FEDERAL COURT OF AUSTRALIA
MCG Quarries Pty Ltd v Beach [2017] FCA 1601
File number(s): VID 747 of 2017 Judge(s): DAVIES J Date of judgment: 21 December 2017 Catchwords: PRACTICE AND PROCEDURE – Application for summary judgment; where leases included a term that was alleged to contravene the Competition and Consumer Act 2010 (Cth) by preventing the applicant supplying stone to the leasee; where it was alleged that it would have been unlawful for the applicant to supply stone by reason of their planning permit and it was accordingly argued that no damage was suffered; whether utility to relief sought where respondent agreed not to enforce term in lease and amended lease to remove it; whether triable issues raised having regard to the conditions in the planning permit and leases Legislation: Competition and Consumer Act 2010 (Cth)
Federal Court of Australia Act 1976 (Cth)
Federal Court Rules 2011 (Cth)
Cases cited: Spencer v Commonwealth (2010) 241 CLR 118 Date of hearing: 1 December 2017 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Economic Regulatory, Competition and Access Category: Catchwords Number of paragraphs: 15 Counsel for the Applicant: Mr M Martin QC Solicitor for the Applicant: Mills Oakley Counsel for the Respondents: Mr D Hyde and Mr A Barraclough Solicitor for the Respondents: Rigby Cooke Lawyers ORDERS
VID 747 of 2017 BETWEEN: MCG QUARRIES PTY LTD
Applicant
AND: BARBERA ANN BEACH
First Respondent
RODNEY JAMES BEACH
Second Respondent
HAROLD RUSSELL BEACH (and another named in the Schedule)
Third Respondent
JUDGE:
DAVIES J
DATE OF ORDER:
21 DECEMBER 2017
THE COURT ORDERS THAT:
1.The respondents’ application for summary judgment pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth) be dismissed.
2.The respondents to pay the costs of the applicant, such costs to be taxed in default of an agreement.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
DAVIES J:
INTRODUCTION
The applicant (“MCG Quarries”) has sued the respondents for contravention of s 45 of the Competition and Consumer Act 2010 (Cth) (the “Consumer Act”). The respondents own property which they have leased to Mt Gellibrand Wind Farm Pty Ltd (“Mt Gellibrand”) for the construction and operation of a wind farm. The alleged contravention relates to the inclusion of a term in those leases which, it was contended, prevented Mt Gellibrand from acquiring stone from MCG Quarries. It is also alleged that the respondents’ conduct was unconscionable within the meaning of s 21 of sch 2 to the Consumer Act. MCG Quarries has claimed that it has suffered loss and damage and seeks damages and an order that the term is void or unenforceable. The respondents have applied for the proceeding to be summarily dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) (“the FederalCourtAct”) and r…
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- AGLC
- MCG Quarries Pty Ltd v Beach [2017] FCA 1601
- Case
- [2017] FCA 1601
- Decision Date
CaseChat Overview and Summary
The legal issues the court needed to address included whether the lease term contravened the Competition and Consumer Act, and if the relief sought by MCG Quarries was appropriate, particularly in light of the respondents agreeing not to enforce the lease term and amending the lease to remove it. Additionally, the court had to determine if there were any triable issues concerning the conditions in the planning permit and the leases. The court found that the affidavit evidence and reply pleading raised a factual issue regarding whether Mt Gellibrand believed the lease term entirely precluded it from purchasing stone from MCG Quarries, thereby affecting MCG Quarries’ entitlement to damages.
The Federal Court found that the application for summary judgment was not appropriate because the factual issue regarding the interpretation and impact of the lease term was material and required determination. The court held that the evidence presented by MCG Quarries indicated that Mt Gellibrand may have believed the lease term completely barred the purchase of stone from MCG Quarries, thus raising a causation issue pertinent to MCG Quarries’ claim for damages. Consequently, the court dismissed the respondents' application for summary judgment and ordered the respondents to pay the applicant's costs, to be taxed in default of an agreement.
Orders
Orders of the court
1. The respondents’ application for summary judgment pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) and r 26.01 of the Federal Court Rules 2011 (Cth) be dismissed.
2. The respondents to pay the costs of the applicant, such costs to be taxed in default of an agreement.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Rule 26.01(1)(a) of the Rules is in substantially the same terms. Rule 26.01(1)(b) additionally includes the ability to obtain judgment where a proceeding is “frivolous or vexatious or an abuse of process”. A proceeding is “frivolous” if it is “without substance or groundless or fanciful”. A proceeding is “vexatious” if it is pursued without any reasonable ground or if it is “without foundation, cannot succeed, or is brought for an ulterior and collateral purpose”: see the dictionary in sch 1 to the Rules. CONSIDERATION MCG Quarries is in the business of resource development, civil construction, mining and quarrying. Its quarry projects include the quarry at 320 Mooleric Road, Birregurra, Victoria. The respondents are owners of farming land in Birregurra. They leased part of their land to Mt Gellibrand for the purpose of the construction and operation of a wind farm. Mt Gellibrand obtained a permit from Colac Otway Council to conduct the wind farm which includes conditions that require Mt Gellibrand to upgrade Mooleric Road (which it uses to access the leased property) and construct roads on the leased property (“the Mt Gellibrand Permit”). For the purpose of upgrading Mooleric Road and constructing roads on the leased property, Mt Gellibrand has acquired stone and, MCG Quarries has alleged, will in the future acquire stone. The following term was included in the leases:16The rights [of Mt Gellibrand] do not extend to bringing onto the Land any rock or crushed rock sourced from any site on any other land (“off-site quarry”) except:16.1 rock and crushed rock from an off-site quarry which:(a)operates under an approved Department of Primary Industries Extractive Industry Work Authority; and(A)is within 15 kilometres of the Land but only if its approved Department of Primary Industries Extractive Industry Work Authority has been operative at least since 28 February 2012; or(B)the off-site quarry is located at least 15 kilometres from the Land. The definition of “Land” in the leases covered the real property owned by the respondents. It is common ground that the quarry did not satisfy the criteria in clause 16.1(a) and the term therefore prevented Mt Gellibrand from using stone from the quarry to construct roads on the leased land. However, it was contended for the respondents that as Mooleric Road was clearly outside the definition of “Land” in the leases, the term never prevented Mt Gellibrand from acquiring stone from the quarry to allow Mt Gellibrand to upgrade Mooleric Road. MCG Quarries’ pleaded case in reply however was that the express term had the effect of precluding MCG Quarries from supplying stone to Mt Gellibrand for the upgrade to Mooleric Road because that was how the term was understood by Mt Gellibrand and/or it was more efficient and therefore preferable to deal with only one supplier of stone for both the upgrade to Mooleric Road and the construction of the wind farm on the land. MCG Quarries’ pleaded case is supported by an affidavit of Adam Green, a project manager at MCG Quarries, which was filed in opposition to the summary judgment. Mr Green deposed to a conversation on 22 June 2017 between himself and a Mr Andrew Tshaikiwsky at Mt Gellibrand, in which Mr Tshaikiwsky was said to have told Mr Green that Mt Gellibrand had wished to purchase stone from MCG Quarries to upgrade Mooleric Road and the work required by Mt Gellibrand for the construction of wind farms on the respondents’ land but was unable to do so because the purchase of the stone from MCG Quarries would be in breach of the lease agreements between Mt Gellibrand and the respondents. Having regard to this evidence, there is a factual issue for determination as to whether Mt Gellibrand took the view that the term in the leases completely precluded it from purchasing rock from MCG Quarries, and contrary to the submissions for the respondents, the fact that Mooleric Road was not on the land does not provide a complete answer to the applicant’s entitlement to relief by way of damages. I accept the submission for MCG Quarries that the reply pleading and affidavit evidence of Mr Green raises a causation issue for determination which may relevantly and probatively bear upon whether MCG Quarries is entitled to the relief that it seeks by way of damages.