Federal Court: October 2025

PRACTICE AND PROCEDURE

Application to strike out pleadings – whether pleadings fail to disclose a reasonable cause of action – accessorial liability for internet platforms – whether pleadings are vague and embarrassing

Australian Competition and Consumer Commission v Meta Platforms, Inc. (formerly Facebook, Inc.) (No 4) [2025] FCA 1084 concerned an application by the defendant, Meta, to strike out all, or alternatively some, of the Australian Competition and Consumer Commission’s (‘ACCC’) further amended statement of claim.

The ACCC’s claim related to scam cryptocurrency advertisements on Facebook, the global social media platform operated by Meta (at [2]). The ACCC alleged Meta engaged in misleading conduct, made misleading representations and was also accessorially liable in respect of contraventions of the Australian Consumer Law (Cth) and Australian Securities and Investments Commission Act 2001 (Cth) (at [1] and [4]).

This was the second strike-out application brought by Meta in the litigation, it having succeeded on the first.

Principles

Applications to strike out pleadings are inherently case specific. That said, there are useful guiding principles which her Honour, Abrahams J, helpfully summarised in this decision.

In the Federal Court, the starting point is rule 16.21 of the Federal Court Rules 2011 (Cth) (‘Federal Court Rules’), whereby the Court has a discretion to strike out a pleading if it:

1. contains scandalous material; or
2. contains frivolous or vexatious material; or
3. is evasive or ambiguous; or
4. is likely to cause prejudice, embarrassment or delay in the proceeding; or
5. fails to disclose a reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
6. is otherwise an abuse of the process of the Court.

Abrahams J stated the following principles:

• ‘The Federal Court Rules in relation to pleading requirements must be interpreted and applied considering section 37M of the Federal Court of Australia Act 1976 (Cth), which provides that the overarching purpose of the civil practice and procedure provisions is to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible (Chandrasekaran v Commonwealth of Australia (No 3) [2020] FCA 1629 (‘Chandrasekaran’) at [101] and Australian Competition and Consumer Commission v NQCranes Pty Ltd [2021] FCA 1270 (‘NQCranes’) at [14])’ (at [10]).
• ‘… at least in contemporary times, with the development of case management procedures, courts do not take an “unduly technical or restrictive approach to pleadings”, provided they fulfil their function … ’ (at [10]).
• ‘The main purpose of a pleading is to give notice to the other party of the case it has to meet … Pleadings are not an end in themselves, instead they are a means to the ultimate attainment of justice between the parties to litigation … ’ (at [8]).
• As regards whether the pleading provides sufficient notice of the case to be met, ‘the [statement of claim] must be considered holistically, not in a piecemeal fashion’ and particular parts must not be analysed ‘in a vacuum’ (at [12]).
• ‘A strike out application is directed to the sufficiency of the pleadings or equivalent documentation, as opposed to the underlying prospects of success of the proceedings …’ (at [8]).

• ‘For the purposes of [rule 16.21(1)(e) of the Federal Court Rules], a “reasonable cause of action” is one that has some chance of success having regard to the allegations pleaded… A cause of action cannot be struck out merely on the basis that it appears to be weak…’ (at [8]).
• ‘Particular care should be taken where the applicants’ cause of action is novel. Kirby J observed in British American Tobacco v Western Australia [2003] HCA 47 at [103]:“In the case of novel causes of action, a measure of caution should be exercised in providing summary judgment. This is especially so where the facts, adduced at trial, might cast light and colour upon the resolution of the legal questions”’ (at [9]).
• ‘Summary processes [such as strike-out applications] must not be used to stultify the development of the law… As the Court observed [in Spencer v Commonwealth [2010] HCA 28]:“Where the success of a proceeding depends upon propositions of law apparently precluded by existing authority, that may not always be the end of the matter. Existing authority may be overruled, qualified or further explained”’ (at 8]).
• ‘As a general observation, an approach to the conduct of proceedings where a party fails to take a pleading point which it considers to be a genuine one when making a strike out application, on the basis that it may be taken in a later application, is inconsistent with s 37M. An applicant in repleading is entitled to approach that task on the basis that complying with a Court’s ruling is sufficient’ (at [13]).

In the author’s opinion, these principles help to illustrate the significant challenges generally faced by applicants who seek strike-out orders. Indeed, in this case, the application to strike-out was dismissed (at [40]).

The most interesting aspect of the decision concerned the ACCC’s accessorial liability claim. The ACCC accepted its approach was novel because it did not allege Meta had specific knowledge the pleaded advertisements (by the scam advertisers) were misleading (at [34]).

Rather, the ACCC’s (novel) claim was that Meta could be accessorially liable for the misleading advertisements by the scam advertisers (which were published on Meta’s Facebook platform) because:

1. Meta knew (generally) of the significant and far-reaching problem of Celeb-Bait advertisements on its platforms; and
2. Meta knew, by reason of its own ad-review system, of the content of each pleaded advertisement, shortly prior to the advertisement appearing on the Facebook platform (at [32]-[36]).

Thus, on the ACCC’s claim, the relevant knowledge was to be attributed to Meta by reason of the operation of its systems, rather than by identifying a particular person within the corporation as having the relevant knowledge.

Her Honour refused to strike out that accessorial liability claim, despite its novelty. In doing so, her Honour noted care needs to be taken to avoid stultifying the development of the law (at [35]-[36]). This is in a context where, unlike advertising through traditional media, advertising online is automated and high-volume, with no human reviewing and assessing each advertisement. The issue of what is necessary to establish the knowledge an internet platform is required to hold to be accessorily liable is likely to have significant and broad implications. It is a matter of public interest. Her Honour held that whether the ACCC could make out a claim of accessorial liability on that basis needed to be determined at a final hearing (at [36]).

EQUITY AND TRUSTS

Whether constructive trust should be imposed over copyright in video obtained and created through trespass – where inequitable and against good conscience for maker to assert ownership – whether appellant entitled to injunctive relief restraining respondent from publishing video

In The Game Meats Company of Australia Pty Ltd v Farm Transparency International Ltd [2025] FCAFC 104, the Full Court of the Federal Court held that copyright material obtained and created through an invasion of the legal or equitable rights of the appellant, in this case trespass on the appellant’s property, was held on constructive trust for the appellant despite the absence of a pre-existing fiduciary relationship between the parties.

Background

The appellant, The Game Meats Company of Australia Pty Ltd (‘GMC’), operated a licensed halal goat abattoir in Eurobin, Victoria. The premises were subject to strict requirements, enclosed by secure perimeter fencing and clear signage warning against unauthorised entry stating: ‘Restricted Area. Do Not Enter, Authorised Personnel Only’, and ‘Stop. All Visitors Must Report to the Office’ (at [3]).

The respondent, Farm Transparency International Ltd (‘FTI’), was an animal protection advocacy operation dedicated to educating members of the public about matters related to animal exploitation and suffering at farms, slaughterhouses and other commercial businesses (at [4]).

Between 9 January and 13 April 2024, on seven occasions, FTI’s employees and agents entered the Eurobin premises at night by crawling under the perimeter fence without GMC’s knowledge or authority. While inside, they installed equipment in the abattoir to capture video footage of GMC’s activities. At trial, it was not in contest that FTI’s agents were trespassing. FTI produced 14 minutes of video from the material filmed as a result of the trespass (at [5]).

On 3 May 2024, FTI lodged a formal complaint with the Department of Agriculture, Fisheries and Forestry (‘DAFF’) by sending it the footage. DAFF sent a copy of the complaint to GMC on 5 May 2024 (at [6]).

On 13 or 14 May 2024, FTI supplied the footage to Channel Seven, which broadcast a story about the matters depicted on it but did not show the video itself. On 17 May 2024, FTI uploaded the footage in conjunction with a media release and still images obtained from the footage on its own website. On the same day, GMC commenced the current proceedings (at [6]).

First instance decision

At first instance, in The Game Meats Company of Australia v Farm Transparency International Ltd [2024] FCA 1455, Snaden J awarded GMC $130,000 in damages comprising $100,000 exemplary damages and $30,000 general damages for FTI’s trespasses on several different occasions (at [7]).

His Honour also found FTI’s purpose in publishing the footage was to cause commercial loss to GMC and actuated by a desire to harm GMC’s business (at [8]).

However, his Honour opined that GMC was not entitled to an injunction restraining FTI from publishing any video footage that it obtained at the abattoir, nor was it entitled to a constructive trust over the copyright in that material (at [7]).

GMC appealed this decision to the Full Court of the Federal Court and FTI cross-appealed in respect of quantification of the exemplary damages.

Appeal to the Full Federal Court

The pivotal question in GMC’s appeal concerned the question whether the trial judge had erred in refusing to impose a constructive trust vesting copyright in GMC.

Jackman J examined the High Court’s decision in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 (‘ABC v Lenah’), focusing particularly on the judgments of Hayne and Gummow JJ. Their Honours held that, where a cinematograph film is created in circumstances involving an invasion of the plaintiff’s legal or equitable rights, or in breach of obligations owed by the maker to the plaintiff, it may be inequitable and contrary to good conscience for the maker to assert ownership of the copyright against the plaintiff and to broadcast the film (at [9]).

In such circumstances, the maker may be treated as a constructive trustee of the copyright (a form of personal, though intangible, property) conferred by section 98 of the Copyright Act 1968 (Cth) (‘Copyright Act’) (at [9]). Their Honours held that the plaintiff may then obtain a declaration recognising the existence of the constructive trust, and a mandatory order compelling assignment of the statutory copyright title to the plaintiff, noting section 196(3) of the Copyright Act requires such assignments to be in writing and signed by the assignor (at [9]). Their Honours further confirmed there is no objection in principle to imposing a constructive trust over copyright created by unlawful conduct, where it would be inequitable for the maker to rely on the statutory copyright. Jackman J noted this reasoning was subsequently cited with apparent approval by Kiefel CJ, Bell and Keane JJ in Smethurst v Commissioner of the Australian Federal Police [2020] HCA 14 (at [10]).

Authorities also demonstrate that copyright, though ordinarily vested at law in the author, may be held on trust for another where it would be inequitable for the maker to assert copyright. Examples of this include works created within a partnership, by a director or employee of a company, or at the request of and on behalf of an intended owner who has funded the work. Importantly, the doctrine is not confined to cases involving pre-existing relationships; constructive trusts may arise even absent such a relationship. However, in ABC v Lenah no such remedy was imposed, as Lenah did not claim copyright over the film (at [11]).

Furthermore, Jackman J emphasised that the concept of ‘unconscionable conduct’ is not to be applied in an unstructured way. As the High Court observed in Garcia v National Australia Bank Ltd [1998] HCA 48, the term ‘unconscionable’ describes the result rather than the reasoning that justifies it (at [16]). In Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18, the use of ‘unconscionable’ or ‘unconscientious’ across diverse contexts was found to have sometimes obscured, rather than clarified, the principles involved (at [16]).

His Honour further referred to a series of authorities where constructive trusts had been imposed to address wrongdoing in the context of intellectual property. In Federal Commissioner of Taxation v United Aircraft Corp [1943] HCA 50, Adamson v Kenworthy (1931) 49 RPC 57 and Sterling Engineering Co Ltd v Patchett [1955] AC 534, courts imposed constructive trusts over patents obtained by licensees or employees in breach of obligations to licensors or employers. These cases involved pre-existing relationships (at [12]).

His Honour also referred to authorities where constructive trusts were imposed absent a prior fiduciary relationship. Where property is obtained by theft or fraud, equity imposes a constructive trust on the wrongdoer. This principle was recognised in Black v S Freedman & Co [1910] HCA 58 (at [17]). Where mistaken payments are made, courts have imposed constructive trusts (Wambo Coal Pty Ltd v Ariff [2007] NSWSC 589 and Shields v Westpac Banking Corp [2008] NSWCA 268) (at [19]). In Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6, the Full Federal Court held a constructive trust arises where the property sought to be recovered (or its traceable proceeds) was the claimant’s, and a delinquent fiduciary or third party has derived it through wrongdoing (at [23]). In Pallant v Morgan [1953] Ch 43, which was recognised by the High Court in John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19, a constructive trust was imposed even where the property had never belonged to the claimant, on the basis that it would be unconscionable for the defendant to assert ownership (at [26]).

Jackman J stressed that in situations where no fiduciary duty exists, constructive trusts are nevertheless adaptable to different contexts, consistent with equity’s foundation in unconscionability (at [16]).

Applying these principles, His Honour found:

• FTI had not created an expectation by conduct that it would confer a benefit on GMC, but the Pallant v Morgan authorities confirm that lack of a fiduciary relationship or prior ownership does not bar relief (at [28]);
• FTI’s wrongdoing was morally comparable to theft, fraud or knowing receipt of mistaken payments. Although not fraudulent in intent, FTI engaged in covert entry onto GMC’s premises to cause detriment and gain an unlawful advantage, and its publication of the footage was calculated to harm GMC’s business (at [20]); and
• this conduct demonstrated a deliberate and high-handed disregard of GMC’s rights (at [18]).

Jackman J rejected the primary judge’s concern that recognising a constructive trust was too bold for a trial court. The High Court in ABC v Lenah had already envisaged such an outcome and this case provided a particularly strong factual basis.

FTI’s submissions that copyright did not equate to a right of publication, and that it never intended to rely on copyright under the Copyright Act, were dismissed. His Honour found these submissions misconceived for the following reasons (at [39]):

• section 86 and section 13(2) of the Copyright Act confer exclusive rights of reproduction, publication and authorisation, all of which FTI had exercised;
• copyright encompasses far more than a right to sue for infringement; and
• GMC sought to restrain FTI’s continued assertion of those rights via a constructive trust.

FTI’s further argument that a constructive trust would unjustly burden its employees was also rejected, as no wrong had been committed against them.

Accordingly, Jackman J held FTI held the copyright in the images and footage captured between 9 January and 13 April 2024 (including the 14-minute video) on trust for GMC. Burley J concurred with Jackman J as did Horan J in a brief judgment.

The Court allowed the appeal, dismissed the cross-appeal and made the following orders, amongst other things:

• FTI be permanently restrained from publishing the images except to DAFF;
• within seven days, FTI assign the copyright in writing to GMC, failing which the Registrar was empowered to execute the transfer;
• within seven days, FTI permanently delete all images captured at GMC’s premises; and
• within 14 days, FTI file an affidavit confirming deletion and identifying all recipients of the images and the means and dates of disclosure. 

Denes Blazer is a barrister at 12 Wentworth Selborne Chambers. Paris Hart is a barrister at Chalfont Chambers.