Epiflor Epipanel Pty Ltd v Abel Lemon and Co Pty Ltd

[1988] FCA 369

(LIMITED DISTRIBUTION)

IN THE FEDERAL COURT OF AUSTRALIA)

)

VICTORIA	DISTRICT	REGISTRY	)	No. VG 131 of 1988
)

GENERAL DIVISION	)
BETWEEN:

EPIFLOR EPIPANEL PTY LTD Applicant

and

ABEL LEMON & CO PTY LTD Respondent

MINUTES OF ORDER

COURT: Woodward J

DATE:  14 July 1988

PLACE: Melbourne

THE COURT ORDERS THAT:

1.    The applicant pay the respondent’s costs,

NOTE:	Settlement and entry of orders 1 s dealt wlth in
-	Order 36 of the Federal Court Rules.

2.     The order be stayed for three months

IN THE FEDERAL COURT OF AUSTRALIA)

)

VICTORIA DISTRICT REGISTRY	)	No. VG 131 of 1988
)

DIVISION	GENERAL	)
BETWEEN:

EPIFLOR EPIPANEL PTY LTD Applicant

and

ABEL LEMON & CO PTY LTD Respondent

COURT: Woodward J

14 July 1988

-	DATE:
PLACE: Melbourne

EXTEMPORE RE ONS FOR JUDGMENT

In this matter I have a considerable degree of

sympathy for the applicant. It seems that it has, for several years, been supplied by the respondent with vinyl chips, which are an essential ingredient in a floor-laying process which is an important part of the applicant's

business. At some stage over the last two years, in the	course of a re-organization of the respondent company and
other related corporations, a decislon was taken that the respondent and its related companies would cease to supply these vinyl chips on a normal sale and purchase basis to the
people that they had previously been dealing with. They
would instead dispose of them only as part of the total
floor-laying process which they were marketing, and whlch

L. .

- 2 -

they were prepared to license the applicant, and other prople in the same positlon as the applicant, to perform for them.

After this declsion was reached, it seems that

supplles of the chips continued to be available on the previous basis for some time; but eventually the applicant was informed that the vinyl chips would no longer be supplied

by the respondent, and that the only way it could obtain them

from a related company was to seek and obtain appointment as

a	licensed	applicator	of the respondent's floor-laying
system.

The applicant began these legal proceedings soon
after it became apparent that it was not going to be able to

get supplies from the respondent; they have continued over a

period of just over three months.	The preparation of the
case has been very expeditious	on both sldes, whlch wlll
fortunately have	had the effect of keeplng costs to a
reasonable level.	However, as the case was due for hearing,
the applicant has appreciated,	no doubt on sound legal

advice, that its prospects of success were either slight or

non-existent and it has consented to the appllcation belng
struck out. This I did yesterday, reserving the question of The applicant has argued that it ought not to be required to pay the respondent's costs, not by reason of anything to do wlth the litlgation itself, but by reason of the fact that the applicant was unaware of any potential	costs.
source of supply which could replace the respondent's
supplies, whereas the respondent was itself obtaining its
supplies from a particular English source and did not make clear to the applicant the availabillty of supplles from that
source until a few days ago. It seems that there was a
reference to the English source as being a posslble suppller,
in an affidavit which was sworn on behalf of the respondent
on 20 June. But the full availability of that source was n o t
made clear until affidavits were sworn on 11 July.
It seems to me that, In order to avoid the normal result that costs follow the event, and the withdrawal of an application requires the payment of the respondent's costs, the applicant would have to show either (a) that there was something in the respondent's conduct of the actlon which had
led the applicant to believe that it had a good cause of
action, when that was not the case, or (b) that there was
something in the behaviour of the respondent before the
action was commenced with was so unconscionable, or otherwise
improper, that it ought to be deprived of its costs, although
it was successful in the lltigation.

In this case I think the worst that could posslbly

be said of the respondent (and I should say that I have not

called on the respondent to reply) is that it acted in a

hard-headed business fashion when it changed its method of operation, offered only its revised service to the applicant

as a licensee, and did not volunteer the fact that the

llcensee could obtain supplies from	another overseas source
~f it wlshed to do so.

In the exercise of my discretion, I am unable to
see that the conduct involved, even regarded in Its worst

possible light, was such that the respondent should be

deprived of its costs. Accordingly I must	dismlss the
application that no order for costs he made.

It is ordered that the applicant pay the

respondent's costs; but I shall, in all the circumstances,

stay the order for three months.

I certify that this and the

three ( 3 ) preceding pages are

a true and accurate copy of

the Reasons for Judgment herein	of
The Hon Mr Justice Woodward

Associate

Dated:  19 July 1988

Counsel for the Applicant:	M T J. Kennon
Solicltors for the Applicants: McIntyre	& Carter
Counsel for the Respondents:	Mr C. Scerrl

Solicitors for the Respondents: Mallesons Stephen Jaques

Date of hearing:  14 July 1988