Charleson, H.W. v Mobil Oil Australia Ltd

[1987] FCA 372

Re: HENRY WILLIAM CHARLESON and AUSTRALIAN AUTOGAS CONVERSIONS (S.A.) PTY.
LIMITED
And: MOBIL OIL AUSTRALIA LIMITED
No. G20 of 1987
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Forster J.

CATCHWORDS

Practice and Procedure - proceedings struck out as incompetent - misrepresentation or misleading conduct prior to incorporation of applicant - relevant conduct not renewed, repeated or confirmed - joinder not possible where cause of action not established - applicant not a party to proceedings.

Federal Court Rules

Trade Practices Act 1974

HEARING

ADELAIDE

#DATE 17:7:1987

Counsel for the Applicants: Mr M. Hoile

Solicitors for the Applicants: Playfords

Counsel for the Respondent: Mr J. Mansfield Q.C.

Solicitors for the Respondent: Thomson Simmons & Co

ORDER

The proceedings instituted by the Applicant Australian Autogas Conversions (S.A.) Pty. Limited be struck out.

The Applicant Australian Autogas Conversions (S.A.) Pty. Limited pay the costs of the respondent's Motion to be taxed.

The Applicant, Henry William Charleson, amend the application and the statement of claim accordingly.

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

JUDGE1

The respondent applied by notice of motion to have the statement of claim dismissed on the ground that it failed "to disclose a cause of action justiciable by the Federal Court". When the notice of motion first came before me I was informed by counsel that the applicants had prepared and would serve an amended statement of claim and I adjourned the hearing to enable counsel for the respondent to consider the amended statement of claim. When the matter came before me again I was informed by counsel for the respondent that he no longer sought the striking out of the claim by the first applicant since the amended statement of claim had pleaded matters which, if proved, would provide a cause of action under s.52 of the Trade Practices Act 1974 and upon other bases. However counsel still sought that the second applicant be struck from the statement of claim because it was said the facts pleaded did not, and even by amendment could not, form the basis of any claim by the second applicant against the respondent under s.52 of the Trade Practices Act or under the Misrepresentation Act (S.A.) 1971-1972 and could not form the basis of a claim for damages for fraudulent misrepresentation or for breach of contract.

1. The facts pleaded are fairly simple and straightforward. The first applicant ("Charleson") is a service station operator. From and about the months of July to October 1984 Charleson discussed with the respondent the assignment to Charleson of a lease and franchise agreement with respect to a service station owned by the respondent. During these discussions it is pleaded that one Fulton, on behalf of the respondent, represented that if Charleson bought the lease of the service station from the previous lessee the respondent, (a) intended to and would move and replace certain canopies on the premises, (b) intended to and would install a diesel tank and pumps at the said service station and (c) intended to and would renovate and improve the premises so as to bring them up to the ordinary standard of a Mobil service station.

2. It is pleaded that these representations were intended to induce Charleson to enter into an assignment of a lease from the respondent and various other documents with respect to the service station and to pay various sums of money to the preceding lessee and to the respondent. Charleson began to operate the service station on or about 3 September 1984.

3. It is next pleaded that the respondent by its servants or agents Fulton and Rabelato made the same representations between the month of September 1984 and late 1984 and that as a consequence Charleson purchased certain filters and equipment for diesel fuel.

4. The statement of claim goes on to allege that at the time that the representations mentioned above were made the respondent did not intend (a) to replace the said canopies, (b) to instal the said diesel tanks and pumps, (c) to renovate and improve the said service station so as to bring it up to the ordinary standard of Mobil service stations.

5. It is also alleged that in about September 1985 the respondent removed "various lighting" from the premises and at the time represented that it intended to and would replace the said lighting. It is further alleged that the respondent did not intend to replace the lighting or alternatively was recklessly indifferent as to whether or not it would do so and it had no reasonable basis in making the representation.

6. A contract between Charleson and the respondent whereby the respondent agreed to do the three things mentioned above is alleged in the alternative and its breach is complained of.

7. The second applicant ("Autogas") was incorporated on 28 June 1986 and has carried on business as a service station proprietor. It has pleaded that at all material times Charleson was a principal shareholder and managing director of Autogas. On 1 July 1986 Charleson "assigned the operation of the business (of the service station) to Autogas".

8. It is pleaded in para. 25 that by reason of the misrepresentations, conduct and breaches the applicants have suffered loss and damage.

9. The applicants claim
   
   

(i) a declaration that the respondent is engaged in conduct in contravention of s.52 and 53A of the Trade Practices Act

(ii) an enquiry as to loss or damages sustained by the applicants by the acts of the respondent in

contravention of s.52 and 53A(1)(b) of the Trade Practices Act

(iii) damage and additional relief pursuant to ss.82 and 87 of the Trade Practices Act including an order or declaration pursuant to s.87 that the agreements (entered into when Charleson entered the service station business) be varied

(iv) an order restraining the respondent from

exercising any alleged right under any agreement or security for the payment of any money or the performance of any obligation by the applicant

(v) damages for misrepresentation pursuant to the

Misrepresentation Act 1971

(vi) damages for fraudulent misrepresentation

(vii) damages for breach of contract.

1. The respondent argues that any misleading or deceptive conduct by it or any conduct in any way giving rise to any of the causes of action pleaded is alleged on the statement of claim to have taken place during a period from approximately eighteen months to two years before Autogas was incorporated. It is not alleged that after the incorporation of Autogas there was any further conduct by the respondent which had the effect of repeating or reviving what had previously been said or done prior to incorporation. In these circumstances it is said that a mere assignee or successor in title has no right of action with respect to misrepresentations made to its assignor or predecessor in title.

2. It is argued by the applicants that the misrepresent- ations and misleading and deceptive conduct are continuing in nature and can be taken still to be effective on the present lessee, that is Autogas. I am unable to accept that misrepresentations or conduct indulged in by the respondent to Charleson at times at least eighteen months prior to the incorporation of Autogas can give Autogas any cause of action simply because Charleson is its managing director and principal shareholder. If it were alleged that after incorporation of Autogas in some way either specifically or by implication the respondent renewed repeated or confirmed the misrepresentation or misleading conduct and if it were further alleged that Autogas acted in reliance on this misrepresentation or conduct the position might be different. Indeed it might also be different if Charleson were to the knowledge of the respondent negotiating and discussing on behalf of a company in existence or to be formed. In the present case the conduct and misrepresentation complained of is misrepresentation as to the respondent's then intentions at a time well before the incorporation of Autogas. I cannot accept that upon incorporation and in the absence of any assignment Autogas succeeded to any right of action which Charleson might have had against the respondent simply because he is the managing director and principal director of Autogas.

3. The applicants then argue that the provisions of Order 6 of the Federal Court Rules dealing with the joinder of parties, in some way not entirely clear to me, enable Autogas to be joined as an applicant. Rule 2 and Rule 8 are pointed to but in my opinion these rules do not assist Autogas. The rules do not create causes of action but simply permit persons who have a cause of action against a respondent to be added to proceedings in certain circumstances. In the present matter it is my view that Autogas has on the statement of claim no cause of action at all against the respondent and therefore cannot be joined.

4. It was further argued that even if Autogas has no cause of action against the respondent it may be entitled to the benefit of any variation made in the lease pursuant to Charleson's prayer for relief under s.87 of the Trade Practices Act and if it is entitled to such benefit it should be a party to the proceedings. It is sufficient to say that in my view this cannot be so. Section 87 in its terms and intent enables the court to make an order varying a contract on behalf of a person who is a party to "a proceeding for an offence under Part V of the Trade Practices Act". Autogas is not in my view a party to such a proceeding and therefore cannot expect the lease to be varied on its behalf. Whether or not Charleson personally may be entitled to such a variation is another matter entirely.

5. For these reasons I order that the proceedings instituted by Autogas be struck out as incompetent and the application and the statement of claim be amended accordingly. The applicant Autogas must pay the taxed costs of the respondent of the notice of motion.