Bruce v Odhams Press Limited

REASONS FOR JUDGMENT The proceeding commenced by application filed on 9 July 1997 supported by a statement of claim filed on the same day. As a result of a directions hearing on 9 August 1997 the applicants filed an amended statement of claim on 27 August 1997 and on 8 September 1997 the first respondent ("Pioneer") filed a notice of motion seeking an order that paras 51, 52 and 53 of the amended statement of claim be struck out pursuant to O 11 r16 . The second to eleventh respondents support Pioneer's application. Order 11 r16 enables the Court to strike out the whole or part of a statement of claim if it discloses no reasonable cause of action, has a tendency to cause prejudice, embarrassment or delay in the proceeding or is otherwise an abuse of the process of the Court. The allegations in the amended statement of claim can be summarised as follows - prior to 1990 Pioneer engaged the first applicant and the third to eighth respondents as owner/drivers to transport materials from Pioneer's quarries to its concrete plants. It arranged these engagements by way of radio contact between its radio room and the owner/drivers. In 1990 Pioneer announced that it would no longer engage owner/drivers directly and proposed that the applicants and the other owner/drivers form a company which Pioneer would engage to transport materials from its quarries to its concrete plants. As a result of that proposal, Pioneer, the first applicant, and the other owner/drivers entered into an agreement (said to be partly oral and partly to be implied) whereby they formed a company to act as trustee of a unit trust in respect of which the first applicant and the other owner/drivers would become directors and shareholders and the owners of units in the unit trust. By the agreement Pioneer was to engage the company to cart materials from its quarries to its concrete plants and other sites and the company was to engage the unit holders to perform the carting services. By the agreement the parties were to endeavour to ensure a fair and equitable distribution of work between the unit holders and the company, would not, without due cause, fail or cease to engage any of the unit holders to perform any of the cartage services but if it did, then Pioneer would engage the unit holder directly to perform what would otherwise be the unit holder's fair share of the cartage services. It is alleged that pursuant to the agreement the second respondent ("Delta") was incorporated as the trustee of the Wollert Contractors Unit Trust which was formed and the first applicant and the other owner/drivers became directors of Delta and took up units in the Trust. Pioneer entered into an agreement with Delta on 27 June 1991 for the provision of the cartage services and Pioneer continued to contact relevant owner/drivers from its radio room, although the cartage services were provided through the medium of Delta. It is further alleged that from June 1991 Delta and the unit holders entered into a subcontracting agreement whereby unless there was insufficient capacity only the unit holders would be engaged by Delta to perform the cartage services and there was to be a fair and equitable distribution of the cartage services between the unit holders. By that agreement Delta was not, without due cause, to fail or cease to engage any unit holders to perform cartage services or terminate the original agreement without reasonable notice. It is said that subsequently the ninth, tenth and eleventh respondents became parties to and bound by the original agreement and the subcontract agreement. It is alleged that in 1993 the first applicant suffered from health problems as a result of which the applicants were unable to perform any cartage services between September 1993 and February 1994 during which period Pioneer and Delta allocated work that would otherwise have been performed by the applicants to the remaining unit holders with the applicants' consent. In January 1994 the applicants became able to perform some of the cartage services on a part‑time basis and after two weeks they were allocated part‑time work. Eight months thereafter they became able to perform full‑time cartage services but Delta failed to inform Pioneer of that fact, this constituting a breach of the subcontracting agreement by Delta. It is then said that in October 1994 Delta told Pioneer that Delta was holding a letter of resignation on behalf of the applicants and that they would not be returning to full‑time cartage work and that the first applicant had resigned as a director of Delta. As a result the applicants were allocated less of the cartage services than they otherwise would have been given as a result of which Delta breached the subcontracting agreement and alternatively, the third to eleventh respondents breached the original agreement. It is alleged in the alternative that the representations or statements made by Delta to Pioneer were negligent and constitute misleading and deceptive conduct contrary to s 12 of the Fair Trading Act (Vic) and s 52 of the Trade Practices Act 1974 (Cth). It is then alleged that in October 1994 the first applicant informed Pioneer directly that the applicants were available to perform the cartage services on a full‑time basis and that Pioneer requested Delta to give it a copy of the purported letter of resignation on behalf of the applicants which Delta failed to provide and that Delta requested the applicants to resign from performing any of the cartage services and terminate their involvement in the subcontracting agreement which they refused to do. There was a short period of two months when Pioneer allocated cartage services to the applicants on a full‑time basis but thereafter Delta told Pioneer that the applicants had been sacked in relation to the performance of cartage services and thereafter Pioneer and Delta ceased engaging the applicants to perform any cartage services. It is said that as a result Delta had breached the subcontracting agreement and Pioneer breached the original agreement and that the third to eleventh respondents caused or permitted Delta to breach its obligations under the subcontracting agreement in breach of their obligations under the original agreement. It is also alleged that the first applicant was invalidly removed as a director of Delta. None of these allegations are the subject of the application to strike out. That application is directed at the following paragraphs in the amended statement of claim: "Exclusionary Provisions 51. At or around the time of the representation referred to in paragraph 43, the first and second respondents: a) made a contract or arrangement, or arrived at an understanding; and/or b) gave effect to a provision of a contract, arrangement or understanding - that had the purpose of preventing, restricting or limiting the acquisition of cartage services by them from the applicants. Particulars The contract, arrangement or understanding made, arrived at and/or given effect to was to the effect that neither of them would from that time or shortly thereafter engage the applicants to perform any work related to the Cartage Services. 52. The contracts, arrangements or understandings referred to in the previous paragraph were exclusionary provisions for the purposes of section 45 of the Trade Practices Act 1974 and were in breach of such section. 53. The applicants have suffered and continue to suffer loss and damage as a result of the said contracts, arrangements or understandings made and/or given effect to." Paragraph 43 is in the following terms: "43 In or around October 1994, the first respondent advised the first applicant that: a) the second respondent had failed to satisfy it that the applicants had resigned from performing any of the Cartage Services; and b) as a result thereof stated to the second respondent that it would resume allocating work to the applicants through the first respondent's radio room."