Q. It was not your belief?
A. I believed that it was quite in order to do what we were doing with the exemptions granted to the various other companies throughout Australia.
…
Q. You believed, didn't you, that those three companies, if they hadn't received those authorisations, would not have been entitled to require that of their operators?
A. In a sense, but can I just explain one thing because we are labouring here. I never in all the years I have been involved in the taxi industry at Granville had anybody say they didn't want to accept Cabcharge except one gentleman, so it was a system that was automatically taken for granted and the rule was left there under the assumption that the rule was granted to one organisation, granted to two and it was purely a rubber stamp facility, and quite obviously was an oversight. We probably could have done it but at the end of the day it wasn't going to make any difference. It was never used.
17 In asking these questions counsel was referring to s47 Trade Practices Act 1974 which, relevantly, is as follows -
(1) Subject to this section, a corporation shall not, in trade or commerce, engage in the practice of exclusive dealing.
…
(6) A corporation also engages in the practice of exclusive dealing if the corporation:
(a) supplies, or offers to supply, goods or services;
(b) supplies, or offers to supply, goods or services at a particular price; or
(c) gives or allows, or offers to give or allow, a discount, allowance, rebate or credit in relation to the supply or proposed supply of goods or services by the corporation;
on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services or, if that person is a body corporate, a body corporate related to that body corporate will acquire goods or services of a particular kind or description directly or indirectly from another person not being a body corporate related to the corporation.
(7) A corporation also engages in the practice of exclusive dealing if the corporation refuses:
(a) to supply goods or services to a person;
(b) to supply goods or services at a particular price to a person; or
(c) to give or allow a discount, allowance, rebate or credit in relation to the supply of goods or services to a person;
for the reason that the person or, if the person is a body corporate, a body corporate related to that body corporate has not acquired, or has not agreed to acquire, goods or services of a particular kind or description directly or indirectly from another person not being a body corporate related to the corporation.
18 The authorisations referred to had been obtained from the Trade Practices Commission or perhaps the Australian Competition and Consumer Commission under s88 of the Act.
19 There followed attempts by interested persons to have the authorisations set aside. On 11 March 2005 the Australian Competition and Consumer Commission refused to do so but on 27 June 2006 the Australian Competition Tribunal did so. The judgments of those bodies are exhibits U and V respectively.
20 It was common ground that Cumberland Cabs had not obtained any authorisation permitting activity that would otherwise be in breach of s47. When asked, Mr Hyer explained the reason why there had been no application in these words -
A. The only thing I could suggest was the secretary manager of the day would have thought that it would be okay to go with the other groups as if it had been approved for one it would be approved for all.
21 Later in his evidence, having apparently come to the view that Cumberland Cabs had been incorporated by the time it converted to Cabcharge, he gave the evidence extracted above, justifying the by-law by his belief that it was in order to do what Cumberland Cabs was doing because of the authorisations granted to those networks that had applied for them.
22 Mr Hyer also said that when the other networks made their applications they were of a substantial size and Cumberland Cabs was fairly small, also that there were other networks that did not apply for authorisation though they maintained rules like by-law 9. Mr Hyer said that the network never actively tried to enforce by-law 9, whether by the use of by-law 17 or otherwise. He said that only one driver had objected to accepting Cabcharge patrons and that Cumberland Cabs had not made an issue of it but had permitted him to act as he wished. Mr Hyer said that credit patrons amounted to about forty per cent of taxicab users and cash patrons to about sixty per cent. He said that it was uneconomic for any driver to refuse to accept credit passengers. The evidence established that a driver received the amount on the meter regardless of whether the patron paid in cash or credit. Patrons paying by credit were charged a loading for that service, of course. In recent times drivers have been receiving a small surcharge where patrons have paid by credit.
23 Mr Molomby criticised the evidence and motives of Mr Hyer, who first explained the absence of an application for authorisation by reference to the probable belief of the secretary/manager of the co-operative at the time and then, having realised that Cumberland Cabs must by then have been incorporated, by reference to his own belief. The existence of the belief itself was challenged as not rationally consistent and cavalier. Then Mr Molomby drew attention to the form of by-law 9 which was still in existence at the time of the hearing in April 2007, even though the Australian Competition Tribunal had set aside the authorisations in June 2006. Given the importance of the matter, it was submitted, the continued existence of a rule nearly a year after revocation, especially, as was the case, where Cumberland Cabs had itself made a submission to the Australian Competition Tribunal, was indicative of someone who had a disregard for the law and was used to getting away with things.
24 Mr Molomby also drew attention to changes in the sizes and composition of the various taxi networks in Sydney from time to time. While it might have been accurate, as Mr Hyer said, to call the three networks who applied for authorisations substantial and Cumberland as smaller, the position became quite different as time went by. By the time of the applications to set aside the authorisations Cumberland Cabs was the second largest network, yet it had never sought an authorisation, even though it contended for the maintenance of the status quo in the applications before the Australian Consumer and Competition Commission and the Australian Competition Tribunal. The contention of a belief that if a few networks had authorisations it would be alright for Cumberland Cabs to continue to operate without one should not be accepted. At least, it was further evidence of the cavalier attitude contended for. There had been no proper explanation for the delay, once the authorisations had been set aside, in removing the by-law from the Driver's Handbook.
25 Mr Molomby submitted that there was an inconsistency between the position taken by Mr Hyer that by-law 9 was not enforced and the fact that Cumberland Cabs contended before the Australian Consumer and Competition Commission and the Australian Competition Tribunal that authorisations ought to stand. Mr Molomby submitted that Mr Hyer's explanation that no issue had been forced between Cumberland Cabs and the protesting taxi driver was glib. The fact was that the driver had to drive a taxi bearing the "Cabcharge" logo. It would be impossible in practice to segregate intending travellers so as to divert elsewhere those wishing to pay by Cabcharge. Mr Molomby pointed to the usual conditions of lease between Cumberland Cabs and the operator, which was terminable on twenty-eight days notice in writing without attribution of reasons. An operator running the risk of being effectively summarily dismissed was equally effectively discouraged from raising any objection. It was therefore not surprising that the only evidence was that one driver had done so.
26 The modern taxi industry is one that attracts investors. Taxi licences or "plates" sell on the open market, but those who purchase them do not necessarily operate or drive the taxicabs to which they become attached. It is common for investors owning one or more plates to have networks like Cumberland Cabs manage them. Out of almost nine hundred plates in its current fleet, Cumberland Cabs manages some six hundred such plates for investors, letting them to operators who take on the opportunity and responsibility of providing a taxi and running a business by the use of it. Even operators are not necessarily drivers, and operators who drive taxis whose plates they own or lease may also take on drivers to do shifts that the operators are unable or unwilling to do. So a person might be all or any of an investor, an operator and a driver.
27 Mr Hyer's evidence was that the requirement to accept Cabcharge as in by-law 9 was one made of drivers and of nobody else. It was no part of the terms of any lease between Cumberland Cabs (on behalf of the investor) and any operator. It was on this evidence that Mr Blackburn, for Mr Hyer, submitted that particular (b) - that Premier Cabs Pty Limited required as a condition of belonging to its network that operators agree to comply with the by-laws - had not been made good. Any requirement of the by-laws, he submitted, was only of drivers.
28 In my opinion there is no substance in that submission. There was no evidence about the numbers respectively of operators and drivers or of how many, if any, operators do not drive at all, but plainly many operators must at least some of the time drive the taxis they operate. For such persons, a requirement that a driver comply with by-law 9 amounts to a requirement that they, the operators, comply with it. And effectively, by-law 9 binds even operators who do not drive, because if it has any effect at all it will discourage them from engaging drivers who run the risk of denying themselves the services offered by the network.
29 In my opinion Premier Cabs Pty Limited did require operators to comply with the by-laws, either because they were drivers or because if they engaged drivers who were not prepared so to comply, their businesses would be denied the services without which they could not operate.
30 Mr Blackburn's alternative submission was that even if the by-laws constituted a breach of the provisions of s47, that did not prove the substantial truth of the imputation. First, Mr Hyer should be accepted in his assertion that he believed it permissible to have by-law 9. Moreover, it was submitted, maintenance of the Cabcharge system, whether by by-law 9 or otherwise, conferred great benefit on drivers and operators alike. Mr Blackburn referred to the forty per cent or so of patrons who paid by that method and to the evidence of unprofitability of a taxi business that was not prepared to use that system. Mr Blackburn referred to the reasons expressed by the Australian Competition Tribunal for setting aside the authorisations. He pointed out that the authorisations were to permit the imposition of penalties for breaches of rules of networks. The real reason why the Tribunal set aside the authorisations was that the provision of credit facilities had become so widespread in the taxi industry that drivers could not really refuse non-cash payments: see para [50] of the Tribunal's reasons.
31 I think that these submissions should be accepted. I accept Mr Hyer's explanation for the reason for maintaining the by-laws including by-law 9 and at the same time not applying for authorisation. The authorisations were commonly granted in the taxi industry in New South Wales and in other States and there seems no reason to think that any further network applying for a similar authorisation would not have been granted one. There was no direct evidence to this effect, but I think that Mr Hyer probably thought that if Cumberland Cabs bothered to apply, it would receive a grant accordingly. However that may be, his attitude to his business and his legal obligations was lax.
32 I do not think, however, that there was any inconsistency between the maintenance of the by-law and the failure to apply for authorisation or any support given by Cumberland Cabs to those seeking to maintain the status quo in the Commission or the Tribunal. I see no inconsistency with the continued form of the Driver's Handbook some ten months after the setting aside of the authorisations. Cumberland Cabs was not required to withdraw the book and reprint it immediately. Ordinary business standards may be permitted to prevail. What was required was that Cumberland Cabs should not attempt to enforce the by-laws and there is no evidence that it did.
33 Notwithstanding the demonstrated inappropriate attitude of Mr Hyer and his organisation to the requirements of s47 and the inappropriate maintenance of by-laws which included by-law 9, there is no evidence of the truth of the imputation. None of this material persuades me that Mr Hyer conducted his business in a wild manner. None of it persuades me that he conducted it in an unpleasant manner. None of it persuades me that he conducted his business in a dictatorial manner. His tolerance of the protesting driver and his eschewing any attempt to deal with him by application of the by-laws tends to show the opposite. I take into account also the evidence of Mr Thomas, a taxicab driver for a period of thirty-two years and an operator for twenty-four of those years, who has driven for the Cumberland network and knows Mr Hyer and people who know him. He says, and I accept, that Mr Hyer's reputation in the circles in which Mr Thomas moves is of a fair and approachable man.