Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd [2001] FCA 226 | Case summary

Federal Court of Australia|1998-11-19|Before: Einstein J, Burchett J, Gyles J

THE COURT ORDERS THAT: The proceeding stand over for further orders. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT 1 On 31 January 1995 Burchett J delivered judgment in proceedings between the Trade Practices Commission and the present first three respondents, imposing penalties and granting other relief for breach of s 45 and s 45A of the Trade Practices Act 1974 (Cth) ("the Act") (Trade Practices Commission v TNT Australia Pty Ltd Ors (1995) ATPR 41-375 ("the TPC proceeding")). Amongst the relief granted were injunctions, to operate until 31 December 1998, to restrain the respondents to those proceedings from engaging in conduct such as that involved in that case. 2 On 21 July 1995 Multigroup Distribution Services Pty Limited ("the applicant") filed a summons in the Supreme Court of South Australia against TNT Australia Pty Limited, Ansett Transport Industries (Operations) Pty Limited, Mayne Nickless Limited and J McPhee & Son (Australia) Pty Limited and filed a statement of claim in those proceedings on the same day. The relief claimed in the summons was: "The relief set out in the Statement of Claim annexed hereto." The statement of claim alleged breaches of ss 45(2)(A), 45(2)(b) and 46 of the Act, together with common law conspiracy, relying upon the same general facts as in the TPC proceeding. The relief sought was: "28 The plaintiff claims: 28.1 Damages; 28.2 Account of profits; 28.3 Interest; 28.4 Such further or other orders as the Court may think fit; and 28.5 Costs." 3 On 10 October 1995 the proceeding was transferred to this Court by an order of the Supreme Court of South Australia. 4 Following proceedings to strike out the statement of claim (see Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR 41-522) an amended statement of claim was filed, dated 25 October 1996, in which the relief sought was as follows: "30. The Applicant claims: 30.1 Damages; 30.2 Account of profits; 30.3 Interest; 30.4 Such further or other orders as the Court may think fit; and 30.5 Costs." 5 On 3 February 1997 a further amended statement of claim was filed, which included the following claim for relief: 30. The Applicant claims: 30.1 Damages; 30.2 Account of profits; 30.3 Interest; 30.4 An order restraining the Respondents from offering to supply or supplying express freight transportation services to organisations or entities known by them to be customers of the Applicant on terms more favourable than the terms for the time being offered or proposed to be offered to other customers of the Respondents for the same or substantially similar transportation services; 30.5 Such further or other orders as the Court may think fit; and 30.6 Costs." 6 It is necessary to ascertain what is said in the statement of claim about the relevant time of contraventions. In par 9, which alleges the contravening arrangements or understandings, it is pleaded that: "… from a date or dates currently unknown to the Applicant, but at least since 1987 … and thereafter have continued until a date currently unknown to the Applicant …" Paragraph 10 pleads (in the alternative): "… in the period between January 1987 and April 1987 (inclusive) in the case of the First, Second and Third Respondents … arrived at an understanding, and the Fourth Respondent made or entered into the same arrangement or understanding after October 1987 …" Paragraph 11 pleads (in the alternative): "… in the period between June 1987 and December 1987 (inclusive) in the case of the First, Second and Third Respondents …each of those Respondents made an arrangement, or alternatively arrived at an understanding, and the Fourth Respondent made or entered into the same arrangement or understanding after October 1987 …" Paragraph 12 pleads (in the alternative): "… in the period between January 1988 and December 1988 (inclusive), each of the Respondents, … made an arrangement …" Paragraph 13 pleads (in the alternative): "… in or about November 1990, each of the Respondents … made an arrangement …" Paragraph 17 pleads that: "From time to time since at least 1 January 1987 in the case of the First, Second and Third Respondents … have given effect to the arrangements … and from time to time after October 1987 the Fourth Respondent has given effect to the same arrangement …" Paragraphs 20 , 24 and 26 in effect allege that the conduct of the respondents continues to cause loss and damage as particularised in par 28. 7 Then followed: "Concealed Fraud 27. At all material times prior to 25 July 1994, the Respondents concealed the fact that the arrangements and understandings had been entered into and given effect for the purpose of depriving their competitors and customers of that knowledge by: (a) denying liability in the TPC proceedings at the time of the filing of defences by the Respondents in those proceedings; (b) the instructions given by officers of the Respondents at the various meetings to the effect that the arrangement or understanding must be kept secret; (c) instructions given by officers of the Respondents in relation to the destruction of documents including diaries of officers of the Respondents; (d) internal correspondence within the Respondents, including internal memorandum of the Third Respondent dated 5 August 1982 from Mr Ian Williamson, National Manager AirFreight - Jetspress to the persons named in that memorandum; and (e) communications between the Respondents or their solicitors and the Applicant or its solicitors, including: (i) Letter dated 17 August 1976 from Messrs Davis King & Company, solicitors to Messrs Booth & Boorman, solicitors; (ii) Letter dated 1 November 1976 from Messrs Davis King & Company, solicitors to Messrs Booth & Boorman, solicitors; (iii) Conversation between Mr P Brown and Mr F Gardiner on 7 September 1987 (iv) Letter dated 12 April 1988 from Mr JR Cribb to Mr GJ Poche and subsequent facsimiles and telephone conversations between managers of the Applicant and Mr JR Cribb; (v) Letter dated 19 April 1988 from Mr WT Bytheway to Mr GJ Poche and subsequent telephone conversations between Mr Webber and Mr GJ Poche, including a telephone conversation on 28 April 1988; (vi) Letter dated 21 April 1988 from Mr GP Farrell (Snr) to Mr GJ Poche; (vii) Letter dated 21 December 1988 from Mr JR Cribb to GJ Poche; (viii) Letter dated 19 June 1989 from Mr GC Bolton to Mr GJ Poche; (ix) Meeting between Mr GC Bolton and Mr GJ Poche on 1 August 1990 at Mascot Airport, Sydney; and (x) Meeting between Mr P Brown and Mr GJ Poche on 2 August 1990 at Mascot Airport, Sydney. Loss and Damage 28. By reason of the matters alleged in paragraphs 20, 24 and 26 the Applicant has suffered loss and damage consisting of: (a) the loss of customers; (b) the restriction of the Applicant's ability to win customers and increase market share; (c) the artificial suppression of the level of rates able to be charged by the Applicant; (d) the deprivation and limitation of the ability of the Applicant to offer competitive rates to customers of the Respondents; (e) the restriction on the ability of the Applicant to obtain access to economies of scope and scale; (f) the reduction and limitation of the profits of the Applicant; (g) the restriction of the financial resources available to the Applicant; (h) additional costs and expenses incurred by the Applicant; (i) the restriction of the growth of the Applicant's business; (j) the suppression of the value of the goodwill of the Applicant; and (k) the restriction of the value of business of the Applicant. PARTICULARS The Applicant is unable to quantify the loss and damage suffered as a result of the conduct of the Respondents at this stage. The Applicant alleges that the effect of the conduct of the Respondents, up at least until the time the First to Third respondents withdrew their defences in the TPC proceedings on 25 July 1994, on the profitability of the Applicant expressed as a percentage of sales was to suppress the profits of the Applicant to a level which were lower than that which would have been applied in the market where the Respondents did not engage in such conduct. By way of example, during the period ending 30 June 1988 the Applicant's profits expressed as a percentage of sales was 6.5%. Similar levels of profitability were maintained up until the period ending 30 June 1994, but during the period ending 30 June 1995, which is approximately one year after the Respondents withdrew their defences in the TPC proceedings, the Applicant's profitability expressed as a percentage of sales increased to 13.2%. The Applicants loss and damage will be quantified in a report or reports of an expert firm of accountants which will be filed in due course." 8 Reference is made in various parts of the statement of claim to a schedule alleging 181 incidents, all but a handful of which occurred prior to 21 July 1992. It is also pleaded that advantage will be taken of s 83 of the Act to rely upon findings of fact made in the TPC proceeding. Whilst there will, no doubt, be an issue about that, it appears from His Honour's judgment that, for the purpose of that proceeding, the relevant agreements were made between 1987 and 1990 and that the effect of them was operative between 1987 and mid-1991. 9 Relevant parts of pars 10 and 13 of the first, second and fourth respondents' defences is as follows: "10 … (b) says that if (which is denied) it entered into or gave effect to any arrangements or understandings as alleged, it did not conceal those arrangements or understandings or that effect had been given to those arrangements or understandings for the purposes and in manner alleged in paragraph 27 or at all; (c) says that the Applicant's only entitlement to relief is under the Trade Practices Act 1974 (Cth) and that the doctrine of concealed fraud has no application to a claim under that Act. 13. In further answer to the whole of the Further Amended Statement of Claim, the … Respondent says: (a) to the extent the Applicant claims damages or other relief in respect of any cause of action arising under the Trade Practices Act 1974: (i) insofar as the material facts relating to that cause of action were first pleaded in the Statement of Claim, any such cause of action is barred or extinguished by virtue of sections 82(2) and 87(1CA) of the Trade Practices Act 1974 to the extent that it accrued before 21 July 1992; (ii) insofar as the material facts relating to that cause of action were first pleaded in the Further Amended Statement of Claim, any such cause of action is barred or extinguished by virtue of sections 82(2) and 87(1CA) of the Trade Practices Act 1974 to the extent it accrued before 3 February 1994; …" 10 Paragraphs 16 and 21 of the defence of the third respondent are as follows: "16. In further answer to paragraph 27 of the Further Amended Statement of Claim, the Third Respondent says that even if facts to support the application of the doctrine of concealed fraud existed in the present case (which is denied) that doctrine has no application in relation to claims made under the Trade Practices Act 1974. … 21. In further answer to the whole of the Further Amended Statement of Claim, the Third Respondent says that if, which is denied, the Applicant has suffered any otherwise recoverable loss or damage: (a) as a result of contraventions of the Trade Practices Act 1974 as alleged in the Further Amended Statement of Claim, such loss or damage was first suffered more than 3 years prior to the commencement of these proceedings and any claim for damages to that extent is accordingly statute barred; (b) as a result of tortious or other conduct as alleged in the Further Amended Statement of Claim, such loss or damage was first suffered more than 6 years prior to the commencement of these proceedings and any claim for damages is to that extent accordingly statute barred." 11 The reply to the defences of the first, second and fourth respondents includes: "2. In reply to paragraph 10(c) of the Defence, the Applicant says that, by reason of the facts and matters alleged by paragraph 27 of the Further Amended Statement of Claim, the conduct of the First Respondent constituted fraudulent concealment by it of the facts giving rise to the Applicant's causes of action arising under the Trade Practices Act. 3. In reply to paragraph 13 of the Defence, by reason of the First Respondent's fraudulent concealment of the facts giving rise to the Applicant's cause of action, the statutory provisions there pleaded do not operate as a bar to or in extinguishment of the Applicant's causes of action either arising under the Trade Practices Act or at law. 4. Further, or in the alternative to paragraph 3: (a) the conduct engaged in by the First Respondent, as alleged by paragraphs 9-26 of the Further Amended Statement of Claim and particularised in the Amended Index to Pleading and Statements ("the anticompetitive conduct"): (i) was engaged in surreptitiously, with the intention that the Applicant should not become aware of that conduct; (ii) was denied by the First Respondent, and otherwise concealed, in the manner alleged by paragraph 27 of the Further Amended Statement of Claim; (iii) was conduct in respect of which the Applicant did not have sufficient knowledge to commence proceedings at an earlier time; (iv) was the conduct (or alternatively, conduct which included the conduct) in respect of which, in proceedings brought against it by the Trade Practices Commission in action No. G807 of 1992, the First Respondent: (i) withdrew its Defence, and thereby: (A) did not attempt to defend; and (B) prevented litigation by the Trade Practices Commission of the anticompetitive conduct; (ii) consented to pecuniary penalties being imposed upon it; (v) was engaged in for the purposes, and had the effect, of causing harm to the Applicant; (b) by reason of the matters set out in subparagraph 4(a): (i) it would be unconscionable for the First Respondent to seek to rely upon the statutory provisions pleaded by paragraph 13 of its Defence; and 6. the First Respondent is estopped from doing so." 12 The reply to the defence of the third respondent included: "3. In reply to paragraph 16 of the Defence, the Applicant: (a) denies that the doctrine of concealed fraud has no application to a claim under the Trade Practices Act; and (b) says that, by reason of the facts and matters alleged by paragraph 27 of the Further Amended Statement of Claim, the conduct of the First Respondent constituted fraudulent concealment by it of the facts giving rise to the Applicant's causes of action arising under the Trade Practices Act. … 5. In reply to paragraph 21 of the Defence, by reason of the Third Respondent's fraudulent concealment of the facts giving rise to the Applicant's causes of action, the statutory provisions there pleaded do not operate as a bar to or in extinguishment of the Applicant's causes of action either arising under the Trade Practices Act or at law. 6. Further, or in the alternative to paragraph 5: (a) the conduct engaged in by the Third Respondent, as alleged by paragraphs 9-26 of the Further Amended Statement of Claim and particularised in the Amended Index to Pleading and Statements ("the anticompetitive conduct"): (i) was engaged in surreptitiously, with the intention that the Applicant should not become aware of that conduct; (ii) was denied by the Third Respondent, and otherwise concealed, in the manner alleged by paragraph 27 of the Further Amended Statement of Claim; (iii) was conduct in respect of which the Applicant did not have sufficient knowledge to commence proceedings at an earlier time; (iv) was the conduct (or alternatively, conduct which included the conduct) in respect of which, in the TPC proceedings (action NG807 of 1992), the Third Respondent: A. withdrew its Defence, and thereby: I. did not attempt to defend; and II. prevented litigation by the Trade Practices Commission of the anticompetitive conduct; B. consented to pecuniary penalties being imposed upon it; (v) was engaged in for the purpose, and had the effect, of causing harm to the Applicant; (b) by reason of the matters set out in subparagraph 6(a): (i) it would be unconscionable for the Third Respondent to seek to rely upon the matters pleaded by paragraph 21 of its Defence; and (ii) the Third Respondent is estopped from doing so." 13 Preparation of the case has occupied a good deal of time, principally because of the burden of discovery. Proof of the formation of an alleged cartel some fourteen years ago, of its subsequent operation and of its effect upon the business of the applicant, as well as the defence of such a case, is a mammoth undertaking. The case is still far from ready for hearing and much evidence remains to be filed. Hearing of the proceedings has been tentatively fixed for the commencement of sittings in 2002. Whether that tentative arrangement can be met is not yet certain. Although it is not possible to make an accurate estimate of the length of hearing of the case now, it will plainly be many months. In this setting, I decided to accede to an application for the separate and early determination of several questions. Those which remain live relate partly to issues relating to time barriers and, secondly, to the claim for account of profits. I did so because of the impact that these questions have upon the management of the case from the point of view of the parties and the Court. It is desirable that in litigation on this scale all concerned should know, as far as possible, where they are going. The issues to which these questions relate have the capacity to involve months of hearing time and the necessity for considerable preparation. There are undoubtedly problems with dividing issues for separate determination, and the pendulum of fashion has swung against this procedure particularly amongst appellate judges not confronted with management of a trial (or a docket). On the other hand, the procedure is available and the decision whether to use it is one for the judge managing the practicalities of the case.

what (if any) limitation period applies in law to a claim for relief under section 87(1) of the trade practices act 1974 (cth)? 14 Relevant provisions of Pt VI of the Act headed "Enforcement and Remedies" include the following: "80 Injunctions (1) Subject to subsections (1A), (1AAA) and (1B), where, on the application of the Commission or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute: (a) a contravention of any part of the following provisions: (i) a provision of Part IV, IVA, IVB or V; (ii) section 75AU or 75 AYA; … the Court may grant an injunction in such terms as the Court determines to be appropriate. … (4) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised: (a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; (b) whether or not the person has previously engaged in conduct of that kind; and (c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind. (5) The power of the Court to grant an injunction requiring a person to do an act or thing may be exercised: (a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing; (b) whether or not the person has previously refused or failed to do that act or thing; and (c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person refuses or fails to do that act or thing. … 80A Order to disclose information or publish advertisement (1) Without limiting the generality of section 80, where, on the application of the Minister or the Commission, the Court is satisfied that a person has engaged in conduct constituting a contravention of a provision of Part IVB or V, the Court may make either or both of the following orders: (a) an order requiring that person or a person involved in the contravention to disclose to the public, to a particular person or to persons included in a particular class of persons, in such manner as is specified in the order, such information, or information of such a kind, as is so specified, being information that is in the possession of the person to whom the order is directed or to which that last-mentioned person has access; (b) an order requiring that person or a person involved in the contravention to publish, at his or her own expense, in a manner and at times specified in the order, advertisements the terms of which are specified in, or are to be determined in accordance with, the order. 80B Section 75AU contraventions - orders limiting prices or requiring refunds of money Without limiting the generality of section 80, where, on the application of the Commission, the Court is satisfied that a person has engaged in conduct constituting a contravention of section 75AU, the Court may make either or both of the following orders: (a) an order requiring that person, or a person involved in the contravention, not to make a regulated supply of a kind specified in the order for a price in excess of the price specified in the order while the order remains in force; (b) an order requiring that person, or a person involved in the contravention, to refund money to a person specified in the order. … 82 Actions for damages (1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVB or V or section 51AC may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention. (2) An action under subsection (1) may be commenced at any time within 3 years after the date on which the cause of action accrued. … 87 Other orders (1) Without limiting the generality of section 80, where, in a proceeding instituted under, or for an offence against, this Part, the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in (whether before or after the commencement of this subsection) in contravention of a provision of Part IV, IVA, IVB or V, the Court may, whether or not it grants an injunction under section 80 or makes an order under section 80A or 82, make such order or orders as it thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (2) of this section) if the Court considers that the order or orders concerned will compensate the first-mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage. (emphasis added) (1A) Without limiting the generality of section 80, the Court may, on the application of a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in (whether before or after the commencement of this subsection) in contravention of a provision of Part IVA, IVB or V or on the application of the Commission in accordance with subsection (1B) on behalf of such a person or 2 or more such persons, make such order or orders as the Court thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (2)) if the Court considers that the order or orders concerned will compensate the person who made the application, or the person or any of the persons on whose behalf the application was made, in whole or in part for the loss or damage, or will prevent or reduce the loss or damage suffered, or likely to be suffered, by such a person. (1B) Where, in a proceeding instituted for an offence against section 79 or instituted by the Commission or the Minister under section 80, a person is found to have engaged (whether before or after the commencement of this subsection) in conduct in contravention of a provision of Part IVA, IVB or V, the Commission may make an application under subsection (1A) on behalf of one or more persons identified in the application who have suffered, or are likely to suffer, loss or damage by the conduct, but the Commission shall not make such an application except with the consent in writing given before the application is made by the person, or by each of the persons, on whose behalf the application is made. (1C) An application may be made under subsection (1A) in relation to a contravention of Part IVA, IVB or V notwithstanding that a proceeding has not been instituted under another provision of this Part in relation to that contravention. (1CA) An application under subsection (1A) may be commenced: (a) in the case of conduct in contravention of Part IVA - at any time within 2 years after the day on which the cause of action accrued; or (b) in any other case - at any time within 3 years after the day on which the cause of action accrued. (1D) For the purpose of determining whether to make an order under this section in relation to a contravention of Part IVA, the Court may have regard to the conduct of parties to the proceeding since the contravention occurred. (2) The orders referred to in subsection (1) and (1A) are: (a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Court thinks fit, to have been void ab initio or at all times on and after such date before the date on which the order is made as is specified in the order; (b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after such date before the date on which the order is made as is so specified; (ba) an order refusing to enforce any or all of the provisions of such a contract; (c) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage; (d) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage; (e) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at his or her own expense, to repair, or provide parts for, goods that had been supplied by the person who engaged in the conduct to the person who suffered, or is likely to suffer, the loss or damage; (f) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at his or her own expense, to supply specified services to the person who suffered, or is likely to suffer, the loss or damage; and (g) an order, in relation to an instrument creating or transferring an interest in land, directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to execute an instrument that: (i) varies, or has the effect of varying, the first-mentioned instrument; or (ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first-mentioned instrument." The breaches alleged in the further amended statement of claim are of Pt IV of the Act entitled "Restrictive Trade Practices". 15 The issue which the question is intended to pose arises because there is no limitation period which, in terms, applies to orders made pursuant to s 87(1), by contrast with, for example, s 82(2) and s 87(1CA) amongst the sections I have reproduced above. Indeed, there are a number of other time provisions in Pt VI - see ss 77(2), 79(6) and 81(2). Leaving aside criminal proceedings (which are not relevant to Pt IV), sections which do not have any express provisions are ss 80, 80A, 80B and 87(1). Each provides injunction-like remedies. It is not surprising that there is no time limit to enjoining persons to obey the law, although ss 80(4) and 80(5) are a little unusual in this context. Sections 80A and 80B (along with s 87(1A)) have nothing to do with Pt IV. 16 It will be observed that s 87(1) assumes that a proceeding is on foot under, or for an offence against, Pt VI and a finding of the relevant kind has been made. It is clear from the words of the section, and from the decision of the High Court in Sent v Jet Corporation of Australia Pty Ltd (1986) 160 CLR 540 ("Sent") that such a proceeding is a proceeding other than a proceeding for relief under s 87(1). The High Court (unanimously) said (at 543): "Sub-section (1) of s 87 confers on the Court authority to make a compensatory order in favour of a person if two conditions are satisfied. The first is that the person is "a party to the proceeding", that is, a proceeding instituted under or for an offence against Pt VI. The second is that the person "has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in …in contravention of a provision of Part IV or V". The first condition would be devoid of content if the right to seek relief under s 87(1) were acquired simply by making an application for relief under that sub-section. The "proceeding" to which the sub-section refers is a proceeding other than a proceeding for relief under that sub-section. The relief which might be granted to a party under sub-s (1) is therefore ancillary or additional to the relief which the Court might grant in the proceeding under other provisions of Pt VI, although the power to grant relief under sub-s (1) is not dependent on the granting of relief under other provisions of that Part." The Court went on to consider the more controversial question as to whether, as the Act then stood, an application under s 87(1A) could stand on its own feet without being founded upon some other proceeding, and decided to the contrary. Importantly, for present purposes, their Honours went on to say (at 546): "Although s 87 contains no time limitation, the proceeding on which the power to grant relief under s 87 depends will be barred if it is instituted outside the time, if any, limited for instituting that proceeding." 17 The effect of the decision in Sent in relation to s 87(1A) was reversed by the legislature when s 87(1C) and s 87(1CA) were enacted. No relevant changes have been made in or in relation to s 87(1). It follows that the analysis by the High Court as to the effect of that section remains operative. Thus, the question as framed is not apt to give a useful result, because it assumes that there can be a claim for relief under s 87(1) of the Act. This is not correct in the relevant sense because there can be no application to the Court or proceeding brought pursuant to that section. Time bar questions are decided in relation to the proceeding to which the relief under s 87(1) may be parasitic. 18 That raises a question as to the nature of the principal proceeding. Section 87(1A) provides for an application by a person who suffered, or is likely to suffer, loss or damage. Section 87(1), on the other hand, speaks of a person who is a party to the other proceeding. This would most naturally relate to a person who was a party other than the applicant. Whilst no submissions were directed to that issue, there is much to be said for that construction. Otherwise, for example, in relation to contraventions of Pts IVA, IVB or V, it is difficult to see why it should be necessary to have express provision in both s 87(1) and s 87(1A). The effect of this construction would be, however, that an applicant for an injunction under s 80 or damages under s 82 for breach of Pt IV would not be entitled to relief pursuant to s 87(1). This is not as surprising as might appear at first sight, as the types of orders envisaged by s 87(2) are, with the exception of subsection (d), appropriate to the consumer protection provisions of Pts IVA, IVB and V rather than restrictive trade practices in Pt IV. On the other hand, there is a question as to why to extend the power to make s 87(1) orders in relation to a breach of Pt IV in favour of a party who is not an applicant but not to a party who is an applicant. I shall assume for the purposes of the argument (as did the parties) that an order can be made under s 87(1) in favour of the applicant in the principal proceeding. 19 The position thus is that an applicant may seek relief under s 80 for an injunction with no express statutory time limit. Once the finding of actual or proposed contravention which is necessary to found an injunction pursuant to s 80 is made, then the jurisdiction to make orders under s 87(1) would be enlivened if actual or likely loss or damage is found. On the face of it, by reason of s 87(2)(d), this would include the power to order that the contravener pay the amount of the loss or damage to the person who suffered the loss or damage, notwithstanding that a direct application for damages pursuant to s 82 might be out of time. This anomaly was remarked upon, but did not need to be addressed, by the High Court in Sent. It has caused some conflict amongst other judges who have considered the relationship between these sections. 20 In Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1988) ATPR 40-853 (at 49,191 to 49,193) Pincus J held that if a claim for the amount of loss or damage is outside the timed limited by s 82(2) the same loss or damage may not be compensated under the ancillary provisions of s 87(1A). As the proceedings had been commenced before the 1986 amendments to the Act, the case was decided on the law as it stood at the time of the decision of the High Court in Sent. The earlier cases of Fenech v Sterling (1984) 57 ALR 98 ("Fenech") and James v Australia & New Zealand Banking Group Ltd (1986) 64 ALR 347 had been decided on a basis contrary to the later decision in Sent. 21 In Calmao Pty Ltd v Stradbroke Waters Co-owners Co-operative Society Ltd (1989) 21 FCR 28 Pincus J considered the issue again but on this occasion on the law as it stood after the 1986 amendments, that is, after subsections (1C), (1CA) and (1D) were added. At 29-30 his Honour said: "It is not very clear why s 87(1CA) does not expressly impose a three year limit for s 87(1) claims, as well as s 87(1A) claims. However, the general intention seems to be to limit both in the same way, as may be deduced from the fact that s 87(2) says: "The orders referred to in sub-sections (1) and (1A) are…" and then lists a series of possible orders, such as declarations and the like. The draftsman seems to have thought that he caught s 87(1) claims in the three year net with the s 87(1A) claims. Although the intention could certainly have been made clearer than it has been, I think a claim of a kind mentioned in s 87(1A) has a three year time limit even if it could have been (or has been) brought under s 87(1) instead." This is controversial. 22 In Dorfler v ANZ Banking Group Ltd (1991) 103 ALR 699 Spender J (in the context of a strike out application) said (at 702): "The power of the court to make orders under s 87(1) is dependent upon proceedings being instituted under, or for an offence against, one of the other provisions of Pt VI. In this case, the proceeding which brings s 87(1) into play is the claim for damages under s 82(1). The period of limitation contained in s 82(2) refers to an action commenced under s 82(1). It follows that this action, so far as it relates to relief under s 87(1), is required to be commenced within the period specified by s 82(2). A cause of action accrues under s 82 when the applicant has suffered loss or damage. A cause of action under s 87(1A) may accrue as soon as loss or damage is likely to be suffered. In Western Australia v Wardley Australia Ltd (1991) 102 ALR 213; (1991) ATPR 41-131, the Full Court of the Federal Court said at ALR 228; ATPR 52,929: "It follows that the cause of action under s 87(1A) may accrue as soon as loss or damage is likely to be suffered. This means that the time bar in s 87(1CA) upon applications under s 87(1A) may, in a given case, have a different operation to that in s 82(2)."" (emphasis added) This was plainly correct, in my opinion, and is consistent with the decision in Sent. 23 To similar effect is the decision of Einstein J in Peabody Resources Ltd v Macquarie Generation (Einstein J, unreported, November 1998 (BC9806319)) at pars 692 to 697 that in a case for damages brought under s 82 the time limit in that section applied to bar any s 87 relief. 24 In Tanzone v Westpac Banking Corporation (1999) ATPR 46-195 ("Tanzone") Windeyer J of the New South Wales Supreme Court said (at 52,384): 57. Although in view of my decision it is not necessary to deal with the special defences raised it may be desirable if I do so shortly. The plaintiff has sought an injunction under s 80 and additional relief under s 87(1). The limitation periods of two and three years provided in s 87(1CA) apply only to application for orders under s 87(1A). It has been argued that this is a mistake which occurred as a result of legislative amendments. Whether or not that is so it seems to me that the wording is perfectly clear and thus I must differ from the conclusion of Pincus J in Calmao Pty Ltd v Stradbroke Waters Co-Owners Co-Operative Society Limited (1989) ATPR 40-984 at 50,741; (1989) 21 FCR 28. I have little doubt that what was intended was to carry forward the three year limitation period which applies to s 82 claims to s 87 claims, other than those for unconscionable conduct under Part IVA and to have a two year limitation period for those latter claims. It is quite unsatisfactory not to have a fixed period for s 87(1) claim, but that is the position as it now exists. A discretion to grant or refuse relief makes for undesirable uncertainty. However the defence based on the statutory limitation fails." 25 The most recent considered examination of the relevant issue in this Court was that by Merkel J in Gregg v Tasmanian Trustees Ltd (1997) 73 FCR 91 (at 130-134), albeit in relation to s 87(1CA). The relevant portions of the judgment conclude the following (at 132-134): "If I am wrong in my analysis of s 87(1CA) in relation to the facts of the present case and the cause of action accrued on 4 June 1993 that is of no avail to the respondent as the limitation period relates only to the statutory causes of action under s 87(1A) of the TPA and does not in terms affect the right in equity of the applicant to set aside the mortgage or to injunctive relief in equity and under s 80 of the TPA. … Further, s 87(1CA) only applies to an application under s 87(1A). In terms and in its operative effect s 87 offers an additional remedy to that available under other sections such as ss 80 and 82: see Trade Practices Commission v Milreis Pty Ltd (1977) 29 FLR 144 and Poignand v NZI Securities Australia Ltd (1992) 37 FCR 363 per Gummow J. Section 82 contains its own limitation period (s 82(2)) but no such period is provided for in s 80. Accordingly, whether it is appropriate to grant an injunction under s 80 more than two or three years after a contravention of Pt IVA or V has occurred appears to be a matter which might go to discretion rather than jurisdiction. … The jurisdiction to grant "an injunction" conferred by s 80 arises only if the Court is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute, inter alia, a contravention of Pt IV, IVA or V. The jurisdiction conferred is not expressed to be compensatory and arises irrespective of loss and damage. These distinctions are important. Section 80 has a clear public interest element which is absent in s 87(1A) which is limited to relief compensating an applicant who has suffered or is likely to suffer loss and damage. It is to be noted that the time limit in s 87(1CA) does not apply to the broader public interest compensatory provisions in s 87(1). For example there is no time limit in s 87 in respect of a claim for compensatory relief in respect of a contravention of Pt IV. The differences in wording, function and operation of ss 80 and 87(1A) make it quite inappropriate to imply a statutory time limit for relief under s 80 when there is nothing in the section which expressly or by implication warrants that course. … Accordingly, irrespective of whether the additional remedies under s 87(1A) are unavailable by reason of s 87(1CA) the Court nevertheless has jurisdiction in equity and under s 80 to grant injunctive relief. 26 In Bell Group Ltd (in liq) v Westpac Banking Corporation (2000) 173 ALR 427 Carr J noted the conflicting authorities and declined to strike out a claim on the basis that the s 82 limitation period applied to claims under s 87(1). 27 After judgment was reserved, my attention was drawn to a decision of the Queensland Court of Appeal in I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2000] QCA 383. This decision relates to the relationship between s 82 and s 87, but not concerning time. The question arose because it was held at first instance that there were two causes for the relevant loss, one of which was a breach of s 52. Rather than award damages pursuant to s 82, the judge made an order of the type referred to in s 82(2)(d) for part of the loss on the basis that s 82 required full compensation or none at all. Whilst this raises very different issues to those involved here, some of the discussion by the Court warrants consideration. In pars 22-26 inclusive the Court said: "Broad interpretation preferred 22. No appellate court has ever, having considered the interrelationship between s 82 and s 87 with respect to pecuniary orders, decided that s 87 must be read down so as to have, in this respect, no practical effect. We do not so decide, but think rather that s 87(1) should be given the effect which its terms appear to require, namely that an order may be made requiring that the defendant compensate the plaintiff for part only of a loss which is causally connected with the contravention complained of. 23. Considerations which have encouraged us to adopt this view are, firstly, that no sufficient reason appears to do such violence to the language as appears to be necessary, in order to achieve the result for which the appellant contends; secondly, to hold that s 87(1) means, if we may so express it, what it says may contribute to the resolution of a problem which is now lamentably old; thirdly, the solution we propose is in accordance with the position which has been reached by the New Zealand Court of Appeal in Goldsbro v Walker (1993) 1 NZLR 394; we refer especially to the reasons of Cooke P (as his Lordship then was) at 399, of Richardson J at 404 line 6 and to Hardie Boys J at 406; fourthly, the liberal approach we favour accords with that recommended in recent years by the High Court of Australia and with that suggested by the Swanson Committee; lastly, it appears to be difficult to construct any plausible limitation to be read into s 87(1), so far as it deals with a part-loss order, in order to achieve the neutering of that provision which the appellant advocates. 24. Further discussion of the last point is, perhaps, warranted. Mr Keane QC, who led Mr McKenna for the appellant, suggested that s 87(1) should be confined to supplementary relief - relief ancillary to some other kind of relief. There is nothing, in our view, in s 87(1) to justify that construction. In particular, there can be no doubt that a s 87(1) order compensating for part of the loss may be made when no order is obtained under s 82. A submission which was, we thought, pressed more strongly was that the power to order payment of part only of the loss could only be exercised at the plaintiff's election; that seems to involve requiring the Court to apply the "all or nothing" rule to indivisible losses unless the plaintiff could be advantaged by its not doing so. 25. We would think that adoption of this limitation would lead to some manoeuvring on a plaintiff's part; if during the course of the trial it emerged that there was solid ground for holding that the plaintiff, perhaps by positive wrong-doing, contributed to the happening of an indivisible loss, then the plaintiff would be wise to press a s 87 claim. If the evidence appeared to tend in the opposite direction, the s 87 claim would be dropped, in the hope of recovering all of the loss on the basis that the defendant's misleading conduct was a cause or a substantial cause of it. 26. We incline to the view that once a proceeding of a kind mentioned in s 87(1) is before the Court, it has vested in it all the powers which s 87 encompasses, whether or not the plaintiff presses for a s 87 order (to avoid being a victim rather than a beneficiary of the "all or nothing" rule). The Court is not confined to giving such relief as is contended for by counsel. Subject to giving the parties the opportunity to comment upon what the Court has in mind, the Court may properly mould the relief granted in such a way as to achieve a fair result for both sides." 28 It appears from pars 8-15 inclusive of the decision that their Honours were prepared to regard the decision of the High Court in Sent as being both contrary to the intention of the Swanson Committee and contrary to the trend of later authority as to the width of s 87. I do not believe that that course is open to me. However, as I have said, beyond establishing that s 87 is ancillary to other provisions, the decision in Sent does not directly dispose of the present issue which, indeed, was left open in that case. 29 The discussion of Pt VI of the Act in Marks v GIO Australia Holdings (1998) 196 CLR 494 ("Marks v GIO"), whilst of considerable significance, has little to say about the precise question which arises here. The same may be said of Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 ("Wardley") and Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281. 30 From this smorgasbord of judicial opinion it can, I think, be safely held that the only proceeding for damages which can be brought under Pt VI for contravention of the provisions of Part IV of the Act is pursuant to s 82, and thus subject to the time limit imposed by s 82(2). There can be no proceeding brought pursuant to s 87(1) of the Act. It also seems clear enough that there is no relevant limitation period for the bringing of a proceeding for injunction pursuant to s 80. This is readily understandable as, generally speaking, an application for an injunction would be made in circumstances where contravention is either threatened or is occurring, although, as I have said, ss 80(4) and (5) do somewhat complicate the matter. 31 In my opinion, it follows from the decision of the High Court in Sent that as there is no time provision in relation to the commencement of proceedings pursuant to s 80, then there is no time provision in relation to the grant of relief pursuant to s 87(1) in a proceeding brought pursuant to s 80. If it were not for the words in s 87 "including all of the orders mentioned in subsection (2) of this section" and the express terms of s 87(2), I would be inclined to read s 87(1) as not authorising orders in the nature of those encompassed by s 82. This would result in a coherent construction of Part VI. With some misgivings, I do not believe that s 87(1) can be so read in view of the express provisions of s 82(2)(d). In my opinion, Windeyer J was plainly right in this respect in his decision in Tanzone. 32 This proceeding as presently framed includes a claim for injunction obviously based on s 80. It follows that there is jurisdiction to make an order pursuant to s 87(1) upon the relevant finding as to loss or damage being made. The fact that that claim for injunction was not made until 3 February 1997 does not, it seems to me, make any difference to the question of jurisdiction. The result is that a claim under s 80 is made years after an injunction in relation to similar contraventions has been made against three of the four respondents, at a time when damages may not be recoverable in relation to most of the conduct complained of under s 82 (depending upon other arguments of fact and law), thus permitting an order for compensation indistinguishable from an order under s 82 to be made. It seems to be accepted that an order under s 87 is discretionary (Tanzone; Fenech), and whilst it may be accepted that delay may be a powerful factor against exercise of the discretion, a respondent is in a very different position when subject to a discretionary judgment than if there is a statutory time limit which has not been complied with. 33 In my opinion the answer to the gist of the question is in the negative. However, as I said earlier, the question as framed is not apt. It proceeds upon a false premise. Furthermore, it is framed as a purely academic question, without being tied back to this proceeding (Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 ("Bass")). The parties should agree upon a revised question with these considerations in mind. In the absence of agreement, I will resolve the matter. This aspect of the proceeding will accordingly stand over. 34 The respondents have sought to argue that s 14 of the Limitation Act 1969 (NSW) is applicable by reason of the operation of s 79 of the Judiciary Act 1903 (Cth). Counsel for the applicant points out that this issue is academic, as this provision is not pleaded. I agree with the applicant.

is an account of profits a remedy available in respect of the kinds of causes of action pleaded in the further amended statement of claim? 35 The authority cited on behalf of the applicant in support of an affirmative answer to this question is the following passage from the decision of the Full Court in Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 (at 287-8): "(It remains to be seen whether the phrase "loss or damage" in ss 82 and 87 is sufficient to support not only a compensatory remedy in the sense of injury to the plaintiff's interests, as generally understood in the law of torts, but also a restitutionary remedy to disgorge the respondent's gains and profits at the expense of the applicant, as "the loss" of the applicant in the language of the section: see P Birks, An Introduction to the Law of Restitution, p 13; Beatson, "Benefit, Reliance and the Structure of Unjust Enrichment" [1987] CLP 71 at 74.)" The point was also left open by Gummow J in Telmak Teleproducts (Australia) Pty Ltd v Coles Myer Ltd (1988) 84 ALR 437 at 455 and Lehane J in C-Shirt Pty Ltd v Barnett Marketing & Management Pty Ltd (1997) ATPR (Digest) 46-168 at 54,362. 36 The applicants also relied upon their submissions in relation to the question I have already dealt with, in which they sought to draw an analogies between s 82, as damages at law, and ss 80 and 87 as equitable relief. 37 It was also put that there "are many examples in private anti-trust suits in the United States of damages being assessed by reference to the profit of the contravener". No reference to authority was made. The submission in reply of the first, second and fourth respondent takes issue with this proposition and refers to some commentaries. In the absence of a fully developed submission on the point, I do not propose to have regard to this argument. In any event it would, at best, be of indirect assistance. 38 In my opinion, the decision of the High Court in Marks v GIO Australia Holdings is an answer to the other contentions of the applicants. The decision of the majority in that case underlines the compensatory nature of orders to be made pursuant to s 87 and makes clear that analogy between s 87 and equitable relief is an unsafe foundation to build upon (Gaudron J at 502, 503 and 505, McHugh, Hayne and Callinan JJ at 510 and 513, Gummow J at 528-9 and 534-535). An account of profits is not compensation but rather an award to prevent unjust enrichment (Dart Industries Inc v Décor Corp Pty Ltd (1993) 179 CLR 101 per Mason CJ, Deane, Dawson and Toohey JJ at 111, per McHugh J at 123). 39 Whilst there may be arguments for such a remedy in Pt IV cases (see, for example, in another context, D Friedmann, 80 Columbia Law Review 504) this would require an amendment to the Act. 40 In Australian Rugby Union v Hospitality Group (2000) 173 ALR 702 I considered and rejected an argument that the tort of inducing breach of contract was appropriate for the award of restitutionary damages by way of account of profits (par 129). What I said there would support the conclusion that an account of profits would not be appropriate where the purpose is to compensate and nothing I have heard in argument in this matter has caused me to doubt my conclusion in that case. 41 I should say something about the decision of the House of Lords in Attorney General v Blake [2000] 3 WLR 625. In Australian Rugby Union v Hospitality Group I was referred to the English Court of Appeal decision in that case ([1998] 2 WLR 805) which had contemplated the award of an account of profits for breach of contract. I said (at par 128): "Such a radical change in the received wisdom as to the common law of Australia is not for a single judge. Even if the House of Lords were to approve what was said on the issue in the Court of Appeal, I would have significant reservations about adopting it." The House of Lords has now confirmed that for England an account of profits is available as a remedy for breach of contract in what is described as an exceptional case. The present is not a contract case and the decision is not directly in point. In any event, notwithstanding a wide ranging review of the authorities, I see no reference in the speeches to any prior case which would authorise an account of profits where the object is compensation for loss or damage. In my view, the decision of the House of Lords does mark a radical change in the law of remedies which it is not open to a single judge of this Court to apply to the construction of the Act. 42 Thus, my answer to the question posed is in the negative. Again, I am troubled that the question is in an academic form. The parties should agree upon a more appropriate question tied back to the case. In the absence of agreement, I will hear submissions on the point. The matter will stand over accordingly.

other questions 43 One of the foreshadowed questions was not pursued. The other, which related to circumstances under which the consequences of a relevant time limitation under the Act might be avoided, becomes inappropriate to answer in view of the conclusion I have come to as to the first question dealt with in this judgment. The applicant stoutly resisted the appropriateness of this question at all times. If I had come to the conclusion that there was a potential time bar involved in relation to the application of the relief provided for by s 87(1) in this case, I would have been inclined to answer the question notwithstanding the substantial arguments mounted against that course. Even though the question is not academic as far as s 82 is concerned, I am not satisfied that resolving that question would be of any real utility, bearing in mind the other issues related to time bars which remain in the case. I take into account the reservations of the High Court expressed in cases such as Wardley and Bass. 44 The proceeding will stand over for further orders. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Counsel for the Applicant: RC McDougall QC with G Brandis

Solicitor for the Applicant: Phillips Fox

Counsel for the First, Second and Fourth Respondents: TF Bathurst QC with MR Speakman

Solicitor for the First, Second and Fourth Respondents: Clayton Utz

Counsel for the Third Respondent: AC Archibald QC with RJ Wright

Solicitor for the Third Respondent: Blake Dawson Waldron

Date of Hearing: 7 and 8 December 2000

Date of Judgment: 12 March 2001

Trade Practices Act 1974(Cth)

Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd

At a glance

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Judgment (13 paragraphs)

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Legislation Cited (3)

Cases Cited (19)