FEDERAL COURT OF AUSTRALIA

I Cook Foods Pty Ltd v City of Whitehorse [2026] FCA 155

ORDERS

THE COURT ORDERS THAT:

1.    The Respondent’s application dated 5 August 2025 for the summary dismissal of the Applicant’s claims pursuant to r 26.01 of the Federal Court Rules 2011 (Cth) and/or s 31A of the Federal Court Act 1976 (Cth) (Application) be dismissed.

2.    The Respondent pay the Applicant’s costs of the Application on a lump sum basis to be agreed or assessed by a Registrar of the Court.

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

REASONS FOR JUDGMENT

ANDERSON J:

INTRODUCTION

1    By interlocutory application dated 5 August 2025, the respondent, the City of Whitehorse, (Council) seeks an order pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) and/or r 26.01 of the Federal Court Rules 2011 (Cth) dismissing the applicant’s, I Cook Foods Pty Ltd’s, (ICF) claims against it. The application is brought on the basis that ICF has no reasonable prospect of successfully prosecuting its claims against the Council.

2    The Council relies on the following affidavits in support of the application:

(a)    the affidavit of Katerina Sioulas sworn 3 July 2025 (Sioulas Affidavit);

(b)    the affidavit of May Hassan affirmed 16 July 2025 (Hassan Affidavit);

(c)    the affidavit of Julia Cushing affirmed 17 July 2025 (Cushing Affidavit).

3    ICF relies on the affidavit of Mr Ian Cook, the director of ICF, affirmed 15 August 2025.

BACKGROUND

4    Until 2023, the Council provided a “Meals on Wheels” service to residents within its municipality. The main recipients of this service were vulnerable residents, including older adults, and people living with a disability.

5    From 2015 to April 2019, ICF was engaged as the sole supplier of meals to the Council’s Meals on Wheels program, pursuant to a contract dated 26 August 2025, and made between the Council and ICF (Contract). The initial term of the Contract was three years; the Contract was thereafter extended for one year.

6    The service operated five days per week, with weekend meals delivered each Friday. Under the Contract (cl 7), ICF was required to deliver meals to the Council’s three Distribution Centres, which were then delivered to residents by a team of volunteers. The Contract also contained the following terms:

(a)    first, the respondent refers to the following clauses as the “Compliance Obligations”:

(i)    specification (attachment 2) cl 4: ICF must comply with the Food Act 1984 (Vic) and legislative requirements; operate within the Guidelines of the HACC Program Manual 2013 (Part 3, Delivered Meals and Centre Based Meals Victorian Home and Community Care Program Manual 2013, page 144) and ensure the level and standard of Service is in accordance with Council’s Funding and Service Agreement with the Victorian Department of Health;

(ii)    tender schedule 4 (attachment 6) item 4.1.1: ICF must prepare, pack and deliver all food to the Council in strict accordance with the Food Act, the Food Standards Code and any relevant code of practice for the handling and preparation of food and the cleanliness of food premises; and

(iii)    tender schedule 4 (attachment 6) item 4.1.1: ICF must comply with all laws affecting performance under the Contract and with all requirements made or notices or orders given by any governmental, semi-governmental, municipal, health, licensing or other authority with jurisdiction or authority in relation to performance by ICF under the Contract;

(b)    second, the respondent refers to the following clauses as the “Business Continuity Obligations”:

(i)    cl 34: ICF shall have documented arrangements to effectively protect the Council from the consequences of a business interruption (or series of interruptions). Such arrangements must include plans for restoring and maintaining the delivery of the Services and for maintaining communication with Council;

(ii)    tender schedule 4 (attachment 6) item 4.3.12: ICF must prepare and submit a Business Continuity Plan (BCP) that will ensure the ongoing provision of meals in the event of an emergency that impacts on the ability of ICF to produce the required meals. The BCP will be reviewed and submitted on an annual basis;

(iii)    tender schedule 4 (attachment 6) item 4.7.8: ICF is responsible for ensuring that the required numbers of correctly labelled meals are delivered to the Distribution Centres within the specified timeframes each day. In the event that ICF is unable to supply the required number of meals, ICF will advise the Coordinator and ensure delivery of an equivalent product in terms of number, quality, meeting individual dietary requirements and nutritional value. This will be provided at ICF’s expense. As part of the tender submission ICF must supply the specific details of systems in place to ensure continuity in supply; and

(iv)    tender schedule 4 (attachment 6) item 4.7.9: ICF must ensure that a contingency plan is in place at all times to ensure continuity of supply.

7    Further, the Contract provided that the Council may terminate the Contract in the event of a default: cl 17. A default event included where ICF “fails to comply with any of its obligations under this Contract and the failure, if capable of being remedied, is not remedied within any period stipulated by the Designated Officer in a written notice giving particulars of the failure”: cl 16(b).

8    On the morning of 22 February 2019, the Council received a notification from the Department of Health and Human Services advising of a precautionary food withdrawal of food produced by ICF as a result of suspected listeria contamination. That notification advised the Council to immediately discard any food distributed to it by ICF on or before 21 February 2019, including refrigerated and frozen food, and advised that “food contaminated with Listeria monocytogenes can cause serious illness called listeriosis, resulting in complications or in some cases, death in vulnerable groups”. The Department also requested the City of Greater Dandenong to issue ICF with an order under the Food Act requiring it to cease production (Closure Order).

9    Ms Sioulas deposed that, in order to prevent any risk of listeria contamination at the Distribution Centres, the Council’s Environmental Health Officer (EHO) team conducted collected samples of food provided by ICF to the Council for testing and environmental swabbing of the Silver Grove Distribution Centre (the main distribution centre at the time) and submitted the samples and swabs to the Melbourne Diagnostic Unit for laboratory testing (Council Testing). One of the samples returned a positive result for Listeria monocytogenes. Ms Sioulas also deposed that the EHO team also conducted a listeria clean of the Distribution Centres in accordance with the Department’s Listeria guidelines.

10    From 22 February 2019, ICF ceased supplying meals to the Council. A dispute exists between the parties as to whether ICF failed to procure an alternative supply or delivery of an equivalent product or whether the Council terminated any obligation on ICF to provide an alternative supply or deliver an equivalent product.

11    As a result of ICF’s failure to provide meals, the Council was required to source meals from a range of alternate providers.

12    On 27 February 2019 - five days after ceasing supply - ICF wrote to the Council advising that, “[w]e have spoken with Michelle Sievwright at ‘Chef Good’ who is willing to help our [sic] councils with meals. Please contact Michelle…”. When contacted, Chef Good advised it could not meet the Council’s volume requirements.

13    On either 28 or 29 March 2019, the Council served ICF with a notice of default dated 28 March 2019 (Default Notice) in accordance with cl 16(b) of the Contract, specifying two defaults:

(a)    failure to comply with the Compliance Obligations by reason of ICF’s failure to comply with the requirements under the closure order, or subsequent and related orders, resulting in ICF’s inability to resume operations; and

(b)    failure to comply with the Business Continuity Obligations by reason of ICF’s failure to ensure continuity of supply.

14    The Default Notice required ICF to remedy the defaults within seven days, and gave notice that the Council intended to terminate the Contract, pursuant to cl 17 of the Contract, if the defaults were not remedied.

15    Later that day (being 28 or 29 March 2019), the Council was advised by the Department, in a letter dated 28 March 2019, that ICF had taken the steps required by the Closure Order and the Closure Order had been revoked.

16    Despite the revocation, ICF did not respond to the Default Notice, nor did it recommence supply to the Council (whether itself or by way of a third-party supplier).

17    On 10 April 2019, the Council gave notice to ICF terminating the Contract pursuant to cl 16(b) and 17 of the Contract (Termination Notice) for failure to remedy the defaults.

18    On 26 March 2025, nearly six years after the relevant events, ICF commenced this proceeding.

ICF’S CLAIMS AGAINST THE COUNCIL

19    By its statement of claim dated 16 March 2025 (SoC), ICF brings two related but distinct claims against the Council:

(a)    first, that the Council wrongfully repudiated the Contract by relying on an invalid termination notice; and

(b)    secondly, that the Council engaged in unconscionable conduct in connection with the supply of goods or services, contrary to the prohibition in s 21 of sch 2 of the Competition and Consumer Act 2010 (Cth) (the Australian Consumer Law), by relying on the Council Testing to terminate the Contract.

SUMMARY JUDGMENT – PRINCIPLES

20    In Haire v Workco Australia Pty Ltd [2024] FCA 1266, Horan J referred to Spencer v The Commonwealth (2010) 241 CLR 118 as the “seminal decision” on the construction of the power to summarily dismiss a proceeding in s 31A of the Federal Court Act: at [14]. The plurality in Spencer observed, “the inquiry required in this case is whether there is a ‘reasonable’ prospect of prosecuting the proceeding, not an inquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail”: at [52] (Hayne, Crennan, Kiefel and Bell JJ). The plurality emphasised that the expression “no reasonable prospect”, should not be paraphrased or subjected to judicial gloss, and that “the power to dismiss an action summarily is not to be exercised lightly”:  at [58]-[60], see also at [24] (French CJ and Gummow J)

21    The principles relevant to a summary judgment application were summarised by Gilmour J in Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 at [6] (quoted in, amongst others, Mogislevsky v Leroy (trustee of the bankrupt estate of Mogislevsky) [2017] FCAFC 52 (McKerracher, Farrell an Markovic JJ) as follows:

(a)    the Court must be very cautious not to do a party an injustice by summarily dismissing proceedings;

(b)    the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to trial, it may succeed;

(c)    in a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading;

(d)    it is not Parliament's intention to require the Court to engage in lengthy and elaborate trials on an interlocutory basis for the purposes of determining whether or not a proceeding has no reasonable prospects of success. It may be necessary for the opposing party to provide no more than an outline of evidence, sufficient to show that there is a genuine dispute, to prevent the summary application becoming a trial;

(e)    if there is a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial. It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claim succeeds that there is ‘no reasonable prospect of success’;

(g)[sic]    it ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt. On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a trial;

(h)    evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects;

(i)    in determining if there are real issues of fact in issue so as to preclude summary judgment the courts must draw all reasonable inferences in favour of the non-moving party.

22      A further elucidation of s 31A of the Federal Court Act was undertaken by Sundberg J in Adnunat Pty Ltd (ACN 005 816 268) v ITW Construction Systems Australia Pty Ltd (ACN 004 297 009) [2009] FCA 499 at [37] where his Honour said that the authorities appear to have endorsed the following principles:

•    In applying s 31A, the court does not conduct fact finding but must assess the strength of the allegations made by reference to the pleadings, affidavits and any other evidence adduced, in order to determine whether the claim is sufficiently strong to warrant a trial. Ultimately, the court must consider whether there are any real, as opposed to fanciful, issues of fact or law that require proper determination at a trial.

•    In assessing whether there are reasonable prospects of success, the court should draw all reasonable inferences (but only reasonable inferences) in favour of the non-moving party. Moreover, where the evidence on a summary judgment application is of an ambivalent character, there will be a real issue of fact and therefore reasonable prospects of success for the purposes of s 31A.;

•    The moving party bears the onus of persuading the court that its opponent has no reasonable prospects of success. However, where the moving party establishes a prima facie case for summary judgment, the opposing party must be able to point to “specific factual or evidentiary disputes that make a trial necessary”.

•    As s 31A requires in effect a prediction as to the outcome of a claim, the court should be more reluctant to summarily dismiss a claim where real questions of fact and credit arise. In those cases, the court will not have all material evidence before it until trial, the credit of important witnesses will not have been tested and it will as a consequence be very difficult if not impossible to fairly assess the prospects of the claim.

(Citations omitted).

23    For the Court to give judgment for the Council in relation to these claims at this early stage, the Court must be satisfied that ICF has no reasonable prospect of successfully prosecuting the claims. The Council submits that I should so find in this case, applying the well-established principles guiding the exercise of power in an application by a defendant for summary judgment: see Buurabalayji Thalanyji Aboriginal Corporation v Onslow Salt Pty Ltd (No 2) [2018] FCA 978 (McKerracher J) at [3]. The Council submitted that the Court ought to find ICF’s prospect of success in respect of each of the causes of action against the Council is fanciful, and that ICF’s case against the Council is of insufficient merit to warrant the matter going to trial.

24    In Australian Securities and Investments Commission v Cassimatis (2013) 220 FCR 256; [2013] FCA 641 at [47], Reeves J observed that a summary dismissal application is unlikely to be successful where the Court is satisfied that there is a real question of fact, and in particular where the factual dispute(s) can be described as significant, substantial, plausible or weighty. Further, at [49] his Honour observed that the Court should be particularly cautious where a proceeding raises mixed questions of fact and law; such a combination usually giving rise to the sort of complexity which traditionally requires a trial. As a general principle the moving party will “need to show a substantial absence of merit on either of the question of fact or law concerned, or where the two questions are mixed, on the mixed question, before having any chance of success in persuading the Court that questions of these kinds should be resolved summarily”: at [49], see also Haire at [21].

Alleged Repudiation of Contract

25    ICF alleges that the Council wrongfully repudiated the Contract by serving an invalid Termination Notice. ICF alleges the Termination Notice was invalid by reason of reliance on:

(a)    the purported “defective” Default Notice;

(b)    false allegations of ICF’s non-compliance with its Compliance Obligations and Business Continuity Obligations in circumstances where ICF communicated the names of “operational suppliers who could provide interim supply to [the Council], namely… Choice Fresh Meals and Chef Good”;

(c)    reliance on ICF’s failure to respond to the Default Notice in circumstances where attempts by ICF to communicate with the Council, and a request to meet with the CEO of the Council, were unsuccessful; and

(d)    reliance on an irrelevant clause, being cl 16(b).

26    ICF also alleges that the Council is estopped from relying on the interoperability of the BCP by reason of the Council’s conduct in preventing the operation of the BCP.

The Alleged “Defective” Default Notice

27    It is convenient to deal first with the alleged defects in the Default Notice as they underpin each of the complaints directed at the Termination Notice.

28    First, ICF alleges that the Default Notice was invalid by reason of “non-particularisation of default” because “the reference to tender Schedule items set out in [paragraph] 9(a)(vi) [of the SoC] is meaningless”. The SoC contains no paragraph 9(a)(vi). Assuming ICF instead intended to refer to paragraph 10(a)(vi) of the SOC, which identifies “Tender Schedule items 5.2, 6.1, 7.1, 9.1, 10.1, 11.1, 12.1, 13.1 (menu choices)”, each of those items appear in the Tender Schedule to the Contract; concern ICF’s obligation to provide a selection of foods to the Council; and are incorporated into the Contract.. I reject ICF’s submission that the Default Notice is invalid by reason of its non-particularisation of the default. The Default Notice expressly includes reference to the Tender Schedule and the items in that schedule relied upon.

29    Secondly, ICF alleges that the Default Notice is invalid because the grounds identified were false or inaccurate for the following four reasons.

30    First: reliance on failure to comply with the Compliance Obligations in circumstances where the Closure Order had been revoked. In response, the Council submits that the uncontradicted evidence is that the Default Notice was sent to ICF at 11.45am on 29 March 2019 and the Council received notice of the revocation, from the Department, at 2.00pm on 29 March 2019. This ‘uncontradicted evidence’ is deposed to by Ms Cushing in the Cushing Affidavit.

31    Second: reliance on a failure to comply with the Business Continuity Obligations when the BCP was available. In response, the Council submits that

(a)    it is common ground that ICF did not supply meals after the date of the Closure Order (that is, after 22 February 2019), nor did it ensure delivery of an equivalent product;

(b)    it is not to the point that ICF gave the Council the names of another supplier (or suppliers). The Contract required more than this; and

(c)    in any event, by issuing the Default Notice, the Council made plain that it required ICF to perform its obligations in accordance with the Contract.

32    Third: the Council engaged other food suppliers. The Council agrees that it engaged alternative suppliers given “the importance of maintaining the Meals on Wheels service”. The Council submits in response that ICF’s reliance on this as excusing its failure to comply with the Business Continuity Obligations, or as invalidating the Default Notice, cannot be accepted. In support of this submission, the Council contended that the corollary of this submission is that the Council would be required to suspend the service until such time as ICF resumed operations, or was otherwise in a position to comply with its obligations – a plainly untenable proposition.

33    Fourth: the alleged “defective” Council Testing. The Council submits that it did not rely on Council Testing results as the basis for providing a ground to substantiate the Default Notice. ICF rely on Mr Cook’s affidavit evidence to dispute this and contend that the Council’s Testing results are highly flawed. In particular, Mr Cook deposes that:

(a)    at the time of giving the Default Notice there were no longer any operative investigations being undertaken by the City of Greater Dandenong, which, because of the location of ICF’s food processing facility, was the relevant food safety authority;

(b)    at the time of the Default Notice, the relevant State Government food regulator was the City of Greater Dandenong and, at the time, it was satisfied as to ICF’s food safety standards and compliance;

(c)    The investigations and sampling by the Council were incompetent or, alternatively, defective in that it:

(i)    took the minimum three food samples;

(ii)    inadequately labelled the samples as to their dates;

(iii)    retrieved the samples from an industrial waste bin;

(iv)    took samples from food kept by the Council past the expiry date;

(v)    failed to divide the samples into three parts;

(vi)    failed to pay for the samples;

(vii)    failed to notify the applicant of the sample;

(d)    the Council took samples from locations remote from ICF’s premises, increasing the likelihood that any bacteria relevant to safety or unsuitability came from sources extraneous to ICF.

(e)    he believes that the defectiveness in the sampling by the Council could not have been accidental and was intended to be defective. This is a serious allegation which, at present, is unsubstantiated.

(f)    in March 2019, Ms Katerina Sioulas, an employee of the Council, received certificates of analysis confirming that the food sampled was “safe and suitable” in accordance with the Food Act

34    Further to the above, Mr Cook, in his affidavit, takes issue with much of the matters deposed to in the affidavits relied upon by the Council: the Sioulas Affidavit, the Hassan Affidavit and the Cushing Affidavit. It is sufficient for the purpose of this summary judgment application to note that there are substantial factual disputes between the parties, some of which are technical in nature and need to be explored at trial and tested by cross-examination. It is only at that point in time that a determination can be made as to whether or not the Default Notice was defective.

Allegations of Continuing Non-compliance with Compliance Obligations and Business Continuity Obligations

35    ICF alleges that the Council falsely alleged ICF was in breach and continued to be in breach of its Compliance Obligations and Business Continuity Obligations.

36    The Council’s evidence is that it received notice of the revocation order at 2pm on 29 March 2019, after it served the Default Notice and before it served the Termination Notice. The Council alleges that despite the revocation, ICF did not resume operations.

37    The Council further alleges that not only did ICF not resume its operations, but it did not remedy its failure to comply with the Business Continuity Obligations by actioning its BCP, or otherwise, in the time required by the Default Notice. The Council submits that the obligation on ICF was to “ensure continuity of supply. In the event that it was unable to itself supply meals to the Council, ICF was required to ensure delivery of an equivalent product in terms of number, quality, meeting individual dietary requirements and nutritional value, at its own expense”. The Council alleges that ICF did not discharge that obligation as at the date of the Default Notice and it had not remedied that default at the time of termination.

38    The Council submits that ICF’s failure to ensure ongoing continuity of supply was not trivial. It went to the heart of the contract and deprived the Council of the entire benefit of the bargain, being the supplier of meals for its Meals on Wheels service. At the time the Default Notice was served, supply had been absent for over a month and by termination, more than six weeks. The Council submits that it put ICF on notice of its non-compliance and afforded it an opportunity to remedy the breach, yet ICF did not do so and did not respond to the notice. In these circumstances, the Council’s reliance on ICF’s ongoing breach of its Business Continuity Obligations alone was, in its submission, sufficient to justify termination.

39    Mr Cook in his affidavit, disputes the Council’s allegation in relation to Compliance Obligations and Business Continuity Obligations. Mr Cook deposes to the Business Continuity Plan being available and able to be performed. Mr Cook deposes that ICF never received notification that Chef Good or Choice Fresh Meals could not supply food pursuant to the BCP. Mr Cook deposes that at no stage prior to the Default Notice on 28 March 2019 did anyone from the Council notify ICF of any issues relating to the BCP and its performance. Mr Cook deposes that the Council made their own supply arrangements on 22 February 2019 without working with ICF. Mr Cook deposes to the Council not engaging with ICF about actions that needed “to be taken to activate the BCP”.

40    It is plain on the affidavit material filed by the parties that a substantial factual dispute exists between the parties which can only be resolved at trial and after cross-examination of witnesses of the disputed accounts.

ALLEGED UNCONSCIONABLE CONDUCT BY COUNCIL

41    ICF alleges that the Council contravened s 21 of the ACL by unconscionably relying on the Council Testing to terminate the Contract. ICF alleges it suffered loss and damage, and seeks damages pursuant to s 236(1) of the ACL.

42    In order to establish that the Council engaged in unconscionable conduct, ICF must establish (inter alia) that:

(a)    the Council engaged in conduct that was, in all of the circumstances, unconscionable;

(b)    the Council did so in connection with the acquisition or possible acquisition of goods and / or services from ICF; and

(c)    ICF suffered loss and damage “because of” that conduct.

43    The gravamen of ICF’s claim is that the Council exercised regulatory and investigatory powers under the Food Act in relation to ICF, including powers to make a finding that premises were “clean” and/or “sanitary” or that food being prepared, sold, or otherwise handled at ICF’s premises was “safe” and/or “suitable” as those terms are understood under the Food Act. By reason of these “powers”, and that a finding of “unsafe or unsuitable food production” by ICF would enable the Council to terminate the Contract, ICF alleges it was at a “special disadvantage” in relation to the Council.

44    ICF alleges that the Council knowingly exercised these powers in a “sub-standard” or “sub-legal” manner with the intention of producing test results that showed ICF’s “food products were unsafe or unsuitable” or, alternatively, the Council was reckless to the accuracy of the results and that, despite the test results showing the food was “safe and suitable”, the Council relied on those results to terminate the Contract.

45    The Council, by its defence, denies that it exercised any regulatory or investigative powers under the Food Act or otherwise in relation to ICF. The Council contends that it did not have any statutory authority to investigate ICF or to form a conclusion as to whether its premises were “unclean” or “unsanitary”, or whether food supplied by it was “unsafe” or “unsuitable”, as those terms were understood under the Food Act. The Council submits that, properly construed, the powers relied upon by ICF in its claim are conferred not on the Council but on the “relevant authority”. The Council contends that the relevant authority is the City of Greater Dandenong and not the Council.

46    These factual and legal disputes between the parties, including those matters going to whether the Council has engaged in unconscionable conduct, are unsuitable to be dealt with summarily on an application such as the present. Disputed matters of this nature must be dealt with at trial where all the evidence can be examined; tested through cross-examination and submissions ultimately made by the parties as to the legal consequences.

DISPOSITION

47    For the reasons given, I am not satisfied that ICF has no reasonable prospect of prosecuting its claims alleged against the Council. There exists on the affidavit material substantial factual and legal disputes between the parties which cannot be resolved summarily. The level of disputation is such that it cannot be said that ICF has no reasonable prospect of successfully prosecuting claims against the Council. Furthermore, because of the serious nature of a claim of unconscionable conduct made against the Council, I would decline, in the present case, on the affidavit material, to deal with such a claim on a summary judgment application.

48    Accordingly, the Council’s application will be dismissed. The Council will pay ICF’s costs of the application on a lump sum basis to be agreed or assessed by a Registrar of the Court.

Associate:

Dated:    26 February 2026