Redfern v Dunlop Rubber Australia Ltd

In relation to these matters several questions arise. First and foremost is the question of the meaning of the words in s. 4 (1) "in relation to trade or commerce among the States" and it is, I think, convenient to deal with this point at once. The purpose of the section is to destroy contracts which operate in restraint of, or made with intent to, restrain trade or commerce and to render unlawful any such contract or the formation of, or the participation in, any combination having that effect or formed with that intention. But the operation of the section is restricted to contracts and combinations "in relation to trade and commerce with other countries or among the States". To my mind a contract or combination is, within the meaning of the section, in relation to such trade and commerce where it can be seen that, according to its tenor, the contract will operate directly on some activity which constitutes some part of such trade or commerce or where it appears that the designed activities of the combination will so operate. So understood the section would appear to be within power. But the further objection is taken that a contract or combination may, at one and the same time, be in relation to inter-State and intra-State trade and commerce and that it is beyond the legislative competence of the Commonwealth Parliament to render such contracts or combinations wholly unlawful. This, it is said, is what s. 4 (1) purports to do in such a case and so it is contended that the section travels beyond constitutional power. In my view this argument must be rejected. The object of the section is the protection of inter-State and overseas trade and commerce and there can be no question that legislation on this topic is within Commonwealth legislative power. Nor can I see that legislation can be said to transcend constitutional power where it purports to make unlawful agreements or combinations which, in the sense in which I have used the term, relate generally and without discrimination both to inter-State and intra-State trade. Once it be conceded that the Commonwealth Parliament may legislate to prohibit or declare unlawful contracts and combinations of a particular character in relation to trade and commerce with other countries and among the States it is not, I think, a valid objection that some such contracts or combinations may be found to relate also to other matters. Nor is the objection taken independently to the provisions of s. 11 sustainable. Indeed I find it difficult to see any ground upon which the provisions of that section can be thought to be invalid for they purport to do no more than to provide a particular form of sanction in relation to other provisions of Pt II of the Act which, in considering this ground of objection, must be taken to be valid. If, as I think, the provisions of s. 4 (1) are valid and have the operation which I have ascribed to them then it seems to me clear that the provisions of s. 11 are valid and operative in so far as they relate to any contravention of the earlier section. Accordingly I agree that to the extent to which the demurrers are based upon the alleged invalidity of the relevant provisions of the Act they must fail.

It is, therefore, necessary to consider whether the matters alleged in the statement of claim disclose a right in the plaintiffs to the damages which they claim. In short the question may, I think, be stated by asking whether it appears sufficiently, or at all, from the statement of claim that the injuries of which the plaintiffs complain resulted from some "act or thing" done by the defendants in contravention of s. 4 (1). In this connexion it should be observed that a number of "acts or things" are alleged by the statement of claim commencing with the general allegations appearing in par. 14 and then proceeding to what may be called the more particular allegations appearing in pars. 16 and 17.

These three paragraphs are prefaced by a number of allegations apparently designed to show that each of the defendants was, in some measure, engaged in inter-State trade. I refer particularly to pars. 8 to 12. Whether the draftsman of these paragraphs has achieved his purpose is, I think, open to question. However, I am prepared to assume that he has and to accept for the purpose of the demurrers that some unspecified part of the business activities of the defendants, as alleged, constituted trade or commerce among the States. But, subject to one matter to which I shall refer presently, there is nothing to suggest that any dealings between the plaintiffs and the defendants at any time constituted any part of such trade and commerce.

It is against this background that par. 14 alleges that "at some time prior to the 8th day of May 1961 the defendants and each of them entered into a contract among themselves and/or became members of or engaged in a combination among themselves in respect of the distribution sale and delivery of tyres etc. manufactured by them". The allegations contained in par. 15, which sets out the provisions of the alleged contract "and/or" the objects of the combination, disclose the arrangement, if it may be so called, as a general trade agreement providing for the fixing of wholesale prices, trade list prices, trade-in allowances, retail prices and, generally, the terms and conditions upon which tyres should be sold both by wholesale and retail. It is also alleged that the arrangement provided that "any trader who committed any breach or was guilty or was adjudged by the defendants or any of them or any person or persons acting on behalf of the defendants or of any of them to have been guilty of any breach or non-observance of the terms and conditions of trade prescribed by any of the defendants should thereupon become ineligible to be supplied with tyres etc. at wholesale prices by any of the defendants and should thereafter be eligible to obtain tyres etc. from any of the defendants at trade list prices only and that each defendant should thereafter refuse to sell in any State of the Commonwealth of Australia to any such trader tyres etc. at wholesale prices or other than trade list prices for delivery whether in that State or across State borders from or into any other State of the Commonwealth of Australia to or on account of that trader". I find it unnecessary to traverse the provisions of par. 15 in detail for it is clear they do not allege an arrangement which of its own force affected the rights of the plaintiffs or caused any injury or loss to them. Nor, I should add, is any allegation made that the injuries of which the plaintiffs complain resulted from the making of this arrangement. Nevertheless I agree that the arrangement, which I use as a convenient term to cover both "contract" and "combination", was an arrangement "in relation to trade and commerce among the States" and that it was in restraint of trade within the meaning of s. 4 (1) (a). However it is of importance to stress the fact that the initial contract or combination was not in any sense self-executing as regards the plaintiffs or any other traders. The arrangement as alleged did not purport to impose any contractual obligations upon them nor were the sanctions which it contemplated imposed automatically by force of the arrangement itself. What it contemplated was a common course of action by the defendants in relation to individual traders in any of the events specified in sub-pars. (vii), (viii) and (ix) of par. 15 and it seems clear enough to me that if and when an occasion for common action should arise the common action taken might, according to the circumstances in which it was taken, be common action wholly in relation to inter-State trade or wholly in relation to intra-State trade.

With, apparently, a full appreciation that neither the making of the contract nor the formation of the combination alleged in par. 14, although in contravention of s. 4 (1), could not be substantiated as the "act or thing" giving rise to the injuries complained of, the statement of claim proceeds to make two further allegations of a combination between the defendants. Paragraph 16 alleges that "the defendants and each of them on or about the 8th day of May 1961 and thereafter until the 12th day of November 1961 contracted and/or combined among themselves to refuse to sell or deliver and did in fact in combination among themselves refuse to sell or deliver tyres etc. at wholesale prices or at any price other than the trade list price to the plaintiffs or any of them at any place in Australia". Alternatively par. 17 alleges that "the refusal by the defendants and each of them to sell or deliver to the plaintiffs or any of them as alleged in paragraph 16, was done in the execution of the contract referred to in paragraph 14 and/or in the course of and as part of the engaging by the defendants and each of them in the combination" referred to in that paragraph. But whether regard is had to the provisions of par. 16 or the alternative allegations made in par. 17, what is alleged is further common action by the defendants on and after 8th May 1961. That common action was a refusal in combination to sell tyres to the plaintiffs at other than trade list prices. This, it is said, took place in contravention of s. 4 (1) and it must be taken to constitute the "act or thing" said to have been done in contravention of Pt II of the Act and which gave rise to the plaintiffs' alleged injuries. On this view the question arises whether this further combination was in relation to trade and commerce among the States. Clearly enough as alleged in par. 16 it was not. It is not suggested in the statement of claim that any of the dealings of the plaintiffs or between the plaintiffs and the defendants ever formed part of such trade and commerce and the additional claim made in par. 16 - that "in particular (the defendants) refused to sell or deliver tyres etc. from their factories and/or warehouses situate in States other than Victoria for delivery across State borders into Victoria for delivery there to the plaintiffs or any of them" - carries the matter no further. So far as appears, all dealings between the plaintiffs and the defendants had been in the course of intra-State trade and an agreement between the defendants to refuse to sell tyres to the plaintiffs cannot be converted into an agreement in relation to inter-State trade by a refusal to accede to a request for supplies from another State. I doubt, however, whether the concluding words of par. 16, upon close analysis, carry the matter as far as this.

The alternative provisions of par. 17, however, seek to find the relationship between the later common action on the part of the defendants and inter-State trade and commerce in the fact as alleged that what was done was done "in the execution of the contract referred to in paragraph 14 and/or in the course of and as part of the engaging by the defendants and each of them in the combination" referred to in that paragraph. But these expressions can mean no more than that the defendants, having agreed upon a common course of action in relation to individual traders in certain events, proceeded on and after 8th March 1961 to take that common action in relation to the plaintiffs whose dealings with the defendants or otherwise are not alleged to have constituted any part of inter-State trade and commerce. As I see the original arrangement it was a common agreement on matters of trade policy which, though it envisaged the necessity in certain events of further common action in individual cases, did nothing of its own force to affect the rights of the plaintiffs or any other traders. Yet it was rendered unlawful by the provisions of s. 4 because it could be said to relate, inter alia, to inter-State trade. But the further common action against individual traders might, according to the character of the activities affected thereby, relate, in some cases, to inter-State trade only and, in others, to intra-State trade only. Nevertheless it is asserted that a refusal in combination to sell to an individual trader whose activities are entirely confined to intra-State trade, would, because of the antecedent agreement, constitute a refusal in combination "in relation to" inter-State trade. In my view this contention should be rejected. The later common action in the individual case postulated would in no way operate on any activity constituting some part of inter-State trade. In the present case the common action contemplated in the events alleged in par. 15 was a refusal in combination to sell tyres "at wholesale prices or other than trade list prices". Can it be said that a sale to such a trader at trade list prices in pursuance of a common agreement of the character alleged in par. 14 would constitute part of inter-State trade and commerce or that it would be a sale "in relation to" such trade and commerce? To my mind the contention involved in this enquiry cannot be seriously entertained. Why then should a refusal in combination to sell to such a trader at wholesale prices be regarded as a refusal "in relation to" inter-State trade? For my part I can see no reason why it should and accordingly I am of the opinion that neither par. 16 nor par. 17 alleges a contract or combination in contravention of s. 4 (1). I should add that I do not regard the allegations in par. 18 as carrying the matter any further. The allegation that the combinations alleged in two preceding paragraphs were "in restraint of trade or commerce among the States" is simply an allegation as to the legal effect of the combinations alleged whilst the allegation that they were entered into and engaged in with intent to restrain such trade is inadequate to invest them with the character of combinations "in relation to" such trade and commerce. Since the matters alleged in pars. 16 and 17 must be taken to be the "acts or things" giving rise to the plaintiffs' alleged injuries the demurrers should, in my view, be allowed.

Each of the defendants has demurred to the whole of the plaintiffs' statement of claim in an action in which the plaintiffs are claiming treble damages on the footing that they were injured in their property by acts of the defendants and each of them done in contravention of Pt II of the Australian Industries Preservation Act 1906-1950. Section 11 of the Act does purport to create such a cause of action and the defendants in the first place assert the invalidity of that section and of s. 4, which is the section in Pt II which the plaintiffs claim that the defendants have contravened.

The scheme of Pt II of the Act is to create a number of offences punishable by pecuniary penalty (ss. 4 to 9); to authorize the Court to grant injunctions restraining the carrying out of any contract or combination forbidden by s. 4 (s. 10); and to give any person injured by any act in contravention of ss. 4 to 9 or an injunction granted under s. 10 a cause of action for special damages (s. 11). This has been the scheme of Pt II of the Act since its enactment in 1906 but in 1909 and 1910 its provisions were substantially modified by amendment. Section 11, however, stands as originally enacted.

It is desirable at the outset to state the effect of s. 4 as it was originally enacted and of the amendments made to it in 1910. As enacted in 1906 the effect of s. 4 (1) was to prohibit the making or the entering into of any contract or the being party to or engaging in any combination "in relation to trade or commerce with other countries or among the States" either (a) "with intent to restrain trade or commerce to the detriment of the public" or (b) "with intent to destroy or injure by means of unfair competition any Australian industry the preservation of which is advantageous to the Commonwealth " The principal amendments made to s. 4 (1) in 1910 were (1) by inserting in par. (a) before the words "with intent to restrain" the words "in restraint of or"; (2) by omitting the words "to the detriment of the public"; (3) by inserting in par. (b) before the words "with intent to destroy or injure" the words "to the destruction or injury of or". Section 4 was further amended by adding a new sub-section, viz: - "(3) It shall be a defence to a proceeding for an offence under paragraph (a) of sub-section (1) of this section, and an answer to an allegation that a contract was made or entered into in restraint of, or with intent to restrain, trade or commerce, if the party alleged to have contravened this section proves - (a) that the matter or thing alleged to have been done in restraint of, or with intent to restrain, trade or commerce, was not to the detriment of the public, and (b) that the restraint of trade or commerce effected or intended was not unreasonable."

The only other amendment to which I think it necessary to refer is to the introduction in 1909 of ss. 7A, 7B and 10A.

It was with the Act as amended in 1909 that the case of The King and The Attorney-General of the Commonwealth v. Associated Northern Collieries - to adopt its earliest title - [1] (Isaacs J.); [2] ; and [3] was concerned and the validity of s. 4 - which was vital to the success of the proceedings - was assumed at every stage. Earlier, in Huddart, Parker & Co. Pty. Ltd. v. Moorehead [4] where the validity of the section was not called into question, two members of the Court had stated that it was within legislative authority: see Barton J. [5] and Higgins J. [6] . It seems to me that the assumption made in these earlier cases was correct and that s. 4 (1) was valid because the only contracts and combinations with which it was concerned were "in relation to trade or commerce with other countries or among the States". That being so, it was unnecessary to consider reading into pars. (a) or (b) any limitation to restrict the intents there referred to the restraint of inter-State or overseas trade or to the detriment of or injury to such Australian industry as fell within the description of inter-State or overseas trade or commerce. Parliament has power, subject to express limitations, to forbid the making of any contracts or the engaging in any combination in relation to overseas or inter-State trade if the phrase "in relation to" involves, as I think it does, that what is forbidden is directly related to inter-State or overseas trade or commerce so that the law is with respect to that trade or commerce. At times the argument before us proceeded as though the power conferred upon Parliament by s. 51 (i.) of the Constitution is no more than a power to be used for the protection or development of inter-State or overseas trade and commerce or the benefit of those engaging therein. The power is not so restricted. It is a power to make laws with respect to overseas trade and commerce and, subject only to express limitation, it extends to forbidding inter-State or overseas trade or commerce itself or anything occurring in or directly affecting such trade or commerce. In Bank of N.S.W. v. The Commonwealth [1] the contention that Commonwealth legislative power over banking was a limited power was made by the plaintiffs and rejected by the Court. Dixon J. (as he then was), having referred to the authorities establishing that the grant of legislative power in s. 51 is plenary in its quality, said: "For the reasons I have indicated, I am unable to accept the view that the word "banking" should have ascribed to it anything but the wide meaning and flexible application of a general expression designating, as a subject of legislative power, a matter forming part of the commercial economic and social organization of the community" [2] . What is true of the banking power is, of course, true of what may be called Parliament's first and most general power and authority is not wanting that this trade and commerce power has a "wide meaning and flexible application": Australian Coastal Shipping Commission v. O'Reilly [3] ; O'Sullivan v. Noarlunga Meat Limited [4] ; although it has never been regarded as having the scope which the Supreme Court of the United States has attributed to the trade and commerce power in the United States Constitution, for this Court has always insisted that the distinction between intra-State trade and commerce on the one hand and inter-State trade and commerce on the other is established by the Constitution itself and must be observed: see, for instance, Wragg v. State of New South Wales [5] . In my opinion, therefore, s. 4 (1) was valid as enacted. Furthermore, I consider that the 1909 and 1910 amendments thereto were valid and that the resulting amended sub-section, as it now stands, is valid. All the amending legislation did was to modify the description of contracts or combinations "in relation to trade or commerce with other countries or among the States" in which participation - to use a compendious word - is forbidden by the sub-section. That part of the sub-section necessary and sufficient for its validity was left untouched. It follows that I regard s. 4 (1) of the Act, as it stands, as a valid law and I do so notwithstanding that there is not in either (a) or (b) any limitation confining the trade, commerce or industry to be protected from restraint, injury or destruction to that which falls within the conception of inter-State or overseas trade or commerce. A consequence of this view is that, if a contract or combination is "in relation to trade or commerce with other countries or among the States", the sub-section can validly apply to participation in it, notwithstanding that it is in relation to other matters as well. Thus, participation in one combination in restraint of overseas, inter-State and intra-State trade is validly within the scope of the section. This too, it seems, was assumed in The King and the Attorney-General of the Commonwealth v. Associated Northern Collieries [1] for the Vend covered all coal raised from the Newcastle mines: see [2] . It was, however, strenuously argued that it is beyond the power of Parliament to prohibit participation in a contract or combination unless it is wholly or at least mainly in relation to overseas or inter-State trade and commerce. It is, of course, clear that Commonwealth power over trade and commerce can only extend to such intra-State trade and commerce as is inseparably connected with inter-State trade and commerce, but full acceptance of this limitation is quite consistent with according to the Commonwealth power to prohibit or regulate acts which relate to intra-State trade and commerce if they relate to inter-State or overseas trade and commerce as well. If registration of persons engaged in inter-State transport were to be required on terms not contrary to s. 92, that requirement would apply to a person engaged in both inter-State and intra-State transport as well as to a person engaged solely in inter-State transport. Similarly, persons dealing in firearms in the course of inter-State and intra-State trade would not escape the operation of a Commonwealth law requiring the registration of persons dealing in firearms in the course of inter-State trade. Again, if registration of contracts fixing prices of goods sold in the course of inter-State trade were required, that requirement, if valid, would apply to any contract whereby prices were fixed for overseas, inter-State and intra-State trade. A licence to use a patent would not be put beyond the reach of Parliament by including in it provisions relating to the manufacture of non-patented articles. If a bank should choose to conduct hire-purchase business, or any other business, as well as banking, its solvency is a matter that would remain within the scope of the Parliament's banking power. It is true that the constitutional distinction between overseas and inter-State trade and other trade would enable a person engaged in trade to make arrangements relating to his intra-State trade free from control under Commonwealth legislation but it does not enable such a person, by making arrangements relating to trade generally, to put those arrangements beyond Commonwealth control if they do relate to inter-State or overseas trade.

1. (1911) 14 C.L.R. 387. 2. (1912) 15 C.L.R. 65 (F.C.). 3. (1913) 18 C.L.R. 30 (P.C.). 4. (1909) 8 C.L.R. 330. 5. (1909) 8 C.L.R., at p. 360. 6. (1909) 8 C.L.R., at p. 409. 7. (1948) 76 C.L.R. 1. 8. (1948) 76 C.L.R., at p. 334. 9. (1962) 107 C.L.R. 46. 10. (1954) 92 C.L.R. 565, at p. 597. 11. (1953) 88 C.L.R. 353. 12. (1911) 14 C.L.R. 387. 13. (1911) 14 C.L.R., at p. 440.

Accordingly, I consider that s. 4 validly applies to contracts or combinations in relation to overseas or inter-State trade notwithstanding that they are in relation to intra-State trade as well and that s. 4 (1) does validly operate in accordance with its terms and without importing any unexpressed limitation into pars. (a) or (b).

The attack upon the validity of s. 11 finally came to rest, I think, upon the contentions that Commonwealth power did not extend to give to a person injured by the contravention of Commonwealth law a right of action for damages, treble or otherwise, unless the injury was in respect of something which it was otherwise within Commonwealth power to protect, and that in any event it was outside Commonwealth power to authorize the awarding of treble damages to a person injured by a contravention of Commonwealth law which, without any provision of Commonwealth law, would give the person injured a cause of action for ordinary damages under State law. I have not found any reason for denying to the Commonwealth Parliament power to give to a person injured by a contravention of Commonwealth law a right of action for injuries so suffered. I regard the granting of such a right of action as incidental to the power to legislate with respect to the subject under which the law imposing the restriction is validly made. So a law authorizing an action for damages for breach of patent would be valid as incidental to the power conferred by s. 51 (xviii.); a law entitling a person to recover damages suffered by reason of the posting of a dangerous article in contravention of the Post and Telegraph Act would be valid as incidental to the power conferred by s. 51 (v.); a law entitling a person to recover damages suffered by reason of the carrying of explosives by air in contravention of regulations would be valid as incidental to the power to control civil aviation under s. 51 (i.) and (xxix.) and s. 122; and, to take an analogy which is perhaps closer to the present case, I consider that it would be incidental to the power conferred by s. 51 (i.) if the Commonwealth were to grant to any person injured by reason of the contravention of a prohibition against doing something defined as a dangerous practice, in the course of inter-State trade, a right of action for any damages suffered by reason of the doing thereof. Furthermore, there need be no other connexion between the person injured and Commonwealth power beyond the circumstance that the person responsible for the injury was acting in contravention of valid Commonwealth law. To refer back to one of the examples which has been given, it would not matter if the person injured by reason of the contravention of a prohibition against the carrying of explosives upon aeroplanes were a passenger in the aeroplane wrecked by an explosion or an inmate of a house upon which an aeroplane, wrecked by an explosion, crashed. It is no objection to the exercise of Commonwealth power over those who are subject to it that they are controlled for the benefit of other persons. It could hardly be thought, for instance, that members of the defence forces could not be controlled for the benefit of the civilian population. I conclude, therefore, that in this case, if a person not engaged in inter-State trade is injured by an act in contravention of s. 4, Commonwealth power does extend to give the person injured a right of action.

As to the second ground upon which the validity of s. 11 was attacked, I shall assume without deciding that, independently of s. 11, a person injured by a contravention of s. 4 could, without being empowered by the Commonwealth, recover the actual damages so caused in a State court. Making this assumption, however, I am not prepared to deny to the Commonwealth the power to authorize a person injured to recover treble damages in this Court. To expose an offender to the risk of treble damages at the suit of a person injured by the commission of an offence is a device to discourage law-breaking that has a long history, particularly in this branch of the law. Section 4 of the Statute of Monopolies 1623 is an early example. This provided that an aggrieved person should recover treble damages with double costs and any attempted interference with an action therefor laid the offender open to the penalties or praemunire. Section 7 of the United States Sherman Act 1890 is another example. If the Commonwealth Parliament can confer upon a person injured by a contravention of Commonwealth law a right of action for actual damages, then all that can be said against going further and conferring a right of action for treble damages is that it is thereby made clear that the object of the legislation is not merely to recoup the person injured for his loss; it is also to discourage law-breaking by a means that is centuries old. I find no reason to doubt that it is within the competence of Parliament to adopt such means as Parliament chooses to ensure that the laws which it is authorized to make will be observed and that breaches will be brought before the Court for punishment as well as for the compensation of those injured thereby. Although the Commonwealth Parliament's legislative power is limited to defined subjects, it is with respect to those subjects as full as that of a legislature with unlimited powers, save only to the extent that the Constitution itself either expressly or by necessary implication imposes its own limitations.

For the reasons which I have given, I regard s. 11 as within the power of the Commonwealth to make laws incidental to inter-State and overseas trade and commerce.

Before leaving the constitutional aspects of this case it is perhaps desirable to say that I have not gone beyond the matters argued before us and that, in particular, I have not adverted to what was suggested but not argued, viz. that the statements in James v. The Commonwealth [1] , to the effect that the provisions of the Act do not contravene s. 92, are now open to question.

1. (1935) 52 C.L.R. 570, at p. 599; [1936] A.C. 578, at p. 626.

The remaining matter is whether the statement of claim sufficiently alleges a cause of action under s. 11. The basic elements of such a cause of action are (1) that the defendants have acted in contravention of s. 4 of the Act and (2) that by reason of such acts the plaintiffs have been injured in their person or property in a particular sum. The statement of claim in an action under s. 11 should set out precisely and concisely facts which if proved at the trial will establish these two elements. It is, however, easier to state that what is required is a statement in a summary form of the material facts upon which the plaintiffs rely for their claim but not the evidence by which those facts are to be proved than it is in a case like this to formulate a statement of claim strictly in accordance with the precept. In a case where what the plaintiffs are seeking to make out is that all the defendants have made a contract or contracts and engaged in a combination or combinations in contravention of the section because each contract or combination is (1) in relation to trade and commerce among the States and (2) in restraint of and with intent to restrain trade or commerce, it seems to me necessary that the statement of claim should, after the usual formal allegations, state, as to any contract relied upon, the parties thereto, when it was made and sufficient of its terms to show in the context of other facts pleaded that (i) it was in relation to trade and commerce among the States and (ii) it was in restraint of trade or commerce. The allegation that the contract was made with intent to restrain trade or commerce would ordinarily be stated separately. Similarly, as to each combination relied upon, what is required is a statement of the parties thereto, when each became a party, and the facts which, when taken together, show that the combination was in relation to trade or commerce among the States and was in restraint of trade. Again the intent to restrain trade and commerce would be separately stated. The difficulty that, as I see it, the pleaders of the statement of claim here met was in the statement of what, if proved, would show that each contract or combination alleged was "in relation to trade or commerce among the States" as these words are used in the opening words of s. 4 (1), and was "in restraint of trade or commerce" as these words are used in s. 4 (1) (a).

The pleading, it seems to me, is not free from formal defects but here we are concerned with demurrers, not pleading summonses. By demurring to the whole of the plaintiffs' statement of claim the defendants have overlooked any defects in form and taken the stand that on the facts alleged - however confusedly - the plaintiffs have no cause of action. The issue between the plaintiffs and the defendants is whether it is apparent on the face of the statement of claim that it is bad in substance because it does not contain the allegations of fact necessary to establish the cause of action given by s. 11 of the Act. The initial problem is, therefore, to ascertain what facts are alleged in the statement of claim.

Paragraph 1 identifies the plaintiffs. In par. 2 it is alleged, with a wealth of unnecessary detail, that each of the plaintiffs is and was at all times material engaged in the business of buying, selling, dealing in, retreading and repairing motor and cycle tyres and tubes involving the purchase of retread rubber and other rubber materials called "tyres etc". Paragraph 2 for the most part does contain allegations of fact which, for the purposes of the demurrer, must be taken to be admitted. Paragraphs 3 and 4 identify the defendants. Paragraphs 5 to 12 relate to the business carried on by the defendants and allege neither precisely nor tersely they were at all times material manufacturers of tyres etc. which were sometimes sold "at volume discount prices" and sometimes at higher "trade list prices" and that, except between 8th May and 12th November 1961, the defendants and each of them sold tyres etc. to the plaintiffs at volume discount prices. It is also alleged that the tyres etc. sold by the defendants "constituted all or substantially all the tyres etc. manufactured in Australia which were sold in Australia" - but the significance of this to the cause of action, as distinct from the proof of injury, is not apparent. It is also alleged that it was part of the business of the defendants and each of them to manufacture tyres etc. and to sell them in the State of manufacture for delivery to purchasers in other States and to move tyres etc. from the State of manufacture to warehouses in other States for sale therefrom. For the most part, what is alleged in pars. 8 to 12 are matters of fact. Paragraph 13 is different. It asserts that, by reason of the earlier allegations, "each of the defendants was at all material times engaged in trade and commerce among the States of the Commonwealth of Australia". This is a proposition of mixed fact and law which the demurrer does not admit and may be disregarded for present purposes. To do this does not, however, detract from what is alleged in pars. 8 to 12 - that is, that contracts for sale for delivery inter-State were made and the carriage of goods from State to State occurred in the course of business of each defendant. In par. 14 a contract or combination is alleged made prior to 8th May 1961 to which the defendants and each of them were party "in respect of the distribution sale and delivery of tyres etc. manufactured by them as aforesaid". This seemingly refers back to pars. 8 to 12 which, in so far as they allege contracts for delivery inter-State to buyers and the movement of tyres etc. from State to State for sale there, do allege actual inter-State trade. I consider, therefore, that the contract or combination alleged in par. 14 is sufficiently alleged to have been "in relation to trade or commerce among the States". In par. 15 three things are attempted. Firstly, to state the terms of the contract alleged in par. 14 which reveal that it was "in restraint of trade". Secondly, to state the objects of the combination in par. 14 to show either that it was in restraint of trade or that those who engaged in it did so "with intent to restrain" trade, or both. Thirdly, to allege that the contract and combination was in restraint of, and was intended to restrain, inter-State trade. It is not surprising that so ambitious an enterprise as to bring all these matters together in one paragraph should result in some confusion, but this result is something that goes to form rather than substance. It seems to me that, if a contract with terms as set out in par. 15 were made, it would be in restraint of trade and if the objects of a combination were those set out therein, it would be in restraint of trade and it could be inferred that those who knowingly engaged in a combination with such objects would intend to restrain trade. Paragraph 16 alleges a contract and combination between the defendants made on or about 8th May 1961 and operating until 12th November 1961. It is as follows: - "16. The defendants and each of them on or about the 8th day of May, 1961 and thereafter until the 12th day of November, 1961 contracted and/or combined among themselves to refuse to sell or deliver and did in fact in combination among themselves refuse to sell or deliver tyres etc. at wholesale prices or at any price other than the trade list price to the plaintiffs or any of them at any place in Australia and in particular refused to sell or deliver tyres etc. from their factories and/or warehouses situate in States other than Victoria for delivery across State borders into Victoria for delivery there to the plaintiffs or any of them." It will be observed that again the pleaders have sought to combine a number of allegations in the one paragraph with less than happy results. It is alleged that there was a contract or combination "to refuse to sell or deliver" to the plaintiffs or any of them at any place in Australia and it is alleged that the defendants did "in combination among themselves" refuse to trade with the plaintiffs. There is not in this paragraph any allegation that the contract was in relation to trade or commerce among the States but, because the words "in combination" have been used in relation to the allegation of refusal to sell or deliver from States other than Victoria into Victoria, there is, I think, an allegation that the combination alleged related to some trade and commerce among the States. Paragraph 17, assuming that in par. 16 it is alleged that the refusal to trade there alleged was in execution of the contract referred to therein, alleges alternatively that it was in execution of the contract referred to in par. 14 and was part of engaging in the combination therein alleged. Paragraph 18 is as follows: - "18. Each of the contracts referred to in paragraphs 14 and 16 hereof, was made and entered into, and/or each of the combinations referred to in pars. 14 and 16 hereof was engaged in by the defendants and each of them in restraint of or with intent to restrain trade or commerce among the States". In so far as this paragraph refers to the intent of the defendants, it is an allegation of fact and it follows that the demurrer admits that the contracts referred to in pars. 14 and 16 were made and the combination therein referred to were entered into and engaged in by the defendants with intent to restrain trade or commerce among the States. In so far as par. 18 alleges that each of the contracts or combinations referred to in pars. 14 and 16 were in restraint of trade, it does not seem to me to be an allegation of fact which the demurrer admits. The assertion is no more than a conclusion from the terms of the contracts alleged and the objects of the combinations alleged and is a statement of the kind referred to by Dixon C.J. in South Australia v. The Commonwealth [1] , viz. one involving a legal conclusion which should be disregarded in dealing with a demurrer. Paragraph 19 purports, no doubt, to be a statement in summary form of the plaintiffs' causes of action but it cannot stand on its own. In particular, it contains no allegation that the "contracts and/or combinations" referred to were in relation to inter-State trade. Injury to the plaintiffs in their property by reason of contraventions of s. 4 of the Act is alleged in par. 20. Although the making and the carrying out of the contracts as alleged and the entering into and engaging in the combinations as alleged are pleaded separately, it may be that each group of allegations relates to the one set of circumstances and that eventually what is proved to have been done must be looked at as a whole in order to judge whether the plaintiffs have been injured by any contravention of the Act. See for instance Continental Ore Co. v. Union Carbide & Carbon Corporation [1] . The plaintiffs are therefore entitled in these demurrer proceedings to rely upon the generality of par. 20 of the statement of claim and it is not necessary to find elsewhere therein a precise linking up of what is alleged as a contravention and particular injury.

1. (1962) 108 C.L.R. 130, at p. 142. 2. (1962) 370 U.S. 690 [8 Law Ed. 2d 777].

From the foregoing detailed examination of the statement of claim, I have come to the conclusion that it is defective in substance in that it is not alleged that the contract referred to in par. 16 was in relation to trade or commerce among the States but otherwise its defects are those of form, and that facts are alleged which, if admitted without more, would establish (1) a contract or combination in relation to trade and commerce among the States made or engaged in by the defendants and each of them before 8th May 1961 in restraint of and with intent to restrain trade and commerce; (2) the carrying out of that contract or combination prior to 8th May 1961 and thereafter until 12th November 1961; (3) a combination entered into by the defendants and each of them on or before 8th May 1961 and engaged in until 12th November 1961 in relation to trade and commerce among the States and in restraint of or with intent to restrain trade and commerce; and (4) injury suffered by each defendant in his property by reason of the making of the contract and the entering into and engaging in the combinations previously stated.

It follows that the demurrer, which is not limited to the only defect of substance which I have found in the statement of claim, should be overruled.

I have no doubt that s. 4 (1) (a) of the Australian Industries Preservation Act 1906-1950 is a valid enactment of the Commonwealth Parliament, being a law with respect to trade and commerce with other countries or among the States. The offence it creates depends upon the contract or combination impeached being in relation to overseas or inter-State trade or commerce, and "being in restraint of or with intent to restrain trade or commerce". That means that the contract or combination must first answer the statutory description by being in relation to overseas or inter-State trade or commerce. But, as I construe the enactment, it is not necessary either to its validity or its meaning that, in order to constitute the offence, the trade or commerce which the contract or combination restrains or which is intended to be restrained should be either wholly - or indeed, I think, at all - restricted to overseas or inter-State trade or commerce. To determine whether a contract or combination is one in relation to overseas or inter-State trade or commerce, its full legal effect must, of course, be considered. It must fall fairly within that description. The connexion with overseas or inter-State trade or commerce must not be so remote or insignificant that there is no real relationship.

Section 11 of the Act is also, in my opinion, within power and valid. Such a provision is a not unknown method of ensuring compliance with the law.

I agree in what has been said by other members of the Court on the two aspects mentioned above; and do not wish to say more.

As to the statement of claim: Each defendant has separately demurred. If it appears that the facts alleged in the statement of claim do not show a cause of action, or claim for damages, to which effect can be given by the Court, the demurrer must succeed. Otherwise it must fail: see O. 26, r. 1 of the Rules of Court. I can see there may be great difficulties if the case goes to trial upon issues arising out of this statement of claim, as it is now framed. It seems to me in various places to make double allegations, and confused and imprecise statements, and to make allegations of law mixed with allegations of fact, and I am inclined to think too that par. 16, concerning the alleged arrangement, however it should be described, of 8th May 1961, is as it stands insufficient to bring that transaction within the prohibition of the Act. But we are not now concerned with the issues of fact for trial or with whether the statement of claim is embarrassing. This is not an application to strike it out. A demurrer in this Court must be on the ground stated in the Rules - not on any matter which might at common law have been a ground for special demurrer. Moreover, although the defendant pleaded and demurred we are not concerned with and cannot look at the defence. According to O. 26, r. 10, and on general principles, it ought not to have been included in the demurrer book.

The demurrers are to the whole of the statement of claim. Despite the difficulties that are likely to arise if the plaintiffs do not better formulate their claim before trial, I do not think it can be said that the facts alleged do not show a cause of action and claim for damages to which the Court could give effect as against the parties demurring.

The first question for determination is whether ss. 4 (1) (a) and 11 (1) of the Australian Industries Preservation Act are a valid exercise of the power to make laws with respect to trade and commerce with other countries and among the States. Section 4 (1) (a) makes it an offence for any person to make or enter into any contract or to be or to continue to be a member of or to engage in any combination in relation to trade or commerce with other countries or among the States in restraint of or with intent to restrain trade or commerce. And, by sub-s. (2), every contract made or entered into in contravention of the section is declared to be absolutely illegal and void. Section 11 (1) gives any person who is injured in his person or property by any other person by reason of any act or thing done by that other person in contravention of Pt II of the Act the right to sue for and recover treble damages in the High Court subject to the written consent of the Attorney-General to the bringing of such action being first obtained (s. 14 (2)).

The plaintiffs' statement of claim is based upon s. 11 (1) and the section in Pt II of the Act which is said to have been contravened is s. 4 (1) (a) so that if either of those sections is ultra vires, the demurrer must succeed.

The attack upon s. 4 (1) (a) is based, in the first place, upon the use in it of the words "in relation to". The constitutional power is to make laws "with respect to" inter-State and overseas trade or commerce and a law expressed to be made "in relation to" such trade or commerce, covers, so it is put, a wider field than the Constitution permits. I cannot agree that this is so. "A power to make laws "with respect to" a specific subject is as wide a legislative power as can be created. No form of words has been suggested which would give a wider power.": per Latham C.J. in the Banking Case [1] . Nor do I agree with a further submission that the Commonwealth Parliament's power to forbid contracts or combinations in restraint of trade is limited to contracts or combinations relating only to overseas or inter-State trade. Contracts or combinations in restraint of inter-State or overseas trade may, in my opinion, be made the subject of legislation by the Commonwealth Parliament, notwithstanding the fact that they may also relate to intra-State trade. The words in s. 4 (1) (a) "in relation to trade or commerce with other countries or among the States" sufficiently confine the operation of the section to the classes of contracts and combinations with which it is constitutionally competent for the Commonwealth Parliament to deal, namely those which relate to overseas and inter-State trade or commerce. And, if they do so relate, it is not, in my opinion, to the point to say that they relate also to intra-State trade or commerce.

As far as I am aware, this is the first occasion on which the validity of s. 4 (1) (a) has been questioned but opinions on that subject were expressed by members of this Court many years ago in Huddart Parker & Co. Pty. Ltd. v. Moorehead [1] . Since then the section has been amended in certain respects but not in a way which affects this question. Barton J. said: "Sections 4 (1) (a) and 7 (1) of the Australian Industries Preservation Act 1906, which apply only to the second of these appeals, are not called in question. They are, indeed, in terms and in meaning, clearly within the legislative authority with regard to "trade and commerce with other countries and among the States" given by the Constitution in s. 51 (i.)" [2] . And Higgins J., referring to the same two sections, said: "These sections are admittedly laws "with respect to" inter-State and foreign trade within s. 51 (i.) of the Constitution; and it is only because they do regulate such trade that they are valid" [3] . Although those statements were made in a case in which validity was conceded, they show that, in the opinion of both Barton and Higgins JJ., the concession was rightly made and I agree that it was.

1. (1909) 8 C.L.R. 330. 2. (1909) 8 C.L.R., at p. 360. 3. (1909) 8 C.L.R., at p. 409.

A further argument was based upon the fact that par. (a) of s. 4 (1) is not expressed to be limited to restraints of or an intent to restrain overseas or inter-State trade. It speaks in general terms of trade or commerce and it was submitted that the paragraph, if construed as applying to all trade or commerce, took the sub-section outside power. To save it from destruction, therefore, the word "such" should be read into the paragraph before the words "trade or commerce". Read in this more limited fashion, the result would be, it was said, that the statement of claim would be demurrable since it does not allege that the plaintiffs were engaged in inter-State or overseas trade or commerce and there could therefore be no contravention of Pt II of the Act causing injury to them or to their property. The answer is, in my opinion, that once it is found that s. 4 (1) is sufficiently linked with s. 51 (i.) of the Constitution by the use of the words "in relation to trade or commerce with other countries and among the States", it is unnecessary to seek a further link in par. (a) or to narrow the meaning of that paragraph in the way suggested. In other words, the Parliament may validly enact a law forbidding the making of contracts or the formation of combinations in relation to overseas or inter-State trade or commerce which in fact restrain or are intended to restrain trade or commerce, be it overseas, inter-State or intra-State in character.

Two reasons have been advanced in support of the submission that s. 11 is invalid. It is said that it is a law with respect to damages and the right to sue for them and, for this reason, is beyond power. If, however, it is not invalid for that reason the cause of action which it creates is given to all persons injured by the contravention of the Act by another person whether the injured person is engaged in inter-State, overseas or intra-State trade or commerce or is not engaged in trade or commerce at all. Neither of these reasons affords grounds for holding that the section is invalid. The section is not to be read in isolation. It is part of a legislative scheme and an action based upon it is in the nature of a penal action designed both to compensate the injured person and to punish those who act in contravention of the Act and thereby cause injury to others. One of its purposes is to discourage persons from contravening the Act and to encourage those who are injured by such contraventions to take action to uphold the law. Provisions such as s. 11 (1) have long been associated with legislation of the kind to which the Australian Industries Preservation Act belongs. Section 4 of the Statute of Monopolies ( 21 Jac. 1 c. 3) provides an example. Section 7 of the Sherman Act provides another. In my opinion s. 11 (1) is a valid exercise of power.

It becomes necessary then to consider whether there is to be found in the statement of claim a sufficient statement of the facts necessary to be proved to support the cause of action. In a case of this kind the essential allegations are, in my view, these: (1) That the defendants were parties to a contract or were members of or engaged in a combination; (2) That such contract or combination related to inter-State or overseas trade or commerce; (3) That the contract or combination was in restraint of trade or commerce or that the defendants entered into the contract or became or continued to be members of the combination with intent to restrain trade or commerce; and (4) That by reason thereof the plaintiffs suffered damage.

The statement of claim is a confused and confusing document but I think that there can be extracted from it a sufficient allegation of the necessary ingredients of the cause of action. Paragraph 1, when read with par. 15, alleges that each of the plaintiffs was a person engaged in the business of "selling and dealing with tyres for resale". Paragraph 14 alleges that the defendants were the parties to a contract or the members of or engaged in a combination "in respect of the distribution, sale and delivery of tyres manufactured by them" in various States of the Commonwealth, and pars. 8 to 12 sufficiently allege that such contract or combination related to inter-State trade or commerce. Paragraph 15 alleges the terms of the contract and the objects of the combination and the terms and objects described would make the contract one in restraint of trade or the combination a combination in restraint of trade. Paragraph 16 alleges that another and later contract was made between the defendants to refuse to sell or deliver tyres at wholesale prices to the plaintiffs and that the defendants refused to sell or deliver tyres for delivery to the plaintiffs across State borders. It alleges further that the defendants in combination refused to sell or deliver tyres to the plaintiffs across State borders at wholesale prices. Paragraph 17 alleges that the refusal to sell or deliver to which par. 16 refers was done, "in the alternative to par. 16", in the execution of the contract earlier alleged in par. 14 or in the course of the "engaging by the defendants and each of them in the combination" referred to in that paragraph. Paragraph 20 alleges that the plaintiffs were injured in their property by reason of the defendants' contraventions of s. 4 of the Act.

For these reasons I am of opinion that the demurrer should be overruled.