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Gallagher v Pioneer Concrete (NSW) Pty Limited

[1993] FCA 59



Applicants were lorry owner drivers (LOD’S) engaged by Pioneer to carry ready-mixed concrete to building sites in Sydney.  Pioneer claimed the LOD’s had an agreement to restrict the number of trucks available to Pioneer and also to prevent it from engaging third parties.  They also operated on a rotation system to share work and equalise income.


Held (Lockhart J)

The equalisation system conceals differences between operators.  It limits ability of market participants to change the number and form of ownership of trucks.  The practices penalize efficient operators and subsidize inefficient operators:

‘They are acts of protection which are contrary to the dictates of market competition.  There is a lessening of competition … caused by an artificial limit being imposed on the number of trucks that may be used …’

There was a lessening of competition – was it substantial?

In the cartage market?  Yes: practices restricted, prevented and hindered competition.  It ‘cannot be doubted that the erection or maintenance of barriers to entry can lead to a substantial lessening of competition’

In the concrete market? Market inherently competitive. Nevertheless, there was SLC here.  Cartage accounted for approximately 15% of the cost to the customers – the restrictions meant there was an inability to meet customer demand.


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