Trade Practices Commission v Email Ltd

Re: TRADE PRACTICES COMMISSION
And: EMAIL LIMITED and ANOTHER (1980) 43 FLR 383
No. G92 of 1978
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

GENERAL DIVISION
Lockhart J.(1)

CATCHWORDS

Trade Practices - Arrangement or understanding in restraint of trade - having effect of substantially lessening competition - whether arrangement or understanding may be inferred from circumstantial evidence only - whether mutual exchange of price lists between competitors constitutes communication necessary to give rise to the meeting of minds essential to an arrangement or understanding - whether necessary to establish reciprocity of obligations for arrangement or understanding - conduct of competitors in exchanging price lists and tendering at same prices explicable by market situation and commercial reasons, and insufficient to establish arrangement or understanding.

Trade Practices Act 1974 (Cth.) ss. 45 (2) (b) (ii); 76; 80.

Trade Practices - Arrangement or understanding in restraint of trade - Circumstantial evidence - Whether arrangement or understanding may be inferred from circumstantial evidence only - Trade Practices Act 1974 (Cth), ss. 45 (2) (b), 76, 80.

HEADNOTE

The Trade Practices Commission commenced proceedings against Email Ltd. ("Email") and Warburton Franki (Sydney) Pty. Ltd. ("Warburton Franki") to recover pecuniary penalties pursuant to s. 76 of the Trade Practices Act 1974 -1977 ("the Act") and for injunctions. Email and Warburton Franki manufactured and supplied electricity meters. Until mid-1978, when Warburton Franki ceased such business, they were the only manufacturers in Australia of these products. From 1968 to 1978 Email's market share fluctuated between sixty and seventy per cent. About ninety-eight per cent of meters were sold to electricity supply authorities. The electricity supply authorities required that there be more than one manufacturer of such meters.

Email and Warburton Franki issued identical price lists, submitted identical tenders, adopted the same price variation clause, sent to each other their respective price lists, forwarded to each other new price lists immediately they changed prices or introduced any new meter or component, and tendered in accordance with their respective price lists.

The Commission contended firstly that there was an arrangement or understanding between the respondents on a number of matters which contravened s. 45 (2) (b) (ii) of the Act and secondly, that the forwarding of price lists from one party to the other was an arrangement which itself contravened s. 45 of the Act.

Held: (1) If an agreement or understanding in restraint of trade is to be inferred from circumstantial evidence, that evidence must lead to the inference that the parties were in agreement as to what was to be done and were not just hoping what might be done or might occur.

Schweppes Ltd. v. Registrar of Restrictive Trading Agreements, (1965) 1 WLR 157; Re Crane Makers' Association's Agreement, (1965) 1 WLR 917; Re British Basic Slag Ltd.'s Agreements, (1963) 1 WLR 727, referred to.

(2) When a credible explanation is given by a respondent, such explanation may negate any inference of an arrangement or understanding.

(3) Each item of circumstantial evidence…