Federal Court of Australia

ATC Insurance Solutions Pty Ltd v United Firefighters’ Union of Australia [2023] FCA 566

ORDERS

THE COURT ORDERS THAT:

1.    The respondent’s interlocutory application dated 19 December 2022 be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’CALLAGHAN J

Introduction

1    The respondent seeks summary judgment alternatively the striking out of the applicant’s statement of claim dated 8 November 2022.

The pleaded case

2    The applicant, ATC Insurance Solutions Pty Ltd (ATC or the applicant), is an insurance provider. The respondent, the United Firefighters’ Union of Australia (UFU or the respondent) is an organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth). ATC provided income protection insurance to the UFU pursuant to the “Protect Injury & Sickness Policy” (Policy) between it and the UFU. A third party, Protect Services Pty Ltd (Protect), administered the Policy.

3    The Policy provided, at all relevant times, benefits in case of injury or sickness to UFU Victorian Branch members covered by it.

The facts alleged

4    The statement of claim contains the following allegations of fact.

5    On the morning of 30 August 2022, Mr Craig Johnston, a field officer employed by Protect, told Mr Peter Marshall (the Victorian Branch Secretary of the UFU) that Protect would be hosting a charity dinner on 5 October 2022; that representatives of a number of unions would likely be invited, including the Electrical Trades Union (ETU) and Australian Manufacturing Workers’ Union (AMWU); and “given that the ETU and AMWU were likely to be invited to the dinner, Mr Johnston was not sure whether Mr Marshall would want to attend the [dinner].”

6    At 1:49pm on 30 August 2022, Mr Marshall sent Mr Michael Connolly (the CEO of Protect) an email in which he asserted that Protect had made a decision to exclude the UFU at an upcoming mental health related event; and asserted that there had been “partisan, political interference by the ETU State Secretary Troy Grey (sic)” in Protect; and sought a meeting with Mr Connolly to discuss the ongoing contractual relationship between UFU and Protect.

7    At approximately 4:00pm on 30 August 2022, Mr Marshall met with Mr Connolly and told him that the UFU had decided to terminate its arrangement with Protect as the entity administering insurance for members of the UFU.

8    On the morning of 1 September 2022, Mr Marshall met with Mr Connolly and reiterated that the UFU would be terminating its arrangement with Protect as the entity administering insurance for members of the UFU; and told Mr Connolly that if Protect “made things difficult” he would “ruin” Protect and tell others that Protect was “an operative for Dan Andrews [(the Premier of Victoria)]”.

9    In the afternoon of 1 September 2022, Mr Marshall met with Mr Chris Anderson (the CEO of ATC) and Mr Chris Ketsakidis at which time Mr Marshall asked Mr Anderson about the relationship between ATC and Protect; and told Mr Anderson that Protect could no longer be involved in providing insurance to UFU members due to “political interference by unions”.

10    On 21 September 2022, Mr Marshall met with Mr Connolly and told him that the UFU would be proceeding with the termination of the arrangement with Protect as the entity administering income protection insurance for UFU members.

11    On 21 September 2022, Mr Marshall met with Mr Anderson and told him that Protect had been “sacked” by the UFU as the entity administering insurance for members of the UFU; it would be easy to replace field officer services provided by Protect for the administration of any insurance policy; ATC was a “good insurer” and that the UFU wanted ATC to continue to provide insurance to members of the UFU even though the UFU had “sacked” Protect; ATC and Protect were closely intertwined and ATC would continue to use Protect to administer the Policy; and if ATC would only continue as insurer if Protect continued to administer the Policy, then the UFU had decided that ATC was also “sacked”.

12    On and from 6 October 2022, the UFU published to its Victorian Branch members a bulletin (Bulletin) and a form (Form).

13    The Bulletin was alleged to be in these terms:

Bulletin No: 105 | 6 October 2022 TO: ALL UFU Ops Members

INCOME PROTECTION ENHANCEMENT

IMPORTANT NOTIFICATION

Members are advised that in accordance with today’s zoom meeting, the UFU has recently been in positive negotiations with a new provider for Enhanced Income Protection.

The UFU has notified Protect Income Protection and ATC Insurance (that operates with Protect) that we will not be renewing our contract as we have negotiated an enhanced package for our members with an alternative provider.

Protect and ATC Insurance were unable to provide such enhancements for UFU Members.

As such, members are requested to fill out the form included in this bulletin and return to the UFU office ASAP via email org3@ufuvic.asn.au.

LINK TO FORM: https://jmp.sh/qu0zaec

The UFU will be convening a Zoom meeting tomorrow with delegates and members to provide further information on this new achievement.

Important Information

In the meantime, if you have a current matter with Protect, please notify Ruby Gallis on [landline number deleted] or [mobile number deleted].

Additionally, if you are requested to fill out a renewal with Protect or any body other than the UFU hyperlinked document provided, please reject such request and notify the UFU.

We are proud to be the only Firefighters Union Branch in Australia to have achieved Income Protection for its members. In accordance with our Log of Claims, we now seek to build upon this and further enhance Income Protection for Professional Firefighters/ UFU Members.

If you are approached by any representative other than the UFU please contact UFU Secretary Peter Marshall on [mobile number deleted]

Strength in Unity

READ OUT AT MUSTER AND PIN ON NOTICE BOARD

Authorised by Peter Marshall, Branch Secretary”

14    The Form was alleged to be in these terms:

INCOME PROTECTION INSURANCE

AUTHORITY AND DECLARATION

NOTE: If you wish to be covered by the income protection insurance policy negotiated by the United Firefighters Union of Australia – Victorian Branch effective 1 November 2022, please sign this authorisation and declaration form so as to facilitate the payment and reimbursement of the premium efficiently and instantaneously.

1.    I authorise the Union to liaise with the insurer and its representatives on my behalf.

2.    I authorise my employer to deduct from my post-tax earnings the weekly premium of $50.43 which is to be remitted directly to the insurer’s representative on my behalf and I aim to be simultaneously reimbursed via payroll for that same amount.

3.    I authorise the amount of the deduction to be increased or reduced from time to time, on the condition that the same amount is reimbursed to me by my employer.

4.    I authorise my employer to provide my name, address, contact details and date of birth to the insurer’s nominated representative for the purpose of administering my income protection insurance.

5.    I authorise the insurer to provide my employer with a breakdown of my income protection insurance premium for the purpose of complying with tax laws.

6.    I understand the income protection insurance will come into effect as at the date that this duly signed and dated authority and declaration is received by the Union.

7.    I understand that the amount reimbursed by my employer is not deductible in my personal income tax return; nor will that amount be reported as income on my annual payment summary.

8.    I understand that this declaration is to apply for a period of up to five years from the date of this declaration or until a new declaration is sought from my employer to otherwise comply with taxation requirements or I otherwise withdraw the declaration.

Name:    

Date of Birth:    

Address:    

Contact Email:    

Mobile:    

Registered/Payroll No.    

Employer    

Dated:

Signed:

Once this form is completed and signed, please send a scanned copy to org3@ufuvic.asn.au. The UFU will ensure that your Employer and the insurer receive a copy.”

The pleaded causes of action

15    The pleaded causes of action are as follows:

16.    By reason of the matters pleaded in paragraphs 13, 14, and 15 above, on and from 6 October 2022, the UFU represented to its Victorian Branch members that:

a.    the UFU had notified Protect and ATC that the UFU would not be renewing the Policy as it had negotiated an enhanced package for its members with an alternative provider;

b.    Protect and ATC were unable to provide an enhanced package for UFU members; and

c.    the reason why the UFU was not renewing the Policy was:

i.    the UFU had negotiated an enhanced package for its members with an alternative provider; and

ii.    Protect and ATC had stated they were unable to provide an enhanced package for UFU members.

(together, the Representations, and each a Representation)

PARTICULARS

The Representations were partly express and partly implied. To the extent that they were express they were contained in the Bulletin. To the extent that they were implied, they were implied by the contents of the Bulletin.

16    Under the heading “the true position”, the pleading continues:

17.    Contrary to the Representations pleaded at paragraphs 16(a) and 16(b) above, when the UFU made the Representations, the UFU had not in fact:

a.    negotiated an enhanced package for its members with an alternative provider;

b.    notified Protect and ATC that:

i.    it had negotiated an enhanced package for its members with an alternative provider;

ii.    this was the reason the UFU would not be renewing its contract;

c.    informed Protect and ATC of any enhancements for UFU members it had negotiated with an alternative provider; or

d.    provided Protect and ATC with any opportunity to consider providing such an enhancements to UFU members.

18.    In the premises of paragraphs 6, 7, 8, 9, 10, 11, and 12 above, and contrary to the Representation pleaded at paragraph 16(c) above:

a.    the reason the UFU had decided not to continue with the Policy provided by ATC and administered by Protect was Mr Marshall’s perception that Protect had decided to exclude Mr Marshall and the UFU from the Protect Charity Function;

b.    Protect and ATC were never asked whether they could, nor did they state that they could not, provide an enhanced package for UFU members.

19.    By reason of the matters alleged in paragraphs 16, 17, and 18 above, the Representations, and each of them, were misleading or deceptive or likely to mislead or deceive.

17    There is also a claim for misleading or deceptive conduct, as follows:

20.    Each of the Policy, and the income protection insurance policy alleged in the Bulletin and the Form to have been negotiated by the UFU (Alleged UFU Policy), is and was:

a.    a financial product within the meaning of s 12BAA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); and

b.    by operation of s12BAB(1AA), a financial service for the purposes of Part 2, Division 2 of the ASIC Act.

21.    Further, by publishing the Bulletin and the Form, the UFU:

a.    provided a recommendation or a statement of opinion to its Victorian Branch members that could reasonably be regarded as being intended to influence those members in making a decision in relation to a financial product, or an interest in a financial product, namely the Policy and/or the Alleged UFU Policy, within the meaning of s12BAB(5) of the ASIC Act;

b.    thereby, provided financial product advice to those members, within the meaning of s12BAB(1)(a) and (5) of the ASIC Act; and

c.    thereby, provided a financial service to those members, within the meaning of s12BAB(1) of the ASIC Act.

22.    In the premises of paragraphs 20 and 21 above, by publishing the Bulletin and the Form to its Victorian Branch members, the UFU engaged in conduct:

a.    in trade or commerce; and

b.    in relation to financial services

within the meaning of s 12DA of the ASIC Act.

23.    By reason of the matters alleged in paragraphs 13 to 22 above, by making the Representations, and each of them, the UFU, in trade or commerce, has engaged in conduct in relation to financial services that is misleading or deceptive or likely to mislead or deceive, in contravention of s 12DA(1) of the ASIC Act.

18    The loss and damage alleged is “[l]oss of profit from the Policy or any subsequent income protection insurance policy offered to UFU members”.

19    An injurious falsehood claim is also made as follows:

25.    By reason of the matters pleaded in paragraphs 13, 14 and 15 above, on and from 6 October 2022, the UFU made statements to its Victorian Branch members that:

a.    the UFU had notified Protect and ATC that the UFU would not be renewing its contract as it had negotiated an enhanced package for its members with an alternative provider;

b.    Protect and ATC were unable to provide an enhanced package for UFU members; and

c.    the reason why the UFU was not renewing the Policy was:

i.    the UFU had negotiated an enhanced package for its members with an alternative provider; and

ii.    Protect and ATC had stated they were unable to provide an enhanced package for UFU members.

(together, the Statements, and each a Statement)

PARTICULARS

The Statements were express and were contained in the Bulletin.

26.    The Statements were of and concerning the Policy, being a financial product provided by ATC.

27.    In the premises of paragraphs 17 and 18 above, the Statements pleaded at paragraph 25(a) and (b) above were false in that the UFU had not in fact:

a.    negotiated an enhanced package for its members with an alternative provider;

b.    notified Protect and ATC that:

i.    it had negotiated an enhanced package for its members with an alternative provider;

ii.    this was the reason the UFU would not be renewing its contract;

c.    informed Protect and ATC of any enhancements for UFU members it had negotiated with an alternative provider; or

d.    provided Protect and ATC with any opportunity to consider providing such an enhancements to UFU members.

28.    In the premises of paragraphs 6, 7, 8, 9, 10, 11, and 12 above, and contrary to the Statement pleaded at paragraph 24(c) above:

a.    the reason the UFU had decided not to continue with the Policy provided by ATC and administered by Protect was Mr Marshall’s perception that Protect had decided to exclude Mr Marshall and the UFU from the Protect Charity Function;

b.    Protect and ATC were never asked whether they could, nor did they state that they could not, provide an enhanced package for UFU members.

29.    In the premises of paragraph 6, 7, 8, 9, 10, 11, and 12 above, the Statements pleaded at paragraph 24 were malicious in that, contrary to the Statements:

a.    the UFU had in fact decided to no longer continue with the Policy as administered by Protect due to Mr Marshall’s perception that Protect had decided to exclude Mr Marshall and the UFU from the Protect Charity Function;

b.    the UFU would no longer engage with ATC as insurer as ATC would not disassociate itself from Protect as the entity administering the Policy;

c.    Mr Marshall had told Mr Anderson that Protect had been sacked due to “political interference by unions”; and

d.    the UFU’s conduct in making the Statements was intended to damage Protect and ATC and their respective capacities to provide and administer the Policy or any subsequent income protection insurance policy offered to UFU members.

20    And again the loss and damage alleged is “[l]oss of profit from the Policy or any subsequent income protection insurance policy offered to UFU members”.

Interlocutory application

21    The respondent relies on an interlocutory application dated 19 December 2022, seeking the following orders:

1.    There be summary judgment for the Respondent on the Applicant’s Originating Application and the Statement of Claim, in whole or in part, pursuant to s.31A of the Federal Court of Australia Act 1976 (Cth) and rule 26.01 of the Federal Court Rules 2011 [(Cth)].

2.    All or part of the Applicant’s Statement of Claim be struck out pursuant to rule 16.21 of the Federal Court Rules 2011 [(Cth)].

22    The respondent submitted that the applicant has “no reasonable prospect of successfully prosecuting the proceedings; and has disclosed no reasonable cause of action” for the purposes of s 31A(2) of the Federal Court of Australia Act 1976 (Cth), rr 26.01(1)(a) and 16.21(1)(e), and (c) respectively of the Federal Court Rules 2011 (Cth).

23    The respondent relied on four grounds in support of the application, viz that:

(1)    no loss or damage flows from the applicant’s pleaded case;

(2)    the respondent’s alleged conduct was not in trade or commerce;

(3)    the applicant has no standing to seek the declaration for an alleged contravention of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act); and

(4)    the injunctive orders sought could have no practical utility.

Principles – summary judgment

24    Section 31A of the Federal Court Act relevantly provides:

31A    Summary judgment

…

(2)    The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:

(a)    the first party is defending the proceeding or that part of the proceeding; and

(b)    the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.

(3)    For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:

(a)    hopeless; or

(b)    bound to fail;

for it to have no reasonable prospect of success.

(4)    This section does not limit any powers that the Court has apart from this section.

…

25    Rule 26.01 of the Federal Court Rules similarly provides:

26.01    Summary judgment

(1)    A party may apply to the Court for an order that judgment be given against another party because:

(a)    the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or

…

26    The essential requirement for an order under s 31A or r 26.01 is that the court be satisfied that the applicant has no reasonable prospect of successfully prosecuting the claim: Spencer v Commonwealth (2010) 241 CLR 118 at 131-32 [24]-[25] (French CJ and Gummow J) and 141 [60] (Hayne, Crennan, Kiefel and Bell JJ). This is a lower standard than the “General Steel” test of “hopeless” or “bound to fail” (see Dey v Victorian Railways Commissioners (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125). Exercising the summary dismissal power must always be attended with caution. Spender at 132 [24] (French and Gummow JJ). It is a “serious step taken only with great care and if it is possible to conclude with confidence that there is no reasonable prospect of success”. Danthanarayana v Commonwealth [2016] FCAFC 114 at [4] (Jagot, Bromberg and Murphy JJ).

Principles – strike out

27    Rule 16.21 of the Federal Court Rules relevantly provides:

16.21 Application to strike out pleadings

(1)    A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading:

…

(c)    is evasive or ambiguous; or

…

(e)    fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or

…

28    In Forrest v Australian Securities and Investments Commission (2012) 247 CLR 486 at 502-3 [25]-[27], French CJ, Gummow, Hayne and Kiefel JJ set out the following axiomatic propositions:

(a)    it is a fundamental requirement for a fair trial of allegations of contravention of law that the party making those allegations identify the case which it seeks to make and to do that clearly and distinctly;

(b)    the task of the pleader is to allege the facts said to constitute a cause of action or causes of action supporting claims for relief; and

(c)    a pleader is not entitled to “plant[] a forest of forensic contingencies and wait[] until final address or perhaps even an appeal hearing to map a path through it”.

29    In Young Investments Group Pty Ltd v Mann [2012] FCAFC 107; (2012) 293 ALR 537 at 540 [7], Emmett, Bennett and McKerracher JJ said that:

A statement of claim must allege a cause of action with sufficient particularity and not simply make allegations in general terms. The adequacy of a statement of claim is to be assessed by reference to whether the cause of action is pleaded at a level of particularity that is sufficient to define the issues and inform the other party of the case that it has to meet, in the context of the particular allegations. A respondent or defendant is entitled to know the factual foundation for the case that is being alleged, so that the respondent or defendant can prepare to meet that case at trial. In order to disclose a reasonable cause of action, a statement of claim must contain an allegation of all of the relevant facts necessary to support any allegation made in it. A pleading that simply pleads a conclusion is embarrassing and should not be permitted to stand.

30    The power to strike out pleadings is not lightly to be exercised. As the Full Court said in Young Investments Group at 540 [6]:

Provided that a pleading fulfils its basic function of identifying the issues, disclosing an arguable cause of action and apprising the other party of the case that it has to meet at trial, the pleading should be allowed to stand and the proceeding should be allowed to go to trial. 

Loss and damage

31    The UFU submitted that the alleged representations could not have caused the loss and damage pleaded, that is “[l]oss of profit from the Policy or any subsequent income protection insurance policy offered to UFU members”.

32    The UFU submitted that the “decision to terminate the Policy was made by the [UFU] (and not its members), and occurred prior to the alleged representations”, and that:

[t]here is no pleaded causal nexus between the representations and the alleged loss and damage. There could not, in any event, be a causal nexus as the Agreement provides that the Policy is one to be agreed between the FRV and [the UFU]. There is no contract (actual or pleaded) between the [UFU] members and ATC.

33    In my view, that submission, with respect, misses the point.

34    As ATC submitted, the pleaded conduct of the UFU is alleged to be likely to cause ATC the pleaded loss and damage, because:

[I]mmediately after making the alleged … [mis]representations, the UFU bulletin urged members to complete and return an authority and declaration for the “enhanced” policy that the UFU claimed (falsely [(so it is alleged)]) to have negotiated with another provider, and to reject any request to renew with Protect. Having been told (falsely [(again, so it is alleged)]) that “Protect and ATC were unable to provide such enhancements”, it is plainly likely that at least some members have acted and will act on UFU’s misrepresentations, in order to reject any policy offered by ATC and Protect, thereby causing ATC loss of profit.

35    As senior counsel for ATC also submitted (and I agree), the UFU’s submission that “the decision to terminate the Policy was made by the [UFU] (and not its members), and occurred prior to the alleged misrepresentations” is beside the point, because the likelihood of loss and damage alleged flows from the alleged representations, not from the termination of the Policy.

36    ATC also submitted, and with respect I also agree, that any question of causation is a matter to be determined at trial, after the issue is appropriately defined in the pleadings.

37    It follows that the first ground is not made out.

In trade or commerce

38    Section 12DA of the ASIC Act provides that a “person must not, in trade or commerce, engage in conduct in relation to financial services that is misleading or is likely to mislead or deceive”.

39    The UFU submitted that the alleged representations were not made in trade or commerce for the purposes of the ASIC Act.

40    It submitted that the alleged representations were “squarely an industrial matter” and that “communications of an overtly industrial nature between a union and its members” are not made in trade or commerce, and that:

There is nothing about an internal union communication that bears a trading or commercial character.

In this case, the Bulletin is a document that seeks to update members with information as to their income protection. Representations made by a union in the context of an internal union meeting of its members in relation to the conditions of employment of employees fall outside conduct that is ‘in trade or commerce’.

41    It relied on ALDI Foods Pty Ltd v Transport Workers’ Union of Australia (2020) 282 FCR 174. In that case the Full Court (Besanko, Bromberg and O’Bryan JJ) at 191 [47], 192 [51] held that the union communications discouraging consumers from shopping at ALDI were not made in trade or commerce, and that “in trade or commerce” refers “only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character” (quoting Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604 (Mason CJ, Deane, Dawson and Gaudron JJ)).

42    ATC submitted, to the contrary, that the UFU’s conduct “is not remotely comparable to the TWU industrial campaign that was the subject of the ALDI litigation, or the statements by a foreman to an employee that were the subject of Concrete Constructions”.

43    I agree. The ATC’s case is that the UFU was a party to a commercial insurance contract which covered its members. The alleged representations concerned the rejection of the current commercial insurance contract, and the entering into of a different commercial insurance contract. Such alleged conduct was plainly “an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character”.

44    The UFU relied on the fact that the alleged representations were made in an internal bulletin between the UFU and its members. But that fact alone cannot deprive them of a trading or commercial character. Compare Firewatch Australia Pty Ltd v Country Fire Authority (1999) 93 FCR 520 at 544 [65] (Goldberg J) (“It is no doubt true that a substantial part of the motivation of the CFA and its officers in publishing of the bulletin was for the purpose of ensuring public safety but such a consideration does not mean that the publication and distribution of the bulletin was not conduct ‘in trade or commerce’”).

45    At the hearing, ATC further submitted that “whether the impugned conduct was in trade or commerce is a real and mixed issue of fact and law for trial, which is inappropriate for summary determination”. Again, with respect, that is plainly correct.

46    Further, and in any event, ATC has also pleaded a claim for damages, founded on the tort of injurious falsehood, based on the same conduct. There is no “trade or commerce” element to such a claim.

47    In that circumstance, there would be no practical value in granting summary dismissal on the statutory claim.

48    It follows that the second ground is not made out.

Standing to seek declaratory relief

49    The UFU next submitted that ATC has no standing to seek a declaration for an alleged contravention of s 12DA of the ASIC Act, because the provision contained in s 12GBA that “ASIC may apply to a Court for a declaration that a person has contravened a civil penalty provision” means, for reasons that were not explained, that no party – even ASIC – can seek declaratory relief. That submission only needs to be stated to be rejected. Courts have made declarations with respect to s 12DA of the ASIC Act on a number of occasions. See, by way of example, Australian Securities and Investments Commission v Westpac Banking Corp (Omnibus) [2022] FCA 515; (2022) 407 ALR 1 and Rural Funds Management Ltd v Bonitas Research LLC [2020] NSWSC 61; (2020) 143 ACSR 241. It was not explained why such cases were wrongly decided.

50    It follows that the third ground is not made out.

Utility of injunctive relief

51    The UFU also submitted that the injunctive relief sought by ATC could have no practical utility in circumstances where ATC pleaded that a decision had already been made by the UFU to take out an income protection policy with another insurer.

52    In my view, if the UFU wishes to contend that such relief would lack utility, it is a matter for it to plead by way of defence. It is not a basis to dismiss the proceeding or to strike out the statement of claim.

53    It follows that the fourth ground is not made out.

Disposition

54    I will accordingly dismiss the UFU’s interlocutory application.

Associate:

Dated:    2 June 2023