McKellar v Container Terminal Management Services Ltd (No 2)

Case [2000] FCA 1608

FEDERAL COURT OF AUSTRALIA

McKellar v Container Terminal Management Services Ltd (No 2)
[2000] FCA 1608

PRACTICE AND PROCEDURE – pleadings – application for summary dismissal of proceeding pursuant to Federal Court Rules, O 20 r 2 – whether further amended statement of claim discloses reasonable cause of action – whether proceeding frivolous or vexatious.

PRACTICE AND PROCEDURE – application to strike out further amended statement of claim pursuant to Federal Court Rules, O 11 r 16 – whether further amended statement of claim discloses reasonable cause of action – whether fails to plead material facts – whether pleading has a tendency to cause prejudice or embarrassment – whether leave to replead should be granted.

TRADE PRACTICES – Trade Practices Act 1974 (Cth) – ss 52, 53B, 75B – whether allegations adequately pleaded – whether adequate material facts pleaded.

TORT – negligence – duty of care – economic loss – Stevens v Brodribb Sawmilling Pty Ltd (1986) 160 CLR 16 - Perre v Apand Pty Ltd (1999) 198 CLR 180 – whether adequate material facts pleaded – whether claim misconceived and untenable.

Trade Practices Act 1974 (Cth) ss 52, 53B and 75B

Federal Court Rules O 11 r 16, O 20 r 2

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1 referred to
Batten v CTMS Ltd [1999] FCA 1576 considered
Batten v CTMS Ltd [2000] FCA 915 considered
McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 at 417-421, 461 referred to
Maritime Union of Australia v Patrick Stevedores No 1 Pty Ltd (1998) 77 FCR 456 referred to
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 at 95 referred to
Stevens v Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16 considered
Perre v Apand Pty Ltd (1999) 198 CLR 180 at 193-194, 202, 217, 218, 253, 254, 300-301, 325 considered
Pyrenees Shire Council v Day (1998) 192 CLR 330 at 419-420 referred to
Dey v Victorian Railways Commissioners (1949) 78 CLR 62 referred to
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 referred to
Fancourt v Mercantile Credits Ltd (1983) 154 CLR 87 at 99 referred to
Sibir v Glanville [2000] FCA 1108 referred to
Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 193 referred to
Council for the City of the Gold Coast v Pioneer Concrete (Qld) Ltd (1998) 157 ALR 135 referred to
Croker v Philips Electronics Australia Limited [2000] FCA 991 referred to
Elliott v Seymour [1999] FCA 976 referred to
Elliott v Seymour (No 2) [2000] FCA 694 referred to

ANDREW McKELLAR and ANOR v CONTAINER TERMINAL MANAGEMENT SERVICES LIMITED and ORS

VG 555 of 1998

WEINBERG J

10 NOVEMBER 2000
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

DISTRICT REGISTRY

VG 555 of 1998

BETWEEN:

ANDREW McKELLAR
First Applicant

CHRISTOPHER MURRAY
Second Applicant

AND:

CONTAINER TERMINAL MANAGEMENT SERVICES LIMITED
First Respondent

FYNWEST PTY LTD (ACN 080 502…

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Details
AGLC
McKellar v Container Terminal Management Services Ltd (No 2) [2000] FCA 1608
Case
[2000] FCA 1608
Decision Date

CaseChat Overview and Summary

The McKellar v Container Terminal Management Services Ltd (No 2) case involved applicants suing various respondents for misleading conduct in relation to employment terms. The Federal Court of Australia was tasked with deciding whether the applicants could proceed with their claims under section 75B of the relevant Act. This section allows for damages to be recovered against those who are involved in a contravention of Part V, provided certain criteria are met.

The court had to determine whether the applicants' claims met the requirements set out in the Act. Specifically, the court examined whether the respondents were "knowingly concerned" in the contraventions, which requires more than mere knowledge of the contravention but necessitates knowledge of the facts establishing the contravention and some positive action in connection with it. The applicants alleged that the respondents were involved in a plan to mislead workers about job security and employment terms, but the court found that the applicants did not demonstrate that the respondents had the necessary knowledge and involvement to be held liable under section 75B.

The court held that the applicants' claims were misconceived and did not meet the legal requirements for liability under section 75B. The court dismissed the application against certain respondents and struck out the claims against others. The applicants were granted leave to amend their claims to focus on the Trade Practices Act 1974 (Cth) instead. The court also ordered the respondents to provide an outline of their submissions on any costs orders that should arise from the dismissal of the claims.

In summary, the McKellar v Container Terminal Management Services Ltd (No 2) case highlighted the importance of meeting specific legal criteria when bringing claims under section 75B of the relevant Act. The applicants' claims were dismissed due to their failure to demonstrate that the respondents had the necessary knowledge and involvement in the alleged contraventions. The court granted the applicants leave to amend their claims to focus on the Trade Practices Act 1974 (Cth) and ordered the parties to provide submissions on any costs orders arising from the dismissal of the claims.

Orders

Orders of the court

1. The application against the tenth and eleventh respondents be dismissed.

2. The applicants’ claims against the seventh to ninth, twelfth to twenty-seventh, and thirty-fourth respondents, and against the fifth, sixth, twenty-eighth, and thirtieth to thirty-third respondents be struck out.

3. The applicants be given leave to file and serve a second further amended statement of claim against the seventh to ninth, twelfth to twenty-seventh, and thirty-fourth respondents, and against the fifth, sixth, twenty-eighth, and thirtieth to thirty-third respondents, limited to claims brought under the Trade Practices Act 1974 (Cth), by 31 January 2001.

4. The respondents, having succeeded on each of the motions before the Court, file and serve by 24 November 2000 a brief outline of submissions in relation to any orders for costs which should be made arising out of these orders.

5. The applicants file and serve by 8 December 2000 a brief outline of submissions in response.

Background

Background to the litigation

In Batten v CTMS Ltd [1999] FCA 1576 Kiefel J noted that s 75B of the Act defines the persons who are to be taken as involved in a contravention of Pt V so that loss and damage may also be recovered against those persons. Her Honour observed:“27. Although the shadow of a conspiracy is cast by references to “strategies”, “objectives” and agreements to implement them, it is nowhere suggested that the Minister took part in plans for the making of the Dubai representations. It is alleged that he encouraged the Patrick companies to dismiss union labour and hire non-union labour, in an endeavour to decrease or destroy union power on the waterfront, but damages are not alleged to flow from any such agreement. The applicants’ case is centred upon misrepresentations as to the quality and nature of the employment and its terms (and also to later breaches of contract). In particular it is alleged that, contrary to the representations, no job security was intended by those speaking on behalf of CTMS or Fynwest. It is not alleged that the Minister played any part in the making of the representations, apart from providing an objective which required the hire of labour.28. The allegations that the Minister aided, abetted, counselled or procured the making of the Dubai representations may then be dealt with shortly. Such participation is like that of an accessory before the fact in criminal proceedings: see Yorke v Lucas 158 CLR 667; 1983 49 ALR 672, 676-7 (Full Court). Putting aside difficulties with the level of knowledge that the Minister was alleged to have, a topic to which I shall return, there is nothing to show that the Minister participated in such a way in the contraventions upon which the applicants’ claim for relief relates.29. That leaves the question whether the Minister could be said to have been “knowingly concerned” in the contraventions as alleged. It must be recalled that this refers, again, to involvement in a contravention. The applicants’ case goes so far as to allege some knowledge and an interest in an overall plan, but not all aspects of how it was secured. Mere knowledge of the prospect that a contravention will, or has, occurred will not suffice. It must be shown that the respondent in question had knowledge of the facts which establish the contravention and that they acted in some positive way in connection with it: Bell v Australasian Recyclers (WA) Pty Ltd (1986) ATPR 40-644; 47, 222; Sent & Petres & Collier v Jet Corporation of Australia Pty Ltd (1984) 2 FCR 201; R v Tannous (1987) 10 NSWLR 303, 307-8.” (emphasis added) Her Honour’s observations may be applied with equal force to the claims brought by the applicants against Mr Corrigan. They also apply to the claims brought under s 75B of the Act against the twenty-seventh respondent, Mr Clayton – see pars 123-132 of the further amended statement of claim. They reveal a complete misunderstanding of the requirements which must be met before a claim under s 75B can be made out.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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