Re Crane Makers' Association's Agreement

I will ask Lord Justice Diplock to read the first judgment.

This is an appeal on a question of law from a decision of the Restrictive Practices Court of the 11th January 1965. It is brought by way of Case Stated pursuant to paragraphs 7 and 8 of the Schedule to the Restrictive Trade Practices Act, The actual decision of the court was the dismissal of an application by the Registrar of Restrictive Trading Agreements under Rule 41 of the Restrictive Practices Court Rules, 1957, for discovery by the respondents of various classes of documents relating to an alleged variation of a restrictive agreement which had been referred to the court under section 20, subsections (1) and (2) of the Act, the alleged variation having been made by the respondents after the commencement of the proceedings in respect of the restrictive agreement in its original form.

Under Rule 41 of the Restrictive Practices Court Rules. the court has power to order discovery "of the documents relating to the proceedings". How it exercises that power in particular cases is a matter which lies within the court's discretion, and does not normally raise any question of law. In the present case, however, it is common ground that an issue arose between the parties as to whether or not the classes of documents of which discovery was sought by the Registrar were "documents relating to the proceedings". This does involve questions of law and, in particular, an important question as to the jurisdiction of the Restrictive Practices Court in proceedings under section 20 of the Act. That question may be shortly stated as follows: Upon reference to the court of an agreement of which particulars are for the time being registered under Part I of the Restrictive Trade Practices Act 1956, has the court jurisdiction to consider whether there are any terms of the agreement, or of the agreement as varied after the commencement of the proceedings, which are not disclosed in the particulars as registered?

In an appeal by way of Case Stated under the Restrictive Trade Practices Act 1956, it is provided by Rule 81 of the Restrictive Practice Court Rules 1957 that: "The judgment of the court shall, in so far as facts are stated therein, be deemed tobe a case stated for the purpose of any appeal on a question of law to which those facts give rise". This has the disadvantage that the judgment does not necessarily isolate the question of law upon which a party desires to appeal from other issues in the case. In the present case, in addition to the question of law as to the jurisdiction of the court on which the opinion of the Court of Appeal is sought, there was also a technical point on the pleadings. Understandably enough, the distinction between these two grounds for refusing the Registrar's application is not always clearly drawn in the judgment, but it is common ground that the question of law as to the jurisdiction of the court was argued, and was decided by the court in favour of the respondents, and analysis of the judgment confirms this.

The circumstances of this case as disclosed by the facts stated in the judgment are unusual. The respondents are members of an unincorporated trade association, the Association of Crane Makers. Its constitution is regulated by so-called "Articles of Association", by "By-Laws" and by "Section Rules". Copies of these documents were furnished by the respondents to the Registrar in 1957 pursuant to section 10 of the Act and to Regulation 1 of the Registration of Restrictive Trading Agreements Rules, 1957. At that date, and until after the commencement of the present proceedings in the Restrictive Practices Court by notice of reference issued on the 4th September 1963, the By-Laws contained provisions requiring members to notify to the secretaries of the Association any inquiries which they received for the supply of cranes. By-Law No. 7 contained machinery for enabling a member to require a "File" Meeting to be called of members interested in the same inquiry. A "File" Meeting was empowered to take decisions by unanimous vote on "such matters as specification clauses considered to be unreasonable, making conditions as to variation clauses, penalty clauses, or like matters affecting the tender". Numerous "File" Meetings were in fact held under this By-Law at which decisions were taken with respect to particular inquiries. One of the commonest decisions was that a "special consultative fee" of a fixed amount should be added to thetender price by each member tendering, and that this sum should be shared by the successful tenderer with the unsuccessful tenderers. The ostensible justification for this consolation prize to unsuccessful tenderers was to recompense them for the costs incurred by them fruitlessly in preparing their own tenders. Particulars of those decisions of "File" Meetings were duly furnished by the respondents to the Registrar, and were filed by him in the Register of Agreements as particulars of the respondents' agreement No. 2578 on the Register.

It has never been disputed that as a result of By-Law No. 7 and decisions taken at "File" Meetings held thereunder, "restrictions" of the kind specified in section 6, subsection (1), of the Act were accepted by members of the Association, nor that agreement No. 2578 was subject to registration under section 9 of the Act, nor that agreement No. 2578 was properly referred to the Restrictive Practices Court by the Registrar on the 4th September 1963.

Shortly after the commencement of the proceedings in the Restrictive Practices Court, however, the Association at an extraordinary general meeting held on the 16th October 1965 passed a resolution deleting By-Law No. 7, and substituting therefor three new By-Laws in the following terms? "(7). Interchange of Conditions of Sale. (i) To the intent that Members shall not be misled or misrepresented by purchasers Members shall send to the Secretaries a copy of their current terms and conditions of sale and shell notify the Secretaries within seven days of any changes therein. The Secretaries shall on request make such information available to all other Members. (ii) Members may in the event of their deciding to quote subject to special terms and conditions of contract in respect of a particular inquiry notify the Secretaries of the special terms and conditions of contract they have decided to quote and the Secretaries shall on request make this information available to all other Members who have notified the inquiry and indicated that they propose to tender. (8) Consultative Fees, (i) Where an inquiry is issued in a form which will involve Members tendering In an unusual amount of service the Secretaries shallon the request of a Member notifying the inquiry call a meeting of all Members who have notified the inquiry and indicated that they intend to tender for the purposes of deciding whether the Member or Members obtaining the order shall pay a consultative fee as some contribution towards the cost of tendering so that such cost to the unsuccessful tenderers shall not be spread over their prices charged to other customers who neither require nor receive the unusual service and if so decided of agreeing the amount of such consultative fee. (ii) Where a consultative fee has boon decided upon the Member obtaining the order shall pay the agreed amount of the consultative fee to the Secretaries. The source from which the consultative fee is raised in solely a matter for the Member obtaining the order and there is no arrangement or understanding between Members that any sum shall be added to the tender prices to cover a consultative foe nor shall any such arrangement be made. (ill) The question as to whether there shall be a consultative fee and the amount therefor shall be decided by a unanimous vote of those present and voting at a meeting called pursuant to paragraph (i) of this By-Law, each Member having one vote. A Member given notice of but not attending such meeting shall be bound by the decision of the meeting. (iv) A Member receiving an order resulting from an inquiry in respect of which it was decided there should be a consultative fee shall within twelve months of notifying receipt of the order pay to the Secretaries the amount of the consultative fee so decided. The Secretaries shall within twenty-eight days of receipt of the consultative fee distribute the same equally among all members who submitted bona fide tenders for such inquiry. (9) Market Survey. Members and members of Sections shall meet at regular intervals to consider and review market conditions both at home and overseas and in general shall meet at Least once in every six months". At some date thereafter a copy of this resolution was furnished by the respondents to the Registrar, who filed it in the Register.

By their Statement of Case, which was not filed until the 1st May 1964, the respondents admitted that agreement No. 2578 in the form in which it existed at the date of the commencement of the proceedings did contain "restrictions" which they did not seek to justify. They sot out the resolution of the 16th October 1963, and denied that the agreement as varied by the...