Australian Competition & Consumer Commission v Pauls Ltd - [1999] FCA 1750

FEDERAL COURT OF AUSTRALIA
Australian Competition & Consumer Commission v Pauls Ltd [1999] FCA 1750
PRACTICE AND PROCEDURE – pleadings – application to strike out statement of claim – claims of prolix pleadings – need for brevity – use of annexed documents to statement of claim coupled with allegations of the effect of those documents.
Trade Practices Act 1974 (Cth) ss 52, 53(a), 53(c) and 53(eb)
Federal Court Rules O 11 r 3, O 11 r 4 and O 11 r 16
Davy v Garrett (1877) 7 ChD 473 followed
Hill v Hart Davis (1884) 26 ChD 470 followed
Re Brazendale, (Northrop J, 31 October 1991, unreported) cited
Bloom v Kugi Pty Ltd (Drummond J, 31 May 1991, unreported) cited
Murex Diagnostics Australia Pty Ltd v Chiron Corporation (1995) 128 ALR 525 cited
Torrens Aloha Pty Ltd v Citibank NA (1996) 32 ATR 450 applied
Brambles Holdings Ltd v Trade Practices Commission (1979) 28 ALR 191 cited
Carr v McDonald’s Australia Ltd (1994) 63 FCR 358 cited
Coshott v Kam Tou Mak (Wilcox J, 3 March 1998, unreported) cited
AUSTRALIAN COMPETITION & CONSUMER COMMISSION v PAULS LIMITED (ACN 009 698 015)
D 4 OF 1999
O’LOUGHLIN J
21 DECEMBER 1999
ADELAIDE (Heard in Darwin)

IN THE FEDERAL COURT OF AUSTRALIA

NORTHERN TERRITORY DISTRICT REGISTRY

D 4 OF 1999

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

PAULS LIMITED (ACN 009 698 015)
RESPONDENT

JUDGE:

O’LOUGHLIN J

DATE OF ORDER:

21 DECEMBER 1999

WHERE MADE:

ADELAIDE (Heard in Darwin)

THE COURT ORDERS THAT:
1. The further amended statement of claim in this matter be struck out.
2.The applicant be at liberty to file and serve a further amended application and a second further amended statement of claim within twenty-eight days of this date.
3.The applicant file and serve within twenty-eight days of this date its answers to the respondent’s request for further and better particulars of the further amended statement of claim.
4.The applicant pay the respondent’s costs of and incidental to this order which costs are to be taxed in default of agreement.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NORTHERN TERRITORY DISTRICT REGISTRY

D 4 OF 1999

BETWEEN:

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION
APPLICANT

AND:

PAULS LIMITED (ACN 009 698 015)
RESPONDENT

JUDGE:

O’LOUGHLIN J

DATE:

21 DECEMBER 1999

PLACE:

ADELAIDE (Heard in Darwin)

REASONS FOR JUDGMENT

In these proceeding the applicant, the Australian Competition and Consumer Commission (“the ACCC”) seeks declarations that the respondent, Pauls Limited (“Pauls”):
§ has engaged in conduct in trade or commerce that was misleading or deceptive or was likely to mislead or deceive: contrary to s 52 of the Trade Practices Act 1974 (Cth) (“the TPA”)
§ has engaged in conduct in trade or commerce in connection with the supply of milk products or the promotion of milk products which falsely represented that milk products were of a particular quality or composition: contrary to s 53(a)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1999] FCA 1750
Decision Date: 21 DECEMBER 1999

CaseChat Overview and Summary

The Australian Competition & Consumer Commission (ACCC) filed a case against Pauls Ltd, a dairy company, in a court in Australia. The dispute revolves around claims that Pauls Ltd engaged in misleading or deceptive conduct by implying that all raw milk used in their products was sourced from the Northern Territory. Pauls Ltd argued that the implication was tenuous as more than half of the raw milk came from Queensland. The court was required to decide if the statement of claim by the ACCC was overly complex and if it sufficiently detailed the claims against Pauls Ltd.

The court determined that while the reasoning in the statement of claim may indeed be tenuous, it was not so uncertain as to warrant a strike out application. The court found deficiencies in the pleading but believed that the best course of action was to allow Pauls Ltd to file and serve a fresh pleading. The court advised the ACCC to address the issues raised by Pauls Ltd and to be more precise in their pleadings to avoid similar issues in the future. The court also noted that the ACCC was entitled to costs due to the success of Pauls Ltd in their attacks on the statement of claim and the existence of glaring errors.

The court ordered the further amended statement of claim to be struck out and gave the ACCC twenty-eight days to file and serve a second further amended statement of claim. The ACCC was also required to provide answers to the respondent's request for further and better particulars within the same time frame. Additionally, the ACCC was ordered to pay the respondent's costs of and incidental to this order.

Orders

Orders of the court

1. The further amended statement of claim in this matter be struck out.

2. The applicant be at liberty to file and serve a further amended application and a second further amended statement of claim within twenty-eight days of this date.

3. The applicant file and serve within twenty-eight days of this date its answers to the respondent’s request for further and better particulars of the further amended statement of claim.

4. The applicant pay the respondent’s costs of and incidental to this order which costs are to be taxed in default of agreement.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Pauls complained that the process of reasoning that led to the ultimate conclusion, as pleaded in par 26, was, what it described as, “tenuous, at best, involving two “leaps of faith!” They were said to be, first, that the use of the words “The Territory’s own” involved an implication that all raw milk that was used in processing the milk products was obtained in the Northern Territory and, secondly, that because more than half of the raw milk came from Queensland, it made it false to describe the milk as “The Territory’s Own”. The complaints, may, in the end, turn out to be justified. But that will be for the trial judge to determine after hearing all the evidence. The pleadings are not attended by that required degree of uncertainty that is necessary to justify a strike out application.Conclusion These reasons have, of necessity, been longer than is normal in a strike out application. This has been occasioned because of the extensive attacks that have been made on the composition of the FASC. I have not mentioned all of the attacks: in some cases, because I did not think them to be of sufficient importance to warrant detailed consideration. I have noted the areas where, in my opinion, there are important deficiencies in the FASC; those deficiencies are of such a nature that the best course of action is to strike out the FASC with leave to file and serve a fresh pleading. In composing that fresh pleading, I would counsel the pleader to have regard, not only to these reasons, but also to the other complaints of the respondent. Not all were justified but recognition of some of them will enhance the quality of the next version of the statement of claim. As an example I point to the expression in par 3 of the FASC – “It doesn’t get any fresher than this …”. There was much debate over the proper inference to draw from that statement. In subpar 5(e) the ACCC claimed that this statement amounted to misleading or deceptive conduct because most of the milk products were supplied to consumers between three and seven days after the raw milk had been obtained from the dairies. What meaning is attributable to the word “fresh” and its derivatives? Is it temporal? That is, three to seven days is not fresh. Or is it comparative? That is, no other supplier of milk gets its milk to its consumers in a shorter space of time? Another small curiosity in the area of “fresh” milk is that the third advertisement (see pars 9, 10 & 11) contains the same statement: “It doesn’t get any fresher than this …”. Despite the treatment of that statement in pars 3, 4 and 5 (dealing with the first advertisement) the pleader did not plead in par 11 that the third advertisement was misleading or deceptive for the reason that it took three to seven days to supply the milk to consumers. The task of preparing, in pleading form, the three-part exercise in respect of nine different advertisements is a painstaking and laborious one. But that cannot excuse laxity. The respondent is entitled to know, exactly, the case that it is to meet in respect of each of those advertisements. Although the respondent has not been wholly successful in its attacks on the FASC, the degree of its success, coupled with the existence of some glaring errors in the pleading, are sufficient to justify the respondent having its costs. I will allow the ACCC twenty-eight days from this date within which to file a second further amended statement of claim. The earlier order (see par 7 hereof) that the ACCC supply further and better particulars of certain provisions of the FASC may, if it be appropriate, be satisfied in whole or in part, by addressing the requests for particulars in the next statement of claim.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NORTHERN TERRITORY DISTRICT REGISTRY	D 4 OF 1999

BETWEEN:	AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT
AND:	PAULS LIMITED (ACN 009 698 015) RESPONDENT
JUDGE:	O’LOUGHLIN J
DATE OF ORDER:	21 DECEMBER 1999
WHERE MADE:	ADELAIDE (Heard in Darwin)

JUDGE:	O’LOUGHLIN J
DATE:	21 DECEMBER 1999
PLACE:	ADELAIDE (Heard in Darwin)