Queensland Judgments
Authorised Reports & Unreported Judgments
  • sclq logo
  1. Caselaw
  2. QSC
  3. 2005
  4. The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission - [2005] QSC 139

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission[2005] QSC 139

The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission[2005] QSC 139

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

The IMB Group Pty Ltd (In liquidation) and Ors v ACCC and Ors [2005] QSC 139

PARTIES:

THE IMB GROUP PTY LTD (IN LIQUIDATION)
ACN 050 411 9046
(plaintiff)
LOGAN LIONS LIMITED (IN LIQUIDATION)
ACN 060 338 758
(second plaintiff)
DAVID JOHN IVERS
(third plaintiff)
GLENN JAMES IVERS
(fourth plaintiff)
JOHN LINDSAY IVERS
(fifth plaintiff)
LUKE VINCENT IVERS
(sixth plaintiff)
MICHAEL JOHN McLEAN
(seventh plaintiff)
LANCE THOMAS STONE
(eighth plaintiff)
SAMSON NEALE BACKO
(ninth plaintiff)
WILLIAM ANTHONY MUSGRAVE
(tenth plaintiff)
v
AUSTRALIAN COMPETITION AND CONSUMER COMMISSION (formerly called the TRADE PRACTICES COMMISSION)
(first defendant)
JOHN BROOME
(second defendant)
TERENCE JAMES GUTHRIE
(third defendant)
MELINDA DENISE McDONALD (nee JENNINGS)
(fourth defendant)
ALBERT CHARLES JULUM
(fifth defendant)

FILE NO/S:

BS No 8429 of 1999

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

27 May 2005

DELIVERED AT:

Brisbane

HEARING DATE:

24 February 2005

JUDGE:

Holmes J

ORDER:

1. The decision of the Registrar of 2 February 2004 is set aside.

2. No renewal of the claim is granted.

3. The plaintiff’s action as against the second, third, fourth and fifth defendants is dismissed.

CATCHWORDS:

PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF COURT - where plaintiffs served initiating proceedings on defendants five years after the action was commenced – where claim renewed regularly during the five year period by the registrar  -  whether a “good reason” was demonstrated as to why the unserved claim should be renewed, pursuant to r 24(2), Uniform Civil Procedure Rules 1999 (Qld)- whether the registrar’s decisions should be set aside

Corporations Law (Cth)

Supreme Court Act 1995 (Qld), s 209(1)

Trade Practices Act 1974 (Cth), s 47, s 52

Uniform Civil Procedure Rules 1999 (Qld), r 16, r 24(2), r 376(4), r 667, r 791

Battersby & Ors v Anglo-American Oil Company Ltd & Ors [1945] KB 23

Farrell v Delaney (1952) 52 SR (NSW) 236

Krawszyk v Graham (1966) SASR 23

MacDonnell v Rolley [2001] QCA 32

MQF v Corry [2000] QSC 416; SC No 4724 of 1996, 14 January 2000

Muirhead v The Uniting Church in Australia Property Trust (Q) [1999] QCA 513

Van Leer Australia Pty Limited v Palace Shipping KK and Anor (1979) 180 CLR 337

COUNSEL:

T J Bradley for the applicants

K Wilson SC for the respondents

SOLICITORS:

Shand Taylor Lawyers for the applicants

Australian Government Solicitor for the respondents

  1. The second, third, fourth and fifth defendants seek, by alternative means, the summary termination of the plaintiffs’ action against them. Firstly, they submit that I should set aside a number of decisions by the Registrar to renew the claim, and should myself refuse any renewal, instead dismissing the action; alternatively, I am asked to strike out the allegations and claims made against those defendants on the grounds that they are embarrassing or seek to add new causes of action by amendment after the limitation period has expired.
  1. The claim and statement of claim were filed on 16 September 1999, but were not served on the third, fourth and fifth defendants until 15 September 2004, or in the case of the second defendant, until 21 September 2004. In the interim the plaintiffs had obtained renewals of the claim at roughly six month intervals from September 2000 until September 2004, when the Registrar refused any further renewal. The present application was first before the court on 15 December 2004, when the plaintiffs were given leave to file an amended statement of claim and the application was adjourned. The amended statement of claim was duly filed on 7 February 2005.

The claim

  1. The claim seeks, as against the first defendant, the Australian Competition and Consumer Commission (“the ACCC”), declarations that it improperly exercised “judicial power” and breached its duty to observe the rules of natural justice; adventurously, damages for the alleged breach of the rules of natural justice; and damages for malicious prosecution, abuse of process and unlawful interference with contractual relations. Against the second defendant are sought damages for unlawful interference with contractual relations; against the second, third, fourth and fifth defendants, damages for misfeasance in public office.

The statement of claim

The background allegations

  1. What emerges from the statement of claim is that the first plaintiff was an insurance and financial services company which acted as agent for the National Mutual Life Association of Australia Ltd (“National Mutual”) and Legal & General Life of Australia Limited (“Legal & General”). The second plaintiff was an unlisted public company, a vehicle through which a sporting, entertainment and recreation project revolving round a rugby league team, the Logan Lions, was to be developed. The most important aspect of the project was to enter the team in the Australian Rugby League competition. The first plaintiff marketed a syndicate scheme under which savings investment plans were to be sold to members of the public, who would then be able to buy shares to be issued in the second plaintiff.
  1. The third to tenth plaintiffs were all employees of, directors of and/or investors in the first plaintiff. Of the third to tenth plaintiffs, all but the fourth plaintiff were directors of the second plaintiff. Throughout 1993, the third plaintiff, David Ivers, in particular had a number of contacts with Legal & General concerning the Logan Lions proposal and the syndicate scheme. Legal & General, the pleadings allege, was aware of and gave its support to the first plaintiff’s marketing methods.
  1. In July 1993, however, the ACCC raised questions as to whether aspects of the first plaintiff’s conduct in marketing the syndicate scheme breached sections of the Trade Practices Act 1974 (Cth). Later that year, the third, fourth and fifth defendants, who were at the relevant times employees of the ACCC, carried out a number of interviews with investors in the syndicate scheme.
  1. On 17 September 1993 the ACCC commenced proceeding number QG155 in the Federal Court against Legal & General, the first to tenth plaintiffs, and others. (From other material, it appears that it alleged breaches of the Trade Practices Act: third line forcing contrary to s 47, and representations contravening s 52.) However, acting through the second defendant, its Deputy Chairman, the ACCC promptly reached an agreement with Legal & General, which generated a good deal of media coverage. The effect of the agreement was that Legal & General would cease its involvement with the first plaintiff in relation to the syndicate scheme and the Logan Lions proposal, and would give all the syndicate members the opportunity to cancel their savings plan policies. The members were notified of their options by a letter, settled in consultation with the ACCC, which advised that the first plaintiff had made misrepresentations.  The plaintiffs were not aware that any consultations between the ACCC and Legal & General had taken place.
  1. Three days after its commencement, proceeding QG155 was discontinued. In November 1993, it is pleaded, National Mutual sent a similar letter, again settled in consultation with the ACCC, to its policy holders signed up through the agency of the first plaintiff; again, those consultations as to the letter’s terms took place without the plaintiffs’ knowledge. The letters, according to the statement of claim, caused most syndicate members to cancel their investment plan policies. The scheme and the development proposal failed, and the first plaintiff in consequence went into liquidation (on 11 November 1993; the second plaintiff went into liquidation on 26 February 1998).
  1. In October 1993 the first plaintiff had by letter put an offer of settlement to the ACCC, on the condition that no prosecution proceed. Notwithstanding, the ACCC instituted a fresh set of proceedings, number QG175, in which, it appears, the same relief was sought as in QG155, with the addition of an order for the implementation of a Trade Practices compliance program. In June 1994 the ACCC commenced a third set of proceedings, number QG77, seeking similar relief against National Mutual.

The causes of action pleaded

  1. The statement of claim alleges against the ACCC malicious prosecution in the institution of proceedings QG155 and QG175; “improper exercise of ‘judicial’ power”; and a breach of its duty to observe the rules of natural justice. More significant for present purposes are the allegations and causes of action pleaded against the second to fifth defendants. Apart from a preliminary allegation that all were acting within their apparent or actual authority as officers of the ACCC, what follows are those paragraphs which concern them:

“29.The Third, Fourth and Fifth Defendants met with representatives of the First Plaintiff, and Peter Rosengren of McCullough Robertson Solicitors on 6 August 1993 to discuss the First Defendants concerns about potential breaches of the TPA (“the August meeting”).

“30.At the August meeting, the Third Defendant raised strongly his view that the promotion of the Syndicate Scheme by the First Plaintiff constituted a breach of s 47(6) of the TPA.

…

“34.On 13 August 1993 the Third Defendant informed the First Plaintiff’s legal representative, McCullough Robertson, that the First Defendant had received information that the First Plaintiff was still engaging in conduct in breach of the third line forcing provisions of the TPA.

…

“36.Since September 1993, the Third, Fourth and Fifth Defendants made a number of telephone enquiries and conducted personal interviews with various members of the Syndicate Scheme, including employees of the RAAF, members of the Camu Community in North Queensland.  During these telephone enquiries and interviews, the Third, Fourth and Fifth Defendants made representations to certain members of the Syndicate Scheme including representations to the following effect:

(a) That the Syndicate Scheme was in breach of the law;

(b) That there was no way that the Logan Lions development proposal could proceed;

(c) The Logan Lions development proposal was a scam;

(d) That Logan Lions had not lodged a bid for entry into the NSWRL;

(e) That Logan Lions had not lodged the proper applications to the Logan City Council.

…

“43.On 17 September 1993, and subsequent to the filing of proceedings number QG155, the Second Defendant, on behalf of the First Defendant, reached an agreement (“the September agreement”) by telephone with Mr Trevor Matthews, Managing Director of Legal & General in the following terms:

(a)Legal & General would not allow the First Plaintiff to continue selling its savings plan policy in conjunction with the promotion of the Syndicate Scheme and the Logan Lions development proposal.

(b)Legal & General would offer all syndicate members the opportunity to cancel their savings plan policies with interest and with no withdrawal penalties.

(c)All policy holders would be notified of the options available to them through a letter to be sent by Legal & General, the terms of which were to be settled with the First Defendant.

(d)This letter would include advice that a number of misrepresentations were made by the First Plaintiff and the correct position in relation to each of these claims. 

(e)Legal & General would implement a comprehensive compliance program for its employees and all agents throughout Australia to fully explain the obligations imposed by the TPA.

(f)The quantum of any penalties sought by the First Defendant would be less in the light of active co-operation by Legal & General.

…

“51.The First and Second Defendants owed the plaintiffs a duty to observe the rules of natural justice.

…

“87.The First and Second Defendants exerted direct pressure on Legal & General to enter into the September agreement.

“88.The First and Second Defendants persuaded, induced and procured Legal & General not to perform its obligations under its agency contract with the First Plaintiff. 

“89.In the premises, the conduct of the First and Second Defendants referred to herein constituted an unlawful interference with the contractual relationship between the First Plaintiff and Legal & General.

…

“91.In the premises, the conduct of the Second to Fifth Defendants constituted the tort of misfeasance in public office.”

Damage alleged

  1. As to damage, it is pleaded that the first plaintiff lost commissions, its agency with Legal & General, and the opportunity to develop and market the syndicate scheme and the Logan Lions proposal. The second plaintiff lost the financial benefit anticipated from investment in the proposed share issue. All the remaining plaintiffs, other than the seventh plaintiff, lost their employment with the first plaintiff. Finally it is pleaded that all plaintiffs suffered

“(a)damage to their personal and business reputation;

  1. damage to their image, credit and character;
  2. mental pain, anguish and anxiety;
  3. pain and suffering;
  4. embarrassment;  and
  5. hurt feelings.”

The amended statement of claim

Allegations and causes of action

  1. To a large extent the amended statement of claim rearranges the allegations in the existing statement of claim, dispensing with some, but it also raises new allegations. In addition to the representations already pleaded as made to investors in the syndicate scheme, it is alleged that the third defendant made representations to National Mutual and to officers of the Queensland Department of Consumer Affairs that the first plaintiff had acted fraudulently, and to the Australian Securities Commission that the first plaintiff had breached the Trade Practices Act and the Corporations Law.  The amended statement of claim specifically pleads for the first time a cause of action in defamation against the first, third, fourth and fifth defendants, arising from the representations made by the third, fourth and fifth defendants, which, it is said, seriously damaged the plaintiffs’ reputations and caused them embarrassment. 
  1. Although misfeasance in public office by the second defendant was alleged in the statement of claim, the amended statement of claim gives, for the first time, particulars of the allegation. The entering of the agreement with Legal & General was: a contravention by Legal & General of s 52 of the Trade Practices Act, to which the second and first defendant were parties; a breach of a duty owed by the first and second defendant to take reasonable care in the exercise of statutory powers; and a breach of a duty owed by the first and second defendant to observe the rules of natural justice; those matters forming the basis for the allegation of misfeasance in the exercise of statutory powers.  The agreement is said also to amount to an interference with the contract between the first plaintiff and Legal & General and an interference with the trade and business of the first plaintiff.
  1. In addition, it is said that the fourth and fifth defendants on behalf of the first defendant persuaded or induced National Mutual to enter an agreement in December 1993 in roughly similar terms to that reached with Legal & General, requiring National Mutual to offer its policy holders a refund and to advise them that misrepresentations had been made by the first plaintiff. The plaintiffs were denied the opportunity to have any involvement in the consultations between National Mutual and the defendant. The misfeasance alleged against the fourth and fifth defendants is characterised as the entering into the agreement with National Mutual, which, it is said, was intended to cause a breach of the first plaintiff’s contract with National Mutual and to interfere with its business, and constituted breaches of duties to take reasonable care in the exercise of statutory powers and to observe the rules of natural justice. It is also alleged that the fourth and fifth defendants by the agreement with National Mutual committed a separate tort of inducing breach of contract and interference with trade or business by unlawful means. The plaintiffs also sue the second defendant and the fourth and fifth defendants in negligence in respect of the respective agreements.

The relief sought

  1. The relief sought is rather more soberly framed than the original prayer for relief. No damages are claimed for denial of natural justice; instead there are claims for damages for defamation against the first, third, fourth and fifth defendants; damages for misfeasance in public office against the first, second, fourth and fifth defendants; damages for malicious prosecution and/or abuse of process against the first defendant; damages for inducing breach of contract and/or interference with trade or business by unlawful means against the first, second, fourth and fifth defendants; and damages for negligence against the first and second defendants. (Oddly, there is no claim for damages in negligence against the fourth and fifth defendants, although that cause of action is pleaded against them.)

Renewal of the claim

“Another good reason”

  1. Rule 24(2) of the Uniform Civil Procedure Rules 1999 enables renewal of an unserved claim:

“If the claim has not been served on a defendant and the registrar is satisfied that reasonable efforts have been made to serve the defendant or that there is another good reason to renew the claim, the registrar may renew the claim for further periods, of not more than 1 year at a time, starting on the day after the claim would otherwise end.”

There is no suggestion in this case that any attempt had been made to serve the defendants. Renewal depended on “another good reason” being shown. 

  1. Rule 24 places no limit on what may amount to “good reason”. The fact that the limitation period has expired does not preclude the exercise of the discretion.[1] Factors which may be relevant include “the length of the delay, the reasons for the delay, the conduct of the parties and the hardship or prejudice caused to the plaintiff by refusing the renewal or to the defendant by granting it.”[2]  As to hardship to the plaintiff, the loss of the ability to pursue an action, the limitation period having expired, cannot of itself provide “good reason”[3]; and in considering any hardship to the plaintiff it is relevant to consider whether it is self inflicted, as opposed, for example to the situation where the defendant has done something “to induce delay in service or to encourage a belief that the claim against it might be settled without recourse to litigation.”[4] 
  1. As to conduct, it is relevant to consider whether the delay was deliberate or the product of mishap or oversight;[5]  and whether any notice has been given to the defendant.[6]  “[D]elay will be much less significant if the defendant has been aware from the first of the pending claims, and has had an opportunity of preparing to meet it.”[7]  The merits of the proposed action are relevant.[8]  The possibility of prejudice, as opposed to demonstrated actual prejudice, may be taken into account “so long as it is not baseless speculation”.[9] 

The applications for renewal

  1. The claim in the present case became stale on 16 September 2000. The first application for renewal was supported by an affidavit of the plaintiffs’ solicitor, Mr Saunders, sworn on 12 September 2000, in which he deposed that the proceedings had been issued to avoid a possible limitations defence. The renewal was sought on the basis that judgment had not yet been given in proceedings QG175. It was likely, Mr Saunders said, that the findings in those proceedings would have a bearing on matters which were the subject of the Supreme Court action. Once proceedings QG175 were resolved, his instructions were to amend the claim so that all the claims against the defendants arising out of both sets of Federal Court proceedings could be dealt with at once; that was in the interests of all parties and provided a good reason for renewing the claim.
  1. The next application for renewal, in March 2001, was made on an affidavit by the third plaintiff Mr David Ivers, who deposes that he is authorised to swear it on behalf of all plaintiffs. It has a cover sheet indicating that it is “filed on behalf of the plaintiffs” and bearing their solicitors’ details as an address for service. In it, the third plaintiff relies on the reasons given by Mr Saunders, and says that judgment in the Federal Court proceedings has still not been delivered. He says too that the first defendant has been made aware, in the course of the Federal Court proceedings, of the Supreme Court action.
  1. On the next application for renewal, in August 2001, the third plaintiff again swore an affidavit, which bore on its face a notation that it was filed on behalf of the plaintiffs and gave their solicitors’ address for service. It reiterated the reasons for renewal given in his earlier affidavit. On 11 March 2002, the third plaintiff swore another supporting affidavit, but this document appears not to have been filed by the plaintiffs’ solicitors. It bears no notation as to whose behalf it is filed on, nor any address for service. In it, the third plaintiff relies once more on the non-delivery of the Federal Court decision. In September 2002, the fourth plaintiff, Mr Glenn Ivers, swore an affidavit to support the next application for renewal. The form of this affidavit is unusual in that its cover sheet is handwritten, although its content is consistent with its being filed by the plaintiffs’ solicitors. The fourth plaintiff deposed in it that judgment had been given in the Federal Court proceedings on 5 May 2002 but was subject to appeal and cross-appeal. Once the appeal decision was given, the claim might need substantial amendment.
  1. The Full Federal Court gave judgment on 20 February 2003. In March 2003 a further application for renewal was made. The affidavit filed on this occasion (sworn by the fourth plaintiff) again bore a cover sheet indicating that it was filed by the plaintiffs’ solicitors; as did all of the affidavits filed on subsequent renewal applications, other than the last. The fourth plaintiff deposed that the plaintiffs were determining what costs they would seek in QG175 (presumably, after taxation or agreement of costs ordered by the court); once those costs were received they intended to take legal advice with a view to amending the claim. (In fact, according to Mr Cranwell of the Australian Government Solicitor’s office which represented the first defendant in QG 175, no approach was made to that office in respect of the plaintiffs’ costs until October 2003, and matters proceeded slowly after that.)
  1. The claim was renewed again for six months from 16 September 2003 on the affidavit of the third plaintiff, who deposed that the process of determining the quantum of costs to be sought was near completion, and the intention was still to obtain advice about amendment once those costs were received. In February 2004, the third plaintiff swore an affidavit deposing that an offer to settle costs had been received but there were difficulties in obtaining authority to accept it from the second plaintiff’s liquidator. The last application to renew the claim for three months from 16 September 2004 was unsuccessful. By that date the third, fourth and fifth defendants had been served; the second defendant having been served later, the claim was by then stale.

Review of the Registrar’s decisions

The basis for review

  1. The defendants relied on r 16 of the Uniform Civil Procedure Rules, which gives wide powers in relation to setting aside originating process, and r 791, which enables a party to an application dissatisfied with a Registrar’s decision to have it re-heard as alternative bases for the application to set aside the Registrar’s decisions to renew the claim. To those might be added r 667, which enables the setting aside at any time of an order made in the absence of a party. Since the plaintiffs accepted, consistently with what was said by Muir J in MQF v Corry[10], that in any event there existed an inherent jurisdiction in the court to review the Registrar’s decisions, it is unnecessary to dwell on those rules. 
  1. In considering whether any or all of the Registrar’s decisions should be set aside it is appropriate to consider not only what was before him but all the information now before me.[11]  If I were to take the view that the claim was at any stage wrongly renewed, its service while stale would be an irregularity capable of cure in the exercise of my powers under r 371;  but such an exercise would be appropriate only if I were satisfied that it was proper to renew the claim.[12]  Rule 24(3) provides that a claim may be renewed whether or not it is in force. 

The defendants’ arguments against renewal

  1. The defendants’ fundamental contention was that the Registrar could not have been satisfied that there was, in any instance, “another good reason to renew the claim”. In addition, they pointed to questions of whether the applications for renewal were regularly made. Their first point was that there was no evidence that the applications for renewal were made with the authority of all plaintiffs. Since s 209(1) of the Supreme Court Act 1995 requires a plaintiff to appear in person or by barrister or solicitor, there was no entitlement in the third and fourth plaintiffs to apply for renewal on behalf of any other plaintiff. 
  1. Secondly, nothing in any of the affidavits filed in support of the applications to renew referred to consent having been obtained from the liquidators of the first or second plaintiffs, either for the bringing of the action or for the applications to renew the claim. Enquiries have been made of the liquidators: Mr Schmierer advised that during his time as liquidator of the first plaintiff (from 30 June 2003 to 28 June 2004) he did not give approval for any of the company’s directors to continue to exercise any power under s 499(4) of the Corporations Act 2001 (Cth);  nor to the best of his recall did the committee’s inspection approve the continuing exercise of any powers by the directors. Mr Kahtri and Mr Worrell, of Worrells Solvency and Forensic Accountants, were appointed as liquidators of the first plaintiff on 16 September 2004 (after the third plaintiff had sworn an affidavit for renewal of the claim at that time).   On that date, according to Mr Khatri, he as liquidator advised he had no objection to the statement of claim being served. 
  1. In relation to the second plaintiff, the position is complicated by the fact that its first liquidator filed a notice of ceasing to act on 27 May 2003, and a new liquidator was not appointed until 6 April 2004. In the intervening period, two of the applications to renew were made. The solicitors for the plaintiffs did not respond to a letter from the defendants’ solicitor asking directly whether the liquidators of the first and second plaintiff had given approval for the institution of the proceedings, the application for renewal of the claims, service of the originating process, or filing and serving the amended statement of claim.

Registrar’s last renewal set aside

  1. The third plaintiff does, at least in the March 2002 application for renewal, appear to have proceeded impermissibly on behalf of all plaintiffs, and it also seems to be the case that all applications were made without the necessary authority of the first and second plaintiffs’ liquidators. I am content to proceed on the basis that these were irregularities which could still be cured on demonstration of the necessary authorisations. But I have concluded, nonetheless, that the Registrar could not properly have been satisfied, at least as at the date of the last successful application, that there was good reason to renew the claim as against the second to fifth defendants. The grounds contained in the affidavit material were, in summary, that it was necessary to await the outcome of the Federal Court proceedings so that the claim against the defendants could be amended appropriately; that the first defendant was aware of the Supreme Court action; and that the question of costs needed to be resolved so that funds would be available for the purposes of amendment.
  1. None of these contentions, in my view, was particularly compelling so far as the second to fifth defendants were concerned. The Federal Court proceeding might have had some bearing on the action for malicious prosecution against the first defendant, but there is no demonstrated connection between it and the causes of action against the second to fifth defendants, either before or after amendment. If indeed there were real grounds for thinking that the Federal Court proceedings ought to have been concluded before the Supreme Court action was litigated, that was a matter which could have been the subject of appropriate application. Although Battersby & Ors v Anglo-American Oil Company Limited & Ors[13] has not been followed on the question of discretion to renew after expiration of the limitation period, this statement in my view remains apposite:

“[O]rdinarily it is not a good reason that the plaintiff desires to hold up the proceedings while some other case is tried or to await some future development.  It is for the court and not for one of the litigants to decide whether there should be a stay, and it is not right that people should be left in ignorance that proceedings have been taken against them if they are here to be served.”[14]

What the plaintiffs were, in effect, seeking here was a unilateral stay.

  1. There were a number of factors against renewal as against the second to fifth defendants at the time of the February 2004 application. There was nothing in the material to indicate that any of those defendants was aware of the proceedings. It was then four years and five months since the filing of the claim. The delay was deliberate. The proposed action against the third to fifth defendants on any close examination of the pleadings was without merit: the allegations could not by any stretch of the imagination found an action in misfeasance. Against the second defendant, there was, so far as the allegation of interference with contractual relationship was concerned, nothing by way of fact pleaded to demonstrate any unlawful act; nor, indeed, was the intent or unlawfulness necessary for misfeasance in public office squarely pleaded, although there was a hint at breach of the rules of natural justice.

Renewal on the information now before the Court

The additional information

  1. The question then arises as to whether renewal of the claim is warranted on all the information now before the Court. I start from the basis that the proceedings and renewal application are supported by all plaintiffs and the liquidator. There is now an affidavit of the fourth plaintiff annexing material which, it is contended, shows that the defendants had notice of the proceedings; and the statement of claim has been amended. In addition Mr Bradley, for the plaintiffs, mounted this argument: had the plaintiffs served the defendants with the claim, they would have been subjected to the prospect of insupportable legal costs in two courts at once. Evidence of impecuniosity was to be found in the fact that the first and second plaintiffs were in liquidation. As to the last renewals, and the affidavits alluding to the necessity to resolve the question of costs, the third plaintiff now explains that the plaintiffs were in a poor financial position and needed the benefit of the costs order in order to brief solicitors and counsel to amend the statement of claim. Mr Bradley added these submissions: the plaintiffs’ claim was a significant one, for the loss of their entire business undertaking; it was litigation against a statutory authority, in effect for improper conduct, with a significant public interest attached. There was no demonstrated prejudice sworn to by the defendants.

Evidence of notice to the defendants

  1. The plaintiffs, by an affidavit of the fourth plaintiff, pointed to these instances in which the prospect of their proceeding against the defendants was made known. On 4 October 1993, the plaintiffs’ solicitors wrote to the ACCC’s solicitors denying any breach of the Trade Practices Act, pointing out that if their conduct had been unlawful, it had been unintentional, and no real harm had been suffered by anyone. It went on to set out the loss and damage suffered by the plaintiffs because of the ACCC’s allegations and the commencement of the Federal Court proceedings. There was no suggestion that these instances of loss were to be the subject of any litigation by the plaintiffs; rather they seem to have been cited as part of a plea for discontinuance of the proceedings against them. The letter ended with a set of offered undertakings as to the plaintiffs’ future conduct.
  1. In the course of the proceedings in the Federal Court in QG175, in March 1998, the plaintiffs filed a document described as an affidavit, but more in the nature of a submission, objecting to the admission of certain witness statements taken by the ACCC. It was asserted that they were improperly obtained, and excerpts of what were said to be statements made by the third to fifth defendants to prospective witnesses were set out. The submission also included a complaint of the conduct of the ACCC in its dealings with Legal & General, particularly in respect of a letter written by the second defendant to the latter detailing the action required of it, if injunctions were not to be obtained against it.
  1. The plaintiffs point to various requests made by them which indicated their interest in the conduct of the defendants. They had sought witness statements from persons spoken to by ACCC officers together with diary notes, internal memoranda and correspondence. In an affidavit in support of that claim the third plaintiff had canvassed what was alleged to be the second defendant’s improper conduct with Legal & General. That affidavit was filed to support objections to ACCC witness statements.
  1. At about the same time the plaintiffs made an application for discovery seeking “diary notes, internal memoranda and correspondence” to or from the witnesses who had given statements to the ACCC, and to or from ACCC officers including the second to fifth defendants. The third plaintiff put in a submission arguing that any legal professional privilege was lost by virtue of the ACCC’s improper conduct in obtaining statements. Similar documents were sought in respect of communications between the ACCC and Legal & General and National Mutual; again it was submitted that improper conduct destroyed any privilege. The third plaintiff asserted that the settlement negotiations between those parties effectively forced the first plaintiff’s closure.
  1. On 13 August 1998 the third plaintiff filed an affidavit (again more in the nature of a submission) in support of a further application for discovery. Again, a number of what were said to be extracts from statements of investors interviewed by the ACCC’s officers were set out. There were allegations that the third defendant had put words in the mouths of indigenous Cape York investors he had interviewed, and that the third to fifth defendants had given investors to understand that the scheme was a “rip off”, that the Logan Lions project was illegal, that there were no plans for Logan Lions development lodged with the Logan Council and that it was not a candidate for the NSW Rugby League. The affidavit contains an allegation that the third to fifth defendant have acted “illegally or improperly in breach of Section 138 of the Evidence Act” which “would expose [them] to a civil penalty within the terms of Section 125 of the Evidence Act”.
  1. On 2 September 1998, the Australian Government Solicitor wrote to the plaintiffs advising as to the witnesses who would be called in QG175. The letter advised that the second defendant was no longer employed by the ACCC, which did not rely on his evidence, and would not call him. The third defendant did remain an employee of the ACCC, and had made a statement in response to the allegations made against him. He duly did file an affidavit, giving his recollection of how the various interviews were undertaken and denying specific allegations as what he had said during them.
  1. On 13 September 1999, the court heard submissions by the plaintiffs seeking to have an amendment of their defence or a cross-claim permitted, the purpose of which would be to ventilate in the Federal Court proceedings the ACCC’s conduct in its dealings, through the second defendant, with Legal & General. Those submissions were couched entirely in terms of a desire to proceed against the ACCC, rather than any other prospective defendant. Counsel for the ACCC noted, in the course of his submissions, that the third to fifth defendants were to have been called as witnesses, but were “put off” when the plaintiffs abandoned their objection (based on the alleged impropriety in interviewing) to the admission of investors’ statements. Drummond J, ruling against the plaintiffs, observed that they had alluded, from time to time during the proceedings, to allegations that the ACCC had acted improperly, with adverse consequences to the first plaintiff, without any attempt at formally making them an issue; it was not appropriate, given the late stage of the litigation, that the claims now be aired. (It is a fair inference that the plaintiffs’ failure in this application led to the filing of the claim and statement of claim in this proceeding on 16 September 1999.)
  1. On 4 October 1999, when Mr West, the then liquidator of the first plaintiff, was giving evidence in the hearing in QG175, Drummond J asked him whether he was aware of what he understood to be “an action on foot in the Supreme Court by IMB”. Mr West thought that “a summons” had been served in an action for malicious prosecutions “against various members of the ACCC and the ACCC itself’. He was rather vague about whether he had signed a consent to litigation or not.
  1. Judgment was delivered in QG175 on 5 May 2002. In his reasons his Honour noted that the plaintiffs had an action on foot in the Supreme Court against the Commission. An appeal and cross-appeal were heard by the Full Court of the Federal Court in November 2002. In the course of the hearing the ACCC, it is said, tendered a copy of the statement of claim filed in this proceeding.

Conclusions

  1. On the question of notice, it is relevant to note that the second defendant left the ACCC in September 1995 before, it would seem, any particular claim of misconduct had been made. The allegations against the third to fifth defendants made in the course of the Federal Court proceedings were in connection with their interviews of investors; they were couched in terms of improper conduct warranting exclusion of the evidence; and they were not, it seems, persisted with. Those allegations would not of themselves have given those defendants any notice of the prospect of proceedings against them elsewhere.
  1. It was not until 1999, and then only by way of the vaguest reference in the evidence of Mr West, that the existence of an action against parties other than the ACCC was raised, without any indication of its content. The second to fifth defendants were not, of course, parties to QG175 or the appeal; one can only speculate as to what might or might not have come to their notice. On the whole, while there is a prospect that the third to fifth defendants at least had some notion that there were complaints as to how they had taken investor statements, there is nothing to show they were alerted that there was an action on foot against them in respect of that matter, and certainly no suggested means by which they might have become aware of the further allegations against them.
  1. Then there is the question of the effect of the amended statement of claim, given the clear inadequacy, against these defendants, of the original pleading. For reasons which will become apparent, I do not propose to make any ruling, but it is appropriate to consider the plaintiffs’ prospects of successful amendment in considering the merits of the action as now formulated. In order for the proposed amendments to be allowed so as to include any new cause of action it would, of course, be necessary, pursuant to Rule 376(4), that the new cause of action arose out of “the same facts or substantially the same facts” as a cause of action for which relief was claimed in the original pleading.
  1. The proposed misfeasance action against the fourth and fifth defendants is an entirely new cause of action, notwithstanding its allegation in the statement of claim, because nothing was there pleaded to support it. One can, however, glean in the original statement of claim the basis of the later defamation claim, in the allegations as to the making of representations to investors and the claim for damage to reputation, character and embarrassment. The separate claims for defamation against the third defendant in respect of alleged representations to National Mutual, the Department of Consumer Affairs and the Australian Securities Commission have no connection with anything in the original pleading and do not seem a proper matter for amendment. There is no whiff in the original pleading of any negligence claim against any of the second to fifth defendants; if it were intended to bring such a claim by the amended statement of claim it is difficult to see how that amendment could be supported.
  1. As against the second defendant I think there is a better case for saying that substantially the same facts (in the form of the entering of the September agreement) were pleaded in the original statement of claim as now underlie the more adequately pleaded causes of action in interference with trade or business and misfeasance in public office.
  1. However, even taking into account the fact that the amended statement of claim, unlike the existing pleading, does contain viable causes of action for some of which amendment might be permitted, the fact remains that these were brought to the attention of the defendants eleven years after the events giving rise to the claims and five years after the claim and statement of claim were filed. The existence of the Federal Court proceedings, with some limited factual overlap, did not preclude the defendants being at least made aware of the existence of the Supreme Court action. Although it is suggested that the plaintiffs’ impecuniosity would have prevented the running of contemporary proceedings in each of the Supreme Court and Federal Court, there is no documenting of that impecuniosity other than the bare assertion that the first and second plaintiffs were in liquidation. The alleged need for renewal from 2003 in order to obtain costs so as to fund advice and amendment of the statement of claim hardly seems a reason for not serving the claim itself, particularly in light of the years which had by then elapsed since its filing
  1. There is no specific prejudice asserted on the part of the defendants, and it seems that the third to fifth defendants have probably had occasion to turn their minds to the allegations as to what they said to investors. Nonetheless, there is still the prospect of some general prejudice through the lapse of time, particularly in a case turning on recollection of the content of conversations.
  1. So far as the question of prejudice to the plaintiffs, the public interest point they raise seems to me to have far more force in connection with the proceedings against the ACCC than it does as applied to the ACCC’s individual officers. It is of some significance that there is no application for dismissal by the ACCC which has always been in rather a different position so far as notice of this action is concerned. And of course, any prejudice to the plaintiffs in the loss of their actions against these defendants has been wholly and solely the product of their decision not to serve the claim.
  1. Taking all these factors into account I am not satisfied that there is or has been in the more recent past good reason to renew the claim. I set aside the decision of the Registrar of 2 February 2004 and I decline to grant any renewal of the claim. I dismiss the plaintiffs’ action as against the second, third, fourth and fifth defendants.

Footnotes

[1] Van Leer Australia Pty Limited v Palace Shipping KK and Anor (1979) 180 CLR 337 at 346.

[2] Victa Ltd v Johnson (1975) 10 SASR 496 per Bray CJ at 500 cited by Stephen J in Van Leer Australia Pty Ltd v Palace Shipping KK & Anor (1979) 180 CLR 337 at 344.

[3] Muirhead v The Uniting Church in Australia Property Trust (Q) [1999] QCA 513.

[4] Van Leer Australia Pty Limited v Palace Shipping KK and Anor (1979) 180 CLR 337 at 351.

[5] Ibid at 350.

[6] Ibid at 350.

[7] Krawszyk v Graham (1966) SASR 23 at 80.

[8] MacDonnell v Rolley [2001] QCA 32 at para [12].

[9] MacDonnell v Rolley [2001] QCA 32 at para [14]..

[10] [2000] QSC 416; SC No 4724 of 1996, 14 January 2000 at para [9].

[11] Farrell v Delaney (1952) 52 SR (NSW) 236 at 238.

[12] Gillies v Dibbetts (2001) 1 Qd R 596 at 603.

[13] Battersby & Ors v Anglo-American Oil Company Limited & Ors [1945] KB 23.

[14] Ibid at 32.

Close

Editorial Notes

  • Published Case Name:

    The IMB Group Pty Ltd (In liquidation) and Ors v ACCC and Ors

  • Shortened Case Name:

    The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission

  • MNC:

    [2005] QSC 139

  • Court:

    QSC

  • Judge(s):

    Holmes J

  • Date:

    27 May 2005

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Battersby & Ors v Anglo-American Oil Company Ltd & Ors [1945] KB 23
2 citations
Jump To
Cite 1 - [1945] KB 23
Cite 2 - [1945] KB 23
Farrell v Delaney (1952) 52 S.R. (N.S.W.) 236
2 citations
Jump To
Cite 1 - (1952) 52 S.R. (N.S.W.) 236
Cite 2 - (1952) 52 S.R. (N.S.W.) 236
Gillies v Dibbetts[2001] 1 Qd R 596; [2000] QCA 156
1 citation
Jump To
Cite 1 - [2001] 1 Qd R 596
Krawszyk v Graham (1966) SASR 23
2 citations
Jump To
Cite 1 - (1966) SASR 23
Cite 2 - (1966) SASR 23
MacDonnell v Rolley [2001] QCA 32
3 citations
Jump To
Cite 1 - [2001] QCA 32
Cite 2 - [2001] QCA 32
Cite 3 - [2001] QCA 32
MQF v Corry [2000] QSC 416
2 citations
Jump To
Cite 1 - [2000] QSC 416
Cite 2 - [2000] QSC 416
Muirhead v The Uniting Church in Australia Property Trust [1999] QCA 513
2 citations
Jump To
Cite 1 - [1999] QCA 513
Cite 2 - [1999] QCA 513
Van Leer Australia Pty Limited v Palace Shipping KK and Anor (1979) 180 CLR 337
4 citations
Jump To
Cite 1 - (1979) 180 CLR 337
Cite 2 - (1979) 180 CLR 337
Cite 3 - (1979) 180 CLR 337
Cite 4 - (1979) 180 CLR 337
Victa Ltd v Johnson (1975) 10 SASR 496
1 citation
Jump To
Cite 1 - (1975) 10 SASR 496

Cases Citing

Case NameFull CitationFrequency
Hansell v Collison Finance and Investments Pty Ltd [2006] QDC 543 citations
Queensland Building and Construction Commission v Sullivan (No 2) [2016] QDC 962 citations
The IMB Group Pty Ltd (in liq) v Australian Competition and Consumer Commission[2007] 1 Qd R 148; [2006] QCA 4073 citations
The IMB Group Pty Ltd (in liquidation) v Australian Competition and Consumer Commission [2006] QSC 121 citation
1

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.