Sammy Russo Meat Supplies Pty Ltd v Australian Safeway Stores Pty Ltd
[1998] FCA 1600
•15 DECEMBER 1998
FEDERAL COURT OF AUSTRALIA
PRACTICE AND PROCEDURE – pleading – statement of claim – application to deliver further amended statement of claim – alleged contraventions of s 48 of Trade Practices Act 1974 (Cth)
Trade Practices Act 1974 (Cth): s 48
Australian Competition and Consumer Commission v Mobil Oil Australia Limited (1997) ATPR ¶41‑568 - distinguished
SAMMY RUSSO MEAT SUPPLIES LTD & ANOR v AUSTRALIAN SAFEWAY STORES PTY LTD & ORS
VG 313 of 1997
GOLDBERG J
MELBOURNE
15 DECEMBER 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 313 of 1997
BETWEEN:
SAMMY RUSSO MEAT SUPPLIES LTD
(ACN 005 434 202)
First ApplicantPERFECT CREATIONS PTY LTD
(ACN 063 476 193)
Second ApplicantAND:
AUSTRALIAN SAFEWAY STORES PTY LTD
(ACN 004 319 939)
First RespondentWOOLWORTHS (VICTORIA) PTY LTD
(ACN 004 177 155)
Second RespondentBARTTER ENTERPRISES PTY LTD
(ACN 000 451 374)
Third Respondent
JUDGE:
GOLDBERG J
DATE:
15 DECEMBER 1998
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
Introduction and background
The applicants apply, pursuant to leave granted, to deliver an amended application and a further amended statement of claim. The applicants have propounded a further statement of claim which is, in effect, their sixth attempt to plead a statement of claim. The progress of this proceeding has been tortuous and slow having regard to difficulties which the applicants have confronted in pleading causes of action appropriately. The initiating application and first statement of claim were filed on 27 June 1997. The history of this matter is set out in my earlier reasons for judgment on 4 June 1998 and 3 September 1998 and I will not repeat all those reasons.
A truncated summary of the progress of the proceeding is as follows. On 12 September 1997 motions to strike out parts of the statement of claim filed by the first and second respondents (collectively called “Safeway”) and the third respondent (“Bartter”) came on for hearing. The applicants, after argument, did not wish to support the statement of claim and leave was given to the applicants to deliver an amended statement of claim which they did on 26 September 1997. On 28 October 1997 Safeway filed a motion seeking to strike out various paragraphs of the amended statement of claim which motion was supported by detailed written submissions. On 7 November 1997 the applicants filed and delivered their submissions in response to Safeway’s motion and annexed to those submissions a further amended statement of claim (being the third statement of claim delivered by the applicants). On 24 February 1998 Safeway’s strike out motion, supported by Bartter, came on for hearing and, after argument, counsel for the applicants did not wish to continue to uphold the further amended statement of claim and leave was given to the applicants to apply to deliver a further amended statement of claim.
On 8 May 1998 the applicants filed a motion seeking leave to deliver an amended application and a further amended statement of claim (the fourth statement of claim). On 4 June 1998 I refused the applicants leave to file and deliver an amended application and the fourth amended statement of claim and gave them leave to apply to deliver an amended application and a further amended statement of claim limited to making allegations giving rise to a cause or causes of action under ss 48, 96 and 75B of the Trade Practices Act 1974 (Cth) (“the Act”). That leave was sought on 30 June 1998 and a proposed further amended statement of claim was propounded (the fifth statement of claim). On 3 September 1998 I refused leave to the applicants to deliver the fifth amended statement of claim but in my reasons I said I was satisfied that the pleading against Bartter should be allowed to proceed in due course. I gave the applicants leave to apply to deliver a further amended application and a further amended statement of claim limited to making allegations giving rise to a cause or causes of action under ss 48, 96 and 75B of the Act and such leave was sought by motion belatedly filed on 20 November 1998. Safeway opposes the application for leave to deliver the sixth statement of claim.
As in previous reasons it is necessary to refer briefly to what is pleaded in the proposed further amended statement of claim. It alleges that from July 1994 to early May 1997 Bartter supplied eggs to the applicants and that from March 1996 to September 1997 Bartter supplied eggs or other poultry products to Safeway in Victoria and New South Wales. In particular between March 1996 and May 1997 the applicants sold eggs to consumers at Chirnside Park Shopping Centre (“the shopping centre”) at retail prices less than the retail prices at which Safeway sold eggs at the shopping centre.
It is then alleged that in or about March 1996 a representative of Bartter telephoned a representative of the applicants and said that Bartter had received complaints from Safeway that the applicants were selling eggs too cheaply and that the applicants should increase the price of their eggs otherwise Bartter would have problems from Safeway. There were similar conversations in or about June or July 1996, on 28 April 1997 and on 2 May 1997. It is then alleged that between March 1996 and May 1997 Bartter suggested to the applicants that they increase their retail price for eggs supplied by Bartter to a retail price above or close to the price offered by Safeway at the shopping centre (“the price suggestion”). Six separate conversations are particularised between representatives of the applicants and representatives of Bartter as constituting the price suggestion. None of these conversations involved a Safeway representative as a participant.
It is then alleged that between July 1996 and September 1996 Bartter failed or refused to fill completely the orders placed by the applicants (“the supply restrictions”), that on 5 May 1997 Bartter increased its wholesale price of supplying eggs to the applicants (“the price increase”) and that between 6 May 1997 and 25 September 1997 Bartter refused to supply the applicants with any eggs (“the refusal to supply”). It is then alleged that the supply restrictions, the price increase and the refusal to supply were imposed by Bartter upon the applicants with the intention of applying pressure upon the applicants to accept the price suggestion.
It is then alleged that the matters to which I have referred constitute and result in resale price maintenance, namely contraventions of s 48 of the Act by doing an act referred to in s 96(3)(a)(b) or (d) of the Act.
The allegations against Safeway are found in pars 20 to 24 in which it is alleged that Safeway was involved in Bartter’s contraventions within the meaning of s 75B of the Act. Those paragraphs are in the following terms:
20.In or about March 1996 Safeway complained to Bartter that the Applicants were selling eggs too cheaply.
PARTICULARS
The complaint to Bartter was made to Simon Bartter of Bartter’s head office by a representative of Safeway who the applicants can not presently name. Further particulars will be provided after discovery.
21.On or about 28 April 1997 Safeway complained to Bartter about the applicants’ selling price of $1.99 per dozen for eggs.
PARTICULARS
The complaint was made to Simon Bartter of Bartter’s head office by a representative of Safeway who the applicants can not presently name. Further particulars will be provided after discovery.
22. In or about May 1997 Safeway:
(a)complained to Bartter that the Applicants were selling eggs too cheaply;
(b)informed Bartter that Bartter should arrange for the Applicants to increase the selling price of eggs supplied to the Applicants by Bartter;
(c)informed Bartter that Safeway would increase its purchase orders for eggs from Bartter if Bartter procured an increase in the selling price of eggs sold by the Applicants;
(d)informed Bartter that unless Bartter persuaded the Applicants to increase their retail price for eggs to a retail price above or close to Safeway’s retail price of eggs at its Chirnside Park Shopping Centre supermarket:
(i)Safeway would restrict orders for goods to be supplied by Bartter to Safeway;
(ii)Safeway would not place fresh orders with Bartter for supply of goods including eggs and other poultry products.
PARTICULARS
The complaints to and informing of Bartter by Safeway were constituted by conversations between Simon Bartter and the Safeway managers (who the Applicants can not presently name) who dealt with Simon Bartter, in or about May 1997, the substance of which was to the effect alleged. The Applicants will provide further particulars after discovery.
23.In March 1996 and April and May 1997, Safeway knew and intended that the effect of the complaining to and informing of Bartter by Safeway referred to in paragraphs 20, 21 and 22 was that:
(a)Bartter would make it known to the Applicants that Bartter would not supply the Applicants unless the Applicants agreed not to sell the eggs below a specified retail price, namely a retail price equal or close to the retail price offered by Safeway at its Chirnside Park Shopping Centre supermarket;
(b)Bartter would attempt to induce the Applicants not to sell the eggs supplied by Bartter at less than a specified retail price, namely a retail price equal or close to the retail price offered by Safeway at its Chirnside Park Shopping Centre supermarket;
(c)Bartter would withhold supply of eggs to the Applicants for the reason that the Applicants:
(i)had not agreed to sell eggs supplied to them by Bartter at a retail price more than a price equal or close to the retail price offered by Safeway for eggs at its Chirnside Park Shopping Centre supermarket; and/or
(ii)had sold or were likely to sell eggs supplied to them by Bartter at a retail price less than a retail price close to the retail price offered by Safeway for eggs, at its Chirnside Park Shopping Centre supermarket.
PARTICULARS
The knowledge and intention of Safeway was constituted by the knowledge and intention of the Safeway managers who dealt with Simon Bartter in March 1996 and April and May 1997, and of Helen Raymond, a Safeway manager responsible for part of the operation of the Safeway Chirnside Park Shopping Centre supermarket. The Applicants will provide further particulars after discovery.
24.By reason of its conduct alleged in paragraphs 20, 21, 22 and 23, Safeway:
(a)aided, abetted, counselled or procured the contravention by Bartter of Section 48 of the Act;
(b)induced the contravention by Bartter of Section 48 of the Act;
(c)was directly or indirectly, knowingly concerned in, or party to the contravention by Bartter of section 48 of the Act;
and thus was involved in the contravention within the meaning of Section 75B of the Act.”
It is then alleged that by reason of Bartter’s contravention of s 48 and Safeway’s involvement in that contravention within the meaning of s 75B of the Act the applicants have suffered loss and damage which is particularised.
Parties’ submissions
Safeway submits that leave to file and deliver the statement of claim in the form proposed should be refused as the pleading does not remedy the defects which were identified in my reasons of 3 September 1998 in relation to the previous proposed amended statement of claim. It is submitted that the claim pleaded is speculative and “not capable of being supported by adducible evidence”. It is said that par 20 of the fifth pleading, the subject of my reasons of 3 September 1998, has now been divided into three paragraphs, namely pars 20, 21 and 22 with a number of variations. It is said, in particular, that the statement of claim is defective because although the dates upon which it is alleged that Safeway representatives participated in the relevant conversations have been more precisely identified (previously the dates had been identified as from March 1996 to June 1997), no Safeway person is identified. Indeed, the applicants acknowledge that they do not know the identity of the Safeway representatives involved.
The applicants submit that the identity of the alleged Safeway participants is critical and that Safeway is unable to plead to the proposed further amended statement of claim without knowing their identity. It is said that the identities of the Safeway representatives are material facts which should be provided.
The applicants respond that Safeway’s submissions confuse the prospects of success of the claim being established with the pleading of a viable cause of action. It is said that it is in the nature of a s 48 claim that it will often be difficult for an applicant to provide detailed particulars until after discovery but that difficulty is no reason for refusing leave to allow the statement of claim to proceed.
Reasoning
The only allegations and particulars of the conversations said to involve Safeway are found in pars 20, 21 and 22. Conversations which are particularised and said to constitute what is called “the price suggestion” in par 14, which do not involve any Safeway representatives, are not relied on as allegations against Safeway.
It is apparent from the proposed further amended statement of claim that the applicants do not have it within their power or control to lead evidence against Safeway. The conduct and conversations on which they rely occurred with Bartter representatives and it is from those representatives (as well as from Safeway) that the applicants must obtain their evidence. The allegations against Bartter are different because they involve conversations and conduct in which representatives of the applicants were participants.
Mr Glick, who appeared with Mr Young for Safeway, submitted that Safeway was entitled to know what were the mental elements involved in the allegations against it relying on Yorke v Lucas (1985) 158 CLR 661. Mr Glick pointed out that the provisions of s 84 of the Act, which overcome some of the common law difficulties in imputing intention to a corporation, do not apply to s 48 contraventions and that the principles laid down in Tesco Supermarkets Ltd v Nattrass [1972] AC 153 and Krakowski v Eurolynx Properties Limited (1995) 183 CLR 563 still apply. Mr Glick submitted that the applicants could not succeed against Safeway under s 75B of the Act without knowing the identity and position of the Safeway representatives whose intention was to be imputed to Safeway.
Mr Glick submitted that although par 22 of the proposed further amended statement of claim sets out conclusions which, if substantiated, would constitute a contravention of s 48 he submitted that the particulars did not support the contravention, or participation in the contravention, attributed to Safeway. This submission confuses evidence with particulars. The allegations in par 22 are to the effect that Safeway representatives, not presently known to the applicants, had conversations with Simon Bartter in the terms set out in par 22. If Simon Bartter gives evidence in the terms of par 22 then there will be admissible evidence against Safeway.
The position is different from that which faced Heerey J in Australian Competition and Consumer Commission v Mobil Oil Australia Limited (1997) ATPR ¶41‑568. At p 43,897 his Honour said:
“What the Commission is seeking to do precisely fits the homely but apt metaphor which the law has long used. Its pleading shows that the Commission does not have a case, but hopes by the discovery process to fish around in the hope that something will turn up. And this notwithstanding that, as pointed out in Melbourne Home of Ford (No. 3), discovery is much less effective than s 155 procedures. In my opinion, this would be an abuse of process of this Court, oppressive to the respondents, and damaging to the interests of litigants (including the Commission itself in other cases) who must be accommodated within the finite resources of this Court.”
In that case before instituting the proceeding the Commission had used its powers under s 155 of the Act to obtain relevant information so that it had the opportunity to obtain information on a more extensive basis than that provided by the discovery process. It was therefore difficult to see how the discovery process could assist the Commission in supporting or proving its case.
The proceeding is continuing against Bartter and if on the evidence a case to answer is made out against Bartter, Bartter will have to decide whether to call evidence from its representatives who are alleged to have participated in the conversations not only particularised in par 14 but also particularised in par 22. If Bartter does call such evidence then evidence will be available to be used by the applicants against Safeway.
Mr Glick submitted that if the evidence as presently known and available to the applicants remains uncontradicted there will be no case made out against Safeway. But, that depends upon the ability of the applicants to lead admissible evidence from Bartter or to put Bartter in the position of having to call evidence. Although the applicants do not identify by name the Safeway representatives who are alleged to have participated in the conversations in March 1996, on 28 April 1997 and in May 1997 those persons are said to have spoken to Simon Bartter. In particular the conversations in May 1997 are said to have occurred between Simon Bartter and the Safeway managers “who dealt” with Simon Bartter. Although the identification of the relevant Safeway representatives is not precise it is sufficient, in my opinion, as it points Safeway in the direction of the persons from whom it can obtain instructions at least for the filing of the defence. Safeway is, to that extent, in a more informed position that it was with the fifth statement of claim (the subject of the 3 September 1998 reasons) where the relevant conversations were said to have occurred “during the period from March 1996 to June 1997” and were said to have occurred between managers of Safeway “and managers of Bartter including among others Simon Bartter”.
Similarly the allegation in par 23 as to Safeway’s knowledge and intention has been refined from knowledge “during the period from March 1996 to June 1997” to knowledge and intention “in March 1996 and April and May 1997” and instead of being the “knowledge of its managers responsible for” the shopping centre supermarket (as in the fifth statement of claim) is said to be the “knowledge and intention of the managers who dealt with Simon Bartter”.
In my opinion the proposed further amended statement of claim cures the deficiencies in the fifth statement of claim because the dates of the relevant conversations in which it is alleged Safeway representatives participated are more precisely identified. It is said that Safeway cannot plead properly to the proposed statement of claim without knowing the identity of the alleged participants. However, on each of the occasions relied upon it is said that Simon Bartter was the Bartter representative who participated in the conversations and this gives Safeway the opportunity to have an understanding of who might have been involved. Similarly the knowledge and intention alleged against Safeway in par 23 is said to be the knowledge and intention of the Safeway’s managers who dealt with Simon Bartter in March 1996 and April and May 1997 and of Helen Raymond, a Safeway manager responsible for part of the operation of Safeway at the shopping centre.
For these reasons I consider that Safeway is put in a position where it is told the claim it has to meet. The applicants may have difficulty in leading admissible evidence to justify the allegations made but that is not a reason for refusing to allow the proposed further amended statement of claim to proceed at this time. I do not consider that it is unjust to allow the proposed further amended statement of claim to proceed against Safeway in its present form. To adopt part of the observations of Scott J in the Court of Appeal in Bruce v Odhams Press Limited [1936] 1 KB 697 at 713 the particulars put Safeway on its guard as to the case it has to meet.
The applicants will be granted leave to file and deliver a further amended statement of claim in the form of the proposed further amended statement of claim which is exhibit “A” to the affidavit of Peter Pryles sworn 24 September 1998 and an amended application consistent with the allegations in that further amended statement of claim. I will hear the parties on the costs of the motion filed 20 November 1998.
I certify that this and the preceding eight (8) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg
Associate:
Dated: 15 December 1998
Counsel for the Applicants: Mr M Dreyfus Solicitor for the Applicants: Pryles & Defteros Counsel for the First & Second Respondents: Mr L Glick and Mr A Young Solicitor for the First & Second Respondents: Clayton Utz Counsel for the Third Respondent Mr S Newman Solicitor for the Third Respondent Jerrard and Stuk Date of Hearing: 2 December 1998 Date of Judgment: 15 December 1998
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