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Wednesday, 14 August 1974
Page: 917


Senator WRIGHT (Tasmania) -May I intervene at this stage to seek elucidation from both sides? I refer first of all to the amendment that Senator Greenwood has put forward. The idea that we can have simply a striking down as unlawful of the very provision that is in restraint of trade comes to me as a new notion in this field. My understanding was that a contract in unreasonable restraint of trade- unreasonable from the point of view of the parties and from the point of view of public interest- was void except insofar as there were severable provisions in the agreement, and where money is paid under it the question is whether the avoidance is for the benefit of a particular class. In some of those cases if the avoidance is for the benefit of a particular class, even though the avoidance may be actually creating an illegality as distinct from voidance or unenforceability, money is recoverable.


Senator Murphy - I think you are coming to our point of view, senator, in the general drift of what you are putting. I think you will be with us. You would not want what is being proposed by the Opposition.


Senator WRIGHT -I am just putting my point of view for the purpose of seeing whether there is difference from it on either side. I take this opportunity to state that position and to show that to me it would be quite new to say that only the provision that is in restraint of trade is unenforceable. I think, it would produce anomalous consequences.


Senator Murphy - That is what is being proposed from your side.


Senator WRIGHT - I am addressing myself to Senator Greenwood primarily. If I am in agreement with Senator Murphy on this matter, that does not deter me from pointing out any matter. I am only seeking elucidation. I have not had the chance to verify this matter and I speak very tentatively.

The second matter I wish to mention is that, as I understand it, under the common law a contract in restraint of trade is not void or unenforceable. It is only void or unenforceable if it is unreasonable, first in the interests of both parties and, secondly, from the point of view of public interest. In this Bill there is nothing about unreasonable restraint of trade. The Bill seeks to strike down a contract in restraint of trade and says that it is unenforceable. Senator Murphy has put forward in the print of the Bill language to say that one should not trouble about a restraint because it has such a slight effect upon the competition between the parties as to be insignificant. That is new language. Is it intended to be synonymous with the common law definition of the situation? If not, in what respect is it intended to be different? I think that in this field of the law we will add to the perplexity and confusion if, in relation to Commonwealth law dealing with activities of corporations, we introduce this new formulation of the law to create a substantial difference in the formulation of the common law which will still apply to private individuals. These individuals who are not corporations will be subject to the common law as varied by any State law. To me the whole thing is a hotchpotch. I think that it demonstrates that the Government is creating a cobweb which will defy practical, efficient administration.







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