FEDERAL COURT OF AUSTRALIA Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2012] FCAFC 97 Citation: Polar Aviation Pty Ltd v Civil Aviation Safety Authority [2012] FCAFC 97 Appeal from: Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126 Parties: POLAR AVIATION PTY LTD and CLARK ANDREW BUTSON v CIVIL AVIATION SAFETY AUTHORITY, TERRENCE FARQUHARSON, GARY PRESNEILL, ROBERT COLLINS, JIM MARCOLIN, PETER JOHN and ALLAN COOK File number: VID 32 of 2012 Judges: PERRAM, DODDS-STREETON AND GRIFFITHS JJ Date of judgment: 4 July 2012 Catchwords: PRACTICE AND PROCEDURE – Appeal from summary dismissal of proceeding pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) –primary judge struck out pleading as disclosing no reasonable cause of action – strike out not appealed - whether primary judge erred in holding that alleged duty of care could never arise, or in holding, prior to close of pleadings, that it did not arise in this case – whether primary judge should have granted leave to replead, although not sought - appellants obliged adequately to plead alleged duty and material facts –no entitlement to rely on defence and reply for necessary material facts – no proposed amended pleading produced – complex history of matter indicated ample opportunities to rectify deficiencies – appeal dismissed Legislation: Civil Aviation Act 1988 (Cth) Civil Aviation Regulations 1988 (Cth) Federal Court Rules 1979 (Cth), O11 r 16 Federal Court of Australia Act 1976 (Cth), s 31A Limitation Act 1935 (WA), s 47A Cases cited: Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd, (Unreported, Federal Court of Australia, Beaumont J, 13 September 1994) Fernando v Commonwealth of Australia (2010) 188 FCR 188 cited National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 considered Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 2) (2010) 267 ALR 547 approved Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126 affirmed Repacholi Aviation Pty Ltd v Civil Aviation Authority (2009) 263 ALR 9 distinguished Spencer v The Commonwealth (2010) 241 CLR 118 considered Stuart v Kirkland-Veenstra (2009) 237 CLR 215 considered Sullivan v Moody (2001) 207 CLR 562 discussed W v Home Office [1997] Imm AR 302 cited Wride v Schulz [2004] FCAFC 216 considered Date of hearing: 21 May 2012 Date of last submissions: 21 May 2012 Place: Melbourne Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 94 Counsel for the Appellants: Mr G Nash QC with Dr EJ Boros Solicitor for the Appellants: Maitland Lawyers Counsel for the Respondents: Mr C Caleo SC with Mr I Harvey Solicitor for the Respondents: Australian Government Solicitor IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 32 of 2012 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: POLAR AVIATION PTY LTD First Appellant CLARK ANDREW BUTSON Second Appellant AND: CIVIL AVIATION SAFETY AUTHORITY First Respondent TERRENCE FARQUHARSON Second Respondent GARY PRESNEILL Third Respondent ROBERT COLLINS Fourth Respondent JIM MARCOLIN Fifth Respondent PETER JOHN Sixth Respondent ALLAN COOK Seventh Respondent JUDGES: PERRAM, DODDS-STREETON AND GRIFFITHS JJ DATE OF ORDER: 4 JULY 2012 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The appeal be dismissed with costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 32 of 2012 ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: POLAR AVIATION PTY LTD First Appellant CLARK ANDREW BUTSON Second Appellant AND: CIVIL AVIATION SAFETY AUTHORITY First Respondent TERRENCE FARQUHARSON Second Respondent GARY PRESNEILL Third Respondent ROBERT COLLINS Fourth Respondent JIM MARCOLIN Fifth Respondent PETER JOHN Sixth Respondent ALLAN COOK Seventh Respondent JUDGES: PERRAM, DODDS-STREETON AND GRIFFITHS JJ DATE: 4 JULY 2012 PLACE: MELBOURNE REASONS FOR JUDGMENT Introduction 1 The appellants, Polar Aviation Pty Ltd ("Polar") and Clark Butson, by notice of appeal filed on 13 January 2012, appeal from the judgment of Kenny J given on 30 September 2011 in Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 4) [2011] FCA 1126 ("Polar (No 4)"). 2 Her Honour ordered that the appellants' further amended statement of claim dated 29 September 2010 ("FASOC") seeking relief against the respondents, Civil Aviation Safety Authority ("CASA") and a number of its officers and former officers, be struck out and that the proceeding commenced on 12 April 2010 be dismissed pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) ("the Federal Court Act"). 3 The FASOC alleged that the respondents were liable for misfeasance in public office and breaches of four duties. Her Honour held that the pleading of the principal claim of misfeasance in public office was embarrassing and the four pleaded duties allegedly owed to the appellants were untenable. On appeal, the appellants did not challenge the striking out of the FASOC and dismissal of their causes of action based on misfeasance in public office and the alleged breaches of statutory duty, a duty of good faith and a duty not to interfere unlawfully or intentionally with the appellants' trade or business. The present appeal relates only to the primary judge's dismissal of the cause of action based on breach of a common law duty to exercise CASA's statutory powers with reasonable care ("the duty of care") which, in the FASOC, was overshadowed by the other alleged causes of action. 4 The notice of appeal states the following grounds: 1 The learned judge erred in holding 1.1 that the appellants' claim in negligence had no reasonable prospects of success; 1.2 that no facts which might emerge at trial could affect those prospects of success. 2 The learned judge erred in holding that the respondents owed no duty of care to the appellants and in particular: 2.1 in holding that the present case "can be distinguished [in this respect] from Repacholi Aviation Pty. Ltd. v Civil Aviation Authority [2009] FCA 1487; (2009) 263 ALR 9"; 2.2 in holding that the existence of such a duty "is inconsistent with the statutory regime governing CASA and the setting in which CASA issues, suspends or cancels certificates, licences and other authorities"; 2.3 in holding that the obligation of CASA to accord primacy to the safety of air operations leaves no scope for a duty of care owed by CASA to persons such as the respondents whose livelihood may be affected by the negligent acts or omissions of CASA and its officers; 2.4 in holding, at a stage when the pleadings had not closed, that no facts which might be proved at trial could affect the determination of the issue as to whether CASA and its officers owe such a duty of care in respect of the exercise of their statutory powers; 2.5 in holding that, because the "issue, cancellation and suspension [of licences and air operators' certificates are] regulated by" the Civil Aviation Act 1988, the respondents did not have such "control" of the risk to the appellants as was necessary to impose upon them a duty of care to the appellants. 2.6 in holding that no duty of care arose because the appellants had available to them administrative law remedies and other remedies, "including, in an appropriate case, remedies for misfeasance in public office, relief on judicial review of a relevant administrative decision, and the broad remedies available upon a successful application for review in the AAT". 3 The learned judge gave insufficient weight to the range of factors in favour of a legal duty to exercise CASA's statutory powers with reasonable care which are set out in paragraph [63] of her Honour's reasons. 4 The learned judge erred: 4.1 in holding that issues of vulnerability and reliance were not sufficiently pleaded, appearing as they do as particulars to paragraph 16(a) of the Further Amended Statement of Claim; 4.2 alternatively, in not giving leave to amend the Further Statement of Claim to include as independent allegations the matters at present contained in those particulars. 5. The learned judge erred: 5.1 in treating the "high level of generality" of the duty alleged as fatal to the cause of action, despite the limited form in which the breaches of that duty were alleged; 5.2 alternatively, in not giving leave to amend the allegation of duty to restrict it to cover the matters alleged as breaches. 5 The appellants sought the following relief: 1 The judgment and orders appealed from be set aside. 2 The Further Amended Statement of Claim dated 29 September 2010 be struck out. 3 The appellants have leave to file a Further Further Amended Statement of Claim against the respondents in respect of damages for negligence. 4 The respondents pay the costs of this appeal. 6 As is apparent from the notice of appeal, while the appellants appeal from the order that the proceeding (now limited to the cause of action based on the duty of care) be dismissed, they do not appeal from her Honour's order that the FASOC be struck out and, indeed, seek such an order on appeal. 7 The failure to appeal from the order striking out the FASOC may have suggested that the appellants conceded that the pleading of the duty of care in the FASOC was deficient. Before us, however, senior counsel for the appellants explained the necessity to replead as a practical measure arising because (as only a minor part of the complex and "monstrous" FASOC) the duty of care could not be readily disentangled from the other claims which were now not pursued. 8 Before the primary judge, the appellants did not seek leave to replead in the event that the FASOC were struck out, and did not produce a proposed further amended pleading for that purpose. Although leave to replead was not sought below, the appellants nevertheless alleged that the primary judge erred in failing to grant it and sought leave to replead as relief on appeal. It was apparent that if the appellants succeeded in their appeal from the dismissal of the proceeding, the proceeding would remain in limbo without an extant pleading. No proposed further amended pleading was, however, produced on appeal. Ultimately, as (for the reasons set out in detail below) we find no error in her Honour's dismissal of the proceeding, it was unnecessary to resolve the procedural difficulties attending the appellants' oblique application for leave to replead. Background 9 Polar, a flying school and commercial flight operation business based in Western Australia, required licences, approvals and certificates under the Civil Aviation Act 1988 (Cth) ("the Act") in order to operate. The Civil Aviation Safety Authority ("CASA"), established under s 8 of the Act, issues licences, approvals and certificates pursuant to s 9 of the Act. 10 Between 2004 and 2006, CASA came into dispute with Polar and Mr Butson, in the course of which it suspended Polar's Airline Operator's Certificate ("AOC") and its approval of Mr Butson as Polar's chief pilot and chief flying instructor. 11 The present appeal must be seen in the light of its complex history. 12 On 16 September 2009 in VID 677 of 2009, the appellants made an application for damages against the respondents, under s 47A of the Limitation Act 1935 (WA). That application annexed an unfiled statement of claim. The court's jurisdiction to hear the application was disputed. 13 On 12 April 2010, in a new proceeding (VID 255 of 2010), the appellants sought damages against the respondents and filed a statement of claim which was in the same form as that in proceeding VID 677 of 2009, discussed by Kenny J in Polar Aviation Pty Ltd v Civil Aviation Safety Authority (No 2) (2010) 267 ALR 547 ("Polar (No 2)"). (See Polar (No 2) at [98]). 14 On 16 April 2010 in VID 677 of 2009, her Honour held that there was jurisdiction to hear the application in that proceeding. On 29 April 2010, however, her Honour in Polar (No 2), refused the appellants leave to bring an action outside the limitation period under s 47A(3) of the Limitation Act 1935 (WA). Her Honour held that the appellants' delay was occasioned by their legal advisers' ignorance of s 47A, rather than mistake, and the respondents were materially prejudiced by the delay, because their recollection of events, and hence their capacity to defend, were diminished. 15 Kenny J also recognised that when determining whether to grant leave, the strength of an applicant's cause of action may be a relevant consideration, although subject to less rigorous scrutiny than on a strike out or a summary judgment application. 16 Her Honour stated at [63] of Polar (No 2): I accept, however, that leave should be denied where a proposed cause of action is patently untenable [and]…the strength of a cause of action is a relevant consideration. 17 Her Honour stated that the weight to be attributed to that consideration would vary depending on the circumstances of the case. 18 Kenny J then assessed the appellants' proposed statement of claim in the light of those considerations, recognising that similar, although not identical, claims were pleaded in Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93 ("Repacholi"). 19 Her Honour summarised the relevant issues in Repacholi at [65] and [66] of Polar (No 2) as follows: The applicants in Repacholi, Repacholi Aviation and its director Mr Repacholi, argued that a variety of administrative actions by CASA were outside CASA's statutory powers; and sought to found claims for breach of statutory duty and negligence against CASA, as well as claims for misfeasance in public office against various officers, on those actions. The applicants had filed an amended statement of claim naming CASA and Mr Farquharson, the second respondent here, as the only respondents, and sought leave to file a proposed further amended pleading naming additional officers as individual respondents. The respondents opposed leave and filed an application seeking summary judgment or an order striking out the amended statement of claim. The description of the claims below is drawn from [51]–[76] of the judgment, which appear to refer to the proposed pleading rather than the pleading on file. In any event, it appears that the only significant difference between them was the addition of the misfeasance claims. McKerracher J ordered the amended statement of claim be struck out and denied leave to file the proposed further amended statement of claim. His Honour concluded that "the only claim capable of surviving would be a claim in negligence against CASA, not against its individual officers", and granted the applicants leave to file a further amended pleading consistent with the reasons for judgment: see Repacholi at [169]–[171]. 20 Kenny J concluded at [69] to [71] of Polar (No 2): Because of the approach taken by his Honour, the Repacholi decision is most directly helpful in regard to the proposed negligence claims. After surveying the authorities, McKerracher J concluded (at [151]) that, although the claim was inadequately pleaded, "it [was] not possible to conclude that a claim in negligence [was] not open". In reaching this conclusion, McKerracher J did not find it necessary to engage in a detailed analysis of the particular statutory functions alleged to have been performed without reasonable care. Rather, he relied on general principles, citing, inter alia, Mason J's statement in Sutherland Shire Council v Heyman (1985) 157 CLR 424 at 458–9 ; 60 ALR 1 at 27 that "[i]t is now well settled that a public authority may be subject to a common law duty of care when it exercises a statutory power or performs a statutory duty". Acknowledging that the inquiry was "multi-faceted" (at [145], quoting Graham Barclay Oysters Pty Ltd v Ryan (2002) 211 CLR 540; 194 ALR 337; [2002] HCA 54 at [149] per Gummow and Hayne JJ), his Honour was not prepared to conclude at the strike out stage that a common law cause of action against CASA for negligence in the exercise of its statutory duties was unavailable. Though McKerracher J's discussion of the issue was limited by the material before him, he observed (at [146]) that "[t]he nature of the control exercised by CASA over the conduct of flight and air operations is substantial" and "the degree of vulnerability of those conducting operations under the auspices of the air operations regime administered by CASA is significant", indicating that these considerations might support the existence of cause of action in negligence. McKerracher J's conclusion that the applicants should be afforded a further opportunity to formulate a negligence claim against CASA was primarily based on the nature of the relationship between CASA and the air operators it regulates. These considerations were not particular to the facts in Repacholi and apply equally to the present case. Considering the low standard applicable on a leave application under s 47A, subject to matters mentioned immediately hereafter, I would not regard the applicants' negligence claim against CASA as patently untenable in the sense that the pleading does not disclose a legally recognised claim. 21 In the context of the s 47A leave application, to which a "low standard" applied, her Honour ("without expressing any view as to the correctness of the formulation of the duty" (at [73] of Polar (No 2)) declined to hold that the appellants' negligence claim must fail. 22 Kenny J nevertheless expressed substantial doubts, based on the available material, about the viability of a negligence claim in the appellants' particular circumstances. Foreshadowing concerns which became critical in the present case, her Honour stated at [75] of Polar (No 2): None the less, while I accept in light of Repacholi that a claim in negligence against CASA might well be properly pleaded in the appropriate circumstances, I have substantial doubts, based on the available material, about the viability of a negligence claim in the applicants' particular circumstances. The absence of material facts in the pleading, which I discuss below in connection with the misfeasance claims, means that the precise content of the duty allegedly owed to the applicants remains undeveloped. As pleaded, the duty is currently formulated at an unsatisfactory level of generality: see Pharam-a-Care (sic) Laboratories Pty Ltd v Australia (No 3) [2010] FCA 361 at [99] quoting Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 at [24] and Australian Competition and Consumer Commission v Australia and New Zealand Banking Group Ltd [2008] FCA 1623 at [2]. In this regard, I note that the reasons in Repacholi indicate that in that case there was at least some attempt to give content to the alleged duty by reference to an obligation to collect information regarding takeoff procedures: see Repacholi at [57]. This lack of specificity indicates that, in truth, in the applicants' case, the negligence claim against CASA is very largely speculative. 23 Her Honour refused the appellants leave pursuant to s 47A to bring the application in proceeding VID 677 of 2009. 24 Proceeding VID 255 of 2010 continued and on 28 May 2010, the appellants filed and served an amended statement of claim. Paragraph 16 of the amended statement of claim (which was provided to us after the conclusion of the hearing of the appeal) was in similar terms to paragraph 16 of the FASOC, and is set out below: 16 CASA and the officers of CASA owe, and at all material times owed, to Butson and to Polar Aviation: (a) a common law duty to exercise CASA's statutory powers with reasonable care, having regard both to the purpose for which those powers were conferred and to the interests of Butson and Polar Aviation as persons affected by the exercise of such powers; PARTICULARS A. The duty arises from the following: (i) the common law of negligence (ii) it is foreseeable that failure of CASA to exercise its statutory powers with reasonable care could injure the commercial interests of Butson and of Polar Aviation; (iii) control of the risk of harm to Butson or Polar Aviation arising from a failure of CASA to exercise its statutory powers with reasonable care lies with CASA; (iv) Butson and Polar Aviation are vulnerable to the actions of CASA in that neither Butson nor Polar Aviation is able to protect himself or itself from the consequences of a failure of CASA to exercise its statutory powers with reasonable care; (v) the existence of such a duty is consistent with the scope and purpose of the Act. B. the measure of the standard of care expected of CASA and an officer of CASA is determined in part by the duties imposed on officers of CASA by the CAC Act referred to in paragraph 10 hereof. 25 The respondents sought further and better particulars of allegations in the amended statement of claim which, we were informed, principally related to the respondents' knowledge in the context of alleged misfeasance in public office. 26 On 29 September 2010, the appellants filed the FASOC in response to the request for further and better particulars. 27 The FASOC alleged, inter alia, a number of duties owed by the respondents to the appellants. Paragraph 16 of the FASOC alleged: 16 CASA and the officers of CASA owe, and at all material times owed, to Butson and to Polar Aviation: (a) a common law duty to exercise CASA's statutory powers with reasonable care, having regard both to the purpose for which those powers were conferred and to the interests of Butson and Polar Aviation as persons affected by the exercise of such powers; PARTICULARS (i) The duty arises from the following: (A) the common law of negligence (B) it is foreseeable that failure of CASA to exercise its statutory powers with reasonable care could injure the commercial interests of Butson and of Polar Aviation; (C) control of the risk of harm to Butson or Polar Aviation arising from a failure of CASA to exercise its statutory powers with reasonable care lies with CASA; (D) Butson and Polar Aviation are vulnerable to the actions of CASA in that neither Butson nor Polar Aviation is able to protect himself or itself from the consequences of a failure of CASA to exercise its statutory powers with reasonable care; (E) the existence of such a duty is consistent with the scope and purpose of the Act. (ii) the measure of the standard of care expected of CASA and an officer of CASA is determined in part by the duties imposed on officers of CASA by the CAC Act referred to in paragraph 10 hereof. (b) a statutory duty to exercise CASA's statutory powers: (i) in accordance with the provisions of the legislation governing such exercise and performance; (ii) reasonably and in good faith for the purposes for which, those statutory powers were given and not for collateral purposes; (iii) in such a way as not unlawfully to infringe the rights or privileges held by Butson and Polar Aviation under the provisions of the Act or the regulations and orders made thereunder. PARTICULARS The duty arises from the following: (A) Butson and Polar Aviation, by reason of the matters set out in paragraphs 1, 2 and 11 to 15 hereof hold, and at all material times held, rights or privileges conferred on them by or pursuant to that Act. (B) Those rights and privileges are liable to be directly affected by the exercise of CASA's statutory powers; (C) The legislation imposes limits and controls on CASA's statutory powers; (D) Butson and Polar Aviation, as the holders of the said rights or privileges, are persons included in the group of persons for whose protection those limits and controls are imposed; (E) any exercise of CASA's statutory powers otherwise than reasonably and in good faith for the purposes for which they were given is not a lawful or valid exercise of those statutory powers. (c) a common law duty to exercise CASA's statutory powers: (i) in a proper manner and in good faith; (ii) lawfully and in accordance with the obligations imposed on the officers of CASA by the CAC Act; (iii) otherwise than arbitrarily, capriciously or vexatiously; and (iv) not in such a way as unlawfully and intentionally to interfere with the trade or business of Butson or Polar Aviation; PARTICULARS The duty arises from the following: (A) the statutory limits on the powers of CASA; (B) the exercise of CASA's statutory powers otherwise than in a proper manner and in good faith: (I) is not authorised by the Act or the regulations and orders made thereunder; (II) makes the purported exercise of the power invalid; (C) actions of CASA not directed to the purposes of the Act or which are arbitrary, capricious or vexatious: (I) are not authorised by the Act and are therefore unlawful; (II) are invalid; (D) the provisions of sections 22 to 25 of the CAC Act; (E) the common law right of a person that no other person shall unlawfully and intentionally interfere with his, her or its trade or business. 28 The alleged duties were summarised by Kenny J at [37] of Polar (No 4) as follows: 1. a common law duty to take reasonable care in the exercise of CASA's statutory powers (FASC, par [16(a)]); 2. a statutory duty to exercise CASA's statutory powers lawfully, reasonably and in "good faith" for the purposes for which those powers were given (FASC, par [16(b)]); 3. a common law duty generally to the same effect as 2 above but also involving a common law duty not to exercise CASA's statutory powers "in such a way as unlawfully and intentionally to interfere with the trade or business" of Polar or Mr Butson (FASC, par [16(c)]); 4. a common law duty not to act beyond power, intending to cause harm to either Polar or Mr Butson, or knowing that their acts were beyond power and that harm to Polar or Mr Butson was foreseeable, or recklessly indifferent (a) to whether their acts were beyond power and (b) to the likelihood of harm to Polar and Mr Butson (FASC, par [17]). 29 The FASOC alleged that the breaches arose from "a pattern of conduct" adopted by CASA towards the appellants after an operational audit, when a difference of opinion emerged (see the primary judge's reasons at [40] of Polar (No 4)). 30 The alleged breaches, comprising the pattern of conduct and unlawful acts, are set out at [41] of Polar (No 4). Notice of motion 31 By a notice of motion dated 13 October 2010, the respondents sought that the FASOC, or parts thereof, be struck out under O 11, r 16 of the Federal Court Rules 1979 (Cth) and further, or alternatively, that the proceeding be dismissed pursuant to s 31A of the Federal Court Act. 32 Order 11 rule 16 of the Federal Court Rules 1979 (Cth) provides: 16 Embarrassment etc Where a pleading: (a) discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading; (b) has a tendency to cause prejudice, embarrassment or delay in the proceeding; or (c) is otherwise an abuse of the process of the Court; the Court may at any stage of the proceeding order that the whole or any part of the pleading be struck out. 33 Section 31A of the Federal Court Act provides: 31A Summary judgment (1) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is prosecuting the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding. (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section. (5) This section does not apply to criminal proceedings. 34 The notice of motion was supported by the respondents' written submissions dated 30 November 2010. The appellants filed written submissions dated 20 December 2010 in opposition. 35 The respondents' outline of submissions set out the tests applicable for relief under O 11, r 16 of the Federal Court Rules 1979 (Cth) and s 31A of the Federal Court of Act. The respondents submitted that upon an assessment of the pleadings, the appellants had no reasonable prospects of succeeding in any claim for damages as alleged. The submissions analysed the statutory context and relevant provisions of the Act and the nature of the pleaded claims. In relation to the common law duty of care, the submissions stated: 5.1. The threshold issue to be determined, in deciding whether the Respondents owe a common law duty of care to the Applicants in the present case supporting an action in negligence, is whether such a duty is capable of being imposed on the First Respondent (CASA) or its officers in relation to persons (including the Applicants) whose conduct the Respondents must regulate in the public interest. … 5.5 The question whether a duty of care of the scope or content for which the Applicants contend exists is a proper question to be determined on a summary dismissal application: Commonwealth of Australia v Griffiths (2007) 70 NSWLR 268. … 5.11 In Repacholi Aviation Pty Ltd v Civil Aviation Safety Authority (2009) 263 ALR 93 (Repacholi), McKerracher J at [151] held that it was not possible to conclude that a claim in negligence was not open to be made against the First Respondent based on a duty of care in the exercise of its statutory powers; see also Polar Aviation Pty Ltd v Civil Aviation Safety Authority [No.2] [2010] FCA 404, Kenny J at [71]ff. The alleged duty in the present case is entirely general in nature (cf. Repacholi at [57]) and runs directly counter to the statutory obligations of the First Respondent. A duty to take reasonable care to exercise statutory powers having regard to the interests of the persons regulated would necessarily impinge on the statutory duty to exercise the powers by reference to safety considerations. 5.12 The factual matters pleaded relate to the exercise of statutory powers by the First Respondent and by officers of the First Respondent on its behalf. (The individual Respondents are not alleged to have been involved in the exercise of statutory powers other than those conferred upon the First Respondent.) Even if it was foreseeable that the exercise of power would or may cause economic detriment to the Applicants, there is no pleading of material facts to establish "the crucial elements of reliance, assumption of responsibility and, most importantly, vulnerability": Precision Products (NSW) Pty Limited v Hawkesbury City Council (2008) 74 NSWLR 102 at [106]. 5.13. The allegations in the FASC do not establish a relationship or position of vulnerability in the requisite sense: see Woolcock Street Investments Pty Ltd v CDG Pty Limited (2004) 216 CLR 515 at [23] per Gleeson CJ, Gummow, Hayne and Heydon JJ. 5.14. There can be no duty of care imposed on the First Respondent (a fortiori, the individual Respondents) to have regard to the economic interests of the Applicants in the way alleged. For the reasons identified in Precision Products, there can be no reasonable cause of action in negligence, upon the case pleaded by the Applicants, against the Respondents or any of them. 36 The appellants submitted that there was no basis for striking out the FASOC. Their submissions stated: 2.5 The facts giving rise to each of the causes of action pleaded are interlinked and the material facts relied upon to establish each of those causes of action can be found in the FASC as set out in the attached table. 37 The appellants' submissions discussed the statutory context and stated: 3.8 The statutory context plays a different role in negligence "...[T]he proposition that a public authority is not liable at the suit of an individual for damages for breach of statutory duty unless the statute on its true construction manifests an intention to confer a civil cause of action has no application to the liability of an authority for breach of a common law duty of care." Instead, the statutory provisions provide "…the setting in which [the authority's] acts and omissions have to be considered." 38 The appellants further submitted that: 4.2 The test for whether a duty of care arises in this context has been in a rapid state of development. Proximity, general reliance, distinctions between policy and operational decisions and the reasonable public authority have all been floated as possible determining factors and found wanting. … 4.6 The relevance of factual findings to the determination of whether or not a duty of care exists makes this an inappropriate matter for determination as a preliminary issue. 39 Kenny J, by order made on 30 September 2011 struck out the FASOC and dismissed the proceeding under s 31A(2) of the Federal Court Act. the judgment below 40 In her reasons for judgment in Polar (No 4), Kenny J analysed in detail authorities governing strike out applications under O 11 r 16 of the Federal Court Rules 1979 (Cth) (equivalent to r 16.21 of the Federal Court Rules 2011 (Cth), which expands the grounds) and summary judgment under s 31A of the Federal Court Act. 41 Her Honour also noted that the rule governing strike out essentially related to the sufficiency of pleadings and (at [8]) set out the following extract from the Full Court's decision in Wride v Schulz [2004] FCAFC 216 at [25]: [T]he the pleadings must disclose a reasonable cause of action against the party against whom the cause of action is brought and must state all material facts necessary to establish that cause of action and the relief sought. A "reasonable cause of action" for this purpose means one which has some chance of success if regard is had only to the allegations and the pleadings relied on by the applicant. 42 Her Honour discussed authorities, including National Mutual Property Services (Aust) Pty Ltd v Citibank Savings Ltd (1995) 132 ALR 514 ("National Mutual") in which Lindgren J (at 529) approved a summary of general principles in Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (Unreported, FCA, Beaumont J, 13 September 1994) ("Allstate") (at 24, distilled from the editorial note at (1992) 66 ALJ 47 in Lonrho plc v Tebbitt, The Times, 24 September 1991). The authorities indicated that a reasonable cause of action was one with some chance of success having regard to the allegations pleaded, even if weak; and that the strike out power should be exercised only in a plain and obvious case, where it was obvious that no reasonable amendment could cure the alleged defect and there was no reasonable question to be tried. 43 In Allstate, Beaumont J (at 24) cited the following principles: (1) A "reasonable cause of action" means one with some chance of success if regard be had only to the allegations in the pleadings relied upon by the claimant; in such a case, the claim cannot be struck out: Davey v Bentinck [1893] 1 QB 185. (2) The mere fact that the case appears to be a weak one is not of itself sufficient to justify the striking out of the action: cf Wenlock v Moloney [1965] 1 WLR 1238. (3) Normally, the power to strike out should be exercised only in plain and obvious cases, where no reasonable amendment could cure the alleged defect: cf Hodson v Pare [1899] 1 QB 455. (4) It goes without saying that if a substantial case is involved in the claim, the power to strike out cannot be exercised. (5) Where a point of law has to be decided, and the judge is satisfied that this can be done by him appropriately, thereby avoiding the necessity of, and expense in going to trial, he is entitled to determine the point: cf Williams & Humbert v W & H Trade Marks [1986] AC 368. 44 Accepting that the strike out power should be exercised with caution and only in a plain and obvious case, Kenny J stated at [12] of Polar (No 4): Notwithstanding the need for caution, where in a strike-out application, a point of law arises, which can appropriately be decided at the interlocutory stage, the judge is entitled to determine the point, thereby avoiding the need for and expense of a lengthy trial. For the reasons set out below, this is a case in which certain points of law should be decided at this stage, since their disposition does not depend on further evidence and findings of fact, and their resolution will limit any future trial. 45 Kenny J also discussed s 31A of the Federal Court Act, noting that the court can dismiss a proceeding (or part thereof) if it is satisfied that the relevant party has no reasonable prospect of success, which did not require that it be hopeless or bound to fail. 46 Her Honour referred to the High Court's discussion of s 31A in Spencer v The Commonwealth (2010) 241 CLR 118 ("Spencer") where the applicant's pleading (while not fully formulated or particularised) left open a possibility which required factual exploration of an informal agreement. 47 In Spencer, French CJ and Gummow J, in a joint judgment (on which the appellants particularly relied both before the primary judge and on appeal) stated (at [25]) that the court must make "a practical judgment…as to whether the applicant has more than a 'fanciful' prospect of success [which] may be a judgment of law or of fact or of mixed law and fact". 48 French CJ and Gummow J stated at [25]: Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the court has formed the view that the applicant is unlikely to succeed on the factual issue. 49 French CJ and Gummow J also stated at [26]: Where an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant. 50 Kenny J also referred to the slightly different judgment of the plurality (Hayne, Crennan, Kiefel and Bell JJ) in Spencer, who stated, inter alia, that it was "important, to emphasise that the evident legislative purpose revealed by the text of the provision will be defeated if its application is read as confined to cases of a kind which fell within earlier, different, procedural regimes" (at [60]). 51 Kenny J concluded at [17] and [18] of Polar (No 4): Thus, in effect, no hard and fast rule can be laid down as to when summary judgment is available. Much depends on the case at hand. The critical question is that set by the statute — has the moving party persuaded the court that the opposing party has no reasonable prospect of success? As the above discussion indicates, there is a clear distinction between the operation of s 31A of the Federal Court Act and the strike-out provisions of the Rules. In their joint judgment, French CJ and Gummow J acknowledged this, adopting the following passage in the judgment of Lindgren J in White Industries Australia Ltd v FCT (2007) 160 FCR 298 (White Industries) at 309 [47]: [E]vidence may disclose that a person has or may have a "reasonable cause of action" or "reasonable prospects of success", yet the person's pleading does not disclose this. In such a case O 11, r 16 empowers the Court to strike out the pleading but … s 31A(2) would not empower the Court to give judgment for the respondent against the applicant. A failure after ample opportunity to plead a reasonable cause of action may suggest that none exists and therefore that the applicant has no reasonable prospects of success, but the existence of a reasonable cause of action and the pleading of a reasonable cause of action remain distinct concepts. See also Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (2008) 252 ALR 41 at 44 [6]. 52 Kenny J analysed the statutory context for the appellants' claims. Her Honour observed that "the object of the CAA is to establish a statutory regime for maintaining, enhancing and promoting the safety of civil aviation" (at [21]) and noted "the unmistakable emphasis on safety in s 9" (at [24]). Her Honour referred to "the primary importance of safety within this legislative regime…" recognised in the Civil Aviation Regulations 1988 (Cth) ("CAR") at [25]), and the "numerous references to 'safety' in the CAA, CAR and CAO [Civil Aviation Orders] emphasize that, in issuing AOC's or making regulatory decisions, CASA is obliged by law to accord primacy to the safety of air operations" (at [30]). 53 Kenny J also noted that a decision to cancel, suspend or vary an AOC (or a condition of an AOC) or to cancel, suspend or vary a licence is reviewable on the merits by the Administrative Appeals Tribunal (at [34]). 54 Her Honour then addressed each of the claims pleaded in the FASOC. As stated above, her Honour concluded that: (a) there was no statutory duty as pleaded; (b) there was no tenable basis on which the appellants could bring an action in tort against the respondents for breach of a general duty to be of good faith; (c) there were no pleaded elements necessary to a tort of inference with trade or business by acting beyond statutory power (assuming such a tort existed); and (d) the pleading of misfeasance in public office was embarrassing and should be struck out with no leave to replead, as (despite CASA's provision of relevant documentation) there was nothing in the material to indicate any basis "for pleading the critical element of intention or reckless indifference" (at [123]). 55 There is no appeal from those findings. 56 Kenny J also discussed in detail the alleged common law duty of care. Her Honour held that CASA and the individual respondents owed no duty of reasonable care as alleged, not to harm the appellants with respect to the discharge of their statutory functions. That finding is the focus of the present appeal. 57 Kenny J rejected the appellants' contention that it was not appropriate in this case to determine the existence of a duty of care as a preliminary issue. 58 Under the heading "It is appropriate to consider whether the duty as pleaded exists", her Honour analysed relevant authorities which identified criteria relevant to the existence of the duty, including distinctions between operational and policy decisions, misfeasance and non-feasance and statutory powers and duties, together with the plaintiff's vulnerability and the authority's control. 59 While acknowledging the appellant's submissions concerning the absence of guiding principles and lack of stable consensus about relevant criteria, her Honour rejected the appellants' submission that it was premature to determine the existence of the duty before trial because it would be first necessary to consider "the positions occupied by the parties on the facts as found at trial" (at [50]). Her Honour stated at [50] of Polar (No 4): At the hearing, senior counsel for the applicants argued that the existence of a duty of care ought not be determined prior to trial and depended on findings of fact as to the precise relationship between CASA and the airline operators and air pilots. The applicants' senior counsel said that he had in mind that there would be "evidence of exactly how airlines operate, how they are financed, how they are dependent … for their efficient and safe operation on the certainty of being able to continue to operate". 60 Her Honour did not think that the facts as proven at trial would affect her conclusion. 61 Her Honour stated at [52] of Polar (No 4): Although a court must proceed cautiously in exercising power under O 11 r 16, for the reasons set out below, I consider that this power is appropriately exercised in this case. As appears below, the existence of the duty as pleaded in the FASC is inconsistent with the statutory regime governing CASA, and the setting in which CASA issues, suspends or cancels certificates, licences and other authorities. This is not a case in which the facts as proven at trial would affect the conclusion I have reached. To avoid the necessity of, and expense in going to trial, it seems to me proper to determine the point: compare Commonwealth v Griffiths (2007) 70 NSWLR 268 at 294–295 [125]–[131]. Further, as regards the evidence to which senior counsel for the applicants referred (see par [50] above), the FASC contained no pleading of any material fact, by reference to which it might be said that such evidence might be relevant and admissible. 62 Her Honour concluded that this case was distinguishable from Repacholi, where McKerracher J declined to hold that it was not open to plead a duty of care against CASA in the exercise of its statutory duty. 63 Kenny J distinguished (at [53] of Polar (No 4)) the present case from Repacholi on the grounds foreshadowed in her earlier, more detailed comparison in Polar (No 2), discussed above. In the present case, her Honour held, consistently with her earlier analysis in a somewhat different context, that the FASOC pleaded the alleged duty of care at an unsatisfactory level of generality, which was fatal, because such a general duty of care was inconsistent with the statutory regime and due exercise of CASA's powers under the Act. In contrast, her Honour acknowledged that in Repacholi, the pleading gave some content to the alleged duty by reference to collecting information regarding take-off procedure. Moreover, in Repacholi, the proposed pleading was far from complete. 64 Under the heading "The duty as pleaded does not exist", Kenny J discussed Stuart v Kirkland-Veenstra (2009) 237 CLR 215 ("Kirkland") where the High Court examined a different empowering provision and statutory scheme in determining whether or not a duty of care was owed in exercising powers under s 10 of the Mental Health Act 1986 (Vic). 65 Her Honour noted the observations in Kirkland that reasonable forseeability of harm from lack of reasonable care by a holder of statutory power is not necessarily enough to result in liability to compensate. Power was also a necessary but not sufficient condition of duty. It was necessary to examine the particular statutory regime to determine whether it established a relationship between the authority and a class of persons, the degree and nature of control exercised over the risk of harm, the degree of vulnerability of those who depend on the proper exercise of the power and "the consistency or otherwise of the asserted duty of care with the terms, scope and purpose of the relevant statute" (Kirkland 245 [112] to [113] per Gummow, Hayne and Heydon JJ). 66 Her Honour noted that in Kirkland, Gummow, Hayne and Heydon JJ considered that the factor of control was critical to finding that there was no duty. Crennan and Kiefel JJ, however, considered that the statutory power must be exercised towards an identifiable class or individual, as distinct from the public at large. Her Honour concluded that control and the identification of a class were important factors. 67 Her Honour also accepted that coherence of the law was a significant factor. Her Honour referred, in that context, to Sullivan v Moody (2001) 207 CLR 562, in which the High Court held that persons investigating and reporting on allegations of child sex abuse were not subject to a legal duty to take care to protect those suspected of being the source of harm, because such a duty would be inconsistent with the proper and effective discharge of their professional and statutory responsibilities. Her Honour stated that the "Court's decision turned on the proposition (at 580 [53]) that to find a duty of care in that case "would so cut across other legal principles as to impair their proper application" (at [59]). 68 Kenny J also referred to W v Home Office [1997] Imm AR 302 in which Lord Woolf MR (with whom Thorpe and Waller LJJ agreed) adopted an approach not dissimilar from that in Sullivan v Moody, and identified a number of relevant factors, including whether there were other private law remedies for deliberate abuse of power and public law remedies available to challenge decisions. 69 Her Honour recognised (at [63]) that in the present case there were some factors in favour of the existence of the duty. The alleged duty related to a positive act, rather than a failure to act, the appellants had a relationship with CASA which predated the power and the respondents would or should have known that the lack of reasonable care in exercising the statutory power to suspend, cancel or fail to renew authorisations could result in harm to the appellants. 70 Her Honour concluded, however, that the above factors were outweighed by other factors pointing against the imposition of a legal duty of care. Her Honour found that the legal relationship between the appellants and the respondents was not straightforward or analogous to any existing relationship in which a similar duty of care had been found to exist. The FASOC did not plead a relationship or vulnerability of the kind where a duty of care to avoid economic loss was said to be owed. Moreover, the appellants could protect themselves by making immediate application to the Administrative Appeals Tribunal for appropriate interlocutory relief. Nor did CASA have unfettered control over the issue, cancellation and suspension of the relevant certificates, licences or approvals. Rather, it was subject to the statutory regime under the CAA. 71 Her Honour concluded at [65] to [67]: Further, although CASA had statutory power to issue, cancel, suspend or renew the relevant certificates, licences or approvals, CASA did not have unfettered "control" over their issue, cancellation and suspension. Rather, issue, cancellation and suspension were regulated by the CAA. In exercising the relevant statutory powers to issue, cancel or suspend, CASA was subject to the statutory regime established under the CAA, which had as its main aim, "maintaining, enhancing and promoting the safety of civil aviation". As discussed above, the functions of the CAA were all directed to this end — as s 9A(1) made clear. The legislative regime established under the CAA was a regime to maintain, enhance and promote air safety. The regime established by the CAA required CASA to make air navigation safety the paramount concern: see s 9A(1). Thus, CASA was required by its governing statute to treat air navigation safety as the most important consideration in issuing, cancelling, suspending or renewing any AOC, or approval as Chief Pilot or Flying Instructor. With this in mind, it is difficult to avoid the conclusion that the duty for which Polar and Mr Butson contend — to take reasonable care not to harm them and others in the same class as them cannot be reconciled on any practical basis with CASA's overarching obligations to make air navigation safety its most important consideration in performing its functions and exercising its statutory powers. This is not to say that a public authority such a [sic] CASA cannot be subject to a number of duties. But in the case of a public authority charged by its governing statute with giving primacy to air navigation safety, one would not anticipate that the law would impose on that public authority a legal duty to have regard to the interests of a particular class — here operators of air services businesses or air pilots — where that would in all likelihood impose on the public authority conflicting obligations. 72 Her Honour observed that even if not absolutely inconsistent with CASA's exercise of its statutory powers, the imposition of a duty of care could lead CASA and its officers to act defensively, contrary to the primary importance placed on air safety navigation. Further, other remedies were available to persons in the appellants' position, which had militated against the existence of a duty of care in Fernando v Commonwealth of Australia (2010) 188 FCR 188. 73 Her Honour concluded at [71] of Polar (No 4): The considerations against the existence of a duty of care lead me to conclude that CASA (and therefore the individual respondents) did not owe the applicants a duty of care of the kind alleged in para [16(a)] of the FASC. 74 Her Honour then discussed deficiencies in the pleading of the negligence in the FASOC as follows at [75] of Polar (No 4): There are other deficiencies in the applicants' pleading of negligence. As can be seen in the earlier analysis of the applicants' FASC, the facts alleged in the FASC relate almost entirely to the exercise of statutory powers by CASA and its officers. When the pleading is examined, there is, as the respondents submitted, no express pleading of material facts that could, if proven, establish "the crucial elements of reliance, assumption of responsibility and, most importantly, vulnerability": see Precision Products at 126 [106] (Allsop P). This pleading is especially important in such a case as this in which the relevant statutory powers are not directed towards the protection of a class of persons or their property, as distinct from the public at large. On the contrary, relevantly here, the CAA expressly provided that the public interest in air navigation safety was to be CASA's most important concern in any exercise of its statutory powers. In exercising its statutory powers at issue in this case — to issue, cancel, suspend or renew certificates, licences and other approvals — CASA did not necessarily assume responsibility to act in the applicants' interests. As noted already, the most important consideration in the exercise of the relevant statutory powers was air navigation safety. This meant that the powers would invariably be exercised against the applicants' interests in a situation where air navigation safety so required. 75 Her Honour concluded at [76] of Polar (No 4): In all the circumstances, it cannot be said to be open to the applicants upon the FASC to prove the facts at trial which would constitute a reasonable cause of action in negligence against the respondents. In so far as the FASC endeavours to plead negligence against the respondents, this pleading should be struck out. Discussion 76 The appellants submitted that it was unclear from the reasons for judgment whether her Honour had: (a) concluded that in no circumstances could CASA owe a duty of care and be liable for negligence in the exercise of its statutory powers; or alternatively; (b) accepted the possibility that particular facts might give rise to the existence of such a duty and concomitant liability, but in the case before her fixed the ambit of the facts to those pleaded in the FASOC, determined that those facts, if established, could not support the conclusion that a duty existed and therefore proceeded to determine the existence of the duty. 77 The appellants submitted that in either case, her Honour erred. A holding that there was no reasonable prospect of success because the duty of care could never exist was inconsistent with the authorities, which left open its possible existence, depending upon facts. If, however, her Honour merely concluded that a duty of care were possible, but could not be supported by the facts pleaded in the FASOC, she erred in deciding, prior to the close of pleadings, that it did not exist in this case. 78 Before us, senior counsel for the appellants submitted that the FASOC pleaded some particulars to paragraph 16 (which would in turn give rise to evidence which would or would be expected to be led at trial) about CASA's control of the risk of harm and the appellants' vulnerability. Senior counsel stated that the appellants would also seek to lead evidence at trial in relation to disputes about asymmetric flying. 79 Senior counsel did not, however, submit that the above particulars in themselves constituted facts material to the existence of the duty, as distinct from a potential basis on which such facts might be the subject of evidence at trial. The appellants could point to nothing in the FASOC that impugned the correctness of her Honour's conclusion that the FASOC alleged no material facts supportive of the alleged duty of care or that the factual matters raised orally by senior counsel (referred to at paragraph 59 above) would not, on the basis of the pleading in the FASOC, be relevant and admissible at trial. 80 The appellants' principal argument on appeal was thus that her Honour erred in treating the FASOC as the exhaustive source of facts potentially relevant to the existence of the pleaded duty. The appellants submitted that her Honour should not have determined the existence of the duty until the filing of the defence and reply, from which further facts might emerge, giving rise to a duty of care which was not inconsistent with CASA's statutory obligations. 81 The appellants acknowledged their obligation adequately to plead the material facts necessary to the duty of care. They identified no authority to support their claimed entitlement to await the filing of a defence, to enable the pleading of their alleged cause of action to be perfected by way of reply. 82 Senior counsel at one point submitted that such an approach was necessary in this case, because the defence could not have been anticipated. No defence was, however, filed. Rather, the respondents made the application for strike out and summary judgment. The appellants had ample notice of the grounds on which the FASOC was challenged, which were set out in the written submissions filed by the respondents, discussed above. More importantly, the respondents' principal contentions and her Honour's concerns about the absence of material facts in the appellants' earlier pleading had been rehearsed in detail in Polar (No 2). 83 Senior counsel for the appellants alternatively submitted that the duty of care was adequately pleaded in the FASOC, and that the strike out application was based upon, and her Honour erroneously accepted, an unanticipated claim of immunity in respect of the pleaded duty. 84 Circularity, inconsistency, conflation of distinct questions and mischaracterisation of her Honour's findings characterised the above submissions. 85 First, on a fair reading of her Honour's reasons, particularly when read in the light of her earlier, closely related judgment in Polar (No 2) (to which her Honour expressly referred), she did not hold that a duty of care in the exercise of CASA's statutory powers was absolutely precluded or that such a duty existed but CASA had immunity. 86 To the contrary, while her Honour's reasons may pose a significant hurdle to the existence of any such duty of care, her Honour held only that the duty of care as pleaded did not exist. So much is evident from her observations at [52] and [53] of the reasons, the heading above [47], the heading above [54] and the clear indication in [54] that her Honour's analysis was "of whether or not the duty as pleaded in this case exists" (emphasis added). 87 That conclusion is also supported by her Honour's discussion of Repacholi (both in Polar (No 2) and in this case) and the distinction she drew between that case and the present, which is inconsistent with the view that the duty could never in any circumstances arise. 88 Secondly, her Honour was entitled to confine the facts relevant to her analysis of the existence of the pleaded duty to those raised in the FASOC, all the more so given the long history of the matter and the previous opportunities afforded to the appellants to remedy the deficiencies in their pleading. 89 The appellants were obliged adequately to plead the alleged duty, including the necessary material facts on which the duty and its ambit were based. If (assuming the pleaded facts to be true) the FASOC failed to disclose a cause of action in negligence, the respondents were entitled to seek, as they did, to strike the pleading out. Indeed, that was the very course which appears to have been taken in the seminal proceedings in Donoghue v Stevenson [1932] AC 562, albeit that the general demurrer failed in that instance. 90 The appellants were not, in that context, entitled to rely on an anticipated defence and a possible reply in order to articulate further facts which might, perhaps, perfect a materially deficient pleading. 91 Nor, if it be relevant, do we accept that the appellants were taken by surprise by the respondents' allegations in support of their notice of motion. The appellants were well apprised of the basis of the challenge, and her Honour's previous concerns about the absence of material facts, but did not seek leave to file a further amended pleading. 92 We also reject the submission that the duty of care was adequately pleaded in the FASOC and the respondents, under the notice of motion, asserted a claim of immunity which her Honour erroneously upheld. 93 Her Honour persuasively analysed the authorities relevant to the application of s 31A of the Federal Court Act, the existence of the pleaded duty of care, and the striking out of the FASOC. After concluding that the FASOC should be struck out, her Honour, having regard to the appellants' evidence and submissions, as well as their pleading, dismissed the proceeding. We see no error in her Honour's conclusion that the duty as pleaded did not exist. Nor, in our opinion, did her Honour err in dismissing the proceeding rather than granting leave to replead where the FASOC (the third iteration of the appellants' statement of claim) was struck out, the appellants neither sought leave to replead nor produced a proposed amended pleading, and the extensive history of the matter indicated that the appellants had already had ample opportunity to remedy, if possible, the deficiencies in their case. Conclusion 94 In our opinion, the appeal should be dismissed with costs. I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Perram, Dodds-Streeton and Griffiths. Associate: Dated: 4 July 2012