Bath House Supplies Pty Ltd v The Bath House Pty Ltd

[1983] FCA 192

Re: THE BATH HOUSE SUPPLIES PTY. LIMITED; HAROLD RICHARD ATKINSON and MAY
ATKINSON
And: THE BATH HOUSE PTY. LIMITED and MALCOLM BRUCE POMEROY
No. G107 of 1983
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Lockhart J.

CATCHWORDS

Practice and Procedure - Defence under the Trade Practices Act claimed to debt recovery action - Applicant's notice of motion to restrain respondent from contemporaneous debt action in Local Court of Adelaide - Respondent's notice of motion to strike out statement of claim as not furnishing requisite particulars of claim.

Trade Practices Act 1974, s.52

HEARING

SYDNEY

#DATE 27:6:1983

ORDER

(1) That the applicants furnish to the respondents particulars of the terms and conditions of the agreement alleged in paras. 6., 6A. and 7B. within 10 days of today:

(2) That the respondents file and serve their amended defences to the amended statement of claim together with any cross claims within 14 days after the particulars mentioned in order (1) have been furnished to the respondents;

(3) That the applicants file any defence to any such cross claims within a further period of 14 days;

(4) That the parties exchange lists of documents within 14 days after the close of pleadings;

(5) That the parties give inspection of those documents within a further period of 7 days;

(6) That the parties administer any interrogatories which they seek to administer within 14 days of inspection of documents, such interrogatories to be answered within a further 14 days;

(7) That these orders are to be treated as being in substitution for the orders made on 30 May 1983;

(8) That the order made that day standing the matter over for further directions to 8 August next be vacated;

(9) That the first respondent be restrained until the determination of the proceedings in this Court or further order from proceeding further in the Local Court of Adelaide in proceedings number 765 of 1983 commenced on 6 April 1983;

(10) That the costs of all parties of both notices of motion be costs in the proceeding in this Court;

(11) That any party is at liberty to apply generally in relation to any matter on 2 days notice;

(12) That this matter stand adjourned until Monday 10 October next at 9:30 a.m. for further directions.

JUDGE1

These are two motions being heard by consent, one to strike out the statement of claim and the other to restrain the first respondent. The Bath House Pty. Limited, until the determination of the proceeding in this Court from continuing further with certain proceedings before the Local Court of Adelaide.

On 6 April 1983 the first respondent commenced proceedings in the Local Court of Adelaide claiming $38,895.30 as the balance said to be owing by the first applicant. The Bath House Supplies Pty. Limited, for baths and ancillary products sold and delivered to the first applicant from September until December 1982.

On 4 May 1983 the first applicant and Harold Richard Atkinson and May Atkinson, both described as the second applicants commenced proceedings in this Court by filing an application alleging that the first respondent in trade or commerce made certain false representations to the applicants and that such conduct constituted misleading or deceptive conduct in contravention of s.52 of the Trade Practices Act 1974 and seeking relief of various descriptions. That application was served on the respondents on 12 May.

On 14 May the initiating process in the Local Court was served on the applicants. The application filed in this Court was returnable on 23 May for directions. On that day the application was adjourned until 30 May. In the meantime, on 23 May, the first applicant filed the notice of motion to which I referred earlier seeking to restrain the first respondent from proceeding further in the Local Court of Adelaide.

On 30 May certain directions were made by this Court, with the consent of the parties, including a direction that the respondents file and serve their defences together with any cross claims within 28 days. Counsel for the respondents then gave an undertaking to the Court to give to the applicants not less than seven days notice of any intention to proceed with the action in the Local Court. The applicants filed a statement of claim. The respondents filed a defence and, pursuant to leave given by me earlier today, an amended defence in the proceedings in this Court.

On 21 June the respondents filed their notice of motion for an order that the statement of claim be struck out as failing to disclose any cause of action and as failing to disclose the material particulars on which the alleged cause of action was said to be based. Both motions were listed for hearing today.

I turn first to the motion to strike out the statement of claim. The respondents assert that the statement of claim is defective in various respects which it is unnecessary to state in detail because, as the argument proceeded today, it became common ground that the statement of claim did not comply with Order 12 Rule 1 in that the requisite particulars of certain relevant claims were not stated. This criticism of the statement of claim applied in particular to the allegations of an agreement in paragraph 6.

The course which I then suggested to counsel, and to which they acceded, was that the applicants should have leave to amend the statement of claim and that those amendments should be formulated today provided, of course, that they overcame the difficulty inherent in the present statement of claim. When I resumed the hearing of the application this afternoon counsel for the applicants handed me a draft amended statement of claim which had been shown earlier to counsel for the respondents.

Counsel for the respondents contended that the amendments did not meet the principal objection which he had asserted earlier as vitiating the statement of claim. In particular it did not state in para. 6. of the amended document the terms and conditions of the agreement therein mentioned, although it did go on to specify, as the present statement of claim does not, the parties to the agreement, the form of the agreement and where it was made.

Counsel for the applicants informed me that the applicants are prepared to inform the respondent of the terms and conditions of the agreement alleged in para. 6. The course I propose to take is not to strike out the statement of claim but to give leave to the applicants to file an amended statement of claim in the form of the document handed to me by counsel. I propose to direct the applicants to furnish further particulars of that amended statement of claim so as to overcome the objections raised by counsel for the respondents. I should add, however, that it may be that certain of the allegations of the amended para. 6., particularly those in the second sentence of that paragraph, are technically unnecessary allegations in a pleading and are more appropriately dealt with by furnishing particulars. But I see no harm in alleging them as they have been alleged here. Nor is any objection taken to them on behalf of the respondents. Nor do I think it necessary to decide whether the absence of a statement of the terms and conditions of the agreement alleged in para. 6. necessarily renders the paragraph bad. I think this is a point plainly open to argument, but the applicants do not contend that they ought not to furnish the requested particulars sought by the respondents.

At this stage I shall then give leave to the applicants to file in court the amended statement of claim initialled by me and placed with the papers. I will deal with any further orders soon.

I turn to the motion of the applicants to restrain the respondents from proceeding further in the Local Court. It is necessary to analyse to some extent the cases of the parties, in particular as disclosed by the pleadings in this Court, but I do not propose to do so in any detail as the pleadings speak for themselves.

The amended statement of claim asserts that in about June 1980 the first respondent agreed with the first named of the second applicants to appoint the first named second applicant or a company to be formed by the first and second named second applicants as sole distributor in the State of New South Wales, excepting Albury and Wagga Wagga, of the baths and bath products produced or sold by the first respondent: para. 6.

Paragraph 7. alleges that at all material times the second respondent acted as agent for the first respondent for the purpose of procuring the making of the agreement referred to in para. 6. It is alleged in para. 8. that prior to or at the time of entering into the agreement to which I have referred (and which is said to have been confirmed in the circumstances mentioned in para. 6A. that the second respondent made certain representations to the applicant. They are set out in sub-paras. 8(a), (b), (c) and (d) of the amended statement of claim and I need not refer to them. Then it is alleged that, at the time those representations were made, the second respondent knew or ought to have known that the applicants were dealing with the first respondent upon the faith of those representations.

It is alleged in para. 10. that the matters to which I have referred constituted misleading conduct under s.52. It is also alleged that, in reliance upon representations, the applicants entered into the agreement to which I have referred in para. 6.

I should pause here to say that counsel for the applicants has informed me that the agreement pleaded in paras. 6., 6A. and 7B., although referred to sometimes as "the agreements", is in truth the one agreement.

In para. 13. the applicants allege that in the Local Court proceedings the first respondent seeks to recover from the first applicant $39,145.30 for moneys alleged to be payable by the first applicant to the first respondent, and that the hearing of the proceedings of the Local Court have not yet been listed for trial.

In the amended defence which was filed in court today, but which of course may itself require further amendment in view of the filing a few moments ago of the amended statement of claim, many of the allegations in the statement of claim are admitted but others are put in issue. It is, I think, sufficient for me to say for present purposes that the material allegations made in the statement of claim relating to the alleged misrepresentations are denied. The appointment of the first applicants by the first respondent or, indeed, by any other material parties as sole distributor in New South Wales, excluding Albury and Wagga Wagga, is also denied although the materiality of the allegations referable to that issue will be determined no doubt in due course.

If this Court restrains the respondents from proceeding further in the Local Court until the determination of the proceedings in this Court, in my opinion it will be open to them to cross-claim in this Court for recovery of the moneys claimed by them in the Local Court.

The claim which the respondents propound in the Local Court arises out of common transactions and facts, essentially the sale by the first respondent and the purchase by the first applicant of baths and ancillary products from September to December 1982.

In Fencott v. Muller (1983) A.T.P.R. 44, 201 Mason, Murphy, Brennan and Deane JJ. in a joint judgment which binds this Court say at p. 44,222:

"The scope of a controversy which constitutes a matter is not ascertained merely by reference to the proceedings which a party may institute, but may be illuminated by the conduct of those proceedings and especially by the pleadings in which the issues in controversy are defined and the claims for relief are set out. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter.

A judicial power which is not exercised to determine the whole of a controversy is, generally speaking, not appropriately and conveniently exercised. Not appropriately, because the controversy is not quelled; not conveniently, because the parties - the principal beneficiaries of the exercise of judicial power - must litigate anew to have the outstanding questions and issues determined. The reference by Barwick C.J. in Philip Morris to what is necessary or convenient for the resolution of a federal claim is perhaps too restricted a limitation on the ambit of "matter". Such a test would be unexceptionable if the primary purpose of the exercise of a federal judicial power in a s.76(ii) matter were the judicial administration of the federal law; that is, if the primary purpose were to ensure that the federal law applicable to a particular claim was correctly applied in resolving it. But the primary purpose of exercising judicial power is not the maintenance of legal principle: that is incidental to the determination of the dispute in hand.

The power judicially to determine the whole of a dispute is inconsistent with a limitation which would restrict the court to resolving only the federal claim and what is necessary for that purpose. To adopt a more restrictive approach to the ascertainment of the ambit of a matter is to ensure that the obstacles of arid jurisdictional dispute will beset the path of a party who must invoke federal jurisdiction, especially federal jurisdiction exclusively vested in a federal court pursuant to s.77(ii). The judicial ascertainment of facts in a particular controversy would be bedevilled by the possibility of divergent findings or by unseemly attempts to secure a first finding from one court rather than another."

The applicants raise no objection to the counter claim being brought in this Court. If the counter claim is brought here it will enable the whole matter which forms the basis of the controversy between the parties to be litigated here. But if I refuse the injunction the respondents will, of course, pursue their action in the Local Court which plainly cannot determine the matters in issue before this Court based as they are on alleged contraventions of s.52. A most undesirable state of affairs would then ensue, the applicants being locked in battle with the respondents in two courts with, amongst other disadvantages, increased costs to all parties.

Other considerations support the granting of the injunction sought. The parties have filed pleadings in this Court and obtained orders by consent for discovery and interrogatories; particulars of the statement of claim and of the defence, in each case before their amendment, have been sought and furnished and they are quite elaborate documents. Nothing has happened in the Local Court, as I understand it, save for the filing and serving of the initiating process.

I therefore propose to accede to the applicants' application for an injunction to restrain the respondents from proceeding in the Local Court until the determination of the proceedings in that Court. The orders which this Court makes are as follows:-

(1) That the applicants furnish to the respondents particulars of the terms and conditions of the agreement alleged in paras. 6., 6A. and 7B. within 10 days of today;

(2) That the respondents file and serve their amended defences to the amended statement of claim together with any cross claims within 14 days after the particulars mentioned in order (1) have been furnished to the respondents;

(3) That the applicants file any defence to any such cross claims within a further period of 14 days;

(4) That the parties exchange lists of documents within 14 days after the close of pleadings;

(5) That the parties give inspection of those documents within a further period of 7 days;

(6) That the parties administer any interrogatories which they seek to administer within 14 days of inspection of documents, such interrogatories to be answered within a further 14 days;

(7) That these orders are to be treated as being in substitution for the orders made on 30 May 1983;

(8) That the order made that day standing the matter over for further directions to 8 August next be vacated;

(9) That the first respondent be restrained until the determination of the proceedings in this Court or further order from proceeding further in the Local Court of Adelaide in proceedings number 765 of 1983 commenced on 6 April 1983;

(10) That the costs of all parties of both notices of motion be costs in the proceeding in this Court;

(11) That any party is at liberty to apply generally in relation to any matter on 2 days notice;

(12) That this matter stand adjourned until Monday, 10 October next at 9:30 a.m. for further directions.