Galienne Pty Ltd v S. W. Hart & Co. Pty Ltd

[1988] FCA 166

.L --.

IN THE FEDERAL COURT LIMITED DISTRIBUTION

OF AUSTRALIA

WESTERN AUSTRALIA

DISTRICT REGISTRY 1

GENERAL DIVISION ) NO. WAG 33 Of 1986

B E T W E E N :  GALLIENNE PTY LTD
as Trustee for the J . D . Mllne
Family Trust

Applicant

and

S.W. HART 6 CO. PTY LTD

First Respondent

and

ANTHONY MARWICK

Second Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:	FRENCH J.
DATE OF ORDER:	8 APRIL 1988
WHERE MADE:	PERTH

( 2 ) and (iv) of the applicant's interrogatories.

THE COURT ORDERS THAT:

1. The r0SQOndentS do within 14 days provide an answer to

interrogatories 1 and 3(a), (b)(i), (ii), (iii)(l) and

2.          The applicant to pay the respondents' costs of the directions hearlng on 16 June 1987 insofar as it related to the provision of answers to interrogatories.

3. The application be adjourned for further directlons to

12 April 1988 at 9.15 am.

Note: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT ) LIMITED DISTRIBUTION

OF AUSTRALIA 1

WESTERN	AUSTRALIA	)
DISTRICT	REGISTRY	1
GENERAL	DIVISION	1

No. WAG 34 of 1986

B E T W E E N :  LTD PTY PETARYN

Applicant

and

S.W. HART & CO. PTY LTD

First Respondent

and

ANTHONY MARWICK

Second Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:	FRENCH J.
DATE OF ORDER:	8 APRIL 1988
WHERE MADE:	PERTH

THE COURT ORDERS THAT: i

1 . The respondents do within 1 4 days provide an answer to

interrogatories 1 and 3(a), (b)(i), (ii) and (iv) of

the applicant's interrogatories.

2.          The applicant to pay the respondents' costs of the directions hearing on 16 June 1987 insofar as it related

to the provision of answers to interrogatories.
3.	application The be ad~ourned for further dlrections to
12 April 1988 at 9.1 5 am.
Note:  Settlement and entry of orders is dealt with in

Order 36 OE the Federal Court Rules.

IN THE FEDERAL COURT ) LIMITED DISTRIBUTION

AUSTRALIA OF 1

WESTERN AUSTRALIA 1

DISTRICT	REGISTRY	1	No. WAG 39 of 1986
B E T W E E N :	PARTNERS	JARKS	( A Firm)

Applicant

and

S.W. HART & CO. PTY LTD

First Respondent

and

ANTHONY MARWICK

Second Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:	FRENCH J.
DATE OF ORDER:	8 APRIL 1988
WHERE MADE:	PERTH
THE COURT ORDERS THAT:

1. The respondents do within 14 days provide an answer to

interrogatories 2 and 6(a) and (b)(i), (ii), (iii)(l)

and (2) and (iv) of the applicant's interrogatories.

2 .          The applicant to pay the respondents' costs of the directions hearing on 16 June 1987 lnsofar as it related to the provision of answers to interrogatories.

3 .          The application be ad~ourned for further directions to 12 April 1988 at 9.15 am.

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

..

IN THE FEDERAL COURT	1	LIMITED	DISTRIBUTION
OF AUSTRALIA	1
WESTERN AUSTRALIA	)
DISTRICT REGISTRY	)

GENERAL DIVISION	)	NO. WAG 3 3 Of 1986
B E T W E E N :	GALLIENNE PTY LTD as Trustee for the J.D. Milne Family Trust

Applicant

and

S.W. HART h CO. PTY LTD

First Respondent

and

ANTHONY MARWICK

Second Respondent

i.

!-

NO. WAG 34 Of 1986

B E T W E E N :  PETARYN PTY LTD

Applicant

and

S.W. HART h CO. PTY LTD

First Respondent

and

ANTHONY MARWICK

Second Respondent

. I .I

2 .

NO. WAG 39 O f 1986

B E T W E E N :  JARKS PARTNERS (A Firm)

Applicant

and

S.W. HART S CO. PTY LTD

First Respondent

and

ANTHONY MARWICK

Second Respondent

CORAM :  FRENCH J.
8 April 1988

REASONS FOR JUDGMENT

S.W. Hart 6 Co. Pty Ltd ("Hart") carries on the business

of manufacturing and selling, under the brand name "Solahart", a

range of products for heating domestic water supplies	and swimming
pools and for space heating.

The applications presently before the Court are brought

by three disaffected Solahart dealers, Gallienne Pty Ltd

("Gallienne'), Petaryn Pty Ltd ("Petaryn") and Jarks Partners

("Jarks"). Each had been appointed pursuant to written a

agreement with Hart as its Solahart dealer for a geographically

defined area.	In April 1984 Gallienne, by assignment from	its
predecessor, became the Solahart dealer	in the Rockingham	area.

Petaryn was appointed for the Victoria Park area from l June 1985

and Jarks for the Osborne Park area from 24 August 1985.

Proceedings against Hart and its general manager, Marwick, were

commenced in thls Court by Galllenne and Petaryn on 17 Aprll 1986

and by Jarks on 2 May 1986.

Whlle they are not ldentlcal, there are common elements

in the claims brought by each of the applicants as set out In

their amended statements of claim.	In	each case the pleadings
have progressed to the point where a defence	and	reply have been

filed. In the case of Gallienne, Hart has instituted a

cross-claim and a defence to the cross-claim has been	filed.
On 6 October 1986 Toohey J. ordered that each party give discovery on or before 27 October 1986.	The applicants each gave

formal discovery by verified list filed on 10 November 1986. No

such list was filed by the respondents, although it appears that

there has been mutual discovery and inspection on an informal

basis. No further steps were taken until the applications were

brought on by the Court €or mention in a callover on 5 March 1987.

At that time the applicants sought leave to administer

interrogatories, drafts of which were tendered. Leave was given

to interrogate on matters peculiarly within the knowledge of	the
respondents. The respondents were given leave	to administer

interrogatories similarly limited by 19 March 1987. Each party

was to answer the interrogatories, saving all just objections, on

or before 14 April 1987. On 23 April 1987 the respondent was

given further time until 30 April to administer its

interrogatories and to answer those of the applicants. In the

event, it administered interrogatories to the applicants on 30

April, although to this date none of them appear to have been answered. The respondents have, in each case, filed answers to

the applicants' interrogatorles taking objections to	most	o € them
and it 1s these which now fall €or determination.

On 13 May 1987, the respondents filed a motion In the

Gallienne proceedings seeking	to strike out various parts	of the
re-amended statement	of	claim. Argument on this and on the

respondents' objections to the applicants' interrogatories was

heard on 16 June 1987 and on 19 June 1987 orders were made

striking out paras.8, 10 and 12 of the Gallienne statement of

claim. The respondents foreshadowed strike out motions in

relation to similar parts of the amended statements of claim in

the Petaryn and Jarks proceedings.

Counsel for Gallienne indicated that in light of the

decision on the pleadings in that matter, he would seek leave to

re-amend the statement of claim on each of the applications. Each

of the applicants was then given leave to file and deliver an

amended statement of claim on or before 3 July 1987 and the

respondents were given leave to deliver an amended defence by 24

July.

On the question of the objections to the applicants'

interrogatories, some of the matters raised related to paragraphs of the statement of claim which were struck out in the Gallienne

case and which it was anticipated would be the sub~ect of

amendment ln the Petaryn and Jarks cases. I indicated that I

might leave over the question of any declsion on the

interrogatorles until the form	of	these amendments became clear.
In the event, amended statements	of claim were filed on	13 July
1987 and amended defences	on 13 August and	I deal with the

interrogatories on the basis of those amended pleadings.

The argument on 16 June dealt primarily with the

objections taken by the respondents in the Jarks case, the

interrogatories there administered being the fullest set and

encompassing those objected to in Gallienne and Petaryn.

The causes of action raised against Hart by Jarks may be

summarized as follows:-

1.    Fraud by means of pre-contractual misrepresentation (paras. 3D and 3E).

2. Misleading or deceptive conduct in contravention of s.52 of the Trade Practices Act constituted by the

pre-contractual representations and failure to

furnish relevant information (paras. 3F and 3G).

3 .     Breach of warranty or collateral contract arising from the pre-contractual representations (para.4A).

4.     Breach of the dealership agreement by soliciting

sales, retail selling and supplying Solahart

products within the dealership area (para.7).

5.     Abuse of market power in contravention of s.46 of

the Trade Practices Act 1974 (para. 8).

6 .     Price discrimination in contravention of s.49 of

the Trade Practices Act 1974 (paras.10 and 11).

Hart's general manager, Marwick, is drawn in under

para.12	of the amended statement of claim, as one involved in each
of the contraventions of the Trade Practices Act 1974	by virtue of
the provisions of s.75B of that Act.

It is not necessary for present purposes to set out the

defences to these pleas. They will be addressed to the extent

necessary in dealing with each of the contentious interrogatories.

I now turn to deal with those in order.

Interrogatory 1

This relates to para.9 of the former defence which

pleads that, by an addendum t o the dealership agreement, specified was to receive monetary compensation in respect of sales made to

builders were t o "come under the full and direct control" of

those builders. That plea is maintained in 9(b) of the amended

defence. The interrogatory asks whether Jarks had received

monetary compensation in respect of the sales to those builders

and for details of the payments made. Objection was taken on the

ground	that	the	interrogatory	was	"irrelevant,	fishing,
scandalous,	oppressive,	vague,	and at best	matter	a	for

cross-examination only". The grounds of objection so stated

discloses a failure to consider the provisions of 0.16 r.6(3) of

the Federal Court Rules which provides:-

" ( 3 ) Subject to sub-rule ( 4 ) , a party may object to

answering any interrogatory on the following grounds but

no other

(a) where the answering is not required by an order,

that the interrogatory does not relate to any

matter in question between him and the party

requiring the answer;

(b) that the interrogatory is vexatious or oppressive:

and

(c)	privilege."
Although the objections taken were not framed in the

language O E this rule, relevance and oppression plainly come

within the specified grounds and it 1s likely that the

characterisation of an interrogatory as fishing can also be

resolved into an objection as to relevance. AS to an interrogatory being scandalous or vague, I am inclined to regard

that as a special class of vexation or oppression.

Jarks, in its reply, denies the existence of the

addendum pleaded in para.9 of the defence, and there is no issue

between the parties on the pleadings that any monetary

compensation was actually paid pursuant to the addendum pleaded.

The interrogatory does not, on the face of it, appear to be

relevant. In any event it addressem a matter which is within

Jarks' knowledge and thus outaide the terms of the leave granted

on 5 March 1987.	NO order	will	be	made	in respect of
interrogatory 1. Interrogatory 2

Paragraph 8 of the further amended statement of claim,

like its predecessor, alleges an abuse of market power on the part

of Hart in contravention O E 8 . 4 6 of the Trade Practices	Act.	It
pleads, inter alia, that Hart conducts	and at	all material times

conducted a business known as "Super Service Emergency Hot Water"

under which it carried out the installation, supply, repalr and

service of Solahart products. These services were said to have

been provided to persons within the dealership area. By paras. 17

and 18 of the defence prior to amendment, Hart pleaded that 1t

owns, but does not operate that business, and that installation,

supply, repair and service of Solahart products forms only a minor

part of its activities. In the defence as amended, Hart denies

this allegation in its entirety. Interrogatory 2 asks who

operates the business and i f it is not Hart, whether	it is under
Hart's direction, management	or control, and if it is an entity

owned wholly or partly by Hart. Although I would not have been

prepared to allow this interrogatory in light of the pleadings as

they previously stood, I think that it is now appropriate to be

answered and I will so order.

Interrogatory 3

t

This goes to para.23 of the former defence, which again

responds to a plea in para.8 of the amended Statement of claim.

That plea, inserted by way of particulars in support of the 8 . 4 6

!

claim, asserts in substance that Hart competes wrth Jarks	in the
dealership area through businesses known as "Solahart Melville"

and "Solahart Morley". By para.23 Hart admitted that it has

carried on these two businesses since 3 1 January 1985 and 9

November 1985 respectlvely, selling Solahart products, but

otherwise denies the allegation that lt carries on through them

the installation, retail supply, repair and service of Solahart

products. Interrogatory 3 asks whether the two businesses involve

retail sale of Solahart products. As this was admitted, the

question is pointless. Under the defence as amended,	it is still
admitted but more plainly. Nor	In the circumstances could I see

what further point is served in relatron to the s.46 plea by

requiring particulars of sales made by these entities. The

position in this respect is not altered by the amendments.

Interrogatory 4

This relates to para.29 of the former defence which

denies allegations in particulars to the former para.8 that Hart

is in a position to control or market the goods and services and

i

goes on to say that the markets in which Hart competes are the

.hot water service market: the pool heating market: and the space

heating market.. The interrogatory asks, inter alia, for a

statement of "every act, fact, matter, circumstance	or thing
relied upon in support of the allegation that the markets	in which

the First Respondent competes are the hot water service market, the pool heating market, and the space heating market". The

question is, on the face of it, oppressively wide and will not be

allowed. Without descending into detail, the sub-questions that

follow as part of interrogatory	4 also fail for oppressive width
and lack of relevance.
Interrogatory 5

This interrogatory relates to para.30 of the former

defence, which responds to former para.(iii) of the particulars to
sub-para.8(2) of the amended statement of claim where it was

alleged that:-

"...the "goods. and "services" hereinbefore referred to

are	solar	heating	products	and	the	marketing,
installations	and	servicing	of	the	same;	or,

alternatively, are Solahart products and the marketing,

installation and servicing of the same respectively."

This was denied in para.30 of the former defence which

went on to say that the geographical markets in which Hart ..*. 1

canpetes are limited by reference to the State of Western

Australia, Australia and the world. Interrogatory 5(a) is by way

of a request for particulars of the paragraph, an application of

interrogatories which will not be allowed except in special

circumstances - Conde v 2KY Broadcasters Pty Ltd (1982) 2 NSWLR

221.    Interrogatories S(b) and 5(c) ask for "all acts, facts,

matters, circumstances and things relied upon for the	allegations'
identified in para.30.	The request is too wide and in any event,

appears to be 8eeking particulars. Interrogatory 5(d) asks about

market surveys prepared by Hart in respect of Its solar hot water products and does not seem to be relevant to any issue. Interrogatory 5(e) which is linked to it, is oblectionable for the same reason.

Interrogatory 6

This refers the respondents to a document annexed to the

interrogatory. The document in question is an internal memorandum

of Hart dated 2 1 February 1984, some 1 8 months before the

dealership agreement.	It refers to the desirability of a company
policy regarding builders and trade sales to	be implemented when

existing dealerships change hands. The interrogatory asks what

the proposed policy was and whether it became company policy and,

i f so, and whether it has been implemented. Various subsidiary

questions follow. In	my opinion parts of this interrogatory have
become relevant by virtue of the addition of a new para.3B	in the
re-amended statement	of claim and its denial by the respondents.
In my opinion the respondents should answer interrogatories	6 ( a )
and (b)(i), (111, (iii)(l)	and ( 2 1 , and (iv).
Interrogatory 7

This was answered, but, acsording to Jarks, not

adequately.	It refers to documents marked 2, 3 and 4 annexed to
the	interrogatories. The annexures comprise one pamphlet and two

circular letters promoting Solahart products. The interrogatory

asks whether documents of such style	and	form were dlstributed
within the dealership area during the currency	of	the dealership

agreement. Hart answered by saying that No. 2 was sent to new home owners in the dealership area In August 1986, No. 3 was not distributed in the area and No. 4 may have been, but enqulrles

made did not reveal a definite answer. The interrogatory further

asks whether the addressees for the documents responded.	In
answer to this question, Hart said that	in respect of document No.

2, two new home owners must have responded but the deponent, the

Chief Executive of Hart, did not know how. In answer to a further sub question, it was disclosed that two of the addressees had purchased Solahart units and these names, the sales order numbers

and the dates were given. In my opinion, the question has been

adequately answered and no further order	is required.
Interrogatory 8

This refers to documents 5 and 6 of the annexures.

Document 5 is a copy of a letter dated 17 September 1985 to the

Trade Practices Commission, pursuant to a notification under the

Act, and enclosing a copy of an amended dealership agreement.

Document 6 is a copy	of	an exclusive dealing notification form
under s.93(1)	of the Trade Practices Act dated 7 October 1985.	It

shows Hart as the "person giving nqtice" and identifies "Solahart

solar hot water systems, other products, spare parts and

components"	as	the relevant goods and services. Interrogatory	8
asks for identification of the	"new"	category	of corporate

distributors referred to in the letter to the Trade Practices Commission and for details of where the original agreement and

amended agreement might be inspected. It also sought details of

exlsting dealerships and the agreement previously lodged. Thls

relates to an exclusive dealing claim which has been abandoned by

the amendment.	No	order	will	be	made	in respect to thls
interrogatory.
Interrogatory 9

This interrogatory relates to further and better

particulars of the defence provided by Hart on 27 October 1986.

In para.A5 of the particulars, Hart provided two tables of sales

made by it in the Jarks dealership area. The first did not

include sales to builders and plumbers. The second did set out

sales to builders. The particulars so provided specified the

date, the customer's name and address, the type of unit sold, the sale price, any discount allowed and the name of the installer. The interrogatory asks which, if any, of the supplies of Solahart

units and components particularised were made to:-

buildings already having a Solahart unit in place;

buildings having in place an existing solar hot

water unit	of	a make other than Solahart (and
sought full particulars	of such existing units	by

reference to brand, capacity, age, and mode	of
function);

( iii)buildings having in place a hot water system other

than a solar system (and sought full particulars of such existing unit by reference to brand, capacity, age, and mode of functionlt

(iv) new buildings.

It also asked Hart to specify whether such matters were evidenced in writing and 1 f so, where and when such documents might be inspected.

The particulars which inspired the interrogatory are

said to relate to para.11 of the defence. In this paragraph, Hart

admitted selling or supplylng Solahart units within Jarks'

dealership area to customers other than those described in clause

3.2	of	the dealership agreement. Notwithstanding a careful
perusal	of	the pleadings and re-reading counsel's submissions on

the transcript, I was unable to appreciate the relevance	of any of
these questions. In any event, 9(ii)	and (iii) seem, on the face
of it, to be oppressive and of little benefit to Jarks' case.	I
would not have allowed the interrogatory under the pleadings as
they previously stood and see no reason	to do so now.
Interroqatory 10

This relates to para.Al3 of the particulars of defence.

Par a g r a ,ph A13 gave particulars of para.45 of the former defence

which denied sub-para.D(iii) of the particulars to sub-para. 8(3)

of the former amended statement	of claim. That,	in turn, had
alleged	abuse	of market power by Hart to eliminate or
substantially damage a competitor.	It is	an interrogatory which

is, on the face of it, of marginal relevance, if relevant at all. It is in that sense, I think, oppressive having regard to the extent of the investigation it would appear to requlre.

Interrogatory 11

This interrogatory concerns para.Al4 of the partlculars

which related to a defence to the price discrlmination claim brought under s.49, by para.9 of the amended statement of claim.

That is in substance the same as para.10 of the Gallienne pleading

which was struck out on 19 June and has been replaced by a new

para.10 in the amended statement of claim in the Jarks case. The

interrogatory in substance, seeks the provision of further and

better particulars of the particulars given in para.Al4. To that

extent,	it	is	objectionable unless special circumstances can be
shown to justify its use	to, in	effect, extract particulars.	No
order will be made on it.

SUMMARY

The effect of these reasons is that no order will be

made for further answers to any of the interrogatories

administered by Jarke to Hart save for interrogatories 2 and 6(a)

and (b)(i), (ii), (iii)(l) and ( 2 ) and (iv).

As to the interrogatories in the Gallienne and Petaryn

matters, it was conceded by counsel that those still pursued by

the applicants in those matters, did not raise any issues not

covered by the interrogatories in the Jarks proceedings. I will

order that answers be given to interrogatory 1 in the Gallienne

and Petaryn matters, it being in each case in the same terms as

interrogatory	2	in	the Jarks application. The respondents will
also be required	to	answer interrogatories 3(a), (b)(i),	( i i ) ,

(iii)(l) and (2) and (iv) in the Gallienne and Interrogatories

3(a), (b)(i), (ii) and (iv) in the Petaryn matter, these belng the equivalents to the parts of interrogatory 6 which I consider relevant. Otherwise I make no order for the provision of further answers to any of the interrogatories in any of the matters. The

applicants in each case will have to bear the costs	of so much of
the directions hearing as was taken up	rrith this question.

I certify that this and the preceding

fifteen (15) pages are a true copy of

the Reasons €or Judgment of his Honour

Justice French.

Associate:

Date: 8 1q88.

l / .

Counsel for the Applrcants: Mr D. Solomon

Solicitors for the Applicants: Phillips Fox

Counsel €or the Respondents: M r P. Fitzpatrlck

Solicitors for the Respondents: Robinson Cox

Date of Hearing:  16 June 1987

Date of Judgment: 8 April 1988

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