Wright Rubber Products Pty Ltd v Bayer AG

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

BETWEEN: WRIGHT RUBBER PRODUCTS PTY LTD (ACN 075 384 100)

Moore J 1 In a decision published in December 2005, the Commission of the European Communities determined that Bayer AG and Chemtura Corporation (previously known as Crompton Corporation) participated in a global price-fixing cartel with others between 1996 and 2001. Simply described, there were arrangements fixing prices and maintaining approximate market share between the members of the cartel. The Commission's decision was based on a factual finding that these two corporations together with Flexsys NV were the major global producers of rubber chemicals accounting together for approximately half of the world-wide rubber chemical market. 2 On 27 September 2007, the applicant commenced representative proceedings under Part IVA of the Federal Court of Australia Act 1976 (Cth) seeking relief including damages alleging as a central allegation the respondents engaged in conduct proscribed by the Trade Practices Act 1974 (Cth). Simply put, the applicant alleges the respondents engaged in price-fixing which led to Australian purchasers of rubber chemicals paying inflated prices for those chemicals. It is tolerably clear that the applicant's case is rooted, in substantial part, in the findings of the Commission of the price-fixing cartel concerning rubber chemicals. How precisely the case is now framed will be discussed shortly. The applicant claims to be (a claim apparently not disputed) a manufacturer of rubber components to supply to other manufacturers and a consumer of rubber chemicals. The representative proceeding is now brought on behalf of commercial manufacturers likewise using rubber chemicals either directly or indirectly though, again, how the group is defined will be discussed shortly. 3 This judgment concerns an application for leave to appeal from a judgment of 13 November 2009 ([2009] FCA 1317) striking out the applicant's amended statement of claim. As often happens, the argument in the application for leave to appeal included the argument to be put in the appeal if leave was granted. A convenient way of dealing with the issues raised in the proceedings is to identify, in turn, each element of the statement of claim which the primary judge considered was deficient, his Honour's reasons for reaching that conclusion and my assessment of each of those elements and those reasons. That will then provide the context for my consideration of the question of leave which I discuss at the conclusion of these reasons.

The cartel arrangements 4 The amended statement of claim is broadly structured in the following way. The applicant is identified, the nature of the proceedings as representative proceedings is specified, various expressions are defined, the representative group is described, the applicant's purchases of rubber chemicals is described, the identity of the respondents and their trading activities are specified (at separate points later in the pleadings the respondents are categorised as either "the Foreign Respondents" or "the Australian Respondents"), the Australian market for the supply of rubber chemicals is described, the "Global Cartel Arrangement" said to contravene the Trade Practices Act in so far as they operated in the Australian market were identified and an aspect of the cartel described as "Periodic Global Cartel Arrangements" is then identified. The remainder of the pleading identifies how the Global and Periodic Global Cartel Arrangements were given effect to by both the Foreign Respondents and the Australian Respondents and attracted the operation of the Trade Practices Act and, lastly, how their cartel conduct caused damage to the applicant and group members. 5 Obviously a central plank of the applicant's case is the existence of the cartel arrangement. It is first addressed by para 14 of the amended statement of claim. That paragraph provides: 14. In or about July 1995, the Foreign Respondents and other manufacturers and suppliers of Rubber Chemicals including Flexsys made an agreement or arrangement or arrived at an understanding ("Global Cartel Arrangement") containing provisions that or to the effect that each of them would, by their officers, servants or agents: (a) fix, control or maintain the prices at which they or bodies corporate related to them, and other persons from time to time, would supply Rubber Chemicals around the world including Australia; (b) allocate customers, sales volumes and market shares by preventing, restricting or limiting the supply of Rubber Chemicals by them or bodies corporate related to them around the world including Australia to particular customers, regions or volumes; (c) ensure that parties to the Global Cartel Arrangement who lost market share and/or volume and/or customers following an agreed price increase would later regain market share and/or volume and/or customers at the expense of other parties to the Global Cartel Arrangement; (d) refrain from supplying Rubber Chemicals at prices other than the prices which were agreed from time to time as referred to in subparagraph (a); (e) refrain from supplying Rubber Chemicals to customers or regions or at volumes other than as agreed from time to time as referred to in subparagraph (b); (f) participate in meetings, conversations and other communications with each other and other persons from time to time for the purpose of affirming, with or without variation, the Global Cartel Arrangement and observing and giving effect to, and procuring bodies corporate related to them; to observe and give effect to the provisions referred to in subparagraphs (a) to (e) above; (g) conceal the meetings, conversations and other communications referred to in subparagraph (f) above from the whole world except for other persons giving effect to the Global Cartel Arrangement; and (h) conceal the existence and terms of Global Cartel Arrangement.

6 Extensive particulars are then provided in para 14 of the cartel arrangement which incorporate a schedule (schedule 3) to the statement of claim. That schedule identifies events (generally meetings and conversations) giving rise to and perpetuating the cartel arrangement. Whether they are particulars in the orthodox sense does not presently matter. The effect of the cartel arrangement is addressed in the next paragraph as follows: 15. The provisions of the Global Cartel Arrangement: (a) pleaded in each subparagraph of paragraph 14 above had a substantial purpose or effect or were likely to have the effect of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining, of the price for Rubber Chemicals supplied by the Foreign Respondents and bodies corporate related to them in the Australian Market in competition with each other, within the meaning of section 45A of the Act; … (b) by reason of the matters alleged in subparagraph 15(a), are deemed by section 45A of the Act to have had the purpose or effect, or been likely to have the effect, of substantially lessening competition within the meaning of section 45(2) of the Act; and (c) pleaded in subparagraphs 14(b), (c), (d) and (e) had a substantial purpose of preventing, restricting or limiting the supply of Rubber Chemicals by the Foreign Respondents and bodies corporate related to them to particular persons or classes of persons in the Australian Market, within the meaning of section 4D of the Act.

7 Paragraph 16 pleads what is described as "Periodic Global Cartel Arrangements": 16. Further and in the alternative, in and from about July 1995, the Foreign Respondents participated in periodic meetings between themselves and other persons from time to time, at each of which they: (a) affirmed the provisions of the Global Cartel Arrangement with or without modification; further or alternatively (b) entered into arrangements or arrived at understandings containing provisions: (i) fixing, controlling or maintaining, the prices at which each of them, further and alternatively bodies corporate related to them, would sell Rubber Chemicals in the global market and in markets delineated by them within the global market for Rubber Chemicals, including Australia; (ii) that each of them and bodies corporate related to them would refrain from supplying Rubber Chemicals at prices other than prices which may be agreed from time to time as referred to in subparagraph (i) herein; (iii) allocating customers, sales volumes and market shares by preventing, restricting or limiting the supply of Rubber Chemicals by them or bodies corporate related to them around the world including Australia to particular customers, regions or volumes: (iv) that each of them and bodies corporate related to them would refrain from supplying Rubber Chemicals to customers or in regions or at volumes other than as agreed from time to time as referred to in subparagraph (iii) herein; (v) whereby they would seek to ensure that parties to the Global Cartel Arrangement who lost market share and/or volume and/or customers following an agreed price increase would later regain market share and/or volume and/or customers at the expense of other parties to the Global Cartel Arrangement; (vi) that each of them would observe and give effect to, and procure bodies corporate related to them to observe and give effect to the arrangements or understandings arrived at; and (vii) that each of them would, by themselves and bodies corporate related to them, and by the officers, servants or agents of all of them, conceal the existence and terms of the arrangements or understandings from the whole world other than parties giving effect to the arrangements or understandings, (such further periodic arrangements or understandings being hereinafter described together and severally as the "Periodic Global Cartel Arrangements"). Then follows para 17 which is to the same general effect as para 15 though it is pleaded by reference to the Periodic Global Cartel Arrangements rather than the Global Cartel Arrangement. 8 In his reasons for judgment the primary judge observed (at para 17) after referring to criticism he had made in an earlier judgment of 10 October 2008 ([2008] FCA 1510) about this aspect of the statement of claim, that: 17 Although the causes of action are now better articulated, no further material facts are pleaded in order to clarify the specific case brought against the respondents.

9 His Honour then identified the concerns of the respondents. He explained that they complained that para 14 merely paraphrases s 45A of the Trade Practices Act, as an example. The complaint was that this paragraph failed to identify the conduct which is said to give rise to the relevant agreement, arrangement or understanding. It did not explain what the parties to the cartel arrangement had agreed to do and with whom they would do it. The respondents pointed to para 15(c) complaining that it recites the substance of s 4D of the Trade Practices Act without identifying the persons or classes of persons who are said to be the subjects of the restrictions or limitations. His Honour noted similar objections were raised in relation to paragraph 16 and 17, which relate to the Periodic Global Cartel Arrangements. 10 His Honour then referred to the argument of the applicant. He noted that the applicant's counsel conceded that this part of its case is pleaded "at a level of generality" but contended that "the best available particulars have been provided and the core allegations are clear". Counsel for the applicant called in aid the decision of Bennett J in Australian Competition and Consumer Commission v April Marketing Services Australia Pty Ltd [2007] FCA 2024. 11 His Honour then proceeded to explain the basis of the conclusion earlier expressed at para 17 of his reasons: 22 Due allowance must be made for the fact that the cartel agreements were (it may be assumed) negotiated in secrecy by the representatives of the corporate entities involved. The applicant was, of course, not privy to these discussions and the arrangements to which they gave rise. Despite this, the applicant has been able to draw on a large amount of information which has emerged from foreign proceedings in which regulatory authorities have brought participants in the cartel to account for their conduct. It has been able to prepare the detailed material in Schedule 3 to its amended statement of claim. The particulars of 110 meetings between employees of the relevant companies are itemised in that Schedule. This material includes the relevant dates, participants, locations and the subject matter of each meeting. The existence and inclusion of this material begs the question - if such detailed information is already available to the applicant, why were the pleadings not more specific? 23 Paragraphs 14 to 17 are central to the pleading. Some modest attempts have been made to improve the drafting since my earlier reasons were published. Nonetheless, the principal deficiencies, earlier identified, remain such that these four paragraphs are embarrassing. They should be struck out. (Emphasis added)

12 It is unnecessary to rehearse the arguments put in the application for leave to appeal. It is sufficient to note that the applicant filed an affidavit in that application establishing the fact that the applicant had no information available to it beyond the material (centrally the decision of the Commission of the European Communities) which was drawn on to provide the particulars contained in the amended statement of claim. In addition, in the application for leave to appeal (first heard by Middleton J but then referred to this Full Court) the respondents tendered a copy of that Commission decision and one of two other documents the applicant had, namely a document described before us as a deposition in class action proceedings in the United States District Court. 13 If, as appears to be the case, the primary judge was suggesting (or even finding as a matter of fact) in the highlighted passage at the end of para 22 I have just quoted, that the applicant had further material it should draw upon to articulate its case in greater detail then there was no basis for that suggestion and in so far as it was a finding of fact, no evidence to support the finding. In my opinion, while the primary judge recognised, in point of principle, the overwhelmingly obvious difficulties an applicant has in detailing in a pleading cartel arrangements (almost always the product of clandestine meetings, conversations or other communications) he failed, with respect, to make sufficient allowance for those difficulties when assessing the adequacy of the way the cartel was pleaded. 14 I should add that we have had the benefit of being taken to the Commission's decision of December 2005. It was not before the primary judge though he was aware of its existence and that many of the particulars were derived from it. It is inconceivable its contents were not known to the respondents and indeed it was tendered by them before Middleton J. It is also untenable, in my opinion, to suggest that the pleading as presently framed does not sufficiently articulate the nature of the cartel and the material facts on which the applicant presently relies at least for the purposes of requiring the respondents to file a defence. In due course and after discovery, it may well be possible for the applicant to provide further and better particulars. However whether that is necessary or the applicant should be required to do so are matters for consideration in due course.

The market 15 The next criticism by the primary judge of the amended statement of claim concerns the way in which the applicant has pleaded the relevant market. It is pleaded this way: 12. At all material times, there was in Australia a national market for the supply of Rubber Chemicals to commercial manufacturers of Rubber Compounds and Rubber Products within the meaning of section 4E of the Act ("the Australian Market").

13. At all material times each of Bayer, Chemtura and Uniroyal ("the Foreign Respondents"), further or alternatively each of the Bayer Group and the Chemtura Group, were, or but for the arrangements or understandings referred to below would have been, by themselves or bodies corporate related to them: (a) in competition with each other and with other persons from time to time in the Australian Market, and throughout the world, in relation to the supply of Rubber Chemicals within the meaning of section 45(3) of the Act; and (b) competitive with each other and with other persons from time to time in the Australian Market, and throughout the world, in relation to the supply of Rubber Chemicals within the meaning of section 4D of the Act.

16 The primary judge addressed the adequacy of the pleadings in this respect in paras 24 to 40 of his reasons. The gravamen of the complaint of the respondents, accepted by his Honour, was that the applicant was relying on two markets (an Australian market and a global market) in an undifferentiated and confusing way. His Honour described the points in the pleadings where these two markets are relied on in para 28 of his reasons: 28. The respondents contend that the amendment is of a 'cosmetic' nature, because the particulars still refer to a worldwide market rather than describing the nature of the market in Australia. They point to what they submit is a series of inconsistencies in the various references to markets: · The reference in paragraph 12 made to a "national market … in Australia"; · The references in paragraph 13 to the Australian market and world-wide market; · Paragraph 16(b)(i) refers to the fixing, controlling and maintaining of prices in the "global market"; · Paragraph 26(b) speaks of both a "global market" and an "Australian market"; · The particulars subjoined to paragraph 13 refer to worldwide sales and global producers and to foreign decisions which speak of the market for rubber chemicals becoming "increasingly globalised" and "the worldwide character of the rubber chemicals market." The particulars also direct attention to a reference to "a single global market" which appeared in the Rubber Chemicals World Data Book 2004.

17 After discussing, in some detail, the authorities concerning what is a market for the purposes of the Trade Practices Act, his Honour returned to the pleadings and concluded: 38. The applicant has pleaded that there is a global market for the supply of rubber chemicals and an Australian market for those products. The particulars refer to the global market and how elements of that market extend to Australia. For example, the particulars sub‑joined to paragraph 12 include the information that the "total demand for rubber chemicals in Australia in the Cartel Period was approximately AUD$120 million". That demand was met exclusively by imports, the majority of which were produced elsewhere by the Respondents and one other company. Reliance was also placed, in the particulars subjoined to paragraph 13, to a passage in the Rubber Chemicals World Data Book 2004 which refers to "a single global market". Reference was made to findings by the European Commission, in December 2005, that cartel arrangements involving the respondents and others led, after 1995, to agreed increases of prices on a global and "multi regional" basis. 39. Emirates and the other authorities to which I have referred make it clear that, simply because a market is global, this does not mean that there could not be a market in Australia for the same products. The applicant's pleading is not, in my view, deficient by reason only that it speaks of the respondents being in competition with each other in the Australian market and throughout the world. There may be a market in Australia which forms part of a wider global market. That will, however, be the case only if the same firms are in close competition with each other to attract customers for their goods in both the global market and the Australian market which forms part of the global market. Unfortunately, the applicant does not plead sufficient material facts for the respondents to know clearly whether the applicant is alleging the existence of a global market (of which a market in Australia forms part) or whether it is alleging the existence of a market in Australia and a global market in which, for example, different or additional firms compete for business. The problem is compounded by the variable and imprecise phraseology to which attention has been drawn in paragraph 28 above. 40. Although the applicant's most recent attempt to identify a market in Australia has remedied some of the defects in its original statement of claim, further refinement will be necessary before the necessary degree of precision is achieved.

18 In my respectful opinion it is wrong for his Honour to say that the applicant has, in any relevant sense, pleaded that there is a global market for the supply of rubber chemicals and an Australian market for those products. It is true that there are references to a global market at various points in the pleadings. However those references have to be understood by reference to the facts known to the applicant which are substantially derived from the Commission's decision referred to earlier. That decision focuses on cartel arrangements applying globally. However the case pleaded by the applicant is plainly restricted to the operation or implementation of those arrangements in the Australian market as pleaded in para 12. So much is apparent from paras 26 to 28 in particular and subsequent paragraphs of the amended statement of claim which plead the conduct engaging (and in contravention of) the relevant provisions of the Trade Practices Act. The reference in para 26(b) to the global market simply speaks of the purpose for which the alleged price fixing in Australia was undertaken. It was, it is being alleged, undertaken as part of a cartel arrangement to maintain allocated shares of the global market. As I read it, the reference is not intended to sustain or advance a claim that the alleged price-fixing was, for the purposes of establishing proscribed conduct, other than price-fixing in the Australian market.

Foreign and Australian Respondents giving effect to cartel arrangement in Australia 19 It is convenient to deal with deficiencies his Honour perceived in relation to the way the case was pleaded in so far as it was being alleged that the cartel arrangements were given effect to in Australia. There are two aspects to this part of the case. One is the way the Foreign Respondents gave effect to the arrangements. The other is the way the Australian Respondents did. 20 As to the conduct of the Foreign Respondents, the primary judge said in his reasons of 13 November 2009, after noting that further particulars had been provided in the most recent iteration of the statement of claim, that the deficiencies in the pleadings he had identified in his reasons in October 2008 remained and were serious defects which gave rise to embarrassment. In those earlier reasons his Honour had said: 31. Paragraphs 18 to 25 plead that the foreign respondents gave effect to the global cartel arrangement and the periodic global cartel arrangements in australia (paragraphs 18 to 23), thereby contravening both paragraphs (i) and (ii) of s 45(2)(b) of the Act (paragraph 24) and that, as a result the applicant and group members suffered loss and damage (paragraph 25). These paragraphs plead the applicant's case in the most general terms. Again, there is a rolling up of two causes of action. Some conduct is, for example, pleaded in paragraph 18 that would seem to amount to price fixing; other types of conduct involve the imposition of an exclusionary provision and yet, (in paragraph 24), as already noted, this conduct, collectively, is said to give rise to contraventions of both sub-paragraphs of s 45(2)(b) without any attempt being made to specify which conduct is relied on in respect to which cause of action. 32. There is a notable absence of material facts needed to establish this part of the applicant's case. In paragraph 19(b), for example, it is alleged that each of the foreign respondents: "imposed on its respective Australian Respondent additional operational procedures and restrictions by which the Foreign Respondent could require the Australian Respondent to act consistently with the Global Cartel Arrangement or the Periodic Cartel Arrangements as in place from time to time." 33. In paragraph 20 it is pleaded that the operational procedures and restrictions referred to in paragraph 19(b) were addressed to unnamed persons in Australia, were intended to be received by unnamed persons in Australia and were "received in Australia". In paragraph 21 it is pleaded that the imposition of the operational procedures and restrictions was conduct, engaged in by the foreign respondents, in Australia. No material facts are pleaded to identify the "additional operational procedures and restrictions" which were said to have been imposed on Australian subsidiaries or to identify the means by which and the terms in which they were said to have been imposed.

21 As to the conduct of the Australian Respondents, his Honour said in his reasons of 13 November 2009: 46. Paragraphs 26 to 36 of the amended statement of claim appear in substantially the same terms as in the original. The principal deficiencies in this section of the pleading were identified in my earlier reasons as being: · The failure to plead any material facts concerning the directions which it is said caused the Australian companies to engage in price fixing or to impose exclusionary provisions; · The absence of material facts to establish that any of the Australian companies was the agent of one of the foreign respondents; and · The absence of any pleading of intentional and knowing participation by respondents for the purposes of establishing liability under s 75B of the Act. 47. Some attempt has been made to deal with some of these deficiencies. It is now pleaded (in paragraph 26) that the Australian respondents knew of the global cartel arrangements and the periodic global cartel arrangements. The s 75B pleading, in paragraph 36, is amended to allege that the foreign respondents knew of the Australian respondents' contravening conduct and vice versa. 48. The respondents complain that these amendments have not overcome the difficulties identified in my earlier reasons apart from the failure to allege that the Australian respondents were aware of the provisions of the cartel agreements. In particular, the bare allegation of agency remains in paragraph 33 and the amendments to paragraph 36 do not plead the intentional and knowing participation of respondents in alleged contraventions of the Act. 49. Although the applicant has not amended paragraph 33 it has sought to make good its allegation that the two Australian respondents acted as agents of foreign respondents by the provision of particulars. In substance, what appears to be alleged is that direction and agency can be inferred from the fact that each of the Australian respondents was a wholly owned subsidiary of one of the foreign respondents. Each is alleged to have been aware of the cartel arrangements and sought to implement them in Australia. In a case such as the present the applicant cannot, in my view, be expected to do more in making it clear how it puts this aspect of its case. 50. Difficulty continues to attend the attempt to make good an alternative claim relying on s 75B of the Act. In its amended form paragraph 36 alleges that any respondent which did not directly contravene the Act was a person involved in such contraventions by another respondent "as" (in the sense of "because") the foreign respondents "did the matters" pleaded in various paragraphs (including paragraphs 14 to 17) and "knew" that the Australian respondents "knew" about the cartel arrangements. It is also put that the Australian respondents "did the matters pleaded in paragraphs 26 and 27" (giving effect to the cartel arrangements) and "knew" about the global cartel arrangements and the implementation of them by the foreign respondents. 51. The most obvious difficulty to which this amended version of paragraph 36 gives rise is that it relies on some of the earlier parts of the pleading which I have ruled must be struck out. There is a further difficulty created by the use of phrases such as "did the matters pleaded" and "knew ... the matters pleaded" in various paragraphs. These are apt to cause confusion, particularly when one of the said "matters" is the knowledge of other respondents. Even in the absence of the problems caused by such cross‑referencing, there is an undesirable lack of precision inherent in such phrases. 52. Paragraph 36 is embarrassing and should be struck out.

22 His Honour's analysis in relation to the Foreign Respondents proceeds on an assumption that I would not necessarily embrace. The assumption is that a claim for damages arising from conduct comprehended by s 45(2)(b)(i) is a cause of action distinct from a claim to damages arising from conduct comprehended by s 45(2)(b)(ii). It is well settled that a claim for damages under s 82(1) is a statutory cause of action and the "wide variety of situations [involving] contraventions of Pts IV and V which give rise to causes of action under s 82(1) are diverse": Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525 and I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at [42]-[46]. However s 82(1) fastens on contravention of a "provision" of, relevantly, Part IV which proscribes conduct. Section 45(2)(b) proscribes conduct namely giving effect to a provision of a contract, arrangement or understanding which has one of two possible characteristics. One characteristic is if the provision is an exclusionary provision the other is that it has the purpose [or effect] of substantially lessening competition. It appears to me highly arguable that if the conduct has both characteristics then there is a contravention of one provision of the Act, namely s 45(2)(b) and one statutory cause of action for damages arising from that contravention. If so, there is no rolling up of two causes of action, and as his Honour concluded. 23 However even if the assumption made by his Honour is correct, there is no inherent vice, in my opinion, in pleading both causes of action in a "rolled up" way as long as it is clear that the allegation is that the respondents engaged in conduct having both characteristics identified in s 45(2)(b). As to his Honour's criticism that the pleading lacks particularity, it must be borne in mind, as his Honour acknowledged earlier in his reasons of 13 November 2009 (in the passage I have quoted at [11] above), that an applicant alleging cartel conduct is at a singular disadvantage in providing great particularity (at least before discovery is made) given that the cartel is likely to be the product of clandestine and secret arrangements known to the respondents (assuming, of course, that the case alleged is ultimately made out). For my part, I consider that the pleading against the Foreign Respondents sufficiently adequately articulates the case against them for the purposes of them knowing the case they need to meet and against which they can plead their defence. 24 Similar observations can be made about his Honour's criticism of the pleading against the Australian Respondents. 25 I now address the criticisms of the pleadings in so far as they raise a case based on s 75B of the Trade Practices Act. That paragraph reads: (1) A reference in this Part to a person involved in a contravention of a provision of Part IV, IVA, IVB, V or VC, or of section 95AZN, shall be read as a reference to a person who: (a) has aided, abetted, counselled or procured the contravention; (b) has induced, whether by threats or promises or otherwise, the contravention; (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. (2) In this Part, unless the contrary intention appears: (a) a reference to the Court in relation to a matter is a reference to any court having jurisdiction in the matter; (b) a reference to the Federal Court is a reference to the Federal Court of Australia; and (c) a reference to a judgment is a reference to a judgment, decree or order, whether final or interlocutory.

26 I accept that the drafting of para 36 is a little clumsy. However the way it is constructed is, in part, influenced by being a pleading in the alternative which has used the pleading device of incorporating by reference material facts pleaded in the principal case which are partly true (as asserted facts) and partly untrue (as asserted facts) in the alternative case. 27 Without deconstructing the paragraph with surgical precision, it is tolerably clear it invites a reader to assume that the case pleaded against all respondents of entering and directly or indirectly implementing cartel arrangements (the Foreign Respondents) or knowing of them and implementing them (the Australian Respondents) cannot be made out against one or some of them. By necessary implication, the references to either Foreign Respondents or Australian Respondents later in the paragraph cannot and should not be treated as a reference to respondents who are liable only as accessories. 28 On the assumption referred to in the preceding paragraph, subpara (a) then identifies an additional element of the case against those Foreign Respondents said to be liable only as an accessory. That case involves asserting the Foreign Respondents (and by necessary implication not a Foreign Respondent liable only as an accessory) entered and directly or indirectly implemented the cartel arrangements (the earlier paras 14 - 20 and 31 - 33) and those Foreign Respondents liable only as an accessory knew the other Foreign Respondents had done this and also knew the Australian respondents (and by necessary implication not an Australian Respondent liable only as an accessory) knew of the cartel arrangements and had given effect to them (the earlier paras 26 and 27). 29 On the same assumption subpara (b) adds a further element of the case against those Australian Respondents liable only as an accessory. That further element involves asserting the other Australian Respondents knew of and gave effect to the cartel arrangements (the earlier paras 26 and 27) and that those Australian Respondents liable only as an accessory knew the other Australian Respondents had done this and also knew the Foreign Respondents (and by necessary implication not a Foreign Respondent liable only as an accessory) entered and directly or indirectly implemented the cartel arrangements (the earlier paras 14 - 20 and 31 - 33). 30 Of course whether this pleaded case will ultimately establish the liability as an accessory of any respondent against whom the principal case fails will depend on the conclusions the trial judge reaches about the scope and operation of s 75B which, as I apprehend it, is not a settled issue. But the pleading is not so deficient, in my opinion, as to require it to be re-pleaded. I would also have thought that, if leave to appeal is given (as it is), then it is open to me in determining the appeal (where errors of the primary judge have been identified) to determine whether the pleading is embarrassing or not and not simply to assess whether it was reasonably open to the primary judge to decide it was embarrassing.

The identification of the group 31 In response to his Honour's criticism of the definition of the group in the reasons of 10 October 2008, the applicant amended the definition. It now depends on the three defined terms, namely "Rubber Chemicals", "Rubber Compounds" and "Rubber Products". The definitions of these expressions in para 3 are: "Rubber Chemicals" means the chemicals listed in Schedule 1: "Rubber Compounds" means compounds of natural or synthetic rubber and other raw materials manufactured using Rubber Chemicals; and "Rubber Products" means intermediate and/or finished products manufactured using Rubber Compounds for manufacturers and consumers. The group is identified in para 4: 4. The group members to whom this proceeding relates ("Group Members") are commercial manufacturers of Rubber Compounds and/or Rubber Products who during the period 1 July 1995 to 31 December 2001 ("Cartel Period"): (a) paid at least five thousand Australian dollars (AUD$5000.00) for Rubber Chemicals (as listed in Schedule 1); or (d) paid at least ten thousand Australian dollars (AUD$10,000) for Rubber Compounds; and who: (i) were at all relevant times ordinarily resident in or carrying on business in Australia: (ii) are not Justices or Registrars of the High Court of Australia or the Federal Court of Australia; and (iii) are not a Respondent in this proceeding or an entity related to such a person within the meaning of the Corporations Act 2001.

32 After noting the amendments and observing some earlier criticisms had been met, his Honour said: 12. There remains, however, a significant problem with the group definition. This is the ambiguity inherent in the word 'using' which appears in the definitions of "Rubber Compounds" and "Rubber Products". The alleged anti-competitive conduct relates to the sale of rubber chemicals. The class, however, is defined to include those who have paid the requisite amount for rubber chemicals and/or rubber compounds. Rubber compounds, as defined in the amended statement of claim, are manufactured using the specified rubber chemicals. 13. The respondents contend that the word 'using' is ambiguous. When a rubber chemical is used in the creation of a product it may become an identifiable part of that product. On the other hand it may simply be a catalyst, that is, it will be 'used up' in the manufacturing process and form no part of the finished product. This will not create a problem for manufacturers of rubber compounds because they will know whether they have used rubber chemicals to produce the compounds. Manufacturers of rubber products will be in a different position. They will be members of the group if they produce intermediate and/or finished products using rubber compounds. They may or may not also be the manufacturer of those compounds. If they are not, the practical way to ascertain whether or not they form part of the defined group will be to conduct tests on the compounds they used to see if they contain rubber chemicals. If however, those chemicals have been eliminated in the course of creating the compound they will not be able to know whether the compounds are of a kind which bring them within the definition. Resort to the manufacturer or supplier of the compound may not be easy given that the definition remains wide enough to cover compounds which were manufactured anywhere in Australia. Even if contact is made, the manufacturers of rubber products will have to rely on the manufacturers of the compounds to provide them with accurate information about the types of chemicals used to produce the compounds. 14. The Federal Court of Australia Act 1976 (Cth) ("the FCA Act") requires that a description of the group members be provided in the originating process for a representative proceeding: s 33H(1)(a). As I said in my earlier reasons, those group members who do not wish to be bound by the outcome of the proceeding must have the opportunity to opt out: s 33J of the FCA act. It is, therefore, imperative that the group is defined with sufficient clarity to ensure that manufacturers know whether or not they are caught by the group definition. Given the ambiguity of the term "using", the group definition still fails to identify the members of the group with sufficient clarity. 15. This problem with the group definition has implications for the efficacy of other parts of the amended statement of claim. The applicant pleads (in paragraph 37) that Bayer Australia and Chemtura Australia were able to and did influence the price of rubber compounds in Australia. In paragraph 38 it is alleged that the respondents overcharged for rubber compounds. As a result it is alleged (in paragraph 40) that the applicant and group members suffered loss and damage caused by them having to pay more for rubber compounds than they would have been required to do had the respondents' contravening conduct not occurred. In the absence of a clear definition of group members and a clear understanding of what is comprehended by the term "rubber compounds", these paragraphs are embarrassing. The respondents cannot fairly be expected to plead to them. (Emphasis added)

33 If, in describing the word "using" as ambiguous, his Honour meant that it could, in context, have several meanings then I respectfully do not agree. It has the one meaning. In the context of the defined meaning of "Rubber Compounds" it refers to "Rubber Chemicals" being deployed in the process of manufacturing "Rubber Compounds". In the context of the defined meaning of "Rubber Products" it refers to "Rubber Compounds" being deployed in the process of manufacturing "Rubber Products". 34 However his Honour may have simply meant that the "using" may occur in one of the two ways described in para 13. If so, I do not share his Honour's concerns about the consequences of this on the definition of the group. The fundamental statutory requirement is that the application (or some other document supporting the application) "describe or otherwise identify the group members": s 33H(1)(a). This has been done, in the present case, unambiguously. The fact that enquiries might need to be made by a person uncertain of whether they are a group member does not deprive the description of objective criteria by reference to which membership or non-membership can be established. This was the test applied by the Full Court in King v GIO Holdings Ltd [2000] FCA 1543 at [11]. If a person who may be a group member does not wish to ascertain whether they meet those criteria or is unable to do so but in any event does not wish to be involved in the proceedings, they can opt out of the proceedings. If a person who may be a group member is unable to ascertain whether they meet those criteria and wishes to prosecute with certainty a claim of the type being advanced by the applicant, then that person can opt out and pursue an individual claim. 35 It is true that the respondents should know the constitution of the group with a view to being able to assess the likely membership of it including numbers and the size of the businesses involved. This would obviously be important information for any respondent in assessing their potential exposure by way of liability to damages which, in turn, may then be relevant if any respondent wishes to compromise the claim. However it is not impossible to conceive of mechanisms which would enable any respondent to gain this information if they did not presently have it: see for example King v GIO Australia Holdings Ltd (2002) 121 FCR 480 at [12], [17] and [27] and a later decision in that litigation, [2002] FCA 1560.

Leave to appeal 36 The starting point in considering whether leave to appeal should be granted is, I immediately acknowledge, the need for great caution in too readily interfering with pre-trial processes by granting leave to appeal against discretionary interlocutory judgments concerning matters of practice and procedure. Whether pleadings are sufficient involves a process of evaluation about which minds may reasonably differ. However in this matter I have concluded leave to appeal should be granted having regard to what I perceive to be a number of errors attending the conclusions of the primary judge. 37 It has taken some considerable time since the applicant commenced these proceedings for the pleading issues concerning the statement of claim to be ventilated before the primary judge. There are a number of authorities to which we were referred which suggest that the rigour with which pleadings have historically been scrutinised is, within appropriate limits, yielding to a more flexible approach influenced by the nature of the case sought to be advanced and the context in which it is advanced. Those authorities suggest that some flexibility may be appropriate in cartel cases and also in representative proceedings. 38 I illustrate the second point by referring to a judgment of Merkel J in Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 569 concerning the adequacy of the pleadings and the judgment of the Full Court in an appeal from a later judgment of Merkel J in the same proceedings. I agree with the observations of Merkel J and the Full Court. The proceedings were a representative proceeding claiming damages flowing from an explosion interrupting the supply of gas to consumers in Victoria. The respondents challenged on several occasions the way the case was pleaded. In the course of rejecting one such challenge (though some were successful), Merkel J observed: 8 In my view the Court's case management and individual docket system is such that it is well placed to ensure that there is no embarrassment or prejudice about the pleadings and proper particulars can be required to be provided at an appropriate time. At this point of time I am not satisfied by the evidence or the submissions on behalf of Esso that the pleadings are so wide that the resulting embarrassment or prejudice is such that Esso is unable to properly or adequately plead to the statement of claim or proceed with any other interlocutory steps. The pleading deals with technical matters, the nature of which are well understood by Esso and it would appear, to a significantly lesser extent, the applicants. In all the circumstances I am not persuaded that it is appropriate that I strike out the statement of claim on the ground relied upon by Esso.

39 In a concluding observation, Merkel J. said: 12 Finally, I would add that pleadings are only a means to an end and [sic] (see Gould and Birbeck and Bacon v Mount Oxide Mines Ltd 22 CLR 490 at 517). Further the relief to be granted on a pleadings motion is a matter of discretion (see Brambles Holdings Ltd v Trade Practices Commission (1979) 28 ALR 191 at 193). Even if I had acceded to the arguments of Esso to a greater extent than I have in my view the Court's individual docket system of case management and its ability to ensure that the proceeding is conducted in a manner which does not unfairly prejudice any of the parties is such that I would not strike out the pleading. Rather, if complaint is made about any particular aspect being embarrassing or prejudicial the Court has ample power to deal with that aspect so as to avoid prejudice or embarrassment in the course of its management of the case. I am satisfied that the causes of action relied upon have been pleaded in a manner that ensures that Esso understands those causes of action and the substance of the allegations made against Esso. Thus, the pleading is fulfilling its basic function at this stage. In all the circumstances I would decline to exercise my discretion to strike out the statement of claim or any part thereof.

40 Nonetheless, Merkel J had not been entirely uncritical of the pleadings and his Honour had struck out an earlier version of the statement of claim indicating that he had taken a stricter approach to the pleadings than he might otherwise have taken because of the magnitude of the litigation and the issues it raised. Later judgments of Merkel J concerning the pleadings attracted applications for leave to appeal by respondents (either as respondents or cross-respondents to cross-claims). French J in the Full Court in Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564 observed at [50] (Beaumont and Finkelstein JJ agreeing): The Court exercises a degree of restraint in responding to the contention that the pleading is so fatally flawed that it should not see the light of day at a trial of the action. It is not enough that the pleaded case is weak or has a low prospect of success - Coe v Commonwealth of Australia (1979) 53 ALJR 403. The Court should not shrink from striking out an untenable pleading because it thinks that argument is necessary to demonstrate its deficiencies - General Steel at 130 (Barwick CJ). On the other hand an application to strike-out which involves prolonged and serious argument should only be entertained if the judge not only harbours doubt about the soundness of the pleading but also is satisfied that striking out will avoid the need for a trial or substantially reduce the burden of its preparation - Williams & Humbert Ltd v W & H Trademarks (Jersey) Ltd [1986] 1 AC 368 at 436 (Lord Templeman), applied in Sun Earth Homes Pty Ltd v Australian Broadcasting Corporation (1990) 45 FCR 265.

41 As noted earlier, the proceedings were commenced on 27 September 2007. It was necessary for orders to be made authorising service of the application overseas. That was done in late November 2007. In May 2008, the primary judge heard an application by the respondents to strike out the statement of claim. Five months later, on 10 October 2008, the primary judge gave judgment striking out the applicant's pleadings. The next pleading contest (a further application to strike out the statement of claim) was heard in February 2009. Almost 10 months later, on 13 November 2009, the primary judge gave judgment striking out the applicant's pleadings. That is the judgment to which this appeal relates. 42 There is now no room to debate whether it is necessary for Courts to hear and determine cases with as much expedition as is reasonably possible. It is necessary. The point was made by the plurality in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [114] and emphatically made by Heydon J at [156]. The time it has taken to resolve the pleading issues concerning the formulation of the applicant's case in this matter is at odds with what litigants can reasonably expect in this Court about how a docket judge will case manage a case towards resolution by judicial determination or settlement. And it is not simply a question of litigants' reasonable expectations. To the extent that mechanisms for fulfilling this need can be enshrined in legislation, the recent amendments to the Federal Court of Australia Act made by the Access to Justice (Civil Litigation Reforms) Amendment Act 2009 (Cth) and s 37M(1)(b) of Schedule 1 (which speaks of legal disputes being resolved "as quickly, inexpensively and efficiently as possible") and s 37M(2)(d) of Schedule 1 (which contains the objective of "the disposal of all proceedings in a timely manner"), appear to be intended to serve this purpose. 43 Delay can have insidious consequences. A Full Court discussed the consequences of delay in giving judgment in Expectation Pty Ltd v PRD Realty Pty Ltd (2004) 140 FCR 17. While many of the observations made by the Full Court concerned the consequences of a delayed judgment after a final hearing involving contested evidence, the following observations (at [74]) are apt to apply more generally and to delayed judgments in relation to interlocutory contests: ... A judge who comes to make an inordinately delayed decision will inevitably be subjected to great pressure to complete and publish the judgment. A conscientious judge could not but feel that pressure. It is almost inevitable that there will also be some form of external pressure - whether from the parties, the management of the Court, the press or parliamentarians. That pressure could well unconsciously affect the process of decision-making and the process of giving reasons for decision. The decision that is easiest to make and express will have great psychological attraction. As was recently said by the Western Australian Court of Appeal in Mount Lawley Pty Ltd v Western Australian Planning Commission [2004] WASCA 149, in the course of a valuable review of the significance of delay in the delivery of judgments: '…a long delay can give rise to disquiet … because of the suspicion, on the part of the losing party, that the task may have become too much for the trial Judge and that he or she had been unable, in the end, to grapple adequately with the issues.' ([31]).

44 I do not suggest the primary judge in giving judgment on 13 November 2009 was affected in this way. However the observations of the Full Court are a salutary reminder of the need for judges to resolve contested disputes, whether interlocutory or final, as soon as practicable and the potential consequences of not doing so. 45 What I have said about delay mainly focuses on the delay from the perspective of the litigants and the objective fact of delay. Why it has taken the time it has to resolve these pleading issues is unknown. Quite possibly there is a compelling explanation. As Barker J recently noted in SZFNX v Minister for Immigration and Citizenship [2010] FCA 562 (at [150]): All courts, including the Federal Magistrates Court, are encouraged to bring down decisions in a timely period following hearing. Undoubtedly, as the judgments in NAIS explain, there are a range of circumstances, not the least of which might be the workload of individual judicial officers, that explain why some decisions take longer to be delivered than parties might expect or would prefer.

46 But the delay in resolving the pleading issues in this matter has been considerable. In these circumstances and in light of the erroneous approach of the primary judge I consider the more appropriate and just course is to grant leave and allow the appeal rather than deferring to the views of the primary judge on these questions of practice and procedure and refuse leave. To adopt any other approach would leave the applicant grappling with alleged problems with the pleadings where the precise problems have, in some instances, not been identified. Necessarily there would be further delay as the parties and the Court moved towards a point where the applicant pleaded a case which the respondents could not or did not wish to challenge or pleaded a case in a way that satisfied the Court in any further challenge to the applicant's pleadings. 47 For the preceding reasons, leave to appeal should be granted and the appeal allowed with costs. The notices of motion of the third and fifth respondents of 11 December 2008, of the second respondent of 13 January 2009 and of the first respondent of 3 February 2009 seeking the striking out of the applicant's amended statement of claim should be dismissed with costs. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore.

BETWEEN: WRIGHT RUBBER PRODUCTS PTY LTD (ACN 075 384 100)

Jessup and dodds-streeton jj 48 In this application for leave to appeal, we have had the advantage of reading a draft of the reasons prepared by Moore J. For reasons which follow, we take the view that the application for leave should be granted, and that the appeal should be allowed, but we do not agree that the Amended Statement of Claim should be reinstated in toto. As will appear, there are two areas in which we agree with the primary Judge that parts of the Amended Statement of Claim should be struck out. 49 On an application for leave to appeal from an interlocutory judgment, the two-part test of sufficiency of doubt and substantial injustice referred to by the Full Court in Décor Corporation Pty Ltd v Dart Industries Inc. (1991) 33 FCR 397, 398-400 should be applied. Further, where the judgment being challenged is a discretionary one which relates to a matter of practice and procedure, the Full Court should be especially cautious before intervening: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170, 177. The present was that class of case. However, we do not understand it to have been suggested by the respondents that, if the court were of the view that the judgment of the primary Judge in the present case was attended by sufficient doubt to warrant the matter being reconsidered, and did take the view that substantial injustice would be occasioned to the applicant if leave to appeal were refused, we should decline to intervene for no better reason than that the matter concerned practice and procedure. Further, as we make clear towards the end of these reasons, although the sufficiency of an applicant's Statement of Claim is a matter of practice and procedure, depending upon the way in which the matter has been approached in a particular case, real issues as to his or her access to justice may thereby be presented.

Identification of the relevant market 50 The applicant identified the relevant market, and positioned the respondents within it, in paragraphs 12 and 13 of its Amended Statement of Claim, as follows: 12. At all material times, there was in Australia a national market for the supply of Rubber Chemicals to commercial manufacturers of Rubber Compounds and Rubber Products within the meaning of section 4E of the Act ("the Australian Market"). 13. At all material times each of Bayer, Chemtura and Uniroyal ("the Foreign Respondents"), further or alternatively each of the Bayer Group and the Chemtura Group, were, or but for the arrangements or understandings referred to below would have been, by themselves or bodies corporate related to them: (a) in competition with each other and with other persons from time to time in the Australian Market, and throughout the world, in relation to the supply of Rubber Chemicals within the meaning of section 45(3) of the Act; and (b) competitive with each other and with other persons from time to time in the Australian Market, and throughout the world, in relation to the supply of Rubber Chemicals within the meaning of section 4D of the Act. Lengthy particulars were supplied for each of these allegations. In his reasons, the primary Judge did not identify any difficulty arising out of the particulars to para 12, and we do not understand the respondents to have raised any. 51 It was in the particulars to para 13 that, according to submissions made on behalf of the respondents that were accepted by the primary Judge, problems arose. The particulars referred in terms to the decision of the European Commission of 21 December 2005 mentioned by Moore J in his reasons. Save to set out a list of 23 companies which were said to be included "(without limitation)" amongst those with which the foreign respondents competed with each other "from time to time in the Australian market", the lengthy particulars to para 13 are concerned wholly with the "throughout the world" dimension of the pleading. 52 When para 13(a) of the applicant's pleading alleges that the respondents referred to were "in competition with each other ... within the meaning of s 45(3) of the Act", it must be taken to have been alleging that those respondents were in competition in a market in which they supplied rubber chemicals, being a market in Australia (as required by s 4E of the Trade Practices Act 1974 (Cth)). When para 13 (b) of the pleading alleges that those respondents were "competitive with each other … within the meaning of s 4D of the Act", it must be treated as alleging that those respondents (and other persons) were in competition with each other, that is to say, in competition in a market in Australia. Against this understanding, the allegation that the respondents were in competition with each other and other persons, and were competitive with each other and other persons, "throughout the world" may be treated as part of the body of facts, relevant to the case, upon which the applicant would rely, but cannot be regarded as making any contribution to the establishment of the applicant's cause of action as such. To the extent that the pleader chose to particularise these allegations, one would have expected him or her to elaborate, to the extent necessary, upon the allegation that the respondents referred to were in competition with other, and were competitive with each other, in the Australian market as identified in para 12. The particulars to para 13 perform no such role. 53 The circumstance to which we have just referred would not, at least normally, make the pleading in para 13 embarrassing within the meaning of O 11 r 16. As we have said, the particulars which are supplied, on their face, appear largely to perform the function of fleshing out the "throughout the world" aspect of the relevant allegations. To the extent that particulars of the respects in which the respondents were in competition with other, and were competitive with other, in the Australian market were not supplied under para 13 as such, it would have been open for the respondents to seek those particulars. However, his Honour took the view that, because of the introduction into the pleading of notions of a "global market", the Amended Statement of Claim was embarrassing, and should be struck out. 54 In paras 28 and 29 of his reasons of 13 November 2009, the primary Judge said: 28. The respondents contend that the amendment is of a 'cosmetic' nature, because the particulars still refer to a worldwide market rather than describing the nature of the market in Australia. They point to what they submit is a series of inconsistencies in the various references to markets: · The reference in paragraph 12 made to a "national market … in Australia"; · The references in paragraph 13 to the Australian market and world-wide market; · Paragraph 16(b)(i) refers to the fixing, controlling and maintaining of prices in the "global market"; · Paragraph 26(b) speaks of both a "global market" and an "Australian market"; · The particulars subjoined to paragraph 13 refer to worldwide sales and global producers and to foreign decisions which speak of the market for rubber chemicals becoming "increasingly globalised" and "the worldwide character of the rubber chemicals market." The particulars also direct attention to a reference to "a single global market" which appeared in the Rubber Chemicals World Data Book 2004. 29. The applicant responded that the rubber chemicals market is global in nature, and that this emerges clearly in the particulars sub-joined to paragraphs 12 and 13. The applicant denies that the existence of a global market means that there is no Australian market. In any event, it contends that the issue should be resolved at trial and not on a strike-out application.

55 In our view, para 29 is significant. In response to the respondents' strike-out motion, the applicant might well have defended its pleadings by saying that it was clear that an Australian market only was alleged, and that the references to a wider market, in the particulars to para 13 and elsewhere, were merely by way of sketching the scene within which the global cartel arrangements, duly given effect to in Australia, were made. So far as we can understand the applicant's case as presented below (and we do not have the benefit of the written submissions which were relied upon before the primary Judge), that was an element of the applicant's justification of its pleading. However, in submissions before the primary Judge, counsel for the applicant said: Because of the advance [sic] state of communications and because of the fact that the major suppliers are all round the world one can have in an ergonomic sense a global market. Now, that has to be fitted into the Australian Act. The Australian Act requires, obviously, a market in Australia. But the Act doesn't say, for example, if there is a global market - and there are many markets which are global now or quasi-global - the Act doesn't apply, because that would be to knock out the teeth of the Act in an enormous number of cases. But what it requires is that there be an Australian market. But if part of the activity in that global market is in Australia, then the Act latches onto that, and that's effectively what - so there's no inconsistency between saying there's a global market, because that's recognising an economic reality, and saying that there is an Australian market for the purposes of the Act. And if that is a proposition which is wished to be advanced, saying that if you have a global market you can't have an Australian market, then that is a matter for ultimate hearing, which would involve a significant issue.

56 Later, counsel said that the circumstance that the particulars (presumably to para 13) caused some confusion by reason of the fact that they referred to a "global market" should not give rise to any confusion. They referred in this respect to the judgment of Hill J in Riverstone Computer Services Pty Ltd v IBM Global Financing Australia Ltd [2002] FCA 1608 at [21]. In a passage referred to by the primary Judge in his reasons, Hill J had said: A global market which includes Australia (and the inference is that any global market did) is arguably a market in Australia if sales are made here (and the evidence shows they are) even if that market might also exist in the United States, Japan, China or any country which was a member of the European Union. Counsel for the applicant continued: So, we submit that … what is at least arguable is that if one has a global market, if it includes, as when in the geographical territory, Australia, it fits within the section 4E definition of the Act as an Australian market. The fact that the reality is that it does so as part of a global market doesn't detract from the pleading but rather reflects the reality and indeed reflects the reality as put forward by the respondents themselves.

57 We have set out these extracts from the transcript of the hearing before the primary Judge because they explain para 29 of his Honour's reasons. Strictly speaking, the applicant did not plead that there was a global market for the supply of rubber chemicals, and to that extent the primary Judge was in error to have so observed in para 38 of his reasons. However, given the way in which the market situation was explained to his Honour as set out above, he had every reason, in our respectful view, to see para 13 in that light. The inclusion of the words "throughout the world" twice in that paragraph, when the provisions of the Trade Practices Act upon which the applicant relied are confined in their operation to markets in Australia, at least had the potential to confuse and might, depending upon the context in which they were found in the pleading as a whole, be considered to be embarrassing. It is here that the function of particulars becomes important. Although particulars are not part of a pleading, if a pleading would otherwise suffer from one of the defects referred to in O 11 r 16, the provision of appropriate particulars may make the pleader's intention clear, and thus remove the source of any embarrassment. 58 Rather than having that function, the particulars to para 13 say nothing of any value (other than, in the passage to which we have referred, to repeat the allegation that the relevant respondents competed with each other and with others) about the competitive position in Australia. They were not, in that sense, particulars of the only elements of para 13 which spoke the language of the Trade Practices Act. They did not resolve the potential source of embarrassment in the pleading itself: they compounded it. 59 We do not understand the primary Judge to have resisted the proposition that a market in Australia may exist as part of a global market. In the extract from Riverstone which we have set out above, his Honour emphasised the word "arguably", and, a little later in his reasons, continued (at [37]): In a case such as the present where an applicant alleges the existence of a global market or a market extending beyond the bounds of Australia (but which includes Australia), it is necessary that that market be identified in any pleading. It is a material fact or particular: see Auskay International Manufacturing & Trade Pty Ltd v Qantas Airways Ltd (2008) 251 ALR 166 at 173. The pleadings must identify the relevant goods or services, the geographic boundaries of the market and those involved in close competition within the market whom it is said have engaged in anti-competitive conduct. A single market will thus be identified, which will include a "market in Australia". The gravamen of his Honour's concerns in presently relevant respects, and the steps which he required the applicant to undertake to address them, were the subject of para 39 of his reasons: Emirates v ACCC (2009) 255 ALR 35 and the other authorities to which we have referred make it clear that, simply because a market is global, this does not mean that there could not be a market in Australia for the same products. The applicant's pleading is not, in our view, deficient by reason only that it speaks of the respondents being in competition with each other in the Australian market and throughout the world. There may be a market in Australia which forms part of a wider global market. That will, however, be the case only if the same firms are in close competition with each other to attract customers for their goods in both the global market and the Australian market which forms part of the global market. Unfortunately, the applicant does not plead sufficient material facts for the respondents to know clearly whether the applicant is alleging the existence of a global market (of which a market in Australia forms part) or whether it is alleging the existence of a market in Australia and a global market in which, for example, different or additional firms compete for business. The problem is compounded by the variable and imprecise phraseology to which attention has been drawn in paragraph 28 above. In written submissions filed in the present application, counsel for the applicant contended that the primary Judge was in error "in apparently concluding … that the applicant needs to plead with more precision the existence and scope of a global market and its relationship to the Australian market alleged." As we read the reasons of the primary Judge, his Honour did not, even "apparently", so conclude. Neither expressly nor implicitly did he make it a requirement that the applicant rely on the existence of a global market. It is clear from the passage set out above that his Honour took the view that it was entirely a matter for the applicant whether to allege that there was an Australian market only, a global market only (of which an Australian market was part) or an Australian market and a global market. 60 In a footnote to their submissions, counsel for the applicant proposed that the primary Judge had, in the course of the hearing before him, "at least partially indicated that the applicant did not need to trouble itself further in relation to the interrelationship between the Australian market and global market". That submission is a mischaracterisation of what occurred before the primary Judge. Referring to his Honour's reasons given on 10 October 2008 ([2008] FCA 1510), counsel for the applicant submitted that his Honour had not been saying that, if an Australian market were part of a global market, the Trade Practices Act did not apply. His Honour observed (and it appears to have been, and still to be, common ground) that the respondents did not contend otherwise, and invited counsel for the applicant not to trouble themselves on that point. On no view was his Honour inviting counsel for the applicant not to trouble themselves on the question of the inter-relationship between the Australian market and the global market, if indeed the existence of those two markets were to be alleged. 61 For reasons which we have attempted to explain, the conclusion that para 13 of the Amended Statement of Claim was embarrassing was, in our opinion, a view which was reasonably open to the primary Judge. His Honour's conclusion to that effect was of a discretionary character. We do not suggest that another judge might not reasonably have approached the matter differently, but we are unpersuaded that his Honour's conclusion was attended by error of the kind that should be corrected on appeal.

The cartel arrangements 62 The primary Judge observed, correctly in our respectful view, that paras 14-17 of the Amended Statement of Claim were "central to the pleading". To the extent necessary for present purposes, the paragraphs of the pleading with which the primary Judge had difficulty are set out in the reasons of Moore J. The primary Judge described the applicant's changes made since his judgment of 10 October 2008 as "some modest attempts … made to improve the drafting", but considered that the principal deficiencies remained. Those deficiencies were the ones which his Honour identified in his earlier reasons, principally in paras [22]-[23] thereof: The discrete causes of action arising under sub-paragraphs (i) and (ii) of s 45(2)(a) of the Act are not pleaded separately. Rather they are rolled up, in a confusing way, in paragraphs 14 and 15 of the statement of claim. In paragraph 14 the applicant alleges that the foreign respondents agreed to do certain things. Some of those things (such as the conduct identified in paragraph 14(b)) is the type of conduct which might lead to a contravention of s 45(2)(a)(i); some of the conduct (such as that identified in paragraph 14(a)) might be thought to constitute a contravention of s 45(2)(a)(ii); and some of the conduct (such as that falling within paragraph 14(d)) might be relied on to support either or both causes of action. Paragraph 15 alleges that the provisions of the global cartel arrangement had various purposes and effects, picking up the language of ss 4D and 45A of the Act. No attempt is made to discriminate between the various provisions of the global cartel arrangement in order to enable the respondents to understand which parts of the arrangement are relied on to support the applicant's price fixing case and which are said to be relied on in relation to the exclusionary provisions case. In our view, a starting point to an understanding of the reasons for the judgment under appeal are these paragraphs of his Honour's reasons of 10 October 2008. 63 The essence of the primary Judge's concern, in his reasons of 10 October 2008, was that the facts alleged were not organised by reference to what were apparently two discrete characterisations of the respondents' conduct on which the applicant proposed to embark, namely, those arising under subpara (i), and those arising under subpara (ii), of s 45(2)(a) of the Trade Practices Act. With respect to his Honour, we do not consider that that circumstance made the Amended Statement of Claim embarrassing. Taking first paras 14 and 15 thereof, a pleading technique is adopted which is both conventional and, generally at least, satisfactory. In para 14, the applicant sets out the facts, so far as they are known to it, as to what actually occurred. In para 15, it places a complexion upon those facts which picks up the statutory prohibitions. In the latter respect, it is significant that its allegations by way of characterisation are expressed conjunctively. That is to say, it alleges that the global cartel arrangement (as to which see para 14) had a purpose, or was likely to have an effect, of the kind referred to in s 45(2)(a)(ii); and it goes on to allege that that same arrangement had a purpose which would pick up the definition of "exclusionary provision" in s 4D of the Trade Practices Act. 64 The allegations in paras 14 and 15 to which we have referred both set out the facts upon which the applicant would rely, and articulated the statutory basis for the applicant's allegation that those facts gave rise to a cause, or to causes, of action. For our part, and with respect to his Honour, we cannot understand why an allegation that a series of facts sufficiently identified gives rise to two causes of action should be regarded as embarrassing. Particularly in the context of a cartel case in which the applicant is presumptively unaware of the minutiae of the goings-on between the respondents, we do not think that O 11 r 16 implicitly places upon the former the obligation to sort the alleged facts as between the causes of action referred to. We express these views, of course, in the specific context of the terms of s 45(2) of the Trade Practices Act. The respects in which a contract, arrangement or understanding of the kind referred to in paras (a) and (b) of that subsection would give rise to a cause, or to causes, of action are closely related, and by no means exclude the realistic possibility that a single contract, arrangement or understanding might fall foul of each of the numbered subparagraphs. As alleged by the applicant, such was the situation on the facts of the present case. Our observations should not be regarded as having any application to delicts which are quite separate from each other, in point of content or context. 65 The primary Judge also asked the question, rhetorically it seems to us, why were the extensive details as to the cartel arrangements alleged, to which the applicant referred in its particulars, not made the subject of allegations in its pleading as such. With respect to his Honour, we do not think it is the correct approach to lay down a challenge, in effect, to the applicant to load up its pleadings with as much information of wrongful conduct as is available to it. Failure to do so should not be regarded as a source of embarrassment within the terms of O 11 r 16. In a case such as the present, where the applicant was, as it were, outside the tent apropos the cartel arrangements of which it complained, it was, in our view, appropriate for it to have pleaded the broad substance of those arrangements, and to have used the particulars as the means by which to place as much flesh upon the bones as was then available to it. Looking at paras 14 and 15 in isolation, the most obvious criticism of them would not be that they were embarrassing: it would be that they lacked particulars. In the way that the applicant has approached it, these particulars have been provided, at least, so it seems, to the extent that they may be. 66 For the reasons which we have attempted to explain, we consider, with respect, that the primary Judge was in error to have treated paras 14 and 15 as embarrassing within the meaning of O 11 r 16. His Honour took the view that paras 16 and 17, which dealt with the so-called "periodic global cartel arrangements", were relevantly indistinguishable from paras 14 and 15, and so do we. Our point of difference is that we do not regard any of these paragraphs as embarrassing.

Giving effect to cartel arrangements 67 Under the heading "Giving effect to the global and periodic global cartel arrangements", the applicant's Amended Statement of Claim commences with the following allegations: 18. From in or about July 1995, the Foreign Respondents and each of them by themselves or by bodies corporate related to them including Bayer Australia and Chemtura Australia ("the Australian Respondents"), further or alternatively each of the Bayer Group and the Chemtura Group: (a) supplied Rubber Chemicals in the Australian Market at the prices, or at prices not lower than the prices, fixed by the Global Cartel Arrangement or the Periodic Global Cartel Arrangements as in place from time to time around the world including Australia; and (b) supplied Rubber Chemicals in the Australian Market in volumes and to customers and in regions necessary to maintain the share of the global market for Rubber Chemicals allocated to each of them by the Global Cartel Arrangement of the Periodic Global Cartel Arrangements as in place from time to time around the world including Australia. 19. From about July 1995 until about December 2001, each of the foreign Respondents by themselves or agents: (a) issued directions to its respective Australian Respondent as to: (i) the price at which Rubber Chemicals manufactured by or on behalf of the Foreign Respondent were to be sold in Australia from time to time; and (ii) the volume of Rubber Chemicals which could be supplied by either the Foreign Respondent or Australian Respondent in Australia from time to time; (b) imposed on its respective Australian Respondent additional operational procedures and restrictions by which the Foreign Respondent required the Australian Respondent to act consistently with the Global Cartel Arrangement or the Periodic Global Cartel Arrangements as in place from time to time. Lengthy particulars are provided under para 19. Those particulars were, for the most part, introduced in the Amended Statement of Claim: they had not been present originally. In his reasons for judgment under appeal, the primary Judge noted, with ample justification, that the material facts remained "effectively unchanged from the original". His conclusion was that the deficiencies to which he had drawn attention on 18 October 2008 had not been rectified, and that, therefore, the pleading was still embarrassing within the meaning of O 11 r 16. 68 What his Honour had said in October 2008 about para 18 of the original Statement of Claim, set out in para 31 of his Honour's reasons of that date, has been referred to by Moore J. To the extent that the primary Judge complained of the applicant's having "[rolled] up" its two causes of action (those said to arise under subparas (i) and (ii), respectively, of s 45(2)(b) of the Trade Practices Act), we refer to what we have said at para 64 above. It seems to us, with respect to his Honour, that the pleader was taking the same approach as had been done with respect to the alleged making of the contract, arrangement or understanding in paras 14-15 and 16-17. The applicant's factual allegations are set out in paras 18-20, in para 21 it is alleged that the conduct referred to had been engaged in in Australia, in para 23 sufficient is said to make it clear that the applicant alleges that the conduct amounted to giving effect to the cartel arrangements previously alleged, and in para 24 it is alleged that the facts referred to gave rise to contraventions of each of the internal provisions in s 45(2)(b) of the Trade Practices Act. 69 For reasons explained earlier, we do not consider that a pleading in this form should have been regarded as embarrassing. So long as it is clear, as it was, that the applicant alleged that the primary facts set out gave rise to contraventions of both subpara (i) and subpara (ii) of s 45(2)(b), the respondents knew what was put against them, and no occasion arose, in our view, for the applicant to have attempted to sort facts, of which it had only indirect knowledge, as between those which might have supported a case under one, or the other, or both, of these provisions. 70 In his reasons of 10 October 2008 (which were effectively reaffirmed in the reasons for judgment under appeal), the primary Judge gave as an example of the applicant's failure to allege material facts the terms of paras 19, 20 and 21 of the Amended Statement of Claim. For our part, we do not consider that these paragraphs of the pleading lack material facts. It must be remembered that the applicant is not concerned here to make allegations as to its own conduct, or the conduct of those with whom it was associated. Its allegations are directed to those against whom it alleges covert dealings. Of their nature, such allegations must be informed by what the applicant, a stranger to those dealings, infers from the outward indications. Like the running down pleader who alleges that the driver of a car, observed to travel through a red light, failed to keep a proper lookout, failed to apply his or her brakes in sufficient time, failed to maintain the braking system in a roadworthy state, and the like, the applicant in the present case is entitled to allege what it infers, so long as the basis for the inference - to the extent reasonably available to the applicant - is sufficiently set out. That latter aspect, of course, is conventionally the function of particulars. 71 Save with respect to s 75B of the Trade Practices Act (dealt with below), we do not understand the primary Judge to have based his decision to strike out the Amended Statement of Claim upon any deficiency in so much thereof as alleged that the Australian respondents had given effect to the cartel arrangements.

Section 75B of the Trade Practices Act 72 Section 36 of the Amended Statement of Claim is in the following terms: Further and in the alternative, by engaging in the conduct alleged in paragraphs 14 to 35 above, to the extent, if at all, that any of the Respondents did not themselves directly contravene the Act in the manner there alleged, each such Respondent was a person involved in like contraventions by one or more of the other Respondents within the meaning of section 75B of the Act, as: (a) the Foreign Respondents did the matters pleaded in paragraphs 14, 15, 16, 17, 18, 19, 20, 31, 32 and 33 and knew at all material times those matters and the matters pleaded in paragraphs 26 and 27, and (b) the Australian Respondents did the matters pleaded in paragraphs 26 and 27 and knew at all material times those matters and the matters pleaded in paragraphs 14, 15, 16, 17, 18, 19, 20, 31, 32 and 33. PARTICULARS Actual knowledge is to be inferred from the particulars provided to paragraphs 12, 13, 14, 15, 16, 17 and 19. Further particulars will be provided following discovery.

73 The primary Judge concluded that s 36 was embarrassing, and should be struck out. His reasons were as follows: Difficulty continues to attend the attempt to make good an alternative claim relying on s 75B of the Act. In its amended form paragraph 36 alleges that any respondent which did not directly contravene the Act was a person involved in such contraventions by another respondent "as" (in the sense of "because") the foreign respondents "did the matters" pleaded in various paragraphs (including paragraphs 14 to 17) and "knew" that the Australian respondents "knew" about the cartel arrangements. It is also put that the Australian respondents "did the matters pleaded in paragraphs 26 and 27" (giving effect to the cartel arrangements) and "knew" about the global cartel arrangements and the implementation of them by the foreign respondents. The most obvious difficulty to which this amended version of paragraph 36 gives rise is that it relies on some of the earlier parts of the pleading which we have ruled must be struck out. There is a further difficulty created by the use of phrases such as "did the matters pleaded" and "knew ... the matters pleaded" in various paragraphs. These are apt to cause confusion, particularly when one of the said "matters" is the knowledge of other respondents. Even in the absence of the problems caused by such cross‑referencing, there is an undesirable lack of precision inherent in such phrases. With respect to the first difficulty which his Honour had with the s 75B pleading, for reasons expressed above, we take the view that his Honour was in error to have ruled that the earlier paragraphs referred to should have been struck out. Relevantly, we would carry our conclusion over into the s 75B point. However, the "further difficulty" to which his Honour adverted requires consideration in its own right. 74 The starting point, of course, is s 75B(1) of the Trade Practices Act itself. By that provision, a reference in the enforcement and remedial provisions of the Trade Practices Act to a person "involved" in a contravention of a provision of Part IV (including s 45) is to be read as a reference to a person who "has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention". In para 36 of the Amended Statement of Claim, the pleader appears to allege that, to the extent that any one of the respondents had contravened s 45, all of the other respondents were knowingly concerned in, or party to, that contravention. The approach taken has been to identify the earlier paragraphs in the Amended Statement of Claim in which allegations were made against the foreign respondents, and to pick up the paragraphs in which allegations were made against the Australian respondents (ie the "giving effect" allegations), and to say that the foreign respondents did and knew the former, and knew the latter; and to make corresponding allegations of doing things, and knowing things, against the Australian respondents. The primary Judge took the view that this approach was "apt to cause confusion" and, for reasons which follow, we are unpersuaded that his Honour was in error to have done so. 75 The pleading commences: "by engaging in the conduct alleged in paragraphs 14 to 35 above". Those paragraphs contain the whole of the applicant's conduct allegations against all respondents. If they are made good in the case of a particular respondent, then, on the assumption that the Amended Statement of Claim discloses a cause of action, that respondent must have contravened s 45. Yet the pleading continues "to the extent … that any of the Respondents did not themselves [sic] directly contravene the Act in the manner there alleged". There is, therefore, an internal contradiction which is embarrassing on any view. If one ignores that embarrassment, one continues into para 36 from the perspective of a respondent who was not, save as provided by s 75B, involved in a contravention of the Trade Practices Act. 76 Taking first subpara (a) of para 36, the pleading then alleges that the foreign respondents did everything alleged in paras 14-20 and 31-32 of the Amended Statement of Claim, and knew those things, and knew also what is alleged in paras 26 and 27. Do these respondents include the respondent who presumptively would not have contravened other than as provided in s 75B? If so, by the allegation that that respondent "did the matters pleaded in paragraphs [14-20]", the applicant would have made good its cause of action in the primary sense, and the pleading would be internally inconsistent for the reasons referred to in the previous paragraph. If not, there is no allegation of knowledge on the part of that respondent for the purposes of s 75B, since the only such allegation relates to the knowledge of the respondents referred to in subpara (a). For the primary Judge to have observed that the pleading was "apt to cause confusion" was, in our view, no overstatement. 77 Turning to subpara (b) of para 36, it is not earlier alleged in the Amended Statement Claim that the Australian respondents were primary members of the cartel. In paras 26-28, it is alleged that those respondents gave effect to the global, and periodic global, cartel arrangements. Specifically, in para 26 it is said that those respondents "knew of the Global Cartel Arrangements and Periodic Global Cartel Arrangements". Those arrangements, in turn, are comprehensively specified in paras 14-15 and 16-17 respectively. Thus, to the extent that para 36(b) contains an allegation that the Australian respondents knew the matters pleaded in para 26, it is repetitive. This is presumably what the primary Judge had in mind when he said that "one of the said 'matters' is the knowledge of other respondents". For our part, we would not consider that aspect to be the source of any embarrassment, since paras 26 and 27 allege facts other than the knowledge of the respondents there referred to. 78 However, the problem with subpara (a) to which we referred above exists also in subpara (b). As it seems to us, the allegations in paras 26 and 27 of the Amended Statement of Claim would make good the applicant's case that there had been contraventions of s 45(2)(b) on the part of the Australian respondents. Knowledge of the cartel arrangements was, as pleaded, part of that case. If the respondent sought to be made liable under s 75B is one of the respondents referred to in para 36(b), the pleading would thus be internally inconsistent. If not, there is no allegation of knowledge for the purposes of s 75B. 79 In its written submissions, the applicant contended that para 36 "was in conformity with what was required by Justice Sackville in ruling on a similar strike out application in Australian Competition and Consumer Commission v PRK Corporation Ltd [2008] FCA 403 at [61]-[68], namely identifying unambiguously the matters known to each of the respondents". We do not agree. What it is alleged that each of the respondents knew is the subject of considerable ambiguity in para 36, most probably because, if we may so observe without disrespect to those involved, the paragraph was added as a kind of catch-all without any adequate attention being given to the facts which were said to give rise to a particular respondent, presumptively not otherwise involved in a contravention of s 45, not only being concerned in the contravention of another respondent, but knowingly being so. These matters should not, in our view, be left to the surmise of the reader, as para 36 does. 80 We do not consider that the decision of the primary Judge to strike out para 36 of the Amended Statement of Claim was attended by error.

Group definition 81 On this subject, we agree with what has been written by Moore J.

Disposition of the application 82 For reasons explained above, there are some respects in which we take the view that the judgment of the primary Judge was attended by sufficient doubt to warrant the attention of the Full Court. Would there be substantial injustice if, notwithstanding the existence of that doubt, his Honour's judgment were allowed to stand? The result of that judgment was that the Amended Statement of Claim as a whole was struck out. By contrast, if the matter were approached conformably with the reasons given above, paras 13 and 36 only would have been struck out. We accept that para 13 is significant in the structure of the Amended Statement of Claim generally, and that its deletion might leave the applicant without a properly pleaded cause of action. The appropriate expedient, in such a case, would be to strike out the paragraph, and to give the applicant leave to re-plead. That leave should also extend to the subject presently covered by para 36, although the deletion of that paragraph, of itself, would not affect the integrity of the Amended Statement of Claim as a whole. 83 For a Statement of Claim to be struck out entirely when such an expedient is not called for should, in our view, readily be regarded as the source of substantial injustice. It would mean that the applicant is denied the primary avenue to justice provided by the rules of court. It is no answer, in our view, to say that the applicant can always re-plead. The question is whether substantial injustice would arise if the order made by the primary Judge were allowed to stand, that is to say, would arise from the operation of the order itself. Pleadings are an important part of the civil justice system, and an applicant is entitled to define its case by the use of them. When a court strikes out an applicant's pleading, it is striking out not merely the document on which it is printed, but the allegations which the applicant makes. It is saying, in effect, that the allegations in the pleading are not such as the court will receive. The significance of an order under O 11 r 16 should not, in our view, be underestimated. At least when such an order strikes out the whole of an applicant's pleading, it removes the basis for the applicant to seek justice in the court. On the assumption (which for the purposes of an application for leave to appeal we must make) that such an order should not have been made, we have little hesitation in concluding that substantial injustice would normally be the result, and would clearly be the result in the present case. 84 We would allow the application for leave to appeal, allow the appeal, set aside the order striking out the Amended Statement of Claim, substitute an order striking out paras 13 and 36 thereof and give the applicant 21 days to re-plead.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Jessup and Dodds-Streeton.