Atkins v Master Builders Association of NSW

[2005] FCA 1402

FEDERAL COURT OF AUSTRALIA

Atkins v Master Builders Association of NSW [2005] FCA 1402

PRACTICE AND PROCEDURE – pleading – alleged contravention of s 46 of the Trade Practices Act 1974 (Cth) – failure to plead material facts – statement of claim struck out.

TRADE PRACTICES – alleged misuse of market power in contravention of s 46 of the Trade Practices Act 1974 (Cth) – pleading – failure of statement of claim to plead material facts.

Trade Practices Act 1974 (Cth) s 46
Federal Court Rules O 11 r 2(a)

The Bega Co-operative Society Limited v The Milk Authority of the Australian Capital Territory (unreported, Federal Court of Australia, Neaves J, 12 May 1992) cited
Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR 41-522 cited
Collex Waste Management Pty Limited v Waste Recycling and Processing Service of NSW [1999] FCA 213 cited
Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568 cited
Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 cited

KEITH RAYMOND ATKINS v
MASTER BUILDERS ASSOCIATION OF NEW SOUTH WALES

NSD 965 OF 2005

LINDGREN J
26 SEPTEMBER 2005
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 965 OF 2005

BETWEEN:	KEITH RAYMOND ATKINS APPLICANT
AND:	MASTER BUILDERS ASSOCIATION OF NEW SOUTH WALES RESPONDENT
JUDGE:	LINDGREN J
DATE OF ORDER:	26 SEPTEMBER 2005
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.        The statement of claim filed on 23 August 2005 be struck out.

2.The applicant have leave to file and serve an amended statement of claim by 17 October 2005.

3.The applicant pay the respondent’s costs of the respondent’s motion brought by notice of motion filed on 2 September 2005.

4.The costs referred to in order 3 shall include the respondent’s costs of the directions hearing of 31 August 2005.

5.The proceeding be stood over to Wednesday 19 October 2005 at 9.30 am for further directions.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 965 OF 2005

BETWEEN:	KEITH RAYMOND ATKINS APPLICANT
AND:	MASTER BUILDERS ASSOCIATION OF NEW SOUTH WALES RESPONDENT

JUDGE:	LINDGREN J
DATE:	26 SEPTEMBER 2005
PLACE:	SYDNEY

REASONS FOR JUDGMENT

INTRODUCTION

1. The respondent (MBA) moves, by notice of motion filed on 2 September 2005, for an order that the statement of claim dated and filed 23 August 2005 be struck out, or, in the alternative, that paras 11 and 12 of it be struck out.

2. According to the application which commenced this proceeding on 15 June 2005, the applicant (Mr Atkins) claims damages and injunctive relief for ‘misuse of market power, contrary to s 46 of the Trade Practices Act 1974, by the publication and dissemination of a document’ entitled Guide to Internal Wet Area Waterproofing by MBA’s agent, MBA’s ‘Waterproofing Council (NSW) Technical Committee 2003-4’, without acknowledgment of Mr Atkins’s contribution to that document or of his own book entitled The Bathroom Book.

   THE ALLEGATIONS MADE IN THE STATEMENT OF CLAIM

3. The following are the allegations made in the statement of claim.

4. Mr Atkins is a member of MBA.  He is also the author of The Bathroom Book, which is published and sold Australia-wide by ‘Standards Australia’.  Over many years, Mr Atkins has developed expertise in ‘the waterproofing industry’, and has promoted himself as having such expertise, and engaged in educational and promotional activities for reward, both under his own name and under the registered business name, ‘Bathroom Expo’.

5. Mr Atkins has examined and experimented upon the comparative waterproofing qualities of various products available for use in the waterproofing industry, both alone and in collaboration with others, such as ‘James Hardie’ and the ‘CSIRO’.

6. The second edition of The Bathroom Book was published in December 2000 ‘as a symbol of [Mr Atkins’s] expertise and basis for self-promotion by way of lectures, seminars and other educational activities for reward’.  In the second edition of The Bathroom Book, Mr Atkins also advocates certain products and procedures.

7. MBA is a ‘not for profit organisation, chartered with representing the interests of the building and construction industry’.  (According to MBA’s defence to this paragraph, MBA is registered as an association under the Workplace Relations Act 1996 (Cth).)

8. Mr Atkins has not alleged, as he must do for the purposes of s 46, that MBA is a corporation for the purposes of the Trade Practices Act 1974 (Cth) (‘TP Act’). I have explained to Mr Atkins, who appears this morning unrepresented, that the word ‘corporation’ is defined in s 4 of the TP Act and that it may well be that the relevant paragraph of the definition is para (b), which refers to:

   ‘...a trading corporation formed within the limits of Australia or...a financial corporation so formed.’

9. MBA promotes itself as ‘the leading building and construction industry association’.  The words just shown within quotation marks appear also within quotation marks in para 7 of the statement of claim. This suggests that Mr Atkins has obtained them from a publication of MBA. Apparently due to oversight, MBA has not pleaded to para 7 in its defence.  However, counsel for MBA said that on the assumption that the words do come from a publication or advertisement authorised by MBA, it will be conceded that MBA promotes itself as ‘the leading building and construction industry association’ within New South Wales.

10. Mr Atkins’s complaint begins to emerge in paras 8 and 9.  In 2004, MBA, through its agent, the MBA Waterproofing Council (NSW) Technical Committee 2003/2004, caused to be published the Guide to Internal Wet Area Waterproofing, which does not acknowledge the research and development carried out by Mr Atkins, or his book, as a source of information:

    ‘...as a reference tool and training aid and which establishes best practice in Internal Wet Area Waterproofing.’

11. According to para 10, MBA initiated the publication of the Guide, and subsequently promoted its use when it knew of Mr Atkins’s research and development and of the existence of his book.

12. If one were to pause here, one might assume that Mr Atkins’s complaint is of plagiarism or perhaps infringement of copyright. However, consistently with the application which launched the proceeding (see [2] above), paras 11 and 12 purport to plead a cause of action for contravention of s 46 of the TP Act. Those paragraphs are as follows (I omit the particulars to paragraph 12 – there are no particulars to para 11):

    ‘11[The MBA] has a leading role in providing education and training in the waterproofing industry by the provision of its own materials and by acting in conjunction with training institutions, and as such has a substantial degree of power in the waterproofing educational market.

    12[The MBA] has taken advantage of that power and, by its initiation of the publication and ongoing promotion of ‘the Guide’, acted in breach of s 46 of the Trade Practices Act 1974.’

    CONSIDERATION

13. Rule 2(a) of Order 11 of the Federal Court Rules provides that subject to the Rules, a pleading must contain, and only contain, a statement in a summary form of the material facts on which a party relies, but not the evidence by which those facts are to be proved.

14. Attempts to plead claims of contravention of provisions in Pt IV of the TP Act have often given rise to disputation: see, for example, The Bega Co-operative Society Limited v The Milk Authority of the Australian Capital Territory (unreported, Federal Court of Australia, Neaves J, 12 May 1992); Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR 41-522; Collex Waste Management Pty Limited v Waste Recycling and Processing Service of NSW [1999] FCA 213; Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568; Australian Wool Innovation Ltd v Newkirk [2005] FCA 290.

15. In some cases it may be difficult to decide whether a statement of claim contains, and only contains, material facts.  Not so here.  The statement of claim consists almost entirely of conclusions rather than of the facts on which they are supposedly based.

16. There are no facts pleaded identifying ‘the waterproofing educational market’. To plead a market it is necessary to plead the facts as to the buyers and sellers, or the potential buyers and sellers, and the goods or services in question.

17. The statement of claim does not allege facts showing MBA’s possession of a substantial degree of market power. I note, in passing, that although the reference to ‘leading role’ in para 11 is an embarrassing irrelevancy which should not be repeated, there are no facts pleaded supporting the conclusion which those words express either.

18. So far as para 12 is concerned, there are no facts pleaded establishing that MBA ‘has taken advantage’ of the substantial degree of market power which it is alleged to have possessed.  All that one is told is that MBA has plagiarised or copied from The Bathroom Book – something which a person without market power might do, and to which market power is irrelevant.

19. A further problem is that there is no pleading of MBA’s purpose in taking advantage of its market power. The proscribed purposes are identified in s 46(1) of the TP Act. In para 12 there are particulars of certain claimed damaging effects of MBA’s alleged contravention of s 46, such as, that Mr Atkins’s ability to hold himself out as an expert in the waterproofing educational market has been substantially damaged. However, the statement of claim assiduously avoids the pleading of a ‘purpose’ of the MBA, as distinct from effects damaging Mr Atkins.

20. A further shortcoming in the statement of claim is that it does not plead facts showing a causal link between the alleged contravention and those effects on Mr Atkins.

21. Yet a further deficiency is that there are no pleaded facts establishing the deleterious effects.

22. It is not appropriate simply to strike out paras 11 and 12 because the entire statement of claim is infected by deficiencies.

    CONCLUSION

23. The statement of claim should be struck out.  Mr Atkins should have leave to file and serve an amended statement of claim within 21 days, that is to say, by 17 October 2005.  The costs of the motion will follow the event.

I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren.

Associate:

Dated:             5 October 2005

The Applicant appeared in person.
Counsel for the Respondent:	Mr G Colman
Solicitor for the Respondent:	MBA Lawyers
Date of Hearing:	26 September 2005
Date of Judgment:	26 September 2005