prix, plus entertainment ‑ ‑ ‑

GLEESON CJ:   The plus is important because, typically, these spectacles can be watched on television at home so anybody whose principal concern is to actually watch the Three Tenors can watch them, often much more comfortably, from home than at the spectacle.

MR GLEESON:   Yes.

McHUGH J:   But without the atmosphere.

MR GLEESON:   Then, for $1,000, you need to get some atmosphere.

McHUGH J:   Or plenty to drink and eat.

GLEESON CJ:   You are looking for some “bang” for your hospitality buck.

MR GLEESON:   Exactly, and part of the case we put when pointing to the broader market was to say there are other ways of spending the hospitality dollar.  They do not all involve inviting people to a table and seeing the event.  Indeed, one alternative put was that people could buy top quality tickets to the rugby themselves and organise their own dinner beforehand and that would be another option for spending the entertainment dollar.  So, even at the rugby, there are other ways of doing it than having to deal with one of these organised packages.

Your Honour, we accept that that the quality of the event and its saleability depends on the spectacle plus the whole of the package and these witnesses were saying, very clearly, that “When we price that product we do not put blinkers on which makes us think the only people we have to compete against are the other rugby suppliers.”  That is the sort of evidence which THG was in the very best position to contradict and chose not to.

McHUGH J:   If you face so much competition from these other spectacles, why is it that you insist on monopoly rights in respect of your own spectacle?  Why not open it up to a little competition?  Since you say you are already under competition, why not some internal competition?

MR GLEESON:   If the market is the broader market that we allege, your Honour, then the law entitles and encourages the Australian Rugby Union to be as competitive as it can be in the broader market.  That means

putting on the very best spectacle and offering the best corporate hospitality to try and draw people to buying that hospitality.

One of the things in the evidence from the IMG man was that he could not sell all of his packages to the centenary test in 1999 against England which, one would have thought, was a reasonable quality event.

McHUGH J:   Had you had some competition within rugby union hospitality, you might have to reduce your prices to match your competitors and to match THG.

MR GLEESON:   There is already competition.  One of the things Mr Ellicott put to you was that they had been excluded from this market.  The evidence showed that in 1999 the ARU, in respect of off‑site hospitality, conducted a tender process and allowed in a number of tenderers, being the best tenderers.  THG chose not to even tender.  That is an illustration, your Honour, that if one is looking at the subsequent questions in the case ‑ which none of the courts ever had to decide ‑ of exercise of power, that there are arguments available there.  But, ultimately, if the market is the broader market, the law permits and encourages the ARU to compete as vigorously as it can in the broader market.  If Telstra were in an international market for telecommunications it would be encouraged to do everything it can to make as much profit as it can to compete against British Telecom and other companies.

Those are our submissions, your Honour.

GLEESON CJ:   Thank you, Mr Gleeson.  Yes, Mr Ellicott.

MR ELLICOTT:   Your Honour, in relation to this issue about market within a market, we would say that there is a question of principle as to where you draw the line between what is called a sub‑market in those cases ‑ ‑ ‑

GLEESON CJ:   Only because the important question is what is a market?

MR ELLICOTT:   Yes, that is right.  But simply to make a statement, “It is a tool for economic analysis” does not tell you very much and that is really what my friend is saying here, that all that we have is a tool for economic analysis.  When you have a monopolist and you have a sizeable number of primary consumers, referred to as significant, who would buy these hospitality packages ‑ ‑ ‑

GLEESON CJ:   To say that you have a monopolist begs the question, does it not?  That is the issue in the case.

MR ELLICOTT:   Yes, but if you have somebody like the ARU with considerable power in relation to hospitality packages, which is reflected through their ticketing system, then that is, in a way, a useful way of marking out the market.  That is to say, they have, in a sense, defined it, because nobody else does it and that is why, in a sense, this is a more confining situation than, say, tennis, or whatever it may be, or at the opera or the ballet.  It is that monopoly power which, in a sense, when you see it you think, “There is a market.”  It does not mean there is but it is a pretty clear indicia to their being there.

My friend referred to the calling of these witnesses but what his Honour did at pages 39 and 40 was, having heard all those witnesses and considered their evidence, he concludes – this is people who looked at all the events ‑ at page 40, paragraph 7:

There is no reliable evidence of customers moving from event to event because of the price.

Price sensitivity, I do not need to tell your Honours how important that is to the definition of market.

So far as these other tenderers are concerned, at page 16, at line 32:

The Agent is appointed a non‑exclusive manager and agent to provide services in connection with Off‑site Hospitality –

McHUGH J:   Mr Ellicott, the problem is I cannot see any point of principle in this case, it is just a question of fact or judgment as to whether or not you have a wider market or a discrete market for rugby union hospitality.

MR ELLICOTT:   Your Honour, there must be a failure, we would submit, on the part of the Full Court to give a reasoned judgment as to why it came to the conclusion that it did, and it did not do that.

GLEESON CJ:   What was wrong with Justice Gyles attaching some significance to the fact that all these other people came along and gave evidence about how they set their prices in terms of how they identified their competition, and your client did not?

MR ELLICOTT:   Simply because those people were the ones who were likely to give the evidence against us, the others who had, in fact, been called, and we called some of their primary consumers and they were likely to give evidence against us.  They got a free kick in cross‑examination of their own primary consumers.  So, when that is weighed against the fact,

also, that his Honour refused us leave to call a substantial number of these people, it does not stand up as a very forceful proposition to hold against us.

So far as the question of Jones v Dunkel is concerned, it is simply is not a case where we were called upon to refute anything ‑ Schellenberg, your Honours’ judgment in that case ‑ and therefore we would say that his Honour misconceived Jones v Dunkel.  On the question of it just being a question of fact, we would submit that there is a lot to be said for the view, on the face of it, that the judges below and above were clearly wrong, and that that is something that would cause this Court to have concern but also the need because there was obviously a failure on the part of the Full Court to discern the essential need for price sensitivity, and secondly, their failure in the circumstances to understand that his Honour had found that there were, indeed, a significant number of people, or primary consumers, who would be concerned to buy hospitality packages for rugby union international test matches.

GLEESON CJ:   Thank you, Mr Ellicott.

The decisions at first instance and in the Full Court of the Federal Court on the primary question that the applicant seeks to argue in this case turned on a matter of fact and degree relating to market definition for the purposes of the Trade Practice Act.  The case does not raise any question of principle suitable for a grant of special leave and we are not persuaded that the interests of justice require such a grant.  The application is refused with costs.

AT 10.15 AM THE MATTER WAS CONCLUDED