Case: Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446
Outcome: considered
The authorities on s 45 of the TPA explain the concept of a 'contract, arrangement or understanding' as it is used in Pt IV: see Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd [2004] FCA 1678 ; (2004) 141 FCR 183 (' Leahy' ); Apco Service Stations Pty Ltd v Australian Competition and Consumer Commission [2005] ATPR 42-078 (' Apco' ); Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75 ; (2003) 216 CLR 53 (' Rural Press' ); Trade Practices Commission v Email Ltd (1980) 43 FLR 383 (' Email' ); and Trade Practices Commission v David Jones (Australia) Pty Ltd (1986) 13 FCR 446 (' David Jones' ). Some assistance is also to be gained from authorities that have considered s 45E in its original form: Gibbins ; see also Keith Russell Simplicity Funerals Pty Ltd v Cremation Society of Australia (ACT) Ltd (1982) 57 FCR 472. 107 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. 112 Parallel conduct can constitute circumstantial evidence from which an arrangement or understanding may be inferred: Email at 386. Where there is no direct evidence of an arrangement or understanding, an inference that such an arrangement or understanding existed may be drawn from evidence that the parties' conduct exhibits 'a concurrence of time, character, direction and result': David Jones at 468 applying R v Associated Northern Collieries [1911] HCA 73 ; (1911) 14 CLR 387 (' Northern Collieries' ) at 400. Inferences of an arrangement or understanding are apt to be drawn from circumstantial evidence when the facts are particularly within the knowledge of a party who is not called to give evidence: Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 (' Jones v Dunkel' ); see also David Jones at 465. 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.