Toben v Jones

REASONS FOR JUDGMENT 1 The respondent seeks to strike out the originating application and statement of claim that have been filed in this proceeding. The respondent relies on paras (c), (e) and (f) of r 16.21(1) of the Federal Court Rules 2011 (the Rules), which provide as follows: (1) A party may apply to the Court for an order that all or part of a pleading be struck out on the ground that the pleading: …. (c) is evasive or ambiguous; or … (e) fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or (f) is otherwise an abuse of the process of the Court. 2 The originating application seeks declarations that the respondent has defamed the applicant and engaged in conduct that contravenes ss 18 and 20 of Sch 2 of the Competition and Consumer Act 2010 (Cth) (ACL). It also seeks "compensatory, general, special, aggravated and exemplary damages" as well as a stay of the respondent's claim for costs against the applicant in proceeding NSD 327 of 2001. 3 The statement of claim pleads that, on 31 August 2009, the respondent caused an article to be published on the Internet about the applicant. Paragraph 3 of the statement of claim pleads that the article conveyed the following imputations about the applicant, which are said to be defamatory: (a) The Applicant is an anti-semite. (b) The Applicant falsely said that the influence of the Talmud was pervasive. (c) The Applicant falsely said that the Shoah was a mass fraud perpetrated on humanity. [As in original] 4 The statement of claim also pleads that the alleged imputations were representations that constituted conduct by the respondent that was misleading or deceptive or likely to mislead or deceive. The statement of claim further pleads that the alleged representations were false to the respondent's knowledge and constituted unconscionable conduct within the meaning of the unwritten law from time to time. The applicant thus claims that the respondent has contravened ss 18 and 20 of the ACL. 5 In an affidavit read on the hearing of the interlocutory application, the applicant's solicitor stated that the applicant seeks leave to file an amended statement of claim. A copy of the amended statement of claim is annexed to the affidavit. There is, however, no interlocutory application presently before me seeking the requisite leave. 6 The foreshadowed amendments: (a) add an allegation that the matter complained of has remained on the Internet since 31 August 2009 and that the applicant's claim for defamation is limited to the period from 23 May 2011; (b) amend the imputation identified in paragraph 3(b) of the statement of claim (see [3] above) so as to read: "The Applicant falsely said that all Jews were opposed to non-Jews because the influence of the Talmud was pervasive", and to carry that amendment into the pleading of the claim based on s 18 of the ACL; (c) limit the claim based on s 18 of the ACL to the period from 1 January 2011; (d) add a particular to the claim based on s 18 of the ACL that the matter complained of was placed on the Internet by the respondent in the course of his employment with the Australia/Israel & Jewish Affairs Council (the AIJAC) and that the placing of that matter on the Internet "related to the business and/or professional activities of the AIJAC, of the Respondent as its employee and of the Applicant"; (e) remove the claim based on s 20 of the ACL. 7 The respondent says that the amendments foreshadowed by the draft amended statement of claim do not overcome the defects of pleading or the other bases on which he seeks to strike out the originating application and statement of claim. However the respondent relies on the draft amended statement of claim, and on what he sees to be the continuing deficiencies of pleading revealed by it, as a reason why, if his application to strike out is successful, leave to replead should not be granted as a matter of discretion. 8 The bases for the respondent's application to strike out the originating application and statement of claim can be summarised as follows: (a) The cause of action for defamation is barred by s 14B of the Limitation Act 1969 (NSW) (the Limitation Act). (b) In any event, two of the alleged imputations (those identified in paragraph 3(b) and (c) of the statement of claim) are bad in form in that they are vague and embarrassing. (c) No proper cause of action against the respondent for contravention of s 18 of the ACL is disclosed. (d) In any event, the pleading of the cause of action based on s 18 of the ACL is defective in that the only matter pleaded is a mere conclusion drawn from unstated facts. (e) The whole of the proceeding is, in any event, an abuse of the Court's process. 9 In the course of the hearing I raised the question of the jurisdictional basis on which the applicant sought to advance his case under s 18 of the ACL. I was informed that the applicant relied on the extended operation given by s 6(3) of the Competition and Consumer Act 2010 (Cth) to the ACL as a law of the Commonwealth: see in that regard Australian Competition and Consumer Commission v Jutsen (No 3) (2011) 285 ALR 110. Reliance on that particular operation of the ACL is not manifest on the face of the statement of claim, although counsel for the respondent made clear that the respondent did not seek to raise any jurisdictional objection in that regard. Nevertheless, that matter, in my view, is a defect in the pleading of the applicant's claim based on contravention of s 18 of the ACL which should not be left unattended.

The claim for misleading or deceptive conduct 26 Section 18(1) of the ACL provides: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. 27 Paragraph 6 of the statement of claim pleads: On or about 31 August 2009 to date and continuing, the Respondent in trade or commerce (to wit business or professional activity) engaged in conduct that was misleading or deceptive or which was likely to mislead or deceive, contrary to the provisions of section 18 of schedule 2 of the Competition and Consumer Act. 28 Particulars are provided. These particulars: (a) repeat the pleaded imputations as "representations"; (b) state that the representations were false, misleading and deceptive because each was untrue to the knowledge of the respondent; and (c) allege that, as a result, the applicant has suffered loss and damage. 29 There are two main objections raised by the respondent to this pleading. These objections are connected. 30 The first objection is that paragraph 6 merely pleads a broad legal conclusion unsupported by the pleading of material allegations of fact, as required by the Rules. In the present case the provision of the particulars does not overcome this deficiency. 31 The second objection is that, for a number of reasons, paragraph 6 does not plead a reasonable cause of action based on s 18 of the ACL. These reasons, in essence, are that: (a) the act complained of is the publication on the Internet of the alleged representations on 31 August 2009, which was before the ACL came into force; (b) the alleged representations, as contained in the impugned article, cannot be misleading or deceptive simply because the impugned article is placed on the Internet; and (c) it cannot be discerned from the face of the pleading that the conduct complained of was "in trade or commerce". 32 Although a statement of claim must be as brief as the nature of the case permits, it must also state the material facts on which the applicant relies that are necessary to give the respondent fair notice of the case to be made at trial: r 16.02. A party must state the necessary particulars of each claim that is pleaded: r 16.41. However, the function of particulars is not to "fill the gaps" where the material allegations of fact are missing. Furthermore, if knowledge is pleaded then the material facts on which the applicant relies must be particularised: r 16.43. 33 In McKellar v Container Terminal Management Services Ltd (1999) 165 ALR 409 at [21]-[31] Weinberg J helpfully set out the principles explaining the need for a pleading to contain the material allegations of fact on which the pleading party relies. At [25]-[27] his Honour said: For a statement of claim to disclose a cause of action it must set out the material facts which give rise to the cause of action. A cause of action for misleading and deceptive conduct is not established unless the statement of claim sets out the circumstances which gave the representation its deceptive and misleading character at the time it was made. Mere non-fulfilment of a statement as to a future matter does not establish that the statement was relevantly misleading and deceptive: Pioneer Electronics Australia Pty Ltd v Edge Technology Pty Ltd. When a claim is made under s 82 of the Act, the gist of the cause of action being damage, the statement of claim must allege the damage suffered, and that it was suffered by reason of the contravention of the Act. Material facts must be pleaded which show the required causal link between any alleged contravention of the Act, and any damage to the applicant. A deficient pleading, namely one that does not plead relevant material facts, cannot be saved by particulars. It is not sufficient simply to allege loss and damage as a result of alleged contraventions of the Act; it is necessary to identify a causal connection between the impugned conduct and such loss as is said to have been suffered by the applicants: Bond Corp Pty Ltd v Thiess Contractors Pty Ltd (1987) 14 FCR 215 at 222; 71 ALR 125 per French J, cited with approval by Burchett J in Multigroup Distribution Services Pty Ltd and by Goldberg J in Mitanis. In Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Ltd (1998) ATPR 41-633 Foster J dealt with an application to strike out certain paragraphs of a further amended statement of claim which purported to plead a cause of action under ss 51A, 52 and 53 of the Act. His Honour stated (at 40,977): It necessarily follows that when [s 52] is sought to be used in litigation as the foundation of a cause of action or claim for some specific form of relief, it imperative that the factual basis upon which the section is alleged to be brought into play must be stated with appropriate clarity in a statement of claim. This is, of course, a fundamental principle of pleading. 34 These observations apply with equal force to claims based on s 18 of the ACL, including for damages under s 236. 35 In the present case it is clear, as the respondent contends, that all the applicant has done in relation to his claim based on contravention of s 18 of the ACL is to plead a bald legal conclusion. For this reason alone, the pleading of the s 18 claim is wholly deficient and should be struck out. The deficiency is illustrated by the respondent's second objection, specifically that it cannot be discerned from the face of the statement of claim that the conduct complained of was "in trade or commerce". 36 It may be that, in many cases, this particular question would not arise because allegations of fact will have been pleaded from which this element of s 18, or at least the applicant's case in relation to it, with reference to the impugned conduct, is apparent. In the present case, however, the impugned conduct is simply identified as the publication on the Internet of the impugned article. On what basis can it be said that this single act was "in trade or commerce" beyond the applicant's mere formulaic assertion of that fact? 37 The significance of the words "in trade or commerce" as an essential element of the statutory proscription of s 52 of the Trade Practices Act 1974 (Cth) was discussed by the High Court in Concrete Constructions (NSW) Pty Limited v Nelson (1990) 169 CLR 594. There the plurality (Mason CJ and Deane, Dawson and Gaudron JJ) stressed that the phrase "in trade or commerce" has a restrictive operation. The statutory proscription only attaches to "conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character": see at 603. 38 Their Honours continued (at 603): So construed, to borrow and adapt words used by Dixon J in a different context in Bank of NSW v The Commonwealth, the words "in trade or commerce" refer to "the central conception" of trade or commerce and not to the "immense field of activities" in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business". [Footnote omitted] 39 In that case it was held that the making of an incorrect statement to a worker by his employer's foreman, leading to the worker's injury, was not "in trade or commerce" for the purposes of s 52. 40 In the course of submissions I was taken to a number of authorities in which the requirement of "in trade or commerce" was discussed extensively. I refer, in particular, to Fasold v Roberts (1997) 70 FCR 489 at 526-531; Giraffe World Australia Pty Limited v Australian Competition and Consumer Commission (1999) ATPR ¶41-669 at 42,540; Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449 at [25]-[50]; Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 134 FCR 422 at [43]-[54] and [59]; and Orion Pet Products Pty Ltd v Royal Society for the Prevention of Cruelty to Animals (Vic) Inc (2002) 120 FCR 191 at [172]-[194]. These cases make clear that it is not sufficient to attract the operation of the statutory proscription that the impugned conduct be "in relation to" or "in connection with" trade or commerce, as opposed to "in trade or commerce". The respondent also relied on a number of these authorities to draw a distinction between conduct that is essentially political in character or represents public advocacy and conduct that is essentially of a trading or commercial character. 41 It is not sufficient for the applicant merely to plead that the impugned conduct was "in trade or commerce". He must, by his pleading, identify the material facts that identify the trade or commerce in question and the connection between that trade or commerce and the publication of the impugned article so as to lay the foundation to allege that the impugned conduct was "in" trade or commerce. 42 In submissions the applicant pointed to the fact that the impugned article was published on the AIJAC's website and that, on the website, the AIJAC referred to its activities as including publication of a monthly magazine and a free email news and commentary service. I am unable to see, however, how the mere fact that the AIJAC publishes, separately, a monthly magazine and a free email news and commentary service renders the respondent's publication on the AIJAC website itself an activity "in trade or commerce", without further elaboration. In any event, none of these matters are referred to in the statement of claim or the amendments proposed thereto. 43 I should also note in that regard that in the foreshadowed amendments the applicant, by particulars, refers to the respondent placing the impugned article on the Internet in the course of his employment with the AIJAC and that "such material related to the business and/or professional activities of the AIJAC, of the Respondent as its employee and of the Applicant". 44 It may be accepted that an employee may be capable of contravening s 18 of the ACL when acting in the trade or commerce of his employer: Houghton v Arms (2006) 225 CLR 553 at [35]; Taylor v Crossman (No 2) (2012) 199 FCR 363 at [44]. But these particulars do not carry the matter much further. They are expressed in omnibus form and at a level of generality that leaves unanswered the question of why the impugned conduct was in trade or commerce. 45 Finally, the pleading of the s 18 claim also suffers from the defects noted in subparagraphs (a) and (b) of [31] above.

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