R v Associated Northern Collieries [1911] HCA 73

R v Associated Northern Collieries [1911] HCA 73 - HCA 1911 case summary — Zoe

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Tyrention anp Errecr or Provision ror Murua Exciusion 0 OvursipE CoMPETITION. ; Iseein it prima facie an intention that the shipowners shall not; more than a certain proportion of whatever price may be obtain for the Vend coal. Circumstances like the strike of 1909 might permit of much higher prices being obtained from the public than the fixed maximum, and the collieries were not disposed to b absolutely content with their previously fixed f.0.b. price and allow the shipowners to get all possible surplus advantage of the market. - The higher prices might be reasonable or unreasonable ; that was - immaterial for this purpose, but whatever they were the arrange- ment amounted to this, if only they were obtained by joint consent the excess should be shared equally. By constituting, as between themselves, the shipowners jointly the agents of the Vend jointly, - the Associated Collieries retained a hold upon the transactions of - sale which secured the due fulfilment of this part of the bargain. As a deterrent against its secret violation, they established a right to the whole of the excess unless their prior consent were given - ' and this right with the right of examination of the shipowners' ; books made any attempt at evasion futile. The defendants by the means built up a ring fence as I have already described it, which was high enough and close enough to shut out almost all effective - competition. It is demonstrated by tenders (see Q3), contrac and verbal evidence that, for the larger contracts, consumers quently desire several pits to draw from. Regularity and con tinuity of supply are of high importance to railways, gas and electric lighting companies and public bodies generally. To guard agains' interruption or total stoppage it is desirable to have a number pits from which supplies can be drawn. This in itself puts a power- _ ful lever into the hands of the combination and seriously detracts from the availability of the non-Association mines - Wallsend, Bur- _ wood Extended and Ebbw Main - to meet the general demand supposing all other things equal. An example of the power this confers on the combination is afforded by Learmonth's telegram to John Brown of 30th October 1909 (Ex. P8). Again, whatever chances of outlet the non-Vend mines may have, means of transport are indispensable and there is a closed door between them and the

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supplied with coal that he would rather not have, in return for not . getting at all the coal he prefers. Mr. Campbell adds to the sup- 4 posed advantages of the arrangement, those of regularity and con- tinuity. They are only consequences of what is already said. How the inter-State consumers of coal in Australia suffered for want of some such beneficial arrangement all the years down to 1907 the defendants have not vouchsafed to explain. How the foreign trade and the purely New South Wales trade suffers at the present time is not shown. It was also claimed as a benefit from this arrangement to the smaller collieries and I suppose through them to the public that their products are more sure of earlier and regular despatch. Perhaps to the collieries this may be so, though I am not altogether convinced of that on the whole, but to consumers Ishould say certainly not. If a consumer wants the coal of a par- ticular small colliery, so far from being sure of getting it quicker, he is not, unless in some exceptional cases, sure of getting it at all. The object of the ring fence then so far as a deduction may be made from the agreement unqualified by what was done under it was to control, so far as it could be controlled, the supply to the public of what is known as Newcastle coal. Mr. Knoz said it was absurd to talk of creating a monopoly of Newcastle coal just as it would be to talk of creating a monopoly of Tasmanian apples. If the charge were that the defendants had created a monopoly in the production of Newcastle coal, there would be more force in the argument. New- castle coal, of course, can only be produced in the Newcastle district, and that fact must remain so, combination or no combination, so Jong as all the mines are worked. But the supply of Newcastle coal to the public involves other considerations. The producers of that coal, whether singly or in any form of mutual association as a Vend, might, lawfully or unlawfully, raise the price, restrict their aggregate output, and allot individual proportions of that output,

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tons, but it is more. The shipping companies also sold direct to the public. The Adelaide Steamship Co. to a very small extent indeed, the quantity so sold being negligible, the other three do sell retail in a substantial sense ; they issue lists such as those in Ex. K8 in which prices are given for dealers on the wharf, for casual dealers and for private orders. So far as Victoria is concerned the lists show that to dealers on the wharf up to Ist June 1906 the price was 14s. 9d. for screened coal ; 13s. 9d. for engine coal ; 11s. 6d. for smiths coal. Private orders on the wharf, which may be taken as the datum, were 2s. more. From Ist June 1906 dealers on the wharf were charged 16s. 9d. for screened ; 15s. 9d. for engine ; 13s. 6d. for small. From 28rd July 1906 the price to dealers on the wharf was 19s. 3d. screened, 18s. 3d. engine, 16s. small. There was a discount of 2} per cent. given to dealers taking 25 tons per month and paying by 14th of following month. If that discount were frequently operative, it would be in cases at the rate of 300 tons per annum and applying this to 600 dealers would make the total tonnage something very great, about 180,000 tons, but the total quantity sold in this way was not one half that tonnage. There is the statement that about 7 per cent. of the total trade is what is called the general trade (Ex. X. 107). This is substantially assented to by defendants (see p. 1806). But that does not give anything exact for Victoria. The total inter-State trade is certainly over 1,200,000 tons and about 7 per cent. of that is 84,000 tons of which it would not be over estimating it to say 60,000 tons were sold in Victoria. Continuing the range of prices, the October list 1906 repeated the July list, so that up to end of 1906 the price had risen for screened coal from 14s. 9d. to 19s. 3d. to dealers with 2s. extra to the public direct. I do not refer to this so far as any advance of price resulting from the combination, because of the admission that before 24th Septem- ber the Shipping companies were not acting in combination ; al- though the colliery proprietors had to a certain extent coalesced, and had determined, in conjunction with the shipping companies, to assist those companies or some or one of them, since I must take it they were acting independently, to obtain the South Australian contract. And these rises in price during 1906 are probably due to the influence of the coming change which was confidently anticipated.

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the bad trade was brought about by excessive competition. He adds that different collieries were, it seemed to him, selling for what they could get. He goes on to say that the one result of that exces- sive competition was the want of trade. By "result"? I think he must mean " cause," for excessive competition would increase trade; but even if he does mean " cause" the figures I already quoted show that his idea was wrong. His error in this respect is further demonstrated by reference to Ex. 33c. In 1900, a war year, the total export of Newcastle coal was 3,021,912 tons. In 1901 it was 3,104,685 tons. In 1902 it was 2,966,764. In 1903 it was 3,420,197 tons, a larger output than Newcastle had ever seen, much larger than the previous year, which he regarded as a year of prosperity. In 1904 it was 2,951,301 tons almost as large as in 1902, and far above the average of 1897-8-9. In fact it was over 486,000 tons above that average then as I have shown. The next year 1905, the export tonnage rises another 510,000 tons, making the total export output of Maitland and Newcastle coal nearly a million tons more than the average for the three years immediately preceding the war year. And Wheeler, though pressed in cross- examination, persisted that serious Maitland competition was not felt till 1906. That is very probable since the total output from all the Maitland mines for 1905 was about 1,162,800 tons. Mr. Ford was J. & A. Brown's banker and he has been the banker for the Vend, but that does not qualify him to testify to the cost of production in the mines. His "impression" as to whether competition was excessive does not carry much weight with me as showing that 9s. or even 7s. 6d. was a disastrous price, particu- larly in view of more solid evidence that I have before me and still less can I build on his statement as to other people's impressions. But he may possibly be correct in thinking that some of the col- lieries were selling for what they could get, they may have been going below 7s. 6d. In fact V.8, Chamber of Commerce Reports 1910-11, p. 61, shows that in 1905 some Newcastle coal was sold as low as 7s. 3d. although the selling price was 9s. Undisclosed rebates may in some instances have still further reduced net receipts. Maitland certainly was selling as low as 7s. 1$d. in 1905; about 7s. 1d. in 1906 (Gale's reports L.8) as an average for all trade.

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I am driven to reason it out as best I can from the probabilities the situation as read by the light of ordinary human and busin motives. Consequently I think that they would naturally to some extent to remove the prohibition against meeting public requirements without entirely abandoning their scheme, and ¥ therefore compromise opposing influences by leaving some, comparatively small, advantage to those going beyond allo ment In November 1907 they determined (J. p. 59) to meet the difficulty they were in by the danger of public outery on one hand, and risk of collieries overselling on the other, by what they called ": scientific basis of allotment for an extended period after 1908." : Jam confirmed in my impression, because, on 21st November 1907 when the Vend committee reduced compensation to 1s. and adhe to 2s. for penalties important events had taken place. On 20 August (X. 143) an impressive telegram had been sent by shipping companies to the Vend pointing out the seriousness of th shortage in three States, and the likelihood of general indignation leading to hostile legislation. There had been an effort to meet the urgency of the situation. In September (X. 158) another pressing letter was sent, and another assurance given of endeavour to meet the shortage. Then in November came the strike of 1907 which lasted about a fortnight. While the prices continued and State. services were endangered, the Premier of New South Wales was approached by the Vend to obtain relief from penalties from various State Governments for the short delivery or non-delivery of coal | under contract and it was pending receipt, and in fact one day | before receipt of the Premier's reply, that the Vend passed the resolt- tion I have just referred to, maintaining a penalty of 2s. for over-_ stepping allotment. I assume the collieries were not prepared to - go so far as to impose a direct fine for daring to supply the urgent needs of the various States especially when asking for relief for -

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penalties, and at the same time human nature tells us that ordin- arily no colliery would be prepared to supply coal for no reward at all. I have a distinct prima facie impression from all the cir- sumstances connected with the penalty that 2s. was recognized as something appreciably less than the amount of profit when the declared selling price was 10s., but what I cannot tell from this branch is how much. That has to be determined by resort to other and independent evidence. The declared price was not raised to Us. until 2nd December 1907 (see Cant's letter of 9th December Ex. X. p. 198). I do not feel concerned with the reduction of com- pensation in November to half the amount of penalty. It may have been some scheme of partition of profits in an indirect way, and the fixation in February 1908 a direct partition of those profits. I am not prepared to search out possible answers to a prima facie inference when the defendants might so readily have satisfied all doubts. Even at the bar no reasonable explanation was suggested as to the penalties which, taken not so much in isolation as in con- junction with other features, impress my mind against the Vend. But even considered alone, it is not to be overlooked that, notwith- standing the liability to penalties, several of the collieries did in fact largely over-deliver. At what date these over-deliveries began Ido not know. However there is a letter of 10th December 1907 from Laidley to Learmonth (Ex. 0. 1), and in that letter reference is made to the heavy payments they may be called upon to make for excess of coal invoiced during that year. There is another letter of 6th December from Mr. E. P. Simpson of Minter, Simpson & Co., writing on behalf of the Pacific Co. to the Secretary of the Vend. He refers to the very heavy responsibilities the company will have incurred in the then present year for penalties. He suggests that some automatic process should be arranged whereby those collieries which might in any one year secure trade in excess of their Vend should receive some reasonable addition to the Vend in the following year based on a proportion of such excess. One can hardly imagine

and without some evidence cannot presume - these collieries supplied the extra coal without some little profit. I think that in actual practice that such an automatic arrangement was applied. I mean that in alloting the output for any given year, the total

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as against 1s. f.0.b. In 1909-10 it recedes 6d. leaving the eventual shipping increase at 6s. 10d. as against 3s. 6d. f.o.b. Small coal in 1907 showed a rise of 3s. 3d. as against Is. ; in 1908-9 a further tise of 1s. 4d. as against 6d., and in 1910 a further rise of 5d. which was in fact an increase of Is. 9d. as against 6d. (9) Melbourne and Metropolitan Board of Works. - In 1907 at the Pumping Station there is a rise in large of 6s. as against 2s. 6d. f.o.b. ; and in 1908 a further rise of 3s. 6d. as against ls. f.o.b. At Werribee Farm, the price from Ist July 1906 to 30th June 1908 was fixed by con- tract, it was an advance of 2s. 5d. on previous prices as against Js. 6d. f.0.b. increase. I merely mention this as not affecting the result because it was before the combined agreement, but in order to make the next figure understood. In 1909 there was a further advance of 6s. 4d. as against 2s. f.0.b. ; and in 1910 that was reduced. by 6d. ; the eventual Shipping increase stands therefore at 5s. 10s. as against 2s. f.o.b. (10) Commonwealth Services. - For Point Nepean in 1907 the rise is lls. as against 2s. 6d. f.0.b.; in 1908 there is a further rise of 4s. 3d. as against Is. f.o.b. ; and in 1909 there is further rise of 6d. being an increase over 1907 of 4s. 9d. as against 1s. f.o.b. For Queenscliff there was a rise in 1907 of 5s. 6d. as against 2s. 6d. f.o.b. ; for 1908-9 a further rise of 3s. 9d. as against 1s. f.o.b. ; and for 1910 a further rise of 6d. being an in- crease of 4s. 3d. as against 1s. (11) Victorian Government - Special Services. - (a) Sunbury - there was a rise for house coal in 1907 of 6s. 3d. as against 2s. 6d. f.o.b. ; in 1908 a further rise of 2s. as against 1s. f.o.b. (b) For the Melbourne District, in 1907 a rise of 6s. 3d. as against 2s. 6d; in 1908 a rise of 2s. as against Is. (c) At Melbourne General Post Office in 1907 a rise of 5s. 3d. and 5s. 9d. as against 2s. 6d. ; in 1908 a further rise of 1s. 6d. as against ds. (d) Lady Loch Steam coal : In 1907 an average rise of 5s. 11d. as against 2s. 6d. ; Jumbunna Coal was however taken at a higher price. In 1908 there was a further rise of 1s. 8d. as against 1s.

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reduced this benefaction by 1s. 3d. per ton equalling £500. I cannot _ believe the shipping companies were prepared to do business on these terms, and therefore am of opinion that there must be some fallacy either with respect to the wharfage or the amount charged in connection with the lighter and the cost of carriage. But what- ever the difficulty may be in arriving at freight with precision, I do not believe that the advance of 5s. 9d. and 6s., 7.e., a net advance of 3s. 3d. and 3s. 6d. from the standpoint of the shipping companies left them in the position of being underpaid. I will assume in their _ fayor that for this year 1907 they charged no excess freight, but the f.o.b. price was 6d. in excess, being £200. In the next year 1908, the contract price for 5,500 tons was 22s. 6d., the f.o.b. price was 11s. 'The defendants' claim additions which leave the balance for freight at 5s, 6d., the agreed maximum, even on these figures that is 1s. 4d. too much, being £366 13s. 4d., so that I need not enquire further ; _ the f.0.b. price is also 1s. too much, which is £275 making a total of

£641 13s, 4d., even granting the full charges connected with the _ lighter and the full carriage paid. It may not be out of place to observe at this point that the freight for the Metropolitan Gas Co. this year was 4s. 2d. for both large and small. (9) Victorian Government Special Services ; (a) Coburg - In 1908, 240 tons of house coal were charged 23s. 3d., the f.0.b. price was I1s., : A to that is to be added wharfage 1s. ; wharf expenses Is. ; screening Is.; cartage 3s. 9d. and standing expenses 4d., making 18s. 1d., leaving a balance of 5s. 2:1. for freight or 1s. in excess which amounts to £12. The excess f.0.b. is 1s. also equalling £12. (b) Yarra Bend and Kew. - 1900 tons at 23s. in 1908 ; 3d. less is charged for cartage,
there is therefore again 1s. excess in freight amounting to £95, and Is. f.o.b. also comes to £95, a total of £190. In the previous year the balance for freight appears to be only 3s. 3d. ; cartage to Kew _ appears in Ex. K8 as 3s. 3d. for 1907, and 3s. 6d. in subsequent years.

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Associarep Temunerative. That seems to be answered by the renewal on March - QOETHEEN 18th 1905 (Ex. Cl) by which the term of contract was extended for 2 years further, bringing the operation of the contract down to 22nd April 1907. In 1907 however, the combined agreement was in force, - the f.0.b. price had advanced by 2s. 6d. 3 In 1907 the tender of McIlwraith McEacharn & Co., dated 29th - January 1907, was as already stated 18s. 11d. without wharfage and for all ports. This being an average, Fremantle alone would be less. _ The f.o.b. price was 10s. except Seaham which was 9s. 3d. (see letter of 24th January 1907, Chapman to Hunter X. p. 29). The defend- ants in their summary 19S have taken the f.0.b. price at 10s., which I think is substantially right. The balance is 8s. 11d. for freight which means a little less for Fremantle. The tender of the Adelaide _ Steamship Co. is 19s. 5d. all round, which would mean less than 9s. 5d. for Fremantle. The Melbourne Steamship Co. tendered at : 19s. 10d or 9s. 10d. for Fremantle. Assuming the tenders of the Adelaide Steamship Co. and the Melbourne Steamship Co. to be genuine and honest tenders, the very highest possible freight to Fremantle would be 9s. 10d. and would average very much less. In October 1908 tenders were called, for 1, 2 and 3 years for Newcastle coal. On 24th April by letter Cant to Appleton the price f.o.b. had _ been fixed at 11s. for 1 or 2 years with 12s. for the 3rd year for the Western Australian Railways in substitution for a previous fixation - of 11s. for the first year and 12s. for the second and third years. On 29th October McIlwraith McKacharn tendered 21s. for Fremantle alone for one year and separately at the same price for two years. Verbal negotiations ensued resulting in McIlwraith & Co. tendering at 19s. for the first and 19s. 6d. for the two succeeding years. The other tenders for this contract have already been mentioned. That left McIlwraith's freight at 8s. for one year, and 8s. 6d. for the two next years. The quantity contracted for was 23,000 tons for the

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Geraldton, the agreed maximum of which is only 2s. more than ee 'Fremantle. For the City Council it also appears that in respect to ee small coal bagged ex yard the amount for freight was 14s. 11d. or Associamep s. lid. over the maximum. For small coal loose ex ship 1s. 9d., poke and ex yard 10s. 9d. In 1910 the defendants admit for large coal = - - ~ 10s. for the Gas Co.; 11s. for the City Council and Is. for the Tronworks. Besides this the Government was charged Ls. 9d. for ~ small coal Fremantle, and 13s. for large coal Geraldton. The City Council for small coal bagged delivered in city was charged in 1910 Us. 2d. ex yard for freight, which is 1s. 2d. above the maximum and was charged 11s. ex ship and 10s. ex yard as freight. The cost _ Price for small this year was 7s. So far I have referred only to the Western Australian freights. But the excess f.0.b. prices in themselves constitute a heavy detri- 'ment for which the whole combination is responsible ; and even _ if the freight were moderate the excess prices charged to consumers 'would render the shipping companies and the Vend alike liable or the consequences. Taking not all the tonnage of large coal, but uply the tonnage stated in defendants' summaries, viz., 35,800 for 1907 to 1910 inclusive, the f.0.b. overcharge is £895 for 1907, '£1,790 for 1908, 1909 and 1910 respectively, in all £6,265 for the period. I do not stop to reckon up the excess freights - but it is easily seen they are considerable. _ We now come to QUEENSLAND. _ So far as freights are concerned, the evidence of excess is meagre, _ the primary proofs submitted consist of two contracts with Chillagoe

Railway Co., Cairns. One contract was made 16th February 1906 : by the Adelaide Steamship Co. (G5) and the other on Ist February 1909 between the same parties. There is no doubt that the first
contract, though made before the combined agreement, and even ' " Defore the Vend was fully formed, was entered into after steps had been taken to form the Vend and being for three years with possible further continuance. There is no doubt also the Adelaide Steamship

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conclusion as to which set of figures I thought was more correct, I should be disposed to adopt the Crown's figures in E10 rather than the defendants' figures in 198. The defendants admit upon the evidence that in 1908 the balances for freight were as follows : - Queensland Meat Export Co. 3,500 tons, 10s. 9d.; Townsville Harbour Board, 3,600 tons, 11s. ; Townsville Gas Co., 3,000 tons, ls.; Mount Morgan Co., 6,000 tons, 10s.; the Chillagoe Co. was 3,000 tons. In 1909, there is admitted freight to Townsville Gov- ernment Railway, 750 tons, 10s. ; The Queensland Meat Co., 6,500 tons, 10s.; Harbour Board, 3,600, 11s. ; Gas Co., 3,000 tons, 11s. Tn 1910 the Harbour Board, 3,600 tons, lls. ; Gas Co., 3,000 tons, lls.; Townsville is 160 miles nearer Newcastle than Cairns and therefore the face money difference in freight is not as great as the real difference. I cannot avoid coming to the conclusion that the Townsville freights were excessive. In 1907, the balance for freight on 880 tons for the railways was 9s. In 1909, it was 10s. for 750 tons. The freight to the Meat Export Co. for 5,000 tons in 1907 was admittedly 8s. 6d. Why it rose in 1908 to 10s. 9d. and stood in 1909 at 10s. is difficult to understand in the absence of explana- tion except on the basis that the latter prices were unreasonably high. I have no doubt at all that 11s. was exorbitant, so was 10s. 9d., only to a less degree, and I feel no real doubt that 10s. was excessive for Townsville. I observe in the Schedule in the com- bined agreement that 12s. 6d. is the maximum for Cairns and 17s. for Townsville, a difference of 2s. 6d. That has relation only to large coal at 7s., but no other maximum price for large coal is fixed, and none for small except for small coal at 5s., where there is a difference of 2s. If these stipulated differences afford a fair or even an approxi- mate guide as between the two places, the conclusion I have stated is immensely strengthened. The f.0.b. excess on large and small coal amounts for the period mentioned to a considerable over- charge. For this, as in the case of Western Australia, all the defend- ants are responsible.

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ally outweighing all the circumstances to which I have referred. I the suggestion that the prices obtained prior to 1905 indicate at the lower prices of that year must in all probability be due to ome abnormal circumstance. No doubt previous prices are a sion of the facts to be considered and weighed ; but they must taken in conjunction with all other circumstances, and the similarly or dissimilarity of surrounding conditions are important in ermining whether the defendants' suggestion should be adopted. e is evidence of prices going back many years, but of course _ the further back they go the less convincing they are, because trade conditions are certainly not constant for many years together. The world trade, and even the domestic trade, are subject to normal velopments, as well as unexpected changes. Production and 'means of transport alter, and in the later portion of the period we are to consider, new mines were brought appreciably into the sphere of competition. Ultimately, as I understood, the defend- ants placed very little or no reliance on prices before 1901 or per- haps 1900. The f.0.b. prices before 1900 would not help them very ~ much. The Chamber of Commerce Report for 1910-11 gives at p. 61 the Newcastle selling price for the various years and they vary greatly. For instance, in 1891 the first old Vend year, it was 11s. ; ~ in 1892 it was 10s. ; in 1893 it was 9s. ; in 1894 it was 8s. ; in 1895 it was 7s. ; in 1896-7-8 it was 7s. 3d. and 7s. 6d., and in 1899 it was 8s. Maitland was not yet a disturbing factor. Then came two events, the Boer war and the formation of the new coal Association. ~ In 1900 prices were 8s., 10s. and 12s. In 1901 and 1902, the declared price was Ils. and in 1903 it was 10s. I stay there a moment _ because Mr. Ford has told us that the war not only made the trade _ particularly good in 1900, but also created an artificial demand that lasted as he thinks for 2 years. The coal Association "also as T have _ pointed out still affected 1903.

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of shortage is immensely increased, the public are thus left entirely in the hands of the Vend, and this Association is free from the motive for relaxing its limitation which would spring from the

possibility of outside supplies. It has been urged on behalf of the "Shipping Companies that the allotment regulation is purely a Vend arrangement and not a creation of the combined agreement ; that the Shipping Companies found that instituted and had to acceptit, and make the best of it, and at times tried, as I have pointed out, to get rid of it, and so, say the Shipping defendants : " We "are not responsible for it." The colliery defendants say likewise among other things : - "' Whatever injury has been or is occasioned by it, is the result of our own independent Vend agreement and as that per se is not being attacked we are not assailable in this action." But that argument cannot prevail. A consumer prefers for the
purposes of his business coal from pits A. B. & C., and finds that coal from pits X. Y. & Z. are altogether unsuitable. He is told _ that he cannot rely on having all or any from the pits he desires, but may have to take some or all from the pits he disapproves of, and take them at the same price because the Vend classes them together. In such a case, if ordinary competitive shipping conditions existed, he might choose between what is for his purpose second or third rate coal, at the top price, and Southern or even Western coal at a less price. That possibility is a powerful antidote against autocratic refusals to depart from the allotment rule, such as we have seen evidenced. But where each group for its own objects makes and adheres to a compact of mutual exclusiveness, they form, so to speak, the corresponding blades of huge "commercial shears that cut off all approach to relief from despotic prices of the Vend, as well as those of the Shipping Companies. And not only are prices heightened but shortages are likely to occur. We have just partly seen how the Shipping Companies feared and felt them, and tried to some extent to provide against them.

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for 2 years from Ist March 1906 at Port Pirie. The coal was to be steam coal from approved pits, approximate quantity per annum - 70/84,000 roasting East Greta, Hebburn or Pelaw Main 25,000 - tons, in all 95/109,000 tons per annum. Under this contract, Scott - Fell delivered 167,600 tons steam coal which was Wallsend and - Lithgow. Such a contract could hardly have been unknown to the - defendants. There is no doubt that the defendant collieries refused - to supply Scott Fell to enable him to carry out this contract and Mr, - Knox very properly admitted (p. 1411) that it is perfectly clear there was an arrangement between the collieries and the shipping com- panies that the collieries would not sell inter-State to Scott Fell. In March 1906, the South Australian Railways called for tenders for - the supply of 96,000 tons Newcastle coal a year for 1, 2 or 3 years, and also separately for freight for that quantity of coal. Scott Fell & Co. were known by the defendants to be anxious to obtain the contract. Mr. Wheeler said that at the meeting early in April of the colliery proprietors at which also Mr. Hunter and Mr. Newman were present, Mr. Hunter stated with reference to those tenders, that he feared the trade would go away from the steamship owners because of some outside competition that was likely to be brought into the market. He said the outside competition was by some tramp steamers, probably, and Messrs. Scott Fell & Co. The Vend minutes of this meeting, 23rd April 1906, have been referred to in detail, Captain Webb was also there. And this was followed by a meeting the next day at which the resolution was passed that the collieries should proceed with their scheme of amalgamation and the combined agreement should be entered into. It was also resolved that any further application for coals by Scott Fell & Co., other than for bunker purposes should be referred to the Collieries' Board. In the meantime the guarantee of 24th April was given. Huddart Parker & Co. and the Adelaide Steamship Co. tendered the all-round price of 11s. 9d. previously alluded to. That guarantee, it may be repeated, expressly mentioned that it was to enable Huddart Parker and the Adelaide Steamship Co. to secure the contract and was signed for the Caledonian Co. by Howard Smith Co. by C. N. New- man, managing director. Of course no real competition with the selected tenderers was contemplated ; nevertheless we find Howard

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I have now to ask myself the question, does this amount to monopolising, or an attempt to monopolise, or combination « conspiracy to monopolise the inter-State trade or commerce in New- castle coal with intent to restrain, to the detriment of the public its supply or price. The intent is obvious - and to prevent a possible misconception I unhesitatingly find its existence as a ma of fact from the whole circumstances. The detriment I have al declared. Mr. Mitchell argued that no combination though try to get the whole of the trade into their own hands and excludin other people would contravene the Statute unless they did so b some unlawful means. He relied on some observations of Garrow ] in Wickens v. Evans (1). In that case an agreement was made between three persons carrying on the trade of trunk and box makers and travelling in various parts of England, that each would restrict - himself to trading in certain portions of the country and give up his existing trade in other parts, viz., the remaining portions where _ the other two contractors respectively worked in their trade ; they agreed to assist each other, and in case other persons sho begin to trade as box makers in any of the districts allotted to o1 of them they should all meet and devise means to promote their own views. The learned Baron said : - '* What those means may be it is unnecessary to surmise ; but we cannot presume they will illegal; and therefore this stipulation does not affect the validit of the agreement.'" On those words Mr. Mitchell hangs his argument but in my opinion they have no application to this case. The ques-_ tion was whether three box-makers out of the number to be found in - al] England made an illegal contract in agreeing to confine themselve E to certain respective districts. The learned Baron after pointing out the mischief sought to be cured, namely, the loss and incon- venience to each by exercising their trade in the same places in various parts of the country, put the question " What is the remedy (1) 8Y. &J., 318, at p. 329.

At a glance

Court

Decision date

Source

Judgment (1349 paragraphs)

191). unknown (Y9). At the conference of July 1907, some que:

Cited By (6)