Hornsby Automotive Group Pty Limited v Mitsubishi Motors Australia Limited [2004] FCA 976

FEDERAL COURT OF AUSTRALIA

Hornsby Automotive Group Pty Limited v Mitsubishi Motors Australia Limited [2004] FCA 976

Federal Court Rules, O 11 r 16, O 20 r 2 Trade Practices Act 1974 (Cth), ss 4D, 45, 46 HORNSBY AUTOMOTIVE GROUP PTY LIMITED ACN 003 629 543 v MITSUBISHI MOTORS AUSTRALIA LIMITED ACN 007 870 395 N 900 OF 2003 GYLES J 30 JULY 2004 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 900 OF 2003

BETWEEN: HORNSBY AUTOMOTIVE GROUP PTY LIMITED ACN 003 629 543

APPLICANT

AND: MITSUBISHI MOTORS AUSTRALIA LIMITED ACN 007 870 395

RESPONDENT

JUDGE: GYLES J

DATE OF ORDER: 30 JULY 2004

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. Paragraphs 25, 26, 33, 38, 40 and 41 of the Second Amended Statement of Claim be struck out.

2. Leave be granted to file a further amended statement of claim in accordance with these reasons.

3. The costs of the motion will be the costs of Mitsubishi Motors Australia Limited in the proceeding.

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 N 900 OF 2003

BETWEEN: HORNSBY AUTOMOTIVE GROUP PTY LIMITED ACN 003 629 543

APPLICANT

AND: MITSUBISHI MOTORS AUSTRALIA LIMITED ACN 007 870 395

RESPONDENT

JUDGE: GYLES J

DATE: 30 JULY 2004

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 This is a notice of motion by the respondent Mitsubishi Motors Australia Limited (the respondent) pursuant to O 11 r 16 of the Federal Court Rules to strike out a Second Amended Statement of Claim in whole or, alternatively, in part. In framing these reasons I will assume knowledge of the terms of the agreement between the parties, the relevant pleading and the relevant statutory provisions. I do not propose to give elaborate reasons. I bear in mind the well-known authorities dealing with the proper approach to striking out pleadings. The attack on the pleading raises some issues of principle and some issues of detail. 2 One issue of principle concerns the reference to 'some Mitsubishi dealers' in paragraphs 22, 23, 25, 38, 40 and 41. It is submitted on behalf of the respondent that failure to identify the dealers, the date and place of the entering into the alleged arrangement and the lack of detail concerning the consequent actions of the respondent were fatal flaws in the pleading and, amongst other things, demonstrate that the applicant does not have a case. In my opinion, this is not a defect of pleading. A party cannot be obliged to plead particulars of which it is not aware. The applicant is not obliged on an application of this kind to produce the evidence that would justify the pleading. Counsel for the applicant indicated, however, that it was based upon what would be contended to be an admission by the respondent. In my opinion, the basic allegations are clear enough to enable a pleading in response and so are not embarrassing. 3 The next issue of principle relates to a complaint about the allegation of breach of s 45(2)(a)(i) and s 45(2)(b)(i), incorporating s 4D of the Trade Practices Act 1974 (Cth) (the Act). In my opinion, this complaint is well founded. The essence of an exclusionary arrangement within the meaning of s 4D is horizontal – namely, between persons who are competitive with each other. It may be that the involvement of a party who is not competitive with the others would not detract from that situation, but the existence of the horizontal arrangement is fundamental. In my opinion, no relevant horizontal arrangement has been pleaded here. Indeed, it is doubtful whether there is any horizontal agreement pleaded. The suggestion alleged to have been made by 'some Mitsubishi dealers' to the respondent could have been made individually by those dealers. Even if there were a joint opinion and suggestion expressed by some Mitsubishi dealers to the respondent in the form alleged, there is no provision of any such arrangement or understanding that could be held to have the purpose identified in s 4D(1)(b). The material allegation pleaded against the respondent is that it independently decided to give effect to the opinions of some of its dealers by, in effect, forcing the applicant out of its dealership by the use of contractual provisions. Even giving a beneficial construction to the pleading, the most that some of the competitors agreed to do was to suggest to the respondent that it reduce the number of dealers. There was no suggestion that they had any power to interfere with the supply or acquisition of goods and services. There is no pleading that the dealers concerned were party to any arrangement involving the steps alleged in paragraphs 24 or 27. There is no link between the arrangement alleged involving some dealers and the denial of access to rebates, discounts and incentive payments. The utilisation of contractual provisions by the respondent as alleged is not the kind of preventing, restricting or limiting of the supply or acquisition of goods and services that is referred to in s 4D. It is also pointed out by counsel for the respondent that the pleading fails to identify the particular persons or classes of persons in respect of whom the supply or acquisition of goods or services would be prevented, restricted or limited.