The s 87B Claim
47 Dresna contended that the primary judge erred by refusing it leave to amend the PFASC to incorporate the s 87B claim.
48 The s 87B claim relies for its efficacy on undertakings given to the ACCC by Franklins and Dairy Farm (the parent company of Franklins) in June 2001. These undertakings, which were referred to in the decision of the primary judge as "the Franklins Undertakings", were made pursuant to s 87B of the TPA.
49 At [6] of his reasons for decision, the primary judge said, in respect of the Franklins Undertakings:
"Their apparent purpose was to ensure, so far as possible, that the remaining Franklins stores were sold to "independent operators" rather than to Coles or Safeway."
50 Dresna, in paragraphs 77-81 of the PFASC, sought to introduce a cause of action based on the tort of conspiracy by unlawful means, where the unlawful means are the alleged breaches by Franklins of the Franklins Undertakings.
51 The primary judge refused leave to amend the PFASC to include the s 87B claim, on the basis that breaches of s 87B undertakings cannot be regarded as "unlawful acts" for the purpose of the tort of conspiracy by unlawful means. At [129] of his reasons for judgment, his Honour said:
"The section does not confer private rights and was plainly never intended to do so. It would be inappropriate, in those circumstances, to permit the section to be invoked indirectly as the "unlawful means" for the tort of conspiracy".
52 Dresna submitted on the appeal that the question of whether a statute confers private rights is simply not relevant to a determination of whether a breach of the statute constitutes unlawful means. In support of this proposition, it cited some authorities including: Coal Miners' Industrial Union of Workers (WA), Collie v True (1959) 33 ALJR 224 at 227; Williams v Hursey (1959) 103 CLR 30 at 78-80, 108, 122 et al (see paragraph 18 of the applicant's outline of submissions).
53 Dresna contended that the reasons of the primary judge were flawed to the extent that they were limited to a consideration of the conferral of private rights by s 87B without more. It was submitted by Dresna that, the primary judge failed to consider, as a separate issue, whether a breach of an undertaking given pursuant to s 87B of the TPA would constitute unlawful means for the purpose of pleading the tort of conspiracy.
54 In its written outline and in oral submissions, Dresna relied primarily on two arguments to support the proposition that a breach of s 87B would, in fact, constitute "unlawful means".
55 The first, implicit in the language employed in Dresna's written outline (see, for example, at [18]-[19]), was that a breach of a s 87B undertaking is a contravention of statute and automatically constitutes unlawful means. In the alternative, it was submitted that a breach of a s 87B undertaking is analogous to a breach of contract and on this basis should constitute unlawful means for the purpose of the tort of civil conspiracy. Related to this last submission, Dresna also contended that, as there is no authority to conclusively remove a breach of s 87B from the ambit of wrongs that the common law recognises as constituting unlawful means, Dresna should at least have the opportunity to argue the s 87B claim at trial.
56 In my respectful view, each of these submissions is wrongly based. The alleged breach by Franklins of the Franklins Undertakings does not amount to a breach of statute. At its highest, it involves conduct by Franklins, which, may enliven s 87B(3) and the discretion of the ACCC to take enforcement action. Assuming that a decision is made to take enforcement action, the Court may find (after first satisfying itself that the undertakings were lawfully accepted by the ACCC) that an undertaking has been breached and make orders of the type prescribed under s 87B(4). However, none of this is automatic. The statutory scheme articulated at s 87B does not proscribe behaviour but rather sets up the means by which, following the satisfaction of at least two preconditions, the ACCC may obtain orders pertaining to conduct that contravenes arrangements that govern a relationship between itself and the person giving the undertakings.
57 Further, I do not accept that a breach of a s 87B undertaking is analogous to a breach of contract. As Coles submitted, the giving and acceptance of an undertaking under s 87B(1) is an administrative arrangement sanctioned by the statute: see Australian Petroleum Pty Ltd v ACCC (1997) 73 FCR 75.
58 In Australian Competition & Consumer Commission v Signature Security Group Pty Ltd [2003] FCA 3, Stone J said at [41]:
"The purpose of a corporation giving undertakings to the ACCC is, at least in part, to avoid unnecessary litigation by voluntary undertakings that the corporation will not engage in conduct of the type precluded by the terms of the undertakings."
59 In my respectful opinion, to find that a breach of an undertaking given in this restricted context (typically following a period in which the parties are engaged in private negotiations) can constitute the unlawful means for the tort of conspiracy is to extrapolate to an untenable degree. It is not helpful to refer, as Dresna did, to questions of public interest as a basis for treating by way of analogy, a breach of a s 87B undertaking as a breach of contract.
60 I also reject the submission of Dresna that, in the absence of any authority that establishes that a breach of a s 87B undertaking is not "unlawful means" for the purpose of the tort of conspiracy, the pleading should be allowed to proceed. In my view, the absence of positive authority on the issue does not elevate the untenable s 87B claim to the status of arguable.
61 Accordingly, I consider that his Honour the primary judge was correct to hold that there was no basis in law for the s 87B claim and was right to decline leave to amend, in that respect.