Sammy Russo Meat Supplies Pty Ltd v Australian Safeway Stores Pty Ltd
[1998] FCA 1192
•3 SEPTEMBER 1998
FEDERAL COURT OF AUSTRALIA
PRACTICE AND PROCEDURE – pleading – statement of claim – application to deliver amended application and further amended statement of claim pleading contraventions of ss 48, 96 and 75B of the Trade Practices Act 1974 (Cth) (“the Act”) – whether certain paragraphs pleaded with sufficient particularity to enable respondents to know what the claim is that they have to meet – pleading allegations of loss and damage – particulars required.
Trade Practices Act 1974 (Cth): s 48, s 75B, s 96
Pt IV
Multigroup Distribution Services Pty Limited v TNT Australia Pty Limited (1996) ATPR §41,522 - followed
Bruce v Odhams Press Ltd [1936] 1 KB 697 - followed
James v Australia and New Zealand Banking Group Ltd (1985) ATPR §40,504 - followed
SAMMY RUSSO MEAT SUPPLIES PTY LTD AND ANOTHER v AUSTRALIAN SAFEWAY STORES PTY LTD AND ORS
VG 313 of 1997
GOLDBERG J
MELBOURNE
3 SEPTEMBER 1998
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 313 of 1997
BETWEEN:
SAMMY RUSSO MEAT SUPPLIES PTY LTD
(ACN 005 434 202)
PERFECT CREATIONS PTY LTD
(ACN 063 476 193)
ApplicantsAND:
AUSTRALIAN SAFEWAY STORES PTY LTD
(ACN 004 319 939)
WOOLWORTHS (VICTORIA) PTY LTD
(ACN 004 177 155)
BARTTER ENTERPRISES PTY LTD
(ACN 000 451 374)
RespondentsJUDGE:
GOLDBERG J
DATE OF ORDER:
3 SEPTEMBER 1998
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
The applicants be refused leave to file and deliver an amended application and further amended statement of claim in the form of the amended application and further amended statement of claim which are exhibits FR1 and FR2 to the affidavit of Frank Russo sworn 30 June 1998.
The applicants have leave to apply to the Court on or before 24 September 1998 for leave to deliver a further amended application and 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) which application, if made, is to be supported by an affidavit exhibiting the proposed further amended application and further amended statement of claim.
Any such application shall be returnable before Goldberg J at 9.30 am on 29 October 1998.
Any respondent wishing to oppose the application to file and serve written submissions by 4.00 pm on 5 October 1998.
The applicants file and serve written submissions in reply by 4.00 pm on 15 October 1998.
Otherwise the directions hearing, the notice of motion for security for costs and the motion filed 28 October 1997 be adjourned to 29 October 1998.
The applicants pay the respondents’ costs of the motion filed on 30 June 1998 and the respondents’ costs reserved on 5 August 1998 and that pursuant to O 62 r3(2) those costs be paid forthwith notwithstanding that the proceeding is not concluded.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
VG 313 of 1997
BETWEEN:
SAMMY RUSSO MEAT SUPPLIES PTY LTD
(ACN 005 434 202)
PERFECT CREATIONS PTY LTD
(ACN 063 476 193)
ApplicantsAND:
AUSTRALIAN SAFEWAY STORES PTY LTD
(ACN 004 319 939)
WOOLWORTHS (VICTORIA) PTY LTD
(ACN 004 177 155)
BARTTER ENTERPRISES PTY LTD
(ACN 000 451 374)
Respondents
JUDGE:
GOLDBERG J
DATE:
3 SEPTEMBER 1998
PLACE:
MELBOURNE
EXTEMPORE REASONS FOR JUDGMENT
On 4 June 1998 I gave leave to the applicants to apply to the Court to deliver an amended application and a further amended statement of claim limited to causes of action, arising under ss 48, 96 and 75B of the Trade Practices Act 1974 (Cth) (“the Act’). I refused leave to deliver an amended statement of claim based on causes of action under ss 45(2)(a) and 45(2)(b) of the Act. The history of the proceeding leading up to that order is recited in my reasons for judgment on 4 June 1998. I do not wish to repeat those reasons but I incorporate, by reference, the history of the proceeding referred to in those reasons and also the principles and authorities upon which the reasons were based.
I said at the time that there may be sufficient facts, spread throughout the proposed amended statement of claim that was propounded at that time, to justify pleading a breach by the third respondent (“Bartter”) of s 48 of the Act by reference to s 96 and also against the first and second respondents (“Safeway”) by reference to s 75B of the Act, and it was for that reason that I granted such leave. That leave was sought on 30 June 1998 and a proposed further amended statement of claim was exhibited to an affidavit on that date in accordance with my directions.
It is necessary to refer briefly to what is pleaded in that proposed further amended statement of claim. After identifying the parties, it refers to the fact that there had been a supply of eggs by Bartter to the applicants from July 1994 to early May 1997. It alleges that between March 1996 and March 1997, Bartter supplied eggs and other poultry products to Safeway in Victoria and New South Wales and that between March 1996 and May 1997 the applicants sold eggs to consumers at Chirnside Park Shopping Centre at retail prices less than the retail prices at which Safeway sold eggs at that shopping centre.
It is then alleged that between March and July 1996 there were conversations between representatives of the applicants and representatives of Bartter relating, in general terms, to the price at which the applicants were selling eggs, and that Bartter had received complaints from Safeway about those eggs being sold at those prices. It was also alleged that there were statements in those conversations about the applicants selling their eggs at too low a price and that Bartter wanted the applicants to increase the selling price.
It is then alleged in paragraphs 12 to 14 that there were a number of conversations between March 1996 and May 1997 in which Bartter suggested to the applicants that they should increase the prices at which they were selling eggs at Chirnside Park Shopping Centre above or close to the price at which Safeway was selling eggs. That is very much a general summation of the conversations which related to the sale of the eggs supplied by Bartter by the applicants.
I should note at this stage that, although a number of conversations are particularised between Bartter representatives and the applicants’ representatives between March 1996 and May 1997, there are no conversations alleged with either of those parties with any Safeway representative.
It is then alleged that between July 1996 and September 1996 Bartter either failed or refused to fill completely, orders for eggs placed by the applicants (“the supply restrictions”), that on 5 May 1997 Bartter increased its wholesale price of eggs to the applicants (“the price increase”) and that from 6 May 1997 until 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 on the applicants to accept what was called the price suggestion.
It is then alleged that the matters to which I have referred (which are generally found in paragraphs 9 to 18) constitute and result in contraventions of s 48 of the Act by doing an act referred to in s 96(3)(a), (b) or (d) of the Act. Subject to the issue of loss and damage to which I will refer, that completes the causes of action alleged against Bartter.
In paragraphs 20, 21 and 22, one finds the allegations against Safeway which are said to give rise to an allegation that Safeway is involved in the contraventions by Bartter within the meaning of s 75B of the Act. Those allegations are:
“20. During the period from March 1996 to June 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 Safeways 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 managers of Safeway including among other Helen Raymond and managers of Bartter including among others Simon Bartter, between March 1996 and June 1997, the substance of which was to the effect alleged. The applicants will provide further particulars after discovery.
21. During the period from March 1996 to June 1997 Safeway knew that
(a)Bartter had made it known to the Applicants that Bartter would not supply the Applicants with eggs unless that 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 had attempted 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 withheld supply of eggs to the Applicants for the reason that the Applicants-
(i)had not agreed to sell the 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 of Safeway was constituted by the knowledge of its managers responsible for the Chirnside Park Shopping Centre supermarket, including among others Helen Raymond. The applicants will provide further particulars after discovery
22.By reason of its conduct alleged in paragraphs 20 and 21, 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; and/or
(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.”
A request for further and better particulars has been delivered in relation to further particulars of the complaints, of the allegation of informing and the allegation of Safeway’s knowledge. The applicants’ response is that they cannot provide particulars until after discovery.
Paragraph 23 of the statement of claim pleads loss and damage in the following terms:
“By reason of-
(a)the contravention by Bartter of Section 48 of the Act; and/or
(b)the involvement of Safeway within the meaning of Section 75B of the Act in the contravention by Bartter of section 48 of the Act, the Applicants have suffered loss and damage.
PARTICULARS
The Applicants have suffered loss of profits and damage to their goodwill and reputation. From July 1996 to September 1996 the Applicants had restricted volume of sale of eggs. From 6 May 1997 until on or about 25 September 1997 the Applicants had no supply of eggs and could not sell eggs or had restricted volume of sale of eggs. As a consequence of unavailability or restricted supply of eggs, including in particular the type of eggs previously supplied to the Applicants by Bartter, the applicants lost profits from the sale of eggs and the sale of other products. Further particulars of loss and damage are being compiled and will be provided before trial.”
Safeway and Bartter oppose the application for leave to deliver the amended application and further amended statement of claim. Safeway says in substance that paragraphs 20 and 21 are defective, do not raise allegations of material fact, to the extent to which they do, they are not supported or justified by the particulars and that Safeway does not know the case it has to answer. Bartter’s complaint is not as fundamental as Safeway’s complaint. But Bartter alleges that the pleadings lack clarity, specific allegations of material fact are not pleaded in such a way that they can be responded to and that there are a number of deficiencies to which I will refer shortly.
The applicants’ response is that the submissions made do not warrant a refusal of leave. Mr Dreyfus, who appears for the applicants, says that Safeway knows the case it has to meet from what is said in paragraphs 20 to 21 and that Bartter is able to plead to the matters which are alleged against it. The applicants say in substance that those matters can be responded to and that what the parties are seeking to do is in effect achieve a summary dismissal in the guise of opposing leave. I propose to deal with the allegations against Safeway and Bartter and the loss and damage aspect separately.
Allegations against Safeway
In my opinion paragraphs 20 and 21 are deficient and do not constitute a proper pleading. As was stated by Burchett J in Multigroup Distribution Services Pty Limited v TNT Australia Pty Limited (1996) ATPR §41,522 at 42,679:
“The primary function [of a statement of claim] is to tell the defending party what the claim is that he has to meet. That is a matter of elementary natural justice; the claim cannot be answered until it is known.”
Further on his Honour continued:
“In order to achieve these fundamentals, [defining the issues between the parties] a statement of claim must set out clearly, not just the bare claim that is made, but also ‘the material facts on which it is based’, including facts that, if not specifically pleaded, might take the other party by surprise. Federal Court Rules O 4 r6; O 11 rr2, 10.”
I should also refer to Bruce v Odhams Press Ltd [1936] 1 KB 697 where at 711 to 713, Scott J sets out what he says are the cardinal provisions of pleadings and identifies the different functions performed by pleadings and particulars.
The difficulty with paragraphs 20 and 21 is that although they allege complaints, allegations of Safeway informing Bartter and allegations of Safeway’s knowledge, they do not identify complaints other than by reference to a period of time between March 1996 and June 1997.
The particulars which are said to support the allegations do not, in my opinion, give Safeway an understanding or an indication of what the claim is they have to meet. It is true as Mr Dreyfus submits, that Safeway knows what the claim is in the sense that it is an allegation of being a party to the contravention of the resale price maintenance provisions of the Act. But Safeway is not told with any degree of particularity what are the relevant material facts which give rise to the allegations.
To refer to conversations between managers of Safeway, including Helen Raymond, gives Safeway little opportunity to identify what are the particular incidents upon which the applicants rely. The matter is complicated because of Mr Dreyfus’ reference to an earlier affidavit in the proceeding which referred to a video of some meetings between Bartter representatives and the applicants’ representatives and to transcripts of those meetings. As I understood Mr Dreyfus, he sought to rely upon those matters to define, in a sense, more narrowly or more particularly what were the allegations being made. It was said that those matters had been referred to earlier but it had been the subject of earlier criticism.
The difficulty I have with Mr Dreyfus’ submission in that respect is that if there is going to be a reference to those matters, it should be made clear that those matters are being relied upon. I say nothing at this stage as to whether or not those matters warrant or support the allegations made. It is to be noted that in paragraph 14 of the proposed statement of claim there is reference to a number of conversations but it is not clear whether those are the only conversations upon which the applicants wish to rely or from which the applicants seek to draw an inference of the involvement of Safeway. Those conversations at least identify certain dates in respect of which there may be an opportunity to be more precise about what is the case that has to be met.
Although Mr Dreyfus did not wish to embrace the opportunity to seek to re‑plead paragraphs 20 and 21, having regard to the fact that the applicants seem to be relying upon other material, they should be given the opportunity to restate or re‑plead their allegations against Safeway.
Allegations against Bartter
So far as the submissions made by Bartter are concerned, it is fair to say that the pleading against Bartter is somewhat discursive but the particular complaint made by Mr Morris, who appears for Bartter, was that the pleading lacked clarity. He referred to a number of alternative propositions set out, for example, in paragraphs 7, 15, 20 to 21 and paragraph 23 and he submitted that any denial or non‑admission of those paragraphs would be meaningless. I do not think that is so. There is no reason why allegations cannot be made in a pleading in the alternative and that is in effect what is done in a number of those paragraphs. Any denials or non‑admissions can address the alternative pleadings.
It is then alleged that material matters have not been pleaded where they should have been and Mr Morris refers, for example, to an allegation in paragraph 13 that on 2 May 1997 Mr Russo spoke with a person identified as Butch the storeman who made certain statements. There is also reference to other parties. It seems to me that those allegations sufficiently identify what are the particular matters relied on. If the question of authority be in issue as to whether those persons had authority to speak for the applicants that is a matter that can be raised in the defence.
It is then said that there are a number of allegations in paragraphs 14 to 17 which should be pleaded as material facts but have been set out as particulars. In my opinion, those paragraphs sufficiently identify material allegations of fact. It was pointed out in Bruce v Odhams Press Ltd (supra) that the dividing line between material facts and particulars may become blurred but I am not satisfied that any surgery needs to be done to those paragraphs.
The complaint is made that in paragraph 6 the applicants have not pleaded that the supply of eggs was pursuant to a supply contract between July 1994 and May 1997 and that elsewhere it is not pleaded why there was an obligation on Bartter to fill completely orders placed by the applicants. In my opinion, those matters are not deficiencies in the pleading so far as the cause of action alleged is concerned. They may be informative but, in my opinion, they do not result in a deficiency in the pleading as such.
There are a number of other subsidiary submissions with which I will not deal but, subject to what I propose to say about the pleading of loss and damage in paragraph 23, I am satisfied that the pleading against Bartter is such that it should be allowed to proceed in due course.
Loss and damage
In my opinion there are problems with the pleading of loss and damage in paragraph 23. It is an ingredient of the cause of action relied upon that there has to be suffered loss and damage. This matter has been identified and dealt with in a number of cases. See, for example, Bond Corporation Pty Ltd v Theiss Contractors Pty Ltd (1987) 14 FCR 215, at 222. In James v Australia and New Zealand Banking Group Ltd (1985) ATPR §40,504, at 46,034, Toohey J, then sitting as a judge of the Federal Court, said:
“While the Bank is not required to plead specifically to particulars of damages, it is entitled to know with some certainty what is being claimed and the basis of the claim.”
His Honour went on to say that it was not apparent from the particulars what was the claim of the Bank and his Honour continued:
"I do not think the particulars should be allowed to stand in their present form; they should be struck out and matters of loss and damage pleaded with particularity."
There are two aspects to the complaint here about loss and damage which need to be identified. There is a significant ambiguity which needs to be addressed. It was earlier pleaded in paragraph 17 that between 6 May and 25 September 1997 Bartter refused to supply the applicants with any eggs. Bartter has propounded some evidence through its solicitor that eggs in fact were obtained by the applicants between 6 May and 25 September 1997 and that there was not a refusal to supply eggs. That latter matter is a matter of evidence which is not relevant to the issues before me. What is relevant is for there to be identified, in a significant case like this under Pt IV of the Act, what exactly is the loss and how it is said it was suffered. Not only does there have to be pleaded a causal relationship between the contraventions and the loss and damage alleged (see Bond Corporation Pty Ltd v Theiss Contractors Pty Ltd (supra)) but the loss and damage itself has to be pleaded.
It seems to me on a fair reading of paragraph 23 and the particulars, particularly in the context of earlier paragraphs, that what is said is that between 6 May and 25 September 1997 the applicants had no supply of eggs at all from any source and could not sell eggs. Although there is an alternative pleaded or particularised that they had a restricted volume of sale of eggs, it is not made clear what the case is. It is one thing to have an alternative allegation in relation to matters which may give rise to a particular cause of action. It is another thing to have alternatives in the particulars which confuse and make ambiguous what is the case being made about loss and damage.
It seems to me in a case like this, the allegations of loss and damage are fundamental and should be made quite clear and explicit so that the parties know at the outset what is the case they have to meet. It is pleaded that the applicants have suffered loss of profits and damage to their goodwill and reputation. The nature of that loss of profits and the damage to the goodwill and reputation is not identified. I note that the initiating application and the first statement of claim in this matter were filed on 27 June 1997 - over 14 months ago - and the applicants are still not in a position to particularise their loss and damage.
I consider it important in a case of this nature that if there are going to be allegations of loss of profits and allegations of damage to goodwill and reputation, that those matters be particularised at as early a stage as possible. In the ordinary course, on a first directions hearing, one would order further particulars, but having regard to the matters which I have raised in relation to the allegations against Safeway and the lapse of time that has occurred in this case, I think it appropriate that the applicants plead properly as part of the statement of claim upon which they wish to rely against all respondents how they put, and what is the case to be made on, their loss and damage and, in particular, quantification in relation to loss of profits and damage to goodwill and reputation. In my opinion, it may be relevant to the future conduct of the proceeding as to how that case is put.
For all of these reasons, I propose to refuse leave to deliver the proposed amended application and the further amended statement of claim in the form propounded. The proposed amended application is interdependent with the proposed further amended statement of claim and until the application is amended there is extant and on the Court record an existing application which will remain. I am prepared to grant the applicants leave to apply to deliver a further amended application and a further amended statement of claim.
Initially the respondents did not vehemently oppose that course of conduct, recognising consistently with the dicta of the High Court in State of Queenslandv JL Holdings Pty Ltd (1997) 189 CLR 146 that it is important that justice be done to all parties and that one be not blinded by case management principles. In reply, the respondents submitted that having regard to the submissions made by the applicants, having regard to the difficulties and problems associated in particular with paragraphs 20, 21 and 23, such leave should be refused. I reject those submissions and consider that the applicants should be given the opportunity to apply to deliver a further amended application and a further amended statement of claim.
I certify that this and the preceding ten (10) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg
Associate:
Dated: 3 September 1998
Counsel for the Applicants: Mr M Dreyfus Solicitor for the Applicants: Pryles & Defteros Counsel for the first and second respondents: Mr L Glick Solicitor for the first and second respondent: Clayton Utz Counsel for the third respondent: Mr J M Morris Solicitor for the third respondent: Jerrard & Stuk Date of Hearing: 3 September 1998 Date of Judgment: 3 September 1998
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