Brisbane Broncos Leagues Club Ltd v Alleasing Finance Australia Pty Ltd
[2011] FCA 466
•10 May 2011
FEDERAL COURT OF AUSTRALIA
Brisbane Broncos Leagues Club Ltd v Alleasing Finance Australia Pty Ltd [2011] FCA 466
Citation: Brisbane Broncos Leagues Club Ltd v Alleasing Finance Australia Pty Ltd [2011] FCA 466 Parties: BRISBANE BRONCOS LEAGUES CLUB LTD (ACN 010 798 679) v ALLEASING FINANCE AUSTRALIA PTY LTD (ACN 003 421 136) and TOTAL CONCEPT PROJECTS AUSTRALIA) PTY LTD ACN 073 474 771) (IN LIQUIDATION)
BRISBANE BRONCOS LEAGUES CLUB LTD (ACN 010 798 679) v ALLEASING PTY LTD (ACN 008 655 025)
File number(s): NSD 1177 of 2010
NSD 1734 of 2010Judge: JACOBSON J Date of judgment: 10 May 2011 Catchwords: PRACTICE AND PROCEDURE – Application for summary dismissal of proceeding – Whether claim has no reasonable prospect of success – Whether claim is frivolous, vexatious or abuse of process – Application to strike out of pleadings – Whether pleading tends to cause prejudice, embarrassment or delay
TRADE PRACTICES – Exclusive dealing – Third line forcing – Allegation of supply of installation and marketing services to customers on the condition that goods to be installed were to be leased from an agent of supplier – Whether such an acquisition was “from another person” – Whether Trade Practices Act 1974 (Cth) s 47(6) enlivened
TRADE PRACTICES – Misleading and deceptive conduct – Question of fact to be determined in all the relevant circumstancesLegislation: Federal Court of Australia Act 1976 (Cth) s 31A
Federal Court Rules 1979 (Cth) O 20 r 5, O 11 r 16
Trade Practices Act 1974 (Cth) ss 47, 84Cases cited: Brisbane Broncos Leagues Club v Alleasing Finance Australia Pty Limited [2011] FCA 106 referred to
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 referred to
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 referred to
Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 discussed
Miller & Associates Insurance v BMW Australia Finance Ltd (2010) 241 CLR 357 referred to
Spencer v Commonwealth (2010) 241 CLR 118 citedTextbooks cited: Heydon JD, Trade Practices Law (Lawbook Co, subscription service) at [18.90] (update 130) Date of hearing: 12 April 2011 Date of last submissions: 12 April 2011 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 40 NSD 1177 of 2010 Counsel for the Applicant: Mr R J Weber SC with Mr A J Abadee Solicitor for the Applicant: Slater & Gordon Lawyers Counsel for the First Respondent: Mr S M Nixon Solicitor for the First Respondent: Mallesons Stephen Jaques NSD 1734 of 2010 Counsel for the Applicant: Mr R J Weber SC with Mr A J Abadee Solicitor for the Applicant: Slater & Gordon Lawyers Counsel for the Respondent: Mr S M Nixon Solicitor for the Respondent: Mallesons Stephen Jaques
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1177 of 2010
BETWEEN: BRISBANE BRONCOS LEAGUES CLUB LTD (ACN 010 798 679)
ApplicantAND: ALLEASING FINANCE AUSTRALIA PTY LTD (ACN 003 421 136)
First RespondentTOTAL CONCEPT PROJECTS AUSTRALIA) PTY LTD ACN 073 474 771) (IN LIQUIDATION)
Second Respondent
JUDGE:
JACOBSON J
DATE OF ORDER:
10 MAY 2011
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
The First Respondent’s Motion filed on 6 April 2011 be dismissed with costs.
The Respondents file a Defence and any Cross-Claims on or before 31 May 2011.
The matter be listed for directions on 7 June 2011.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1734 of 2010
BETWEEN: BRISBANE BRONCOS LEAGUES CLUB LTD (ACN 010 798 679)
ApplicantAND: ALLEASING PTY LTD (ACN 008 655 025)
Respondent
JUDGE:
JACOBSON J
DATE OF ORDER:
10 MAY 2011
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
Leave be granted to the Applicant to amend its Application and Statement of Claim in the form of the document filed on 1 April 2011.
The Respondent’s Motion filed on 6 April 2011 be dismissed with costs.
The Respondent file a Defence and any Cross-Claims on or before 31 May 2011.
The matter be listed for directions on 7 June 2011.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1177 of 2010
NSD 1734 of 2010
BETWEEN: BRISBANE BRONCOS LEAGUES CLUB LTD (ACN 010 798 679)
ApplicantAND: ALLEASING FINANCE AUSTRALIA PTY LTD (ACN 003 421 136)
First RespondentTOTAL CONCEPT PROJECTS AUSTRALIA) PTY LTD ACN 073 474 771) (IN LIQUIDATION)
Second Respondent
JUDGE:
JACOBSON J
DATE:
10 MAY 2011
PLACE:
SYDNEY
REASONS FOR JUDGMENT
Introduction
Following upon my judgment in Brisbane Broncos Leagues Club v Alleasing Finance Australia Pty Ltd [2011] FCA 106, the Applicant (“Broncos”) amended its Statement of Claim to replead its allegation of exclusive dealing.
Both the claim of exclusive dealing as originally pleaded and as amended invoke s 47(6) of the Trade Practices Act 1974 (Cth) (“Trade Practices Act”) but the new claim is entirely different from that which I dealt with in my earlier judgment.
The original claim was that Alleasing Finance Australia Pty Limited (“AFA”), the first Respondent in matter NSD 1177 of 2010 (the “Class Action”) engaged in third line forcing by supplying or offering to supply the services of leasing certain items of equipment to Group Members on condition that they acquire other services from the second respondent in the Class Action, Total Concepts Projects (Australia) Pty Limited (In Liq) (“TCP”).
The Amended Statement of Claim alleges that TCP engaged in third line forcing by supplying or offering to supply its services to Group Members on condition that they acquire “from another person”, namely the rental company that owned the plant and equipment, the services of leasing that equipment.
Importantly, the Amended Statement of Claim goes on to allege that the conduct constituting the exclusive dealing was engaged in by TCP as agent of AFA and accordingly that AFA is deemed also to have engaged in exclusive dealing by virtue of s 84 of the Trade Practices Act.
AFA submits that the allegation of agency exposes a fundamental flaw in the claim. The defect is said to be that if TCP supplied or offered to supply the services on the proscribed condition as agent for AFA, there can be no third line forcing. This is because AFA, as principal, offered to supply the services on condition that Group Members acquire other services from the same corporation, namely AFA.
On this approach, s 47(6) is not enlivened because TCP, as agent for AFA, did not supply, or offer to supply, the goods or services on condition that Group Members acquire goods or services from “another person”. AFA therefore seeks judgment under s 31A of the Federal Court of Australia Act 1976 (Cth) or an order that the claim of exclusive dealing be dismissed or struck out under O 20 r 5 or O 11 r 16 of the Federal Court Rules 1979 (Cth) (“Federal Court Rules”).
Claims of exclusive dealing in similar terms to the claim in the Class Action have been made in two related representative actions. The first is matter NSD 1198 of 2010 (the “Asquith Proceeding”). The second is matter NSD 1749 of 2010 (the “Richmond Proceeding”). No Notice of Motion was filed in the Asquith Proceeding or the Richmond Proceeding but the parties to those proceedings agree that the relevant question will be answered by AFA’s Notice of Motion.
Broncos has a separate proceeding in matter NSD 1734 of 2010 (the “second Broncos proceeding”). That matter is not a representative proceeding and is brought only against Alleasing Pty Ltd (“Alleasing”) which is a company related to AFA.
The original Statement of Claim in the second Broncos proceeding included a claim of exclusive dealing but that claim has now been abandoned. Broncos seek leave to amend the Statement of Claim to substitute a claim of misleading and deceptive conduct against Alleasing. The substance of the proposed claim is that Alleasing engaged in misleading or deceptive conduct by failing to disclose to Broncos the true identity of the party from whom the equipment was leased.
The effect of the Broncos’ claim in the second Broncos proceeding is that it was misled or deceived into entering into a rental agreement with Alleasing in the mistaken belief that the lessor of the goods was AFA.
Alleasing contends that the claim of misleading or deceptive conduct has no reasonable prospect of success because the rental agreement was embodied in a document which plainly disclosed the identity of the contracting party. Accordingly, Alleasing opposes leave to amend. In the event that leave is not required, Alleasing seeks judgment on the claim under s 31A of the Federal Court of Australia Act or an order that the claim be dismissed or struck out.
The exclusive dealing claim
Paragraph 39 of the Amended Statement of Claim describes “another person” as “the rental company that owned the equipment” which was the subject of the leasing agreement. It does not identify AFA as that person. The reason for this appears to be that paragraph 38(b) alleges that Group Members were not actually aware prior to the execution of the agreements, that AFA was the owner of the equipment.
I do not consider that anything turns on that point for the purposes of addressing the present motion. Since AFA was the owner, it seems to me to be appropriate to proceed on the assumption that AFA was the other person, at least for the purpose of considering AFA’s argument.
AFA’s argument turns largely upon the observations of a Full Court in Hospitality Group Pty Ltd v Australian Rugby Union Ltd (2001) 110 FCR 157 (“Hospitality Group”). In that case, Hill and Finkelstein JJ (with whom Emmett J relevantly agreed) addressed the proper construction of s 47(7) of the Trade Practices Act. Their Honours’ observations are equally applicable to the construction of s 47(6).
It is clear from the reasons given by Hill and Finkelstein JJ at [69] that, as a matter of construction, the third line forcing provisions of ss 47(6) and 47(7) require the existence of three parties. In relation to s 47(6), the first is the corporation that supplies or offers to supply. The second is the person to whom the corporation supplies or offers to supply the goods. The third is “another person”, namely the person who is the subject of the proscribed condition. That is to say, the third person is the person from whom the first person is obliged to acquire other goods or services.
The Hospitality Group case was concerned with the sale of “hospitality packages” consisting of tickets to rugby union matches and pre-match and post-match hospitality. The Australian Rugby Union (“ARU”) marketed tickets to its matches subject to a condition that purported to limit the rights of a ticket holder to transfer the ticket at a premium. Hospitality Group Pty Ltd (“THG”), purchased and on-sold tickets at a price which was in breach of the stipulated condition.
The “third party” in the Hospitality Group case was International Management Group of America Pty Ltd (“IMG”) which had entered into an agreement with ARU for the exploitation of various rights, including corporate hospitality.
The effect of the contention made by THG in the Hospitality Group case was that the ARU refused entry to persons who had purchased tickets from THG because those persons had not purchased tickets from the ARU’s approved agent, IMG.
Hill and Finkelstein JJ held at [71] that s 47(7) was not enlivened because:-
“…. If IMG acted as agent for ARU there are only two parties.”
Their Honours went on to say at [71] that s 47(7) is concerned with forcing a person to acquire services from someone else by refusing the person the supply of services from the offender. They concluded by saying the sub-section:-
“… is not concerned with a case where all that happens is that ARU prohibits the acquisition of hospitality packages other than through an authorised franchisee.”
In my opinion, when properly considered in light of the facts of the case, Hospitality Group is not authority for the wide proposition for which counsel for AFA submits. That is to say, it is not authority for the proposition that in every case where the third party is an agent of the first party, there can be no third line forcing.
In Hospitality Group, IMG was in no different position from an in-house ticketing department of a large corporation. There would have been no breach of s 47(7) if an employee of ARU in the publicity department refused to supply THG with tickets and directed THG to purchase the tickets from the ticketing department.
One can therefore readily see why in Hospitality Group their Honours reached the conclusion that the transaction involved only two parties, rather than the relevant three. But it is equally clear that the facts of the Hospitality Group case are distinguishable from those which are posited in the class action. Here, the scope of the agency alleged to exist between TCP and AFA is not entirely clear but it is not analogous to the nature of the agency relationship which existed in Hospitality Group.
What is alleged in the class action is that TCP supplied or offered to supply its services upon condition that Group Members enter into rental or leasing arrangements with a different party, which happened to be, for certain purposes, the agent of TCP. In my view, that is sufficient to constitute three parties so as, arguably, to give rise to a contravention of s 47(6).
In any event, in my opinion, AFA’s submission is based upon an incorrect construction of s 84 of the Trade Practices Act. Section 84(2) deems conduct engaged in by an agent to be also engaged in by the principal so that conduct by the agent becomes “as well” conduct by the principal: Heydon JD, Trade Practices Law (Lawbook Co, subscription service) at [18.90] (update 130) . It follows that both principal and agent are jointly and severally liable.
Accordingly, I am unable to conclude that the claim of exclusive dealing pleaded in the Amended Statement of Claim in the Class Action has no reasonable prospects of success: Spencer v The Commonwealth (2010) 241 CLR 118 (“Spencer”).
Nor is the claim one which ought summarily to be terminated as disclosing no reasonable cause of action or as frivolous or vexatious: Spencer at [24].
Even if the claim of exclusive dealing is precluded by the authority of the Full Court in Hospitality Group (which in my opinion it is not), the decision may be qualified or explained by later authority. It should not be used to stultify the development of the law by the application of summary disposition: Spencer at [25].
The misleading conduct claim
The misleading conduct claim against Alleasing is pleaded in paras 14–28 of the Amended Statement of Claim. I propose to deal with the issue upon the basis that leave to amend is not necessary so that the question which arises is whether it ought to be summarily dismissed under s 31A or under the applicable rules.
The Statement of Claim pleads the history of the relevant dealings between Broncos and AFA or its predecessor which included oral negotiations between Mr Kuehner of Broncos and Mr Grover of the “Alleasing Group” when a revised rental schedule was entered into between Broncos and AFA in 2007.
The substance of what is pleaded in paragraph 23 of the Amended Statement of Claim is that in 2008 Broncos negotiated with Mr Grover for what it believed to be a renewal of the rental arrangements and that it did so in the belief, generated in part by the prior dealings, that the AFA, a company with substantial assets, would be the lessor.
Importantly, in paragraph 23(e), Broncos pleads that in the course of the negotiations Mr Grover orally represented to Mr Kuehner that the new agreement was a continuation of the previous agreement.
In my opinion, it is clear on the face of the pleading that Broncos’ claim is not limited to one of mere non-disclosure. It includes a claim of express oral misrepresentation and it involves a consideration of all of the circumstances relevant to the making of the renewed rental agreement in 2008.
The issue raised by the claim of misleading and deceptive conduct is a question of fact to be determined by all the relevant circumstances. The terms of the contract are but one of the relevant circumstances: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [37]–[39], [109]; Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [24], [102], [130].
Nothing said by the High Court in Miller & Associates Insurance v BMW Australia Finance Ltd (2010) 241 CLR 357, to which Alleasing referred in argument, casts any doubt on the principle to which I have referred.
It follows that the claim of misleading conduct made against Alleasing is not susceptible to summary disposal under s 31A of the Federal Court of Australia Act or under the Federal Court Rules.
To the extent necessary, I will grant leave to Broncos to amend its Statement of Claim in the form of the document filed on 1 April 2011. However I will dismiss the motions brought by Alleasing for the summary disposal of the claim.
Orders
Each of the Motions must be dismissed with costs.
As discussed with the parties during the hearing, I will direct that Defences be filed in each of the matters within 21 days of today.
I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson.
Associate:
Dated: 10 May 2011
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