Mikasa (NSW) Pty Ltd v Festival Stores [1972] HCA 69; (1972) 127 CLR 617 (21 December 1972)

HIGH COURT OF AUSTRALIA

MIKASA (N.S.W.) PTY. LTD. v. FESTIVAL STORES [1972] HCA 69; (1972) 127 CLR 617

Constitutional Law (Cth) - Restraint of Trade

High Court of Australia
Barwick C.J.(1), McTiernan(2), Menzies(3), Walsh(4), Gibbs(5).and Stephen(6) JJ.

CATCHWORDS

Constitutional Law (Cth) - Powers of Commonwealth Parliament - Restrictive trade practices - Retail price maintenance - Judicial power of Commonwealth - Power to grant injunction restraining persons from engaging in retail price maintenance practice invested in Commonwealth Industrial Court - Whether within judicial power of the Commonwealth - Freedom of inter-State trade and commerce - Prohibition of retail price maintenance - Whether permissible regulation - The Constitution (63 & 64 Vict. c. 12), ss. 51 (i.), (xx.), 71, 92 - Trade Practices Act 1965-1971 (Cth), ss. 66B (2), 90AA.

Restraint of Trade - Restrictive practices - Retail price maintenance - Withholding of supply of goods to retailer - Withholding "for the reason that" retailer likely to sell below recommended price - Reason for withholding - Price specified as price below &which the goods not to be sold - Whether a recommended price a "specified" price - Power of Industrial Court to make restraining order - Trade Practices Act 1965-1971 (Cth), ss. 66B (2), 90AA.

HEARING

Sydney, 1972, July 25-28, 31; August 1; December 21. 21:12:1972
APPEAL from the Commonwealth Industrial Court.

DECISION

December 21.
The following written judgments were delivered : -
BARWICK C.J. The respondent, Festival Stores, is a firm whose members, as various locations, including the city of Brisbane, a wide variety of goods for household use. In selling in those businesses, the respondent, with whom without repetition I shall include its constituent members, prices its goods below the price fixed or recommended by the manufacturers or wholesalers of such goods, or which, though not so fixed or recommended, is commonly charges by other retail stores in the trading areas in which its own stores are placed. In parlance current in the retail trade and amongst many members of the public, the businesses so conducted are known as "discount houses". I gather that there are many retail businesses so conducted in the major cities of Australia. (at p623)

2. Included in the range of goods in which the respondent deals is dinnerware. The appellant is an importer and wholesaler of, amongst other goods, dinnerware, some from the United Kingdom and some from Japan. Amongst the lines of dinnerware thus imported and sold by the appellant by wholesale are three, one from the United Kingdom referred to in the evidence as "Meakin ware" or "J. & G. Meakin" and two from Japan, one sold under the name "Mikasa" and the other under the name "Premiere". both lines being made by the same Japanese manufacturer. (at p623)

3. Prior to the commencement of the Trade Practices Act 1971 (Cth) (the amending Act), namely, 9th August 1971, the appellant had prepared and circulated to certain retailers a document called in the evidence of the proceedings out of which this appeal arises, a "catalogue", but which would be more accurately described as a price list, of "Mikasa" dinnerware. In its prefatory remarks, the document appears to have been addressed to consumers. It announced only the retail prices of the various lines in the range but the appellant's wholesale price was to be ascertained by deducting a percentage from those retail prices. This percentage had been separately communicated to those retailers. Prior to 9th August 1971 the appellant's practice was to invoice goods purchased by the retailer at the price set out in the document less that percentage, namely thirty-seven and a half per cent. Evidently a principal purpose of the issue of the document was to enable those retailers who were its chosen recipients, mainly the large department stores of the capital cities, to ascertain the wholesale prices at which the goods there listed could be bought. In so far as the retailer might use the document as part of its own display of the dinnerware, it would enable the retailer's customers to ascertain the retail price of the various items of the range of its dinnerware. But it does not appear that the document was distributed to the public at large. However, it is clear from the evidence given in the said proceedings that the "catalogue" enabled, and was intended to enable, each retailer in possession of it to know, without further inquiry, what the other retailers who were supplied by the appellant with "Mikasa" dinnerware were charging for the lines listed in the document ; this on the justified assumption that they had the catalogue and would abide by its retail prices. (at p624)

4. For some time prior to the commencement of the amending Act, the respondent had sought to purchase "Mikasa" dinnerware from the appellant for sale in the "discount houses" of the group. The appellant had consistently refused to supply this dinnerware to the respondent, expressly giving as its reason that its policy was not to supply that line of dinnerware to "discount houses". It did not enlarge upon that statement. In particular, neither in conversation with the representative of the respondent nor in correspondence, it raised no particular objection to the manner in which the respondent merchandised the goods it sold. However, the appellant did offer to supply the other two lines, "Meakin ware" and "Premiere", as to which the respondent's representative was told that there was "no price restriction". (at p624)

5. Presumably in anticipation of the operation of the amending Act the appellant prepared and distributed to the same "outlets" as before, a new "catalogue" in which again only retail prices appeared. The prefatory remarks in this document, however, are not so obviously addressed, if at all, to consumers. This document can properly be called an illustrated catalogue. The column of retail prices on each page where any prices appear is headed "Suggested Retail Price" and at the foot of the column there appears the legend "This is a recommended price only with which there is no obligation to comply." "Prices subject to alteration without notice." In a circular letter covering the distribution of this catalogue the appellant wrote :

"Gentlemen,

Please note this invoice is at wholesale selling price, not as
previously.

Owing to the Retail Price Maintenance Act being
promulgated it is now necessary to invoice in this manner.

You will find in our catalogue a recommended retail price
with which by law there is no obligation to comply.

Yours faithfully,
MIKASA (NSW) PTY. LTD." (at p625)

6. After the commencement of the amending Act, the appellant invoiced "Mikasa" dinnerware sold to retailers at the amount of the discounted retail price, without reference to that price or the percentage rate of the discount. But in fact, to the knowledge of the retailers, the wholesale price was calculated and ascertained in exactly the same fashion as before. (at p625)

7. After the commencement of the amending Act, the appellant continued to refuse to supply "Mikasa" dinnerware to the respondent maintaining its same reason for doing so. The respondent, having been refused supply of this dinnerware, on 3rd September 1971, obtained from a judge of the Commonwealth Industrial Court an order calling on the appellant to show cause why it should not be restrained from engaging in the practice of resale price maintenance in respect of "Mikasa" dinnerware. This was a procedure authorised by s. 90AA and the definition of "the Court" in s. 5 of the Trade Practices Act 1965-1971 (Cth) (the principal Act, as amended). The Industrial Court, after an extensive hearing in which oral and documentary evidence was given and tendered both on behalf of the appellant and of the respondent, found that, in fact, the appellant had withheld from the respondent the supply of "Mikasa" dinnerware for the sole reason that the respondent was likely to sell such dinnerware at less than the suggested price in the appellant's catalogue, a price which the Court concluded was, for the purposes of s. 66B (2) (d) (ii) of the principal Act, as amended, the price specified by the appellant as the price below which the goods were not to be sold. Accordingly, the Court granted the respondent's application and restrained the appellant from engaging in the practice of resale price maintenance in respect of tableware marketed by the respondent under the trade name "Mikasa" [1972] HCA 69; (1971) 18 FLR 260 . (at p625)

8. The appellant appeals to this Court, by its leave, from the whole of the judgment and order of the Commonwealth Industrial Court. The grounds of appeal include the following :

"(1) THAT the Trade Practices Act 1965-1971 is not a valid
exercise of the legislative power of the Commonwealth
Parliament AND the said Act is wholly invalid.

(2) THAT the validity of the Trade Practices Act 1971 was
conditional and dependent upon the validity of certain
parts of the Trade Practices Act 1965-1969 which were
held to have been at all times were invalid.

(3) THAT the provisions of the Trade Practices Act 1971
under the terms of which the orders and decrees were
purportedly made against MIKASA (N.S.W.) PTY. LIMITED
are invalid as contravening s. 92 of the constitution of the
Commonwealth of Australia.

(4) . . .

(5) . . .

(6) THAT the provisions of the Trade Practices Act 1971
purporting to confer certain jurisdiction upon the
Commonwealth Industrial Court as in the said Act set forth
are invalid as purporting to invest the said Court with
certain non judicial powers, contrary to the provisions
of the said constitution.

(7) . . .

(8) . . .

(9) . . .

(10) THAT on the evidence it was not shown that MIKASA (N.S.W.) PTY. LIMITED was engaged in the practice of

resale price maintenance.

(11) THAT the Commonwealth Industrial Court misconstrued the words 'for the reason that' appearing in the said

Trade Practices Act 1965-1971 s. 66B (2) (d).

(12) THAT there was no evidence upon which it was open to the Court to hold that 'the sole reason' that MIKASA

(N.S.W.) PTY. LIMITED withheld supplies from FESTIVAL
STORES was that it was likely to sell goods for less than
the prices specified.

(13) THAT the said Court misconstrued the meaning of the words 'price specified' and 'price below which the

goods are not to be sold' where appearing in s. 66B
(2) (d) (ii) of the Act.

(14) THAT there was no evidence upon which it was open to the said Court to find that MIKASA (N.S.W.) PTY.

LIMITED had 'specified' a price as one 'below which
the goods are not to be sold'." (at p626)

9. No argument was presented in support of the first ground of appeal, nor have I any reason to think that the Act as a whole is invalid. (at p626)

10. The submission in support of the second ground of appeal was founded basically upon a literal application of remarks made by me in my reasons for judgment in Strickland v. Rocla Concrete Pipes [1971] HCA 40; (1971) 124 CLR 468, at pp 498-499 . The passage, occuring at the end of these reasons, is as follows :

"Therefore perfoming to the full the duty which I conceive
to be imposed upon me by s. 15A, I am unable so to construe
the Parliament's enactment as to disclose a law with respect
to foreign corporations and trading and financial corporations
formed within the limits of the Commonwealth. Therefore
though I am clearly of opinion that the Parliament could have
made a valid law in the terms of the Act specifically limited
either as the sole or as a separate part of its operation to
agreements made or practices followed by such corporations,
I am of opinion that it has not done so. Indeed, because of the
manner in which the Parliament has expressed its enactment,
the Act is in my opinion wholly invalid. It purports to
impose obligations upon all persons who make the agreements
or follow practices of the described kind in relation to all forms
of trade and its terms are incapable of being construed in any
more limited sense."

Upon this it is said that Pt II of the Trade Practices Act 1965-1969 (Cth) (the principal Act) was invalid so that the Trade Practices Tribunal was never constituted at all. It is then said that Div. 2 of Pt VIA inserted by the amending Act is an indispensable part of the scheme of the amending Act so that, if an exemption from the application of Pt VIA cannot be obtained for want of a tribunal to grant it, that Part is invalid or at the least inoperative. (at p627)

11. However, whilst my quoted expression in referring to the Act was clearly incautious, the meaning of the passage, in the context of my reasons as a whole, is, in my opinion, clear enough. I found myself in that case unable by the use of s. 15A of the Acts Interpretation Act 1901-1966 (Cth) to discover in Pts V and VI of the principal Act a law with respect to foreign corporations and trading corporations formed within the limits of the Commonwealth and, at the same time, a law with respect to foreign and interstate trade. Consequently, so far as the Act purported to impose the obligations to which I referred in the passage I have quoted, the Act was, in my opinion, invalid. No attention had been paid in the case to ancillary provisions such as are found in Pt II of the principal Act and no submission was made as to the validity of that Part. My remarks ought to be confined to the provisions of Pts V and VI of the principal Act which were under consideration. A conclusion that I held Pt II to be invalid ought not to be drawn. In any case, no other Justice participating in the decision of Strickland v. Rocla Concrete Pipes Ltd. [1971] HCA 40; (1971) 124 CLR 468 held or suggested that Pt II was invalid. (at p627)

12. Reviewing the principal Act again, I can see no reason why that Part should not stand, though other parts of the principal Act were invalid. The tribunal's functions were not assigned in or by that Part : nor did any provision of that Part, or of any other part of the Act, deny the possibility of functions, other than those arising under Pts V and VI of the principal Act, being assigned to it. Indeed, the principal Act in Pt XA gives some scope to the tribunal. Consequently, in my opinion, the appellant fails on the second ground of appeal. (at p628)

13. The third ground of appeal raises a matter not raised before the Industrial Court. A question immediately arises as to the appellant's interest to challenge the constitutional validity of s. 90AA. As it happens, a sufficient description of the appellant's method of business was given before that Court to enable a decision to be made by this Court as to whether the appellant had an inter-State trade in "Mikasa" dinnerware either at the inception of the proceedings before the Industrial Court or in actual contemplation at that time. Having examined the evidence and considered the submissions on this aspect of it made by counsel for the appellant, I am of opinion that the appellant had no such trade and consequently had no interest, founded on the impact of the Act itself on its inter-State trade, to raise the invalidity of the principal Act, as amended, based on s. 92 of the Constitution. All that the appellant established was that by contracts made in Sydney it sold "Mikasa" dinnerware for delivery in Sydney but, on occasions, accepted instructions from the buyer to forward the purchased goods to an address in a State other than New South Wales. Delivery of goods from this State to another State was not contractually a part of the transaction of sale. Even in cases where the appellant agreed apart from the transaction of sale to forward to another State goods brought by the purchaser, the evidence left open the possibility that the goods in fact delivered in the other State were delivered out of stocks held in that other State. (at p628)

14. However, the injunction granted by the Industrial Court restrains the respondent "from engaging in the practice of resale price maintenance in respect of tableware marketed by the respondent under the trade name 'Mikasa'". Resale price maintenance is not defined by a formula of words : but s. 66B (2) of the principal Act, as amended, specifies six groups of acts which, if done will amount to engaging in the practice of resale price maintenance. Thus, the injunction covers the performance of all these acts and in so far as any of them may be done in the course of trade and commerce between the States, it purports to preclude the appellant from performing any of these acts in the course of that trade and commerce. As this injunction is perpetual, it may be that its terms afford the appellant a sufficient interest to challenge it as offending the constitutional guarantee. The matter having been fully argued, I will, therefore, consider whether such a restraint offends s. 92 without deciding the question of the appellant's interest to raise the objection to the width of the injunction. This course will involve examining the validity of those provisions of the Act which form the basis on which such an injunction may be granted. (at p629)

15. The provisions of Pt VIA of the principal Act, as amended, are not constitutionally based exclusively on s. 51 (i.). So far as the appellant is presently concerned and its intra-State trade is concerned, they are referable to s. 51 (xx.). However, both heads of legislative power are subject to the Constitution, and thus to s. 92. (at p629)

16. It is clear that the provisions of Pt VIA and the orders which they authorize may include in their operation activities in interState trade and commerce. Section 66B renders unlawful the performance of the various acts it describes. No question of indirection arises. The acts themselves are directly proscribed. Thus, to the extent to which the Act and orders made thereunder embrace in their operation acts of iner-State trade and commerce, the Act and such orders would transgress the constitutional guarantee unless these provisions of the Act, including the authorization of the making of orders, are in their nature regulatory, in the relevant sense. Otherwise they constitute an inadmissible impairment of inter-State trade and commerce. (at p629)

17. I have expressed myself on other occasions as to the relevant concept of regulation in connexion with the constitutional guarantee of freedom of trade, commerce and intercourse between the States. There is no need for me to repeat what I have said. Suffice it to say that further consideration, particularly of decisions of this Court since last I had occasion to express them, afford, in my opinion, no reason to change or qualify those views. To my mind, basically, the law to be relevantly regulatory must in its nature and in the extent of its reach be concerned with the accommodation of the activities of members of the Australian community each to other, particularly in matters of trade and commerce, so that it can properly be said that each is free to engage in such trade and commerce. For example, see generally Samuels v. Readers' Digest Association Pty. Ltd. [1969] HCA 6; (1969) 120 CLR 1, at pp 14-17, and cf. O'Sullivan v. [1966] HCA 64; (1966) 115 CLR 177, at pp 184-185. (at p629)

18. It was early thought that the Australian Industries Preservation Act 1906-1930 (Cth) was valid, though the question-begging description of "illegitimate methods of trading" was said to be its aim : see James v. The Commonwealth (1936) 55 CLR 1, at pp 54-55 . That Act, in its attempt to control monopolisation, is broadly of the same nature as Pt VIA of the principal Act, as amended. The essence of the practice of resale price maintenance, though its manifestations may be various, is the endeavour of a vendor of goods to restrict the purchaser's ability to sell his goods at prices of his own designation and thereby to extend the control by the vendor of the market in the goods. This endeavour, when not restrained by law, can be successful because of the relevant positions of the parties, the vendor to be able to exact the purchaser's assent to the restriction being, in some way, in an advantageous or overpowering position. Monopolising, and other methods and devices designed to distort the market in goods and to limit the ability of traders to trade therein, have long been regarded as unacceptable in a free society. Their prohibition or control has from time to time been accepted as a proper adjustment of the rights inter se of traders in the market. It seems to me that a law preventing entirely or sub modo such a practice as resale price maintenance is no more than a law accommodating the liberty of the vendor to trade to the liberty of the purchaser to trade, each under the law to be free, in the proper sense of that word, to trade in the goods. Part VIA of the Act is, in my opinion, relevantly, in its nature, a regulatory law. (at p630)

19. It may well be that not all forms which such a practice may take are necessarily inimical to the ability of persons to trade in commodities : indeed, it may even be that some forms of the practice may in some circumstances be conducive to the maintenance of the ability of some persons to trade. But even so, the reach of Pt VIA is not so extensive as, by the extent of the area it covers, to depart from what I conceive to be its essentially regulatory nature. Being of that nature, it is for the legislature to decide the extent to which there should be legislative interference with the ability of a vendor to engage in the practice of resale price maintenance. It would follow, in my opinion, that the statutory authority to enjoin the carrying on of the practice so far as concerns the constitutional guarantee, is valid, not because it forms part of the legal framework of the society but because it is in its nature truly regulatory. I am of the further opinion that the terms of the injunction do not transgress s. 92 of the Constitution. The appellant therefore fails on the third ground of appeal. (at p631)

20. The sixth ground raised by the appellant was that s. 90AA of the principal Act, as amended, purported to vest non judicial powers in the Industrial Court contrary to the provisions of Ch. III of the Constitution as interpreted in Reg. v. Kirby ; Ex parte Boilermakers' Society of Australia (1956) 94 CLR 254 . The submission is that as the Act does not define any principles or criteria upon or subject to which the Court should exercise its discretion to grant, or as to the terms on which it should grant, injunctions to restrain the practice of resale price maintenance, the function it would exercise in granting an injunction pursuant to s. 90AA is an executive and not a judicial function. I have found it difficult to perceive the basis for this submission. It seems ultimately to fasten upon an absence of a criminal sanction for carrying on the practice of resale price maintenance. But the Act clearly proscribes the acts which it includes in its specification of the practice. It conditions the power to enjoin upon the breach in fact of that proscription. The determination that there is such a breach in fact is clearly a judicial function. Injunction to restrain an act in breach of a statute, particularly where that act is not made a criminal offence, is clearly, in my opinion, a judicial function and one traditionally performed by courts, where damage to an individual or his property results from that act. Latterly, the courts have come to enjoin breaches of statute which are in themselves breaches of the criminal law where the statute does not indicate that the criminal penalty is to be the sole sanction for the observance of the terms of the statute. (at p631)

21. It seems to me that there is no substance in the submission that lack of statutory directions as to the manner in which the discretion to enjoin should be exercised, where breach of the statutory proscription is established to the court's satisfaction, renders the grant of the power to enjoin invalid either as non judicial or for any other reason. (at p631)

22. It is also submitted that the injunction not to engage in the practice of resale price maintenance ranges much more widely than the extent of the breach of the statute which had been proved and was for that reason beyond the statutory power to grant an injunction. To express this in the particular circumstances of the instant case, it was pointed out that the Court was satisfied that the appellant had refused to supply the goods in question to the respondent for the sole reason that the respondent was likely to sell the goods at a price less than the price specified below which the goods are not to be sold ; yet the injunction if valid perpetually restrains the appellant from doing any of the acts which are included in any of the sub-sections of s. 66B and not merely the act which was found to have been committed. (at p632)

23. As such a course, in my opinion, is plainly authorized by s. 90AA which gives power to grant an injunction restraining the person who has engaged in the practice of resale price maintenance from engaging in that practice in respect of specified goods, in my opinion, the section must not be construed as limiting the power of the Court to grant an injunction to restrain the particular form of resale price maintenance in which it has, in fact, found the person to have been engaging. Consequently, so far as this submission goes to the validity of s. 90AA, in my opinion, it fails. Equally, in so far as it goes to the propriety of the order in fact made in this case, in my opinion, it fails. Of course, it seems to me the Industrial Court ought to consider in each case what injunction it will grant but may properly decide to take the course followed in this case. (at p632)

24. I shall now deal with the remaining grounds of appeal. They raise the sufficiency of evidence to support, and the propriety of, some of the findings of fact made by the Industrial Court and challenge in several respects the construction placed by that Court upon s. 66B of the principal Act, as amended. After what was obviously a most careful and thorough examination of the evidence tendered before it, the Industrial Court found that prior to the commencement of the amending Act the appellant had been engaging in the practice of resale price maintenance in "Mikasa" dinnerware, and that by its new catalogue and the letter which accompanied its circulation the appellant had conveyed and had intended to convey to the retailers who formed its exclusive outlets for "Mikasa" dinnerware that its course of business would remain as before except that the manner in which the goods were invoiced would be changed. (at p632)

25. The appellant's case before the Industrial Court and in correspondence with the respondent was and had been that the possibility of price cutting by the respondent was not in the appellant's mind when refusing to supply "Mikasa" dinnerware. Rather than that, the reason why the appellant refused the supply was the respondent's manner of merchandising the wares which it did sell, the appellant claiming that that method of merchandising and of display or the lack of it would endanger what was said to be the image which the appellant had with some expenditure of money and energy built up for "Mikasa" dinnerware. However, the Court refused to accept the evidence of the appellant that the likelihood that the respondent would sell "Mikasa" dinnerware if supplied to it at less than the catalogued prices formed no part of the considerations which led the appellant to refuse supply of those goods. (at p633)

26. No doubt this refusal to believe the appellant's assertions in this respect stemmed in part from the observation of those who gave the evidence as well as from the high improbability that it could be true. The Court concluded on the evidence and the correspondence passing between the parties that the sole reason why the appellant refused the respondent the supply of the "Mikasa" dinnerware was that the respondent was likely to sell that dinnerware if supplied to it at prices less than the prices recommended in the new catalogue. The Court further held that that recommended price was in the circumstances and in relation to the refusal by the appellant to supply the goods the specification of a price below which the goods were not to be sold within the meaning of s. 66B (2) (d) (ii). (at p633)

27. Having read the transcript of evidence and considered the extensive arguments of counsel put to this Court in support of the appellant's contentions I am fully satisfied that there was evidence on which the Industrial Court could reach all the conclusions of fact to which I have referred. Further, I am of opinion that it is not shown that that Court was wrong in making any of those conclusions of fact. Indeed, the full and clearly expressed judgments of the Industrial Court furnishing its reasons for so concluding are to my mind convincing. Accordingly, I would not disturb any of those findings of fact. On the contrary, I accept them for the purpose of resolving this appeal. (at p633)

28. There are, however, conclusions of law involved in the application of those findings to the circumstances of the case in order to reach the ultimate conclusion that the appellant had engaged in the practice of resale price maintenance in relation to "Mikasa" dinnerware after the commencement of the amending Act. I shall deal with them seriatim. (at p633)

29. First of all it was submitted that s. 66B (2) (d) (ii) applied only in respect of goods which had already been supplied to the person who was seeking a further supply which further supply had been refused. It was said that the expression "is likely to sell goods supplied to him by the supplier" referred only to goods which had already been supplied and that the expression was inapt to include goods which would have been supplied if the supply had not been withheld. Counsel pointed to the circumstance that in par. (e) (ii) of that sub-section there was included the expression "goods supplied to him, or to be supplied to him". Attention was thus called to the contrast between that formula and the formula used in par. (d). However, in my opinion, the subject matter of par. (e), including as it does the expression "has obtained, or wishes to obtain" in the opening parts of the paragraph, clearly differentiates the two paragraphs and makes the presence of the words "or to be supplied to him" both natural and necessary in par. (e), whereas there are no circumstances in relation to par. (d) which, in my opinion, would require the inclusion of those words. It is hardly likely that the Parliament should have intended to confine par. (d) (ii) to persons who had had at least one supply of the goods from the supplier and to have excluded from the operation of the paragraph persons who were seeking the supply of the goods for the first time. Grammatically the expression "is likely to sell goods supplied to him by the supplier" is quite inapt at the one time to include goods supplied and goods to be supplied, particularly in the context of a provision dealing with the withholding of supply. The sense of the provision, in my opinion, is that the supply has been withheld for the reason that the person from whom it has been withheld is likely to sell the goods, if supplied to him, at a price less than the price specified. In my opinion that is the proper construction of the paragraph and this submission of the appellant should be rejected. (at p634)

30. It was then submitted that the expression "for the reason that" meant for the reason only that or for the sole reason that. The Industrial Court found that in fact the sole reason for the withholding by the appellant of the supply of "Mikasa" dinnerware from the respondent was that the respondent was likely to sell the dinnerware at less than the recommended price. As I have said, I would not disturb that finding, but, in my opinion, it was not necessary to make that finding in order to establish that the appellant had in this case engaged in the practice of resale price maintenance in the "Mikasa" dinnerware. In my opinion it is not correct to so emphasize the participle in the phrase "for the reason that" as to interpret the paragraph as requiring the withholding of the supply to be for one reason only. In my opinion, if the likelihood that the would-be purchaser would sell at less than the specified price is an operative reason for withholding that supply, the supplier engages in the practice of resale price maintenance, however many other reasons the supplier may in fact have for not supplying the goods to the would-be purchaser. The likelihood of price cutting is not required, in my opinion, to be the predominant reason ; it is enough if it is an operative reason, that is to say, a substantial reason in the totality of reasons for the withholding of the supply. There was abundant evidence on which this lesser conclusion of fact could have been drawn in this case. Understandably, the Industrial Court did not credit the assertion that the appellant was moved only by considerations which did not include the possibility of price cutting. After all, the predominant feature of a discount house is, I gather, that it sells at prices less than those charged in other parts of the trade. The appellant's sole reason given to the respondent for the refusal to supply was that the respondent was a discount house. But even if the other reasons now given by the appellant for withholding supply had been operative in its decision to follow that course, the appellant, in my opinion, ought to have been found to have engaged in the practice of resale price maintenance in the "Mikasa" dinnerware, the likelihood that the respondent would sell below the recommended price being also a reason for withholding supply. (at p635)

31. The last matter of law which was raised by the appellant's counsel was that the price recommended in the new catalogue could not be regarded as "the price below which the goods are not to be sold" within the meaning of s. 66B (2) (d). The essential matter to bear in mind, in my opinion, when construing and applying par. (d) is that it is dealing with a situation in which a sale has not taken place. It is not possible, therefore, to regard the expression "below which the goods are not to be sold" as being referable to an agreement of sale or to a contractual or other obligation arising out of or connected with a sale. If it be rightly concluded that an operative reason for the withholding of the supply by the appellant was that the respondent was likely to sell the goods, at some price which did not have the approval of the appellant, it seems to me to follow that the appellant in this case has refused to supply the respondent because the respondent was likely to sell at less than that approved price which in this case was the price recommended in the new catalogue. There can be little question, in my opinion, that the recommended price was a specified price and that it was specified by the appellant. It also seems to me to follow that that price is the price below which, so far as the appellant is concerned, the goods are not to be sold. In relation to a refusal to supply because the intending purchaser is likely to sell below that specified price the Industrial Court was correct in concluding that that specified price was the price below which the goods were not to be sold. (at p636)

32. The Industrial Court reinforced its conclusion by its view that the proper inference from the catalogue and the covering letter was that the appellant was intending to inform its retail customers that though there may be no legal obligation by virtue of the purchase of the goods to sell at the recommended price, the failure to observe the recommended price could be visited with other consequences. In my opinion, the Industrial Court was correct in drawing that inference from the documents in the circumstances of the case. Accepting that inference, it seems to me correct to say that the recommended price in the catalogue was a price specified by the appellant below which the goods were not to be sold by its customer retailers. Thus, whether the matter be looked at in relation to the individual transaction with the respondent or rather the refusal to have a transaction with the respondent or whether one looks at it in relation to the appellant's dealing in general with its selected retail outlets the Industrial Court was correct in concluding that there was a price specified by the appellant below which the goods were not to be sold. Section 66C does not, in my opinion, afford a protection to the appellant because that section is restricted in its operation to the recommendation as a single circumstance. In this case there is more than the mere recommendation on which to found the conclusions to which I have just referred. (at p636)

33. The Industrial Court found that the provisions of s. 66D had been satisfied in the circumstances of this case and used that circumstance as an alternative basis for concluding that the appellant had engaged in the practice of resale price maintenance. However, as I am of opinion that the Industrial Court was justified in concluding, without the aid of s. 66D, that the appellant had engaged in resale price maintenance I find no need to consider whether or not the requirements of s. 66D were satisfied in this case. (at p636)

34. In the result, I am of opinion that the appellant fails in respect of all the submissions which were made on its behalf and I would dismiss the appeal. (at p636)

MCTIERNAN J. In my opinion the appeal should be dismissed. I have read the reasons of the Chief Justice. I concur substantially in his Honour's opinion that none of the grounds of appeal has been made good. (at p636)

MENZIES J. This is an appeal, by leave, from a decision of the Commonwealth Industrial Court determining that the appellant had, contrary to Pt VIA of the Trade Practices Act 1965-1971, engaged in the practice of resale price maintenance in relation to Mikasa tableware, and restraining it by injunction from continuing to do so [1972] HCA 69; (1971) 18 FLR 260 . (at p637)

2. The Trade Practices Act 1965-1969 was, on 9th August 1971, amended to include Pt VIA - Resale Price Maintenance. The new provisions made it unlawful to engage in the practice of resale price maintenance and provided for the taking of proceedings by, inter alia, a person who has suffered loss or damage by reason of another engaging in the practice. The respondents sued on the basis that they were within this category of persons. (at p637)

3. It was common ground that the appellant had, after 9th August 1971, refused to sell Mikasa ware to the respondents who are all what is known as discount houses, and whose method of business it is to sell their goods to the public at less than prevailing retail prices. If this withholding of supply to them did amount to engaging in resale price maintenance, it is clear enough that the respondents suffered loss or damage thereby and so established their right to sue. (at p637)

4. The respondents' companies trade together as Festival Stores. Festival Stores and two like concerns form a buying group. Behind this group stands National Investments Ltd. of which the various companies in the groups are subsidiaries. One Waldron was, at all times material, the Group's Merchandising Manager. The turnover of the group was currently of the order of $23,000,000 a year. (at p637)

5. The appellant, although it did not do so in the Commonwealth Industrial Court, now challenges the validity of Pt VIA of the Act on various grounds. It also contests the correctness of the conclusion of the Commonwealth Industrial Court that upon the proper construction of the Act, it has, since 9th August 1971, engaged in the practice of resale price maintenance in relation to the respondents. (at p637)

6. It is convenient to deal first with the various challenges to the validity of the Act. (at p637)

7. The first contention is that the Trade Practices Act 1965-1971 is wholly invalid because it is dependent upon the Trade Practices Act 1965-1969 and, in the Strickland Cases [1971] HCA 40; (1971) 124 CLR 468 , it was decided that that Act was wholly invalid. This contention fails at the outset because in the Strickland Cases [1971] HCA 40; (1971) 124 CLR 468 , the Court did not so decide. At most, there is to be found in one of the judgments what may be thought to be a too generally expressed conclusion that the Act is wholly invalid (1971) 124 CLR, at pp 498-499 . In those cases, however, it was the validity of ss. 35, 41, 42 and 43 of the Trade Practices Act 1965-1969 that was in issue and there is in none of the judgments reasoning that impugned the Act as a whole. It is therefore unnecessary to consider the further element in the contention that, by reason of the supposed dependence, the 1971 Act has no force or effect. It may be said, however, that there would be considerable obstacles in the way of the acceptance of this contention. (at p638)

8. Secondly, it was contended by counsel for the appellant that the power, given to the Commonwealth Industrial Court by s. 90AA of the Act, to grant an injunction, is not judicial power and that the section is consequently invalid. The Commonwealth Industrial Court is, of course, a federal court created under s. 71 of the Constitution and, according to the decisions, it can have judicial power only. I have no doubt, however, that the power conferred by s. 90AA is judicial power and nothing more. It is a power, in proceedings between parties with respect to a matter at issue between them, to grant an injunction to restrain what, in such proceedings, is found to be an unlawful practice. The moving party may be (a) the Attorney-General, (b) the Commissioner of Trade Practices or (c) a person who has suffered loss or damage by reason of another person having unlawfully engaged in resale price maintenance. To fall within the conception of judicial power, it is not necessary that the jurisdiction conferred to grant an injunction should be conditioned by what a court of equity would, in ordinary cases, require before granting an injunction. A new jurisdiction can be conferred upon a federal court provided that there is a "matter" between parties and that any discretion conferred upon such a court to grant or refuse an injunction in the determination of that matter, is a judicial discretion. These elements are plainly present in s. 90AA. The present proceedings are not at all unlike proceedings for an injunction by a person who has suffered special damage by reason of a public nuisance. The point was made that although the practice of resale price maintenance is made unlawful, no criminal proceedings lie against a person who engages in that practice. This consideration does not seem to me to carry any implication about the character of s. 90AA which provides for legal proceedings against a person said to have engaged in the unlawful practice. By taking such proceedings the moving party raises for determination a matter, namely, (1) whether the other party has engaged in unlawful practice, (2) if so, whether the moving party has thereby suffered loss or damage, and (3) if so, whether in the exercise of judicial discretion an injunction should be granted to restrain continuance of that practice. The second ground of constitutional invalidity taken therefore fails. (at p639)

9. The third ground of attack is founded upon s. 92 of the Constitution. This challenge could perhaps be disposed of merely by saying that the appellant who had refrained from raising such a constitutional issue in the Commonwealth Industrial Court established no sufficient foundation in those proceedings to give it the standing to make such a challenge in this Court. It might suffice to say that it has not been shown that the injunction which has been granted would interfere with the freedom of the appellant's inter-State trade because the evidence did not show either that the appellant had any inter-State trade in Mikasa ware or that it intended to engage in such trade therein. The evidence is consistent with the appellant meeting any orders which it might receive for Mikasa ware from stocks in the State in which delivery is to be made, or, from stocks outside that State, without any obligation to deliver from such stocks. The movement of goods from one State to another is, of course, itself part of inter-State trade, but the problem with which we are here concerned is an altogether very different problem, namely whether the injunction would interfere with what is, or would be, inter-State trade between the appellant and its customers - see W. & A. McArthur Ltd. v. Queensland [1920] HCA 77; (1920) 28 CLR 530, at pp 532, 534 , and the order (1920) 28 CLR, at p 570 . From the pleadings and the order, the limited character of the decision is apparent. (at p639)

10. However, because the injunction granted would restrain the appellant from engaging in the practice of resale price maintenance in the course of any inter-State trade which it might establish in relation to Mikasa ware, it is, I think, proper to deal with the issue which has been fully argued, namely, whether the provisions of Pt VIA of the Act making the practice of resale price maintenance unlawful and providing for the granting of injunctions to restrain such practice can validly apply to transactions of inter-State trade. (at p639)

11. In The Commonwealth v. Bank of New South Wales (1949) 79 CLR 497, at p 639 , the Privy Council said, inter alia, that the regulation of inter-State trade is compatible with its absolute freedom. This concept has since been examined in this Court upon a number of occasions which it is not necessary to enumerate. The idea has not, I think, been expounded more clearly than was done by Kitto J. in Hughes and Vale Pty. Ltd. v. New South Wales (No. 2) [1955] HCA 28; (1955) 93 CLR 127, at p 218 and in Greutner v. Everard [1960] HCA 33; (1960) 103 CLR 177, at p 188 . I content myself with citing a passage from the latter case which I regard as epitomizing what is accepted doctrine [1960] HCA 33; (1960) 103 CLR 177, at p 188

"When s. 92 speaks, as it does, of trade, commerce and
intercourse as activities among organized communities, it
quite evidently speaks of them as carried on not amidst
anarchy, but in conformity with rules. In whatever terms
it may be right to define the class of rules which is postulated,
because of the very nature of the communities the definition
must at least be wide enough to include a law of general
application limiting the permissible dimensions of the units of
traffic on the roads and wearing no other aspect than that of a
law directed to the obviating of physical damage to persons
or property. For the purpose of determining whether a law
is of such a description considerations of the need for it or of
its reasonableness may conceivably be relevant in some
circumstances.But once the description is found to apply, it cannot
matter, in my view, whether the restriction appears necessary
or reasonable, large or small, regarded either generally or in
relation to the circumstances of a particular case. For in any
event the law, because of its character, must be conceded a
place as part of the legal framework within which s. 92
contemplates inter-State trade, commerce and intercourse as
being freely carried on."

This passage indicates the character of regulation that is compatible with s. 92. I referred to the same concept in Samuels v. Readers' Digest Association Pty. Ltd. [1969] HCA 6; (1969) 120 CLR 1, at p 40 in connexion with a law prohibiting undesirable selling practices. In my opinion, the provisions of the Act with respect to resale price maintenance are laws of the same character. It is, of course, obvious that not every regulation of trade which is imposed by the Commonwealth Parliament or a State Parliament falls within this description of permissible regulation but resale price maintenance is a practice that has so generally been found to require legislative regulation in the public good that I have no difficulty in concluding that to regulate it as has been done by Pt VIA of the Act is to do no more than provide part of the legal framework within which inter-State trade may be freely carried on. Part VIA of the Act can stand with s. 92 of the Constitution (at p640)

12. In my opinion, the constitutional challenges to Pt VIA of the Act fail. (at p640)

13. The appellant's further argument was that the Commonwealth Industrial Court, in finding as it did that the appellant had engaged in the practice of resale price maintenance, misconstrued some of the provisions of Pt VIA and wrongly applied that Part to the trading practices of the appellant. The construction of the relevant provisions and the findings of the Commonwealth Industrial Court upon the facts can conveniently be considered together. (at p641)

14. In s. 66B (2) of the Act, there are set out a number of trading practices which constitute engaging in the practice of resale price maintenance. What was found against the appellant was that it, being a supplier, had withheld Mikasa ware from the respondents for the reason that they were likely to sell Mikasa ware supplied to them by the appellant at a price less than the price specified by the appellant as the price below which the goods were not to be sold. To form a proper appreciation of the arguments of counsel for the appellant, I find it necessary to set out s. 66B (2) (d) (ii) in full.

"66B. (2) Subject to this Part, a person (in this section
called 'the supplier') engages in the practice of resale
price maintenance if -

. . .

(d) the supplier withholds the supply of goods to a
second person for the reason that the second
person -

(i) . . .

(ii) has sold, or is likely to sell, goods supplied
to him by the supplier, or goods supplied to
him by a third person who, directly or
indirectly, has obtained the goods from the
supplier, at a price less than the price specified
by the supplier as the price below which the
goods are not to be sold ;" (at p641)

15. The appellant's first argument against the findings of the Commonwealth Industrial Court depended upon the construction which was sought to be put upon the words "for the reason that". The Court decided that the evidence showed that the price cutting methods of trading of the respondents was the one and only reason why the appellant withheld supples of Mikasa ware from the respondents. Had I been in the position of the Court I doubt whether I would have reached a conclusion so exclusive and so exhaustive, for in business affairs it is usual to find that a course of action has been adopted for a number of reasons, and I am disposed to think that the appellant's policy in relation to Mikasa ware was not adopted for only one reason. However, it was open to the Court to find as it did. This finding made it unnecessary for the Court to decide whether the words "for the reason that" meant "for the sole reason" or could be satisfied by something else. It was stated, however, that there was a good deal to be said in favour of the view that the sub-section covered a case where the reason specified therein is not the only reason for the withholding. It is my view that if the goods would not have been withheld had it not been for the likelihood of price cutting the withholding which occurred does then fall within the description in s. 66B (2) (d) even if the supplier had additional reasons for withholding supplies. Accordingly, as to this matter, my conclusion is that there was evidence upon which the Court could decide as it did but, in any event, it was not necessary to go as far as to find that the likelihood of price cutting was the only reason for withholding supplies. Evidence to the effect that the practice of the respondents in trading at a discount had nothing to do with the withholding of supplies of Mikasa ware, was, in the light of other evidence, quite incredible and the Court did not believe it. The conclusion that the appellant would not supply the respondents with Mikasa ware except upon conditions as to their selling price was not only open, it was correct. The argument for the appellant based upon the words "for the reason that" to take the appellant outside s. 66B (2) (d) accordingly fails. (at p642)

16. It was further argued that the appellant was outside s. 66B (2) (d) (ii) because the phrase "goods supplied" therein meant goods which had been supplied and as the appellant had not supplied any Mikasa ware to the respondents the terms of the sub-section were not fulfilled. The strength of this argument depends largely upon the use of the words "goods supplied" in s. 66B (2) (e) and (f) where, by reason of the context, it is plain that the words do mean goods which have already been supplied. There is, however, no such context in s. 66B (2) (d) (ii) itself, and it seems to me that the words as used there do cover not only goods supplied in the past but goods supplied in the future. I would not restrict the words "likely to sell goods supplied" as confined to the future sale of goods already supplied. The appellant's argument based upon the words "goods supplied" accordingly fails. (at p642)

17. Next, it was argued by counsel for the appellant, that the appellant had not specified a price as a price below which Mikasa ware was not to be sold. Here some consideration of the evidence upon which the Commonwealth Industrial Court made a finding to the contrary is necessary. Before the introduction of the bill for the Trade Practices Act 1971 to include the provisions here in question, the appellant had, without doing anything unlawful or exposing itself to proceedings, engaged in resale price maintenance. It appears that Mikasa table ware is not only a high-quality product but it has been the fixed aim of the appellant to secure for it in Australia a reputation making it attractive to retail buyers who are concerned to buy something which is regarded as exclusive, notwithstanding that there may be other less fashionable goods of like quality available at a lower price. In pursuit of this reputation, not only has there been specialized advertising but some attention has been paid by the appellant to the manner in which Mikasa ware has been displayed by some retailers. The appellant indeed made the large claim that its policy was to supervise the retailers of Mikasa ware generally but that claim broke down when it appeared that many hardware stores throughout the country stock Mikasa ware without any such supervision from the appellant. Nevertheless, the appellant's general policy was clearly enough to make and keep Mikasa ware as an exclusive line to be sold, in general, at uniform prices. It was a recognition of this policy in relation to Mikasa ware that the appellant indicated that it was ready to supply the respondents with Premier ware - said to be of equal quality to Mikasa ware but without its exclusive appeal - without any restriction as to its retail selling price. J. & G. Meakin ware was also available to the respondents without restriction as to selling prices. (at p643)

18. In the days when there was no need to worry about the lawfulness of resale price maintenance, the appellant did use a price list which specified the retail prices of Mikasa ware. Goods were sold and invoiced to retailers at prices calculated by reference to the listed retail prices. Thus, invoices took the form of showing the listed retail price, less thirty-seven and a half per cent, plus sales tax and charges for postage or freight. Later, when legislation to control resale price maintenance came before Parliament but before the bill became an act, this list was replaced by catalogues which included lists headed "Suggested Retail Price" and bore the legend "This is a recommended price only with which there is no obligation to comply" and "Prices subject to alteration without notice". There is no doubt that such catalogues were framed with provisions which became s. 66B (2) (b) and s. 66C of the Act in mind. Whether they succeed in taking advantage of s. 66C, it is not necessary to inquire in this case. After the issue of the new catalogues, the retailers supplied with Mikasa ware by the appellant were notified as follows :

"Please note this invoice is at wholesale selling price, not as
previously.

Owing to the Retail Price Maintenance Act beig
promulgated it is now necessary to invoice in this manner.

You will find in our catalogue a recommended retail price
with which by law there is no obligation to comply." (at p644)

19. The invoices under the new order were the old invoices with the word "retail" crossed out and the letters "W.S.P.", i.e., Wholesale Selling Price, substituted therein. To the whole selling price tax and charges were added. The wholesale selling price was, however, the retail selling price recommended in the catalogues, less thirty-seven and a half per cent. There was, therefore, no change in substance in the way in which the appellant fixed its prices to retailers for goods supplied. (at p644)

20. It seems to me, however, that the case which the respondents set out to and did make against the appellant under s. 66B (2) (d), did not really depend upon the course which the appellant followed in relation to retailers to whom it did supply goods. It withheld the supply of goods from the respondents and the present inquiry is to ascertain its reason for so doing. The answer to this inquiry is not provided by a consideration of the appellant's course of dealing with those to whom it did supply Mikasa ware. In truth, the importance of the matters I have been discussing is limited to the establishment of two facts: (1) that it was the policy of the appellant to recommended retail selling prices to its customers, and (2) that the appellant's practice was to calculate its wholesale selling price by reference to its recommended price. The crux of the matter now being considered, however, lies in ascertaining whether the appellant withheld supplies to the respondents for the reason that the respondents were likely to sell goods supplied to them at a lower price than that which the appellant would specify. This depends essentially upon the evidence of the negotiations between the appellant and the respondents. (at p644)

21. As I read the evidence, it was not established that the appellant ever communicated to the respondents a list of retail prices which it insisted that the respondents should undertake to observe as a condition of obtaining supplies of Mikasa ware. There was, however, as I think, ample evidence that the appellant withheld supplies because it was aware that the respondents would not observe the retail prices which the appellant would, in accordance with its general practice, specify by recommendation such as in the catalogue already referred to, or otherwise. The fact was that the only way that the respondents could have obtained supplies of Mikasa ware would have been to accept restrictions which tied them to the appellant's retail selling prices specified, perhaps by recommendations which would state that there was no obligation to comply with them. It is not my reading of s. 66B (2) (d) that the supplier's price must be specified, before the withholding of supplies occurs or that a supplier's prices could not be specified in a recommendation. It is sufficient for the provision if there be a withholding of supply because of the likelihood that the person seeking the goods would not observe the price which it is the firm policy of the supplier to specify. Two things were made very clear. First, that the appellant had a policy of specifying prices by recommendation ; secondly, that the respondents had a policy of cutting prices. The problem is whether it was these conflicting practices that led to the withholding of supply. The evidence points to an affirmative conclusion and the Commonwealth Industrial Court so found. In doing so it was, I think, correct. (at p645)

22. The Commonwealth Industrial Court, in reaching its conclusion, considered the evidence in detail and with great care. Because I agree with the analysis of the evidence made in the judgment of the learned judges of that Court, I find it unnecessary to embark on an independent survey of that evidence. Indeed, the only matter of fact upon which I do not entirely share their Honours' view is that it was merely because of their price cutting policy that supply of Mikasa ware was withheld from the respondents, but as I have already explained, their Honours' conclusion was open to them on the evidence, and in any event their ultimate decision that there was a withholding within the terms of s. 66B (2) (d) can be upheld without going as far as their Honours did. (at p645)

23. The one matter remaining for consideration is s. 66M which is an evidentiary provision. Their Honours did use the section as an alternative way of reaching their conclusion that the appellant had withheld goods for the reason that the respondents would sell them at prices less than the prices specified by the appellant as a price below which the goods were not to be sold. Having regard to the language of s. 66M and in particular to the words "supplied as mentioned in the last preceding sub-paragraph" in s. 66M (1) (c) (iii), and the words "the plaintiff . . . had acted . . ." in the concluding words of sub-s. (1), I am doubtful whether this section was applicable in the circumstances of this case. I prefer to leave what I regard as the construction of a difficult provision until its construction should be necessary for the resolution of a case. It is not necessary for the resolution of this case. (at p645)

24. For the reasons stated previously, I would dismiss this appeal. (at p645)

WALSH J. The circumstances that have given rise to this appeal and the submissions upon which the appellant relied are set out in the judgments of other members of the Court. (at p646)

25. The Commonwealth Industrial Court found that between 10th August 1971 and 3rd September 1971 the appellant withheld supplies of Mikasa ware from the respondents for the sole reason that they were likely to sell those goods at a price less than the price specified by the appellant as the price below which the goods were not to be sold. I am disposed to the opinion that the Court ought not to have found that that was the sole reason for the withholding of the supplies. If that finding had been a critical one in the decision of this appeal, it would have been necessary to examine fully the question whether it was a finding with which it would be proper for this Court to interfere. But, in my opinion, it was not necessary for the Court to find that the stated reason was the sole reason for the withholding of supplies, before it could be justified in making the orders against which this appeal is brought. Their Honours did not accept the case of the appellant that the likelihood of pricecutting by the respondents was not in the appellant's mind and played no part in the decision to refuse supplies of Mikasa ware. I am of opinion that their Honours were fully justified in refusing to accept that view of the facts. The evidence furnished, in my opinion, ample grounds for a finding that the likelihood that the respondents would sell at less than the prices which the appellant sought to maintain was a substantial and operative reason for the withholding of supplies. It seems plain, having regard to the Court's rejection of the case which the appellant endeavoured to make out, that the Court would have made that finding, if it had not come to the conclusion that the likelihood of resale at reduced prices was the sole reason for the appellant's decision to withhold supplies. In my opinion, such a finding is sufficient to satisfy the requirements of s. 66B (2) (d) (ii) of the Trade Practices Act 1965-1971 (Cth) (the Act). (at p646)

26. In considering the propriety of the finding that the appellant acted in contravention of par. (d) (ii), it is necessary also to decide a question as to the construction and the application, in the circumstances of this case, of the words "at a price less than the price specified by the supplier as the price below which the goods are not to be sold", which are contained in that paragraph. During the argument reliance was placed by the appellant upon the facts that in the notifications sent by it to retailers to whom it sold Mikasa ware, it was stated that the price set out in its catalogue was a recommended retail price with which by law there was no obligation to comply, and that in the catalogue the list of prices was set out under the heading "Suggested Retail Price". It was argued that a "recommended" or a "suggested" price is not a price that answers the description of a "price specified . . . as the price below which the goods are not to be sold". In my opinion, that is not an argument upon which the appellant can rely in the circumstances of this case. (at p647)

27. The respondents were not persons to whom the prices mentioned in the catalogue for Mikasa ware were recommended or suggested in express terms by the appellant. The respondents were persons to whom supplies were refused. Section 66B (2) (d) is concerned with the withholding of supplies. Cases in which a sale or an agreement to sell is made by a supplier who imposes or seeks to impose, as a part of that bargain, restrictions as to the price at which the goods will be resold are governed by pars. (b) and (c). In a case in which supplies are withheld from a person (whether or not there has been an earlier supply of goods of that kind to that person), it does not appear to be possible to maintain the distinction between a "recommended" price on the one hand and what may be called a dictated or mandatory price on the other hand or to insist that it is only a price of the latter character that can be a specified price within the meaning of par. (d) (ii). It would deprive the provision of any sensible operation if it were to be construed so as to make lawful a withholding of supplies for the reason that the potential customer was likely to sell at a price below the price which the supplier wished to be maintained as the selling price, provided that his desired selling price was stated to be a recommended or a suggested price. (at p647)

28. In their joint judgment in this case Spicer C.J. and Smithers J. considered the argument that a recommended price cannot be a price specified as the price below which the goods are not to be sold. Their Honours were conscious of the force of that argument, as applied to cases where a supply of goods does take place and the supplier does no more than to recommend to his purchaser a resale price. Their Honours said (1971) 81 FLR 260, at p 268:

"It would seem clear however that a suggestion or recommendation
of a particular price for retail sales which is genuinely
nothing more than that can hardly be regarded as the specification
of a price as the price below which the goods 'are not'
to be sold. A price so suggested or recommended is clearly a
specified price, but it is only suggested or recommended, and
not specified, as the price at which the goods are to be sold."

Later, their Honours turned their attention to the situation that exists when supplies are withheld from a person who desires to obtain them and when the supplier maintains a list of prices which are said by it to be recommended prices. In relation to that situation their Honours made the following observations, with which I am in agreement. Their Honours said [1972] HCA 69; (1971) 18 FLR 260, at p 275:

"In such a case the observance of what is called the
recommended price is actually a condition of doing business at all.
It follows that qua that potential purchaser, the recommended
price is not merely a recommended price, but is in fact a price
which the seller stipulates shall be observed by the purchaser
if the goods are supplied to him. Whatever the character of
what is called a recommended price in a transaction between a
seller and a person with whom the seller will deal, its character
in relation to the rejection of a retailer's offer to purchase
supplies for the reason that the person is likely not to observe
that price, is that it is a price specified as the price below
which the goods, if sold to that person, are not to be sold by
him."

In my opinion, the reasoning contained in the foregoing paragraph is not rendered inapplicable by the circumstance that it does not appear that when supplies were sought by the respondents in this case and were refused there was any actual discussion of a price list. Upon the findings made by the Commonwealth Industrial Court, it is plain that the parties were aware that there were prices which the appellant made known to its retailers and which it desired to maintain and the appellant was aware that the respondents were likely to sell below those prices. In my opinion, prices may be "specified" by the supplier within the meaning of par. (d) (ii), although at the time when supplies are sought the details of those prices are not actually stated by one party to the other. (at p648)

29. I turn now to consider another submission made on behalf of the appellant. This was that in carrying out the task entrusted to it by s. 90AA of the Act, the Commonwealth Industrial Court would not be exercising judicial power. It was said that because the Act did not formulate any criteria by reference to which the Court was to decide whether or not an injunction should be granted, and did not confine the power of the Court to the granting of an injunction to restrain the commission of breaches of the Act of the same kind as those which were proved to have been already committed, the scope of the power extended beyond that of the powers to grant injunctions which are ordinarily vested in courts exercising judicial power. It was said that the Act entitled the Court to grant an injunction to restrain the doing of acts which the person found by the Court to have contravened s. 66B of the Act had never threatened or intended to do and that the Court was empowered, also, to grant a general injunction against the doing of all acts which would constitute the practice of resale price maintenance in respect of the goods specified in the order, even when the only proved contravention of the Act was an isolated act committed a long time before the making of the order and was an act which was unlikely to be repeated. (at p649)

30. In my opinion, these submissions do not provide any basis for a conclusion that the power given to the Court is not judicial in its character. Where a person has engaged in the practice of resale price maintenance an application may be made under s. 90AA by the Attorney-General or the Commissioner of Trade Practices or by a person who has suffered loss or damage by reason of the firstmentioned person having engaged in that practice. In every such case the Court is required to decide the question whether or not the person against whom the application is made has engaged in the practice of resale price maintenance, that is to say, the Court must decide whether that person has acted in a way which is declared by the Act to be unlawful. It is necessary for the Court to make findings of fact in relation to events which have occurred before the date of the application and to apply to the facts so found the provisions of the Act, in accordance with the construction which the Court puts on those provisions ; and it is by those processes that the Court determines whether or not a person, who is a party to proceedings before it, has acted in breach of the Act and has thereby rendered himself liable to have an injunction granted against him, in accordance with a provision which seems clearly to be intended to furnish a sanction by which the observance of the restrictive provisions of the Act may be secured. Where the applicant is not the Attorney-General or the Commissioner, the Court is required also to decide whether the applicant has suffered loss or damage by reason of the fact that the other party has engaged in the practice of resale price maintenance. Finally, the Court has to determine whether an injunction should be granted and, if so, what the terms of the injunction should be. In my opinion, all those functions which the Court is called upon to perform have the characteristics which are commonly associated with the exercise of judicial power. When it is found that those functions have been entrusted by the Parliament to a court which has been duly constituted in accordance with Ch. III of the Commonwealth Constitution as a federal court, it is plain in my opinion that the court, when hearing and deciding an application which requires the performance of those functions, is engaged in the exercise of judicial power. The considerations upon which the argument for the appellant on this question relied and to which I have referred above do not appear to me to have any significance in deciding what is the character of the power conferred upon the court. That does not mean, of course, that those considerations are to be ignored by the Commonwealth Industrial Court when it has to decide in a particular case whether or not an injunction should be granted and has to decide whether any injunction that is granted should be broad or limited in its terms. (at p650)

31. I am of opinion therefore that the submission that s. 90AA is invalid for the reason that it attempts to confer on the Court a power which is not judicial power should be rejected. (at p650)

32. In relation to all the other submissions made on behalf of the appellant, I agree with the reasons for judgment of Menzies J. and with his conclusion that those submissions should not be accepted and I do not wish to add anything to his Honour's reasons concerning those questions. (at p650)

33. In my opinion the appeal should be dismissed. (at p650)

GIBBS J. Having had the advantage of reading the reasons for judgment prepared by my brother Menzies I find it unnecessary to do more than state very briefly my reasons for agreeing that the appellant's submissions on the two main constitutional questions involved in the appeal must fail. (at p650)

2. It was first submitted that s. 90AA of the Trade Practices Act 1965-1971 (Cth) ("the Act") attempts to give the Industrial Court a power which is not judicial in character and that the section is therefore invalid. The power which s. 90AA confers is exercisable only on an application made by one person against another under that section ; clearly there must be a controversy between parties before the section can apply. The Industrial Court is given power to settle that controversy and to settle it authoritatively. It goes without saying that in doing so it must hear both parties and in other respects proceed judicially. In settling the dispute the Court must find, inter alia, whether the person against whom the relief is sought has engaged in the practice of resale price maintenance and that involves finding the facts and applying to them the existing law as stated in Pt VIA of the Act. If the Court finds in favour of the applicant it may grant an injunction - a traditional form of relief in judicial proceedings - and it may enforce compliance with the injunction by proceedings for contempt of court. All these circumstances indicate that the power conferred is judicial in nature. However, in the argument for the appellant reliance was placed on the width of the discretion conferred. A somewhat similar argument was recently considered in Cominos v. Cominos [1972] HCA 54; (1972) 127 CLR 588 . In my opinion s. 90AA does not confer on the Court a discretion of an arbitrary kind. It appears from the section that the object of granting an injunction is to restrain a person who has already engaged in an unlawful practice from again engaging in that practice. To require, rather than permit, the Court to grant an injunction once the condition precedent to its grant had been established would deny the Court the power to adapt the remedy to the needs of the case and would lead to injustice ; moreover, an injunction is in its nature a discretionary remedy. Since the discretion is conferred on a court and is to be exercised in proceedings inter partes, it must be concluded, when there is no indication in the Act to the contrary, that it is to be exercised judicially. The existence of the discretion does not alter the conclusion that the power conferred by s. 90AA is a judicial power. (at p651)

3. The other main constitutional submission made on behalf of the appellant was that Pt VIA of the Act is invalid because it attempts to interfere with the freedom of inter-State trade guaranteed by s. 92 of the Constitution. I agree with the remarks made by my brother Menzies as to the interest of the appellant to raise this question and as to the propriety of deciding it. I agree also that the appellant's challenge to the validity of Pt VIA must fail. Part VIA proscribes a practice - resale price maintenance as defined in s. 66B (2) of the Act - which the Parliament considers undesirable. In most of its aspects, the practice proscribed could not form part of inter-State trade, but would at most be incidental or ancillary to such trade : statements or inducements made by a seller to a buyer or prospective buyer (see s. 66B (2) (a), (b) and (f) and the action of withholding the supply of goods (see s. 66B (2) (d) and (e)) do not themselves form part of inter-State trade. To forbid the practice in those aspects would not impair the freedom guaranteed by s. 92. Although s. 66B (2) (c) goes further in prohibiting the making of any agreement for the supply of goods containing a proscribed term, the legislation is not in my opinion invalid for that reason. A law which prohibits certain classes of contracts, made in the course of inter-State trade, will not necessarily be invalid - see Samuels v. Readers' Digest Association Pty. Ltd. [1969] HCA 6; (1969) 120 CLR 1, at pp 36,38 . In my opinion, Pt VIA effects a permissible regulation of the manner of trading, within the principles discussed in that case. In support of the appellant's argument, it was submitted that Pt VIA, which applies only in the circumstances specified in ss. 7A and 66A, discriminates against inter-State traders, in favour of an intra-State trader who is not a corporation. However, the Parliament has endeavoured to make the law apply as widely as its legislative power permits. The Part applies to intra-State trade conducted by corporations, that is to a substantial proportion of intra-State transactions, as well as to inter-State trade. In my opinion the Part cannot be said to discriminate against inter-State trade. Part VIA in my opinion is not rendered invalid by the provisions of s. 92. (at p652)

4. As to the other questions raised, I find no need to add anything to the reasons of my brother Menzies, with which I am in agreement. (at p652)

5. I would dismiss the appeal. (at p652)

STEPHEN J. The circumstances giving rise to these proceedings are described in the reasons for judgment of my brother Menzies and require no elaboration by me. The arguments on this appeal were concerned in part with questions of constitutional validity and in part with the construction of certain provisions of the Trade Practices Act 1971 and with their application to the particular circumstances of this case. I shall deal first with questions of validity. (at p652)

2. As to two of these contentions, that relying upon what was said to be the effect of Strickland v. Rocla Concrete Pipes Ltd. [1971] HCA 40; (1971) 124 CLR 468 , and that which turned upon the contention that the power of the Commonwealth Industrial Court, under s. 90AA of the 1971 Act, to grant an injunction is not judicial power, I am, with respect, content to adopt the reasoning and conclusions of my brother Menzies. In my view each of these attacks fails. (at p652)

3. The remaining challenge to constitutional validity relies upon s. 92 of the Constitution ; it is said that the injunction granted by the Commonwealth Industrial Court burdens the appellant's inter-State trade and that the provisions of the Act which authorize the imposition of such a burden cannot validly apply to that trade. For the reasons expressed by Menzies J. I consider that it is doubtful on the evidence whether the appellant has locus standi to rely upon s. 92 but that it is nevertheless desirable that I should deal with the issue sought to be raised by the appellant involving s. 92. (at p652)

4. The terms of s. 92 require that trade commerce and intercourse among the States be absolutely free ; but if that freedom means, as it does, more than the absence of State tariff barriers it necessarily imports the existence of an ordered society, without which the effective exercise of individual freedom, at least in relation to such material concepts as trade and commerce, becomes impossible. This concept Barton J. expressed concisely when he said that "absolutely free" was akin to a state of "ordered liberty" : Duncan v. Queensland [1916] HCA 67; (1916) 22 CLR 556, at p 592 . This is a concept that reappears in many subsequent decisions both of this Court and of their Lordships in the Judicial Committee - it sufices to refer to Australian National Airways Pty. Ltd. v. The Commonwealth [1945] HCA 41; (1945) 71 CLR 29, at p 61 ; The Commonwealth v. Bank of New South Wales (1949) 79 CLR 497, at p 639 ; Hughes and Vale Pty. Ltd. v. State of New South Wales (No. 2) (1955) 93 CLR 127, at p 159 ; and Freightlines & Construction Holdings Ltd. v. State of New South Wales [1967] UKPCHCA 1; (1967) 116 CLR 1, at pp 20-21 . (at p653)

5. In Samuels v. Readers' Digest Association Pty. Ltd. [1969] HCA 6; (1969) 120 CLR 1, at p 15 , the Chief Justice spoke of such freedom in terms which I would respectfully adopt. He said :

"This of its nature, in my opinion, involves laws regulating
the relationships of free men to each other and to their institutions
within a society. It is not, in my opinion, that freedom is
qualified by such laws. It is not really that there is a freedom
'from' something. It is a freedom of - and therefore to -
trade. It is the concept of freedom in a civilized society, in
contrast with unbridled licence in a lawless state which itself
involves the necessity for laws of the kind which accommodate
one man's activities to those of another so that each is free to
trade within the society organized under and controlled by
law.

The limitations upon s. 92, in my opinion, are thus to be
found in the concept of freedom and not in qualifications
imposed on that concept." (at p653)

6. The question, then, is whether the present law, s. 66B (2) and the power of the Commonwealth Industrial Court to grant injunctions to restrain engagement in the unlawful practices which it describes, is no more than a law which goes to the creation of that state of ordered liberty which is a prerequisite to the exercise of the freedom conferred by s. 92 and which their Lordships in Freightlines (1967) 116 CLR, at p 21 described as that framework within which the freedom conferred by s. 92 operates. In that case Lord Pearce, having earlier reiterated what had been said in the Banking Case (1949) 79 CLR, at p 639 as to the absolute freedom of inter-State trade and commerce being compatible with its regulation, said (1967) 116 CLR, at p 20 that the freedom conferred by s. 92 operates within a framework consisting, in part, of rules of strictly regulatory character, the extent of the framework being nowhere indicated with any precision or at all, its extent being a matter of inference and commonsense. (at p654)

7. The composition of the relevant portion of that framework has been referred to on a number of occasions in the past. (at p654)

8. In James v. The Commonwealth (1936) 55 CLR 1, at pp 54-55 , the prohibition of objectionable trade practices in inter-State trade, the repression of destructive monopolies and the prevention of illegitimate methods of trading were regarded as instances of a valid exercise of Commonwealth legislative power which did not infringe s. 92. (at p654)

9. In the Banking Case (1949) 79 CLR, at p 640 their Lordships expressed agreement with the statement of Latham C.J. in Australian National Airways Pty. Ltd. v. The Commonwealth [1945] HCA 41; (1945) 71 CLR 29, at p 61 , that a law prescribing rules as to the manner in which trade was to be conducted might be valid in its application to inter-State trade. (at p654)

10. In Hughes and Vale Pty. Ltd. (No. 2) (1955) 93 CLR, at p 160 the framework within which s. 92 operates was described as extending to "directions for the orderly and proper conduct of commercial dealings or other transactions or activities, at all events if the directions are both relevant and reasonable" and not discriminatory. (at p654)

11. Only the honest conduct of trade and commerce is protected by the section : O'Sullivan v. Miracle Foods (S.A.) Pty. Ltd. [1966] HCA 64; (1966) 115 CLR 177, at p 196 per Windeyer J. ; so that "to prevent cornering, restriction of competition in a society based on free competition in trade, or monopolization" is compatible with freedom of trade : Samuels v. Readers' Digest Association Pty. Ltd. [1969] HCA 6; (1969) 120 CLR 1, at pp 19-20 per Barwick C.J. Thus a non-discriminatory law "may operate generally in suppression of monopolies, or, to penalize and prohibit the making of certain classes of contracts" and laws for the proscription of undesirable and objectionable practices in merchandising do not affect the freedom accorded by s. 92 : Readers' Digest Case (1969) 120 CLR, at pp 36, 38 per Taylor J. ; the prevention of undesirable selling practices is compatible with s. 92 : Readers' Digest Case (1969) 120 CLR, at p 40 per Menzies J. (at p654)

12. By the Trade Practices Act 1971 Parliament has made the practice of resale price maintenance unlawful. It has not prohibited the carrying on of any part of inter-State trade but has struck only at a particular practice which has, in the past, been a feature of parts of that trade. That practice, of resale price maintenance, is one which has been the subject of legislative attention in many countries where economies based upon the competitive, private enterprise model exist. Within the Commonwealth, the practice is unlawful in Queensland and, in Western Australia, requires registration before being indulged in. In the United Kingdom, during the three decades preceding the first legislation in 1956 it was the subject of periodic parliamentary investigation and, since 1964, has been generally prohibited by the Resale Prices Act 1964. In Canada it has been declared unlawful. In many Western European countries it is unlawful and art. 58 (a) of the Treaty of Rome appears to contemplate its unlawfulness within the Common Market area. (at p655)

13. The practice has, at common law, been regarded, both in the United Kingdom and in Australia, as being in restraint of trade, although held in particular instances not to be unreasonably so : Elliman Sons & Co. v. Carrington & Son Ltd. (1901) 2 Ch 275 ; Palmolive Co. (of England) v. Freedman (1928) Ch 264 ; Palmolive Co. (Australasia) v. McCaskie (1925) 26 SR (NSW) 212 ; J. Kitchen and Sons Pty. Ltd. v. Stewart's Cash and Carry Stores [1942] HCA 18; (1942) 66 CLR 116 . (at p655)

14. The foregoing suffices to indicate clearly enough, in the light of the authorities, that the practice is one which a legislature may well consider proper to prohibit. It is one of the tasks of the legislatures of this country to create the permissible framework within which s. 92 is to operate and of this Court to adjudicate upon whether their enactments go beyond the permissible limits of that framework and entrench upon the freedom which s. 92 preserves ; but it is no part of this Court's task to evaluate the merits of the component parts of that framework ; its features are open to judicial examination only for the purpose of ensuring that it is a framework which is being erected and not a barrier. The distinction between the two will frequently be elusive but never illusory. (at p655)

15. In the present case the matter is not, I think, in doubt. The subject of resale price maintenance takes its place in that class of legislation concerned with the regulation of trading practices which legislatures may conclude are injurious to the well-being of trade as a whole or to the interests of the community. This is, in my view, enough to justify its presence as part of the framework of rules regulating interstate trade within which s. 92 is to operate. Accordingly I conclude that the appellant's attack upon the constitutional validity of the Act fails. (at p655)

16. Constitutional challenges apart, the appellant contended that the Commonwealth Industrial Court was in error in holding that it had engaged in that variety of the unlawful practice of resale price maintenance described in s. 66B (2) (d) (ii) of the Act. (at p656)

17. Two principal errors were alleged, the first being that that Court had wrongly concluded that the appellant had withheld the supply of goods from the respondents solely for the reason specified in that sub-paragraph ; in fact it was said that that reason was only one of several factors, and by no means the most important, which led the appellant to act as it did, and that on its true construction the sub-paragraph was only applicable when the specified reason was the sole reason for withholding supply. Since the Commonwealth Industrial Court found as a fact that the appellant's sole reason for withholding supply was the unlawful reason that the respondents were likely to resell the appellant's goods at discounted prices, it was not necessary for the Court to determine whether, for the sub-paragraph to apply, the prohibited reason must be the sole reason or may be only one of several reasons. Spicer C.J. and Smithers J., in their joint judgment, did however express the view that for the sub-paragraph to apply the prohibited reason need not be the only reason for the supplier withholding supply. (at p656)

18. Despite the arguments of counsel for the appellant to the contrary I consider that, upon the evidence before the Commonwealth Industrial Court, which was analysed with great care in the joint judgment of Spicer C.J. and Smithers J., it was open to that Court to conclude that the appellant's sole reason for withholding supplies from the respondents was the unlawful reason specified in the subparagraph. (at p656)

19. Even if the appellant's attack upon that finding of fact were to succeed it would not, I think, assist it. On any permissible view of the evidence the Court would have been entitled to find that that unlawful reason, if not the appellant's sole reason, was at least a substantial and proximate reason, albeit one of several reasons, for the refusal to supply. Such a finding would, in my view, suffice to satisfy the requirements of s. 66B (2) (d) (ii). (at p656)

20. In the sub-paragraph the words "for the reason" are, in their context, appropriate to describe one of a number of reasons for the adoption of a particular course of conduct ; the construction of the sentence in which the phrase appears does not operate to place any particular emphasis upon the word "the" so as to give to it that meaning of "sole" or "only" which in some contexts it may have. If one of a number of reasons was what the draftsman intended to refer to, the use of "the" was not inappropriate for that purpose. In Coast Brick & Tile Works Ltd. v. Raichand (1967) 1 AC 192 , the Judicial Committee, in an East African appeal, was concerned to interpret the words "the security" appearing in a section which read, in part :

"The provisions of this Ordinance shall not apply -

. . .

(b) to any money-lending transaction where the security for
repayment of the loan and/or interest thereon is effected
by execution of a legal or equitable mortgage . . ."

It was held that "the security", in its context, included cases in which one only of several securities taken was of the character described ; "the sole security" was no more than "a possible meaning grammatically" and other "possible alternative ways of construing the section" were by omitting "the" altogether or reading "the" as meaning "a". It was this last meaning that was in fact adopted and in doing so their Lordships expressed (1967) 1 AC, at p 203 , entire agreement with the reasoning and conclusion of Gould J.A., a member of the East African Court of Appeal in an earlier case Shah v. Patel (1961) EA CA, 397 at pp 409-410 on the same section, who had said :

"I do not think that the use of the definite article necessarily
favours Mr. Mandavia's argument for the purpose of which he
must insert, as he did in argument, the word 'only'. On the
other hand, a construction which would permit the operation
of the section where the mortgage or charge was not the only
security, would also necessitate reading the word 'the' as
'a', or some similar modification. Either construction appears
to be open on the existing wording and I think that it must be
resolved by a consideration of the intention of the legislature
so far as it can be gathered from the section as a whole."

He concluded that "the words of the section allow of two alternative constructions", and adopted that which substituted "a" for "the" (1967) 1 AC, at p 204 . In Gissing v. Liverpool Corporation (1935) Ch 1 , the Court of Appeal had to consider a different but analogous point in holding that a section prescribing as a condition of benefit that "the annual contributions have been made" did not necessarily require that all annual contributions due should have been made ; Maugham L.J. said (1935) Ch, at pp 30-31 that he did not start with any strong conviction that the use of the definite article "the" pointed to the view that every annual contribution should have been made ; that was the prima facie meaning but might yield to the context. Other instances occur where "the" has not been given an exclusive meaning : R. v. Meehan (1905) 2 IR 577 , National Mutual Life Association of Australasia Ltd. v. Federal Commissioner of Taxation [1970] HCA 51; (1970) 122 CLR 13 , and those numerous decisions in this Court in which "the purpose" referred to in s. 26 (a) of the Income Tax Assessment Act has been construed to mean the dominant purpose but not necessarily the sole purpose. (at p658)

21. If context is to be considered it is important that the paragraph is not concerned with the doing of a physical act, perhaps impetuously, but rather with the calculated carrying out of a particular commercial decision by a supplier of goods ; common experience suggests that decisions, at least of that nature, have lying behind them a process of decision-making involving the conscious or unconscious weighing of numerous factors, each no doubt of varying weight but each distinct from the others. In such a context each substantial and proximate reason will, in my view, answer the description of "the reason" in this paragraph. (at p658)

22. Sections 3 and 4 of the New Zealand Commercial Trusts Act 1910 provide that offences are committed whenever discounts are given or the supply of goods is refused if the reason for doing so is one of the reasons specified in the respective sections. In each section the words "for the reason that" are used. In a decision on those sections, Merchants' Association of New Zealand v. The King (1913) 32 NZLR 1233 Stout C.J. rejected the view that the ultimate object sought to be attained by the supplier in refusing supply was the reason to which the sections referred ; he instead concluded that the immediate cause or reason was what was intended, "what led immediately and directly to the act done" rather than "the aim beyond" (1913) 32 NZLR, at pp 1255-1256 . The Court of Appeal took a similar view. That case did not raise the question of competing proximate reasons but rather a series or chain of reasons, ranging from the immediate to the remote, a concept familiar enough in problems of causation and applicable too when human reason rather than physical cause is in question ; Hart and Honore in Causation in the Law (1959), suggest at p. 49 that a reason for action may be described as just a cause "looked at from the inside". In the present case it might be proper to regard the several reasons for refusal of supply referred to in the evidence as forming such a chain rather than as being competing reasons of equal proximity to the refusal ; if so, it was, I think, the fact that the respondents were believed to be likely to sell Mikasa ware at a discount below other retailers that was the immediate or proximate reason for refusal of supply, the other reasons spoken of by witnesses called on behalf of the appellant being in the nature of more remote reasons, like "the aim beyond" of which Stout C.J. spoke. Accordingly on this alternative view of the evidence I would also conclude that the appellant's argument, turning on the phrase "for the reason", fails. (at p659)

23. The second of the appellant's main arguments concerned with the construction of s. 66B (2) (d) (ii) was the contention that whatever measures the appellant took to make known its recommended price to those to whom it supplied Mikasa ware it did so only in strict conformity with s. 66c of the Act and did not specify any price as that "below which the goods are not to be sold". Those words involve, it was said, more than that a supplier should communicate a recommended minimum price ; there must also be an imperative element in the communication, coupled with an express or implied threat of some commercial sanction which will be imposed for non-compliance. These features were lacking in the present case and, accordingly, there was no relevant specification of a price, without which there could be no unlawful practice. (at p659)

24. The appellant, shortly before the present legislation came into operation, had published a new catalogue of Mikasa ware, setting out the "suggested retail price" of the ware and stating that these prices were only recommended prices with which there was no obligation to comply. When the legislation came into operation it altered its wholesale price structure, which had previously involved its prescribed retail price less discount, to a straight out wholesale price and it informed customers of this change, stating that the new catalogue's recommended retail price was one "with which by law there is no obligation to comply". A number of witnesses were called by the appellant who testified that no threats of the enforcement of resale price maintenance had ever been made by the appellant either before or after the introduction of the Act. The appellant relied upon these curcumstances for the submission that although it had notified recommended retail prices to its wholesale customers there was no evidence of any threatened sanction for non-compliance with those prices; it was said that in these circumstances the Commonwealth Industrial Court could not properly find that there had existed any specified price such as s. 66B (2) (d) (ii) required as an ingredient of the unlawful practice which it described. (at p659)

25. The sub-paragraph does, I think, require the existence of a stated minimum price in the sense that in its absence one ingredient of the unlawful practice will be missing. But if the supplier has stated a minimum price, whether to the world at large or to the person who is refused supply, then, although the statement be made wholly without threat of sanctions for non-observance, a refusal to supply a particular person for the reason that the supplier believes that that person will resell at less than that minimum price will suffice to make that price one which, in relation to that person, is a price specified by the supplier as a price below which the goods are not to be sold. (at p660)

26. It follows that in the present case nothing turns upon the precise wording of the catalogue or of the letter announcing the new invoicing procedure. It is enough that the appellant had established minimum retail prices and had announced them and that it then refused to supply the respondents for the reason that, as it knew, they intended not to adhere to those prices. This conduct on the appellant's part constituted the withholding of the supply of goods for the reason that the respondents were likely to resell them at a price less than the price which, by its very behaviour towards the respondents, the appellant showed to be a price below which it would not permit its goods to be resold. The refusal operated to convert what I shall assume, in favour of the appellant, to have been an unobjectionable recommended price into a "price below which the goods are not to be sold". Because it is the refusal which effects this conversion it would seem that it is only immediately upon, not simultaneously with, the making of a first refusal that the conversion occurs; in the present case this does not arise since there was a history of requests for supply and refusals of those requests, which refusals were for the reason referred to in the sub-paragraph. (at p660)

27. Section 66C is in no way out of harmony with this interpretation. That section is expressly limited in its operation to the terms of s. 66B (2) (b), which refers to the unlawful practice of inducinga customer not to sell at less than the supplier's specified resale price and which is not concerned with the element of refusal to supply. Accordingly there is nothing strange in the fact that the making of a recommendation as to re-sale prices may fully accord with s. 66C and yet be a sufficient specification to satisfy the requirements of s. 66B (2) (d) (ii); such a result will ensue because, not content with making a lawful recommendation of a price, the supplier then seeks to convert that into something quite different, a mandatory minimum price enforced by the refusal of supplies. (at p660)

28. For these reasons I reject, as did the Commonwealth Industrial Court, each of these two principal submissions concerning the interpretation of s. 66B (2) (d) (ii). (at p660)

29. A further contention was advanced by the appellant concerning the construction of s. 66B (2) (d) (ii), to which brief reference may be made. It was argued that in the phrase "has sold, or is likely to sell, goods supplied to him by the supplier" the word "supplied" was used as the past tense of the verb "to supply". It followed that the sub-paragraph could only apply to cases where there had been an actual supply of goods before further supplies were withheld. Since the appellant had never supplied Mikasa ware to the respondent the paragraph would, on that view, be inapplicable. (at p661)

30. In fact the form of the verb "supply" used in this paragraph is not the past tense but rather a common enough instance of the use of the past participle; it is neutral in temporal meaning and applies equally to the future as to the past. Accordingly it provides no support for this contention. The appellant attacked on two grounds, one factual and the other interpretational, the use made of s. 66M of the Act in the joint judgment in the Commonwealth Industrial Court. The application of the evidentiary provisions of that section was not necessary for the disposal of the case by that Court and I accordingly refrain from expressing any views on its interpretation; in doing so I am not to be taken as necessarily approving of the construction placed upon the section in the joint judgment in the Commonwealth Industrial Court. (at p661)

31. I would dismiss this appeal. (at p661)

ORDER

Appeal dismissed with costs.