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Walk the line Jane Doe 1 – ABC 0

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					Intellectual     Walk the line
Property
29 August 2007   While most business minded individuals are aware                •	 a lender requiring borrowers to insure
                 of the Trade Practices Act 1974 (Cth) (Act) and the                mortgaged property with a certain insurer.
                 general policy which drives the behaviour of the                Third line forcing does not include the supply of
                 ACCC, many are unaware of the strict application                single packages of goods or services that are
                 of the provisions that apply to conduct that                    supplied by multiple vendors as there is not a
                 constitutes third line forcing.                                 separate supply upon which the original supply was
                 `Third line forcing’ is a common commercial                     conditional.
                 behaviour that is currently prohibited as one type              While this type of conduct occurs every day in
                 of exclusive dealing under the Act. Generally                   ordinary transactions including for example, petrol
                 speaking, third line forcing refers to the practice of          discount vouchers on supermarket dockets, this is
                 a supplier making the supply of one set of goods or             because the Act also includes a `notification’
                 services conditional upon the customer separately               process. Generally speaking if a company provides
                 purchasing another set of goods or services from                the ACCC with notice of the conduct that
                 an unrelated third party supplier. Interestingly, the           constitutes third line forcing and can show that the
                 other exclusive dealing provisions of the Act only              benefits to the public outweigh the likely
                 apply to conduct if the purpose, effect or likely               detriments to the relevant market then the conduct
                 effect of that conduct is to substantially lessen               will usually be exempted from the operation of the
                 competition. The third line forcing provisions apply            Act. The public benefits usually considered by the
                 without regard to any competition test.                         ACCC include fostering business efficiency,
                 Specific examples of behaviour that may constitute              improving product quality and promoting
                 third line forcing include:                                     competition in certain markets.
                 •	 a car dealer offering a larger trade-in if the car           For assistance notifying the ACCC in relation to
                    buyer financed the purchase of their new car                 exclusive dealing or determining whether your
                    with a preferred finance provider                            company’s conduct constitutes third line forcing
                                                                                 please contact Emma Weedon on 07 3233 8911 or
                 •	 a petrol station giving discounts on petrol on the
                                                                                 eweedon@mccullough.com.au.
                    basis that the consumer has purchased a certain
                    value of goods from a supermarket, and
Focus


                 Jane Doe 1 – ABC 0
                 Much publicity has surrounded the recent case of                Proceedings Reports Act 1958 (Vic). Jane Doe also
                 Doe v ABC & Ors1, particularly in relation to the               brought civil proceedings against the ABC, the
                 possible creation of a tort of privacy. However                 reporter and the sub-editor for breach of a
                 importantly this case also considers the changing               statutory duty, negligence, breach of privacy and
                 action of breach of confidence in some detail.                  breach of confidence.

                 Background                                                      Traditional position
                 Jane Doe was the victim of a sexual assault by her
                             2
                                                                                 Traditionally an obligation of confidence in relation
                 husband, XY, in early 2001 and he was later                     to information was only imposed if:
                 convicted by a jury in relation to the incident. The
                                                                                 •	 the information was confidential
                 sentencing of XY was reported by the ABC in three
                 bulletins which disclosed XY’s name, the fact that              •	 the information was originally imparted in
                 the victim was his wife and the suburb in which                    circumstances importing an obligation of
                 Jane Doe lived. One of the bulletins also included                 confidence, and
                 Jane Doe’s maiden name which she had                            •	 use of the information would cause detriment to
                 recommenced using after the assault.                               the disclosing party.3
                 The journalist and sub-editor involved in recording             Generally this meant that there was an existing
                 and broadcasting the report pled guilty in separate             relationship between the disclosing party and the
                 criminal proceedings to identifying a victim of a               party receiving the confidential information such as
                 sexual offence which is prohibited by the Judicial              a commercial relationship.

                 1 [2007] VCC 281
                 2 For obvious reasons Jane Doe’s and XY’s identities were not
                 published in the judgement of this case!                        3   ABC v Lenah Game Meats Pty Ltd [2001] HCA 63 per Gleeson CJ.
Modern changes                                           broadens the circumstances in which a breach of
                                                         confidence may be found it is most likely that Doe
In recent times courts have been more willing to         v ABC & Ors will generally be applied in
impose obligations of confidence in circumstances        circumstances involving `private information’.
in which the party receiving the confidential            Naturally in this case it was held that information
information knows or ought to know that the party        relating to a sexual attack by the victim’s husband
to whom that information relates intends that            had the necessary `private’ character to give rise to
information to be kept confidential. This is             an expectation on the part of Jane Doe that her
particularly apparent in the United Kingdom due to       identity would not be disclosed to the public.
the influence of certain European conventions
relating to human rights. One successful                 The ABC has lodged an appeal in relation to the
application of these principles is found in Douglas v    decision of the Victorian County Court.
Hello! Ltd4 which related to unauthorised coverage
of the wedding of Catherine Zeta-Jones and               Future application
Michael Douglas.
                                                         Despite the fact that the case largely related to
In Doe v ABC & Ors, Hampel J expressly stated that       `private information’ commercial entities should
`it is no longer necessary for there to be a             consider the possible application of Doe v ABC &
relationship of trust and confidence in order to         Ors when obtaining information in the course of
protect confidential information’ and that `the          their business that is intended by a third party to be
obligation of confidence … is defined by reference       kept confidential. This may extend to sensitive
to the circumstances, not the relationship’. This is a   commercial information that is protected by a
significant departure from the previous Australian       commercial entity but which becomes available to
position but is also consistent with ideas set out in    a competitor in circumstances where the
past cases.                                              competitor has not acted unlawfully or in bad faith.
While the removal of the absolute requirement for        For further assistance or enquiries please contact
a relationship of trust and confidence to be in place    Malcolm McBratney on 07 3233 8878 or
                                                         mmcbratney@mccullough.com.au.
4   (2001) QB 967




Tread lightly when terminating agency
agreements in the EU
The case                                                 Commercial Agents (Council Directive) Regulations
                                                         1993, which gave effect to the Council Directive
The decision of the House of Lords in Lonsdale v         86/653/EEC – 18 December 1986, particularly
Howard & Hallam Limited was handed down on               Article 17.
4 July 2007 and clarified the law regarding
compensation for termination of agency                   Lonsdale argued that he was entitled to
relationships in the European Union.                     compensation for `damage suffered as a result of
                                                         termination of his relations with his principal’. The
                                                         right to compensation was clear, but the
The facts                                                calculation of any damage suffered and also the
Mr Graham Lonsdale (Lonsdale) is a commercial            value of the agency business at the termination
agent in the shoe trade. In 1990, shoe                   date were the issues for the court to decide.
manufacturers Howard & Hallam (H&H) appointed            Lonsdale argued that the French approach of
Lonsdale to sell their brand in a particular territory   awarding an amount equivalent to agency
in England but the parties never entered into a          commission for two years should be applied.
written agreement with respect to the agency
appointment. In 2003 H&H ceased trading and sold
the goodwill in the brand to a competitor.               The twist
Lonsdale did not dispute that he had been paid all       Remarkably, the House of Lords gave leave to the
commission he was owed by H&H when the                   Winemakers’ Federation of Australia (WFA) to
arrangement was terminated.                              intervene in the case and make submissions on
                                                         behalf of its members. The argument submitted by
                                                         the WFA was that the French approach should be
The issues                                               rejected and that a valuation of an agency business
Despite Lonsdale not being owed any further              at the termination date should be offset by the value
contractual entitlements, Lonsdale claimed that he       of any goodwill the agent retains by providing
was entitled to statutory compensation under the         alternative products to existing customers together
                                                                                                          Page 2
with any goodwill of the principal not generated or                        What does this mean for you?
preserved by the agent’s activities.
                                                                           The European Union is a growing market for
The reason for this submission was to counter                              Australian exports and the commercial need to
possible excessive awards to agents on the basis                           appoint an agent in the territory can bring with it a
that if such awards became a precedent, they                               number of risks not faced when contracting with
would simply be written into the price of                                  an agent or distributor inside Australia.
contracting an agent, thus adding to the cost of                           Accordingly, it is important to seek legal advice
exporting to the UK.                                                       before appointing any agents, and in particular, if
                                                                           an agent is appointed in Europe, to remember that
The decision                                                               compensation will likely be payable on the
                                                                           expiration or termination of an agency agreement.
The House of Lords ruled that compensation                                 Accordingly, alternative structures, such as a
should be awarded to agents entitled to                                    distributorship, may be worthwhile considering.
compensation by virtue of the directive by
reference to the value of the specific agency on the                       For further assistance or enquiries please contact
assumption that it continued following termination.                        Malcolm McBratney on 07 3233 8878 or
Specifically, the award should be the amount the                           mmcbratney@mccullough.com.au.
agent could reasonably expect to receive from a
hypothetical purchaser at the time of termination.
In valuing the agency business in this way, the
extent to which the agent could transfer the
goodwill in existing customers to another principal
could be reflected in the valuation considering the
circumstances as they existed in the `real world’ at
the time.




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Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for
information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue
dealt with in this publication. If you would prefer not to receive further Focus newsletters from us, please email info@mccullough.com.au with
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