Fleming's Nurseries Pty Ltd v Siciliano

Issues raised by the notice of motion 5 The notice of motion raised various matters, many of which were interrelated. In these reasons, I have addressed the matters raised by the notice of motion in a way that focuses on the issues that emerged during submissions as the crucial points of difference between the parties.

wrongful interference with contractual rights 6 The first issue was the respondents' allegation that the applicants' claim of wrongful interference with contractual rights has not been properly pleaded. The claim of wrongful interference with contractual rights is pleaded in paragraph 33 of the Amended Statement of Claim as follows: '33. Further, or in the alternative, VFS & Sons [the third respondent] at all material times: (a) had knowledge of each of the 1993, 1995, 1999 and 2000 Non-Propagation Agreements; (b) procured and induced Fred and Bruno or one or other of them to commit the breaches of the said Non-Propagation Agreements referred to in paragraphs 26, 28, 30 and 32 above; (c) and has thereby intentionally interfered with Fred and Bruno or one or other of them in performing their obligations pursuant to one or more of the 1993, 1995, 1999 and 2000 Non-Propagation Agreements. Particulars (i) The applicants refer to and repeat paragraphs 4, 5 and 6 above and the particulars subjoined to those paragraphs; (ii) The applicants refer to and repeat the matters set out in paragraphs 13, 16, 19 and 22 above and the particulars subjoined to those paragraphs; (iii) The said breaches are constituted by conduct which took place on orchard properties owned by VFS & Sons or further or alternatively by Bruno and Tony [the fifth respondent] and further or alternatively by Fred.' 7 The unusual feature of the pleading is that the third respondent, VF Siciliano & Sons Pty Ltd, is alleged to have caused and procured Fred and/or Bruno to breach their contractual obligations under the non-propagation agreements referred to in paragraphs 26, 28, 30 and 32 of the Amended Statement of Claim. In short, the allegation is that a corporation alleged to be controlled by one or more of the brothers induced breaches of contract by Fred and/or Bruno. 8 The pleaded facts indicate a very close working relationship between the brothers and their two companies, extending from the ownership of the land through the conduct of an orchard business to the wholesaling of the fruit produced by the orchard. It is apparent from the Amended Statement of Claim that the brothers conduct, and have at all relevant times conducted, their business in close cooperation with each other. It is also apparent that the precise role played by the two corporate entities is not precisely fixed, or at least, the boundaries of their conduct is not precisely clear. The basis of the applicants' complaint is essentially that the allegations do not disclose a reasonable cause of action, having regard to the absence of material facts supporting the allegation of wrongful interference with the contractual obligations of Fred and Bruno. 9 The standard to be applied before a pleading is struck out is that the claim must be 'so clearly untenable that it cannot possibly succeed': General Steel Industries Inc v Commissioner of Railways (NSW) (1964) 112 CLR 125 at 130. I am conscious that this is an early stage of the proceeding. Bearing in mind what the Amended Statement of Claim states concerning the relationship between the brothers and their companies, I am not prepared to conclude at this stage that the claim of wrongful interference with contractual rights is so untenable that it cannot possibly succeed. 10 As to the question whether or not the claim is properly pleaded, in my view there is no deficiency in the pleading: the material facts are pleaded and particulars are provided in support of the claim. It is simply a question of whether the facts alleged and the particulars provided make out a tenable claim. I am satisfied that the claim is sufficiently arguable that it should not be struck out.

Infringement of plant breeder's rights 11 I turn to deal with the causes of action concerning the allegation that the third applicant's plant breeder's rights have been infringed. The attack on this part of the pleading was based on submissions which, at least to some extent, involved a misapprehension of what is required by the rules of pleading and the authorities. In the first place, the respondents submitted (by reference to the paragraph concerning the Rich Lady plant breeder's rights allegations) that allegations in paragraphs 34 to 38 were in the nature of conclusions of law. In my opinion, that characterisation is not apposite. Paragraphs 34 to 38 make allegations of material fact, and are expressed in language which reflects the facts required to be established under ss 3, 11 and 53(1)(a) of the PBR Act, in order to establish an infringement of plant breeder's rights. That does not mean that what is alleged is a conclusion of law. 12 Secondly, the respondents appeared to contend that the pleading must set out primary facts, rather than any kind of conclusionary fact. Again, the respondents' contention misunderstands the relevant principles of law. 13 Order 11 r 2(a) of the Federal Court Rules ('the Rules') requires that a pleading shall contain only 'a statement in summary form of the material facts on which the party relies, but not the evidence by which those facts are to be proved'. The purpose of pleadings is to define the issues and to inform the other parties of the case that they must meet: Dare v Pulham (1982) 148 CLR 658 at 664. In distinguishing between material facts and evidence, the pleader must choose an appropriate level of generality in which to express the material facts that is consistent with the purposes to be achieved by the pleadings. 14 The Rules do not compel the pleader to adopt so detailed an approach to the identification of material facts that it would unduly lengthen or complicate a pleading, or, to use the language of Burchett J in Scott v Beneficial Finance Corporation Ltd (unreported, Burchett J, 14 December 1996), throw up 'an impenetrable forest of detail'. A statement of claim is not defective merely because it pleads what might be said to be conclusions of fact at a higher level of generality than the primary facts that must be proved by evidence. So much clearly appears from the decision of French J in Kernel Holdings Pty Ltd v Rothmans of Pall Mall (Australia) Pty Ltd (1991) 217 ALR 171 at 173; see also BWK Elders Australia Pty Ltd v Westgate Wool Co Pty Ltd (No 2) [2002] ATPR 41-860 at 44,748 [15] per Mansfield J. 15 In my opinion, the Amended Statement of Claim is not defective by reason that it adopts the language found in s 11 of the PBR Act in order to plead the material facts at an appropriate level of generality. I reject the respondents' principal contention that the plant breeder's rights allegations are not pleaded generally in a way that discloses the material facts. 16 There is, however, an aspect of the plant breeder's rights claims that is, in my view, deficiently pleaded. The Amended Statement of Claim alleges a contravention of plant breeder's rights in respect of three different plant varieties: paragraphs 34 to 38 relate to the Rich Lady peach; paragraphs 41 to 45 relate to the Arctic Star nectarine; and paragraphs 48 to 52 relate to the Earliqueen plum. The allegations concerning the Spring Giant apricot are not founded on the PBR Act but are wholly contractual in nature; those allegations are not presently relevant. 17 Essentially the same structure is adopted in the Amended Statement of Claim for each group of paragraphs alleging an infringement of plant breeder's rights. It is therefore convenient to take one paragraph as an example. Paragraph 34 states: '34. … prior to the date of issue of the application herein, Fred, without the licence, authority or consent of Zaigers [the third applicant] has, in respect of propagating material (being any part or product from which, whether alone or in combination with other parts or products of that plant, another plant with the same essential characteristics can be produced) of the plant variety Rich Lady ("the Rich Lady protected material"): (a) produced or reproduced the Rich Lady protected material; (b) conditioned the Rich Lady protected material for the purposes of propagation; (c) offered the Rich Lady protected material for sale; (d) sold the Rich Lady protected material; and (e) stocked the Rich Lady protected material for the purpose of (a), (b), (c) and (d) above. Particulars (i) On a date or dates unknown to Zaigers but prior to 3 December 2005, Fred whether alone or in conjunction with Bruno, Tony, VFS & Sons or VFS Produce [the fourth respondent] propagated at least about 201 Rich Lady peach trees (ii) Zaigers relies on the trees counted by Mr Graham Fleming, a representative of the applicants, in the presence of Fred, Bruno or Tony at an inspection conducted on 3 December 2005 on land situated at Volume 9628 Folio 288, where a count of trees revealed 781 Rich Lady peach trees; (iii) Save for the 580 Rich Lady peach trees supplied to Fred and Bruno as referred to in paragraphs 15 and 24 above, Zaigers have not otherwise given their licence, authority or consent to the respondents to propagate Rich Lady peach trees; (iv) Zaigers cannot, until after completion of discovery and inspection, give full particulars of the unauthorised infringing acts of the respondents but at trial of this proceeding it will rely upon and claim relief in respect of all such acts.' 18 It is apparent from these particulars that the case is being made that a count of trees at an inspection on the property revealed some 281 trees that were not supplied by the applicants. On that basis, the claim is made that Fred, either alone or in conjunction with his brothers or the other respondents, propagated (on dates unknown) at least 201 Rich Lady peach trees. 19 In my view, the particulars as pleaded are capable of supporting the allegations in subparagraphs (a), (b) and (e) of paragraph 34. However, I have concluded that they do not support the allegations in subparagraphs (c) and (d). Subparagraphs (c) and (d) effectively allege that the respondents commercialised propagating material by offering it for sale or selling it to others, rather than by using it themselves in the course of their orchard and wholesale fruit business. 20 Similar comments can be made about the structure of other paragraphs to which I referred in paragraph [16] above, perhaps even more strongly. Paragraphs 41 to 45, which relate to the Arctic Star nectarine, are supported by particulars that the fourth or fifth respondent, or one or more of them, have sold fruit of the Arctic Star nectarine variety. Reliance is placed on a purchase of such fruit by a Mr Tony Wilcox at the West Melbourne Wholesale Fruit and Vegetable Market. In the case of the Earliqueen plum variety, the allegation pleaded in paragraphs 48 to 52 is similar: the particulars state that the fourth or fifth respondent, or one or more of them, have sold fruit of the Earliqueen plum variety. Reliance is placed on an Earliqueen plum fruit tray found at a Safeway Supermarket in Donvale in December 2005. 21 In my view, the particulars supporting the allegations relating to the Arctic Star nectarine and the Earliqueen plum are capable of supporting the allegations of infringement by way of producing or reproducing protected material, conditioning that material for the purposes of propagation and stocking it: subparas (a), (b) and (e). However, the particularised facts lend no support to the allegation that the respondents commercialised material by offering or selling the relevant protected material to others: subparas (c) and (d). After discovery or other interlocutory steps, the applicants may be able to allege facts that would be capable of supporting an allegation that the respondents have offered or sold protected material to others, but at the present stage I have concluded that subparagraphs (c) and (d) in paragraphs 34 to 52 inclusive are not supported by the particulars given. In the absence of support from particulars, they should be struck out of the Amended Statement of Claim. 22 In reaching this conclusion, I have taken into account the provisions of O 58 r 27 of the Rules. Rule 27(1) provides: '(1) In proceedings for infringement of a PBR, particulars of the infringement must specify the manner in which it is alleged that the PBR has been infringed and must give at least one instance of each type of infringement alleged.' I consider that subparagraphs (c) and (d) of paragraphs 34 to 52 of the Amended Statement of Claim allege a different type of infringement than the other subparagraphs of those paragraphs.

23 Mr Caine, senior counsel for the applicants, referred me to several authorities dealing with a like provision to O 58 r 27(1) concerning patent pleadings: see s 117 of the Patents Act 1990 (Cth) and Dart Industries Inc v David Jones Ltd [1990] AIPC 90-689 ('Dart v David Jones'); and Dart Industries Inc v Grace Bros Pty Ltd (1990) 18 IPR 87 ('Dart v Grace Bros').

24 In Dart v David Jones, King J considered the sufficiency of a pleading and particulars of patent infringement which alleged that the plaintiff retailer had possessed for sale, offered for sale, offered for supply, sold or supplied certain press type sealed containers. His Honour referred to the equivalent provision of the Industrial Property Rules (Vic) and concluded that the particulars were adequate, having regard to the pre-discovery stage of the proceedings: at 36,412-36,413. His Honour concluded that the particulars were sufficient to apprise the other side of the nature of the case they had to meet. King J added that, on the face of it, a marketing company such as David Jones should know what it has sold, or should have access to records from which such information may be ascertained: at 36,414.

25 In Dart v Grace Bros, anothercase involving a retailer, the defendants argued that the particulars alleging the instances of sales of goods were inadequate. Marks J held that it was appropriate, given the early stage of the pleading, to accept the adequacy of the particulars that had been given. In reaching this conclusion, his Honour referred to the fact that more detailed information was not in the possession of the plaintiff, but it was clearly within the possession of the manufacturers and retailers of the products. In addition, Marks J observed that defendants failed to put on affidavit that they did not deal in the subject goods at the relevant time. His Honour noted that defendants were well aware that 'they and they alone hold the key to the solution of the problem whether they deal in these goods or not': at 89. 26 In my view, there are distinctions between the above authorities and the present case. The principal allegation against the respondents is that they have grown trees of the relevant varieties in the course of their orchard and wholesale fruit business and that they have sold fruit of the relevant variety. The facts particularised go no further than raising a case of that kind. While the relevant particulars can support (at least to the necessary threshold stage in a pleading) the allegations in, for instance paragraphs 34(a), (b) and (e), they do not lend any support to the allegations in paragraphs 34(c) and (d). Accordingly, I propose to strike out the unsupported subparagraphs (c) and (d) in paragraphs 34 to 52 of the Amended Statement of Claim. 27 Mr Hess, senior counsel for the respondents, argued that the other allegations of infringement of plant breeder's rights were not supported by material facts. It was argued that the particulars merely identify that trees have been found in existence at the properties and, in the case of Arctic Star and Earliqueen, provide some factual material indicating sales. In my view, a sufficient case is raised by the allegations that have been pleaded and the facts that have been particularised. The respondents' attack on the other aspects of the pleadings concerning contravention of plant breeder's rights therefore fails.

Other aspects of the pleading 28 The respondents criticised other minor aspects of the pleading in argument. The respondents argued that some illogicality or inconsistency arose because paragraphs 4, 5 and 8 of the Amended Statement of Claim allege that each of Fred, Bruno and Tony are and were at all relevant times in effective control of fourth and fifth respondents. Mr Caine submitted that there was no logical inconsistency in alleging that each of the brothers was in effective control of the two companies. Be that as it may, Mr Caine indicated that if pleading requires some attention, it would be appropriate to address this matter by adding some words to paragraphs 4(f), 5(e) and 8(e) of the Amended Statement of Claim, to the effect that the relevant individual was in effective control 'either alone or in conjunction with his brothers'. I consider that the additional words suggested by Mr Caine may assist the clarity of the pleading; however I decline to make a specific finding that the pleading as it stands is illogical or inconsistent in this regard. 29 It was also submitted that there were deficiencies or pleading inadequacies in relation to the allegations of breach of contract in the Amended Statement of Claim. I do not accept these submissions. The breach of contract claims are pleaded at an appropriate level of generality, and the particulars are capable of supporting the allegations. 30 Two other complaints were raised by the respondents, but seemed to disappear in the course of argument. One of these appeared to be based on a misapprehension of the references in the Amended Statement of Claim to 'further inspection' as references to a further inspection of the respondents' orchard properties, rather than an inspection of documents. On my reading, the references are to further inspection of documents and Mr Caine confirmed that that is so. This removes the respondents' complaint. However, it should be noted that Mr Caine reserved his clients' rights to make a further application for physical inspection should the need arise. There is no doubt that the applicants have that right under the PBR Act and under the Rules. 31 The other complaint was, I think, largely resolved during the course of argument. The respondents complained that the Amended Statement of Claim has assumed the existence of a licence, authority or consent from the third applicant to propagate 580 Rich Lady peach trees. I do not think that is what the Amended Statement of Claim does, and in any event, this complaint was not pressed in argument.

Form of application 32 Finally, the respondents raised a complaint that largely concerned the form of the Application. The respondents submitted that the Amended Statement of Claim and the Application, taken together, do not allow the respondents to identify precisely the relief that is sought by each applicant against each respondent. Mr Hess submitted, perhaps a little highly, that it was impossible to work out what relief was sought in what respect. In my view, it is possible to reasonably infer from the Application what relief is sought against which party and by which applicant. On the other hand, a respondent should not have to divine or infer the relief sought by the various applicants against the various respondents, as it should be spelt out in the application. I would add that if those matters are spelt out in the application, they do not need to be spelt out in the statement of claim. 33 Mr Caine indicated that, for other reasons, the applicants will seek leave to amend the Application. The other reasons concern the need to make a minor amendment to the current form of the Application. He suggested that if leave were granted, the applicants would clarify, by making appropriate amendments to the Application, what relief is sought by which applicant against which respondent. In my view, those amendments should be made and I will grant the necessary leave to enable that to be done.

Orders 34 I propose to make orders to the following effect: first, that subparagraphs (c) and (d) of paragraphs 34 to 52 be struck out; secondly, that the applicants be given leave to amend the Amended Statement of Claim; thirdly, that the applicants be given leave to amend the Application. I will order that notice of motion dated 19 April 2006 filed by the respondents be otherwise dismissed. 35 As to costs, I will order that the respondents pay 75 per cent of the applicants' costs of and incidental to the notice of motion. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young.

Associate: Dated: 16 June 2006 Counsel for the Applicants: B Caine SC with A Maryniak

Counsel for the Respondents: BJ Hess SC with T Cordiner

Solicitor for the Respondents: Phillips Ormonde Fitzpatrick