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Trade Practices Commission v Axive Pty Ltd

Trade Practices Commission v Axive Pty Ltd

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Case Copied 15 December 1994 49 min read

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COURT OF AUS-

UTH W-

IS-

No. NG953 of 1993

BETWEEN: p

Applicant

M D

First Respondent

CORAM I	Sheppard J
PLACE :	Sydney

DATE

15 December 1994

lK@-&mU~onour: These proceedings were commenced on 3 December

1993. On that day the Court granted the Commission leave to eerve short notice of an application for an interlocutory injunction for 8 December 1993. On 8 December 1993 the Court by consent ordered that, until further order, the respondents be restrained from directly or indirectly implementing, observing, performing or otherwise giving effect to the contract, arrangement or understanding specified in particulars to paras 7 and 8 of the statement of claim. The transaction referred to was alleged to have been entered into at a meeting which took place on 8 October 1993 at the Sydney Markets Industries Club. It was said to have been confirmed at a meeting held at the Epping RSL Club on 9 November 1993. It was alleged that the respondents, other than the eighteenth

and nineteenth respondents, agreed that, as from 8 October 1993, there would be a minimum price at which they would sell ice being a base price of $1.00 for a 3.5 kilogram bag, $1.50 for a 5 kilogram bag and $3.00 for a 10 kilogram bag. It was alleged that the eighteenth and nineteenth respondents agreed that the minimum price would apply from 9 November 1993. The arrangement was to apply to "all new sites".

There are twenty respondents. They are all companies or persons, or employees of companies, engaged in the manufacture and sale of bulk and packaged ice. The particular activity in question is the distribution of ice in plastic bags to retail outlets, usually motor service stations and bottle shops. Frequently, particularly in the case of service stations, the supplier places at the retail outlet a refrigeration cabinet to which ice is from time to time delivered. In some cases it is said to be delivered "on consignment", but whether this is done or not, the distributor receives an agreed price per bag from the operator of the retail outlet. The price charged the customer, i.e. the consumer, is a matter for the operator of that outlet. It is no concern of the distributor. The evidence does not deal with the matter directly, but it seems unlikely that reductions in the price charged outlets for ice supplied to them would usually be passed on to the consumer.

A further matter to be noted is that packaged ice is sold at outlets whose principal business is the selling of other commodities, e.g. petrol or liquor. Customers of service

stations or bottle shops would, in many cases, be attracted to particular service stations or bottle shops because of discounted petrol or liquor. On the other hand, the availability of ice on the premises is more likely to be regarded as a convenience. It seems unlikely that many people would go searching for the cheapest ice…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1994] FCA 983
Decision Date: 15 Dec 1994

CaseChat Overview and Summary

This case involved proceedings brought by the Trade Practices Commission against various companies and individuals for breaching the Trade Practices Act 1974. The companies and individuals were alleged to have entered into an agreement to fix minimum prices for the sale of bagged ice, which was in contravention of section 45 of the Act. The case involved twenty respondents, but the judgment focuses on the cases brought against Axive, Mr Haydon, Abbco, Mr Scott, Lidcombe Ice, and Mr and Mrs Tite.

The key legal issues the court had to decide were the appropriate penalties to be imposed on the respondents for their breaches of the Act and whether a permanent injunction should be granted against certain respondents. The court considered various factors in determining the penalties, including the size of the companies, the degree of market power, the deliberateness and extent of the violation, and the degree of co-operation with enforcement authorities.

The court concluded that Axive should be fined $2,500 and Mr Haydon $750. Abbco and Lidcombe Ice were fined $7,500 and $4,000 respectively, and Mr Scott was fined $1,500. The court imposed nominal penalties of $10 on Mr and Mrs Tite, taking into account the financial viability of their businesses and Mr Tite's health issues.

The court also ordered a permanent injunction against Abbco, Lidcombe Ice, and Mr Scott to mark the illegality of the arrangement entered into. The respondents were ordered to pay the Commission's costs of the proceedings, subject to certain qualifications.

Orders