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Some recent cases to be aware of:
Anti-Competitive Conduct
Two businesses were recently found to have breached the Trade Practices Act (the “Act”) when they set up in the same premises and shared a common administrative and operational costs. They were not partners and retained their own clients. They entered into a number of agreements, including terms to fix the professional fees they charged and to share in what they refer to as the "unreferred clients". They also limit the geographical areas in which they would operate.
The conduct was found to be "price fixing" and "market sharing", both of which contravened the Act.
Partners in a laundry hire and services business decided to go their separate ways. One retained the existing business. As part of the sale, the departing partner was prohibited from acting for 5 years in a similar business at any place in the state. The agreement was evidenced in writing. The court found that the restraint was unenforceable as it breached the Act and, instead, ordered that the laundry hire and services business be varied to limit the restraint geographically and the restraint period to be 3 years. They entirely removed the restraint in relation to providing "dry cleaning services". The lesson from the case is that agreements requiring non-competition must be reasonable in the circumstances otherwise they will be unenforceable.
Retail Price Maintenance
Navman sought to ensure that its dealers did not sell below the bench mark that it used for pricing of its marine products. It did so by issuing correspondence that discouraged discounting. Navman also cut off supply to some retailers who had offered discount products. The court ordered Navman to pay $1.25 million in penalties, an $80,000 penalty to a director and a further $30,000 penalty to the Australian sales manager.
If you have any questions, please do not hesitate to contact Tal Williams on (02) 9458 7241.
Tal Williams
Partner
Corporate Law & Commercial Litigation
