Fadu Pty Ltd (ACN 007 815 090) v ACN 008 112 196 Pty Ltd as Trustee of the "International Linen Service Unit Trust" (No 2)

Case •

[2007] FCA 2081

•

21 December 2007

FEDERAL COURT OF AUSTRALIA

Fadu Pty Ltd (ACN 007 815 090) v ACN 008 112 196 Pty Ltd as Trustee of the “International Linen Service Unit Trust” (No 2) [2007] FCA 2081

COSTS – claim and cross-claim – both sides enjoyed success but neither succeeded on its primary case.

Trade Practices Act 1976 (Cth) s 4M, 45(2), 87(3)
Federal Court of Australia Act 1976 (Cth) s 43

Fadu Pty Ltd v ACN 008 112 196 Pty Ltd [2007] FCA 1965 cited
Ruddock v Vadarlis (2001) 115 FCR 229 cited
Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660 cited

Dal Pont, Laws of Costs (2003)

FADU PTY LTD (ACN 007 815 090), ANTOINE GEORGE NEMER, LINDA NEMER, GEORGE ANTHONY NEMER AND TIP TOP DRY CLEANERS PTY LTD (ACN 007 758 661) v ACN 008 112 196 PTY LTD (FORMERLY KNOWN AS INTERNATIONAL LINEN SERVICE PTY LTD) (ACN 008 112 196) AS TRUSTEE OF THE "INTERNATIONAL LINEN SERVICE UNIT TRUST", MINORIS PTY LTD (ACN 008 296 375) AS TRUSTEE OF CERTAIN TRUSTS, TIGER (SA) PTY LTD (ACN 065 465 956) AS TRUSTEE OF "THE E & V NEMER INHERITANCE TRUST NO 2", PETER JAMES MANAGEMENT SERVICES PTY LTD (ACN 061 086 299), E G NEMER NOMINEES PTY LTD (ACN 007 803 849), ELIAS GEORGE NEMER, PETER WILLIAM JAMES AND INTERNATIONAL LINEN SERVICE PTY LTD (ACN 117 168 233)

No SAD 13 of 2007

FINN J
21 DECEMBER 2007
ADELAIDE


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 13 OF 2007

BETWEEN:

FADU PTY LTD (ACN 007 815 090), ANTOINE GEORGE NEMER, LINDA NEMER, GEORGE ANTHONY NEMER AND TIP TOP DRY CLEANERS PTY LTD (ACN 007 758 661)
Applicants

AND:

ACN 008 112 196 PTY LTD (FORMERLY KNOWN AS INTERNATIONAL LINEN SERVICE PTY LTD) (ACN 008 112 196) AS TRUSTEE OF THE "INTERNATIONAL LINEN SERVICE UNIT TRUST"
First Respondent

MINORIS PTY LTD (ACN 008 296 375) AS TRUSTEE OF CERTAIN TRUSTS
Second Respondent

TIGER (SA) PTY LTD (ACN 065 465 956) AS TRUSTEE OF "THE E & V NEMER INHERITANCE TRUST NO 2"
Third Respondent

PETER JAMES MANAGEMENT SERVICES PTY LTD
(ACN 061 086 299)
Fourth Respondent

E G NEMER NOMINEES PTY LTD (ACN 007 803 849)
Fifth Respondent

ELIAS GEORGE NEMER
Sixth Respondent

PETER WILLIAM JAMES
Seventh Respondent

INTERNATIONAL LINEN SERVICE PTY LTD
(ACN 117 168 233)
Eighth Respondent

JUDGE:

FINN J

DATE OF ORDER:

21 DECEMBER 2007

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:

1.        The application be dismissed.

2.On the cross-claim, the terms of clause 2 of the Deed Poll dated 30 September 2005 be varied so as to read as follows: 

“2.The Restraint Givers jointly and severally covenant that they will not (and that they will procure that their related entities do not): 

2.1Conduct, or be involved, directly or indirectly, in the conduct of, a laundry hire business; 

2.2…

in any part of the area within the boundary line marked out in Appendix ‘B’ in the reasons for judgment published in this proceedings on 11 December 2007 for a period of three years after the Completion Date (as that term is defined in the Heads of Agreement).”

3.The first, fourth, seventh and eighth respondents pay 50 per cent of the applicants’ costs of the proceedings. 

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


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 13 OF 2007

BETWEEN:

FADU PTY LTD (ACN 007 815 090), ANTOINE GEORGE NEMER, LINDA NEMER, GEORGE ANTHONY NEMER AND TIP TOP DRY CLEANERS PTY LTD (ACN 007 758 661)
Applicants

AND:

ACN 008 112 196 PTY LTD (FORMERLY KNOWN AS INTERNATIONAL LINEN SERVICE PTY LTD) (ACN 008 112 196) AS TRUSTEE OF THE "INTERNATIONAL LINEN SERVICE UNIT TRUST"
First Respondent

MINORIS PTY LTD (ACN 008 296 375) AS TRUSTEE OF CERTAIN TRUSTS
Second Respondent

TIGER (SA) PTY LTD (ACN 065 465 956) AS TRUSTEE OF "THE E & V NEMER INHERITANCE TRUST NO 2"
Third Respondent

PETER JAMES MANAGEMENT SERVICES PTY LTD
(ACN 061 086 299)
Fourth Respondent

E G NEMER NOMINEES PTY LTD (ACN 007 803 849)
Fifth Respondent

ELIAS GEORGE NEMER
Sixth Respondent

PETER WILLIAM JAMES
Seventh Respondent

INTERNATIONAL LINEN SERVICE PTY LTD
(ACN 117 168 233)
Eighth Respondent

JUDGE:

FINN J

DATE:

21 DECEMBER 2007

PLACE:

ADELAIDE

REASONS FOR JUDGMENT

  1. When I published my reasons in Fadu Pty Ltd v ACN 008 112 196 Pty Ltd [2007] FCA 1965, I directed that the parties file and serve draft minutes of order to give effect to my findings and reasons and to make submissions on costs. The differences between them that were evidenced in the hearing subsist still.

  2. As to the orders to be made, I should indicate that I intend to dismiss the Amended Application (which sought relief in respect of restraints of trade at common law) for the reason that, by virtue of s 4M of the Trade Practices Act 1976 (Cth), the law relating to restraint of trade at common law was, in the circumstances, not capable of operating concurrently with s 87(3) of the TP Act, which was invoked by the first, fourth, seventh and eighth respondents (“the respondents”) in their cross-claim of 2007.  My so doing does not imply that the applicants did not enjoy any measure of success in the proceedings.  On the contrary.  But for the provisions of s 4M which in turn attracted the remedial provisions of s 87(3), the applicants would have been entitled to the relief they sought.  It was only the respondents invocation of s 87(3) – and the respondents in the circumstances had the incentive to do so – that resulted in a lesser success for the applicants. 

  3. Accordingly, I will order that:

    (i)        the application be dismissed;  and

    (ii)on the cross-claim, the terms of clause 2 of the Deed Poll dated 30 September 2005 be varied so as to read as follows: 

    “2.The Restraint Givers jointly and severally covenant that they will not (and that they will procure that their related entities do not): 

    2.1Conduct, or be involved, directly or indirectly, in the conduct of, a laundry hire business; 

    2.2…

    in any part of the area within the boundary line marked out in Appendix ‘B’ in the reasons for judgment published in this proceedings on 11 December 2007 for a period of three years after the Completion Date (as that term is defined in the Heads of Agreement).”

  4. On the issue of costs, the applicants seek that the respondents pay their costs of the proceedings.  The respondents in turn seek an order that the applicants pay 75% of their costs of the proceedings.  Both sides of this matter enjoyed a real measure of success but neither side was successful on its primary case.  The reason for this is because I found, in the circumstances, that the restraints in question contravened s 45(2) of the TP Act.  Though the respondents alone sought an order under s 87(3) of the Act to have the restraints varied – the applicants positively opposed such an order – the effect of my so ordering resulted in a lesser measure of success than either side of the litigation sought to secure. 

  5. It is well accepted that the general discretion conferred by s 43 of the Federal Court of Australia Act 1976 (Cth) to award costs is absolute and unfettered but that it must be exercised judicially. It is equally well accepted that in the exercise of that discretion:

    (i)ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order;

    (ii)where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed;  and

    (iii)a successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties’ costs of them.  In this sense “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.

    Ruddock v Vadarlis (2001) 115 FCR 229 at [11] approving Hughes v Western Australian Cricket Association (Inc) (1986) 69 ALR 660; ATPR 40-748 at 48,136. See generally Dal Pont, Laws of Costs, ch 8 (2003).

  6. The present matter is not one in which it is appropriate in my view to attempt an issue by issue dissection of the proceedings.  In the view I have taken of proceedings, it is best described as a composite one in which matters dealt with in the application infused the cross-claim and, importantly, the manner in which I considered the discretion under s 87(3) ought properly to be exercised.  As I noted above, each party secured a measure of success albeit not the particular measure for which they held their respective hopes.  Rather than attempting to apportion the costs of the application and cross-claim respectively, the appropriate course to take is to deal with the matter as a whole.  So viewed, I consider the proper approach to take is to order that the respondents pay 50 per cent of the applicants’ costs in the proceedings.  This, doubtless, reflects a rough evaluation of the balance of the successes and failures actually experienced by the parties.  But it fully reflects my own appreciation of the significance of the respective successes of the parties in the matter and, I would emphasise, of the consequences of the various forensic choices they made that contrived both the course of, and the shape of the issues in, the proceedings.  Accordingly, I will order that (iii) the first, fourth, seventh and eighth respondents pay 50 per cent of the applicants’ costs of the proceeding.    

  7. I have made no orders in respect of the restraints imposed in the Heads of Agreement dated 5 August 2005 notwithstanding that the respondents “draft orders” seeks that I do so.  The reason I take this course is that such relief was not sought either in the application or in the cross-claim and so was not a matter in issue before me.  No amendment of the pleadings was sought by any of the parties even after I had adverted to this situation. 

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn.

Associate:

Dated:        21 December 2007

Counsel for the Applicants: Mr R Whitington QC with Mr N Rochow
Solicitor for the Applicants: Cowell Clarke
Counsel for the 1st, 4th, 7th & 8th Respondents: Mr W Wells QC with Mr T Duggan
Solicitor for the 1st, 4th, 7th & 8th Respondents: Kelly & Co
Counsel for the 2nd, 3rd, 5th & 6th Respondents: Mr M Evans
Solicitor for the 2nd, 3rd, 5th & 6th Respondents: Iles Selley
Date Submissions Received: 19 December 2007
Date of Judgment: 21 December 2007
Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0