FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2007] FCA 1390

PRACTICE AND PROCEDURE – application under O 22 r 4 of the Federal Court Rules for leave to withdraw an admission made in a defence of an implied representation – underlying facts would have to be proved in any event – no significant detriment or prejudice

Trade Practices Act 1974 (Cth) ss 45E, 76 and 80

Federal Court Rules O 22 r 4

Centrestate Exports Pty Ltd v Amarantos Shipping Co Ltd [2005] SASC 158 

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, BOVIS LEND LEASE LIMITED ACN 000 098 162, DAVID NOONAN AND LASLO LANCSAR

No NSD 1611 of 2006

FINN J

3 SEPTEMBER 2007

CANBERRA

THE COURT ORDERS THAT:

1.                  The Fourth Respondent has leave to amend para 33 of his Further Amended Defence to read: 

“The Fourth Respondent is not in a position to know and does not admit the first two paragraphs of paragraph 36 of the further amended statement of claim but does admit the words to the effect of those particularised except that he does not admit that the words were said in a private meeting.” 

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

REASONS FOR JUDGMENT

1                     The fourth respondent, Laslo Lancsar, has applied under O 22 r 4 of the Federal Court Rules for leave to withdraw an admission made in his defence in proceedings brought against him alleging he relevantly participated under ss 76 and 80 of the Trade Practices Act 1974 (Cth) in a contravention by the second respondent, Bovis Lend Lease Limited, of s 45E of that Act. 

2                     The applicant, the Australian Competition and Consumer Commission, in its Further Amended Statement of Claim pleaded at para 35 that a meeting between Mr Lancsar and Mr Noonan, both of whom were officials of the Construction, Forestry, Mining and Energy Union, and Mr Hensley and Mr Little of Bovis took place in private and that at that meeting Mr Noonan said words to the effect that the CFMEU would not continue negotiations with Bovis regarding a joint national agreement between the two and would start shutting down projects around the country unless Bovis took immediate action to resolve the union’s concerns relating to the use made of sub-contractors by Bernmar and that he wanted the issue of Bernmar’s use of sub-contractors fixed now.  In the ensuing paragraph (para 36) it is claimed that Mr Noonan impliedly represented that the CFMEU required Bovis to cease acquiring plasterboard services from Bernmar and terminate Bernmar’s contract with Bovis as a pre-condition to the CFMEU continuing negotiations with Bovis regarding their national agreement.  The particulars indicated that this implied representation arose from the statements pleaded in para 35 and several express oral representations made by Mr Noonan during the private meeting, i.e.

“In response to Hensley’s question ‘what do you expect us to do?’, Noonan said, words to the effect, ‘[y]ou’ll think of something creative.  You guys are professionals at screwing subbies, we don’t need to tell you how to do your job.’”

3                     Lancsar’s Further Amended Defence to the above statement of claim in large measure admitted the substance of what had been pleaded against him.  In particular, although he did not admit the totality of what was pleaded in para 35 and, in particular, that Noonan said the CFMEU would start shutting down projects around the country, he admitted the implied representation pleaded in para 36.  It is this admission relating to the implied representation that Mr Lancsar now wishes to withdraw and in its stead to plead:

“The Fourth Respondent is not in a position to know and does not admit the first two paragraphs of paragraph 36 of the further amended statement of claim but does admit the words to the effect of those particularised except that he does not admit that the words were said in a private meeting.” 

4                     The relevant principles governing the grant of leave to withdraw an admission have been canvassed in recent authorities to which I was taken both by counsel for Mr Lancsar and counsel for the ACCC.  For present purposes it is sufficient for me to refer to the decision of Debelle J in Centrestate Exports Pty Ltd v Amarantos Shipping Co Ltd [2005] SASC 158 where, after considering the authorities that had been traversed in recent case law, his Honour said (at para 32) of the discretion to grant leave:

“The overriding consideration is the interests of justice. The Court will not lightly permit a party to withdraw an admission where the other party has acted to its detriment on the admission or is otherwise prejudiced by the withdrawal. It is plainly necessary to have regard to all relevant factors including the nature and importance of the admission, the circumstances in which the admission was made, whether the admission was made deliberately or inadvertently, the reason given for the application to withdraw, the detriment or prejudice which might be caused to the other party and the stage which the proceedings have reached, and whether the admission is contrary to the facts. The list of relevant factors affecting the Court’s decision will plainly vary from case to case.”

5                     Given the subject matter of the admission (which involves the acceptance of an asserted characterisation of what was said), it would have taken little to induce me to grant the leave, the more so as the primary facts upon which the implication is said to arise would have to be proved in any event by the ACCC in this proceeding.

6                     The ACCC opposes the grant of leave largely on the basis of what it asserts is (i) the unsatisfactory nature of the affidavit put on by Mr Lancsar’s legal adviser to explain the reasons why leave is sought;  and (ii) correspondence between its own lawyers and Mr Lancsar’s legal adviser concerning the admissions generally made by Mr Lancsar.  As to the latter, the burden of the letter to Mr Lancsar’s lawyers, having acknowledged that he had admitted generally the substance of the factual matters alleged by the ACCC, sought to enquire whether he was interested in cooperating with the ACCC with a prospect of the action being discontinued against him (although the letter did point out it had no instructions in relation to offering him a client cooperation agreement).  The letter did not deal explicitly with the admission relating to para 36 of the Further Amended Statement of Claim.  Mr Lancsar’s solicitor’s affidavit and annexed letter simply assert that Mr Lancsar instructed him that he does not recall giving instructions in relation to para 36 of the Further Amended Statement of Claim and that if he gave those instructions to admit to the whole of the paragraph he must have misunderstood the paragraph or made a mistake.  He asserts that para 33 is not accurate, “both in relation to the first two paragraphs as well as to the place the alleged words were said”.  The annexed letter did not refer to the ACCC’s correspondence.

7                     In my view it is unsurprising no such reference was made.  That letter was general in character, having an object of seeking guardedly to secure the cooperation of Mr Lancsar with the ACCC.  It is unsurprising that Mr Lancsar gave instructions to his lawyer not to respond to it.  The circumstances of the case are, in my view, one where it is in the interests of justice that the withdrawal be permitted.  The ACCC might understandably be annoyed at this withdrawal from an otherwise relatively comprehensive series of admissions being made, but I do not consider that any significant detriment or prejudice will be occasioned by the withdrawal. 

8                     Accordingly I give the leave that is sought by Mr Lancsar.   

Associate:

Dated:         4 September 2007