South Australian Egg Board v Bi-Lo P/L

[1991] FCA 549

NOT FOR CIRCULATION

IN THE FEDERAL COURT OF AUSTRALIA )

)

SOuTH DIST RICT REGISTRY )

)

M E R A L DIVISION	) No. 5663 of 1991
BETWEEN:
SOUTH AUS-IAN EGG BOARD

Applicant

- and -

BI-L0 PTY LIMITED

Respondent

REASONS FOR JUDGMENT

W: von Doussa J.

14 August 1991

This is a notice of motion by Bi-Lo Pty Limited ("Bi-Lo") against the South Australian Egg Board ("the Board").

I do not propose to go into the background to this action, or to Action No. 62 of 1991 wherein Bi-Lo is the applicant and the Board is one of the respondents.

In the application the Board seeks: 

The notice of motion seeks orders:

1.   That the Board's application be dismissed on the ground

that the applicant has no standing to bring the said
application.

1. Alternatively that the Statement of Claim filed on behalf of the applicant be struck out *rofdisclose a cause of action.

   A

/by RECEIVED \\

i)   a declaration that by reason of the conduct referred to

in the statement of claim Bi-Lo has contravened s.31(b)
of the Marketina of Eaas Act 1941-1973 ("the Act");

ii) an injunction restraining Bi-Lo from attempting to sell, deliver, offer or expose for sale eggs which have not been graded by the Board or its registered agents;

iii & iv) orders for an account of all sales made by Bi-Lo

contrary to the provisions of Section 31(b) of the Act,
and for damages.

It is contended by Bi-Lo that the Board lacks standing to sue for any of these remedies, hence the assertion that the first order sought in the notice of motion should be made. Then it is contended in support of the second order sought that the pleadings fail to disclose circumstances which bring the applicant's claims into a class where the Court would grant declaratory or interlocutory relief of the kind claimed even if the applicant has standing to sue for the reliefs, and that no facts are pleaded which disclose a cause of action

entitling the Board to an account or to damages.

Both orders are opposed by the Board, and by the Attorney-General for the State of South Australia who has intervened in the proceedings.

The order dismissing the proceedings is sought pursuant to Federal Court 0.20, r.2, and the order seeking to strike out the pleadings is sought pursuant to Federal Court 0.11, r.16. A court will not act to strike out an action on a pleading on the ground that it discloses no reasonable cause of action or is frivolous or vexatious or an abuse of the process of the court save in a plain and obvious case. The court will not ordinarily decide a debatable question of law on such an application: Davis v. The Commonwealth of W t r a l i q (1986) 61 ALJR 32 at 35; and the power to dismiss proceedings will be exercised sparingly: General Steel

-tries Inc. v. Commissioner for Railwavs (NSW) & OrS (1964) 112 CLR 125. Applications under these rules are usually dealt with upon an examination of the pleadings but in this instance the parties have each made reference to the terms of the Act to better understand the pleadings and I propose to follow the same course.

Bi-Lo submits that the Board lacks standing as it is seeking to enforce by equitable relief the performance of a public duty which it contends is imposed on Bi-Lo by the Act, and the breach of which is properly to be proved and punished

of the criminal law applicable to proceedings of that kind.	in a court of summary jurisdiction according to the principles
It is submitted that under the Act the Board has no private right or special interest which it is entitled to enforce. That being so it is contended that proceedings for equitable relief of the kind claimed can only be maintained by the Attorney-General on the relation of the Board. The principles which govern the standing of an applicant to institute proceedings in Australia are discussed in Robinson v. The
Western Australian Museum (1977) 138 CLR 283; Australian

e

(1980) 146 CLR 493; gnus v. Alcoa of Australia Ltd (1981) 149

CLR 27 and in a t e s Securitv Services Ptv Ltd v. Keatina & OrS

reported at first instance in (1990) 98 ALR 21 and on appeal
(1990) 98 ALR 68.

I cite only two passages from those judgments. The first is from Qnus v. Alcoa of Australia Ltd at 42 where Stephen J., referring to the traditional standing accorded to an applicant who showed a special interest arising from a violation of a public right, observed that the criterion of 'special interest' supplies no rule capable of mechanical application. His Honour went on to say:

"As the law now stands it seems rather to involve in each case a curial assessment of the importance of the concern which a plaintiff has with particular subject matter and of the closeness of that plaintiff's relationship to that subject matter."

matinq in the Full Court at p.76 where Lockhart J. said after The second passage is from Yates Securitv Services Ptv Ltd v. reviewing the authorities:

"In my opinion it is now established in Australia that a plaintiff has no standing to bring an action to prevent the violation of a public right if he has no interest in the subject matter beyond that of any other member of the public. If no private right of his is interfered with he has standing to sue only if he has a special interest in the subject matter of the action. The question of what is a sufficient interest will vary according to the nature of the subject matter of the litigation."

In my view it is clearly arguable that the Board has an interest in the enforcement of the Act beyond that of other

members of the public. It is arguable that it has a peculiar interest in the compliance with the Act by Bi-Lo, giving rise to what may fairly be described as a close relationship with that subject matter. Besides the functions which the Board has in respect of the licensing of persons involved in the marketing chain, it has functions in relation to the acquisition of eggs from producers; to the grading of eggs which in turn, under the regulations, carries responsibility for ensuring the wholesomeness and quality of eggs sold in S.A.; the setting of prices; and the resale of eggs acquired by it from South Australian producers. It is arguable that it has a special statutory interest, and a commercial interest, in the subject matter of Bi-Lops compliance with the Act.

Bi-Lols argument that the Board lacks standing to sue for an account and for damages rests on sub.s.31a(4) - which is to

be construed against the background of sub.s.30(3). Section

delivered to the Board by a person to whom eggs are sold or	31a makes provision for the grading and stamping of eggs
delivered in the course of trade or commerce between the States. The eggs the subject matter of the Board's pleadings are eggs of this character, its complaint being that Bi-Lo has sold, and unless restrained intends to continue selling, eggs of this character which are not graded and stamped contrary to sub.s.3lb(l). Sub-section 31b(l) relevantly reads:

"31b.(l) A person shall not sell by retail any eggs which may be delivered to the board pursuant to subsection (1) of section 31a of this Act for grading and stamping unless those eggs have been graded and stamped as provided in that section."

Sub-section 31a.(4) reads:

"(4) There shall be payable to the board, in respect of the grading and stamping of eggs delivered pursuant to subsection (1) of this section, by the person who so delivered those eggs, a charge of an amount fixed by the board as being, in the opinion of the board, an amount equal to the cost of the grading and the stamping of the eggs. "

Bi-Lo's argument is that sub.s.31a.(4) entitles the Board only to recover the actual cost of the grading and the stamping of the eggs. If the Board has not graded and inspected eggs under s.31a. there can be no question of it being out of

pocket - and therefore it can have no claim entitling it to an

account or to damages.

There are, however, a number of questions of construction
which arise under ss.3la. and 31b. on this submission which go

to, among other things, the quantification of the Board's

cost. It is not appropriate to address these questions of	construction on an application of this kind in the absence of
evidence about the structure and extent of the Board's operations, and the activities involved in the grading and stamping of eggs. It is possible that on a full understanding of the factual background against which sub.s.31a.(4) is to be applied, that the Board may have standing to assert a claim for an account or for damages.

In pavis v. The Commonwealth (supra) at 36 Gibbs C.J.

said:

"Questions of standing are decided not in the abstract, but in relation to the nature of the statute whose validity is in question. In some cases therefore it will be convenient to defer the question of standing until the merits of the case are considered: see Robinson v. Western Australian Museuq (supra) at 302-303; gnus v. Alcoa of Australia Ltd (supra) at 38-39 and Rea. v. Lnland Revenue Commissioners: Ex ~ a r t e National Federation of Self-Em~loved and Small Businesses Ltd [l9821 A.C. 617 at 630, 636. Whether the question of standing should be determined in advance of the merits or not lies within the discretion of the court."

In the present case the question of standing in relation to the claims for an account and damages should be deferred until trial. That issue, if it really is one as to standing rather than to entitlement on the proper construction of the Act, is one very much ancillary to the main area of disputation.

For these reasons I consider the first order sought by Bi-Lo in its notice of motion should be declined.

The next submission of Bi-Lo is that the matters pleaded do not bring the Board's claims for equitable relief within a class of case recognised as one which enlivens the jurisdiction of the court. In my view this is probably not so. I think the submission of the Crown Solicitor that the

granting of the relief sought is a matter of discretion is

clearly arguable.

In Attornev-General for the State of Oueensland t ex re1 .
Kerrl & Another v. T. (1983) 57 ALJR 285 the Attorney-General,

who clearly had standing, sought an injunction to prevent a threatened breach of the criminal law. Gibbs C.J. said at

"While there is no doubt that in appropriate cases the Court will grant an injunction to restrain a breach of the criminal law, that is 'an exceptional power confined, in practice, to cases where an offence is frequently repeated in disregard of a, usually, inadequate penalty ... or to cases of emergency': see muriet v.

union of Post Office Workers. r19781 A . C . 435. a t ~.481.

In pamsav v. Aberfovle Manufacturina Co. (Australia1 Ptv.

m (1935), 54 CLR 230, at p.245, Rich J. said that

'Old-fashioned views upon the jurisdiction of Courts of equity find the growth of the use of injunction [in the field of criminal law] more repugnant than satisfying.' Whether or not that view is shared, it is obviously true to say, as Lord Wilberforce said in S,ourietls Case, at p.481, that the jurisdiction 'is one of great delicacy and is one to be used with caution.' As was pointed out in that case by Lord Wilberforce at p.481, and by Viscount Dilhorne at pp.490-491, where Parliament has provided for the trial of offences by jury, it may seem wrong, and it may lead to great difficulties, if the Court, applying a civil standard, in effect, convicts a subject without the trial to which he or she is entitled. It is true that some of the remarks of Lord Wilberforce in the passage mentioned relate to the exercise of discretion by the Attorney-General, but similar considerations obtain when the matter comes before the Court. "

Here the threatened breach of the law asserted by the Board is	not a matter which would otherwise be tried before a jury, but
before a court of summary jurisdiction. It is, in my opinion, arguable by the Board that the penalty provided by the Act from a breach of s.31b is an inadequate penalty to deter future breaches, and in any event that in the circumstances of this case there are grounds which could justify the exercise of the discretion. Whether the discretion would be exercised in favour of granting relief would depend on all the circumstances of the case, many of which will not be known until trial. It is however sufficient for present purposes that the Board satisfy the Court that it has a reasonably arguable case, and I consider the Board has done so.
The balance of the submissions made by Bi-Lo in support of the order to strike out the whole or parts of the pleadings turn on questions of construction of the Act. Those questions of construction are ones that should await the trial when the factual background will be made known to the Court.

In my opinion the notice of motion should be dismissed.

I certify that this and the

f$ preceding pages are a

true copy of the Reasons for Judgment of Mr Justice

'on Doussa {+

Associate:

Dated: 19 144 1

Counsel for the applicant : Mr Hayes QC with M r

Costello

Solicitor for the applicant	: Floreani Coates & Co.
Counsel for the respondent	: Mr Bleby QC with Mr

Corkery

Solicitor for the respondent	: Piper Alderman
Date of hearing	: 13 August l991