Registrar of Restrictive Trading Agreements v W.H.Smith and Son Limited and others

Date

26 June 1969

Legislation

Restrictive Trade Practices Act 1956, s.14

Keywords

competition law; reasonable cause to believe; objective belief

Counsel

David Hirst QC, F.M. Ferris for the Registrar, A.J. Bateson, Charles Lysaght for W.H.Smith, G. Dillon QC and Walker for Menzies

Solicitors:

Treasury Solicitor; Bircham & Co.; Peachey & Co.

Judge:

Lord Denning MR, Fenton-Atkinson and Megaw LJJ.

Court:

Court of Appeal (Criminal Division)

Reported:

[1969] 3 All ER 1065; [1969] 1 WLR 1460.

Summary:

This case concerned the selling of newspapers in Newport, Monmouthshire. A Mrs Seer asked three wholesalers of newspapers to supply her small shop with papers but each refused.

The Registrar served notices on each of the suppliers she had contacted under s14 of the Restrictive Trade Practices Act 1956. The Registrar stated in each of the notices that he had "reasonable cause to believe" that each of the firms had been parties to a restrictive agreement and required each of them to give particulars of it.

After receiving responses from each of the firms several months passed and the Registrar appeared to have been satisfied with the information he had received and the denials that there was any such agreement.

Decision

Lord Denning concluded that:

• before an order for examination is made, there must in fact be reasonable cause to believe that a restrictive agreement has been made. Section 14 (1) starts with the words: "If the Registrar has reasonable cause to believe that any person... may be party to" a restrictive agreement. That does not make the registrar the judge of the matter. The words are not: "... if the Registrar thinks he has reasonable cause to believe." They are: "If [he] has reasonable cause", i.e., in fact.
  
  
• it is for the judge to find whether or not reasonable cause did in fact exist. The Registrar can, of course, act on information from credible people and the like, but if he seeks an order from the court, he must place his information before the court so that the court can see whether in fact there is reasonable cause to believe;
  
  
• the test of reasonable belief was objective and not subjective. It is best to take the known facts and ask: "Do they give reasonable cause to believe?"
  
  
• in this case, on all the materials placed before the court, there was not reasonable cause to believe that these three wholesalers had engaged in an agreement of a restrictive nature contrary to the Act. Each had ample justification for refusing to supply Mrs. Seer.