Halliday, Hugh Carnegie v Cox Investments Pty Ltd

[1984] FCA 321

CIRCULATION.

Trade Practices - misleading and decepnve conduct - applicacion for lnterlocutory injunction - parallel Supreme Court proceedings

Trade Practices Act 1974 (Cth) ss.52, 82, 87

ComDanies Act 1961 ( W ) s.67

HUGH CARNEGIE HALLIDAY V COX INVESTYENTS PTY LIMITED. GORDON DAVID COX, CECILIA .ALICE MARY COX. KEVIN J N S ANDREWS and LEONARD VICTOR MADDOCKS

No. GIA G.47 of 1984

I

Davies, J

18 September 1984

Perch

!

IN THE FED- COURT OF AUSTRALIA )

)

NESTERN AUSTRALIA DISTRICT	)
REGISTRY	) No. WA G.47 of 1984
1
GENERAL DIVISION	1

I

BETWEEN : HUGH CARIEGIE HALLIDAY

l

Appl 1 canr:

!

Respondents

O R D E R

I

JUDGE MPXING	ORDER	Dames, J
DATE OF ORDER	18 September 1984

!	WHERE W E	Perth
I

= U the applicant, Hugh Carnegle Halliday, undertaking by hls

counsel thar: :

1. These proceedings In the Federal Court of Australia wlll

be prosecuted expeditiously	as aqainst Cox Investments
Pty Limlted.

2. Within twenty-eight ( 2 8 ) days the applicant will gay to

Cox Investments Pty Llmlted $5,000, being the agreed

i	costs of Action No.2843	of 1983 in the Supreme Courr:	of
Western Australia.

THE COTJRT ORDERS

1. Until further order Cox Investments Pty Limlted, Gordon

David Cox and Cecilia Mice Mary Cox be restralned from
further prosecuting Action No.2843 of 1983 In r;he
Supreme Court of Western Australia. Liberty is reserved
to apply for variation or termmation of this order.
2.	These proceedings shall be listed for hearing commencmg
Tuesday, 20 November 1984, and five ( 5 ) days are

allocated.

3. The costs of this appllcatlon shall be costs In the

cause.

!

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!	. I
IN THE FED= COURT OF AUSTRALIA 1

1

WESTERN BUSTRrZLIA	DISTRICT	1
REGISTRY	1 No. WA G.47 of 1984
GENERAL DIVISION	1

I I

BEXWEEN : HUGH CARNZGIE HALLIDAY

Appllcanr.

AND	INVESTMENTS	COX	PTY
LIMITED, GORDON	DAVID

COX, CECILIB ALICE MARY

COX, KEVIN JAMES ANDRZAS

and LEONARD VICTOR

lWDOCKS

Respondents

REASONS FOR JUDG1"IENT

(ex tempore)

Coram	Danes, J
18 September 1984

In this matter, there is an application to stay proceedlngs

which have been commenced in the Supreme Court of Hestern

Australia. That action was commenced in 1983 and is now ready

for trial. "he actlon and the present proceedings arose ouc of a

sale of shares In the company J.L. Burley Pty Llmitea from Cox

Investments Pty Limlted tb International Leather Products Pty shares, the applicant In chese proceedings, Mr H.C. Halllaay,

gave a guarancee for the paymenc of the Purchase prlce.

L.

In the Supreme Court action, Cox Investments Pty Limited l

sued International Leacher Products Pty Llmited, three direccors

of International Leather Products Pty Llmited, Kevin James

Andrews, Leonard Vlctor Maddocks and the applicant in these

proceedings. The writ sought relief against Mr Halliday on the basis of the guarantee given. Default ~udgment has been obcained

in the action against all parties other than Mr i-ialliaay. Mr

Halliday's defence has relled upon an allegatlon that the

arrangement breached s.67 of the Comuanles Act 1961 ( W ) .

In the proceedings whlch have now been broughc in che

Federal Court of Australia by Mr Halliday against Cox Investmencs

Pty Limited, two members of that company and agalnst Mr dndrews

and Mr Maddocks, other princlples of law have been relled upon In

addition to the s.67 princlple. Mr Halliday has relled upon

warranties and represencatlons, upon unconsclonable conduct by

persons who were under a fiduciary duty, and upon s.52 of the

Trade Practices Act 1974 (Cth). Mr Halliday, In raising those

issues, is pucting the defence which he raised in the Supreme

Court proceedlngs on a different basis. It appears that, in

substance, he wishes to say that, even if s.67 of the ComDanies

A A 1961	(hiAA) does not avoid the guarantee itself buc only che
collateral	arrangement wnereby the company J.L. Burley Pty

Limicea would assist in the financlng of the purchase of shares

in itself, nevertheless, the circumstances under whlch the

guarantee was glven were such as to mlslead or deceive him, or

were llkely to mislead or decelve nun, by reason of the fact chat

he entered Into che arrangernenc on the understandlng thar:

internatlonal Leacher Products Pty Limlted was able itself to

3.

finance che purchase of the shares and he was misled by the other

parties to the arrangement lnto thinklng that thac was the

sltuation.

I have put the matter In simplistic terms. The prmciples

upon whlch Mr Halliday wlll rely at any trlal are more complex than that, but I chink that is the substance of the matter. In the proceedings In the Federal Court of Australia he seeks to rely in substance upon the same facts as he relies upon In the Supreme Court, but he wlshes to rely on all principles of state

and federal law which may give hlm the rellef he seeks. If he

succeeds in establlshing that s.52 of the Trade Practices Act was

breached, he wishes t o rely for relief upon ss.82 and 87 of the Trade Practices Act, and particularly Lpon s.87 with a view to having the guarantee set aslde pursuant to the discretionary

power conferred by that section.

It seems to me, therefore, chat the issues all arise out of

substantlally the same facts and that It is deslrable that Mr and federal laws, provided that that can be achieved wichout

undue Inluscice co Cox Investments Pty Limlced.

I I I

I should make It clear before going further that I have not

formed the view that Mr Halliday can succeed m establishing a

!

breach of 5.52. I simply regard that matter as arguable, as

I

indeed are all the other matters upon which Mr Halliday wlshes to

rely. in partlcular, Mr Halllday will have to face the hurdle of

establishing thac, if there was any relevant act done by Cox

I

I ’l

,

I 4.

Investments Pty Limited, that it was done in trade or commerce. Clearly that, in itself, will be a matter for argument. It seems

to me that the s.52 issue stands so far as merit is concerned on

the same footlng as the other issues whlch arise under scate law.

There is no issue whlch clearly is more favourable to Mr Halllday

than any ocher issue.

Looking at convenience, it is clear that the Federal Court

of Bustralla is the only court in whlch all the Issues which Mr Halliday wlshes to ralse can be litigated. I would not issue an

injunction with regard to the Supreme Court action unless I were

satisfied that the proceedlngs in this court could be dlsposed of

promptly and that the coscs thrown away would be borne by Mr

Halliday. However, Mr J.G. Fitzgerald, who now appears for Mr

Halliday, has lndicated that he will give approprlate

undertaklngs as to these two matters, and I am therefore of the

view that it 1s desirable that the matter proceed In this court

so that all relevant issues	of federal and state	law may be
litigated in the one hearing.

i

- NB : NOT APPROPRIATE FOR REPORTING OR FOR GENERAL \

I I

! - CIRCULATION.

c

Trade Practlces - mlsleadlng and deceptlve conduct -

application Cor mcerlocutory lnlunctlon - Darallel

Supreme Court proceedlnqs

Trade Practlces Act 1974 (Cth) 5 5 . 5 2 , 8 2 . 07

Companies Act 1961 ( H A ) 5.67

I

HUGH CARNEGIE HALLIDAY V COX INVESTYENTS PT?? LIMITED.

GORDON DAVID COX, CECILIA ALICE IYQY COX, KZVIN JilMES

ANDREWS and LZONARD VICTOR MADDOCKS

No. W G.47 of 1984

Davies, 2

I

18 Septemer 1984

Perch

i

IN THE FEDERAL COURT OF AUSTRALIA )

1

WESTERN-AUSTRALIA DISTRICT	)
REGISTRY	) No. W G.47 of 1984
)

DIVISION GENERAL )

BETWEEN : HUGH CARNEGIE HALLIDAY

Applicanc

AND

LIMITED, GORDON DAVID

COX INESTMENTS PTY

COX, CECILIA ALICE "I COX; K E Y I N STAKES ABDFFW

and LL'ONANI VICTOR

MADDOCXS

Respondents

O R D E R

JUDGE MFXING ORDER	Dames, J
DATE OF ORDER	18 September 1984
h i E MADE	Perth

= U the applicant, huqh Carnegze ktalllday, undercaKlnc b p 2 1 s

counsei char :

1. These proceedlngs in the Federal Court of Austraila will -

be prosecuted espedlclouslg	as aqalnst Cox investments
Ptp Llmlted.

2. Gjlthln twenty-elqht ( 2 8 ) days the appllcanc wlll pay CO Cox Investmencs Pty Llmlted $5,000, belng the aareea costs of Actlon No.2843 of 1983 in the Supreme Courc of Western Bustralla.

I

THE COURT ORDERS

1. Untll furzher order Cox Investments Pty Llmlted, Gordon

David Cox and Cecllla Allce Mary Cox be restralned from

further prosecuting Action No.2843 of 1983 In the

Supreme Court of Western Australla. Llberty IS reserved to apply for varlatlon or termlnatlon of thls order.

2 .	These proceedings shall be llsted for hearlng commencing
Tuesday, 2 0 November 1984, and five ( 5 ) days are

allocated.

3 . The costs of thls appllcatlon shall be costs m m e

cause.

IN THE FEDERAL COURT OF AUSTRALIA 1

)

WESTERN’	AUSTRALIA	DISTRICT	)
REGISTRY	) No. KA G.47 of 1984
1

DIVISION GENERAL 1

a m : HUGH CARNEGIE HALLIDAY

Appllcanc

Respondents

REASONS FOR JUEGlYENT

(ex tempore)

Coram	Dames	, J
18 Sentember 1984

in chls matcer, mere 1 s an appilcation eo stay proceedlngs

whlcn have Deen commencea In cne Supreme Courc of ‘resyern

Australia. That acclon was commenced In 1983 and 1 s now ready

for trlal. The action and the present proceedmgs arose out of a

sale of shares In the company J.L. Burley Pty ilmitea from Cox

Investments Pty Llmlted tr, Internatlonal Leather Proaucts Pty

Llmlted. As ?art of the arrangements for che sale of chose shares, cne aFpllcanc In chese proceedmgs, Mr H.C. tlalllaay,

qave a guarancso for che paymenc of tne Furchase prlce.

2 .

In the Supreme Court actlon, Cox Investments Pty Limlted

sued Ineernatlonal Leacher Products Pty Llmlted, three direccors

of Internatlonal Leather Products Pty Limited, Xevln James

Andrews. Leonard Victor Maddocks and the appllcant in these

proceedlngs. The wrlt sought rellef agalnst Mr Halllday on the

basls of the guarantee glven. Default judgment has been obtalned

m the actlon against a l l partles other than Mr Halilday. Mr

Halllday's defence has relled upon an allegation that che

arrangement breached 5.67 of the ComDanles Act 1961 ( W ) .

In the proceedlngs whlcn hawe d-.ub been brought m the

Federal Court of Australla by Mr Halllday against Cox Invescnencs

Pty Llmited, two members of that company and agalnst Mr Andrews and Mr Maddocks, other prmciples of law have been relled upon ln addltion to che s.67 2rinclple. Mr Halllday has relied upon warrantles and representatlons, upon unconsclonable conducr: by

?ersons who were under a flduciary ducy, and upon s.52 of the

Trade Practlces Bct 1974 (Cth). Mr Halllday, ln ralslng chose

lssues, IS pucclng the defence wnlcn he ralsed In che Supreme

Court proceedlngs on a dlfferenc basls. It appears chat. ln

substance, he wlsnes CO say that. 2ven If s . 6 7 of tne ComDanles

-m 1961 ( % A ) does noc avold tne guarantee Lzself 3uc onip cne

collateral arrangement whereby the company J.L. Burley P t y

Llmlted would assist In the flnanclnu of the purchase of snares

In Itself, nevertheless, the clrcumstances under whlcn the

guarantee was glven were such as CO mlslead or decelve hlm. or

were llkely to mlslead or decelve nun. by reason of the fact chat

ne entered m c o cne arrangemenc on the understandlng tcac

incernatlonal Leacher Jroduccs ?ty Llmlted was aole ltsell to

3 .

Ilnance the purchase of the shares and he was misled by the otner

partles- to the arrangement Into thinklng that that was the

sltuatlon.

I have put the matter In slmpllstlc terms. The prlnclpies

upon whlch Mr Halllday wlll rely at any trlal are more complex

than thac, but I thlnk that is the substance or' the matter. I n

the proceedlngs m the Federal Court of Australia he seeks to

rely In substance upon the same facts as he relies upon In tne

Supreme Court, but he wlshes to rely on all principles of state

and federal 19" whlch may glve hlm the relief he seeks. If he

succeeds In establishing that 5 . 5 2 of the Trade Practices Act was

breached, he wishes to rely for relief upon ss.82 and 0 7 of the

Trade Practices Act, and particularly q o n 5 . 0 7 with a vlew to

havmq the guarantee set aslde pursuant eo the dlscreclonary

power conferred by that sectlon.

It seems eo me, therefore, chat the Issues all arlse out substantlally the same faccs and that of

It 1s deslrable that Mr

Halllday be given an opportunlty to rei:? upon all relevant scace

and federal laws, provided that that can be acnleved wlchout

undue ~n~usclce eo Cox Invescments Pty Llrnlced.

I should maKe l e clear before golng furrher that I have not

formed the vlew that Mr Halllday can succeed in establlsnlng a

breach of 5.52. I simply regard that matter as arwable, as

Indeed are all the otner matters upon wnlch Mr ifalliday wlsnes to

rely. in parclcular, Mr Halllday w l l l have to face the hurdle of

establlsnlng thac, l f there was any relevant act done DY Cox

4 .

Investments Pty Limited, that lt was done In trade or commerce. Clearly-that, in Itself, wlll be a matter for argument. It seems

to me that the s . 5 2 Issue stands so far as merit is concerned on

the same footing as the other issues which arlse under state law.

There IS no issue whlch clearly	1s more favourable	to Mr Halllday
than any other issue.

Lookmg at convenlence, lt 1s clear that the Federal Courr;

of Australia 1s the only court In whlch all the issues whlch Mr

Halllday wlshes to ralse can be Iltlgatea. I would not lssue an

lnlunctlon with regard to the Supreme Court actlon unless I were

saclsfied that the proceedmgs m thls court could be dlsposed of

promptly and that the costs thrown away would be borne by Mr

Aalllday. However, Mr J.G. Fltzgerald, who now appears for Mr

i-falllday, has mdlcated thac he will glve appropriate

undertaklngs as to these two matters, and I am therefore of tne

n e w thar; lt 1 s desirable that the macter proceed In tnls cour:

so thac all relevant issues	of federal and state law may be
llclgated In the one hearlng.