Tradestock Pty Ltd v TNT (Management) Pty Ltd (No 2) [1978] FCA 1; (1978) 32 FLR 420 (27 January 1978)

FEDERAL COURT OF AUSTRALIA

TRADESTOCK PTY. LTD. v. T.N.T. (MANAGEMENT) PTY. LTD. (No. 2) [1978] FCA 1; (1978) 32 FLR
420
Trade Practices

COURT

FEDERAL COURT OF AUSTRALIA
Smithers J.(1)

CATCHWORDS

Trade Practices - Security for costs - Further affidavit material - Viable cause of action - Effect of amendment of statement of claim - Additional individual plaintiffs added - Effect of amending legislation on cause of action in pending proceedings - Trade Practices Act 1974, ss. 4, 4D, 45, 80, 82 - Federal Court of Australia Act 1976, s. 56 - High Court Rules, O. 29, r. 1. After the defendants had obtained an order that the plaintiff company give security for costs in an action under the Trade Practices Act 1974, the plaintiffs pursuant to leave reserved adduced new evidence on affidavit. The new evidence considerably strengthened the plaintiff company's prospects of succeeding against certain defendants. After the action had commenced, s. 45 of the Trade Practices Act 1974 was amended with effect from 1st July, 1977. The plaintiff company sought to amend its statement of claim to allege that the defendants had continued and were continuing to give effect to a certain unlawful contract, arrangement or understanding. Application was also made for leave to add certain individual shareholders in the plaintiff company as plaintiffs in the action.

Held:(1) The substantive law as to the rights and duties of the parties in respect of all the relevant conduct of the defendants alleged to be unlawful, whether committed before or after 1st July, 19778 had not changed by reason of the legislative amendment of that date. The amendment sought should be allowed, it being necessary for the purpose of determining the real questions in controversy between the parties.

Wigan v. Edwards (1973), 47 ALJR 586; Baldry v. Jackson, (1976) 1 NSWLR 19; The Fairport; Vogiatzis v. S.S. Fairport, (1967) P 467; Ausfield Pty. Ltd. v. Leyland Motor Corporation of Australia Ltd. No. (2) (1977), 30 FLR 477; Trade Practices Commission v. Guests' Garage Pty. Ltd. (1976), 26 FLR 433, referred to.

(2) The original order that security be given for costs, should be set aside in respect of the costs of certain defendants, because: (a) the plaintiff's claim was a bona fide one; (b) there was a good prospect that the plaintiff would succeed in obtaining relief by injunction, damages and declaration against the defendants or most of them; (c) the damages recoverable might be substantial; (d) on the basis that the plaintiff's claim was well founded then the wrongful conduct of some of the defendants might be seen to have contributed significantly to the plaintiff's impecunious condition.

(3) The joinder of the shareholders in the plaintiff company as plaintiffs was irrelevant to the exercise of the discretion of the court in relation to the order for security for costs.

Pearson v. Naydler, (1977) 1 WLR 899, followed.

HEARING

Melbourne, 1977, October 24, 25; November 3, 4, 28; 1978, January 27.
27:1:1978
APPLICATION.

The material facts appear from the judgment.

A. R. Castan, for the plaintiff.

J. S. Lockhart Q.C. and L. D. S. Waddy, for the first defendant.

A. I. Tonking, for the second, third and fourth defendants.

M. E. J. Black, for the fifth defendant.

A. J. Rogers Q. C. and A. Chernov, for the sixth defendant.

R. A. Sundberg, for the seventh defendant.

P. R. Francis, for the eighth defendant.

G. J. F. Dethridge, for the ninth, tenth and eleventh defendants.

J. Dwyer, for the twelfth defendant.
Cur. adv. vult.

Solicitors for the plaintiff: Ellison Hewison & Whitehead.

Solicitors for the first defendant: Blake & Rigall.

Solicitors for the second, third and fourth defendants: Allen Allen &

Hemsley.

Solicitors for the fifth defendant: Clarke Richards Grant & Co.

Solicitors for the sixth defendant: Paveys.

Solicitors for the seventh defendant: Moule Hamilton & Derham.

Solicitors for the eighth defendant: Mc Cracken and McCracken.

Solicitors for the ninth, tenth and eleventh defendants: Mallesons.

Solicitors for the twelfth defendant: Henderson and Ball.

DECISION

January 27.

The following judgment was delivered.
SMITHERS J. In May 1977 on the application of the first, second, third,

fourth, fifth, sixth, seventh and twelfth defendants an order was made that subject to further order the plaintiff's action be stayed in respect of those actions until security for their costs was provided by the plaintiff in certain specified amounts. That order and the reasons therefor appear in Tradestock Pty. Ltd. v. T.N.T. (Management) Pty. Ltd. (No. 1) [1977] FCA 1; (1978) 30 FLR 343 . (at p421)

2. The relevant principles as outlined in that decision are not challenged but the plaintiff being unable to provide the specified security or any part thereof has, pursuant to leave reserved, submitted new evidence and now seeks an order removing the stay. (at p421)

3. This new evidence is directed to the matter of the bona fides of the plaintiff's business, its difficulties arising because of the alleged contract, arrangement or understanding between the defendants not to deal with it, and to indicating to the court evidence actually available to the plaintiff of the existence and implementation of the alleged contract, arrangement or understanding. (at p421)

4. The plaintiff has submitted that on the material now before the court it appears that the case against the defendants is a strong one, and that on the balance of justice it is entitled to the exercise of the court's discretion in its favour. Certain procedural orders are also sought. (at p422)

5. The plaintiff company, under the control of Mr. Frewen and Mr. Stock, in March 1976, took over the business of what may be called transport brokers theretofore carried on by them in partnership under the name "T.I.C. Management Consultants". The partnership had been in business since July 1975. The nature of the business was that of consultants and advisers to business entities using road, rail and air-freight services. Mr. Frewen and Mr. Stock would study the requirements of such an entity, work out coordinated programmes and endeavour to arrange with a carrying company for the supply of the transport services required at the best terms obtainable in the freight-carrying industry. Their remuneration was by way of commission received by them from the carrying company or otherwise but of course it was derived ultimately from the sums paid by those who accepted and used the relevant freight-carrying services. It would seem that the kind of business which the plaintiff carries on has been carried on by others in the past, but there is no evidence that they succeeded. (at p422)

6. The evidence indicates that the plaintiff has from time to time been appointed by a number of quite substantial companies as their transport brokers. Its duties to those companies as such involve investigation of their current programmes for the carriage of goods and the preparation of reports and proposals for the most efficient implementation thereof and the negotiation of contracts with freight-carrying companies for carriage of goods in accordance with the requirements of the user companies. The plaintiff renders these services on the basis that during the period of the plaintiff's appointment as broker the user companies themselves shall refrain from negotiating directly with the carrying companies. It is normally a term of the appointment that the user company incurs no liability to pay any fee or commission to the broker for his services. It is apparent however that the user companies know that a fee by way of commission or otherwise will be paid by the carrying company with whom a contract of carriage is successfully arranged. (at p422)

7. If not expressly stated it would necessarily be apparent to the user company that the freight rates quoted to it by a carrying company would reflect the fact that the plaintiff's remuneration was payable by the carrying company. But adoption of this method of trading is not a condition of the plaintiff conducting its consulting, advising and negotiating business on behalf of users of freight-carrying services. The evidence indicates that there are alternatives whereby, for instance, the plaintiff acts as a principal contracting with a carrying company for the supply by it of freight services which the plaintiff makes available to the user at a rate differential in its favour or by arranging a straight-out fee payable by users for the plaintiff's consulting planning and negotiating services. But if the important freight-carrying companies as a body refuse to hold any communication with the plaintiff with reference to the supply of their services to users, then the plaintiff's business is gravely inconvenienced if not fatally injured. (at p423)

8. In the performance of its services to the user companies, according to whatever procedure is adopted, it would normally or at least frequently occur that the plaintiff would seek competitive quotations with a view to keeping their carrying costs as low as possible. It is the case for the plaintiff that there is much scope for its engagement by companies requiring any considerable quantity of freight services. (at p423)

9. It is said also on its behalf that in the absence of a ban upon dealing with brokers by an important segment of freight carriers in business, it would succeed in attracting freight carriers to do business on the proposed basis with benefits to the users of their services and to itself and possibly to the freight carriers themselves. (at p423)

10. The defendants deny that any benefits would accrue to them. They take the view that the remuneration of the plaintiff is an added cost for which the services performed by the plaintiff would not be adequate or perhaps any compensation. And the defendants have other objections to the business procedures proposed. (at p423)

11. If there be a contract, arrangement or understanding of the kind alleged by the plaintiff then not only is it excluded from doing business with the parties to it, but, and more importantly for the purposes of the Trade Practices Act 1974, the services of the parties to the contract, arrangement or understanding are not available to persons who appoint the plaintiff as their transport broker and desire that negotiation of their requirements be undertaken by that broker. (at p423)

12. Clearly it is important to the success of the plaintiff's business that the large transport companies such as the defendants be willing to consider on their merits as commercial propositions requests for transport services which the plaintiff may make to them on behalf of its customers. The substantial complaint which the plaintiff makes in these proceedings is that this willingness is denied to it because of a contract, arrangement or understanding between the defendants that none of the defendants will consider any proposition emanating from the plaintiff as broker. (at p423)

13. When this matter was last before me I took the view that the evidence did not suggest that the plaintiff's prospects of proving such a contract, arrangement or understanding were promising. But at the conclusion of the hearing of the application now before me the situation is very different particularly in relation to certain of the defendants. On the evidence now before me the conclusion to be drawn is that against certain of the defendants at least the prospect of the plaintiffs' success must be rated as quite high. I emphasize, of course, that at the trial the evidence leading to this conclusion may be contradicted or explained away. But at this stage I must be guided by what is before me. (at p424)

14. The evidence falls into three classes. First there is evidence of the difficulties experienced by the plaintiff in its dealings with various defendants who refuse to deal with it. Some have never been responsive to approaches from the plaintiff, some have dealt with the plaintiff for a time and later withdrawn from contact. Some have made clear to customers of the plaintiff that they will not negotiate with them unless the plaintiff is entirely excluded from all relevant communications. The evidence discloses conduct common to most of the defendants of failure to answer letters which in ordinary circumstances one would have expected to be answered. (at p424)

15. Secondly, there is evidence that a number of the defendants are members of the National Freight Forwarders Association, called for convenience the "N.F.F.A.", the minutes of which disclose that letters from the plaintiff to members seeking quotes for freight movements for various organizations have been referred by the members to the N.F.F.A. and that on three occasions, namely 12th February, 1976, 20th May, 1976, and 4th August, 1976, there was unanimity on the part of the representatives of members who were present that it was better for the client and operator to deal direct and without the intervention of a broker. (at p424)

16. Thirdly there is evidence of various telephone conversations between Mr. Frewen or Mr. Stock with persons apparently responsible and representative at fairly high level of certain of the defendants, to the following effect:

(a) On 26th July, 1976, one Mr. F. Gardiner of Interstate Parcels
Express Co. Pty. Ltd. (I.P.E.C.) the second defendant, in a

conversation with Mr. Frewen the contents of which were as follows:

"Mr. Frewen said: I had a meeting with Ian Shortell some months
ago and he gave me the names of his executive directors - Roy
Heasman, John Jacobs, Dick Pedlow - and said we could put any
proposition to them. Mr. Gardiner said: Oh] That can't be right
because the N.F.F.A. decided unanimously that we would not deal
with consultants or brokers and that was three months ago. I was
there. It was an inauguration dinner for Roy Heasman when they
put him in the chair. There were forty people there representing the
industry. At the meeting the N.F.F.A. decided unanimously to
refuse to deal with broker agents or consultants so I can't
understand why he told you he would. I will ring him up as soon as
we finish speaking to check up."

"Mr. Frewen said: Hold on I will just check my diary to see when
the meeting with Ian was. Yes here it is, it was in March. The 9th
March at 4 p.m. - that's before the N.F.F.A. meeting you are talking
about. Sorry I thought it was only a couple of months ago. I had my
times confused. Mr. Gardiner said: Yes, I thought that must be the
case because the N.F.F.A. dinner and meeting was only three
months ago, at the end of May and it was definitely decided not to
do business with consultants or brokers."

"Mr. Frewen said: Well, that's pretty clear, thanks for talking to
me. Mr. Gardiner said: Nothing personal you understand, it's just
that we can't let this type of barter market develop. We must make
sure our salesmen look after the customer. It's more personal than
the cold, hard method of negotiating with agents representing
clients that you are suggesting."

"Mr. Frewen said: Yes, but we have many clients and

eventually because we are getting more we will come to the situation

where you will want to talk to us about a particular client but
you are not helping to enable this to happen by refusing to
talk about our present clients. What happens next? Mr. Gardiner
said: Well, we are prepared to lose a client if he wants to do

business through you but we will face that later."

(b) On 26th July, 1976, one Mr. Ian Shortell of the first defendant
T.N.T. (Management) Pty. Ltd. spoke to Mr. Frewen in a
conversation which proceeded as follows:

"Mr. Frewen said: Good morning Ian, how are you? Mr. Shortell
said: Fine thanks."

"Mr. Frewen said: Ian, I haven't had a reply to our recent letters
concerning our clients. Also did you receive a call this morning from
Fred Gardiner? Mr. Shortell said: No, we haven't replied to your
letters and I haven't heard from Gardiner as yet."

"Mr. Frewen said: But Gardiner said he was going to phone you
this morning. Mr. Shortell said: Yes . . . Yes I have spoken to him
this morning."

"Mr. Frewen said: Gardiner told me that the N.F.F.A. will not
deal with us. Is that correct? I believe there were some forty
members at a meeting. Mr. Shortell said: Yes, I guess that is right."

"Mr. Frewen said: Ian, at my last meeting with you, you told me
that the pipeline was open and that I was to put forward any deals
to Heasman, Pedlow or Jacobs.Mr. Shortell said: Yes, that's true
but at the moment we are not dealing with consultants. I thought I
made our position well clear when I telexed Shovelton Storey."

"Mr. Frewen said: Yes I recall that time. That makes things very
difficult if forty of you have decided not to do business with us, that
makes it a bit hard mate. Mr. Shortell said: Well, that's the way it
is."

(c) On 26th July, 1976, one Mr. Wise of the fifth defendant Ansett
Transport Industries (Operations) Pty. Ltd. spoke to Mr. Stock in a
conversation which proceeded as follows:

"Mr. Wise said: Wise here. Mr. Stock said: Noel Stock here. I
don't know if you know me but we wrote to you and haven't
received a reply. We wondered if you have received our letters or
perhaps you are ignoring us."

"Mr. Wise said: Yes we have received your letter and as to the
other you put it right, we have chosen to ignore you. If we want to
do business we want to deal direct with customers. Anyway your
list of commission charges frightened us. Mr. Stock: But they are
negotiable - we are like the insurance brokers and we can
negotiate on any particular deal."

"Mr. Wise said: One per cent, two per cent or half a per cent - it's
a cost, and my own salesmen I believe to be the best choice if it
comes to paying somebody. It really boils down to a decision to
deal with you, or with my own salesmen, and I have decided to
deal with salesmen. Mr. Stock said: We are saying that the
salesmen is a cost our clients can avoid. After all what do
salesmen do for the client, they just make calls with their rate
schedules and attempt to get the client to spend more money."

"Mr. Wise: Yes, but that's good, what you want to do is lower our
rates. Why don't you go out and get higher rates. Mr. Stock said:
Your reaction is predictable. But we act in the client's interests and
attempt to improve his situation with regard to efficiency and
reduce wastage. At the moment we are dealing with small to
medium transport companies and in order to improve our clients'
situation in some instances we would like to deal with larger
companies like yours but you have slammed the bags. You won't
negotiate with us."

"Mr. Wise said: Yes, we have decided not to do business with
you. If we want to we can do business later and at that stage you
can say bugger you John you missed the boat. Mr. Stock said: Well,
I've spoken to Ian Shortell and we understand that is an N.F.F.A.
decision."

"Mr. Wise said: Well if you have spoken to Ian that's all very
well. But if you say it is an N.F.F.A. decision, and I am a member
of the N.F.F.A., that's restrictive trade and I didn't tell you that.
Mr. Stock said: Well I am only repeating what we know is true and
what we have proof of."

"Mr. Wise said: If you are saying that, you are talking restrictive
trade. There is no way you will get me to say that."

(d) On 26th July, 1976, one Mr. Wilkins of the eighth defendant,
Young's Transport Pty. Ltd., spoke to Mr. Stock in a conversation
part of which was as follows:

"Mr. Stock said: Well we haven't received a reply and we are not
quite sure, but are you ignoring us. Mr. Wilkins said: No, we
weren't ignoring you in fact we appreciate the opportunity to do
business and I remember one company, Shovelton Storey."

"Mr. Stock said: Yes about six months ago a client of ours SKF
was lost by you through our involvement and perhaps we can
redeem the situation. Incidentally are you independent of the
N.F.F.A. Mr. Wilkins said: No, we are members of the N.F.F.A.
and I am not telling you anything new when I say that your
approaches have been discussed, especially your commissions we
can't afford to pay."

(e) On 27th July, 1976, one Mr. Linfoot of the sixth named
defendant Brambles Industries Ltd., in a telephone conversation
with Mr. Frewen said the letters received from the plaintiff had not
been answered because his organization would not deal with
brokers or agents and would not discuss anything with the
plaintiff unless the client actually directed it to do so. Mr. Linfoot
said that his organization was a member of the N.F.F.A. and that
he was a "Brambles representative" at N.F.F.A. meetings but it
was three months since he had attended a meeting. (at p427)

17. The minutes of the N.F.F.A. meetings contain the following:

4th March, 1969.
FREIGHT BROKERS.

The activities of freight brokers were discussed. It was clear that
the only possible effect of their functions is to depress rates and it
was agreed that N.F.F.A. policy regarding freight brokers is -
'That quotations will not be submitted to other than genuine
shippers or authentic members of the transport industry (i.e. no
quotations to freight brokers, consultants or other variations of
"go-between" type operators).' "

12th February, 1976.

"T.I.C. MANAGEMENT CONSULTANTS.
It was noted that the above organization had made approaches to
several transport companies for quotes for freight movement for
various other organizations. Similar 'Transport Brokerage
Agencies' had appeared in the industry at various times in the
past and previous experience showed that it was better for the
client and operator to deal direct."
20th May, 1976.

"TRANSPORT CONSULTANTS.

A letter from Tradestock Pty. Ltd. incorporating T.I.C.
Management Consultants, to a member company was tabled.
The letter outlined a proposal with regard to the member's existing
clients: (1) Future requirements with regard to freight
transportation services. (2) Negotiation of future rates and
charges for services offered by the company. (3) Tradestock's
remuneration. Point three was based on a percentage of charges
earned.

In discussion it was agreed that this type of operation could only
increase charges to the extent of the brokerage payable, that
similar 'Transport Brokerage Agencies' had appeared in the
industry at various times in the past and that experience showed
that it was better for the client and operator to deal directly with
each other."

4th August, 1976.

"TRANSPORT BROKERAGE SERVICES.

A letter from Tradestock Pty. Ltd. was tabled and noted. The
meeting reaffirmed its opinion that it is in each company's best
interests to deal directly with its own clients." (at p428)

18. The minutes disclose that present at the meetings of the

N.F.F.A. on the dates referred to above were:

12th February, 1976

Present:

Chairman . . . Mr. G. C. Uniacke

Mr. J. Wise . . . Ansett Freight Express

Mr. J. Linfoot . . . Brambles Long Distance
Transport

Mr. M. G. Davies . . . Mayne Nickless Ltd.
Mr. J. Price

Mr. R. E. Heasman
Mr. J. Gouldstone . . . T.N.T./Altrans Ltd.

Mr. T. Prebble

Mr. N. O'Brien . . . Youngs Transport

Apologies:

A.U.T. Holdings Ltd.

I.P.E.C. Australia Ltd.

Tradex Transport.

20th May, 1976.

Present:

Chairman . . . Mr. R. E. Heasman, T.N.T.

Mr. E. Prebble . . . T.N.T.

Mr. N. Robinson . . . Brambles Ltd.

Mr. W. Roots . . . A.U.T. Holdings Ltd.

Mr. P. Chase . . . A.U.T. Holdings Ltd.

Mr. N. O.'Brien . . . Youngs Transport

Mr. M. G. Davies . . . Mayne Nickless Ltd.

Mr. F. Gardiner . . . I.P.E.C. Australia Ltd.

Mr. R. Bass . . . I.P.E.C. Australia Ltd.

4th August 1976.

Present:

Chairman . . . Mr. R. E. Heasman -
T.N.T./Altrans Ltd.

Executive -

Mr. J. Wise . . . Ansett Freight Express

Executive -

Mr. J. W. Linfoot . . . Brambles Ltd.

Mr. R. Banks . . . I.P.E.C. Australia Ltd.

Mr. R. C. Wilkins . . . Youngs Transport

Mr. G. E. Lincoln . . . A.S.P. Container Express

Mr. M. G. Davies . . . Mayne Nickless Ltd.

Apologies:

Mr. F. Gardiner . . . I.P.E.C. Australia Ltd. (at p428)

19. Those of the defendants who are members or divisions or associates of members of the N.F.F.A. are the first (T.N.T.) second (I.P.E.C.), fifth (Ansett), sixth (Brambles), seventh (Mayne Nickless), eighth (Youngs) and twelfth (Tradex) - the third and fourth defendants are associated with the second defendant. (at p429)

20. At the hearing of this present application Mr. Frewen was cross-examined at considerable length by Mr. Rogers Q.C. for the sixth defendant and Mr. Lockhart Q.C. for the first defendant. The books of the plaintiff were produced, as were also the documents in the possession of their customers and these were subjected to close examination and many questions were asked arising out of the matters disclosed in the books and documents. Mr. Frewen's experience in the freight-carrying industry was examined. Many questions were asked about the manner in which the telephone conversations set out above were conducted and recorded. It appeared that Mr. Frewen and Mr. Stock were seated at telephones in tandem so that each could hear all that was said and speak into the phone if that had been required and each was equipped with paper and pen to record what was being said by either of them and the person with whom the phone was connected. (at p429)

21. But the result of the cross-examination may be summarized by saying that: (a) the experience of Mr. Frewen was less than might have appeared from his affidavit on its face but it was far from trivial and he did reveal a substantial degree of knowledge of the industry; (b) the bookeeping methods of the plaintiff were in some respects complicated but appeared to be designed to record correct statements of its dealings with its customers and generally; (c) nothing was revealed to throw doubt on the general bona fides of Mr. Frewen or the plaintiff; (d) the method of recording the telephone conversations was shown not to be the most efficient that might have been designed but there was no suggestion made to the witness that the substance of the conversations was not accurately recorded in Mr. Frewen's affidavit. (at p429)

22. Arising out of the foregoing, Mr. Castan on behalf of the plaintiff stated: (1) that by reason of s. 45 of the Trade Practices Act 1974 as it stood prior to 1st July it was a contravention of the Act (a) to make a contract, arrangement or understanding in restraint of trade, and (b) to give effect to such a contract arrangement or understanding; (2) that since 1st July, 1977, by reason of the amendments to the Trade Practices Act 1974 which were made by Act No. 81 of 1977 it is a contravention of s. 45 (2) (b) for a corporation to give effect to a provision of a contract, arrangement or understanding whether made before or after 1st July, 1977, if that provision is an exclusionary provision. It was pointed out that a provision the purpose of which is to prevent restrict or limit the supply of services to or the acquisition of services from particular persons generally, or in particular circumstances, by all or any of the parties to a contract, arrangement or understanding is an exclusionary provision within the meaning of the statute, see s. 45 and s. 4D. It was urged also that such a provision is inevitably a provision in restraint of trade proscribed by s. 45 (2) of the Trade Practices Act as it stood immediately before 1st July, 1977. (at p430)

23. Mr. Castan submitted: (1) There is uncontradicted evidence as to the minutes of the meetings of the N.F.F.A. set out above, uncontradicted evidence of the experiences of the plaintiff in its attempts to do business with various defendants, and uncontradicted evidence that Mr. Gardiner and Mr. Shortell unhesitantingly stated that members of the N.F.F.A. have agreed not to do business with the plaintiff or with anybody negotiating through the plaintiff. (2) Although the defendants do not admit acting in concert their conduct in relation to the plaintiff is uniform, it is the conduct which would follow the observance of the alleged contract, arrangement or understanding if it were made, and at the very least it is conduct indulged in after reference of the subject matter thereof to the N.F.F.A. for its consideration and after the expression by those speaking in that body of the unanimous common opinion that, in effect, the desirable course for those in the association was to abstain from doing business with or through the plaintiff or any broker. (3) The proceedings in relation to the matter at the N.F.F.A. meetings support the inference that at the very least there was created an understanding between the members that they would not do business with or through the plaintiff; that once the views of the N.F.F.A. were expressed each member would realize that for the purpose of its own business it was dependent upon each other member conducting itself in accordance with the unanimous views expressed and that conduct on its part which would conflict with the implied understanding as to the conduct of each as expressed at the meetings of N.F.F.A. would be a breach of faith. (4) The evidence referred to in the last paragraph renders it likely that the alleged contract, arrangement or understanding will ultimately be proved. (5) Some of the defendants did do business through the plaintiff initially but thereafter withdrew and various defendants did not reply to letters from the plaintiff, and this might, in the absence of some positive evidence that such acts or omissions were performed in concert, possibly pass as coincidental individual actions, but positive evidence to the contrary was now provided in the minutes of the N.F.F.A. meetings, inference therefrom and the positive statements by Mr. Gardiner and Mr. Shortell and to a lesser extent of Mr. Wise and Mr. Linfoot. (6) The suggestion of the defendants that there was sound commercial reasons to explain the defendants' common course of conduct towards the plaintiff was true only in the sense that that commercial advantage depended upon the defendants maintaining by arrangement or understanding a common attitude of refusal to do business with or through the plaintiff; there would be no such good commercial reason if each defendant was operating in conditions in which his competitors were genuinely free, without ties, to deal or not to deal with or through the plaintiff. In such a state of affairs the only consideration in relation to any particular proposition would be the financial merits to the freight carrier of the proposition in question. (7) So far as it is said that to inject the services of the plaintiff into the freight-carrying business involves an added cost, that statement is an oversimplification. It is pointed out that although there is undoubtedly competition between the defendants there are no details of the cost structure of the defendants before the court. It is urged that the statement ignores savings to be made by the defendants because of the part to be played by the plaintiff; it disregards the possibility of discounts being already given to people with bargaining power and inbuilt variations in range of cost and profit coverage in various sections of the business done by entities such as the defendants; and that even if the actual cost to the ultimate customer for the freight carriage arranged were to bear the cost of the remuneration of the plaintiff that was and had been shown to be something which it would pay the ultimate customer to bear. (8) The plaintiff has a genuine business with genuine services to offer and a good prospect of success if the law is obeyed. (9) For the plaintiff to give proper service to its customers it was essential that those offering freight-carrying services in a big way such as the defendants should be willing to do business with it according to law, and by reference to the commercial value to it of the business offered to it. The refusal of the defendants to do this is a material causative factor of the plaintiff's current financial difficulties. (at p431)

24. On behalf of the sixth defendant, Brambles Industries Ltd., Mr. Rogers Q.C. contended that the inability of the plaintiff to do business with his client and indeed with the defendants generally was due to the presence of a good commercial reason for the defendants' refusal to do such business, namely that the plaintiff's services involved an added charge for the commission or other charges of the plaintiff for such services. He said that this was such a clear explanation of the attitude of the defendants that any agreement between them on the matter should be regarded as irrelevant. He said that the industry is competitive, that the brokerage fees would have to be added to the freight charges already made and that there is no evidence that that could be done. (at p431)

25. Mr.Rogers criticized Mr. Frewen for failing to know the profit ratio in the industry, but it is not clear to me how Mr. Frewen could be expected to have relevant information of the profit ratio of business done by, for instance, Brambles Industries Ltd. But as matters stand it seems to me that the capacity of the industry to bear the cost, be it added or substitutionary of the plaintiff's services, could only be tested in the market place where the various parties are free to do business individually unhampered by restrictions undertaken as between themselves. In this case it could be true that all or some of the defendants said to be acting in concert would indulge in the same conduct as it is said they have committed whether or not there be any understanding between them and other defendants. But if there is a contract, arrangement or understanding between them that such conduct will be indulged in, then questions inevitably arise. Mr. Rogers said that even if such a contract, arrangement or understanding be proved it is not shown by the plaintiff that the conduct of the defendants although conforming to its terms is committed "in accordance with" such contract, arrangement or understanding. See the definition of "give effect to" in s. 4 (1) of the Trade Practices Act. He said the plaintiff must establish that when the defendants or any of them have refused a broker's business they have done so not because of the commercial or other merits or demerits of the proposed transaction as they appeared to them individually, but because they are the terms of the relevant arrangement or understanding. This view was also put by Mr.Lockhart Q.C. and supported by other parties. I do not think it is sound. (at p432)

26. Since the Trade Practices Act 1974 has been operative it has been the will of Parliament that contracts, arrangements or understandings such as that now alleged should not be made and if made should not be given effect to. And Parliament has said that in relation to a provision of a contract, arrangement or understanding the words "give effect to" are to include "do an act or thing in pursuance of or in accordance with or enforce or purport to enforce" (s. 4 (1)). It is to be observed that an act done by way of implementation of a contract, arrangement or understanding would necessarily be done "in pursuance thereof". If the only acts struck at by the Act are those done by way of implementation of the contract, arrangement or understanding then there is no work left to be done by the words "or in accordance with". And there is good reason for thinking that those words are intended to cover the situation where what is done is or may be done for reasons other than to implement the understanding. In such circumstances proof of the real or dominant motive or reason of the actor is likely to be a matter of great difficulty and may in many cases be impossible. To adopt the view submitted by Mr. Rogers would be to conclude that Parliament, which has stated its disapproval of the relevant contract, arrangement or understanding and the kind of action for which it provides, was content to allow such action to proceed as though it were lawful in circumstances where the evidence was insufficient to prove the precise motive for or actuating reason of the conduct in question. (at p432)

27. What is prohibited by the section does not turn on whether the motives of the persons concerned are good or bad or desirable from their own or the community's interests. The law does not prohibit even the most irrational decision not to do business, so long as the decision is an individual one. What is prohibited is a decision commercially wise or unwise, which is a decision which the maker has undertaken with others to make or has entered into a contract, arrangement or understanding with them that he will make. When he makes that decision it is necessarily a decision made "in accordance with" that arrangement or understanding although it might have been made without the decision-maker having the arrangement or understanding in his mind. This view of the statute gives a natural meaning to the words of the definition in s. 4 (1) and accords with the objectives of the statute. (at p433)

28. It was however argued that as the plaintiff had failed to show that business between the defendants and the plaintiff on the lines proposed by the plaintiff could be profitable a refusal by the defendants to deal with the plaintiff was adequately explained by the commercial possibility that it would not be profitable to do so. It was said to be consequence of this that the court should not be impressed with the argument that the evidence indicates the possibility that there is a contract, arrangement or understanding between the defendants not to accept such business. (at p433)

29. The intervention in the business of carrying freight by a broker introduces a new party to relevant transactions and a new cost. So far as appears an individual trader could reasonably conclude that such benefits as might accrue from the intervention of the broker were not worth the resulting cose and adjustments. Whether he was wise or unwise, the decision would be a matter for him. But it would be far from surprising that a number of traders faced with the intervention of a broker which prima facie at least would increase costs, would embark upon a common course of action to avoid the intervention. The lawfulness of such a procedure would be one factor but its attractiveness would be apparent. (at p433)

30. In the light of foregoing the lack of proof that business along the lines proposed by the plaintiff would be profitable to the defendants is not significant on the issue of the existence of the alleged contract, arrangement or understanding or whether the defendants have given effect to it. (at p433)

31. The significance of the statements made by Mr. Gardiner and Mr. Shortell set above is not only that they are admissions of the matters alleged by the plaintif, but they reveal that there is available to the plaintiff direct evidence of the alleged contract, arrangement or understanding. As matters stand at present there is no denial by Mr. Gardiner and Mr. Shortell that the alleged statements were made and indeed no assertion in cross-examination or otherwise that those statements were not made. (at p433)

32. It is appropriate therefore, at this stage, to treat the statements as true. Accordingly Mr. Gardiner and Mr. Shortell could be expected to give evidence at the trail to the effect thereof with particulars of those matters which are stated therein in general form, namely for instance, the identity of those present at the meeting of May 1976. As matters stand there is evidence available to the plaintiff that all the forty members present at the meeting in May 1976 were parties to a very clear arrangement or understanding to the effect alleged by the plaintiff. On this basis, in conjunction with the evidence of the minutes of N.F.F.A. the plaintiff is entitled to say at this stage that it has good prospects of proving that at all material times there was in existence a contract, arrangement or understanding between a number of the defendants including the first, second, fifth, sixth, seventh and eigth defendants not to do business with or through the plaintiff and that that contract, arrangement or understanding was given effect to. The third and fourth defendants are associates with the second defendant as part of a group of companies known as the I.P.E.C. Group. (at p434)

33. Mr. Lockhart urged that no assumption should be made that, because no evidence is adduced orally by any of the defendants the plaintiff has established in some way a case for an injunction. He said that the plaintiff must prove that in December 1976 there was a contract, arrangement or understanding between the defendants and that that contract, arrangment or understanding had been given effect to by the parties to it. Mr. Lockhart addressed himself to the minutes. He said and indeed all counsel adopted it, that at most those minutes may be taken as giving rise to the inference that those present agreed with the views expressed. He said that the minutes do no more than express a recognition of an attitude which all shared. He contended that to infer from it that the parties expressing their common attitude were at the same time creating an arrangement or understanding that they would govern their conduct according to the attitude expressed would be unjustified. But it is difficult to ignore the fact that the recipients of the letters referred to in the minutes of 20th May and 4th August thought fit to bring those letters to the association meeting. On the face of the minutes it is certainly a reasonable inference that the recipients of the letters desired to obtain an expression of the association's view before they made a decision as to how they would deal with the matter. And it is difficult to think that those who left the meeting would not believe that they could safely govern their conduct by reference to the attitude expressed, relying on the others to do the same. Not much more can be necessary for an understanding. The class of business was such that mutual formal commitments would be unnecessary and understandings would be common. Cf. Top Performance Motors Pty. Ltd. v. Ira Berk (Queensland) Pty. Ltd. (1975) 24 FLR 290 where the nature of an arrangement or understanding in the context of the Trade Practices Act is discussed. These considerations are of course shown to be real by the statements of Mr. Gardiner and Mr. Shortell. (at p434)

34. Mr. Lockhart then said that assuming that there was some arrangement or understanding between the defendants or some of them, the question arose as to what were its terms and whether when his client refused to do business with the plaintiff it was doing so pursuant to those terms or by way of independent decision. He emphasized that Mr. Shortell, in his conversation, is to be taken as emphasizing that whatever any other traders may do or say his company just does not like dealing with or through the plaintiff. However, on the evidence as it stands at present it would be fanciful to conclude that Mr. Shortell and Mr. Gardiner failed to indicate both that they did not want to deal with or through the plaintiff and that their competitors felt the same and also that they had an arrangement or understanding with their competitors that they would not deal with or through brokers. In the result I think the contention of the plaintiff that it has good prospects of proving that there was an arrangement or understanding between the defendants or some of them that they would not deal with or through brokers including the plaintiff and that their conduct has proceeded in accordance therewith, is well based. (at p435)

35. Mr. Lockhart referred to the amendments of the Trade Practices Act 1974 which were made by Act No. 81 of 1977 which came into force on 1st July, 1977. He said that it was a consequence of those amendments that the plaintiff could not obtain relief in this action in respect of conduct of the defendants committed after 1st July, 1977. He said that it followed from this that the plaintiff could not obtain relief by injunction in this action and that the most the plaintiff could obtain in this action would be some moderate damages in respect of conduct occurring before 1st July, 1977. (at p435)

36. By virtue of the amendments to the Trade Practices Act 1974 which became effective on 1st July, 1977, s. 45 as it stood prior to that date was omitted from the Act and a new s. 45 was enacted. By virtue of sub-s. (2) (b) of that section it was provided that a corporation shall not give effect to a provision of a contract, arrangement or understanding made or arrived at before of after the commencement of the section if that provision is an exclusionary provision. It is important to observe that a provision in an agreement between freight carriers who are in competition with one another to the effect that they will refrain from making their services available to or through the agency of some particular person is an exclusionary provision because its obvious purpose is that of preventing, restricting or limiting the supply of services to particular persons or particular persons in particular circumstances or on particular conditions. Persons desiring to negotiate through an agent or broker would, in my opinion, be comprehended within this designated class. (at p435)

37. It is to be observed also that such a contract, arrangement or understanding would be in restraint of trade within the meaning of s. 45 as it stood before 1st July, 1977. This action was commenced before 1st July, 1977. With a view to meeting the situation created by the amendments of that date the plaintiff sought leave to amend its statement of claim to include an allegation that the defendants have continued to give effect to the contract, arrangement or understanding alleged against them since 1st July, 1977, and are continuing to do so. (at p436)

38. The application for leave to amend is made pursuant to the High Court Rules, O. 29, r. 1, which is in the following terms: "(1) The Court or a Justice may, at any stage of the proceedings, allow a party to amend his endorsement or pleadings in such manner, and on such terms, as is just. (2) All such amendments shall be made as are necessary for the purpose of determining the real questions in controversy between the parties." (at p436)

39. Mr. Lockhart urged that the statute which might have given the plaintiff a right to relief in respect of conduct of the defendants before 1st July, 1977, namely s. 45 (2) of the Trade Practices Act as it then stood, had been repealed. Assuming that by s. 8 of the Acts Interpretation Act 1901-1973 the right to damages in respect of such conduct survived, those damages would be moderate and not likely to attract an exercise of discretion in favour of the plaintiff in the matter of security for costs. But the right to an injunction in respect of that conduct would be lost because similar conduct committed after 1st July, 1977, would not be a contravention of the repealed s. 45 (2), the only section relied upon in the action as pleaded. Such conduct if wrongful was so only because of the terms of s. 45 (2) as enacted on 1st July, 1977. For the plaintiff to attempt to rely upon that section was to introduce a cause of action which did not exist at the date of the issuance of the writ. It is perfectly true that if the plaintiff seeks an injunction in respect of conduct since 1st July, 1977, he must do so by reference to the threat of continuing unlawful conduct as at the date at which he seeks the making of the injunction. (at p436)

40. If and when that date arrives conduct proscribed by the provisions of s. 45 (2) as in force prior to 1st July, 1977, and not otherwise would not be unlawful. At that date conduct of the kind in question will be unlawful only if it contravenes the provisions of s. 45 (2) as enacted on 1st July, 1977. To include a claim for relief in respect of conduct made unlawful then, for the first time, would appear to be a new cause of action. But I think a broader consideration is involved. (at p436)

41. Section 82 of the Act concerning a claim for damages has not been amended in any way material to the point presently at issue. And s. 80 of the Act concerning the grant of injunctions has also suffered no amendment which is material. Accordingly the grant of an injunction depends on the conduct in question being a contravention of Pt IV or Pt V of the Act. It is by that section that the cause of action concerning the remedy of injunction is defined. It was under that section that the action was first brought. It is under it that the action proceeds. (at p437)

42. When the plaintiff seeks to amend the statement of claim as proposed the amendment does no more than indicate that the conduct of the defendant continuing as alleged since 1st July, 1977, is conduct which at all times at which it was or is committed constituted a contravention of Pt IV of the Act and is therefore actionable pursuant to s. 80. To be actionable at the date of the writ the alleged conduct was required to be conduct proscribed by s. 45 (2) as it existed prior to 1st July, 1977. It is so alleged in the statement of claim. The amendment seeks to raise the point that the conduct alleged against the defendants as being unlawful by reference to s. 45 (2) as originally enacted is also proscribed by s. 45 (2) as enacted on 1st July 1977. This appears to follow from the terms of the later enactment. Included in what is proscribed by it is the giving effect to a contract, arrangement or understanding containing an exclusionary provision whether made or entered into before or after 1st July, 1977. (at p437)

43. To achieve the remedy of injunction the plaintiff must show at the trial that what is threatened is a continuing contravention of Pt IV of the Act. In what I think is the relevant sense in relation to the present question, this is the cause of action upon which these proceedings were launched. The amendment proposed makes it clear that in the same sense that cause of action is still pursued at this stage and is still available by virtue of the enactment of the new s. 45 (2) on 1st July, 1977. The substantive law as to the rights and duties of the parties in respect of all the relevant conduct of the defendants alleged to be unlawful whether committed before or after 1st July, 1977, has not changed by reason of the amendment of that date. It does not appear to me that the principles upon which an amendment to plead a cause of action arising after an action is brought should be refused require that the amendment sought in this case should be refused. (at p437)

44. It appears to me that it is just to permit the plaintiff to make the desired amendment. Also such an amendment is necessary for the purpose of determining the real questions in controversy between the parties, namely whether the conduct of the defendants since 1st July, 1977, constitutes the giving effect by them of the contract, arrangement or understanding which was made prior to the issue of the writ herein. Reference may be made to Wigan v. Edwards (1973) 47 ALJR 586 ; Baldry v. Jackson (1976) 1 NSWLR 19, at pp 27-28 ; The Fairport; Vogiatzis v. S.S. Fairport (1967) P 167 ; and Ausfield Pty. Ltd. v. Leyland Motor Corporation of Australia Ltd. (No. 2) (1977) 30 FLR 477 . (at p437)

45. It was argued on behalf of the defendants that it was not sufficient for the plaintiff to establish that there was a contract, arrangement or understanding in restraint of trade which offended against the provisions of s. 45 (2) as in force before 1st July, 1977, and that the defendants or some of them gave effect thereto, but that it must also show that the provision was such that the restraint was likely to have a significant effect on competition between the parties to the contract, arrangement or understanding. For present purposes the material consideration appears to me to be that the intervention of a broker advising users of freight services and whose business it is to seek competitive quotations and lowest rates available must have a significant effect on competition. The kind of intervention envisaged would facilitate "shopping around" among the defendants. Prima facie that process must significantly affect competition. When it was said to Mr. Wise of the fifth defendant by Mr. Stock that the defendant's salesmen just call on clients with their rate schedules and attempt to get the client to spend more money, Mr. Wise said, "Yes but that's good; what you want to do is lower our rates - why don't you get out and get higher rates?" Reference may be made to the decision in Trade Practices Commission v. Guests' Garage Pty. Ltd. (1976) 26 FLR 433 . (at p438)

46. The ultimate question is whether the order for security for costs made last May should be discharged or varied. This is a matter for the exercise of discretion according to the principles outlined in my reasons for making the original order. The matter depends upon the provisions of s. 56 of the Federal Court of Australia Act 1976 and s. 363 of the Companies Act 1961 (Vic.). (at p438)

47. It is relevant that I am now satisfied: (a) that the plaintiff's claim is a bona fide one; (b) that there is a good prospect that the plaintiff will succeed in obtaining relief by injunction, damages and declaration against the defendants or most of them; (c) that the damages recoverable may be substantial; and (d) on the basis that the plaintiff's claim is well founded then the wrongful conduct of the defendants may be seen to have contributed significantly to the plaintiff's impecunious condition. (at p438)

48. But at this stage a factor has emerged of a more subtle significance. This is a case in which it is said for the defendants that it is or may be true that they will not deal with or through the plaintiff, but the unanimity of attitude should be regarded merely as the sum total of individual decisions of the various defendants made according to commercial considerations of significance exclusively to the individuals concerned. (at p438)

49. But the evidence before the court contradicts this and part of that evidence is in the form of statements made by persons of importance which on their face show quite clearly that the allegations of the plaintiff are true and that the representatives of those engaged in this industry had no compunction in entering into the arrangement or understanding alleged or giving effect to it. The arrangement or understanding was quite unlawful and as far as appears it is still being observed by various defendants. (at p439)

50. The Trade Practices Act lays down rules according to which the commercial conduct of members of the public is to proceed. The intention is to promote competitive trade on fair conditions. When the largest traders in some industry contravene those rules an unacceptable element of dominance may well creep in - and if it does the kind of situation which arises when legal relief is sought is different in nature from that in litigation between individual parties on matters of contract and the like. It is a contest between an individual and a group with great strength which may well operate oppressively. Justice as understood in the context of the Trade Practices Act must, it seems to me, be concerned with those elements of the situation. Accordingly in a case such as that before the court declarations by representatives of members of the group concerned which reflect a complete disregard of the rules laid down by the Trade Practices Act, which is supported by the proceedings disclosed by the minutes of the N.F.F.A. assume a particular importance. (at p439)

51. In current circumstances I have to balance the possibility of the defendants being put to the expense of being unsuccessfully sued by the impecunious plaintiff, against the likelihood that that plaintiff has a good cause of action for very substantial relief against a group of defendants who are so far as the evidence appears, in the relevant respects, conducting their business in concert and unlawfully with a view to the exclusion of the plaintiff from the opportunity to conduct its business according to the rules laid down by the law. (at p439)

52. Having regard to the matters referred to in those reasons I am of opinion that on balance consideration of the justice of the situation requires that the plaintiff be relieved from giving security for costs in respect of various of the defendants. (at p439)

53. With respect to the twelfth defendant, (Tradex Transport Pty. Ltd.) the managing director, Mr. Strang, has submitted an affidavit in which he states that the letters of 15th June, 1976, and 13th July, 1976, said to have been sent by the plaintiff to it, outlining the proposals of the plaintiff for trading with it as a broker, were not in fact received. He states that his company did receive a letter from the plaintiff's solicitors dated 12th October, 1976, making certain claims against it. He explains why he decided that this letter should not be answered and that explanation is not unacceptable, certainly as the evidence at present stands. It is of more importance that Mr. Strang stated that if before receipt by him of the letter of 12th October, 1976, the twelfth defendant had been approached by the plaintiff with an offer of business he would have considered such offer on its merits. Presumably this attitude is a continuing one and on this basis it is my view that the order for security for costs in favour of the twelfth defendant should not be disturbed. If this basis should turn out to be fallacious the matter of security for costs in respect of the twelfth defendant may be reconsidered. (at p440)

54. It was submitted by Mr. Sundberg that the same view should be taken with respect to the seventh defendant, Mayne Nickless. It was pointed out that even during the middle and latter part of 1977 two divisions of the seventh defendant had performed carrying services for users pursuant to contracts which a representative of the plaintiff had or was understood by the division concerned to have arranged. It was said that whatever might have otherwise been thought, consideration of these events made it improbable that the seventh defendant was party to the alleged understanding between the defendants or that notwithstanding that it was a party it had not and did not intend to give effect to it. There is force in this contention but considering such evidence of these carrying contracts as is before the court I am unable to think that they support any positive inference as to the improbability referred to. The contracts were made during the course of the current proceedings. It is difficult, therefore, from the mere fact that they were made, to feel that their making and fulfilment has particular significance. (at p440)

55. It is clear that the seventh defendant is an active member of N.F.F.A. It was represented by one or two persons at each meeting at which the proposals of the plaintiff were dealt with and must be well aware that other members would expect it to act in accordance with the view repeatedly confirmed at those meetings, and it must be that it itself would expect that the other members would do the same - and it is a company of such standing that such an expectation would be likely to be respected and to obtain respect. In these circumstances it appears to me that what is most significant in relation to what the seventh defendant has put forward is not that one or more of its divisions did some work for or in association with the plaintiff but the omission to indicate whether or not the seventh defendant is willing to deal with or through the plaintiff contrary to the terms of the views expressed at the N.F.F.A. meetings. This defendant has taken the trouble to file affidavits detailing the work which its divisions have done for or in association with the plaintiff. Although these affidavits tend to create the impression that it regards itself as exempt from the views expressed at the N.F.F.A. meetings and any arrangement or understanding that might be thought to arise therefrom and that it is prepared to deal with or through the plaintiff in the ordinary course of business, there is no statement to that effect by a senior officer of the seventh defendant. (at p440)

56. Again, of all the forty carrying companies said by Mr. Gardiner to have been at the meeting in May when Mr. Heasman was placed in the chair and to have agreed upon a common policy, it would be more than surprising that the seventh defendant was not one of them. The case against the seventh defendant does not necessarily depend upon proof that it or others acting in concert with it have actually given effect to the alleged contract, arrangement or understanding. As well as an injuction the plaintiff seeks declaratory relief. In the circumstances therefore, having regard to the considerations set forth herein, I think that the order for security in favour of the seventh defendant should be discharged. (at p441)

57. It was submitted for the fifth defendant that it was not shown that it was a party to the alleged contract, arrangement or understanding or had given effect to it. However, because of the presence of Mr. Wise at relevant meetings of N.F.F.A. and the content of the statements made by Mr. Wise referred to above, I regard it as very probable that this defendant was party to the understanding alleged and would regulate its conduct accordingly. Similar comments are applicable to the eighth defendant who offered no evidence and made no submissions peculiar to its own position. Mr. N. O'Brien represented that defendant at the N.F.F.A. meetings of 12th February and 20th May, 1976. (at p441)

58. As to the sixth defendant (Brambles) the Brambles group was represented at all relevant meetings of the N.F.F.A. The comments above concerning the standing and influence in the industry of the seventh defendant (Mayne Nickless) are fully applicable to the sixth defendant. (at p441)

59. There is of course a question of identification of the actual defendants with the actual membership of N.F.F.A. At the hearing of this application no real point was made concerning this matter. I think it was the view of all parties that the question was one of form rather than substance. (at p441)

60. I next turn to deal with an application on behalf of the plaintiff and William James Frewen and Noel Edward Stock that Mr. Frewen and Mr. Stock be joined as plaintiffs so that they may pursue a course of action for damages in respect of alleged contraventions of the provisions of Pt IV of the Act which are said to be of the same nature as those alleged by the T.I.C. Management Consultants prior to March 1976. No real reason was advanced as to why this application should not be granted. It was however submitted that such joinder should be treated as irrelevant to the exercise of the discretion of the court in relation to the order for security for costs. I accept this submission and have exercised my discretion as though no application for joinder had been made or granted. The judgment of Megarry V.C. in Pearson v. Naydler (1977) 1 WLR 899 indicates that the discretion should be so exercised. (at p441)

61. It was argued for the defendants that the plaintiff should in any event be ordered to pay the costs of the application for relief against the order staying the action pending the providing of security for costs. It was pointed out that the new material had been available to the plaintiff at the time when the defendants' applications for security for costs were heard. It is to be observed however that had the material in question been provided to the court at the hearing of those applications the hearing thereof would have extended for a substantially longer period. It is to be noted also that in the circumstances of this case an order for payment of costs by the plaintiff which the plaintiff was required to meet forthwith might be quite as effective to prevent the plaintiff from pursuing it as would a stay. (at p442)

62. In all the circumstances I think its proper to order that the defendants' costs of those proceedings, except to the extent that they include the amount of additional costs which would have been incurred in relation to their applications for a stay of proceedings pending the provision of security for costs which was heard in April 1977 had the material put before the court in the present proceedings then been placed before the court shall be paid by the plaintiff in any event but that taxation and payment thereof be stayed pending further order and that the amount of the said additional costs be costs in the cause. (at p442)

63. It remains to consider an application for a stay of this action by the tenth and eleventh defendants pending the provision by the plaintiff of security for the costs of those defendants. The material before the court does not indicate that those defendants have entered into a contract, arrangement or understanding in contravention of Pt IV of the Act or have given effect to any such arrangement. The plaintiff is an unfinancial company. Accordingly I think it proper to order that, in respect of the tenth and eleventh defendants, and subject to such further order as may be made herein, the action be stayed until security for the costs of such defendants is provided in the total sum of $2,000 to the satisfaction of the registrar. (at p442)

64. In conclusion it may be observed that the possibility that this order may involve the defendants or some of them in the expense of successfully defending this action is in the mind of the court. That would be on the basis that such defendants were not involved in any arrangement with other defendants which offend the Trade Practices Act and accordingly were free to deal with and through the plaintiff by reference to the commercial merits of any proposed transactions. Naturally such a defendant would object to being subjected to a claim for an injunction to restrain it from doing what it is not doing and is not intending to do. (at p442)

65. Having regard to the circumstances of this case and to what was said to the court by parties in these proceedings the court would entertain an application by any defendant to re-impose the stay on that defendant giving to the court through counsel an assurance that it is not a party to any contract, arrangement or understanding the terms of which restrict it in any way from doing business with or through the plaintiff, and will consider and deal with any business proposals put forward by the plaintiff on their commercial merits and give quotations as requested by the plaintiff for the carriage of freight for the plaintiff or freight users for whom it may be acting where such carriage is within the scope of business ordinarily undertaken by the defendant in question. The nature of the assurance in contemplation would not be that it was an undertaking with legal consequences. Its observance would be voluntary but of course if it were not observed the stay of proceedings would be subject to review. (at p443)

66. Liberty to apply herein generally is reserved to all parties. I certify for counsel including senior counsel. (at p443)

ORDER

Orders accordingly.