Morphett Arms Hotel Pty Ltd v Trade Practices Commission and Nicholas Enterprises Pty Ltd

30 ALR 88

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Between: Morphett Arms Hotel Pty Ltd
And: Trade Practices Commission and Nicholas Enterprises Pty Ltd

Court:

Judges: Bowen CJ
Brennan J
Deane J

Subject References:
Trade practices
Contracts arrangements or understandings affecting competition
Price fixing
Inference of understanding from behaviour
Acts done and statements made on behalf of company
Actual authority
Relevant market
Pecuniary penalty
Injunctive relief
Appeal
Findings of fact
Weight of evidence
Inference from evidence
Onus of proof
Discretion to grant injunctive relief
Form or order
Federal Court of Australia
Appeal to Full Court from decision of single judge

Legislative References:
(CTH) Trade Practices Act 1974 - s 45(2); s 45A; s 80; s 84(2)

Hearing date: 29, 30 April 1980
Judgment date: 1 May 1980

Adelaide

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The appellant appealed to the Full Federal Court against orders made by a single judge of the court declaring that the appellant and the second respondent had each contravened s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth) in that they together arrived at and gave effect to an understanding to reduce discounts then being offered in the retail sale of bottled beer (see Trade Practices Commission v Nicholas Enterprises Pty Ltd (1980) 28 ALR 201 ; 5 TPC 565 and the earlier proceedings at 26 ALR 609 ; 4 TPC 388 ).

The appellant argued that the single judge's finding of an understanding was not only unlikely but was not in accordance with the case pleaded and sought to be made on behalf of the respondent Commission, also that the evidence of particular witnesses was given too much weight by the judge and that he was in error in treating certain things done and statements made by a director of the appellant as having been done and made on behalf of the appellant and that his findings as to the relevant market were incorrect. Finally, the appellant submitted that the grant of injunctive relief was unnecessary and inappropriate and that the costs awarded against the appellant were too high.

Held, per curiam, dismissing the appeal:-

(i)

There were no grounds for interfering with the judge's findings of fact or the inferences which he drew from them.

(ii)

Different evidence was admissible against each of the respondents upon the hearing and the finding of an understanding as against but two respondents did not mean that that understanding was limited to projected action by those two respondents to the exclusion of all or any of the other respondents.

(iii)

The onus of proof was not that applicable to criminal proceedings.

(iv)

The judge did not attach any undue weight to the evidence tendered.

(v)

It was unnecessary for the judge to rely on s 84(2) to make the appellant liable for the acts and statements of one of its directors as the evidence fully warranted a finding of actual authority.

(vi)

The judge was entitled to employ s 45A of the Trade Practices Act 1974 (Cth) in defining the relevant market in which competition occurred between the appellant and the second respondent.

(vii)

The order for costs made by the judge was within a discretion which was not shown to have miscarried.

(viii)

Obiter: The judge reached the conclusion that it was a necessary ingredient of such an "understanding" that there must 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. But 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, in so far as the other party or parties to the understanding are concerned. It was not necessary for a final view to be expressed on this question since the judge'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.

Appeal

This was an appeal against orders by a single judge of the Full Court of the Federal Court of Australia declaring that the appellant and the second respondent had each contravened s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act 1974 (Cth.).

Order

The court orders that the appeal be dismissed with costs.