The Inconsistency Ground
6 Both Adshel and the PTC contended that it was not open to JC Decaux to plead a claim under Pt IV of the Act which was inconsistent with a claim, in the same proceeding, under Pt V. In order to understand this submission it is necessary to set out, albeit briefly, the general nature of the claims made by JC Decaux.
7 In its claim under Pt V of the Act JC Decaux pleads that on 1 July 1997 Adshel took an assignment from Australian Posters Pty Ltd of that company's rights under a contract into which it had entered with the PTC on 4 July 1991. That contract concerned the manufacture, supply, installation, cleaning and maintenance of tram and bus shelters in the Melbourne metropolitan area. JC Decaux describes these rights, perhaps somewhat tendentiously, as rights under the "Non-Exclusive Agreement".
8 In its Pt V claim JC Decaux alleges that in breach of s 52 of the Act, Adshel engaged in misleading or deceptive conduct by representing to its customers, to the Melbourne City Council, and to other municipal councils within metropolitan Melbourne that:
(a) it was, and would continue to be, the exclusive supplier to the PTC of bus and tram shelters for installation in the Melbourne tramway network, and of shelter advertising services in metropolitan Melbourne; and
(b) that it had an exclusive right to supply bus and tram shelters and shelter advertising services within that area.
JC Decaux also alleges that from about August 1999 to December 1999 Adshel represented that it had the exclusive rights to supply bus and tram shelters on the Yarra Trams network for the duration of the "Non-Exclusive Agreement".
9 The applicant alleges that each of these representations was false. It also alleges that by its conduct in various negotiations with local councils, and by its sales of shelter advertising space to its customers, Adshel engaged in misleading or deceptive conduct.
10 In its Pt IV claim JC Decaux alleges that Adshel and the PTC were parties to an "arrangement or understanding" pursuant to which Adshel would be the exclusive supplier of street furniture (as defined) to the PTC, and to local councils in Melbourne. That "arrangement or understanding" is described in the pleading as the "Exclusivity Arrangement".
11 In par 37 of its further amended statement of claim JC Decaux sets out the terms of that arrangement:
"37. Since June 1997, Adshel and the PTC have been parties to an arrangement or understanding (the Exclusivity Arrangement) pursuant to which:
(a) Adshel would be the exclusive supplier of Street Furniture to the PTC and local councils in metropolitan Melbourne;
(b) Adshel would be the exclusive supplier of Street Furniture to the PTC and local councils on the Melbourne tramway network;
(c) Adshel would be the exclusive supplier of Street Furniture to the PTC and local councils on the Yarra Trams network in Melbourne."
12 The further amended statement of claim then provides a series of particulars of the "Exclusivity Arrangement". The first of those particulars is as follows:
"The Exclusivity Arrangement is to be inferred from:
(i) the fact that at all times since 4 July 1991, Australian Posters (and since 1 July 1997, Adshel) has been the sole supplier of Street Furniture to PTC throughout the Melbourne tramway network, including the Yarra trams network as set out at paragraph 55 of the Adshel Second Further Amended Statement of Claim;
…"
13 The reference to the "Adshel Second Further Amended Statement of Claim" in particular (i) is defined in the pleading as a reference to a statement of claim filed by Adshel in a different proceeding which it has instituted in the Supreme Court of Victoria against the PTC. That proceeding is pending, and it is not yet clear when it will come to trial.
14 The respondents contended that the applicant's claim in relation to the "Exclusivity Arrangement" which is brought under Pt IV of the Act, as particularised above, is the direct opposite of its claim in relation to the "Non-Exclusive Agreement" which is brought under Pt V. As matters presently stand, the two claims are not pleaded in the alternative. However, during the course of argument, the applicant foreshadowed that it would seek leave to amend its pleading in order to make it clear that the Pt IV claim would be pursued only as an alternative to the Pt V claim.
15 The respondents submitted that the applicant's Pt V claim, which is brought against Adshel alone, was obviously based upon the premise that the 1991 agreement, which was subsequently assigned to Adshel, was, as the pleading describes it, a "Non-Exclusive Agreement", but that it had been falsely represented to be an "exclusive agreement". The Pt IV claim, however, was said to have as its underlying premise that the 1991 agreement was, in truth, an exclusive agreement.
16 The respondents submitted that the applicant's claims, as formulated, should not be permitted to stand together. Whatever the intrinsic merits of that submission might be it obviously had greater force before the applicant foreshadowed that it would seek leave to plead these claims in the alternative. Notwithstanding that intimation by the applicant, Adshel submitted that, as a matter of proper practice and procedure, having asserted in its Pt V claim that Adshel did not have the exclusive rights in question, the applicant could not, in the same proceeding, rely upon the exclusivity of those rights as the basis for its Pt IV claim.
17 The PTC initially developed its submissions in relation to this issue in a manner which differed slightly from that adopted by Adshel. It submitted that given that it was not a party to the applicant's Pt V claim, it should not, at least at this stage, be put to the expense and inconvenience of defending a Pt IV claim which may never proceed. It submitted that the proper course for that applicant to adopt was to proceed initially with its claim against Adshel, and to commence a separate proceeding in respect of the Pt IV matters only if that Pt V claim failed.
18 After JC Decaux foreshadowed that it would amend its pleading to plead these claims in the alternative, the PTC reformulated its opposition to the two claims being simultaneously maintained. It did so in the face of O 11 r 8 of the Rules which expressly allows for inconsistent claims to be pleaded in the alternative. Order 11 r 8 provides:
"8. (1) A party shall not in any pleading make an allegation of fact, or raise any ground or claim, inconsistent with a previous current pleading of his.
(2) Sub-rule (1) does not affect the right of a party to make allegations of fact, or raise grounds or claims, in the alternative."
19 Order 11 r 8 has its analogues in the rules of court which apply in State Courts, and in England. It reflects the principle that either party may, in a proper case, include in his pleading alternative and inconsistent allegations of material facts, as long as that party does so separately and distinctly. Thus a plaintiff may plead two or more inconsistent sets of material facts and claim relief thereunder in the alternative and may rely upon several different rights alternatively, although they may be inconsistent - Phillips v Phillips (1878) 4 QBD 127 at 134. Whenever alternative cases are alleged, the facts relating to those cases should be stated separately, and should not be comingled, so as to show on what specific facts each alternative cause of action is based - Davy v Garrett (1878) 7 ChD 473 at 489.
20 On the other hand, it is a fundamental rule of pleading that different plaintiffs cannot claim inconsistent alternative relief - Smith v Richardson (1878) 4 CPD 112. The rules also provide that a party must not, in a subsequent pleading, make any allegation of fact, or raise any new ground or claim inconsistent with that party's previous pleading - Bullen & Leake and Jacob's Precedents of Pleadings, 12th ed, pp 41-42.
21 Although a party can, as a general rule, plead inconsistent sets of facts in the alternative, it cannot do so where one of those sets of facts must be known to the party to be false. Such a pleading is embarrassing and will be struck out. In Brailsford v Tobie ((1888) 10 ALT 194) the defendant pleaded two factually inconsistent accounts in justification for her not having paid the moneys claimed by the plaintiff. Holroyd J ordered that the defendant elect which one of these two cases she would maintain, saying (at 195):
"…I think it would be most improper to allow the defendant to plead as she has done. The actual facts must be within her own knowledge, and that being so she has set up two sets of facts inconsistent with one another. If this were allowed it would be permitting the facts to deliberately place on the record statements, one or other of which must be known to be a lie. This, in my opinion, ought not to be allowed." (See Issitch v Worrell (2000) 172 ALR 586 at 594-5.)
22 The PTC developed its submission in the following way. The applicant plainly contemplated that the Pt IV claim would proceed only in the event that its Pt V claim failed. The PTC was involved only in the Pt IV claim. Although O 11 r 8 permits inconsistent facts or claims to be pleaded in the alternative, that rule was said to operate only where those inconsistent facts or claims were pleaded against the same party, or parties. The PTC submitted that O 11 r 8 had no application in circumstances where inconsistent facts or claims were pleaded against different parties.
23 The PTC supported this submission by contending that if O 11 r 8 were to permit the applicant to do what it had foreshadowed, the effect would be to allow a "queue" to develop in the one proceeding. Any party not involved in the principal claim, but only in the alternative claim, would have to await the outcome of that principal claim in order to ascertain whether or not it was required to become involved in the litigation. The PTC submitted that the rule could not have been intended to countenance such a course which would be tantamount to an abuse of process.
24 The PTC submitted further that its objection to the course proposed by the applicant would not be overcome by treating the problem as merely being one of case management. To hear the principal claim against Adshel first, and then to proceed to hear the alternative claim if necessary, would do nothing to alleviate the prejudice which the PTC would suffer as the party "waiting in the wings". So long as the applicant's alternative claim remained on foot, the PTC would be required to prepare to meet that claim. The PTC submitted that it would be a scandalous waste of its resources, and those of the Court, to require a proceeding of that type to be prepared for trial on a wholly speculative basis.
25 In response to these contentions, the applicant began by denying that there was any inconsistency between its claims under Pts IV and V of the Act. It submitted that these claims both arose from the same factual matrix, and that they were both based on the following facts, all of which were entirely consistent with each other. Those facts were said to be as follows:
(a) Adshel did not have any legal rights to be the sole or exclusive supplier to the PTC;
(b) while Adshel did not have any such rights, it did have an arrangement (which did not give rise to any legal rights) to be the sole or exclusive supplier to the PTC; and
(c) it was misleading for Adshel to represent that it was the sole or exclusive supplier to the PTC because that representation implied that Adshel had some legal basis for making it when in fact this was not the case.
26 The applicant submitted, in the alternative, that if I were to conclude that there was, in fact, an inconsistency between the facts or claims as pleaded, that course was one which the applicant was entitled to adopt provided it was done in accordance with O 11 r 8, by pleading the facts or claims in the alternative. The applicant submitted that there was nothing in the language of that rule which suggested that it was limited in scope, as the PTC contended, to those cases where inconsistent facts were pleaded against the same party or parties.
27 As I understood Adshel's submissions, it did not, in the end, join with the PTC in its argument regarding the construction of O 11 r 8. Adshel accepted, at least tacitly, that there was nothing to warrant reading down the rule, or reading into it, a qualification of the type suggested by the PTC.
28 In my opinion, there is no substance in the submission that O 11 r 8 should be read down in the manner for which the PTC contends. The PTC was unable to point to any authority in support of its suggested construction of the rule. Having regard to the language in which the rule is expressed that is scarcely surprising.
29 That is not to say that JC Decaux may not, ultimately, have to elect as to which of these two causes of action it desires to pursue. Where a person has with full knowledge done an unequivocal act showing the choice of one of two inconsistent rights, the doctrine of election at common law dictates that he cannot afterwards pursue the other, inconsistent right - United Australia Ltd v Barclays Bank Ltd [1941] AC 1. The purpose of this doctrine is to prevent a person, ultimately, taking up inconsistent positions - Elder's Trustee and Executor Co Ltd v Commonwealth Homes and Investment Co Ltd (1941) 65 CLR 603; O'Connor v SP Bray Ltd (1936) 36 SR(NSW) 248 at 257-63; and Sargent v ASL Developments (1974) 131 CLR 634 at 655. It may also be that the related doctrine of approbation and reprobation will come into play - Randwick Municipal Council v Broten [1964-5] NSWR 1445; and Fried v National Australia Bank Ltd [2000] FCA 910. However, neither of these doctrines is, in my view, able to be called in aid by the respondents at this stage. All that has occurred to date is that a statement of claim has been filed which foreshadows two claims which may be inconsistent, and which will in any event be pleaded in the alternative.
30 I should add that in my view there is substance in the applicant's contention that there is, in any event, no true inconsistency between the two claims. There is plainly a distinction between the "Non-Exclusive Agreement" which is the focus of the applicant's Pt V claim, and the "Exclusivity Arrangement" which lies at the heart of its Pt IV claim. The fact that the "Non-Exclusive Agreement" is relied upon by the applicant in support of the inference that the "Exclusivity Arrangement" came into existence does not, of itself, demonstrate any such inconsistency.
31 The fact that there is no impediment created by the rules which govern pleadings in this Court to these two claims being pleaded in the alternative does not mean that it will necessarily be appropriate to deal with them both at the one time, and in the course of the one hearing. It may be that as a matter of sound case management the Pt V claim should be heard first, and the Pt IV claim stood over until a later stage. Even so, that is a far cry from saying that the current pleading gives rise to an abuse of the process of the Court. The inconsistency ground must be rejected.