Melbourne Steamship Co Ltd v Moorehead[2] was the last of a series of cases in which members of a cartel, described as the "Coal Vend" were prosecuted under the Australian Industries Preservation Act.
[9] The shipping companies joined the Coal Vend in late September 1906,[7]: at p. 440 initially involving were Adelaide Steamship, Howard Smith Co, Huddart Parker & Co and McIlwraith McEacharn & Co,[10] each of which had colliery interests.
[5] The reason for the Bill was explained as being to protect Australian industries from unfair competition, particularly the International Harvester Co, given the pejorative label of the "American Octopus Trust" as part of a campaign by H.V.
[14] By 1907 the parliament was concerned at price fixing within Australia in oil, coal, boot and shoe machinery, bricks, confectionery, tobacco, and proprietary articles and the Australian Industries Preservation Act was amended to give the Comptroller-General of Customs investigative powers including requiring people to answer questions.
The conviction of Huddart Parker however was set aside, with the majority, Griffith CJ, Barton & O'Connor JJ, holding that the provisions based on the corporations power were invalid.
The corporate and individual defendants challenged every aspect of the prosecution, including denials of membership of the Coal Vend, despite making and receiving payments.
Isaacs J found that each of the defendants were engaged in a combination with intent to restrain inter-state trade and commerce in Newcastle coal to the detriment of the public.
[7] The shipping companies and their managing directors appealed to the High Court, primarily on the basis that the Australian Industries Preservation Act required proof of intent not just to increase prices, but to cause detriment to the public.
The High Court, Griffith CJ, Barton and O'Connor JJ, held in Adelaide Steamship Co Ltd v R,[19] delivered in September 1912, that the intent of the agreement was to prevent unlimited and ruinous competition and to fix the "hewing rate" paid to miners.
[20] Melbourne Steamship were not a defendant in the prosecution of the original shipping companies in the High Court, however the statement of claim included its role in joining the Coal Vend.
[2]: at p. 350–1 Griffith CJ noted that definition of "answer questions" in the Act was to the best of the person's knowledge, information and belief and held that a corporation could not give evidence in that regard.
[2]: at p. 352–3 Griffith CJ stated that one of the arguments put by the government was a technical point of pleading and that it was axiomatic that the government never take a technical point, stating I am sometimes inclined to think that in some parts – not all – of the Commonwealth, the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary, is either not known or thought out of date.
[23] The Attorney-General, Billy Hughes, had held a referendum in 1911 to amend section 51 of the Constitution to give the Australian Parliament power to make laws about "Combinations and monopolies in relation to the production, manufacture, or supply of goods or services", however this was widely rejected, obtaining support from just 39% of the voters and a majority in just one state, Western Australia.