Putrim Pty Ltd & ors Mayne Nickless & ors

[1992] FCA 1014

JUDGMENT No. .,!.2.!.k.,,./!~,~

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

B E T W E E N :

PUTRIM PTY LIMITED AND OTHERS 1 ,

Applicants	b.;
,-
:

A N D :

i

MAYNE NICKLESS AND OTHERS 1

Respondents I.

m: NORTHROP J

PLACE :	MELBOURNE
m:	30 NOVEMBER 1992

EX TEMPORE REASONS FOR JUDGMENT

There are two motions before the Court. The fir

is that of the respondents dated 14 October 1992 seeking an

order that the amended application and statement of claim

filed on behalf of the applicants be struck out pursuant to 011 r16 of the Federal Court Rules on the grounds that they have a tendency to cause prejudice, embarrassment or delay in	i:~ L
the proceedings, alternatively, that the statement of claim	! I
disclosed no reasonable cause of action against the second,	1 ,
respondent apparently filed and served a defence to the
third, fourth, fifth and sixth-named respondents.	In the way

the matter proceeded, counsel appearing for the respondents conceded that possibly there were causes of action available to the applicants and, in fact, what was being sought was that the existing amended statement of claim be struck out and that	8	,
if it was struck out, there would be no objection to leave	!

being granted to plead again. It is noted that the first

L

statement of claim. The other respondents have not done so.

By the other motion, notice of which is dated 23 October

1992, the applicants are seeking a number of orders, including an order that another company, Keyline Pty Ltd, be added as an

applicant. They also seek an order that the applicants have

leave to amend the statement of claim and application. The
application and statement of claim in the form as sought to be
amended were handed to the Court. For the sake of clarity,
the Court has been looking at the proposed amended application
and proposed amended statement of claim which, for the
purposes of the hearing of these motions, have been referred
to as the further amended application and the further amended

statement of claim.

During the course of the submissions, the Court, of its

own motion, drew attention to the provisions of the
Jurisdiction of Courts (Cross-Vestina) Act 1987 (Cth), and in

particular to sub-secs5(4) and (7), which empowers the Court

to transfer a proceeding under this section on the application

of a party to the proceeding, of its own motion or on the
application of the Attorney-General of the Commonwealth or of
a State or Territory. As the Court indicated during the
course of submissions, on the facts of this case, this may
well be a case where the Court, of its own motion, should
transfer the application, being the proceedings herein, to the
Supreme Court of Victoria. I propose to deal with that matter
first .

In considering this issue it is necessary to make a very

brief reference to the further amended application and the

further amended statement of claim. To say the very least,

the further amended statement of claim, in its current form,
is a confusing document and it is difficult to analyse it
clearly in order to determine just what is being sought. The
further amended application illustrates the relief being
sought and to a large extent the further amended statement of
claim is based on that application. Looking at the whole of
the statement of claim it appears that the claim based upon
the Trade Practices Act is a small part of a far greater
series of claims. This can be illustrated by reference to the
further amended application. The orders being sought are as

follows :

"1. A declaration that the conduct described in

paragraphs 2 4 , 25 and 26 of the statement of claim was
defamatory and slanderous.

2 .    Damages in respect of such slander.

3.    Damages for breach of contract.

4 .    Damages for the injurious falsehood referred to in

paragraphs 2 4 and 25 of the statement of claim.

5.    Damages for breach of the respondents' obligations

of confidence.

6.    Damages for interference with the first, second and

third-named applicants' contractual or commercial
relations with their customers.

7.    An injunction both interlocutory and permanent

restraining the respondents and each of them from further
contacting any of the customers of the first, second and
third-named applicants.

8. A declaration that the respondents have breached one

or more of the provisions of the Trade Practices Act 1974
(Cth) and/or the Fair Tradina Act 1985 (Vic), as alleged
in paragraphs 3 2 and 33 of the statement of claim.

9.    Damages pursuant to the provisions of the Trade

Practices Act 1974 (Cth) and/or the Fair Tradina Act 1985

(Vic) .

10. An injunction both interlocutory and permanent in
the terms of paragraph 7 above pursuant to the provisions
of the Trade Practices Act 1974 (Cth) and/or the Fair

Tradina Act 1986 (Vic).

11. At the option of the applicants an account of the
profits made by the first-named respondent resulting from
its said wrongful conduct and an order for the taking of

all necessary accounts and discovery and aid thereof.

12. Aggravated damages for the conduct described in
paragraph 39 of the statement of claim.

13. An order cross-vesting all necessary powers and jurisdictions as to give effect to the relief sought

herein. "

It is apparent from a reading of the application that

this is a case which primarily, almost essentially, is
dependent upon State law, both at common law and on State
legislation. For this purpose the Fair Tradina Act provisions
are similar to, if not identical with, the provisions of the
Trade Practices Act except it is not limited to corporations.

The relief that can be given is similar under each Act.

Insofar as the second to sixth-named respondents are

concerned, they are being sued apparently in their capacity as
individuals being personally liable. There is some doubt as
to whether the pleadings disclose that they are also being
sued as aiding and abetting the first respondent in relation

to the claim against the first respondent based upon the Trade

Practices Act. The further amended statement of claim, as I

said before, tends to support all those claims.

Sub-section 5(4) of the Jurisdiction of Courts [Cross-

Vestina) Act 1987 is a long section which provides as follows:

"5. ( 4 ) Where :

(a)	a proceeding (in this subsection referred to as the "relevant proceeding") is pending in the Federal Court or the Family Court (in this subsection referred to as the "first court"); and
(b)	it appears to the first court that:
(i) the relevant proceeding arises out of, or is related to, another proceeding pending in the Supreme Court of a State or Territory and it is more appropriate that the relevant proceeding be determined by that Supreme Court;

(ii) having regard to:

(A) whether, in the opinion of the first

court, apart from this Act and any law of
a State relating to cross-vesting of
jurisdiction, the relevant proceeding or a
substantial part of the relevant
proceeding would have been incapable of
being instituted in the first court and
capable of being instituted in the Supreme
Court of a State or Territory;

(B) the extent to which, in the opinion of the first court, the matters for determination in the relevant proceeding are matters

arising under or involving questions as to
the application, interpretation or

validity of a law of the State or

Territory referred to in sub-subparagraph

(A) and not within the jurisdiction of the
first court apart from this Act and any
law of a State relating to cross-vesting
of jurisdiction; and

(C) the interests of justice;

it is more appropriate that the relevant
proceeding be determined by that Supreme Court;

or

(iii) it is otherwise in the interests of
justice that the relevant proceeding be
determined by the Supreme Court of a State
or Territory;

the first court shall transfer the relevant proceeding to

that Supreme Court. ''

In the case of Mansell v Cumminq (1989) 86 ALR 637, I attempted to express my opinion as to the meaning of those provisions and how they should be applied to matters in the

Federal Court. I see no reason to depart from the views I

there expressed and I adopt those reasons to be applied to the

present case.	I refer to and repeat what was said at pp641-
6 4 4 .

To some extent there may be a conflict of views between

those views and the views expressed by Wilcox J in Bourke v
State Bank of New South Wales (1988) 22 FCR 378. To the
extent that there is any conflict I will follow the views I

have expressed previously.

It is important to note that in this case I make no

finding that the proceedings were commenced otherwise than

bona fide in the Federal Court. It is quite clear that the

only jurisdiction which normally would have come within this Court is that under the Trades Practices Act, and that apart

had jurisdiction in relation to all the other claims by reason	from the cross-vesting legislation, this Court would only have
of its accrued jurisdiction. The accrued jurisdiction is a discretionary matter and in cases of this kind, in my opinion, it is of importance that that is a factor to be taken into account in considering the interests of justice in determining which court should determine this matter. The basis for the development of the accrued jurisdiction was that the Federal Court was the only court which could deal with the totality of
the disputes between the parties. It is on this point that
there appears to be the contrary view expressed, to some extent, by Wilcox J. At the present time it is quite clear the Federal Court has jurisdiction in the State matters because of the cross-vesting legislation. But the mere fact of having that jurisdiction, in my opinion, is not of itself, sufficient weight to ignore what are essentially State matters. Unless some conscious effort is made to look at the whole matter dispassionately, it would be very easy for the Federal Court, in effect, to take over the whole of the jurisdiction of the State courts. This would be contrary to the whole question of comity between courts. To some extent I referred to this matter in Mansell.
In the present case, as I have indicated already, looking at the whole of the application and the statement of claim, it
is obvious that the real issues are State matters. This can
be illustrated by a reference to the orders being sought. It
is also illustrated by the fact that paragraph 24 of the further amended statement of claim seems to be the crucial
paragraph dealing with the conduct which gives rise to all, or, if not all, most of the various causes of action relied
upon by the applicants. The allegations relate essentially to State matters being allegations relating to what might be said to be conduct in relation to customers of the applicants, or
some of them, which result in interference with the contracts, defamation, fair trading claims, trade practices claims and possibly inducing breach of contract. Looking at all the circumstances, this is a case which comes within the provisions of paragraph 5(4)(b) of the Cross-Vestina Act,

because not only is there the State common law, there is also
the State legislation. The claims come within all aspects of
sub-paragraph (ii). In my opinion, this is a case which in
the interest of justice should be heard by a State court.
Also, in my opinion, it is appropriate that this is a case
under sub-paragraph (iii) namely that otherwise, in the
interests of justice, the proceeding be determined by the
Supreme Court.

A number of submissions were made against this course. The submissions illustrated the differences of procedure in the Federal Court and the Supreme Court, particularly having

regard to the directions hearing systems, in this Court; to
the possible greater costs incurred in the Supreme Court; to
the possible greater delay in the Supreme Court; and to the

method by which a respondent could find it easier to delay a

hearing in the Supreme Court than in this Court. In my

opinion, none of those are sufficient to outweigh, in the

interests of justice, the need to ensure that what are in fact

essentially State matters should be heard in the State court

and not in this Court. This Court should not continue with

the hearing of a matter which, although within its

jurisdiction, is a matter essentially of a State nature. In

coming to this view, I adopt the opinions expressed in Mansell
that neither party has the onus of proof. This is
illustrated, particularly, in a case like this where the Court
has acted on its own motion. Even if a party seeks an order
under the cross-vesting legislation, in my view, it is not a
case of who carries the onus, it is a case of looking at the

whole of the facts and determining whether, in the interests
of justice, the matter should be dealt with by the State court
or not.

Accordingly, in my opinion, this is a case where I should transfer the matter to the Supreme Court of Victoria.

The question then arises whether I should make orders in

relation to the pleading matter.	The matter has been argued
before me.	It has also been suggested tha the pleading

provisions in the Supreme Court are different to those in this
Court, and that in any event there would need to be a re-
pleading to a large extent if the matter does go to the
Supreme Court, to enable the Supreme Court Rules to be
followed as far as the pleadings are concerned. Having heard
the argument, I think it is appropriate that this is a case
where I should make orders in relation to the pleading

matters.

First of all, this is a case where leave should be

granted to the applicant to join Keyline Pty Ltd as an

applicant. In cases of this kind it is important to have all

relevant parties before the Court and Keyline Pty Ltd should

be a party. Leave is granted for that purpose.

During the course of submissions, a large number of

authorities were referred to, particularly in relation to
pleadings in defamation matters but, in my opinion, the
crucial matter is to look at the statement of claim itself.

The relevant rules are contained in 011 of the Federal Court Rules. Under r16, where a pleading has a tendency to cause prejudice, embarrassment or delay in the proceeding, the Court may, at any stage of the proceeding order that the whole or any part of the pleading be struck out.

It is important to note what is required in pleadings.

Those requirements are set out in the earlier part of 011, and

in particular rules 1, 2, 3 and 4. It is necessary to note

also the importance of the distinction between a pleading, and
particulars of a pleading, and the fact that the particulars
themselves are not a pleading, but have a different purpose
altogether. This is made clear in H 1976 Nominees Ptv Ltd v
Galli (1979) 30 ALR 181 and a number of authorities referred
to in that case. What is essential is that the pleading
should set out in a summary form the material facts upon which
the pleader relies, but not the evidence by which those facts

are to be proved.

In the present case, looking at the statement of claim as

a whole, it is clear, in my opinion, that there has not been a
compliance with that requirement. There has been a mix-up
between material facts, non-material facts, conclusions of law

and matters of that kind.

It is clear that by a pleading a

party may raise any point of law, see rule 9.

It is also

quite common for a pleading to set out the material facts and then draw attention to the relevant legal basis upon which it is claimed that those facts constitute a breach of that legal provision, particularly in relation to, say, the Trade

Practices Act or the Fair Tradinu Act. But the present pleading goes far beyond that. This is illustrated particularly by paragraph 24, referred to earlier in these reasons, which is one of the crucial paragraphs of the

statement of claim. It must be remembered that this paragraph

applies not only to the Trade Practices Act, the Fair Tradinq

- 1 Act breach of contract, and inducing breach of contract, but

to defamation also. There are particular rules of pleading in

relation to defamation matters in the Supreme Court and there
is need to ensure that the person against whom the claim is
being made, knows, or is told, of what it is that the

complaint relates to in matters of that kind. There are no

such rules in the Federal Court Rules. But the pleading does

not comply with those rules. This mix up of allegations
illustrates, to my mind, the fact that the pleading itself is

bad.

Similar comments may be made in relation to other

paragraphs. I do not propose to go through the statement of

claim in detail. In H 1976 Nominees Ptv Ltd, I expressed the

view that in an appropriate case it is far better and far
easier for all concerned for the whole of the statement of
claim to be struck out with leave being granted to re-plead.
This enables the pleader to get the whole of the statement of

claim in proper order and in a form which can be understood.

In the present case it is argued on behalf of the

applicants that there is a very strict onus, or high standard,
of proof required to establish embarrassment under the rule
relied upon here, 011 r16. I reject that submission. The
authorities referred to by counsel for the applicants were all
cases in which what was being sought was the bringing to an
end of the particular action itself. This is illustrated
particularly by General Steel Industries Inc v Commissioner
for Railwavs (NSW) (1964) 112 CLR 125 where the Chief Justice
set out in some detail the whole question of striking out.
That was a case where his Honour, in substance, dismissed the
action on a pleading point. That is exceptional. Before that
can be done it must be established that the claim is bad
beyond belief, has no foundation or a similar high test. The
other cases referred to were of a similar kind. There is no
such requirement in relation to striking out a pleading, or
part of a pleading, and giving leave to re-plead.

As it stands at the moment, the further amended statement

of claim is in a form which, in my opinion, makes it almost
impossible to plead to. In these circumstances the
respondents have established that the pleading has a tendency

to cause prejudice and embarrassment. The only way to make

this case proceed speedily is to ensure that the issues be
defined clearly. This can be done by striking out the

existing amended statement of claim and giving leave to re-

plead. In the result, the following orders are made:

1. The applicants have leave to join Keyline Pty Limited as an applicant.

2. The amended statement of claim dated 4 September 1992 be struck out and that the applicants have leave to re-plead within 28 days and that any further pleadings be in accordance with the Supreme Court Rules.

3 .    The proceeding be transferred to the Supreme Court of Victoria.

1. The applicants pay the respondents' costs of the respondents' motion, notice of which is dated 14 October 1992, including one day's hearing, and the costs thrown away by the striking out of the amended statement of claim, otherwise the costs of the second day's hearing be costs in the cause.

I certify that this and the preceding twelve (12) pages are a
true copy of the Reasons for Judgment of the Honourable Mr

Justice R.M. Northrop.

Associate:

Date: 23 A m /qq 7~