Arrowcrest Group Pty Ltd v Ford Motor Company of Australia Ltd (No 2)
[2002] FCA 1618
•17 DECEMBER 2002
FEDERAL COURT OF AUSTRALIA
Arrowcrest Group Pty Ltd v Ford Motor Company of Australia Ltd (No 2)
[2002] FCA 1618COSTS – discount for costs on claim rather than separate order on cross claim
INTEREST – damages for loss of future profits – whether interest on discounted amount should run from accrual of cause of action
PRACTICE AND PROCEDURE – short form judgment – whether further questions should be answered
Federal Court of Australia Act 1976 (Cth) s 51A(1)
Federal Court Rules O 35 r 3, O 35 r 8.Holder v Searle (1998) 44 IPR 1 at 23 cited
Australian Competition and Consumer Commission v Commercial and General Publications Pty Ltd (No 2) [2002] FCA 1349 at [33] citedARROWCREST GROUP PTY LTD (ACN 007 521 280) AND TRISTAR STEERING AND SUSPENSION AUSTRALIA LIMITED (ACN 004 311 111) v FORD MOTOR COMPANY OF AUSTRALIA LIMITED (ACN 004 116 223)
S 208 of 2002HEEREY J
17 DECEMBER 2002
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
S 208 OF 2002
BETWEEN:
ARROWCREST GROUP PTY LTD (ACN 007 521 280)
FIRST APPLICANTTRISTAR STEERING AND SUSPENSION AUSTRALIA LIMITED (ACN 004 311 111)
SECOND APPLICANTAND:
FORD MOTOR COMPANY OF AUSTRALIA LIMITED
(ACN 004 116 223)
RESPONDENTJUDGE:
HEEREY J
DATE OF ORDER:
17 DECEMBER 2002
WHERE MADE:
MELBOURNE
THE COURT ORDERS THAT:
1.Pursuant to Order 35 Rule 3 judgments in this proceeding will take effect as at 25 November 2002.
2.There be judgment for the first applicant against the respondent in the sum of $7,870,136 together with interest from 17 October 2002 to 25 November 2002 in the sum of $88,296.46.
3.There be judgment for the second applicant against the respondent in the sum of $12,000,000 together with interest from 17 October 2002 to 25 November 2002 in the sum of $134,630.14.
4.There be judgment for the respondent against the second applicant in the sum of $778,419.38 together with interest in the sum of $78,900.
5.There be judgment for the respondent against the first applicant in the sum of $161,029 together with interest from 17 October 2002 to 25 November 2002 in the sum of $1812.22.
6.The judgment in par 4 be set off against the judgment in par 3
7.The judgment in par 5 be set off against the judgment in par 2.
8.The respondent pay 90 percent of the applicants’ costs of and incidental to the proceeding (including both the claim and the cross claim), including any costs reserved, such costs to be taxed in default of agreement.
9.The respondent’s second and further amended cross claim be otherwise dismissed.
10.Each of the judgments herein are to carry interest at the rate specified in Order 35 Rule 8.
11.The time for filing and serving any notice of appeal is extended to 31 January 2003.
12.There be a stay of execution on all judgments until 31 January 2003.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
S 208 OF 2002
BETWEEN:
ARROWCREST GROUP PTY LTD (ACN 007 521 280)
FIRST APPLICANTTRISTAR STEERING AND SUSPENSION AUSTRALIA LIMITED (ACN 004 311 111)
SECOND APPLICANTAND:
FORD MOTOR COMPANY OF AUSTRALIA LIMITED (ACN 004 116 223)
RESPONDENT
JUDGE:
HEEREY J
DATE:
17 DECEMBER 2002
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
On 25 November 2002 I gave a judgment in the form of answers to questions agreed on by the parties. I then directed that the parties bring in proposed minutes of orders to give effect to the reasons then given. Today the parties have argued a number of issues as to the form the final judgment should take.
Costs
The respondent argues that it should get its costs on the cross-claim. It has succeeded to the extent of $778,419.38 against Tristar for breach of the warranty agreement. That dispute was resolved prior to the commencement of the hearing and the amount payable by Tristar was agreed by the parties. The other amount in respect of which the respondent succeeded was $161,029 against Arrowcrest relating to replacement costs for alloy wheels.
In the overall scheme of things I do not think it is reasonable to give the respondent costs separately on its cross-claim. As the applicants fairly point out, there were many other claims made in the cross-claim which failed. The respondent sought declarations that the 2001 long term agreement (LTA) and the alloy wheels LTA had been duly terminated, that Tristar repay allegedly excessive prices paid by Ford, that there be an injunction preventing Arrowcrest from seeking to enforce the alloy wheels LTA, that there be an order declaring void the alloy wheels LTA, a declaration that the alloy wheels LTA was void or duly avoided, an order setting aside the alloy wheels LTA on the ground that it was procured by unconscionable conduct, an order that Arrowcrest repay allegedly excessive prices and an order that Arrowcrest indemnify Ford against any claim that might be brought against Ford by Delphi for breach of contract induced by Arrowcrest.
All these claims were rejected. Moreover, the judgment in relation to the Tristar warranty agreement is based on evidence which was otherwise relevant to the claims on which the applicants succeeded. I think the appropriate course is to make a discount from the costs awarded in favour of the applicant. Similar orders were made in Holder v Searle (1998) 44 IPR 1 at 23 and Australian Competition and Consumer Commission v Commercial and General Publications Pty Ltd (No 2) [2002] FCA 1349 at [33]. I fix that discount at 10 per cent. So there will be an order in favour of both applicants for their costs including reserve costs for 90 per cent of those costs.
Interest
Section 51A(1) of the Federal Court of Australia Act 1976 (Cth) provides for the making of an award of interest, unless good cause is shown to the contrary, from the date when the cause of action arose until the date as of which judgment is entered. Strictly speaking, the former date would be 3 September 2002, but the parties had an interim arrangement under which supplies were made up until 16 October. So it is not in dispute that the relevant date from which interest should run is 17 October 2002. The date as of which judgment is to be entered should, I think, be the date on which I gave the answers to the questions, that is 25 November 2002. Judgment will take effect as at that date pursuant to O 35 r 3 of the Federal Court Rules.
The question arises whether there should be interest on the damages awarded insofar as they represent future loss of profits. I think the applicants are correct in pointing out that the judgment is for an amount already discounted to make allowance for the fact that the lost profits for which compensation has been ordered would not have been received until some time in the future. So the damages really reflect the value to the applicants of their loss as at the date the cause of action accrued, looking forward from that date into the future. In theory they should have received that amount as at that date and they should therefore get interest on that amount up until the date of judgment.
Further question
The respondent submitted that as part of the statement of issues procedure I should answer a further question as follows:
“47(a)Were the representations referred to in paragraph 54CA of the Further Amended Cross‑claim of the Respondent false or untrue at the time they were made?
(b) Did Tristar have a reasonable basis for the representations referred to in paragraph 54CA of the Further Amended Cross‑claim of the Respondent at the time such representations were made, to the extent to which those representations related to future matters?”
The applicants took a neutral stand as to this. However they indicated that if the question were asked they would contend for answers different from those contended for by Ford.
In my opinion no further question should be entertained. As the respondent fairly acknowledged, the answer to the proposed question would not materially alter the effect of my answers of 25 November or the orders that would be necessary to give effect to those answers. It is not suggested that the answers have left a legal or factual gap in the necessary foundation for a judgment or that the answers are internally inconsistent. All that the respondent submits is that an answer to the further question “will elucidate the court's reasons so as to give the respondent a proper opportunity of considering its appeal options.”
The almost universal rule is that once reasons for a judgment are pronounced a judge does not give commentaries or enter into debate about the meaning of the reasons. If there is any ambiguity in the reasoning, that is a matter for an appellate court. Although the judgment in this case was given in somewhat unusual form, that was with the full assent of the parties and I think the answers given on 25 November should be treated in the same way as a judgment.
Stay
The respondent does not at the moment seek a stay until the hearing or determination of any appeal but rather an extension of the time for filing any notice of appeal until 31 January 2003 and a stay for that period. This is not opposed.
Orders
There will be orders that:
1.Pursuant to Order 35 Rule 3 judgments in this proceeding will take effect as at 25 November 2002.
2.There be judgment for the first applicant against the respondent in the sum of $7,870,136 together with interest from 17 October 2002 to 25 November 2002 in the sum of $88,296.46.
3.There be judgment for the second applicant against the respondent in the sum of $12,000,000 together with interest from 17 October 2002 to 25 November 2002 in the sum of $134,630.14.
4. There be judgment for the respondent against the second applicant in the sum
of $778,419.38 together with interest in the sum of $78,900.
5.There be judgment for the respondent against the first applicant in the sum of $161,029 together with interest from 17 October 2002 to 25 November 2002 in the sum of $1812.22.
6. The judgment in par 4 be set off against the judgment in par 3
7. The judgment in par 5 be set off against the judgment in par 2.
8.The respondent pay 90 percent of the applicants’ costs of and incidental to the proceeding (including both the claim and the cross claim), including any costs reserved, such costs to be taxed in default of agreement.
8.The respondent’s second and further amended cross claim be otherwise dismissed.
9.Each of the judgments herein are to carry interest at the rate specified in Order 35 Rule 8.
10.The time for filing and serving any notice of appeal is extended to 31 January 2003.
11. There be a stay of execution on all judgments until 31 January 2003.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. Associate:
Dated: 16 January 2003
Counsel for the Applicant: D Shavin QC and J P Moore Solicitor for the Applicant: Cosoff Cudmore Knox Counsel for the Respondent: R C Macaw QC and M A Robins Solicitor for the Respondent: Allens Arthur Robinson Date of Hearing: 17 December 2002 Date of Judgment: 17 December 2002
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