Traztand Pty Ltd v Bousfield, Ron

[1984] FCA 339

Re: TRAZTAND PTY LIMITED
And: RON BOUSFIELD; RICHARD HYDE; WILLIAM KAYES
No. 301 of 1984
Trade Practices
(1984) ATPR para 40 - 497 / 56 ALR 188

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
St. John J.

CATCHWORDS

Trade Practices - secondary boycott Section 45D - whether servants or agents of corporation acting within scope of their authority are liable when they cause that corporation to cease trading with the applicant.

TRADE PRACTICES ACT 1974 Section 45D

HEARING

SYDNEY

#DATE 23:10:1984

ORDER

1. The application is dismissed.

2. The applicant to pay the respondents' costs.

3. The orders of Northrop, J. made on 5 September 1984

are discharged.

4. The applicant to pay costs as reserved in the

interlocutory motion before Northrop, J.

5. Order 3 above discharging orders made by Northrop, J.

is suspended for a period of twenty-one (21) days after publication of reasons for dismissing the application.

JUDGE1

On the 4 October 1984 I dismissed the application of the applicant company and made consequential orders and indicated that I would later give reasons for judgment.

1. The applicant company, Traztand Pty. Limited, sought the following orders against the respondent:-
   
   

"1) An order that the respondents are in breach of Section 45D of the Trade Practices Act.

2) An order that the respondents have wrongfully and maliciously conspired and combined amoungst (sic)themselves to injure the Applicant in its business.

3) An order that the respondents wrongfully and with intent to injure the Applicant induced the State Rail Authority, Christine Watkins and Rocco Marando to break their respective contracts with the Applicant and to refuse to perform or further perform same.

4) An order that the respondents have maliciously and wrongfully and with intent to injure the Applicant by threats of unlawful means intimidated the State Rail Authoroity (sic), Christine Watkins and Rocco Marando to break their contracts with the Applicant and to cease to deal with the Applicant.

5) An order that the respondents wrongfully and intentionally caused loss to the Applicant by unlawful means.

6) An order restraining the respondents from:-

(a) engaging in the conduct and activities referred to in paragraphs (1-5);

(b) from preventing the Applicant receiving authorisation from the Government (sic) Insurance Office to carry out repair work.

7) An order that the respondents lift and remove all bans against the Applicant."

1. The application was based upon an alleged breach of S.45D of the Trade Practices Act 1974 ("the Act"), the relevant words of which in sub-section (1) of S.45D are as follows:-
   
   

"Subject to this section, a person shall not, in concert with a second person, engage in conduct that hinders or prevents ... the acquisition of ... services by a third person from a fourth person ... where --

(a) ...

(ii) the conduct is engaged in for the purpose, and would have or be likely to have the effect, of causing -

(A) substantial loss or damage to the business of the fourth person;

..."

Also relevant is sub-section (2) of that Section which provides that, for the purposes of the Section, a person shall be deemed to be engaged in conduct for a purpose mentioned in that sub-section if he engages in that conduct for purposes that include that purpose.

1. The three respondents were, at the relevant time, employees of the Government Insurance Office of N.S.W. ("the G.I.O."), a statutory corporation whose business is insurance in various fields, including insurance against loss of or damage to motor vehicles. The applicant company carried on business as a panel beater and motor repairer, and the predecessors of the applicant company had registered a business name, Westfield Auto Body Repairs under which they traded.

2. Some time in 1983, the State Rail Authority of N.S.W. ("the S.R.A.") advertised for private firms to be included as contractors to repair their motor vehicles and transport equipment. The two partners who were then registered as Westfield Auto Body Repairs, namely Mr. Mittiga (who is now and was at the relevant time a director of the applicant company) and Mr. Spasojevic answered that invitation by indicating the amount per hour, namely twelve dollars ($12), that they would charge for motor body work. As a result they were listed as contractors under the category "panel beating, automotive painting and general body repairs" and thereafter, the S.R.A. had that type of repair done by that company and, included in the repairs done to its vehicles, was damage caused by accident against which the S.R.A. was insured with the G.I.O. That insurance work was charged for at a rate of eighteen or nineteen dollars ($18 or $19) per hour.

3. The G.I.O. standard motor vehicle policy gave the insurer the option of reinstating the vehicle by entering into a contract with a motor repairer for that purpose. I accept the evidence that it was the general practice to satisfy the insured's claim under the policy by this method. The procedure was that the insured would take the damaged vehicle to a motor repairer, a quotation to carry out the repairs would be prepared, and an assessor from the G.I.O. would inspect the vehicle and, if approved, accept the quote. The work would be done, the insured would be asked to sign a clearance and the motor body repairer would invoice the G.I.O. direct and would be paid directly by the latter. The same practice was applied to all insured vehicles including accident damage to S.R.A. vehicles.

4. In May 1984 a vehicle, owned by a Mr. Belmonte and insured by the G.I.O., had been damaged in a motor car accident and repaired by the applicant company pursuant to a claim made against the insurer. The applicant company's quotation for the work included the provision and installation of a new axle. The new axle was not in fact installed, but was charged for and the vehicle re-delivered to Mr. Belmonte with damage to either the axle or the differential housing and whilst the vehicle was being driven, the wheel to which the relevant axle should have been connected came off, in circumstances that could have caused serious damage to the vehicle or to persons. Evidence was lead as to the circumstances in which the omission to fit the new axle occurred, but I do not find it necessary to make specific findings as to who was responsible, but it is notable that the foreman apparently in charge of the repair job was still employed by the applicant company and was not called to give evidence.

5. At the time of this incident, the respondent Mr. Bousfield was Chief Assessor in the Motor Vehicle Section of the G.I.O.; Mr. Hyde was a senior assessor of the G.I.O. in the Parramatta area; and the respondent Mr. Kayes was Acting Motor Vehicle Manager of the G.I.O. in Sydney. The G.I.O. and other insurers in this State have a practice of what has been termed "suspending" motor repairers whose workmanship has been found to be not up to standard and, as a result of what occurred in relation to the repair of Mr. Belmonte's vehicle, the G.I.O. suspended Westfield Auto Body Repairs. All three respondents had a part to play in the making of or maintaining that decision. The suspension fixed upon was a period of six months and a lot of evidence has been devoted to the decision-making process and the applicant company's request for a review of the decision and the ultimate refusal of such request. All respondents were cross-examined as to their purpose or purposes in imposing the suspension to the extent that it became the central factual issues in the case. Counsel for the applicant company submitted that, because the G.I.O. had produced documentary evidence of the policy of suspension, that the three respondents were acting without authority. I find as a fact that, in deciding upon suspension, all three respondents were acting in accordance with a practice which was long established and certainly within the scope of their authority. As to the suggestion that the suspension was imposed in order to cause economic hardship to the applicant company, I am satisfied that that was not the purpose of any of the respondents and I doubt whether they considered at all the economic consequences of their action to the applicant in that way. All three respondents had a duty to ensure that repairs were properly carried out and their motivation, as stated in evidence, was, to summarise it in general terms, to promote efficiency.

6. After the Belmonte repair work and the incident of the wheel coming off, the S.R.A. were notified by telephone that the G.I.O. would not order work from the applicant company where that work was the subject of an insurance claim. There is some evidence from Mr. Best, an insurance clerk with S.R.A., to the effect that, in that telephone call, the S.R.A. was advised not to give any work to the applicant company, but the following letter from the G.I.O. makes it clear that all that the G.I.O. was concerned with was insurance work. The relevant part of that letter is:-
   
   

"...

The G.I.O. is not prepared to accept quotations from this firm until further notice.

..."

1. As well as repairing accident damaged vehicles owned by the S.R.A., the applicant company also did repairs within the category for which they had been listed as contractors in maintaining vehicles and which was generally referred to as maintenance work. In addition, when accident damaged vehicles were being repaired, some mechanical repairs were carried out, outside the insurance cover for the S.R.A. in order "to save downtime", even though the applicant company was not listed as a contractor for mechanical repairs by the S.R.A. After the suspension began, maintenance work was still done for the S.R.A. by the applicant company, but this represented only a very small percentage of work when compared with the amount of insurance work done on S.R.A. vehicles.

2. Reverting to the terms of S.45D of the Act, counsel for the applicant submitted that the three respondents acted in concert and identified the applicant company as the fourth person mentioned in that Section. The respondents were alleged to be the first and second persons and the third persons were alleged to be the S.R.A., two named private persons whose vehicles the G.I.O. refused to reinstate by having repairs done by the applicant company, and the G.I.O. itself. As to the case based upon the S.R.A. being one of the third persons, I find as a fact that, in respect to insurance work, the applicant company did not supply services to the S.R.A. but supplied them to the G.I.O. As to the case based upon the G.I.O. being one of the third persons, that statutory body can only act through its servants and agents and acting as they did in relation to the applicant company, the three respondents were acting on behalf of the G.I.O. and were not acting on their own behalf. Counsel for the applicant's reliance upon Said v. Butt (1920) 3 KB 497 to assert the contrary is ill-conceived. If servants or agents of a corporation, acting within the scope of their authority, together cause that corporation to cease trading with another person or corporation, S.45D does not afford that other person or other corporation a cause of action against the servants or agents. As to the two named private persons who were insured with the G.I.O., the same principles apply.

3. I am of the opinion that it was not the intention of the legislature that circumstances such as arose in this case are within the purview of S.45D. Any person or corporation who is in the habit of having services supplied by it pursuant to an agreement made in that behalf is not enjoined from ceasing to enter into agreements for such services. For those reasons I dismissed the application and made the consequential orders.