Pivotel Satellite Pty Limited v Optus Mobile Pty Limited

REASONS FOR JUDGMENT 1 These reasons for judgment concern a notice of motion for leave to amend the application and statement of claim in this proceeding. 2 I dealt with a similar application in reasons for judgment published on 27 May 2010 (Pivotel Satellite Pty Limited v Optus Mobile Pty Limited [2010] FCA 516). In those reasons I explained why I declined to grant leave to the then proposed amendments having regard to the basic principle that a pleading must be sufficient to put the other party on notice of the case it is required to meet. Since that date the applicants (Pivotel) have further amended the proposed application and statement of claim and now seek leave by a notice of motion filed on 12 October 2010 to rely on those documents as amended. However, the respondents (Optus) contend that the kind of deficiencies which led to the refusal of leave on the last occasion remains. 3 The parties accepted the basic test of sufficiency of pleadings as summarised above. In addition, Pivotel emphasised a point made in the earlier reasons for judgment (at [7]) that sufficiency depends on the nature of the individual case. In the context of the present case, involving allegations of breaches of the Trade Practices Act 1974 (Cth) (including Pt IV), the question whether the level of generality at which a pleading is expressed meets the test of sufficiency should not be applied without regard to the complexities inherent in defining markets, particularly in the abstract without the benefit of expert evidence. Observations about the sufficiency of pleadings in State of Queensland v Pioneer Concrete (Qld) Pty Ltd [1999] ATPR 41-691; [1999] FCA 499 at [12]-[22], albeit not expressed in the same terms, lend support to Pivotel's submission to this effect. 4 Pivotel's fundamental submission is that Optus's objections to the amendments now proposed, when analysed, do not concern a lack of sufficiency in the requisite sense but, rather, invite the premature determination of substantive and complex issues of fact and law independent of any evidence, particularly expert economic evidence. This submission is generally persuasive. The statement of claim now proposed is different from that the subject of the reasons of 27 May 2010. It is apparent that the new version has been drafted with those earlier reasons for judgment (which accepted many of the objections Optus then made) in mind. Considered as a whole it cannot now be said that the current version of the statement of claim exhibits the type of difficulties which led to acceptance of Optus's submissions on the last occasion. 5 Optus maintains that the proposed pleading fails to identify the relevant services. The services in question, however, are now identified in paras 6 to 43 of the proposed claim. Insofar as Optus's concern appeared to relate to the word "included" in para 23, the relevant services are apparent from the balance of the pleading. If any doubt remains it is able to be rectified by a request for particulars. There is no reason, however, to deny leave for any failure to identify the services. 6 Nor is there any fundamental inconsistency between Optus having a monopoly over its own network (para 91) and competition between carriers in wholesale network services, as defined (para 43). As Pivotel submitted, it contends that the markets are network markets. In that context (and without descending into the complexities that might be associated with such markets), Optus may both have a monopoly over its network and yet participate in a broader market that involves the supply and acquisition of mobile terminating access services. Whether this can ultimately be provided or not is beside the point. What is clear is that the case is as it is pleaded. Further, it is not apparent why the case as pleaded is insufficient to fulfil the basic purpose of pleadings or is other than arguable. 7 The same reasoning applies to the fact that the pleading leaves open a potential overlap between the retail satellite mobile market and retail international calls market as defined. On the previous occasion all of the markets potentially overlapped (see at [21]) in the context of a pleading which provided market descriptions at a high (indeed, incomprehensible) level of generality. That is no longer the case. 8 As to market power, paras 86 to 95 identify the material facts on which Pivotel relies. Whilst each fact in isolation may be insufficient, the pleading must be read as a whole. Optus cannot be in any real doubt about the case it has to meet having regard to these paragraphs. In particular, para 95 answers Optus's question about what it is said it did which it could not do but for the alleged substantial market power in the wholesale network markets - namely, prevent interconnection and any-to-any connectivity without constraint from, or regard to, the other network carriers or its customers. Again, for pleading purposes, this is sufficient. It also undermines Optus's additional point about the inadequacy of the pleading of the taking advantage of market power. Paragraphs 106 to 108 of the claim, moreover, disclose the facts Pivotel says are material to the claim that Optus's conduct would not have been commercially rational but for its alleged market power. 9 The same considerations work against acceptance of Optus's submission about the inadequacy of the pleading of substantial lessening of competition. As Pivotel submitted there is no longer a bare assertion of the impact on Pivotel. Other facts are pleaded including alleged effects on the market (see paras 111 and 114 for example). Insofar as the claims about the retail mobile satellite market are concerned Pivotel is relying on future events, but para 111 makes this clear. The pleading itself is sufficient for this purpose. 10 As to the misleading and deceptive conduct claims, the pleading does disclose Pivotel's case that it is an alleged failure to disclose to customers which is in issue (paras 138 to 140 and 146 to 150). Pivotel disavowed any suggestion that Optus was obliged to carry all calls by its customers including to Pivotel's network (see, by contrast, [24] in Media Ocean Limited v Optus Mobile Pty Limited (No 9) [2010] FCA 1165). On this basis its pleading is sufficient to disclose the case Optus will be required to meet. 11 As to the alleged discrepancies between the pleadings and the relief sought in the application, I accept Pivotel's submission that arguments about the form of the declarations and orders sought are premature. Consistent with the approach taken in Media Ocean Limited v Optus Mobile Pty Limited (No 9), this application is not a convenient vehicle to resolve disputes about the form of the proposed declarations and orders when, in reality, relief must always depend on the particular circumstances apparent at the time relief is proposed to be granted. 12 For these reasons the applicants should be granted leave as sought. Costs may be argued. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.