Kegalla Holdings Pty Ltd v Liquor Dist. Pty Ltd

[1990] FCA 533

s33'/+

JUDGMENT No ........ ........ ... .. ,,

NOT FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY )	NO. NG 190 of 1989

) 1

GENERAL DIVISION 1 I

BETWEEN:  KEGALLA HOLDINGS PTY.
LIMITED

Applicant

AND :  LIOUOR DIST. PTY. LIMITED

Respondent

21 August 1990

REASONS FOR JUDGMENT

LOCKHART J.

This is a motion to strike out an amended statement of claim and application in so far as those documents relate, or in the case of the amended statement of claim, plead a cause of action and damages based on alleged contravention of S. 52 of the Trade

Practices Act 1974.

Second, a cause of action based on alleged damages arising a breach of what is pleaded as an agreement by way of guarantee.	from breach of agreement. And third, damages said to arise from
three causes of action. There is a defence on file to the l,> I

The amended statement of claim asserts as I understand it, three separate causes of action, one, as I have said, based on alleged contravention of S. 52 of the Trade Practices Act and consequential damages which it is sought to recover under S. 82 of that Act.

1.

initial statement of claim but there is no defence to the amended	! '
statement of claim. The defence to the initial statement of claim does however raise in paragraph 3 a defence asserting that the cause of action based on the Trade P r a c t i c e s A c t arising from S. 82(2) is statute barred.
Section 82(2) of the Trade P r a c t i c e s Act provides that an action under sub-section (1) of that section may be commenced at any time within three years after the date on which the cause of action accrued.
There is a question as to whether S. 82(2) is expressed in terms which suggest that it is a condition precedent to jurisdiction or at least an element in the cause of action that the action be brought within the 3 year period mentioned in S. 82(2) but the point was adverted to by Gummow J. in Elna

Aus t ra l ia P t y Limited v Internat ional Computers ( A u s t r a l i a ) P t y

Limited (No 2 ) (1987) 16 FCR 410 at 415, where his Honour, after	,
citing authority said that he regarded himself as bound by the

.

weight of authority for the view that S. 82(2) gives rise	I
i
essentially to a defence not an ingredient or element in a cause	i
L

of action.	I respectfully share his Honour's view.	r
i

Technically then there is no defence on file to the
plaintiff's assertion of damages arising from a contravention of
S. 52. The point is not unimportant because a party is not of

I-

course bound to raise a statute of limitations point as a defence	I -
I
and indeed even if it is raised by way of being pleadedb as it	l : I
should be, there are, as is well known, a number of responses	, I I.
I
that plaintiffs may make to such defences.	I need not refer to

!

them.	' .
L'
What it does, however, is to highlight the significance of the fact that a statute of limitations point prime facie at least	. ,
> ,
ought to be pleaded. In the present case I have little doubt however that if I were to dismiss the motion on this point alone then it would be followed by an amended defence which would raise the point as indeed the initial defence did to the initial
. .
statement of claim.
Nevertheless it seems to me that it is a valid answer to the notice of motion that the amended defence has not been filed and the statute of limitations not pleaded. I agree with Donaldson
L.J. in Ronex Properties Limited v John Laing Construct ion

Limited [l9831 1 QB 398 where his Lordship said, at 405:

"Where it i s thought to be c l e a r t h a t t h e r e i s a

de fence under the L imi ta t ion A c t , the defendant can

e i t h e r plead t h a t de f ence and seek t h e t r i a l o f a

pre l iminary i s s u e or, i n a very c l e a r case , h e can

seek t o strike o u t the c la im on t h e ground t h a t i t i s

f r i v o l o u s , vexa t ious and an abuse o f the process o f

the cour t and support h is a p p l i c a t i o n wi th evidence. But i n no circumstances can he seek to strike out on

t h e ground t h a t no cause o f a c t i o n i s disclosed."

That passage was cited with approval by Toohey J. in Nel la

- i ,

v Kingia P t y Limited [l9861 7 IPR 55 at 57.

,

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Thus I would in the present case dismiss the motion because although a defence of S. 82(2) has been foreshadowed it is in fact technically not pleaded. In any event in the exercise o f the court's discretion I would dismiss the motion because even if it is possible to raise these matters other than by way of defence, in my opinion it is a practise to be discouraged that they be raised other than by way of defence.	I:
I should add that I see nothing contrary to what I have said in the judgment of a full court of this Court in Jobbins v Cape1
Court Corporation Limited ( 1 9 8 9 ) 91 ALR	314.

There is however, another ground why I think the motion should not succeed.	In Nel la v Kingia, Toohey J. said, also at	i .
i

57, indeed shortly before his Honour referred to Donaldson L.J.

in Ronex v John Laingthat:	l. -
! +

"The weight o f a u t h o r i t y i s aga ins t i

d i smis s ing a proceeding o r s t r i k i n g o u t a I

s ta tement	o f c la im a s d i s c l o s i n g no cause o f	!
, P:

a c t i o n m e r e l y because the p a r t y sued may I

have a de fence under t h e r e l e v a n t l i m i t a t i o n t a

s t a t u t e . "	L-
..

It is also clear from Gummow J.'s	judgement in Elna v	. .
! 2

In t e rna t iona l Computers ( A u s t ) P t y Limited at p. 421 where his 1 .

Honour referred to Nel la vKingiawith approval and said that in

his view it had not been demonstrated that in respect of either of the trade practices claims the applicant had disclosed no

reasonable cause of action. His Honour preceded that stAtement '

with an observation that the meaning scope and operation of S.

82(2) have scarcely been explored.

In Jobbins the full court said at page 319 and 320:

"Where i t i s c l e a r t h a t an appl icant cannot succeed upon t h e case pleaded because S . 82(2) w i l l be a complete answer to t h e claim, the Court should not merely d e f e r t h e i n e v i t a b l e . A s t h e a c t i o n must f a i l , t h e Court should not h e s i t a t e to s a y s o : Riches

v Direc tor o f Publ ic Prosecutions [l9731 1
WLR 1019."

Having perused the amended statement of claim and heard the argument of counsel, including the written submissions of counsel for the moving party, Liquor Distributors Pty Limited which, I should add, have been most helpful, I am not satisfied that it is clear that on the amended statement of claim the cause of

under S. 82 is necessarily statute barred. In the light of the	action based on contravention of S. 52 and claim for damages
evidence that question will be determined in due course.
Hence for this reason also I would not be minded to accede to the notice of motion to strike out the relevant parts of the statement of claim relating to the Trade Practices Act. Accordingly the motion is dismissed.
In my opinion the costs of Kegalla Holdings of the motion should be paid by Liquor Distributors and I so order.

I certify that this and the

preceding five ( 5 ) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

Associate ~ f & ~ % ~

Dated: 21 August 1990

Counsel for the Applicant . A.J. Meagher

Solicitors for the Applicant :	Tietyens
Counsel for the Respondent	M. McDonogh
Solicitors for the Respondent:	Tillyard & Callanan
Date of Hearing	21 August 1990
Date of Judgment	21 August 1990