Trade Practices Commission v Bata Shoe Co of Australia Pty Ltd [1980] FCA 24

Federal Court of Australia|1980-03-12|Before: Lockhart J

ne be i
' k CATCHWORDS Trade Practices ~- resale price maintenance - - - footwear wholesale -

refusal to supply - agent for respondent conveying communications

to retailer - whether agent acting within the scope of its

authority - whether respondent withholding supply because of

retailers' lack of proper seating and fitting facilities for

footwear at retail stores or because respondent feared retailer

would sell or be likely to sell footwear at a price less than

the price which the respondent had through its agent specified

to the retailer as being the price below which the footwear

Trade Practices Act, 1974 (Cth.) ss. 96 (3) (a), (b), (a) (1) ana (a1); (£), (6).

THE TRADE PRACTICES ACT 1974 BETWEEN: TRADE PRACTICES COMMLSS1ON

IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION )

respondent from engaging in the practice of resale price maintenance contrary to s. 48 of the Trade Practices Act 1974 ("the Act"), and to recover, on behalf of the Commonwealth of

The respondent carries on business as a manufacturer, importer and wholesaler of leather footwear and polyvinyl chloride footwear, marketed under the trade name

"Bata". Adnam and Pockley Pty. Limited ("Adnam and Pockley")

is the agent of the respondent for the purpose of selling its

engaged, and continues to engage, in the practice of resale

Between November 1976 and April 1977 the respondent by its agent made it known to Woolworths Limited ("Woolworths") that it would not supply Bata leather footwear to Woolworths unless Woolworths agreed not to sell that leather footwear at a price less than a price specified by the respondent (s.

Between November 1976 and April 1977 the respondent by its agent induced or attempted to induce Woolworths not to sell Bata leather footwear supplied to Woolworths by the respondent at a price less than a price specified by the respondent (s. 96 (3) (b) of

respondent by its agent used in relation to Bata leather footwear supplied or that may be supplied by it to Woolworths a statement of price that was likely to be understood by

Since about May 1977 the respondent has withheld the supply of Bata leather footwear to Woolworths for the reason that Woolworths had not agreed not to sell Bata leather footwear at prices less than prices specified

Since about May 1977 the respondent has withheld the supply of Bata leather footwear to Woolworths for the reason that Woolworths had sold or was likely to sell Bata leather footwear supplied to Woolworths by the respondent at prices less than prices

The case turns principally upon the evidence as to six conversations during the period November 1976 to April 1977 between officers of Adnam and Pockley and Woolworths. The witnesses are in conflict as to what was said during

There is no dispute that since about May 1977 the respondent has refused to supply Woolworths with Bata leather footwear. The reason for this is primarily what the case 1s about. The applicant says that it 1s because the respondent feared that Woolworths would sell Bata leather footwear at prices below the minimum price specified by the respondent. The reason given by the respondent is that it will not sell to retailers like Woolworths, Coles, and K-Mart because their shops do not have proper facilities and staff for fitting shoes or adequate "after sales" service to deal with enquiries or complaints from customers, and that this is the policy of the Bata organisation, not only in Australia, but

statement of claim that the respondent withheld the supply of Bata leather footwear to Woolworths in November 1976, it is not disputed that this allegation has not been established

and that in fact there was no such withholding of supply.

Nor is it disputed that the respondent at all material times has supplied polyvinyl chloride footwear to Woolworths and other similar retail organisations in Australia. The respondent says that the same considerations as to fitting facilities, staff and "after sales" service do

Before turning to the evidence as to the six conversations, it is convenient to say something of the

The respondent is a member of the world-wide Bata organisation which had its origins in Czechoslovakia a little over a century ago. Until the second world war the Bata organisation carried on business principally in Europe; but at the beginning of the war Thomas Bata, the son of the founder of the organisation, left Czechoslovakia and went to Canada where he established its headquarters. They are still

there. It developed from a small business at the end of the

second world war to an organisation which 1s now the largest manufacturer of shoes in the world operating in about ninety-seven countries with over one hundred and two companies. Most of the companies not only manufacture shoes

The Bata organisation employs about ninety thousand people and produces over three hundred million pairs of shoes a year. Its Australian operations began in the mid 1950's when a Bata company in Australia imported footwear but, due to import restrictions that were applied in 1953, the business ceased. It was not until 1961 that the Australian operations of the Bata organisation really commenced with the establishment of a factory at Seaford in Victoria on the Mornington Peninsular. The respondent commenced the manufacture of footwear from that plant in May 1961. There are no retail outlets managed or operated by the respondent in Australia. Its activities are importing and manufacturing shoes in Australia. Its New South Wales agent, Adnam and Pockley, sells Bata footwear in New South Wales by wholesale. Adnam and Pockley carries on business at Zetland, Sydney. It was appointed agent for the respondent in 1961. Stock is received from the respondent on a consignment basis only.

Adnam and Pockley acts as agent for the respondent.

The first conversation relied on by the applicant to establish its case was in November 1976 in the office of Mr. Adnam at Zetland between Mr. Adnam, Mr. Smart and Mr. Clegg. Mr. Adnam is the managing director of Adnam and Pockley. Mr. Smart is the footwear merchandise manager of Woolworths. Mr. Clegg is the footwear buyer for the "Big Ww"

Although Mr. Clegg said that Mr. Kelly, the sales Manager of Adnam and Pockley, may have been present, no witness said positively that he was there. Mr. Kelly said

that he was not there. I find that he was not present.

Mr. Smart and Mr. Clegg visited Mr. Adnam because Woolworths had been experiencing some difficulty in obtaining stocks in Queensland of Bata leather footwear from the Queensland agent of the respondent. Mr. Smart asked Mr. Adnam if it would be possible for Adnam and Pockley to look after the stock requirements of Woolworths for its Queensland variety store. Mr. Adnam agreed but he said that

Woolworths may have trouble obtaining deliveries in New South

Wales if it "did not have a look at our selling price". Mr. Smart asked Mr. Adnam to give him some guidance as to the price which Woolworths should charge for Bata leather footwear. Mr. Adnam said that, if it was to sell at somewhere near the selling price of Gowings Limited in Sydney, he felt that Adnam and Pockley would be able to continue supplying Woolworths. Mr. Smart told Mr. Adnam that

Neither Mr. Smart nor Mr. Clegg knew at that time what price was charged by Gowings; but later that day they found out what it was. Woolworths then increased its price to a level about three cents below the Gowings' price. Woolworths later opened two additional stores at Gladstone

and Elizabeth in Queensland and stock flowed through without

There is some disparity in the evidence as to the extent of the increase in the price charged by Woolworths. Mr. Smart put the figure as being about three cents under the price of Gowings. Mr. Clegg said that the price was increased to the same price as the Gowings' price. I prefer the

that, if Woolworths did not increase its price to somewhere near the Gowings' price, it would run the risk in the future of uncertain supply of Bata leather footwear from Adnam and

Mr. Adnam said that he thought the conversation occurred about October 1976 and that a Mr. Mitchell was present also. Mr. Mitchell was a buyer employed by Woolworths who had retired before the hearing. Neither party called him to give evidence. It is unlikely that Mr.

Mr. Adnam denied that he ever suggested to any of the Woolworths' representatives that the price at which Woolworths ought to sell Bata shoes was the price at which any particular retailer sold them. He denied saying that Woolworths could still have problems with supply 1f it continued with its "present pricing policy". He said that he told them that Woolworths could have difficulty with supply if Adnam and Pockley ran out of stock which was quite a

the evidence of Mr. Smart and Mr. Clegg as to what was said in this conversation, it is not material; and I prefer the

evidence of Mr. Smart as he appeared to me to be the witness

with the most accurate recollection of the conversation. Both Mr. Smart and Mr. Clegg impressed me as truthful and reliable witnesses. Mr. Adnam was an elderly man who did not have a very clear recollection about conversations in 1976 and 1977. Where his evidence conflicts with the evidence of Mr. Smart and Mr. Clegg I accept the evidence of the latter gentlemen as being more reliable. I will return to Mr.

In my opinion, the probabilities support the version given by Mr. Smart and Mr. Clegg. Woolworths was experiencing a supply problem in Queensland. Evidence to this effect, although in general terms, was given by both Mr. Smart and Mr. Clegg. Mr. Adnam agreed that Mr. Clegg told him in this discussion that Woolworths had experienced

problems with supply of Bata shoes in Queensland. Mr. Kelly said that Mr. Clegg told him earlier in 1976 that Woolworths was having difficulty with supply in Queensland. Mr. Adnam agreed that he was told that Woolworths was changing its policy and centralising its buying in Sydney. He agreed that

Mr. Smart and Mr. Clegg asked for guidance as to price and

that, although he did not say that Woolworths should charge somewhere near the price of Gowings, he did say that they should look at the prices charged by other Sydney retailers

The evidence of Mr. Smart and Mr. Clegg is corroborated by the fact that Woolworths did increase its prices for Bata shoes, to a level a few cents below the

Another matter of importance in determining the credibility and reliability of the witnesses is a letter of 18 November 1976 from Adnam and Pockley, signed by Mr. Kelly as sales manager, and addressed to the respondent for the attention of Mr. J. Lewis. Mr. Lewis was an employee of Woolworths from 1951 until October 1966, having been the Commonwealth footwear buyer for Woolworths from December 1959 until he left its employ. From October 1966 until October 1971 he was employed by a footwear importer and from January 1972 until October that year he was employed by Adnam and Pockley as its sales manager. From November 1972 until April 1978 he was employed by the respondent, originally as sales

It has now been clearly established that both Woolworths Divisions, viz. Woolworths Family & Variety Stores and Woolworths Big W. Stores, are discounting our footwear.

Complaints have been received from Myers Western Stores Ltd. that, because of

this, Woolworths Big W. country outlets are adversely affecting their business

and, likewise, Managers of certain of the Myer Sydney Ltd. stores, which are operating within the same suburban complexes, are similarly affected.

For example, our Bata Stride 1s being retailed by Woolworths at $14.54 as a regular policy, whereas all traditional footwear retailers conform to a price of $14.99. Scout and ponytails are similarly discounted.

In the light of the above authentic information we are bringing this matter to your notice seeking a directive as to whether we should continue to supply Woolworths. Currently, we are holding a volume of orders for them but will delay shipment pending your decision in this matter.

J.Kelly, Sales Mgr." Mr. Adnam said that he saw and approved the letter

before it was signed by Mr. Kelly and that it accurately

reflected a conversation that he had with Mr. Kelly before the letter was sent. He said that the reason for Mr. Kelly writing the letter was that the purchasing officer of Myer was a man who was "very unusual" and "who spends his time growling about ~- to all manufacturers - what other retailers

Mr. Adnam placed the conversation with Mr. Smart and Mr. Clegg as probably occurring before the writing of

Mr. Kelly said that the letter was prepared after discussion with Mr. Adnam, that the reference in the letter to "all traditional footwear retailers conform to a price of $14.99" was intended to mean that the average retailer sells that item at about $14.99. He said that the choice of the

word "conform" was unfortunate as Adnam and Pockley did not have recommended prices; that the letter was written following a complaint by the footwear controller of Myer

Western Stores; and that he thought it was necessary to send

sentence "Currently, we are holding a volume of orders for

them but will delay shipment pending your decision in this Matter" was not true; that orders were being executed progressively, not held; and that in fact Adnam and Pockley did not commence delaying shipment as Mr. Adnam decided to

continue to supply until told otherwise by the respondent.

"a simple report which we make dozens and dozens of continually about anything in the footwear trade that may affect Bata in any shape or form and having had a formal complaint by someone representing a firm of substance in any event, it behove Adnam and Pockley to report such a thing. What we reported was the context of advice or the complaint by Robinson, not expressing an opinion of ours. It was a simple report."

Mr. Adnam himself referred to the letter as a report to the

Adnam and Pockley received no reply to the letter. I shall mention later how the letter came to the attention of

unconvincing. It was a report by the agent to his principal ef complaints from an important customer; but it was much

Adnam and Pockley was drawing the attention of the respondent to the fact that Woolworths was discounting Bata footwear, that other retailers were charging the same price for Bata leather footwear whereas Woolworths was undercutting that price and that complaints had been received from the Myer organisation that the discounting by Woolworths was adversely affecting the business of Myer where the two were in competition in the same market. Adnam and Pockley thought

it sufficiently serious to seek "a directive as to whether we

In my opinion the letter corroborates the evidence of Mr. Smart and Mr. Clegg that it had come to their attention, by way of gossip in the trade, that other retailers were exerting pressure on the Queensland agent of the respondent not to supply Woolworths with Bata shoes, and their evidence that Mr. Adnam suggested that there could be trouble with supplying Bata shoes to Woolworths in New South Wales unless a price was charged by Woolworths akin to the

price generally charged by "traditional footwear retailers".

The letter of 18 November 1976 is a clear indication of the concern felt by Adnam and Pockley about Woolworths undercutting other retailers. I have no doubt that what was said by Mr. Adnam to Mr. Smart and Mr. Clegg in the November 1976 discussion gave a very clear impression to them that unless Woolworths increased its price so as to "conform" to the price charged by "all traditional footwear retailers", a guide being the price charged by Gowings, continuity of supply in New South Wales could not be

Although Mr. Adnam said that he thought the letter had been sent after the meeting between Mr. Smart, Mr. Clegg, and himself it is likely that the letter was sent before that

meeting. The concern expressed by Adnam and Pockley in the letter as to the failure of Woolworths to conform to the selling price that "all traditional footwear retailers" were then charging was allayed by the undertaking given by Mr. Clegg or Mr. Smart to charge about the same price as the

It was submitted by counsel for the respondent that

Mr. Smart and Mr. Clegg did not know what the Gowings price was until after the November 1979 conversation had concluded and that it was inherently improbable that they would commit Woolworths during the conversation to charge the same price as Gowings, or a price very close to that price, without knowing what it was. I do not find this improbable. Mr. Smart and Mr. Clegg knew that the Woolworths' price was less than the Gowings price, although they did not know the precise difference. Their main concern was to ensure

Counsel for the respondent submitted that, if the court accepts the evidence of Mr. Smart and Mr. Clegg, the respondent is not bound by the statements of Mr. Adnam as he was not acting within the scope of the authority of Adnam and Pockley as agent for the respondent. It was not

suggested that his statements did not bind Adnam and Pockley.

The nature and scope of the actual authority of an agent is generally determined by the nature and scope of the

duty entrusted to him: see Colonial Mutual Life Assurance

Society Limited v. The Producers' and Citizens' Co-Operative Assurance Company of Australia Limited (1941) 46 C.L.R. 41;

Coroneo v. Kurri Kurri and South Maitland Amusement Co.

Limited (1934) 51 C.L.R. 329; AustralasianBrokerage Limited

Vv. Australian and New Zealand Banking Corporation Limited

Actual authority may be express or implied. The documentary evidence as to the terms of the agency of Adnam and Pockley is scant. The letter of appointment of Adnam and Pockley as the respondent's agent in New South Wales is dated 11 April 1961. It states that Adnam and Pockley was to be the sales representative of the respondent in New South Wales, to sell the products of the respondent at the prices and on the "sales terms" laid down from time to time by the respondent. Adnam and Pockley was to be responsible "in enforcing all distribution and pricing policies laid down by the company from time to time". The appointment was made initially until 31 December 1961, but it was renewed annually

Mr. MThring, the managing director of the respondent, said in evidence that it was the respondent's policy not to supply retailers who did not have proper facilities for the fitting of shoes, trained staff and "after sales" service. He regarded the administration of that

policy in New South Wales as falling squarely within the

authority of Adnam and Pockley. He denied that the respondent had a policy of not supplying retailers who discounted the prices of Bata leather footwear below those normally charged by other retailers; but for reasons which I

In my opinion, it was the respondent's policy not to supply retailers who did not have proper facilities, trained staff and "after sales" service; and it was its policy also not to supply large retailers, such as Woolworths, who discounted Bata leather footwear below prices normally charged by other retailers. This is a matter which I will deal with fully later; but it is sufficient at this stage, on the question of agency, for me to say that the administration of the respondent's policy of not supplying retailers for reasons connected with pricing policy fell

The respondent knew, at least by late March 1977, of the discussion that had taken place in November 1976 between Mr. Adnam, Mr. Smart and Mr. Clegg. The respondent never suggested that such a discussion should have been directly with it. When Mr. Thring saw the letter of 18

November 1976, which he says he saw for the first time in

late Mach 1977, he did not protest to Mr. Adnam or Mr. Kelly that Adnam and Pockley was acting outside the scope of its

authority. His sole reaction was one of disapproval that

In April 1977 Mr. Thring was content to allow Adnam and Pockley to conduct the relevant discussions with Woolworths on behalf of the respondent on questions relating

The evidence establishes that customers in New South Wales appear to have assumed that Adnam and Pockley was the appropriate company to approach when any matters arose concerning prices of footwear. Mr. Adnam's evidence was that retailers frequently approached him for suggestions as to the appropriate price to be charged for Bata leather footwear. Retailers in New South Wales appear to have assumed that it was Adnam and Pockley who had the requisite authority to

discuss prices. Also, both Adnam and Pockley and Woolworths regarded it as natural that the matters discussed in November

The letter from Adnam and Pockley to the respondent

of 18 November 1976, and the letter of 26 April 1977 to which

I shall refer later, show that Adnam and Pockley regarded its function as including discussions with retailers relating to

price and implementing the respondent's policies as to price.

It is right in a case of this kind to take a practical and commercial view as to the scope of Adnam and Pockley's authority rather than a technical or legalistic

one: see Australia and New Zealand Bank Limited v. Ateliers

de Constructions Electrigues de Charleroi 1967 1 A.C. 86 at

For all practical purposes, Adnam and Pockley was authorised to handle on behalf of the respondent all matters arising out of sales in New South Wales including the

If the statements and actions of Mr. Adnam did not fall within the scope of the express authority of Adnam and

Pockley from the respondent they clearly were within its

If the conduct of Mr. Adnam did not fall within the

scope of the actual authority of Adnam and Pockley, whether

express or implied, it fell within the scope of its ostensible authority. The matters to which I have referred establish this. If the actual authority of Adnam and Pockley was confined to conveying communications from the respondent to Woolworths, and vice versa, in relation to the respondent's supply policies, at best, from the respondent's point of view, what Adnam and Pockley did was to fulfill its role in a somewhat over zealous or excessive manner, but not so as to be unrelated to its authority. The most natural thing in the world for Woolworths to do, when it was concerned about continuity of supply and wanted to discuss questions relating to the respondent's supply policy, including matters concerned with price, was to speak to Adnam

" (6) For the purposes of sub-section (3), anything done by a person acting on behalf of, or by arrangement with, the supplier shall be deemed to have been

(Australia) Pty. Limited 1974 A.T.P.R. 40,000, Smithers J.

considered the phrase "on behalf of" appearing in s. 66 (4)

of the Restrictive Trade Practices Act 1971 which is in the

same terms as sub-section (6) of s. 96 of the Act. Fis Honour held that s. 66 (4) was intended to go further than the law of agency. Spicer C. J. agreed with Smithers J.

Enterprises Pty. Limited 1978 2 A.T.P.R. 40-097, Fisher J.

In my opinion Mr. Adnam's actions fall within the scope of s. 96 (6) so that what he did in November 1976 was done by Adnam and Pockley "acting on behalf" of the respondent, even if there was in truth no authority of Adnam

and Pockley to bind the respondent under the general law of

The statements of Mr. Adnam about the price that ought to be charged by Woolworths answer the description of a "price specified by the supplier" within the meaning of the relevant paragraphs of sub-section (3) of s. 96. The fact that a price is stated to be within a range of a particular figure, or that otherwise an element of approximation is

introduced, does not detract from the true character of the

price as being a specified price: see Trade Practices

Commission v. Pye Industries Sales Pty. Limited 1978 A.T.P.R.

couched in terms of recommendation does not prevent it from

being a price specified by the supplier: see Festival Stores v. Mikasa (N.S.W.) Pty.

Limited (1971) 18 F.L.R. 260 per Spicer Cc. J. and Smithers J. and the judgment of the High Court in the appeal of Mikasa

(N.S.W.) Pty. Limited v Festival Stores (1972) 127 C.L.R.

In my opinion the discussion of November 1976 between Mr. Adnam, Mr. Smart and Mr. Clegg fell within the terms of s. 96 (3) of the Act in that the respondent made it known to Woolworths that the respondent would not supply goods to Woolworths unless Woolworths agreed not to sell those goods at a price less than a price specified by the respondent (s. 96 (3) (a) ); the respondent induced and attempted to induce Woolworths not to sell at a price less than a price specified by the respondent goods supplied to

Woolworths by the respondent (s.96 (3) (b); and the

respondent used, in relation to its goods supplied and that

may be supplied by the respondent to Woolworths, a statement of a price that was likely to be understood by Woolworths as

the price below which the goods were not to be sold (s. 96

Mr. Clegg gave evidence that he received a telephone call from Mr. Adnam in March 1977 when Mr. Adnam said that Adnam and Pockley had received some complaints from retailers in the Elizabeth area (that 1s of South Australia) that Woolworths was not selling at the maximum price allowable in South Australia. Mr. Clegg said that he told Mr. Adnam that he was not interested in hearing about the complaints of other retailers. He could not recall saying anything else. He said that soon after this conversation Mr. Kelly telephoned him and asked him what Woolworths was "going to do about it". Mr. Clegg said he did not recall his reply

Mr. Adnam said that Adnam and Pockley has nothing to do with the supply of Bata footwear to purchasers in South Australia other than Woolworths; that he has never received

complaints from retailers in South Australia as to the prices

being charged by Woolworths in South Australia; that he knows retailers of footwear in South Australia, apart from Woolworths, only by repute; and that he has not had any dealings with retailers of Bata footwear in South Australia over the last 20 years. He denied ever telling "Mr. Smart" that he received any such complaints. In fact the evidence

of this conversation was given by Mr. Clegg, not Mr. Smart.

Mr. Thring said that the respondent employs salesmen who cover the territory of South Australia operating from Adelaide and that Adnam and Pockley does not service any

retail outlets in South Australia except Woolworths.

It may be that there were complaints made by retailers about the prices charged by Woolworths in the Elizabeth area, the complaints being made either direct to Adnam and Pockley or to the respondent who passed them on to Adnam and Pockley. This is in the realm of speculation so I

The applicant's case as to these conversations rests upon the evidence of Mr. Clegg. The applicant contends that this evidence warrants the findings that the supplier

(the respondent) used in relation to Bata shoes, a statement

of a price that was likely to be understood by Mr. Clegg on behalf of Woolworths as the price below which the shoes were

not to be sold (s. 96 (3) (f) ); that the respondent made it

known to Mr. Clegg on behalf of Woolworths that it would not supply shoes to Woolworths unless Woolworths agreed not to sell those shoes at a price less than a price specified by the respondent (s. 96 (3) (a) ); and that the respondent induced or attempted to induce Woolworths not to sell, at a price less than a price specified by the respondent, the

shoes supplied to Woolworths by the respondent (s. 96 (3) (f£)).

In my opinion this evidence does not warrant these findings or any of them. It is too general and imprecise. Mr. Clegg does not appear to have taken the conversations very seriously. Nor did he treat them as a threat to withhold supply or as an indication by Adnam and Pockley that the price of Bata leather footwear in South Australia should be not less than the maximum price allowable in South Australia where price control legislation has been in force for some

Mr. Smart said in evidence that somewhere between 5 and 10 April 1977 Mr. Kelly telephoned him whilst Mr. Clegg

"and told me that he had received a direction from the Bata head office in Melbourne to the effect they were not prepared to supply leather footwear to stores who discounted below the recommended level. Also he said that Bata had stipulated that they were not prepared to supply stock to stores who did not operate in a traditional footwear method...because we did not have the facilities of other retailers, i.e. seating and fitting facilities, but they would be prepared to supply us with P.V.C. stock which would refer to workboots and the like, of which they have continued to supply us."

Mr. Kelly said that on an occasion in March 1977, when Mr. Thring was travelling through Zetland to Sydney airport at Mascot, Mr. Thring, Mr. Adnam and he were discussing a number of matters and either Mr. Adnam or he mentioned the letter of 18 November 1976 and Mr. Thring claimed he had never seen it. Mr. Kelly obtained the copy

retained by Adnam and Pockley and showed it to Mr. Thring who

"was quite amazed". They discussed the letter and it was

following that discussion that Mr. Thring wrote a memorandum dated 31 March 1977 to Adnam and Pockley for the attention of Mr. Kelly which was received by Adnam and Pockley on 4 April

It seems that this discussion was on 28 March 1977.

Mr. Kelly said that, having received the memorandum of 31 March 1977, he telephoned Mr. Smart and that he read the letter in its entirety to him to which Mr. Smart replied "we will have to kick this around". Nothing further was

said. Mr. Kelly said that he did not elaborate on the

It was not put to Mr. Smart in cross examination that Mr. Kelly had read to him the whole or any part of the memorandum of 31 March. The two versions of the conversation are not irreconcilable. It is possible that Mr. Kelly read the memorandum to Mr. Smart and that he concluded that the

respondent was not prepared to supply its leather footwear to

stores who discounted below the recommended level and that it was not prepared to supply stock to stores who did not have

However, I prefer the evidence of Mr. Smart to that

of Mr. Kelly where the two conflict. Mr. Smart impressed me

as a truthful and reliable witness. Mr. Kelly at times tried to explain away things that were damaging to the respondent's case, such as the letter of 18 November 1976. His evidence

about a letter of 26 April 1977 to which I will refer later, was unsatisfactory and unconvincing; and certain of his answers in the witness box were inconsistent with what had been said by him or on his instructions in a statement in answer to a notice under s. 155 of the Act served upon Adnam

and Pockley. I will return later to Mr. Kelly's credibility.

Counsel for the respondent submitted that it does not matter which version of this conversation is correct because neither fell within the relevant paragraphs of the statement of claim: 15, 16, and 17. Those paragraphs plead this conversation but in terms that confine the relevant statement by Mr. Kelly to a statement of a price that was likely to be understood by Woolworths as the prices below which Bata footwear was not to be sold, namely the maximum prices at which footwear could be offered for sale in South

Australia as specified pursuant to the South Australian

Prices Act 1948-1976. There is no reference at all in any of the evidence of Mr. Smart relating to this conversation about South Australian prices or anything that could be so

understood or construed. The applicant has failed to

It was alleged in the statement of claim that there was a breach of the resale price maintenance provisions of

the Act by reason of a conversation on about 19 April 1977 between Mr. Kelly and Mr. Clegg. No evidence was led about this conversation and counsel for the applicant abandoned the

On 22 April 1977 there was a meeting in the office of Mr. Adnam attended by himself and Mr. Kelly on behalf of Adnam and Pockley, and by Mr. Smart and Mr. Clegg on behalf of Woolworths together with Mr. Robinson who was in 1977 a

The evidence of Mr. Robinson, Mr. Smart and Mr. Clegg as to what occurred and was said at the meeting is substantially the same although Mr. Robinson's recollection

was not as clear as the recollection of the other two.

Mr. Adnam and Mr. Kelly gave evidence that was substantially the same, although Mr. Adnam's recollection was

I accept the evidence of the witnesses Robinson, Smart and Clegg. Mr. Smart's recollection is the most reliable, although I do not suggest that Mr. Clegg and Mr.

In my opinion what occurred, so far as material, was that, after Mr. Smart introduced Mr. Robinson to Mr. Adnam, Mr. Smart asked Mr. Kelly if he could give details of the letter that he had already spoken about to Mr. Clegg and himself on the telephone earlier that month. Mr. Kelly read out the letter, which in fact is the memorandum of 31 March 1977 from Mr. Thring to Adnam and Pockley addressed to the attention of Mr. Kelly. They were informed by Mr. Kelly that the respondent would be prepared to supply Woolworths with P.V.C. footwear if Woolworths would sell it at a price comparable to the maximum price in South Australia. It was made clear to them that Bata branded leather footwear would not be sold by the respondent to Woolworths for two reasons: first, because the respondent was not prepared to supply such

footwear to discounters; and second, because it was not

prepared to supply to retailers who did not have proper

Mr. Robinson told Mr. Adnam that Woolworths was prepared to increase its selling prices to the "recommended level" after the cessation of the current price freeze that the Prime Minister, Mr. Fraser, had asked private enterprise to voluntarily adhere to. Woolworths agreed to support the Prime Minister and Mr. Robinson asked Mr. Adnam if he would write to the respondent in Melbourne to see what its reaction

Before the meeting Woolworths had been in touch with the applicant and, although its primary concern was to obtain supply of Bata leather footwear, it regarded the meeting in part as a means of obtaining evidence for possible proceedings under the Act. Although this means that one should approach the evidence of the witnesses from Woolworths as to this conversation with care, in my opinion it does not

I prefer the evidence of Messrs. Robinson, Smart and Clegg where it conflicts with the evidence of Mr. Adnam

or Mr. Kelly. I have mentioned already some reasons for my

view. There are others. Mr. Adnam was cross examined about a letter written by Adnam and Pockley to Mr. Thring dated 26

April 1977 following the meeting of 22 April. It reads as

Confirming our phone conversation on Friday, 22nd April, we wish to report that, in response to our request, three Woolworths' executives visited our office to discuss the current problem:

Mr. Chris Robinson, Australasian Mens' Wear Controller for Woolworths and Big W.

Mr. Bill Smart, Footwear Controller for Big W. and Variety stores

The Woolworths' team made it abundantly clear they required continuity of supply under the Bata brand and was in no way interested in any other brand.

An undertaking was given by them to market all Bata products, including

P.V.C., at a level comparable with general marketing practice operating in all states. This would have been

effective as of now, except for the Government's current price freeze but, immediately this is lifted, they will look to us for guidance in the orderly marketing of Bata merchandise, which undertaking is a complete reversal from their normal approach to marketing.

The Woolworths' executives also pointed out that, in the forseeable future,the Big W. Division would expand to 25 outlets throughout Australia and, even at this

juncture, are considering a suitably located warehouse from which to service their operation.

We are currently holding repeat orders from them, totalling some 600 prs., which have been "frozen" pending your final decision in this matter.

With an organisation the size of Woolworths, with their present and future potential, "Can Bata afford not to be a part of this operation?"

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (310 paragraphs)

Cited By (1)