Trade Practices Commission v Queensland Aggregates Pty Ltd

[1981] FCA 132

Re: TRADE PRACTICES COMMISSION
And: QUEENSLAND AGGREGATES PTY. LIMITED and BRIAN WHITE
No. Qld. G 3 of 1981
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Sheppard J.

CATCHWORDS

Trade Practices - exclusive dealing - offer to provide work if haulage contractor acquired truck from another company - whether offer of work "services" for purposes of Trade Practices Act 1974 - ss.4, 47(1), (6) and (13) thereof.

HEARING

SYDNEY

#DATE 14:8:1981

ORDER

1. The point of law which was separately tried be decided adversely to the respondents.

2. The respondents pay the applicant's costs of the argument thereof.

JUDGE1

This is the determination of a point of law the argument upon which was heard separately as the result of an order made by me pursuant to Order 29 Rule 2 of the Rules. The Commission is suing the respondents for penalties and an injunction in relation to a number of alleged breaches of s.47 of the Trade Practices Act 1974. The section prohibits exclusive dealing. The scheme of it is to proscribe in sub-section (1) the practice of exclusive dealing and then in succeeding sub-sections to provide for what is to constitute that conduct. The sub-section in question is sub-section (6) which provides:

"A corporation also engages in the practice of exclusive dealing if the corporation -

(a) supplies, or offers to supply, goods or services;

(b) supplies, or offers to supply, goods or services at a particular price; or

(c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation,

on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services or, if that person is a body corporate, a body corporate related to that body corporate will acquire goods or services of a particular kind or description directly or indirectly from another person."

The amended statement of claim in paragraphs 4 to 14 inclusive alleges the making by the first respondent of a number of offers each of which is said to constitute exclusive dealing and thus a contravention of s.47. Each paragraph is in a form similar to the others, the only difference being that the offers were made at different times to different persons. In order that the point in question may be understood it is sufficient, therefore, to refer only to one paragraph. For this purpose I have selected paragraph 4 and the particulars appended to it. It is as follows:

"4. In or about May, 1979 the first respondent offered to supply work as a cartage contractor to Gordon Ashburn Ahlquist on condition that he acquire a Ford Louisville truck from Denmac Ford Pty Ltd.

PARTICULARS

The said offer was made at Brisbane in the State of Queensland to the said Gordon Ashburn Ahlquist orally by the second respondent as the servant or agent on behalf of the first respondent."

Additional particulars have been filed. It is relevant only to refer to paragraph 1(a) of those particulars which is as follows:

"1. As to paragraphs 4 to 14 inclusive of the Amended Statement of Claim, particulars of the full terms of each offer therein referred to are as follows:-

(a) Each offer was of the opportunity to earn income from First Respondent in return for work to be performed by the offeree or offerees as cartage contractor for the First Respondent, on condition that the offeree or offerees acquired a Ford Louisville truck from Denmac Ford Pty Ltd (or in the case of one Lachlan Matthew Hogan or alternatively he and Jane Joanna Hogan a Ford truck from Denmac Ford Pty Ltd)."

Paragraph 2(d) of the first respondent's defence says that the first respondent objects in point of law to paragraphs of the amended statement of claim, including paragraph 4, on the ground that the conduct alleged in paragraphs 4 to 14 inclusive thereof would not fall within any of the descriptions in s.47(6) of the Act, "since offering to engage and pay a supplier of services does not fulfil any of such descriptions".

The second respondent has raised a similar point in his defence, the detail of which need not be referred to.

The essence of the respondents' submissions is that the conduct which the Commission alleges is not within the section because this is not a case where the first respondent offered to supply services; rather it is a case where, to take the example provided by paragraph 4 of the amended statement of claim, Mr. Ahlquist offered to supply services to the first respondent.

The competing submissions of the parties cannot be understood without reference to the definitions of "services" and "supply" in s.4 of the Act or without reference to sub-section (13) of s.47. Paragraph (a) of that sub-section provides that a reference to a condition shall be read as a reference to any condition, "whether direct or indirect and whether having legal or equitable force or not".

"Services" is defined in s.4 of the Act as follows:

"'services' includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under -

(a) a contract for or in relation to -

(i) the performance of work (including work of a professional nature), whether with or without the supply of goods;

(ii) the provision of, or of the use or enjoyment of facilities for, amusement, entertainment recreation or instruction; or

(iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction;

"(b) a contract of insurance;

(c) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or

(d) any contract for or in relation to the lending of moneys,

but does not include rights or benefits being the supply of goods or the performance of work under a contract of service"

It is to be observed that although the definition is not an exhaustive one that circumstance is of no relevance in the present case.

"Supply" is defined in s.4 to include, when used in relation to services, "provide, grant or confer".

The transaction which the Commission alleges in the present case is a simple one. It may be summarised as one in which the first respondent offered work as a cartage contractor to Mr. Ahlquist on condition that he acquire a Ford truck from Denmac Ford Pty. Limited. The Commission alleges that the offer to supply Mr. Ahlquist with work is an offer to supply him with services within the meaning of the Act. It submits that the offer need not be one intended, if eventually accepted, to create a contractual relationship although it may have been of this kind. That is not a submission with which I have dealt in determining the point at issue. I have assumed that the offer may be one the acceptance of which would not result in a binding contract. That assumption may not prove to be correct. However, I have proceeded as I have because both parties asked me to do so, saying that the point might or might not arise depending on how the evidence in the case falls out. I should add that I have not given any attention either to the significance of the word "will" in s.47(6). That word was the subject of discussion and decision by the majority in S.W.B. Family Credit Union Limited v. Parramatta Tourist Services Pty. Limited (1980) 32 A.L.R. 365. That was not the subject of any submission by counsel and its significance is not relevant to the outcome of the point here in question.

In ordinary language a person who performs work for another is performing a service for him. In that sense Mr. Ahlquist, if he were given work by the first respondent, would be performing a service for it. In return for that service he would be paid money. The first respondent would not be performing a service for Mr. Ahlquist.

But the matter must be approached with the definition of "services" in mind. The fact that the first respondent would not in the circumstances of this case be providing a service in the ordinary sense of that term will not avail it if it is providing, for example, a benefit which is to be regarded as a service for the purposes of the definition.

If one turns to the terms of the definition which I have earlier set out and has regard only to the word "benefits" and to the circumstance that these will comprise "services" if they are provided, granted or conferred in trade or commerce the Commission's approach to the problem can be understood. It submits that the first respondent offered to provide (from the definition of "supply") a benefit that was to be provided in trade or commerce on condition that Mr. Ahlquist to whom the first respondent offered to provide the benefit would acquire a truck from Denmac Ford Pty. Limited. The benefit which the first respondent was said to be providing - and this is the essence of the matter - was work for Mr. Ahlquist when he acquired the truck. In terms of the particulars earlier set out that allegation was further refined in the Commission's allegation that each offer was of the opportunity to earn income from the first respondent in return for work to be performed by the cartage contractors including Mr. Ahlquist. The word "work" is defined in the Concise Exford Dictionary to mean, inter alia, employment, especially the opportunity of earning money by labour. It is in that sense that the Commission has used the word "work" in the particulars furnished as part of the statement of claim.

One of the attacks made by counsel for the first respondent upon that approach to the problem was to say that once the benefit was said to be the opportunity to earn income from the first respondent in return for work to be performed by the cartage contractors, no more was involved than the opportunity to receive payments of money. This was said to be outside the section; see my judgment in the S.W.B. Family Credit Union case 32 A.L.R. at pp.383-384. I am of opinion that that submission should be rejected because there is more involved in the provision of work or the opportunity to earn income from work than a mere payment of money. The benefit is not the payment or payments of money which will be made but the opportunity to carry out the work which is to be provided. The payment of money which is to come as the result of the exercise of that opportunity is but a consequence of the availability of the work and the undertaking of it by the cartage contractors.

It remains to consider whether, notwithstanding the width of the definition of "services", there is to be perceived a legislative intention to limit its meaning, where parties are in a relationship pursuant to which one provides work for the other, to those benefits which are conferred on the party for whom the work is done, in this case the first respondent. In my opinion there is nothing in the general part of the definition to warrant the conclusion that there is any such limitation. "Benefit" is a word of wide import. A benefit could be conferred by a person performing work or upon such a person.

Is there then anything in the provisions of paragraph (a) of the definition which sheds light on the matter? Sub-paragraph (i) specifically includes benefits that are provided, granted or conferred under a contract for or in relation to the performance of work whether with or without the supply of goods. This provision, which is not to limit the generality of the principal part of the definition, does seem to envisage a benefit provided as a result of work being done under a contract for another pursuant to which goods as well as work may be provided. But the critical words are, "a contract for or in relation to the performance of work". Those words do not suggest to me that there could not be, within the meaning of the section, a benefit conferred pursuant to such a contract by the party for whom the work is done as well as by the party who carries out the work. Be that as it may, the later provisions of the definition are clearly made subsidiary to the earlier more general provisions and cannot control the meaning which those provisions have.

I have also had regard to the closing words of the definition which exclude rights or benefits being the supply of goods or the performance of work under a contract of service. I have given no full consideration to the significance of those words. All I say is that they have no relevance to the circumstances of this case and thus do not here operate to cut down the effect of the general part of the definition.

For the reasons I have given the point of law which has been argued is decided adversely to the respondents. I order that they bear the costs of the argument.