Section 45
11 The draft statement of claim deals with the matter at length, and exhaustively, in relation to each respondent. It is possible, however, to summarise the allegations without doing injustice to the pleader.
12 There is some important background, relating particularly to Qantas. Qantas, it is alleged, ordinarily supplies seats to travellers on its aircraft both through retail sales directly to the public and by way of wholesale sales to travel agents for resale to the public. It is then alleged that sales to travel agents are made in a particular way:
"10. Pursuant to usual travel industry practice travel agents are and were at all material times able to ascertain the availability of seats on all flights operated by the Third Respondent through the Abacus system. Further, once seat availability had been ascertained, travel agents are and were at all material times, able to book seats on all flights operated by the Third Respondent, directly with the Third Respondent through the Computer Reservation System ("CRS"). All travel agents have free and unfettered access to seats on flights operated by the Third Respondent through this system and are thus able to compete effectively against each other."
13 Though perhaps it does not greatly matter, the pleading goes on to describe, in a way which differs significantly from what was said in the earlier pleading, the role of a "consolidator". In the earlier document it was alleged that Direct Flights and Airnet were "consolidators". That is not now alleged. A consolidator is said to be one whose sole function is to issue "paper tickets" where a travel agent has booked a seat (through the CRS); for that service the consolidator is paid a fee. In other words, a consolidator is not a re‑seller or distributor; its function may be described (as alleged in the draft statement of claim) as a purely clerical one.
14 What is alleged in relation to National Airlines is somewhat different. It is said that until about late 1994 National Airlines could not sell tickets via the CRS, because of United States sanctions against Vietnam. Those sanctions were lifted, so it is alleged, in late 1994; but, because of the agreement then entered into between National Airlines and Airnet, National Airlines' tickets were never available (for peak season flights) via the CRS.
15 There is a second background matter which should be mentioned. The earlier of the two agreements between Qantas and Direct Flights, which continued in effect between late 1991 and some time during 1994, is described in the draft statement of claim as an agreement or arrangement whereby Qantas would charter aircraft to Direct Flights. The later of the two agreements is described somewhat differently. Under that agreement Qantas allocated to Direct Flights all its peak season direct flights seats between Sydney and Saigon, other than a small number sold to preferred travel agents. Direct Flights then on‑sold the seats to travel agents at a profit. The agreements between National Airlines and, successively, Direct Flights and Airnet are said to have been of substantially the same character as the later agreement between Qantas and Direct Flights; in the case of National Airlines, however, there were no preferred travel agents and all its peak season direct flight seats were sold under the earlier agreement to Direct Flights and, under the later agreement, to Airnet.
16 In substance, however, the making and giving effect to each of the agreements is said to have involved the respondents in contraventions of s 45 in much the same way. As a result, I can use, as a sufficient example of all the relevant allegations, those made against Qantas and Direct Flights in relation to the earlier of the two agreements between them.
17 The offending provisions of that agreement are pleaded in this way:
"(a) the Third Respondent would allocate to the First Respondent all of the available seats on its peak season direct flights between Sydney and Saigon;
(b) the said seats would not be available to travel agents directly from the Third Respondent through the CRS;
(c) the Third Respondent would withdraw all seats on all of the said flights from the Abacus system, with the result that seat availability could only be ascertained through the First Respondent;
(d) the said seats would only [be] available to travel agents through the First Respondent;
(e) the First Respondent would have complete and unfettered discretion as to which travel agents it chose to allocate seats;
(f) the First Respondent could refuse to allocate seats to a travel agent should it so wish;
(g) the First Respondent could charge a higher fee for the allocation of the seats than it could have charged as a consolidator for the Third Respondent;
(h) the First Respondent could set the price to be paid by travel agents for the said seats."
18 The effect of those provisions is then described as follows:
"(a) travel agents in general and the Applicant in particular, were no longer able to ascertain availability of seats on the said direct flights operated by the Third Respondent through the Abacus system;
(b) travel agents in general, and the Applicant in particular, were no longer able to book the said seats from the Third Respondent directly through the CRS;
(c) travel agents in general, and the Applicant in particular, could only obtain the said seats from the First Respondent;
(d) the First Respondent had complete control over the distribution to travel agents of the said seats;
(e) the First Respondent had complete control over which travel agents were allocated seats on the said direct flights;
(f) only those agents who were chosen by the First Respondent to receive seats on the said flights were able to provide such seats to their customers;
(g) other travel agents who were not allocated any of the said seats by the First Respondent [, including] the Applicant, were unable to provide customers with seats on the said flights;
(h) such customers would then go to a travel agent who had been able to procure the said seats from the First Respondent;
(i) travel [agents] unable to obtain the said seats in particular the Applicant, were thereby prevented from competing in the market as defined …;
(j) the First Respondent controlled the retail market for the sale of seats on the said flights."
19 The pleader proceeds to allege that Qantas and Direct Flights put the provisions of the agreement into effect as follows:
"(a) for the peak season of 1994, the Third Respondent withdrew all seats for the said direct flights from the Abacus system;
(b) for the peak season of 1994, the Third Respondent withdrew all seats for the said direct flights from the CRS;
(c) the Third Respondent allocated all the said seats to the First Respondent;
(d) the First Respondent accepted the allocation of the said seats from the Third Respondent;
(e) the said seats were only available for booking by travel agents through the First Respondent;
(f) the First Respondent set the price paid by travel agents for the said seats;
(g) the First Respondent supplied the said seats only to certain travel agents chosen by the First Respondent."
20 As a result of the making and putting into effect of the agreement, it is said that the applicant was unable to trade competitively because Direct Flights refused to supply the applicant with seats on the peak season direct flights so that the applicant was unable to provide such seats to customers; as a result the applicant was unable to trade competitively in the market and suffered loss and damage.
21 There is a suggestion in some of the respondents' submissions that the anti‑competitive effect pleaded is the effect on the applicant so that, his market share being undeniably very small, it could not be said that he had pleaded that the effect of making or giving effect to the provisions of the agreement was a substantial lessening of competition. That, however, in my view is not a fair reading of the draft statement of claim. The alleged lessening of competition is a more general and substantial one. It is one said to result from the "withdrawal" of seats from a system (the CRS) in which they would be available freely to all travel agents and their sale through an exclusive wholesaler which was free to dispose of them as it chose. It is that which is said to result in "lessening competition … in breach of s 45(2)(a)(ii) of the Trade Practices Act": that is, a substantial lessening of competition in the relevant market. That is the pleaded contravention; it is said to have caused loss to the applicant through its particular application to him.
22 There is no room for doubt as to the approach to be taken to the applicant's motion. It is the approach which the Court takes to a strike‑out motion, described by Sheppard J in Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 124 ALR 685 at 695 as follows:
"… a court asked to strike out all or part of a pleading needs to be careful to ensure that giving effect to the application does not prevent a party from making a case which it is entitled to make. One has to err on the side of caution lest one deprive a party of a case which in justice it ought to be able to bring."
23 On the other hand, I cited in my earlier judgment, reported at (1998) ATPR 41‑662, AT 41,374, recent authority in this Court which "puts beyond argument, in the context of a case arising under Pt IV of the Trade Practices Act, the proposition that an applicant must plead material facts sufficient to make out each element of the causes of action propounded". It is, of course, true that in Pancontinental Mining Ltd v Posgold Investments Pty Ltd (1994) 121 ALR 405 at 414 Beaumont J said:
"… under the modern system of pleading, the question is not whether the facts pleaded are in themselves sufficient to give rise to a cause of action. Rather, the question is whether it would be open to the applicant upon the pleadings to prove facts at the trial which would constitute a cause of action: see Mutual Life & Citizens' Assurance Co Ltd v Evatt (1970) 122 CLR 628 at 631."
24 That is, indeed, in substance what the Privy Council said in Evatt at 631 in drawing a distinction between common law pleading and pleading under the judicature system. When, however, one examines Dorset Yacht Co v Home Office [1970] AC 1004, the authority cited by their Lordships, it becomes apparent, in my opinion, that the distinction drawn is by no means as sharp or as far‑reaching as may at first sight appear: see at 1033 per Lord Morris of Borth‑y‑Gest, at 1052 per Lord Pearson and at 1057 per Lord Diplock. Of course, the pleader must plead facts not evidence and the pleading may be regarded as a framework; it must, however, if it is to be adequate, be a complete framework.
25 If the draft statement of claim is tested against those principles, I do not think that leave should be given to the applicant to file it, to the extent that it incorporates the allegations of contravention of s 45. I take that view because, if the allegations about the customary availability of seats on flights operated by Qantas via Abacus and the CRS were proved, if it were proved also that that custom applied to airlines generally so as to extend to National Airlines and if the making and giving effect to agreements containing the alleged provisions were established, nevertheless infringement of s 45 would not, on the part of any respondent, be made out. That is so because the substantial effect of the agreements alleged is simply that (apart, in the case of Qantas, from the two preferred travel agents) Qantas and National Airlines have each appointed an exclusive distributor which has complete freedom as to the way in which it sells seats on peak season direct flights by wholesale. But, whatever its custom may have been, there is no allegation that either Qantas or National Airlines had not itself a corresponding freedom. If there is a lessening, or a substantial lessening, of competition, it is not because of an effect of the agreement, or because the agreement is put into effect. If the effect of the provisions of the agreements is (I do not think that the pleaded facts, properly understood, go further than this) that the distributor may distribute as widely, or as narrowly, as Qantas or National Airlines might have done but for the agreements, material facts are not alleged which are sufficient for the purpose of pleading contravention of s 45. In my view, the respondents correctly submit that, despite its much greater clarity, the draft statement of claim in this respect carries the matter no further than its predecessor did. I do not think that the applicant should have a further opportunity to replead this aspect of his case.