Williams & Hodgson Transport Pty Ltd v Castlemaine Tooheys Ltd

[1984] FCA 271

Re: WILLIAMS AND HODGSON TRANSPORT PTY LIMITED
And: CASTLEMAINE TOOHEYS LIMITED
No. QLD G55 of 1984
Practice and Procedure
(1985) ATPR para 40 - 540

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Spender J.

CATCHWORDS

PRACTICE AND PROCEDURE - application to strike out Statement of Claim - significant questions as to ambit and construction of s.47 of the Trade Practices Act 1974 - section of significance to commercial community - principles governing applications to strike out.

Trade Practices Act 1974, s.47, sub-s. 47(6)

HEARING

BRISBANE

#DATE 17:8:1984

ORDER

1. Dismiss the Respondent's application to strike out the Statement of Claim.

2. Costs of the application to strike out the Statement of Claim be the applicant's costs in the cause.

JUDGE1

This is an application for the Statement of Claim in this matter to be struck out and judgment to be entered for the respondent. I do not propose to follow that course and I will shortly state why.

At the core of the Statement of Claim is a complaint that the respondent has engaged in exclusive dealing contrary to s.47 of the Trade Practices Act 1974 ("the Act"), in respect of the manner in which it supplies beer to licensed premises in North Queensland. The nature of the challenged conduct appears from the matters pleaded in paragraphs 5 and 6 of the Amended Statement of Claim:

"5. In contravention of the provisions of s.47 of the Trade Practices Act 1974 the Respondent in its aforesaid trade or commerce engages in the practice of exclusive dealing in that it -

(i) supplies or offers to supply its goods on the condition that the person to whom it supplies or offers or proposes to supply the said goods will acquire goods or services of a particular kind or description directly or indirectly from another person, namely the service of carriage of the goods purchased by a carrier engaged or nominated by the respondent at a cost payable directly or indirectly by the purchaser of the goods to the exclusion of a carrier engaged or nominated by the purchaser;

(ii) it refuses to supply its goods to a person for the reason that the person has not agreed to acquire services of a particular kind or description directly or indirectly from another person, namely the service of carriage of the goods by a carrier engaged or nominated by the respondent at a cost payable directly or indirectly by the intending purchaser of the goods to the exclusion of a carrier engaged or nominated by the intending purchaser.

6. Further particulars of the matter pleaded in the preceding paragraph are
-
(i) On 5th March, 1984 a servant or agent of the respondent orally informed a servant or agent of the applicant that the applicant could not carry the respondent's beer to Mackay, Queensland, notwithstanding that certain hoteliers in Mackay wished to engage the applicant so to do, and that a carrier known as 'Q.R.X.' was the respondent's preferred carrier.

(ii) On 8th March, 1984 a servant or agent of the respondent orally informed an agent of the applicant that the said 'Q.R.X.' was the respondent's preferred carrier of cartons of its beer to its customers in Mackay and Rockhampton in Queensland and of kegs of its beer to all places in Queensland and that the applicant could apply to be the preferred carrier but that the applicant would have only one carrier.

(iii) By writing dated 19th March 1984 the respondent advised the applicant that -

(a) its trading terms for the supply of bulk and packaged beer from Brisbane to its customers in the Mackay area were then on a C.I.F. Mackay basis;

(b) the respondent employed the said Q.R.X. as its carrier for the purpose of effecting deliveries from Brisbane to its customers hotel.

(iv) Orders given in March and April, 1984 by several hotels in Queensland to the respondent for the purchase from the respondent of kegs and/or other packages of its beer on a term that the said goods should be collected by or despatched by or carried by the applicant were filled by the respondent sending the goods by Q.R.X. or were responded to by servants or agents of the respondent informing the hotelier that the goods ordered could not be carried by the applicant.

(v) In reply to letter dated 3rd April, 1984 written to the Respondent by the Freshwater Hotel Cairns requesting the respondent to acknowledge that all further orders would be sent by the applicant the respondent replied by letter dated 9th April 1984 that it would not be convenient to accept orders on that basis and the respondent would consider orders placed on a C.I.F. Basis.

(vi) On 29th March, 1984 the Mackay Hotel ordered from the respondent 240 cartons of 'stubbies' and 10 kegs of ale and requested the respondent to deliver such goods to the applicant for carriage to that Hotel; contrary to such request the respondent fulfilled such order by forwarding the goods ordered to the Mackay Hotel by the carrier Q.R.X. whereby the said Hotel indirectly acquired the service of carriage of goods from another when it paid the respondent's charge on a c.i.f. basis.

(vii) On 29th March, 1984 the Freshwater Hotel Cairns ordered from the respondent 10 kegs of ale and requested the respondent to deliver such goods to the applicant for carriage to that Hotel; contrary to such request the respondent fulfilled such order by forwarding the goods ordered to the Freshwater Hotel by the carrier Q.R.X. whereby the said Hotel indirectly acquired the service of carriage of goods from another when it paid the respondent's charge on a c.i.f. basis.

(viii) On 4th April 1984, the Mackay Hotel ordered from the respondent a quantity of the respondent's products and requested the respondent to deliver such goods to the applicant for carriage to that Hotel; contrary to such request the respondent fulfilled such order by forwarding the goods ordered by the Mackay Hotel by the carrier Q.R.X. whereby it indirectly acquired the service of carriage of goods from another when it paid the respondent's charge on a c.i.f. basis.

(ix) In reply to letter dated 5th April, 1984 written to the respondent by the Hotel Mackay requesting the respondent to confirm that all orders placed would be forwarded by the applicant, the respondent replied by letter dated 11th April, 1984 that it would not be convenient on that basis and the respondent would consider orders placed on a c.i.f. basis."

The issue in this case is one to which there has not been extensive attention previously directed, although there are observations in some cases, and in the text books, as to what precisely is encompassed by sub-s. 47(6) of the Act. See Trade Practices Commission v. Legion Cabs (Trading) Co-operative Society Ltd (1978) A.T.P.R. 40-092 per Franki J.; In re Ku-ring-gai Co-operative Building Society (No. 12) Ltd & Anor (1978) A.T.P.R. 40-094; and Donald and Heydon Trade Practices Law, Vol 1 at p.292.

The proper approach to an application to strike out a pleading is not in dispute here; I merely refer to the statement of principle by the former Chief Justice Sir Garfield Barwick in General Steel Industries Inc v. Commissioner for Railways (N.S.W.) (1964) 112 C.L.R. 125 at p.129, and to the earlier judgment by Dixon J., as he then was, in Dey v. Victorian Railways Commissioners (1949) 78 C.L.R. 62 at p.91. Those principles were followed by the Full Court of the Federal Court in Universal Telecasters (Queensland) Ltd v. Ainsworth Consolidated Industries Ltd and Anor (1983) A.T.P.R. 40-384 at 44,525 and 6.

While I have, as the transcript will indicate, real difficulty in seeing how such a common practice as a C.I.F. contract can possibly come within the exclusive dealing provisions of s.47, the position is by no means the same when the allegation is that goods will be supplied only on a C.I.F. basis. To take the analogy of Mr Pincus Q.C. in argument if a grocer says, I will supply goods to you only on the basis of a delivered price, does that conduct involve a contravention of sub-s. 47(6)?

It clearly would not be a breach of s.47 if the respondent permitted purchases of beer to either accept its C.I.F. terms, including the use of Q.R.X. as its "preferred carrier", or alternatively permitted that merchandise to be received by the purchaser at its Brisbane premises.

These proceedings really raise two questions: first of all, does the respondent permit the supply of beer to North Queensland purchasers only on C.I.F. terms with the preferred carrier, and if so, does that constitute an indirect acquisition of services by the North Queensland purchaser. It is a short point and the matter, with suitable directions, can be quickly resolved at a trial.

My view is that this Court's summary jurisdiction to stay or dismiss the proceedings should not be invoked here, and the proceedings should be continued to allow Castlemaine Tooheys to raise its points in opposition to the claim in the appropriate way.

I also do not propose to exercise the summary jurisdiction here because it seems to me that there are significant questions as to the proper construction and ambit of s.47, which has been unexplored to any considerable degree, and the case does raise at least arguable questions as to the ambit of that section. The section is a matter of some considerable importance in a general operation of the Act and has a real significance to the commercial community, particularly in the common and commercially important area of C.I.F. contracts. That is another and very compelling reason why it would not be appropriate to exercise the summary jurisdiction of the Court to strike out the Statement of Claim. Therefore, I will not strike out the amended Statement of Claim.

In the course of argument Mr Davies Q.C. indicated a wish to further amend the Statement of Claim to allege that purchasers received itemised accounts, one item of which was freight. Subject to that, the Statement of Claim on which he wishes to rely is in its present form and that is the Statement of Claim on which this ruling is made.