ACCC v Liquorland (Australia) Pty Ltd

[2006] FCA 826

Facts

Applications were made for liquor licences in NSW near Liquorland and Woolworths.  Legislation gave Liquorland and Woolworths the right to object to those applications and they did so (or threatened to do so) in relation to each application.  In each case the objection was subsequently withdrawn.  The negotiations which led to the withdrawal resulted in deeds restricting the liquor licences that were granted to the applicants – including the type and quantity or takeaway liquor that could be stocked or sold.  The location and configuration of premises was also restricted. 

The ACCC alleged these constituted contracts, arrangements or understandings which substantially lessened competition or constituted exclusionary provisions.

Trial judge (Allsop J)

Exclusionary provisions

Can a purpose of restricting dealings with a 'class' exist where the relevant class does not exist at the time of the agreement?

[811] ‘There is no reason ... to conclude that a purpose is not to prevent sales to particular persons (or classes of person) merely because the purpose is to prevent the sale in the future of goods to a particular class formed in the future. ... The question is: What was the purpose of the provision? In this case: What was the subjective purpose of Woolworths as to the provision? Was it, relevantly, to prevent, restrict or limit supply or acquisition of goods to or from particular persons or classes of persons. If the restriction is to operate through a party not yet able to supply, that does not gainsay the purpose which is one which is to operate in the future. The future operation of a relevant restriction is contemplated by s 4D(2). I see no reasons to constrain s 4D(1) by the implication of a need for a present legal right or capacity to supply, if a purpose otherwise satisfying s 4D is found, though only to operate at some future time or in some future circumstance.’

[812] ‘For the same reasons, I reject the submissions of Woolworths that the s 4D case fails because of the futurity of the class. The task is not an over-elaborate one. It is to ascertain the relevant purpose of the provision, here, by ascertaining the purpose of the party, Woolworths, by whose efforts the clauses were included in the deeds. If, taking into account any element of futurity, the class has the requisite particularity, the provision will be satisfied.’

[813] ‘Woolworths submitted that the particularity of the persons or class must arise entirely otherwise than by the characteristic of being excluded from supply. ...  relevant to the particularity of the class, is the fact that its members are the objects of the purpose in question.’

[814] ‘It was submitted by Woolworths that the class cannot be ‘some unidentified potential group of customers’. The relevant question is not an isolated proposition capable of independent analysis; rather, the relevant question is whether, on the facts as they present themselves here, a purpose of each relevant provision was to prevent, restrict or limit the supply of goods to particular persons or class of person. The degree of definition and the common characteristics that lead one to the conclusion that a class is ‘particular’ is not capable of being expressed otherwise than by application of the language chosen by Parliament to the facts and purpose in question. To seek to do so is to embark on a process of deconstructing, or glossing, of Parliament’s words with the almost inevitable (and certainly impermissible) substitution of a different word or phrase for that chosen by Parliament. That one person’s view that the definition of a class to which the purpose in question was directed is sufficiently ‘particular’ to fall within the section is open to debate is an inevitable consequence of the indeterminate frame of reference contained within the adjective ‘particular’.

[816] ‘... Woolworths’ purposes included, relevantly, the purpose of preventing the supply of takeaway packaged liquor (other than themed liquor) to all future customers of the Ettamogah Pub. The commercial aim of Woolworths was to protect the existing business of Woolworths in the local area from losing custom to the Ettamogah Pub. The purpose therefore can also, and separately, be expressed to be preventing the supply of takeaway packaged liquor (other than themed liquor) to future customers of the Ettamogah Pub who might otherwise buy such liquor from the Woolworths’ stores in the area. I do not think that one can define the group any more closely. Though the evidence tells one that there is likely to be a geographical catchment for people who will shop at the Ettamogah Pub or the Woolworths’ stores at Campbelltown, that does not really assist in the delineation of the class. ... the class can be defined in one of two ways. It has a degree of particularity in both forms. This is sufficient, it seems to me, for the class to be called a particular class. The purpose of Woolworths was directed towards restricting supply to that identifiable (and particular) class. I therefore conclude that the purpose of the provisions of the Ettamogah Deed, in particular clause 1.2, was to prevent or restrict or limit the supply of takeaway packaged liquor to the above particular classes of persons. I conclude that Woolworths thereby contravened s 45(2)(a)(i) and (b)(i) in that respect.’

[more extracts to follow]