Kadkhudayan v W D & H O Wills

The Amended Notice of Appeal 16 The appellants filed a document styled "Amended Notice of Appeal" on 13 December 2001. Attached to that document is a letter dated 12 December 2001 which sets out the case which the appellants wish to have considered by the Full Court. These documents also reflect a lack of understanding of the Court process as they do not identify with any clarity any meaningful ground of appeal. 17 The Amended Notice of Appeal, and the attached letter, appear to raise four principal grounds of complaint on which the appellants rely as their grounds of appeal: (i) what Mr Kadkhudayan refers to as a "cover-up" by the Court; (ii) "discrimination" by Wills and the Court; (iii) breach of contract with the appellants and with the ACCC; and (iv) an allegation that the primary judge changed the appellants' case.

"Cover-up" 18 Mr Kadkhudayan explained at the hearing before the Full Court on 28 February 2002 that, in his words, the expression "cover-up" meant that certain parts of the transcript of the hearing before the primary judge were "made up". At pp 36-38 of the transcript of the hearing held on 28 February 2002, Mr Kadkhudayan explained that: "It's [(ie) the transcript] not in the sequences that things were happening at the Court." ... "I believe that they made the tape - the transcript of the tape here and then they sent it to Lee J." "Someone in that office that had no idea about the case - when that person read the transcript thought that I was at fault ... and after that, the person gives his final finding and outcome and suggest it to the judge and judge sign it because he's quite busy to go through five files - to go through the whole thing." 19 In his letter of 12 December 2001, Mr Kadkhudayan gives four examples of what he asserts are parts of the transcript that are "made up":

· transcript 25 July 2000 from page 172 item 30 to page 177 item 25. These pages contain the transcript of the re-examination of Mr Potter by Mr Oslington QC, counsel for the respondent. Mr Potter was called by the respondent as an expert witness at first instance. Mr Kadkhudayan asserts, in relation to these pages:

"These 5 pages did not happen, and the witness was not there. I do not know the name of the witness, I was not allowed to speak to him and I do not have affidavit from him. It is easy to prove that this witness is not right and lying, to much cover-up." (sic) The transcript records that Mr Potter was examined by Mr Oslington (at T 127-130); cross-examined by Mr Kadkhudayan at some length (at T 130-172); and further cross-examined by Mr Kadkhudayan (at T 177-184). However, Mr Kadkhudayan does not appear to have a problem with those parts of the transcript. Mr Oslington refers (at T 127) to an affidavit of Mr Potter made on 19 August 1999 which was tendered as Exhibit 5 in the proceedings. Mr Kadkhudayan's allegations in relation to this part of the transcript are entirely unsubstantiated. There is no evidence to support any of them.

· Transcript 26 July 2000 pp 279-280. These pages record some cross-examination of Mr Sage by Mr Kadkhudayan. Mr Sage was employed by Wills in various positions until May 1998. It appears that Mr Kadkhudayan is again alleging that these pages of the transcript were fabricated, although the basis of that allegation is not explained. Mr Kadkhudayan's allegations relating to this part of the transcript are also unsubstantiated.

· Transcript 26 July 2000 p 310 items 15-20. This page records part of the cross-examination of Mr Sage by Mr Kadkhudayan. At line 19, Mr Kadkhudayan is recorded as saying "bullshit". He asserts in his letter that:

Again, Mr Kadkhudayan's allegations in relation to this portion of the transcript are entirely unsubstantiated.

· Transcript 26 July 2000 pp 313-320. These pages contain the transcript of the re-examination of Mr Sage by Mr Oslington. Apparently Mr Kadkhudayan is again alleging that these pages of the transcript were fabricated, but the only information given in this respect is: "cover-up". The allegations in relation to this part of the transcript are entirely unsubstantiated.

"Discrimination" 20 Mr Kadkhudayan appears to allege discrimination in two respects: first, by Wills in failing to appoint him as its wholesaler; second, by the primary judge in failing properly to consider his case.

Discrimination by Wills 21 Ground 7 of the Amended Notice of Appeal states: "7. Discrimination between my neighbour deli and Puff & Stuff." At p 2 par 2 of Mr Kadkhudayan's letter, he goes to some lengths to explain the quantities of cigarettes he bought from Wills in 1995 which were sold to both wholesale and retail customers, compared to the quantities bought and sold by Puff & Stuff over the same period. The letter alleges that Mr Kadkhudayan's calculations reveal that he sold a far greater quantity of cigarettes than Puff & Stuff, and yet he was not appointed as a wholesaler by Wills. Mr Kadkhudayan is apparently alleging that Wills discriminated against him in failing to appoint him as a wholesaler. The non-appointment of the appellants as a wholesaler under the new distribution system proposed by Wills was relied upon by the appellants at first instance as an element in the contravention of s 46(1)(c) of the TPA. "Discrimination" by Wills is not of itself sufficient to entitle the appellants to a remedy against Wills, unless it is established that the "discrimination" involved a contravention of TPA. The primary judge held that the evidence adduced at the hearing did not support the appellants' case of a misuse of market power by Wills. No error has been shown in the primary judge's conclusion in this respect.

Discrimination by the primary judge 22 At p 3 par 5 of his letter, Mr Kadkhudayan appears also to assert that the primary judge discriminated against him. It appears that Mr Kadkhudayan is asserting that the primary judge overlooked (or alternatively, forgot) the fact that the ACCC had ordered Wills to pay damages in respect of the "price permission" (ie price fixing) between the appellants, Wills and Fourth Avenue Deli. Presumably, Mr Kadkhudayan believes that the ACCC's findings should have been taken into account by the primary judge in deciding whether Wills had done something "wrong". Mr Kadkhudayan asserts in par 5 that: "Discrimination for price permission ... Justice Lee forget that one and not see that one because very busy and I believe for judgment, Justice Lee gave papers to somebody else to read and these were passed back to Justice Lee for his signature without his having time to properly examine. I still believe in Justice Lee." (sic) Insofar as this complaint alleges that the primary judge discriminated against the appellants, or otherwise failed properly to discharge his judicial function, it is without foundation. The fact that a penalty was imposed upon Wills for contravention of s 45 TPA does not establish that the primary judge's conclusions are erroneous in any respect. Plainly his Honour was aware of that matter, as the ACCC's proceedings, and the penalty imposed, are referred to in pars [13] and [14] of the judgment at first instance.

Breach of contract 23 Ground 5 of the Amended Notice of Appeal asserts that: "Company(Wills) broke my contract - cover-up." Ground 6 alleges: "Company (Wills) broke agreement between themselves and ACCC - cover up - and judge cannot find documents." At p 3 par 3 of his letter, Mr Kadkhudayan asserts that: "Company broke my Contract and Justice Lee said yes I had Contract, but cover-up that one." Paragraph 4 asserts that: "Company broke Agreement between them and ACCC to give me back my supply …." A cause of action in contract is not pleaded in the Statement of Claim. The application indicates that it is made under ss 46, 48 and 82 TPA. There is no reference in either the application or in the Statement of Claim to a contract-based claim. The description by the primary judge of the issues arising in the case is not consistent with a contract-based claim having been advanced at the hearing. This complaint therefore leads nowhere.

The primary judge changed the appellants' case 24 Paragraph 6 of the appellants' letter reads as follows: "Your Honours, you explain to me that I prove how change my case from Market Power to Wills Company do something wrong with my business. From Vol 2 tab 30 page 3 item 25 to page 4 item 20 and page 7 item 15. "Your Honours, change my case with very serious order from judge." Page 7 item 5-10: "Dr Baxter agreed with that and said to judge he would do that after I come back to Court." (sic) The pages referred to reproduce the transcript of a directions hearing held on 9 March 1999 before O'Loughlin J. Mr Kadkhudayan, an interpreter, and Dr Baxter, then counsel for the respondent, attended by telephone. 25 At transcript p 3 l 25 - p 4 l 20, O'Loughlin J is recorded as having explained to Mr Kadkhudayan in general terms that it is for him, as the applicant, to prove his case against Wills. His Honour says: "Mr Mohammad, [the interpreter] I am going to explain to Mr Hassan [Mr Kadkhudayan] the difficulties that he has. I want you to explain things to him step by step. Number one, it is Mr Hassan who is asking the Court to make Wills pay him some money. The Court will not make Wills pay any money to Mr Hassan unless Mr Hassan satisfies the Court that Wills has done something wrong. It is Mr Hassan and only Mr Hassan who tells the Court what it is that Wills has done wrong. I do not want to hear from Lynch and Meyer, I do not want to hear from Mr Hassan's accountant. It is Mr Hassan who must tell me what it is that Wills has done that is wrong. If Mr Hassan does not know what is wrong, how am I expected to know?" His Honour then goes on at Transcript pp 4-7 to discuss further interlocutory steps that are to take place in the matter - discovery, further evidence to be filed by Mr Kadkhudayan etc. At Transcript p 7 l 15 (one of the pages referred to in the letter above), his Honour informs Mr Kadkhudayan that he is going to adjourn the proceedings for an unspecified time to allow Mr Kadkhudayan to compile his evidence, and directs Mr Kadkhudayan to ring Dr Baxter when he has done so, so that the matter can be relisted. His Honour also directs Dr Baxter to arrange the next listing, to which Dr Baxter replies (at Transcript p 7 l 18): "We will arrange that." 26 It seems as though Mr Kadkhudayan has simply misunderstood what O'Loughlin J said at the directions hearing on 9 March 1999. He seems to be alleging that O'Loughlin J said that Mr Kadkhudayan would be successful in his action against Wills, and would be entitled to the money, if he could prove that Wills had done something wrong. Presumably Mr Kadkhudayan believes that he proved at first instance that Wills had done something wrong (although exactly what is not explained) and that he is therefore entitled to some money. The appellants may be disappointed that the primary judge dismissed their claim by reason of a failure to prove the contraventions of the provisions of ss 46 and 48 TPA which were the pleaded foundation for that claim. If, and insofar as the appellants contend that the primary judge misconceived the appellants' case, or changed that case, then it is the appellants who are mistaken.

The appellants' s 46(1)(c) claim 27 This claim was founded in the new distribution system adopted by Wills early in 1997 under which it would only supply cigarettes to licensed wholesalers. Although the appellants applied for such appointment they were not appointed. 28 In order to succeed in their s 46 claim the appellants had to establish: · that the respondent had a substantial degree of power in the relevant market;

· that it did so for the purpose of deterring or preventing the appellants from engaging in competitive conduct in the market.

The appellants failed to prove any of these requirements. 29 Nothing which has been put to us by Mr Kadkhudayan exposes any arguable error in the findings made by the primary judge with respect to this aspect of the appellants' claim.

Resale price maintenance 30 Section 48 TPA prohibits a corporation or other person from engaging in the practice of resale price maintenance. Section 96 TPA specifies various acts as being acts which constitute engaging in resale price maintenance. One such act, when applied to the circumstances of the present case, can be restated as follows: "(Wills) ... attempting to induce (the appellants) not to sell, at a price less than a price specified by (Wills), goods supplied to (the appellants) by (Wills)." (s 96(3)(b)) 31 The primary judge said that the issue to be determined on the appellants' case was whether, by its conduct, Wills attempted to induce the appellants not to sell goods supplied to the appellants by Wills at a price less than a price specified by Wills. 32 The primary judge found that Wills did specify a price, namely Wills' price, below which cigarettes supplied by Wills were not to be sold if the appellants were to receive promotional payments in respect of brands of cigarettes promoted by Wills [29]. 33 The issue then became whether Wills attempted to induce the appellants not to sell cigarettes supplied by Wills to the appellants at a price less than the specified price. The primary judge described that issue as posing for consideration: "... whether the statement by Wills that a price support scheme, generally available to retailers, would not be available to the applicants unless they sold Wills cigarettes at or above Wills' price, was intended to obtain compliant conduct from the applicants or [whether Wills] was indifferent to what the applicants chose to do." On the hearing of this appeal, counsel for the respondent did not disagree with that formulation of the issue. 34 The primary judge distinguished between two situations. On the one hand, a supplier may be aware that the retailer does not depend upon price support payments provided by the supplier and may intend no more than that the retailer take or refuse the promotional payment and run its business accordingly. On the other hand, the supplier may be aware that the retailer could not absorb the financial impact of withdrawal of such support and may be taken to have relied upon that knowledge in acting as it did and to have intended that the retailer alter its position so that it would sell at the price specified by the supplier and not continue to sell at the retailer's price. 35 The primary judge found that in the period November 1995 - August 1996 the appellants complained vigorously to Wills about the withdrawal of promotional payments; that Wills was aware that the appellants were losing money in the period June - October 1996; and that Wills was aware that the appellants operated their business on high turnover and low margins. The primary judge then continued: "35. It may be concluded, therefore, that when Mr Sage, Wills' Convenience Area Manager, Adelaide, was asked by Mr Kadkhudayan in August 1996 'why haven't I been receiving promotions' and responded 'because you have been selling under wholesale price', the intention of Wills was to attempt to induce the applicants to alter their sale price to a price not less than Wills' price." (emphasis added) If this is a finding of fact, taken at face value it is equivalent to a finding that Wills intended to obtain compliant conduct from the appellants, rather than a case in which Wills was indifferent as to what the appellants chose to do. 36 Nonetheless, his Honour concluded: "41. In all the circumstances I am not satisfied that the evidence adduced has established that between November 1995 and August 1996, Wills specified a price other than the cost of acquisition as the price below which the goods supplied by Wills to the applicants were not to be sold and I am not satisfied that Wills engaged in the practice of resale price maintenance by attempting to induce the applicants not to sell Wills' goods at less than a price that exceeded the cost price of those goods." 37 Two "circumstances" were referred to by the primary judge in his reasons. First: "37. Although that policy (ie Wills' longstanding position that it would not support a retailer selling Wills products at less than Wills' price) involved Wills stipulating to a retailer the minimum price at which Wills wanted the retailer to sell Wills products, it may be concluded that the purpose of the policy, and the intent of Wills in advising the applicants thereof, was to avoid devaluation of the image of its goods and detriment to Wills' trade with other retailers." 38 Second, the primary judge found that in August 1996 the appellants sold goods supplied by Wills at less than cost price after taking into account allowances that reduced the cost price. His Honour said that s 98(2) TPA provides that resale price maintenance will not arise where a supplier withholds supply of goods because the retailer has sold goods of the supplier at less than cost to, inter alia, promote the business of the retailer: His Honour then said at par [39]: "It would seem to follow that if a supplier states that it will not provide allowances to a retailer that sells any of the supplier's products below cost, it would be difficult to show, in the absence of other cogent circumstances, that such a statement involved the practice of resale price maintenance." 39 The members of the Court were troubled by an apparent inconsistency between par [35] of the judgement, and the conclusion reached in par [41]. That concern was heightened by the fact that the primary judge had specifically identified (par [31]) the question in the case as being whether Wills' withdrawal of the price support scheme from the appellants was intended to obtain compliant conduct from the appellants. Accordingly, members of the Court raised the issue with counsel for the respondent even though it was not an issue raised by the Amended Notice of Appeal, or by the appellants' letter already referred to. In Neil v Nott (1994) 121 ALR 148 at 150, the High Court said: "A frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy." However, the members of the Court are conscious of the need to preserve both the fact and the appearance of impartiality, as well as the undesirability of giving, or being perceived to give, legal advice to an unrepresented party. See, generally, Brehoi v Minister for Immigration & Multicultural Affairs [2001] FCA 931, per Beaumont J. 40 In response, the respondent's counsel submitted: - that pars [35] and [37] of the judgment are not findings of fact. The paragraphs refer to matters that "may be concluded", in the sense that they are possible conclusions which might be open, rather than matters which the primary judge found to be so; - if and insofar as par [35] is a finding of fact as to Wills' intention, it is wrong and contrary to the evidence. The respondent would wish an opportunity of lodging a Notice of Contention with respect to this matter, as well as the opportunity of marshalling the material and putting submissions as to why any such finding is wrong and contrary to the evidence. The respondent was not in a position to attend to those matters immediately, because the issue raised by members of the Court had not been raised by the appellants; and - in any event, the Court was not entitled to embark upon a consideration of this issue, unless the Amended Notice of Appeal was further amended to raise the issue. Otherwise the respondent would not be aware of the case which it had to meet. 41 The Court was of the view that it would not be proper to embark upon a consideration of this question, unless the issue for determination was formulated, and unless the issue was one which the appellants sought to raise. 42 Accordingly, the Court formulated the following further proposed amendment to the Amended Notice of Appeal: "1. Having posed the question in par 31, and having made the findings of fact in pars 35 and 37, his Honour erred in law in concluding as he did in par 41 that Wills did not engage in the practice of resale price maintenance by attempting to induce the appellants not to sell Wills' goods at less than a price that exceeded the cost of those goods. 2. Alternatively, having posed the question in par 31, his Honour failed to answer the question and make a finding of intention consistently with the question, and thereby has erred in law in concluding as he did in par 41 that Wills did not engage in the practice of resale price maintenance by attempting to induce the appellants not to sell Wills' goods at less than a price that exceeded the costs of those goods." The Court formulated those grounds as possible grounds of appeal to provide some definition of the matter which was of concern to members of the Court. Mr Kadkhudayan applied to further amend the Amended Notice of Appeal to raise these grounds, although it is fair to say that this application was prompted by the members of the Court. 43 Counsel for the respondent opposed the application for leave to amend, essentially on two grounds. First, the respondent would be prejudiced by a late amendment as it would result in an adjournment of the appeal resulting in an increase in costs for which it would not be protected by an order for costs. In all probability Mr Kadkhudayan would be unable to meet a costs order. Second, to permit the amendment would be an exercise in futility as even if a contravention of s 48 were established, there was at the most an unsuccessful inducement. The respondent's counsel alleged that the appellants did not change their position on the faith of the attempted inducement and it was not causative of any loss. The respondent's counsel further submitted that if and insofar as the primary judge found that damages of $250,000 would have been an appropriate award had a contravention of s 48 been established, that finding was wrong. 44 The Court reserved its decision on the appeal, and on the application for leave to amend. It did so on the basis that if leave to amend were granted and if the Court determined that the primary judge had found as a matter of fact that the intention of Wills was to attempt to induce the appellants to alter their sale price to a price not less than Wills' price, then the respondent should have a further opportunity of contesting the correctness of that finding of fact if it wished to do so.

A possible conclusion or a finding? 45 Paragraph 24 of the Statement of Claim alleges that at a meeting on about 27 August 1996 Mr Kadkhudayan met with Mr Sage. Mr Kadkhudayan said words to Mr Sage to the following effect: "Why haven't I been receiving promotions?" to which Mr Sage's response was: "That's because you have been selling under wholesale price and if you don't go up to the wholesale price you're not going to get any promotions." Paragraph 20 of the defence was the response to par 24 of the Statement of Claim. Paragraph 20 admits that a meeting occurred between Sage and Mr Kadkhudayan and that Mr Kadkhudayan said words to Sage to the following effect: "Why haven't I been receiving promotions?" and that Sage said words to Mr Kadkhudayan to the following effect: "That's because you have been selling under wholesale price" but the allegations contained in par 24 of the Statement of Claim are otherwise denied. 46 Paragraph 20 of the defence appears to be the source of the conversation which appears in quotation marks in par [35] of the primary judge's decision. 47 Paragraphs [35] and [37] of the judgment both contain the expression "it may be concluded". Either both paragraphs represent a conclusion reached by the primary judge, or neither does. In its written submissions, the respondent contended that par [37] is a conclusion drawn by the primary judge, but in oral submissions Mr Oslington asserted that both pars [35] and [37] did no more than postulate possibilities. 48 In our view both pars [35] and [37] record conclusions reached by the primary judge. Paragraph [35] appears to record the answer to the "question in the case" which the primary judge posed for consideration in par [31]. Having stated the "question in the case" in par [31] it is probable that the judgment would record the primary judge's finding on the critical question which his Honour posed. No other paragraph in the judgment responds to that question. If par [35] is not a conclusion reached by the primary judge, then no answer is supplied in the judgment to the "question in the case" posed for consideration in par [31]. On that basis, par [41] would record a conclusion that the s 48/s 96(3)(b) claim fails, without any findings as to why it fails. 49 In our view, the structure of the judgment is that notwithstanding the par [35] finding the primary judge was not satisfied that there was a contravention of s 48/s 96(3)(b) TPA because of the findings recorded in par [37], and because the appellants sold Wills products at less than cost price.

An erroneous conclusion? 50 If the primary judge was correct in his conclusion that Wills' intention was to induce the appellants to alter their sale price to a price not less than Wills' price, then a contravention of s 48/s 96(3)(b) TPA is established. In the light of that conclusion, it is beside the point that the purpose of the promotional payments policy, and the intent of Wills in advising the appellants thereof, was also to avoid devaluation of the image of its goods and detriment to Wills' trade with other retailers. The observations in par [37] may well explain why Wills might have conceived it to be in its commercial interest to secure compliant conduct on the part of retailers in not selling below the specified price. But that does not negate contravention of s 48/s 96(3)(b). 51 The primary judge said that "it would seem to follow" from s 98(2) TPA, that if a supplier states that it will not provide promotional allowances to a retailer that sells the supplier's products below cost that "it would be difficult to show, in the absence of other cogent circumstances, that such a statement involved the practice of resale price maintenance". But, s 98(2) TPA merely provides that s 96(3)(d) [which deals with the withholding of supply] does not apply where the person from whom supply is withheld has sold goods at less than cost for the purpose of promoting that person's business. Section 98(2) has no application to s 96(3)(b). 52 For these reasons his Honour ought to have found that contravention of s 48/s 96(3)(b) TPA was established in the light of his finding that Wills' intent was to obtain compliant conduct from the appellants.

Causation and Loss 53 The Statement of Claim (par [40]) alleges an attempt to induce the appellants not to sell cigarettes at a price lower than Wills' price for those cigarettes in contravention of ss 48 and 96(3)(b) TPA. The Statement of Claim does not plead, nor did the appellants set out to prove, that they did anything upon the faith of or by reason of the attempted inducement. The case is not one in which, for example, the appellants increased their prices to the Wills' price, and in consequence, suffered a loss of sales. Prima facie, no loss flows to the appellants from an unsuccessful attempt to induce the appellants not to sell cigarettes at a price lower than Wills' price. 54 The loss pleaded as following from the contravention of ss 48 and 96(3)(b) is promotional payments which were denied to the appellants by Wills in the 1996, 1997 and 1998 financial years. Loss of the cigarette wholesaling business was pleaded as a consequence of the contravention of s 46(1)(c) TPA; it was not pleaded as a loss flowing from contravention of ss 48 and 96(3)(b) TPA. 55 Even though the primary judge concluded that a contravention of s 48 TPA had not been established, his Honour embarked upon an assessment of any loss that may be said to have been suffered by the appellants by reason of Wills' conduct had it been found that such conduct constituted a contravention of s 48 TPA. His Honour concluded that the loss "could have been assessed" at $250,000. 56 His Honour assumed that "but for the contravening conduct of Wills" the applicants could have expected to receive from Wills a further sum of $25,000 by 30 June 1997, and at least $30,000 in the year ended 30 June 1998 as promotional payments on purchases of Wills products made in those years. Had those payments been made the business would have made a profit in those years instead of net losses of $10,700 and $17,200 which were in fact recorded. His Honour said that the appellants, "if they had been free of the distraction of conflict with Wills", would have realised by 30 June 1998 that the business had to be sold or restructured particularly after Wills changed its method of distribution in 1997 by appointing nominated wholesalers for that purpose. The value of stock and plant as at 30 June was $180,000, but if the business had received promotional payments in the course of trading to 30 June 1998 an orderly sale of the business at that time would have included a component for goodwill. After making a non-specific allowance for imponderables and contingencies, his Honour reached the conclusion that the loss suffered by the appellants could have been assessed at $250,000. 57 There are a number of problems with this approach. First, loss of the value of the business was not pleaded as a consequence of the s 48 contravention; it was only pleaded as a consequence flowing from the s 46(1)(c) contravention. Second, his Honour "assumed" that but for the contravening conduct of Wills the appellants could have expected to receive from Wills a further sum of $25,000 by 30 June 1997 and at least $30,000 in the year ended 30 June 1998. No factual findings are made which make good that assumption. It is unclear why the assumption was made. The appellants did not have any contractual entitlement to receive the payments; by 13 May 1997 Wills had informed the appellants that they had not been appointed as a licensed wholesaler under the new distribution system, hence the foundation for the making of promotional payments in favour of the appellants was swept away as the appellants would thereafter acquire cigarettes from the licensed wholesaler, rather than from Wills. 58 An offer of promotional payments which involves a contravention of s 48/s 96(3)(b) cannot of itself be the foundation of an entitlement to receive the payment in question. Mr Kadkhudayan's evidence at the trial was that he lowered his retail prices to a level below the wholesale price at which he purchased cigarettes in order to better his competitors' prices. This was an election made independently of the respondent's conduct, and which necessarily caused the appellants' loss. The appellants did not contend, nor could they contend, that they lowered the prices to a level below cost on the faith of a representation that a promotional rebate would nonetheless be payable, as it was a constant and communicated feature of Wills' policy that promotional rebates would not be paid to retailers who sold Wills' goods below cost. 59 It follows that we do not agree with his Honour's assessment of the appellants' loss in consequence of the contravention of s 48/s 96(3)(b). In our view, the appellants have not established that they sustained any loss in consequence of the unsuccessful attempt to induce the appellants not to sell cigarettes at a price less than Wills' price. Accordingly, we would refuse leave to amend the Amended Notice of Appeal further to add the grounds earlier referred to for the reason that to allow the amendment would not be productive of any ultimate benefit to the appellants. To allow the amendment would only increase the costs of the appeal, as the respondent would have to be given the opportunity of arguing that the conclusion reached in par [35] of the judgment is wrong.

Costs 60 The primary judge declined to make an order for costs against the appellants even though they failed in their claim. The grounds on which his Honour declined to do so were: - the appellants had suffered destruction of their financial position which was contributed to by Wills' commercial decision to change its distribution methods; - Wills was not at risk of an order for costs as the appellants were not legally represented; - alleged contraventions of ss 46 and 48 TPA involve a substantial degree of public interest. The Statement of Claim pleaded circumstances that warranted enquiry in the public interest. 61 Two questions need to be determined. The first is whether the cross-appellants should be given leave to cross appeal against the costs order made by the primary judge, even though the application for leave to cross appeal has been made out of time: Order 52 r 22. The second is whether if leave is granted, the costs order made by the primary judge should be set aside. 62 As to the first, by letters dated 16 November 2001 and 15 February 2002 the respondent's then solicitors notified the appellants that if the Notice of Appeal was not struck out as incompetent, Wills intended to file a cross appeal to challenge that part of the judgment that deals with the costs of the proceedings. The appellants were thus on notice when the appeal was originally listed for hearing on 28 February 2002 that the respondents intended to challenge this aspect of the primary judge's decision. The appellants are therefore not prejudiced by the cross-appellant's delay in making the application. We are satisfied that the delay in instituting a formal challenge to that decision is referable to the extraordinary conduct of the respondent's Adelaide solicitor, and not something for which his Sydney principals, or Wills, is directly responsible. Accordingly, the time within which a notice of cross appeal from par 2 of the orders made by the primary judge on 31 May 2001 may be filed should be extended until 28 March 2002. 63 The discretion whether or not to depart from the usual order that costs follow the event must be exercised judicially, in accordance with established principle and factors directly connected with the litigation: Oshlack v Richmond River Council (1998) 193 CLR 72 at pars [29], [51], [65] and [134]. 64 In our view, the primary judge took into account and was influenced by irrelevant considerations in the exercise of his discretion. The respondent's conduct in denying the appellant retail promotional payments and in declining to accept the appellants' offer to act as a wholesaler was, on the primary judge's findings, lawful commercial conduct. The fact, if it be a fact, that commercial decisions lawfully taken by Wills contributed to the destruction of the appellants' financial position is simply a reflection of the operation of the market place. It is not a factor directly connected with the litigation which could warrant a departure from the usual order. 65 The fact that the application alleged contraventions of ss 46 and 48 TPA is also an irrelevant consideration as the allegations were not established. The proceedings at first instance were not an "inquiry in the public interest". The appellants brought an action seeking damages. They sought to enforce private rights. They did not bring their claim for the benefit of anyone other than themselves. 66 Accordingly, the order made by the primary judge that there be no order as to the costs of the proceedings at first instance should be set aside. In lieu thereof it should be ordered that the appellants pay the respondent's costs of the proceedings at first instance. 67 In coming to our conclusion in that respect we have taken into account our view that his Honour ought to have found, in the light of his findings of primary fact, that a contravention of s 46/s 96(3)(b) was established. That does not require any different conclusion on the costs question, as the appellants failed to show that this contravention was causative of any loss.

Conclusion 68 The appeal should be dismissed. 69 The costs of the appeal were materially increased by the neglect of the respondent's solicitors. Two hearings were required. The hearing fixed for 28 February 2002 was aborted on the day of the hearing because the respondent's then solicitors in Adelaide neglected to inform their Sydney principals, or their client, of the date fixed for the hearing of the appeal. Counsel intended to be briefed had not been briefed. 70 The appellants should pay the respondent's costs of the appeal subject to the qualification that the respondent should pay any costs incurred by the appellants in relation to the hearing fixed for 28 February 2002 and any costs thrown away by the adjournment of the hearing on that date. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Counsel for the Respondent: B Oslington QC, M Henry

Solicitor for the Respondent: Allens Arthur Robinson

Date of Hearing: 28 February 2002, 12 April 2002