Adsteam Building Industries Pty Limited v The Queensland Cement and Lime Company Limited

Adsteam Building Industries Pty Limited v The Queensland Cement and Lime Company Limited - [1998] FCA 791 - FCA 1989 case summary — Zoe

[25]

None of the respondents, as I understand their submissions, suggests the s 45 case is without reasonable foundation. The explanation for this is clear. During the hearing, the Trade Practices Commission's statement of claim against the first three respondents and others was put in evidence, together with the parties' joint written submission to Lockhart J in the penalty proceedings. The main allegations in para 12 of the applicant's pleading are plainly taken from the allegations in the Commission's statement of claim that the four respondents and Nucon contravened s 45. The Commission's statement of claim, in so far as it deals with the activities of the four respondents and Nucon in the Gold Coast market, is confined to their activities during the period the subject of the present action; it alleges that "[f]rom not later than early 1989 until in or about June 1994" the respondents and Nucon "made a number of arrangements or arrived at a number of understandings among themselves in relation to the supply and delivery of pre-mixed concrete in the Gold Coast concrete market" (para 19). This market was defined to include, but to extend a little more widely than, the market described in the applicant's pleading. The Commission's pleading goes on to allege (in para 21) that these arrangements or understandings "included arrangements or understandings" to the effect of that alleged in para 12(i) of the applicant's pleading; (the Council's pleading, however, contains a more extensive list of "pet" customers for each respondent than does the Commission's pleading). In paras 23 and 24, it is alleged that they made and gave effect to arrangements or understandings to much the same effect as those pleaded in para 12(ii) of the applicant's pleading. It is clear from para 27 that the Commission's case was that the arrangements or understandings referred to in paras 19, 21 and 23 of its pleading and on which it based its case that s 45 was contravened were entered into, not on one occasion but in the course of regular meetings of representatives of the four respondents and Nucon held during the "cartel period". It is also clear that this part of the Commission's pleading is the source of much of the information provided by the Council's solicitors in the correspondence I have referred to about the Council's alternative case (although those solicitors provided some information additional to that which is contained in the Commission's pleading). In para 120, the Commission also alleged that these five organisations made and gave effect to arrangements or understandings to increase "the base concrete price", which are similar to the arrangements alleged in para 12(v) of the applicant's pleading. In para 25, the Commission alleged that the arrangements or understandings described in paras 21 and 23 of its pleading were given effect to by each of the four respondents and Nucon, inter alia, monitoring one another's compliance with those arrangements and understandings; this allegation is not mirrored in the applicant's pleading, although the latter, in para 12(iii)A, does contain an allegation that the five organisations acted to maintain the market share of each "by monitoring the market share of each other".

[39]

But the present pleading of loss and damage is, as I have said, still insufficient to plead that issue in the manner normally required, even with respect to the direct supplies and even if the Council only intends to rely on the alternative case limited in accordance with the leave I will give to amend the pleading. For example, the Council does not state how its damages claim in respect of direct supplies is related (if at all) to the implementation of the arrangement or understanding in para 12(i) or in para 12(ii) or in para 12(v). It is not "sufficiently apparent", in the sense in which that term is used in the passage cited in Bond Corporation at 222, how these losses could have been caused by the implementation of arrangements of the kind the subject of paras 12(i), (ii) and (v). The conduct referred to in para 12(i) does not strike me as conduct that necessarily would have resulted in the Council paying higher prices for direct supplies of concrete. The same can be said of the conduct referred to in para 12(ii), which appears on its face, to be capable of affecting only the prices of concrete indirectly supplied to the Council. As to para 12(v), while "rigged" prices of the kind there referred to can affect in an obvious way the cost to Council of direct supplies, the Council can still not hope to recover in respect of the many direct deliveries made prior to 1993 which are included in its present "direct supply" claim. So far as the Commission's pleading and the joint submissions in the penalty proceedings reveal, it was no part of the case there presented to the Court that conduct of the kind referred to in para 12(i), (ii) or (v) of the Council's current pleading caused either of its predecessor Councils loss of the kind sought to be recovered by the Council in that part of its s 45 claim that relates to direct supplies. Paragraph 19(i) cannot therefore stand. Paragraph 22 cannot make the pleading a sufficient one on the issue of damages: it does no more than state how a causal relationship between the conduct in para 12(i), (ii) and (v) and the loss claimed in respect of direct (and indirect) supplies will bring about that loss, if such a relationship exists, without giving any hint as to how the existence of that relationship may be able to be proved.

[46]

Various of the respondents said the pleading in paras 15 and 17 was deficient because it fails to identify the particular provision or provisions of the various arrangements and understandings relied on which has the character proscribed by the relevant sub-section of s 45. They complain, in effect, that s 45(2), on its proper construction, does not prohibit the making of or the giving of effect to any contract, arrangement or understanding, that the sub-section only operates when there is a contract, arrangement or understanding which contains, as one of its provisions, ie, as one of its terms or parts or clauses, a provision (or provisions) that has the prohibited character. While none of the respondents put the submission in exactly these words, this, in my opinion, is the effect of the submission. So put, the lack of substance in this particular attack on the pleading I think stands revealed. The term "provision" in s 45 cannot be limited in the way contended for by the respondents. That term is not given any special meaning in the Act. In my opinion, it bears that which it has in ordinary usage. According to the Shorter Oxford English Dictionary (3rd ed), this word can, in an appropriate context (such as I think is provided by s 45(2) the Trade Practices Act) mean "[e]ach of the clauses or divisions of a legal or formal statement, or such a statement itself, providing for some particular matter". The object of the section - to proscribe the making of and the giving effect to binding agreements and non-binding express or implied arrangements and understandings in so far as they have the requisite anti-competitive character - requires, in my opinion, s 45(2) to be read as prohibiting the making of and the giving effect to a term of a contract, arrangement or understanding that has the requisite anti-competitive character and also as prohibiting the entirety of a contract, arrangement or understanding, if the whole transaction can be seen to possess that character.

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Judgment (100 paragraphs)

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Cases Cited (5)