Ford Motor Company of Australia Ltd v Jefferson Ford Pty Ltd

Case •

[2007] FCA 870

•

6 June 2007

FEDERAL COURT OF AUSTRALIA

Ford Motor Company of Australia Ltd v Jefferson Ford Pty Ltd [2007] FCA 870

FORD MOTOR COMPANY OF AUSTRALIA LIMITED, FORD MOTOR COMPANY OF CANADA LIMITED & FORD MOTOR COMPANY v JEFFERSON FORD
VID1427 OF 2006

JESSUP J
6 JUNE 2007
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID1427 OF 2006

BETWEEN:

FORD MOTOR COMPANY OF AUSTRALIA LIMITED
First Applicant

FORD MOTOR COMPANY OF CANADA LIMITED
Second Applicant

FORD MOTOR COMPANY
Third Applicant

AND:

AND BETWEEN:

AND:

JEFFERSON FORD PTY LTD
Respondent

JEFFERSON FORD PTY LTD
Cross Claimant

FORD MOTOR COMPANY OF AUSTRALIA LIMITED
First Cross Respondent

THOMAS JOSEPH GORMAN
Second Cross Respondent

BRUCE IAN MCDONALD
Third Cross Respondent

STEPHEN KRUK
Fourth Cross Respondent

FBIS INTERNATIONAL ISSUES MANAGEMENT PTY LTD
Fifth Cross Respondent

CLAUDIO MINISINI
Sixth Cross Respondent

JUDGE:

JESSUP J

DATE OF ORDER:

6 JUNE 2007

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.Subparagraphs (c) and (d) of par 13 of the Defence be struck out.

2.The respondent have leave to file and serve, within 14 days, an Amended Defence containing allegations in place of those struck out by par 1 of these Orders.

3.Pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth), there be judgment for the first, second, third and fourth cross respondents upon the cross claimant’s claim under ss 51AC and 51AD of the Trade Practices Act 1974 (Cth).

4.The cross claimant have leave to file and serve, within 14 days, an Amended Cross-Claim to take account of –

(a)par 3 of these Orders; and

(b)the allegations in par 41(c) of the Cross-Claim.

5.Paragraphs 44-56 of the Cross-Claim be struck out.

6.Costs be reserved.

7.Save as ordered above, the motion of which the applicants and the first-fourth cross respondents gave notice on 26 April 2007 be dismissed.

8.The proceeding be listed for directions on 29 June 2007.

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


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID1427 OF 2006

BETWEEN:

FORD MOTOR COMPANY OF AUSTRALIA LIMITED
First Applicant

FORD MOTOR COMPANY OF CANADA LIMITED
Second Applicant

FORD MOTOR COMPANY
Third Applicant

AND:

AND BETWEEN:

AND:

JEFFERSON FORD PTY LTD
Respondent

JEFFERSON FORD PTY LTD
Cross Claimant

FORD MOTOR COMPANY OF AUSTRALIA LIMITED
First Cross Respondent

THOMAS JOSEPH GORMAN
Second Cross Respondent

BRUCE IAN MCDONALD
Third Cross Respondent

STEPHEN KRUK
Fourth Cross Respondent

FBIS INTERNATIONAL ISSUES MANAGEMENT PTY LTD
Fifth Cross Respondent

CLAUDIO MINISINI
Sixth Cross Respondent

JUDGE:

JESSUP J

DATE:

6 JUNE 2007

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. According to the applicants’ Statement of Claim filed in this proceeding on 22 December 2006, the first applicant, Ford Motor Company of Australia Limited, manufactures and supplies, throughout Australia, motor vehicles, and parts and accessories therefor, under and by reference to the names “Ford” and “Motorcraft”.  The second applicant, Ford Motor Company of Canada Limited, is the owner of various Australian registered trade marks consisting of, in different representations, the word “Ford”.  The third applicant, Ford Motor Company, is a company incorporated in the United States of America, and is the owner of various Australian registered trade marks consisting of, or using, the word “Motorcraft”.  The respondent, Jefferson Ford Pty Ltd, operates Ford dealerships, and provides services associated with those dealerships, at several locations in suburban Melbourne under the names “City Ford”, “Jefferson Ford”, and “President Ford”.  In relation to the business operating under each of these names, there is a dealer agreement between the first applicant and the respondent which regulates the distribution of Ford vehicles, parts and accessories by the respondent. 

  2. The applicants allege that the respondent has advertised and sold motor vehicle parts under or by reference to the names “Ford”, “Motorcraft” and certain of the trade marks owned by the second and third applicants, which parts have not been manufactured, approved or licensed by the applicants. The gravamen of the applicants’ case is that, although the respondent is a Ford dealer and, in the normal course, obtains authorised parts from the first applicant, it has, in some instances at least, obtained parts from third parties and applied the said names and marks on them. The respondent’s alleged conduct in these respects is said to constitute an infringement of those trade marks, to constitute a breach of s 52, and of certain of the provisions of s 53, of the Trade Practices Act 1974 (Cth) (“the TP Act”), and to constitute a breach of certain of the provisions of the dealer agreements between the first applicant and the respondent.

  3. In its Defence filed on 20 March 2007, the respondent joins issue with the substantial allegations of wrongdoing made by the applicants. To the extent necessary for present purposes, I shall refer to the details of the respondent’s Defence presently. It also makes a Cross-Claim against the first applicant, against the Chief Executive Officer of the first applicant (Mr Tom Gorman), against a Vice President of the first applicant (Mr Bruce McDonald), against the Regional Manager, Southern Region, of the first applicant (Mr Stephen Kruk), against a company engaged by the first applicant to undertake investigations in respect of the sale of allegedly counterfeit Ford motor vehicle parts (FBIS International Issues Management Pty Ltd (“FBIS”)) and against the Chief Executive Officer of FBIS (Mr Claudio Minisini). It alleges that the first applicant engaged in unconscionable conduct within the meaning of s 51AC of the TP Act in a number of respects to which I shall turn presently, that the first applicant contravened an applicable industry code within the meaning of s 51AD of that Act, and that Mr Gorman, Mr McDonald and Mr Kruk aided, abetted, counselled or procured the first applicant to engage in that conduct, and were, directly or indirectly, knowingly concerned in, or parties to, that conduct. It also alleges that the first applicant breached the dealer agreements between them in a particular respect. It alleges that FBIS and Mr Minisini made certain statements and representations in the course of their investigations on behalf of the first applicant which were misleading and deceptive in contravention of s 52 of the TP Act and of s 9 of the Fair Trading Act 1999 (Vic). Additionally, it makes various interlocking, and in some respects reciprocal, allegations against the cross respondents that they aided and abetted each other’s conduct, and were knowingly involved therein.

  4. Presently before the court are two Notices of Motion, each filed on 26 April 2007.  The first is by the applicants and Messrs Gorman, McDonald and Kruk, and seeks three things: first, the striking out of certain provisions of the Defence pursuant to O 11 r 16 of the Federal Court Rules 1979 (Cth), secondly, summary judgment on the Cross-Claim, to the extent that it relies upon a cause of action under ss 51AC and 51AD of the TP Act, and thirdly, the striking out of certain provisions of the Cross-Claim pursuant to O 11 r 16. The second Notice of Motion is by FBIS and Mr Minisini, and seeks the striking out of certain provisions of the Cross-Claim against those parties pursuant to O 11 r 16 of the Rules.

    THE APPLICANTS’ MOTION UNDER O 11 r 16 IN RELATION TO THE DEFENCE

  5. The applicants seek the striking out of subpars (b) – (g) of par 10 of the Defence pursuant to O 11 r 16 of the Rules.  The only other subparagraph of par 10, subpar (a), contains a denial of the allegations in par 10 of the Statement of Claim.  Paragraph 10 of the Statement of Claim contains the applicants’ central factual allegation against the respondent, namely, that it has promoted, advertised or offered for sale, sold, supplied and distributed in Australia, under or by reference to the names “Ford”, “Motorcraft” and/or the trade marks to which I have referred, motor vehicle parts not manufactured, approved or licensed by the applicants or any other member of the Ford group. 

  6. Subparagraphs (b) – (g) of par 10 of the Defence are as follows:

    (b)Further and alternatively, from time to time, Jefferson Ford, in the course of conducting the Ford dealerships, has offered for sale and sold, supplied and distributed, in Australia, motor vehicle parts under and by reference to the trade marks “Ford” and “Motorcraft”, and the said trade marks have been applied to, or in relation to, the said motor vehicle parts by, or with the consent of, the Applicants or a member of the Ford Group.

    PARTICULARS

    The said motor vehicle parts are the motor vehicle parts identified and referred to in the particulars to paragraph 10 of the statement of claim.

    (c)In the circumstances set forth in the preceding sub paragraph hereof, by reason of s 123 Trade Marks Act 1995, Jefferson Ford’s said conduct did not and does not infringe s 120 Trade Marks Act 1995.

    (d)Further and alternatively, from time to time, Jefferson Ford, in the course of conducting the Ford dealerships, has offered for sale and sold, supplied and distributed, in Australia, motor vehicle parts under and by reference to the trade marks “Ford” and “Motorcraft” in good faith to indicate the intended purpose of the said motor vehicle parts, namely, as spare parts and accessories for use on Ford motor vehicles.

    (e)In the circumstances set forth in the preceding sub paragraph hereof, by reason of s 122 (1)(c) Trade Marks Act 1995, Jefferson Ford’s said conduct did not and does not infringe s 120 Trade Marks Act 1995.

    (f)Further and alternatively, from time to time, Jefferson Ford, in the course of conducting the Ford dealerships, has offered for sale and sold, supplied and distributed, in Australia, motor vehicle parts under and by reference to the trade marks “Ford” and “Motor craft” in good faith to indicate the intended purpose and characteristics of the said motor vehicle parts for use and suitability as spare parts and accessories on Ford motor vehicles.

    (g)In the circumstances set forth in the preceding sub paragraph hereof, by reason of s 122(1)(b)(i) Trade Marks Act 1995, Jefferson Ford’s said conduct did not and does not infringe s 120 Trade Marks Act 1995.

    It will be seen that, in these pleadings, the respondent alleges that it had the consent of the applicants, or of a member of the Ford group, to the use of the trade marks in question, that it was using those marks in good faith to indicate the intended purpose of the parts which it sold, and that it was using those marks in good faith to indicate the characteristics of those parts, and their suitability as spare parts and accessories for Ford motor vehicles.  It says, alternatively to its denial in par 10(a) of the Defence, that, for the reasons set out in subpars (b) – (g), there was no infringement of the second and third applicants’ marks.

  7. In support of their motion, the applicants say that the cumulative and alternative pleadings in subpars (b) – (g) of par 10 of the Defence are embarrassing. As I understand the point, the applicants contend that the only circumstance in which the respondent would ever have occasion to rely upon par (b) or par (c) of s 122(1) of the Trade Marks Act1995 (Cth) would be in circumstances where it did not have the consent of the second and third applicants to use the marks. They say that the marks might have been used with the consent of those applicants, or they might have been used, for example, to indicate intended purpose, but that those two circumstances were mutually exclusive, and it was embarrassing for the respondent to have included in its Defence positive allegations at both levels, even in the alternative. They accept that, in an appropriate situation, inconsistent allegations may be made, without embarrassment, where those allegations are legitimately made in the alternative. However, as I understand their point, the applicants rely upon the mental element which is involved in a Defence under s 122(1)(b) and (c) of the Trade Marks Act (ie use in good faith), and say that they are entitled, in effect, to put the respondent to its choice, of stating, at this stage, whether that element was present in its use of the marks, and if it says that it was, they allege that the respondent cannot, without embarrassment, at the same time say that the marks were affixed with the consent of the second and third applicants, even in the alternative.

  8. To the extent that I can understand it, I think that the distinction which the applicants seek to make between legitimate, and illegitimate, alternative allegations is too fine a basis for the exclusion of the respondent, at this early stage, from the opportunity to resist the applicants’ infringement allegations at every available level.  It is sufficient to identify a factual basis upon which the respondent might both have been using a mark in good faith for a purpose to which it refers in subpar (d), or subpar (f), of its pleading, and, at the same time, might have had, or have thought that it had, the consent of the second and third applicants to use the mark.  For my own part, the inconsistency between these positions is far from obvious.  Neither do I think that, should they desire to file a Reply, responding to these subparagraphs of par 10 of the Defence will cause the applicants any embarrassment.  Manifestly they will know, or at least believe that they know, whether they consented to the use of the marks; and, if nothing else, I can think of no reason why they should not simply put the respondent to its proof as to its purposes in using the marks.  For these reasons, I shall dismiss so much of the applicants’ motion as is concerned with subpars (b) – (g) of par 10 of the Defence.

  9. The first applicant seeks also the striking out of the words “and further, it repeats the matters set forth in subparagraph 10(b) to (e) hereof” from par 11 of the Defence. That paragraph responds to par 11 of the Statement of Claim, which contains an allegation that, by its conduct referred to in par 10, the respondent infringed the trade marks within the meaning of s 120(1) of the Trade Marks Act by using marks or signs which were substantially identical with, or deceptively similar to, the marks owned by the second and third applicants in relation to goods in respect of which those marks were registered. Consistently with my decision in relation to par 10, I shall also dismiss the applicants’ challenge to par 11.

  10. In order to understand the applicants’ next challenge to the Defence, it is necessary to set out Clause 14.2 of each of the dealer agreements to which they refer in the Statement of Claim:

    Limitations on Use

    (a)Subject to paragraph (b), the Dealer must not use any Trade Mark in connection with its business.

    (b)Paragraph (a) does not restrict the Dealer from:

    (i)dealing in Designated Products to which the Trade Mark refers in the manner and form, and to the extent, approved by Ford; and

    (ii)displaying on a separate used vehicle outlet as part of the Dealership Operations one or more signs indicating the Dealer is an Authorised Ford Dealer (subject to obtaining the prior written approval of Ford (which can be given, given conditionally, withheld or revoked in its discretion)).

    This provision is picked up in par 9(e) of the Statement of Claim as follows:

    There are terms of the Ford Dealer Agreements, including: …

    (e)that the Respondent must not use any of the Ford Trade Marks in connection with its business except for dealing in designated products to which each Trade Mark refers in the manner and form, and to the extent, approved by the First Applicant (clause 14.2).

    In par 13 of the Statement of Claim, the applicants refer to their preceding allegations as to the unauthorised use of the second and third applicants’ trade marks, and under ss 52 and 53 of the TP Act, and allege that, by reason thereof, the respondent breached a number of clauses of the dealer agreements, including Clause 14.2. The respondent denies that it breached the dealer agreements, and adds:

    (c)Further and alternatively, if, which is denied, clause 14.2 has the meaning contended in paragraph 9(e) of the statement of claim:

    (i)Ford has not designated any products pursuant to clause 14.2(b)(i); and

    (ii)Jefferson Ford is obliged by the Ford Dealer Agreements to deal in Ford Marketed Products which necessitates the use of Ford trade marks in connection with its business;

    (iii)since entering into the Ford dealership agreements, Jefferson Ford has to Ford Australia’s knowledge used the Ford trade marks in connection with its business notwithstanding that Ford Australia has not designated any products as “Designated Products”, without Ford Australia alleging that any such use was in breach of clause 14.2 of the Ford dealership agreements.

    (d) By reason of the matters set forth in the preceding sub paragraph, it would be unconscionable for Ford Australia to rely on clause 14.2 in relation to the use by Jefferson Ford of Ford trade marks in connection with its business, and in the circumstances, Ford Australia is estopped and precluded from so relying on clause 14.2 of the Ford Dealership Agreements.

  11. The applicants took the respondent’s pleading as an invocation of the doctrine of what they describe as “estoppel by conduct” referred to in Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387 and Commonwealth v Verwayen (1990) 170 CLR 394, particularly in the terms stated by Deane J in the latter judgment (170 CLR at 444):

    The central principle of the doctrine is that the law will not permit an unconscionable – or, more accurately, unconscientious – departure by one party from the subject matter of an assumption which has been adopted by the other party as the basis of some relationship, course of conduct, act or omission which would operate to that other party’s detriment if the assumption be not adhered to for the purpose of the litigation.

    The applicants submit that cl 13(c) and (d) of the Defence do not allege all the facts necessary to make good a plea of estoppel.  It is said that it is not made clear that the respondent made an assumption, how, and by whom, that assumption was induced, and whether, and if so how, it acted or positioned itself in such a way as would make a departure from the assumption unconscionable.

  12. The respondent says that the applicants have misunderstood its case altogether.  It is not alleging that a “promissory estoppel” in the Walton Stores or Verwayen sense arose at all.  Rather, it alleges what it described as “estoppel by conduct”.  As is apparent from the previous paragraph in these reasons, that is also the label which the applicants assign to the kind of estoppel alleged by the respondent.  Yet the parties seem to have something quite different in mind.  I gathered from submissions made on behalf of the respondent that it had in mind alleging something tantamount to common law estoppel of the kind identified by Jordan CJ in Discount & Finance Ltd v Gehrig’s NSW Wines Ltd (1940) 40 SR (NSW) 598, 602-603. If so, the plea of unconscionable reliance in par 13(d) of the Defence would be irrelevant and thus embarrassing. It is difficult to appreciate how such a plea could legitimately be made otherwise than by reference to the analytical framework for estoppel to be found in some recent judgments in the High Court of which that of Deane J in Verwayen is an exemplar. 

  13. The gathering of all the different kinds of estoppel into a single “overarching” doctrine has not yet been accepted by the High Court: see Giumelli v Giumelli (1999) 196 CLR 101, 112-113. That there are still distinct doctrines is implicit in the way the respondent sought to uphold par 13(c) and (d) of its Defence. By deflecting the applicants’ attack in this way, yet by retaining, in a central role, a plea of unconscionability, the respondent has, I consider, produced a situation in which the applicants do not know either the jurisprudential basis of the Defence or the legally relevant facts relied on to support it. I consider that the subparagraphs in question either do not articulate each of the factual elements necessary to make good the plea of estoppel, or are embarrassing, or both. For those reasons, I shall strike them out, reserving to the respondent leave to re-plead.

    THE APPLICANTS’ MOTION UNDER S 31A OF THE FEDERAL COURT ACT

  1. I turn next to the application of the applicants and of Messrs Gorman, McDonald and Kruk (to whom I shall in this part of my reasons refer collectively as “the applicants”) for summary judgment pursuant to s 31A of the Federal Court Act 1976 (Cth).  That section reads as follows:

    (1)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

    (a)the first party is prosecuting the proceeding or that part of the proceeding; and

    (b)the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.

    (2)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

    (a)the first party is defending the proceeding or that part of the proceeding; and

    (b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

    (3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

    (a)       hopeless; or
               (b)       bound to fail;

    for it to have no reasonable prospect of success.

    (4)This section does not limit any powers that the Court has apart from this section.

    The application relates to the respondent’s Cross-Claim under s 51AC of the TP Act. Subsection (1) of s 51AC reads as follows:

    A corporation must not, in trade or commerce, in connection with:

    (a)the supply or possible supply of goods or services to a person (other than a listed public company); or

    (b)the acquisition or possible acquisition of goods or services from a person (other than a listed public company);

    engage in conduct that is, in all the circumstances, unconscionable.

    The applicants rely upon subs (9) of s 51AC, which is as follows:

    A reference in this section to the supply or possible supply of goods or services does not include a reference to the supply or possible supply of goods or services at a price in excess of $3,000,000, or such higher amount as is prescribed.

    The applicants’ point is that the supply of goods upon which the respondent relies for the purposes of its claim under s 51AC was for a value of more than $3,000,000 and, therefore, that the Cross-Claim is not maintainable.

  2. In order to resolve the matter arising under s 31A of the Federal Court Act, it is necessary to consider the structure and content of the Cross-Claim, to the extent that it relies upon s 51AC of the TP Act. It is necessary to refer to pars 24 – 42 of the Cross-Claim. In par 24, the respondent alleges the existence of the same dealer agreements as are relied upon by the applicants in their Statement of Claim. In par 25, the respondent alleges that the dealer agreements concerned, or were in connection with, the supply or possible supply of goods or services by the first applicant to the respondent within the meaning of s 51AC. In par 26, it is alleged that the first applicant caused or procured the Australian Federal Police to obtain a warrant to search the City Ford premises of the respondent, and to seize certain motor vehicle parts or accessories which were alleged to be counterfeit. In par 27, it is alleged that, at no time prior to the execution of the warrant, did the first applicant request the respondent to provide any information about the parts the subject of the warrant, undertake any examination of the respondent’s business records, or conduct any audit under the dealer agreements with respect to the sale of counterfeit parts. Under par 28, it is alleged that the Australian Federal Police seized property of the respondent to the value of about $500,000 pursuant to the first applicant’s allegations that the seized goods were counterfeit goods. Under par 29, it is alleged that, pursuant to Clause 16.4 of the dealer agreement, the first applicant advised the respondent that it was conducting an audit in respect of the parts that were the subject of the warrant, and requested certain documents and information in that regard. In par 30, it is alleged that the first applicant requested a great deal of documentation from the respondent, including all documentation in respect of specified motor vehicle part numbers from 1 February 2002, and specified a time plan that it knew or ought to have known could not be complied with because of the volume of documentation demanded. In par 31, it is alleged that the respondent’s solicitors requested the first applicant to provide information about the allegedly counterfeit parts, but that those requests were refused. By par 32, it is alleged that, notwithstanding that the respondent provided the first applicant with such documentation as it was reasonably able to do, the first applicant, persistently and contrary to the truth of the matter, alleged that the respondent had not provided all documentation demanded by the first applicant, that the respondent was refusing to supply documents to which the first applicant was entitled, and that the respondent was unwilling to cooperate in the conduct of the audit by the first applicant.

  3. Paragraph 33 of the Cross-Claim is a lengthy and significant pleading.  It commences as follows:

    From at least September 2006, Ford Australia determined to pursue a policy of engaging in a course of conduct towards Jefferson Ford which it intended would lead to Jefferson Ford selling its interest in conducting the Ford dealerships, or alternatively terminating the Ford dealership agreements or alternatively ceasing to conduct the Ford dealerships by not renewing the Ford dealership agreements at the expiry of the present term, on about the 1st July 2007, by, in particular…

    There follows a series of subparagraphs, lettered (a)-(p), in which particular things are alleged against the first applicant as constituting, or at least as providing particular examples of, the course of conduct referred to.  Those allegations include: systematically seeking to disrupt the conduct of the respondent’s business by making excessive and unreasonable demands for a vast quantity of documents and other information; seeking to intimidate the respondent by threatening to terminate the City Ford dealership; causing or procuring the Australian Federal Police to issue the warrant referred to in the absence of evidence of wrongdoing, and in circumstances where the first applicant had available to it its rights under cl 16.4 of the dealer agreements; informing the respondent’s customers that the respondent was selling counterfeit parts; entering into the respondent’s premises without prior notification to the respondent’s senior officers and/or in the knowledge that those senior officers would not be available to supervise the audit then being conducted; seeking to intimidate, harass and bully the respondent’s employees by interviewing them without the permission, and not in the presence, of the respondent’s senior officers, and by filming and recording those interviews; removing or attempting to remove stocks of parts from the respondent’s premises without the respondent’s permission; systematically importuning the respondent’s employees to change their stories, and to provide untrue information about the conduct of the respondent’s business concerning the sale of allegedly counterfeit parts; systematically and deliberately misreporting the provenance and genuineness of the parts inspected by characterising them as counterfeit; alleging that the respondent was knowingly promoting, advertising or offering for sale, selling, supplying or distributing non-genuine parts as genuine parts; systematically alleging that the respondent had not allowed the first applicant to conduct its audit, allegedly in breach of the dealer agreements; unreasonably refusing to accept a particular order for the supply of 138 Ford motor vehicles at a rate previously agreed that would have made it financially and commercially feasible for the respondent to sell those vehicles to a third party, in order that the respondent would be prevented from satisfying its December 2006 quarterly platinum sales targets under a program which formed part of the commercial relationship between the respondent and the first applicant, thereby depriving the respondent of financial bonuses that would have been available under the program; systematically refusing to provide any of the information requested by the respondent’s solicitors, where that information was necessary to enable the respondent to consider the allegations made by the first applicant, and the first applicant’s demands of the respondent; demanding that the respondent execute unreasonable and/or onerous undertakings, which required it to admit, in effect, that it had sold counterfeit parts as genuine parts, in circumstances where the respondent genuinely disputed that any parts sold by it were counterfeit in the sense of not being genuine parts, and where the first applicant had refused to provide any or any sufficient or proper information that the parts were not genuine; demanding that the respondent sell all its dealer agreements within 6-12 months, and accompanying that demand with a series of specific, commercially unattractive, demands upon the respondent; and instituting this proceeding instead of using the dispute resolution process available under the dealer agreements. 

  4. Paragraphs 34-40 of the Cross-Claim categorise the conduct previously alleged, and link it to particular formulations of the respondent’s case under s 51AC of the TP Act. In par 34, it is alleged that the conduct set forth in pars 31-33 was done in trade or commerce in connection with the supply or possible supply of goods or services to the respondent and that it was, in all the circumstances, unconscionable. Paragraph 35 is concerned only with so much of par 33 as alleges the first applicant’s demand for undertakings requiring the respondent to admit that it had sold counterfeit parts as genuine parts, and the first applicant’s demands that the respondent sell its dealer agreements, together with the associated demands to which I have referred. It is alleged that, by engaging in this conduct, the first applicant sought to impose unreasonable terms and conditions within the meaning of s 51AC(3)(b) of the TP Act. Paragraph 36 refers to the allegations in pars 26-33, and asserts that, by not instituting the dispute resolution process under cl 27 of the dealer agreements, but by instituting this proceeding instead, the first applicant was exerting pressure on, and using unfair tactics against, the respondent within the meaning of s 51AC(3)(d) of the TP Act. Paragraph 37 refers to the conduct alleged in pars 31 and 32, and alleges that, by that conduct, the first applicant contravened s 51AC(1) by using pressure and unfair tactics against the respondent within the meaning of s 51AC(3)(d) of the TP Act. Paragraph 38 refers to the conduct alleged in pars 26 to 28, and says that the first applicant thereby contravened s 51AC(1) by unreasonably failing to disclose to the respondent that it intended to cause or procure the Australian Federal Police to issue the warrant before informing the respondent that counterfeit parts may have been sold to the respondent, and which the respondent may have been mistakenly selling as genuine parts, whereby the respondent was at risk to its business within the meaning of s 51AC(3)(i) of the TP Act. Paragraph 39 alleges a breach of s 51AC by the first applicant failing to comply with the requirements of an applicable industry code (which is referred to) within the meaning of s 51AC(3)(g) of the TP Act. In par 40, it is alleged that the conduct referred to in par 39 was in contravention of s 51AD of the TP Act. In par 41(a) and (b), the respondent refers to the allegations in pars 30-33, and alleges that the first applicant contravened s 51AC by failing to act in good faith within the meaning of s 51AC(3)(k) of the TP Act, both generally and by conducting the audit for a collateral or ulterior purpose to intimidate the respondent into obtaining its supplies of genuine parts from the first applicant only, or into selling, terminating or not renewing the dealer agreements. In par 42, it is said that all the conduct referred to in pars 26-41 caused the respondent to suffer loss and damage.

  5. In support of their motion for summary judgment, the applicants contend that the “supply or possible supply of goods” upon which the respondent relies under s 51AC(1) of the TP Act must be all of the vehicles and parts supplied by the applicants to the respondent’s dealerships under the dealer agreements, which commenced on 1 July 2002. Dealing with parts first, it was established by affidavit filed on behalf of the applicants that the wholesale value of parts purchased by the respondent from the first applicant between 1 July 2002 and 31 March 2007 was in excess of $106,000,000. If one takes only the period between the first instance of conduct of the first applicant as alleged in the Cross-Claim and the filing of the Cross-Claim (conservatively, October 2006-February 2007), the wholesale value of parts purchased by the respondent was in excess of $9,000,000. The aggregate value of parts purchased by the respondent for any two successive months within that period is in excess of $3,000,000.

  6. Dealing next with vehicles, it was established by affidavit filed on behalf of the applicants that the wholesale value of vehicles purchased by the respondent from the first applicant between 1 January 2005 and 1 April 2007 was in excess of $286,000,000.  Taking only the period October 2006-February 2007, the figure was in excess of $54,000,000.

  7. The respondent does not dispute the general thrust of the figures referred to in the two preceding paragraphs: indeed, the size of the figures is such that only some quite extraordinary arithmetical error by those responsible for preparing them would have the prospect of making any difference to the result which would otherwise be yielded for the purpose of s 51AC(9). What is perhaps more important is that the respondent itself may be assumed to know at least the general order of the value of its purchases of vehicles and parts from the first applicant, and expressed no reservation about these data. Its response to the first applicant’s motion is at a different level. In relation to vehicles, it submits that the way the supply of units by the first applicant was financed had the effect that the vehicles were not “supplied” by it to the respondent at all. And in relation to parts and vehicles, it submits that s 51AC(9) operates by reference to individual transactions, identified by individual orders from time to time. I shall consider each of these responses in turn.

  8. An affidavit filed on behalf of the applicants discloses the procedure by which the respondent orders, and obtains, new vehicles from the first applicant.  Each month, the respondent is given an allocation of vehicles, part or all of which it may accept.  By accepting an allocation, the respondent orders the corresponding number of vehicles from the first applicant.  Once all Ford dealers have made their orders from within their allocations in this way, they may place further orders from the first applicant’s stock of unallocated vehicles for the month.  Once orders are placed (in either of these ways), the first applicant delivers the vehicles to which the orders relate to the respondent.  The first applicant does not invoice the respondent.  Rather, it invoices a finance company in respect of the vehicles ordered by, and delivered to, the respondent.  The finance company pays the first applicant.  Once a vehicle is sold to a customer, the respondent advises the first applicant and pays the finance company.  By this procedure, the cost of holding vehicles between the date of delivery to the respondent and the date of sale to a consumer is financed.

  9. It was submitted on behalf of the respondent that it was the finance company, not the first applicant, which supplied the vehicles to the respondent and, therefore, that the aggregate price of the vehicles over the relevant period could not be taken into account for the purpose of s 51AC(9) of the TP Act. By this argument, the respondent may indeed be able to get around subs (9), but it would, it seems to me, at the same time destroy its cause of action under subs (1). The conduct proscribed by s 51AC(1) is conduct which accompanies, goes with, or is involved in the “supply” of which the section speaks: Monroe Topple & Assoc Pty Ltd v Institute of Chartered Accountants [2001] FCA 1056, [260]. That is to say, it is the conduct of the supplier which accompanies (etc) the supply or supplies in question which is proscribed. The respondent cannot, consistently with the approach which it takes in relation to vehicles under subs (9), contend that the vehicles are “supplied” to it for the purposes of subs (1). In the result, the position seems to be either that the respondent has no cause of action under subs (1), or that the supplies on which it relies (subject to the point of construction to which I shall come next) were necessarily at a price much greater than $3,000,000.

  10. In relation to the parts, there is no tripartite financing arrangement. Parts are sold directly by the first applicant to the respondent, and invoices are raised accordingly. As I have stated above, it would seem that, over any time period which might be considered to be relevant for present purposes, the price of the parts obtained by the respondent from the first applicant was in excess of $3,000,000. That conclusion is, however, subject to the respondent’s argument as to the construction of s 51AC, to which I shall next turn.

  11. The respondent disputes that the first applicant may, in effect, call up all the sales which it made under the dealer agreements, or over any period of time which may be relevant to this proceeding, for the purposes of deriving an aggregate figure against which to apply s 51AC(9). Rather, the respondent contends that, each time it placed an order for parts with the first applicant, and that order was accepted, a contract came into existence obliging the first applicant to supply the parts, and the respondent to pay for them. It is each such contract which, according to the respondent, gives context to the operation of s 51AC(9) in the circumstances of this case.

  12. Section 51AC(9) is a kind of deeming provision. Its subject matter is not the supply or possible supply of goods or services, but a reference in the section to the supply or possible supply of goods or services. In relation to the present case, the reference with which the court is concerned is to be found in subs (1). That is to say, subs (1) is confined to conduct, in trade or commerce, in connection with the supply or possible supply of goods or services at a price of $3,000,000 or less. In this context, “price” is the amount paid, or payable, for the goods or services: see subs (11)(a). The question in the present case, therefore, becomes whether the respondent’s Cross-Claim is based upon an allegation that the first applicant has supplied, or might possibly supply, goods for which the respondent paid, or was obliged to pay, an amount of more than $3,000,000.

  13. It is not in dispute that the “supply” to which s 51AC(1) refers includes supply pursuant to a transaction based on a particular contractual obligation. However, the term is a wide one (and is widely defined in the TP Act) and I can think of no reason why it should be confined to such a context, or even to a number of such contexts pursuant to s 23 of the Acts Interpretation Act 1901 (Cth). In the commercial or business settings with which the TP Act is concerned, it is not unlikely that there would be many situations in which the supply of goods was effected, arranged or even contemplated without there being any particular, or even identifiable, contract or transaction in mind. The prohibition in s 45 upon understandings containing exclusionary provisions is an obvious example. So too the reference in s 51AC(1) itself to the “possible supply” of goods. If a corporation engaged in unconscionable conduct in its negotiation for the intended supply – and in that sense for the “possible supply” – of goods of a particular kind over a period of some five years, for example, there would have been a contravention of s 51AC, notwithstanding that no particular contract for the supply of goods then existed, and that no transaction had by then occurred. If the putative purchaser of the goods would, as matter of probability, have been required to pay, say, $5,000,000 for them, if and when they were supplied, that sum should, in my view, be treated as the “price” at which, at the time of the negotiation, the goods might possibly be supplied. In such an example, subs (9) would exclude the conduct complained of from the purview of s 51AC.

  1. For the foregoing reasons, I take the view that the “supply” to which s 51AC refers, and, therefore, that the exclusion for which subs (9) provides, may operate by reference to a course of dealing or proposed dealing, even in the absence of the existence, at the time when the question comes to be asked, of a contractually-based transaction underpinning the relevant supply or supplies. I so conclude as a matter of construction. To apply that conclusion in the context of the present case, it is necessary to consider the nature of the respondent’s Cross-Claim: to consider, in other words, the kind and extent of the “supply” upon which it relies in alleging a contravention of s 51AC of the TP Act. Accepting for these purposes that the “supply” to which subs (1) refers is supply by the corporation being accused of unconscionable conduct (ie in line with Monroe Topple), the respondent did not suggest that the “supply” upon which it based its Cross-Claim was the supply of parts and accessories by third parties to which parts, according to the applicants’ Statement of Claim, the respondent has allegedly fixed the trade marks of the second and third applicants. 

  2. The whole of the Cross-Claim in relevant respects proceeds from the following allegations in par 25:

    In the circumstances set forth in the preceding paragraph, the Ford Dealer Agreements were agreements:

    (a)concerning or in connection with the supply or possible supply of goods or services by Ford Australia, a corporation, to a person, Jefferson Ford, within the meaning of s 51AC(1) of the TP Act;

    (b)to which an applicable industry code applied pursuant to Part IVB of the TP Act, namely the Franchising Code of Conduct.

    PARTICULARS

    Pursuant to Section 51AE TP Act (“the Act”), the TP (Industry Codes-Franchising) Regulations 1998 is a prescribed code for the purposes of Sections 51AD and 51AC(3)(g) of the Act.

    Paragraphs 26-28 relate to the search warrant, and are in terms unconnected with the supply or possible supply of any goods, but I shall assume, in favour of making them relevant to the cause of action on the Cross-Claim, that there is an intended connection with the kind of supply alleged in par 25.  Paragraphs 29 and 30 relate to actions by the first applicant purportedly under cl 16.4 of the dealer agreements.  That clause provides:

    Inspection, examination, test, instruction and audit

    The dealer must allow any person designated by Ford, at reasonable times and intervals and during normal business hours to:

    (a)inspect or examine the Dealership Facilities, Dealership Operations or the Dealer’s stocks of Designated Products and used vehicles at the Dealership Facilities for Service;

    (b)test the Dealer’s plant, machinery, tools and equipment;

    (c)check any Service being carried out by the Dealer on Ford Marketed Products;

    (d)instruct the Dealer and the Dealer’s employees in:

    (i)the proper handling of warranty, policy, campaign, programme and other Service; and

    (ii)the preparation of claims to be submitted to Ford in accordance with the Warranty and Policy Manual or the relevant campaign or programme instructions; and

    (e)examine, copy and audit any and all of the Dealer’s accounting, Service and other records and documents relating to the Dealership Operations.

    The respondent alleges that the first applicant requested or demanded documents and information relating to the parts that were the subject of the search warrant, and other parts. By tying its allegations to the first applicant’s use of cl 16.4, I take it that the respondent invokes par 25 of the Cross-Claim as identifying the “supply” to which the paragraphs relate for the purposes of s 51AC. Paragraphs 31 and 32 relate to the course of correspondence, and the exchange of accusation and counter-accusation, that occurred between the parties in the context of the search warrant and the first applicant’s demands.

  3. Thus, it seems to be clear that the “supply or possible supply” which the respondent alleges in pars 34, 36, 37 and 38 of the Cross-Claim is that alleged in par 25, namely, the ongoing, regular, supply of goods by the first applicant to the respondent pursuant to the dealer agreements. The allegations of unconscionable conduct are not tied to any particular transaction by way of supply. In the nature of things, neither could they be. The respondent’s conduct of which the applicants complain is the affixation of marks and signs to parts obtained from others. It is the first applicant’s actions in connection with its investigation of that conduct of which the respondent complains. But it cannot make its own acquisition of parts from third parties the occasion for proceeding against the first applicant under s 51AC. It must, in the circumstances, identify a supply, or course of supply, to it by the first applicant. But there is no individual transaction in connection with which it makes its allegations against the first applicant. Considered as individual transactions, the supplies of goods by the first applicant to the respondent simply are not controversial. To bring itself under s 51AC the respondent has thus used the ongoing course of supply, pursuant to the dealer agreements, of vehicles and parts as between the first applicant and itself.

  4. Paragraph 39, and subpars (a) and (b) of par 41, of the Cross-Claim invoke certain of the matters, listed in subs (3) of s 51AC, to which the court may have regard in determining whether particular conduct is unconscionable. The allegations themselves are still of contraventions of subs (1), and are no less based in the connotation of “supply or possible supply” employed by the respondent in those paragraphs of the Cross-Claim with which I have dealt in the previous paragraph of these reasons.

  5. Paragraph 35 is in the same category, save that it refers only to the first applicant’s conduct as alleged in subpars (n) and (o) of par 33 of the Cross-Claim.  Those subparagraphs allege that the first applicant demanded that the respondent execute certain undertakings, make certain admissions and sell its dealerships.  To the extent that the respondent ties these allegations to the supply or possible supply of goods (which it would need to do), it could only be the ongoing course of supply to which I have held the respondent’s other allegations relate.

  6. There is one qualification to the proposition that the only supply or possible supply with which the Cross-Claim is concerned is the ongoing course of supply of vehicles and parts from the first applicant pursuant to the dealer agreements. It relates to par 33(l) of the Cross-Claim. The respondent there alleges that it was an element in the implementation of the first applicant’s policy that it unreasonably refused to accept an order from the respondent for the supply of 138 vehicles at a previously-agreed rate. The applicants accepted that this was, as alleged, a discrete transaction that might be seen as invoking s 51AC without reference to the general course of trading between the parties. There was evidence that the wholesale list price was $29,446 for each of these vehicles, and that the previously-agreed rate to which the Cross-Claim refers was that price less a discount of $9,500 per vehicle. Had the 138 vehicles been sold to the respondent under such an arrangement, the overall price would have been $3,027,802 inclusive of GST, or $2,752,548 exclusive of GST. The respondent did not dispute the accuracy of these calculations, but contended that the “price” to which s 51AC refers must, in the context of a wholesale transaction, be the price net of GST. I am, for present purposes only, prepared to take judicial notice of the fact that, at the wholesale level, prices are commonly quoted ex-GST. However, the question is what was the amount which would have been payable to the first applicant for these vehicles: s 51AC(11)

  7. Under s 7-1 of the A New Tax System (Goods and Services Tax) Act 1999 (Cth), GST is payable on “taxable supplies”. It is clear from subdivision 9-A of Part 2-2 of that Act that the supply of the 138 vehicles would have been a “taxable supply”. Under subdivision 9-B, it would have been the first applicant which was obliged to pay the GST. To the extent that GST would have been included in the amount payable by the respondent on the first applicant’s invoice, this would have been by way of an adjustment as between the parties to the transaction. In economic terms, it would not be inappropriate to refer to this as the first applicant in effect passing on the cost of the GST to the respondent. In legal terms, however, the respondent’s only obligation to pay the sum in question would have arisen as a matter of contract on the first applicant’s (or the financial company’s) invoice. The respondent itself would not have been under any legislated obligation to pay the GST. Thus the full sum of $3,027,802 should be regarded as the amount which would have been payable for the vehicles for the purposes of s 51AC(11), and therefore as the price for the purposes of subs (9).

  8. Thus I find, for the purposes of s 51AC(11) of the TP Act, that the amount paid or payable for the goods supplied, or possibly supplied, by the first applicant to the respondent, as alleged by the respondent in the Cross-Claim, exceeds $3,000,000. Save for the matters with which I have dealt in these reasons, the respondent did not venture any basis upon which it might be found otherwise at trial. For those reasons, I conclude that the respondent’s Cross-Claim under s 51AC of the TP Act is bound to be defeated by subs (9) of that section, and that the respondent therefore has no reasonable prospect of successfully prosecuting that part of its Cross-Claim, within the meaning of s 31A of the Federal Court Act. Necessarily, neither does the respondent have a reasonable prospect of prosecuting its claim for the accessorial liability of Messrs Gorman, McDonald and Kruk, to the extent that those claims have their foundation in s 51AC of the TP Act.

  9. The applicants seek summary judgment also in relation to the respondent’s claim under s 51AD of the TP Act. In argument before me, the respondent conceded this point, and said that it did not propose to prosecute that part of the Cross-Claim. In those circumstances, I shall grant the applicants’ motion with respect to s 51AD.

    THE MOTION OF FBIS AND MR MINISINI UNDER O 11 r 16

  10. I propose to deal next with the motion of FBIS and Mr Minisini.  They seek the striking out, pursuant to O 11 r 16 of the Rules of Court, of pars 44-49 and 53-56 of the Cross-Claim.  The Cross-Claim against those cross respondents commences at par 43, which alleges that FBIS and Mr Minisini have conducted interviews with various persons seeking information about the sale and supply by the respondent of allegedly counterfeit motor vehicle parts as genuine Ford motor vehicle parts.  To the extent that it is presently able, the respondent particularises that allegation by reference to an affidavit affirmed by Mr Minisini on 22 December 2006.  I shall return to that affidavit presently.  Paragraph 44 of the Cross-Claim is as follows:

    In the course of the said interviews the Fifth and Sixth Respondents stated or implied to the said persons interviewed that Jefferson Ford had sold or was selling and supplying counterfeit Ford motor vehicle parts as genuine Ford motor vehicle parts.

    PARTICULARS

    The said statements are to be inferred from the fact that the Fifth and Sixth Respondents conducted the said interviews with the said persons seeking information about the sale and supply by Jefferson Ford of allegedly counterfeit Ford motor vehicle parts as genuine Ford motor vehicle parts.  The said persons interviewed are set out in Claudio Minisini’s said affidavit.  Further particulars may be provided after the completion of the discovery process.

    In par 45, it is alleged that, in making the statements referred to in par 44, FBIS and Mr Minisini impliedly represented, and/or stated, that the respondent was dishonest, was disreputable, was illegally selling counterfeit parts as genuine parts, and was selling or supplying counterfeit parts as genuine parts knowing them to be, or reckless as to whether they were, not genuine. In par 46, it is alleged that the conduct referred to in par 45 was misleading and deceptive, and, in par 47, s 52 of the TP Act and s 9 of the Fair Trading Act are invoked in that regard. Paragraph 49 alleges loss and damage.

  11. Paragraph 48 of the Cross-Claim is of a different character.  It makes an allegation not against FBIS and Mr Minisini, but against the first applicant.  It alleges that the conduct of FBIS and Mr Minisini, referred to in par 45, was for and on behalf of the first applicant, and that the first applicant was liable therefor. 

  12. Paragraphs 53-55 of the Cross-Claim make allegations of accessorial liability against FBIS and Mr Minisini for the purposes of s 75B of the TP Act. Paragraphs 53 and 54 allege that FBIS and Mr Minisini, respectively, aided and abetted the first applicant to engage in some of the conduct alleged in par 33 (ie conduct said to be unlawful pursuant to s 51AC of the TP Act) and to engage in the conduct alleged in par 48 (ie the conduct of themselves, for which the first applicant is alleged to be vicariously liable), and were knowingly concerned in or parties to that conduct of the first applicant. Paragraph 55 alleges that Mr Minisini aided and abetted (etc) FBIS to engage in the conduct alleged in par 53. Paragraph 56 of the Cross-Claim alleges loss and damage as a result of the conduct alleged in pars 50-55 (of which only pars 53-55 are presently relevant).

  13. I shall consider first FBIS’s and Mr Minisini’s attack on pars 44-47 of the Cross-Claim.  Paragraph 44 is critical.  The respondent was not represented at any of the interviews to which it refers, and it seems that its only present source of information about those interviews is the affidavit affirmed by Mr Minisini on 22 December 2006.  I appreciate that a motion invoking the court’s power under O 11 r 16 should not be decided by reference to an examination of the adequacy of the evidence available to the pleader.  However, the question whether par 44 discloses a reasonable cause of action, or otherwise avoids embarrassment, cannot be addressed without first identifying the essence of the allegation made therein.  Manifestly, a pleading in the form of par 44 could not survive unless particulars were given of the making of the statements, or of the facts and circumstances by which the implication arose, as alleged.  To the extent that it is able, the respondent has given such particulars, and has done so by reference to Mr Minisini’s affidavit.  Not merely as a matter of evidence, therefore, the terms of the affidavit give content to the allegation in par 44 itself. 

  14. In his affidavit of 22 December 2006, Mr Minisini said that he was the Chief Executive of FBIS.  He said that FBIS had been engaged by the first applicant “to undertake investigations in relation to suspected counterfeit automotive parts in Australia, including in relation to parts sourced from” the respondent.  Mr Minisini said that he had conducted interviews with 10 named persons.  He proceeded to set out, in brief summary terms, the things he was told by each of those persons in the interview which he conducted with him or her.  Mr Minisini said nothing about any statement which he himself made in the course of those interviews.  I am prepared to assume, in the respondent’s favour, that Mr Minisini commenced each interview with a statement of his purpose, much along the lines quoted earlier in this paragraph.  The respondent urged the appropriateness of such an assumption, but was not able to point to any evidence of Mr Minisini having made a statement to an interviewee of the kind alleged in par 44 of the Cross-Claim. 

  15. That is not the end of the matter, of course, since the respondent’s case is based on inference.  As I understand this case, it is put at two levels.  First, it is said that it should be inferred that Mr Minisini actually made statements beyond those set out in his affidavit, and effectively informed the interviewees that the respondent had sold, or was selling, counterfeit parts as genuine parts.  I cannot accept that any such inference is fairly open on the affidavit which forms the basis for the particulars to par 44 of the Cross-Claim.  To propose that Mr Minisini went so far as to make statements to this effect would, in my view, be in the realm of speculation rather than of inference. 

  16. The second way in which the respondent puts the matter is to say that the context and circumstances of each interview, including, as I understand it, the body language of Mr Minisini himself, were such as to convey an implication of the kind alleged in par 44.  It is said that, while he may not have expressly stated that the respondent had been selling counterfeit parts, it should be inferred that, by the occasional nod, wink or knowing look, and by the context of the subject matter generally, he implied as much, and that such an implication would have been quite apparent to the interviewees.  The difficulty with this way of putting the matter, in my view, is that it relies entirely upon silent assumptions about human nature and the dynamics of human behaviour which could not be regarded as uncontroversial.  There is nothing in the evidence which would justify the making of those assumptions.  According to Mr Minisini’s affidavit, FBIS was engaged by the first applicant to undertake certain investigations.  It seems that Mr Minisini himself carried out the necessary work.  It is possible that he did so in a less professional way than is apparent from the terms of his affidavit, and that he engaged in some kind of body language which, in effect, conveyed an impression of guilt apropos the respondent’s alleged involvement in the sale of counterfeit parts.  However, the affidavit on which the respondent relies is not, in my view, sufficient to sustain an inference to that effect.  The respondent’s difficulty, no less in the matter of the implication than in the matter of the express statements, is that the inference it would ask the court to make could not be made within the four corners of its pleading as particularised. 

  17. I should not strike out the respondent’s pleading under O 11 r 16 simply because I am not satisfied that the respondent presently has sufficient evidence to make good its allegations (although that circumstance should, it seems to me, have been a matter of concern under O 11 r 1B).  But the respondent’s problem is not, in truth, one of a deficiency of evidence.  I have dealt with the matter by reference to Mr Minisini’s affidavit only because the respondent itself has used that affidavit as the reference point in its particulars to pars 43 and 44 of the Cross-Claim.  Proceeding this way, it is as though the relevant provisions of the affidavit were themselves set out in the particulars, and thereby gave content to what par 44 itself says was “stated or implied” to the interviewees.  In my view, that content, and necessarily par 44 itself, does not disclose a reasonable cause of action within the meaning of O 11 r 16(a).  I so conclude because, even if all the matters upon which the respondent relevantly relies were established at trial, the case would inevitably fail, since the inferences which the respondent would seek to make would not be open.

  18. Paragraphs 45-47 of the Cross-Claim depend entirely on par 44.  In the circumstances, I propose to grant the motion of FBIS and Mr Minisini to strike out those four paragraphs. 

  19. Paragraph 48 makes no claim against FBIS or Mr Minisini, and I shall not deal with it in this part of my reasons.  Paragraph 49 alleges loss and damage flowing from the conduct alleged in pars 43-48.  In so far as FBIS and Mr Minisini are concerned, it cannot survive the striking out of pars 44-47.  Whether it should be struck out altogether is a matter I shall consider presently in the context of the applicants’ motion. 

  1. Turning to par 53 of the Cross-Claim, as engrossed that paragraph contains three typographical errors, in its cross-referencing to par 33 of the Cross-Claim, which were, in part, responsible for the strike-out motion of FBIS and Mr Minisini. As engrossed, the cross-references made no sense, which left par 48 as the only intelligible allegation of a primary contravention of the TP Act which FBIS was said to have aided and abetted. In relation to that paragraph, it was submitted on behalf of FBIS that the pleading did no more than allege that it, as the primary actor in circumstances where, in par 48, it is alleged that the first applicant is vicariously liable, aided and abetted the first applicant to be so. I agree with that aspect of the submissions made on behalf of FBIS. The “conduct” to which par 53(a) of the Cross-Claim relevantly refers is not that of the first applicant at all. Paragraph 48 of the Cross-Claim does not allege that the first applicant engaged in conduct: it alleges only that the first applicant was vicariously liable for the conduct of FBIS. In my view, an allegation that a primary actor is at the same time aiding and abetting his or her principal, whose liability is only vicarious, is nonsensical and embarrassing. I would, therefore, strike out so much of par 53 of the Cross-Claim as picks up par 48 thereof. And I would take the same step in relation to par 54, which is concerned with Mr Minisini.

  2. Turning to the subparagraphs of par 33 of the Cross-Claim which were the subject of the typographical errors to which I referred, it was explained at the hearing of the motion that the particular conduct of the first applicant which was intended to be referred to was –

    ·informing the respondent’s customers that the respondent was selling counterfeit parts as genuine parts (the particulars to which refer only to pars 43-48 of the Cross-Claim);

    ·systematically importuning the respondent’s employees to change their stories, and to provide untrue information about the conduct of the respondent’s business concerning the sale of allegedly counterfeit parts (the particulars to which refer to two particular conversations between Mr Minisini and employees of the respondent); and

    ·alleging that the respondent was knowingly promoting, advertising or offering for sale, selling or supplying, or distributing, non-genuine parts as genuine parts (the particulars to which, relevantly, refer to Mr Minisini’s affidavit of 22 December 2006 and to pars 43-48 of the Cross-Claim).

    Because of the terms of the particulars to the first and third of these allegations, I consider that the references to them in par 53(a) of the Cross-Claim cannot survive the striking out of the primary paragraphs of the Cross-Claim in which the respondent’s allegations are based directly upon the interviews conducted by Mr Minisini, as disclosed in his affidavit of 22 December 2006.  I would not say the same about the second allegation, which is clearly something of which the respondent has direct evidence. 

  3. However, since I propose to grant the applicants’ motion under s 31A of the Federal Court Act, there is a more fundamental reason by the whole of par 53 of the Cross-Claim, to the extent that it picks up par 33, should be struck out. The only alleged contraventions of the TP Act by the first applicant in relation to which the respondent deploys the subparagraphs of par 33 which are picked up in par 53 are of s 51AC thereof. The first applicant will obtain judgment on those allegations. There will then be no wrongful conduct to which the allegations of accessorial liability in par 53 of the Cross-Claim could attach. In the result, the whole of that paragraph will be struck out.

  4. The challenge to pars 54 and 55 of the Cross-Claim inevitably falls to be decided in the same way as does that to par 53.  Those paragraphs too will be struck out.  Paragraph 56 alleges loss and damage as a result of the matters set forth in pars 50-55.  Because of the conclusions I reached in relation to pars 53-55, it could only be in relation to pars 50-52 that par 56 would have any work to do.  I shall return to that aspect presently. 

    THE APPLICANTS’ MOTION UNDER O 11 r 16 IN RELATION TO THE CROSS-CLAIM

  5. The first applicant moves under O 11 r 16 in relation to the Cross-Claim in two respects.  First, it seeks, alternatively to its application under s 31A of the Federal Court Act, that pars 33-39, 40 and 41(a) and (b) of the Cross-Claim be struck out.  Since I propose to grant the first applicant the relief which it seeks under s 31A, there is no point in further considering the questions arising under the Rules.

  6. Secondly, the first applicant seeks that pars 41(c), 42 and 44-56 be struck out.  I have already decided that pars 44-47 should be struck out.  Paragraph 48 alleges that the conduct alleged in par 47 was done for and on behalf of the first applicant.  In the absence of par 47, par 48 would be meaningless, and must also, therefore, be struck out.  Paragraph 49 alleges loss and damage flowing from the conduct alleged in pars 43-48.  I have decided above that par 49 should be struck out to the extent that it refers to pars 44-47.  I now decide that it has no work to do at all in the absence of par 48, and should be struck out absolutely.

  7. I shall consider next the applicants’ attack on par 41(c) of the Cross-Claim.  It reads as follows:

    Further, by engaging in the conduct referred to in paragraphs 30 to 33 hereof:
    …

    (c)Further, Ford Australia’s failed to act within the terms of clause 16.4 of the Ford Dealer Agreements by establishing and/ro conducting the said Audit for a collateral or ulterior purpose to intimidate Jefferson Ford into:

    (i)obtaining its supplies of Ford Genuine Parts from Ford Australia only; alternatively,

    (ii)selling its interest in conducting the Ford dealerships, or alternatively terminating the Ford dealership agreements or alternatively ceasing to conduct the Ford dealerships by not renewing the Ford dealership agreements at the expiry of the present term, on about the 1st July 2007 –

    and thereby breached the Ford Dealer Agreements.

    By this pleading, the respondent effectively alleges a breach of contract. In par 42, it alleges that it suffered loss and damage as a result of conduct which includes that to which par 41(c) refers. In its prayer for relief set out at the end of the Cross-Claim, the respondent claims damages only under the TP Act, but I am prepared to treat the omission to claim damages generally as an oversight, and would, subject to my disposition of the applicants’ motion in relation to par 41(c), give leave to amend. It is to that motion that I next turn.

  8. It is not submitted on behalf of the applicants that par 41(c) of the Cross-Claim did not disclose a reasonable cause of action.  Rather, it is said that the pleading, and pars 30-33 on which it is based, did not properly particularise, with the required specificity, the acts and omissions of the first applicant said to give rise to the inference of the collateral or ulterior purpose alleged by the respondent.  It is said that the allegation is effectively one of bad faith, and has not been properly particularised.  I do not agree.  I consider that any fair reading of pars 30-33 of the Cross-Claim would leave little scope for doubt as to the facts and circumstances on which the respondent relies for the purposes of par 41(c).  I accept that conduct tantamount to bad faith is alleged, but I consider that the allegation is sufficiently pleaded.  If there are further particulars which the applicants require on specific matters they may, of course, request them.  For these reasons I shall not strike out par 41(c) of the Cross-Claim.  It follows that neither should par 42 be struck out.

  9. Paragraphs 50-52 of the Cross-Claim are concerned wholly with accessorial liability under s 75B of the TP Act. As I have said above, there will be judgment for the applicants in relevant respects.

  10. Paragraphs 53-55 of the Cross-Claim involve no allegations against the applicants.  It was not explained by the applicants upon what basis they claimed to have standing to have those paragraphs struck out.  To the extent that it is necessary to deal with them, I have done so under the motion of FBIS and Mr Minisini.

  11. Paragraph 56 alleges loss and damage as a result of the conduct alleged in pars 50-55 of the Cross-Claim.  To the extent that the latter concern the applicants, I have given judgment for them on the matters to which pars 50-52 relate.  Otherwise, par 56 has been dealt with under the motion of FBIS and Mr Minisini.  The paragraph will be struck out.

    SUMMARY

  12. For the reasons stated above, there will be judgment for the first applicant on so much of the Cross-Claim as is based on ss 51AC and 51AD of the TP Act. I shall strike out subpars (c) and (d) of par 13 of the Defence (with leave to replead), and pars 44-56 of the Cross-Claim. I shall give the respondent leave to make such amendments to its Cross-Claim as it may be advised, having regard to the summary disposition of its claims under ss 51AC and 51AD of the TP Act. I note that I heard no argument on the question whether the Cross-Claim, in the form it presently takes, would be appropriate in the absence of those claims. I am provisionally of the view that amendments are necessary, but it is a matter for the respondent to address this aspect. I shall hear the parties on the question of costs, and on any other orders that might be required in consequence of the matters dealt with in these reasons.

I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

Associate:

Dated:        6 June 2007

Counsel for the Applicant: Mr P Anastassiou SC
Solicitor for the Applicant: Allens Arthur Robinson
Counsel for the Respondent: Mr A K Panna SC & Mr A Phillips
Solicitor for the Respondent: Macpherson & Kelly
Counsel for the Fifth and Sixth Cross Respondent: Mr M Wise
Solicitor for the Fifth and Sixth Cross Respondent: Home Wilkinson Lowry
Date of Hearing: 21-22 May 2007
Date of Judgment: 6 June 2007
Actions
Download as PDF Download as Word Document
Most Recent Citation
Saraceni v Mentha [2011] WASC 94
Cases Citing This Decision

1

Saraceni v Mentha [2011] WASC 94
Cases Cited

4

Statutory Material Cited

0

Giumelli v Giumelli [1999] HCA 10
Pipikos v Trayans [2018] HCA 39
Giumelli v Giumelli [1999] HCA 10