Knott Investments Pty Ltd v Winnebago Industries, Inc (No 2)

[2015] FCA 1214

FEDERAL COURT OF AUSTRALIA

Knott Investments Pty Ltd v Winnebago Industries, Inc (No 2) [2015] FCA 1214

Citation:	Knott Investments Pty Ltd v Winnebago Industries, Inc (No 2) [2015] FCA 1214
Parties:	KNOTT INVESTMENTS PTY LTD v WINNEBAGO INDUSTRIES, INC, WINNEBAGO OF INDIANA, LLC, WINNEBAGO RV PTY LTD (ACN 169 971 760), APOLLO MOTORHOME HOLIDAYS PTY LTD (ACN 051 584 153) and BARMIL ENTERPRISES PTY LTD (ACN 121 841 405)
File number(s):	NSD 907 of 2014
Judge(s):	YATES J
Date of judgment:	11 November 2015
Catchwords:	PRACTICE AND PROCEDURE – application to amend originating application and statement of claim – application refused
Legislation:	Competition and Consumer Act 2010 (Cth) Sch 2 Federal Court Rules 2011 r 16.02
Cases cited:	Fencott v Muller (1983) 152 CLR 570 Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486 Rural Press Limited v Australian Competition and Consumer Commission (2003) 216 CLR 53
Date of hearing:	23 October 2015, 5 November 2015
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	54
Counsel for the Applicant:	Mr PW Flynn
Solicitor for the Applicant:	King & Wood Mallesons
Counsel for the Respondents:	Mr M Darke SC with Mr A Shearer
Solicitor for the Respondents:	Corrs Chambers Westgarth

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 907 of 2014

BETWEEN:

KNOTT INVESTMENTS PTY LTD
Applicant

AND:

WINNEBAGO INDUSTRIES, INC
First Respondent

WINNEBAGO OF INDIANA, LLC
Second Respondent

WINNEBAGO RV PTY LTD (ACN 169 971 760)
Third Respondent

APOLLO MOTORHOME HOLIDAYS PTY LTD (ACN 051 584 153)
Fourth Respondent

BARMIL ENTERPRISES PTY LTD (ACN 121 841 405)
Fifth Respondent

JUDGE:	YATES J
DATE OF ORDER:	11 NOVEMBER 2015
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The further amended interlocutory application filed with leave on 23 October 2015 be dismissed, with costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 907 of 2014

BETWEEN:

KNOTT INVESTMENTS PTY LTD
Applicant

AND:

WINNEBAGO INDUSTRIES, INC
First Respondent

WINNEBAGO OF INDIANA, LLC
Second Respondent

WINNEBAGO RV PTY LTD (ACN 169 971 760)
Third Respondent

APOLLO MOTORHOME HOLIDAYS PTY LTD (ACN 051 584 153)
Fourth Respondent

BARMIL ENTERPRISES PTY LTD (ACN 121 841 405)
Fifth Respondent

JUDGE:

YATES J

DATE:

11 NOVEMBER 2015

PLACE:

SYDNEY

REASONS FOR JUDGMENT

1. This proceeding concerns alleged contravention of ss 18 and 29 of Sch 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law) by the respondents in relation to the promotion and supply of recreational vehicles (RVs) using the Winnebago name and two logos:  the Winnebago name logo and the W logo (together, the Winnebago logos).

2. The first and second respondents are companies incorporated under the laws of Iowa in the United States of America.  The third and fourth respondents are local companies that carry on business in Australia as sellers and rental providers of RVs and caravans. The fifth respondent is also a local company.  It is the ultimate holding company of the third and fourth respondents.

3. By a further amended interlocutory application filed with leave of the Court on 23 October 2015, the applicant applies to amend its originating application and statement of claim. The interlocutory application is opposed.  The principal basis for the opposition concerns the manner in which the applicant has pleaded various allegations of accessorial liability in the proposed amended statement of claim.  There are other miscellaneous objections to the proposed pleading. 

4. It is convenient to approach the consideration of the interlocutory application by reference to the groupings of the allegedly contravening conduct that have been pleaded.

   THE PLEADED PRIMARY CONTRAVENTIONS

5. The alleged contravening conduct, as pleaded in the proposed amended statement of claim, can be grouped as follows:

   (a)representations made by non-party dealers on websites: paragraphs 36-40 (the dealers’ website representations);

   (b)representations made by the third and fourth respondents on a website: paragraphs 44-50 (the third and fourth respondents’ website representations);

   (c)representations made by “one or more of” the respondents in magazines: paragraphs 52-55 (the magazine representations); and

   (d)other conduct: paragraphs 12-24 and 31-35.

   The dealers’ website representations

6. The essence of these allegations, pleaded in paragraphs 36-40, is that dealers authorised by “one or more of” the third and fourth respondents have falsely represented on certain websites that:

   (a)all RVs and caravans branded with the Winnebago name and Winnebago logos are manufactured, imported, provided or sold by or with the licence, sponsorship or approval of the respondents and/or derive from a common manufacturing or trading source (being the first respondent or the second respondent or companies licensed by them); and/or

   (b)RVs and caravans manufactured by the respondents, or “one or more of” them, and branded with the Winnebago name and Winnebago logos, are manufactured, imported, promoted or sold by or with the licence, sponsorship or approval of the applicant (or a company related with or associated or affiliated with the applicant) or have some other connection with the applicant and/or are associated with the applicant’s Winnebago-branded RVs and caravans. 

7. Accessorial liability is pleaded against, separately, the third and fourth respondents in paragraphs 41 and 42, and the first and second respondents in paragraphs 42A and 43: see [31]-[33] and [20]-[22] below, respectively.

   The third and fourth respondents’ website representations

8. The essence of these allegations, pleaded in paragraphs 44-50, is that the third and fourth respondents have falsely represented on a website that:

   (a)there was only one entity or group of companies using the Winnebago name in relation to RVs and caravans in Australia; and/or

   (b)the third and fourth respondents were the only companies authorised to use the Winnebago name in relation to RVs and caravans in Australia; and/or

   (c)all RVs and caravans sold under the Winnebago name in Australia derive from the same manufacturing or trading source.

9. Accessorial liability is pleaded against “one or more of” the first and second respondents in paragraphs 50A and 51: see [23]-[25] below.

   The magazine representations

10. The essence of these allegations, pleaded in paragraphs 52-55, is that “one or more of” the respondents have falsely represented that:

    (a)they established their RV business in Australia in 1958;

    (b)“one or more of” them have been selling Winnebago-branded RVs and caravans in Australia since 1958; and/or

    (c)“one or more of” them have been operating under the Winnebago name or the name Winnebago Australia & New Zealand in Australia since 1958. 

11. Accessorial liability is pleaded against “one or more of” the first and second respondents in paragraphs 55A and 56: see [26]-[28] below.

    Other conduct

12. This conduct falls into three broad groups.

13. First, the applicant alleges, in paragraph 12, that in or around May 2014, the first respondent promoted a range of outdoor clothing under or by reference to the Winnebago name and the Winnebago name logo. The applicant alleges, in paragraphs 18 and 21-23, that this conduct is ongoing and falsely represents that this clothing is manufactured, imported, promoted or sold by or with the licence, sponsorship or approval of the applicant, or a company related to or associated or affiliated with the applicant, or has some association with the applicant, or that the clothing is promotional material associated with, or is otherwise associated with, the applicant’s Winnebago-branded RVs.

14. Secondly, in paragraphs 13-16, the applicant makes a series of allegations.  It alleges that:

    (a)on or around 24 March 2014, the fourth respondent registered the domain name gowinnebago.com.au and, on or around 23 June 2014, registered the business name Winnebago Australia in Australia;

    (b)on or around 6 June 2014, the third respondent was incorporated in Australia under its present corporate name; and

    (c)from at least 14 July 2014, “one or more of” the third, fourth and fifth respondents have displayed the Winnebago name logo at certain business premises.

15. The applicant then alleges, in paragraphs 17-17B, that:

    (a)since at least 29 July 2014, “one or more of” the third, fourth and fifth respondents have promoted the sale of RVs and caravans to persons in Australia from the website under or by reference to the Winnebago name, the Winnebago logos and the business name Winnebago Australia;

    (b)since at least February 2015, “one or more of” the third and fourth respondents have manufactured and sold RVs in Australia and have imported and sold in Australia caravans under or by reference to the Winnebago name, the Winnebago logos and the business name Winnebago Australia; and

    (c)since at least August 2015, “one or more of” the third and fourth respondents have manufactured, promoted and sold RVs in Australia and have imported and sold in Australia caravans, under or by reference to the name Winnebago Australia & New Zealand.

16. The applicant alleges, in paragraphs 19-22 and 24, that, by the conduct summarised in

    
    

    [14]-[15] above, the third, fourth “and/or” fifth respondents have falsely represented, and continue to falsely represent, that:

    (a)the RVs and caravans promoted and sold by the third, fourth “and/or” fifth respondents in Australia under the Winnebago name or one or other of the Winnebago logos are manufactured, imported, promoted, distributed, rented or sold by or with the licence, sponsorship or approval of the applicant, or a company related to or associated or affiliated with the applicant, or have some other association with the applicant, or are part of the product range of or are otherwise associated with the applicant’s Winnebago-branded RVs; and/or

    (b)the third, fourth “and/or” fifth respondents manufacture, import, promote, distribute, rent or sell RVs and caravans bearing the Winnebago name or one  or other of the Winnebago logos by or with the licence, sponsorship or approval of the applicant, or are otherwise associated or affiliated with the applicant. 

17. In relation to this (second category) allegedly contravening conduct, accessorial liability is pleaded against the first and second respondents in paragraphs 25-28: see [29]-[30] below.

18. Thirdly, in paragraphs 31-35, the applicant alleges that since at least February 2015, “one or more of” the third and fourth respondents have sold and promoted, and continue to sell and promote, Winnebago-branded RVs and caravans in Australia pursuant to certain licence and distribution agreements without affixing to the RVs and caravans, or using in advertising or promotional materials, any form of disclaimer, and without requiring wholesale customers to affix to RVs and caravans or use any form of disclaimer.  Further, the first and second respondents do not require the third or fourth respondents to use any form of disclaimer or require the third or fourth respondents to impose the use of a disclaimer on wholesale customers.  The applicant alleges that, by this conduct, the first and second respondents, and the third and fourth respondents, have falsely represented and continue to falsely represent that these RVs and caravans are manufactured, imported, promoted or sold by or with the licence, sponsorship or approval of the applicant. 

19. Confusingly, in paragraph 25, the pleading states that the licence and distribution agreements comprise two agreements between the first and second respondents “or one of them”, on the one hand, and “one or more of” the third, fourth and fifth respondents, on the other hand; whereas the licence and distribution agreements are particularised as comprising three agreements, as follows:

    (a)an International Licence Agreement between the first respondent and the third respondent dated 25 July 2014;

    (b)an International Distributor Agreement between the second respondent and the third respondent dated 25 July 2014; and

    (c)a Marketing Contribution Agreement between the first respondent and the third respondent dated 25 July 2014.

    ACCESSORIAL LIABILITY: FIRST AND SECOND RESPONDENTS

    The dealers’ website representations

20. The applicant pleads, in paragraph 42A(a), that the dealers’ website representations were made “with the knowledge, consent and authorisation” of “one or more of” the first and second respondents, which may be inferred from one or more particularised matters.  At the risk of some simplification, the particulars can be summarised as follows.  The applicant states that the third and fourth respondents are licensed by the first “and/or” second respondents pursuant to the licence and distribution agreements.  I pause to note that the fourth respondent is not a party to those agreements.  It is referred to in the body of the International Licence Agreement as an approved manufacturer, subject to the first respondent’s receipt of a signed “Manufacturers Agreement”.  The pleading is silent on whether such an agreement has been signed by the fourth respondent and received by the first respondent. The applicant then refers to various provisions of the International Licence Agreement and the International Distributor Agreement and states that there is no requirement on the part of the third respondent or on dealers to use the Winnebago name and the Winnebago name logo with a disclaimer.  The applicant also states that, under the International Licence Agreement, the first respondent indemnifies the third respondent, and, under the International Distributor Agreement, the second respondent indemnifies the third respondent and its dealers, against claims made by the applicant in respect of any alleged or actual infringement of intellectual property rights in connection with Winnebago-branded vehicles and Winnebago-branded motor homes respectively.  The applicant also repeats earlier particulars which, by reference to the fourth respondent’s website, identify and refer to the dealers.

21. The applicant also pleads, in paragraph 42A(b), that the first and second respondents had knowledge of certain matters.  These matters are referred to in particulars and include knowledge of the applicant’s use of the Winnebago name and the Winnebago logos; of the fact that, by 2010, the applicant had developed a reputation in the Winnebago name and the Winnebago logos in Australia in relation to RVs and caravans; of the fact that “one or more of” the third and fourth respondents authorised dealers to use the Winnebago name and the Winnebago logos without a disclaimer; and of the fact that the Winnebago-branded RVs and caravans promoted and supplied by the dealers are not manufactured etc. with the licence, sponsorship or approval of the applicant or a company related to or associated or affiliated with the applicant, and do not have an association with the applicant or its Winnebago-branded RVs and caravans.

22. The applicant then pleads, in paragraph 43, that, by reason of these matters, “one or more of” the first and second respondents are persons involved in the contraventions concerning the dealers’ website representations because they were knowingly concerned in or party to the contraventions, or aided, abetted, counselled or procured the contraventions.

    The third and fourth respondents’ website representations

23. The applicant pleads, in paragraph 50A(a), that the third and fourth respondents’ website representations were made “with the knowledge, consent and authorisation” of “one or more of” the first and second respondents, which may be inferred from one or more particularised matters. Here, the applicant substantially repeats the particulars to which I have referred in [20]. To these particulars, the applicant adds reference to various provisions of the International Licence Agreement and International Distributor Agreement that require the third respondent to obtain the first respondent’s and second respondent’s separate approvals to the third respondent’s marketing, advertising and promotional activities and materials, including the way in which the Winnebago name and Winnebago name logo are to appear. I pause to note that, although named and provisionally approved in the International Licence Agreement as the third respondent’s manufacturer, the fourth respondent is not said to be under any such contractual obligation.

24. The applicant also pleads, in paragraph 50A(b), that the first and second respondents had knowledge of certain matters.  These matters are referred to in particulars and include knowledge of the applicant’s use of the Winnebago name and the Winnebago logos; of the fact that, by 2010, the applicant had developed a reputation in the Winnebago name and the Winnebago logos; and of the fact that the RVs and caravans supplied by the third or fourth respondents are not manufactured etc. with the licence, sponsorship or approval of the applicant or a company related to or associated or affiliated with the applicant, and do not have an association with the applicant or its Winnebago-branded RVs and caravans. 

25. The applicant then pleads, in paragraph 51, that, by reason of these matters, the first and second respondents were persons involved in the contraventions represented by the third and fourth respondents’ website representations because they were knowingly concerned in or party to the contraventions, or aided, abetted, counselled or procured the contraventions.

    The magazine representations

26. The applicant pleads, in paragraph 55A(a), that the magazine representations were made “with the knowledge, consent and authorisation” of “one or more of” the first and second respondents, which may be inferred from one or more particularised matters.  The particulars provided are those referred to in [20] and [23] above.  The applicant also provides, as particulars, the allegation that the first and second respondents are, and were at all material times, aware that “one or more of” the other respondents were publishing the magazine advertisements.  This allegation is a bald one, particularly in relation to the first respondent’s and second respondent’s awareness of the contravening conduct alleged against the fourth respondent and the fifth respondent, who have no relevant contractual obligations to the first respondent or the second respondent under the licence and distribution agreements.

27. The applicant repeats, in paragraph 55A(b), the allegations of knowledge which I have summarised in [21] above.

28. The applicant then pleads, in paragraph 56, that, by reason of these matters, the first and second respondents were persons involved in the contraventions represented by the magazine representations because they were knowingly concerned in or party to the contraventions, or aided, abetted, counselled or procured the contraventions. 

    Other conduct

29. The applicant pleads, in paragraph 26, that, pursuant to the licence and distribution agreements, the first and second respondents purported to authorise, license or permit the third, fourth and fifth respondents to engage in the conduct I have summarised in [14]-[15] above.  It pleads that “it may be inferred” that the first and second respondents knew that the third, fourth and fifth respondents were engaging in that conduct.  The particulars to this last mentioned allegation refer to various provisions of the International Licence Agreement and the International Distributor Agreement.  I pause to note that the fifth respondent is not a party to those agreements or even referred to in them.  The applicant pleads, in paragraph 27, that the first and second respondents knew that the Winnebago-branded RVs and caravans the subject of the alleged representations were not manufactured etc. with the licence, sponsorship or approval of the applicant or a company related to or associated or affiliated with the applicant, and do not have any other association with the applicant or with its Winnebago-branded RVs and caravans. The applicant then pleads that the first and second respondents were involved in the alleged contraventions of the third, fourth and fifth respondents because they were knowingly concerned in or party to the contraventions, or aided, abetted, counselled or procured the contraventions.

1. Confusingly, in paragraph 28, the applicant makes a further allegation of knowing involvement in the alleged contraventions, not confined to the involvement of the first and second respondents.  In oral submissions, the applicant suggested that paragraph 28 was probably intended to refer only to the accessorial liability of the first and second respondents.  The applicant also appeared to accept that paragraph 28, if so confined, was otiose.  

   ACCESSORIAL LIABILITY:  THE THIRD AND FOURTH RESPONDENTS

   The dealers’ website representations

2. The applicant pleads, in paragraph 41(a), that the dealers’ website representations were made “with the knowledge, consent and authorisation” of “one or more of” the third and fourth respondents, which may be inferred from one or more particularised matters.  The applicant says that these dealers are the authorised dealers of “one or more of” the third and fourth respondents.  Here, the applicant again refers to various provisions of the International Licence Agreement and the International Distributor Agreement and to the fact that there is no requirement on the third respondent or on dealers to use the Winnebago name and Winnebago name logo with a disclaimer.  The applicant also refers to the indemnity provisions provided in those agreements.  These particulars substantially reproduce the particulars which I have summarised in [20] above.  The applicant repeats the earlier particulars identifying and referring to the dealers shown on the fourth respondent’s website.

3. The applicant also pleads, in paragraph 41(b), that the third and fourth respondents had knowledge of certain matters in terms substantially similar to the summary in [21] above.

4. The applicant then pleads, in paragraph 42, that, by reason of these matters, “one or more of” the third and fourth respondents are persons involved in the contraventions concerning the dealers’ website representations because they were knowingly concerned in or party to the contraventions, or aided, abetted, counselled or procured the contraventions.

   CONSIDERATION

5. In their written submissions, the respondents canvass a number of principles relating to the requirements for a proper pleading and the circumstances in which leave will be granted to amend a pleading.  One cardinal rule is that the pleading must state the material facts on which a party relies that are necessary to give the opposing party fair notice of the case to be made against that party at trial: r 16.02(1)(d) of the Federal Court Rules 2011.  Although important in all cases, the requirement for a proper pleading is particularly important when allegations of misleading or deceptive conduct are made.  The case to be brought must be clearly and distinctly stated so that the defending party has a proper opportunity of meeting it: Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486 at [21]-[26]. Insistence on this requirement is not mere pedantry or, as the plurality in Forrest put it, a “pleader’s quibble”.

6. In relation to the pleading of accessorial liability, the respondents submitted that, in order to establish such liability, it is necessary for the applicant to show, and hence to plead, that the accessory participated in, or assented to, the principal contravention with prior knowledge of all the essential elements of the contravention: Rural Press Limited v Australian Competition and Consumer Commission (2003) 216 CLR 53 at [48]. Furthermore, the respondent submitted that it is necessary to show, and hence to plead, that the accessory was involved in the contravention by some positive act in relation to the impugned conduct, amounting to a close involvement: Fencott v Muller (1983) 152 CLR 570 at 584. I accept these submissions. I do not understand the applicant to have contested the need for its pleading to comply with these requirements.

7. The respondents submitted that the proposed pleading fails to plead the necessary material facts and to provide sufficient or appropriate particulars of knowledge by each respondent of the elements required to establish accessorial liability against each respondent.  The respondents also submitted that the proposed pleading fails to plead the necessary material facts and to provide sufficient or appropriate particulars of each respondent’s close involvement in each of the principal contraventions for which each respondent is said to liable as an accessory.

8. The respondents submitted that, rather than pleading necessary material allegations of fact, the applicant has simply provided “rolled up” allegations, largely concerning the entry by the first and third respondents into the International Licence Agreement and the second and third respondents into the International Distributor Agreement.  The respondents submitted that these “rolled up” allegations provide a wholly inadequate basis for alleging that the first and second respondents, and the third and fourth respondents, each had knowledge of the essential elements of the principal contraventions and that each was involved, in the relevant sense, in the contraventions in respect of which the applicant alleges that each respondent is liable as an accessory.  I accept these submissions.

9. The deficiencies in the pleading can be illustrated by the following examples.

10. First, as I have noted, the fourth respondent is not a party to the licence and distribution agreements.  Given that fact, on what basis can its knowledge of, consent to or authorisation of the dealers’ website representations be inferred?  The pleading is silent on this.  The only substantial basis for the allegation that is put forward in the proposed pleading is the licence and distribution agreements to which the fourth respondent is not a party. 

11. Secondly, the dealers are not parties to the licence and distribution agreements.  While the existence of the licence and distribution agreements might be a step in the chain of reasoning leading to the drawing of an inference, it simply does not follow from the fact that the first and third respondents entered into the International Licence Agreement, and that the second and third respondents entered into the International Distributor Agreement, that any of those respondents had knowledge of, consented to or authorised any or all of the dealers’ website representations.  There is a substantial gap in the chain of reasoning, and the first, second and third respondents are not informed about how the applicant will put its case in this regard.  There is not even an allegation that the respondents knew of the dealers’ websites or, more particularly, their content.  In short, the applicant has failed to plead material allegations of fact. The gap is obviously wider when one comes to consider the position of the fourth respondent, who is not even a party to the agreements on which the applicant relies.

12. Thirdly, in relation to the dealers’ website representations, there is no proper pleading of a positive act which associates the first, second, third or fourth respondents with the making of each allegedly false representation.  To the extent that this work is intended to be undertaken by the words “consent or authorisation”, the pleading is conclusory in nature.  The pleading does not state how, or by what acts, each respondent consented to or authorised each allegedly false representation so as to amount to the knowing involvement that must be established.  Once again, material allegations of fact are not pleaded. 

13. Fourthly, in relation to the third and fourth respondents’ website representations, the pleading of accessorial liability against the first and second respondents proceeds on the basis that each had a contractual right in relation to the approval of the third and fourth respondents’ promotional materials.  The unstated assumption appears to be that, acting under contractual obligations, the third respondent and the fourth respondent each submitted the content of the website to the first respondent and the second respondent, who each gave their individual consents to the third respondent and the fourth respondent.  If that is so, it has not been pleaded.  It is not enough to simply plead the existence of contractual rights and obligations.  The facts must be pleaded.  There is, however, a further difficulty.  Once again, the fourth respondent is not a party to the licence and distribution agreements.  There are no apparent contractual obligations placed on it under those agreements.  Absent any such obligation, on what basis does the applicant say that either the first respondent or the second respondent or both gave prior approval to the fourth respondent to make the representations said to have been made by it?  Once again, material allegations of fact are not pleaded.  Further, my comments above concerning the use of the words “consent or authorisation”, and the requirement to show and plead knowing involvement, apply to the pleading of accessorial liability in respect of these alleged representations.

14. Fifthly, in relation to the magazine representations, the applicant pleads that “one or more of the respondents” made the representations.  This, of course, includes the first and second respondents.  However, the applicant also confusingly pleads that the first and second respondents are liable as accessories.  For this reason alone, this allegation of accessorial liability is embarrassing.  But it is also based on the same “rolled up” pleading and deficient particulars to which I have referred in relation to the other allegations of accessorial liability.  The pleading therefore suffers from the same defects and deficiencies.  Further, as I have noted in [26] above, the allegation that the first and second respondents were and are aware that “one or more of” the other respondents were publishing the magazine representations is simply a bald assertion, particularly when made with respect to conduct alleged against the fourth respondent and conduct alleged against the fifth respondent.  The first and second respondents are not informed by the proposed pleading of the case that the applicant seeks to make in this regard.

15. Sixthly, there are a number of difficulties with the pleading of the first and second respondents’ alleged accessorial liability in relation to the conduct summarised in [14]-[15] above.  I have already referred to the difficulties associated with paragraph 28 of the proposed pleading:  see [30] above.  A further difficulty relates to the centrality of the licence and distribution agreements to the allegation of accessorial liability. The principal contravention is said to have been made by the third, fourth and fifth respondents.  The applicant pleads that, by the licence and distribution agreements, the first and second respondents purported to authorise the third, fourth and fifth respondents to engage in the impugned conduct, and knew that they were engaging in that conduct.  However, as I have stated, neither the fourth respondent nor the fifth respondent is a party to the licence and distribution agreements. The fourth respondent is provisionally approved in the International Licence Agreement as the third respondent’s manufacturer, but it is not authorised under the International Licence Agreement to engage in the conduct alleged against it.  The pleading does not contain the necessary material allegations of fact which connect the first and second respondents to the conduct alleged against the fourth respondent and the conduct alleged against the fifth respondent. 

16. Moreover, the applicant pleads that the licence and distribution agreements are dated 25 July 2014, while also pleading that some of the conduct to which accessorial liability attaches occurred before that time. The pleading is unclear as to whether each pleaded event stands as a separate principal contravention or whether the principal contravention is found only in the events considered cumulatively. In oral submissions, the applicant argued that each aspect of conduct I have summarised in [14]-[15] stands as a discrete contravention under s 18 and s 29 of the Australian Consumer Law. In written submissions, the respondents raised questions about whether an apparently uncommunicated fact of domain name registration could be, without more, a representation made to consumers in Australia that RVs and caravans promoted and sold by the third, fourth “and/or” fifth respondents are the applicant’s RVs and caravans, or RVs and caravans associated with the applicant or the applicant’s RVs and caravans. Leaving aside that matter, the proposed pleading does not expose how it is said, for example, the first and second respondents were knowingly concerned in that conduct. In oral submissions, the applicant argued that knowing involvement could be inferred from the fact that the first and second respondents entered into the licence and distribution agreements with the third respondent four months later, and that the fourth respondent is provisionally approved as the third respondent’s manufacturer in the International Licence Agreement. It seems to me that this argument, which seeks to connect the fourth respondent’s prior conduct of registering the domain name with the first and second respondents, contains unstated, but necessary, assumptions concerning the first respondent’s and the second respondent’s knowledge and conduct, which should be pleaded as material allegations of fact. The same comment applies in relation to the other allegedly contravening conduct occurring before the licence and distribution agreements were entered into.

17. The respondents raise other issues concerning the adequacy of the proposed pleading. 

18. First, in paragraph 33 of the proposed pleading, the applicant pleads that the first and second respondents have made and continue to make false representations: see [18] above.  This is pleaded as a representation to “dealers and consumers in Australia”.  The first and second respondents’ liability is alleged to arise because they entered into the licence and distribution agreements.  However, it is not apparent on the face of the pleading how the event of entering into the licence and distribution agreements with the third respondent stands as a representation to “dealers and consumers in Australia”, let alone the false representation that is alleged.  In oral submissions, the applicant accepted that, in this regard, paragraph 33 is overreaching.

19. Secondly, in paragraph 52 of the proposed pleading, the applicant pleads that “one or more” of the respondents made the magazine representations: see [10] above.  I have referred to this allegation in the context of the pleading of the first and second respondents’ alleged accessorial liability: see [26]-[28] above.  The respondents raise a discrete issue: the allegation in paragraph 52 does not properly identify who engaged in the impugned conduct.  Taken with the difficulty associated with the pleading of accessorial liability, this submission must be accepted.  Paragraphs 52, 55 and 55A are confusing.

20. Thirdly, the respondents submitted that paragraphs 32 and 36 of the proposed pleading do not properly identify the persons said to have engaged in the contravening conduct.  Paragraph 32 refers to “wholesale customers” of the third and fourth respondents.  I understand this paragraph to refer to all wholesale customers of the third and fourth respondents.  So understood, I do not think that paragraph 32 is deficient in this regard.  Paragraph 36 refers to actual dealers by business name.  I do not accept that these dealers have not been sufficiently identified.

    CONCLUSION AND DISPOSITION

21. Leave should be refused to amend the statement of claim in the manner proposed.  The proposed pleading contains numerous defects and deficiencies.  I have sought to illustrate the main ones.  The problem arises, in part, from the “rolled up” nature of many allegations in the pleading and its apparent attempt to cast a wide net of liability over the first and second respondents, and the third, fourth and fifth respondents, when, perhaps, a more judicious and disciplined analysis of liability is warranted.  The “rolled up” nature of a number of allegations is manifested in the applicant’s somewhat indiscriminate use of the conjunction “and/or” and the phrase “one or more of”.  Such use has resulted in confusing and in some cases inconsistent allegations.  Some allegations in the proposed pleading simply do not withstand scrutiny when seen with the balance of the pleading.  The “rolling up” of allegations in this way also has a tendency to obscure the fact that necessary links in the chain of reasoning leading to a finding of liability, and hence necessary material facts, have not been pleaded. 

22. The respondents should not be embarrassed by imposing on them the task of unravelling “rolled up” allegations of the kind found in the proposed pleading or by imposing on them the task of attempting to second-guess how, at trial, the applicant might choose to advance its case against each respondent.

23. It follows that the interlocutory application should be dismissed with costs.

24. Some of the defects and deficiencies to which I have referred are present in the existing statement of claim.  No application has been made to strike out all of part of that pleading, but that is no reason why leave to amend, as proposed, should not be refused.

25. I wish to make one final observation.  The present dispute arises in the context of the adequacy of a proposed pleading.  The comments I have made are not confined to that context.  Even if the matter were to proceed in some more informal way, without a statement of claim, it would still be necessary for the applicant to articulate clearly and distinctly the case to be brought against each respondent. 

I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Yates.

Associate:

Dated:        11 November 2015