Reddy Cut Garments Pty Ltd & The Trustees of the sisters of St Joseph v Housewives United Buyers Co-Op [1980] FCA 23

St. Joseph - I shall refer to them as St. Josephs - by application accompanied by a statement of claim, which was later amended, seeking an order restraining the respondents from carrying out or acting 1n accordance with the terms of a certain contract, arrangement or understanding asking for damages, and, also asking for an order restraining St. Josephs from allowing or permitting the use of its premises for the sale of school uniforms.

It was alleged in the amended statement of claim that in 1978 St. Josephs, at schools which it operated at Revesby and Milperra, entered into a contract, arrangement or understanding with Reddy Cut whereby Reddy Cut would supply school uniforms to pupils and parents of pupils at the said schools through school shops conducted on behalf of St. Josephs. It was also said that the contract, arrangement or understanding in question had the purpose and effect of substantially lessening competition.

There was an addition in the amended statement of claim to the effect that St. Josephs, being a corporation, was in a position as operator of schools at Revesby and Mailperra substantially to control a market for school uniforms and in the years 1978 and 1979 took advantage of the power in relation to that market for the purpose of eliminating or substantially damaging the Housewives Co-operative, being a competitor in that market.

By a letter dated 11 February 1980, the Housewives Co-operative gave particulars of the matters alleged in its

amended statement of claim at the request of St. Josephs. In

this letter it alleged an arrangement between St. Josephs and Reddy Cut, which it said should be inferred. The substance of the terms of this arrangement was set forth in ten numbered paragraphs in the letter. Particulars were also given alleging that the market in question was the market in school uniforms prescribed for the schools conducted by St. Josephs at Revesby and Milperra and covering an area in which parents and pupils were to be found.

Particulars were also given that the whole arrangement had the purpose or effect of substantially lessening competition, and it was said that the Housewives Co-operative relied upon the inherent tendency of the provisions of the alleged arrangement set forth in the particulars as having that purpose and effect.

In relation to the claim of monopolisation, which was added in the amended statement of claim, it was alleged in the particulars that St. Josephs was in a position substantially to control the market which had been referred to by reason of the fact that through their control of the nature of the product, that is the items of school uniforms, they controlled the ease with which firms might enter the market, as 1t was the threat of entry of a new firm into a market which operated as an ultimate regulator of competitive conduct. It was said that in addition the economics of running a cupboard or shop at the school, the advertising in school bulletins and other material and the differential treatment accorded to suppliers of the school shop

as against other suppliers of school uniforms were also other

The particulars said that the act or omission which was alleged to constitute taking advantage of a monopoly position consisted of the changes of uniforms at St. Lukes, Revesby in approximately March 1979 and at Mount St. Josephs in relation to school shorts.

The matter before me today is a motion for interlocutory relief. In its form amended during the proceedings, it seeks first an order restraining Reddy Cut and St. Josephs from carrying out or acting in accordance with the terms of any contract, arrangement or understanding relating to the sale of school uniforms at schools conducted by St. Josephs at Revesby and Milperra. It also seeks an order restraining St. Josephs from allowing or permitting the use of their premises at Revesby and Milperra for the sale of school uniforms and an order restraining St. Josephs from changing items of school uniforms at Revesby and Milperra without notice to Housewives Co-operative and from advertising in its school bulletins or elsewhere without including reference to the availability of uniforms at the shop of the Housewives Co-operative.

In determining what should be done upon this motion for interlocutory relief, the principles which I am bound to apply are that the Housewives Co-operative, to succeed, must make out a case for the relief, and in doing so, at least establish a prima facie case in the sense which is referred to in Beecham Group

Limited v. Bristol Laboratories Pty. Limited (1968) 118 C.L.R.

618. If I consider that a prima facie case in this sense has

been established, I then have to consider whether, on the balance of convenience between the parties, I should grant the relief which is sought.

Having heard the evidence tendered on this motion I find that I am not satisfied that the Housewives Co-operative has established a prima facie case in the relevant sense. In view of the fact that the matter will have to go to a final hearing it is undesirable that I should discuss the evidence in detail. Indeed, the evidence tendered at that hearing may not be precisely the same as it is before me; it may be added to or subtracted from.

However, I think I should make some comment of a general character. So far as the alleged arrangement is concerned, there 1s no direct evidence that such an arrangement was made between Reddy Cut and St. Josephs. The evidence which has been given does not, to my mind, enable me, or lead me, to infer the arrangement which is alleged by the Housewives Co-operative. Indeed, if one looks at the ten paragraphs of the particulars, the evidence would lead me to infer in respect to some of those allegations that no arrangement was in fact made on _ those particular aspects between St. Josephs and Reddy Cut.

So far as monopolisation is concerned, there 1s before me no evidence from which I would infer the existence of the purpose

which is required by s.46 of the Trade Practices Act 1974. The

purpose which is required to be established before that section operates is that a corporation that is in a position to

substantially control a market shall not take advantage in

relation to that market for the purpose of eliminating or substantially damaging a person being a competitor in the market; I am summarising it. It does not appear to me on the evidence before me I have a basis on which to draw that inference.

I leave to one side the question whether on the evidence so far given any conclusion should be drawn that St. Josephs is a trading corporation within the meaning of the Trade Practices

Act. Certainly, the decision in The Queen v. Trade Practices

Tribunal; Ex parte St. George County Council (1974) 130 C.L.R.

533, raises the serious question as to whether they should be classified in some way other than as a trading corporation, notwithstanding it may be said that they trade. I also leave to one side the question of the nature of the market and of competition in the market.

In view of the conclusions which I have expressed, 1t follows that I am bound to dismiss the motion for interlocutory relief. It 1s, therefore, unnecessary to deal with the balance of convenience.

I will, however, on this aspect of the matter say that an early hearing is practicable if the parties are able to prepare themselves for it. It is practicable so far as this Court is concerned and I am not persuaded that on an application for interlocutory relief the balance of convenience would be in favour of actually interfering, in the sense of stopping, the present method of dealing with school uniforms and substituting

another method before there has been an ultimate trial of the

issues. I think the balance of convenience rather leans towards having an early hearing, so the matter can be finally determined, and in the meantime not disturbing the system which has been operating for some considerable period.

The order I make is that the motion for interlocutory relief

is dismissed and costs are reserved. I make an order for return

) NEW SOUTH WALES DISTRICT REGISTRY) No. G74 of 1979

BOWEN C.J.: This is a matter in which the parties require an urgent decision. I propose to give my decision immediately.

The proceedings were commenced by the Housewives United buyers Co-operative Limited - I shall refer to them as Housewives Co-operative - against Reddy Cut Garments Pty. Limited - I shall

refer to them as Reddy Cut - and the Trustees of the Sisters of

St. Joseph ~ I shall refer to them as St. Josephs - by application accompanied by a statement of claim, which was later amended, seeking an order restraining the respondents from carrying out or acting in accordance with the terms of a certain contract, arrangement or understanding asking for damages, and, also asking for an order restraining St. Josephs from allowing or permitting the use of its premises for the sale of school uniforms.

It was alleged in the amended statement of claim that in 1978 St. Josephs, at schools which it operated at Revesby and Milperra, entered into a contract, arrangement or understanding with Reddy Cut whereby Reddy Cut would supply school uniforms to pupils and parents of pupils at the said schools through school shops conducted on behalf of St. Josephs. It was also said that the contract, arrangement or understanding in question had the purpose and effect of substantially lessening competition.

There was an addition in the amended statement of claim to the effect that St. Josephs, being a corporation, was in a position as operator of schools at Revesby and Milperra substantially to control a market for school uniforms and in the years 1978 and 1979 took advantage of the power in relation to that market for the purpose of eliminating or substantially damaging the Housewives Co-operative, being a competitor in that market.

By a letter dated 11 February 1980, the Housewives Co-operative gave particulars of the matters alleged in its

amended statement of claim at the request of St. Josephs. In

this letter it alleged an arrangement between St. Josephs and Reddy Cut, which it said should be inferred. The substance of the terms of this arrangement was set forth in ten numbered paragraphs in the letter. Particulars were also given alleging that the market in question was the market in school uniforms prescribed for the schools conducted by St. Josephs at Revesby and Milperra and covering an area in which parents and pupils were to be found.

Particulars were also given that the whole arrangement had the purpose or effect of substantially lessening competition, and it was said that the Housewives Co-operative relied upon the inherent tendency of the provisions of the alleged arrangement set forth in the particulars as having that purpose and effect.

In relation to the claim of monopolisation, which was added in the amended statement of claim, it was alleged in the particulars that St. Josephs was in a position substantially to control the market which had been referred to by reason of the fact that through their control of the nature of the product, that is the items of school uniforms, they controlled the ease with which firms might enter the market, as 1t was the threat of entry of a new firm into a market which operated as an ultimate regulator of competitive conduct. It was said that in addition the economics of running a cupboard or shop at the school, the advertising in school bulletins and other material and the differential treatment accorded to suppliers of the school shop as against other suppliers of school uniforms were also other

The particulars said that the act or omission which was alleged to constitute taking advantage of a monopoly position consisted of the changes of uniforms at St. Lukes, Revesby in approximately March 1979 and at Mount St. Josephs in relation to school shorts.

The matter before me today is a motion for interlocutory relief. In its form amended during the proceedings, it seeks first an order restraining Reddy Cut and St. Josephs from carrying out or acting in accordance with the terms of any contract, arrangement or understanding relating to the sale of school uniforms at schools conducted by St. Josephs at Revesby and Milperra. It also seeks an order restraining St. Josephs from allowing or permitting the use of their premises at Revesby and Milperra for the sale of school uniforms and an order restraining St. Josephs from changing items of school uniforms at Revesby and Milperra without notice to Housewives Co-operative and from advertising in its school bulletins or elsewhere without including reference to the availability of uniforms at the shop of the Housewives Co-operative.

In determining what should be done upon this motion for unterlocutory relief, the principles which I am bound to apply are that the Housewives Co-operative, to succeed, must make out a case for the relief, and in doing so, at least establish a prima facie case in the sense which is referred to in Beecham Group

Limited v. Bristol Laboratories Pty. Limited (1968) 118 C.L.R.

618. If I consider that a prima facie case in this sense has

been established, I then have to consider whether, on the balance of convenience between the parties, I should grant the relief which is sought.

Having heard the evidence tendered on this motion I find that I am not satisfied that the Housewives Co-operative has established a prima facie case in the relevant sense. In view of the fact that the matter will have to go to a final hearing it is undesirable that I should discuss the evidence in detail. Indeed, the evidence tendered at that hearing may not be precisely the same as it is before me; it may be added to or subtracted from.

However, I think I should make some comment of a general character. So far as the alleged arrangement is concerned, there is no direct evidence that such an arrangement was made between Reddy Cut and St. Josephs. The evidence which has been given does not, to my mind, enable me, or lead me, to infer the arrangement which is alleged by the Housewives Co-operative. Indeed, if one looks at the ten paragraphs of the particulars, the evidence would lead me to infer in respect to some of those allegations that no arrangement was in fact made on those particular aspects between St. Josephs and Reddy Cut.

So far as monopolisation 18 concerned, there is before me no evidence from which I would infer the existence of the purpose

which is required by s.46 of the Trade Practices Act 1974. The

purpose which is required to be established before that section operates is that a corporation that is in a position to

substantially control a market shall not take advantage in

relation to that market for the purpose of eliminating or substantially damaging a person being a competitor in the market; I am summarising it. It does not appear to me on the evidence before me I have a basis on which to draw that inference.

I leave to one side the question whether on the evidence so far given any conclusion should be drawn that St. Josephs 1s a

trading corporation within the meaning of the Trade Practices

Act. Certainly, the decision in The Queen v. Trade Practices Tribunal; Ex parte St. George County Council (1974) 130 C.L.R. 533, raises the serious question as to whether they should be classified in some way other than as a trading corporation, notwithstanding it may be said that they trade. I also leave to one side the question of the nature of the market and of competition in the market.

In view of the conclusions which I have expressed, 1t follows that I am bound to dismiss the motion for interlocutory relief. It is, therefore, unnecessary to deal with the balance of convenience.

I will, however, on this aspect of the matter say that an early hearing is practicable if the parties are able to prepare themselves for it. It is practicable so far as this Court is concerned and I am not persuaded that on an application for interlocutory relief the balance of convenience would be in favour of actually interfering, in the sense of stopping, the present method of dealing with school uniforms and substituting

another method before there has been an ultimate trial of the

issues. I think the balance of convenience rather leans towards

having an early hearing, so the matter can be finally determined,

and in the meantime not disturbing the system which has been

operating for some considerable period. The order I make is that the motion for interlocutory relief

is dismissed and costs are reserved. I make an order for return