Energex Ltd v Alstom Australia Ltd

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FEDERAL COURT OF AUSTRALIA

Energex Limited (ACN 078 849 055) v Alstom Australia Limited (ACN 000 215 092)
[2005] FCAFC 215

PRACTICE AND PROCEDURE – interlocutory judgment – leave to appeal – criteria for leave – refusal of motion for summary dismissal of claim and strike out of statement of claim – arguable questions in relation to application of s 82(2) of the Trade Practices Act 1974 (Cth) – availability of relief under s 87 – whether abuse of process – viability of a plea of deceit associated with collusive tendering – judgment at first instance not attended with doubt – motion for leave dismissed

TRADE PRACTICES – collusive tendering – contraventions of s 45 of Trade Practices Act – duration of over 20 years – whether claims for damages time barred – accrual of causes of action – application of s 82 to anti-competitive conduct – alternative claim under s 87 – whether collateral purpose of circumventing time limit – whether abuse of process – deceit – whether implied representation in collusive tendering – motion for leave to appeal against refusal to summarily dismiss action and/or strike out statement of claim dismissed

Trade Practices Act 1974 (Cth) s 45, s 82, s 87
Trade Practices Amendment Act (No 1) (2001 (Cth) Item 21
Federal Court of Australia Act 1976 (Cth) s 24(1A)

Energex Limited v Alstom Australia Ltd [2004] FCA 575 cited
Australian Competition and Consumer Competition v ABB Transmission and Distribution Ltd [2001] ATPR 41-815 cited
Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] ATPR 41-839 cited
Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd (No 2 – Power Transformers) [2002] ATPR 41-871 cited
Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd  (No 2 – Distribution Transformers) [2002] ATPR 41-872 cited
Dey v Victorian Railways Commissioners (1949) 78 CLR 62 cited
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 cited
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 cited
Karedis Enterprises Pty Ltd v Antoniou (1995) 59 FCR 35 cited
Hawkins v Clayton (1988) 164 CLR 539 cited
Little v Law Institute of Victoria (No 3) [1990] VR 257 cited
Australian Associated Motor Insurers Ltd v NRMA Insurance Ltd (2002) 124 FCR 518 cited
Commonwealth v Verwayen (1990) 170 CLR 394 cited
Atlantic City Electric Co v General Electric Co 312 F2d 236 (2nd Circuit 1962) cited
Bailey v Glover 88 US 342 (1874) cited
Western Australia v Wardley  Australia Ltd (1991) 30 FCR 245 cited
Scarcella v Lettice (2000) 51 NSWLR 302 cited
Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 cited
Minogue v Ling [2000] FCA 125 cited
Johnson Tiles Pty Ltd v Esso Australia Pty Ltd (2000) 104 FCR 564 cited
I and L Securities Pty Ltd v HGW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 cited
Warner v Elders Rural Finance Ltd (1992) 41 FCR 399 cited
Australian Competition and Consumer…

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Details
Case
[2005] FCAFC 215
Decision Date

CaseChat Overview and Summary

The case of Energex Ltd v Alstom Australia Ltd involved a dispute between the energy provider Energex Ltd and several respondents, including Alstom Australia Ltd and Wilson Transformer. Energex sought damages and injunctive relief under the Trade Practices Act 1974, alleging deceit and fraudulent conduct by the respondents. The respondents sought to have the claims dismissed or struck out under the Federal Court Rules, arguing that they were time-barred or constituted an abuse of process. The primary judge had to determine the validity of these submissions and whether the claims should proceed to trial.

The legal issues before the court included whether the claims were time-barred under section 82 of the Trade Practices Act, the interpretation of when a cause of action accrues, and whether the claims for damages under section 87 were an abuse of process given the statute of limitations. The primary judge addressed these issues by examining the general principles governing summary judgment and the striking out of pleadings. He concluded that the claims were not time-barred and should proceed to trial, as the limitation period should not deprive Energex of its right to compensation for a fraudulent conspiracy detected after the limitation period had expired.

The primary judge's reasoning was based on the principle that the limitation period should not start until the loss or damage becomes apparent. He noted that in cases involving latent defects, such as those in a building, the economic loss does not occur until the defect is discovered. Similarly, in cases of fraudulent conduct, the cause of action accrues when the fraudulent conduct is detected. The primary judge held that the claims were not time-barred and should be allowed to proceed to trial.

ORDERS:
On the motion of the first, second, third, fourth, and fifth respondents seeking leave to appeal from the judgment of Weinberg J made 7 May 2004, the motion was dismissed, and the respondents were ordered to pay Energex's costs of the motion. Similarly, on the motion of the sixth and seventh respondents seeking leave to appeal against the judgment of Weinberg J made 7 May 2004, the motion was dismissed, and the respondents were ordered to pay Energex's costs of the motion.

Orders

Orders of the court

A. On the Motion of the First, Second, Third, Fourth and Fifth Respondents filed 14 May 2004 seeking leave to appeal from the judgment of Weinberg J made 7 May 2004:

1. The motion be dismissed.

2. The First, Second, Third, Fourth and Fifth Respondents pay the Applicant’s costs of the motion.

B. On the Motion of the Sixth and Seventh Respondents filed 14 May 2004 seeking leave to appeal against the judgment of Weinberg J made 7 May 2004:

1. The motion be dismissed.

2. The Sixth and Seventh Respondents pay the Applicant’s costs of the motion.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

As will be seen later the grant of the injunction against the Alstom and Wilson Transformer respondents is said to be relevant to the propriety of the claims for damages under s 87 of the Act brought ancillary to claims for injunctive relief under s 80. The Reasons for Judgment of the Learned Primary Judge The Alstom respondents submitted to his Honour that the allegations pleaded against them should be dismissed under O 20 r 2(1) of the Federal Court Rules or struck out under O 11 r 16. Their essential contentions were: 1.Energex had failed to plead the essential elements required to establish a cause of action in deceit.2.A significant number of the allegations did not ‘deal with’ Energex and did not disclose a cause of action maintainable by it.3.A significant number of the claims based on s 82(1) of the Act were statute barred. 4.The claims based on ss 80 and 87 of the Act constituted an abuse of process in that they served no independent purpose other than to avoid the limitation period in relation to claims statute barred under s 82. The Wilson Transformer respondents joined with the Alstom respondents in submitting that all the causes of action for damages pursuant to s 82(1), apart from those arising from one specific tender number QES30/98, were statute barred because they had not been commenced within the time specified by s 82(2). They further contended that the claim for injunctive relief under s 80 and for loss or damages under s 87(2)(d) should be dismissed as disclosing no reasonable cause of action or as being frivolous or vexatious or constituting an abuse of process. They submitted that the claim for deceit should be summarily dismissed. The learned primary judge set out in some detail the arguments advanced by these respondents. It is not necessary to set them out again in these reasons. It is sufficient to go straight to his Honour’s reasoning on the various points made. His Honour began by accepting that the proceedings have the potential to run for months if they go to trial. The conduct of the proceedings so far indicated that they would be hard fought with every conceivable point likely to be taken. His Honour set out the general principles governing applications for summary disposition of proceedings enunciated in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91 (Dixon J) and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 128-130 (Barwick CJ). The essential proposition emerging from those authorities, as stated by his Honour, is that the power to order summary judgment in favour of a respondent must be exercised with caution and should not be exercised unless it is obvious that there is no real question to be tried. A similar approach was required in considering the striking out in whole or in part of a pleading under O 11 r 16. None of these propositions was contentious. His Honour then considered whether the claims under s 82 of the Act were time barred. He accepted the contention by counsel for Energex that it would be contrary to basic principle to deprive an injured party of its right to compensation arising out of an allegedly fraudulent conspiracy merely because the conspiracy was not detected until after the limitation period had expired. He also accepted the submission that s 82 should be interpreted without any preconception flowing from the ordinary application of common law doctrines of tort and contract. The task for the Court was to construe the expression ‘suffers loss or damage’ in s 82(1) and the cognate expression concerning when the cause that relates to the ‘conduct accrued’ in s 82(2). While those expressions were to be given their ordinary and natural meaning it was a meaning to be informed by the extensive body of authority about the time of accrual of causes of action arising out of misconduct or breach of statute. His Honour observed that some of the cases suggest that this occurs only when the misconduct or breach comes to light. He took the example of the case of a building with a latent defect. When such a building is purchased the plaintiff does not suffer economic loss until the defect becomes manifest. His Honour noted that the way in which such a case is typically pleaded is to assert that the loss results from the payment of a greater amount than would have been paid had the defect been known. In some cases under s 52 of the Act involving the purchase of an asset it may be the case that a finding cannot be made until the benefits and burdens of the transaction have been fully ascertained. That may be long after the date of purchase of the asset.

Ratio Decidendi

Legal Principle Established

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