Australian Rugby Union Ltd v Hospitality Group Pty Ltd - [1999] FCA 1136 - FCA 1995 case summary — Zoe

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Australian Rugby Union Ltd v Hospitality Group Pty Ltd

[1999] FCA 1136

Federal Court of Australia|1995-08-25|Before: Tamberlin J, Sackville J

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Source facts

Court

Federal Court of Australia

Decision date

1995-08-25

Before

Tamberlin J, Sackville J

Source

Original judgment source is linked above.

Judgment (24 paragraphs)

[1]

Australian Rugby Union Ltd v Hospitality Group Pty Ltd [1999] FCA 1136 INTERLOCUTORY PROCEEDINGS - applications for interlocutory injunctions - applicant sold tickets to certain rugby union test matches subject to condition that tickets cannot be resold at a premium or used for commercial purposes - applicant also entered agreement appointing third respondent as one of its licensed retail travel agents, entitling third respondent to some tickets to the matches - agency agreement only allowed agent to sell tickets as part of "travel packages" - first and second respondents bought tickets from third respondent - first and second respondents sold tickets to public as part of "hospitality packages" - whether serious issues to be tried in relation to breach of contract, inducing breach of contract, or breach of Part IV of Trade Practices Act 1974 (Cth) - balance of convenience TRADE PRACTICES - whether applicant, by supplying tickets subject to condition and by restricting scope of agents' activities, breached Part IV of Trade Practices Act 1974 (Cth) CONTRACT - restraint of trade - whether condition on tickets and restrictive clause in agency contract are void as being restraints of trade - whether void for uncertainty or as being a penalty INJUNCTIONS - mandatory interlocutory injunction - whether applicant should be ordered to deliver tickets to third respondent in accordance with agency agreement UNDERTAKINGS - applicant's prior undertaking not to use information in certain documents for purposes other than the conduct of the proceedings - documents admitted into evidence - whether applicant should be released from undertaking

[2]

Trade Practices Act 1974 (Cth), ss 4F, 4L, 4M, 45(2), 46(1), 47, 87(2) Restraints of Trade Act 1976 (NSW), s 4(1) Federal Court Rules, O 15, r 18 Harman v Secretary of State for the Home Department [1983] 1 AC 280, distinguished Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, cited Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, cited Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] (1998) 72 ALJR 873, cited Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464, cited Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499, cited Carson v Minister for Education (Queensland) (1989) 25 FCR 326, cited Michael v State Housing Commission (1996) 68 FCR 105, cited Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533, cited National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209, cited Russell v Russell (1976) 134 CLR 495, followed Chapmans Ltd v Australian Stock Exchange (unreported, Tamberlin J, 25 August 1995), cited Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322, cited Woolworths Ltd v Campbells Cash and Carry Pty Ltd (1996) 92 LGERA 244, cited Greater London Council v Connolly [1970] 2 QB 100, cited Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397, cited Beneficial Finance Corporation Ltd v Sharker (1993) 32 NSWLR 161, cited Shevill v Builders Licensing Board (1982) 149 CLR 620, cited Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25, cited Teheran-Europe Co Ltd v ST Belton (Tractors) Ltd [1968] 2 QB 545, cited Buckley v Tutty (1971) 125 CLR 353, cited Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288, cited Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269, cited News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410, cited ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460, cited Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177, cited

[6]

The Dispute 1 Three motions seeking interlocutory relief have been heard together. The orders sought by the parties relate principally to the acquisition of tickets to be included in "hospitality packages" for the Bledisloe Cup Rugby Union match, to be played between the Australian Wallabies and the New Zealand All Blacks at Stadium Australia, Homebush, on 28 August 1999. There is therefore some urgency about resolving the interlocutory dispute, although the task has not been made any easier by the very substantial volume of affidavit and documentary evidence upon which the parties have chosen to rely and the plethora of issues they have raised. 2 The applicant (the "ARU") has attempted to restrict the entitlement of persons acquiring tickets to the Bledisloe Cup and to other matches involving the Wallabies to resell their tickets. One way in which it does this is to sell tickets subject to a condition in the following terms (the "Condition"): "It is a condition of sale that any ticket may not be resold at a premium or used for advertising, promotion or other commercial purposes without the prior written consent of the ARU. If a ticket is sold in contravention of this condition, the bearer of the ticket will be denied admission to Stadium Australia". The ARU intends to incorporate the Condition in its tickets for future international rugby union matches played at Stadium Australia. 3 The ARU has also included provisions in contracts between it and its agents limiting the permitted scope of their activities. There is such a limitation in the agreement between the third respondent ("ATS"), one of the ARU's "licensed retail domestic travel agents", and the ARU known as the "1999 Domestic Retail License Agreement" (the "ATS Licence Agreement"). The limitation is contained in cl 3.11 of the ATS Licence Agreement (the "Restriction"), the terms of which are set out later. 4 The first and second respondents ("THG" and "ICM", respectively) are in the business of providing "hospitality packages". These packages include "premium" tickets to major sporting events or other forms of entertainment. The packages normally also include other benefits, such as meals, an open bar and celebrity guest speakers. The evidence suggests that the market (however defined) for so-called hospitality services is growing rapidly and that purchasers are willing to pay substantial amounts for packages offered in conjunction with tickets to events for which there is a strong demand. 5 The dispute arises because the ARU wishes to enforce what it says are its contractual entitlements, while the respondents say they wish to be free to conduct their businesses without the constraints the ARU seeks to impose. The ARU claims inter alia, that ATS has agreed to sell 450 tickets to the Bledisloe Cup to ICM in breach of the ATS Licence Agreement and that THG and ICM have induced breaches of the ATS Licence Agreement and of the Condition. Among the many defences raised by the respondents is that the ARU, by supplying tickets to the Bledisloe Cup subject to the Condition and by including the Restriction in the ATS Licence Agreement, has engaged in the practice of exclusive dealing, in contravention of s 47(1) of the Trade Practices Act 1974 (Cth) ("TP Act"), and has used its market power for proscribed purposes, in contravention of s 46(1) of the TP Act. The respondents also say that the Condition and the Restriction are void under the common law doctrine of restraint of trade. 6 The contention by THG and ICM, that the Condition and the Restriction contravene Part IV of the TP Act, rests in part on a narrow definition of the market for hospitality services. In substance, THG and ICM say that the ARU's purpose is to exclude them from providing hospitality services at Test matches conducted by the ARU at Stadium Australia. They argue that there is a "Hospitality Market", being the market for hospitality services at two rugby union events held or to be held at Stadium Australia in 1999. These events are the Centenary Test, between the Wallabies and England, which was played at Stadium Australia on 26 June 1999, and the Bledisloe Cup (the "Matches"). The respondents contend that the dominant purpose underlying the ARU's decision to impose the Condition and the Restriction was to prevent THG and ICM from competing with the ARU in the Hospitality Market. They say that the ARU wished to obtain for itself the financial benefits of providing hospitality services at the Matches and at future rugby union matches at Stadium Australia. 7 THG and ICM also say that there is a separate market for tickets to international rugby matches at Stadium Australia (the "Ticket Market"). They argue that the ARU has also breached Part IV of the TP Act in relation to the Ticket Market.

[7]

The Proceedings 8 The ARU commenced the present proceedings by an application filed on 16 April 1999, naming THG as the only respondent. On the first return date, 23 April 1999, THG gave undertakings to the Court to refrain from making certain representations as to its capacity to provide premium tickets to the Centenary Test, Bledisloe Cup or any Rugby Test match conducted at Stadium Australia. THG also gave undertakings not to sell or offer for sale tickets to any of those matches and not to induce any other persons to sell or offer for sale tickets to those matches. The latter orders were not, however, to prevent THG from complying with contractual obligations in existence at the date of the orders. These orders have since been extended and are now in force until 31 August 1999. 9 There was some discussion at early directions hearings about the possibility of holding an expedited final hearing before the Centenary Test. Although the Court was prepared to make some time available for this purpose, the parties took the view (although not necessarily with equal enthusiasm) that it was not feasible to prepare a complicated case for final hearing within such a short period. 10 On 10 June 1999, THG filed a motion seeking orders restraining the ARU, inter alia, from refusing THG's clients admission to the Centenary Test "for any reason which is an issue in these proceedings". The ARU consented to an order in these terms. That order does not apply to the forthcoming Bledisloe Cup. 11 On 17 June 1999, orders were made by consent joining ICM and ATS as respondents to the proceedings. Orders were also made joining the fourth respondent, but no interlocutory relief is now sought against him. 12 On 18 June 1999, the ARU filed a motion seeking interlocutory relief in relation to the Bledisloe Cup. The motion, which was subsequently amended, was set down for hearing on 9 August 1999. Separate motions were later filed on behalf of THG and ATS. 13 The hearing of the motions, although listed for two days, occupied three days. Much time was spent on dealing with objections to the voluminous affidavit and documentary evidence. I permitted the parties a limited time for cross-examination. Mr Ellicott QC, who appeared with Mr Muddle for THG and ICM, cross-examined Mr O'Neill and Mr Thorburn of the ARU and Mr Calvert of International Management Group of America Pty Ltd ("IMG"), an agent of the ARU. Mr Seib, who appeared for ATS, also cross-examined Mr O'Neill and Mr Thorburn. Mr Gleeson, who appeared for the ARU, cross-examined Mr Rees and Mr Thompson of THG. 14 It is not generally appropriate in an interlocutory hearing to make an assessment of the credit of witnesses. I was not invited to depart from the usual course in this case. The oral evidence has, however, been of some assistance in clarifying the facts and in determining what serious issues of fact and law arise for determination.

[8]

The Parties 15 The ARU is a company limited by guarantee under the Corporations Law. Its voting members are the eight "provincial" Rugby Unions of the States and Territories of Australia. The ARU is responsible for the organisation, promotion and administration of rugby union in Australia at the national representative level. The ARU promotes and manages the Wallabies, the Australian Rugby Union representative team. Among its activities, the ARU has promoted the Matches at Stadium Australia. 16 The ARU's objects include fostering the game of rugby union throughout Australia and arranging and conducting international tours by Australian teams. The ARU's objectives are expressed to include making the Wallabies a world power on a consistent basis, ensuring that "the game of rugby [becomes] a leading mass entertainment product" and building on the "values and ethos that sets [rugby] apart from other sporting codes". The objectives do not identify the values or ethos that answer this description. 17 The ARU is a non-profit organisation. However, like many non-profit organisations (that is, organisations not permitted to distribute profits to shareholders or members), it derives substantial revenue from its activities and generates large surpluses. According to the ARU's Chief Executive Officer, Mr O'Neill, most of the ARU's earnings are ploughed back into the game, by means of dedicated grants to members of the "Rugby family", including member Unions. 18 The ARU provides what it describes as "corporate hospitality" at matches it promotes. The ARU has appointed IMG and the David Campese Management Group Ltd as agents for the marketing and sale of corporate hospitality packages, including premium tickets, to customers. Although it seems that the ARU has adopted a policy of limiting the number of corporate packages it offers, there is no dispute that the ARU derives substantial revenue from the sale of corporate hospitality packages. 19 THG and ICM are part of a global group of companies which provide catering and corporate hospitality services at major sporting events in a number of countries. The two companies carry on the operations of the group in Australia, although their activities extend beyond the provision of hospitality services. THG has offered hospitality packages for many major sporting events in Australia, such as the 1998 National Rugby League Grand Final, international one-day cricket finals and the Australian Football League Grand Final in Melbourne. Commencing in May 1998, it began to enter into "Sales Contracts" with clients for the provision of hospitality packages to the Centenary Test and the Bledisloe Cup. The packages include premium seats to the Matches. 20 Although THG is a party to the Sales Contracts, with clients, it is ICM which generally enters into contractual arrangements with suppliers to the group. It is for this reason that ICM, rather than THG, entered into the agreement with ATS for the latter to provide tickets for the Bledisloe Cup (the "ATS-ICM Agreement"). According to Mr Rees, the Chief Executive (Asia Pacific) of THG, any tickets obtained by ICM under arrangements with suppliers are internally transferred to THG and ultimately distributed to clients at or before a particular event. 21 ATS conducts business as a travel agent and tour operator. It commenced operations by organising golfing tours within Queensland, but its activities have since expanded and it now sells tickets and tours to sporting events in Australia. Typically, it advertises packages comprising tickets to a sporting event and hotel accommodation.

[9]

The Motions 22 The ARU seeks the following interlocutory orders: (i) an order restraining ATS and ICM from performing the ATS-ICM Agreement, insofar as it relates to the provision of tickets to the Bledisloe Cup; (ii) an order restraining THG from performing or procuring the performance of any contract between it and a Mr Burraway, trading as Wimbledon Tickets Ltd ("Wimbledon"), insofar as the contract relates to the provision of tickets to the Bledisloe Cup; (iii) an order restraining THG, ICM and ATS from selling, offering by way of accommodation or allowing to be used as part of a hospitality package tickets to the Bledisloe Cup or to any rugby test match presented by the ARU at Stadium Australia; and (iv) an order restraining THG, ICM and ATS from inducing any person other than the ARU to do any of the things referred to in (iii). 23 In addition, by an amendment introduced near the close of the hearing, the ARU sought to be released from an undertaking it had given to the Court on 10 June 1999. That undertaking required the ARU, until further notice, not to use information contained in certain documents for any purpose other than the conduct of the proceedings and, in particular, not to use the information to prevent delivery to any person of tickets to the Bledisloe Cup or to refuse admission to any person. The ARU's undertaking merely expressed restrictions which would have applied in any event to it in consequence of gaining access to documents produced by THG or ICM under compulsory processes of the Court: Harman v Secretary of State for the Home Department [1983] 1 AC 280; Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10, at 32-33, per Mason CJ. The ARU says that, since the relevant documents have been introduced into evidence, the undertaking should be discharged: Federal Court Rules ("FCR"), O 15, r 18. 24 The application by the ARU to amend its motion to include the claim to be released from the undertaking was opposed by Mr Muddle, on behalf of THG and ICM. I allowed the amendment because I took the view that it was in substance merely a different way of expressing the relief sought in the unamended form of the motion. In my opinion, no significant prejudice was occasioned to any of the respondents by allowing the ARU to seek to be released from its undertaking and I propose to deal with the application in this judgment. 25 For its part, THG seeks an order, until further order, restraining the ARU from refusing THG's clients admission to the Bledisloe Cup, or treating them in a lesser manner than other ticket-holders, "for any reason which is an issue in these proceedings". As was pointed out in argument, this expression is less than precise, although Mr Muddle assured me, somewhat optimistically, that the parties knew what it meant. In any event, the intent of the order sought by THG appears to be to restrain the ARU from preventing THG's clients from gaining admission to the Bledisloe Cup, or from denying them access to facilities, because they hold tickets acquired (as the ARU would contend) in breach of the Condition or the Restriction. 26 Mr Rees, the Chief Executive (Asia-Pacific) for THG gave uncontested evidence that THG has acquired about forty-eight tickets for the Bledisloe Cup. It appears, however, that THG is relying on performance of the ATS-ICM Agreement and the agreement with Mr Burraway of Wimbledon to procure the balance of tickets needed to fulfil its contractual commitments to its hospitality package clients. 27 ATS seeks an order that the ARU forthwith deliver 750 tickets to the Bledisloe Cup, or the balance of those tickets that remain undelivered under the ATS Licence Agreement. ATS seeks an order in this form because the ARU has refused to deliver any of the tickets to which ATS says it is entitled under the terms of the ATS Licence Agreement. Mr Seib, who appeared on behalf of ATS, acknowledged that ATS is seeking what amounts to mandatory relief and that such relief is but rarely granted at the interlocutory stage. Nonetheless, he submitted that the case is sufficiently clear to warrant such relief. 28 ATS also seeks an order that the ARU allocate the tickets purchased by ATS to the Bledisloe Cup "equitably". This claim for relief is founded on an allegation that the ARU has failed to allocate tickets equitably, as required by cl 4.3 of the ATS Licence Agreement. ATS has not explained how this order might effectively be implemented, having regard to the vagueness of the relief sought and the imminence of the Bledisloe Cup.

[10]

The Principles Governing the Grant of Interlocutory Relief 29 The principles governing a claim for interlocutory relief are not in doubt. The applicant must satisfy the Court that there is a serious question to be tried: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148, at 153-154, per Mason ACJ; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [No 3] (1998) 72 ALJR 873, at 880, per Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ. In addition, the applicant must show that the balance of convenience favours the grant of an injunction: Castlemaine Tooheys, at 153; Bullock v The Federated Furnishing Trades Society of Australasia (No 1) (1985) 5 FCR 464 (FC), at 472, per Woodward J (with whom Smithers and Sweeney JJ agreed). In considering the balance of convenience, it may be appropriate to take into account the apparent strength of the applicant's case. As Woodward J said in Bullock, at 472: "the two legs of the test need not be considered in isolation from each other. Thus an apparently strong claim may lead a court more readily to grant an injunction when the balance of convenience is fairly even. A more doubtful claim (which nevertheless raises 'a serious question to be tried') may still attract interlocutory relief if there is a marked balance of convenience in favour of it." It follows that it may be appropriate on an interlocutory application, even one which raises a serious question to be tried, to make some assessment of the apparent strength of the applicant's claim. Such an assessment may have some bearing on whether interlocutory relief should be granted. 30 A particular question arises in connection with ATS's claim for an order that the ARU forthwith deliver the undelivered tickets to the Bledisloe Cup, to which ATS claims that it is entitled. This is in the nature of an interlocutory mandatory injunction, which has been described as "a particularly rara avis": RP Meagher, WMC Gummow and JRF Lehane, Equity Doctrine and Remedies (3rd ed 1992), at 600. Nonetheless, the learned authors of that work suggest that an application for an interlocutory mandatory injunction attracts the same test as other applications for interlocutory relief, although they recognise that the fact that the relief is mandatory often tilts the balance of convenience in the respondent's favour: Equity Doctrine and Remedies, at 600-601. The practice in this Court has been to apply the same principles as govern the award of prohibitory injunctions, but to accept that the exercise of the jurisdiction requires particular caution and that relief is more likely to be given if the effect is to compel the respondent to revert to a course of conduct pursued before the events which provoked the litigation: Businessworld Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 499 (Gummow J), at 503; Carson v Minister for Education (Queensland) (1989) 25 FCR 326 (Spender J), at 337-339; Michael v State Housing Commission (1996) 68 FCR 105 (Carr J), at 119. 31 If the grant of interlocutory relief, whether by way of a prohibitory or mandatory injunction, has the practical effect of granting final relief, the general approach is that the applicant is required to establish not merely that there is a serious issue to be tried but that a prima facie case has been established: Equity Doctrine and Remedies, at 595. The reason for applying this principle is that an injunction ought not to be granted if the effect is to deny the respondent an effective right to a trial, where the respondent has advanced a genuinely triable issue: W Sofronoff, "Interlocutory Injunctions Having Final Effect" (1987) 61 ALJ 341, at 349. For this reason, the Court will usually evaluate the applicant's case for final relief where the effect of an order will be to determine the substance of the matter: Kolback Securities Ltd v Epoch Mining NL (1987) 8 NSWLR 533 (McLelland J), at 536; National Mutual Holdings Pty Ltd v Sentry Corporation (1989) 22 FCR 209 (Gummow J), at 231.

[12]

Narrowing the Issues 34 It is convenient at this point to dispose of two issues that can be dealt with independently of other questions in the proceedings. 35 First, I do not think it appropriate to make an order, as sought by ATS, that the ARU equitably distribute tickets to it. I am not satisfied on the evidence at this stage of the proceedings that there is a serious issue to be tried as to whether the ARU failed to comply with its obligation under cl 4.3 of the ATS Licence Agreement to "spread seat allocations equitably among its licensed retailed travel agents". It is true that none of the tickets proposed to be allocated by the ARU to ATS are located between the twenty-two metre lines (the premier position for spectators). But that of itself does not tend to show a breach of cl 4.3 of the ATS Agreement. 36 In any event, it is impossible to discern how the order sought by ATS could be sensibly framed or enforced. An order in the general terms referred to in the motion is simply incapable of being enforced or supervised, especially given the brief time available before the Bledisloe Cup is scheduled to be played. 37 Secondly, in my opinion, an order should be made discharging the undertaking given by the ARU on 10 June 1999, insofar as it concerns documents which have been admitted into evidence at the interlocutory hearing. This conclusion seems to me to flow from the operation of FCR, O 15, r 18, which provides as follows: "Any order or undertaking, whether express or implied, not to use a document for any purpose other than those of the proceedings in which it is disclosed shall cease to apply to such a document after it has been read to or by the Court or referred to, in open Court, in such terms as to disclose its contents unless the Court otherwise orders on the application of a party, or of a person to whom the document belongs." 38 The ARU's undertaking of 10 June 1999 extended to Exhibits SRR 3 and SRR 4 to Mr Rees' first affidavit and to certain other documents produced by THG on discovery or in response to notices to produce. Exhibit SRR 3 comprises a copy of the ATS-ICM Agreement and a copy of what purports to be an agreement dated 10 May 1999 between THG and Wimbledon providing for the parties to swap tickets to certain events, including the Matches ("the Wimbledon Agreement"). (I refer to the Wimbledon Agreement as a "purported" agreement because it was common ground that Wimbledon had been dissolved before 10 May 1999.) Exhibit SRR 4 comprises copies of tickets to the Matches already in THG's possession. These tickets, like all others to the Matches, have computer-generated codes that allow them to be individually identified. 39 Exhibits SRR 3 and SRR 4 were tendered at the hearing on behalf of THG and ICM. They were initially marked as confidential exhibits over the objections of Mr Gleeson, who contended that there was no basis for regarding the documents as commercially sensitive or otherwise warranting the protection of confidentiality. On reflection, I think that this submission is correct. Exhibit SRR 3 simply comprises contracts which, according to their terms, entitle ICM and THG to acquire blocks of tickets to the Matches from, respectively, ATS and Wimbledon. As I have said, Exhibit SRR 4 comprises copies of tickets issued by the ARU which are in the possession of THG. So far as these exhibits are concerned, there is no basis for departing from the general principle that evidence ought to be adduced in open court and that judicial proceedings should be conducted in public: Russell v Russell (1976) 134 CLR 495, at 520, per Gibbs J. I therefore propose to direct that Exhibits SRR 3 and SRR 4 not be treated as confidential exhibits. It follows that the documents should be treated as having been read in open Court. 40 In these circumstances, there seems to me to be no reason why the principle of openness embodied in FCR, O 15, r 18 should not apply to Exhibits SRR 3 and SRR 4. As Tamberlin J observed in Chapmans Ltd v Australian Stock Exchange, unreported (25 August 1995), O 15, r 18 is plainly intended to abrogate the decision in Harman v Home Department, at least where documents produced on discovery or by way of subpoena have been read by the Court or referred to in open court: cf Eltran Pty Ltd v Westpac Banking Corporation (1990) 25 FCR 322, at 324-5 (suggesting that, in any event, Harman might not apply, where the documents have been read in open court). 41 THG and ICM contended that the ARU intends or at least wishes to consider using the documents comprised in Exhibits SRR 3 and SRR 4 to support its refusal to deliver tickets to ATS and, perhaps, to refuse entry to the Bledisloe Cup to clients of THG who have purchased hospitality packages. That may be so. But the question of whether the ARU is entitled to withhold tickets or to refuse entry to ticket-holders is distinct from the question of whether the undertaking given on 10 June 1999 should remain in force. The undertaking should remain in force only if the documents produced by THG or ICM have not been read or referred to in open court, or if there is some persuasive reason why, despite their having been read or referred to in open court, the restrictions on their use should continue to apply. 42 In my opinion, the fact that THG fears that the ARU may use the information contained in the documents to adopt "self-help" remedies is not of itself such a reason. It was THG, after all, that tendered the documents in support of its claim for relief and there is, as I have said, nothing that makes them inherently confidential. I do not think that THG should be able to insist on maintaining the restrictions on use of these documents that would apply if they had never been tendered, or treated as tendered, in open court. By discharging the orders made on 10 June 1999, the Court is not endorsing any use the ARU may wish to make of the documents. It is merely giving effect to the general policy of open justice reflected in FCR, O 15, r 18. 43 The following documents are part of Exhibit B, which was tendered by the ARU and admitted into evidence: RC 0104; RC 0107; RC 0393; and RC 0394. These documents are in a different position from Exhibits SRR 3 and SRR 4, since they were tendered by the ARU, rather than by or on behalf of THG. However, no specific submissions were made as to why restrictions should remain on the use of these documents. They were not treated as confidential at the hearing and there is no reason so to treat them. In my view, no persuasive reason has been shown why FCR, O 15, r 18 should not apply to them. 44 So far as I am aware, and subject to correction, the other documents identified in the orders of 10 June 1999 have not been read or referred to in open court. Accordingly, they should continue to be subject to the terms of those orders.

[13]

The Course of Events 45 Because of the urgency of the matter, I do not propose to record in detail the course of events leading to the interlocutory dispute. I shall limit the account to the major events. What follows is drawn largely from the documentary evidence or unchallenged affidavit evidence. 46 During 1998, the ARU distributed tickets to matches involving the Wallabies (none of which was played at Stadium Australia) in a variety of ways. All tickets issued by the ARU for purchase by members of the public contained an endorsement to the following effect: "This ticket may not be resold at a premium or for commercial purposes without the prior written consent of the ARU. If this ticket has been resold in contravention of the condition, the bearer of the ticket will be denied admission." As from May 1998, THG began to enter into Sales Contracts with clients for the provision of hospitality packages, including tickets to the Centenary Test and the 1999 Bledisloe Cup. Some of the Sales Contracts contained endorsements to the following effect: "10 RESERVED GRANDSTAND SEATS GUARANTEED IN A BLOCK OF 10 BETWEEN THE 22 METRE LINES FOR THE 1999 BLEDISLOE CUP AT STADIUM AUSTRALIA". Each of the agreements was in standard printed form and included a term as follows (cl 4): "Tickets, if applicable and included in the package, will be provided on the day unless otherwise stated. Any tickets referenced are merely an accommodation and THG merely acts as an agent between Client and the original holder of the tickets...". (Emphasis added.) During 1998, as Mr Rees acknowledged in evidence, THG had no entitlement to tickets to the Matches (although its defence to the allegation of misleading and deceptive conduct is that it had reasonable grounds for expecting that it would ultimately obtain premium tickets to satisfy its contractual commitments). 47 On 10 August 1998, Mr Thorburn advised the Board of the ARU that a number of non-authorised companies were offering corporate hospitality for events at Stadium Australia. He reported that he had been discussing with Stadium Australia and the ARU's lawyers "the appropriate actions we should take to both curtail their activities and establish our own presence in the market". On 24 August 1998, the ARU's solicitors wrote to Mr Thorburn recording that they had received instructions to consider: "the legal means by which the ARU may prevent [unauthorised corporate hospitality providers including THG] from providing unauthorised hospitality in relation to the rugby test matches". 48 On 17 December 1998, ATS applied in writing to the ARU to become a retail licensee of the ARU. The form was signed by Mr Whan, a director of ATS, and indicated that ATS wished to receive an allocation of 1,500 tickets to the Bledisloe Cup. 49 On 24 December 1998, the ARU's solicitors wrote to THG informing it of the terms of the condition then applicable to all tickets to Test matches. The letter asserted that THG had no entitlement to sell or offer to sell tickets for Rugby Test matches to members of the public. The letter also asserted that the ARU was not entitled to make representations about its ability to provide premium seats at the Matches. 50 THG responded by a solicitors' letter of 18 January 1999. The letter stated that "THG offers to assist its clients' purchase of tickets to the respective sporting events. Clients are made fully aware that this aspect of the service is subject to ticket availability and the express terms and conditions attaching to any ticket." 51 In January and February 1999, THG continued to enter into Sales Contracts with clients for the provision of hospitality packages for the Bledisloe Cup. Correspondence continued between the parties' solicitors. In consequence of that correspondence, the solicitors for THG apologised to certain clients for having made false representations about its ability to provide reserved grandstand seats between the twenty-two metre lines at the lower level of Stadium Australia, since these were reserved for ARU members and Stadium Australia members. 52 On 12 February 1999, THG requested ATS's assistance, among other things, in obtaining 450 tickets to the 1999 Bledisloe Cup at Stadium Australia in blocks of ten between the twenty-two metre lines. 53 On 2 March 1999, the ARU and ATS executed the ATS Licence Agreement. This recorded (cl 2.1) "the concept" as being that the ARU would "grant a limited number of retail licenses [sic]" to retail travel agents operating in the domestic market, each of which would be entitled to an agreed allocation of tickets to the Wallabies domestic Test matches. The ARU had the right to appoint an exclusive domestic wholesale travel agent, from which licensed retail travel agents could also purchase "travel packages" (cll 2.2, 2.3). The agreement was to terminate at the completion of the last domestic Test match played in 1999 (cl 2.4). 54 The travel agent had the right to promote itself as the ARU's official agent and to use the Bledisloe Cup and Wallabies logos (cll 3.2, 3.3, 3.4). The ARU agreed to promote the agent in specified ways (cll 3.5-3.9). 55 The ATS Licence Agreement included the following provisions: "3.10 Subject to availability, the travel agent is permitted to purchase 'travel packages', including domestic test match tickets from the wholesale travel agent. If it is discovered that the travel agent proceeds to directly, or indirectly, source (or attempt to source) match tickets from any avenue other than this wholesale agent, that travel agent's ticket allocation and license will be immediately revoked. 3.11 The travel agent is only permitted to sell ARU match tickets as part of a travel package (i.e. tickets are not permitted to be sold as a wholesale product) and only in Australia. The travel agent cannot on sell the tickets through any other means. Contravention of this clause may result in the cancellation of the license and a failure to allow entry to any ticketholders. ... 3.13 The travel agent will use its best endeavours to promote travel packages to all domestic test matches that have been taken by the travel agent. ... 4.3 The ARU will spread seat allocations equitably among its licensed retail travel agents." ATS was entitled to 1,500 tickets to the Bledisloe Cup, but had an option to "release back" fifty per cent of these tickets to the ARU. It in fact subsequently exercised that option. 56 On 4 March 1999, two days after the date of the ATS Licence Agreement, ICM and ATS entered into an agreement in writing for the provision of "travel packages" by ATS to ICM (the ATS-ICM Agreement referred to earlier). The ATS-ICM Agreement, so far as material, provided as follows: "Upon payment to ATFS of $A114,000 from ICM Marketing, ATFS [ATS] will provide the following. *450 travel packages to the Bledisloe Cup (Stadium Australia, Sydney 28th August 1999). These packages include 450 premium seats for this event. *200 travel packages to the Centenary Test (Stadium Australia, Sydney 26th June 1999). These packages include 200 premium seats to this event. The above packages and tickets will be delivered by ATFS to ICM Marketing six weeks prior to each event. The Premium Seats are as per the seating plan on the enclosed map. ATFS will attempt to block all the seats together but guarantee that there will be a minimum of 10 seats blocked together to make up the total seating allocation. ... Should Australian Tours for Sport fail to deliver seating in the quantity and location as outlined above, ICM Marketing Pty Ltd will be entitled to a refund as follows: Bledisloe Cup $180 per package & Centenary Test $165 per package." 57 On 12 March 1999, the ARU's solicitors informed the solicitors for THG that all tickets to Rugby Tests at Stadium Australia were then being sold on terms that included the Condition. The letter noted that the terms of the Condition were broader than those previously notified to THG. 58 On 23 April 1999, THG gave undertakings to the Court to which I have already referred. 59 On 12 May 1999, Mr Thompson, on behalf of THG, signed the Wimbledon Agreement. As I have said, Wimbledon had in fact been dissolved by this time, but the agreement was signed on its behalf by a Mr Burraway. The Wimbledon Agreement provided for a swap of tickets as follows: "Wimbledon Tickets Limited will supply: 104 tickets between the 22 metre lines for the Centenary Test to be played on 26 June 1999 and 120 tickets between the 22 metre lines for the Bledisloe Cup to be played on 28 August 1999. Tickets to be supplied will be in groups of ten or better. In consideration for the above, The Hospitality Group Pty Limited will swap: 104 tickets for the Centenary Test to be played on 26 June 1999 and 120 tickets between the 22 metre lines for the Bledisloe Cup to be played on 28 August 1999 together with the sum of A$10,000. The swap will take place at an address to be confirmed by the two parties." It will be seen that the terms of the swap are rather curious, since it seems that Wimbledon was both to supply and receive the same quality and quantity of tickets to the Matches. This does not appear to be what the parties intended. 60 According to Mr Thompson, he executed the Wimbledon Agreement on the instructions of Mr Rees of THG. Mr Thompson said that he gave no detailed consideration to whether the Wimbledon Agreement breached the undertakings given to the Court by THG on 23 April 1999. 61 Mr Thompson also said that, by July 1999, THG had entered into agreements to provide 420 hospitality packages to the Bledisloe Cup.

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The Alleged Breach of the ATS Licence Agreement 62 The ARU submitted that ATS contravened the Restriction (that is, cl 3.11 of the ATS Licence Agreement), by entering the ATS-ICM Agreement under which it promised to provide ICM with 450 "travel packages to the Bledisloe Cup". Clause 3.11, it will be recalled, provides that ATS is to sell Match Tickets only "as part of a travel package (ie tickets are not permitted to be sold as a wholesale product)...". The ARU argued that ATS's sale of tickets to ICM was not part of a travel package and in any event constituted the sale of the tickets "as a wholesale product". 63 Mr Gleeson contended that the ATS Licence Agreement contemplated that ATS, like the other retail travel agents, would sell only into the domestic retail travel package market. The ARU was to assist ATS and other agents in this endeavour. Clause 3.11 had to be construed within this framework. It was designed to prevent ATS from selling tickets to the Matches by wholesale, whether to another travel agent or otherwise. The sale of 450 Bledisloe Cup tickets to ICM, for the obvious purpose of enabling ICM to sell or pass on the tickets to retail hospitality package clients, squarely answered the description of a sale of the tickets as a wholesale product: Woolworths Ltd v Campbells Cash and Carry Pty Ltd (1996) 92 LGERA 244 (NSWCA), at 247, per Sheller JA. 64 Mr Gleeson argued that the fact that the ATS-ICM Agreement described the subject-matter of the contract as "travel packages" could not convert the sale of tickets to the Matches into a sale "as part of a travel package". He said that this was because the ATS-ICM Agreement was a "sham". Mr Gleeson pointed out that Mr Rees had admitted in cross-examination that all ICM needed from ATS was tickets to the Matches and that ICM had neither required nor sought travel services from ATS. 65 Mr Seib, on behalf of ATS, countered this contention by arguing that, as a matter of construction, ATS's actions did not amount to a contravention of the Restriction. He submitted that cl 3.11 of the ATS Licence Agreement should be given a much narrower interpretation than that suggested by the ARU. According to Mr Seib, the expression "travel package" in cl 3.11 takes its meaning from the words in parentheses which follow that expression. He argued that the parties merely intended that ATS should not be entitled to sell tickets in the manner of a wholesale travel agent - that is, by bulk sales to other travel agents. A sale of 450 tickets to a provider of hospitality packages was not caught by the language. In any event, the sale to ICM was of "travel packages", since that is how the ATS-ICM Agreement described the subject matter of the transaction between those two parties. 66 It is enough to say that I consider it strongly arguable that the language of the Restriction is broad enough to prevent ATS from selling or providing tickets to Matches in substantial quantities to a provider of hospitality packages. It seems to me that it is not necessary to consider whether the ATS-ICM Agreement was (as the ARU argued) a "sham". The fact that ATS and ICM chose to characterise the subject matter of the ATS-ICM Agreement as the sale of "travel packages" cannot determine conclusively, for the purposes of an agreement between ATS and the ARU, whether ATS sold "match tickets as part of a travel package". The answer to that question must depend on what in fact was the subject matter of the arrangement between ATS and ICM. As to that, there appears to be little doubt. It follows that the ARU has established that there is a serious question to be tried as to whether ATS breached the Restriction. 67 The respondents put forward two arguments which, if accepted, would render the Restriction void or unenforceable. The first was that the Restriction is void for uncertainty. The general principle is, however, that courts are loath to hold a contractual provision bad for uncertainty if a reasonable meaning can be attributed to it: Greater London Council v Connolly [1970] 2 QB 100; Trade Practices Commission v Tooth & Co Ltd (1979) 142 CLR 397, at 420, per Stephen J. While there may be some dispute about the precise scope of the Restriction, I think it very unlikely that the clause will be held to be void for uncertainty. There is no obvious difficulty about giving the words of the Restriction a sensible meaning which takes account of the commercial context in which the ARU and ATS were operating at the time they entered into the ATS Licence Agreement. 68 ATS also argued that the Restriction is invalid as a penalty. Although this contention has not been pleaded, Mr Seib contended that, because a relatively trivial breach of the Restriction could lead to termination of the ATS Licence Agreement, the Restriction operated as a penalty and was therefore invalid. Mr Seib did not explain why the authorities (see the cases referred to in Beneficial Finance Corporation Ltd v Sharker (1993) 32 NSWLR 161 (Wood J), at 167) produce this result. On its face, the Restriction seems merely to provide that a particular breach by ATS may lead to the ARU terminating the agreement. In effect, the Restriction stipulates that ATS's promise is to be treated as a fundamental term of the contract, giving rise to a right in the ARU as promisee to terminate the agreement if the term is breached: Shevill v Builders Licensing Board (1982) 149 CLR 620, at 626-627, per Gibbs CJ. In my opinion, ATS has not established that there is a serious issue to be tried on the question of penalty. Inducing Breach of the ATS Licence Agreement 69 The ARU submitted that there is a serious issue to be tried as to whether ICM knowingly induced ATS to breach the ATS Licence Agreement. The ARU argued that Mr Rees, who conducted the discussions with Mr Whan of ATS, must have been aware that ATS was contractually limited to the sale of retail travel packages and that a sale by it of 450 tickets to the Bledisloe Cup to ICM would contravene ATS's contractual obligations to the ARU. Mr Gleeson pointed out that Mr Rees had been informed in December 1998 of the condition then incorporated into the tickets for matches promoted by the ARU. According to Mr Gleeson, Mr Rees must have realised that there would be contractual restrictions on ATS's entitlement to resell tickets obtained from the ARU. Moreover, so Mr Gleeson argued, the very form of the ATS-ICM Agreement suggested that the parties were at pains create the appearance (but not the reality) that ATS was complying with its obligations to the ARU under the ATS Licence Agreement. 70 On the other hand, Mr Rees denied in his evidence any knowledge of the contractual restrictions incorporated in the ATS Licence Agreement. He said that he had assumed, as he was entitled to do, that ATS was acting consistently with its contractual obligations to the ARU. There was no direct evidence contradicting Mr Rees' account. 71 At a final hearing, it will be necessary to explore a number of factual questions concerning Mr Rees' knowledge and intentions when negotiating the arrangement with ATS. These questions cannot be resolved at an interlocutory hearing. Nor is it appropriate to make findings or to express views at this stage that evidence given by particular witnesses should or should not be accepted. I think, however, that there is a serious question to be tried as to whether ICM knowingly induced ATS to breach the ATS Licence Agreement.

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The Wimbledon Agreement 72 The ARU's primary case in relation to the Wimbledon Agreement is that the entry into the agreement on 12 May 1999 breached par (f) of the undertaking to the Court given by THG on 23 April 1999. Paragraph (f) of the undertaking required THG to refrain from "selling or offering for sale, other than with the Applicant's express consent, tickets to: (i) the Bledisloe Cup Rugby Test Match to be played between Australia and New Zealand at Stadium Australia on 28 August 1999...". Paragraph (g) of the undertaking required THG to refrain from "inducing, other than with the Applicant's express consent, any person other than the Applicant, their servants or agents to sell or offer for sale tickets for: (i) the Bledisloe Cup Rugby Test Match to be played between Australia and New Zealand at Stadium Australia on 28 August 1999; ... provided that nothing in clause (g) shall prevent the Respondent from complying with its contractual obligations which are already in existence as at the date of these orders." 73 The ARU argued that the Court has jurisdiction to restrain a threatened contempt of Court (Victoria v Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25, at 84, per Mason J). Accordingly, so it was argued, an order should be made restraining THG from performing the Wimbledon Agreement. 74 Mr Thompson gave evidence that he signed the Wimbledon Agreement on instructions from Mr Rees and Mr Evans (the London-based Chairman of THG and ICM). Mr Rees gave evidence that he had been told by Mr Evans in March 1999 of a verbal agreement with Mr Burraway of Wimbledon. Under that agreement, Mr Burraway was to provide THG, by way of a swap arrangement, with 200 to 300 tickets to the Bledisloe Cup. THG was to exchange for these tickets a number of tickets it was to receive from ATS (these not being tickets between the twenty-two metre lines and therefore of lesser quality). Mr Rees denied that he had given instructions to Mr Thompson to execute the Wimbledon Agreement. 75 Mr Evans did not give evidence, but a letter from Mr Burraway, dated 6 August 1999, was tendered. This letter (which of course was written after the event) confirmed that an oral agreement had been reached in March, but did not specify its terms. Mr Burraway also confirmed in the letter that Wimbledon had been deregistered as a company in January 1999. He stated that Wimbledon was in a position to supply 256 tickets to the Bledisloe Cup, although this is not the number referred to in the Wimbledon Agreement. Presumably (it is not clear) these tickets are between the twenty-two metre lines. In any event, it seems that the terms of the Wimbledon Agreement differed in certain respects from that of the oral arrangement made between Mr Evans and Mr Burraway in March 1999. 76 Contempt of Court is a very serious matter. Care must be exercised before concluding that there is a serious question to be tried, where the question is whether, in effect, one party has breached a restraining order made by the Court. On the material before me, having regard to the proviso to par (g) of the undertaking, I am not prepared to say that there is a serious issue to be tried as to whether the signing of the Wimbledon Agreement, constituted a breach of the undertakings. Undisclosed Principals 77 THG and ICM relied on cl 4 of the Sales Contracts to establish the proposition that when they, or either of them, procured tickets to be provided to their retail clients, they did so as agents for the clients as undisclosed principals. It will be recalled that cl 4 states that "[a]ny tickets referenced are merely an accommodation and THG merely acts as an agent between Client and the original holder of the tickets." 78 THG and ICM submitted that it was not to the point that several of their clients gave evidence that they (the clients) had never expressly authorised THG to acquire tickets to the Matches on their behalf. According to Mr Muddle, the signing of the Sales Contracts, including cl 4, provided the necessary authority. 79 This submission rests on the established, albeit anomalous rule that an undisclosed principal can sue and be sued on a contract except in circumstances where the terms of the contract expressly or impliedly confine the benefit to the parties to the contract: Teheran-Europe Co Ltd v ST Belton (Tractors) Ltd [1968] 2 QB 545, at 552, per Lord Denning MR. 80 The difficulty in the present case is that THG and ICM did not make clear how the doctrine of the undisclosed principal assisted their contentions. I am prepared to accept, in interlocutory proceedings, that the doctrine is capable of applying to ICM's acquisition of tickets from ATS under the ATS-ICM Agreement. Nonetheless, it is difficult to see how the fact that ICM acquired, or became entitled to, tickets as agent for an undisclosed principal would preclude a finding that ATS breached the Restriction. Similarly, it is difficult to see how that fact could prevent a finding that ICM had knowingly induced ATS to breach the Restriction (assuming the elements of the tort of inducing breach of contract were otherwise made out). 81 If attention is directed to the acquisition of tickets by THG or ICM from other sources, the difficulty remains. ICM may well have obtained some tickets for the Bledisloe Cup from persons who purchased individual tickets directly from the ARU. Assuming ICM did so as agents for its hospitality package clients as undisclosed principals, it is by no means clear why the agent-principal relationship would prevent a finding that ICM knowingly induced the ticket-holder to breach his or her contract with the ARU. It must be remembered that the Condition, if valid, does not merely prohibit resale of the ticket at a premium, but any use of the ticket for commercial purposes. 82 I do not think that the undisclosed principal argument, at this stage of the proceedings, materially assists either the defence put forward by THG and ICM or their affirmative claims for relief.

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Restraint of Trade 83 The respondents argued that the Condition and the Restriction are invalid under the common law doctrine of restraint of trade. The argument that the Condition is invalid can be summarised as follows: · The general principle is that a restraint of trade, whether imposed by contract or otherwise, is void as contrary to public policy, unless it affords no more than reasonable protection to the interests of the covenantee: Buckley v Tutty (1971) 125 CLR 353, at 376; Amoco Australia Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288, at 306, per Walsh J. · The onus of establishing that the restraint affords no more protection to the covenantee than is reasonably necessary lies on the party seeking to support the restraint: Buckley v Tutty, at 377. · In New South Wales, a restraint of trade is valid to the extent that it is not against public policy, whether it is in severable terms or not: Restraints of Trade Act 1976 (NSW), s 4(1). · The ARU's purpose in introducing the Condition was to prevent competitors wishing to provide hospitality packages for the Matches from doing so. In view of this fact, the ARU cannot demonstrate that the restraints imposed on ticket-holders by the Condition were reasonably necessary to protect its legitimate interests or were reasonable in the public interest. 84 The ARU's response was as follows: · The Condition does not fetter any pre-existing freedom of a ticket-holder: Esso Petroleum Co Ltd v Harper's Garage (Stourport) Ltd [1968] AC 269, at 298, 328-329. It is merely part of the price that a person wishing to view the Matches must pay in order to enjoy the spectacle. There is therefore no restraint of trade at all. · As a matter of fact, the ARU's primary purpose in imposing the Condition was not to prevent competitors providing hospitality services. The ARU had and has a legitimate interest in ensuring the quality of service provided at the Matches and in promoting the well-being of rugby union (for example, by ensuring that tickets to the Matches are available in appropriate proportions to all sections of the rugby union "family" and to members of the public). The ARU's conduct in imposing the Condition reflects its legitimate commercial and sporting interests. · For these and other reasons, even if the Condition could be characterised as a restraint of trade, it is reasonable having regard to the interests of the ARU and the public. 85 It is fair to say that the respective arguments, although stated in outline, were not developed in detail. The respondents seemed to me to be somewhat uncertain as to the identity of the persons whose trade was said to have been restrained by the Condition. It was not clear whether it was the trade of undisclosed ticket holders that had been restrained or of those who (like THG and ICM) wished to acquire tickets from the individual ticket holders for their own commercial purposes. If the latter, the respondents' contentions appear to extend the doctrine of restraint of trade beyond the areas in which it has been traditionally applied. 86 The last consideration is of course not a reason for rejecting the respondents' argument, especially at an interlocutory stage. The authorities establish that the common law doctrine is not limited to contractual restraints of trade, but applies to all restraints, however imposed: Buckley v Tutty, at 375. It may be that a person who is not party to a contract may nonetheless complain that his or her trade has been restrained by a provision in that contract. It is to be remembered that the TP Act is expressed so as not to affect the law relating to restraint of trade "in so far as that law is capable of operating concurrently" with the TP Act itself: s 4M(a). 87 The application of the restraint of trade doctrine to the Condition will depend both on legal questions not fully explored in argument and on a range of factual issues that cannot be resolved in interlocutory proceedings. While I am inclined to think that the respondents are likely to encounter obstacles on this aspect of their case, I think that they have identified a serious issue to be tried so far as the condition is concerned. 88 In my opinion, the position is different in relation to the application of the restraint of trade doctrine to the Restriction. If the doctrine does apply to the Restriction, it is difficult to see how it could result in ATS being free to dispose of tickets in the Bledisloe Cup in any manner it thinks fit, and, in particular, to ICM. As Mr Gleeson pointed out, if the restraint of trade doctrine were to apply to the Restriction, the ARU would have a powerful argument that the invalid provision could not be severed from the rest of the ATS Licence Agreement, since to do so would be to materially change the intent of the contract: News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410 (FC), at 582, cf Restraints of Trade Act 1976 (NSW), s 4(1). It would follow, if this argument were correct, that the consequence of applying the restraint of trade doctrine would be to invalidate the entire agreement, thereby negating any entitlement of ATS to secure tickets to the Bledisloe Cup. 89 In any event, on the material presently available, it seems to me that the ARU has a strong argument that the Restriction did not restrain any pre-existing freedom of ATS or that, if it did, the restraint was reasonable. As Mr Gleeson argued, when the ATS Licence Agreement was entered into, ATS had no entitlement to tickets and no ability to sell or dispose of tickets. The agreement regulated the manner in which ATS and the ARU were to market ATS's allocation of tickets. It is strongly arguable that the restraint was incidental to the agency arrangements which appear to have been designed to exploit a particular market for the mutual benefit of the ARU and ATS. If this is ultimately held to be the case, the likelihood is that there is no restraint of trade within the meaning of the doctrine and no question of reasonableness arises: Esso v Harper's Garage, at 329; cf J D Heydon, The Restraint of Trade Doctrine (2nd ed 1999), at 51-54. Alternatively, the evidence suggests that the terms of the agency agreement were no more than a reasonable commercial arrangement to service a particular segment of the market (however defined) for tickets to the Matches. 90 At this stage, I am not satisfied that the respondents have established a serious issue to be tried in relation to the application of the restraint of trade doctrine to the Restriction. That position, of course, may change at a final hearing.

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The Trade Practices Contentions 91 The respondents argued that the ARU contravened Part IV of the TP Act, by incorporating the Condition in tickets to the Matches and by including the Restriction in the ATS Licence Agreement. They put their case in a number of different ways. 92 First, it was said that the ARU had engaged in the practice of exclusive dealing, in contravention of s 47(1) of the TP Act. The actions of the ARU were said to come within par (e) of the definition of "the practice of exclusive dealing" contained in s 47(2) of the TP Act. Paragraph (e) provides that a corporation engages in exclusive dealing if it "(e) will not, or will not except to a limited extent, re-supply goods or services, or goods or services of a particular kind or description, acquired directly or indirectly from a competitor of the corporation or…". According to the respondents, the ARU had supplied tickets to the Matches subject to the Condition, which required a purchaser not to re-supply the ticket to any person, or alternatively, to persons who intended to use the ticket for commercial purposes. Similarly, the ARU had supplied tickets to ATS and other retail travel agents on condition that the purchaser would not re-supply the tickets as a wholesale product or otherwise than as part of a travel package. 93 Section 47(10) of the TP Act provides that there can be no exclusive dealing by reason of conduct of the kind referred to in s 47(2) unless "(a) the engaging by the corporation in that conduct has the purpose, or has or is likely to have the effect, of substantially lessening competition; or (b)…". It is enough that the corporation engaged in the conduct for a purpose that included the proscribed purpose, so long as it was a "substantial" purpose: s 4F(1)(b). 94 The respondents, as I followed them, argued that the imposition of the Condition had the purpose or effect of substantially lessening competition in the Ticket Market, that is the market for tickets to national representative level rugby matches organised by the ARU. The inclusion of the Restriction in the ATS Licence Agreement had the purpose or effect of substantially lessening competition in the Hospitality Market, that is the market for the supply to clients of corporate hospitality packages in conjunction with national representative level rugby matches organised by the ARU. 95 Secondly, the respondents contended that the ARU had contravened s 45(2)(a)(ii) of the TP Act, which provides as follows: "(2) A corporation shall not - (a) make a contract or arrangement, or arrive at an understanding, if - (i) ...; or (ii) a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition". 96 According to the respondents, the ARU had entered into contracts, in the form of tickets to the Matches, which included a provision (the Condition) having the purpose or effect of substantially lessening competition in both the Hospitality Market and the Ticket Market. Similarly, the ATS Licence Agreement constituted a contract which included a provision (the Restriction) having the same purpose or effect. 97 Thirdly, it was argued that the ARU had misused its market power in contravention of s 46(1) of the TP Act. Section 46(1) provides as follows: "(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) …; (b) …; or (c) deterring or preventing a person from engaging in competitive conduct in that or any other market". The respondents contended that the ARU had a substantial degree of market power in both the Hospitality Market and the Ticket Market. THG and ICM were competitors of the ARU in the Hospitality Market, since the ARU was in the business of providing hospitality packages. The ARU's conduct had the purpose of deterring or preventing THG and ICM, not merely from engaging in competitive conduct, but from conducting any operations at all within the relevant market. The ARU had given effect to this purpose by imposing the Condition on all tickets sold and by introducing or enforcing the Restriction. 98 The ARU submitted that the respondents' TP Act claims were bound to fail because the evidence was insufficient to establish that there was a serious question to be tried as to the existence of either the Ticket Market or the Hospitality Market. Moreover, according to Mr Gleeson, the respondents had not shown that there was a serious issue to be tried as to whether the ARU had the proscribed purpose, having regard to evidence that the ARU was concerned about misrepresentations allegedly made by THG to its clients and about the quality of the service provided by THG to its clients. 99 The ARU also argued that, so far as the Restriction was concerned, the effect of a contravention of the TP Act would be to render the whole contract void. The Restriction could not be regarded as a severable part of the ATS Licence Agreement, since it was an integral part of the arrangement between the parties. It was not open to the respondents to rely on s 87(2) of the TP Act to vary the ATS Licence Agreement so as to excise the Restriction, since s 87(2) cannot be used "to impose upon the parties a regime which could not represent a bargain they would have struck between them". ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 (FC), at 503; see also TP Act, s 4L. A Serious Question on Market Issues? 100 The general principles governing the identification and differentiation of markets for the purposes of the relevant provisions of the TP Act have been analysed by the High Court in Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177 and in other cases in this Court: see, for example, Arnotts Ltd v Trade Practices Commission (1990) 24 FCR 313 (FC); News Ltd v Australian Rugby Football League Ltd (1996) 58 FCR 447 (Burchett J), at 474ff (reversed on other grounds (1996) 64 FCR 410); Sita Qld Pty Ltd v Queensland (1999) 164 ALR 18. It is enough for present purposes to quote an extract from the comments of the Trade Practices Tribunal in Re Queensland Co-operative Milling Association Ltd (1976) 25 FLR 169, at 190, cited with approval in Queensland Wire: "A market is the area of close competition between firms or, putting it a little differently, the field of rivalry between them. (If there is no close competition there is of course a monopolistic market.) Within the bounds of a market there is substitution - substitution between one product and another, and between one source of supply and another, in response to changing prices. So a market is the field of actual and potential transactions between buyers and sellers amongst whom there can be strong substitution, at least in the long run, if given a sufficient price incentive. Let us suppose that the price of one supplier goes up. Then on the demand side buyers may switch their patronage from this firm's product to another, or from this geographic source of supply to another. As well, on the supply side, sellers can adjust their production plans, substituting one product for another in their output mix, or substituting one geographic source of supply for another. Whether such substitution is feasible or likely depends ultimately on customer attitudes, technology, distance, and cost and price incentives. It is the possibilities of such substitution which set the limits upon a firm's ability to 'give less and charge more'. Accordingly, in determining the outer boundaries of the market we ask a quite simple but fundamental question: If the firm were to 'give less and charge more' would there be, to put the matter colloquially, much of a reaction? And if so, from whom? In the language of economics the question is this: From which products and which activities could we expect a relatively high demand or supply response to price change, ie a relatively high cross-elasticity of demand or cross-elasticity of supply?" 101 I do not think it appropriate to analyse in depth the evidence adduced in relation to the market questions. Doubtless that evidence was more limited than is likely to be the case at a final hearing. Only one expert report was tendered, that of Professor Bewley, and (for understandable reasons) there were important gaps in the evidence that might well be filled at a final hearing. Any opinions I express are therefore based on incomplete evidence which may well be supplemented and analysed more thoroughly at a final hearing. 102 On the evidence before me, I am not satisfied that there is a serious issue to be tried as to the existence of a Hospitality Market as narrow in scope as that advanced by the respondents. It seems to me that Professor Bewley's opinion that there is such a market is, at this stage, insufficiently supported by primary evidence of the assumptions that underlie his opinion. In particular, there is no cogent evidence that "primary consumers" (the purchasers of hospitality packages) are insensitive to increases in price or reductions in quality of hospitality packages provided at the Matches and other international events promoted by the ARU. 103 Such evidence as there is suggests that the corporate hospitality market has grown rapidly in Australia over a short period of time and encompasses many different kinds of sporting and entertainment events in major population centres. Hospitality providers such as THG and ICM offer packages to many different events and the evidence, albeit incomplete, suggests that there is a strong degree of substitutability among the various events. There is evidence, for example, that primary consumers purchase hospitality packages to more than one event, a proposition that holds true for a significant proportion of purchasers of packages to the Matches. The pricing of hospitality packages, so far as can be ascertained from the incomplete evidence, tends to fall within a broad range and there is nothing to suggest that packages to the Matches command a substantially higher price, or yield a higher margin, than packages to other high-demand sporting or entertainment events. 104 Professor Bewley suggested that there were substantial barriers to entry in the market for hospitality services. However, the primary evidence rather suggests that the barriers are relatively insubstantial, as reflected in the relatively recent entry of a number of participants in the industry. One of the factual assumptions made by Professor Bewley (the difficulty and expense of compiling a data base of potential customers) is not at this stage supported by the evidence. 105 I think that the respondents, on the evidence adduced thus far, are likely to face considerable difficulties in establishing the existence of the Ticket Market. There is, however, some (albeit rather slight) evidence of a very committed "core" of rugby union supporters (not necessarily people likely to purchase hospitality packages) who might not be deterred by price increases from patronising events such as the Matches promoted by the ARU. This evidence might be used as the foundation for an argument of the kind rejected (in relation to rugby league) by Burchett J in News Ltd v ARL, but which was not resolved on the appeal. 106 It is true, as Mr Gleeson pointed out, that there are gaps in the evidence and there is evidence which suggests that the ARU takes account of the ticket prices for other major sporting events, when setting the prices for the Matches. Nonetheless, albeit with some hesitation, I think that the respondents have established that there is a serious issue to be tried as to the existence of the Ticket Market. But I would classify their case on this issue as relatively weak. Of course, as with other contested issues, the position may change at the final hearing. 107 It is not entirely clear that the existence of the Ticket Market (assuming the respondents can ultimately establish its existence) will assist the respondents in relation to the Restriction. It would be necessary for the respondents to establish, for example, that the ARU had used its power in the Ticket Market to impose the Restriction for the substantial purpose of deterring or preventing THG or ICM and other hospitality service providers from engaging in competitive conduct in that market (TP Act, s 46(1)(c)). Assuming the respondents could establish the necessary purpose, they would then have to show that s 46(1)(c) supports orders under the TP Act, varying the ATS Licence Agreement so as to enable ATS to obtain tickets from the ARU and to resell them free of the constraints imposed by the Restriction. It is far from obvious that this will be the result, having regard to the centrality of the Restriction in the arrangements embodied in the ATS Licence Agreement. 108 In the result, the respondents have not established a serious issue to be tried insofar as their claims depend on the existence of the Hospitality Market. I think that the respondents have established a serious issue to be tried insofar as their claims depend on the existence of the Ticket Market. Even so, on the material before me, I think that the claim is relatively weak and faces special difficulties in its application to the Restriction.

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Balance of Convenience 109 There are special difficulties in assessing the balance of convenience in this case. Not only are there three parties, each seeking orders, but the various claims cannot be considered in isolation from each other. For example, the ARU's claim to an order restraining ATS from performing its agreement to supply tickets to ICM must take account of ICM's position as the other party to that agreement. Furthermore, the respondents not only raised defences to the ARU's claim but relied on their respective cross-claims. 110 Nonetheless, in assessing the balance of convenience it is convenient to start with the position as between the ARU and ATS. The following factors particularly bear on the balance of convenience in relation to their respective claims: · The ARU has established that there is a serious issue to be tried as to whether ATS breached the ATS Licence Agreement by entering into the ATS-ICM Agreement. Taking into account the defences raised by ATS, I think that the ARU's case should be regarded, on the material before me, as relatively strong. · At this stage, the respondents have not established that there is a serious issue to be tried on the question of whether the Restriction is void as a restraint of trade. They have not established a serious issue to be tried as to whether the Restriction contravenes Part IV of the TP Act, insofar as that claim rests on the existence of the Hospitality Market. They have established a serious issue to be tried as to whether the Restriction contravenes Part IV of the TP Act, insofar as the claim rests on the existence of the Ticket Market. However, I regard the respondents' claim as relatively weak. · The ARU has offered to provide ATS with sufficient tickets to enable it to meet its contractual obligations to clients other than ICM. There is therefore little danger of ATS suffering a loss of business reputation if orders are made in favour of the ARU or if the ARU is not required to hand over to ATS tickets not yet delivered to it under the ATS Licence Agreement. Nor will ATS's clients (other than ICM) suffer loss or inconvenience if orders are made restraining completion of the ATS Licence Agreement. The expectations of ATS's clients that they will receive the travel packages for which they have paid or agreed to pay can be met. · On the other hand, it is difficult to see how the ARU would suffer serious and irreparable loss if ATS provided tickets to ICM, assuming that ICM would pass on the tickets to THG in order to supply hospitality packages to clients. It is true that the ARU will be forced to accept, against its will, that THG can use the tickets supplied by ATS in order to provide hospitality packages to THG's clients. But the ARU will have been paid for the tickets and THG has undertaken to ensure that its packages are distinguished from those provided by the ARU. Thus, should some of THG's clients be dissatisfied with the quality of their seating or with other aspects of the hospitality packages (as the ARU says may be the case), their discontent is unlikely to be directed to the ARU. · The ARU retains possession of the tickets to the Bledisloe Cup to which ATS claims to be entitled under the ATS Licence Agreement. Unless a mandatory injunction is granted, the ARU will be able to prevent ATS from performing its agreement with ICM by the simple device of withholding the tickets. (The ARU will also be able to prevent THG from using tickets acquired from ATS to complete the swap arrangements envisaged in the Wimbledon Agreement.) The effect of a mandatory injunction, having regard to the limited duration of the ATS Licence Agreement, would be very close to granting ATS final relief. 111 As between the ARU and THG/ICM, the following factors seem to me to be particularly relevant to the balance of convenience: · The ARU has established that there is a serious issue to be tried as to whether ICM induced ATS to breach the ATS Licence Agreement. Even taking into account the defences, I think that the ARU's case should be regarded, on the material before me, as relatively strong. · The ARU has not established that there is a serious question to be tried as to whether THG breached the terms of pars (f) or (g) of the orders of 23 April 1999, by entering the Wimbledon Agreement. However, I think that the ARU has established a serious issue to be tried as to whether THG or ICM induced Mr Burraway, in March 1999 or May 1999, to breach the Condition incorporated in the tickets acquired by him, although this issue gives rise to what will clearly be disputed factual questions. Moreover, the respondents' contention that the ARU's incorporation of the Condition into tickets falls foul of Part IV of the TP Act (insofar as the contention relates to the Ticket Market) bears on the question of whether the ARU should be entitled to restrain completion of the Wimbledon Agreement. · Mr Burraway is not a party to the proceedings and he may be prejudicially affected by an order restraining THG or ICM from performing the Wimbledon Agreement. (No submission was made that the Court should not make an order affecting Mr Burraway, effectively a party to the Wimbledon Agreement, without him being joined: cf News Ltd v ARL (FC), at 523-525. It is by no means clear that the Court should overlook his non-joinder.) · THG will be unable to complete the Wimbledon Agreement by using tickets supplied by ATS, unless the ARU chooses to provide ATS's allocation to it. · On the evidence before me, I do not think that the ARU has shown that there is a serious issue to be tried as to whether ICM or THG induced ticket-holders other than ATS and Mr Burraway to breach contracts with the ARU. It is clear enough that THG has obtained some tickets from sources other than ATS and Mr Burraway. However, the evidence did not explore the circumstances in which these tickets were acquired by THG or ICM. It may well be that at a final hearing the evidence will show that the tickets were in fact acquired directly from the ARU and that THG's proposed use of the tickets is in breach of the Condition. Alternatively, it may show that THG or ICM induced third parties to supply the tickets in breach of contractual arrangements between them and the ARU. At present the evidence does not address these issues. · For reasons I have explained, I do not think that the ARU will suffer serious and irreparable loss if THG is able to procure tickets to the Bledisloe Cup through ATS or Mr Burraway, for the purpose of satisfying their contractual obligations to supply hospitality packages to clients. · If THG is unable to fulfil the requirements of its Sales Contracts (it has sold 420 packages to the Bledisloe Cup), it will suffer some loss of reputation and goodwill among clients and potential clients. On the other hand, on THG's own case, it acted merely as an agent for its clients who were made aware (at least if they read the Sales Contract carefully) that it might not prove possible to acquire tickets on their behalf. · If THG is unable to fulfil its Sales Contracts, undoubtedly the expectations of its clients will be disappointed and, in some cases, even if the cost of the hospitality packages is refunded, they may suffer some financial loss or loss of business goodwill. The expectations of innocent third parties constitutes an important, but not overriding consideration in determining the balance of convenience. · It would obviously be highly undesirable if innocent ticket-holders were to be denied entry to Stadium Australia on the day of the Bledisloe Cup because the ARU thought they had acquired their tickets from, or through, the agency of THG. · There has been some delay on the part of the ARU in pressing the claim for interim relief. However, I think that most of the delay can be explained by the continuing negotiations between the parties (which led to an agreed interim regime for the Centenary Test) and the difficulties of preparing for an interlocutory hearing in complex matters. 112 No set of interlocutory orders in the present case can be entirely satisfactory. The balance of convenience seems to me to lead to the following position: · THG should be able to use the tickets already in its possession (that is, those identified in Exhibit SRR 4) to fulfil its Sales Contracts. · No order should be made requiring the ARU to supply ATS with tickets pursuant to the ATS Licence Agreement (except for those tickets covered by the ARU's open offer). · It is unnecessary to restrain ICM and ATS from taking any steps to perform the ATS-ICM Agreement, since ATS has not received tickets from the ARU that would enable it to perform its obligations under that agreement. · The ARU should be restrained from denying admission to Stadium Australia to any person holding a ticket to the Bledisloe Cup, or from treating such a person less favourably than other ticket holders after admission, on the ground that the person obtained his or her ticket from or through the agency of THG or ICM. · It is not necessary to make any orders restraining ATS from selling or offering to sell tickets to the Bledisloe Cup or other Rugby Test Matches presented by the ARU at Stadium Australia since it has no such tickets available to it (except those that will be made available to enable it to satisfy its contractual commitments to retail clients). · No further order should be made restraining THG or ICM from utilising any tickets they obtain from any source other than ATS, for the purpose of providing hospitality packages to clients. But THG is subject to the undertakings given on 23 April 1999, which remain in force until after the Bledisloe Cup. 113 The upshot will be that THG will be able to satisfy at least some of its obligations under the Sales Contracts from the tickets already in its possession and those it may be able to obtain from Mr Burraway. I appreciate that, unless the ARU chooses to release some tickets to ATS, THG may not be able to satisfy all its obligations under the Sales Contracts. Some innocent third parties may therefore experience inconvenience or loss. While that result is less than ideal, I do not think that this consequence should be overcome by requiring the ARU to provide tickets to ATS under the ATS Licence Agreement. 114 I have declined to make an order restraining performance of the Wimbledon Agreement. As I have explained, I do not accept that there is a serious issue to be tried as to whether THG is in breach of the undertaking given on 23 April 1999. As I have also explained, Mr Burraway, who has been regarded as a party to the Wimbledon Agreement, has not been joined in the proceedings, and the Court ought not lightly make orders, even if it has power to do so, which affect his contractual entitlements. A further consideration is that THG will not be able to obtain tickets to the Bledisloe Cup from ATS which would enable it (THG) to provide a "swap" for Mr Burraway's tickets. Whether THG can obtain tickets from Mr Burraway, consistently with the undertakings of 23 April 1999, is a matter for THG to consider. 115 The position relating to future Matches is not easy to resolve. In view of the evidence relating to the possible involvement of ICM in a breach of the ATS Licence Agreement, I think that THG and ICM should be restrained from inducing any travel agent licensed by the ARU from selling or providing, or offering to sell or provide, tickets to future Rugby Test matches presented by the ARU at Stadium Australia. However, I am inclined to think that the balance of convenience is marginally against the grant of further relief to the ARU. 116 It is true that neither THG or ICM has incurred contractual commitments to clients in respect of future matches. Nonetheless, the inability to offer hospitality packages to Rugby Test matches may well place them at a competitive disadvantage with other hospitality providers that cannot easily be measured in monetary terms. Provided that THG extends (in a temporal sense) its offer to distinguish its packages from those offered by the ARU (as I think it should), as at present advised I find it hard to see how the ARU will suffer any significant detriment if THG and ICM are not restrained from providing hospitality packages. 117 I think it would be helpful to all parties if a final hearing were held as soon as reasonably feasible (having regard to the expected length of the case). If this occurs it may well be possible to have a final hearing before the next Rugby Test matches at Stadium Australia (which apparently will not be until 2000). I also intend to reserve liberty to apply. The ARU may wish to be heard further on the continuation of the undertakings given on 23 April 1999 beyond 31 August 1999, and I would be disposed to provide that opportunity.

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Orders 118 I propose to make the following orders: 1. Subject to compliance by the ARU with order 2, THG and ICM be restrained until final hearing or earlier order, by themselves, their servants or agents, and whether as agent for a third party or otherwise, from inducing any domestic travel agent appointed by the ARU, its servants or agents, to sell or offer for sale, offer by way of accommodation, or allow to be used as part of a hospitality package, tickets to any Rugby Test match presented by the ARU at Stadium Australia. 2. (a) Within seven days of the date of these orders (or such further time as the Court allows), the ARU serve on THG and ICM a list of domestic travel agents currently appointed by it in respect of Rugby Test matches to be played at Stadium Australia and the term of each agent's appointment. (b) Within seven days (or such further time as the Court allows) of any change taking place in the list of domestic travel agents previously served on THG and ICM, including any change occurring by reason of the expiry of an agent's term of appointment, the ARU serve on THG and ICM a notice in writing specifying the change. 3. The ARU, by itself, its servants or agents, be restrained from (a) refusing admission to Stadium Australia on 28 August 1999 to any person holding a ticket to the Bledisloe Cup; or (b) treating any such person less favourably than other ticket holders to the Bledisloe Cup; on the ground that that person acquired or received the ticket to the Bledisloe Cup from, or through the agency of THG or ICM. 4. The ARU be released from undertaking number 1 given to the Court on 10 June 1999, insofar as the undertaking relates to Exhibits SRR 3 and SRR 4 to the affidavit of Simon Rhodri Rees, sworn on 13 May 1999, and the respondents' discovered documents numbered RC 0104, RC 0107, RC 0393 and RC 0394. 5. Liberty to apply be granted on 48 hours' notice. 6. Costs of the motions be costs in the cause. 119 These orders are made on the basis that · The ARU will give effect to its offer to provide ATS with sufficient tickets to the Bledisloe Cup to enable it to meet its contractual obligations to clients other than ICM; · THG and ICM are each prepared to give an undertaking to inform each of their or its clients receiving hospitality packages for the Bledisloe Cup, that the hospitality and tickets are provided through THG or ICM (as the case may be) independently of the ARU. 120 In order to give the parties an opportunity to correct any errors in these orders, or to propose amendments consistent with my reasons, I shall stand the matter over for a short period. At that time, the parties can advise whether they wish to have the opportunity to make submissions as to costs. I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville.