Case: Australian Competition and Consumer Commission v McMahon Services Pty Ltd [2004] FCA 353 ; [2004] ATPR 41-996
Outcome: considered
In Sammy Russo Supplies Pty Ltd v Australian Safeway Stores Pty Ltd [1998] ATPR 41-641 at 41,094 Goldberg J identified the material facts which need to be pleaded in order to establish a cause of action under s 45(2)(a)(ii) of the Act . His Honour said: "When pleading a cause of action under s 45(2)(a)(ii) it is necessary to identify and plead material facts in relation to: (a) the making of a contract or arrangement or the arriving at an understanding; (b) the identification of a provision in that contract, arrangement or understanding; (c) an allegation that the provision has the purpose, or would have, or be likely to have the effect, of substantially lessening competition; (d) an allegation identifying the relevant market in which competition would be lessened and the manner in which competition would be lessened. If s 45A is relied upon it is still necessary to allege that the parties to the contract, arrangement or understanding are in competition with each other. ... It is not sufficient simply to allege that a provision of a contract had the purpose of substantially lessening competition. It is necessary to allege material facts identifying a relevant market. This is made clear by s 45(3) ..." See also: Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 2) (1979) 26 ALR 609 at 646-7; Australian Competition and Consumer Commission v McMahon Services Pty Ltd [2004] FCA 353 ; [2004] ATPR 41-996 at 48,671. 17 Australian Competition and Consumer Commission v McMahon Services Pty Ltd [2004] FCA 353 ; [2004] ATPR 41-996 was also a case in which the applicant sought to rely on the deeming provision in s 45A(1) of the Act . The statement of claim alleged that there was a market "for the provision of demolition and asbestos removal services in the greater metropolitan area of Adelaide ...". It was also alleged that certain of the respondents were in competition with each other in that market. Although the respondents denied the latter allegation they admitted that they were in competition in the market for "demolition services in the greater metropolitan area of Adelaide." The respondents sought further particulars of the allegations contained in these paragraphs. Selway J refused the application. In doing so his Honour said (at 48,671) that: "The ACCC relies upon the deeming provision in TPA s 45A(1). That relates to agreements or understandings reached between parties "in competition with each other". "Competition" is relevantly defined in TPA s 45(3) to mean "competition in any market in which a [relevant] corporation is a party." "Market" is relevantly defined in TPA s 4E. Plainly enough it is material to the case that the ACCC seeks to establish that the relevant parties to the agreement or understanding are in "competition" with each other. It is also a material fact that they are operating in the same market. At the very least it is a necessary particular of that material fact to identify what that market is. The respondents seek from the ACCC further particulars of the relevant market: the source or sources of business or businesses, the nature of the client or clients and details of the business or businesses in competition. In some contexts these particulars might well be necessary. For example, if the allegation related to the effect of an agreement or understanding on the overall operation of the market then it may be necessary for the ACCC to provide quite detailed particulars of that market in order to identify the relevant effect ... However, in this case the relevant anti-competitive purpose or effect is strictly limited in scope. It relates only to the price of a particular contract let by the Department of Defence and particularised in the Statement of Claim. The competitors involved in that tender process are specified by name in the Statement of Claim. So too are those said to be parties to be arrangement or understanding. The price said to be fixed has not been particularised, but it is either the "price" contained in the offer by the fifth respondent ... or the "price" obtained by the Department of Defence. Plainly enough it is not the price of services generally available in the market place. In any event, the broader market is identified and particularised." 20 In my view an applicant, in a proceeding such as the present in which exclusive reliance is placed on s 45A of the Act , must, in its statement of claim, identify the market or markets in which it is said that the anti-competitive conduct has taken place. The pleadings must identify (at least) the relevant goods or services and the geographic boundaries of the market. The pleading need not descend to the degree of particularity to which Heerey J objected in McPhee or the detail which Selway J found to be unnecessary in McMahon Services . In both of those cases it was held that the identification of a market was a material fact or particular which had to be pleaded. This had been done in an acceptable way in McMahon Services . It is true that the necessary competition between those who have entered into arrangements can take place in any market. This does not mean that applicants are absolved from the need to identify the parameters of that market by reference to the relevant goods and services and the geographic area within which competition in relation to the supply of those goods and services is said to take place. In McPhee Heerey J deprecated the ACCC's attempt to define the market in minute detail. He did not, however, hold that no attempt to define the market was necessary. Indeed his reasoning proceeded on the assumption that a geographic and product market had been pleaded. As McMahon Services demonstrates this can be done succinctly and without unnecessary prolixity.