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 email@example.com. 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  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  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 firstname.lastname@example.org. 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 email@example.com. 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. Level 11 Central Plaza Two 66 Eagle Street Brisbane QLD 4000 GPO Box 1855 Brisbane QLD 4001 Australia Telephone 07 3233 8888 Fax 07 3229 9949 Email firstname.lastname@example.org Web www.mccullough.com.au 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 email@example.com with ‘unsubscribe’ in the subject heading and we will remove your address from our mailing list. Or write to us with your request to ‘unsubscribe’ at Business Development & Marketing, McCullough Robertson, GPO Box 1885, Brisbane QLD 4001. Page 3
"Walk the line Jane Doe 1 – ABC 0"