T.P.C. v Bata Shoe Company ot Australia Ptv. Limited

Federal Court of Australia|1986-03-17|Before: Pincus J, Pincus JJ, Wilcox JJ

CATCHWORNS TPragas praccices - resale price maintena. ts - standard of proot - whether suppliec made it known that goods would not be supelicd uniess the acquirer ageeed not to sei the goca, helow a spec.ried price within para. 36(3)(a) of the Act - meaning or "inducing", 'specitiet"

and "suvoliirad" within para. Y6(3)(b) - consideration of application of sub-s. $$6(4) to sub-s. 96(3) - application orf para. 4Fib) in determining whether there has been a withholding ot supply within sub-para. 96(3)(a)}(11) - whether the supplier used "a scatement or a price" within para. 96139(f) ~ considecation of trial Judge's acceptance or certain evidence.

Trade Practices Act 1974: ss. 5, 48, 76, 78, 79. sub-s. 96(4). paras. 4F(b), 9ei3)(a), 9St3(D), 9or3rL). sub-para. 96(3)(d)\ili).

Briginshaw v. Briqinshaw (1938) 60 C.L.R. 336 Helton v. Allen (1940) 63 C.L.R. 691

Reyeek v. McElcoy (1965) _12 C.L.R. 517 Cooper v. Slade (1958) 6 H.L.C. 746

T.P.C. v Bata Shoe Company ot Australia Ptv. Limited (No. 3) 44 FLLLR,. i449

Brunskill v. Sovereign Marine and General [Insurance Co. Limited (1985) o2 A.L.R. 53

THE HEATING CENTRE PTY. LIMITED v. TRADE PRACTICES COMMISSTON G1lO4t of 1985

CORAM: LOCKHART, WILCO% and PINCUS JJ. SYDNEY 17 MARCH 1986

Respondent MINUTE OF ORDER JUDGES MAKING ORDER: LOCKHART, WILCOX and PINCUS JJ. WHERE ORDER MADE: SYDNEY DATE OF ORDER: * 17 MARCH 1986 THE COURT HEREBY ORDERS THAT:

Leave be granted to Brian Butterfield to appeal out of time

against order 10 of the orders made herein by Beaumont ¢g. an

respondent one-half of its costs of the appeal of The Heating

) } NEW SOUTH WALES DISTRICT RECISTRY } No. G lod of 1985 ) )

CORAM: LOCKHART, WILCOX and PINCUS JJ. 17 MARCH 1986

We have had the aavantage of reading the reasons for judgment or Pincus J.. We agrees with those reasons in respect of most of the matters discussed by his Honour but there are some matters about which we have reached different conclusions and in relation to which we will express our own views. It may be taken that we agree with Pincus J.

Pincus J. is of the opinion that the learned trial dudge ecred in holding that the June 1982 conversation between Mr. Chapvle of Golden Decors and Mr. Brian Butterfield, who controlled the affairs

ot the appellant, fell within para. 96(3)(a) ot the Trade Practices

Act 1974. The trial Judge found that the conversation of June 1982

between Mr. Butterfield and Mc. Chapple included the following, taken

"To the best of my recollection, Brian said, we are getting tired of the problem we are having in Wagga with the discounting'. I replied it was very difficult to maintain a price, a suggested retail price, and sell heaters. The conversation closed, He remarked, if the discounting did not stop, he would appoint another dealer in town and = stop supplying us and supply him. If said I would try to sell at the recommended retail price, but what was

he going to do about the others. He said he would fix that ..."

"Mr. Chapple further said, in evidence which again I accept, that during this conversation, the second respondent said that he was 'sick and tired' of the discounting 1n Wagga and that 1f Golden Decors Pty. Limited did not charge at the recommended price, $837, as shown in the pricelist, he would find

another dealer, or they would have their supply cut off."

His Honour found with reterence to that conversation that the appellans by its agent, Mr. Butterrield, made it known to Golden Decors that the appellant would not supply it with the Kent Tile Fice unless Golden Decors agreed not to sell those goods at a price less than a price specified by the appellant, namely its recommended retail

price, and that the acts in question fell within nara. 96(3)(a} of the

His Honour's finding was based in part on his impression of witnesses whose evidence on critical matters was in sharp conflict. The relevance of a judge's estimation of a witness is not necessarily contined to the question wnether that witness is to he believed. It

may be necessary to evaluate the character or personality of a witness

in considering what conclusion ought to be drawn from establiched, but ambiguous or cryptic, facts. In the present case Mr. Buttertield gave lengthy evidence in rclation to a variety of matters. The trial Judge had an unrivalled opportunity to appreciate his personality and method of conducting business. Moreover, his finding that, during the June 1982 conversation, Mr. Butterfield was seeking the agreement of Mr. Chapple not to discount must be wiewed in the light of all the relevant facts bearing on, and providing background to, that conversation. One of the circumstances on which his Honour was entitied to rely was the dealer newsletter dated 1 March 1982 issued

by the appellant which contained the following statement:

"PRICECUTTING - WE URGE YOU IN THE STRONGEST POSSIBLE TERMS TQ MAINTAIN YOUR SUGGESTED RETAIL PRICE"

This document and other matters were part of the matrix of fact which his Honour tock into account, and was entitled to take into account, when determining whether the matters complained of fell within sub-s. 96(3) of the Act. There is, of course, an important legal difference between a threat to discontinue supply if a person sells at Less than

specified price and a threat to discontinue supply unless the person agrees not to sell at less than that price. The latter, not the former, is caught by para. 96(3)(a:. But we disagree with the view of Pincus J. that the trial Judge erred in regarding the conversation of June 1982 as being limited to the former. The evidence was, admittedly, cryptic hut tne whole point of Mr, Butterrielid's telephone call to Mr. Chapple was to procure from Mr. Chapple some commitment as to his future conduct in relation to discounting. He did not telephone to deal with a particular order but to discuss the situation

generally. Mr. Chapple so understoed him. The two men discussed the

situation generally, including the possible appointment by Mr.

Butterrield of another dealer and the discounting practice of others.

Me. Chapple offered a general promise that he "would tr to sell at

We agree with the view of Pincus J. that, having regard to the course taken by the respondent at the trial, the finding against the appellant in respect of the May conversation must be set aside; but otherwise we are of the opinion that no error has been

demonstrated in relation to the findings involving Golden Decors.

We share the view of Pincus J. that the principles enunciated

by the High Court of Australia in Brunskill v. Sovereion Marine and

General Insurance cto. Limited (£19853 62 A.L.R. 53 preclude any

intecference by this Court with the acceptance by the trial Judge of Mr. Van Roy's evidence regarding the meeting of @ March 1982. But we do not, with respect, share his Honour's unease about that acceptance. It is true that the trial Judge did not mention in his reasons for judgment that certain evidence of Mr. Van Roy did not accord with a mattec stated by him to the respondent some five months arter 8 March 1982, but it doss not follow that his Honour did not have that matter in mind when determining the questions or credibility and reliability of Me. Van Roy. Indeed, it 1S apparent from his reasons that his Honour did have reservations about Mr. Van Roy, extending beyond the

uncident involving lack of candour with the Court in respect or the

tine ot his proposed overseas visit at or about the time when he was

called to give evidence, and that he gave the matter of Mr. Van Roy's

pV years, ae sta SAENZ IMME RE MEET SR a RRR RRA mE tn mRNA En amaraty at meme Menem em =

credit careful] consideration. In our cpinion, it cannot be said that the discrepancy between the statement and the evidence was necessarily destructive of Mr. Van Roy's credit. That discrepancy was certainly a matter of suspicion, upon which Mr. Van Roy was understandably closely questioned. But he gave an explanation which incluced a reference to the circumstances under which the statement was made and a Claim that, at the time of the March 1982 meeting, he related the participants to their position in the Heating Centre organisation rather than to their

names. This explanation was one which the trial Judge was entitled to

Pincus J. has dealt in some detail with the content or the two discussions between Mr. Butterfield and representatives of the Burning Log. The first discussion took place early in March 1982 when Mr. Walsh, the National Sales Manager of the Burning Log, called at the appellant's premises at West Ryde and there introduced Mr. Russell Palmer to Mr. Butterfield. During the course of the discussion which ensued Mr. Butterfield informed Mr. Walsh that the appellant would not permit the Burning Log to have the Kent Tile Fire merely for the purpose of generating floor traffic. Mr. Walsh assured Mr. Butterfield that he was very serious about selling the product.

stopping supply." Mr. Walsh said that he thereupon assured Mr. Butterfield that the Burning Log "were very serious about that ... and... would do our

very best to sell the procuct". His Honour, arter reciting this

evidence, found that Mr. Waish's intentions on that matter were

honourable, despite a submission to the contrary put on behalf of the

appellant; and he accepted the evidence of Mr. Walsh. His Honour

found that, as a result of the conversation to which we have just

referred, the appellant's conduct fell within paras. 96:(3)(a), (b) and

His Honour's finding that the reference to discounting in the sense of discounting from the appellant''s suggested retail price has not been shown to be erroneous. The conversation in question must, of course, be viewed in the light of the evidence as a whole, including the evidence ot the prior existence of a published price list by which the appellant notified its recommended retail prices. The word "discounting" used Sy Mr. Buttertield is meaningful only as a reference to the prices specified in that price list; and it 1s clear that Mr. Walsh so understood it. To attract para. 96(3) (a), (Bb) oer (f) it is mot necessary that a particular price be specified or that a formula be specified from which a particular price may be ascertained. It 1s true that the notion of a specified price is partially detined in sub-s. 96(4) and that para. 9614)(c) deems the price to have been specified where a formula is specified from which the price may be ascertained (see also para. 96(4)(d)); but sub-s. (4) is intended merely to extend the meaning of the phrase "specified by the supplier". It is not an exhaustive definition and does not prevent a finding that a price may be specified by an anterior document, provided that the supplier in performing an act otherwise within sub-s. (3) makes it clear that he 1s referring to that document. This

is what happened on this occasion and ~- in contrast to Pincus J. - we

see no difficulty about his Honour's finding in relation to the acts

However, in relation to para. 96(3)(a), on this occasion, we share the view of Pincus J. that the trial Judge fell into error, There was no express reterence in the conversation between Me.

Butterfield and Mr. Walsh to an agreement not to discount. 1s we have already indicated in relation to Golden Decors, this does not necessarily exclude the operation of para. (a); 1t may be clear from the whole context of a conversation that a supplier was seeking an agreement and was using a threat not to supply as a means to that end. As stated, this is our construction of the Jume conversation between Mr. Butterfield and Mr. Chapple and, aS will appear, of the conversation of 8 March 1982 between Mr. Butterfield and Mr. Van Roy. But we donot think that the discussion between Mr. Butterfield and Mr. Walsh may be so regarded. In contrast to the other two situations, this was not an occasion in which Mr. Butterrield

initiated a contact im order to seek an assurance as to the future conduct of the supplier. The conversation at West Ryde occurred because Mr. Walsh called in to introduce Mr. Palmer. The conversation appears to have been relatively short and casual. Mr, Butterrield certainly used the occasion in which to make a threat to discontinue supply 1f the Burning Log discounted, this being the conduct talling within paras. (b) and (f), but it is not clear that he was seeking any promise about price from Mr. Walsh. [It is true that Mr. Walsh ofrered assurances about his seriousness in selling the product; but this reaction may have gone a little further than what was sought by Mr. Butterfield. The matter does not depend in any way upon credibility but upon construction of the conversation. Under those circumstances we feel free to give effect to our opinion that, having regard to the

onus and standard of proof in respect of the matter, the better view

is that the allegation basea upon para, 1a) should be Found not to be

Pincus J. agrees with the trial Judge tnat the allegations under para, 96(3)(b) and (©) arising out of the conversation ot 8 March 1982 between Mr. Butterfield and Mr. Van Roy were made out - and we agree - but his Honour is of the view that the allegation under para. 96(3)(a) should fail. The problem, in the view of Pincus J., was the now familiar one that nothing was expressly said about agreeing not to discount. However, this was a lengthy meeting at the premises or the Burning Log, appointed for the purpose of discussing the possible appointment of the Burning Log as a dealer. In that context the proposed trading arrangements were discussed. One of those matters was pricing policy; and it was during that discussion that Mr. Butterfield made his demand that "there was to be a no discount situation". He was not dealing with a particular order. He was seeking an assurance from the Burning Log representatives as to the future conduct of that company in relation to pricing. His words "we are only interested in people who are not involved in discounting" andicate clearly that he related the proposed pricing policy of the Burning Log to the question whether that company would be appointed as a dealec, that is supplied at all. Mr. Butterf1reld then handed to Mr. Van Roy a price list, saying that these were the prices at which the Burning Log had to sell. Although Mr. Van Roy does not appear to have given any promise, 1n terms, to abide by these prices, he did make handwritten notes on the price list in Mr. Butterfield's presence rrom which Mr. Butterfield might reasonably have assumed that Mr. Van Roy had accepted his demands. Upon tnese facts it was, in our opinion,

clearly open to the trial Judge to find conduct falling within para.

In the result we would differ from the findings of the Judge only in respect of his reliance upon the May 1982 conversation relating to Golden Decors and in respect of the allegation under s. 96(3)(a) arising out of Mr. Waish's visit to West Ryde. These differences do not significantly affect the view which ought to be taken about the course of conduct undertaken by Mr. Butterfield on behalf of the appellant. It remains true, as the trial Judge said, that the evidence shows a "deliberate campaign embarked upon by" Mr. Butterfield "in a market situation which gave him reason to believe

that the Kent Tile Fire was a successful product which could survive

without any need to discount its recommended retail price. It was a

campaign conducted in contravention of s. 48 of the Trade Practices

Act in relation to which the pecuniary penalties assessed by the trial Judge cannot be regarded as excessive. It is, in our view, doubcful that those penalties would have been any the iess if the trial Judge had not made the two findings against the appellant which we regard as erroneous. However, as there can be no assurance on that matter, it is appropriate to review the penalties in the light of the appellant's limited success and to reduce the penalties imposed in respect of each of Golden Decors and the Burning Log by $2,500.00. The amended penalties will then be in relation to Golden Decors, $7,500.00, in relation to Kurrajong Hardware, $15,000.00, 1n relation to the Burning

The trial Judge ordered that the respondents betore him, the present appellant and Mr. Butterfield, pay one half or the costs ot the applicant and the Trade Practices Commission. That apportionment was made by reference to the transactions with the various suppliers in respect of which the Commission had succeeded or failed. It seems to us highly unlikely that his Honour's apportionment would have been

atfected by the minor amendments to his orders which should be made.

In relation to the costs of the appeal, the appellant has had some success but it has failed in regard to most or the matters argued. Making allowance for 1ts antitlement to have the costs of the matters upon which it has succeeded, but taking unto account the contrary position 1n regard to those upon which it has failed, it appears to us to be appropriate to order that the appellant, The Heating Centre Pty. Limited, pay to the respondent Commission one-half

We agree with Pincus J. that leave should be granted to Mr.

Butterfield to appeal out of time but that his appeal should be

preceding pages are a true copy of the Reasons for Judgment herein of

their Honours Mr Justice Lockhart and Mr Justice Wilcox

Associate: Kowa Darke. t / BO pate: /Pfh March 1796.

IN THE FEDERAL COURT OF AUSTRALTA ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G104 of 1985 GENERAL DIVISION )

This is an appeal from a judgment of a single judge of this court in which it was found that the appellant had

contravened s.48 of the Trade Practices Act 1974 ina number of

respects; pecuniary penalties were imposed. The proceedings were brought against the appellant, The Heating Centre Pty. Limited, and against one Brian Butterfield. The respondent succeeded in some respects against both, but only the company appealed. However, Mr. Butterfield sought leave to appeal out of time against an order for costs made against him by the learned primary judge and that application is further mentioned below.

In these reasons, it is appropriate to call the company the

appellant. It was proved to be a distributor of certain heaters made in New Zealand called "Kent Tile Fires" and each of the

findings against it was concerned with its activities as such a

Section 48 of the Trade Practices Act is as follows:

"A corporation or other person shall not engage in the practice of resale price maintenance."

The consequences of breach are prescribed, inter alia, by s.76 which empowers this Court to impose pecuniary penalties, not to exceed (in the case of a body corporate) $250,000 in respect of each act or omission. The practice of resale price maintenance is, in effect, defined by Part VIII of the Act and principally by

It is necessary to deal separately with each of the conclusions of the learned primary judge which is challenged, but it is convenient to discuss first an attack of a general nature mounted by counsel for the appellant. This was based on the assertion that the learned primary judge had not applied the

The principal passage in which his Honour dealt with

"I accept that, although the civil standard of the balance of probabilities is appropriate, in reaching conclusions and drawing inferences, the court should be mindful of the seriousness of the allegations, having regard to the penalties

involved (see Trade Practices Commission v. Mobil Oi] Australia Limited (1984) 80 A.T.P.R. 40,182

eg? TETRA IINT PRY TL PEEP REMI AS ERS AL MR Mgt ge aINER EG te

per Toohey dg. at 45,529 and the cases there cited)."

Counsel for the appellant submitted that, although s.78 provides that criminal proceedings do not lie for contravention of part IV, in which s.48 is to be found, nevertheless the criminal standard of proof applies, He emphasised the size of the pecuniary penalties provided by s.76 and suggested that although parliament had elected to avoid attaching the stigma of criminality to contraventions of Part IV, proceedings under that

Whatever may be the reason for the distinction, the position is that the Act clearly characterises proceedings under s.76 as civil: see s.78 and contrast with s.79, while equally clearly characterising proceedings for a penalty in respect of a breach of Part V of the Act as criminal proceedings. In so doing, Parliament must be taken to have intended that the court would apply the respective standards of proof applicable to each category. It is, of course, an attribute of civil proceedings that the necessary facts must be proved on the balance of probabilities, but, of course, taking into account the gravity of

the matters alleged: Briqinshaw v. Briginshaw (1938) 60 C.L.R.

Counsel also submitted that, aif the criminal standacd was not applicable, then, in view of the penalties imposed, the civil standard should have been so modified in favour of the

appellant as to be very little different from the criminal

standard. However, that contention is inconsistent with the

decision of the High Court in Rejfek v. McElroy (1965) 112 C.L.R.

The question whether there is any substantial difference

between the civil standard, where fraud is alleged, and the

criminal standard was critical there, because anew trial was

sought on the ground that the case had been decided on the

criminal standard. That relief was granted, the court remarking:

"The difference between the criminal standard of proof and the civil standard of proof is no mere matter of words: it is a matter of critical substance. No matter haw grave the fact which is & to be found in a civil case, the mind has only to : be reasonably satisfied and has not with respect to

any matter in issue in such a proceeding to attain that degree of certainty which is indispensable to the support of a conviction upon a criminal charge; see Helton v. Allen (1940) 63 C.L.R. 691 per Dixon, Evatt and McTiernan JJ. at p.714." (pp.521, 522)

Counsel for the respondent pointed ouf that in other

proceedings of a similar character, the standard of proof has

repeatedly been held to be the civil standard; he instanced

proceedings for penalties under the Corrupt Practices Prevention

Act 1854 and referred to Cooper v. Slade (1958) 6 H.L.C. 746, 10

E.R. 1488 at 1498. He also pointed out that in customs

prosecutions brought, as the relevant statute requires, ""in accordance with the usual practice and procedure of the court in é civil cases", the standard of proof is the civil standard and that single judges of this court have repeatedly applied that standard in proceedings for the recovery of penalties under ss.76

EN I TS YaST RT iy IS ee EE TP ae ON TET SLE NTI EMIT STS RMT PETRY PC TIE SI TENT TTT ETN TAH METS HY et

There is not such a difference between his Honour's formulation, quoted above, and that to be derived from the decisions of the High Court to which reference has been made as to suggest that his Honour misapplied those cases. Counsel for the appellant, however, argued that some of the detailed findings made by his Honour, and the language in which they are expressed, make good his point that the court did not in truth apply a sufficiently rigorous standard. That argument is dealt with below in the course of the discussion of the correctness of the conclusions his Honour reached on specific allegations of breach. That consideration follows the sequence of the argument and not

The appellant complained that his Honour had found against it in respect of a matter which was abandoned below. Paragraph 22 of the statement of claim alleged, in effect, that the appellant had meade it known to Golden Decors that' the appellant would not supply Kent Tile Fires to Golden Decors unless Golden Decors agreed not to sell them at less than the specified price. The particulars of this allegation were, firstly, a circular dated 1 March 1982 and, secondly, a conversation in or about May 1982. Paragraph 23 of the statement of claim made an allegation precisely the same as that in pac.

22, except that the contravention alleged was "in or about June

1982". The particulars of par. 23 incorporated those of par. 22

and also included a conversation in or about June 1982.

At the hearing before the learned primary judge, counsel for the respondent elicited from a Mr Chapple, of Golden Decors, F that following receipt of a circular of 1 March 1382 he hada Be telephone conversation with Mr Brian Butterfield. No precise E date was specified. Mr. Chapple said in his evidence that "the E. matter of price came up as well as what price as we would be Ee buying at". Mr. Chapple then identified Mr Butterfield in Court. '

A further question was asked about the conversation and counsel

"for the appellant objected on a ground recorded as, "Relevance, er your Honour, not particularised". After some discussion of the Fi

point counsel for the respondent said he would move on to something else. He did so, but soon returned to the subject of

the witness' contact with Mc Eutterfield. He questioned Mr.

Chapple about a conversation aiter the "telephone conversation ee that you said you made to Mr Butterfield after receiving the a newsletter", which further conversation was said to have taken ee place "around June". Counsei for the appellant then asked, ey ",..-is this intended to be...the conversation referred to against ry o

a number 2 in the particulars of paragraph 22 of the statement of

claim?", and counsel for the respondent said it was. The only a difference between the conversation alleged in par. 22 and that ore

i alleged in par. 23 is that the former is alleged to have taken

Place in or about May 1982 and the latter in or about June.

Senior counsel for the respondent, before us, said that the

answer given by counsel for the respondent below was a mistake. That seems to be correct. The conversation to which the answer related was expressly stated to be one other than the conversation which had already been the subject of questioning,

and so the former must have been the par. 23 conversation.

Counsel then brought out the details of the June conversation - a subject dealt with further below - and shortly after that said that he did not press "the earlier conversation that was objected to in any event in relation to this witness »-.". There was further evidence taken from the witness, and in ecross-examination he again referred to his conversation with Mr Butterfield in dune. However, there was no further reference to

The position at the trial was somewhat confused, but it does appear that counsel for the respondent elected not to press the May conversation. Under those circumstances, the appellant was not obliged to meet any case based upon that conversation. Nor did it attempt to do so. His Honour, nevertheless, made a declaration against the appellant in respect of the matters alleged in par. 22. That he did so deliberately is clear because (at p.39 of the reasons) there is an appropriate finding with respect to May 1982 followed immediately by discussion of a conversation in June 1982, which is the subject of a separate finding. It would appear that, understandably in the

circumstances, his Honour overlooked that the respondent had

elected not to press the May conversation and that he thereby fell into error in making a finding adverse to the appellant in relation to that conversation. It is true that paragraph 22 of the statement of claim relied, by way of particulars, upon the circular letter of March 1982 as well as the May conversation,

but it is not suggested that the former could, standing by

itself, support the findings of breach based on that paragraph.

Apart from the contention just dealt with, counsel for the appellant relied upon his Honour's finding under par.22 of the statement of claim for a separate purpose foreshadowed above, mamely as evidencing that the learned primary judge did not apply the proper standard of proof. Although, for the reasons explained, the findings as to the May conversation cannot stand in any event, it still appears necessary to deal with this contention, that is that the finding manifests a misunderstanding

The circular of May 1982 just referred to urged dealers "in the strongest possible terms to maintain your suggested retail price". The copy which went to Golden Decors mentioned that that firm would be one of only two Wagga dealers. Shortly after receipt of the circular, his Honour found there was the conversation referred to above of which Mr. Chapple said that

"the matter of price came up as well as what price we would be

His Honour found that the conversation proceeded on the footing that Golden Decors were to obey -

"the dictates of the newsletter in the matter of the "suggested" retail price of the Kent Tile Fire and, specifically, were to refrain from discounting."

It is not easy to agree that the evidence as to this conversation assists towards proof of a breach of the relevant provision. However, it does not seem necessary to go into that in detail, because even if it be accepted that his Honour took too much from the relevant conversation, it does not follow that in dealing

with other aspects of the case, he fell into error.

findings as to Golden Decors. The principal accepted evidence on which they were based is that of the June 1982 conversation

already mentioned, which his Honour found to have included the

"To the best of my recollection, Brian said, 'We are getting tired of the problem we are having in Wagga with the discounting.' I replied it was very agifficult to maintain a price, a suggested retail price, and sell heaters. The conversation flowed. He remarked, if the discounting did not stop. he would appoint another dealer in town and stap supplying us and supply him. I said I would try to sell at the recommended retail price, but what was he going to do about the others. He said he would fix that. ..."

"Me. Chapple further said, in evidence which again I accept, that during this conversation, the second respondent said that he was 'sick and tired' of the discounting in Wagga and that if Golden Decors Pty. Limited did not charge at the recommended price, $837.00, as shown in the price list, he would find

another dealer, or they would have their supply cut off."

Counsel for appellant contended that his Honour should

not have accepted the evidence just mentioned. It was argued ' that other evidence which his Honour accepted, and in particular . that of a Mr. Guctner, should have produced findings favourable a to the appellant. Particular criticism was made of the language = used by the learned trial judge in rejecting the proposition that a Mr. Gurtner's evidence negated the effect of Mr. Chapple's. His a Honour said that the former was "at best equivocal" from the ig stand~point of the appellant and that of Mr. Butterfield. The ry Phrase just quoted is not, however, inconsistent with application e of the proper standard of proof. To the contention that Mr. i Gurtner's eviderce suggested that Mr. Chapple should not be fe accepted, his Honour answered that it was "at best equivocal"; to te say that a particular piece of evidence neither helped nor hurt e the appellant's case, either generally or in some particular B cespect, does not by any means show a departure from application of the proper standard of proof. For the respondent to succeed, ie it did not have to appear that all the evidence called by it es assisted towards proof of its case. Fe The contention just mentioned must therefore he ts rejected. A more substantial argument advanced, however, was = that the June conversation, found against the appellant as set ie out above, did not fall within all those paragraphs of s.96 on ee which his Honour's findings with respect to Golden Decors were e based. The parts of s.96(3) which were held to apply were ir Be

WRENS SNe I eee OT PS NEN Me eT Te Oe EMR OY SNE ee OO REE OT CET a ET TE EE PT oS

pars.(a), (b) and (ff); the relevant portion of the subsection is Be ae

"The acts referred to in sub-sections (1) and (2) Ee

supplier, goods supplied to the second person by the supplier or by a third person who, directly or indirectly, has obtained the goods from the supplier;

(f) the supplier using, in relation to any goods supplied, or that may be supplied, by the supplier to a second person, a statement of a price that is likely to be understood by that person as the price below which the goods are not to be solid."

Counsel argued that not all attempts to achieve price ES

maintenance are proscribed, but only certain specific actions, BY ih) namely those set out in the section. That is plainly correct; ty Pa for example, under the conditions set out in s.97, it is lawful be to "recommend" a price althogh that may, in peactice, help ig towards maintenance of the price. z a Ee

It is not, at first sight, obvious that the conversation of June 1982, referred to above, against the background of the

other relevant findings made by his Honour, falls within par.(a).

SR epee rep vse TRS NNER eS REE PTO ENE NTRP LTE LIKE LONE LA ITA SS VOL IVT TO EISEN STORY OEE mre roermere®

There need not be a precise correspondence between what the supplier actually says or writes and the language used in

par.(a), That is so because the paragraph begins with the words, "the supplier making it known to a second person that ...", which means that the information specified must be conveyed by one means or another, but not necessarily in the precise terms set out in the statute. The learned primary judge must have taken the view that what was said on behalf of the appellant by Mr. Butterfield so closely corresponded to the notion set out in par.(a) that the appellant was liable. The essence of the conversation quoted above is that the appellant, through Mr. Butterfield, threatened to discontinue supply if the discounting did not stop - that is, if the recommended price was not charged. There may be little difference in commercial effect between such a statement, on the one hand, and a threat not to supply unless "the second person agrees not to sell" at the specified price, on the other; but there is a legal difference. It is one taing not to discount, and another to agree not to discount. It is my view that the conversation held to have taken place in June did not

amount to making known such a matter as is mentioned in par,.(a).

It should be added that it is by no means clear that questions of this sort were agitated before the learned primary judge. The case seems to have been fought below as (at least largely) a contest on factual points. On appeal, howevec, the

appellant raised arguments as to the proper application of the

PARI FRCDOACTES WACO RICE ns sente NSA ATyn OS N IN ON

celevant paragraphs of s.96(3) and I think they must be dealt

Next, it is necessary to consider whether the conversation falls within par.(b), properly construed; that is directed against inducing or attempting to induce people not ta sell at less than the price specified, where the goods come directly or otherwise from the inducer. Counsel argued that

there must be an "inducement" as that word is commonly used in the law. It is true that the word ordinarily refers to some proffered advantage or disadvantage, promised or threatened, to Follow from following or failing to follow a stipulated course of action. There is no reason, however, to read into par.(b) a necessity to find that anything 1s offered in exchange, so to speak, far not discounting; merce persuasion, with no promise or threat, may well be an attempt to induce. Apart from that, here it appears that there was an inducement in the sense referred to

by counsel, namely a threat to discontinue supply. The argument

Lastly, the question was raised whether the facts falls within par.(f) and it was contended that there was no statement

of price, on the evidence accepted by his Honour. There plainly

The result is that, on this batch of allegations, the

appellant succzeds as to par.22 of the statement of claim and

i i :é i y ¢Li & ¥ : 2? Fo Y s % & u he it zFa g Fy %'

& e €

also as to the finding based upon par.96(3)(a) relating to the

June 1982 conversation, Otherwise, the apyveal in respect of che

Although presented in much more summary form, the arguments as to Kurrajong Hardware followed the same line as those just dealt with; that is, it was said that, applying the proper standard of proof, his Honour should not have made the findings he did and, secondly, that those findings did not bring the matter , within the paragraphs of s.96(3) on which his Honour

No reason appears to interfere with the primary findings made by the learned judge as to Kurrajong Hardware, nor is it necessary to set them out fully in order to determine the legal questions which arise. In substance, his Honour found that a Mr. Lindsay, the owner of Kurrajong Hardware, acquired Kent Tile Fires from a source unrelated to the appellant during 1981 and sold at discount prices. Mr. Butterfield telephoned him about 13 August 1981 and protested about the discounting but Mr. Lindsay said, in effect, that he would continue to discount. Mr. Butterfield told Mr. Lindsay that "things were out of hand" that year, but that he was "going to have things better organised" in

the 1982 winter season. Mr. Lindsay then asked for a dealership

in the Hawkesbury region and that was refused, Mr. Butterfield

saying that he was happy with the present dealer, Decon.

At the end of 1981 or early in 1982, Mr. Lindsay received the appellant's dealer newsletter dated 12 December 1981 which enclosed anew price list. In March or April 1982 Mr. Lindsay again asked Mr. Butterfield for a distributorship but was refused on the same ground. Mr. Lindsay then said that although he had discounted in the past, if he got a dealership he would not discount any more. Then his Honour found that Mr.

Butterfield, who was "the second respondent" below:

",..replied that there were two conditions he would insist on for anyone to have access to his product. One was chat the retail price as indicated on the price list was adhered to. Mr. Lindsay said that the second respondent pointed at the retail price indicated on a copy of the first respondent's price list and said:

'That 15 what you will sell at. {If any dealer sells my produce that is the price you will sell it for.' {In this connection, Mr. Lindsay explained

that the second respondent indicated the prices of $660.00 for the Kent Tile Fire and $140.00 for its flue kit previously mentioned.)" There was then further conversation along the same lines, Mc. Lindsay pressing for a dealership. The upshot was that Mr. Butterfield said he would consider whether he would appoint Mr.

Lindsay to the Richmond dealership, but in the meantime Mr.

As from 9 February 1982, Mr. Lindsay bought from Decon.

The appellant did not sell any of the Fires to Mr. Lindsay.

His Honour found, on the evidence, that as to Kurrajong Hardware _ the appellant was in breach of the same paragraphs of s.96(3) as 2 those quoted above when dealing with Golden Decors, namely =

pars.(a), (b) and (if). His Honour also heid that the conduct of

As to par.(a), it was contended, among other things,

that conduct is not within the paragraph unless "the offending statement is made in the context of a real likelihood of supply".

As to that, it is arguable that the natural reading of the

paragraph is not such as to include instances in which a possible

At a glance

Court

Decision date

Before

Source

Judgment (342 paragraphs)

Parties

Cited By (1)