FEDERAL COURT OF AUSTRALIA

Australian Wool Innovation Ltd v Newkirk [2005] FCA 290

PRACTICE AND PROCEDURE – pleading – motion for striking out statement of claim under O 11 r 16 of Federal Court Rules – statement of claim must plead material facts - while a conclusion may itself constitute a material fact, a conclusion without exposure of the primary facts on which it is based is likely to render the pleading objectionable – facts pleaded at unacceptable level of generality – statement of claim struck out with leave to replead

TRADE AND COMMERCE – Trade Practices - secondary boycotts for the purpose of causing substantial loss or damage – boycotts affecting trade or commerce - allegation of conduct in concert by several respondents – concerted conduct must actually hinder or prevent supply or acquisition of goods rather than create the mere possibility that hindrance or prevention might occur – pleading must go beyond repeating the language of the Trade Practices Act 1974 (Cth) to reveal the facts which bring a claim within that language -  accessorial liability does not attract the extraterritorial application of the Trade Practices Act 1974 (Cth)

TORTS  - Tort of conspiracy requires that conspirators have as their dominant purpose the intent of injuring the claimants  - the object or objects of the conspiracy should be clearly identified – to make out the tort of intimidation there must be found an intention to harm the claimant

Trade Practices Act 1974 (Cth) s 5(1), 45, 45D, 45DB, 51AA, 80(1), 75B, 75B(1)(d), 82

Federal Court Rules O 4 r 6(2)(b), O 6 r 2(a), O 6 r 8, O 9 r 7, O 11 r 2, O 11 r 16, O 13 r 3(1), O 20 r 2

Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568 cited

Australian Builders’ Labourers’ Federated Union of Workers – Western Australian Branch v J-Corp Pty Ltd (1993) 42 FCR 452 applied

Australian Broadcasting Commission v Parish (1980) 43 FLR 129 considered

Beach Petroleum NL v Johnson (1991) 105 ALR 456 considered

Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 applied

Bray v F Hoffman-La Roche Ltd (2002) 190 ALR 1 applied

Bruce v Odhams Press Ltd [1936] 1 KB 697 cited

Chan Cuong Su trading as Ausviet Travel v Direct Flights International Pty Ltd (1998) ATPR 41-662 cited

Charlie Carter Pty Ltd v The Shop, Distributive & Allied Employees’ Association of Western Australia (1987) 13 FCR 413 considered

Concrete Contractors (NSW) Pty Ltd v Nelson (1990) 109 CLR 594 cited

Council for the City of the Gold Coast v Pioneer Concrete (Qld) Pty Ltd (1998) 157 ALR 135 applied

Dataflow Computer Services Pty Ltd v Goodman (1999) 168 ALR 169 applied

Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 applied

Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169 applied

Hughes v Western Australian Cricket Association Inc (1986) 69 ALR 660 cited

Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Aust) Pty Ltd WAG 83 of 1991, 3 September 1991 (unreported) considered

Latham v Singleton [1981] 2 NSWLR 843 cited

Mick Skorpos Petrol Discount King Pty Ltd v The Shell Company of Australia Ltd (1997) ATPR 41-556 cited

Mitanis v Pioneer Concrete (Vic) Pty Ltd (1997) ATPR 41-591 applied

McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 applied

Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR 41-522 cited

Sammy Russo Supplies Pty Ltd v Australian Safeway Stores Pty Ltd (1998) ATPR 41-641 cited

State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499 cited

Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 27 ALR 367 cited

The King and the Attorney-General of the Commonwealth v The Associated Northern Collieries (1912) 14 CLR 387 cited

Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) 83 ALR 299 cited

Trade Practices Commission v David Jones (Australia) Pty Ltd (1985) 7 FCR 109 cited

P McClelland, ‘Sections 45D and 45E of the Trade Practices Act 1974: Re-Born or Misconceived?, Australian Bar Review, Vol 16, No 2, 1997, pp 118-137

J D Heydon, Trade Practices Law, Lawbook Co, Sydney, 2001

Miller’s Annotated Trade Practices Act, 25^th edn, Lawbook Co, Sydney, 2004

Trindade & Cane, The Law of Torts in Australia, 3rd edn, Oxford University Press, Melbourne, 1999

Bullen & Leake & Jacob’s Precedents of Pleadings, Vols 1 & 2, 15^th edn, ed Lord Brennan QC and W Blair QC, Sweet & Maxwell, London, 2004

AUSTRALIAN WOOL INNOVATION LTD & ORS v INGRID NEWKIRK & ORS

NSD 1630 OF 2004

HELY J

22 MARCH 2005

SYDNEY

THE COURT ORDERS THAT:

1.         The Amended Statement of Claim be struck out, with liberty to the applicants to replead.

2.         The applicants pay the first respondent’s costs of the motion, and any costs thrown away as a result of the making of these orders.

3.         The parties confer, and bring in short minutes of order to give effect to the conclusions reached in this judgment, including a timetable for the preparation of any proposed further amended statement of claim.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     An application and statement of claim were filed in this matter on 9 November 2004.  Australian Wool Innovation Ltd (‘AWIL’) was the sole applicant.  AWIL claims that it represents some 30,000 Australian woolgrowers.  There were four respondents to the application, namely three individuals who are American citizens ordinarily resident in the USA, and the fourth respondent, People for the Ethnical Treatment of Animals Inc (‘PETA’), a company incorporated under the laws of Virginia, but which is alleged at material times to have carried on business in Australia.

2                     The application and statement of claim were served on the first respondent, apparently whilst she was visiting Australia.  Leave to serve the originating process outside the jurisdiction has not been sought, and the other respondents have not been served.  The first respondent has entered a conditional appearance, and by notice of motion filed on 25 November 2004 has applied for orders that the proceedings be dismissed or stayed pursuant to O 20 r 2 of the Federal Court Rules (‘the Rules’) or that the pleading be struck out pursuant to O 11 r 16 of the Rules or that the originating process be set aside under O 9 r 7 of the Rules.

3                     On 18 February 2005 AWIL applied by notice of motion to join a further 103 persons or companies as applicants and a further 6 persons as additional respondents to the proceedings.  The additional applicants are said to be persons or companies who are Australian woolgrowers represented by AWIL.  The additional respondents are said to be servants or agents of PETA.  The ninth respondent is an American citizen, the other additional respondents are either citizens of Australia who are ordinarily resident in Australia, or in the case of the eighth respondent, a company registered in NSW.  Leave to file an amended application and an amended statement of claim was sought.

4                     An amended statement of claim (‘the ASC’) was filed in Court on 11 March 2005.  The ASC was treated by the parties as being the subject of the first respondent’s motion filed on 25 November 2004. 

5                     The addition of parties to existing proceedings is effected by means of an order of the Court: O 6 r 8, hence the Court’s leave to file the ASC is probably required, notwithstanding the provisions of O 6 r 2(a) and O 13 r 3(1).

The applicants’ claims

6                     In very broad terms, the ASC alleges that the respondents have announced and implemented what they have described as an ‘Australian wool boycott’ (‘the boycott’) the purpose of which is to stop the overseas sale of wool produced in Australia until the Australian wool industry discontinues the use of the veterinary surgical technique known as mulesing, and until it ceases the export of live sheep for sale as meat.  The conduct complained of falls into four principal stages:

            (i)         the initial announcement by the respondents in Australia and overseas of the boycott of Australian wool;

            (ii)        the intimidation of US and European retailers (including Italian garment manufacturer Benetton Group SpA) with a view to procuring agreement from the retailers not to purchase products containing Australian wool;

            (iii)       the holding of protests in support of the boycott both in Australia and overseas; and

            (iv)       the holding of protests and the carrying out of other intimidatory conduct in Australia and overseas specifically targeting Benetton Group SpA (‘Benetton’) because of its failure to agree not to trade in goods made of Australian wool, which protests and conduct were intended as an example to Benetton and the other US and European retailers which had so far not agreed to PETA’s demands.

7                     The respondents’ conduct is said to have resulted in:

            (a)        contraventions of s 45D and 45DB of the Trade Practices Act 1974 (Cth) (‘the TPA’);

            (b)        unconscionable conduct in contravention of s 51AA of the TPA;

            (c)        accessorial liability for such of the respondents who did not themselves commit the contraventions of the TPA;

            (d)        the tort of conspiracy; and

            (e)        the tort of intimidation.

8                     The relief sought in the amended application includes an order pursuant to s 80(1) of the TPA restraining the respondents from threatening clothing retailers that unless they agree not to purchase any goods made from Australian wool, the respondents will publish matter and stage demonstrations at the retailers’ commercial premises that will harm the retailers’ trade, as well as damages both under s 82 of the TPA and under the general law.

The conduct alleged

9                     The conduct on the part of the respondents (or some of them) on which the applicants rely in support of the pleaded causes of action is said to have occurred on various dates between October 2004 and February 2005.  Some of the conduct is said to have taken place in Australia, although much of it is said to have occurred outside Australia.  The conduct pleaded in pars 18-33 (‘the pleaded conduct’) may be summarised as follows:

            (a)        the first, second, fourth, fifth, sixth, seventh, eighth and ninth respondents have published announcements of the boycott on web sites, and in media interviews, and news releases.  One of the particularised media interviews was given by the first respondent in Australia on the 60 Minutes program;

            (b)        the first, fourth and ninth respondents have intimidated two retailers in the USA (Abercrombie & Fitch and J Crew) and one retailer in the UK (New Look) into agreeing not to purchase any goods made of Australian wool by threatening to publish material defamatory of them and to trespass on their commercial premises;

            (c)        the second and fourth respondents published a letter to a UK retailer (Marks & Spencer Group Plc) urging it to no longer trade in products made of Australian wool;

            (d)        the fourth respondent called on about 24 US retailers not to purchase products containing Australian wool;

            (e)        the fourth and ninth respondents published an announcement in the US that US retailers which did not stop selling products containing Australian wool would face demonstrations and boycotts beginning in November 2004;

            (f)         the third and fourth respondents published a letter to Benetton asserting that it had been chosen as an ‘international target’ and threatening to publish matter and stage demonstrations at its commercial premises that would harm its trade, unless Benetton agreed not to trade in goods made of Australian wool;

            (g)        the second and fourth respondents published letters to two US retailers (Kellwood Company and J C Penney Inc) threatening to make each of them the target of a campaign unless each agreed not to purchase Australian wool or any products containing Australian wool until the practices of live export and mulesing are eliminated;

            (h)        the second, fourth and tenth respondents published letters to a UK garment manufacturer (Laura Ashley Holding Plc) threatening to make it the target of a campaign unless it agreed not to purchase Australian wool or any products containing Australian wool until the practices of mulesing and live export are eliminated;

            (i)         the fourth, sixth and eighth respondents organised and carried out protests outside retailers’ stores in Pitt Street Mall, Sydney on 1 December 2004 in which potential customers were told not to enter the stores, and material was distributed which conveyed defamatory imputations that the applicants mistreat sheep, are cruel to sheep and/or mutilate sheep;

            (j)         the respondents communicated to Australian retailers in about December 2004, threatening to make them the target of a campaign unless they agreed not to purchase Benetton products;

            (k)        the fourth, fifth, seventh and eighth respondents published announcements in Australia that PETA would protest against Benetton at its outlets in Sydney and Melbourne, and nationally at David Jones department stores during the busy post-Christmas sales period;

            (l)         the tenth respondent published a letter to Benetton stating that Benetton must not buy Australian wool, and threatening to publish matter defamatory of Benetton to the general public in relation to Benetton’s alleged involvement in cruelty towards sheep;

            (m)       the fourth respondent organised and carried out protests outside Benetton stores in New York, Chicago and other American cities, in which potential customers were told not to enter the stores, and material was distributed which conveyed defamatory imputations that Benetton mistreats sheep, is cruel to sheep and/or mutilates sheep; and

            (n)        the fourth, sixth, seventh and eighth respondents organised and carried out protests outside retailers’ stores in Pitt Street Mall on 10 February 2005 in which potential customers were told not to enter the stores, and material defamatory of the applicants was distributed.

10                  The only allegation made with respect to the first respondent of involvement in conduct occurring in Australia is that pleaded in the ASC par 18 (see 9(a) above) and par 29 (see 9(j) above).  The only allegation made with respect to the first respondent of involvement in conduct occurring outside Australia is that pleaded in the ASC par 20 (see 9(b) above).

11                  Even though particular respondents are alleged to have engaged in specific conduct, par 39 of the ASC contains an entirely unparticularised allegation that the pleaded conduct was engaged in by the respondents in concert with each other.

Australian wool production chain

12                  Paragraphs 14-17 of the ASC allege that Australian wool is used in the manufacture of garments which are sold by retailers to consumers.  The steps in the production and supply of such garments are said to include the following:

            (a)        Australian wool growers (ie wool growers represented by AWIL and the 2^nd–101^st applicants) and Australian wool exporters (ie the 102^nd–104^th applicants) sell Australian wool to the Australian wool acquirers (ie wool processors or their intermediaries);

            (b)        wool processors (not further described) process the wool into usable yarn (‘Australian wool yarn’);

            (c)        wool processors supply Australian wool yarn to textile manufacturers and garment manufacturers;

            (d)        textile manufacturers manufacture fabric (‘Australian wool fabric’) using at least some Australian wool yarn;

            (e)        textile manufacturers (not further described) supply Australian wool fabric to garment manufacturers;

            (f)         garment manufacturers (not further described) manufacture garments (‘Australian wool garments’) using at least some Australian wool yarn or some Australian wool fabric;

            (g)        garment manufacturers supply Australian wool garments to retailers, or in the case of garment manufacturers who are also retailers, to consumers; and

            (h)        retailers (not further described) sell Australian wool garments to consumers.

The s 45D case

13                  Paragraphs 34-39 of the ASC allege that the pleaded conduct (summarised above) was and is calculated:

            (a)        to deter consumers from acquiring Australian wool garments from retailers (including garment manufacturers who are also retailers);

            (b)        to deter retailers from acquiring Australian wool garments from garment manufacturers;

            (c)        to deter garment manufacturers from acquiring Australian wool fabric and Australian wool yarn from the suppliers thereof;

            (d)        to deter textile manufacturers from acquiring Australian wool yarn from the suppliers thereof; and

            (e)        to deter Australian wool acquirers from acquiring Australian wool from Australian wool growers and Australian wool exporters.

14                  Three s 45D cases are then pleaded in relation to different levels in the Australian wool production chain.  The respondents are alleged to have engaged in conduct in concert with each other that hindered or prevented:

            (a)        each of the Australian wool acquirers [the third person] from acquiring wool from the applicants [the fourth person].  But for that conduct each of the Australian wool acquirers was likely to acquire substantial quantities of Australian wool.  The conduct was engaged in for the purpose and would have or be likely to have the effect, of causing substantial loss or damage to the business of the applicants;

            (b)        retailers [the third person] from acquiring Australian wool garments from garment manufacturers offering to supply such garments [the fourth person].  The conduct was engaged in for the purpose and would have or be likely to have the effect, of causing substantial loss or damage to the business of the garment manufacturers; and

            (c)        consumers [the third person] from acquiring Australian wool garments from retailers or garment manufacturers offering or proposing to supply such garments [the fourth person].  The conduct was engaged in for the purpose and would have or be likely to have the effect, of causing substantial loss or damage to the business of such retailers or garment manufacturers.

15                  Section 5 of the TPA provides (inter alia) that Part IV of the TPA extends to the engaging in conduct outside Australia by bodies corporate incorporated or carrying on business within Australia, or by Australian citizens or persons ordinarily resident within Australia.  Thus the TPA has been constructed on the assumption that when conduct is made a contravention of the Act it is only conduct occurring in Australia that is dealt with, unless the conditions set out in s 5 apply to extend the operation of the TPA to extraterritorial conduct: Bray v F Hoffman-La Roche Ltd (2002) 190 ALR 1 at [47] to [52]; Miller’s Annotated Trade Practices Act, 25^th ed, Lawbook Co, Sydney, 2004, at 126.

16                  The ASC has been drafted by reference to the same assumption insofar as the claims of contravention of s 45D of the TPA are concerned, as pars 49, 56 and 63 are allegations of contravention on the part of the first to tenth respondents based on conduct on the part of those respondents which took place within Australia, whereas pars 50, 55 and 62 allege contraventions, but only on the part of the fourth, fifth, sixth, seventh, eighth and tenth respondents, by reason of conduct occurring outside Australia.  On the case as pleaded, s 5(1) of the TPA applies to those persons, but not to the other respondents, including the first respondent.

The s 45DB case

17                  The pleading of the s 45DB case is confined to par 49(d) of the ASC, and perhaps, par 46.  Paragraph 46 alleges that the applicants supply Australian wool to Australian wool acquirers in trade or commerce between Australia and places outside Australia.  In substance, the effect of par 49(d) is that conduct which is said to result in a contravention of s 45D also results in a contravention of s 45DB, perhaps when taken in conjunction with par 46.

The ‘strike out’ application – the s 45D cases and the s 45DB case

18                  The grounds on which it is said that the claims alleging contravention of s 45D and s 45DB of the TPA should not be permitted to proceed in relation to the first respondent are set out below:

            (a)        The only allegation of fact involving conduct by the first respondent is par 18, where it is alleged that she participated in an interview on the 60 Minutes program in Australia.  If this conduct alone is said to be sufficient to establish primary liability under s 45D or s 45DB, this should be made clear.

            (b)        No material facts are pleaded to establish that the first respondent acted in concert with all other respondents.

            (c)        Except for the applicants, the pleading does not allege the identity of any person who falls within the categories of Australian wool acquirers, garment manufacturers, retailers or consumers.  Hence the first respondent does not know the case she has to meet as she is not told who are the persons who are alleged to have suffered substantial loss or damage, nor who are the persons who are hindered or prevented from acquiring wool or Australian wool garments.

            (d)        All the pleading does is to recite the language of the section.  It does not plead the material facts relied upon.  In particular, no material facts are pleaded to support the allegation that:

                        (i)         the first respondent’s purpose was to cause substantial loss or damage to the business of each of the applicants, or to the business of each of the garment manufacturers offering to supply Australian wool garments, or the business of retailers who offered Australian wool garments for sale and/or garment manufacturers offering or proposing to supply Australian wool garments for sale;

                        (ii)        each member of those classes suffered substantial loss or damage; and

                        (iii)       each member of the classes of Australian wool acquirers, retailers and consumers was hindered or prevented from acquiring goods from the relevant supplier.

            (e)        A number of the allegations made are simply fanciful.  An example is the allegation that the conduct alleged in fact caused substantial loss and damage to each of the classes of persons who are alleged to have suffered loss and damage, and in fact hindered or prevented the supply of goods in the manner alleged.  The generality of the pleading involves the proposition that the conduct alleged caused substantial loss and damage to every retailer who sells Australian wool garments.

            (f)         The alleged contravention of s 45DB in par 49(d) cannot be sustained by the matters referred to in that paragraph as there is no allegation of any hindrance in the movement of goods between Australia and places outside Australia.

Consideration

19                  The applicants contend that the strike out application is misconceived, because the applicants are required to plead the material facts on which they rely, rather than to particularise the evidence by which those facts are to be proven, and in any event, if there is a want of particularity in the pleading, the defect can and should be cured by the provision of further particulars.  The issue is whether the applicants’ claim has been pleaded with sufficient particularity to enable the preparation of a defence.

20                  A statement of claim is required to show the material facts on which it is based (O 4 r 6(2)(b)) but not the evidence by which those facts are to be proved (O 11 r 2).  A pleading which discloses no reasonable cause of action, or which has a tendency to cause prejudice, embarrassment or delay in the proceedings, or is otherwise an abuse of the process of the Court may be struck out (O 11 r 16).  The proceedings may also be stayed or dismissed in the circumstances referred to, under O 20 r 2.

21                  As Lindgren J observed in Australian Automotive Repairers’ Association (Political Action Committee) Inc v NRMA Insurance Ltd [2002] FCA 1568 at [15] the requirement that material facts be stated has two purposes: the natural justice purpose of adequately informing the other party of the nature of the case alleged against that party; and the purpose of providing a basis for determining whether that alleged case, so exposed, constitutes a cause of action cognisable at law.  Particulars serve only the former purpose.  It is not the function of particulars to remedy an omission of material facts.  See also, as to the dual function of pleadings: Mick Skorpos Petrol Discount King Pty Ltd v The Shell Company of Australia Ltd (1997) ATPR 41-556 (Mansfield J).

22                  However, as Lindgren J also observed (at [17]), notwithstanding the well established distinction between material facts and particulars (as to which see the well known passage from the judgment of Scott LJ in Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712-713) a less strict view may be taken now than was taken previously: cf Beach Petroleum NL v Johnson (1991) 105 ALR 456 at 466.  According to this view, the particulars contained in a statement of claim may be taken into account for the purpose of determining whether the statement of claim amounts to a statement of all the material facts.  But even this more flexible view of pleading does not countenance the omission of material facts from the statement of claim regarded as a whole.  Accordingly, if the pleading regarded as a whole does not contain a clear statement of all the material facts on which the applicant relies, it is no answer that the respondent can request the provision of further particulars.

23                  A statement of claim must set out clearly not just the bare claim that is made, but also the material facts on which it is based including facts that, if not specifically pleaded, might take the other party by surprise: Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd (1996) ATPR 41-522, at 42-679.  The material facts are all of those which are necessary for the purpose of formulating a complete cause of action: Bruce v Odhams Press Ltd (supra) at 712.  In the context of a case arising under Part IV of the TPA, an applicant must plead material facts sufficient to make out each asserted element of the cause of action propounded: Chan Cuong Su trading as Ausviet Travel v Direct Flights International Pty Ltd (1998) ATPR 41-662 at 41,374.  A statement of a conclusion drawn from matters of fact not themselves alleged in the pleading is not a statement of a material fact: Trade Practices Commission v David Jones (Australia) Pty Ltd (1985) 7 FCR 109 at 114; Sammy Russo Supplies Pty Ltd v Australian Safeway Stores Pty Ltd (1998) ATPR 41-641.

24                  On the other hand, French J has expressed the view that a conclusion may constitute a material fact: Charlie Carter Pty Ltd v The Shop, Distributive & Allied Employees’ Association of Western Australia (1987) 13 FCR 413; Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Aust) Pty Ltd WAG 83 of 1991, 3 September 1991 (unreported).  In his Honour’s view, the real issue in a case where an objection is raised that a conclusion only is pleaded is whether the facts are pleaded at too great a level of generality to allow the pleading to serve its intended purpose.  Drummond J agreed with that approach in State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] FCA 499.  In Charlie Carter (supra) it was alleged that the respondents were acting in concert with each other, and it was unclear whether the ‘concert’ was said to arise by inference from the overt acts pleaded, or whether it was an additional element, and the pleading was silent as to what it comprised.  If, as appeared to be the case, the statement of claim alleged ‘concert’ as an independent element, then what was pleaded was a conclusion which was unsatisfactory, if only because the allegation of concert was at ‘too great a level of generality or, put another way, [was] insufficiently particular’ (at 418).  The permissible level of generality at which material facts may be pleaded differs depending on the subject matter, but it must be consistent with the goal of defining the issues and informing the parties of the case to be met (at 417).  In the ordinary case, an allegation of a conclusion without exposure of the primary facts on which the conclusion is based is likely to render the pleading objectionable, even if a conclusion may itself constitute a material fact.

25                  A statement of claim which simply repeats the language of a provision of the TPA, and then baldly asserts a contravention of that provision, without more, will be struck out: McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 at [23].

26                  It is now well settled in the context of Part IV and V of the TPA that if damages are sought, material facts to show the causal link between the conduct constituting the contravention of the TPA and the damage must be alleged: Bond Corporation Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222; Mitanis v Pioneer Concrete (Vic) Pty Ltd (1997) ATPR 41-591 at 44,154; Sammy Russo Supplies Pty Ltd v Australian Safeway Stores Pty Ltd (supra) at 41,097; McKellar v Container Terminal Management Services Ltd (supra) at [26]; Council for the City of the Gold Coast  v Pioneer Concrete (Qld) Pty Ltd (1998) 157 ALR 135 at 141.

Specific complaints

18(a) and (b) – ‘acting in concert’

27                  The conduct in which the first respondent is alleged to have engaged in Australia is that referred to in the ASC pars 18(a) and (b).  The conduct in which the first respondent is alleged to have engaged outside Australia is that referred to in the ASC par 20.  Paragraph 39 of the ASC alleges that the pleaded conduct was engaged in by the respondents in concert with each other.  Acting in concert involves knowing conduct, the result of communications between the parties and not simply simultaneous actions occurring spontaneously: Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees’ Union (1979) 27 ALR 367 at 373.  However, as a matter of evidence, acting in concert can be inferred from the conduct of the parties, as where there is such a concurrence of time, character, direction and result as to lead to the inference that apparently separate acts were the outcome of pre-concert: The King and the Attorney-General of the Commonwealth v The Associated Northern Collieries (1912) 14 CLR 387 at 400.

28                  It is an essential element of a contravention of s 45D that the respondent, ‘in concert with a second person …’ engaged in conduct which otherwise involves a contravention of s 45D.  The ASC par 39 makes a bald assertion in terms of the section, without pleading any facts which, if proven, would establish that element.  It is plain that many of the paragraphs and sub-paragraphs in the ASC pars 18-33 do not allege conduct which, on the face of it, is concerted conduct on the part of all respondents, as particular paragraphs or sub-paragraphs are confined to particular respondents.  For example, no facts are pleaded to establish that the first respondent acted in concert with the fourth, sixth and eighth respondents in publishing their news release of 30 November 2004 referred to in par (c) of the particulars to the ASC par 18.

29                  As in Charlie Carter (supra) it is apparent that the applicants rely on something more than an inference to be drawn from the pleaded conduct to establish that the respondents acted in concert.  But what is that ‘something more’?  The ASC par 68 pleads accessorial liability on the part of the respondents to the extent that any of the respondents did (not) itself, himself or herself commit the contravention of s 45D which the applicants allege.  Particulars are given of that allegation including (b) that the first respondent is the President of the fourth respondent and directs its activities.  That may be the ‘something more’.

30                  But the ASC par 39 is an element in establishing that the respondents did contravene s 45D, and it cannot simply be assumed that particulars given of a claim which postulates that there is no primary liability in a particular respondent are the facts on which the applicants intend to rely to establish an essential element of the primary liability of all respondents.

31                  Paragraph 39 of the ASC (and dependent paragraphs) should be struck out as the ASC fails to plead the primary facts on which the conclusion pleaded in par 39 is based.  The ASC par 68(b) suggests that the applicants may be able to plead a case that at least the first respondent and the fourth respondent acted in concert in relevant respects.  The ASC par 68(l) is objectionable because it assumes the matter which it seeks to establish, but the particulars to par 68 generally suggest that the applicants may be able to plead a case that others of the respondents and the fourth respondent acted in concert in relevant respects.  It is less clear whether the applicants are able to plead (or for that matter, would wish to plead) facts to establish that all respondents acted in concert with each other.  For these reasons leave to replead or further amend the amended statement of claim should be given.

18(c), (d) and (e) – problems – pleading the terms of the TPA, not the facts

32                  The first respondent submits, in the words of her counsel Mr Smith SC, that one cannot plead material facts by reference to hypothetical categories.  The names of the persons or companies who were hindered or prevented from acquiring goods, and the identity of the persons whose businesses are likely to be substantially and adversely affected thereby is essential if the first respondent is to know the case she has to meet.  Mr Littlemore QC’s response is that the respondents’ conduct is continuing and that the harm done by the respondents’ conduct is at an early stage of development.  It is sufficient to plead the classes of persons who are affected by the pleaded conduct, and the identities of the particular persons said to fall within a designated class can and will be provided in the fullness of time.

33                  For there to be a contravention of s 45D, there must be at least two persons who concert, and third and fourth persons between whom the process of supply or acquisition is hindered or prevented.  If one commences the analysis at the bottom of the Australian wool chain, the applicants’ case is that the pleaded conduct hindered or prevented consumers (third persons) from acquiring Australian wool garments from retailers or garment manufacturers offering or proposing to supply such garments (fourth persons).

34                  ‘Prevents’ suggests a total cessation of dealings between the third person and the target; ‘hinders’ suggests that they have been made more difficult: J D Heydon, Trade Practices Law, Lawbook Co, Sydney, 2001 at [10.130].  ‘Hinder’, in the context of s 45D has received a broad construction, as in any way affecting to an appreciable extent the ease of the usual way of supplying or acquiring goods or services: Devenish v Jewel Food Stores Pty Ltd (1991) 172 CLR 32 at 45-46 (Mason CJ); Australian Builders’ Labourers’ Federated Union of Workers – Western Australian Branch v J-Corp Pty Ltd (1993) 42 FCR 452 at 460.

35                  In Australian Broadcasting Commission v Parish (1980) 43 FLR 129, Deane J (with whose judgment the other members of the Court agreed in this respect) said at 153:

‘The actual cessation of supply or acquisition of goods or services is commonly the object and can represent the culmination of conduct in breach of s. 45D of the Act.  The conduct hindering or preventing supply or acquisition to which the section refers can be engaged in by threat and verbal intimidation as well as by physical interference with the actual activities.  The fact that the supplier or acquirer of goods or services is a party to the actual cessation of supply does not preclude the activities of others involved in the cessation from amounting to their engaging in conduct in concert of the type proscribed by the section.’

36                  Similarly in his (dissenting) judgment in Devenish v Jewel Food Stores Pty Ltd (supra) at 49-50, Deane J said:

‘Conduct which significantly disadvantages a trader because, and for so long as, it stocks a particular product hinders the acquisition by the trader of that product.  It would be an illogical and unduly constrictive construction of s. 45D(1) to hold that the imposition of economic damage upon a trader to force it to cease stocking a competitor’s product is not “conduct that hinders … the acquisition of” that product within the meaning of s. 45D unless and until the conduct has succeeded to the extent of actually preventing the trader from acquiring and supplying it.’

37                  The amended statement of claim does allege that some retailers were exposed to disadvantageous treatment because they had not agreed not to stock products made of Australian wool.  It would therefore follow from the judgments of Deane J referred to above that the pleaded conduct might, in fact, hinder or prevent at least some retailers from acquiring for resale products made of Australian wool, but whether this would be so in the case of all persons in the category of ‘retailers’ is a different question. Section 45D requires there to be an actual hindrance or prevention of the supply or acquisition of the goods or service in question; it is not sufficient to plead facts which do no more than suggest the possibility that hindrance or prevention might occur.

38                  In any event, the relevant allegation is that consumers were hindered or prevented from acquiring Australian wool garments from retailers, but no facts are pleaded which could establish that there was in fact any affect to an appreciable extent on the ease of the usual way in which consumers acquired Australian wool garments from retailers.  Neither the respondents, nor the Court should be left to speculate as to how this might have come about, assuming it did.  The applicants’ case may be that the operation of s 45D is enlivened because potential consumers were prevented from entering certain stores.  Another possibility (and there may be others) is that one or more retailers succumbed to PETA’s demands, and ceased stocking products made of Australian wool, hence there was no product available for acquisition.  But if that is the way in which the applicants’ case is to be put, they may be confronted with the view of the majority in Devenish v Jewel Food Store (supra) that conduct which prevents the supply of goods by a target corporation, without more, does not amount to the hindering or preventing of acquisition of those goods from the target corporation.

39                  I express no concluded view on that question, (on which I have not received any submissions) because to do so would be premature and the question may never arise.  I mention these two possible ways in which the applicants’ case might be put to illustrate the practical importance of the applicants being required to plead material facts sufficient to make out each essential element of the cause of action propounded.  The two examples of the way in which the case might be put raise quite different factual and legal questions.

40                  Similar problems emerge as one moves up the Australian wool production chain.  The applicants have created in the ASC a theoretical construct in which some retailers might or might not be hindered or prevented from acquiring Australian wool garments from garment manufacturers, rather than pleading facts which, if proven, would show that this has in fact occurred.  If the applicants wish to make out a sweeping case that the category of persons described as retailers were hindered or prevented from acquiring Australian wool garments then the facts necessary to sustain such a case need to be pleaded.  The pleaded facts cannot sustain so broad a claim.  If, on the other hand, the applicants wish to make out a narrower case that particular retailers were in fact deterred or hindered by the pleaded conduct from acquiring goods, then the necessary surgery on the pleading needs to be performed, including (but not limited to) pleading the facts relied upon to establish hindrance or prevention.

41                  The problem with the pleading is not so much that it fails to put a name on all participants.  Sometimes in some contexts, for example, it may be sufficient to allege that consumers were prevented from acquiring a product without being able to name those affected.  Rather, the problem is that the pleading repeats the language of the TPA, rather than pleading the facts which bring the applicants’ claim within that language.

42                  Similar observations apply in relation to the next level in the Australian wool production chain.

43                  The s 45D case as pleaded also suffers from the vice that no facts are pleaded which show the causal link between the conduct constituting the contravention of the TPA and the damage alleged to have been suffered by the applicants on any of them.

44                  The amended statement of claim should be struck out insofar as it pleads a case based on contravention of s 45D of the TPA, with liberty to replead.

18(f) – s 45DB

45                  Section 45DB(1) of the TPA provides:

‘A person must not, in concert with another person, engage in conduct for the purpose, and having or likely to have the effect, of preventing or substantially hindering a third person (who is not an employer of the first person) from engaging in trade or commerce involving the movement of goods between Australia and places outside Australia.’

46                  The ASC par 49(d) alleges that all respondents have by their conduct within Australia contravened s 45DB of the TPA by reason of the matters referred to in pars 40 and 46 of the ASC.  Those paragraphs alleged that the respondents engaged in conduct with each other that hindered or prevented each of the Australian wool acquirers (ie wool processors or their intermediaries) from acquiring wool from the applicants, and that the applicants supply Australian wool to Australian wool acquirers in trade or commerce between Australia and places outside Australia.

47                  I have already found that the pleading is deficient insofar as acting in concert is pleaded, but not the primary facts, and insofar as hindrance or prevention is asserted, but not the primary facts.  However, in addition, the first respondent contends that this pleading is deficient insofar as it sets up a case involving contravention of s 45DB, as there is no allegation that any third person was hindered or prevented in the movement of goods.

48                  In his submissions, Mr Smith SC contended that if Benetton, for example, was induced not to purchase Australian wool products, that would not of itself be sufficient to enliven the operation of s 45DB.  I do not know whether this is an apt example, as the s 45DB case as presently pleaded is confined to overseas wool processors who purchase Australian wool from one or more of the applicants, and I do not know if Benetton conducts its business at that level.

49                  But in addition to the deficiencies in the s 45DB case which are consequential upon my findings in relation to the s 45D claim, there is no allegation of facts which could conceivably establish that the purpose and likely effect of the conduct within Australia was for the purpose and likely to have the effect of inducing a foreign wool processor not to buy Australian wool.

50                  Whether there is a contravention of s 45DB if an overseas person is induced not to buy Australian goods is something which I prefer not to attempt to decide in the abstract, without a pleading in its final form of a claim based on s 45DB, if there is to be one.  That preference is reinforced by the second reading speech delivered in the Senate which is referred to by Mr Robert McClelland in his article on s 45D and s 45E of the TPA (Australian Bar Review, Vol 16, No 2, 1997, at p 128), on which I have not had the benefit of any submissions.

51                  The ASC should be struck out insofar as relief is claimed based on a contravention of s 45DB, with liberty to replead.

Accessorial liability

52                  Paragraph 68 of the ASC alleges that the first respondent was an accessory under s 75B of the TPA to contraventions by the other respondents of s 45D, s 45DB and s 51AA of the TPA.

53                  The first respondent submits that the material facts alleged against the first respondent which are relied on to establish her knowledge of the essential elements of the contraventions of s 45D and s 45DB are not pleaded.  This submission was not developed in oral argument.  The particulars to the ASC par 68 allege that persons said to be primarily liable for contraventions of s 45D and s 45DB are officers, servants or agents of PETA, and that the first respondent is the President of and directs the activities of PETA.  This submission fails for that reason.

54                  Second, accessorial liability under s 75B is asserted against the first respondent in relation to conduct on the part of other respondents which took place outside Australia.  Section 75B occurs in Part VI of the TPA, which is not a part of the TPA which is given an extended operation by s 5(1).  This question was considered by Merkel J in Bray v F Hoffman-La Roche Ltd (supra), in which his Honour applied the general cannon of construction that an enactment will not be construed as applying to foreigners in respect of acts done by them outside the dominions of the sovereign power enacting, subject to a contrary action appearing.  His Honour held (at [55]) that the TPA did not evince a contrary intention and that s 75B is to be construed as only being applicable to conduct in Australia, noting that Wilcox J had come to a similar conclusion in Trade Practices Commission v Australia Meat Holdings Pty Ltd (1988) 83 ALR 299 at 355.

55                  The amended statement of claim should be struck out insofar as it alleges accessorial liability under s 75B of the TPA based on conduct occurring outside Australia.

56                  Third, it is alleged that the first respondent is liable under s 75B in respect of an alleged contravention by the fourth and eighth respondents of s 51AA of the TPA.  Paragraph 66 of the ASC effectively alleges that the pleaded conduct was in trade or commerce.  Whilst the ASC par 65(c) alleges that each of the fourth and eighth respondents engage in some trading or commercial activities, the first respondent submits that the pleaded conduct could not possibly be in trade or commerce: Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604.  Because s 51AA can have no application to the fourth and eighth respondents, the first respondent cannot be liable under s 75B.

57                  This submission should be rejected.  Whether the relevant conduct is ‘in’ trade or commerce involves factual questions including a consideration of the nature of any business conducted by the fourth respondent and the eighth respondent.  The question is whether the relevant conduct is that of a bystander commenting on trade or commerce in which others are engaged, rather than something done in that (or any other) trade or commerce: Dataflow Computer Services Pty Ltd v Goodman (1999) 168 ALR 169.

58                  It cannot be said that the applicants’ claim in this respect is so manifestly untenable that it should be summarily dismissed.

The conspiracy claim

59                  Like fraud, conspiracy is not an allegation that should lightly be made: Hughes v Western Australian Cricket Association Inc (1986) 69 ALR 660 at 700 (Toohey J).

60                  Conspiracy is the agreement of two or more persons to do an unlawful act, or to do a lawful act by unlawful means.  Historically, there are two kinds of conspiracy, the elements of which are distinct:

            (1)        an ‘unlawful means’ conspiracy in which the participants combine together to perform acts which are themselves unlawful; and

            (2)        a combination to perform acts which, although not themselves unlawful, are done with the sole or predominant purpose of injuring the claimant.

See Bullen & Leake & Jacob’s Precedents of Pleadings, Vol 2, 15^th edn, Sweet & Maxwell, London, 2004, at [50-01]; McKellar v Container Terminal Management Services Ltd (supra) at [135] – [154].

61                  Bullen & Leake identifies the necessary elements in an action in conspiracy at [50-01.1]:

‘The claimant must plead and prove the following necessary elements:

(i)        a combination or agreement between two or more individuals (required for both types of conspiracy);

(ii)       an intent to injure (required for both types of conspiracy but must be shown as the sole or predominant purpose for type (2) above);

(iii)      pursuant to which combination or agreement and with that intention certain acts were carried out;

(iv)      resulting loss and damage to the claimant.’

62                  A conspiracy can be proved without evidence of an express agreement.  A court is entitled to have regard to the overt acts pleaded, and to infer from those acts that there was an express agreement to further the common object of the combination.  All of those said to be parties to the conspiracy should be sufficiently aware of the surrounding circumstance, and share the same object, for it properly to be said that they are acting in concert.

63                  ‘Unlawful means’ includes crimes and tort and breaches of statutory provisions: Trindade & Cane, The Law of Torts in Australia, 3^rd edn, Oxford University Press, Melbourne, 1999at p 230.  A person is using unlawful means if they are doing an act which they are not at liberty to commit: Dresna Pty Ltd v Misu Nominees Pty Ltd [2004] FCAFC 169.  It is not open to a party to plead as an alternative to a substantive cause of action already pleaded the tort of conspiracy to commit the substantive wrong, nor can there be a common law conspiracy to contravene the TPA outside the form of conspiracy expressly provided for in s 75B(1)(d) of the TPA: McKellar (supra) at [195] and [197].  But the first respondent has not taken any objection to the ASC on this account, hence these matters can be put to one side.

64                  The tort requires an intention to injure.  As Kiefel and Jacobson JJ observed in Dresna Pty Ltd v Misu Nominees Pty Ltd (supra, at [7]) an agreement to do an unlawful act that results in damage to another party is not the same as a conspiracy to injure that party.  In order to prove a conspiracy a claimant must show that the wrongful act complained of was done with a design of injuring the claimant and that it did so.  According to their Honours, a conspiracy could be directed not only at a particular individual, but also at a class, in the sense of all members of the class.  Their Honours went on to say (at [123]) that the test for an action in conspiracy is: ‘what was the object of those combining when they acted as they did’.  They must have acted in order that, not with the result that, the claimant should suffer damage.

65                  The ASC pleads the conspiracy claim as follows:

‘69.      In or about August 2004, the First, Second, Third, Fifth, Sixth, Seventh, Ninth and/or Tenth Respondents, or any two or more of them, combined to commit an unlawful act or acts with the intention of harming the trade to the First to One Hundred and Fourth Applicants and/or the persons represented by the First Applicant.

            Particulars of unlawful acts

(a)       Threatening to publish defamation;

(b)       Threatening to publish injurious falsehoods;

(c)        Threatening to publish false and misleading statements;

(d)       Publishing defamatory statements;

(e)        Publishing injurious falsehoods;

(f)        Publishing false and misleading statements;

(g)       intimidation;

(h)       interference with contractual relations;

(i)        trespass;

(j)        conduct in breach of Section 45D and Section 45DB of the Trade Practices Act and section 45D of the Competition Code;

(k)       conduct in breach of Section 51AA of the Trade Practices Act.

70.       In the alternative to the preceding paragraph, in or about August 2004, the First, Second, Third, Fifth, Sixth, Seventh, Ninth and Tenth Respondents, or any two or more of them, combined to commit an act with the intention of harming the First to One Hundred and Fourth Applicants and/or the persons represented by the First Applicant.

            Particulars of act

Persuading potential purchasers to boycott goods manufactured with their products.

71.       The Applicants have suffered injury, loss and damage as a consequence of the Respondents’ said conduct.’

66                  The deficiencies in these paragraphs identified by counsel for the first respondent are as follows:

            (a)        the use of ‘and/or’ on the first line of par 69 potentially renders the entire allegation meaningless;

            (b)        further, the use of those words creates multiple possible combinations of persons involved in the alleged concerted act.  The allegation in that form is embarrassing;

            (c)        the persons who are said to have been the object of the conspiracy are not clearly identified, with the paragraph allowing for the focus to be on any one of the named applicants or the unnamed ‘represented’ parties;

            (d)        no acts are pleaded.  The ‘particulars’ are meaningless and embarrassing; and

            (e)        the alternative claim is equally vague and devoid of factual content.  There is no specification of the ‘particulars of fact’.

67                  The first respondent also submits that having regard to the fact that some or all of the named applicants may not have been the object of the conspiracy, the present allegation that all applicants have suffered injury, loss and damage is unsustainable.  Further, there is no particularisation of the alleged loss and damage suffered by each of the named applicants.

68                  In my opinion, the pleading of each of the conspiracy claims is deficient in the following respects:

            (a)        it fails to identify clearly the object or objects of the conspiracy.  The objects are said to be the first to 104^th applicants and/or the persons represented by AWIL (some 30,000 Australian wool growers).  If the objects of the conspiracy were all Australian wool growers, a question may arise as to whether such a conspiracy would be sufficiently targeted to be actionable at the suit of these particular claimants.  A pleading of a single conspiracy, the objects of which may be 104 people or 30,104 people is embarrassing as a conspiracy takes its shape and scope from its objects, and a conspiracy defined in that way is shapeless;

            (b)        it fails to plead the primary facts on which the conclusion of combination is based;

            (c)        it fails to plead the overt acts which were carried out pursuant to the combination with the intention of injuring the claimant;

            (d)        assuming the overt acts are the pleaded conduct, further facts need to be pleaded so as to show how that particular conduct is capable of injuring all of the applicants.  The linkage referred to earlier in these reasons is not there; and

            (e)        the ASC par 70 fails to plead that the conspirators had the sole or dominant intention of injuring the applicants.

69                  The ASC should be struck out insofar as it pleads a claim for damages for conspiracy, with liberty to replead.

Intimidation claim

70                  The tort of intimidation is available when a claimant suffers a loss because the defendant has threatened a third party with an unlawful act as a result of which the third party acts to the financial detriment of the plaintiff: Trindade & Cane (supra) at p 223: Latham v Singleton (1981) 2 NSWLR 843 at 858.  The claimant must show that although the threats are directed at a third party they are really aimed at the claimant: Bullen & Leake Vol 1 (supra) at [33-04].  A necessary ingredient of the tort of intimidation is the intention to harm the claimant: Trindade & Cane (supra) at 224.

71                  The intimidation claim pleads a number of communications sent by particular respondents to particular retailers threatening adverse consequences to the recipients of the communications unless they agreed not to purchase products containing Australian wool.

72                  The claim as pleaded is defective in the following respects:

            (a)        it fails to allege that any of the respondents had the intention to harm the 104 applicants or any of them;

            (b)        with the possible exception of Abercrombie & Fitch (ASC par 72) it fails to allege that the recipients of the communications complied with the demand;

            (c)        it fails to allege that the retailers were threatened with an unlawful act, or to plead facts (including foreign law) from which an inference to this effect can be drawn.  For example, the ASC par 73 simply alleges that a letter was sent to Marks & Spencer urging it to no longer trade in products made of Australian wool; and

            (d)        it fails to plead any link between the conduct complained of and any loss sustained by the 104 applicants.  For example, if it be shown that Abercrombie & Fitch succumbed to PETA’s demands, how does that occasion loss to all or any of the applicants?

73                  This claim should also be struck out, with leave to replead.

Conclusion

1.         The ASC should be struck out, with liberty to the applicants to replead.

2.         The applicants should pay the first respondent’s costs of the motion, and any costs thrown away as a result of the making of these orders.

3.         The parties should confer, and bring in short minutes of order to give effect to the conclusions reached in this judgment, including a timetable for the preparation of any proposed further amended statement of claim.

Associate:

Dated:              22 March 2005