mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Federal Commissioner of Taxation v Lutovi Investments Pty Ltd [1978] HCA 55 ; (1978) 140 CLR 434
Outcome: discussed
In Federal Commissioner of Taxation v Lutovi Investments Pty Ltd [1978] HCA 55 ; (1978) 140 CLR 434, the High Court was dealing with the meaning of the word 'arrangement' in legislation other than the Trade Practices Act . In a passage that has often been cited in judgments dealing with arrangements or understandings under the Trade Practices Act , Gibbs and Mason JJ (with whom Murphy J agreed) said at 444: '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.' 34 This passage cannot be relied upon to suggest that an arrangement or understanding under s 45(2)(a) of the Trade Practices Act need have no substance at all. Plainly, it contemplates that there must be something of substance from which the parties can withdraw, or with which they can act inconsistently. By their 'adoption' of whatever matter of substance is part of the arrangement or understanding, the parties will necessarily have adopted a provision that they see as an appropriate way to regulate their future conduct. To say that they are able to withdraw from the adoption of such a provision, or to act inconsistently with it, is to say nothing more than that an arrangement or understanding is not enforceable in a court of law in the way that a contract is. The notion of an arrangement or understanding that each party will act as it sees fit on every occasion is entirely foreign to s 45 of the Trade Practices Act .
Case: Gramophone Co Ltd v Magazine Holder Co (1911) 28 RPC 221
Outcome: cited
There is some authority, apparently not conclusive, as to the circumstances in which the discretion might be exercised. As long ago as Gramophone Co Ltd v Magazine Holder Co (1911) 28 RPC 221, the House of Lords recognised that there were circumstances in which a court should not be bound to accept admissions. At 225, Lord Loreburn LC (with whom the Earl of Halsbury, Lord Atkinson and Lord Shaw agreed) said: 'It is the duty of a Court to decide cases according to the truth and fact, not according to any assumed or artificial state of facts which the parties may find it convenient to present. No doubt Courts of Law allow and indeed encourage parties to simplify litigation by making admissions and to a certain extent by waiving their rights, because, when there is a real controversy depending upon real facts, everyone ought to facilitate its authoritative settlement. But that is a very different thing from allowing people to obtain an adjudication upon the footing that something exists or has happened which in truth does not exist, or has never happened. The objection to such a course is most striking when the parties agree to admit as true something which lies at the root of the jurisdiction, and any judgment obtained upon the footing of its truth may be used as a weapon in terrorem against persons not parties to the admission. A Court of Justice can never be bound to accept as true any fact, merely because it is admitted between the parties.' 46 At [157], Heydon JA pointed out that 'the court is not bound to act on admissions made by the parties or on states of fact agreed between the parties.' His Honour then cited the Gramophone Co case, quoting an extensive passage from the speech of Lord Loreburn LC, including the passage I have quoted at [43]. At [158] and [159], his Honour referred to two other English cases, Adams v Naylor [1946] AC 543 and Royster v Cavey [1947] KB 204, in both of which it had been held that crucial admissions on which the cases had been conducted at first instance should not be accepted, because they were contrary to fact. By way of conclusion, at [160], Heydon JA said: 'In short, the courts are averse to pronouncing judgments on hypotheses which are not correct. To do so is tantamount to giving advisory opinions and to encouraging collusive litigation. On the other hand, the courts will act on admissions of or agreements about matters of fact where there is no reason to doubt their correctness. But they are reluctant to do so where there is reason to question the correctness of the facts admitted or agreed.'
Case: L Grollo &amp; Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81
Outcome: cited
The word 'understanding' is obviously intended to connote a less precise dealing than either a contract or arrangement. This is so because of the meaning of the word 'understanding' itself, and because, in the terms of s 45(2)(a) , the parties to it may 'arrive at' it instead of making it. Once again, the Oxford English Dictionary supplies an appropriate definition: 'a mutual arrangement or agreement of an informal but more or less explicit nature.' It is the informal and less explicit nature of an understanding that led Smithers J to describe the concept of an understanding as 'broad and flexible' in L Grollo &amp; Co Pty Ltd v Nu-Statt Decorating Pty Ltd (1978) 34 FLR 81 at 89. 29 Similarly, in Grollo at 89, Smithers J said as to an understanding that: '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'. 30 This view as to what is necessary for the formation of an understanding has been followed on many occasions. It is unnecessary to set out all of the authorities in which it has been referred to. I accept the correctness of what Smithers J said without hesitation. It is important, however, not to confuse what is required for the formation of an understanding within the meaning of s 45(2)(a) of the Trade Practices Act with what is required to be the content of an arrangement or understanding for the purposes of s 45(2)(a). Counsel for the ACCC were inclined to rely on authorities describing the formation of an understanding, when attempting to persuade the Court as to the required content. 31 Section 45(2)(a) of the Trade Practices Act , and the other provisions found in s 45 and s 45A , which are set out above, make a number of things very clear. To fall within s 45(2)(a) , an arrangement or understanding must be substantial enough to contain at least one 'provision'. The Oxford English Dictionary relevantly defines 'provision' as meaning: 'Each of the clauses or divisions of a legal or formal statement, or such a statement itself, providing for some particular matter; also, a clause in such a statement which makes an express stipulation or condition; a proviso.'
Case: R v Macraild (unreported, NSW Court of Criminal Appeal, Sully, Dunford and Simpson JJ, 18 December 1997)
Outcome: cited
Some confirmation of this proposition is available from the authorities. On two occasions, the New South Wales Court of Criminal Appeal has said that s 87(1)(c) of the Evidence Act 1995 (NSW) (which is in the same form as s 87(1)(c) of the Evidence Act ) reproduces the pre-existing common law. See R v Macraild (unreported, NSW Court of Criminal Appeal, Sully, Dunford and Simpson JJ, 18 December 1997) at 9 and Watt v R [2000] NSWCCA 37 at [8] . The pre-existing common law is found in Tripodi v R [1961] HCA 22 ; (1961) 104 CLR 1 at 7 and Ahern v R [1988] HCA 39 ; (1988) 165 CLR 87 at 100. In both of these cases, the High Court of Australia made it clear that the statement by B could only be admissible against C if there were 'reasonable evidence' establishing the existence of the common purpose, apart from the statement itself. I do not necessarily accept, as the New South Wales Court of Criminal Appeals appears to have done, that the 'reasonable evidence' test is identical to the formulation 'reasonably open to find' preferred by the legislature. For present purposes, however, Macraild and Watt stand as authority for the proposition that, so far as they are consistent with the terms of s 87(1)(c) of the Evidence Act , Tripodi and Ahern are to be taken as providing authority on the proper construction of that provision. It follows that s 87(1)(c) must be applied on the basis that the admissibility of B's statement as against C can only be determined by reference to evidence other than the statement itself.
Case: Royster v Cavey [1947] KB 204
Outcome: cited
At [157], Heydon JA pointed out that 'the court is not bound to act on admissions made by the parties or on states of fact agreed between the parties.' His Honour then cited the Gramophone Co case, quoting an extensive passage from the speech of Lord Loreburn LC, including the passage I have quoted at [43]. At [158] and [159], his Honour referred to two other English cases, Adams v Naylor [1946] AC 543 and Royster v Cavey [1947] KB 204, in both of which it had been held that crucial admissions on which the cases had been conducted at first instance should not be accepted, because they were contrary to fact. By way of conclusion, at [160], Heydon JA said: 'In short, the courts are averse to pronouncing judgments on hypotheses which are not correct. To do so is tantamount to giving advisory opinions and to encouraging collusive litigation. On the other hand, the courts will act on admissions of or agreements about matters of fact where there is no reason to doubt their correctness. But they are reluctant to do so where there is reason to question the correctness of the facts admitted or agreed.'
Case: Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213 (2002) 118 FCR 236
Outcome: cited
Counsel for the ACCC found it necessary to grapple with the use of the word 'commitment' in the judgment of the Full Court in Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission [2005] FCAFC 161 (2005) ATPR 42-078 (' Apco Service Stations ') at [43] [47]. In that case, which concerned allegations that dealers in the Ballarat retail petrol market had been involved in an arrangement or understanding to fix the price of petrol, and which involved some of the parties to the present case, the trial judge had declined to make a finding that one dealer became committed to any price increase agreed on by the other dealers. In addition, his Honour had made a finding that the other dealers had no expectation that the uncommitted dealer's readiness to receive telephone calls about prices meant that the uncommitted dealer would substantially match those prices. The Full Court expressed the view that these findings led to the unavoidable conclusion that the uncommitted dealer was not a party to any understanding that it would fix its prices at the same level as the other dealers or at any particular level, or even that it would increase its prices at all. In expressing this view, at [45], the Full Court pointed out that the appellants in that case had not disputed that the trial judge had enunciated the correct legal principles. The trial judge had referred, and the Full Court also referred, to observations of Lindgren J in Australian Competition and Consumer Commission v CC (NSW) Pty Ltd [1999] FCA 954 (1999) 92 FCR 375 at [141] , which were specifically endorsed by a Full Court in Rural Press Ltd v Australian Competition and Consumer Commission [2002] FCAFC 213 (2002) 118 FCR 236 at [79] . Lindgren J said: 'The cases require that at least one party "assume an obligation" or give an "assurance" or "undertaking" that it will act in a certain way. A mere expectation that as a matter of fact a party will act in a certain way is not enough, even if it has been engendered by that party. In the present case, for example, each individual who attended the Meeting may have expected that as a matter of fact the others would return to their respective offices by car, or, to express the matter differently, each may have been expected by the others to act in that way. Each may even have "aroused" that expectation by things he said at the Meeting. But these factual expectations do not found an "understanding" in the sense in which the word is used in ss 45 and 45A . The conjunction of the word "understanding" with the words "agreement" and "arrangement" and the nature of the provisions show that something more is required.'
Case: Symes v The Proprietors Strata Plan No 31731 [2003] NSWCA 7
Outcome: cited
In Symes v The Proprietors Strata Plan No 31731 [2003] NSWCA 7 at [45] , Heydon JA (with whom Sheller JA and McClellan J agreed) referred to Damberg , saying: 'It is true that there are cases where the courts are averse to pronouncing judgments on incorrect factual hypotheses, because to do so amounts to the giving of advisory opinions and to encouraging collusive litigation: see the cases discussed in Damberg v Damberg [2001] NSWCA 87 ; (2001) 52 NSWLR 492 at [148] - [160] . However, these perils do not exist here. It has not been demonstrated that the hypothesis that No 3 wall was common property is plainly incorrect. There is some evidence that it was incorrect; on this appeal evidence strongly pointing in the contrary direction has been filed. Courts commonly act on admissions in relation to matters of fact which might be disputed if the parties desired to do so, but which they have chosen to arrive at a compromise about.'
Case: Termijtelen v Van Arkel [1974] 1 NSWLR 525
Outcome: cited
It is clear that the power given to the Court by O 18 r 4(1) of the Federal Court Rules to pronounce judgment based on the admissions of a party is discretionary. The use of the word 'may' in the rule itself indicates this. If authority be needed to make good the proposition that the power is discretionary, it is found in Termijtelen v Van Arkel [1974] 1 NSWLR 525 at 529 per Hope JA and at 534 535 per Bowen CJ in Eq. In that case, the Court of Appeal of New South Wales was examining three separate legislative grants of power to give judgment based on admissions arising from pleadings. Their Honours held that each of the three grants of power was a grant of discretionary power.
Case: Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 24 FLR 286
Outcome: cited
However broad and flexible an understanding might be, for the purposes of s 45(2)(a) of the Trade Practices Act it must be a consensual dealing between parties. Like an arrangement, it falls outside the sphere of contractual obligations of a kind normally enforceable in a court. Unlike an arrangement, it can be tacit, in the sense that it can be arrived at by each party, either by words or acts, signifying an intention to act in a particular way in relation to a matter of concern to another party. In order to be a consensual dealing, however, an understanding must involve a meeting of minds. In Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 24 FLR 286 at 291, Smithers J (with whom Evatt J agreed) referred to what Diplock LJ said in British Basic Slag Ltd v Registrar of Restrictive Trading Agreements [1963] 2 All ER 807 at 819 in relation to English legislation in terms different from s 45(2) of the Trade Practices Act , and said: 'by parity of reasoning it would follow that the existence of an arrangement of the kind contemplated in s. 45 is conditional upon a meeting of the minds of the parties to the arrangement in which one of them is understood, by the other or others, and intends to be so understood, as undertaking, in the role of a reasonable and conscientious man, to regard himself as being in some degree under a duty, moral or legal, to conduct himself in some particular way, at any rate so long as the other party or parties conducted themselves in the way contemplated by the arrangement. It seems to me also that an understanding must involve the meeting of two or more minds. Where the minds of the parties are at one that a proposed transaction between them proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct, it would seem that there would be an understanding within the meaning of the Act.'
Case: Trade Practices Commission v Email Ltd (1980) 31 ALR 53
Outcome: cited
In Apco Service Stations at [46], the Full Court said that the trial judge's findings amounted to no more than what Lindgren J described as a 'factual expectation', falling short of an 'understanding'. The Full Court then referred at [47] to the judgment of Lockhart J in Trade Practices Commission v Email Ltd (1980) 31 ALR 53 as a practical illustration of the proposition that a mere hope or expectation that a party will act in a particular way is insufficient to constitute an 'understanding' for the purposes of s 45(2) of the Trade Practices Act . The Full Court pointed out that Lockhart J in Email held that, whilst sending price lists to a competitor assisted the competitor to follow the sender's prices if it chose to do so, and to do so more quickly than might otherwise be the case, in the absence of any commitment such communications were not sufficient to give rise to the meeting of minds essential to an arrangement or understanding. The Full Court held that the same principle was applicable in the Apco Service Stations case. Information conveyed by some dealers to the uncommitted dealer may have been useful to the uncommitted dealer in enabling him to have his franchisees check competitors' prices and know when to raise his own prices if he chose to do so, but the absence of any expectation that he would do so was fatal to the existence of any understanding. 39 As I have said, the concepts of contract, arrangement and understanding relevant to the application of s 45(2)(a) of the Trade Practices Act are concepts representing points on a spectrum of consensual dealings. It is possible that the spectrum might be extended in one direction beyond contract, to include even more solemnly binding consensual obligations, such as deeds under seal. It is difficult to see that the spectrum of consensual dealings could extend in the other direction beyond the concept of 'understanding', whilst still remaining relevant for the purposes of s 45(2)(a). That end of the spectrum, therefore, lies somewhere between the outer limits of what constitutes an 'understanding' and the closest form of non-consensual dealing that could be imagined. It is possible that this closest form is the expectation that a party will act in a particular way, engendered by that party, to which Lindgren J referred in CC (NSW) Pty Ltd at [141]. It may be in the realm of parallel conduct, even conscious parallel conduct, such as the adoption of identical prices for homogeneous products, which clearly lies beyond the realm of 'understanding'. See the American authorities cited by Lockhart J in Email at 56 57.
Case: Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1
Outcome: cited
The word 'arrangement' is less clearly understood, and more susceptible of elasticity as to its meaning. In general, it appears to connote a consensual dealing lacking some of the essential elements that would otherwise make it a contract. For instance, a dealing that would otherwise be a contract may be described as an 'arrangement' if the parties to it intended not to create a legally binding relationship, but only to give expression to their intentions as to the obligations that each felt morally bound to adhere to in relation to what was to pass between them, or to be carried out by them. Of course, an arrangement might be a broader concept than this, because it is a term the boundaries of which have not been fixed in the traditional understanding of lawyers. The Oxford English Dictionary gives as the apparently appropriate meaning of the word 'arrangement' 'a settlement of mutual relations or claims between parties; an adjustment of disputed or debatable matters; a settlement by agreement', or alternatively, 'disposition of measures for the accomplishment of a purpose; preparations for successful performance.' The ordinary understanding of what amounts to an 'arrangement' makes it difficult to envisage that an arrangement could come about without express negotiations between the parties, although there have been suggestions that an arrangement can be tacit. See Federal Commissioner of Taxation v Cooper Brookes (Wollongong) Pty Ltd (1979) 41 FLR 277 at 301 302 per Fisher J, with whom Brennan and Deane JJ agreed, referred to by Franki J in Trade Practices Commission v TNT Management Pty Ltd (1985) 6 FCR 1 at 24 in the context of s 45(2) of the Trade Practices Act . At the very least, there must be some express communication between the parties, although what is said may not amount to offer and acceptance for the purposes of the law of contract. The need for express communication is also suggested by the use of the verb 'make' in conjunction with both 'contract' and 'arrangement' in s 45(2)(a) of the Trade Practices Act . It is hard to see how two parties could 'make' an 'arrangement' without doing so expressly, at least as to the substance of the arrangement, even if the acceptance by one party of what the other has communicated is implicit in some act, rather than expressed in words.
Case: Tripodi v R [1961] HCA 22 ; (1961) 104 CLR 1
Outcome: cited
Some confirmation of this proposition is available from the authorities. On two occasions, the New South Wales Court of Criminal Appeal has said that s 87(1)(c) of the Evidence Act 1995 (NSW) (which is in the same form as s 87(1)(c) of the Evidence Act ) reproduces the pre-existing common law. See R v Macraild (unreported, NSW Court of Criminal Appeal, Sully, Dunford and Simpson JJ, 18 December 1997) at 9 and Watt v R [2000] NSWCCA 37 at [8] . The pre-existing common law is found in Tripodi v R [1961] HCA 22 ; (1961) 104 CLR 1 at 7 and Ahern v R [1988] HCA 39 ; (1988) 165 CLR 87 at 100. In both of these cases, the High Court of Australia made it clear that the statement by B could only be admissible against C if there were 'reasonable evidence' establishing the existence of the common purpose, apart from the statement itself. I do not necessarily accept, as the New South Wales Court of Criminal Appeals appears to have done, that the 'reasonable evidence' test is identical to the formulation 'reasonably open to find' preferred by the legislature. For present purposes, however, Macraild and Watt stand as authority for the proposition that, so far as they are consistent with the terms of s 87(1)(c) of the Evidence Act , Tripodi and Ahern are to be taken as providing authority on the proper construction of that provision. It follows that s 87(1)(c) must be applied on the basis that the admissibility of B's statement as against C can only be determined by reference to evidence other than the statement itself.