It’s not quite in the class of “man bites dog”, nor is it sufficiently
shocking as to renew one’s faith in the spirit of Christmas, but
Westfield and the rest of the shopping mall oligopoly have lost an
important case in the NSW Land and Environment court and they are not
happy.

Basically Westfield, GPT, Centro and Stocklands (now there’s a quartet
that just loves the competitive cut and thrust of the marketplace) have
been told to go away by a judge of the NSW Court in their continuing
attempt to control or shutdown the pesky factory outlet store operated
in Sydney’s Homebush by Melbourne based Direct Factory Outlet (DFO).

That’s owned by a collection of well-known Melbourne business men and
their families and includes ACCC chairman Graeme Samuel whose shares
are held in a blind trust. There other respondents, such as Sanity
(part of the Brazin group) Colorado, another listed retailer, plus two
smaller retailers.

Nor is it as flamboyant or dramatic a situation as the Orange Grove
case in Sydney’s South west that’s now before the Independent
Commission against Corruption in NSW. But in its own way it is
more important and could very well be quite a significant decision in
the long run.

Here’s the link to the judgement: Westfield Management v Direct Factory Outlets

The case and the decision appeared in the press Friday without much of an explanation. The AFR’s coverage was cursory, and perhaps the best report was in The Sydney Morning Herald.

The judge in the Homebush case, Justice Nicola Pain dismissed the
entire case against DFO Homebush last week and doing so quoted from an
earlier judgement in another court to make the point that action of the
Big Four Mall Operators was an “unfair and oppressive use” of the
judicial process. “I do not think the applicants should be permitted to
continue their litigation further” the judge said.

Here are the relevant sections of her orders at the bottom of the above judgement:

I agree with the Second Respondent’s submissions that,
given the history of this matter, there can be no suggestion that the
Applicants have had insufficient time to formulate their case. The
Applicants are very large commercial entities with considerable
financial resources, unlike all the Respondents, and have had the
advice of several experienced counsel and an experienced solicitor.
Despite this the new pleadings have disregarded my observations in my
earlier judgment on the first strike out application. In my view, the
Applicants conduct can be properly characterised as “giving rise to an
unfair and oppressive use of the processes of the Court”: Dart v
Norwich Union Life Australia Ltd [2002] FCAFC 34.

52 Under Pt 13 r 5(1) of the Supreme Court Rules the Court has a
discretion to either stay or summarily dismiss proceedings. I consider
that, in the circumstances, I should summarily dismiss the proceedings.
As set out above, the Applicants have failed to properly articulate
their case despite being given numerous opportunities to do so. Given
this, I do not think the Applicants should be permitted to continue
this litigation further.

Now that’s as comprehensive a bagging of the strength of a legal case
as any I have heard of for a while. But to read the details of the
various attempts by Westfield and its mates to change or re-plead the
facts of their argument shows the increasing desperate nature of their
case. Trivial and non-trivial sales and prices, the definition of a
shop. All Alice in Wonderland stuff really and a sign of just how far
these giant shopping mall operators want to restrict all opposition to
their businesses.

Readers will remember what Crikey has reported on the past about
Westfield and Orange Grove and Westfield and DFO at Homebush in Westfield’s attitude to competition

The stuff about how Westfield was sending operatives into the DFO
outlet at Homebush to check on prices and to make sure that it was
being sold under normal retail prices, to check also that the goods
being sold were surplus or seconds goods and not first quality retail
stock. Quite amazing and quite, quite mad if you think about it.

Westfield’s nearest centre is at Burwood. Centro has a large centre at
Bankstown. GPT and Stocklands are not big in the inner west of Sydney.
The principle seems to have been bash a new threat whenever you can.

The next big argument will no doubt be an appeal of this
decision. But there are few other rounds. Westfield is trying to
stop not only a DFO at Brisbane airport, but also a big shopping mall
being built at the airport (come on Max More Wilton and Macquarie Bank,
give us a Mega Mall at Sydney Airport and stop being a rapacious
monopoly).

And there’s also the Stocklands attempt to takeover GPT. As a matter of
course that should be knocked on the head, but the ACCC won’t
intervene, so it is up to our gutless institutions to show some
backbone and understand that competition means growth, Concentration in
competition means slow, laggard growth rates and poor returns.

Finally an observation from the judge which sums up the whole cynical
attitude that the big mall operators(and others in our oligopolistic
economy.

“The Applicants are very large commercial entities with considerable
financial resources, unlike all the Respondents, and have had the
advice of several experienced counsel and an experienced solicitor.”

That means cost is not object to delaying, frustrating or generally draining their less well-resourced opponents.

But DFO isn’t the sort of group to take what Westfield and its mates in the mall game dish out. The Age reported this story last year of a fightback by the feisty discounter – Shopping giants accused of collusion