Carley Ann Plume v Federal Airports Corp & Anor; Anthony Zaki Habib v Carley Ann Plume & Anor [1997] FCA 1019 (3 October 1997)

FEDERAL COURT OF AUSTRALIA

TRADE PRACTICES - market power - allegations of misuse - identification of relevant market - whether an inability to perform in a niche or part of a market is relevant

RESTRAINT OF TRADE - void in part for uncertainty - void in part for unreasonableness

Trade Practices Act 1974 (Cth)

Chesire And Fitfoot Law Of Contract 6^th Ed. (1992)

Petty v Penfold Wines Pty Ltd [1994] FCA 1095; (1994) 49 FCR 282

ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460

News Ltd v Australian Rugby Football League Ltd [1996] FCA 1256; (1996) 64 FCR 410

Herbert Morris Ltd v Saxelby [1916] AC 688

Fitch v Dewes [1921] 2 AC 158

Davies v Davies (1887) 36 Ch D 359

Peters Ice Cream (Vic) Ltd v Todd (1961) VR 485

Austra Tanks Pty Ltd v Running (1983) ATPR 40-340

CARLEY ANN PLUME v FEDERAL AIRPORTS CORPORATION

& WAYNE TUCKER

SG 73 OF 1996

ANTHONY ZAKI HABIB v CARLEY ANN PLUME & DAVID ABBOTT

SG 45 of 1997

O'LOUGHLIN J

ADELAIDE (heard in Alice Springs)

3 OCTOBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 73 of 1996

BETWEEN:	CARLEY ANN PLUME APPLICANT
AND:	FEDERAL AIRPORTS CORPORATION First Respondent WAYNE TUCKER Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA	SG 45 of 1997
SOUTH AUSTRALIA DISTRICT REGISTRY

BETWEEN:	ANTHONY ZAKI HABIB APPLICANT
AND:	CARLEY ANN PLUME FIRST RESPONDENT DAVID ABBOTT SECOND RESPONDENT

JUDGE:	O'LOUGHLIN J
DATE OF ORDER:	3 OCTOBER 1997
WHERE MADE:	ADELAIDE (heard in alice springs)

CARLEY ANN PLUME v FEDERAL AIRPORT CORPORATION & WAYNE TUCKER

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant pay the taxed costs of the respondents.

ANTHONY HABIB v CARLEY ANN PLUME & DAVID ABBOTT

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The applicant pay the taxed costs of the respondents.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY	SG 73 of 1996

BETWEEN:	CARLEY ANN PLUME Applicant
AND:	FEDERAL AIRPORTS CORPORATION First Respondent WAYNE TUCKER Second Respondent

IN THE FEDERAL COURT OF AUSTRALIA	SG 45 of 1997
SOUTH AUSTRALIA DISTRICT REGISTRY

BETWEEN:	ANTHONY ZAKI HABIB APPLICANT
AND:	CARLEY ANN PLUME FIRST RESPONDENT DAVID ABBOTT SECOND RESPONDENT

JUDGE:	O'LOUGHLIN J
DATE:	3 OCTOBER 1997
PLACE:	ADELAIDE (HEARD IN ALICE SPRINGS)

REASONS FOR JUDGMENT

At the time these proceedings were instituted on 23 August 1996 the applicant, Ms Carley Ann Plume, was the owner and operator of a passenger bus business. That business was operated by her in Alice Springs under the name "Bus About Alice". In the statement of claim the acronym BAA has been used to describe the business and it will be convenient, on occasions, to follow that procedure in these reasons.

The applicant has complained that the first respondent, the Federal Airports Corporation ("the FAC") denied her the opportunity to operate her business between the airport at Alice Springs and the city centre and that in so doing the FAC contravened the provisions of s 46 of the Trade Practices Act 1974 (Cth) ("the TPA"). She further alleged that the FAC, in entering into an agreement with another bus operator, had contravened the provisions of s 45 of that Act. Ms Plume also alleged that the FAC has engaged in conduct that was misleading and deceptive and in breach of s 52 of the TPA. However, that allegation was ultimately abandoned and need not be further considered. The FAC and the second respondent, Mr Wayne Tucker, who was at all material times employed by the FAC as its Airport General Manager at Alice Springs, have denied these allegations.

The development of the conflict between Ms Plume and the FAC can be traced back to October 1995 when her husband, Mr David Bryan Abbott, joined with Mr Anthony Zaki Habib to acquire a company, Axiom Bay Pty Ltd ("Axiom Bay"). The two men used this company to purchase from Nazant Pty Ltd ("Nazant") its business as an airport shuttle bus operator. In addition to the vehicles that it acquired, Axiom Bay also obtained the benefit of the sole licence that Nazant then enjoyed to provide an airport shuttle bus service; this was achieved when the FAC and Axiom Bay entered into an agreement on 19 October 1995 ("the Axiom Bay agreement"). That licence authorised Axiom Bay to convey "passengers for reward to from and within the said Alice Springs Airport by way of a bus service ...". Clause 4 of the Axiom Bay agreement contained a provision that the FAC would not grant "any similar licence to any other person or body corporate for the period of this licence ...". The term of the licence will expire on 20 February 2000.

There was a proviso to cl 4 of the Axiom Bay agreement and as its terms are very relevant to a resolution of this litigation, its contents are set out in full:

"[P]rovided always that nothing herein contained shall prohibit or restrict other persons or corporate bodies from providing transportation to from or within the Alice Springs Airport where such transportation is part of and incidental to a group tour or organised tourist package or the conveyance of guests customers or passengers to or from any hotel motel guest house boarding house or other accommodation by the operator of such accommodation or such operators employee agent or contractor."

It will be necessary to further consider that proviso in due course. However, the dispute that gave rise to this litigation will be more easily understood if, at this stage, it is pointed out that the activities in respect of which Axiom Bay was licensed was recognised by all relevant parties as a shuttle bus operation. A shuttle bus differs from a courtesy bus. The latter operates under an arrangement whereby hotels, motels and other like institutions make the bus available for their customers and assume responsibility for payment to the bus operator.

The venture between Mr Abbott and Mr Habib was short lived; they quickly fell out. Ms Plume had been engaged to perform some of the clerical and bookkeeping duties of the business but Mr Habib was resentful of her involvement. Eventually Mr Habib bought out Mr Abbott pursuant to the terms of an agreement ("the Abbott agreement") dated 10 November 1995. The consideration for the purchase of Mr Abbott's share in the capital of Axiom Bay was expressed to $1. There then followed the following provision in the Abbott agreement:

"In addition to and separate thereof, the Purchaser [Mr Habib] agrees to compensate Abbott for his formal undertaking, in relation to the Company and its beneficiaries, not to exercise any cause of litigation or pursue any other course of legal action against the Company or its beneficiaries for a compensatory amount of THIRTY THOUSAND DOLLARS ($30,000.00)."

In his affidavit that was sworn on 29 July 1997 and read as part of his evidence in chief in these proceedings, Mr Abbott said that he asked his solicitor to amend the terms of the Abbott agreement so that the sum of $30,000 would be paid to him by Mr Habib for agreeing not to sue Axiom Bay rather than for his share in that company. Mr Abbott said he told his solicitor that he wanted to do it this way for tax purposes. It is common ground that Mr Habib paid the $30,000 to Mr Abbott and that Mr Abbott deposited that money in a joint account that was operated in his and his wife's name. That money (or a part of it at least) was used in the establishment and operation of the business of BAA.

The Abbott agreement imposed a restraint on Mr Abbott for a period of three years. Clause 12 provides as follows:

"Abbott covenants with the Purchaser that:

(a) solely for the protection of the Purchaser in respect of the goodwill of the business of the Company Abbott shall not at any time in trade or commerce for a period of three (3) years from settlement without the prior written consent of the Purchaser, whether:-

(i) alone; or

(ii) jointly with or on behalf of any other person, firm or corporation or as an employee, independent contractor, partner, joint venturer or agent; or

(iii) by means or an agent, independent contractor or employee of any firm or corporation in which Abbott may be interested as a director, shareholder, beneficial owner of shares, lender, adviser or otherwise;

canvass or solicit or place orders for the supply of services of the general description of those supplied by the Company in its business immediately prior to the date hereof from any person, firm or corporation who or which has at any time within one (1) year prior to the date hereof been a customer or supplier of the Company in its business; or

(b) carry on or be engaged in the business carried on by the Company as at the date of this agreement in the area within the radius of five hundred (500) kilometres from the premises of the Company in which the Company carried on its business before settlement;

PROVIDED THAT:

(I) employment by the Company shall not be a breach of this covenant;

(II) if any provision or part of a provision of this clause be held or found to be void, invalid or otherwise unenforceable it shall be deemed to be severed from this clause to the extent of the invalidity or unenforceability but the remainder of this clause shall remain in full force and effect;

(III) nothing in this clause will prevent Abbott from being an employee in a business similar to that carried on by the Company or from owing and driving licensed hire cars or taxi cabs."

Following on Mr Abbott's sale of his interest in Axiom Bay, yet conscious of the obligations under the restraint of trade clause in the Abbott agreement, Ms Plume decided to acquire a bus and set up business as a bus operator, employing her husband as a driver. She said that she and her husband relied upon the third proviso to the restraint of trade clause which stated that nothing in the clause prevented Mr Abbott "from being an employee in a business similar to that carried on by [Axiom Bay]". Mr Abbott also said that he consulted his solicitor and was assured that he would not be in breach of his obligations if he worked as his wife's employee.

In her affidavit of 23 August 1996 which was read as part of her evidence-in-chief, Ms Plume stated that BAA commenced operations on 8 January 1996. She said:

"The activities of the business were to provide passenger transport services principally to tourists and other visitors to Alice Springs. These services fall into two main categories, namely airport transfers and charter services."

Later in the same affidavit, she said that over 90 per cent of BAA's business consisted of airport transfers which she defined as "picking up visitors arriving at Alice Springs Airport and driving them to their accommodation in Alice Springs, and driving departing visitors from their accommodation to the Airport".

Ms Plume was aware of the contents of the Axiom Bay agreement and of its licence to conduct a shuttle service at the time when she decided to set up the business of BAA. I find that in her correspondence with officers of the FAC to which reference is made hereunder, Ms Plume was at pains to present a picture of her business that would bring it within the proviso to cl 4 of that agreement. In par 48 of her affidavit she had said:

"I was careful to arrange the operations of my business so as to provide a different kind of service to that offered by the Airport Shuttle. The Airport Shuttle operates to a set timetable along a predetermined route. It has exclusive rights in relation to casual passengers, which are passengers who arrive at the Airport and have no pre-booked transport in town. BAA, on the other hand, offers a more personal service with higher standards of comfort, courtesy and presentation. BAA picks up only passengers who have made a booking and does not run to a set route. In setting up BAA, I identified a niche in the Airport transfer market which had not previously been serviced."

In her first letter, which was a letter dated 27 December 1995 addressed to Mr Tucker, Ms Plume wrote:

"As of 7 January 1996 `Bus About Alice' will begin operations in a commercial sense, conveying passengers to and from motels and the Airport. It is my recent legal advice which indicates, subject to certain conditions and requirements, that this will not contravene the regulations you have kindly quoted and provided for my perusal.

It is our understanding that an operator may convey passengers to the Airport but under no circumstances shall the Operator convey from the Airport passengers unless the passengers have pre-confirmed bookings. Bus About Alice is in the process of arranging for a dedicated bus parking bay, the terms and conditions as set down by FAC.

In relation to Federal Airports Corporation By-Law 3.3, I acknowledge that an Operator shall not erect, display or distribute any advertisement or cause to be erected, displayed or distribute [sic] any advertisement on the Airport which contains the words `Airport Transfer' or like words."

It is significant that Ms Plume's letter did not describe BAA's intended business as a "shuttle service". But notwithstanding that fact, the response that she received in a letter dated 5 January 1996 from a Mr Astridge of the FAC, who described himself as a "Legal Consultant", was in there terms:

"I have been advised by the General Manager of the Alice Springs Airport that your organisation intends to commence a bus shuttle service to and from Alice Springs Airport on 7 January 1996."

Mr Astridge then proceeded to advise Ms Plume about the existence and effect of Federal Airports By-law 3.1. The terms of that by law are as follows:

"3.1 A person shall not, at a Federal Airport, either personally or by his or her servant or agent, or as the servant or agent of another person:

(a) Sell, for delivery at a Federal Airport, or supply, any goods or services;

(b) Carry on, or solicit for, any business; or

(c) Erect, display or distribute any advertisement or public notice;

except in accordance with the terms and conditions of the lease, licence or authorisation granted or given by the Corporation under the Act.

Penalty: $500.00"

Mr Astridge concluded his letter with the observation that BAA's shuttle service was not authorised to carry on any business at the Alice Springs Airport. He warned that any breach of the by-laws "would result in the corporation moving to comply with its enforcement obligations."

Ms Plume had received Mr Astridge's letter of 5 January 1996 by facsimile transmission. On the same day she wrote Mr Tucker replying to Mr Astridge's letter, seeking formal permission "to convey passengers to and from the Alice Springs Airport" but explaining:

"It is my intention to convey passengers to the airport and convey from the airport passengers with pre-confirmed bookings."

Her letter did not refer to a "shuttle service".

Another Legal Consultant, Mr Koster replied to this letter on behalf of the FAC by letter dated 10 January 1995. In that letter Mr Koster said that the FAC would not provide Ms Plume with an authorisation. He explained that in 1995 the FAC had called for "expressions of interest from parties interested in obtaining a licence to operate a shuttle bus service at Alice Springs Airport". He added that after a tender process a licence had been granted to Alice Springs Airport Shuttle Pty Limited (this was the new name for Axiom Bay Pty Ltd). In fact this statement was not quite accurate as the initial licence had been granted to Nazant. But nothing turns on that mistake. Mr Koster further said that the licence that the FAC had granted provided "that the corporation shall not grant a shuttle bus licence" to any other person during the currency of the licence and concluded by warning Ms Plume that if she commenced "to operate a shuttle bus service at Alice Springs Airport" she would be in breach of the by-laws.

Ms Plume responded to Mr Koster's letter by letter dated 11 January 1996. Once again, she addressed her reply to Mr Tucker. In this letter, Ms Plume stated categorically that she was not intending to run a shuttle service. She commenced by stating that her business would primarily be "a bus charter business" and that "all passengers will have pre-confirmed bookings, requiring Bus About Alice to enter the Airport at a pre-determined time". She concluded in their terms:

"Bus About Alice wishes to provide transportation to or from the Alice Springs Airport where such transportation is part of a group tour or organised tourist package and or the conveyance of guests to or from any hotel, motel or any other accommodation by Bus About Alice acting as the operator's contractor.

I also point out that it was not and is not my intention to `request to operate shuttle service'[sic]. It is not my desire to directly compete with the current Airport Shuttle Service. I undertake to provide a charter business to those organisations that wish to contract my services."

There was a further letter written by Ms Plume to Mr Tucker, dated 23 February 1996 in which Ms Plume had written:

"My only purpose in going into the airport grounds is to fulfil my contract arrangements with various hotels etc who are clients of mine."

The dispute between the parties about the nature and extent of Ms Plume's business activities was highlighted in a telephone discussion between Ms Plume and Mr Tucker on 21 February 1996. Without the knowledge of Mr Tucker, Ms Plume recorded that conversation and the tape recording and a typed transcript of the conversation were tendered in evidence. Mr Tucker stated his position clearly: he said "everything I see about your operation is in head to head competition with the Shuttle Bus".

Under cross-examination, it became clear that Ms Plume differentiated between inward and outward passengers. She first described a shuttle service as one where a bus that is parked at an airport terminal picks up anyone as a fare paying passenger; such passengers were described by her as "inward" passengers. It was her belief that she would require an authorisation from the FAC to engage in that type of business activity. However, Ms Plume considered that the FAC had no power to control her activities in relation to those "outward" passengers whom she picked up in the city for delivery to the airport. Her appreciation of the situation failed to recognise that the FAC's powers of control extend beyond activities involving inward bound passengers and that they include the transportation of outward bound passengers to the Airport Terminal.

But the position is more serious. I find that the contents of Ms Plume's letter of 11 January and 23 February were misleading and deliberately so. During cross-examination Ms Plume was forced to concede that her activities included picking up fare paying passengers from hotels, motels etc and that this activity was contrary to Ms Plume's statement in her letter that transportation would be "part of a group tour or organised package". Ms Plume acknowledged that she knew the difference between a contract with a fare paying passenger and a contract with a hotel (for the transportation of its guests at its cost). She also ultimately acknowledged that her activities in picking up fare paying customers from hotels motels etc for transportation to the Airport amounted to a "shuttle service". I find that in her representations to the FAC Ms Plume knowingly and deliberately misrepresented the nature of the business activities of BAA when she asserted that it was not carrying on and did not intend to carry on a shuttle bus business. Exhibit R7, an advertisement or "flyer" prepared for BAA is headed "Deluxe Airport Transfers" and contains an entry:

"Groups

$5.00 per person each way."

That is the activity of a shuttle bus service.

Despite the warnings in the correspondence from the FAC, BAA continued to operate its business throughout the early months of 1996, purchasing a second bus in February 1996. Mr Tucker said that he had not been persuaded by the contents of Ms Plume's letter of 11 January; he had become aware that BAA had published a time-table, was issuing tickets to passengers in payment for their fares and was advertising publicly that BAA was operating a transfer service to the Airport. Mr Tucker regarded these activities as inconsistent with a tour operator or a courtesy bus; he considered that they were the hallmarks of a shuttle bus business.

It is common ground that Mr Tucker had a meeting with Mr Abbott on 27 February 1996, as a result of Ms Plume having written a letter of complaint to the Department of Transport. These discussions led to a change of heart. Mr Tucker received assurances from Mr Abbott, which he accepted, that necessary changes would be made to the operations of the business. According to Mr Tucker, and I accept his version of the conversation, Mr Abbott said words to this effect:

"I only intend to operate on a contract basis with a maximum of four hotels. I won't carry other passengers to or from the Airport. I'll only be agent for the hotels providing a courtesy bus service."

That was a most important statement; it negated any suggestion that BAA would be engaging in a shuttle bus service which had as its hallmark, the ad hoc picking up of all and any passengers who wished to make use of its services. Mr Tucker explained that he personally thought that such a courtesy bus service might not offend the exclusivity enjoyed by Axiom Bay. Thereafter, according to Mr Tucker there was a more "relaxed" atmosphere which, from Mr Tucker's point of view, was based on an understanding that BAA would not be running a shuttle service. That is why he replied to Mr Abbott, saying:

"OK, I'll find out whether I can give you an authorisation. I'd have to get legal advice about it, especially the Axiom Bay licence."

Thus Mr Tucker said that he had been prepared to investigate whether a "courtesy bus" service for the guests of nominated hotels and motels would be acceptable within the terms of the Axiom Bay agreement.

There the position remained until late May 1996.

In late May of that year Ms Plume informed Mr Tucker that she had made arrangements with four leading hotels in Alice Springs to be their transport operator. She informed him that the arrangements that she had made with the hotels were that she would offer a courtesy bus service to inward bound hotel guests free of charge. Ms Plume and Mr Abbott had separate discussions with Mr Tucker about where BAA's bus could be parked when it came to the Airport to pick up the hotels' guests, what signage could be used to attract the attention of these guests and where the bus driver might be able to stand with that signage. Mr Tucker agreed that such discussions had taken place but he denied that he had then given any authorisation. In par 23 of his affidavit of 10 September 1996 Mr Tucker deposed:

"On 2 June 1996, Mr Abbott came into my office at the Airport and showed me a finished sign that he intended to display in the terminal. The sign referred only to four hotels, and was consistent with our discussion set out in paragraph 21 above, and consistent with the operation of a "courtesy bus" service. I said to him that while I had no problems with the sign and Mr Abbott providing a courtesy bus service for the four hotels, as he appreciated, given the history of this matter and the involvement of lawyers, the approval for the sign would be dependent on authorisation for the proposed service, and that I would need to obtain legal advice as to whether it was acceptable. I stated expressly that I was not giving approval for the sign."

But difficulties flared up quickly. On 3 June 1996 Ms Plume received a telephone call from Mr Tucker who said that he had received complaints about the BAA sign that Mr Abbott was using at the Airport. According to Ms Plume Mr Tucker then said that "BAA could not use any sign at the Airport until BAA had received authorisation from FAC". According to Mr Tucker, he subsequently insisted that BAA cease operations when Mr Abbott said to him on 5 June "I've always intended to operate a shuttle service from Alice Springs to the Airport ...".

The passage just quoted appears in par 25 of Mr Tucker's affidavit affirmed on 10 September 1996. The contents of that affidavit were also read as part of his evidence in chief. Subsequent to 10 September, Mr Abbott swore two affidavits, both of which were also read as part of his evidence in chief. In neither of them did he deny that he had made that statement to Mr Tucker (two earlier affidavits had been filed by Mr Abbott prior to Mr Tucker's affidavit but they did not refer to this incident).

The climax of the dispute came on 22 June. Mr Tucker wrote Ms Plume warning that if "you come onto airport land for any other purposes associated with the conduct of Bus About Alice business you will be trespassing on FAC land and we will take such action as deemed necessary and you may expose yourself to the risk of arrest". Mr Abbott duly arrived at the Airport on 22 June; Mr Tucker gave him a copy of the letter, but at Mr Abbott's request he withheld action until Ms Plume arrived. Ms Plume then filmed the police, who had been called by Mr Tucker, requesting Mr Abbott to leave the airport.

BAA did not thereafter do any airport work at all. Ms Plume said that she continued to operate a general bus business for about five or six months but eventually sold her two buses in January 1997. The greater part of her income in that latter period came from hiring out her buses for use by other operators.

On 23 June 1997, after an unsuccessful attempt to be brought into these proceedings by way of cross-claim, Mr Habib, who was represented by the solicitors who were acting for the FAC and Mr Tucker, instituted originating proceedings in this Court against Ms Plume and Mr Abbott. He accused Mr Abbott of breaching the restraint of trade clause in the Abbott agreement and he alleged that Ms Plume had tortiously induced that breach. By consent, an order was made on 10 July 1997 that this action be tried at the same time as the proceedings that had been instituted by Ms Plume and that all evidence be received as evidence in each set of proceedings.

I turn now to state my conclusions with respect to the principal witnesses in this case - Ms Plume, Mr Abbott and Mr Tucker.

Ms Plume did not impress me as a witness. Under cross-examination she displayed, time and again, her determination to push her point of view. Furthermore, she was overly defensive to the questions asked of her and was continuously apprehensive, seeking to ascertain what might be behind a question. I do not consider that Ms Plume told lies when giving her evidence, but she did attempt to paint a picture of self-righteousness. She regarded herself as a victim of bureaucracy and Mr Tucker as the bureaucratic enemy. Ms Plume has convinced herself that she is fighting a just fight and I doubt very much that these reasons will persuade her that she has been the author of her own misfortunes. Independently of my observations of her in the witness box, my assessment of the worth of Ms Plume's evidence was adversely affected by my findings that her letters of 11 January and 23 February 1996 deliberately set out to mislead Mr Tucker.

Mr Abbott clearly shared his wife's views and is supportive and protective of her. That is obvious from his affidavit material. But beyond that, there is little that I can say with respect to his oral evidence or his demeanour in the witness box. He was only in the witness box for about 30 minutes and less than half that time was spent in cross-examination. It was too short a time to form any positive views and he was not seriously tested in his cross-examination.

Mr Tucker was, on the other hand, an impressive witness. He spoke quietly and with confidence and authority. Occasionally, he would recognise or admit to an error or an inconsistency. When that happened he readily admitted to the blemish and in doing so imbued one with a feeling of confidence in his honesty and integrity.

For example, it was Mr Tucker's evidence that until a final altercation with Mr Abbott on 5 June 1996, Mr Tucker was working in consultation with the FAC's legal advisers towards granting BAA an authorisation to conduct a courtesy bus service. Indeed that had been Mr Tucker's approach since the meeting with Mr Abbott on 27 February when Mr Abbott assured him that BAA would only be acting as an agent for hotels. Mr Tucker said that he accepted at that meeting that Mr Abbott was sincere. Clearly, Mr Tucker's earlier fears and suspicions that BAA was intending to operate a shuttle service had been dispelled. Yet on 3 and 4 June Mr Tucker wrote letters to BAA warning that it was not authorised to conduct any business in or out of the Airport and threatening legal proceedings. Mr Tucker conceded in cross-examination that these letters were "unfriendly". Asked to reconcile the content of these letters with the fact that the draft authorisation was in his possession and imminently ready for presentation to Ms Plume, Mr Tucker candidly and honestly confessed that he could not explain the apparent inconsistency. I reject outright any suggestion that Mr Tucker was engaging in some devious double-game. The existence of the draft authorisation and the involvement of the FAC's different legal consultants point to the genuineness of Mr Tucker's conduct. Elsewhere in his evidence Mr Tucker had said that he had received complaints in early June (from persons who were not identified) about BAA's signage at the Airport. The probable explanation for the "unfriendly" letters was that Mr Tucker was protecting the FAC because at that time formal authorisation had not been given to BAA to operate any activity out of the Airport.

Throughout the trial, including counsel's opening, there were suggestions that Mr Tucker had acted in bad faith towards Ms Plume and her business. Those suggestions have no foundation and are to be rejected out of hand. Indeed, Mr Tucker is to be complimented for his patience and tolerance in dealing with Ms Plume and Mr Abbott, who must, in my assessment be described as pushy and aggressive people. An example of their aggression was the manner in which Mr Abbott conducted himself with respect to his advertising sign. Mr Tucker explained that it was his opinion that the most appropriate position for drivers and tour operators to stand and display the names of the passengers that they are picking up or the names of the hotels or tours that they represent is at the monument in the Airport Terminal. He was of the firm opinion that it was inappropriate for such persons to display their signage in the baggage collection area. As Airport Manager he therefore insisted that all operators stand with their signs at the monument. But Mr Abbott did not agree; he was of the opinion that some of his passengers had not been able to see him at the monument. Mr Abbott therefore took it upon himself to stand with his sign in the baggage collection area and refused to move when requested to do so. The question is not when Mr Tucker's decision about the monument was the right one; the question is whether Mr Tucker, as Airport Manager, was entitled to maintain some measure of reasonable control over people who were carrying on a business activity within the confines of the Airport Terminal. I am of the opinion that he was so entitled; I am of the further opinion that Mr Abbott was at fault in refusing to comply with Mr Tucker's instructions which in my opinion were conducive to the orderly operation of an activity within the Airport. Mr Abbott may have had a likeable personality: such was Mr Tucker's description of him. But that did not stop Mr Abbott behaving in a manner that I can only describe as pushy, uncooperative and aggressive. The whole pattern of their behaviour showed that Ms Plume and Mr Abbott were determined to have their way; they were astute to try to avoid the restraints of the Abbott agreement; they were prepared to push their interpretation of the FAC's by-law, advancing a deliberately false impression of their activities in order to obtain authorisation from the FAC. They were prepared to do or say anything that would achieve their objectives. They had decided that they were entitled to carry on some form of business that involved transporting passengers to and from the Airport. That Mr Tucker should say that they could not do so without FAC authorisation only meant that Mr Tucker was wrong and was unfairly trying to impede them in the pursuit of their supposed lawful activities. Unfortunately, I feel sure that they remain convinced that right is on their side. They will not accept that Mr Tucker acted reasonably, fairly and correctly. I accept Mr Tucker as a witness of truth. I accept his evidence as being far more reliable than that of Ms Plume. Contrary to the beliefs of Ms Plume and Mr Abbott, I find that Mr Tucker did not exhibit any bad faith towards them or their business, nor did he treat them unfairly or unreasonably. Indeed, and notwithstanding their attitudes towards him (which were entirely discourteous) Mr Tucker made every reasonable attempt to assist Ms Plume to obtain authorisation to operate a courtesy bus business.

Mr Tucker was aware of the existence of the licence that Axiom Bay enjoyed and was conscious that the FAC had obligations in contract to Axiom Bay. I am satisfied that these concerns affected Mr Tucker in that he considered that his dealings with BAA had to be circumscribed by the provisions of the Axiom Bay agreement. In particular, I find that Mr Tucker was not prepared to put the FAC at risk. He would not approve any activity that BAA wished to implement without obtaining legal advice and receiving an assurance that approval by FAC of that activity would not breach its obligations to Axiom Bay. I find that attitude to be both understandable and reasonable. Nevertheless, it must be emphasised that at that stage in the negotiations Mr Tucker was motivated by Ms Plume's request for an authorisation to run a courtesy bus service. It was his belief, based on what Ms Plume and her husband had told him, that she did not want to run a shuttle bus service. Far from using any power - market, regulatory or otherwise - to prevent competition, Mr Tucker was using his position in an attempt to obtain for Ms Plume the authorisation that she would have needed to operate a courtesy bus. I find Mr Tucker broke off negotiations when Mr Abbott revealed their duplicitous conduct.

I have already summarised most of the correspondence and conversations that passed between the parties. It remains only to state my findings with respect to the events of June 1996.

I have already referred to the outcome of the meeting of 27 February 1996 whereby Mr Tucker told Mr Abbott he would find out whether BAA could be granted an authorisation. From time to time during the period between February and May 1996 Mr Abbott rang Mr Tucker or spoke to him personally, inquiring about progress; in particular, Mr Abbott was interested to know whether the authorisation would be forthcoming and when. Four such occasions were identified in pars 20 to 23 of the statement of claim and admitted in the defence. Then on 2 June Mr Abbott brought a sign or placard to Mr Tucker for his (Mr Tucker's) approval. It exhibited the names of the four hotels whose guests would be transported by BAA from the Airport to their hotels.

I accept the evidence of Mr Tucker, that at that time he had a copy of a draft authorisation in his possession under which BAA would be licensed to carry on a courtesy bus business. However, I find that the argument over the signage, and in particular Mr Abbott's refusal to cease displaying it led to a fresh outbreak of hostilities and the outburst by Mr Abbott on 5 June when he said:

"I've always intended to operate a shuttle service from Alice Springs to the Airport."

That must have been the last straw for Mr Tucker. It was put to him in cross-examination that he had orchestrated this break-down in relations which culminated in him calling in the police on 22 June. He denied that, saying it was the last thing that he wanted and that he had been looking for a peaceful reconciliation. I accept his evidence. It is plain that Ms Plume never intended to limit her activities to running a courtesy bus for hotels. She conceded, during the course of her cross-examination, that subsequent to 22 June 1996 the FAC had offered her access to the Airport as a courtesy bus for the four hotels pending the determination of these proceedings. She rejected the offer; she did not want such a limited authorisation. It would not permit her to convey fare paying passengers to the airport.

My findings may be summarised as follows:

* the FAC had granted a sole licence to Axiom Bay to carry on a shuttle bus business to and from the Alice Springs Airport

* Mr Tucker believed that the FAC would be in breach of its obligations under the Axiom Bay agreement if it permitted BAA to operate a shuttle bus business to and from the Alice Springs Airport

* Ms Plume falsely told Mr Tucker in her letter of 11 January 1996 that she did not intend to operate a shuttle bus business

* Mr Abbott told Mr Tucker on 27 February 1997 that BAA would only operate "on a contract basis with a maximum of four hotels" (ie a courtesy bus service)

* Mr Tucker inquired of his legal advisers whether the FAC could grant BAA a licence to operate a courtesy bus business

* Ms Plume and Mr Abbott knew that Mr Tucker was making such inquiries

* Mr Abbott refused to remove advertising signage in the period 2-5 June when requested to do so by Mr Tucker

* Mr Abbott told Mr Tucker on 5 June that BAA intended to operate a shuttle service from Alice Springs to the Airport

* Mr Tucker and the FAC thereupon withdrew from further negotiations

* Mr Tucker was instrumental in warning off Ms Plume and Mr Abbott from the Airport premises on 22 June 1996

I turn now to the consideration of the claims that have been advanced on behalf of Ms Plume.

SECTION 46 OF THE TPA

So far as is material to this case, the provisions of s 46 are as follows:

"(1) A corporation that has a substantial degree of power in a market shall not take advantage of that power for the purpose of -

(a) ...

(b) preventing the entry of a person into that or any other market; or

(c) deterring or preventing a person from engaging in competitive conduct in that or any other market.

There is a plea in par 33 of the amended statement of claim in these terms:

"33. The purpose of FAC in

(i) ...

(ii) preventing the applicant her servants and agents from gaining access to the Alice Springs Airport for purposes related to the operation of BAA; and or alternatively

(iii) preventing the applicant her servants and agents from displaying BAA signage in the airport terminal building; and or alternatively

(iv) preventing the applicant her servants and agents from parking BAA vehicles in reasonable proximity to the airport terminal building ...

(v) ...

was to deter or prevent the applicant from engaging in competitive conduct in the transfer market."

The term "the transfer market" had earlier been defined in par 6 the amended statement of claim as follows:

"6. At all material times there was a market for the supply of passenger transport services between the terminal building and various locations in the town of Alice Springs and its environs ("the transfer market")."

The allegations of purpose in par 33 and the allegation of the existence of a market described as "the transfer market" in par 6 were denied by the respondents.

In par 34 of the amended statement of claim there is then a plea that:

"34. ... FAC being a Corporation that has a substantial degree of power in the airport market has taken advantage of that power for the purpose of deterring or preventing another person namely the applicant from engaging in competitive conduct in the transfer market, in breach of Section 46(1)(c) of the Act."

In par 5 of the amended statement of claim it is alleged that:

"At all material times there was a market in the Northern Territory of Australia for the sale and supply of commercial passenger airport services ("the airport market")."

Professor Findlay gave evidence on behalf of Ms Plume and Professor Parry gave evidence on behalf of the respondents. Both are economists, eminently qualified as expert witnesses in this field.

Professor Parry agreed with Professor Findlay that the FAC operates in the "market for Airport Services" but he was not prepared to accept the assertion in par 5 of the amended statement of claim, saying that there was no evidence to support it. He would however, acknowledge that there was a market in Australia for the sale and supply of commercial passenger airport services and that the Northern Territory was part of that market. I appreciate Professor Parry's distinction but in my opinion it is not necessary, in view of the conclusion that I have reached, to come to a definitive view on this issue. I am prepared to accept for the purpose of these reasons that the FAC has a substantial degree of power in the Northern Territory of Australia in the market for airport services.

Both economists were agreed that the market into which BAA entered could properly be described as the "Alice Springs Transfer Market". The buyers in that market are the consumers who make short trips in and around the city, including trips to and from the airport and to and from tourists destinations and community sites. Current suppliers of these transfer services are numerous; they include taxis, hire cars, mini buses, tour operators, accommodation suppliers, the town bus and other bus companies.

Professor Findlay described the many different activities within the Alice Springs Transfer Market as niches: thus that part of the shuttle bus business which Professor Findlay called the "inbound airport transfer" operation was one such niche. It was his view that:

"BAA has been excluded from the transfer market by the action of the FAC. The FAC has a substantial degree of power in the airport services market [and] it has used that power to exclude a firm from the transfer market. In particular, a firm has been excluded from the inbound airport transfer niche on which that competitor depended in order to achieve commercially sustainable entry into the transfer market."

Professor Parry joined issue with that conclusion. He claimed that Professor Findlay was thereby asserting that a business house must have freedom to enter each and every segment (ie niche) of a relevant market. In rejecting that view, Professor Parry said that a consideration of market power or the effect on competition within a market required an analysis of the market as a whole. He said that it could not rely on what takes place within one part (or niche) of that market. I prefer the view of Professor Parry. It seems to me, with respect to the contrary view advanced by Professor Findlay, to carry with it a measure of logic. Neither economist suggested that there is a market for shuttle bus operations or for airport transfers or for any like limited operation. This, of course, represents an immediate problem for the applicant because, in cl 6 of her amended statement of claim, she has pleaded her case on a market that she described as "a market for the supply of passenger transport services between the terminal building and various locations in the town ...". Once it is accepted, as both expert witnesses have accepted, that the relevant market is wider and encapsulates taxis, hire cars and the other modes of transport to which reference has already been made, there ceases to be a need or a justification to look in isolation at one part (or niche) of the chosen market. The question to ask is whether the FAC used its power (if indeed it used any such power) to prevent entry into the Alice Springs Transfer Market: not whether it prevented entry into the inbound airport transfer niche. An intending entrant into the Alice springs Transfer Market faces many hurdles: one cannot operate a taxi or a charter bus without the driver holding appropriate licences. Buses that are used for passenger transportation require registration. Restrictions on business activities exist in most walks of life. It is for this reason also that the preferred view is to have regard to the market in its entirety. By not granting an appropriate authorisation, FAC denied BAA the opportunity to carry on business as a shuttle bus operator. But in my opinion that does not thereby mean that the FAC used any power to deny BAA entry into the Alice Springs Transport Market. In the first place, BAA never sought authorisation to operate a shuttle bus. Secondly, FAC refused to negotiate with Ms Plume because her husband revealed, very late in the piece, when he said that they were intending to operate a shuttle business after all, that they had misled Mr Tucker.

THE PURPOSE OF THE EXERCISE OF POWER

The power with which s 46 is concerned is an economic market power and there must be a causal connection between the exercise of that power and the conduct that is the subject of complaint. That means that it is incumbent on Ms Plume to establish that the FAC used its economic market power in the market for Airport Services in order to "deter or prevent her from engaging in competitive conduct in the transfer market" (par 33 of the amended statement of claim).

In addition there is an obligation on a complainant to establish a causative link between the exercise of the market power and the proscribed conduct. In Petty v Penfold Wines Pty Ltd [1994] FCA 1095; (1994) 49 FCR 282, the facts disclosed that the causative link was missing. Penfolds was found to have a substantial degree of power in the wholesale liquor market in Australia and Mr Petty carried on business in the retail liquor market within the Sydney metropolitan area. Penfolds was a major supplier to Mr Petty but in December 1990, Penfolds refused to make any deliveries. Subsequently, Mr Petty found that Penfolds had been supplying wines to a competitor at a better discount than that given to Mr Petty despite assurances to him by staff of Penfolds to the contrary. One of several allegations made by Mr Petty was that Penfolds' conduct breached s 46 of the TPA in that it sought to deter or prevent him from engaging in competitive conduct in the retail liquor market. That argument was rejected by the trial judge and summarily dismissed by a Full Court of this Court. It transpired that Mr Petty was in default with the payment of his account and, as Wilcox J said, the refusal by Penfolds to supply was:

"... amply explained by the appellant's failure to settle his September account until well after its due date, combined with Penfolds' knowledge of the concern of Mr Petty's bank about his financial position."(at 285)

Australasian Performing Right Association Ltd v Ceridale Pty Ltd (1991) ATPR 41-074 is another example of the exercise of a market power for a legitimate purpose. In that case the appellant owned the right of public performance in nearly all current popular copyright music. The respondents were persons associated with a discotheque within which music had been played without a licence from the appellant. The appellant was successful in obtaining an injunction against the respondents even though the granting of the injunction might have the effect of preventing the respondents from competing in the discotheque market. The Full Court was satisfied that the exercise of market power was not for the impermissible purpose of adversely affecting competition; it found that its purpose (which is a subjective purpose: ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 at 474-475: News Ltd v Australian Rugby Football League Ltd [1996] FCA 1256; (1996) 64 FCR 410 at 576) was "to restrain a group of people from using copyright material unless and until they first obtain the necessary licences" (at 52,130). Earlier in their judgment the members of the Full Court, after referring to Queensland Wire Industries Pty Ltd v The Broken Hill Proprietary Co Ltd [1989] HCA 6; 167 CLR 177 emphasised that "s 46 is only contravened if the relevant act of the corporation is undertaken for a purpose proscribed by subsec (1) of s. 46" (at 52,129). In the Queensland Wire Case Dawson J had warned that he did not consider it helpful "to categorise conduct, as has been done, by determining whether it is the exercise of some contractual or other right". After referring to some cases that were authorities for this contrary proposition his Honour concluded:

"The fact that action is taken pursuant to the terms of a contract has no necessary bearing upon whether it is the exercise of market power in contravention of s 46"(at 202)

But of course Mr Tucker, despite his unequivocal evidence that he was concerned to avoid breaching FAC's obligations under the Axiom Bay agreement, did not deter or prevent Ms Plume from entry into the transfer or any other market. He was prepared to grant her an authorisation that would have materially facilitated her entry into that market; she would have had limited - not unfettered - rights to transport passengers to and from the Airport as part of her activities in the transfer market. But she was not prepared to accept his terms. She wanted to dictate her own terms. In my opinion Ms Plume had no right to do so.

Putting to one side the problem of identifying the correct market, it seems to me to be obvious that the conduct of the FAC could not be described as the exercise of an economic market power. Rather it was the use of a regulatory power designed for the benefit of the members of the public who have occasion to use the facilities of the Airport. Furthermore, when one turns to the issue of "purpose", it seems plain to me that the "purpose" of the FAC was not to take advantage of its power with the objective of adversely affecting a person such as Ms Plume: its purpose in granting Axiom Bay a sole licence to operate a shuttle bus was the orderly regulation of an important business activity and public service that was identifiable with the Airport and the facilities that were available to the public within the Airport. The FAC's purpose in having one licensed shuttle bus was not designed, in my opinion, to hinder or prevent Ms Plume or any third party from engaging in competitive conduct; its concern was to ensure that there was a commercially viable, efficient shuttle bus service that could meet an obligation to have a bus available at the Airport Terminal to receive passengers from every incoming flight. I have placed emphasis on the need for a presence to meet every flight. The shuttle bus was a service for the benefit of the public. It was a service that the FAC wanted to be available for arriving passengers, no matter the time of the flight. Without some form of control, operators might be inclined to pick and choose, not sending out their buses to meet unpopular flights. The FAC, to ensure that this activity did not occur, had to give some assurance to the operator that it would be profitable for him or her to undertake to meet every flight.

Professor Findlay did not challenge the FAC's objective; his complaint was that the granting of a sole licence to Axiom Bay was not the correct solution. However, he was not able, in my opinion, to offer a practical alternative solution. Counsel for the respondents in his written submissions submitted that "commonsense dictates that one cannot have an open door policy for shuttle buses". That statement has appeal - the more so when one remembers that Axiom Bay ran at a loss in the 1996 financial year. But, having regard to my findings of fact, the "purpose" of FAC in granting a sole licence to Axiom Bay does not play a significant part in these proceedings. That particular "purpose" might have required closer scrutiny if Ms Plume had applied for and been refused an authorisation to operate a shuttle bus. But she had applied for permission to operate a courtesy bus and her request had been denied because of the misrepresentations that she and her husband had made.

In my opinion the complaint under s 46 has not been made out and must be dismissed.

SECTION 45 OF THE TPA

Although it was not expressly stated by counsel, I have proceeded upon the premise that Ms Plume is relying upon so much of subs 45(2) as prohibits the making of a contract or arrangement, or the arriving at an understanding if a provision of the proposed contract, arrangement or understanding "has the purpose, or would have or be likely to have the effect, of substantially lessening competition".

In par 35 of the amended statement of claim it was pleaded that "FAC by Tucker or alternatively Tucker alone made a contract or arrangement or arrived at an understanding with Axiom Bay Pty Ltd to the effect that FAC would protect the Shuttle Bus business of Axiom Bay Pty Ltd". Reference was then made to the agreement of October 1995 which I have earlier described as the Axiom Bay agreement. It was described as having the effect that "Tucker would refuse authorisation to any transport operator who approached hotels in the Alice Springs region seeking airport transfer business or who engaged in advertising or marketing in relation to airport transfer services in the Alice Springs region". It was followed by a plea that FAC by Mr Tucker had an agreement "to protect the business of the Shuttle Bus from competition by preventing competitors of the Shuttle Bus from advertising and/or marketing their services ... and by refusing to authorise competitors of the Shuttle Bus to operate at Alice Springs Airport".

But during the course of his final submissions, counsel for Ms Plume moved away from those allegations submitting that there was a subsequent oral agreement between Mr Tucker and Mr Habib to the effect that the FAC would protect the shuttle business without qualification. Mr Tucker denied the existence of any such unqualified arrangement and there was no other evidence pointing to it. Counsel for Ms Plume submitted that the transcript of the taped telephone conversation was sufficient to draw such an inference; I do not agree. That transcript showed that Mr Tucker was justifiably suspicious of Ms Plume's protestations and therefore determined to protect FAC from unwittingly breaching its obligations under the Axiom Bay agreement. Notwithstanding the allegations in the amended statement of claim to which I have referred, I do not understand counsel for the applicant to have attacked the efficacy of the Axiom Bay agreement; his attack was limited to the alleged subsequent oral agreement. There being no evidence to support the existence of any such oral agreement, the claim for relief under s 45 of the TPA must be dismissed. For completeness I should mention that there is the additional problem with respect to the definition of the relevant "market". I have already dealt with that in discussing Ms Plume's claim for relief under s 46. The "competition" that is referred to in sub-s 45(2) means "competition in any market in which a corporation that is a party to the contract ... supplies services ...": sub-s 45(3). That market is, as I have already held, the Alice Springs Transfer Market; and I have already concluded that the FAC did not prevent Ms Plume's entry into that market.

DAMAGES

I turn now to a consideration of the question of damages. I address this subject in the event that the matter should go further. In my opinion, for the reasons that are set out hereunder, I do not believe that Ms Plume has established that she has suffered any loss as a result of the conduct of the FAC.

Mr Trezona, a chartered accountant, was retained by Ms Plume to prepare an analysis of her likely losses. In fairness to Mr Trezona it should be emphasised that most of his calculations were based on figures that were given to him by Ms Plume. He was unable to verify those figures independently. Further, he made his calculations knowing nothing about the quality of the services that Ms Plume had offered and nothing about the quality of the services of the Airport Shuttle, the only shuttle business house then operating. Finally he made his calculation not knowing anything about the actual figures of the Airport Shuttle business.

In his report dated 23 May 1997, Mr Trezona made two calculations. The first was said to be a calculation of Ms Plume's losses up to and including the financial year ending 30 June 2000. These losses were quantified at $414,844. The second exercise was based on an assumption that BAA would be permitted to recommence business on 1 October 1997 and operate as it initially intended. In compiling his calculations for both exercises, no discount factor was applied to obtain a present value of those losses and no allowance was made for Ms Plume to mitigate her losses by engaging in some form of alternative employment. Both those issues are relevant and should have been factored into Mr Trezona's calculations.

It will be sufficient to address the first of these calculations. Axiom Bay (or Airport Shuttle) is required to pay a licence fee to the FAC for its licence to operate its shuttle service. That licence fee is a percentage of its turnover. Mr Tucker said that it was the practice of the FAC to have Axiom Bay's figures "audited". The FAC was thereby able to produce the actual accounts for Axiom Bay and its predecessor, Nazant so that they would be compared with the cash flow budget that Mr Trezona prepared on behalf of BAA. The actual fares received by Nazant and Axiom Bay as disclosed in their accounts were for both inwards and outwards passengers and Mr Tucker said in evidence that the division of these fares was "roughly" equal. Mr Trezona in the preparation of his budget made an assessment of outward fares only. He did this on instructions from Ms Plume that her courtesy bus operations for inward passengers would be supplied free of charge by virtue of the arrangements that she had made with the four hotels. Thus Mr Trezona's budgeted figure for gross fares for the financial year ending on 30 June 1997 is to be compared with one-half of Nazant's and Axiom Bay's actual receipts for a 12 month period. Mr Tucker's budgeted figure was approximately $182,000. In the 12 months ending on 30 September 1995, Nazant grossed $294,000 and in the following 12 months Axiom Bay grossed $338,000. Half of those actual figures, $147,000 and $169,000 respectively is each less than Mr Trezona's budgeted receipts from outward fares. Axiom Bay's figures improve if one takes the gross receipts for the 12 months ending on 31 December 1996. They were $372,000. But half of this sum of $186,000 is only marginally greater than Mr Trezona's budget.

Of greater impact are the actual gross receipts of BAA; in her first months of trading Ms Plume grossed $7,500 of which only $4,500 or thereabouts were fares in respect of transport to and from the airport. In the period from 1 June to 22 June 1996 when she was enjoying the patronage of the four hotels she only grossed $1,200 for her outbound fares. This indicates how far short her actual figures were from those in Mr Trezona's budget. Ms Plume and Mr Trezona were postulating that BAA, a new entrant in the transport market, would capture virtually the whole of the market then enjoyed by the only operator in the market. Such a proposition does not warrant serious consideration.

The reason why the figure of $182,000 bears no relationship to reality is because Ms Plume failed to approach the subject realistically. She instructed Mr Trezona to work on a high season from May to October. That was unduly optimistic; some evidence suggested that high season could commence as late as June or July. In a letter to her financier dated 11 June 1996 (Ex R5) Ms Plume said that "high season is expected to begin in earnest from July". She instructed Mr Trezona to calculate all passengers at $8 per passenger yet there was evidence of her offering discounted fares as low as $5 per person; reference has already been made to BAA's "flyer" Ex R7. The budgeted total income included an additional $24,000 for bus hire thereby increasing total budgeted income to $206,000. Budgeted expenses allowed for a surplus of $72,000. Being a cash flow budget, it included capital repayments of some loans but then it did not include any allowance for depreciation (which in the Profit and Loss account for 30 June 1996 was about $22,000). But a glaring omission was the failure to include the licence fee that BAA would have to pay to the FAC if it was granted an authorisation to conduct a business to and from the Airport. Based on Axiom Bay's licence fee it would be about 8 per cent of gross fees received (ie the estimated $182,000) or an additional item of expenditure of about $14,500 per annum. Without addressing the length of the high season or the likely mean average fee per passenger the further need to greatly reduce the budgeted gross fares means, in my opinion, that a rewriting of Mr Trezona's budget would throw up a significant deficiency.

Mr Trezona's budgets for the subsequent years up to the year 2000 are in the main, built around an increase in gross fares. But the accounts of Axiom Bay give a true indication of the size of the shuttle bus market. There is no room for a dramatic increase in the size of the market. Any growth in BAA's share of the market would most probably be at the expense of Axiom Bay; and I see no reason to assume that BAA would be so successful as to take the whole of Axiom Bay's share. It is true that an efficient shuttle bus operator may increase his or her share of the market at the expense of taxis or hire cars; there was evidence from members of the tourist industry that they favour Ms Plume and Mr Abbott as competent operators. But I have no concrete material upon which I could proceed with confidence to make an assessment that would help Ms Plume. On the contrary, everything points to her intended business running at a loss

This conclusion accords with reality. Ms Plume did run her business at a loss to 30 June 1996. So also was the business of Axiom Bay run at a loss in that year. It was submitted on behalf of the FAC and Mr Tucker that Ms Plume suffered no interference from the FAC until 22 June and that therefore, her losses of about $57,000 for the period ending 30 June 1996 show the futility of her position. I am not prepared to accept this submission. Undoubtedly, there was a measure of interference. On the other hand I have no doubt that the degree of interference was not such as would have been responsible for losses of that magnitude. In coming to this conclusion I have not overlooked some correspondence that supports the respondents' submissions. In particular, there was a letter from Ms Plume's solicitors (Ex R13) in which they refer to the "demise" of her business as from 22 June 1996. A local newspaper article dated 30 July 1996 (Ex R2) contained the following statement:

"Ms Plume said the company had operated for five months without trouble until rival firms complained that they were operating a `shuttle service'".

In my opinion Ms Plume has failed to prove that she suffered any loss as result of her ceasing to operate her business to and from the Alice Springs Airport.

There was a further submission that the respondents made which should be mentioned. They submitted that, if as a matter of law, the FAC was obliged to licence the applicant, damages should be assessed conscious of the fact that the FAC would likewise be obliged to licence any other potential shuttle bus operator. I do not consider that this is a sound submission. First, it did not happen; there is no sufficient evidence that would justify a finding that there was a business house seeking such a licence at or about the time that Ms Plume was seeking one. Secondly, if it be assumed that Ms Plume was granted a licence it does not follow, as a matter of course, that a third or fourth operator would seek a similar licence. It might be that the knowledge that there were two operators in the market might be sufficient to deter subsequent operators from seeking entry. The proposition is too speculative to be given any weight.

The attempt by Ms Plume to attract an award of damages for loss of income from the hiring out of her second bus must also be rejected. That intended charter work and cross hire work was not dependent on access to the Airport. In any event, her records show that she was able to hire out her bus after 22 June 1996.

RESTRAINT OF TRADE

Mr Habib was not called as a witness in the trial. In presenting the case against Mr Abbott and Ms Plume, his counsel was content to rely on the contents of the Abbott agreement (and in particular cl 12) and the concessions elicited from Ms Plume and Mr Abbott during the course of their cross-examinations. The case for Mr Habib was presented on two fronts. It was submitted that Mr Abbott, at the request of and with the knowledge of Ms Plume, approached hotels and motels and other like institutions ("hotels") telling them of the establishment of the business of BAA and seeking their patronage and support. It was further submitted that this patronage and support, if given, would come in the form of the hotels informing their guests and customers of the existence of BAA and the services that it offered. I am of the opinion that the evidence supports those submissions and I make findings accordingly. I also find that some of the hotels that were approached by Mr Abbott were or had been business houses which had dealt with Axiom Bay during the few weeks in which Mr Abbott had been involved with that company. In other words, I am satisfied that Mr Abbott, at Ms Plume's request and with her knowledge sought to have hotels switch their allegiance from Axiom Bay to BAA. In doing this, I am satisfied that Mr Abbott was breaching the spirit of the restraint of trade clause. It was, in my opinion, quite clear that the third proviso was inserted into the restraint of trade clause so that Mr Abbott would be free to regain employment in the transport industry. But it was also clear that this freedom was to be the limit of his activity; that is, he was permitted to work in the industry so long as his work did not amount to the performance of activities that were proscribed in pars 12(a) and (b).

What then was proscribed by pars (a) and (b)?

In my opinion par (a) was intended to prevent Mr Abbott from approaching those hotels who had used Axiom Bay as a shuttle service to and from the Airport. However, through a slip in the drafting, this objective was not achieved. Pruned down to its barest essentials, par (a) of cl 12, can be read as follows:

"Abbott covenants with the purchase that:-

(a) ... Abbott shall not ...

(i) ...

(ii) ...

(iii) ...

canvas or solicit or place orders for the supply of services of the general description with those supplied by the company in its business ... from any [former] customer or supplier of the company"

The use of the words "place orders", the presence of the preposition "from" and the inclusion of the reference to a "supplier", lead, in combination, to the artificial conclusion that Mr Abbott was prevented from "obtaining" shuttle bus services from a former customer or supplier of such services to Axiom Bay. Properly expressed so as to achieve the intended result the language of the paragraph should have read that Mr Abbott covenants that he will not "canvas or solicit or receive orders for the supply of services of the general description of those supplied by the company in its business to any [former] customer of the Company".

I turn then to consider par (b).

Counsel for Axiom Bay mounted a powerful case in support of his submission that Mr Abbott was more than a mere employee of BAA. I accept counsel's submissions and I find that Mr Abbott was engaged in the management of BAA. First, he acted as a trustee for his wife when he acquired the two buses in his name (he held the necessary licence but she did not). His $30,000 was made available for use in the business and he mortgaged his interest in the matrimonial home to support a loan to the business. He actively approached hotels canvassing for business and he spoke with authority on behalf of the business. Finally, he conducted negotiations with Mr Tucker with respect to the ambit of the activities of the business. All these matters in combination justify a finding that he was more than a mere employee. He worked as a driver for the business but he also performed managerial functions. His activities show that he was an integral part in carrying on the operations of the business.

Clearly the restraint was intended to operate for a term of three years. But with the structure of the clause, the period of three years appears in and qualifies only the restriction in par (a). With respect to par (b), no evidence was led that the radius of five hundred kilometres was unreasonable however that clause specifies no limit as to its duration. This raises the question as to what can be considered a reasonable time for the protection of the legitimate interests of Axiom Bay: see Herbert Morris Ltd v Saxelby [1916] AC 688 at 707. Where as in this case, the duration of a restraint of trade clause is not specifically limited, the burden on the convenantee (Axiom Bay) to prove the reasonableness of the covenant is increased. The effect of par (b) is to prevent Mr Abbott from carrying on or being engaged in the provision of airport shuttle services within a 500 kilometre radius of Axiom Bay for the remainder of his life. While it does not necessarily follow that a restraint of trade for life is void, (Chesire and Fitfoot Law of Contract 6^th Ed. (1992) p519 and see for example Fitch v Dewes [1921] 2 AC 158) in my opinion the non-specification of any time limit in par (b) affords far greater protection for the legitimate interests of Axiom Bay than is adequate. On that basis I regard par (b) as unreasonable and therefore unenforceable.

Probably the correct setting out of cl 12 would have had sub-par (a) commencing with the words "canvas or solicit" with all preceding words governing both canvas and soliciting on the one hand and carrying on business on the other hand. But it is not the task of the courts to rewrite agreements for the parties to correct such errors. The parties cannot confer upon a court the task of making their agreement for them by having the court fix the measure of restraint: Davies v Davies (1887) 36 Ch D 359; Peters Ice Cream (Vic) Ltd v Todd (1961) VR 485, Austra Tanks Pty Ltd v Running (1983) ATPR 40-340. I have expressed my views on the probable intentions of the parties, but I have only done that for the purpose of better explaining the deficiencies in the language of the clause. I have no evidence to support my interpretation of their intentions and it could be that my speculation is amiss. The courts traditionally view restraint of trade provisions with care. They are not always ready to overlook deficiencies in the language of the clause. In my opinion this is a case where findings are warranted that the restraint in sub-par (a) is void for uncertainty and the restraint in sub-par (b) is void for unreasonableness.

It follows that the claim against Mr Abbott for breach contract and the claim against Ms Plume for inducing a breach of contract must be dismissed. If I should be wrong however, and if it should be found that Mr Abbott has breached the restraint of trade clause, I should make it clear that the evidence would overwhelmingly support a finding that Ms Plume induced the breach. But I should also make it clear that I do not believe that Mr Habib has proved any loss as a result. Undoubtedly, there were passengers, particularly passengers to the Airport, who used the services of BAA and who, but for the conduct of Mr Abbott would have used the services of Axiom Bay. But no evidence was led to identify these passengers by number or in monetary terms, and no doubt, some of them might have come from hotels that had not been former customers of Axiom Bay. The duration of any breach of the restraint of trade clause was limited to the period January to June 1996. During that period Axiom Bay continued to trade and it continued to trade thereafter. Perhaps the value of its goodwill was impaired for those five months but it was not destroyed. To suggest, as was faintly suggested during the course of closing submissions, that the losses should be quantified as $30,000 has no substance.

CARLEY ANN PLUME v FEDERAL AIRPORTS CORPORATION & WAYNE TUCKER

The Court Orders That:

1. The application be dismissed.

2. The applicant pay the taxed costs of the respondents.

ANTHONY ZAKI HABIB v CARLEY ANN PLUME & DAVID ABBOTT

The Court Orders That:

1. The application be dismissed.

2. The applicant pay the taxed costs of the respondents.

I certify that this and the preceding thirty-two (32) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Loughlin

Associate:

Dated:

Counsel for the Applicant:	Mr S Apps
Solicitor for the Applicant:	Donaldson Walsh
Counsel for the Respondent:	Mr A Bannon SC
Solicitor for the Respondent:	Blake Dawson Waldron
Date of Hearing:	25, 26, 27, 28 August 1997
Date of Judgment:	3 October 1997