Truth About Motorways Pty Ltd v Macquarie Infrastructure Investments Management Ltd [1998] FCA 179

FEDERAL COURT OF AUSTRALIA PRACTICE AND PROCEDURE - application to strike out a statement of claim - whether to strike out - application to set aside notices to produce. Trade Practices Act 1974 (Cth) - ss 51A, 52

truth about motorways pty limited -v- macquarie infrastructure investments management limited

NG 833 of 1997 FOSTER J 13 FEBRUARY 1998 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 833 of 1997

BETWEEN: truth about motorways pty limited

Applicant

AND: macquarie infrastructure investments management limited

Respondent

JUDGE: FOSTER J

DATE OF ORDER: 13 FEBRUARY 1998

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The motion to strike out the statement of claim be dismissed. 2. The motion to set aside the notices to produce be dismissed. 3. Costs of this notice of motion are to be the applicant's costs in the cause. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NG 833 of 1997

BETWEEN: truth about motorways pty limited

Applicant

AND: macquarie infrastructure investments management limited

Respondent

JUDGE: FOSTER J

DATE: 13 FEBRUARY 1998

PLACE: SYDNEY

REASONS FOR JUDGMENT (Extempore) Applications to strike out statements of claim are always confronted by a very considerable hurdle, in that it is necessary to satisfy a Court at the very outset of litigation between the parties that the claim brought by an applicant, in effect, has no reasonable hope of success. The fact that I do not call upon counsel for the applicant implies no criticism whatever as to the careful and lucid argument that has been presented on behalf of the respondent in relation to the application made by it to strike out the applicant's statement of claim. In the course of the presentation by the parties of their respective cases and the ensuing discussion between bench and bar, as well as in the course of Mr Sackar's very helpful address, it has become quite plain that the applicant's case which is sought to be made here is based upon one statement made in a document produced by the respondent in 1996. The document is a prospectus relating to the subscription by the public to the financial units referred to in the prospectus. I need go into no greater detail. The statement of claim refers to the parts of the prospectus called into question and particularises statements therein concerning future traffic volume on the Eastern Distributor, namely:- "Traffic volume on the Eastern Distributor is anticipated to build up rapidly, as a consequence of the existing traffic volumes and the current congestion in the corridor, to an average daily volume of nearly 60,000 vehicles by 2006. Thereafter traffic volume on the Eastern Distributor is forecast to increase more slowly." It is alleged that this statement was false and misleading. Sections 52 and 51A of the Trade Practices Act 1974 (Cth) are relied upon. What is put to me, in effect, is that the establishment of that case, together with the relief sought in respect of it, is a quite hopeless undertaking. At this early stage the allegations in the statement of claim have been supported by affidavit evidence that has been placed before me drawing attention to what is said to be inferences that should reasonably be drawn from the documents referred to therein. Those inferences, it is said, lead or point to a conclusion that the statement must have been incorrect at the time it was made. At this point of time the Court has no evidence adduced by the respondent in opposition to the drawing of that inference. Indeed, there is no pleading from the respondent at this stage as the respondent's approach so far has been simply to seek to strike out the statement of claim. Although the applicant manifestly has no commercial interest in the obtaining of relief in these proceedings, it cannot be said that it has no standing to bring them. Indeed, the contrary has not been argued on behalf of the respondent. It is true that no claim for damages is made by the applicant and now, during the course of these proceedings, a claim for injunctive relief, which if granted would have the effect of preventing the respondent from making a highly significant payment that it is contractually bound to make, is no longer sought. What is sought by the applicant is an order of the Court that something in the form of corrective advertising be undertaken by the respondent, so that it may make a public correction of what is said to be a misleading statement in the prospectus. I should make it quite clear that it is not alleged in the statement of claim that there was anything deliberately misleading. However, that element is not a requirement for the establishment of a case under s 52 of the Trade Practices Act. In the absence of any case which could be said to seek directly to refute the allegations made in the statement of claim, the respondent has put to me that as a practical and commonsense matter, looking down the track as it were, it would not be conceivable that a court would make the order for corrective advertising which is sought by the applicant. It is conceded by the respondent that if I came to the view that I could not accept that submission, an associated submission that declaratory relief could not be granted would not be sustainable. I have given close consideration to this matter as it has developed and as it has been argued. I have come to the conclusion, with some hesitation and misgiving, that I would not be justified in striking out this statement of claim at this stage of the proceedings. It may be that when matters become clearer and pleadings have been completed, such an application could be renewed. I, of course, say nothing about that. I say it only by way of stressing that I am dealing with the matter as it stands today. Today, I am not persuaded that the statement of claim in its present form, which seeks the limited form of relief it now seeks, is indeed unarguable and untenable. In those circumstances, I must dismiss the motion to strike it out. There was a motion before me to set aside notices to produce. During the course of the day the parties have had discussions in relation to that motion. As I apprehend it, documents have been produced in circumstances where the Court has been advised by counsel that there are no further documents which answer the notices, so that this particular motion does not require decision. In the circumstances the appropriate way to deal with it is to dismiss it. As to costs in this matter I will simply order that they be the applicant's costs in the cause. I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.