Re Keith Russell Simplicity Funerals Pty Ltd v Cremation Society of Australia (Act) Limited v Woronora Funeral Cemetry and Crematorium Trust v Eastern Suburbs Crematorium Trust v the Cremation Society of Australia Pty Limited v the New S [1982] FCA 27 (12 March 1982)

FEDERAL COURT OF AUSTRALIA

Re: KEITH RUSSELL SIMPLICITY FUNERALS PTY. LTD.
And: CREMATION SOCIETY OF AUSTRALIA (ACT) LIMITED
And: WORONORA FUNERAL CEMETRY AND CREMATORIUM TRUST
And: EASTERN SUBURBS CREMATORIUM TRUST
And: THE CREMATION SOCIETY OF AUSTRALIA PTY. LIMITED
And: THE NEW SOUTH WALES CREMATION COMPANY PTY. LIMITED (1982) 57 FLR 472
No. G19 of 1982
Trade Practices - Interlocutory Injunction

COURT

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Franki J.(1)

CATCHWORDS

Trade practices - whether arrangement or understanding - whether any alleged arrangement or understanding affected the supply of services - whether any alleged arrangement or understanding contained a provision for a prohibited purpose. Boycott - whether conduct engaged in for a relevant purpose - whether person concerned in prohibited conduct.

Interlocutory injunction - prima facie case - balance of convenience.

Trade Practices Act 1974 ss45D, 45E, 80(2).

Trade Practices - Trade union ban - Arrangement or understanding with trade union alleged - Applicant deprived of use of respondents' services - Application for interim injunction - Whether respondents simply responded to trade union ban in a commercial way - Whether respondents had arrangement or understanding with trade union - Boycott - Purpose - Whether respondents' purpose to cause loss or damage - Trade Practices Act 1974 (Cth), ss. 4F (a) (i), 45D, 45E, 80 (2).

Injunctions - Interlocutory - Whether prima facie case - Balance of convenience - Trade Practices Act 1974 (Cth), s. 80 (2). The applicant, Keith Russell Simplicity Funerals Pty. Ltd., was a corporation whose business provided low cost funerals. It used to use the chapels of the respondents for conducting funeral services and the respondents' services for the disposal of the bodies of deceased persons until the president of the Funeral and Allied Industries Union of New South Wales (the union) advised the manager of the applicant that the union had placed a ban on the applicant because of the alleged use of non-union labour. The result of the ban was that the fourth and fifth respondents refused to supply chapel facilities or cremation facilities for the applicant. The applicant applied to the Federal Court of Australia seeking an order under s. 45E of the Trade Practices Act 1974 (Cth) (the Act) restraining the respondents from giving effect to an arrangement or understanding with the union whereby the applicant would be barred from the use of the respondents' chapel and cremation services. The applicant also sought an interlocutory injunction under s. 45D of the Act.

Held: No order should be made against the first, fourth and fifth respondents because - (1) The applicant had not made out a prima facie case in relation to s. 45E of the Act as the fourth and fifth respondents had simply responded in a commercial way to a trade union ban.

Morphett Arms Hotel Pty. Ltd. v. Trade Practices Commission [1980] FCA 46; (1980), 30 ALR 88; Trade Practices Commission v. Email Ltd. [1980] FCA 86; (1980), 43 FLR 383; Trade Practices Commission v. Allied Mills Industries Pty. Ltd. (1981), 37 ALR 225, considered.

World Series Cricket Pty. Ltd. v. Parish (1977), 16 ALR 181; Federal Commissioner of Taxation v. Lutovi Investments Pty. Ltd. [1978] HCA 55; (1978), 140 CLR 434, referred to.

(2) The application for an interlocutory injunction under s. 45D of the Act must be dismissed because it had not been shown that either of the fourth or fifth respondents had as its purpose either the causing of substantial loss or damage to the applicant's business or the substantial lessening of competition in a relevant market.

Transport Workers' Union of Australia (New South Wales Branch) v. Leon Laidely Pty. Ltd. [1980] FCA 25; (1980), 43 FLR 168; Tillmanns Butcheries Pty. Ltd. v. Australasian Meat Industry Employees' Union [1979] FCA 84; (1979), 42 FLR 331, referred to.

HEARING

Sydney, 1982, February 12, 16-17, 19, 24, 26; March 9, 12. 12:3:1982
APPLICATION.

Application for interlocutory injunctive relief based on alleged contraventions of ss. 45D and 45E of the Trade Practices Act 1974.

J. L. Trew, for the applicant.

T. Simos Q.C. and G. Downes, for the first, fourth and fifth respondents.

R. Smart, for the second respondent.

S. Gibb, for the third respondent.

Cur. adv. vult.

Solicitors for the applicant: Baker & McKenzie.

Solicitors for the first, fourth and fifth respondents: Arkins, Gordon,

Barkell & Lamb.

Solicitors for the second respondent: A. W. M. Dickenson & Sons.

Solicitors for the third respondent: F. C. Bryant & Co.
E. F. FROHLICH

ORDER

1. As against the first, fourth and fifth respondents the motion is dismissed and the question of costs is reserved.

2. As against the second and third respondents, by consent, leave is granted to the applicant to discontinue the proceedings and by consent no order as to costs is made.

3. I republish my "Reasons for Statement" published on 9 March 1982 as my reasons for judgment in the motion for interlocutory relief.

DECISION

The applicant, Keith Russell Simplicity Funerals Pty. Limited, commenced proceedings against three respondents seeking injunctive relief in respect of conduct alleged to constitute breaches of ss.45E, 46 and 45 of the Trade Practices Act 1974 ("the Act"). The applicant conducted a business of providing low cost funerals and used the services of the respondents for conducting services in the chapels of the respondents and for the disposal of the bodies of deceased persons.

The applicant first sought interlocutory injunctive relief based only on alleged contraventions of ss.45E and 45D of the Act. The application for interlocutory relief has so far occupied almost three days. The second respondent, Woronora General Cemetry and Crematorium Trust, has raised the question that it is an emanation of the Crown in the right of the State of New South Wales and some time has been spent by its counsel in presenting a case based on this argument.

A third respondent, Eastern Suburbs Crematorium Trust, also wishes to raise this defence.

On the first day of hearing, upon the application of the applicant and by consent, a fourth respondent, The Cremation Society of Australia Pty. Limited, which operates the Northern Suburbs crematorium and a fifth respondent, The New South Wales Cremation Company Pty. Limited, which operates the Rookwood crematorium were added. Thereafter the proceedings were not developed against the first respondent.

When the matter was last before me submissions involved in deciding the application against the first, fourth and fifth respondents were concluded. I decided to give my reasons for announcing that I would not grant relief against them before proceeding further with the interlocutory application in view of the issue of the shield of the Crown being raised by the other respondents.

The matter commenced before me on 16 February and proceeded on 17, 19, 24 and 26 February. On 17 February I indicated that I felt that this was a case more appropriate to be determined finally and not on an interlocutory basis and that I was prepared to endeavour to give an early date to have the matter heard finally. Senior counsel for the first, fourth and fifth respondents welcomed this course but no application was made to me to adopt it.

The case sought to be made out under s.45E was that each of the respondents be restrained, until further order, from engaging in conduct of making or giving effect to an arrangement or arriving at an understanding with the Funeral and Allied Industries Union of N.S.W. ("the Union") which arrangement or understanding contains a provision to the effect that each of the respondents will refrain from supplying or continuing to supply to the applicant either or both of the services of the use of any chapel and the cremation of the coffin and remains of deceased persons at any crematorium operated by a respondent.

I will consider the case under s.45E first. It was alleged that the fourth and fifth respondents had been accustomed to supply the services of the use of a chapel and/or the cremation of the coffin and remains of deceased persons to the applicant and that the respondents had "made an arrangement" or "arrived at an understanding" with the Union and that arrangement or understanding "contained a provision that had the purpose of preventing or hindering" the fourth or fifth respondents from supplying or continuing to supply the relevant services to the applicant.

Section 45E(4) provides that s.4F(a)(1) is applicable. Section 4F(a)(1) provides, so far as relevant, that a provision of an arrangement or understanding shall be deemed to have a particular purpose if the provision was included in the arrangement or understanding for that purpose or for purposes that include that purpose.

The first question that arises is whether either the fourth or fifth respondent made an arrangement or arrived at an understanding which contained a provision that had the relevant purpose. No counsel was able to direct me to any case where a court has considered the provisions of s.45E nor am I aware of any such case. The words "make an arrangement or arrive at an understanding" suggest to me that the arrangement has to be made between a respondent and the Union, or an understanding has to be arrived at between them, which contains a provision that has a relevant purpose. Section 4F(a) refers to the purpose for which the relevant provision of the arrangement or understanding "was included".

There is a great deal of authority on the meaning of the words "arrangement" and "understanding" in various Acts, for example, the matter was considered by the High Court in Federal Commissioner of Taxation v. Lutovi Investments Pty. Ltd. [1978] HCA 55; (1978) 140 C.L.R. 434. I note that the section of the Income Tax Act there under consideration dealt with an act being done in pursuance or as part of an agreement or arrangment "that had the purpose of. . . ".

Section 45E, read as it is required to be read with s.4F(a), directs attention to a provision which "was included" for a relevant purpose. These words, taken with the word "make" and the word "arrive", have the effect of directing attention to the need for the making of an arrangement or arriving at an understanding in which a purpose was included for the relevant purpose of preventing or hindering the supply of services.

The relevant facts of this case are in a reasonably small compass and at this stage I will consider them only in relation to the fourth and fifth respondents.

The president of the Union advised the manager of the applicant that the Union had placed a ban on the applicant preventing it from using crematoria which he said was due to a breach of a union rule arising out of the use of non-union labour in removing a body from a nursing home. A representative of the fourth and fifth respondent was asked by the managing director of the applicant whether they would accept bookings at either Rookwood or Northern Suburbs crematoria from the applicant. The representative of those respondents said: "No, so far as I know the ban is still on. We can't accept the booking".

The result of the ban was that the fourth and fifth respondents have refused to supply chapel facilities or cremation facilities for the applicant since about the end of January 1982. There is no evidence that the fourth and fifth respondents have done more than give effect to an ultimatum which they received from the union that its members would not perform tasks upon or in relation to bodies provided for cremation by the applicant.

It was argued for the respondents that all they had done was to make a commercial decision, not by way of making an arrangement or arriving at an understanding, but by accepting the consequences they regarded as inevitable. They considered if an attempt were made to disregard the ban no services would be provided by the respondents' employees in relation to coffins and bodies supplied by the applicant and that this would produce a danger to public health and generally a commercially unacceptable position for the respondents. In addition there was no evidence that any provision in any arrangement or understanding, if one existed, could be said to contain a provision which was included for the purpose of preventing or hindering the supply of services to the applicant. At all times the fourth and fifth respondents wished to continue to supply services to the applicant but, because of the ban, this became commercially impossible.

Although the meaning of "make an arrangement" or "arrive at an understanding" must depend on the context in which those words appear I have considered the various views which have been expressed in relation to the requirements of s.45, including those of the Full Court of this Court in Morphett Arms Hotel Pty. Ltd. v. Trade Practices Commission [1980] FCA 46; (1980) 30 A.L.R. 88 at pp.91-92, those of Lockhart J. in Trade Practices Commission v. Email Ltd [1980] FCA 86; (1980) 31 A.L.R. 53 at pp.65-66 and those of Sheppard J. in Trade Practices Commission v. Allied Mills Industries Pty. Ltd. (1981) 37 A.L.R. 225 at pp.235 to 238.

I have of course to look first at whether a prima facie case has been made out, see generally World Series Cricket Pty. Ltd. v. Parish (1977) A.T.P.R. 40-040 per Bowen C.J. at p.17426.

It is necessary for an applicant to establish that, if the evidence remains as it is, there is a probability that at the trial of the action it will be entitled to relief. Bowen C.J. pointed out that this meant that the applicant must have a fair chance of success but that what will be required will vary according to the nature of the case and the consequences which will flow from the making of an interlocutory order.

The court under s.80(2) of the Act may grant an interim injunction "where, in its opinion, it is desirable to do so".

In my opinion the applicant has not made out a prima facie case in relation to s.45E. Upon the view I take the applicant does not have a fair chance of success even if I did not regard the nature of the case as one requiring a somewhat better case then might be the position in a case which did not fall into a rather special category.

In my opinion the respondents have simply responded in a commercial way to a union ban and I do not consider that there is evidence of either the fourth or fifth respondent having made an arrangement or arrived at an understanding which contained a provision which was included for a prohibited purpose. Even if s.45E is read without recourse to s.4F(a)(1) that section casts its shadow over s.45E.

Had I come to a somewhat different conclusion I consider that, because the court is entitled to have regard to the nature of the case and the consequences which will flow from the making of an interlocutory order, and because the court has not had to construe this section previously it would be justified in requiring a reasonably strong case before it granted an interlocutory injunction. Whilst this court should not, in my opinion, be unduly concerned with any industrial consequences which might flow from the making of an order which is a valid order, I am not inclined to place the court in a position where it grants an interlocutory injunction in such a case on what appears to be a case that has a "fair chance of success" but only just a fair chance of success and in which, when the matter is finally determined, a construction of the section unfavourable to the applicant is reached by the court. If the court makes an interlocutory injunction it is entitled to assume that an applicant will endeavour to force compliance with the Court's order and, if a respondent does not comply, that the applicant will be sufficiently interested to bring contempt proceedings against the respondent.

In this case I am of the opinion that, in any event, the balance of convenience would lie against the making of an interlocutory injunction if for no other reasons than those I have just stated. Whilst, of course, an undertaking as to damages does seek to protect the respondent it might not be adequate in the present case.

I appreciate the fact that the applicant's business has been seriously prejudiced by the union ban and that possibly some person seeking cremation services from the applicant may suffer some small measure of damage but I consider that the damage which would be likely to be caused to the respondents if an order is made would be substantial.

I also have had in mind on the balance of convenience the fact that I gave the applicant an opportunity to have the matter determined finally at an early date. An appeal from a final determination is much more satisfactory than an appeal from an interloctory judgment. See generally Superstar Australia Pty. Limited v. Coonan & Denlay Pty. Limited (1981) A.T.P.R. 20-253 at p. 43-272. I also take the same view in relation to making an order relating only to the use of a chapel.

I pass now to consider the application under s.45D. The interlocutory injunction sought under this section relies upon an allegation that a relevant respondent, in concert with a second person, presumably the union, is engaged in conduct which hinders or prevents the acquisition by members of the public from the applicant of the services of the use of a chapel and cremation of the coffin and bodies of deceased persons.

Section 45D will only apply, in a case where the fourth person is a corporation, where the conduct is engaged in for a relevant purpose. Pursuant to s.45D(2) conduct shall be deemed to be engaged in for a particular purpose if the person engages in that conduct for purposes that include the relevant purpose. This section has been construed by the Full Court of this Court in Transport Workers' Union of Australia (N.S.W. Branch) v. Leon Laidley Pty. Ltd. (1980) A.T.P.R. 40-149. At p.42142 Bowen C.J. pointed out that the purpose referred to in s.45D(1) "is the subjective purpose of those who are engaging in the conduct". Deane J. in Tillmann's Butcheries Pty. Ltd. v. Australasian Meat Industry Employees' Union [1979] FCA 84; (1979) 27 A.L.R. 367 at pp.382, 383 said "The 'purpose' referred to in s.45D(1) is the operative subjective purpose of those engaging in the relevant conduct and in concert".

Section 45D(1)(b) specifies the relevant purposes. After 24 February, apart from a new approach first mooted on that day, the applicant only put the case under s.45D upon the basis of the prevention of the acquisition of services by the public from the applicant. In that case the relevant purpose under s.45D(1)(b) is either the causing of substantial loss or damage to the business of the applicant or the substantial lessening of competition in a relevant market. In my opinion it has not been shown that either of the fourth or fifth respondents had either of these purposes.

In my opinion a prima face case has not been made out under s.45D. I do not consider that there is any evidence that the fourth or fifth respondent had any of the relevant subjective purposes. No attempt was made to introduce any evidence to establish either of these purposes.

Almost at the conclusion of his reply counsel for the applicant sought to obtain an order under s.45D different from any of the orders which were sought in the further amended notice of motion. The further amended notice of motion was provided on an earlier day pursuant to my request for a document setting out the precise orders sought. I would not feel inclined to make such further interlocutory order as is now asked in any event. It would involve a further address by counsel for the fourth and fifth respondents. However, I am not satisfied that the evidence establishes any ground for such order. The applicant seeks to have the fourth and fifth respondents restrained from being concerned in, or a party to, conduct by a union member or officer in concert with another union member or officer, that hinders or prevents the supply by those respondents to the applicant of the chapel and cremation services.

Such an order could only be made upon a prima facie case being shown that an officer or member of the union was acting in concert with another officer or member of the union, so that they fell into the category of the first two persons referred to in that section. Even if such case had been made out there is no evidence that either the fourth or fifth respondent was a party to or knowingly concerned in any such conduct.

I do not propose to make any order against the fourth or fifth respondent or against the first respondent. I will fix a date for the resumption of the interlocutory proceedings so that I can consider the position in relation to the second and third respondents. At present it seems only that they have an additional possible defence of the shield of the Crown.