Venning, Phillip John v Suburban Taxi Service Pty Ltd

PHILLIP JOHN VENNING v. SUBURBAN TAXI SERVICE PTY LTD
No. SG 20 of 1993
FED No. 1092/94
Number of pages - 33
Contracts - Equity - Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
FOSTER J

CATCHWORDS

Contracts - Construction and Interpretation of Contracts - implied term - contracts between taxi company and taxi operator - express term authorising termination on one month's notice without giving any reason - whether term to be implied that a good cause or reason need exist.

Equity - unconscionable conduct - refusal to delete termination clause in contracts - termination of contracts - whether course of conduct unconscionable - principle in Commercial Bank of Australia v Amadio.

Trade Practices - unconscionable conduct - s 51AB Trade Practices Act 1974 (Cth), s 57 Fair Trading Act 1987 (SA) - radio bookings supplied to taxi operators - not domestic goods or service.

Trade Practices - misuse of market power - s 46 Trade Practices Act 1974 (Cth) - definition of "market" - whether substantial degree of market power - market share - absence of evidence of barriers to entry - whether taking advantage of market power - whether proscribed purpose - insertion of termination clause in contract between taxi company and taxi operator - enforcement of company radio regulations - termination of contract - letter relating to planning application.

Trade Practices - exclusive dealing - s 47(1) and (7) Trade Practices Act 1974 (Cth) - single package of services supplied.

Trade Practices Act 1974 (Cth) - s 4E, s 46, s 46(1)(b), s 46(1)(c), s 47, s 47(1), s 47(3)(f), s 47(7), s 47(10), s 52A (now s 51AB)
Fair Trading Act 1987 (SA) - s 57(1)

The Commercial Bank of Australia Limited v Amadio and Anor (1983-83) 151 CLR 447
Natwest Australia Bank Limited v Boral Gerrard Strapping Systems Pty Limited (1992) 111 ALR 631
Queensland Wire Industries Pty Limited v Broken Hill Pty Company Limited (1989) 167 CLR 177
Dowling v Dalgety Australia Limited and Ors (1992) 34 FCR 109
General Newspapers Pty Ltd and Ors v Australian and Overseas Telecommunications Corporation Limited (1993) 40 FCR 98
General Newspapers Pty Limited and Ors v Telstra Corporation (1993) ATPR para 41-274
Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 5 ALR 465
Australasian Performing Rights Association Ltd v Ceridale Pty Ltd (1990) 97 ALR 497
Trade Practices Commission v Legion Cabs (Trading) Co-Operative Society Ltd (1978) 35 FLR 372
Marks Lyons Pty Ltd v Bursill Sportsgear Pty Ltd (1987) 75 ALR 581

HEARING

ADELAIDE, 6-10 and 13-14 September 1993
#DATE 9:2:1994, SYDNEY
#ADD 6:3:1996

The Applicant appeared in person.

Counsel for the Respondent: Mr T. Forrest
Instructed By: Stratford And Co

ORDER

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant pay the respondent's costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

FOSTER J In these proceedings, the applicant, Phillip John Venning ("Venning"), sues Suburban Taxi Service Pty Ltd ("Suburban"), seeking damages and other forms of relief to which I shall make reference later in these reasons.

As at 17 September 1990, a critical date in these proceedings, Venning was the owner of two taxi cabs which plied for hire in the Adelaide city and metropolitan areas. He had been associated with the taxi industry in Adelaide for many years prior to that date as an owner, operator, and driver of taxi cabs. Suburban, as at that date, and for many years prior thereto, conducted a business in which it provided to taxi drivers, by radio communication between Suburban's base and equipment located in the cabs, requests or bookings received by telephone from persons requiring the services of a taxi. This radio communication service was supplied only to taxi cab operators who were registered with Suburban and whose cabs, by virtue of such registration, became part of the Suburban fleet operating in Adelaide. Operators bringing cabs into the fleet were required, at least in the later years of the period to be considered in this case, to sign a written agreement with Suburban and to pay a fee for the radio communications service provided.
On 17 September 1990, Suburban terminated its agreements, which were two in number covering two separate cabs, with Venning; thereby preventing Venning from operating the cabs with the benefit of Suburban's radio booking network. Venning alleges that this termination was unlawful for a variety of reasons and has occasioned him significant financial damage.
During the course of the proceedings Venning made application that the case proceed on the issue of liability only. This course was agreed to on the basis that it would be necessary for Venning to demonstrate some loss connected with the causes of action alleged in order to establish liability. There would, however, be no investigation in the proceedings, at this stage, of the amount of any loss sustained.
Venning, at all stages, appeared in these proceedings in person, although, as he indicated during the hearing, he received some legal assistance by way of advice on questions of law associated with his claims. The result has been that his case both in its pleading and presentation has had the difficulties necessarily associated with complex litigation being conducted by unrepresented persons. I allowed Venning considerable latitude in the presentation of his case. Opposing counsel paid due regard to the problems of an unrepresented litigant by being suitably sparing in his objections. The result has been that Venning received, perhaps, more assistance than was warranted with the consequence that the proceedings were unduly protracted.
Venning had issued a number of subpoenas requiring the attendance of management and other personnel, both past and present, of Suburban. He conducted his case over the first four days of the hearing by calling these persons to the witness box for the purpose of cross-examining them. As they were, for the most part, persons alleged by Venning to have, in effect, conspired to harm him, this procedure necessarily engendered far more heat than light. The procedure, although for the most part not objected to, had to be contained within some reasonable bounds. Even so, not much really came out of it except a series of strident accusations met with indignant denials. Venning, himself, did not give evidence until late on the fourth day by which time the proceedings had an appearance of considerable confusion although the nature of the allegations that were being made and denied had emerged. Venning's evidence, although rambling and lengthy, did introduce some order and system into the case.
I turn, then, to a consideration of the allegations made, their alleged legal basis, and the evidence in relation to them. I should indicate that, at the conclusion of the proceedings, I had formed a fairly strong impression as to what the decision in the case should be. However, because of the nature of the evidence and the manner of its presentation, I have re-read and considered the whole of the transcript of the evidence and the numerous exhibits which have been tendered. This procedure has served to confirm the views that I had tentatively formed.
The most convenient approach to the resolution of this case is that I first consider the evidence and make appropriate findings of fact. I shall then consider whether, on those findings, any of the causes of action relied upon have been established. Stated compendiously, those causes of action, as pleaded in Venning's amended statement of claim, appear to be as follows: (a) breach by Suburban of an implied term in its agreements with Venning that it would not unilaterally terminate or discontinue its service to the applicant without good and proper cause, (b) unconscionable conduct by Suburban towards Venning contrary to general equitable doctrines relating to such conduct and also contrary to s 52A (now s 51AB) of the Trade Practices Act 1974 (Cth) and s 57(1) of the Fair Trading Act 1987 (SA) (in similar terms), (c) misuse by Suburban of its market power contrary to s 46 of the Trade Practices Act resulting in damage to Venning, (d) exclusive dealing contrary to s 47 of the Trade Practices Act engaged in by Suburban to the detriment of Venning and (e) conspiracy at common law between members of the management and senior staff of Suburban to cause economic harm to Venning.
Although it is not entirely clear from the amended statement of claim, it was made clear by Venning, during the course of the case and in argument, that his claim against Suburban, stated compendiously, was that from about mid 1984 up until the unilateral termination by Suburban of its agreements with him, Suburban, through its senior management personnel, to whom reference will be made later, acted in a grossly unreasonable and unconscionable manner towards him on a number of occasions, and whose hostile activity culminated in his unwarranted dismissal from the Suburban fleet in September 1990. This activity evidenced a continuing conspiracy to cause him financial harm. The ultimate dismissal was undertaken by Suburban for the purpose of "tipping him over the edge" financially by causing him to lose his earnings from the operation of his two taxis at a time when those earnings were crucial to his survival. At that point of time Venning was heavily committed financially to the establishment of a communications tower enterprise in the Hills District of Adelaide. It was part of his case that this communications tower if erected and operational would provide competition to the communications network established by Suburban and that, for that reason, Suburban took steps, including the dismissal from the fleet, to prevent Venning bringing this enterprise to fruition. The failure of the enterprise left Venning in a state of hopeless debt, the amount of which would be part of the damages claimed in this action.
Venning joined the taxi industry in Adelaide in 1977; in which year he bought his own taxi plate. He was an owner/driver in the Suburban fleet. He says that his time with Suburban until June 1984 was "virtually uneventful". Certainly, the evidence suggests no significant problems. In the middle of 1984 he decided to purchase two additional taxi plates. These were to come from vehicles operating in other taxi fleets, United Yellow and Amalgamated. It is clear, although there is a dearth of specific evidence in the case, that these fleets, with their associated communications networks, operated in competition with Suburban in the taxi industry in Adelaide. These plates were to be affixed to two new vehicles to be included in the Suburban fleet as cars 248 and 249. Suburban, prior to 1984, had been improving its communications system by changing from an earlier radio communications system, in which the driver and base operator communicated orally, to a "digital" system using an encoder and bid box which operated through the taxi's radio. Using this apparatus, a driver could bid for a job simply by operating a button which would result in the number of his vehicle showing up as a bidder for a particular job on a screen used by the allocating officer at the Suburban base. The officer would then allocate the job on the basis of the first bid received. At this point of time, the encoders and bid boxes were produced by an organisation described in the evidence as "Raywood". These pieces of equipment were supplied by Suburban to the individual taxis in the fleet and remained the property of Suburban. The taxis had their own radios. Some of these were supplied by Suburban, in which case, for the most part, they were a radio referred to as a "Tait" radio. Other brands of radio were, however, in use. Venning, apparently, did not favour the Tait radio and had arranged for radios manufactured by the Motorola organisation to be installed in his vehicles.
The Raywood encoders and bid boxes to be supplied by Suburban for these two new vehicles were not immediately compatible with the Motorola radios that Venning had installed in the new taxis. Work was required to be done in order to "interface" the equipment. It was necessary for Motorola to undertake this work. It could not be done in Adelaide. It could only be done at the Motorola workshop in Melbourne. For this reason it was necessary that Motorola have possession of the relevant Raywood encoders so that the work could be done. The arrangements in relation to the delivery and return of the encoders occasioned some tensions between Venning and Suburban.
Venning had written to Mr Brian Aitken, the Operations Manager of Suburban, on 19 June 1984 in the following terms:-

"Dear Brian,

I confirm our recent discussions regarding the proposed inclusions of two more units in this fleet. The two licenses, one from United Yellow and the other from Amalgamated, are due to transfer to me approximately 14th August 1984.

With particular references to digital readout equipment to be used in these vehicles and with due regard to the history of poor reliability of this equipment, most of which can be attributed to lack of qualified service personnel, I advise the following.

It is my duty to ensure that every effort is made to reduce the risk of breakdown and subsequent loss of use. The engineering and time required to interface this equipment to transceivers which have not been used before, will be a costly and time consuming process. The encoders and bid boxes required will have to be the actual ones that are intended for use with this equipment. As a consequence of this, I must insist that custody of the said units is to be my responsibility, from now until date of commissioning of the equipment. Any reasons put forward for a denial of an absolutely standard and straight-forward request, can only be construed as a deliberate attempt to hinder and your co-operation in the matter is earnestly sought."

This letter, in part, seems to reflect what is elsewhere described in the evidence, namely that Suburban was encountering difficulties in the effective installation of the Raywood equipment. It is clear that Suburban's policy was that each vehicle in the fleet would be equipped with its own encoder which would stay with that vehicle as part of its permanent equipment. The issue of spare encoders in circumstances where some repair was necessary to the encoder provided to a specific vehicle was obviously something that Suburban wished to keep under tight control. It is clear that the management of Suburban was anxious to maintain custody and control, so far as possible, of the Raywood equipment. Venning's letter of 19 June was replied to by Mr Brian Aitken by letter of 2 July which read as follows:-

"Dear Mr. Venning,

In reply to your correspondence dated 19th June 1984, you are advised that your request is accepted.

The only stipulation is that the equipment, once tested as outlined, will be secured in my office in a sealed package for your eventual useage (sic).

It is a matter of Company policy - one (1) encoder per car. Each encoder issued is subject to Base Fees and it is the Company responsibility to ensure replacements encoders are available when required, within reason."

The letter was signed by Mr Aitken as Taxi Operations Manager.

Venning makes complaint that the arrangements entered into with Mr Aitken were "countermanded" by managerial staff, Mr Linn and Mr Geddie who substituted fresh arrangements for sending the equipment to Motorola. The detail is of no concern nor, indeed, is it made very clear in the evidence. Venning, however, relies upon the incident as an early indication of victimisation of him by company management. It is part, as I understand his case, of a conspiratorial chain of events designed to harm him. It was an example of his being singled out for special adverse treatment.
The incident is really too trivial to warrant much discussion. However, one or two observations may be made. First, it appears that at the time of writing his letter Venning owned and operated one taxi and was in the process of seeking to bring two further taxis into the fleet. The fleet itself, operating under the Suburban communications network, consisted of some 330 cabs. Venning, it might be thought, was hardly in a position, even as an owner of three cabs, to seek to dictate company policy. Nor, might it be thought, was he in a position to have a reliable overview of the company's situation in relation to the provision and operation of the encoding equipment. However, he speaks in an authoritative manner of the "history of poor reliability" of the equipment. He provides a diagnosis that this "can be attributed to lack of qualified service personnel" and then proceeds, in the last paragraph, to "insist" that he have custody of the equipment. The last sentence is bombastic and aggressive. The whole tone of the letter is arrogant. It is an abrasive document most unlikely to win a warm response from management. It did not do so and this can hardly be a matter of surprise.
After some dickering about the form of receipt to be given by and to Motorola in respect of the encoding equipment, which is of no significance except as a further illustration of Venning's general attitude, it appears that the necessary work was done to "interface" the equipment. When the equipment was returned to Venning, it became apparent that the encoder 249 was not operating effectively, or at least not as well, as that provided for the other vehicle. The problems with this encoder occupied a considerable time in the hearing of this case although the events in relation to it were, undoubtedly, very remote in time from the termination of Venning's agreement with Suburban on 17 September 1990. They are, however, of some significance. They form the basis of an allegation made by Venning that the management of Suburban, in and about September 1984, deliberately sought to harm him financially.
In the first place Venning complained that the encoders destined to be placed in the two vehicles were retained at the premises of Suburban in Adelaide for an unreasonable length of time before being dispatched to Motorola so that the interfacing procedure could take place. Apparently some form of preparation was necessary before they could be sent. The evidence does not make clear what this was. However, Venning approached Mr Butterworth, Suburban's senior technician, on several occasions requesting that the sending of the encoders to Motorola be expedited. He was told that pressure of work was holding the matter up. It is apparent that Butterworth and his technical staff were, indeed, significantly busy at the time dealing with difficulties that were being encountered in the installation and operation of the encoder equipment. I am not satisfied that there was any deliberate delay in the forwarding of Venning's equipment for what was, after all, special treatment. I am satisfied, however, that when the encoder in car 249 was put into operation it was found by Venning and his drivers to be defective in the registering of bids on the screen at base. It appears that it did not fail to register a bid, but rather it was slow in so doing. I am satisfied that this rendered it difficult for the driver of car 249, in circumstances where there was competition for a job with other drivers in the fleet, to be truly competitive. In other words there was ground for complaint. I am also satisfied that Venning made fairly constant complaints and was dissatisfied with the responses received.
On 4 September 1984 incidents occurred between Venning, Butterworth and senior managers Messrs Linn and Geddie which have been relied upon by Venning as indicative of an unconscionable attitude on the part of Suburban towards him. The encoder in car 249 had been operating unsatisfactorily. The driver had brought it in for attention and obtained a spare encoder during the period of repair. The spare encoder worked perfectly. The car was called in to base so that the original encoder could be given back and the spare returned. When Venning attended to comply with this direction, he was told by Butterworth that there was nothing wrong with the encoder, that it had been tested and worked satisfactorily. Venning refused to accept the encoder. The matter was referred to Messrs Linn and Geddie who adopted the view that the encoder had been tested and did work satisfactorily. There was, I am satisfied, a fairly heated argument, although I am equally satisfied that Messrs Linn and Geddie recollect little of it. The upshot was that Venning was told that he could either accept the encoder or, in effect, leave the fleet. I have little doubt that this was an argument of a type not uncommon in business situations where tempers flare. I feel equally confident that Venning displayed an attitude to management which was found to be offensive and no doubt resulted in the rather harsh decision that was made. I can see nothing more in it at all.

Venning, apparently, accepted the decision but later that day found that he had been "put off the air". I can only infer from this that he was being subjected to a form of punishment meted out for company misdemeanours, being a temporary withholding of communication services. Again, although it may well have been a source of irritation to Venning at the time, I can see no basis for any conclusion that it was the manifestation of some conspiratorial plot to cause him economic harm. However, Venning made complaint to the Transport Workers' Union who rang Mr Geddie on his behalf. It appears that the matter was settled on the basis that the equipment would be returned to Motorola for repair if necessary. Mr Geddie was cross-examined with some vigour about this incident by Venning. I am satisfied that he could recollect very little of it. It was, apparently, of enormous significance to Venning but of little consequence to Geddie. I am satisfied, however, that Mr Geddie was annoyed by it at the time and had some derogatory things to say about Venning when he, Geddie, was somewhat the worse for wear through liquor. This was reported to Venning and apparently added to his concerns about Suburban.
The evidence does not make clear what work, if any, was done on the encoder at Motorola. It was returned to operation in car 249 and continued to operate unsatisfactorily. Suburban continued to maintain that the encoder was a satisfactory piece of equipment. Venning had separate examinations made of the encoder and obtained printout readings of its program. It may be stated at once that these examinations which, I am satisfied, were conducted at a level not available in the ordinary workshop situation at Suburban, established that differences in the program of encoder 249 could account for its slowness in registering bids. It appears that this information convinced Venning that he was the subject of a hostile plot concocted by Messrs Linn, Geddie and, perhaps, other members of the senior management of Suburban.
There was an inquiry into the taxi industry in Adelaide in 1985. Although there is no specific evidence before me, it appears that Venning made accusations or complaints to the inquiry relating to the encoder. As a result it was examined by Techsearch Inc. of the South Australian Institute of Technology. Professor Sydenham, Head of the School of Electronic Engineering, provided a report on 6 May 1985. The report speaks of difficulties involved in the examination of encoder 249 as against other encoders which were not subject to defects in their operation. The report states:-

"However, it has become clear that the differences are major in their programming and that at least one difference appears to give a slower bid time to the unit E249/1 due to the way that the programme is structured. It has not yet been possible to decide the extent of the slowness."

After giving a summary of the effective changes that were revealed in the investigation, the report went on to indicate that:-

"This does not necessarily mean that E249/1 is different in performance but does suggest that design evolution is taking place in the product over time.

The system's original programmers should know the effects of these changes and it can be taken either way that they did, or did not, knowingly supply one that is known to be less likely to get a bid."

Professor Sydenham made a "summary of findings" which included the following:-

"It has been established that the programme of unit E249/1 is different in operation to that of the other cabs.

At least one possible cause of delay in sending out a bid pulse appears to exist in Unit 249/1. There may be others.

It is not yet possible to state in a positive manner that Unit 249/1 is seriously less capable of winning bids for there has not been enough information and resources allocated to unravel what its programme is doing.

From the statements made in the transcripts it appears that Unit 249/1 may be a 'rogue' in the currently installed taxi cab system due to design differences in the software and possibly in the interfacing to radios that has not been done previously in South Australia.

The extent of changes, suggestions in the transcripts that mention a new system about to be installed in the fleet, the complex nature of the changes and the fact that electronic products tend to be constantly being improved suggests that Unit 249/1 is an abberration (sic) that may well be explained by reference to the supplier.

It is hard to see why a national product supplier would purposefully alter just one ROM (but maybe there are others?) to be capable of less bid success when the very plant contains the evidence that would show it had been done.

At any time a driver can test his system's operation by setting up bids and then seeing if they are recorded in the printout maintained in the control room. (This only applies if Suburban offer this facility....at least one other SA cab company has it.)

(It is claimed that a similar kind of test was done and that the operator agreed that it seemed to be slow in responding.)

It seems that the matter may well have been resolved if the 249 bid box had been sent back for testing or replacement by Raywood, who may not even know that there exists a problem."

There is nothing in the case which is capable of indicating that Raywood made any examinations of encoder 249. The possibility clearly exists that the encoder was a "rogue", a product of earlier development of the encoder. However, Venning clearly took the view that the encoder had been deliberately tampered with by Mr Butterworth and his staff, at the direction of Messrs Linn and Geddie, so as to put Venning at a disadvantage in respect of that particular taxi's ability to bid for work being offered through the Suburban network. It further appears that Venning sought to address an extraordinary general meeting of the shareholders of Suburban; called in relation to allegations based upon the computer printouts that he had obtained and which, presumably, were the same material that he had supplied to the inquiry. Venning was not a member of the company and a motion that he be allowed to attend the meeting and address it was defeated.
Shortly thereafter Venning left the taxi industry for about 18 months; during which time he operated a service station which, apparently, provided some services to taxi owners and drivers which were competitive with those offered by Suburban. He attracted to employment in this service station two members of Suburban's personnel. He stated that this caused considerable resentment on the part of the management of Suburban. There is nothing in the case which indicates that this statement is correct. I see it as an example of Venning's exaggerated views of Suburban's attitude to him.
Venning's assertions that Suburban had engaged in deliberate tampering with encoder 249 with a view to doing him harm were put with considerable vigour to Messrs Linn, Geddie and Butterworth in the witness box. The assertions amounted to allegations that Messrs Linn and Geddie directed Mr Butterworth to make significant alterations to encoder 249 for the purpose of rendering Venning less competitive. Although the scientific evidence in the case is far from clear, it nevertheless suffices to indicate that the making of the alterations in the program of 249 as against the other encoders would have been a most difficult and complex process. I am satisfied that Suburban did not have the necessary equipment to effect these alterations with any ease. I am further satisfied that the testing equipment that the company did have was not adequate to clearly indicate any malfunction in the encoder. It seems that whenever the encoder was tested with the equipment available to Mr Butterworth, it appeared to function within ordinary limits, especially having regard to the fact that difficulties were being experienced in the operation of other encoders supplied to the fleet.
More importantly, I am perfectly satisfied, that having heard the evidence of Messrs Linn, Geddie and Butterworth and observed their demeanour in the witness box that Messrs Linn and Geddie did not give any instructions to Mr Butterworth to make deleterious alterations to encoder 249 and that Mr Butterworth did no such thing. Indeed, they obviously found these accusations quite bizarre and so, in fact, do I.
Other matters relied upon by Venning as indicative of unconscionable or conspiratorial conduct on behalf of Suburban and its staff may be disposed of quickly. Venning made two attempts prior to departing from the Suburban fleet in 1985 to become a shareholder in Suburban. Neither side tendered the memorandum and articles of Suburban. However, clearly enough, the transfer of shares was subject to the approval of the board. I am quite satisfied that Messrs Linn and Geddie regarded Venning as a trouble maker; or at least as a person who was difficult to work with. They were under no obligation to like him nor to facilitate his becoming a member of the company. Although the evidence is not clear at all, I am prepared to assume that they sought to prevent him becoming a member by opposing the transfer of shares to him. It has not been suggested that, assuming that they did so, they were not within their rights in so doing. A challenging solicitor's letter was written on behalf of Venning on the second unsuccessful attempt to become a shareholder. Nothing eventuated from the letter and I am unable to attribute any significance to these incidents.
Again when Venning had disposed of the service station in 1987 and came back into the taxi industry as an owner/driver in Suburban's fleet there was an alleged incident between himself and Mr Brian Aitken, the Operations Manager, when, it is alleged, Mr Aitken said in a chance meeting between the two men "I thought we had got rid of you". Mr Aitken did not concede that such a remark had been made. However, accepting that it was, I am not prepared to attribute any significance to it in relation to the issues posed in this case. It is, to say the least, unlikely that Venning, having made the accusations about the alleged incidents in 1984 to a public inquiry and having sought, in effect, to vilify the management of Suburban at an extraordinary general meeting, would have been welcomed by a person at senior management level with, as it were, open arms.
Venning relied upon some incidents relating to lease payments on a radio in one of the taxis that he operated after rejoining the Suburban fleet in 1987. The car in question had been obtained by him with a radio already installed. He said that when he was making arrangements with the relevant company officer for the vehicle to be admitted into the fleet he specifically indicated that it had a radio and that he would not be requiring to lease one from the company. At that point of time there was an existing policy that Suburban would provide radios for use in cabs in the fleet. I am satisfied that this was all part of a program designed to standardise the equipment throughout the fleet; one of the reasons for this being that it would promote equity between drivers in relation to bidding. It is not conceded that Venning provided this information, but I will accept for present purposes that he did. It is clear that he was, however, charged a weekly rental fee on the basis that he had a radio leased from the company. He complained about this. The matter was referred to Mr Pipinias, the company officer in charge of radio rentals. Mr Pipinias, according to Venning's case, said that he was "not interested" in Venning's complaint and refused to forego the rental charges. In evidence, Mr Pipinias, who no longer worked for Suburban, stated that it was company policy at the relevant time that vehicles should have leased radios. The radio was available. It was a matter for the individual owner as to whether he used it. The policy was designed to encourage the use of standardised radios. I gathered that Mr Pipinias did not hold a good opinion of Venning. He was of the view that Venning was prone to engage in unfair bidding practices. It might be that another person better liked and not subject to suspicion in this regard and less abrasive in manner and attitude might have prevailed upon Mr Pipinias to bend policy and forego lease payments where a radio had not been taken for use. Be that as it may, I am satisfied that Mr Pipinias was entitled to give effect to company policy and that in doing so he did not manifest any connection with some conspiratorial plot to do harm to Venning.
Mr Pipinias, however, played a far more significant role in matters which, in my view, go to the heart of this case. Before coming to them it is necessary to refer to the agreements between Suburban and its taxi owners and operators and also to certain documents relating to Suburban's policy as to fair competition between drivers in obtaining work.
In 1984 Venning entered into written agreements with Suburban in respect of taxis to be owned and operated by him within the fleet. Each of those agreements indicated an acceptance by Venning "to be bound by the General Regulations of the Company, a copy of which has been given to me". The agreement contained an acknowledgment by Venning that:-

"the Regulations shall form part of this contract and that failure by me to strictly observe the said Regulations, and/or any other justifiable Regulations which the Company may issue from time to time shall entitle the Company to determine this Contract and remove my name from the Register of Owners, or to take such action as the said Regulations provide."

There was a further acknowledgment by Venning "that the Company may terminate (the contract) at any time by one month's written notice to me".
The relevant agreements signed by Venning when rejoining the fleet after 1987 were in somewhat different terms, but contained similar provisions. Under the latter agreements, Venning undertook to "be bound by and at all times honour, comply with and observe in every respect the Company Regulations from time to time prescribed by Suburban for the use of the System". He also accepted that it was his responsibility to ensure that he was familiar with the regulations "in force at any time".
Provisions relating to the termination of the agreement were as follows:-

"5(a) Suburban may terminate this licence at any time (and without giving any reason) by giving one (1) month's prior notice in writing to the Owner.

(b) The Owner may terminate this licence at any time after the expiration of three (3) months from the commencement date stated in the Schedule (and without giving any reason) by giving one

(1) month's prior notice in writing to Suburban.

(c) If the Owner commits a breach of any of his obligations under this licence then Suburban may either:-

(i) terminate the licence forthwith by giving notice to that effect to the Owner; or

(ii) suspend the Owner's right under this licence to use the System for such period as Suburban thinks fit and the effect of any such suspension shall be to exclude the Owner from the System for the period of the suspension but it shall not in any other way affect the operation of this licence and, particularly, it will not affect the Owner's obligation to continue to pay licence fees during the term of the suspension."

It may be noted that part of Venning's case was that agreements prior to his re-entering the fleet in 1987 were oral only. However, it appears that earlier agreements were, in fact, written and did contain terms as to termination. Venning complained that at the time he was required to enter into the written agreements after rejoining the fleet, he objected to the terms entitling the company to terminate the agreement on one month's notice without giving reasons. He stated that he described this clause as being harsh and unreasonable but that he was nevertheless required to sign the agreement if he wished to enter the fleet. He further complained that Suburban, in requiring that he sign these agreements, was discriminating against him; in so far as it did not impose a similar requirement on other drivers. Venning put into evidence an agreement signed by another driver (Warren Hull), which was said to illustrate this point. It does not do so. The agreement is in a different form. It certainly shows a clause of similar kind having been struck out, but the clause above that, which has been struck out, makes similar and somewhat harsher provision to similar effect. The allegation of discrimination is simply not established. Although I have some doubt in the matter, I am prepared to accept for present purposes that Venning did object to signing the agreement and was met with the response he asserts. The effect of his evidence, of course, is an acknowledgment on his part that he was fully aware of the existence of the clause in the agreement.
The relevant Company Regulations, promulgated in March 1987, provided as follows:-

"3.1 The Management shall have the power at its discretion to suspend or withdraw any person's Licence Agreement who is found to be in breach of these regulations.

...

7.1 An operator shall not:

...

7.1.11 Allow the installation of any equipment to the Suburban system without company approval in writing whether mobile radio is company or privately owned."

It is abundantly clear that Suburban had very strict views as to the use of equipment in cabs in the fleet which might have the effect of conferring an unfair advantage on a driver in the bidding procedure. Suburban obviously was intent on standardising all equipment in the cabs with a view to ensuring fairness in the bidding procedure. Clearly there would be good reason for such a policy. Suburban was competing against other companies in Adelaide in the taxi industry. The maintenance of a sizeable fleet operated by satisfied owners and drivers was essential to its conducting profitable operations. If some drivers were able to obtain an unfair advantage in the bidding process through the use of non-standard, non-approved equipment in their cabs, then this would be a source of dissatisfaction amongst drivers in general and could lead to disharmony and poor morale; with a consequent drop off in efficiency and potentially a reduction in the size of the fleet. That these matters were of concern to management in the period after Venning rejoined the fleet is amply evidenced by a document of 20 November 1987 circulated by Mr Pipinias as fleet operations manager to all owners and drivers.
This document stresses the object of "equality of everyone" and makes the point that "Since the inception of that policy, many have taken it upon themselves to try and hinder the progress toward equality by committing themselves to a course of 'Beat the system,' 'Be better than the rest,' etc." The document continues as follows:-

"In the hope of discouraging these efforts of a damaging minority, the Company had to amend its Regulations to cater for these indiscretions, and to date has given all possible opportunity to people who have adopted the 'Unfair Advantage' to mend their ways. It seems the soft approach of leaving matters to conscience has not worked.

In a fleet comprising in excess of 330 vehicles, a handful of individuals are destroying the harmony of the majority. It surprises me that many of you have taken the opportunity to voice your objections toward this unfair advantage, yet very few if any are prepared to police their own working environment.
As stated earlier, the soft approach has not worked, therefore the choice has now been taken to eliminate the use of equipment foreign to the radio system.

The Suburban radio system comprises of:

a) Radio - (Stratacom supplied rental or private if existing in fleet)

b) Bid box - (Stratacom supplied and fitted) c) Encoder - " " " " " " " d) Alert System - " " " " " " "

Regulation 7.1.11 of the Company Regulations of March 1987 as amended states:

An Operator shall not:-

Allow the installation of any equipment to the Suburban system without Company approval in writing whether mobile radio is Company or privately owned.

Regulation 3.1 of the Company Regulations of March 1987 as amended states:-

The Management shall have the power at its discretion to suspend or withdraw any person's licence agreement who is found to be in breech of these Regulations.

The use of foreign equipment includes 'Rapid Fire Bid Boxes,' 'Oscillators,' 'Linear Amplifiers," etc. Those of you who use such equipment not only take an unfair advantage of your fellow taxi drivers, you also cause damage to base equipment, as well as aggravation to radio operators and technical staff.
With consideration to the Regulations specified above a moratorium of one (1) week will be granted beginning Monday 23.11.87 and ending Monday 30.11.87 at 0700.
For those who have any equipment foreign to the system to take the opportunity to have it removed and radios, etc, returned to standard. At the end of that period, random inspections will be conducted 24 hours per day, 7 days per week. These inspections could happen at any time and anywhere. Any person during the course of these inspections found to be using equipment foreign to the system, shall be dealt with in the form of instant dismissal from the fleet."
The circular also stated:

"Fairness and equality must be the overriding principle. Just as none of us are above the law of the land, none of us are above Regulations of the Company. The Company will always be bigger than the individual.

For those who think the methods now to be undertaken are harsh, consider your total environment, your fellow taxi owners, and that all men are equal - not some more equal than others.

Your co-operation in these matters is expected. Don't put up with cheats, the Company doesn't need them. the industry doesn't need them, and YOU most certainly don't need them."

One could hardly imagine a clearer and more definite statement of company policy.
It is perfectly clear from the evidence that Venning had been suspected for some time as having installed equipment in his cabs giving the driver an unfair advantage in bidding. This suspicion had been exacerbated by the fact that Venning refused to allow Suburban personnel to have access to any of his cabs or to make any inspection of them. He sought to explain this attitude as being based upon prior unfortunate experiences with the encoder in cab 249 in 1984. This explanation does not ring true to me. It might be one thing to refuse to allow Suburban technicians to work upon equipment in the cab on the basis of dissatisfaction as to their competence or honesty. It would be quite another thing to refuse a mere inspection which would demonstrate the presence or otherwise of unauthorised equipment.
Mr Pipinias's circular of 20 November 1987 indicated that random inspections would be undertaken. I am satisfied that where difficulties were placed in the way of Suburban making inspections then it was reasonable for the company to avail itself of any opportunity of making an inspection of a cab in circumstances where it was not being so prevented. Mr Pipinias was presented with such an opportunity on 16 September 1990 in respect of one of Venning's cabs. He was able to make an inspection of the inside of the vehicle whilst it was receiving gasoline at the depot. It is clear that Mr Pipinias harboured the suspicion that this vehicle might contain unauthorised equipment. The examination revealed that it did so. The equipment in question was a "booster" device which had the effect of giving added power to the vehicle's radio and enhancing the likelihood of a bid being the first bid received at the base in respect of any job being offered. Quite clearly it was exactly the type of equipment proscribed in the circular letter of 20 November 1987.
Upon this discovery having been made, Mr Pipinias took action against Venning the next day. He forwarded to Venning a letter of 17 September 1990 which read as follows:-

"Dear Mr. Venning,

Pursuant to your licence Agreements with the Company which were signed by you on 7th July 1986 and 21st March 1989, the Company now advises in this express form of its intention to enforce Clause 5(a) of both agreements.

Clause 5 (a): Suburban may terminate this Licence at any time (and without giving reason) by giving one (1) month's prior notice in writing to the Owner.

Further the Company wishes to advise the Car 111 will remain suspended for a period of 4 days from 0900 Monday 17th September 1990 up to and including 0900 Friday 21st September 1990. The reason for the suspension being the use of extra equipment (in conjunction with Company owned radio equipment) which is known to be contrary to Company policy.

Notice of the Company's intention to discontinue its service to your vehicles is effective this day Monday 17th September 1990. You are required to return all Company owned equipment to the Company on Monday 15th October 1990."

The letter was signed by Mr Pipinias as Fleet Operations Manager.

It is to be observed that the notice terminates both of Venning's then current licence agreements with the company. It does so under Clause 5(a) of the agreements. Pursuant to that clause no reasons were required to be given. It also suspends Venning's right to use the company's communications network in respect of the offending car for a period of four days, pursuant to paragraph 5(c)(ii). It may well have been that Suburban could have exercised its rights under paragraph 5(c)(i), by terminating the licences forthwith. The fact that it chose to give Venning one month's notice rather than proceeding under the harsher termination provision is nothing to the point.
Venning's reaction to the service of this notice, according to the evidence, was to approach Mr Pipinias and demand that the notice be withdrawn and that the company "specifically perform" its obligations to him. It is significant that he made no apology nor offered any explanation for the presence of the offending equipment in his vehicle. He seems to have adopted the view which, from my observations in this case, I regard as typical of him. Rules and regulations were for other people but not for him. Mr Pipinias refused to withdraw the notice, with the result that upon its expiry, Venning no longer had the advantage of being part of the Suburban fleet. He said that he could not gain admittance to the fleets of any of Suburban's competitors. He appeared to raise the suggestion in evidence that this fact also resulted from some conspiracy to deny him employment. There is nothing in the evidence to support this suggestion. I reject it.
Before me Venning gave what was intended to be an exculpatory explanation of the presence of the "booster" in his vehicle. He said, in effect, that he was obliged to incorporate it in the vehicle's electronic bidding equipment because Suburban had supplied him with a sub-standard radio in that particular vehicle which they had refused to repair or replace.
I do not accept this explanation. It has all the appearance of afterthought. Venning, in effect, asserts that he introduced this proscribed equipment into his vehicle in order to make himself competitive with other vehicles which had radios capable of sufficient output. He offered no such explanation when he received the notice of termination. In my opinion he introduced the equipment for one reason only, namely to obtain an unfair advantage over other drivers. When he was detected he did not offer his current explanation. He merely blustered. Apart from these considerations, I found the explanation inherently incredible and Venning's demeanour at the time of giving it in the witness box quite unsatisfactory.
Venning sought to avoid the effect of this breach of regulations in another way. He attempted to indicate that, in effect, despite the express policy of Suburban, it did not really care about such breaches. It was only "obsessive" about them when it wished to use them, in effect, as a means of victimisation of himself. He sought to call evidence that Suburban was overlooking a similar breach in respect of another owner's vehicle. The evidence of Mr Bailey, the General Manager of Suburban, satisfies me that this latter incident is by no means being overlooked. It is the subject of investigation. When the investigation is complete Mr Bailey will make a decision as to what steps should be taken in respect of the owner. I can see nothing relevantly inconsistent in the approach to this case as against Venning's.
The incident of 16 September 1990 occurred whilst Venning was heavily embroiled in problems relating to his attempt to establish a commercial communications tower in the Hills District of Adelaide. He was, obviously, over committed financially to an enormous extent. The venture did not have appropriate planning approval and was in severe trouble. He was in fact in the process of selling his taxi plates in order to assist his financial situation. It is unnecessary to consider this aspect of the case in any detail. He has completely failed to satisfy me that Suburban's action in terminating his licences "tipped him over the edge" financially as he alleges.
Nor am I satisfied that a letter written by Mr Geddie on behalf of Suburban to Mr Sievers, President of the South Australian Taxi Association Inc., on 20 August 1990 amounted to unreasonable or unconscionable conduct directed against Venning. The letter was written in response to a request for comment from the Association on material supplied to it in relation to Venning's communication tower project. Various extracts from it are complained of in the amended statement of claim. In particular it speaks of Suburban's knowing Mr Venning very well and of his being keen to equip his vehicles "to obtain that extra competitive edge". There is also reference to questioning both Venning's and Motorola's motives. I do not find it necessary to set out the contents of the letter. It reads as a letter expressing views genuinely held as to Mr Venning, Motorola, and the project. I can see nothing in the letter or in the sending of it which could amount to unreasonable or unconscionable behaviour on the part of Suburban.

On the basis of these facts as found, has Venning demonstrated any cause of action against Suburban?
60. In the first place, Venning relies upon the implication of a term into the relevant licence agreements to the effect that the agreement would not be unilaterally terminated without good and proper cause. I would not be prepared to imply such a term on ordinary principles. It does not appear necessary to do so in order to give the agreement business efficacy. No doubt, in ordinary circumstances Suburban would not terminate an owner's contract in the absence of good cause. It would not be good business to do so. This does not mean, however, that the contract could only operate reasonably in a commercial setting if a binding term to that effect must be implied. The implication of such a term would not be totally inconsistent with Clause 5(a) as the clause only stipulates that reasons need not be given not that they need not exist. However, I am satisfied that the implication of such a term would be contrary to the spirit of the agreement if not to its letter.

In any event, on the facts as found, I am satisfied that Suburban has demonstrated the presence of sufficient cause for termination with the result that, even if the term be implied, there has been no breach of it.
Nor can I see any basis upon which it can be successfully alleged that there has been any breach by Suburban of its obligation not to engage in unconscionable conduct either under the general law or under the provisions of s 52A (now s 51AB) of the Trade Practices Act or s 57(1) of the Fair Trading Act (SA). I am satisfied, as I have said, that there were reasonable grounds for Suburban's terminating Venning's contracts and that there has been nothing demonstrated which would have made it unconscionable so to do. Indeed, it could have terminated the contract forthwith under Clause 5(c)(i) had it so chosen.
Insofar as it is alleged that Suburban was guilty of unconscionable conduct in requiring Venning to enter into Clause 5(a), I find this charge unsubstantiated. Whilst it is true that some inequality of bargaining power might have existed between Suburban and Venning at the time this, in itself, would not suffice to render that aspect of the bargain an unconscionable one. Indeed, it must be borne in mind that, in a situation where competition existed between Suburban and other fleet operators in Adelaide, it was reasonably open to Venning to take his taxis to some competitor of Suburban's who might not have required that he enter into a contract enabling his services to be terminated on one month's notice without the giving of reasons. There is no evidence on this point but it cannot be assumed that this option was not open to Venning. However, more importantly, the doctrine requires more than mere inequality of bargaining power. In this connection I refer to what was said by Mason J (as he then was) in The Commercial Bank of Australia Limited v Amadio and Anor (1983-83) 151 CLR 447 at 461-2:-

"It goes almost without saying that it is impossible to describe definitively all the situations in which relief will be granted on the ground of unconscionable conduct. As Fullagar J said in Blomley v. Ryan (1956) 99 CLR 362, at p 405: 'The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-a-vis the other.'

Likewise Kitto J (1956) 99 CLR, at p. 415 spoke of it as 'a well-known head of equity' which -

'... applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands'.

It is not to be thought that relief will be granted only in the particular situations mentioned by their Honours. It is made plain enough, especially by Fullagar J, that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition of circumstance is placed at a special disadvantage vis-a-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created. I qualify the word 'disadvantage' by the adjective 'special' in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously effects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party."

In my opinion, the circumstances surrounding the entry by Venning into the contracts in the form insisted upon by Suburban fall far short of establishing relevant unconscionable conduct on the part of Suburban. Accordingly I reject this aspect of Venning's claim.
I should add that insofar as this aspect of the claim was based also upon s 51AB of the Trade Practices Act and s 57(1) of the Fair Trading Act the claim would also fail as those provisions apply only to the supply of goods and services "of a kind ordinarily acquired for personal, domestic or household use or consumption". Quite plainly radio bookings supplied to taxi operators cannot be described as services of this kind.
I come then to consider Venning's claim under s 46 of the Trade Practices Act.
So far as is relevant, s 46 provides:-

"(1) A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of -

(a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market;

(b) preventing the entry of a person into that or any other market; or

(c) deterring or preventing a person from engaging in competitive conduct in that or any other market.

(1A) For the purposes of subsection (1):

(a) the reference in paragraph (1)(a) to a competitor includes a reference to competitors generally, or to a particular class or classes of competitors; and

(b) the reference in paragraphs (1)(b) and (c) to a person includes a reference to persons generally, or to a particular class or classes of persons.

...

(3) In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the Court shall have regard to the extent to which the conduct of the body corporate or any of those bodies corporate in that market is constrained by the conduct of -

(a) competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or

(b) persons to whom or from whom the body corporate or any of those bodies corporate supplies or acquires goods or services in that market.

(4) In this section -

(a) a reference to power is a reference to market power;

(b) a reference to a market is a reference to a market for goods or services; and

(c) a reference to a power in relation to, or to conduct in, a market is a reference to power, or to conduct, in that market either as a supplier or as an acquirer of goods or services in that market.

...

(7) Without in any way limiting the manner in which the purpose of a person may be established for the purposes of any other provision of this Act, a corporation may be taken to have taken advantage of its power for a purpose referred to in sub-section

(1) notwithstanding that after all the evidence has been considered the existence of that purpose is ascertainable only by inference from the conduct of the corporation or of any other person or form other relevant circumstances."

The definition of "market" is to be found in s 4E of the Trade Practices Act which reads as follows:-

"For the purposes of this Act, unless the contrary intention appears, 'market' means a market in Australia and, when used in relation to any goods or services, includes a market for those goods or services and other goods or services that are substitutable for, or otherwise competitive with the first-mentioned goods or services."

To make out a cause of action for misuse of market power under s 46, it is necessary to establish:-

(1) the identification of the relevant market or markets for goods or services in Australia;

(2) that the respondent corporation has a substantial degree of power in the relevant market;

(3) that the respondent corporation has taken advantage of that power;

(4) for one or more of the purposes proscribed in s 46(1).

(See Natwest Australia Bank Limited v Boral Gerrard Strapping Systems Pty Limited (1992) 111 ALR 631 at 635-636).

Thus, the first stage in determining the claim under s 46 is to ascertain the relevant market in which Suburban is said to have a substantial degree of power. Indeed this is very often the crucial question as the width of the defined market and the extent of the respondent corporation's market power are necessarily interrelated. In Queensland Wire Industries Pty Limited v Broken Hill Pty Company Limited (1989) 167 CLR 177, Mason CJ and Wilson J said (at 187):-

"In identifying the relevant market, it must be borne in mind that the object is to discover the degree of the defendant's market power. Defining the market and evaluating the degree of power in that market are part of the same process, and it is for the sake of simplicity of analysis that the two are separated."

Their Honours went on to warn that:-

"too narrow a description of the market will create the appearance of more market power than in fact exists; too broad a description will create the appearance of less market power than there is."

In paragraph 2.4 of the statement of claim Venning makes the following assertion as to the relevant market:-

"Pursuant to section 4E of the Trade Practices Act 1974 as amended, the applicant says that the relevant market is 'the market to taxi operators for taxi services other than hailing passengers' hereinafter referred to as 'the market'."

In this context it is necessary also to refer to paragraphs 1.2 and 2.5 of the statement of claim. The former paragraph alleges that Suburban "conducted a business namely the market to taxi operators for taxi services other than hailing passengers pursuant to requests or bookings it had received over the telephone from members of the public." The latter alleges that Venning "conducted a business of providing taxi services to the public using the said Cabs both by way of the market supplied by the respondent as well as hailing passengers from taxi stands in the city and metropolitan area of Adelaide".
The definition of the relevant market put forward in paragraph 2.4 is unclear. The relevant product or service, level of market and geographic area are not clearly set out. In the circumstances that Venning is unrepresented I am prepared to adopt a liberal approach to his definition.
In the course of closing submissions, I inquired of Venning as to his description of the services provided by the Suburban. He seemed to accept that the appropriate description of the services was "the provision of information as to potential radio bookings" and went on to explain that "the basis under which the taxi operator can work, is from the source of either (1) a hailing passenger or (2) the supply of the bookings by way of a two-way radio service company and that the supply of that service is something that he has to pay for".
As to the geographic area contained in the relevant market, I am prepared to accept that Venning suggests that the relevant area is the city and metropolitan area of Adelaide as this can be inferred from the reference to that area in paragraph 2.5 of the statement of claim.
Counsel for Suburban offered no alternative definition. Rather it was asserted that s 46 in any event was inapplicable to the present facts. In these circumstances I feel that it is appropriate for the purposes of the preliminary inquiry as to whether Suburban had a substantial degree of power in a market to define that market in terms similar to those put forward by Venning. However, I would prefer to refer to that market as the market in the city and metropolitan area of Adelaide for the provision to taxi operators by way of radio communication of taxi requests or bookings.
It must be accepted, however, that Venning and Suburban each operated in different markets. Venning can be said to have acquired the services supplied by Suburban, but it cannot be said that Venning was competing in the same market as Suburban. Venning operated in a market by competing against his fellow drivers, whereas Suburban competed against the other taxi companies in Adelaide for telephone bookings for taxi services and in the provision of those bookings to taxi drivers. Unfortunately, Venning's claim has proceeded on the basis that he as a taxi operator and Suburban were operating in the same market, a matter I shall refer to later.
Has it been established that Suburban held a substantial degree of power in its market? Sub-section (4)(a) provides that in s 46 "a reference to power is a reference to market power". In Queensland Wire (at 200) Dawson J explained:-

"The term 'market power' is ordinarily taken to be a reference to the power to raise price by restricting output in a sustainable manner.... But market power has aspects other than influence upon the market price. It may be manifested by practices directed at excluding competition such as exclusive dealing, tying arrangements, predatory pricing or refusal to deal: see Standard Oil Co. v. United States; United States v. E.I. Du Pont De Nemours and Co.; 54 Am. Jur 2d, Monopolies, 35. The ability to engage persistently in these practices may be as indicative of market power as the ability to influence prices. Thus Kaysen and Turner define market power as follows: 'A firm possesses market power when it can behave persistently in manner different from the behaviour that a competitive market would enforce on a firm facing otherwise similar cost and demand conditions.' (Kaysen and Turner, Antitrust Policy

(1959), p. 75)

See also Re Queensland Co-operative Milling Association Ltd. Market power is thus the advantage which flows from monopoly or near monopoly ..."

In Dowling v Dalgety Australia Limited and Ors (1992) 34 FCR 109 Lockhart J, after referring to the High Court decision in Queensland Wire, listed the major factors to be taken into account in defining and identifying market power (at 138):-

"(a) 'The ability of a firm to raise prices above the supply cost without rivals taking away customers in due time, supply cost being the minimum cost an efficient firm would incur in producing the product';

(b) 'The extent to which the conduct of (any of the respondents) in that market is constrained by the conduct of ... competitors, or potential competitors ...' (s. 46(3);

(c) Market share of each respondent must be examined but this alone is generally not determinative of market power as 'the relative effect of percentage command of a market varies with the setting in which that factor is placed' (Mason CJ and Wilson J adopted the language of Reed J in United States v Columbia Steel Co 334 US 495 (1948) at 528);

(d) The presence of vertical integration is another factor, but its presence does not necessarily mean that a substantial degree of power exists; and

(e) To what extent is it rational or possible for new entrants to enter the relevant market? That is to say, what are the barriers to entry? It is this factor which must be taken as the primary consideration in determining market power. See also the judgment of the Full Court of this Court in Arnotts Ltd v Trade Practices Commission (at 336-339)."

In Dowling his Honour went on to consider the meaning to be attributed to the word "substantial" and after referring to several decisions of this Court and the Explanatory Memorandum to the Trade Practices Revision Bill 1986 he concluded:-

"It means that for a corporation to have a substantial degree of market power it must have a considerable or large degree of such power. The difficulty lies, not so much in defining the word, but in applying it to the facts and circumstances of a particular case and in identifying whether the requisite degree of market power exists in the particular case."

The evidence as to Suburban's power in the relevant market is sparse. In paragraph 11.1 of the statement of claim Venning alleges:-

"The respondent is a Corporation that has a substantial degree of power in the market, in that it operates one of the two largest services of its kind in Adelaide."

The evidence did not go much further. Mr Geddie and Mr Pipinias both referred to the composition of the taxi industry in Adelaide at the relevant times. Mr Pipinias stated that in 1990 there were five taxi companies of varying sizes in Adelaide. The largest was United Yellow with a fleet of approximately 380 taxis. Suburban then had a fleet of around 335 taxis. The other taxi companies were considerably smaller.
In effect, Suburban's fleet contained slightly less than 40% of taxis licensed in Adelaide. But market share alone is not determinative of market power. In Queensland Wire Mason CJ and Wilson J said (at 189):-

"Courts have often looked to market share to determine degree of market power: see, e.g. American Tobacco v United States; United States v Grenell Corp. ... But as section 46(3) and the passage from Continental Can which we just quoted suggests, a large market share does not necessarily mean that there is a substantial degree of market power. To borrow the words from Reed J's opinion for the Court in United States v Columbia Steel Co, '(t)he relative effect of percentage command of a market varies with the setting in which that factor is placed."

In Queensland Wire consideration was given to other factors which may evidence market power, in particular barriers to entry. In relation to barriers to entry Dawson J said at 201:-

"The existence of barriers to entry may be conclusive in determining the relevant market and the degree of market power in it. In the context of s. 46, the existence of significant barriers to entry into a market carries with it market power on the part of those operating within the market. Market power follows as a natural consequence of barriers to entry which are also a prerequisite to the establishment and maintenance of a monopoly..."

With the exception of the material as to relative market shares and fleet sizes, in the present case there has been little or no evidence of the other factors which indicate a substantial degree of power in the market. No evidence has shown the pricing behaviour of Suburban or that of other taxi companies.
Nor is there evidence of the existence of barriers to entry. Undoubtedly certain statutory, regulatory and planning steps would need to be followed before a potential new competitor could enter. A new entrant would face initial capital costs, but in the absence of evidence I can not accept that these would be so high as to amount to a barrier to entry: see Queensland Wire per Mason CJ and Wilson J at 192 and per Dawson J at 201.
Moreover, the evidence indicates that to a large degree, Suburban's conduct was constrained by that of the other taxi companies with whom it competed to acquire and retain taxi operators in its fleet. The frequency with which taxi operators would transfer between fleets points strongly to the relevant market being competitive.
In these circumstances I do not find it established that Suburban had a substantial, in the sense of "considerable or large", degree of power in the relevant market. Accordingly I find that Venning cannot establish his claim under s 46.
Should I be wrong in so finding, I am nevertheless, satisfied that it has not been shown that Suburban took advantage of market power for a purpose proscribed by s 46.
In Queensland Wire all members of the High Court made it clear that the phrase "take advantage" in s 46 does not require proof that the conduct was in some way reprehensible. In the context of the economic objectives of s 46, Mason CJ and Wilson J formulated the question of taking advantage of market power as being (at 191):-

"Simply whether a firm with a substantial degree of market power has used that power for a purpose proscribed in the section, thereby undermining competition, and the addition of a hostile intent inquiry would be superfluous and confusing."

Similarly, Deane J (at 194) expressed the view that the words "take advantage of ... power" do not "introduce a need for some distinct examination of the morality or social acceptability of the conduct involved". In his judgment Toohey J (at 214) felt there was little real distinction between the words "use" and "take advantage of" in regard to s 46.
I refer also to the observations of Dawson J. His Honour noted (at 202):-

"The difficulty in determining what conduct constitutes taking advantage of market power and what conduct does not, stems inevitably from the need to distinguish between monopolistic practices, which are prohibited, and vigorous competition, which is not."

His Honour continued:-

"Nor is it helpful to categorize conduct, as has been done, by determining whether it is the exercise of some contractual or other right: see Top Performance Motors Pty. Ltd. v. Ira Berk

(Queensland) Pty. Ltd. (1975) 24 FLR 286; 5 ALR 465; Ah Toy J. Pty Ltd. v. Thiess Toyota Pty. Ltd. (1980) 30 ALR 271; see also Warman International Ltd. v. Envirotech Australia Pty. Ltd. (1986) 11 FCR 478; Williams v. Papersave Pty. Ltd.

(1987) ATPR 40-781. The fact that action is taken pursuant to the terms of a contract has no necessary bearing upon whether it is the exercise of market power in contravention of s 46."

The impugned conduct must be a use of the corporation's market power and not some other power, although as Dawson J pointed out in the above quotation, simple labelling or categorisation is not appropriate. In Natwest Australia Bank Limited v Boral Gerrard Strapping Systems Pty Ltd (1992) 111 ALR 631 French J said (at 637):-

"The conduct must either by necessary implication from its very nature or by reference to other pleaded facts and circumstances constitute a use of that (market) power.... There must be a causal connection between the conduct alleged and the market power pleaded such that it can be said that the conduct is a use of that power. In many cases the connection may be demonstrated by showing a reliance by the contravener upon its market power to insulate it from the sanctions that competition would ordinarily visit upon its conduct." (emphasis added)

See also General Newspapers Pty Ltd and Ors v Australian and Overseas Telecommunications Corporation Limited (1993) 40 FCR 98 at 122.

The market power must be taken advantage of for a proscribed anti-competitive purpose to constitute a breach of s 46. This involves both objective and subjective considerations. The nature of this inquiry and the meaning of "purpose" was considered by a Full Court of this Court in General Newspapers Pty Limited and Ors v Telstra Corporation (1993) ATPR para 41-274. In that case Davies and Einfeld JJ said (at 41,697):-

"There are now several judgments of this Court, including Full Courts, which have emphasised, in relation to s.46, the subjective elements of 'purpose'. See for example ASX Operations v. Pont Data Pty Ltd (No 1) at 474-5; Eastern Express Pty Ltd v. General Newspapers Pty Ltd at ATPR 40,303; FCR 66; Dowling v. Dalgety Australia Ltd (1992) ATPR para 41-165; 34 FCR 109.

However, on reading of the judgments in Queensland Wire, after it has been ascertained what the nature of the conduct was, what the conduct was designed and was likely to achieve and what was the manner of its implementation, the ultimate test is an objective test which, as Deane J said, involves notion of markets, market power, competitors in a market and competition. Dawson J referred to the distinction between monopolistic practices which are prohibited and competitive conduct which is not, and to the search for a satisfactory basis upon which to make that distinction. Toohey J referred to the distinction between predatory conduct and conventional business practice."

Their Honours went on to say:-

"Thus, if having regard to the nature and substance of a transaction and to what it was designed to achieve, it could be said that a substantial purpose of a transaction was one of the purposes prohibited by s.46(1), then that would be sufficient and it would not be necessary to make any further examination of the subjective reasons of the persons in control of the transaction. Nor, if such a purpose was to be inferred from the conduct of the corporation or other relevant circumstances, as s.46(7) permits, would it be a defence to say that the predominant factor actuating the persons in control was the achievement of another end. As s.4F provides, a substantial purpose is sufficient.

The term 'purpose' necessarily has subjective implications for, although it does not mean motive, it means 'the effect which it is sought to achieve - the end in view', per Lord Denning delivering the opinion of the Judicial Committee in Newton v. Federal Commissioner of Taxation (1958) 98 CLR 1 at 8, or 'the result aimed at', per Dawson J in Gulland at 104; and it carries with it 'the notion of an intent to achieve the result spoken of in each of the paragraphs of s.46(1)', per Toohey J in Queensland Wire at ATPR 50,623; CLR 214. The factors which influence a transaction will be relevant as casting light upon the transaction and may bring a transaction within the section notwithstanding that, if purely objective criteria were examined, the transaction might appear not to breach the section. The thinking behind a transaction may clarify what the transaction was designed to achieve and was likely to achieve. But, ordinarily those matters can be inferred from the terms of the arrangement made, from the way in which they were implemented, and from the existence or absence of monopoly-type conduct such as predatory pricing."

In his statement of claim Venning puts the s 46 aspect of his case in three ways. Paragraph 9(c) alleges:-

"To include the said clause 5(a) in a contract for the supply of the respondent's services would seek to authorize the respondent to prevent the entry of the applicant into the market and to deter or prevent the applicant from engaging in competitive conduct in the market thereby constituting a contravention by the respondent of clauses (1)(b) and (1)(c) of section 46 of the Trade Practices Act 1974 as amended."

This amounts to an allegation that Suburban contravened s 46 in taking advantage of its alleged market power to insert Clause 5(a) in to the relevant agreements.
Secondly, paragraph 11.2 alleges:-

"In discontinuing or terminating its services to the applicant as aforesaid, the respondent took advantage of its said power to prevent the applicant from conducting business in the market, and to deter or prevent the applicant from engaging in competitive conduct in the market, contrary to the provisions of Section 46(1) of the Trade Practices Act."

This paragraph formulates a claim that in giving written notice of termination pursuant to its purported rights under Clause 5(a) Suburban was misusing its market power so as to prevent or deter the applicant from engaging in competitive conduct.
In respect of both these paragraphs, the wording of the claims places Venning as competing in "the market" as described in paragraph 2.4, which I have set out above. As referred to previously, it is abundantly apparent that Venning as a taxi operator was not competing in the same market in which Suburban operated. Rather, he acquired services supplied by Suburban and in bidding for the taxi bookings Venning was competing against other taxi drivers. Venning's claims properly amount to allegations that his competitive conduct in relation to other drivers was deterred or prevented by Suburban's conduct. Counsel for Suburban did not object to the pleadings on this point although it was submitted that s 46 did not operate as Venning and Suburban were not competitors. However, the course of the hearing before me indicated an understanding that Venning's complaint went to his ability to compete in the market as between taxi operators. In the light of the references to "any other market" in s 46(1)(b) and (c) I am prepared, for present purposes, to consider the s 46 claim on this basis.

The third way in which Venning's s 46 claim is put is found in paragraph 13 of the statement of claim which reads as follows:-

"In addition, the applicant refers to the particulars contained in subparagraphs 10.44 to 10.46 inclusive herein and says that by virtue of the comments by the respondent's General Manager Malcolm Gedde on an unrelated planning matter, an additional motive for the respondent's said termination and discontinuance is hereby identified by the applicant as a concern on the part of the respondent (where, to the best of the applicant's knowledge there is no evidence whatsoever to support the respondent's fears) that the applicant or his company Applied Communications Technology Pty Ltd was seen as a potential threat as a competitor to the respondent for the supply of services in the market described in subparagraph 4.2

(sic) herein and as a result the respondent as a supplier of services in the market, discontinued and terminated its service to the applicant when the respondent well knew that the supply of the said service and the operation of his two taxi Cabs represented the applicant's sole source of income and thereby took advantage of its said power in an attempt to prevent the applicant or his company from conducting business as a supplier in the market and to deter or prevent the applicant or his company from engaging in competitive conduct as a supplier in the market, contrary to the provisions of Section 46(1) of the Trade Practices Act."

This paragraph, it seems, alleges that in giving notice of termination pursuant to Clause 5(a) Suburban took advantage of its market power for the further purpose of preventing Venning and his company entering Suburban's market as a provider of radio services to taxis.
First, I shall consider the claim that the insertion of Clause 5(a) into the agreements was a misuse of Suburban's market power.
The comments of Dawson J in Queensland Wire quoted above appear to leave open the question whether in certain circumstances the insertion of a condition into a contract or agreement may itself constitute the taking advantage of substantial market power for an anti-competitive purpose.
In General Newspapers Pty Ltd and Ors v Australian and Overseas Telecommunications Corporation Limited (1993) 40 FCR 98 at 122 Wilcox J at first instance held that the conditions in certain contracts imposing requirements for the dedication of printing presses contravened s 46(1). That case related to contracts between Telecom and two printers for the printing of telephone directories. A third printer who had been excluded from the tendering process sought, inter alia, orders setting aside the contracts. Wilcox J found that Telecom's internal documents disclosed that it was aware the printers had no choice but to accede to the conditions and that Telecom took conscious advantage of its market power. His Honour held (at 124) that:-

"It was a significant advantage to Telecom to be able to prevent potential competitors gaining access to the only two Australian plants capable of printing four-coloured directories economically and efficiently."

On appeal, a Full Court of this Court came to an opposite finding: General Newspapers Pty Limited and Ors v Telstra Corporation (1993) ATPR para 41-274. Davies and Einfeld JJ said (at 41,700):-

"In any event, the evidence does not seem to us to disclose that the restrictions in the new contracts were other than normal clauses that one would expect in printing contracts of this type."

And:-

"Accepting the need for dedicated printing presses, it does not seem to us that the clauses in the new contracts imposed any undue restriction beyond that required for the efficient publication of the directories."

Their Honours held (Gummow J agreeing) that it was not a purpose of the transactions that the contracts would make it less likely that either printer would make plant and services available to a competitor of Telecom. Rather, it was one of "a myriad of factors which were taken into consideration" and was not a substantial factor reflected in the final arrangements.
The Full Court's decision still leaves open the possibility that the insertion of a particular clause in a contract may contravene s 46. Obviously, the question must be determined by a careful examination of the facts and circumstances of the particular case.
In my view, Clause 5(a) in the present agreements does not on its face lead to the inference that Suburban in ensuring its insertion in the relevant agreements acted with a relevant anti-competitive purpose. The clause reserves to Suburban the right to terminate on one month's written notice without giving a reason. Such a right to terminate obviously may be used for one or more of many diverse purposes. Neither the terms of Clause 5(a) nor the relevant circumstances of its insertion lead to the inference that a necessary purpose of the clause was to deter or prevent Venning engaging in competitive conduct in his market with other taxi operators.
Patently, the clause was merely part of the standard form of agreement used by Suburban in such circumstances. No doubt it was drawn up by its legal advisers so as to retain a position of advantage of some kind to Suburban in its dealings with taxi operators in its fleet. That it gives such an advantage does not necessitate the finding that in doing so Suburban contravened s 46.
Moreover, Suburban's refusal to delete the clause on Venning's request, whilst it is indicative of a degree of inequality of bargaining power, does not for the reasons already given amount to a use of market power by Suburban. Further, bargaining power is not in all cases congruent with market power. In the circumstances I find that the refusal to delete the clause and the insistence upon its insertion do not amount to Suburban having, in the words of Dawson J in Queensland Wire at 202, "used that (market) power in a manner made possible only by the absence of competitive conditions".
I come then to the claim that the giving of the notice of termination on 17 September 1990 constituted a contravention of s 46. In giving notice Suburban was relying upon what it saw as its legal right under Clause 5(a). As already indicated, in my view, Suburban could properly have asserted a right to terminate forthwith under Clause 5(c)(i) because of Venning's breach of regulation 7.1.11.
In early cases on s 46 it seemed to be assumed that bona fide reliance on a contractual or other legal right would not infringe the provisions of s 46. (See e.g. Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 5 ALR 465).
This approach has been reviewed following the decision of the High Court in Queensland Wire, in particular the comments of Dawson J (at 202) quoted above. This review was noted by a Full Court of this Court in Australasian Performing Rights Association Ltd v Ceridale Pty Ltd (1990) 97 ALR 497 at 510:-

"From time to time the question has arisen whether the exercise in good faith of an extraneous legal right, by a corporation which has substantial market power, may be said to be a taking advantage of its power: see Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 5 ALR 465; 24 FLR 286 at 290, Warman International Ltd v Envirotech Australia Pty Ltd (1986) 11 FCR 478 at 502; 67 ALR 253; 6 IPR 578, Williams v Papersave Pty Ltd (1987) 16 FCR 69 at 77; 73 ALR 475, and, on appeal, (1987) 16 FCR 80; 76 ALR 152. Those cases have now to be read in the light of the meaning attributed by the High Court to the words 'take advantage of' in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177; 83 ALR 577, see especially per Dawson J (CLR 202). None the less, s 46 is only contravened if the relevant act of the corporation is undertaken for a purpose proscribed by sub-s (1) of s 46."

On the facts as found I am unable to conclude that in giving notice of termination Suburban was acting with the relevant purpose of deterring or preventing Venning engaging in competitive conduct in another market.
As I have already indicated the overall design of the radio bidding system was to ensure parity in each driver's ability to enter a bid for bookings. Repeated reference was made by several witnesses to drivers seeking a "competitive edge" or "competitive advantage" in their ability to bid for jobs. Some drivers were prepared to cheat the system at the expense of the other drivers who had complied with Suburban's regulations. In giving the notice Mr Pipinias and Suburban were upholding the principle of fairness and equality and not seeking to deter competition on Venning's part.
In his judgment in Queensland Wire Deane J (at 194) stated the objective of s 46 "is the protection and advancement of a competitive environment and competitive conduct". It would be most remarkable if the enforcement of regulations properly made to ensure a competitive environment by way of parity in ability to compete were held to be in breach of that section.
I come to Venning's third claim under s 46. It relates to his proposal, to which I have already referred, to build a 62 metre radio tower and accompanying communications base site on land in the Hills District of Adelaide. Paragraph 13 refers to the particulars in paragraphs 10.44 to 10.46 which contain selective quotations from the letter dated 20 August 1990 sent by Mr Geddie which I have already considered. Venning contended that these passages from the letter supported his assertion as to Suburban's motives and purposes. I have already rejected these contentions.
In my opinion, the writing of such a letter, whatever effect, if any, it may have had on the result of the relevant planning application, can in no way be said to constitute a breach of s 46 even assuming Suburban to have had the necessary substantial degree of market power. The writing of the letter was not a use of Suburban's market power; there being no "causal connection" between the letter and the market power allegedly possessed by Suburban.
Furthermore, the evidence establishes, in my view, that the management of Suburban did not see Venning or his company as a distinct potential threat. From some of Mr Geddie's comments there may be an inference that Venning's proposed project was seen as having one possible future use as a base for a taxi company; however, if such a view was held it was only one of several alternative possible uses perceived at the time by Mr Geddie. There is nothing in the letter or in Mr Geddie's evidence which indicates or suggests an intention or wish to destroy or deter a potential competitor.
I am, accordingly, satisfied that Venning's claims under s 46 must all be rejected.
The final basis on which Venning puts his case is a contravention of s 47 of the Trade Practices Act. Paragraph 9(d) of the statement of claim reads:-

"To include the said clause 5(a) in a contract for the supply of the respondent's services would seek to authorize the respondent to engage in the practice of exclusive dealing thereby constituting a contravention of clauses (1) and (7) of section 47 of the Trade Practices Act as amended."

Paragraph 12 reads:-

In discontinuing or terminating its service to the applicant as aforesaid, the conduct of the respondent constitutes exclusive dealing contrary to the provisions of sections 47(1) and 47(7) of the Trade Practices Act."

The relevant provisions of s 47 referred to are as follows:-

(1) Subject to this section, a corporation shall not, in trade or commerce, engage in the practice of exclusive dealing. ...

(7) A corporation also engages in the practice of exclusive dealing if the corporation refuses-

(a) to supply goods or services to a person;

(b) to supply goods or services at a particular price to a person; or

(c) to give or allow a discount, allowance, rebate or credit in relation to the supply of goods or services to a person,

for the reason that the person or, if the person is a body corporate, a body corporate related to that body corporate has not acquired, or has not agreed to acquire, goods or services of a particular kind or description directly or indirectly from another person."

Sub-section (7) deals with a practice often referred to as "third line forcing" or "tying in favour of third parties" (see e.g. FH Callaway, "Third Line Forcing" (1979) 53 ALJ 125). I can perceive no basis for the application of s 47(7) on the facts as found. At no stage was Suburban requiring or seeking to require Venning to acquire goods or services of any particular kind from a person other than Suburban. At all relevant times there was only one package of services and only two parties involved. The circumstances are clearly distinguishable from those in Trade Practices Commission v Legion Cabs (Trading) Co-Operative Society Ltd (1978) 35 FLR 372.
In argument, Venning sought to rely on the decision in Marks Lyons Pty Ltd v Bursill Sportsgear Pty Ltd (1987) 75 ALR 581. That case, so far as it dealt with s 47, involved a contravention of s 47(1) and s 47(3)(f) in that a supplier of goods refused to supply for the reason that the acquirer had re-supplied the goods acquired in particular places. The case pleaded and facts in Mark Lyons are clearly distinguishable from those relating to Venning. I see no basis for the application of that case here.
Although they were not pleaded, I have considered whether any other provision in s 47 could apply. In my view, they clearly do not. Nor would I be persuaded, having regard to s 47(10), that Suburban's conduct had the purpose or likely effect of substantially lessening competition.
For these reasons I dismiss the application and enter judgment for Suburban. I order Venning to pay Suburban's costs.

[1994] FCA 1092

09 FEBRUARY 1994