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Wednesday, 14 August 1974
Page: 918


Senator GREENWOOD (Victoria) -I take the point that 3 broad issues are canvassed by the amendments. The first is the point to which Senator Wright has addressed my attention and Senator Murphy's attention, which is whether a provision which states that where there exists a contract in restraint of trade, nothing in this legislation is to render unenforceable any provision in such a contract that is not in restraint of trade or commerce, is a novel and, indeed, unreasonable addition to the law. I think the general proposition as Senator Wright stated it was whether pans of an agreement which is generally held to be in restraint of trade are to be enforceable depends on the extent to which they are independent of the other provisions; and whether by the ordinary canons of severability the pans of the agreement which are sought to be enforced can stand on their own and have no connection to each other. It may be that the words which are sought to be added in this area by the Opposition's amendment are surplusage and unnecessary. I know that when Mr Ellicott moved these matters in the other place he stated:

The purposes of these amendments are as follows: . . . the purpose of sub-clauses (1) and (2) is to ensure that the effect of the unenforceability of a contract will not be to make unenforceable the other provisions. This may indeed be clear as a matter of law already but it ought to be made clear specifically in the legislation.


Senator Murphy - But the honourable senator can see that that is a very unjust result.


Senator GREENWOOD - I agree that, as an elaboration of the propositions involved that view as Senator Murphy puts it, it could have an unjust result. Viewed as Senator Wright puts it, it may be that it is simply stating in language which is not as eloquent as it could be the precise position at law at the present time. I recognise the force of both considerations. Looking at what was said in the other place and at the reasons which were advanced, I believe that nothing will be lost in the light of those arguments by not pursuing that pan of the amendment. But then I note the second of the propositions, that is, whether the proposal of the Opposition is preferable to the proposal of the Government as to the effect which should be given by any companies to contracts, arrangements or understandings in restraint of trade where there are provisions which are not in restraint of trade. Here, as I understand it, though it is not included in clause 45 (1) it, is to be included in sub-clause (2), which states that it shall not have effect given to it to the extent that it is in restraint of trade or commerce, which I imagine is another form of words to give effect to the same proposition as was used in sub-clause (1). To me it seems relatively immaterial which form of words is used because either form indicates that the severability doctrine is to have some application. In those circumstances, unless other arguments are advanced, we will defer our amendments in this area to the amendments proposed by the Government.

The third point relates to the distinction between agreements which are in general restraint of trade, which ought to be banned because they have a significant effect on competition, and those agreements in restraint of trade which are of a price fixing variety and which ought to be always in restraint of trade unless their effect on competition is so minimal that they can stand. It appears that the only distinction- I would be grateful if the Attorney-General would confirm this- between the approach of the Government and that of the Opposition is that the Government's approach is to give a wider interpretation to contracts, arrangements, or understandings by saying that not only such agreements but also those which have the purpose or effect of fixing, controlling or maintaining a price are to be covered by the provision.


Senator Murphy - I think that is right. There is very little difference.


Senator GREENWOOD - In those circumstances, having regard to the fact that the Government's amendment is wider than that of the Opposition, we likewise accept that amendment. But it does leave open the question which Senator Wright has raised and to which I would be equally interested to hear the reaction of the Attorney-General. What does this do in the ordinary situation to a contract which is held to be in restraint of trade because it is not reasonable between the parties, it may have a very significant effect on competition but, in the interests of what one of the parties has sold, the courts otherwise regard the contract as a reasonable restraint of trade?







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