Case: Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd [1991] FCA 557
Outcome: cited
The principles governing the exercise of the Court's power to summarily dismiss a claim on the ground that it discloses no reasonable cause of action, the principles which govern pleadings in this Court and the relevant authorities are conveniently summarised by Weinberg J in McKellar v Container Terminal Management Services Ltd [1999] FCA 1101 ; (1999) 165 ALR 409 at 415-421. It is not necessary to restate, at length, his Honour's exposition of the relevant rules and the statements of principle which emerge from the cases to which he refers. It is sufficient, for present purposes, to note that: &#8226; The power to dismiss a claim because it discloses no reasonable cause of action will not lightly be exercised: see Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 128-130; Webster v Lampard [1993] HCA 57 ; (1993) 177 CLR 598 at 602-603. &#8226; The purpose of pleadings is to define the issues with sufficient clarity such that respondents understand, and have the opportunity to meet, the case made against them: see Dare v Pulham [1982] HCA 70 ; (1982) 148 CLR 658 at 664; Mitanis v Pioneer Concrete (Vic) Pty Ltd [1997] ATPR 41-591 at 44, 151ff. &#8226; A statement of claim must plead all the material facts necessary for the purpose of formulating a complete cause of action. If it does not it is liable to be struck out: Mitanis ; Bruce v Odhams Press Ltd [1936] 1 KB 697 at 712-713. &#8226; It is not sufficient for the pleader to state conclusions drawn from unstated facts: see Trade Practices Commission v David Jones (Australia) Pty Ltd [1985] FCA 228 ; (1985) 7 FCR 109 at 114-5. &#8226; There will be cases in which the power to strike out pleadings will not be exercised notwithstanding a failure to plead all material facts. Such restraint will be appropriate where the deficiency causes no confusion and does not raise issues of substantive principle ( HECEC Australia Pty Ltd v Hydro-Electric Corp [1999] FCA 822 at [59] ), and where deficiencies can be overcome by ordering the provision of particulars or the furnishing of affidavits ( State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] ATPR 41-691 at 42,828-9). &#8226; Not all conclusionary pleadings will be struck out as being deficient: see Charlie Carter Pty Ltd v The Shop, Distributive and Allied Employees' Association (WA) (1987) 13 FCR 413 at 417. Whether or not such a pleading should be struck out will depend on whether or not the facts are pleaded at too great a level of generality: see Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd [1991] FCA 557. 32 Section 33H of the FCA Act requires that any application commencing a representative proceeding must identify the group members to whom the proceeding relates, specify the nature of the claims made on behalf of the group and specify the questions of law or fact common to the claims of the group members. By s 33C of the Act it is required that seven or more persons have claims against the same respondent, that the claims arise out of the same or similar or related circumstances and that the claims of all group members give rise to a substantial common issue of law or fact. 33 As defined, the group in the present proceeding includes persons who have dealt directly with one or more of the respondents in relation to the provision of international airfreight services. It also includes persons who have had no such direct dealing but who have "paid" more than $20,000 for such services during the relevant period. The pleadings in paragraphs 85 and 86 suggest that, within the defined group, there are two further sub-groups: those members who have both paid for and acquired international airfreight services and those who have merely paid for those services. As will be seen these are not mere semantic objections. They give rise to the potential for confusion and, in turn, to embarrassment and prejudice. 34 Before turning to the substantial difficulties to which the imprecision of the definition of the group gives rise, it is to be observed that there are insufficient material facts pleaded to establish that the applicant is a member of the defined group which it seeks to represent. No attempt is made to establish (other than by conclusionary statement in paragraph 85) that the applicant acquired or paid for any international airfreight services in Australia (or anywhere else) during the relevant period. When read together, ss 33C and 33H of the FCA Act require that an applicant in a representative proceeding must be a person who shares with group members the same identifying criteria. 45 The fuel surcharge is dealt with in paragraphs 29 to 55 of the SASC. In paragraph 54 it is pleaded that "[t]he Respondents and each of them engaged in the conduct alleged in paragraph (sic) 31-51 ..." In paragraph 55 it is alleged that, by doing so, the respondents and each of them gave effect to the global cartel arrangement or the subsidiary fuel surcharge arrangement. In paragraph 87(b) it is alleged that all respondents are jointly and severally liable for all loss and damage caused by the imposition of the fuel surcharge. 46 When, however, one examines paragraphs 31 to 51 one finds that paragraphs 31 to 36 deal exclusively with the conduct of Lufthansa; paragraphs 41-45 deal exclusively with the conduct of British Airways, and paragraphs 46-50 deal exclusively with the conduct of Japan Airlines. In paragraph 37 it is alleged that all respondents, other than Lufthansa, introduced fuel surcharges "at agreed levels" in February 2000. No particulars of this agreement are provided, nor are the "agreed levels" identified. 47 The war-risk surcharge is dealt with in paragraphs 64 to 70 of the SASC. The parties to the arrangement pursuant to which the war-risk surcharge was imposed are identified in each of these paragraphs as being Lufthansa, Singapore Airlines and British Airways. It is not pleaded that Qantas, Cathay Pacific, Air New Zealand or Japan Airlines were party to the arrangement or gave effect to it. 48 Despite this paragraph 87(d) pleads that all respondents are jointly and severally liable for all loss and damage caused by the imposition of the war-risk surcharge arrangement. 49 The applicant seeks to meet the respondents' objections to these parts of the SASC by contending that all respondents are liable for any damages occasioned by the imposition of any surcharge because they were all parties to the "overarching" global cartel arrangement. That overarching arrangement is said, in paragraph 26, to be an agreement to meet and discuss the fixing of prices for the carriage of international airfreight and to conceal any resulting price-fixing arrangements. The surcharges are said to have been agreed upon in the course of meetings and discussions held under the overarching arrangement. This arrangement contemplated that any agreed fixing of prices would emerge from further discussions among the respondents or some of them. In the case of the war-risk surcharge not all respondents are alleged to have agreed to impose the surcharge or to have given effect to such an agreement. Their participation in the making of the global cartel arrangement, without more, cannot render those respondents which were not involved in the making and implementing of the war-risk surcharge agreement jointly and severally liable for damages arising from the imposition of that surcharge. 50 These parts of the SASC are internally inconsistent, confusing and embarrassing.