Sundararajah v Teachers Federation Health Limited

Federal Court of Australia|2011-09-02|Before: Davies J, Foster J

REASONS FOR JUDGMENT 1 Dr Raahulan Sundararajah (the applicant) is a dentist who operates a dental clinic known as "The Ashfield Dental Clinic" from terrace house premises at 4 Charlotte Street, Ashfield, NSW. 2 The respondent conducts a private health insurance fund in the interests of teachers in New South Wales. Its members comprise persons who are currently employed as teachers as well as former teachers. 3 In early August 2005, the applicant entered into an agreement with the respondent whereby the respondent agreed to pay members' benefits directly to the applicant electronically using an electronic payments system known as "the HICAPS system". 4 A few months later, the applicant entered into a further agreement with the respondent pursuant to which he was accorded preferred service provider status by the respondent in return for supplying his services to members of the respondent on a "no gap" basis - that is to say, on a basis where the only charge made for the relevant service is the amount of the benefit paid by the respondent. 5 Difficulties arose between the applicant and the respondent. In 2007, 2008 and 2009, the respondent received complaints about the standard of services provided by the applicant to its members. In addition, the respondent became progressively concerned that the applicant may have been over-servicing its members and over-claiming benefits. 6 By letter dated 26 November 2007, the respondent terminated the preferred provider agreement with the applicant. The applicant does not challenge the validity of that termination in this proceeding, or at all. 7 In September 2009, the respondent purported to terminate the HICAPS agreement. When confronted with that action taken by the respondent, in December 2009, the applicant brought proceedings in the Supreme Court of New South Wales in which he alleged that the purported termination of the HICAPS agreement was a breach of that agreement. He obtained an interlocutory injunction from a Judge of the Supreme Court restraining the respondent from acting upon its purported termination of the HICAPS agreement. That injunction was varied in May 2010. It has remained in place until today. 8 In late 2010, the applicant added a claim based upon s 46 of the Trade Practices Act 1974 (Cth) (the TPA) to his pleaded cases. When that claim was added, the proceeding was transferred to this Court which, of course, has exclusive jurisdiction to determine such a claim. 9 The applicant wishes to prevent the termination and therefore the loss of the benefit of the HICAPS agreement. He considers that agreement to be fundamental to the ongoing success of the Ashfield Dental Clinic. 10 These Reasons for Judgment determine the applicant's claims directed to maintaining his access to the HICAPS system.

The Applicant's Case 11 The applicant claims declarations and injunctions based upon three causes of action. These are: (a) Breach of contract; (b) Unconscionable conduct (s 51AA and s 51AC of the TPA); and (c) Misuse of market power (s 46(1)(a) and s 46(1)(c) of the TPA). 12 The applicant does not claim any monetary award by way of damages or compensation.

The Contract Case 13 The applicant alleges that, on or about 5 August 2005, the applicant and the respondent entered into an agreement (the HICAPS agreement) to enable health insurance claims to be settled using a system known as the Health Insurance Claims and Payments System or HICAPS. The fact that the HICAPS agreement was made and the express terms of that agreement are matters which are not in dispute. An express term of the HICAPS agreement provided that that agreement might be terminated for breach (cl 7.2(a)). Another express term of the HICAPS agreement provided that the respondent might terminate the agreement without cause by the giving of 90 days' notice to the applicant (cl 7.3). The applicant also alleges that the HICAPS agreement contains the following implied terms, namely that: (a) The respondent must act in good faith when exercising a right under the HICAPS agreement; (b) The respondent must act in good faith when exercising its right to terminate the HICAPS agreement (cl 7.3); and (c) The respondent must not act unreasonably, unconscionably, unfairly, capriciously or for the purpose of furthering an ulterior or extraneous purpose when exercising its right to terminate the HICAPS agreement without cause pursuant to cl 7.3 of that agreement. 14 The existence of the implied terms described at [13] above is very much a matter of dispute. 15 The applicant also alleges that the respondent owed equitable obligations to the applicant in a manner that accorded with its implied obligations under the HICAPS agreement. 16 The applicant also alleges that, on or about 20 December 2005, he entered into a preferred provider agreement with the respondent for the provision of low cost dental services to its members. The making of the preferred provider agreement is not disputed. It is wholly in writing. 17 Under the preferred provider agreement, the applicant agreed to charge no gap for most dental services provided by him to members of the respondent by accepting the relevant amount specified in the respondent's schedule as full payment for those services. Under that agreement, the respondent agreed to inform those of its members who lived in the areas surrounding the Ashfield Dental Clinic of the existence of the preferred provider agreement. 18 It is the applicant's case that, as at December 2005, approximately 10% of the dental services performed for patients at his clinic were for members of the respondent. 19 The applicant says that, in January 2006, the respondent sent a circular letter to its members in which it urged its members to utilise the services of the applicant for their dental services. The sending of the letter is admitted but the correct interpretation of the letter is a matter of dispute between the parties. 20 The applicant alleges that, by August 2006, approximately 20% of the dental services performed for patients at his clinic at Ashfield were for members of the respondent. He says that from about the same time he advertised his no gap services in magazines associated with the New South Wales Teachers' Federation and in The Sydney Morning Herald. He says that, from about April 2007, he promoted the respondent's health fund by distributing marketing material at the Ashfield Dental Clinic. 21 The applicant alleges that: (a) In about April 2007, the then General Manager of the respondent, Mr Dawson, represented to the applicant that it did not, at that time, have plans to establish its own dental clinic; (b) In about September 2007, Mr Brad Joyce, an employee of the respondent, represented to the applicant that it had not established and did not intend to establish a dental clinic of its own at that time; and (c) On or about 10 December 2007, in a letter sent to its members, the respondent represented to its members that the applicant would not be able to provide no gap dental services after 27 March 2008 and foreshadowed offering replacement preferred provider dental services on its own account. 22 The respondent denies making the representations referred to in subpars (a) and (b) of [21] above and also denies, in any event, that, if made, they were false or misleading. As to the representation referred to in subpar (c) of [21] above, the respondent admits sending the letter but denies that the letter contained all of the representations alleged by the applicant. 23 The respondent admits that the letter dated 10 December 2007 contained an inaccurate statement to the effect that the applicant would not be able to provide no gap dental services after 27 March 2008 and concedes that, in fact, the applicant could continue to provide such services after that date if he wished to do so. The respondent denies that it solicited the custom of patients of the applicant who were members of its Fund. 24 On or about 27 March 2008, the preferred provider agreement was terminated. The validity of that termination is not in dispute in the proceeding. The applicant says that, after the preferred provider agreement was terminated, he continued to provide no gap dental services at the Ashfield Dental Clinic to members and staff of the respondent. 25 The applicant alleges that, by about September 2007, approximately 50% of the dental services performed for patients at his clinic were members of the respondent and that by August 2008 that figure had risen to 80%. 26 The applicant alleges that, on or about 8 September 2009, the respondent purported to terminate the HICAPS agreement. Subsequently, according to the applicant, the respondent accepted that its attempt to terminate the HICAPS agreement in early September 2009 had not succeeded. 27 On 29 September 2009, the respondent purported to terminate the HICAPS agreement without cause by the giving of 90 days' notice. 28 From September 2009, the respondent has operated its own dental clinic in Parramatta. The applicant says that this clinic is in direct competition with the Ashfield Dental Clinic. 29 The applicant contends that the respondent's conduct in issuing the termination notice of 29 September 2009 was in breach of the implied terms of the HICAPS agreement referred to at [13] above and the equitable obligations referred to at [15] above. The applicant argues that the latter breaches were constituted by the issue of that notice in circumstances where: (a) He had been encouraged by the respondent to develop a business strategy based upon the provision of no gap services to members of the respondent; (b) The respondent had misled him about the prospect of the respondent itself establishing a clinic in competition with the applicant's Ashfield clinic; and (c) The respondent must have known that termination of the HICAPS agreement would inevitably have a seriously detrimental effect on the applicant's business.

Unconscionable Conduct 30 In support of this cause of action, the applicant relies upon the particulars provided in respect of par 39 of the Statement of Claim. He says that he was at a bargaining disadvantage and that he would not have any real prospect of securing a service similar to the one now offered. The applicant alleges that the respondent's treatment of the applicant was different from the treatment meted out to other users of the HICAPS system.

Misuse of Market Power 31 For the purposes of this cause of action, the applicant defined the relevant market as: … the market for the provision of no (gap) or minimal gap dental services to members of the Teachers Federation Health Fund I shall call this definition "the pleaded market". 32 The applicant alleges that: (a) He supplied goods and services in the pleaded market; (b) The respondent also supplied goods and services in that market in the form of access for the providers of those dental services, including the applicant, to the HICAPS electronic payment system (the HICAPS facility); (c) Access to the HICAPS facility is a significant advantage to providers of dental services in the pleaded market because the HICAPS facility is convenient and creates a substantial incentive to members of the respondent to obtain their dental services from service providers who have access to the HICAPS facility; (d) The respondent is the only entity which can supply access to the HICAPS facility to providers of dental services to members of the respondent; (e) The respondent has the sole discretion to decide whether to continue to give access to the HICAPS facility to providers of dental services to members of the respondent; (f) Through its control of access to the HICAPS facility and the importance of that facility in the pleaded market, the respondent has a substantial degree of power in that market within the meaning of s 46(1) of the TPA; (g) In about April 2008, the respondent established a dental clinic of its own at 68 Macquarie Street Parramatta (the Parramatta clinic) which provides no gap or minimal gap dental services to members of the respondent under the respondent's banner; (h) The respondent has made the HICAPS facility available to the Parramatta clinic for payment of no gap or minimal gap dental services performed at that clinic for members of the respondent; (i) In establishing and operating the Parramatta clinic and also in making the HICAPS facility available at the clinic, the respondent competed directly with the applicant for the provision of no gap or minimal gap dental services to members of the respondent; (j) In similar fashion, the respondent established a clinic at Surry Hills; (k) As a consequence of issuing the 29 September 2009 notice purporting to terminate the HICAPS facility, the respondent has threatened to terminate the applicant's access to the HICAPS facility; (l) The conduct of the respondent in attempting to terminate the HICAPS agreement and the applicant's access to the HICAPS facility and the sending of the letter dated 10 December 2007 to its members was in breach of s 46(1)(a) of the TPA because its purpose in engaging in that conduct was to substantially damage the applicant as a competitor of the respondent in the pleaded market by increasing the cost to members of the respondent and the inconvenience to members of the respondent in the way in which payment for dental services provided to those members by the applicant would be treated while at the same time itself offering the same services to members of the respondent at a lower cost and greater convenience in terms of the method of payment; and (m) In the alternative, the same conduct is alleged to be a breach of s 46(1)(c) of the TPA because the respondent's purpose in engaging in that conduct was to deter or prevent the applicant from competing in the pleaded market. 33 The applicant alleges that access to the HICAPS facility was withheld from him for approximately one week in September 2009 and that, but for Interlocutory Orders obtained from the Supreme Court of New South Wales on 18 December 2009, access to the HICAPS facility would have been denied to him after the end of December 2009. 34 It is sufficient for present purposes to record the fact that the respondent contends that the case advanced by the applicant based upon s 46 of the TPA is misconceived for a number of reasons. I will address these defences later in these Reasons for Judgment when I come to consider the issues in more detail. 35 In his Application, the applicant seeks declarations giving effect to the substantive allegations which I have summarised above. He also seeks: (a) A declaration that the Notice of Termination dated 29 September 2009 in respect of the HICAPS agreement is void and of no effect; and (b) An injunction pursuant to s 80 of the TPA restraining the respondent from terminating the HICAPS agreement.

The Preferred Providers Agreement 36 This agreement was entered into on or about 20 December 2005. The term of the agreement was from 20 December 2005 to 30 June 2007. 37 The agreement provided that: Dr Ray Sunda agrees to accept as full payment the TFH benefit for dental services provided by himself and dentists employed at the ADC [referring to the applicant's Ashfield Dental Clinic at 4 Charlotte Street Ashfield] for dental items recognised by the fund and listed on the current edition of the Australian schedule of dental services and glossary and provided to ancillary contributors to TFH and their dependants except: [certain identified services] 38 The agreement went on to provide that the respondent agreed to advise its members who were living or working in the Ashfield area and surrounding suburbs of the existence of the preferred provider agreement. The agreement included a clause that it could be terminated at any time if both parties agreed. It also included the following clauses: This agreement can be terminated immediately in the event of unacceptable actions by either party by written advice. If the agreement is not to be renewed after June 30 2007, 4 months' notice in writing is required.

The HICAPS Agreement 39 The HICAPS agreement was entered into on or about 5 August 2005. It consisted of a front sheet in which the individual details of the dental service provider were inserted and the standard HICAPS Terms and Conditions were incorporated. The variable component of the HICAPS agreement identified the relevant health funds which were to undertake the obligation to pay the dental service provider the relevant benefits by using the HICAPS facility. The copy of the HICAPS agreement tendered in evidence did not identify the respondent although it was common ground between the parties that the respondent was one of the funds which was to provide benefits to the applicant through the HICAPS facility. The parties to the HICAPS agreement were the applicant and the health funds listed as parties to the agreement. 40 In the standard Terms and Conditions forming part of the HICAPS agreement, the relevant fund agreed to settle health insurance claims initiated by the relevant dental service provider through the HICAPS facility in accordance with the HICAPS agreement. 41 Clause 7 of the standard Terms and Conditions forming part of the HICAPS agreement was in the following terms: 7 Termination 7.1 This agreement automatically ends: (a) upon termination of the Equipment Agreement; or (b) to the extent that it relates to a Fund, upon termination of a Fund Agreement between HICAPS and that Fund. 7.2 You or a Fund may end this agreement to the extent that it relates to that Fund immediately if: (a) the other party commits a material breach of its obligations under this agreement which breach is not remedied within 90 days of receipt of a notice in writing requesting the breach be remedied or is not remedied within that period to the satisfaction of the party giving the notice; or (b) an Insolvency Event has occurred in relation to that other party. 7.3 A Fund may also end this agreement to the extent that it relates to that Fund on the giving of 90 days' notice to You. 7.4 The ending of this agreement or any part of it to the extent that it relates to a Fund does not affect a party's rights and obligations which arose before it ended and, if the party terminating this agreement is a Fund, that termination does not affect the continued operation of this agreement so far as other Funds are concerned. The "You" referred to in cl 7 is the applicant.

The HICAPS System 42 The HICAPS system enables health funds to settle health insurance claims initiated by a health service provider. 43 In the case of the applicant, when patients who are members of the respondent attend the Ashfield Dental Clinic, those patients can claim on the respondent by simply swiping their membership card through a terminal at the clinic. The claim is then paid to the applicant electronically without further ado. 44 If the HICAPS facility were not available to the applicant, the applicant would need to issue a tax invoice to each patient and the patient would need to pay that invoice with his or her own funds. Upon payment, the applicant would issue an itemised receipt in order to enable the patient to make a claim upon the respondent. The respondent would then process the patient's claim and remit a cheque to the patient for the benefit which it was obliged to pay. The other means of payment would be for the tax invoice issued by the applicant to be sent to the respondent by the patient with a request that the respondent remit the benefit cheque directly to the clinic. The patient would then be responsible for the difference between the benefit cheque paid by the respondent and the amount on the tax invoice. 45 There is no doubt that, for those patients who are members of the respondent to whom the applicant is prepared to provide services on a no gap basis, the HICAPS system is attractive and convenient. But there is also no doubt that the withdrawal of the HICAPS facility from the applicant would not, of itself, prevent the applicant from providing no gap or minimal gap services to his patients, including those of them who are members of the respondent.

The Relevant Events 2007-2009 46 In an affidavit sworn by the applicant on 14 December 2009, the applicant testified that Mr Dawson, the then General Manager of the respondent, told him at a meeting which took place in April 2007 that he (Dawson) did not know whether the respondent would be interested in starting up a dental clinic of its own. That evidence did not support the pleaded allegation that the respondent represented that it did not have plans to set up its own dental clinic. 47 By letter dated 26 November 2007, the respondent purported to terminate the preferred provider agreement, effective from 27 March 2008. The applicant did not object to this action and accepted the termination. 48 In the period from April to November 2007, the respondent received five complaints about the services provided by the applicant to members of the respondent. Each of these complaints was investigated at the time. The applicant was given an opportunity in every case to address those complaints. He availed himself of that opportunity. The validity of these complaints was not fully litigated before me. However, evidence was led from Ms Hatcher, the Executive Manager, Customer Service of the respondent to the effect that, on 9 November 2007, she had recommended to Mr Joyce, the CEO of the respondent, that the respondent terminate the preferred provider agreement with the applicant because of the complaints about the applicant which had been received by the respondent. That recommendation was taken up by Mr Joyce. He sent the letter dated 26 November 2007 by which he terminated the preferred provider agreement. 49 Both Mr Joyce and Ms Hatcher believed that the applicant's performance of dental services for members of the respondent and his billing practices of which the respondent had become aware in 2007 were damaging the reputation of the respondent. I find that both Mr Joyce and Ms Hatcher honestly believed that it was in the best interests of the respondent and its members that the preferred provider agreement be terminated. They also had a reasonable basis for that belief. They had received quite a number of complaints about the applicant by then and at least some of them appeared to those persons to be valid. 50 It appears that both parties had allowed that agreement to continue in force after 30 June 2007. The respondent gave four months' notice of the termination of that agreement. The applicant did not suggest that the termination was not effective. 51 On 10 December 2007, the respondent sent a circular letter to all of its members. That letter was in the following terms: Teachers Federation Health has recently undertaken a review of its dental provider arrangements. As a result of this review Ashfield Dental Clinic will no longer be a preferred dental provider to the fund. Accordingly and as a previous user of dental services at Ashfield Dental Clinic, you should be aware that after 27th March 2008 the no gap arrangement for certain dental services with that Clinic will cease to be available to our members. In the meantime we are looking to replace this preferred provider dental service and will let you know in the New Year when these dental services are available. If you have any questions on this change please do not hesitate to contact us during business hours on 1300 728 188. We are very pleased to announce at this time the opening of our new expanded Teachers Eyecare premises in Parramatta, located at 68 Macquarie Street - just up the road from our old premises. The new location of Teachers Eyecare gives us the opportunity to provide you with an expanded optometry service, superior facilities, a wider range of products such as 'no gap' frames and lenses and the latest designer sunglasses. We now also offer a customer service facility at this location so don't forget, if you have any pending or outstanding Teachers Federation Health claims or membership changes, you can bring them with you to our new premises in Parramatta for us to process. 52 On 14 April 2008, a joint venture of which the respondent was a member, opened the Parramatta clinic. The respondent's financial interest in that joint venture was negligible. 53 The respondent received several further complaints about the applicant during 2008. 54 In late March 2009, the respondent commissioned an audit of the applicant's clinic. Over the succeeding few weeks, an audit was carried out by Michael Kenney of BJ Assurance Services. 55 Mr Kenney was not satisfied with the information he was given by the applicant. He recommended that steps be taken to verify whether benefit claims made by the applicant upon the respondent matched the patient services actually provided. He suspected that the applicant had claimed from the respondent more than he was entitled to. Because HICAPS provided very rapid payment of benefits directly to the applicant, it might prove very difficult to recoup any overpayments. This particular issue was of concern at the time. 56 Ultimately, in light of the results of the audit of the applicant's clinic and a comparative analysis of the applicant's billing history with those of other dentists in New South Wales, Ms McCarthy, the Benefits Analysis and Provider Relations Manager of the respondent, recommended that the applicant's HICAPS access be suspended while a further audit was conducted. Ms McCarthy sent a letter to the applicant on 8 September 2009 which was in the following terms: In the course of a recent dental claims review our analysis revealed a dramatic increase in the average services per patient at your practice. This is a matter which Teachers Federation Health actively addresses in order to minimise any additional burden on the cost of premiums for all our members. Our policy in cases like this is to terminate our members' access to HICAPS at the practices in question. In accordance with this policy, I am writing to inform you of our intention to terminate the HICAPS access as of 21st September 2009. Of course, our members will still be able to submit mail claims for services which you provide after that date. 57 The applicant then retained solicitors to represent him. Those solicitors raised various arguments as to why the purported termination of the HICAPS agreement was ineffective. 58 On 29 September 2009, the respondent sent a further letter to the applicant. That letter was in the following terms: Notice of termination of the HICAPS Provider Agreement Terms and Conditions between Dr Sundarajah and Teachers Federation Health Ltd ("Agreement") In accordance with clause 7.3 of the Agreement, we hereby give 90 days notice of our termination of the Agreement. Please note that we have restored your access to HICAPS for the duration of the 90 day notice period. In addition, pursuant to clause 4.2(h), of the Agreement, please provide us with evidence (including treatment plans, appointment schedules, signed receipts and other supporting documentation) of every transaction processed by you for the purposes of Teachers Federation Health, within the last 3 months. You must provide us with such evidence within 10 business days. We are continuing to make inquiries into your conduct. Nothing in this letter limits any rights which we may have in relation to your conduct. 59 On 18 December 2009, a judge of the Supreme Court of New South Wales granted to the applicant an interlocutory injunction in the following terms: … the Defendant, by itself, its servants or agents, is, until further order restrained from: (a) acting upon or implementing a Notice of Termination dated 29 September 2009 of the HICAPS agreement made between the Plaintiff and the Defendant on 5 August 2005 or from issuing any substitute notice; (b) treating the agreement as being at an end upon the expiry of the 90 day notice period referred to in the Notice of Termination. 60 The interlocutory injunction granted on 18 December 2009 was varied on 27 May 2010. The injunction currently in place is in the following terms: (1) Upon the Plaintiff giving the usual undertaking as to damages, the Defendant, by itself, its servants or agents, is, until further order restrained from: (a) acting upon or implementing a Notice of Termination dated 29 September 2009 of the HICAPS agreement made between the Plaintiff and the Defendant on 5 August 2005 or from issuing any substitute notice pursuant to clause 7.3 of the Agreement. 61 The Surry Hills clinic opened on 12 April 2010. It too is a joint venture operating under the respondent's banner Teachers Dental (the Surry Hills clinic).

The Implied Terms 62 The issue raised by each of the alleged implied terms is whether the respondent is obliged to act in good faith when exercising the right to terminate the HICAPS agreement insofar as it operates between it and the applicant pursuant to cl 7.3 of that agreement. It must be remembered that cl 7.3 of the HICAPS agreement permits the relevant health fund to bring that agreement to an end insofar as it relates to a particular dental services provider on the giving of 90 days' notice to that provider. The right to terminate accorded to the relevant fund is a right to terminate without having to demonstrate good cause. This provision is to be contrasted with cl 7.2 which provides a right to terminate the HICAPS agreement as between a fund and a service provider to both the relevant fund and service provider provided that the terminating party has cause. 63 As a general proposition, a term requiring that contractual rights be exercised in good faith may be implied into a commercial contract. However, a general observation to that effect will rarely provide the answer to particular problems thrown up by individual cases. In Burger King Corp v Hungry Jack's Pty Ltd (2001) 69 NSWLR 558, for example, the New South Wales Court of Appeal held that terms of good faith and reasonableness may be implied into a commercial contract in circumstances where the right to terminate that contract reposed in one of the parties had to be exercised by reference to an extensive list of specific objective and subjective criteria. By way of contrast, in the present case, no such criteria are laid down in the HICAPS agreement. Clause 7.3 does not give the right to terminate to all relevant parties to the HICAPS agreement. The only party entitled to terminate without cause pursuant to cl 7.3 is the relevant fund (the respondent in the present case). 64 Where a power is given to one party to be exercised in its sole discretion so as to bind the other, the terms of the contract are inconsistent with a constraint on the exercise of that power by considerations of reasonableness or good faith (Vodafone Pacific Ltd v Mobile Innovations Ltd [2004] NSWCA 15 at [194]-[197]; and Tomlin v Ford Credit Australia [2005] NSWSC 540 at [119]). 65 For obligations of good faith and reasonableness to be implied into a contract which contains a general power of termination, the obligations to be implied must be both reasonable and necessary (Burger King Corp v Hungry Jack's Pty Ltd at [163] and [167] (p 569)). 66 The courts will not imply an obligation of good faith unless it operates as an aid and in furtherance of the explicit terms of the contract and will never impose such an obligation if it would be inconsistent with other terms of the contractual relationship (Metropolitan Life v RJR Nabisco (1989) 716 F Supp 1504 at 1517; and Hoppers Crossing Club Ltd v Tattersalls Gaming Pty Ltd [2005] VSC 114 at [24]). 67 Even if an express contractual right to terminate is subject to an implied obligation to exercise that right in good faith and reasonably, such a restriction will not operate so as to prevent or hinder an action designed to protect the legitimate commercial interests of a party (Garry Rogers Motors (Aust) Pty Ltd v Subaru (Aust) Pty Ltd (1999) ATPR 41-703 at [37]). 68 Generally speaking, if a contract contains a requirement that the parties act in good faith, they must act honestly, not capriciously, and reasonably. However, good faith does not require a party to act in the interests of the other contracting parties nor to subordinate their own legitimate interests to those of the other parties (Macquarie International Health Clinic Pty Ltd v Sydney South West Area Health Service (2010) 15 BPR 28,563 at [147]). It may be that there is no reasonableness requirement in the obligation, should the obligation be implied. The essence of the good faith requirement is honesty. 69 In the present case, cl 7.3 confers a broad unqualified power on one of the parties to the contract (the respondent) to terminate that contract. There are no criteria at all specified in the HICAPS agreement against which a requirement of reasonableness or good faith could be measured. If the respondent chooses to terminate the HICAPS agreement pursuant to cl 7.3, it is not required to give any reason for its decision to terminate. 70 In my judgment, there is no warrant for implying the terms which the applicant seeks to imply into the HICAPS agreement. They are not reasonable nor are they necessary. They are inconsistent with the express terms of the contract (cl 7.3) and do not aid or further those express terms. 71 For that reason, the notice of termination sent by the respondent to the applicant on 29 September 2009 was valid and effective to terminate the HICAPS agreement.

Was there an Absence of Good Faith? 72 Strictly speaking, this question does not arise. However, I should briefly state my views as to whether or not, assuming the terms sought to be implied by the applicant into the HICAPS agreement are in fact terms of that agreement, those terms were breached in the circumstances of the present case. 73 The respondent had received many complaints about the dental services provided by the applicant at the Ashfield Dental Clinic. In addition, the respondent held concerns that the applicant had over-claimed benefits from it and had also breached other requirements of the HICAPS agreement (such as the failure to provide the provider numbers of all dentists providing services in respect of which benefits were claimed). The respondent is a health fund, the business of which is dependent upon maintaining the confidence and trust of its members. It plainly has a legitimate interest in ensuring that the health service providers with whom it contracts provide services to its members which are not the subject of frequent complaint. It also has a legitimate commercial interest in ensuring that it is not subjected to exaggerated claims for benefits by those health service providers. 74 The applicant's principal contention that the alleged implied terms importing good faith requirements into the HICAPS agreement were breached by the respondent was that the respondent had purported to terminate that agreement in order to further its own interests through the Parramatta and Surry Hills clinics. This allegation is simply not borne out by the evidence. The Parramatta clinic opened in April 2008 and the Surry Hills clinic, which is more than 18 kilometres away from the applicant's Ashfield clinic, opened in April 2010. In my view, it is fanciful to suggest, as the applicant does, that the motivation on the part of the respondent in attempting to terminate the HICAPS agreement was to harm the Ashfield Dental Clinic with a view to advancing the financial well being of the Parramatta clinic and the Surry Hills clinic. The financial interests held by the respondent in those clinics were so small as to explode the applicant's theories in this respect. 75 Should it have been necessary to do so, I would have found that, by purporting to invoke cl 7.3 in order to terminate the HICAPS agreement, the respondent had not breached any implied terms requiring that it exercise that power in good faith. It took that step because it had concerns about the applicant's conduct and the damage that that conduct was causing to the respondent. 76 The breach of contract case would have failed had the terms relied upon been implied into the HICAPS agreement.

The Unconscionable Conduct Case 77 The conduct relied upon in support of this case is conduct which took place in September 2009. It must be assessed against the relevant provisions of the TPA, as they then stood. 78 In s 51AA and s 51AC of the TPA were, at that time, in the following terms: 51AA Unconscionable conduct within the meaning of the unwritten law of the States and Territories (1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. (2) This section does not apply to conduct that is prohibited by section 51AB or 51AC. 51AC Unconscionable conduct in business transactions (1) A corporation must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person (other than a listed public company); or (b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. (2) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a corporation (other than a listed public company); or (b) the acquisition or possible acquisition of goods or services from a corporation (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. (3) Without in any way limiting the matters to which the court may have regard for the purpose of determining whether a corporation or a person (the supplier) has contravened subsection (1) or (2) in connection with the supply or possible supply of goods or services to a person or a corporation (the business consumer), the court may have regard to: (a) the relative strengths of the bargaining positions of the supplier and the business consumer; and (b) whether, as a result of conduct engaged in by the supplier, the business consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and (c) whether the business consumer was able to understand any documents relating to the supply or possible supply of the goods or services; and (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the business consumer or a person acting on behalf of the business consumer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and (e) the amount for which, and the circumstances under which, the business consumer could have acquired identical or equivalent goods or services from a person other than the supplier; and (f) the extent to which the supplier's conduct towards the business consumer was consistent with the supplier's conduct in similar transactions between the supplier and other like business consumers; and (g) the requirements of any applicable industry code; and (h) the requirements of any other industry code, if the business consumer acted on the reasonable belief that the supplier would comply with that code; and (i) the extent to which the supplier unreasonably failed to disclose to the business consumer: (i) any intended conduct of the supplier that might affect the interests of the business consumer; and (ii) any risks to the business consumer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the business consumer); and (j) the extent to which the supplier was willing to negotiate the terms and conditions of any contract for supply of the goods or services with the business consumer; and (ja) whether the supplier has a contractual right to vary unilaterally a term or condition of a contract between the supplier and the business consumer for the supply of the goods or services; and (k) the extent to which the supplier and the business consumer acted in good faith. (4) Without in any way limiting the matters to which the court may have regard for the purpose of determining whether a corporation or a person (the acquirer) has contravened subsection (1) or (2) in connection with the acquisition or possible acquisition of goods or services from a person or corporation (the small business supplier), the court may have regard to: (a) the relative strengths of the bargaining positions of the acquirer and the small business supplier; and (b) whether, as a result of conduct engaged in by the acquirer, the small business supplier was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the acquirer; and (c) whether the small business supplier was able to understand any documents relating to the acquisition or possible acquisition of the goods or services; and (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the small business supplier or a person acting on behalf of the small business supplier by the acquirer or a person acting on behalf of the acquirer in relation to the acquisition or possible acquisition of the goods or services; and (e) the amount for which, and the circumstances in which, the small business supplier could have supplied identical or equivalent goods or services to a person other than the acquirer; and (f) the extent to which the acquirer's conduct towards the small business supplier was consistent with the acquirer's conduct in similar transactions between the acquirer and other like small business suppliers; and (g) the requirements of any applicable industry code; and (h) the requirements of any other industry code, if the small business supplier acted on the reasonable belief that the acquirer would comply with that code; and (i) the extent to which the acquirer unreasonably failed to disclose to the small business supplier: (i) any intended conduct of the acquirer that might affect the interests of the small business supplier; and (ii) any risks to the small business supplier arising from the acquirer's intended conduct (being risks that the acquirer should have foreseen would not be apparent to the small business supplier); and (j) the extent to which the acquirer was willing to negotiate the terms and conditions of any contract for the acquisition of the goods and services with the small business supplier; and (ja) whether the acquirer has a contractual right to vary unilaterally a term or condition of a contract between the acquirer and the small business supplier for the acquisition of the goods or services; and (k) the extent to which the acquirer and the small business supplier acted in good faith. (5) A person is not to be taken for the purposes of this section to engage in unconscionable conduct in connection with: (a) the supply or possible supply of goods or services to another person; or (b) the acquisition or possible acquisition of goods or services from another person; by reason only that the first mentioned person institutes legal proceedings in relation to that supply, possible supply, acquisition or possible acquisition or refers to arbitration a dispute or claim in relation to that supply, possible supply, acquisition or possible acquisition. (6) For the purpose of determining whether a corporation has contravened subsection (1) or whether a person has contravened subsection (2): (a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court may have regard to circumstances existing before the commencement of this section but not to conduct engaged in before that commencement. (7) A reference in this section to the supply or possible supply of goods or services is a reference to the supply or possible supply of goods or services to a person whose acquisition or possible acquisition of the goods or services is or would be for the purpose of trade or commerce. (8) A reference in this section to the acquisition or possible acquisition of goods or services is a reference to the acquisition or possible acquisition of goods or services by a person whose acquisition or possible acquisition of the goods or services is or would be for the purpose of trade or commerce. (12) Section 51A applies for the purposes of this section in the same way as it applies for the purposes of Division 1 of Part V. (13) Expressions used in this section that are defined for the purpose of Part IVB have the same meaning in this section as they do in Part IVB. (14) In this section, listed public company has the same meaning as it has in the Income Tax Assessment Act 1997. 79 In Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (ACN 008 168 090 (No 2) (2009) 253 ALR 324, I explained what I considered to be the elements of unconscionable conduct for the purposes of s 51AC of the TPA. In that case, at [108]-[115] I said: 108 Section 51AC(1) and (2) of the TPA are in the following terms; 51AC Unconscionable conduct in business transactions. (1) A corporation must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person (other than a listed public company); or (b) the acquisition or possible acquisition of goods or services from a person (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. (2) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a corporation (other than a listed public company); or (b) the acquisition or possible acquisition of goods or services from a corporation (other than a listed public company); engage in conduct that is, in all the circumstances, unconscionable. 109 Section 51AC was introduced into Pt IV of the TPA by the Trade Practices Amendment (Fair Trading) Act 1998 (Cth). It came into effect on 1 July 1998. Sections 51AA and 51AB were already in the TPA as at 1998. 110 Subsections (3), (4), (5) and (6) set out statutory guidance as to the factors to which the court can and cannot have regard for the purposes of determining whether a corporation has contravened either subs (1) or (2) of s 51AC. The list of factors set out in those sub-paragraphs to which the court is permitted to have regard is not exhaustive. 111 The balance of s 51AC deals with matters which are not presently relevant with perhaps the exception of s 51AC(12) which provides: (12) Section 51A applies for the purposes of this section in the same way as it applies for the purposes of Div 1 of Pt V 112 In the present case, the ACCC submitted that the court should have regard to the factors described in subparas (a), (b), (d), (e), (f) and (k) of s 51AC(3). Particular emphasis was placed upon the factor described in s 51AC(3)(f). 113 There is a body of authority in this court which establishes the following propositions: (a) The scope of s 51AC is wider than that of s 51AA. The meaning of unconscionable for the purposes of s 51AC is not limited to the meaning of the word according to established principles of common law and equity: per French J in Australian Competition and Consumer Commission v C G Berbatis Holdings Pty Ltd (No 2) (2000) 96 FCR 491; 169 ALR 324; [2000] FCA 2 at [24] and [25], per Sundberg J in Australian Competition and Consumer Commissioner v Simply No-Knead Franchising Pty Ltd (2000) 104 FCR 253; 178 ALR 304; [2000] FCA 1365 at [31], per Selway J in Australian Competition and Consumer Commission v 4WD Systems Pty Ltd (2003) 200 ALR 491; 59 IPR 435; [2003] FCA 850 at [183] and per Jacobson J in Pacific National (ACT) Ltd v Queensland Rail (2006) 28 ATPR (Digest) 46-268; [2006] FCA 91 at [918] and [931]. (b) The ordinary or dictionary meaning of unconscionable, which involves notions of serious misconduct or something which is clearly unfair or unreasonable, is picked up by the use of the word in s 51AC. When used in that section, the expression requires that the actions of the alleged contravenor show no regard for conscience, and be irreconcilable with what is right or reasonable. Inevitably the expression imports a pejorative moral judgment: per Heerey, Drummond and Emmett JJ in Hurley v McDonalds Australia Ltd (2000) ATPR 41-741; [1999] FCA 1728 at [22] and 29. This helpful articulation of the meaning of the word when used in s 51AC was followed by Selway J in Australian Competition & Consumer Commission v 4WD Systems Pty Ltd (2003) 200 ALR 491; 59 IPR 435; [2003] FCA 850 at [183]-[185] (4WD Systems) and by Sundberg J in Australian Competition and Consumer Commission v Simply No-Knead Franchising Pty Ltd (2000) 104 FCR 253; 178 ALR 304; [2000] FCA 1365 at [30]; and (c) Normally, some moral fault or moral responsibility would be involved. This would not ordinarily be present if the critical actions are merely negligent. There would ordinarily need to be a deliberate (in the sense of intentional) act or at least a reckless act: per Selway J in 4WD Systems at [185]. 114 The above statements of principle provide useful guidance as to the content of the concept of unconscionability or unconscionable when used in s 51AC of the TPA. Of necessity, the authorities to which I have referred do not prescribe a precise definition which would be able to be applied to every set of circumstances presented to the court for consideration. The application of the meaning accorded to the concept will always be a matter of judgment in every case and will depend upon a careful consideration of the circumstances of each case. 115 It must also be remembered that, as is the case with other sections of the TPA contained in Pts IVA, IVB and V, s 51AC establishes a norm of conduct. Failure to observe that norm has consequences provided elsewhere in the Act: see the judgment of the High Court in Master Education Services Pty Ltd v Ketchell (2008) 249 ALR 44; 82 ALJR 1322; [2008] HCA 38 at [28]-[32] and the cases cited in those paragraphs. 80 For the same reasons as I would have rejected the allegations that the implied terms as to good faith would not have been breached, had such terms been implied into the HICAPS agreement, I consider that the applicant has failed to establish that the respondent was guilty of unconscionable conduct within the meaning of s 51AA or s 51AC of the TPA. I am of the same opinion in respect of the allegation that the respondent was guilty of contravening equitable notions of unconscionability. The conduct complained of does not involve the necessary moral fault. Further, s 51AA is an alternative to s 51AC. The applicant cannot succeed under both sections.

The Case Based Upon Alleged Misuse of Market Power 81 At all relevant times, s 46 of the TPA was in the following terms: 46 Misuse of market power (1) A corporation that has a substantial degree of power in a market shall not take advantage of that power in that or any other market for the purpose of: (a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market; (b) preventing the entry of a person into that or any other market; or (c) deterring or preventing a person from engaging in competitive conduct in that or any other market. (1AAA) If a corporation supplies goods or services for a sustained period at a price that is less than the relevant cost to the corporation of supplying the goods or services, the corporation may contravene subsection (1) even if the corporation cannot, and might not ever be able to, recoup losses incurred by supplying the goods or services. (1AA) A corporation that has a substantial share of a market must not supply, or offer to supply, goods or services for a sustained period at a price that is less than the relevant cost to the corporation of supplying such goods or services, for the purpose of: (a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market; or (b) preventing the entry of a person into that or any other market; or (c) deterring or preventing a person from engaging in competitive conduct in that or any other market. (1AB) For the purposes of subsection (1AA), without limiting the matters to which the Court may have regard for the purpose of determining whether a corporation has a substantial share of a market, the Court may have regard to the number and size of the competitors of the corporation in the market. (1A) For the purposes of subsections (1) and (1AA): (a) the reference in paragraphs (1)(a) and (1AA)(a) to a competitor includes a reference to competitors generally, or to a particular class or classes of competitors; and (b) the reference in paragraphs (1)(b) and (c) and (1AA)(b) and (c) to a person includes a reference to persons generally, or to a particular class or classes of persons. (2) If: (a) a body corporate that is related to a corporation has, or 2 or more bodies corporate each of which is related to the one corporation together have, a substantial degree of power in a market; or (b) a corporation and a body corporate that is, or a corporation and 2 or more bodies corporate each of which is, related to that corporation, together have a substantial degree of power in a market; the corporation shall be taken for the purposes of this section to have a substantial degree of power in that market. (3) In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the court shall have regard to the extent to which the conduct of the body corporate or of any of those bodies corporate in that market is constrained by the conduct of: (a) competitors, or potential competitors, of the body corporate or of any of those bodies corporate in that market; or (b) persons to whom or from whom the body corporate or any of those bodies corporate supplies or acquires goods or services in that market. (3A) In determining for the purposes of this section the degree of power that a body corporate or bodies corporate has or have in a market, the court may have regard to the power the body corporate or bodies corporate has or have in that market that results from: (a) any contracts, arrangements or understandings, or proposed contracts, arrangements or understandings, that the body corporate or bodies corporate has or have, or may have, with another party or other parties; and (b) any covenants, or proposed covenants, that the body corporate or bodies corporate is or are, or would be, bound by or entitled to the benefit of. (3B) Subsections (3) and (3A) do not, by implication, limit the matters to which regard may be had in determining, for the purposes of this section, the degree of power that a body corporate or bodies corporate has or have in a market. (3C) For the purposes of this section, without limiting the matters to which the court may have regard for the purpose of determining whether a body corporate has a substantial degree of power in a market, a body corporate may have a substantial degree of power in a market even though: (a) the body corporate does not substantially control the market; or (b) the body corporate does not have absolute freedom from constraint by the conduct of: (i) competitors, or potential competitors, of the body corporate in that market; or (ii) persons to whom or from whom the body corporate supplies or acquires goods or services in that market. (3D) To avoid doubt, for the purposes of this section, more than 1 corporation may have a substantial degree of power in a market. (4) In this section: (a) a reference to power is a reference to market power; (b) a reference to a market is a reference to a market for goods or services; and (c) a reference to power in relation to, or to conduct in, a market is a reference to power, or to conduct, in that market either as a supplier or as an acquirer of goods or services in that market. (4A) Without limiting the matters to which the court may have regard for the purpose of determining whether a corporation has contravened subsection (1), the court may have regard to: (a) any conduct of the corporation that consisted of supplying goods or services for a sustained period at a price that was less than the relevant cost to the corporation of supplying such goods or services; and (b) the reasons for that conduct. (5) Without extending by implication the meaning of subsection (1), a corporation shall not be taken to contravene that subsection by reason only that it acquires plant or equipment. (6) This section does not prevent a corporation from engaging in conduct that does not constitute a contravention of any of the following sections, namely, sections 45, 45B, 47, 49 and 50, by reason that an authorization or clearance is in force or by reason of the operation of subsection 45(8A) or section 93. (6A) In determining for the purposes of this section whether, by engaging in conduct, a corporation has taken advantage of its substantial degree of power in a market, the court may have regard to any or all of the following: (a) whether the conduct was materially facilitated by the corporation's substantial degree of power in the market; (b) whether the corporation engaged in the conduct in reliance on its substantial degree of power in the market; (c) whether it is likely that the corporation would have engaged in the conduct if it did not have a substantial degree of power in the market; (d) whether the conduct is otherwise related to the corporation's substantial degree of power in the market. This subsection does not limit the matters to which the court may have regard. (7) Without in any way limiting the manner in which the purpose of a person may be established for the purposes of any other provision of this Act, a corporation may be taken to have taken advantage of its power for a purpose referred to in subsection (1) notwithstanding that, after all the evidence has been considered, the existence of that purpose is ascertainable only by inference from the conduct of the corporation or of any other person or from other relevant circumstances. 82 The applicant's case that the respondent has breached s 46 of the TPA comprises the following propositions: (a) There is a market for dental services provided for no or minimal gap to members of the respondent. This is the description of the market relied upon by the applicant in his pleading; (b) The applicant provides dental services in that market; (c) The respondent supplies services in the same market. The services which the respondent provides in that market comprise access services to the HICAPS electronic payments system and dental services by way of direct competition with the applicant through the respondent's Parramatta and Surry Hills clinics; (d) Because most patients in the postulated market utilise the HICAPS system in order to pay for the dental services provided by dentists in the pleaded market, the respondent has a substantial degree of market power in that market by reason of its control of the provision of the HICAPS facility in respect of its members; (e) By sending the letter dated 10 December 2007 to its members and attempting to terminate the HICAPS agreement, the respondent took advantage of its power in the pleaded market; (f) The respondent's purpose in engaging in the conduct described in subpar (e) above was to substantially damage the applicant as a competitor of the respondent in the pleaded market by increasing the cost to members of the respondent should they wish to utilise the services of the applicant and by making those services less attractive and less convenient to those members; (g) Alternatively, by engaging in the conduct described in subpar (e) above, the respondent's purpose was to deter or prevent the applicant from competing in the pleaded market. 83 The applicant's pleaded case relies upon conduct engaged in by the respondent in the pleaded market and does not rely upon conduct in any other market. 84 In its Written Submissions, the respondent listed a number of pertinent facts which it contended were not in dispute. Those facts were: (a) The Applicant, as a registered dentist and through his clinic at Ashfield, provides dental services to patients some of whom have health insurance (including with the Respondent) and some of whom do not; (b) Only registered dentists can provide dental services and the Applicant competes with other registered dentists of whom there are many hundreds in metropolitan Sydney; (c) The Respondent is a health insurer which provides to its members health insurance services, including paying claims in respect of services provided by health service providers, including registered dentists; (d) The Respondent competes with other health funds in Australia, of which there are about 35, and the Respondent has a market share of about 1.8%; (e) Registered dentists are free to accept payment from their patients by cash, cheques, EFTPOS, credit cards, debit cards, BPAY or electronic deposit as well as accepting payment from the patient's health fund by cheque, electronic transfer or some other means in discharge of the patient's payment obligation to the Applicant; (f) HICAPS Pty Ltd (HICAPS), a subsidiary of NAB, provides electronic claims payment services to almost all Australian health funds and competes with an alternative electronic claims payment system, Healthpoint, and other payment options such as cash, cheques, EFTPOS, electronic transfer etc; (g) Funds use the HICAPS system to pay members' claims by electronic transfer directly to the relevant health service provider. (h) The HICAPS agreement which is the subject of these proceedings is between the Applicant and HICAPS, on its own behalf and as attorney for each of the health funds which participate in HICAPS. Each fund which participates in the HICAPS system has the right to terminate the HICAPS agreement in relation to that fund. 85 I agree that these facts and matters were not in dispute. 86 The pleaded market is not one in which the respondent is a relevant participant. The product dimension of the market is dental services. The suppliers in that market are registered dentists and the acquirers are patients requiring dental treatment. The respondent is neither a supplier nor acquirer in that market. The applicant has not identified any geographical dimension to the market although there is evidence to suggest that the geographical dimension is defined by reference to the 25 postcodes immediately surrounding the Ashfield Dental Clinic. 87 Nor is the respondent an acquirer or supplier of dental services in that geographical area. For a participant in a market to have market power in a relevant market it must either be a supplier or an acquirer of goods or services in that market. 88 These observations are supported by the evidence of Dr Williams, an expert economist, who was called to give evidence on behalf of the respondent. They run counter to the views expressed by Ms Lynne Pezzullo who expressed the opinion in evidence that the respondent had substantial power in the pleaded market because of its capacity to make available or withhold the HICAPS facility. Ms Pezzullo's approach to market definition and to the underlying concepts reflected in s 46 of the TPA are somewhat novel and not supported by the relevant academic learning nor by the terms of s 46 of the TPA itself. 89 Dr Williams also expressed the view that the definition of the pleaded market was artificially narrow. Dr Williams supported a definition of the relevant market as being: The provision of dental services on a no or minimal gap basis to patients in Ashfield and the surrounding 25 postcodes. I shall refer to this market as "the postulated market". 90 Ultimately, in cross-examination, Ms Pezzullo accepted that that was the appropriate definition of the relevant market. As was submitted on behalf of the respondent, once that definition of market was accepted, it removed an essential element of the applicant's pleaded case and one which was necessary if the applicant were to succeed, namely, that the definition of market had to include a restriction referable to membership of the respondent. For this reason, even if the respondent were a participant in the relevant market, it clearly did not have the requisite market power in that market. 91 The respondent also submitted that, even if the respondent had market power in the postulated market, it did not take advantage of that market power by engaging in the conduct for which it was criticised by the applicant. As the respondent correctly submitted, the respondent was entitled, as a matter of law, to terminate the HICAPS agreement pursuant to cl 7.3 whether or not it had any power in the postulated market. Its conduct in exercising the contractual power of termination pursuant to cl 7.3 did not amount to taking advantage of its market power. All that it did was exercise its contractual rights. Its capacity to do so was sourced in the HICAPS agreement - a contract into which the applicant had freely entered and from which he had derived significant benefits. 92 Finally, the applicant has fallen well short of establishing that, even if he were able to satisfy me that the other integers of s 46 relied upon by him were present in this case, the respondent had a s 46 purpose for engaging in the conduct which it engaged in. It is quite clear that the sending of the letter dated 10 December 2007 was designed to inform members of the respondent that the applicant no longer held preferred service provider status with the respondent and that the purported termination of the HICAPS agreement in September 2009 was actuated by a desire to ensure that members of the respondent received appropriate dental services from a competent and satisfactory supplier of those services and that suppliers of those services did not over-service or over-claim from the respondent. 93 I should briefly record that, insofar as Ms Pezzullo's evidence conflicted with that of Dr Williams, I prefer the evidence of Dr Williams. Ms Pezzullo behaved in a partisan fashion during the course of her evidence and appeared to be an advocate on behalf of the applicant. She was not as well qualified as Dr Williams to express the opinions which she had expressed - she was a health economist rather than an economist well versed in the economics and law surrounding competition theories. She took trenchant positions which were difficult to justify when analysed. For example, she opined that, as soon as the respondent acquired its relatively small interests in the Parramatta and the Surry Hills clinics, it immediately started to remove the applicant's access to the HICAPS system. There was no evidence to support this assertion yet, not only did she make it, but she maintained it, notwithstanding that it must have been obvious to her that it was no longer a sensible position for her to take. She declined to make appropriate concessions, such as refusing to agree with propositions that the list of factors in question 6 of her survey questionnaire did not include a reference to the cost of services or the timeliness of the dental services or that her firm had never conducted a survey of patients of dental practices before the one she conducted for the applicant. 94 In the end, I have come to the conclusion that the applicant's case based upon s 46 of the TPA fails at the outset because the respondent was not truly a participant in the postulated market, even as modified by Ms Pezzullo in her evidence. In any event, even if the applicant could surmount the market definition problem, he cannot bring his case within the other requirements of s 46. 95 For these reasons, the case based upon s 46 of the TPA must be rejected.

Conclusions 96 The applicant has failed to establish any of the bases for the relief sought by him. The interlocutory injunction presently in place must be dissolved. His Application must be dismissed with costs. 97 There will be orders accordingly. I certify that the preceding ninety-seven (97) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.

Trade Practices Act 1974(Cth)

Trade Practices Amendment (Fair Trading) Act 1998(Cth)

At a glance

Court

Decision date

Before

Source

Judgment (14 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (15)

Cited By (5)