Case: Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1
Outcome: cited
In Federal Commissioner of Taxation v Lutovi Investments Pty Ltd [1978] HCA 55 ; (1978) 140 CLR 434 (' Lutovi' ), the meaning of an 'arrangement' was considered in the context of s 260 of the Income Tax Assessment Act 1936 (Cth). Gibbs and Mason JJ (Murphy J agreeing) said at 444: '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 Taxation). ... 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.' The High Court's formulation in Lutovi has been applied in the context of 'arrangement or understanding' under s 45 of the TPA: see, eg, Email at 396; and David Jones at 463-464. In Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 (' TNT' ), Franki J referred to the above passage from Lutovi and said at 25: 'I lean with respect to the views expressed by Smithers J in L Grollo &amp; Co Pty Ltd v Nu-Statt Decorating Pty Ltd ... at 89; 17,842 where he said: "I have to remember that the concept of an 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."' 108 In David Jones at 463-464, Fisher J agreed with Franki J's comments in TNT and also favoured the views expressed by Smithers J in L Grollo &amp; Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81. 130 The CEPU drew support for this argument from judicial consideration of the words 'particular persons' in s 4D of the TPA in Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 (' Bullock' ); see also TNT at 75-76. Prior to 1986, s 4D referred to 'particular persons' as the target of the proscribed provision. In Bullock, the Full Court left open the question whether Gray J had been correct in limiting the words 'particular persons' in s 4D to 'persons whose identity is known or can be ascertained': at 473. In apparent response to the decisions in Bullock and TNT, the words 'or classes of persons' were added to s 4D by the Trade Practices Revision Act 1986 (Cth): see Gummow J's discussion in South Sydney at 589-590 [75]. The scope of s 45E has not been similarly expanded to include 'classes of persons'. According to senior counsel for the CEPU, it can therefore be inferred that the legislature did not intend to expand the scope of s 45E. Thus, it was submitted, the section requires the identification of a particular second person. 139 It is convenient to consider the ACCC's primary case, and the CEPU's response to it, before turning to consider the ACCC's alternative argument that in any event the heads of agreement contained a provision that contravened s 45E(3). For ease of reference, I will use the expression 'arrangement' rather than the more cumbersome 'contract, arrangement or understanding'. Obviously, the terms 'arrangement' and 'understanding' are much broader than the term 'contract', and they are often equated in the authorities: TNT at 25; and Amcor at 359-360 [75]. However, neither party suggested that anything turns on the differences that exist between the three concepts. 174 Under s 45E of the TPA, I am not limited to an examination of the words of cl 4.1. This is not a proceeding to enforce a contract. Section 45E is not concerned only with written agreements; it is also concerned with the making of an 'arrangement' or arriving at an 'understanding'. An arrangement or understanding may be informal and unenforceable: Lutovi at 444. The concept of an 'understanding' is a broad and flexible one: L Grollo &amp; Co Pty Ltd v Nu-Statt Decorating Pty Ltd , supra, at 89; TNT at 25; and David Jones at 463-464. For the reasons explained above, I am satisfied that there was a broader arrangement between the parties which overshadowed and controlled the language used in the heads of agreement. It was understood and agreed between the CEPU and Edison that the heads of agreement imposed an obligation on Edison not to retain electrical contractors at the Loy Yang B site if they did not have a current certified agreement with the CEPU, and that this is the way in which Edison would implement it. Nothing in cl 4.1 prevented Edison implementing its arrangement with the CEPU in this way. 222 As to whether the CEPU was involved in Edison's contravention of s 45EA, it is necessary to bear in mind the width of the concept of 'give effect to'. It is defined in s 4(1) as including the doing of 'an act or thing in pursuance of or in accordance with' the contract, arrangement or understanding. An act or thing may be done in accordance with a contract, arrangement or understanding even though the person who did that act or thing did not have the contract, arrangement or understanding in mind at the time: TNT at 68. Independent decisions made by parties to a contract, arrangement or understanding can nevertheless give effect to an arrangement made between them: Dowling v Dalgety Australia Ltd (1992) 34 FCR 109.