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Case Note:<\/span><\/strong><\/p>\n WA Pines Pty Ltd v Bannerman (1980) 30 ALR 559<\/em><\/strong><\/p>\n Introduction<\/span><\/strong><\/p>\n This case was an appeal from the directed orders of a single judge of the Federal Court of Australia that a paragraph in the appellant\u2019s (WA Pines Pty Ltd<\/em>) original statement of claim seeking declaratory relief under s163A of the Trade Practices Act 1974 (Cth)<\/em> be struck out and an appeal against the Federal Court judge\u2019s refusal in reference to the appellant\u2019s applications for the discovery, interrogatories and an order by way or particulars. The respondent, (Bannerman<\/em>), cross-appealed against the original judge\u2019s refusal to strike out another of the paragraphs of the appellant\u2019s statement of claim.<\/p>\n The judgement of Brennan, J. sets out the facts of this case.<\/p>\n Facts of the case<\/span><\/strong><\/p>\n The appellant instituted proceedings under s163A of the Trade Practices Act (Cth)<\/em> seeking a declaration that a notice issued by the respondent Chairman of the Trade Practices Commission pursuant to s155 of the Act<\/em> does not compel the appellant to obey the requirements as set out in the notice and therefore has no legal binding effect either in whole or in part upon the appellant\u2019s duty to act in accordance with the said notice.<\/p>\n Section 155 of the Trade Practices Act<\/em> states:-<\/p>\n The respondent recited in the notice that he had reason to believe that the appellant \u201c\u2026is capable of furnishing information and producing documents relating to matters that constitute or may constitute contraventions of the Act\u201d.<\/p>\n The appellant, in Paragraph 5 of their statement of claim declared that \u201c\u2026lack of definition of the respondent\u2019s state of belief concerning the matters referred to in the notice was inconsistent with the state of belief required to attract the operation of s155 of the Act.\u201d<\/p>\n In Paragraph 6 of the statement of claim the appellant, in alternative, stated that the notice was \u201cissued without the Trade Practices Commission, the respondent or the Deputy Chairman having reason (or alternatively any legally sufficient reason) to believe any of the matters\u201d set out in s155 (1) of the Act.\u201d<\/p>\n The respondent sought an order that paras 5 and 6 of the statement of claim be struck out. In the original hearing, a judge sitting alone in the Federal Court of Australia made an order that para 5 of the statement of claim be struck out as it failed for producing any reasonable cause of action. However, the judge refused to strike out para 6, declined the appellant\u2019s applications for discovery and interrogatories and denied to issue an order by way of particulars that the respondent state the reason to believe any of the matters set out in s 155(1) of the Act.<\/p>\n The appellant appealed against the order striking out para 5 and the judge\u2019s refusal to order discovery, interrogatories and further particulars, while the respondent cross-appealed against the judge\u2019s declination to strike out para 6.<\/p>\n The appellant relied upon s155 of the Act to sustain para 5 in his statement of claim, and asserted the use of 0 15, r 1 of the Federal Court Rules to aid them for an order of discovery of documents to be made against the respondent.<\/p>\n In his cross-appeal, the respondent sought to strike out paras 5 and<\/em> 6 of the statement of claim and relied upon 0 11, r 16 and 0 20, r 2 of the Federal Court Rules to prevent an abuse of process.<\/p>\n Decisions of the Court<\/span><\/strong><\/p>\n The Court dismissed the appeals, whilst allowing the cross-appeal with the following orders:-<\/p>\n The Court based its decision on the following legal issues\u2026<\/p>\n Legal Issues<\/span><\/strong><\/p>\n Brennan J in his judgement stated the following:-<\/p>\n The appellant\u2019s argument to sustain para 5 of the statement of claim…that the power of the Chairman of the Commission to give a notice under s 155 depends upon his belief…that a matter \u201cconstitutes or may constitute, a contravention [of the Act].\u201d The appellant submitted that the Chairman could not have, at the same time, a belief that a matter is a contravention and a belief that the same matter may be a contravention\u2026<\/p>\n Brennan J then defined \u201cmatter\u201d in s 155 (1) of the Trade Practices Act 1974 (Cth).<\/em><\/p>\n (a)The matter to which this section refers comprehends the conduct of persons and the circumstances attendant upon it.<\/p>\n (b)A \u201cmatter that may constitute a contravention\u201d is the facts being investigated, some of which are not known by the Commission\u2026Such a matter does not take from its character the belief of the Commission\u2026but from the nature and quality of the facts as they are or have been\u2026This (may also) encompass future facts\u2026<\/p>\n (c)The character of the matter is determined objectively, and if it could be shown that a contravention would not be constituted by\u2026facts which exist or have existed…there would be no \u201cmatter\u201d relating to which a person could furnish information\u2026as provided for by s 155 (1).<\/p>\n Lockhart J, in reference to Melbourne Home of Ford v Trade Practices<\/em><\/p>\n Commission<\/em> [1]<\/sup><\/a> concluded that \u201c\u2026\u2019matter\u2019 is itself a complex of facts\u2026answering the description of the \u2018matter\u2019 that may or may not constitute [sic] a contravention of the Act.\u201d<\/p>\n Furthermore, using the reference of Riley McKay Pty Ltd v Bannerman<\/em>[2]<\/sup><\/a>, Lockhart J defined \u201creason to believe\u201d<\/em> from s 155 (1) of the Act as:-<\/p>\n \u2026Meaning that the Commission must believe that a person is capable of furnishing information, producing documents or giving evidence, and there must be reasonable grounds or cause for belief before the power conferred by s 155 (1) is exercised.<\/p>\n Brennan J, referring to various cases [3]<\/sup><\/a>, stated:- \u201c\u2026a challenge to the validity of a s 155 (1) notice requires the applicant to show that the Chairman has no reason to believe that the person\u2026is capable of furnishing information, producing documents or giving evidence\u2026\u201d<\/p>\n Furthermore, Lockhart J defined the words \u201cthat constitutes or may constitute\u201d as outlined in s 155 (1) \u201c\u2026intends to draw a distinction between existing or past contraventions\u2026\u201d[4]<\/sup><\/a><\/p>\n In relation to discovery of documents, discovery could not be obtained in the \u2026absence of evidence that the respondent did not have the belief required by s 155 (1).<\/p>\n The court heard no argument to suggest that para 6 was inapposite to raise a challenge though the difficulty in supporting a challenge was recognised. To make this challenge good, it was argued that the respondent may be required to give discovery under 0 15, r 1 of the Federal Court Rules. This rule states that after a direction hearing pursuant to Order 10\u2026any party may unless the court otherwise orders\u2026require any other party to give discovery of documents. In comparison with the Civil Procedure Act 2005 (NSW), under 5.4 (1) it is for the Court to decide whether to grant discovery.<\/p>\n Furthermore, the respondent seeks to strike out paras 5 and 6 of the statement of claim, relying upon rules 0 11, r 16 and 0 20, r 2 of the Court to aid him. 0 11, r 16 states \u201cwhere a pleading discloses no reasonable cause of action\u2026or is otherwise an abuse of process\u2026the Court\u2026may order any part of the pleading to be struck out.\u201d<\/p>\n 0 20, r 2 states \u201cwhere in any proceeding…no reasonable cause of action is disclosed…the Court may order the proceeding to be\u2026dismissed. Under 13.4 and 14.28 of the Civil Procedures Act 2005, the change to these \u201corders\u201d that may be given, is for an evidentiary hearing to be held when an application is first put forth to the Court.<\/p>\n Implications<\/span><\/strong><\/p>\n Brennan J stated the difficulty a recipient of a notice has in challenging the validity of a notice as deemed by s 155 (1), that para 5 did not raise the challenge and so it was right to strike it out.<\/p>\n In relation to the discovery of documents, Brennan J referred to the<\/p>\n case of Melbourne Home of Ford v Trade Practice Commission<\/em>[5]<\/sup><\/a>. An order for discovery and interrogatories was denied on the basis that the applicant was indulging in a \u201cfishing exercise\u201d[6]<\/sup><\/a>, and the original judgement was correct.<\/p>\n Where the respondent sought to strike out paras 5 and 6, relying upon previously discussed rules of the Court, the test to be applied was confirmed by Barwick CJ in General Steel Industries v Commissioner for Railways (NSW)<\/em>[7]<\/sup><\/a>.<\/em> This case dictated that the jurisdiction demonstrating the power to strike out a proceeding should be sparingly used and only when the case is extremely clear.<\/p>\n Conclusion<\/span><\/strong><\/p>\n Lockhart J agreed with the judgement of Brennan J whilst adding the following observations:-<\/p>\n The appellant sought the aid of this Court to indulge upon a \u2018fishing expedition\u2019. [sic] Based upon the established principles, this Court should refrain from that. The appellant\u2019s challenge to\u2026allow discovery\u2026fails. I would dismiss the appeals and allow the cross-appeal with costs.<\/p>\n <\/a>[1]<\/sup> (1979) 5 TPC 26; [1979] ATPR 40-107<\/p>\n <\/a>[2]<\/sup> (1977) 15 ALR 561; 31 FLR 129<\/p>\n <\/a>[3]<\/sup> Nakkuda Ali v Jayaratne [1951] AC 66; Registrar of Restrictive Trading Agreements v Smith [1969] 1 WLR 1460; Bradley v Commonwealth (1973) 1 ALR 241; Inland Revenue Commissioners v Rossminster Ltd [1980] 1 All ER 80<\/p>\n <\/a>[4]<\/sup> Antitrust Civil Process Act 1962 (US); Hart-Scott-Rodino Antitrust Improvements Act 1976 (US); United States<\/em> v Union Oil Co 343 F (2d) 29 (1965)<\/em> referred to<\/p>\n <\/a>[5]<\/sup> (1979) 5 TPC 26; [1979] ATPR 40-107<\/p>\n\n
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\nFootnotes<\/h3>\n