a IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY No. G16 of 1978 DISTRICT REGISTRY GENGRAL DIVISION 1 June 1979 we eww IN THE MATTER OF — THE TRADE PRACTICES ACT 1974 BETWEEN : TRADE PRACTICES COMMISSION Plaintiff AND : GEORGE WESTON FOODS LIMITED First Defendant AND : ALLIED MILLS INDUSTRIES PTY. LIMLTED Second Defendant AND : L.A. COGGAN & SON PTY. LIMITED Third Defendant AND : JAMES MURRAY OGILVIE Fourth Defendant AND : ISABEL MARGARET OGILVIE Filth Defendant AND : JON FREDERICK DALLAS Sixth Defendant DAVIES, J. REASONS FOR JUDGMENT This action concerns a claim brought by the Trade Practices Commission against six defendants, five of whom are hakers in the Australian Qpital Territory. It alleges an arrangement or understanding whereby bread would be supplied in the Australian Capital Territory at prices fixed from time to time and whereby the defendants supplied bread at prices so fixed and did so in pursuance of that arrangement or understanding. The claim against the sixth defendant is for aiding and counselling the acts of the other defendants. I have before me two applications. One is an application of the first defendant to strike out certain paragraphs in the statement of claim and for an order for particulars. The other application is an application of the plaintiff for directions. I shall deal first with the application of the first defendant. This is an application based on order 26, rule 18, on order 20, rule 29 and on the inherent jurisdiction of the court. In so far as the application is based on order 26, rule 18, and on the inherent jurisdiction it 1s necessary that the defendant show that the subject paragraphs of the statement of claim disclose no reasonable cause of action, that the claims made are so frivolous and vexatious as to be demurrable. The submission on this ground was not put strongly and, on the material presently before me, I am not prepared to say that the plaintiff's claim, when it is properly pleaded and particularised, should not proceed to trial. Therefore, I am not presently prepared to strike out the subject paragraph under order 26, rule 18, or under the inherent jurisdiction of the court. However, the defendant further seeks to strike out paragraphs 13, 14 and 15 of the statement of claim relying upon order 20, rule 29, of the Rules of the High Court of Australia. The basis of this application is that the pleading is embarrassing and prejudicial and tends to delay the fair trial of the action. I agree in substance with matters put by Mr. McHugh, QC, senior counsel for the first defendant with respect to this matter. Section 76 of the Trade Practices Act 1974 provides that if the court is satisfied that a person has contravened a provision of Part IV of the Act, the court may order the person to pay a pecuniary penalty not exceeding a specified sum in respect of each act or omission as the court determines to be appropriate having regard to all relevant matters including the nature and extent of the act or omission. Section 80 provides that the court may on the application of the Trade Practices Commission grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of the provisions of Part IV of the Trade Practices Act. This action is brought in reliance upon those sections and it is desirable, I think, that the plaintiff make it quite clear what are the acts or omissions which are said to constitute a contravention of a provision of Part IV and what particular provision of Part IV each of those acts or omissions are alleged to contravene, I turn to paragraph 13 of the statement of claim. It commences with an allegation that certain of the defendants were parties to an arrangement or understanding whereby bread would be supplied in the Australian Capital Territory at prices agreed upon from time to time. It then sets out a number of instances where the defendants gave effect to that arrangement or understanding by agreeing to increase the price of bread, by increasing the price of bread and by supplying bread in accordance with the prices agreed upon. Two particular periods are mentioned in respect of the acts which give effect to the arrangement or understanding. One is December 1976. The other is May, June and until about October 1977. Paragraph 13 then, in sub-paragraph (k), alleges that the arrangement or understanding was in restraint of trade, a pleading which is appropriate to an arrangement or understanding to which effect was given prior to l July 1977. I will turn to the relevance of that date in a momenr. It then contains three sub-paragraphs which are relevant to an arrangement or understanding in respect of which acts were done which gave effect to 1t on or after 1 July 1977. Yet those matters are stated in respect of the one arrangement or understanding. The significance of the date is that, on 1 July 1977, the Trade Practices Amendment Act 1977 came into force. It repealed s.45, as 1t had previously been in force, and substituted a new s.45. Sub-paragraph (k) of paragraph 13 of the statement of claim is appropriate to s.45 as it existed prior to 1 July 1977 and sub-paragraphs (1), (m) and (n) are an appropriate pleading where what is alleged is a contravention on or after 1 July 1977. Paragraph 13 does not specify the particular provision of the Trade Practices Act which is alleged to have been contravened by the arrangement or understanding, although one may assume from the pleading that s.45 is relied upon. In my view, the pleading should make it quite clear what are the acts or omissions relied upon and what are the provisions those acts or omissions contravene. I think that paragraph 13 in its present form does not do that, or at least, if it does that, it contains material which, in so far as the acts or omissions occurred prior to 1 July 1977, are unnecessary and embarrassing and other material which, in so far as the acts or omissions occurred on or after 1 July 1977, are unnecessary and embarrassing. I think the paragraph should be redrawn so as clearly to relate the acts or omissions relied upon as the foundation of the claims under s.76 and s.80 to the particular statutory provision which is said to have been contravened. For that reason, I think that the pleading in its present form is embarrassing and should be struck out. The same position does not apply with respect to paragraph 14, because 1t alleges acts or omissions which took place in December 1976, and its form is, I think, satisfactory. Paragraph 15, however, suffers from the same defect as paragraph 13 for it deals with acts or omissions which cover the period both before and after 1 July 1977. Mr. Rofe, QC, senior counsel for the plaintiff, put to me that the pleading in the present form was satisfactory because what was alleged was a continuous course of action. In my view, the pleading does not make it clear that it relies upon a continuous course of action. Rather, it seems to me that it relies upon specific acts or omissions and does so properly having regard to the terms of s.76. If the plaintiff relies upon a continuous course of conduct, asamaterial fact other than as evidence, the materiality of the continuous course of conduct should be made quite clear, and, presently, that is not clear to me. For those reasons I think that paragraphs 13 and 15 of the statement of claim should be struck out. L give the plaintiff leave to amend within an appropriate date which 1 shall later mention. I should make it clear that [ think that it is desirable that the pleading does quite clearly separate out the acts which are relevant to the earlier s.45 from the acts which are relevant to s.45 in its present form. The defendant will have, or may have, defences which it will want to state with respect to the acts which took place before 1 July 1977 different from those with respect to the acts that took place after that date. The statement of claim should be pleaded in a manner which enables the defendant readily to put forward its defences. I turn now to the question of particulars. Particulars are sought by the first defendant of paragraphs 13, 14 and 15 of the present statement of claim. As I have ordered that paragraphs 13 and 15 be struck out, I cannot make an order directed to those paragraphs. However, I think it is proper for me to make an order in respect of allegations of a like nature which appear in the pleading as amended. When approaching the question of particulars, I have kept in mind that the basis of the pleading is a very general and non-specific one. There is an allegation of an arrangement or understanding whereby bread would be supplied in the Australian Capital Territory at prices agreed upon from time to time. Smithers J has said of the term understanding : "I have to remember that the concept of an understanding is broad and flexible. It may arise merely where the minds of the parties are at one that a proposed transaction proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct.". See p.16 of His Honour''s judgment in L. Grollo & Co, Pty. Limited v. Nu-Statt Decorating Pty. Limited delivered 1 September 1978. The allegation is not that there was an agreement that bread would be supplied at prices agreed upon from time to time but that there was an understanding whereby bread would be supplied in the Australian Capital Territory at prices agreed upon from time to time. The pleading alleges an understanding in pursuance of which bread would be supplied. That seems to me to be an allegation of a very wide nature, difficult to confine and one which does not of itself make it clear what is the case which the defendant has to meet. Particulars are required to be given of matters alleged in pleadings so that the parties may know the case that they have to meet at the trial, so that unnecessary expense is spared and so that parties are not taken by surprise. In my view, there should here be ordered such particulars as make it clear to the defendants what is the ambit of the allegations made against them and what are the material facts and circumstances alleged. When asked for particulars of the arrangement or understanding, the plaintiff answered that it did not know whether the arrangement or understanding was in writing or oral or to be implied and, for that reason, it declined to give particulars. In my view, it should give such particulars as it can. I think that the claim in this case is no different from a claim in an ordinary contractual case or a claim alleging a combination or conspiracy. The plaintiff should be called upon to say whether it alleges that the arrangement or understanding was in writing, whether it was oral and, if it was oral what were the conversations constituting it, between whom those conversations took place, where they took place and what was the substance of the conversations. If the plaintiff relies upon an arrangement or understanding to be implied from certain facts, matters and circumstances, it should state with dates what those facts, matters and circumstances were. After listening to argument from the bar table I formed the view that the plaintiff was not entirely without information, that there were matters upon which it had in mind to rely to establish the arrangement or understanding. I am also influenced to some extent by the fact that, when asked for particulars of paragraph 16, a paragraph which does not concern the first defendant, the plaintiff gave certain particulars of telephone conversations and of press releases. It seems to me that the plaintiff should make clear what is the ambit of the allegation it proposes to make. If it proposes to rely upon conversations it should give particulars of them, if it proposes to rely upon documents it should give particulars of those documents, if it proposes to rely upon matters such as parallel business behaviour it should specify those matters. Having regard to the fact that the plaintiff was not a party to the arrangement or understanding, I limit my order to requiring the plaintiff to give such particulars as it can give, but it should be fully understood by that that the plaintiff will be limited in the calling of evidence to the matters which it has particularised, that is to say, it will be limited in the presentation of its case at trial to the ambit of the matters which appear in the particulars it has given of the arrangement or understanding. It was put by Mr. Rofe that, to order particulars of the facts, matters and circumstances from which the arrangement or understanding was to be implied or inferred, was to order disclosure of evidence and not to order particulars of the claim made. I do not understand my order to have that effect. It seems to me to be proper that the plaintiff should state the facts, matters and circumstances from which an arrangement, understanding, contract or combination arises if the same is alleged to arise by implication or inference from facts, matters and circumstances and I think, in so ordering the plaintiff to give particulars, I am not ordering the plaintiff to give details of the evidence by which it will prove those facts, matters and circumstances. I merely require the plaintiff to demonstrate to the defendant what is the case that is going to be made. The next particulars sought are under sub~paragraphs (d) and (g) of paragraph 13. Particulars are sought of the act of agreeing. In my view, particulars should be given as sought. The next particulars sought are under sub-paragraphs (e), (f), (g), (Ch) and (j) of paragraph 13. These paragraphs allege that the defendants gave effect to the arrangement or understanding. Particulars are sought of the facts and circumstances upon which the plaintiff relies to support its contention that the defendant Weston, in increasing prices, gave effect to the alleged arrangement or understanding. In my view, these particulars should not be ordered. In seeking these particulars, I think the defendant is really seeking evidence or information which will disclose to it the means by which the plaintiff seeks to prove the arrangement or understanding. The allegation is that there was an arrangement or understanding to supply bread at prices agreed upon and sub-paragraphs (e). (£), (g), (h) and (j) allege that the arrangement or understanding was given effect to by increasing prices, by agreeing to increase prices and by supplying bread in accordance with prices. Further particulars of the 10. allegation that what was done gave effect to the arrangement or understanding is, I think, unnecessary. The next particulars sought are under sub-paragraph (k) of paragraph 13. It was first sought to have the plaintiff state whether it alleged that sub-sections (3) and (4) of s.45 of the Trade Practices Act applied. Those particulars were not pressed by Mr. McHugh and, although I have not looked into the matter at any depth myself, I think I would be bound to hold that such particulars should not be given as the onus is on the defendant to prove the application of the provisions of sub-sections (3) and (4) of s.45. However, as the matter was not pressed, I have formed no concluded view on it. Mr. McHugh did seek further particulars of the manner in which it was alleged that the arrangement or understanding was in restraint of trade or commerce. Particulars have been given of this allegation and are contained in a letter, 24 May 1979, from the solicitor for the plaintiff to the solicitors for the first defendant. Those particulars read "The plaintiff claims that each of the said arrangements or understandings was and result in a restraint of trade or commerce in that it and its operation constituted an interference in the determination, by the free interplay of market forces, of prices at which bread was supplied in the Australian Capital Territory at the wholesale and/or retail level by the first, second, third, fourth and fifth defendants.". In my view, those particulars are sufficient particulars of the allegation as to restraint of trade. ll. Particulars were sought under sub-paragraph (1) of paragraph 13 of the facts and circumstances upon which the plaintiff relies to support its contention that the alleged arrangement or understanding had the purpose or had had or was likely to have the effect of substantially lessening competition. In answer to the request for those particulars, the plaintiff said, "The plaintiff proposes to rely upon the provisions of section 45A of the Trade Practices Act 1974 in order co establish that the alleged arrangement or understanding and the provisions thereof had the purpose or had the effect or were likely to have the effect of substantially lessening competition. Further details are matters for evidence. See also the answer to paragraph 13(1), (m) and (n)¢iv) below.". In my view, that is a sufficient answer to the request for particulars. The plaintiff has made it clear what is the ambit of the allegation made. It proposes to rely upon the deeming provision contained in s.45A. Its answer shows what is the case which it proposes to make against the defendant. The request was made before I had determined that paragraph 13 should be struck out and redrawn. No doubt, as s.45A does not have effect in relation to acts done before 1 July 1977, the answer may have been thought to have been inadequate in relation to an allegation which, on the pleading as it then stood, applied not only to acts done after 1 July 1977, but to acts done prior thereto, However, I anticipate that the amended pleading will raise the matters now contained in sub-paragraph (1) only in relation to acts done after 1 July 1977. Therefore, s.45A will be applicable to those acts and, therefore, the particulars which the plaintiff has given will be adequate. 12. Particulars were also sought of paragraphs 14 and 15. I do not think that I need go through the paragraphs in any detail. The particulars sought are similar to those that I have already discussed in relation to paragraph 13 and, in those cases where I have indicated that particulars should be given in relation to allegations of the type contained in paragraph 13, they should also be given in relation to similar allegations appearing in paragraphs 14 and 15. Further particulars were sought of paragraphs 16 and 17. These paragraphs contain an allegation against the sixth defendant. Particulars already given state : "No allegation is made against the first defendant in paragraph 16 of the statement of claim."". A similar statement is made in relation to paragraph 17. Subsequently, some particulars were given. However, Mr. Rofe has said that paragraphs 16 and 17 are not intended to raise any allegation against the first defendant. {In view of this, and in view of the fact that that has been stated in particulars given, [ think that I should not order any particulars to be given to the first defendant under paragraphs 16 and 17. I make it clear, however, that I have acted upon Mr. Rofe's statement. I treat paragraphs 16 and 17 as a pleading not applicable to the first defendant and as paragraphs to which the first defendant is not required to plead. Those matters cover, [ think, all the matters in respect of which I was asked to make an order for particulars. As to 13. the time when particulars should be given, there was dispute by the parties. The first defendant sought particulars before delivering its defence. The plaintiff sought discovery of documents prior to delivering particulars. On the first point, I am of the view that the first defendant should deliver its defence prior to obtaining particulars. I think the rule which is applicable is rule 8 of order 20 of the High Court Rules which provides that particulars of a claim should not be ordered to be delivered before defence unless they are necessary or desirable to enable the defendant to plead or ought for any other special reason to be so delivered. Mr, McHugh submitted that that rule applied only in a case where full particulars had been given and the pleading complied with rule 5. In my view, however, rule 8 has a wider application and applies wherever a party applies to a court or a judge for an order that particulars of a claim be supplied. In my view, the particulars to be ordered are not necessary or desirable in order to enable the first defendant to plead and, in my view, no special reason was put forward which would justify my ordering that they be delivered prior to the delivery of a defence. Mr. McHugh said that it may be that the facts, matters and circumstances which would be alleged would raise a matter which the defendant would wish to deal with by way of defence. However, the only matter that he raised was one which related to s.51(1)(a) of the Trade Practices Act. It seems to me that the matter that he desired to raise in relation to that section could be raised just as easily prior to the delivery of particulars as thereafter. The matter upon which 14, he relied was that the price of bread was raised in the Australian Capital Territory following upon the granting of an authorisation by the Prices Justification Tribunal to raise prices. It seems to me that that is a matter which relates directly to the allegations that the defendants gave effect to the arrangement or understanding by raising prices in the manner set out in the statement of claim. The defence, under s.51(1)(a), if applicable, should be raised at this stage without any further allegation being made in particulars by the plaintiff. For those reasons, I do not order that particulars be given prior to the delivery of the defence. Mr. Rofe submitted that I should not require the delivery of particulars until after discovery is given by the defendants. He conceded that the ordinary rule is that, in an action for the recovery of a pecuniary penalty, discovery of documents and discovery by way of interrogation will not be ordered. He submitted, however, that in the particular circumstance where the plaintiff is lacking in knowledge of material facts, it could not supply adequate material without. obtaining discovery or interrogating and that the court should, in that case, if it sees fit to order particulars, also order that the defendant be obliged to discover material documents and to answer questions by way of interrogation. In my view, however, it is not appropriate to order discovery of documents or to order that the defendants answer questions by way of interrogation. i think the ordinary rule should 15. apply. It was applied by Mr. Justice Campbell in Castlemaine Perkins Limited v. Queen Street Hotels Pty. Limited and Others (1968) Qd.R 501. It is a well established principle that, where a pecuniary penalty 1s sought, the ordinary rules of discovery and interrogation do not apply for the reason that 1t is improper to call upon a defendant to disclose facts which make it liable to the payment of a pecuniary penalty. I have limited my orders to the grant of particulars to such particulars as the plaintiff is able to supply. I think that, in the light of that and in the light of the principle laid down in the Castlemaine Perkins case and elsewhere, I would not order discovery or interrogation and that particulars should be given notwithstanding that discovery and interrogation are not obtained. I turn now to the particular orders that were sought. On the notice of motion of the first defendant, George Weston Foods Limited, dated 23 May 1979. I do not grant the orders sought in paragraph 1. I make the order sought in paragraph 2, but only with respect to paragraphs 13 and 15 of the statement of claim. I grant to the plaintiff leave to deliver an amended statement of claim within 14 days. On paragraph 4 of the notice of motion, I order that the defendant deliver a defence within 21 days of the delivery of the amended statement of claim. On paragraph 3, I order that the plaintiff deliver within 21 days of the delivery of the defence of the first-named defendant, such further and better particulars as it is able to give of such of the allegations as appear in its statement of claim as are of the type I have 16. indicated in my decision should be the subject of particulars. I turn now to the summons of the plaintiff dated 18 May 1979. Paragraph 1 seeks an order that the first and second defendants deliver a defence. I have already ordered that the first defendant deliver a defence within 21 days of the delivery of the amended statement of claim. I make a similar order with respect to the second defendant. I also order that all other defendants deliver an amended defence within 21 days of the delivery to them of the amended statement of claim. Paragraph 2 seeks an order for discovery. That is not now pressed. Paragraph 3 seeks the fixing of a date for trial. I think it is premature to make any order under that paragraph. On paragraph 4, I reserve liberty to each party to apply upon two days notice in writing to the court and to other parties. On the request of the second defendant, there being no objection by the plaintiff, I order that the second defendant have leave to interrogate the plaintiff within 14 days of the delivery of its defence. The second defendant also seeks an order that the plaintiff supply particulars of the kind sought and to be obtained by the first defendant. However, I do not have details of the particulars which have been sought or obtained by the second defendant. I think it is premature to make any order. The second defendant should first seek 17. from the plaintiff the particulars it desires. T£ difficulty ensues, the second defendant may come back to the court. On the question of costs, it seems to me that the first defendant has had substantial success. It has obtained an order that two paragraphs of the statement of claim be struck out with leave to amend and it has had success in relation to particulars. There was a dispute between the parties on a matter of importance. I think the question of particulars was a matter which justified the first defendant in coming to court and it was perhaps the most significant of the matters discussed at the hearing. I think I should grant the first defendant the costs of its motion. I therefore order that the plaintiff pay the taxed costs of the first defendant of its motion. I order that the taxed costs of all parties of the summons for directions be costs in the cause. I further order that the plaintiff pay the costs thrown away by the amendment to its statement of claim.