Trade Practices Commission v. T.N.T. Management Pty Ltd & Ors [1985] FCA 19

ROADSWIFT TRANSPORT PTY. LIMITED Formerly INTERSTATE PARCEL EXPRESS CO. PTY. LIMITED

First Defendant Second Defendant Third Defendant Fourth Defendant

On 25 May 1978 a Statement of Claim was filed by the

Ansett Transport Industries (Operations) Pty. Limited ("Ansett")

Eslea Holdings Limited, formerly Ipec Holdings Limited ("Ipec")

Roadswift Transport Pty. Limited, formerly Interstate Parcel Express Co. Pty. Limited ("Interstate PARCEL")

Were the relevant defendants members of the National Freight Forwarders' Association?

The relationship of persons attending the meeting to the relevant defendant and their

Motive (a) Rejection by the Trade Practices Commission of the

application for authorisation to continue its price fixing role

(b) Client disadvantage, the effect of intermediaries and the defendants' perception of this

any ineffectiveness of individual action by a defendant

(ii) Inference of concert from any parallel changes in behaviour of

(E) The requirements for making an arrangement or entering into an understanding

WAS ANY ARRANCEMENT MADE OR UNDERSTANDING ENTERED INTO AT THE NATIONAL FREIGHT FORWARDERS' ASSOCIATION MEETING HELD ON 20 MAY 1976?

Were the relevant defendants members of the National Freight Forwarders' Association?

The relationship of persons attending the meeting to the

THE CONSTRUCTION OF $.45(2)(a) PRIOR TO 1 JULY 1977

DID ANY RESTRAINT IN THE ARRANGEMENT MADE OR THE UNDERSTANDING ENTERED INTO AT ANY OF THE MEETINGS HAVE OR WAS IT LIKELY TO HAVE A SIGNIFICANT EFFECT ON COMPETITION BETWEEN THE DEFENDANTS? (A) General (B) The four periods of operations of Tradestock (i) The consulting period (ii) The commission period (iii) The freight forwarding period (iv) The period when Tradestock would not deal with the defendants (C) The degree of competition between the

(D) The submission in relation to any broker market

WAS EFFECT GIVEN TO ANY OF THE THREE ARRANGEMENTS OR UNDERSTANDINGS AND THE CONSTRUCTION OF $.45(2)(b) BEFORE 1 JULY 1977? (A) The construction of s.45(2)(b) before l July 1977 (B) General

WAS EFFECT GIVEN TO ANY OF THE THREE ARRANGEMENTS OR UNDERSTANDINGS AND THE CONSTRUCTION OF $.45(2)(b) and (3) AFTER 1 JULY 1977? (A) The construction of s.45(2)(b) and (3) (B) The issue of substantially lessening competition in any market (i) General (il) Economic evidence

(b) Economic evidence based on assumed facts (c) The role of economic evidence (d) The meaning of "competition" in s.45(2)(b) (ii) and (3) (C) Services for the transportation of goods

(B) The effect of the Trade Practices Amendment Act (1977) upon the proceedings

(C) What instructions, if any, did officers of the defendants receive about Tradestock?

(D) Would the defendants deal with transport consultants who did not seek commission?

(A) General The proceedings "were brought by the Commission pursuant to s.77 of the Trade Practices Act 1974 ("the Act") for

the recovery of pecuniary penalties referred to in s.76 of the

Act and pursuant to s.80 of the Act for the grant of injunctions.

The defendants carried on freight forwarding activities. The first three defendants appear to be as large or larger than any other freight forwarders in Australia. in general, the defendants offered to carry goods to all or most States, often by a variety of means, for example, road, rail or

Tradestock Pty. Limited ("Tradestock" ) was incorporated in 1975 and commenced shortly thereafter to carry on what can be described broadly as the business of transport consultants seeking a fee from the client for its advice. Later its business changed to one in which it sought its remuneration by way of commission from the freight forwarder with whom it placed its business. In the early stages of its history Tradestock operated under the name T.I.C. Management Consultants.

A Mr Frewen, who was in the witness box for 49 days, was the

managing director of Tradestock and a Mr Stock, who played a

significant part in the operations of Tradestock, was a director.

In substance, it is alleged by the Commission that the defendants were parties to one or more of three arrangements or understandings, each in breach of s.45(2)(a) of the Act. It is alleged that arrangements were made or understandings were entered into by various defendants that they would not negotiate with, furnish quotations to, enter into contracts with, or otherwise deal with Tradestock, or any other agent and/or broker, in respect of the carrying or forwarding of freight, or the arranging for the carrying or forwarding of freight, proposed or sought by Tradestock or any other agent and/or broker, for or on behalf of persons seeking the services of such defendants or any of them for the carrying or forwarding of freight or the arranging for the carrying or forwarding of freight through Tradestock or any other agent and/or broker. It is alleged that the arrangements were made or the understandings entered into at meetings held on 12 February, 20 May, and 4 August 1976 of a body called the National Freight Forwarders' Association.

The precise nature of the allegations will be dealt with more fully later. It is also alleged that the arrangements or understandings were given effect to in breach of s.45(2)(b) of

the Act. The Act was amended in a way which falls for

consideration by Act No. 81 of 1977 which came into operation on

The case was fought with extreme determination. Interlocutory proceedings occupied some 60 days before a single Judge of this Court and some 20 separate judgments were given in respect of these interlocutory applications. Five appeals were brought to the Full Court of this Court from certain of these judgments. Three applications were made for special leave to appeal to the High Court from the judgments of the Full Court. Of these one was refused, one apparently was not proceeded with and the third was granted although the appeal was unsuccessful. No appeal was brought by the Commission. At the time these interlocutory appeals were instituted, an appeal lay as a right to the Full Court but the Federal Court of Australia Act 1976 has been amended since by adding a s.24(1A) which provides that an appeal should not be brought from an interlocutory judgment

When these proceedings were instituted, this Court was operating under Statutory Rules 20 and 220 of 1977. These rules, in substance, applied the rules of the High Court. An interlocutory application was made by the second defendant that the matter proceed under the Federal Court Rules, which came into operation on 1 August 1979 (Statutory Rules 140 of 1979). This application was made pursuant to order 64 rule (1) of those

rules. All defendants other than the second defendant opposed

the application arguing that the proceedings were of a quasi~criminal nature and they anticipated suffering some disadvantage if the order was made. On 8 May 1981 I decided that, because of the nature of the proceedings, I would not

change the rules under which the proceedings were to be heard.

Although I suggested on a number of occasions that use should be made of the provision in order 31 of the High Court Rules for - a - summons - for - directions,--neither the plaintiff nor any defendant accepted my suggestion. This was unfortunate because I feel that, had some of the problems received attention as a result of a summons for directions, at least some reduction in

The evidence occupied 173 days and the addresses 32 days. In addition, the parties gave me certain written submissions. The submissions for the Commission extended over about 700 pages, those for the first defendant over about 1400, those for the second defendant over about 800, those for the third defendant over about 500, those for the sixth defendant over about 200, those for the seventh defendant over about 15, and those for the eighth and ninth defendants over about 50. In addition, the first defendant sought to tender a further 600 pages in relation to facts which two expert economists had been asked to assume. I declined to accept this further material upon the basis that the mere obligation to read or to decide whether

or not to read such a mass of material in addition to the

material already tendered by the first defendant was an unreasonable burden to impose on a Judge. Thereafter, senior counsel for the first defendant provided me with a list of page references to the transcript in relation to the assumed facts

which apparently had been dealt with in the last mentioned 600

Every point which could possibly be raised concerning the admissibility of evidence appears to me to have been taken and I provided some 40 rulings on the admissibility of

evidence during the hearing. The majority of these were in writing, copies of which were given to the parties. Some of these rulings have mow been published ((1984) A.T.P.R. 40-483 at pp.45,531 to 45,586). Four senior counsel and seven junior counsel were in Court most of the time and from time to time

other counsel appeared. 105 witnesses were called. The

interlocutory applications extended over more than 2000 pages of transcript and the hearing over 16,000 pages. In addition, about

Extensive amendments were allowed without serious opposition, to the defences after the hearing had proceeded for

about 70 days. On the 203rd day of the hearing the Commission

sought to amend para. 32 of its Statement of Claim but I rejected

It is hardly an exaggeration to say, in general, that every possible argument that the ingenuity of counsel could

It will be seen from the extent of the evidence and submissions that it would be ridiculous to do other than deal

with the evidence and submissions which have been made in what I regard as a practical way. If I have not directed attention to any particular evidence it is because I regard it as of minor importance. Likewise, if I have not dealt with a particular submission, it is because I do not regard it as being of overall significance. I have adopted the practice of referring to submissions by defendants generally without identifying the particular defendant, except where necessary, because, in general, the defendants adopted the submissions of those who addressed before them. In some instances reference will be made

to a corporation by a short name and not by its full name.

The first issue for determination is whether the arrangements or any of them were made or the understandings or

any of them were entered into by the defendants in contravention

The next issue is whether any arrangement or understanding proved to have heen made or entered into was given

effect to before 1 July 1977 in breach of 5.45(2)(b) or after 1

July 1977 in breach of s.45(2)(b)(i) or (ii) of the Act which was

It is desirable to refer at this stage to proceedings commenced by Tradestock in 1976. On 17 December 1976 proceedings seeking, inter alia, damages were started in the Victorian Registry of this Court by Tradestock against a number

of companies including certain of the defendants in the present

On 2 May 1977 Smithers J. gave judgment in an application by certain defendants in that action for an order that the proceedings be stayed pending provision by the plaintiff for security for costs of the defendants making the application. An order was granted staying the action against the applicants until security for costs was provided was granted. (Tradestock

Pty. Ltd. v. T.N.T. Management Pty. Ltd. (1977) 30 F.L.R. 343; (1977) 1 A.T.P.R. 40-046).

On 27 January 1978 Smithers J. gave judgment on an application by Tradestock, which had been unable to provide the security for costs required by the stay granted on 2 May 1977, in which it sought a removal of the stay based on fresh evidence ((1978) 32 F.L.R. 420; (1978) 1A.T.P.R. 40-056). The fresh evidence included minutes of N.F.F.A. meetings of 4 March 1969,

12 February 1976, 20 May 1976, and 4 August 1976 and evidence of

telephone conversations including conversations of 26 July 1976 by Frewen or Stock of Tradestock with a Mr Gardiner identified in the judgment as of Interstate Parcels Express Co. Pty. Limited, a telephone conversation with a Mr Shortell identified as of T.N.T. Management Pty. Ltd. and a third telephone conversation with a Mr Wilkins identified as of Youngs Transport Pty. Limited. His Honour ultimately removed the stay in relation to all but certain

In deciding the case now before me in which the evidence is undoubtedly much more extensive than that before Smithers J., I have had the benefit of his Honour's judgments which were referred to quite extensively by various parties. Inevitably, because of the difference in the material before me to that before Smithers J. and in the arguments presented,

differences in the conclusions reached must be expected,

WAS ANY ARRANGEMENT MADE OR UNDERSTANDING ENTERED INTO AT THE NATIONAL FREIGHT FORWARDERS' ASSOCIATION MEETING HELD ON 12

FEBRUARY 19767? Para. 21(1) of the Statement of Claim is as follows:

"21-(-1-} - -9n - _or - about - 12.- February 1976 the first, second, third, fourth and fifth-named Defendants and each of then made an arrangement and/or entered into an understanding whereby they and each of them agreed and/or decided:-

(a) that such Defendants and each of them would not negotiate with, furnish quotations to, enter into contracts with, or otherwise deal with, T.I.C. Management Consultants or any other agent and/or broker, in respect of the carrying or forwarding of freight, or the arranging for the carrying or forwarding of freight, proposed or sought by T.I.C. Management Consultants or any other agent and/or broker for or on behalf of persons seeking the services of such Defendants or any of them for the carrying or forwarding of freight or the arranging for the carrying or forwarding of freight through T.I.C. Management Consultants or any other agent and/or broker; and/or

(b) that such Defendants and each of them would only negotiate with, furnish quotations to, enter into contracts with, or otherwise deal with, persons seeking the services of such Defendants or any of them. for the carrying or forwarding of freight or the arranging for the

carrying or forwarding of freight, direct, and would not negotiate

with, furnish quotations to, enter into contracts with, or otherwise deal with, such persons or any of

The choice of the words "and each of them" in the Statement of Claim is, in my opinion, for more abundant caution so that the Commission would not fail if the allegation is only established against certain of the defendants referred to in the

(A) The minutes of the meeting and their confirmation ata

(B) Oral evidence of witnesses who were called of what took

(C) Admissions of the making of the arrangement or entering

(a) Rejection of the N.F.P.A. application for authorisation to continue its price fixing role.

(b) Client disadvantage, the effect of intermediaries and the defendants' perception of this.

(d) The awareness of ineffectiveness of individual action.

Tt was also submitted by the Commission that the principles in Tripodi v. The Queen (1961) 104 C.L.R. 1 were applicable and a number of other principles supported an inference that the arrangements were made or the undertakings

In addition to the persons recorded in the minutes, a Mr W.A. Levitt, now working with the Department of Motor Transport, attended. In 1976 and for many years previously, Levitt as the executive director of a road transport federation of which the N.F.P.A. was a division had prepared the minutes of the meetings of the N.F.F.A.. Of those who attended the meeting of 12 February 1976 the Commission called only Levitt. The first defendant called a Mr Prebble, the third defendant a Mr Uniacke

and a Mr Price and the fifth defendant a Mr Wise. No explanation

February 1976, which were admitted on one basis or another, are:

The relevant parts of the minutes of the meeting of 12

Wynyard House, Sydney, at 10.30 a.m. on Thursday, 12th February 1976.

PRESENT : Chairman - Mr G.C. Uniacke Mr J. Wise - Ansett Freight Express Mr Jd. Linfoot - Brambles Long Distance Transport. Mr M.G. Davies ) - Mayne Nickless Ltd. Mr J. Price )

Mr R.E. Heasman ) Mr J. Gouldstone) - T.N.T./Altrans Ltd.

The Chairman welcomed Members to this the first Meeting of the New Year and reminded

Members that it had long been customary for the Chairman to maintain an impartial role and

the organisation he represented to nominate a person to represent the Company. The Chairman

advised that Mr. M.G. Davies would be the Mayne Nickless representative.

ll. T.2.C. MANAGEMENT CONSULTANTS. It was noted that the above Organisation had made approaches to several Transport

Companies for quotes for freight movement for various other organisations.

Similar 'Transport Brokerage Agencies' had appeared in the Industry at various times in the past and previous experience

showed that it was better for the Client and Operator to deal direct."

The minutes were confirmed at the meeting of 23 March 1976 at which the first five defendants, inter alia, were

I consider that the minutes are the best evidence of What took place. There was extensive argument about whether the

minutes were admissible. There was a considerable amount of evidence concerning the weight to be given to what was recorded in the minutes. A Mr Shortell, a director of T.N.T., said in relation to an event in December 1974, "If it is in the minutes I presume it did take place ... if it is in the minutes I presume it is a true record". A Mr Prebble, who about 1975 became the

Australian General Manager of T.N.T. Transport System, said that, apart from entries concerning Tradestock in the minutes of the

February and May meetings, he could not recollect any specific

incidents of inaccuracy that particularly worried or concerned

him and that he did not intend to suggest that the minutes were

normally inaccurate. Mr Redpath, the chairman of Mayne Nickless,

who was also chairman of the N.F.F.A. for several years before 1971, said of certain of the minutes in 1979, "I have no reason

to think these minutes are not an accurate record".

I dealt with the admissibility of the minutes in rulings I gave on 14 and 23 November 1983 and, so far as concerns the minutes of the February meeting, I admitted those against all the five defendants - on-thefottowing - grounds: (a) Against all persons as business records to the extent to which they contained statements of fact ("the business record ground"); and (b) Against each defendant that was a member of the N.F.F.A. by virtue of the chairman's signature at the succeeding meeting of the minutes as a true record of the previous meeting ("the membership ground"); and (c) Against each defendant present at a subsequent meeting at which the minutes of the prior meeting were confirmed

whether or not the defendant was represented at the earlier meeting and whether or not the defendant is shown to

There is evidence which I accept that the minutes of the February meeting were confirmed at a meeting on 23 March 1976 at which Heasman, Linfoot, a Mr Robinson, Uniacke, M.G. Davies, N. O'Brien and Wise attended. I am also satisfied that there is some evidence that the minutes were circulated and received by

Evidence was given by Levitt about the manner in which he prepared the minutes. He said that during the currency of the meeting he would take notes of the decisions reached, agreements made or consensus arrived at and that he normally translated his notes into something more formal (meaning the minutes) and sent a copy to the chairman seeking his approval and thereafter he would duplicate the minutes and send a copy to each member. He said it was his practice to record every matter that was discussed at the meeting. He said, "I thought that the correct way to keep the minutes was to record the resolutions, rather than the reasons, Or the synopsis". He also agreed that he did not draw a distinction between things that were resolved on the one hand and things that were discussed or agreed and that he did not note verbal statements made by any particular person. He also said that meetings were quite informal. He said that minutes which he prepared and recorded in the minute book were, to the best of his

knowledge and belief, correct, that at no time had anybody

indicated to him that the minutes in the year 1976 were nota

correct record and that he could never recall anyone seeking to

correct any minute during the time he prepared then. He said that if anything in the minutes was in brackets that indicated that it happened not during but after the meeting. He said that it was not the practice to count votes at a meeting but normally the chairman asked if anybody disagreed with whatever was the

. Whether the relevant defendants were members of the N.F.F.A. The relationship of the persons attending the meeting and the relevant defendant.

. Whether the persons attending the meeting were able to

. (ii) Were the relevant defendants members of the National Freight Forwarders' Association?

Exhibits KD and KN are the rules of N.F.F.A. adopted in 1973. KD was admitted against the first, fifth, seventh, eighth and ninth defendants and I am satisfied that KN was established

to be the rules of the N.F.F.A. at that date. There is no

suggestion that there was any relevant alteration in the rules

between the date of adoption and 1976. Rule 3(b) provides:

"The following Companies together with subsidiaries under their control shall at the establishment of the Association be members:"

The following names appear, inter alia, in the list of members: Ansett Freight Express A.U.T. Holdings Limited Brambles Holdings Limited

Ipec Australia Limited Mayne Nickless Limited Thomas Nationwide Transport Limited

"Each member shall appoint a representative who will be the Chief Executive of the Company or an appointee who will be authorised to speak for and to commit his Company."

Membership was admitted on the pleadings. In addition, I am satisfied that this was so because the first defendant was a

wholly owned subsidiary of Thomas Nationwide Transport Limited.

It is also relevant to note that there is evidence that

the first defendant received circulars from the N.F.F.A. and

The Second Defendant: Although strenuous efforts were made to object to

questions directed to establishing that the second defendant was

a member, the rules show it was a foundation member in 1973 and I

accept from that that it was a member in 1978. In addition, at

one stage of the addresses, senior counsel for the second defendant offered a concession, namely that he was prepared to admit that the Commission had proved that Brambles Holdings was a member of the N.F.F.A. at the relevant times if some admission was made by the Commission about the number of subsidiaries of certain defendants. This further admission was not forthcoming

I am satisfied that the second defendant was a member.

Mayne Nickless Limited was named as a foundation member in the 1973 rules and, although not admitted in the pleadings, membership was subsequentiy conceded by senior counsel for the

third defendant. I am satisfied that it was a member.

The Fourth Defendant: Membership was admitted in the pleadings. However, some question arises because apparently the fourth defendant was not

The rules show Youngs Transport Agency as a foundation

member. The business name Youngs Transport Agency was owned by two individuals named Wilkins and Beasley between 17 July 1973

and 2 March 1976. The fourth defendant took over the business

formerly conducted by Wilkins and Beasley and continued to

conduct it as Youngs Transport Agency with no change in

operations until it was taken over by the third defendant as from

Because of the admission in the pleadings I treat it as being a member for the purposes of the proceedings against it, but membership has not been proved so far as that issue may

Membership was not admitted in the pleadings but Ansett Freight Express was an original member and this was the business name of the defendant in 1973 and thereafter. I am satisfied it

(iii) The relationship of persons attending the meeting to the relevant defendant and their ability to commit it

Heasman held the position of Executive Director, T.N.T. Transport System Freight Division, and was Prebble's immediate superior and immediately below Shortell. On 7 January 1975 he signed a letter to the Trade Practices Commission on behalf of

T.N.T. as Executive Director, General Freight Services.

Prebble, as I have said, was the Australian General

Manager of T.N.T. Transport System at the relevant time.

Brambles' counsel adopted the policy of raising and arguing every question of law and objecting to and, so far as I would allow, arguing the admissibility of every question remotely

It chose to call no witness other than a lady, Marilyn

Sloane. She said that in 1974 she had been employed with

Brambles Sea Cargo which she said was one of the divisions of

Brambles Holdings. However, there seemed to be some doubt

"Brambles" and "Brambles Long Distance Transport" had both been registered for years before 1976 as business names of the second defendant. These registrations continued at all relevant times. In 1981 Linfoot signed an application for the registration of the business name Brambles Long Distance Transport as General Manager of -the second defendant. Linfoot had attended N.F.F.A. meetings in 1974 and 1975 and and it seems

to mea reasonable inference that N.F.F.A. circulars had been

sent to an organisation called Brambles Long Distance Transport.

A Mr Tan Wood had had business relationships with Linfoot. They were clearly employed in the same organisation. Linfoot was superior to Wood. Wood first met Linfoot at

Linfoot's office in Acacia Ridge, Brisbane, in 1973. That office

had the name "Brambles Long Distance Transport, Acacia Ridge"

outside it and it was the largest in the building. Wood attended a conference with Linfoot and a Mr Williams in Brisbane at which various job positions were discussed. From about the middle of 1974 onwards Wood said he met Linfoot approximately once every two months. He said that Linfoot had an office at Nudgee Road, Brisbane, in a building which bore the notation outside "Brambles Transport and Plant Hire Division" or very similar words. From time to time he got instructions from Linfoot at Goldfields House, Sydney, which bore outside the notation "Brambles Industries Limited", together with the words "Head Office" or "Registered Office". It appears that in July 1974 Linfoot was working with a firm which he described as G.W. Chaplin and

Uniacke had acted as the chairman of meetings of the N.F.F.A. and a representative of Mayne Nickless where need arose for anumber of years prior to 1976 and was avery senior executive. He said that he was the chief representative of Mayne Nickless for the N.F.F.A. M.G. Davies and John Price also attended the meetings. Davies was a senior executive and when

Uniacke went to New Zealand in 1976 he handed over his

The Fourth Defendant: There is not much evidence in relation to N. O'Brien

but, because of the admission in the pleadings, the name Young

Transport Agency appearing as a foundation member in the N.F.F.A. rules and O''Brien's name appearing in the minutes with Young Transport against it, Iam satisfied of his authority to speak for and commit the fourth defendant but only as against the

Wise was General Manager of Ansett Freight Express in 1976 and responsible for all its operations. He attended the

N.F.F.A. meetings at least during 1974, 1975 and 1976.

It was suggested by the second defendant that, since 1t had not been shown that the persons attending the meeting were specifically authorised to make any arrangement or enter into any understanding, they could not bind the companies whom they represented. The second defendant did not shrink from the submission that, if a board of directors passed a resolution and circulated it to the senior executives, to the effect that under no account must any breach of the Trade Practices Act take place, the company would be adequately protected and could not be in breach of the Act for any conduct of an employee. One has only to state this proposition to realise that it must be rejected immediately. However, because of the extensive argument that was

presented on this issue, I do not feel that course is open to me.

question of the capacity of a servant or agent to bind a company.

That case went even further than is necessary for the

determination of whether the persons attending the meeting had

sufficient authority to bind the relevant defendants because it

dealt with an admission by the manager of a company who had the

general authority to act in and in relation to the business of

the company. It was said by Latham C.J. at p.113 that, since he

the manager could not bind the company by an admission, no one else could do so". I will deal further with the question of admissions.

The Commission also relied on s.84(2) of the Act. This

"Any conduct engaged in corporate by a director, the body corporate or by the direction or with the (whether express or

agent or servant of the be deemed, for the purposes of this Act, to have been engaged in alsa by the body

occasions, most recently by Toohey J. ain T.P.C. v. Mobil Oil

Australia Ltd. (1984) A.T.P.R. 40-482 at p.45,520. It was also

discussed by Toohey J. in T.P.C. v, Tubemakers of Australia Ltd. (1983) 5 A.T.P.R. 40-358 at pp.44,326-44,328 where an analysis of

the earlier cases was made and reference was made to the judgment

of Morling J. in T.P.C. v. Queensland Aggregates Pty. Ltd. (1982)

61 F.L.R. 52 at p. 66; (1982) 4 A.T.P.R. 40-297 at p.43,698 where his Honour said that it "... appears to disclose a legislative intention to extend, rather than limit, the liability of corporatiions for the actions of others". It seems clear that

s.84(2) is not intended to be an exhaustive statement of

It would not be possible, in my opinion, to conclude that each-person - t-have - menttioned-was present at the meeting other than as a servant of the relevant defendant or that his conduct was other than clearly engaged in on behalf of that defendant. I note the definition of "conduct" in s.4(1) at the relevant time provided that when it was used as anoun, it included "... making a contract or arrangement or entering into an understanding". It seems to me that it is unnecessary to labour what was said in Re Ross Ex. P. A-G for the Northern Territory (1979) 54 A.L.J.R. 145 at 149 in the judgment of Stephen, Mason, Murphy and Aickin JJ. where they said at p.149,

"Context will always determine to which of the many possible relationships the phrase 'on

I consider it would be hard to imagine a more clear case where

what was done at a meeting was done on behalf of the defendant

which I have held the relevant person was representing.

The second defendant also raised the question of the constitutional validity of s.84(2) and referred to Actors and Announcers Equity Association of Australia v. Fontana Films Pty. Ltd. (1982) 150 C.L.R. 169 and to Fencott v. Muller (1983) 57 A.L.J.R. 317. The first of these cases seems to me to have dealt with the question of whether s.45D(5) was a law relating to trade unions or to corporations. I can see a great deal of difference between legislation making a trade union responsible for the act of a member or officer of it for certain of his conduct, and legislation making a company liable for an act done on its behalf by a servant when the corporation power in the Constitution is under consideration. In any event in Fencott v. Muller, supra, although in a joint judgment, Murphy, Mason, Brennan and Deane JJ at p.328 and Dawson J. at p.336 said that it was unnecessary to consider the validity of the section because the case could be

determined without regard to it, Gibbs C.J. at pp.320-321 held

I propose to pay regard to the concluded view expressed by Gibbs C.J. and treat the section as within constitutional

I consider it to be impossible to come to any conclusion other than that Heasman and Prebble were authorised to speak on

behalf of and to commit the first defendant at the meeting and

likewise Linfoot the second defendant, Uniacke and M.G. Davies

the third defendant, O'Brien the fourth defendant and Wise the

fifth defendant. I also consider it to have been established that each was properly attending the meeting on behalf of the

(B) Oral evidence of what took place at the meeting of 12 February 1976

About seven years elapsed after the meeting took place

Of those witnesses who were called, Prebble, who was the Australian Manager of T.N.T. Transport System in 1975, said that he was asked by Heasman to attend the meeting. Prebble said that he was not keen to do this because he felt most of these meetings were awaste of time. Nevertheless, he purported to give a fairly detailed description of a number of events at the meeting. He conceded that some few days before he gave evidence he had refreshed his recollection from a document which included a list of persons who were present. He conceded that the document which he used to refresh his recollection included copies of the minutes both of February and of May but he said that he only saw that part relating to names. He said that after he attended the meeting he forgot all about it until he was told about two years thereafter that he had been at the meeting and that he then "put

my thinking cap on". At that time he was informed that the

proceedings had been commenced by the Commission and he realised that he was at some personal risk. He also said that when he was

first asked about the February meeting he did not recollect

having any involvement with T.1.C. However, he , then said that

his recollection of the February meeting was vivid.

Iam not prepared to place any significant reliance on

Prebble's evidence which I consider is a reconstruction of events. However, this is not a finding that his evidence was

However, I will deal with what Prebble said. It was broadly as follows: He recollected Levitt taking notes. He did not know who T.I.C. was but a man sitting on the opposite side of the table said they were a firm of freight brokers and when he asked who paid them a man said they were paid by "the carrier or the customer or both". Prebble said "If they come near me I will chuck the schedule at them". By this, he said that he meant he would quote schedule rates. He said he was concerned about the rate of commission.

This was the first time he had been told of a request for

commission. There was a lot of side talk at the meeting. The subject of T.1I.C. "just threw up". The remarks were not always directed to the chair. Uniacke was chairman and the others he

remembered who attended were Levitt, Wise, Linfoot, Davies, Heasman and Gouldstone. He did not recall O'Brien or Price. Somebody said "What are we going to do about T.I.C.". Prebble said he did not recall anything said by any person present as to the manner in which he or his company would act in relation to

Wise said that in the 1970's he represented Ansett Freight Express in relation to the N.P.F.A. meetings. He said that he did not have any actual recollection of the meeting of 12 February 1976, that he was very hazy about the thing and "I did not recall anything at all until I saw those minutes". In my opinion, this clearly and honestly sets out this witness' position and I do not place any reliance on his recollection of anything that was said. At best, Wise's evidence in relation to

the meeting can only be regarded as a reconstruction.

R.J. Price said he attended the meeting and he remembered Uniacke, Davies and Wise being present. He said that, in the 1970's, he had not been asked to recall what took place at the meeting and that he did not prepare a proof of evidence nor had a proof been prepared for him. He was asked by counsel, "I have shown you a certain document in my chambers but apart from that document can you tell from your unaided recollection when that meeting was?" Answer: "Not specifically". He was also asked "Now, again, try and put out of your mind what you read in the document. Can you remember what anybody said about anything

Uniacke was asked in relation to the meeting, "Have you any vecollection of who said what at that meeting?" Answer:

"None whatsoever". I consider that Uniacke save no evidence of

Levitt said that he recalled a meeting at which there was discussion concerning Tradestock or T.I.C. He said, "T remember them mainly because I had been given copies of the three meetings at which the matter arose and from those minutes I am basing my memory". He was asked whether looking at the minute book, he was able to recollect who was present at those meetings and he replied that he could not. What evidence he could give about the meetings was really no more than reading from the minute book. He said, when asked whether the question of T.I.C. was on the agenda or not, that he really could not trust his memory that much. He was asked, "Are you able to recollect the substance of what any specific person said at that meeting?" Answer: "Not of any specific person. I can generalise on what happened at the meeting". I consider that what he said about his recollection of the meeting was no more than a reconstruction of

I regard Levitt as a witness who was somewhat ready to agree with questions put in cross~examination. He was certainly not unfavourably disposed to the defendants. I think his evidence must be looked at against his statement that he could

really do no more than read the minutes from the minute book.

Ido not regard the oral evidence as being of any real

I will set out the general principles which apply to

The Commission argued that admissions could be made

The principle that certain officers of a company had authority to make admissions about past events by virtue

of their general authority or having been deputed to

The principle that, where an agent in the course of performing the business which was entrusted to him, made

a statement which contains an admission constituting part of the res gestae, then that admission goes in

Proposition (i) I agree with this proposition. This is supported by

Fraser Henleins Pty. Ltd. v. Cody, supra, at pp.113 and 134-135. At p.134 Williams J. said:

"But there are some agents who derive from their employment an implied authority of a sufficiently wide nature to make their admissions admissible against the principal even with respect to past transactions, provided that, at the time the admissions are

made, they are still in the employment of their principal. This is because their employment is such that they must be presumed to have authority to give information with respect to such transactions, so that it is given in the course of an act they are

See also T.P.C. v. Allied Mills Industries Pty. Ltd. (1981) 55 F.L.R. 174, Sheppard J., at p.178 and T.P.C. v. Queensland

Aggregates Pty. Ltd. supra, Morling J., at pp. 58-59 and 63;

This proposition has to be limited to a situation where the admission is strictly part of the res gestae. Consider, for example, a case where a bald headed man is seeking to make a purchase from a department store. If the shop assistant, who has implied authority to deal with the customer, has instructions not to deal with bald headed men, in my opinion a statement by the shop assistant to a customer, as a reason for refusing to deal with the customer, that he would not serve him because the store keeper did not serve bald headed men would be admissible. A further statement by the shop assistant that bald headed men have never been served by his employer in this shop would not be

admissible. It is necessary to drawa distinction between the authority to make representations which are in the ordinary course of the servant's employment and the authority to make

N.S.W. Country Press Co-Operative Co. Ltd. v. Stewart (1911) 12 C.L.R. 481, Griffith C.J., at pp.491-~-492;

Fraser Henleins Pty. Ltd. v. Cody, supra, Latham C.d. at p.113 and Williams J. at p.134 in the passage I have already cited.

Ex parte Gerard & Co, Pty. Lid.; Re Craiq (1944) 44 S.R. 370 at 377, where the authority of one Lipman to make admissions was considered. He was a director of a company with no special authority to make admissions but he also managed its cellar

"The most, therefore, that could be implied against the company was that Lipman had

authority to make such admissions about the liquor part of its business as were incidental to the carrying on of that part of its business in the ordinary way."

Barrett v. Steel Products Distributing Co. Pty. Ltd. £1962] N.S.W.R. 981, Walsh J. at p.986.:

Victorian Railways Commissioners v. Lord £19681 2 N.S.W.R. 327, Wallace P. at p.334 and Walsh J.A. at p.338.

I agree with what Fisher J. said in T.P.C. v. Nicholas Enterprises Pty. Ltd. (1978) 40 F.L.R. 83 at p. 94; (1979) 2 A.T.P.R. 40-126 at p.18,345 that s.84(2) of the Act did not

extend to admissions. It extends to conduct and conduct when

used as a noun was defined in s.4(1) as including "doing,

refusing todo, or refraining from doing, any act, including making a contract or arrangement or entering into an understanding". However, I do not think this takes the matter any further than does proposition (ii) and I consider that an admission as to past events is not admissible against a

No admission is relied on by the Commission prior toa

conversation which took place between Shortell, Heasman, Frewen,

Locke and Stock on 10 March 1976. I deal with admissions in

relation to the three arrangements or understandings in Part 5.

The Commission relied upon a number of matters of circumstantial evidence in support of proof of the making of the arrangements or entering into the understandings. I propose to

deal with these arguments only briefly because I consider that the making of the arrangement and entering into the understanding of 12 February 1976 is clearly established without reference to

The Commission referred to The King and the Attorney-

General of the Commonwealth v. The Associated Northern Collieries

evidence under the various headings advanced by the Commission.

(a) Rejection by the Trade Practices Commission of the National

Freight Forwarders' application for authorisation to continue its price fixing role

The evidence shows that, prior to the Act coming into force in 1974, the N.P.F.A. had operated a system called the "Blue Book" system. This was a system implemented by the N.F.F.A., before the Act was passed, which, according to some defendants' witnesses, was a method of introducing some measure of price fixing in the industry. I find that it did have some stabilising effect on the industry and provided a list of recommended rates for particular types of carriage on particular routes. However, the evidence shows that, in practice, very frequently, indeed maybe more frequently than not, lower rates were charged by members of the N.F.F.A. Redpath said that the "price scheduling" function of the N.F.F.A. was of paramount

When the Act came into operation on 1 October 1974, an

N.F.FP.A. meeting was called on 10 December 1974. At that meeting

it was moved by Shortell and seconded by Wilkins and agreed that the N.F.F.A. would approach the Commission with a view tos

obtaining common freight schedules on all services.

On 17 December 1974 an Application for Authorisation was

submitted to the Commission signed by Heasman. At the N.F.F.A.

meeting on 15 April 1975 Heasman recapitulated the situation with

regard to the N.F.F.A. submission and on 7 May 1975 the N.F.F.A. delivered a submission to the Commission pointing out the importance of stability in the industry in relation to the interest of particular carriers. Shortell agreed that the major activity of the N.F.F.A. was rate fixing when that was legal. The N.F.F.A. was advised by the Commission in July 1975 that its

(b) Client disadvantage, the effect of intermediaries and defendants' perception of this

It was alleged that the "search cost" and the inability of some smailer people to effectively deal with carriers themselves was a relevant factor. Whilst this argument may have a measure of attractiveness in relation to consultants paid by the client, I am not attracted by it in relation to the situation of a broker requiring payment from the carrier. It is also quite clear from the major effort made by Tradestock to obtain clients who would pay a consulting fee that certainly the clients did not

see any advantage through using Tradestock on that basis.

The Commission submitted there was evidence that senior representatives of the defendants believed that, apart from commission, Tradestock's activities "complicated" the relationship between forwarder and client and lowered rates through playing off one carrier against another. It referred to the evidence of Shortell, Wise, Prebble, Redpath and a Mr

Bennett, the State Manager of a T.N.T. division in Queensland.

In 1974 Shortell was the Group General Manager of T.N.T. Australia and as such he was responsible for all operations of the T.N.T. Group in Australia. He remained in that position

mid-1976 and, although he had known of transport brokers in

• • • • • Carrada, "he had not heard of them in Australia. He regarded Tradestock as of "absolutely minor importance". He said he had

no prior dealings in Australia with brokers or consultants personally nor was he consciously aware of their existence before

He said that in 1976 he had a view as to what brokers might do. A summary of the problems he saw with brokers is that they could introduce a wider range of carriers to clients; could offer bargaining skills; could advise of actual rates being charged; could assist in resisting increases; could shop around for quotes; could try to get the cheapest rates and force rates down ; more than one broker might come in; brokers create a third party in the field. Iwill deal with this question elsewhere but Shortell gave evidence of the competitive way in

He said that, ""T.N.T. took the decision not to pay

commission to brokers". He said he communicated with the

executive directors and gave instructions not to have any dealings with a broker who sought commission from the carrier. He also said these instructions had never been withdrawn. Shortell perceived the possibility that T.N.T.'s rates might be

Wise, who was the General Manager of the total operations of Ansett Freight Express from 1973 until 1982, had some experience in the late 1960's with a Mr Nossbaum. He had approached Wise with a list of clients for some of whom Ansett was already carrying and he had sought commission. Wise said that he refused to pay the commission feeling that Nossbaum's activities would result in the lowering of the company's

remuneration not only because of a reduction in freight costs to the client but also the obligation to pay Nossbaum commission. Since that date, so far as Wise was aware, he said that Ansett

Wise was cross-examined extensively on this evidence

but, in substance, he did not deviate to any significant extent. He said that in 1976 he had the same view and he had the impression that Tradestock posed only a small risk. He conceded that he wished to keep brokers out of the industry generally. He pointed out that many clients were what he described as "priced

"Well, as soon as he started mentioning he was in business to make a commission or to sell

our clients, if you like, my first objection to the fact was that I do not believe that there is enough margin in the industry for a third person to be in it. I was sort of shocked at the fact he was another element trying to come into the industry to take something out of it. We are lessening our profit, I suppose would be the best way of describing it to you, or margin."

He also said that he thought intermediaries tended to destabilise the relationship between the carrier and the client. He said that all his "management life" he had been of the view

that any sort of commission was unacceptable to him.

It appears that Wise's objection was to paying commission. He agreed that he did not want to deal with brokers and he alone decided not to deal with Tradestock. It is clear that Wise had a view extending back for many years before 1976 and that he was dealing, in substance, with a situation where

In 1975 Prebble was the Australian General Manager of what was then called "T.N.T. Transport Systems". It encompassed the general freight arm of T.N.T.'s operations within Australia

and New Zealand but did not include the overnight companies.

Prebble said that he had not heard of brokers in the transport industry prior to 1976 but that he had had experience

with certain consultants paid by the client. He thought these

were about four in number. He said that, at least prior to the

meeting in February 1976, he had had no objection to dealing with such consultants and that he would have had no objection to dealing with Tradestock prior to the meeting on a consultancy basis but, "I would not have paid commission, that was my only objection". He said that he was reluctant to quote the particulars to someone unless he knew who his client was and unless he knew who was carrying for that client and preferably the price that was being paid. One of the reasons for this was that he had to bear in mind the possibility of starting a price war. This was particularly so if the consultant was acting for an existing client of T.N.T. He said he also appreciated the risk that the consultant might take the client to one of his

When Prebble left the meeting of 12 February 1976 he said he had the general view that he would be happy to deal with anyone provided he did not have to pay commission. Prebble said

he would have been prepared to quote Tradestock had they

mentioned a rate of commission that was acceptable.

Redpath is now Chairman of Mayne Nickless and between 1971 and 1982 he held the position of Managing Director. He said

that he had heard of freight brokers for overseas shipping but that he was not aware of any other brokers. He had in mind the margin for interstate carriage of goods and said that he did not think the broker was likely to succeed. He did not think that at

any time there was evidence of much impact of brokers on the

market place and that he would not have expected anybody like Tradestock to survive very long. He thought it was a logical conclusion that a broker or middle man could have the effect of depressing rates which were earned by the freight forwarders

where there was a market price which had to be shared with the

Bennett has been the State Manager of T.N.T. Roadfast in Queensland since July 1981. For two or three years prior to March 1976, he was the Sales Manager in South Australia for Comet, a section of T.N.T., and between March 1976 and June 1977 he was Victorian Manager for North Queensland Express, also a

In early March he received a telephone call from Stock who said he was setting up what he described as a transport broking business. Bennett subsequently met Stock and Frewen at a hotel in Melbourne. Frewen said that he was in the freight broking business and that he hoped to introduce the broking element into the transport industry and that would mean that the transport companies would need less, if any, sales force and the money thus saved could be used to pay for the brokerage. Bennett said that he thought the idea was very unusual and that he could not see the transport companies abrogating their sales function and allowing a third party to gain control of the allocation of the business to whatever transport company they felt like giving

it to. Bennett also said at the meeting that there was nothing

to stop the transport company ultimately dealing in future direct with the customer and cutting out the middle man. He agreed that the sales staff was one of the means whereby a transport company

retained some control of the allocation of business in the

The actual and perceived impact of Tradestock is certainly a matter for consideration and is relevant in relation to the question of motive. There is no doubt that several experienced executives of certain of the defendants perceived a significant problem with the introduction of intermediaries in the dealing between the defendant and clients. However, I think that the main objection was to paying commission and I am not satisfied that any objection, at least prior to the meeting of 12 February 1976, has been shown to have existed in relation to intermediaries not seeking to be paid a commission by the freight

(da) The defendants' awareness of any ineffectiveness of individual action by a defendant

The evidence does not support this submission apart from

some support which may be derived from the fact that Tradestock's

(it) Inference of concert from any parallel changes in behaviour of the defendants

substantial addition to the length of this judgment. I do not

consider this would be justified in view of my clear finding of

I now proceed to consider what is involved in making an

(E) The requirements for making an arrangement or entering into an understanding

In my opinion it is very difficult to attempt to set out satisfactorily the requirements which establish whether or not an arrangement has been entered into or an understanding reached. There is a lot to be said for a view that it is unwise to attempt to place a precise limitation on the meaning of these words. Their meaning has been considered ina number of cases arising under the Act of which the following are examples:

T.P.C. v. Tubemakers Ltd., supra, at pp.44,323-4 (Toohey J.)

T.P.C. v. Allied Mills Industries Pty. Ltd., (1981) 60 F.L.R. 1 at p. 1243; (1981) 3 A.T.P.R. 40-237 at pp.43,151-2 (Sheppard 7.)

T.P.Cc. v. Nicholas Enterprises Pty. Ltd., supra, at pp.87-90; pp.18,341-3 (Fisher J.), and the appeal therefrom to the Full

Court of this Court reported in (1980) 3 A.T.P.R. 40-157 at

T.P.c. v. Email Ltd. (1980) 43 F.L.R. 383 at p. 397; (1980) 3 A.T.P.R. 40-172 at p.42,377 (Lockhart J.)

L. Grollo & Co. Pty. Ltd. v. Nu-Statt Decorating Pty, Ltd. (1978) 34 FP.L.R. 81 at p. 89; (1978) 2 A.T.P.R. 40-086 at p.17,842 (Smithers J.).

Section 45(2) prohibits a corporation from making an arrangement or entering into an understanding in restraint of trade. Some sections of the Income Tax Assessment Act 1936, particularly s.44(2D)(b), s.80B(5)(b) and s.260 contain somewhat

Section 44(2D)(b) was considered in Federal Commissioner

of Taxation v. Lutovi Investments Pty. Ltd. (1978) 140 C.L.R.

434. The law being applied was the Income Tax Assessment Act as

it existed in 1971-72. Section 44(2D)(b) dealt with:

The issue of shares "in pursuance of, or as part of an agreement or arrangement, whether oral or in writing

Section 45(2)(a) of the Act does not include the words

"purpose" or "enabling" but adds the word "understanding". Section 80B(5) dealt, inter alia, with:

A "contract, agreement or arrangement" entered into

but Stephen and Aickin JJ. expressed a contrary view. At p.443

"The arrangement postulated by this sub-section is one to which there are two or more parties. The sub-section speaks of an 'agreement or arrangement' which is 'oral or in writing' and which has been 'entered into'. Both characteristics point to an arrangement which is bilateral or multilateral. The words

'agreement or arrangement'. They are also similar to the language of s.260, though there

fall within s.260 must be between two persons (Newton Vv. Federal

Commissioner of Taxation (1958) 98 C.L.R. 1 at p.7; €19583 A.C. 450 at p.465)."

Their Honours continued that the arrangement could be

one implied or inferred from the circumstances and that the words

"In the context of s.260 an arrangement is something less than a binding contract or agreement, something in the nature of an

understanding which may not be enforceable at law (Newton v. Federal Commissioner of

an arrangement falling within s.80B(5) (see K. Porter & Co. Ptv. Ltd. v. Federal Commissioner

of Taxation C1974] 1 WN.S.W.L.R. 536 at pp.542-544; Federal Commissioner of Taxation

v. Students World (Australia) Pty. Ltd. (1978) 138 C.L.R. 251). It is, however, necessary

that an arrangement should be consensual, and that there should be some adoption of it. But in our view it is not essential that the parties are committed to it or are bound to support it. An arrangement may be informal as well as unenforceable and the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it."

"In seeking an 'arrangement' in the present case, and there can here be no question of an 'agreement', the meaning that has been given

to that term in other sections of the Act, in quite different contexts, is no sure quide.""

Section 260 had heen considered previously by the Privy Council in Newton v. Federal Commissioner of Taxation (1959) 98

C.L.R. 1 at pp.7-9. At p.7 the Privy Council advised:

"Their Lordships are of opinion that the word 'arrangement' is apt to describe something

something in the nature of an understanding between two or more persons - a plan arranged

Leaving aside any possible difference between "arrangement" and "understanding", it is clear I am not required

The meaning of the word "arrangement" in s.80B(5)(b) was

considered after the judgment in Lutovi in Federal Commissioner

of Taxation v. Cooper Brookes (Wollongong) Pty. Ltd. (1979) 41 F.L.R. 277. The main judgment is that of Fisher J. but Brennan

and Deane JJ. at p.280 agreed with Fisher J. At p.301 Fisher J. cited the passage of the joint judgment in Lutovi which I have

"As to the term 'arrangement' in s.80B(5)(b) both parties referred without dissent to the reasoning of Mahoney J. in Federal Commissioner of Taxation v. K. Porter & Co.

Pty. Ltd. €(1974) 22 F.L.R. 344] cited in the preceding quotation from the Lutovi case. There his Honour discussed the possibility

statements or actual representations. He went on: 'In the absence of such a statement or

commitment to the course of conduct may be inferred or implied from the dealings between the parties'. This, I think, is the manner in Which the drawing of an inference or an arrangement is open in the present case."

It seems that judicial consideration of these words has

tended to equate "arrangement" with "understanding". The case before me also proceeded upon the basis that no distinction was to be drawn. I will proceed upon this basis although I would not

necessarily reject a proposition that the requirements for

entering into an understanding may be somewhat different and more easily satisfied than the requirements for making an arrangement. Having all these considerations in mind, I will deal with certain

I lean with respect to the views expressed by Smithers

J. in L. Grollo & Co. Ptv. Ltd. v. Nu-Statt Decorating Pty. Ltd. & Ors, supra, at p.89; p.17,842 where he said:

understanding is broad and flexible. It may arise merely where the minds of the parties

are at one that a proposed transaction proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct."

In T.P.C. v. Nicholas Enterprises Pty. Ltd., supra,

Fisher J. examined the question of what was required to establish an arrangement in s.45 as it existed after the 1977 amendment and

he dealt at pp.18,341-18343 with various cases including Lutovi

and Re British Basic Slag Limited's Agreements £1963] 2 All E.R. 807. At p.89; p.18,342 his Honour said:

"A significant feature of each of the above passages is the emphasis placed upon the necessity for each of the parties to have communicated with the other, for each to have raised an expectation in the mind of the other, and for each to have accepted an

opinion the essential elements of the requisite meeting of minds."

His Honour then stressed that a meeting of the minds is an

essential feature of 5.45 of the Act and that this was the view

expressed by Smithers J. in Top Performance Motors Pty. Ltd. v. Ira Berk (Queensland) Pty. Ltd. (1975) 24 F.L.R. 286; (1975) 1

This case went on appeal and is reported under the title Morphett Arms Hotel Pty. Ltd. v. T.P.C. (1980) 3 A.T.P.R. 40-157. Bowen C.d. delivered the judgment of the Court, the other members

of which were Brennan and Deane JJ. At p.42,234 his Honour said:

"I wish to add one qualification to my general statement of agreement with his Honour's reasons and findings insofar as they relate to

the appellant. That qualification is in respect of the nature of an 'understanding'

for the purposes of 5.45 of the Act. Fisher d. reached the conclusion that it is a necessary ingredient of such an 'understanding' that there be an element of mutual commitment between two or more parties in the sense that each must have accepted an obligation qua the other or others. As at present advised, it seems to me that one could have an understanding between two or more persons restricted to the conduct Which one of them will pursue without any element of mutual obligation, insofar as the other party or parties to the understanding are concerned. It is not, however, necessary that I reach or express any final view on this question since Mr Justice Fisher's view that such an element of mutual commitment was required plainly imposed a heavier burden on the respondent Commission, and thereby favoured the appellant."

In T.P.C. v. Allied Mills Industries Pty. Ltd., supra, Sheppard J. at p.13; p.43,152 cited, with approval, the passage

which I have already cited from the judgment of Fisher J.

Lockhart J, dealt with the question in T.P.C. v. Email Ltd., supra, at pp.395-397; pp.42,376-42,377. After considering a great number of cases including the judgment of Fisher J. and the judgment in the appeal therefrom of the Full Court of this

Court to which I have referred, his Honour said at p. 397;

",..I incline to the view that there is no necessity for an element of mutual commitment between the parties to an arrangement or understanding such that each accepts an obligation qua the other; although in practice such cases would be rare."

Ionote that the precise wording of the minute of the meeting of 12 February 1976 is not that the parties would not deal but that "... it was better for the client and the operator

to deal direct". Nevertheless, I consider that the parties

raised the matter, the matter was minuted, the minutes were confirmed and not corrected, and at least certain of the defendants acted in away which gave effect to what was, in substance, a refusal to deal other than directly. This aspect

Accepting that the minutes are established as a record of what took place, in my opinion the only reasonable conclusion to be drawn is that the persons present at the meeting had at least entered into an understanding that it was better to deal direct with the client and that this was to be interpreted that each would not enter into arrangements other than with the client direct. There is no doubt that there was communication between the parties. There is no doubt that at least I should infer that an expectation was raised in the mind of each of the persons present and infer that there had been an acceptance of a mutual obligation that it was better only to deal with the client direct. In my opinion, the only realistic way the events of this meeting can be interpreted is that the persons present decided mot to deal other than directly with a client and that the allegations pleaded in para. 21 of the Statement of Claim have

I will consider in Parts 6 and 7 whether the arrangement or understanding of 12 February 1976 was in restraint of trade or commerce to the extent that it was a contravention of s.45(2)(a)

WAS ANY ARRANGEMENT MADE OR UNDERSTANDING ENTERED INTO AT THE NATIONAL FREIGHT FORWARDERS' ASSOCIATION MEETING HELD ON 20 MAY 1976?

The Commission advanced arguments under the same heading as with the meeting of 12 February 1976. I will deal with these in the

The relevant parts of the minutes of the meeting of 20 May 1976, which were admitted on one basis or another, are as follows. Only the first and last paragraphs of the minute

numbered 5 were admitted on the business record ground.

Minutes of the Meeting held in the Boardroom, Wynyard House, 291 George Street, Sydney, at 4-00 p.m. on Thursday, 20th May 1976.

PRESENT : Chairman - Mr R.E. Heasman, T.N.T. Mr E. Prebble - T.N.T. Mr N. Robinson - Brambles Limited Mr W. Roots - A.U.T. Holdings Ltd. Mr P. Chase - A.U.T. Holdings Ltd. Me N. O'Brien - Youngs Transport Mr M.G. Davies - Mayne Nickless Ltd. Mr F. Gardiner - IPEC Australia Ltd. -

5. TRANSPORT CONSULTANTS A letter from Tradestock Pty. Ltd.

incorporating T.I.C. Management Consultants, to a Member Company was tabled.

The letter outlined a proposal with regard to the Member's existing clients

1. Future requirements with regard to freight transportation services.

2. Negotiation of future rates and charges for services offered by the Company.

Point three was based on a percentage of charges earned.

In discussion it was agreed that this type of operation could only increase charges to the extent of the brokerage

payable, that similar 'Transport Brokerage Agencies' had appeared in the

industry at various times in the past and that experience showed that it was better for the Client and Operator to deal directly with each other."

Paragraph 27(1) of the Statement of Claim repeats precisely para. 21(1) except that it substitutes the name Tradestock where T.I.C. Management Consultants appeared before and substitutes for the defendants referred to in para. 21 the

first, second, third, fourth, sixth, eighth and ninth defendants.

The minutes were confirmed at the meeting of 4 August 1976 at which the first, second, third, fourth, fifth and seventh defendants, together with Ipec Australia Limited, were

The minutes are admitted as against the first, second, third, fourth and fifth defendants on all three grounds

(ii) Were the relevant defendants members of the National Freight Forwarders' Association?

I have already dealt with the membership of the first

I am satisfied each of them was a member of the N.F.F.A. and that each was present at the subsequent meeting at which the

These minutes are admitted against the sixth defendant on the two grounds which I have called "the business record

Counsel for Express Freight arqued that it was nota

member of the N.F.F.A. but the member was A.U.T. Holdings

Limited. This submission depended on the submission that it had not been proved that either Ex. KD or KN were the minutes of the N.F.F.A. I have considered this matter previously and found that

Ex. KN was established to be the rules. The sixth defendant

provided an appendix to its written submissions on the question of membership of the N.F.F.A. by Express Freight extending over 36 pages. It was conceded that A.U.T. Holdings Pty. Ltd. was the same as A.U.T. Holdings Limited and that Australian United Transport Pty. Ltd. changed its name in 1969 to A.U.T. Holdings

Pty. Limited which in turn changed its name in January 1975 to

A.U.T. Holdings Limited is shown as a foundation member of the N.F.F.A. in rule 3(b) of the rules which also included as a member, subsidiaries under the control of A.U.T. Holdings

Tt is common ground that the sixth defendant, Express Freight, at all relevant times was a wholly owned subsidiary of

Counsel for Express Freight argued that membership of the WN.F.F.A., an unincorporated association, depended on its having entered into a contract to become a member. He cited authority for this proposition. The evidence of Mr Roots was that the then chief executive of the United Group of Companies had decided that the parent company would become the member and a contribution towards membership would be made by each of the subsidiary companies. There is evidence that at the meeting of 23 August 1973 a Mr Coxon represented A.U.T. Holdings Ltd. There

was also evidence that Coxon was first accountant, then general

Manager, and about 1974-1975 joined the Head Office staff of United Transport Holdings. In these circumstances I am satisfied that A.U.T. Holdings Limited (since January 1975 United Transport Holdings Australia Pty. Ltd.) became a member of the N.F.F.A. together with subsidiaries under its control including the sixth defendant. I. include in these circumstances such evidence as there is of attendance at meetings, receipt of circulars and the

I am satisfied that it was a member of the N.F.F.A. but the minutes are not admitted against it on "the confirmation ground" because it was not present at the meeting at which the

These minutes are admitted against the eighth and ninth defendants on "the business record ground" but not on "the membership ground" because I am not satisfied that membership of the N.F.F.A. was established nor are they admitted against the eighth and ninth defendants on "the confirmation ground" because

they were not present at the meeting of.4 August 1976.

I deal now with the question of membership of the N.F.F.A. by the eighth and ninth defendants.

I can see nothing in the evidence to satisfy me that the eighth and ninth defendants were members of the N.F.F.A. The

rules of the N.F.F.A. show that Ipec Australia Limited was a

foundation member but I find nothing to establish that the eighth and ninth defendants were subsidiaries of that company. There is no evidence that I am prepared to accept that the eighth and ninth defendants were admitted as members of the N.F.F.A. in

The only evidence concerning Ipec Australia Limited is

in its annual returns. In the return made up to 31 December 1974

the list of directors shows that three of the directors were also

directors of "Ipec Insurance Ltd. (Group)" and a fourth director was also a director of Ipec Insurance Ltd. The directors' report

includes the statement that, "The company ceased trading as an interstate operator during the year and now operates as an

There is a certificate of change of name from Ipec Australia Limited to Tarlee Investments Limited on 12 November

In the directors' report section of the annual return of Igec Australia Limited made up to 30 December 1975 and in the same sections of the returns of Tarlee Investments Limited made up to 23 December 1976 and 30 April 1978, the company 1s also

The annual return made up to 23 December 1976 shows

three of the directors as also being directors of "Ipec Insurance

Ltd. (Group)"" and another director as being a director of Ipec

Insurance Ltd. The annual return made up to 30 April 1978 also shows that three of the directors were also directors of "Ipec

From January 1976 at the latest the ninth defendant and Ipec Insurance Limited were registered under the Business Names Act in the various States as the proprietor of the business name "Ipec". It was admitted that the eighth defendant before its name was changed to Eslea Holdings Limited was incorporated in 1963 under the name Ipec Insurance Pty. Limited and that it was converted to a public company known as Ipec Insurance Limited and changed its name to Ipec Holdings Limited on 12 January 1978. The title of the proceedings was amended at the request of counsel for the eighth and ninth defendants to Eslea Holdings Limited in respect of the eighth defendant and to Roadswift Transport Pty. Limited. in respect of the ninth defendant. The writ in this case was issued on 25 May 1978 so that the name of the eighth defendant was correctly described at the time of the writ. I find therefore that the business name Ipec at ail relevant times was the registered business name of the eighth and

The minutes are therefore only evidence against the eighth and ninth defendants in so far as they contain statements of fact admitted under the provisions relating to the

admissibility of business records. On this basis the name Ipec

Australia Limited appearing after the names of Gardiner and Bass

Counsel for the sixth defendant strenuously argued that there was no relevant statement of fact in the minutes of 4 August 1976 admissible as a statement of fact ina business record and also that the admissibility on the second of the two

grounds depended upon proof that the sixth defendant was a member

I deal first with the question of whether the last paragraph of item 5 of the minutes contains statements of fact.

The submission was put by the sixth defendant that the word

"agreed" recorded in the minutes was not a statement of fact. I considered and held admissible the words "we accepted your

quotation in part" in the ruling I gave on 18 July 1983. Having regard to s.7B(2)(d) of the Evidence Act 1905, I consider that the last paragraph of item 5 contains statements of fact providing evidence of what happened at the meeting although not evidence of the truth of the matters recorded as having been

agreed. In any event the allegation that an arrangement was made or an understanding entered into does not require proof of an

(iii) The relationship of persons attending the meeting to the relevant defendant and their ability to commit it

The First Defendant: I have already held that Heasman and Prebble could speak for and commit the first defendant at the February meeting and I

consider that the position was the same at the May meeting.

Robinson attended a number of N.F.F.A. meetings in 1974.

He was known very well to Levitt and Levitt talked to him at his place of business which was Brambles office, Pacific Highway, North Sydney. He was also present at-the dinner after the meeting of May 1976. I consider that the only reasonable inference is that N. Robinson was properly present at the meeting of 20 May 1976 on behalf of the second defendant and was authorised to speak on behalf of and to commit it at that

The Third Defendant: I have already held that M.G. Davies could speak on behalf of and commit the third defendant at the February meeting

and I consider the position was the same at the May meeting.

The Fourth Defendant: I have already held that O'Brien was authorised to speak

on behalf of and to commit the fourth defendant at the February

meeting and I consider the position was the same at the May

Roots was chairman and a director of the sixth defendant in 1975-1977. He was also Chief Executive of A.U.T. Holdings Limited, the holding company of the sixth defendant, and chairman of and responsible for the entire operation of the subsidiaries

Roots said that Chase was the general manager of Express Freight and that he was the United Transport representative for the N.F.F.A. Roots explained that the holding company did not do any forwarding itself but operated through a number of subsidiaries of which the sixth defendant was one. Roots said he attended the meeting at Chase's request so that he could attend the dinner afterwards and because of some suggestion that he might become involved himself in N.F.F.A. affairs. Roots said

Chase was the main representative of the company at the meetina.

Tam satisfied that Roots and Chase were authorised to speak on behalf of and commit the sixth defendant at the May

In a letter (Ex. GG) sent to customers, F.A. Gardiner

signed himself as General Manager of the ninth defendant.

Shortell said that in May 1976 he knew Fred Gardiner as the General Manager of Ipec and that he had dealings with Gardiner in relation to Ipec. There was also evidence from Uniacke that in 1975/76 on occasions he had dialled the number he had for

Gardiner and the person answering had said "This is Ipec".

A Mr R.C. Howard, who was called by the third defendant, said in evidence that he had been the Administration Manager of Ipec from 1973 to 1976 and later he formed the international division of Ipec and that Fred Gardiner was his direct boss as General Manager. Howard also recalled Robert Bass whom he saw daily at Ipec. In 1976 Bass became State Manager when Gardiner became General Manager. He said Bass became General Manager of Ipec in 1979 when he was promoted from the position of State

Manager when Gardiner became World General Manager.

A journal called "The Express" and calling itself the "House Journal of the Ipec Holding Group Limited" at p.6 of the September 1980 issue, referred to Gardiner as the Group General Manager of Australian Transport Operations in 1980 and as the General Manager in 1975. This was admitted only in relation to

the eighth and ninth defendants. Counsel for the eighth and

ninth defendants argued that ""Ipec"- was a partnership between

those two companies and, as such, admissions on its behalf must

satisfy the provisions of $.15 of the Partnership Act, 1892

(N.S.W.). Whether or not this was so, I am satisfied that

Gardiner could speak for and commit the eighth and ninth

I consider it impossible to come to any conclusion other than that Heasman and Prebble were authorised to speak on behalf of and to commit the first defendant at the May meeting, and likewise Robinson the second defendant, M.G. Davies the third

defendant, O'Brien the fourth defendant, Roots and Chase the

sixth defendant, and Gardiner the eighth and ninth defendants.

(B) Oral Evidence of what took place at the meeting of 20 May 1976 .

Of the ten persons present at this meeting only three were called. The Commission called Levitt, the first defendant called Prebble and the sixth defendant called Roots. Whilst the obligation to establish what took place at the meeting was upon the Commission, in my opinion it was entitled to rely upon the minutes and call Levitt. The conclusion I draw from the limited oral evidence is that the evidence of the other persons present would not have supported the case of the relevant defendant. I reach this conclusion because all persons present other than Levitt were employees of one or other of the defendants and it

can hardly be thought reasonable that the Commission would call

IT have discussed Prebble's evidence in relation to the

meeting of 12 February 1976 and I express the same view in

relation to the meeting of May 1976. The only difference is that I accept the substance of the evidence he gave in chief in

Prebble said that he recalled the names of those present but that he could not remember where they sat. He remembered there was a discussion about transport consultants and he recalled a letter being "passed around the table, and it was from either T.I.C. or Tradestock and it was an approach to one of the

companies and it detailed their terms of business". He only

recalled one particular section of that letter, that was where it set out that Tradestock would require a 7 1/2 per cent commission

on freight that exceeded $50,000 per annum in revenue. He

remembered his reaction vividly. He said that he burst out

laughing and said words to the effect 'They haven't qot a show in

Prebble was then shown Ex. CY, a letter from Tradestock to the Victorian Manager of Alltrans, which he identified as the letter which he saw at the meeting. He said he did not recall seeing the minutes of the meeting nor did he recall anybody else saying anything. He also said that subsequent to this meeting he did not give any instructions to any of his managers in relation to dealing with Tradestock, that he did not recall attending a dinner after this meeting, that he was not given any instructions by Shortell or Heasman not to deal with Tradestock or brokers or

consultants and that neither Tradestock nor any other freight

broker had ever approached him since the meeting. This was ail the evidence of any significance which Prebble said in

In cross-examination he said that he took the letter as an example of a general approach and that he expected a later

approach from Tradestock. He also said that he did not mind

Tradestock getting some commission as long as his company ended up with a profit. He said he saw the possibility of having to pay aocommission to clients for whom his company was already carrying or run the risk of losing them. He also said that paragraph 5 of the minutes was not an entirely accurate statement of what occurred at the meeting and that he would have remembered the words "in discussion it was agreed" and that that he did not remember that. He also said that side talking was normal at the meetings but that he was not particularly concerned with what

took place at the May meeting as he was not interested.

Senior counsel for the first defendant submitted that it

was clear that the letter that was tabled was Ex. CY and that it had been received by the Victorian Manager of Alltrans Express who, at Shortell's request, forwarded it to him after he had complained that Tradestock was seeking commission from Alltrans in respect of one of its own clients. Shortell gave the Letter to his secretary for filing in the normal way. His secretary would have passed it to Heasman. Heasman tabled it at the

meeting. I did not find any satisfactory explanation of the

reason why this letter came directly from the Victorian Manager

of Alltrans Express to Shortell when that Manager was not

Prebble also said in cross-examination that the letter was passed around very quickly and that he did not remember any discussion about the letter other than what he had said himself. No explanation was offered for Prebble's lack of knowledge of the letter prior to his seeing the letter when it was tabled by

Prebble also said that he had not been told abouta meeting between Frewen, Stock, Locke, Shortell and Heasman which

relation to Roots' evidence on various matters extended over 70

Roots said that he had no idea of what was on the agenda for the meeting since he and Chase went separately to the meetind and he arrived after the meeting had started. He related the seating position of the persons he knew.

He said that he had no recollection of what took place until Heasman, who was the chairman, referred to the Tradestock letter. Roots said he gathered that Heasman was upset.

Roots said he wondered why Heasman raised the question of the

letter. He said he remembered a statement, "Everyone will please

themselves what they do". He believed there was no formal

He said that he asked Prebble who Tradestock was because he was interested to know. He said Prebble said that they were

two people who used to work for T.N.T. as salesmen.

He said that Chase read the letter and said that T.N.T. already serviced that client. He said Prebble said, "An in-house thing should not have been discussed". He said that he never considered that Tradestock might approach his company and that he did not discuss the matter with Chase after the meeting. He said

that somebody said that it could be illegal but that at the time

he did not regard the discussion about Tradestock as being of any importance. He said that no one said how his company would act regarding Tradestock or brokers or consultants. He thought Tradestock was trying to enter the industry as a third party.

He said that he did not understand that any agreement, understanding or arrangement was made not to deal with brokers or consultants and he heard nothing said at the meeting to the

effect that the Tradestock type of operation could only increase

Roots expressed very specific recall on a number of

matters of detail. As was put by the Commission, this contrasted

starkly with his total absence of recollection upon other more

significant matters and rests strangely with Roots' claim of

general indifference about the discussion and Tradestock. He said that he had no recollection of the proceedings at the

meeting before the chairman referred to the letter.

I am not prepared to accept Roots' evidence in relation to the meeting of May 1976. I have reached this conclusion for a number of reasons including my observation of Roots in the witness box. There are a number of matters which I consider are of particular importance in examining Roots' evidence. There were of course many other matters too numerous to deal with

Roots said that Chase was the main representative for the company at the meeting, that he did not regard a discussion about Tradestock as being of any importance and that it had no significance for him at the time. He said it did not achieve any significance until he received a communication from solicitors at a time that he had some difficulty in fixing. He nominated two dates, 1976 or 1978. He said that he discussed this letter with the company's Finance Controller, a Mr Andrews, but that he did

not consider it serious. He also said he did not discuss the letter with Chase and that he gave no instructions to gather any

documents to investigate the accuracy of what was in the letter. He remembers a writ being served shortly after the solicitor's

letter upon his company. He said that, at least prior to going

to see solicitors in Sydney in late 1983, he had not told anybody

his version of what took place at the May N.F.F.A. meeting. He

also said that he had not written down his version in any way. He said that, prior to giving his evidence in this case, he had not lovked at any documents relating to the events of 1976 to jog his recollection. He also said that he was not involved at all in any steps for preparation of the defence of the proceedings which Tradestock commenced and that he did not see any solicitors in that regard. He said that at no time had he prepared a

statement in the form of a written summary of his recollection

Levitt could not remember the name of those who attended this meeting without reference to the minute book. He said in relation to the relevant minute that he had no recollection of the precise words used by any person at the meeting or of the

In cross-examination he said that he remembered the name Shovelton Storey, he did not remember who tabled the letter but he remembered it was passed down the table. He said he did not remember Prebble bursting out laughing but he did recall a discussion about 3 per cent and the rate of remuneration at such a meeting as this. He was asked about whether he remembered words to the effect, "We are dealing with them" and somebody else's words to the effect, "Well, everyone will please themselves what they do, they always do anyway". He said that

was correct but in re-examination he said that, when answering a

question in cross-examination, he was agreeing that the phrase

"everyone will please themselves what they do" was customarily accepted at N.F.F.A. meetings on different subjects and that the expression was used before the Trade Practices Act came into force but a lot more after it came into force. He was further asked about a statement he made in cross-examination about companies dealing with Tradestock and he said he could not say anything further in relation to that meeting. In cross-examination he had agreed that a person whom he could not

identify had said words to the effect, "We are dealing with

In cross-examination Levitt was asked about words in the minute "in discussion it was agreed". Levitt said that, "there was no actual agreement. There was no disagreement on what was being said and it is a journalistic lie to state it was agreed". It is of importance to note that Levitt agreed that there was "no disagreement on what was being said". This is important bearing in mind that the allegation is one of making an arrangement or

I express the same view in relation to Levitt''s evidence as I did in relation to his evidence concerning the meeting of 12

As with the meeting of 12 February 1976 I do not regard

the oral evidence as being of any real significance.

I have already dealt with the principles to be followed

and I deal in Part 5 with particular alleged admissions.

(D) Circumstantial evidence I have the same views on this question as I have

expressed in relation to the meeting of 12 Febreuary 1976.

For the same reasons as I expressed in relation to the meeting of 12 February 1976, I consider that the only realistic inference to draw about the meeting of 20 May 1976 is that the persons present, whom I have held were authorised to speak for and commit a relevant defendant, made an arrangement or entered into an understanding not to deal other than directly with the client. I am satisfied that the Commission has established the

WAS ANY ARRANGEMENT MADE OR UNDERSTANDING ENTERED INTO AT THE NATIONAL FREIGHT FORWARDERS' ASSOCIATION MEETING HELD ON 4 AUGUST 1976?

(A) The Minutes of the meeting of 4 Auqust 1976 The relevant parts of the minutes of the ordinary meeting of 4 August 1976 which were admitted on one basis or

Minutes of the Meeting held in the A.R.T.F. Boardroom, 291 George Street, Sydney, at 10.30 a.m. on Wednesday, 4th August 1976.

PRESENT: Chairman - Mr R.E. Heasman - T.N.T./Alltrans Executive - Mr J. Wise - Ansett Freight Express Executive - Mr J.W. Linfoot - Brambles Ltd. Mr R. Banks - IPEC Australia Ltd.

Mr R.C. Wilkins - Youngs Transport Mr G.E. Lincoln - A.S.P. Container Express

1. CONFIRMATION OF MINUTES . The Minutes of the Meeting held on

Thursday, 20th May 1976, as circulated, were confirmed.

A letter from Tradestock Pty. Ltd. was tabled and noted. The Meeting reaffirmed

best interests to deal directly with it's own clients."

The minutes were confirmed at the meeting of 11 November 1976 at which the first, second, third, fourth and fifth

one Paragraph 33(1) of the Statement of Claim repeats precisely para. 21(1) except that it substitutes the name Tradestock where T.1.C. Management Consultants appears in para. 21(1) and substitutes for the defendants referred to in para.

21(1) the first, second, third, fourth, fifth, seventh, eighth

The Commission relied upon the same matters as it had

done in relation to previous meetings and I will deal with them

(i) The agenda for the meeting included as one of the eight

items: "Transport Brokerage Services - Correspondence from Tradestock Pty. Ltd.".

(ii) The minutes of the immediately preceding meeting of 20

(iii) It was the third time the matter had been raised within

(iv) The letter that was tabled was obviously Ex. P, the

(wv) Of those present, Linfoot (Brambles), Wilkins (Youngs) and Wise (Ansett) had been involved in direct approaches

Exhibit P was a letter from Tradestock to the N.F.F.A. seeking a meeting to discuss the provision of transport services to client

I. have already dealt in general terms with the reliability of the minutes in relation to the meetings of 12 February 1976 and 20 May 1976. In the same way, I consider the minutes the best evidence of what took place at the ordinary

There is evidence, which I accept, that the minutes were confirmed at the meeting held oni1l November 1976 at which Heasman, Linfoot, Davies, O'Brien and Wise were present. As I have previously said, I consider that these gentlemen were authorised to commit the first, second, third, fourth and fifth

defendants respectively. No one represented the seventh, eighth

and ninth defendants so the minutes are not evidence against them

The minutes are admissible against the first five defendants on all grounds and against the seventh defendant on "the business record ground" and "the membership ground".

Membership was admitted by the seventh defendant in the pleadings

and I consider there is also other evidence sufficient to establish membership. The minutes are also admissible against the seventh defendant on "the business record ground" because I am satisfied that Lincoln, as its manager, had authority to commit the seventh defendant. Wilkins was the Managing Director

The minutes can only be admissible against the eighth and ninth defendants on "the business record ground" but the description of Banks in the minutes was not admitted on that ground. There is no satisfactory evidence that Banks was an officer of the eighth and ninth defendants so the minutes are not

admissible against the eighth and ninth defendants.

(B) OQral Evidence of what took place at the meeting of 4 August Qf those who attended the meeting, the Commission called only Levitt and only Wise was called by any defendant. I make

similar comments about the failure to call evidence as I made

Wise had no recollection of what occurred at the meeting without reference to the minutes. He said that after reading the minutes he had a recollection that Heasman was probably the only person he remembers being there. After reading the minutes he recalled a letter being tabled but he did not recall to whom it was addressed or who spoke at the meeting. He was asked in chief, "To your understanding, did you ever reach any agreement or arrangement or enter into any understanding with any other person from the N.F.F.A. not to deal with Tradestock?". He answered, "Never, I certainly did not". He said that he did not recall anything said by any person present at the meeting as to the manner in which he or his company would act in relation to Tradestock and he had no recollection when he left the meeting of having any expectation that anybody else would act in a particular way about Tradestock. I consider the significance of

As I said with regard to the February meeting, I regard

Wise's evidence concerning the August meeting as no more than a

I formed the same view about Levitt's evidence in relation to this meeting as I formed about his evidence in

relation to the February and May meetings of the N.F.F.A.

Levitt was not able to give his evidence other than by

looking at the minutes. He was asked in chief, "Apart from any

belief based on what was customary and apart from any assistance you would derive from looking at the document in front of you, do you have any actual recollection of what was said or done at the meeting of 4 August 19767". The document referred to was the minutes of the meeting. The witness answered "No". Notwithstanding one or two things said in cross-examination to which I will refer, I consider this statement represented the true position of the witness' recollection. In cross-examination the witness was asked, "At the meeting, I suggest to you, you tabled the letter, brought it forward; correct?". Levitt answered "Yes". He was further asked, "And I suggest to you that there was no discussion about the matter at all, except somebody

said words to you to the effect: 'This has arisen before, you

deal with it in the minutes'". Levitt answered, "Words along those lines, words along those lines generally. I tabled a letter for instructions, and my recollection was I was told N.F.F.A. did no trading, and that the members would deal with it in what they thought to be in their best interests individually". The witness was further asked, "Somebody said it had nothing to do with N.F.F.A, did they not?". Levitt answered "Yes". Levitt also answered "Yes" to the question "But it was very brief, almost a passing reference?". He also said that at the meeting two

companies said they were dealing with Tradestock and that he

recollected that the companies were Mayne Nickless and Brambles.

As with the meetings of February and May 1976, I do not

regard the oral evidence as being of any real significance.

I have dealt with the principles to be followed and I

will deal later with particular alleged admissions.

expressed in relation to the meeting of 12 February 1976.

For the same reasons as I expressed in relation to the meeting of 12 February 1976 I consider that the only realistic unference to draw about the meeting of 4 August 1976 is that the persons present, whom I have held were authorised to speak and commit a relevant defendant, made an arrangement or entered into an understanding not to deal otherwise than directly with the client. I am satisfied that the Commission has established the allegations in paragraph 33 of the Statement of Claim except in

ADMISSIONS IN RELATION TO THE THREE NATIONAL FREIGHT FORWARDERS' ASSOCIATION MEETINGS

I doubt whether it is necessary to trouble about the admissions upon which the Commission relied in relation to proving the alleged arrangements or understandings. I am satisfied the arrangements or understandings were made from the inferences which I am prepared to draw from what took place at the meetings. However, a great deal of time was spent in cross-examination about certain conversations and they have been dealt with in some detail in counsels' submissions. I will deal with certain of the alleged admissions in relation to particular

The plaintiff relies first upon the meeting of 10 March 1976 between Shortell, Heasman, Stock, Frewen and Locke. I do not propose to go into details of the evidence of what was said at this meeting but it was clear that there was a discussion about broking and I accept that Shortell showed a general disinclination to deal with intermediaries and in particular to pay commission to any intermediary. I accept that he suggested that some dealings might take place between Tradestock and T.N.T.

However, contrary to the usual practice, Shortell directed that

all proposals should be submitted to the executive directors for

general freight (Heasman), for express freight (Pedlow) and for specialist services (Jacobs). I doubt whether Shortell had any

intention of dealing with Tradestock as a broker or consultant.

The next alleged admission took place in a letter from a Mr Peter Bruce, the Victorian Manager of Hawthorn Taxi Trucks, a division of T.N.T., of 14 July 1976 containing a passage, "it is not the policy of Hawthorn Taxi Trucks to negotiate with agents and besides that, all discussions pertaining to our dealings were made with yourself". In my opinion, this statement was made in the course of negotiations involving Tradestock and was one

The next alleged admission was in a telephone conversation of 26 July 1976 between Stock and Shortell. I accept that Stock told Shortell that Gardiner had told him that there had been a meeting and that the N.F.F.A. had decided not to do business with Tradestock and there were forty people at it. I accept that Shortell said that he had received the client profiles from Tradestock (see Part 8), that he was not going to reply, that T.N.T. was not dealing with brokers and that he

thought he had made that quite clear to Tradestock on a number of

occasions. Shortell did not complain about the adequacy of the profiles. The Commission tendered notes of this conversation Prepared very shortly after the conversation. As with the

minutes of the meeting, I place more reliance on any written

Reliance was placed on a telephone conversation between Linfoot and Frewen on 27 July 1976. I accept that, although Linfoot said he only represented one division of Brambles, he said, in substance, that Brambles was not prepared to deal with brokers or agents but only wanted to deal direct with clients but that it would deal with Tradestock if a client so directed. I also find that this statement was within his authority. No complaint was made about the adequacy of the client profiles. Again a written record of the conversation was in evidence and

Mayne Nickless: Exhibit S, which was a letter from Redpath of Mayne

Nickless of 1 July 1976, clearly states that the policy of Mayne Nickless was to deal directly with clients and not through a middleman or broker. Senior counsel for Mayne Nickless argued that this only represented Redpath's personal view. However, at the time, Redpath was Manaqing Director of Mayne Nickless and I consider that this letter can only be read in any sensible way as a statement rade with the authority of and on behalf of Mayne Nickless of the company's policy and that it is admissible

Reliance was placed on a telephone conversation between Frewen and Wilkins, the Managing Director, which took place apparently in early August 1976 and appears to have been after Youngs received client profiles from Tradestock for Tomasetti, Sylon and Shovelton Storey. Wilkins did not give evidence. [In general I do not regard Frewen as a satisfactory witness and I hold a somewhat similar view about Stock. I am disinclined to yely on their oral evidence alone about anything that might be critical. However, I am prepared to accept Frewen to the extent of finding that in this conversation there was some mention by Frewen that Tradestock was going to the Trade Practices

Commission and that Wilkins said that Youngs was not qoing to do

business with them and that it did not want to do business with consultants or brokers. I do not accept that there was any statement which I am prepared to accept, even if admissible, that Wilkins said that members of the N.F.F.A. would not do business

Reliance was placed upon a telephone conversation between Stock and Wise of 26 July 1976 after Tradestock had sent client profiles (see Part 8) for Mindrill, Tomasetti and Shovelton Storey to Ansett. T am satisfied that in this conversation Wise said in relation to the client profiles that he had chosen not to reply and that he also said, "We do not want to

do business with consultants and brokers ... we want to do

business direct with clients". I also accept that Wise said that Ansett did not want to pay commission and that Stock said that the commission rates were negotiable. There was apparently some discussion about salesmen. Iam not able to make any finding about what was said about the N.F.F.A. Again notes of the

conversation were prepared by Tradestock shortly after it took

I accept that in a telephone conversation between Gardiner and Frewen on 26 July 1976, Gardiner said that he just wanted to do business direct with his clients and would not do business with consultants or brokers. I also accept that Gardiner said that T.N.T. and Ipec had agreed that they would not pay commission and would not deal with agents or brokers. It was put by Ipec that Gardiner was speaking for himself but I find that he was speaking about Ipec in a situation where admissions could be and were made. This would support an arrangement or understanding at least as against Ipec. There was also some conversation about the N.F.F.A. and a dinner after the meeting of

I accept that all these conversations provide admissions against the defendant employing the person concerned. However, with the exception of Ipec, I am not prepared to hold that of

themselves the conversations were admissions of any arrangement

or understanding. However, they do show that these defendants were acting substantially in accord with the arrangements or

understandings that I have found to have been made or entered

Sections 45(2)(a) and (4) were in the following terms:

(a) make a contract or arrangement, or enter into an understanding, in restraint of trade or commerce

(4) A contract, arrangement or understanding that is not of the kind referred to in

sub-section (3) is not in restraint of trade or commerce for the purposes of

this Act unless the restraint has or is likely to have a significant effect on competition between the parties to the

contract, arrangement or understanding or on competition between those parties or any of them and other persons."

The arrangements or understandings pleaded in paras. 21,

27 and 33 of the Statement of Claim are alleged in paras. 22, 28 and 34 to have been in restraint of trade or commerce. -Certain

The onus is clearly upon the Commission to establish

that 'a prohibited arrangement was made or a prohibited

understanding was entered into. That is apart from the question

which arises under s.45(4) which has the effect of excluding from

an arrangement or understanding in restraint of trade or commerce, for the purposes of the Act, an arrangement or understanding which does not have a significant effect upon competition as therein provided. It is also apart from the question of who bears the onus of proving any issue arising under

There is a considerable body of authority in support of the proposition that the onus of establishing the likely effect on competition for the purpose of s.45(4) lies on the defendants. The Commission so submitted. It referred to T.P.C. v. Guests' Garage Pty. Ltd. (1976) 26 F.L.R. 433 at pp.437-8; (1976) 1 A.T.P.R. 40-016 at p.17,291; T.P.C. v. Email Ltd., supra, p.402; p.42,380; T.P.C. v. George Weston Foods Pty. Ltd. (1979) 39 F.L.R. 182 at p.188; (1979) 2 A.T.P.R. 40-114 at p.18,248 and T.P.C. v. Allied Mills Industries Ptv. Ltd., supra, at p.10; p.43,150.

If this is so, it is difficult to see to what the exculpatory facts in s.45(4) refer unless it be to the words "yvestraint of trade". To hold otherwise would appear to leave the Commission without the need to prove the making of an arrangement in restraint of trade or the entry into an understanding in restraint of trade. I would find it very

In my opinion, the first task is to ascertain whether an

arrangement or understanding in restraint of trade or commerce

has been established without regard to the provisions of s.45(4). The Commission submitted that the common law doctrine of restraint of trade was not important in the case before me. The defendants argued that the common law in relation to contracts in restraint of trade or commerce was directly applicable to the law in relation to s.45(2)(a) of the Act. The defendants dealt with the common law requirements of a contract in restraint of trade. The second defendant provided me with 53 pages of written submissions on that question. It was put correctly that, in general, such a contract is one which is unreasonable both between the parties and contrary to the public interest. Broadly, the submission was that the onus lay on the plaintiff to establish at least the requirement of being contrary to public interest. It was also argued for a number of reasons that the defendants were acting reasonably in their own interests and that any arrangement or understanding was not contrary to the interests of the public. It was also argued that, if proved, any arrangement or understanding was to continue business as it had been in the past by approaching clients directly and that this was not giving up any right which any of the defendants had

In my opinion, there is some ground for taking the view that an arrangement or understanding in restraint of trade or commerce in the Act has different elements to those distinguishing a contract in restraint of trade or commerce. An

arrangement or understanding in restraint of trade or commerce

presumably would, in many cases, be terminable at will and the period of time embraced in a contract in restraint of trade or commerce is always a significant factor in determining whether the contract is reasonable as between the parties and not

I bear in mind that at common law a contract in restraint of trade or commerce is not, in general, illegal or prohibited by law but is simply one which cannot be enforced.

The parties are free to have regard to it if they wish.

In his address-in-reply senior counsel for the Commission embraced the proposition which I had raised that there may well be a difference between the requirements for a contract in restraint of trade or commerce and an arrangement or understanding in restraint of trade or commerce. However, there is authority which would support the view that the law of contract in restraint of trade would be applicable to arrangements or understandings. See generally Buckley v. Tutty (1971) 125 C.L.R. 353 and, in particular, Quadramain Pty. Ltd. v.

Sevastapol Investments Pty. Ltd. (1976) 133 C.L.R. 390 at p.40l.

In substance the case has been argued on that footing and that is

The first question I have to decide is the extent, if

any, to which the judgment of the High Court in Quadramain Ptv.

Ltd. v. Sevastapol Investments Pty. Ltd., supra, is applicable to

the question now under consideration. The matter directly at

I propose to express my own views first having in mind, pursuant to s.15AB of the Acts Interpretation Act 1901, the second reading speech in the Senate of the Minister in charge of

the Bill on 30 July 1974. My attention was drawn to this speech

and a number of other speeches in Parliament by senior counsel

for the first, fifth and seventh defendants. At pp.3-4 of the

"I now refer to some features of the drafting of the Bill. Legislation of this kind is concerned with economic considerations. There is a limit to the extent to which such considerations can be treated in legislation as legal concepts capable of being expressed

with absolute precision. Such an approach leads to provisions which are complex in the

extreme and give rise to more problems than they remove.

The present Bill recognises the futility of such drafting. Many matters have, of course, had to be stated in detail. But other provisions, particularly those describing the prohibited restrictive trade practices, have

wherever possible, well understood expressions. I am confident that this will be

afforded an opportunity to apply the law ina realistic manner in the exercise of their traditional judicial role." (Emphasis added)

In so far as I have found the speech applicable, pursuant to s.15AB of the Acts Interpretation Act 1901, I have

had regard to the reference to "economic considerations" and to

the statement that the Bill has been drafted using, wherever possible, "well understood expressions" and the words "apply the law in a realistic manner". Many of the provisions of the Act

are "ambiguous or obscure" within s.15AB(1)(b)(i) as is the

In my opinion, a well understood expression in relation to the subject matter of the Bill was the expression "contract in

restraint of trade" to which it appears I should have regard.

Quadramain, supra, and certain other cases to which I have been referred were decided before s.15AB was enacted. Quadramain was a case where an application was made to enforce a covenant that land would not be the subject of an application for a liquor licence. The original parties to the contract were no longer concerned and the owner of the land benefited by the covenant sought to enforce the covenant against the occupier for the time being of the land to which the covenant applied. The defendant by way of defence asserted that the covenant was in unreasonable restraint of trade and void and also unenforceable by reason of s.45 of the Act. The Court was divided. Barwick C.J., McTiernan, Gibbs, Stephen and Mason JJ., with Jacobs and Murphy JJ. dissenting, held that the covenant was enforceable. The majority took the view that the doctrine of restraint of

It will be evident that two issues arose, first whether

the covenant was in unreasonable restraint of trade and unenforceable at common law and, secondly, unenforceable because

The position under s.45 would certainly involve s.45(1). It would also involve s.45(2) if giving effect to a contract embraced seeking to enforce rights under the contract.

Barwick C.J., at p.394, reached his decision for the single reason that no restraint of trade was involved, as between the parties to this case, in the restrictive covenant noted in the relevant certificate of title. He expressed no view on the

McTiernan J., at pp.395-399, took the view that the covenant in question was a Tulk v. Moxhay type of covenant and was not invalid by reason of the doctrine of restraint of trade. This view was based on the fact that the purchaser of the land had not given up any freedom which he otherwise would have had but that he had taken possession of the land subject to a negative restrictive covenant. At p.399 the provisions of

s.45(1) of the Act were set out and his Honour said:

described as one in restraint of trade, this section has no application."

It would appear that his Honour was only referring specifically to s.45(1) and indeed the whole question before the Court was whether the covenant, which was made before the Act came into operation, could be enforced and the provisions of s.45(1)

specifically dealt with the enforceability of such a contract.

Gibbs J., as he then was, after setting out s.45(1) and

"I consider that the rules relating to restraints of trade have no application to the present case. Of course it is now settled that those rules are not limited to particular kinds of restraint. 'The categories of restraint of trade are not closed': Petrofina (Gt Britain) Ltd. v. Martin £1966] Ch. 146 at p.169. Indeed, the rules are not confined to contractual arrangements but apply to all restraints of trade, howsoever imposed: Dickson v. Pharmaceutical Society of Great Britain £19701 A.C. 403 at p.440; Buckley v. Tutty (1971) 125 C.L.R. 353 at pp.375-376. It is also settled that the rules apply to a restraint which extends only to the use of a particular piece of land: Esso Petroleum Co.

Ltd. v. Harper's Garage (Stourport) Ltd. £19681 A.C. 269; Amoco Australia Pty. Ltd. v.

Rocca Bros. Motor Engineering Co. Pty. Ltd., Ante, p.288. Nevertheless, in Esso Petroleum Co. Ltd. v. Harper's Garage (Stourport) Ltd. C1968] A.C. 269, all the members of the House of Lords who took part in that decision agreed that the rules do not apply toa covenant given by a purchaser or lessee restricting the use to which the land purchased or leased may be put: see per Lord Reid £1968] A.C. at p.298; Lord Morris of Borth-y-Gest £1968] A.C. at pp.308-309; Lord Hodson £19681 A.C. at pp. 316-317; Lord Pearce £19681 A.C. at p.325; Lord Wilberforce £19681 A.C. at pp.332-335. In such a case the covenantee is

not required to establish that the covenant is reasonable; the covenant is not subject to the doctrine."

"In support of the second defence advanced it was submitted that s.45 of the Act applies to any covenant in restraint of trade, even toa reasonable restraint. If that is so, the section, if valid, would have the drastic result that a contract to which the section applies will be invalid even though it is demonstrably reasonable both in the interests of the parties and in the interests of the

public. However, I find it unnecessary to consider whether that is the proper

reached the clear conclusion, for a number of different reasons, that the section has no application whatever to the present case. In the first place, for the reasons already given, in my opinion the covenant in question cannot properly be described as one in

restraint of trade or commerce. Secondly, s.45(1) has the effect of rendering unenforceable only contracts in restraint of trade or commerce; it has no effect on

"Section 45(1) does not have any effect on equitable or other proprietary rights and has no application to the present proceedings. Thirdly, the effect of s.45(4) is that if, apart from that subsection, it could properly be said (contrary to my opinion) that Quadramain was seeking to enforce a contract in restraint of trade, the covenant is nota

the purposes of the Act. The 'contract' is not of the kind referred to in sub-s.(3).

or undertakings; they are dealt with by sub-s.(2) which has no relevance to the

present case. The effect of sub-s.(4) is that a contract will not be in restraint of trade or commerce for the purposes of the Act unless

the restraint has, or is likely to have, a significant effect on competition between the parties to the contract, or on competition between those parties or any of them and other persons."

The views which his Honour expressed in relation to s.45(2) appear to me to be dicta. Whilst his Honour refers to s.45(4) and s.45(2), it was only necessary to consider the effect of s5.45(1) unless it be said that the attempt to enforce the covenant fell within s.45(2)(b) as giving effect to such a covenant. However, his Honour said that sub-s.(1) did not refer to arrangements or undertakings: "they are dealt with by

sub-s.(2) which has no relevance to the present case".

Stephen J. said the doctrine of restraint of trade had no application and then, at pp.405-406, dealt with the defence

under s.45(1) again by way of obiter and said that it was wholly

inapplicable to the covenant under consideration. His Honour

"I consider that the effect of sub-s.(4), which is set out in the reasons for judgment

of Gibbs J., is to exclude from the scope of sub-s.(1), if ever otherwise within it (as to

which I say nothing), a contract which imposes no restraint having or being likely to have a significant effect on competition betweeen those whom the sub-section identifies, namely 'parties to the contract' or one such party and third parties.

Sub-section (4) operates so as to deprive contracts of the character of being in

which they must possess if sub-s.(l) is to apply to them, unless the restraint imposed is

a significant effect on competition between two or more persons, at least one of whom must

Mason J., at p.406, said he did not find it necessary to

It was clearly a material factor in the judgments of Barwick C.d., Gibbs and Mason JJ. that a covenant and nota situation where there was privity of contract was under

Jacobs J., in dissent, held at p.420 that the covenant was unvalid as being in restraint of trade and then said that in reaching that conclusion he had not needed to rely on s.45 of the

"However, I should express my view that, whether or not I am correct in my opinion that the common law doctrine relating to restraint of trade falls to be applied to the present covenant, it is a contract in restraint of trade within s.45(1) unless it is excepted

under s.45(4). The covenantor agreed not to engage in certain trade or commerce on the land in question and that agreement restrains that trade and commerce. It would be a question of fact whether or not it was likely to have a significant effect on competition between the parties to the agreement, or on competition between those parties or any of them and other persons. Though it is the contract between the original parties which

needs to be examined in the application of s.45, if on that examination it were found

that it was unenforceable between the parties neither any rule of equity such as that in Tulk v. Moxhay (1848) 2 Ph. 774 £41 E.R. 1143]

nor s.88 of the Conveyancing Act, 1919 (N.S.W.) could operate to make the contract binding upon successors in title."

Murphy J., at p.421, agreed with the judgment of Jacobs

In my opinion, the judgments in this case are not binding authorities on anything other than the construction of s.45(1). However, the plaintiff has to establish that any arrangement or understanding proved is in restraint of trade or commerce within s.45(2). A contract, arrangement or understanding can be properly described as in restraint of trade or commerce for the purposes of the Act oniy if the test provided un s.45(4) is established. I leave aside the question of who bears the onus of establishing this. Ina situation where the contract, arrangement or understanding is clearly reasonable as between the parties, I do not consider that the authorisation and clearance provisions place the question of public interest outside matters for consideration in 3.45(2)(a). Likewise, the question whether a contract, arrangement or understanding has been made or entered into contrary to s.45(2)(a) must ultimately be determined by the Court and cannot depend upon any determination of the Commission or Tribunal in an application, if made, for an authorisation under s.88 of the Act or a clearance

I consider that it must be established that the contract is first one in restraint of trade according to the common law

I regret that the views I have expressed are not in accordance with the views expressed "with some doubt" by Sheppard

Jd. in T.P.C. v. Allied Millis Industries Pty. Ltd. (1981) supra,

at p.9; p.43,149 or with those expressed by Wootten J. in

Hollywood Premier Sales Pty. Ltd. v. Faberge (Australia) Pty. Ltd. £19763 2 N.S.W.L.R. 144 or with those expressed by Lockhart

Jd. in T.P.C. v. Email Ltd. supra, at p.402; p.42,380. However, I base my views principally on two matters, namely the provisions of s.15AB of the Acts Interpretation Act, 1901, and my difficulty in deciding what is a contract, arrangement or understanding in restraint of trade or commerce by only having regard to the effect upon competition set out in s.45(4). Section 45(4) does not appear to me to pay any specific reqard to the interests of the public unless it be thought that if a contract, arrangement

or understanding does not have a significant effect on the

relevant competition between the parties then the public, in

Later I will deal with the amendments of 1977 which removed the expression "restraint of trade or commerce" but I note with interest the statement made in the report of the

Swanson Committee of August 1976 where, in para. 4.112, the

"The Committee has already stated that it agrees with the submissions put to it that sec. 45 and 47 together are unnecessarily uncertain and complex. The notion of 'restraint of trade or commerce' has given rise to major uncertainty, due both to its unfamiliarity to the business community and to the legal difficulties raised by the Quadramain decision. The Committee has already expressed its view that the phrase 'restraint of trade or commerce' should be

I have reached the conclusions that the Commission has to show that the relevant defendants made an arrangement or entered into an understanding in restraint of trade or commerce in the common law sense to establish a contravention of s.45(2)(a). The question of the application of s.45(4) isa secondary question. I do not consider that it is necessary to decide on whom the onus lies to establish the position under

s.45(4) because of the conclusion I express later upon the

As I have said, the Commission must show that the relevant defendants made an arrangement or entered into an understanding in restraint of trade in the common law sense to establish a contravention of s5.45(2)(a). Although I doubt whether this has been established, and the Commission hardly dealt with this question at all, I will proceed to consider the

Senior counsel for the Commission has made it quite clear that it only relies on the effect of competition between the parties to the alleged arrangement or understanding and not on competition between those parties or any of them and any other

However, he argued that the defendants against whom the allegations in para. 21 and corresponding sections of the Statement of Claim are made were engaged not only in competing in the supply of services of freight forwarding but also in the

acquisition of the services provided by Tradestock and any other persons falling within the phrase "or any other agent and/or

(1) Did the arrangements or understandings have any effect on competition between the defendants referred to in

(2) If the answer to question (1) is "yes", did that restraint have a siqnificant effect on competition

(3) Was any arrangement or understanding likely to have an

effect on competition between the named defendants?

(4) If the answer to question (3) is "yes", was that effect

A threshold question arises, namely, whether it is necessary to ascertain the market or markets in which the named defendants are supplying or are likely to supply freight forwarding services or in which the defendants acquire or are likely to acquire the services of "any other agent and/or broker"

Section 45(4) specifically used the words "competition between the parties to the arrangement or understanding" and it did not specifically refer to competition in a market. I will deal more fully in Part 9 with the question of competition in a market but I consider that the fact that the legislature has chosen the words "competition between the parties to the arrangement or understanding" suggests that that is the competition the legislature had in mind and that no ambiguity arises if the words are given their ordinary meaning. In my

opinion, one can probably have rivalrous behaviour between the parties to an arrangement or understanding without looking to the

particular market in which they operate since it is the

competition between the parties which is significant and not the

because there seems no doubt that all the defendants named in

para. 21 and corresponding paragraphs carried on at least some operations within one market, whether it be the Australian market for the carriage of goods or what the plaintiff called the

Whilst it is necessary to consider only the effect of the arrangements or understandings, I consider that that effect must be determined in the light of the effect at the time or the

effect likely to result at or about the time of the making of or

entering into the arrangements or understandings. I do not think

Although the minute of, for example, the meeting of 12 February 1976 is entitled "T.I.C. Management Consultants", I consider that, whatever arrangement or understanding was reached, it included what was described therein as "transport brokerage agencies" and provided "that it was better for the client and operator to deal direct". I accept that this means that the parties to any arrangement or understanding would not in fact deal with transport consultants or transport brokerage agencies, so it is necessary to examine the effect upon the competition between the parties. In addition, one has to look at the likely

Even isolating these questions indicates what I regard as the complexity of and the difficulty of applying the relevant

The question of the effect of brokers or consultants upon competition between the defendants must not be looked at in an academic way. It is clear that the Minister in charge of the

"The Courts will be afforded an opportunity to apply the law ina realistic manner in the exercise of their traditional judicial role."

As Bowen C.J. and Fisher J. said in relation to the matter then under consideration in Outboard Marine (Australia)

Pty. Ltd. v. Hecar Investments (No, 6) Pty. Ltd. (1982) 66 F.L.R. 120 at p.123; (1982) 4 A.T.P.R. 40-327 at p.43,983:

"The economic meaning must be applied ina practical way to accommodate the concern of

In my opinion, it is necessary to examine the facts carefully and decide the question of the effect on competition in the light of the facts and not to apply a theoretical view of what might be the position if the facts were different or what

might be the position at some time several years later.

I deal later in Part 9 with the economic evidence but I consider that the overriding consideration in the construction of

s.45(4) is the choice in the legislation of the words

"competition between the parties to the arrangement or

In addition to the provisions in s.15AA of the Acts Interpretation Act 1901 requiring me to prefer a construction that would promote the purpose or object underlying the Act, I now have to consider the provisions of s.15AB dealing with the

use of extrinsic material in the interpretation of an Act. I

have already mentioned s.15AB. Without limiting the generality

of the material which I may consider, I am permitted to consider a mumber of matters including, in certain cases, the relevant reports of any committee of inquiry (s.15AB(2)(b)); any explanatory memorandum relating to the Bill containing the provision laid before or furnished to the members of either House of the Parliament by a Minister before the time when the provision was enacted (s.15AB(2)(e)); the speech made to a House of the Parliament by a Minister on the occasion of the moving by that Minister of a motion that the Bill containing the provision be read a second time in that House (s.15AB(2)(f)); any relevant material in the Journals of the Senate, in the Votes and Proceedings of the House of Representatives or in any official record of debates in the Parliament or either House of the Parliament (s.15AB(2)(h). I am required also to consider the provisions of s.15AB(3) providing that, in determining whether consideration should be given to any material in accordance with

sub-section (1), or in considering the weight to be given to any

such material, regard shall be had, in addition to all other

(a) the desirability of persons being able to rely on the ordinary meaning conveyed by the text of the provision taking into account its context in the Act and the

(b) the need to avoid prolonging legal or other proceedings

Senior counsel for the first, fifth and seventh defendants sought to rely upon a considerable amount of material under the provisions of s.15AB. I have done the best I can with this section, which I find extremely difficult to apply, especially in a case like this where at least some counsel are

not easily deterred by the time required to argue a point fully.

I consider that the views expressed by the Full Court of this Court in Qutboard Marine (Australia) Pty. Ltd. supra, upon the construction of the Act are reinforced by use of s.15AB, which had not been passed at the time of the Full Court's

It is, in my opinion, now necessary to look at certain aspects of the correct approach to be adopted in the construction

of a statute such as Part IV of the Act. It is clear that,

although the criminal onus of proof does not have to be satisfied, it is necessary to have regard to the penal nature of the contravention alleged and the extent of the penalty both financial and probably to trade reputation which is involved ina finding of contravention. I also have in mind that the

legislation is of a highly penal nature and in T.P.C. v. Legion

Cabs (Trading) Co-operative Society Ltd. (1978) 35 F.L.R. 372 at p.382; (1978) A.T.P.R. 40-092 at p.17,905 I said in relation to

"I consider that such a section should he construed in a similar way to a_ section imposing a criminal liability. As to the interpretation of statutes creating offences, see Beckwith v. The Queen, per Gibbs (1976) 135 C.L.R. 569 at p.576.""

The passage of Gibbs J., as he then was, to which I

"The rule formerly accepted, that statutes creating offences are to be strictly construed, has lost much of its importance in modern times. In determining the meaning of a penal statute the ordinary rules of

construction must be applied, but if the language of the statute remains ambiquous or

doubtful the ambiquity or doubt may be resolved in favour of the subject by refusing to extend the category of criminal offences: see R. v. Adams (1935) 53 C.L.R. 563 at pp.567-568; Craies on Statute Law, 7th Ed. (1971), pp.529-534. The rule is perhaps one of last resort."

Although s.15AB had not been passed when this statement was made, I doubt whether it should be held to abrogate the

In my opinion, if the language of the Act after the ordinary rules of construction have been applied remains ambiquous or doubtful, it is appropriate to remove or resolve that ambiguity or doubt in favour of a defendant, at least, where

The meaning of "has or is likely to have" in s.45(4)

The words "is likely to have" are associated with "has

or" and the words "a significant effect on competition". They

relation to s.45D of the Act in Tillmanns Butcheries Pty. Ltd. v.

Australasian Meat Industry Employees Union (1980) 42 F.L.R. 331; (1979) 2 A.T.P.R. 40-138. At p.339; p.18,495 Bowen C.J. pointed out that the word "likely" is one which has various shades of

meaning. His Honour discussed various cases including Australian

Telecommunications Commission v. Kreia Enterprises Pty. Ltd. (1976) 14 S.A.S.R. 303, T.P.C. v. Total Australia Ltd. (1975) 24

P.L.R. 413; (1975) A.T.P.R. 40-014, and certain American cases. His Honour said that it was unnecessary to place a gloss on the section by preferring one meaning of likely than another for

determination of the particular case then under consideration

because the circumstances to which s.45D may apply were so various. His Honour further considered the established facts in

the case and had regard to the ordinary course of human affairs.

His Honour referred to T.P.C. v. Total Australia Ltd. supra, where Joske J. considered the words "is likely to have the

effect of" in s.47(5) of the Act. Joske J. took the phrase "is likely to have the effect of" as equivalent to calculated and said that it was a matter of inference as to whether the likely effect is to substantially lessen competition (at pp.416-417; 17,288). An application for special leave to the High Court in

the last mentioned case was refused; (1976) 50 A.L.J.R. 333.

Deane J. at p.347; pp.18,499 and 18,500 said that he was

unable to accept that "likely" is synonomous with "more likely than not" and that in s.45D(1) "the preferable view is that the word 'Likely' is not synonomous with 'more likely than not' and that if relevant conduct is engaged in for the purposes of causing loss or damage to the business of the relevant corporation, it will suffice, for the purposes of the sub-section, if that conduct is, in the circumstances, such that

there is a real chance or possibility that it will, if pursued,

Deane J. considered that the purpose of persons engaging

in the conduct was relevant but it must be borne in mind that the

words of s.45D are "... conduct ... engaged in for the purpose,

and would have or be likely to have the effect, of causing ...

"On the other hand, if conduct had run its ordinary course and had not had the specified effect, it would be but rarely that a court would feel justified in disregarding the lesson of the event and finding that while the conduct did not have the specified effect it had been more likely than not that it would have that effect."

Bray C.d. in Australian Telecommunications Commission v. Kreia Enterprises Pty. Ltd., supra, examined the meaning of the words "is likely" in s.139B(1)(a) of the Post and Telearaph Act 1901. His Honour considered whether the word "likely" is synonomous with "probably" or whether it was satisfied where there was some possibility more than remote or "bare". At p.312 his Honour said that the ordinary and natural meaning of the word 1s synonomous with the ordinary and natural meaning of the word "probably" and both words mean "... that there is an odds on chance of the thing happening". His Honour also pointed out that the statute was a penal statute. His Honour said that he thought that the most natural and ordinary meaning should be given to the word "likely" and that in the section it means "probably" and

that that means that there is a more than fifty percent chance of

In my opinion, it is desirable to note the warning given

by Bowen C.J. in Tillmanns Butcheries Pty. Ltd. v. Australasian

Meat Industry Employees Union, supra, and not to place a gloss on

the section by preferring one meaning of "likely" rather than another if that is not necessary for the determination of a particular case. If, however, I am required to adopt a view, I consider that the word in s.45(2) now under consideration is to be read with due regard to the fact that it appears in a penal statute, that it is linked with the word "significant" and that this means that, whilst the meaning need not be restricted toa situation where the odds are greater rather than equally balanced or somewhat less than equally balanced, the probability must be something not very far short of "more probably than not", except in unusual circumstances as, for example, the situation mentioned by Deane J. of firing a rifle through drawn curtains into a quiet

I consider that "is" differs somewhat from "would be" and that the question must be answered by looking at the position at or about the time of the arrangements or understandings under consideration were made or entered into. The Trade Practices Tribunal, Deane J. presiding, said at p.17,453 in G. & M.

Stephens Carting Contractors Pty. Ltd. (1977) 1 A.T.P.R. 40-042 in relation to s.45 after 1 July 1977:

"It is, in our view, to this direct and immediate effect that the provisions of s.45

I consider this view equally applicable to the section before the

The word ""has" requires the question to be tested against the established facts whereas the words "likely to have", while referring to the period at or about the time when the arrangement was made or the understanding entered into, allows

The meaning of "siaqnificant" The next question is whether, at the time of the alleged

arrangement or understanding, the restraint had a siqnificant effect on competition between the relevant defendants or whether it was "likely to have a significant effect on competition"

In Hecar Investments No. 6 Pty. Ltd. v. Outboard Marine

Australia Pty. Ltd, (1982) 4 A.T.P.R. 40-298 at p.43,705, I considered the meaning of the word "substantial" in s.47(10)(a) of the Act and came to the conclusion that that word refers to an effect on comoetition which is at least "real" or "of substance" or "of significance". On appeal ((1982) 66 F.E.R. 120 at ».124; (1982) 4 A.T.P.R. 40-327 at p.43,983) Bowen C.J. and Fisher J. pointed out that Courts had been reluctant in the past to attempt to define "Substantially" but it was not necessary to decide the meaning of the word to determine the appeal but that it was

difficult to say that the primary Judge erred in law in regard to

the meaning he ascribed to "substantially". Likewise, I think it is unnecessary to attempt to define the word " significant" in s.45(4) since IT do not think it is necessary for the purpose of determining this case, although it is clear that it must mean,

perhaps except in extrordinary circumstances, at least "not

DID ANY RESTRAINT IN THE ARRANGEMENT MADE OR THE UNDERSTANDING ENTERED INTO AT ANY OF THE MEETINGS HAVE OR WAS IT LIKELY TO HAVE A_SIGNIFICANT EFFECT ON COMPETITION BETWEEN THE DEFENDANTS?

Having dealt with the construction of s.45(2)(a) and (4), I can proceed to consider whether any restraint in the three arrangements or understandings had or was likely to have a

significant effect on competition between the defendants.

Since this question involves an examination of what was the effect of the arrangements or understandings upon competition

between the defendants, it is necessary to examine the extent of that competition. I proceed upon the basis that there is no need to look at the question of market in relation to s.45(2)(a) and (4). However, my conclusion would be the same if I adopted a construction of s3.45(4) which involved the consideration of competition ina market whether it be the "national freight forwarding market" as the Commission argued or the total market

Because of my conclusions there is no need to consider

Iwill deal later with the Commission's argument that I should have regard to the question of the acquisition of broking

I will consider first what was the effect of the arrangements or understandings upon competition between the

• • -- (B) The four periods of operations of Tradestock

There were four periods in the operations of Tradestock:

(a) The consulting period when no commission was sought from carriers - from about July 1975 to about early March 1976.

(b) The commission period when commission was sought from carriers - from about March 1976 to about November 1976.

(c) The freight forwarding period when Tradestock was operating as a freight forwarder and not as a consultant or in any real sense as a broker - from about November 1976 until shortly before Tradestock went into liquidation on 31 May 1978.

(d) The period not later than February 1977 when Tradestock

(i) "Ihe consulting period" - (about July 1975 to about early March 1976)

I will consider first the period when Tradestock was operating as a consultant seeking remuneration from clients and

I will proceed upon the basis that the arrangement or

understanding was not to deal with consultants or brokers whether

or not commission was demanded from the carrier and during this

period Tradestock was not demanding such commission.

The position was not one where a number of brokers or

consultants were offering their services in the same way as _

There was some evidence that several consultants or brokers had carried on business in the past. At a meeting of the N.F.F.A. on 11 February 1969 apparently attended by Redpath as chairman, Davies and Wilkins, it had been reported that a Mr Klint was operating as a freight broker and that he had made approaches to members of the forwarding industry and it was agreed that Klint's type of operation only succeeded in depressing freight rates and was to be deplored. At a meeting of the N.F.F.A. on 4 March 1969 at which Redpath, Wilkins and Davies were again present, the minutes of the previous meeting were confirmed. It appears that the activities of freight brokers were discussed and it was agreed that the N.F.F.A. policy

regarding freight brokers was that quotations would not be

submitted to other than general (sic - genuine) shippers or authentic members of the transport industry, i.e. no quotations to freight brokers, consultants or other variations of go-between

Tradestock commenced business about mid-1975 as "Transport Information Service" and "T.I.C. Management Consultants". At least during the period between mid-1975 and early March 1976 it was conducted by Frewen and Stock with some typing assistance from Mrs Frewen. In general, Tradestock sought to advise clients about competitive quotes, about little known or unpublished discounts and rates, and about entering into long term fixed price agreements. It also offered its negotiating services to seek competitive quotes leading to a client switching from one freight forwarder to another in order to acquire transport services at better prices and/or to get better services, in making representations to transport companies designed to stop them putting up rates, in stipulating on behalf of clients for certain minimum standards of service, and in checking invoices and consignment notes. So far as is relevant, I doubt whether it achieved any of these objectives. It also purported to offer certain other consulting services in respect of which it appeared to have no particular expertise. its

expertise in the fields which I have mentioned was aiso considerably limited although Frewen and Stock had had some experience in the transport industry, both having previously

Whatever view one might take about the efficiency of Tradestock, there was no doubt that, prior to the end of 1975, it

made very extensive and determined efforts to obtain clients for

its services ona consulting basis. It appears that Frewen and Stock made use of any personal contacts which they had and that they made a major effort to obtain clients who would pay Tradestock a fee. The submission of the second defendant that Tradestock carried out what was in reality a market survey in this regard appears justified. Tradestock, through its advertising agents, approached an organisation called Dunn and Bradstreet and sought the names and addresses of prospective clients requiring transport services particularly in the Melbourne region. Frewen said that Tradestock was given a list of about 3,000 names. In July or August 1975 Tradestock had circularised 1,965 prospective clients offering all kinds of services including the opportunity to attend a transport seminar. It received only very few inquiries for its consulting services (the response was "miniscule") and not one application to attend the seminar which it had offered in the circular. In addition Tradestock telephoned a large number of companies seeking work. In late January 1976 both Frewen and Stock visited Sydney and apparently approached approximately 30 prospective clients. The total result of Tradestock's extensive, apparently efficient and very determined efforts to attract clients resulted in Tradestock having four clients at the end of January 1976 and having done some work for two or three others who had ceased to be clients by that date. Its clients, to use short name references, at the end of January were Sylon, Lane, New World-Cyclops and Mindrill. Lane and New World-Cyclops were clients for which Tradestock only

wrote a report for which it was paid a fee. The only two clients

for whom Tradestock had any continuing activity early in February 1976 were Sylon for whom it performed some activities until February 1977 and probably Mindrill for whom it performed some

It is clear that Tradestock had been unable to establish itself as a viable organisation by the end of February 1976 on the basis that clients would pay it a fee even where the fee was calculated ag an agreed percentage on what Tradestock claimed were savings achieved for the client. I have considerable doubt whether the savings claimed were made. In short, I am satisfied that Tradestock had no clients in any real sense on a consultancy basis and was unable to operate in this way. So far as the evidence goes, I see no reason to conclude that any other person would have operated any more successfully in obtaining clients at

that time on the basis of obtaining a fee from the client.

(ii) "The Commission Period" ~ (about early March to about November 1976)

By February 1976 it was clear that Tradestock had to have a continual source of income to survive and that endeavours to get clients who would pay a consulting fee or a percentage of

In early 1976 Tradestock formulated the idea of becoming a broker in the sense that it sought commission from the carrier. A Mr Locke, who at one time was a director of Tradestock in which

he had a financial interest and for which he arranged certain

finance, had discussions in late 1975 with Frewen and Stock. Locke was an insurance consultant and the general manager of an insurance underwriting agency, by name Carpenter Locke. Locke suggested that Tradestock start in the broking business in the transport of goods which he described as very akin to the insurance broking business with which Locke said he was familiar.

Locke's concept was that the transport companies would pay

~-commission. He invested an amount of $1500 in the business and

on 20 February 1976 introduced Tradestock to the manager or deputy manager of the Bank of New Zealand in George and William Streets, Sydney. At this time Locke appreciated that the business in its original concept was clearly wumsuccessful. Locke, in evidence, agreed that in establishing a new business it was desirable to have an arrangement with the client that the client would not go elsewhere before introducing the client toa carrier otherwise the transport company would be likely to try to go to the client and cut the broker out. There was evidence that at the meeting the bank official had been told that Tradestock was seeking to get its remuneration by brokerage and it appears that it was said that that would produce an income of about $10,000 per quarter. A portion of the diary of the bank official who conducted the interview recorded that he had been told at the meeting that it was expected that income would be erratic in the first stages but that the fees were expected to increase to $10,000 per quarter in a short period. Locke, through Carpenter Locke, provided a guarantee for the $10,000 overdraft which

On 5 February 1976 Stock met Shortell and Pedlow, who was in charge of Kwikasair, a division of T.N.T., to explain the nature of Tradestock's business. Stock said that Shortell mentioned the possibility of some commission being paid if T.N.T. was introduced to new clients. However, no commitment was

On 10 March 1976 there was a meeting at the Kwikasair depot between Shortell, Heasman, Locke, Frewen and Stock. It was at this meeting that the question of commission was specifically

raised and that meeting has been discussed in Part 5.

By letter of 26 April 1976 Frewen wrote to the Supply Manager of Shovelton Storey Pty. Limited ("Shovelton Storey") making a number of allegations of savings achieved, which I do not consider have been established by the evidence, and proposed that Tradestock undertake a survey of the company's distribution and transport requirements. The letter included a paragraph

"Following the normal practice of our company, Tradestock will negotiate with the transport operators concerned, brokerage commission, which will be included in their submissions to Shovelton Storey and no fee will be claimed direct from you by Tradestock.""

Tradestock at that time had a normal practice of negotiating

Similar letters were written during April 1976 to a number of companies seeking to obtain them as clients upon the

basis that Tradestock's remuneration would come from the carrier.

On 3 May 1976 Tradestock arranged for the following

entry in the Melbourne telephone directory: "Tradestock Pty.

By letter dated 12 May 1976 Tradestock acquired Shovelton Storey as a client. The letter of appointment, a draft

of which was prepared by Tradestock, was in the following form:

"Tt has been decided that this company will review its freight transportation programme.

Following this decision we have engaged the services ef Tradestock Pty Ltd as our

transport broker and that firm will be instrumental in preparing and producing reports and proposals after investigation of our current programme. This appointment is effective from Wednesday 12th May, 1976.

Qur arrangement with Tradestock Pty Ltd is that our company will relinguish (sic) its practice of direct dealing with transport operators in matters relating to negotiation of agreements for transportation services. Tradestock Pty Ltd will, in consultation with us, arrange ail necessary services on our behalf.

We are pleased that Tradestock Pty Ltd have consented to act in this capacity and are confident that suppliers of services will co-operate with them to the fullest extent."

Certain defendants argued that this involved a breach of

The following clients were obtained as a result of the approaches to prospective clients on the basis that no payment by them would be involved:

12 May 1976 Shovelton Storey. This company appeared to be the first new client Tradestock had acquired

11 June 1976 Tomasetti & Sons Pty. Ltd. ("Tomasetti") June 1976 I.C.S. C.A.R.S. Pty. Ltd. ("Cars")

29 September 1976 Hardy Spicer (Australia) Company ("Hardy Spicer")

25 October 1976 Clyde Master Pty. Ltd. ("Clyde Master")

24 November 1976 Lawrence & Hanson Pty. Ltd. ("Lawrence &

On 14 May 1976 Frewen sent a letter to the General Manager, Alltrans Express Vic-Tas., a division of T.N.T., (Ex. CY, see also Part 3(B)), the body of which read as follows:

"Effective from 12th May 1976, Tradestock Pty. Ltd. has been appointed by Shovelton Storey Pty. Ltd. as Consultant and Broker to that firms 'Transportation and Distribution' programme. A copy of our letter of appointment is enclosed.

In order to prepare the necessary reports for our client Tradestock will need to hold

discussions with a representative from your organisation.

To avoid any misunderstanding as to the purpose of our meeting we advise that the areas of discussion will include:

(a) Our clients future requirements with regard to freight transportation services.

(b) Negotiation of future rates and charges for services offered by your company.

With regard to item (c) above we provide the following information:

Tradestock Pty. Ltd. shall be remunerated by the Carrier, as set out below, in connection with Agreements for the carriage or transport of articles, effected or renewed by Tradestock Pty. Ltd., in regard to which Tradestock Pty. Ltd. has produced written authority from the Consignor to effect or renew Agreements.

below, on Agreements where the Carrier's charges earned are:

Up to $50,000 7 1/2% $50,001 to $100,000 5% $100,001 to $150,000 4% $150,001 to $250,000 3% $250,001 and over 2 1/2%

It shall be competent for a Carrier by Agreement with Tradestock Pty. Ltd. to fix Broker's remuneration in respect of any Business at lower rates of Brokerage than the maximum rates prescribed above.

It will be necessary for our meeting to take place in our offices at 422 Collins Street, Melbourne on Wednesday 19th May 1976, at 9.00 am. The undersigned would appreciate it if the representative nominated by your company would contact him to confirm this appointment as soon as possible."

This letter was referred to Shortell and produced a \ somewhat violent reaction. Shortell said that his reaction to

the letter "was firstly one of outrage, one of absolute

indignation". He said this was because he had told Stock that T.N.T. would not pay commission and also because of the rates of commission referred to in the letter. Shortell also said that,

after reading the letter, he considered Ex. CY constituted a

breach of the exclusive dealings provisions of the Act.

On 19 May 1976 Shortell sent a telex to Gillespie, the General Manager of Shovelton Storey. The telex set out the letter from Tradestock and the letter of appointment given to

"We express our utmost concern at the contents of Tradestock's letter when viewed in the light of the Trade Practices Act 1974. Furthermore, it has never been customary for carriers in Australia to pay commission to third parties for the procuration of interstate cartage as it has been proved in other countries that the payment of such commissions increases the national transportation cost by the amount of such commissions.

Shortell agreed that implied in the telex was a wish to make it clear to Shovelton Storey that it would have to get rid

of Tradestock if it wished to deal with T.N.T. and that the

purpose of sending the telex was to try and separate Shovelton

Gillespie sent the following telex to T.N.T. on 20 May 1976:

"Shortell our letter of 12 May 1976 appointing Tradestock is a tangible expression of dissatisfaction with the rates charged by your organisation and other major transport operators. As we see it you have the remedy in your own hands.

Shortell said that he did not hand the original of Ex. CY to Heasman but he had given it to his secretary to file in the normal way. He thought that his secretary had given it to Heasman because a copy which Shortell had seen recently had the initials REH noted by his secretary in the margin together with the date which was either 19/5/76 or 20/5/76. It appears this is the way in which Heasman got Ex. CY, which was the letter tabled at the meeting of the N.F.F.A. on 20 May 1976.

On 2 dune 1976, after Tradestock had acquired Shovelton

Storey as a client on the basis it would be remunerated by the

carrier, it wrote to a mumber of carriers other than the defendants seeking to have them carry for Tradestock's clients on a commission basis. Carriers that I will call shortly, Jetlink,

Mulgrave Associated Transport, Pre-paid Express, Sartoris and

later Toll Chadwick all agreed to pay commission as did Blue Circle.

All clients obtained by Tradestock between March and November 1976, with the exception of Cars, were obtained upon the basis of a letter of appointment whereby each client surrendered the right to negotiate with freight forwarders direct and agreed only to deal through Tradestock, the client having no responsibility to pay any monies to Tradestock. Tradestock was to receive its remuneration by way of commission from the

During the period March-November 1976 Tradestock received the following income: (a) consulting fees ~ s1,000 (Lane) and apparently GIV-9 $250. This was in respect of work done or arranged before March. (b) "savings" $1,216.73 (Sylon). (c) $300 (Kornblums). (d) Commission from carriers - about $1500. (e) It also received some money from Hardy-Spicer but this appeared to have been more as a freight forwarder than as a

By the end of October 1976 Tradestock had a large negative cash flow.

I consider that it is established that at November 1976 it had only the following clients:

Any claims made by Tradestock of its capacity to "bulk buy" transport, "use its clout" or of "having familiarity with actual rates in the market place gained from knowledge of its

other clients" and the like have no real substance.

All parties made detailed submissions concerning Tradestock's dealings with various clients. I do not propose to do more than summarise what I consider flows from the evidence relative to the "commission period". During this period Tradestock did some work for Shovelton Storey, Tomasetti, Kornbliums, Clyde Master, Cars, Stanhome and Sheaffer Pen in addition to Mindrill and Sylon. This work produced very little income. Tradestock obtained some other letters of appointment in substantially the same terms as that from Shovelton Storey. However, in relation to certain of these clients, Tradestock did little or no work in respect of which it obtained commission from

any carrier although it had no other income at the time.

The Commission submitted that Tradestock's failure in this period was due to a refusal to deal by the defendants. The submission presupposes that the defendants would have paid commission if the arrangements or understandings had not existed.

Shortell clearly said that T.N.T. would not pay any commission.

Wise, whilst not going quite as far, left me with the conclusion

that it would have been very unlikely that Ansett would have paid anything other than nominal commission. Mayne Nickless appears to have adopted an attitude consistent with a refusal to pay commission. Brambles, A.S.P. and Youngs chose to call no evidence on this aspect or any other aspect which I regard of significance. There was evidence that Gardiner, the General Manager of Ipec, said in the telephone conversation with Frewen on 26 July 1976 that it would not pay commission. Certainly some of the other carriers agreed to pay commission. In my opinion, it was most unlikely that Tradestock would have been able to carry on a business where it relied on commission from carriers

whether or not the arrangements or understandings existed.

(iii) and (iv) "The freight forwarding period" (about November 1976 until shortly before the time when Tradestock went into liquidation on 31 May 1978) and the period when Tradestock would not deal with the defendants (not later than February 1977)

In December 1976, Stock left the business. He said:

"At that stage I could not foresee my service was warranted - in other words, the business was not there in its present form".

The real problem was the lack of clients. As Stock said:

"0: It was apparent at that time that the real problem that Tradestock had was with its lack of clients, was it not?

On 17 December 1976 Tradestock commenced the proceedings

in the Victorian Registry against certain of the defendants in

During 1976 Tradestock introduced a system called "Freightcard". This was a system designed to operate by Tradestock undertaking the liability to the carrier to pay it for the carriage of a particular consignment for a customer and charging the customer an amount calculated according to a published rate schedule of Tradestock. This sytem was in reality the same as that of any freight forwarder who used sub-contractors to carry out the task of forwarding. Most freight forwarders used sub-contractors to a varying extent. In particular some used mainly sub-contractors with one or more trucks, some used the railways or air services for part of the transportation, and others used specialist carriers for local work or transportation to destinations other than those to which

In cross-examination Stock was shown a letter from Tradestock to Clyde Master dated 9 September 1976 which set out rates and which continued that these rates were "...available through Tradestock and when compared with your current charges will show excellent savings over Brambles-Ansett". He agreed that, if he had veceived that letter, his reaction would have been to say that the letter was no different to a submission of a quotation by Ansett or Brambles or any other carrier. I have the

A document headed "Freightcard Package Express", being part of promotional material issued some time in 1977, describes

Are to offer secure, reliable and highly competitive services as a National Package Carrier specialising in the carriage of small consignments throughout Australia.

To offer highly competitive rates, combined with a fast and reliable service.

We are a National company offering a comprehensive service to senders of small consignments, whilst maintaining highly competitive rates."

Various documents setting out "schedule of rates" were in evidence operative from different dates at least after 1

December 1976. These documents set out Tradestock's schedules of

rates to various cities and the terms including, for example,

trading terms, insurance, C.0.D. collections, hazardous cargoes, delivery areas, pick-up and delivery charges, air express ninimum

Early in 1977 Tradestock placed an advertisement in the Melbourne Age seeking a "Transport Executive - Salary Package to

"Tradestock has introduced a new modern system of freight transportation to Australia which covers all modes: air, road, rail and sea and has many features not currently available to customers of most transport companies".

A Mr Jack, who was then the Victorian State Manager for a truck and bus dealer, applied for and obtained the position. After a telephone conversation, Jack, who was called by the first defendant and who at the time when he gave evidence was the Managing Director of a computer software company, attended a meeting at the offices of Carpenter Locke with Frewen. At this meeting Jack's evidence was that Frewen said that a very large core of owner/drivers of interstate trucks existed and they were independent and without any co-ordination and that he believed that that core of owner/drivers could be marshalled together and

By letter dated 28 January 1977 Frewen engaged Jack as General Manager of the Freightcard Division of Tradestock ata

salary package of $20,000 per annum. Jack joined Tradestock in

February 1977 when he met a Mr Oxley and a Mr Beasley and also a Mr Murray. Jack said that Murray had also accepted the position as General Manager. Frewen met Jack, Murray and Oxley almost immediately after Jack started his employment with Tradestock. Jack's evidence was that Frewen said that the staff were really consultants but they could call themselves what they liked on their business cards and that their job was to gain freight from

At this meeting and on other occasions Frewen told Jack that he was not to approach the major transport companies. When this was first mentioned Frewen read from an article in the Financial Review published early in January 1977 dealing with the litigation to which I have referred between Tradestock and certain transport companies, including some of the defendants in the present case. Jack said Frewen gave instructions to have nothing to do with these companies in the placement of freight and that he named some of then. Jack said he recalled Frewen mentioning Mayne WNickless, Brambles, T.N.T., and Ansett Road Express in this regard, but he believed there were others. He said that Frewen read names from the article and that Frewen asked him to develop the Freightcard system and deal with small to medium transport companies and owner/drivers. At this meeting

Oxley was told to develop existing clients and Murray to develop

Jack related a meeting which took place in a coffee shop, apparently the day before Frewen became ill early in 1977. Jack said that he had been concerned at the obvious lack of cash flow and the low rates which were being charged by Tradestock. Jack said that Frewen said, in substance, that he should endeavour to get as much freight as he possibly could irrespective of rates. This would enhance Tradestock's position with the transport companies and that any losses would be subsequently recovered by an action he was taking against the major transport companies. Jack also said Frewen said that he would undercut freight rates to whatever degree of loss was

dack became dissatisfied with the position and left at

Jack was obviously very unfavourably disposed to Frewen and said that he had considered suing Frewen, but I accept the evidence which he gave about the instructions not to deal with

There is evidence that in the last six months of 1977 what was shown in a Tradestock trading profit and loss statement under the heading "Freight Costs" was 10 per cent higher than the gross income from ail sources. Whilst this is not very conclusive, it does support an argument that Tradestock was

getting forwarding work in the latter half of 1977 at a rate

which did not cover the direct payments to various carriers without taking account of items like salaries, printing and stationary, rent, telephone and the other miscellanous charges of

Although Tradestock, during its freight forwarding era

when it operated under the description "Freightcard", purported

to act as a broker, in my opinion this was no more than a disguise of its operations which were those of a freight forwarder. It was operating as a principal itself and assumed a principal's responsibility to its sub-contractors in freight

Indeed, in his address, senior counsel for the Commission did not seriously contest the proposition that, during the Freightcard era, Tradestock was operating in substantially

the same way as any carrier who sub-contracted all his work.

The Commission accepted that its case was not that any defendant refused to deal with Tradestock at any time when it was

There can be no issue whether the arrangements or understandings had any effect on competition in relation to other than a broker or consultant, that is during any period when Tradestock was only operating as a freight forwarder in the same

(C) The extent of competition between the defendants

Apart from advertising, there was a considerable amount of evidence given by various witnesses including officers of the defendants which, in my opinion, showed conclusively that the field for the transport of goods in Australia was highly competitive at all relevant times and the defendants competed

Officers of some of the defendants gave evidence which showed that they employed a considerable number of salesmen in the field. Indeed, one of the arguments which Tradestock put to carriers was that aocarrier would be able to dismiss many salesmen if it dealt with Tradestock. The Commission argued that a Salesman only represented the interests of his employer whilst a consultant or broker would represent the interests of his client. Whilst this is likely to be substantially the position in relation to a consultant, I am by no means satisfied that this is so, or is likely to be so, with a broker who relies for his existence on the commission which he can obtain from the carrier. This is particularly so where the commission a broker received from a carrier depended on the value of the work which the broker

There was substantial evidence that, although a person wishing to consign a parcel or a small quantity of goods would

be charged by most of the defendants what was called schedule

rates, this was by no means the usual position where the customer had a freight bill of a significant amount. Schedule rates were rates available to the public generally. The evidence showed that, at least with a number of defendants, the schedule rate for a substantial client was only a starting point and that discounts as high as 80 percent or more were obtained sometimes by a client with very large transport costs, for example, a client who spent half a million dollars a year on transport. I think that the casual or small customer would not bother to employ a consultant

There was evidence that salesmen continually visited existing and potential customers. Indeed, I got the impression from one or two witnesses that salesmen made their approaches

with such determination that they often became quite a nuisance.

I am satisfied that any client with a substantial amount of business, who might be prepared to seek assistance froma consultant or broker, could readily obtain quotations from a number of potential carriers without any such assistance. of course, the skill with which he could examine those quotations would depend, like everything else, on the ability of the client but, in general, I conclude that anybody with significant freight costs could get sufficient quotations to be able to choose a carrier who would perform the work in a satisfactory way and for a satisfactory cost. There was evidence that it was not unusual

for a company to employ a number of different transport operators

having chosen that operator which it thought was the most

suitable for each of the particular tasks required.

I now turn to look at some of the evidence concerning

the efforts made by some of the defendants to obtain work.

Shortell, the Chief Executive of Kwikasair Australia and a director of the first defendant, said that Kwikasair, a

division of the first defendant, opened 5000 new accounts a week and that carriers lose and gain customers regularly. He indicated the way in which quotations were made, that senior executives had to make it part of their business to examine the activities of substantial competitors, that discounts up to 90 percent were sometimes given, and that, in addition to several hundred salesmen in 1976, the first defendant had between 30 and 50 people who were called national account executives who looked after major accounts. Shortell did agree that, in general, salesmen were asked to try and find out who were the existing carriers for prospective customers and that this was desirable so chat the salesmen would not quote too far under the existing

A Mr Lewis was the Victorian Sales Manager for Kwikasair Australia. He dealt with the question of discounts, quotations and various factors which could affect the rate quoted. For example, a lower rate might be quoted where trucks, not usually

fully loaded, were regularly carrying goods over the route over

which the prospective customer required transport. He pointed

out that it made no sense to quote rates which would not result

A Mr Collins, the National Sales Manager for all Australia for Kwikasair, discussed methods of quoting and pointed out the various matters which had to be considered. He said clients shopped around for quotations and that the final quote was a matter for negotiation which depended on many factors, for

example, the volume of business that was being offered.

There was evidence from a number of witnesses, for example a Mr Bishop, who since 1981 had been the General Manager of Ansett Freight Express. He said that it was necessary to review rates being charged to clients for a number of reasons. Some clients did not accept the cheapest service. He said he always kept in mind such questions as back loading and the assistance which a client could give in enabling the company to

Wise, who in 1973 was the General Manager of Ansett Freight Express, said that that company generally responded to requests for quotations and that it frequently gave very significant discounts off schedule rates. A number of factors determined the size of the discount, for example, the volume of business being offered, whether the business was profitable and

the measure of profit available from it. He said he looked to

quote a fair price, one which is going to give a return of some description, but one which is going to hold the client. Sometimes a better discount was allowed where a client said it

was going elsewhere if it did not get a better price.

A Mr Jenkins in 1976 became the first General Manager of

T.N.T. Darwin Express, a division of the first defendant. He was

situated in Sydney. He said that clients "actively sought quotations from competitors, that in Darwin he used to trade with approximately 1300 customers each week, and that, because customers sought competitive quotes continuously, it was necessary to do one's best to retain their business by providing the best service and ensuring that correct rates were offered. He said that he had found that companies with very large accounts had very qualified people deciding where their freight contracts would be placed. He also said that in Darwin, T.N.T. Darwin Express gained and lost customers weekly, partly on account of

A Mr Hines, who in 1976 was the State Sales Manager for the T.N.T. Transport System in South Australia, dealt with the

major accounts which had been lost and gained in 1980 and said

A Mr Fegan, National Sales and Marketing Manager of Jetspress Road Express, said that his organisation had 14 or 15

salesmen, that it was necessary in seeking and accepting work to

make the operations profitable and to have the right type and right balance of freight, that salesmen look after the clients on a day to day basis and that he could not see brokers replacing

A Mr Smith was the Sales Manager for Youngs, who employed two salesmen. Youngs did have a rate schedule but 80 percent of the sales were negotiated. He prepared quotations and he conceded that when he was giving them he might have quoted a

lower price if a customer had applied pressure on him.

Like most commercial transactions the result depended on the individuals involved and the business situation existing but I see no reason to assume that the intervention of Tradestock would have resulted in less cost to the client. Tradestock would have been concerned to ensure that its own commission was adequately covered. In addition I would not expect any defendant to offer Tradestock a rate significantly, if at all, lower than

When Tradestock operated as it did in the Freightcard era, it was only another freight forwarder operating, if successful, as a competitor to other carriers including the

There was evidence that some users called for tenders

A Mr Lindsell, the Administration Manager for the Edgell Birds Eye Division of Petersville Industries Ltd., gave detailed evidence of the manner in which it chose freight forwarders. Particular attention was given to a factory it operated at Bathurst. Whilst this evidence certainly is not typical of all

companies with transport requirements, it is the way many may be

expected to operate. lLindsell said 'that he felt no need for a transport consultant. His company did not use a "national" distributor but required carriers to submit prices and the terms and conditions of carriage and from this information priority schedules were prepared which determined the order in which work would be offered to carriers. The priority was fixed according to price and the service which was offered and the experience his company had had with the carrier. It used about 75 different carriers. Its requirements were rather specialised but the evidence showed a very competitive situation. Carriers of all sizes from the major ones to one truck operators were considered. The names of the first and second defendants appeared more than once on the priority schedules. Clearly they were competing for

work not only with themselves but with many other carriers.

A Mr D. Dugan ran a business importing Asian handicrafts and woodware called D. Dugan Pty. Ltd. during 1977 and until January 1978. He gave evidence of the way he selected freight forwarders. He had four criteria - price, reliability,

probability of damage to freight and the attitude of the

forwarder's staff to complaints. He said that he had changed carriers eight or nine times, that he felt no need for a transport consultant, that he got approximately one visit a week from representatives of freight companies, and that "they are all after your business, and they would continually offer better rates than I was getting from other companies". Dugan said he gave some work to Beasley of Tradestock about the end of 1977 because Beasley quoted a lower rate than he was paying. This was clearly ata time when Tradestock was operating as a freight forwarder. Dugan knew Beasley who had approached him before when

A Mr T.d. Gillespie, who had been the General Manager of Shovelton Storey during 1976-1977, said that he was dissatisfied with the costs that that company incurred in having its goods distributed to all States. It was spending about $60,000 a year on freight forwarding. Some of this company's work was done by the first and second defendants. Quotes were obtained from the first, second and third defendants and some other carriers. Gillespie met Frewen some time about April 1976 and in May 1976 gave Tradestock the letter of appointment to which I have referred. It seems that Gillespie believed that Tradestock had achieved savings. However, Shovelton Storey was lost as a client at least by early 1977. This witness is an example of somebody who felt that there was a need for a transport broker. However, it incurred no obligation to the forwarder and the continued activity of Tradestock depended on it being able to get

sufficient commission from carriers to remain in business.

There is some evidence of different sections of at least

[T.N.T. offering competitive quotations in one or two cases.

A Mr Coulter, who for several years from August 1980 had been responsible for the distribution of products of a company called Stanhome and its successor Happy Home Pty. Limited, gave evidence about the methods he had used to choose an appropriate carrier. He said that that company's transport requirements then amounted to about $70,000 per annum and that he selected carriers, negotiated rates, handled complaints with some assistance and checked invoices. He had had experience with a number of carriers including the first and eighth defendants. He had not had satisfaction with Australia Post. His practice was to shop around and he said that he was constantly approached by sales people whom he described as "pretty persistent". He himself negotiated on price and obtained a discount of 60-70

I formed the impression that Coulter was a witness who went about the task of selecting a suitable transport operator in avery practical way and apparently he had been able to satisfy

A Mr Isaacs, who had been responsible for the transport of the products of a division of Repco Corporation Ltd. fora

number of years, described how he had chosen the appropriate

carriers. He said that in choosing a carrier he had regard to reliability including that of delivery times, price and the ability to provide the service he required, for example, being able to arrange for goods to be picked up from the factory after a'call which had been made later than usual. He had made use of Express Freight, T.N.T. and, occasionally, Ansett. He said that he was regularly approached by salesmen of various transport

companies, that he usually sought at least a couple of quotes

which he sought to get in respect of a six month period and that his practice was to tell carriers that he was getting competitive

A Mr Armstrong, the Manager of the warehouse and distribution division of a section of T.N.T., said that between 1973 and 1980 he was the Divisional Manager for T.N.T. at Wollongong. Thereafter, he became the Gold Coast Manager. He described the position at Wollongong in 1973 to 1975 when he said the second, third, and eighth defendants and other T.N.T. divisions operated in the area together with a "lot of locally based medium sized operators". He named these. He also said that there were more than 300 persons operating one or two truck businesses. A number of operators of trucks started with one or two trucks and expanded fairly rapidly. He thought the T.N.T. operation had expanded from about one to forty trucks in about seven years in Wollongong. He described how the major users of transport in Wollongong hada system of calling for tenders.

Others would test the market periodically when they would call

for competitive quotations. Even the smaller operators with one or two trucks would tender for portion of certain work. He said that he was responsible for quoting rates which were negotiated and that clients were gained and lost from time to time both from and to small and large carriers. He also described the position at the Gold Coast. He pointed out that personal contact, which involved establishing a relationship with clients, was the most

successful way he had found of obtaining work in Wollongong.

Bennett, who was a sales representative for Kwikasair, a division of T.N.T., in 1972 and for two years from July 1974 was Sales Manager in South Australia for Comet, another division of T.N.T., gave evidence. After July 1974 he became Victorian Manager for yet another division of T.N.T. called North Queensland Express. He described the method by which he had quoted. Salesmen were given certain parameters within which they were entitled to quote without reference toa more senior officer. These parameters were broadly defined. Some work was unprofitable. He said that some clients had shown him quotations they had received from other carriers and he kad found that the

A Mr Robbins, the Branch Manager of T.N.T. Darwin Express since 1976, gave evidence in relation to the activities

of I.N.T. in Darwin. He said that T.N.T. was continually gaining and losing customers and that it had a printed rate schedule but

in fact all rates were negotiated. His evidence disclosed a very

competitive position with regard to the transport of freight into

Darwin that existed at the time he gave his evidence.

A Mr Neef of T.N.T. Transport System prepared a list of some accounts which had been lost by a particular division of T.N.T. in Victoria between 1977 and 1982. Whilst this list did not deal with Brambles because of certain objections to the inclusion of that material by Brambles, it did show that a significant number of clients were lost to other defendants. These defendants were other divisions of T.N.T., Ansett, Express Freight, Mayne Nickless and Ipec. He also gave evidence of

losses by his organization to the Railways and carriers who were not defendants and also apparently were not members of the

The defendants sought to deal with clients directly. I am satisfied that the defendants were in active competition one with the other. Indeed any defendant not competing actively and successfully would be likely be driven out of business. Youngs ceased interstate freight operations in February 1977 having sold

(D) The submission in relation to any broker market

I have already expressed the view that market is not relevant in relation to s.45(2) as it existed prior to 1 July 1977. The basis of one of the Commission's arguments was that

the arrangements or understandings not to acquire the broking

services that Tradestock was offering them had, or was likely to have, a significant effect on competition between the defendants to acquire those services. The Commission made it clear that the only relevant competition in this argument was that in acquiring

The short answer to this submission is that the only broking services during the period under consideration were those offered by Tradestock. Whilst it may be that one or more of the relevant defendants might have been prepared to acquire some limited service from Tradestock at least where no commission was demanded, it seems pretty clear that in no real sense could it be said that there was any demand by any relevant defendant to acquire services from Tradestock even where no commission was sought. Whether commission was sought or not, I consider that it was unlikely that there would be any competition between the relevant defendants to acquire services from Tradestock irrespective of any arrangements or understandings. There was no evidence of any other consultant or broker operating at the relevant time nor can any reasonable inference be drawn that one

I reject the argument of the Commission based on competition between the defendants to acquire the services of

Tradestock or any other transport consultant or broker.

I consider that the restraints in the arrangements or

understandings did not have nor were they likely to have a

significant effect on competition between the defendants.

WAS EFFECT GIVEN TO ANY OF THE THREE ARRANGEMENTS OR UNDERSTANDINGS AND THE CONSTRUCTION OF S.45(2)(b) BEFORE 1 JULY

(A) The construction of s.45(2)(b) before 1 July 1977

(b) give effect to a contract, arrangement or understanding to the extent that it is in restraint of trade or commerce, whether the contract or arrangement was made or the understanding was entered into before

It is necessary in considering s.45(2)(b) before the 1977 amendment to determine first to what the word "it" refers. Does it refer to giving effect to an arrangement or understanding to the extent that the arrangement or understanding is in

Section 45(4) deals only with the words "contract, arrangement or understanding" and "restraint of trade or commerce" for the purposes of the Act. I see no way of interpreting s.45(2)(b) so that due regard is paid to s.45(4)

unless the word "it" is given its ordinary meaning as a reference

to a contract, arrangement or understanding which is in restraint

The reference to a contract, arrangement or understanding falling within s.45(2)(b), whether or not made or entered into before or after the commencement of that

If the arrangement or understanding was not in restraint of trade or commence within the common law principles and not within the test of s.45(4) when made or entered into, is it necessary to look at the same question at the date of giving effect when testing whether effect has been given in

There are two possible constructions. The first is that the test is made once only at the time the arrangement is made or the understanding entered into. The other is that the question whether or not the arrangement or understanding is in restraint of trade is to be tested according to common law principles and

I rather favour the view that the test is made once only at the time when the arrangement is made or the understanding

However, it is unnecessary for me to reach a concluded view on this question because the answer would be the same whatever view I took. This is because I find that the competition between the defendants did not change during the relevant period nor do I think I need consider in this regard the nature of Tradestock's activities. At all relevant times they were and were likely to be so small as to be negligible in

relation to the competition between the defendants.

{B) General I will deal first with the allegations pleaded in

relation to giving effect to the arrangements or understandings.

I have held that the arrangements or understandings proved were not in restraint of trade or commerce within s.45(2)(a) and (4). As a necessary consequence I find that any allegation that before 1 July 1977 effect was given to an arrangement or understanding in contravention of s.45(2)(b) has not been established. However, because of the history of this

case, I consider that I should deal with certain matters.

Paragraphs 26, 32 and 38 allege giving effect to the arrangement and/or understanding alleged in paras. 21, 27 and 33

"The first, second, third, fourth, fifth, sixth, seventh, eighth and ninth-named Defendants and each of them threaten and intend and will unless restrained by orders of

this Honourable Court continue to act as alleged in paragraphs 26, 32 and 38 hereof."

"The first, second, third, fourth and fifth-named Defendants and each of them gave effect to the arrangement and/or understanding alleged in paragraph 21 hereof by -

(a) refusing to negotiate with, furnish quotations to, enter into contracts with, or otherwise deal with, T.I.C. Management Consultants, in respect of the carrying or forwarding of freight, or the arranging for the carrying or forwarding of freight, proposed or sought by T.I.C. Management Consultants for or on behalf of persons seeking the services of such Defendants or any of them for the carrying or forwarding of freight or the arranging for the carrying or forwarding of freight through T.I.C. Management Consultants; and/or

(b) only negotiating with, furnishing quotations to, entering into contracts with, or otherwise dealing with, persons seeking the services of such Defendants or any of them for the carrying or forwarding of freight or the arranging for the carrying or forwarding of freight, direct, and refusing to negotiate with, furnish quotations to, enter into contracts with, or otherwise deal with, such persons or any of them through T.I.C. Management Consultants."

Paragraph 32 is in similar terms to para. 26 but relates

to giving effect to the agreement of 20 May 1976. The only