Cantarella Bros Pty Ltd v Barilla Alimentare S.p.A

[1999] FCA 592

FEDERAL COURT OF AUSTRALIA

CANTARELLA BROS PTY LTD v BARILLA ALIMENTARE S.P.A. 
[1999] FCA 592

PRACTICE & PROCEDURE  - respondent seeking a stay of proceedings until the finalisation of proceedings in Italy – stay not granted

Trade Practices Act 1974

Voth v Manildra Flour Mills Proprietary Limited and Another (1990) 171 CLR 538 distinguished

CANTARELLA BROS PTY LIMITED v BARILLA ALIMENTARE S.p.A

NG 1187 OF 1998

MATHEWS J

27 APRIL 1999

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1187 OF 1998

BETWEEN:	CANTARELLA BROS PTY LTD Applicant
AND:	BARILLA ALIMENTARE S P A Respondent
JUDGE:	MATHEWS J
DATE OF ORDER:	27 APRIL 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.        The orders sought in the notice of motion be refused.

2.        The respondents pay the applicant’s costs of the motion.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 1187 OF 1998

BETWEEN:	CANTARELLA BROS PTY LTD Applicant
AND:	BARILLA ALIMENTARE S P A Respondent

JUDGE:	MATHEWS J
DATE:	27 APRIL 1999
PLACE:	SYDNEY

EX TEMPORE REASONS FOR JUDGMENT

1. This is an application pursuant to a notice of motion brought by the respondents to these proceedings. For the sake of convenience, I shall refer to the respondents in the main proceedings as "Barilla" and to the applicant as "Cantarella". The notice of motion seeks that the proceedings against Barilla be stayed either permanently or pending final determination of certain proceedings between Barilla and Cantarella, commenced in the Court of Parma, Italy, Civil Division, in February 1998.

2. The proceedings in Australia were commenced by statement of claim, filed in this Court on 5 November 1998, alleging breaches by Barilla of various provisions of the Trade Practices Act 1974. The relationship between the parties goes back to 1992 when a distribution agreement was entered into between Cantarella and the first respondent, Barilla Alimentare S.p.A ‑ an Italian company. In general terms, the distribution agreement provided for the supply by Barilla of foodstuffs to Cantarella for distribution in various Australian retail outlets.

3. Clause 2 of the contract provided that either party was entitled to terminate the agreement upon the giving of certain notice. In the event of Barilla terminating the agreement without notice, Cantarella was entitled to receive compensation to be determined according to a formula relating to the net profit on sales over a 12 month period.

4. In September 1997, Barilla terminated the contract without notice, thereby, it is acknowledged, activating the compensation provisions referred to above.

5. Article 12 of the contract provided that the agreement is to be governed by the Italian Civil Code, and continued:

   For any possible controversy arising from the execution and/or interpretation and/or termination of this agreement the parties elect the competency of the Court of Parma.

6. In about February 1998, Barilla commenced proceedings against Cantarella in the Court of Parma in Italy, seeking what is described in an affidavit of Stephen Howard Klotz, dated 25 February 1999, as:

   9.1a declaration that Cantarella's claim is inconsistent with a proper construction of Article 2 of the Agreement and invalid;

   9.2that the Court appoint an independent expert accountant to ascertain the amount of the compensation payable by Barilla to Cantarella according to Article 2 of the Agreement; and

   9.3an order that Cantarella pay Barilla the amount of $290,146.08 owing on outstanding invoices.

7. It is apparent that the issues in the Italian Court essentially relate to the amount of compensation payable by Barilla to Cantarella pursuant to Article 2. Cantarella has claimed compensation in excess of one million dollars, whereas Barilla concedes an amount of approximately $350,000. It is anticipated that the Parma proceedings will take a further 18 to 24 months to reach final resolution.

8. The notice of motion before this Court, although on its face seeking a “permanent or interim stay”, is clearly not seeking a permanent stay of these proceedings. It has not been urged that this Court is an inappropriate forum for the resolution of the matters raised in Cantarella's claim. To the contrary, there is evidence that the trade practice claims made in these proceedings would not be justiciable in the Italian Court, either in the proceedings commenced by Barilla or in any other proceedings. This Court is therefore an appropriate forum for the resolution of these issues. Indeed it is probably the only one. Accordingly, if the notice of motion were truly seeking a permanent stay of these proceedings, then the application would inevitably fail.

9. However it is clear from the submissions made on behalf of Barilla that a permanent stay is not sought. The essential matter urged on behalf of Barilla is that the resolution of the Parma proceedings is, in effect, a necessary precursor to the determination of appropriate compensation in this Court, (assuming that the Court reaches the compensation issue). Accordingly a stay of these proceedings is sought until the resolution of the Parma proceedings.

10. Mr Street SC, who appears for Cantarella, urges that the principles enunciated by the majority of the High Court in Voth v Manildra Flour Mills Proprietary Limited and Another (1990) 171 CLR 538 apply in these proceedings, namely that the stay should be granted only if this Court is a “clearly inappropriate forum” for the determination of the dispute. This test, as already discussed, cannot possibly be made out in this case.

11. However, I think it appropriate that this application be viewed as an adjournment application (albeit a lengthy adjournment) rather than an application for a stay. Viewed in this light, the applicable test is that of the balance of convenience. Even on this much lower test, I am not at all persuaded that it would be more convenient either for the parties or for the Court to make the orders sought in the notice of motion.

12. It is possible that at some stage in these proceedings issues might emerge which will be incapable of resolution until the outcome of the Parma proceedings is known. If this occurs, Barilla can then seek an adjournment of the whole or any part of the proceedings. But it cannot be known at this stage whether that situation will arise. It is equally possible that these proceedings will be able to run their full course in parallel with the Parma proceedings, and without recourse to the findings of the Parma Court. Alternatively, the Parma proceedings might in any event be resolved before this case reaches hearing.

13. To make an order adjourning these proceedings at this stage would, in my view, unnecessarily delay the proceedings to the prejudice, at the very least of Cantarella and possibly also of Barilla. It is in the interests of all parties, and of the Court, that the proceedings should continue in an orderly manner without undue delay. No basis has been shown at this stage for ordering a stay or an adjournment of the proceedings. I therefore decline to make the order sought in the notice of motion.

14. The respondents are to pay the applicant's costs of the motion.

I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mathews.

Associate:

Dated:             27 April 1999

Counsel for the Applicant:	Mr A W  Street with Ms M Painter
Solicitor for the Applicant:	Mallesons Stephen Jaques
Counsel for the Respondent:	Miss LA Needham
Solicitor for the Respondent:	Deacons Graham & James
Date of Hearing:	27 April 1999
Date of Judgment:	27 April 1999