Ibrahim v Highline and Ibrahim v Worken Pty Ltd
[2008] FMCA 1146
•29 August 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| IBRAHIM v HIGHLINE IBRAHIM v WORKEN PTY LTD | [2008] FMCA 1146 |
| PRACTICE AND PROCEDURE – Application to set aside or vary orders dismissing application for non-appearance – principles – basis for setting aside or varying orders – whether arguable case on merits – whether only one outcome predictable with a high degree of certainty – whether costs orders to be varied – whether costs unnecessarily incurred or wasted. |
| PRACTICE AND PROCEDURE – Further application in a case – further written submissions – filed without leave or supporting affidavit – whether necessary to consider. |
| TRADE PRACTICES – Misleading and deceptive conduct – design and construct tender – contract to perform construction design work. |
| Federal Magistrates Court Rules 2001 (Cth), rr.4.05(2)(b) and (3), 13.03A(c), 16.05(2)(a), Schedule 1 Trade Practices Act 1974 (Cth) ss.51A, 52, 86(1A) |
| Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 Bevaner Pty Ltd v Lubidineuse (1985) 7 FCR 325 Boston Commercial Services Pty Ltd (ACN 114 658 070) v GE Capital Finance Australasia Pty Ltd (ACN 070 396 020) (2006) 70 IPR 146; [2006] FCA 1352 Chu v Telstra Corporation Ltd [2008] FMCA 645 Halton Pty Ltd v Stewart Bros Drilling Contractors Pty Ltd (1992) ATPR 41-158 Ibrahim v Considine Architects [2008] FMCA 1148 Johnson Tiles Pty Ltd & Ors v Esso Australia Pty Ltd & Anor (2000) 104 FCR 564; [2000] FCA 1572 Kavanagh v Blissett [2001] NSWSC 79 National Exchange Pty Ltd v ASIC (2004) 64 IPR 420; [2004] FCAFC 90 Pontifical Society for the Propogation of the Faith v Scales (1962) 107 CLR 9 Rana v University of South Australia (2004) 136 FCR 344; [2004] FCA 559 Singh v Official Trustee in Bankruptcy & Anor [2008] FMCA 521 State of Queensland & Anor v JL Holdings Pty Limited (1997) 189 CLR 146 Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Watson v Foxman (2000) 49 NSWLR 315 WJ Green & Co (1984) Pty Ltd v Wilden Pty Ltd (Unreported, CIV 1478/1996, Supreme Court of Western Australia, 24 April 1997) | ||
| Applicant: | TAREK IBRAHIM | |
| Respondent: | HIGHLINE |
| File Number: | PEG 62 of 2008 |
| Judgment of: | Lucev FM |
| Hearing date: | 7 August 2008 |
| Date of Last Submission: | 20 August 2008 |
| Delivered at: | Perth |
| Delivered on: | 29 August 2008 |
| Applicant: | TAREK IBRAHIM |
| Respondent: | WORKEN PTY LTD |
| File Number: | PEG 63 of 2008 |
| Judgment of: | Lucev FM |
| Hearing date: | 7 August 2008 |
| Date of Last Submission: | 20 August 2008 |
| Delivered at: | Perth |
| Delivered on: | 29 August 2008 |
REPRESENTATION
| Applicant: | In person |
| Counsel for the Respondents: | Mr L Hager |
| Solicitors for the Respondents: | Metaxas & Hager |
ORDERS
PEG 62 OF 2008
Order 1 of the Court’s orders of 19 May 2008 be set aside under r.16.05(2)(a) of the Federal Magistrates Court Rules, 2001 (Cth).
Order 2 of the Court’s orders of 19 May 2008 be varied under r.16.05(2)(a) of the Federal Magistrates Court Rules, 2001 (Cth) by inserting the sum “$205.00” in lieu of the sum “$2210.00” and by adding the words “by 4.00pm on 31 October 2008” between “Rules” and “.”.
Matter be adjourned to a directions hearing at 10.30am on 8 September 2008.
The Applicant and the solicitors for the Respondent are to confer about appropriate orders for the directions hearing on 8 September 2008.
PEG 63 OF 2008
Order 1 of the Court’s orders of 19 May 2008 be set aside under r.16.05(2)(a) of the Federal Magistrates Court Rules, 2001 (Cth).
Order 2 of the Court’s orders of 19 May 2008 be varied under r.16.05(2)(a) of the Federal Magistrates Court Rules, 2001 (Cth) by inserting the sum “$205.00” in lieu of the sum “$2210.00” and by adding the words “by 4.00pm on 31 October 2008” between “Rules” and “.”.
Matter be adjourned to a directions hearing at 10.30am on 8 September 2008.
The Applicant and the solicitors for the Respondent are to confer about appropriate orders for the directions hearing on 8 September 2008.
The Applicant’s Application in a Case filed on 8 August 2008 be dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 62 of 2008
| TAREK IBRAHIM |
Applicant
And
| HIGHLINE |
Respondent
PEG 63 of 2008
| TAREK IBRAHIM |
Applicant
And
| WORKEN PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant applied in the Court’s trade practices jurisdiction[1] alleging misleading and deceptive conduct[2] by:
a)an entity described as “Highline”;[3] and
b)a corporate entity – Worken Pty Ltd,[4]
in relation to design work allegedly performed under contract by the Applicant for Highline in relation to a design and construct tender for Worken.
[1] Trade Practices Act, 1974 (Cth) s.86(1A) (“TP Act”).
[2] TP Act, s.52.
[3] No point was taken as to whether at the relevant time “Highline” was a corporation, and whether the Court had jurisdiction if it was not. The Affidavit of Jeremy Stuart Oliphant, sworn 14 May 2008, in the Highline matter, paras. 1-2 (“Oliphant’s Affidavit”) suggests that Highline may not have been a corporation at that time. However the Affidavit of Phillip Gordon Marsh, sworn 7 May 2008, in the Worken matter (“Marsh’s Affidavit”) contains (as part of Annexure PGM 3) a “Company Profile” seemingly generated by Highline which refers to Highline as “a privately owned company”, “The Company” and to the certification of “the company’s Quality Management System”. As to the Court’s jurisdiction where no corporation is involved see Ibrahim v Considine Architects [2008] FMCA 1148 to be delivered immediately following these Reasons for Judgment. The point not having been taken it is not necessary, for present purposes, to give it further consideration.
[4] “Worken”.
On 19 May 2008 both Applications were dismissed when the Applicant failed to appear at the First Court Date.[5]
[5] Federal Magistrates Court Rules, 2001 (Cth), r.13.03A(c) (“FMC Rules”).
On 26 May 2008 the Applicant made an Application in a Case in each matter to have the dismissal orders set aside or varied.[6] The Applications in a Case were heard on 7 August 2008. The Applicant subsequently, on 8 August 2008, made a further Application in a Case – in the Worken matter only – seeking that his “resubmission”[7] be accepted, or that the matter be listed for a new hearing “about the issue of deception”, or that the Respondent be allowed to file a response.[8] Further written submissions were received in relation to the Further Application in a Case. The Applicant purported to file a further written submission on 25 August 2008[9] but the Court has not considered those submissions.
[6] FMC Rules, r.16.05(2)(a): the Court may vary or set aside orders after entry where the orders were made in the absence of the party.
[7] Presumably a reference to a Written Submission in the Worken matter also filed on 8 August 2008.
[8] Applicant’s Application in a Case, filed 8 August 2008, Orders sought 1 and 2 (“Further Application in a Case”).
[9] “Applicant’s Further Written Submissions”.
Issue
The issue in these proceedings is whether the dismissal orders made on 19 May 2008 ought to be set aside or varied.
Principles – setting aside and varying orders previously made
In Singh v Official Trustee in Bankruptcy & Anor this Court set out the bases on which the Court’s previous orders may be set aside or varied where the orders were made in the absence of a party, namely:
“a) that there is an adequate reason for the non‑appearance;
b) that there is no delay in making the application to set aside;
c) whether the party in whose favour orders have been made would be prejudiced by a new hearing in any respect which could not be adequately compensated by a suitable award of costs or the giving of security; and
d) that there is an arguable case on the merits of the substantive application.”
Adequate reason for non-appearance
The Applicant says that he is unfamiliar with the system of allocation of hearing dates that operates in the federal courts, and was thus unaware that the First Court Date was written on the copies of the Applications given back to him by the Court’s Registry at the time the Applications were filed.[11] The Applicant says at the time he filed the Applications he thought the system was similar to that which he says operates in the Magistrates Court of Western Australia where the hearing date is not determined until a respondent (or defendant) evinces an intention to defend the proceedings.[12]
[11] Applicant’s Affidavit, sworn 26 May 2008, paras. 1-2 (“Applicant’s Second Affidavit”). The Applicant has sworn an affidavit in support of each Application in a Case. The two affidavits are identical, save that in the Worken case two paragraphs (paras. 6 and 7) have been struck through. For the purposes of these Reasons for Judgment it is convenient to refer to both affidavits as the Applicant’s Second Affidavit.
[12] Applicant’s Second Affidavit, para. 4.
The Applicant also says that he was at the Registry on the day of the First Court Date (he does not say what time but it probably does not matter) making an enquiry concerning default judgment in these matters.[13]
[13] Applicant’s Second Affidavit, para. 8.
Finally, the Applicant says that had he been aware of the First Court Date he would have attended Court.[14]
[14] Applicant’s Second Affidavit, para. 9.
The Respondents did not seriously challenge the Applicant on this issue. There was no application to cross-examine on these issues (or any of the issues in either Application in a Case).
The Court must therefore determine this issue on the basis of the Applicant’s evidence. Whilst the Court finds it difficult to see why the Applicant did not see the First Court Date put on the Applications in the Registry, the Applicant’s evidence that he did not see the date must be accepted, in the absence of any challenge and if it is not inherently incredible. It was not challenged and is not inherently incredible. It might be doubted, but it is possible that a litigant unfamiliar with the Registry processes of the federal courts, and familiar with the processes of other courts, might not have seen the date on the copy of the Applications returned to him.
The fact that the Applicant did not see or apprehend that the First Court Date was set down for 19 May 2008 is supported by the evidence that he was at the Registry on that day making enquiries about the default judgment process (because he believed the Respondents had not filed their Responses within time). It is significant that the Applicant attended the Registry of the Court on the day that the hearing was listed to make those enquiries. That fact lends credence to his assertion that he was unaware of the First Court Date.
There is no reason to doubt the Applicant’s evidence that he would have attended Court on the First Court Date had he realised or known that the matters were listed, and again the fact that he attended the Registry of the Court on that date lends credence to his evidence.
Do the foregoing circumstances give rise to an adequate reason for non-appearance on the First Court Date? The Court notes that the reason need only be “adequate”, that is, “sufficient” or “suitable”.[15] A failure to attend on the First Court Date by reason of the Applicant’s unawareness of that date arising from his unfamiliarity with the Registry processes of this Court and in circumstances where the Applicant attended the Registry of the Court on the day of the hearing is in the Court’s view a sufficient, and therefore adequate, reason, for the Applicant’s non-appearance on the First Court Date.
[15] The Shorter Oxford English Dictionary on Historical Principles (Vol. 1) (Oxford: Clarendon Press, 1973) p.23.
No delay in making application to set aside
The Application in a Case in each of these matters was made seven days after the dismissal orders were made by the Court. Those orders were posted to the Applicant, and in the ordinary course of post would have arrived on 21 or 22 May 2008. The Applications in a Case to set aside the dismissal orders were made on 26 May 2008.
The fact that the Applicant is a self-represented litigant, and that English is clearly his second language, are factors warranting consideration in whether a delay of two to three days before making the Applications in a Case to set aside the dismissal orders is undue delay.
The Court notes that the Respondents did not suggest that there was undue delay on the part of the Applicant in making the Applications in a Case to set aside.
In the Court’s view there was, for practical purposes, no unwarranted delay in making the Applications in a Case to set aside, they having been made within two to three working days of receipt of the dismissal orders by the Applicant. Further, the fact that the Applicant was a self-represented litigant for whom English is a second language might ordinarily give rise to some delay while legislation and Court rules are read and considered, and possible courses of action pondered, where they are matters with which the self-represented litigant might not necessarily be familiar. Here, however, there was, effectively, no delay.
In all the circumstances, the Court does not consider that there was any delay warranting further consideration of the Applications in a Case being precluded.
Prejudice to the Respondents
The Court notes that the Respondents did not suggest that there was any prejudice which they might suffer if the Applications in a Case were granted which could not adequately be compensated by a suitable award of costs. The Applicant frankly acknowledged that if the Applications in a Case were to be successful, but ultimately the Applications were unsuccessful then he would “pay all of their costs regardless.”[16] Thus, any future prejudice arising from the setting aside of the dismissal orders might be overcome by an appropriate costs order at the time any final orders are made.
[16] Transcript at page 7.
In the circumstances, the Court considers that there is no prejudice to the Respondents which could not be adequately compensated by a suitable award of costs as part of any final order.
Arguable case on the merits of substantive application
Alleged facts - Applicant
The Applicant has sworn an affidavit in each Application[17] setting out alleged facts.
[17] Applicant’s Affidavit, sworn 22 April 2008 in PEG 62/2008 (“Applicant’s First Highline Affidavit”) and Applicant’s Affidavit, sworn 22 April 2008 in PEG 63/2008 (“Applicant’s First Worken Affidavit”).
In essence, the facts alleged by the Applicant are as follows:
a)he saw a tender advertisement in early November 2004 in The West Australian newspaper for the design and construction of an office building and workshop for a company called Marshcivil;
b)he contacted Marshcivil and spoke to a representative (Neil Constantine) who refused to accept a design only submission for the tender;
c)he received the tender document by post;[18]
[18] Although the Applicant does not say so he must presumably have requested that it be sent to him.
d)he contacted a “company” called Highline which agreed to tender with him jointly, with Highline as builder and the Applicant as designer;
e)he met with Peter Hearne, a representative of Highline, signed an agreement with him, and gave Highline a copy of the tender document;[19]
[19] The terms of this agreement are set out in full below: see para. 27 below.
f)after a few days the Applicant emailed Highline a copy of his design for pricing;
g)on 1 December 2004 the tender was submitted by the Applicant to Marshcivil;
h)the tender document consisted of the proposed building designed by the Applicant (as designer) and a pricing list by Highline (as builder);
i)the Applicant was told that five other tenders were submitted;
j)no winning tenderer was announced;
k)Marshcivil asked the Applicant to make changes in the design;
l)the Applicant worked on design changes, and attended meetings with the “client” and Highline from 1 December 2004 until 13 January 2005;
m)the Applicant several times raised his objections to the changes and the amount of time that he had to put into the process, but was told to do the changes to remain in the tender, and that he was being done “a favour by keeping …[him] in the tender”;
n)the Applicant was told that there was another tenderer also making changes to their tender submission in the same manner;
o)the Applicant was told that the competing tenderers were being used against each other to get more work done for no payment;
p)on or around 17 December 2004 the Applicant was asked to submit his design to the Gosnells Shire Council for development approval;
q)the Applicant asked for a letter of appointment or signed agreement before he submitted the development approval or made any more changes, but was refused;
r)on 7 January 2005 the Applicant and a representative of Highline met with Marshcivil and were told that the tender prepared by Highline and the Applicant had been successful, and the Applicant was again asked to submit a development approval;
s)the Applicant and a representative of Marshcivil visited the Gosnells Shire Council and had a meeting with “two building councillors” (presumably on a date on or after 7 January 2005) at which the design and issues “that needed to be looked at” were discussed;
t)the Applicant again asked for a letter of appointment or a signed agreement, but was again refused, and when he requested that Marshcivil pay him “they stated they had no contract with me and the contract is with Highline”;
u)the Applicant says that he spent more than 280 hours on the tender from start to finish, for which Highline is liable to pay him, but that Highline and Marshcivil “played a gimmick against me not to pay me my fees and take my design.”[20]
[20] The alleged facts set out above are taken from the Applicant’s First Highline Affidavit and Applicant’s First Worken Affidavit, which are in large part identical, but in the case of the Applicant’s First Worken Affidavit are slightly longer dealing with the actions of the Respondents in relation to changes and the development approval after 1 December 2004 in more detail than the Applicant’s First Highline Affidavit. In each case, the Affidavits are short, a page or less.
The precise nature of the relationship between the Applicant and Marshcivil, and Marshcivil and Worken is not set out in the Applicant’s Application or any of his affidavits. Those matters are, to a certain degree, addressed by information contained in the tender Expression of Interest document, which is set out below,[21] but which makes it reasonably clear that Worken was seeking expressions of interest to tender for the work on behalf of Marshcivil.
[21] See para. 30 below.
Misleading and deceptive conduct alleged by the Applicant
In his submissions the Applicant asserted an array of alleged misleading and deceptive conduct by the Respondents. Reduced to its essence the claim can be said to be one in which on the facts alleged by the Applicant he could, at a minimum, argue that:
a)it was represented to him by Highline and Worken that if the design and construct tender was successful he would be paid for his design work;
b)it was represented to him by Worken at meetings with the Gosnells Shire Council that his design was the successful design, and, at least implicitly, that Highline and the Applicant would therefore be successful in their tender;
c)contrary to the representations, his design was said not to be the successful design, therefore Highline’s tender was not successful, and he was not paid; and
d)what was essentially “his” design was then “taken” and used by Worken and Highline.[22]
[22] See the exchange between the Court and Counsel for the Respondents at Transcript page 10. No issue was raised by either party in the course of hearing in relation to future matter representations: TP Act, s.51A.
Alleged facts - Highline
Oliphant’s Affidavit is sworn on behalf of Highline. Oliphant asserts that he was Credit Manager of “Highline Building Constructions”, a business name used by a partnership comprised of three people, which partnership was dissolved in January 2005, and reformed as a partnership involving four people, which partnership ceased to trade in about July 2005 when a company called “Highline Ltd” was formed, and which now carries on the business.[23]
[23] Oliphant’s Affidavit, paras. 1-2.
Oliphant says he had no dealings with the Applicant and that his knowledge is based upon documents in possession of his employer (Highline Ltd), and discussions with Peter Hearne,[24] who is no longer employed by Highline Ltd.[25]
[24] Seemingly a representative of Highline: see para. 22(e) above.
[25] Oliphant’s Affidavit, para. 3.
A copy of an agreement between the Applicant and Highline dated 18 November 2004 is attached to Oliphant’s Affidavit.[26] The terms of the agreement, signed by the Applicant, and by a person (whose signature appears to be the signature of Peter Hearne, designated as a Project Consultant) on behalf of “Hiline Cooperation” are as follows:
[26] Oliphant’s Affidavit, para. 4 and Annexure JSO1 (“Tender Agreement”).
“AGREEMENT
IN THE STATE OF WESTERN AUSTRALIA
THIS AGREEMENT IS DRAFTED MERELY FOR THE PURPOSE OF ONE JOINT VENTURE
BETWEEN
TAREK IBRAHIM AS A DESIGNER (GRADUATE ARCHITECT)
AND
HILINE COOPERATION AS A BUILDER
TO DESIGN AND CONSTRUCT AN OFFICE AND A WARE HOUSE IN A TENDER PROCESS
TAREK IBRAHIM WILL CARRY ALL DESIGN AND DRAFTING DUTIES AND COSTS AND WILL IF THE TENDER IS SUCCESSFUL BE REWARDED ALL BENEFIT AND COMMISSION OF THE DESIGN ASPECT OF THE PROJECT.
HILINE WILL CARRY RESPONSIBILITY FOR THE CONSTRUCTION AND ESTIMATION OF THE TENDER AND THE BUILDING ASPECT OF THE PROJECT AND WILL BE AWARDED WITH THE COMMISSION FOR CONSTRUCTION FROM THE PROJECT IF THE TENDER IS SUCCESSFUL
IF THE TENDER IS NOT SUCCESSFUL NONE OF TE TWO PARTIES HAVE ANY OBLIGATION TOWARDS EACH OTHER
IF ONE OF THE TWO PARTIES WISHES TO WITHDRAW FROM THE PROJECT OR THE TENDER THEN THE OTHER PARTY WILL CARRY THE PROJECT OR THE TENDER AND THE FIRST PARTY WILL HAVE NO LEGAL RIGHTS TO USE THE DESIGN OR ANY INFORMATION FROM THE OTHER PARTY TO ENTER THE TENDER OR FINISH THE PROJECT UNLESS A PAYMENT OF ACCEPTABLE FEES TO THE WITHDRAWN PARTY IS COMPLETED.
18/11/2004”[27]
[27] Oliphant’s Affidavit, Annexure JSO1. The text of the Tender Agreement has been transcribed without amendment from JSO1.
Oliphant says that he is informed by Hearne that after the termination of negotiations between Highline and Worken about the tender for which the Applicant prepared his design that Highline negotiated a contract to build a building to a design “prepared by persons other than the applicant.”[28] Those persons are not identified.
[28] Oliphant’s Affidavit, para. 5.
Alleged facts - Worken
The facts alleged by Worken are set out in Marsh’s Affidavit in which he alleges as follows:
a)that a design and construct tender was received from Highline on 1 December 2004;[29]
b)no winning tenderer was announced;[30]
c)that Highline was requested to make changes to the tender, and that that was done over the period from 1 December 2004 to 13 January 2005, but in the circumstances in which the request for changes was made it was implicit that no payment would be made for the work done or changes made;[31]
d)in any event, Worken was entitled to request changes, and it was for Highline to decide whether to make those changes or not;[32]
e)Marsh says he has no recollection (but he does not in the affidavit deny) that the Applicant was asked to submit his design to the Gosnells Shire Council for development approval,[33] but agrees that the Applicant asked for a letter of appointment or an agreement to be signed before the development approval was submitted or any more changes made to the design, but was refused;[34]
f)denies that the Applicant was told that the Highline tender (with the Applicant’s design) was successful, or that the Applicant was consequently asked to submit the design for development approval;[35]
g)that Marsh is unsure, and has no recollection (but again in the affidavit does not deny) that the Applicant and a representative of Marshcivil visited the Gosnells Shire Council, and discussed with two councillors the design and issues that needed to be looked at;[36]
h)that on a second occasion there was a refusal to sign a letter of appointment or agreement with the Applicant, and that the Applicant was told any contractual relationship the Applicant had was with Highline;[37]
i)that Worken has no knowledge of the time expended by the Applicant in relation to the tender, and says that work was performed on the basis that the Applicant would only be rewarded if the tender was accepted, which it was not, and that consequently no payment has been made;[38]
j)that Worken terminated negotiations with Highline over the tender, and later negotiated a contract with Highline to build a building “to a design unrelated to the applicant’s design.”[39] It is not said whose design was used.
[29] Marsh’s Affidavit, para. 10.
[30] Marsh’s Affidavit, para. 11.
[31] Marsh’s Affidavit, paras. 12-14.
[32] Marsh’s Affidavit, para. 16.
[33] Marsh’s Affidavit, para. 17.
[34] Marsh’s Affidavit, para. 18.
[35] Marsh’s Affidavit, para. 19.
[36] Marsh’s Affidavit, para. 20.
[37] Marsh’s Affidavit, para. 21.
[38] Marsh’s Affidavit, paras. 22-24 and Annexure PG4.
[39] Marsh’s Affidavit, para. 25.
The Expressions of Interest document
The relationship between Worken and Marshcivil is partially explained in the “Expressions of Interest – Form Of Offer”.[40] Clause 1 of the Expressions of Interest document includes the following:
“Worken Pty Ltd as trustee for Shentika Unit Trust is wishing to obtain expressions of interest by open tender for the design and construction of workshop and office facilities at its newly acquired industrial site in Maddington WA. It is our intention to create a well designed and high standard premises that provides a functional access and layout for our Marsh Civil Engineering Contractors operations.”[41]
[40] Marsh’s Affidavit, Annexure PGM2.
[41] Marsh’s Affidavit, Annexure PGM2, clause 1.
The nature of the expression of interest to be submitted by prospective tenderers is set out in clause 5 of the Expressions of Interest document which is as follows:
“For the avoidance of doubt, the “expression of interest” process is to be construed as an invitation to provide a concept design and budget pricing for the structural improvements on the subject property. Nothing in this process shall be construed as an offer to carry out the works or an acceptance of the offer. The process will involve the review of all submissions and the negotiation with one final party to complete the works (as so amended).”[42]
[42] Marsh’s Affidavit, Annexure PGM2, clause 5.
Position of the Respondents
Essentially, the Respondents say that:
a)the “joint venture” agreement between the Applicant and Highline did not provide for payment if the tender was unsuccessful;
b)the tender was unsuccessful; and
c)there was no representation which was misleading or deceptive; and
d)therefore, neither of the Respondents has any liability to the Applicant.
Consideration of arguable case on the merits
Justice remains the paramount consideration in determining whether a party should be shut out from litigating an issue if that issue is fairly arguable, and any power to grant a dispensation, such as the varying or setting aside of judgments or orders, must be exercised with the paramount consideration in mind.[43]
[43] State of Queensland & Anor v JL Holdings Pty Limited (1997) 189 CLR 146 at 155 per Dawson, Gaudron and McHugh JJ; see also Kirby J at 172 and 174; Boston Commercial Services Pty Ltd (ACN 114 658 070) v GE Capital Finance Australasia Pty Ltd (ACN 070 396 020) (2006) 70 IPR 146 at 157 per Rares J; [2006] FCA 1352 at para. 46 per Rares J (“Boston Commercial”).
Section 52 of the TP Act provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
Conduct is misleading or deceptive if it induces or is capable of inducing error.[44] The relevant principles are set out in Johnson Tiles as follows:
“[63] The touchstone of liability is the conduct by act or omission of …[the respondent] and its characterisation as misleading or deceptive. The analysis of the statement of claim must begin by identifying the conduct and the facts relied upon to give it that character. The principles governing characterisation are well established. Conduct is misleading or deceptive if it induces or is capable of inducing error -- Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77; Weitmann v Katies Ltd (1977) 29 FLR 336; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198 (Gibbs J); Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477. The so called "doctrine" of "erroneous assumption" referred to by the High Court in Campomar Sociedad, Limitada v Nike International Ltd (2000) 169 ALR 677 at 704, is merely another way of expressing that general proposition albeit it seems to have arisen in the context of cases involving similar product names. The statement in the joint judgment of Deane and Fitzgerald JJ in Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 2 TPR 48 at 70; 42 ALR 177 at 200 that "no conduct can mislead or deceive unless the representee labours under some erroneous assumption", cited in Campomar, is another way of saying that the representee must be led into error.
[64] Conduct may be misleading or deceptive because it involves an express representation which is false. In the statement of claim in such a case the representation will be pleaded as a fact as will the falsifying facts. The conduct may involve an implied representation conveyed by words or conduct or some combination thereof. Such a representation will be falsified in the same way as an express representation. But the identification of a representational element is not necessary, albeit it will be involved in most cases. Conduct is to be characterised by reference to its actual or possible consequences -- Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228 (Stephen J). This does not require demonstration that anyone has actually been misled -- Annand & Thompson Pty Ltd v Trade Practices Commission (1979) 40 FLR 165 at 176; 25 ALR 91 at 102 (Franki J) and 186; 111 (Northrop J); Brock v Terrace Times Pty Ltd (1982) 56 FLR 464; Taco Co of Australia Inc v Taco Bell Pty Ltd at 72; 202 (Deane and Fitzgerald JJ). It does require a capacity to mislead or deceive attributable to the conduct in question. There must be a logical causal connection between the conduct and some hypothesised error. But not every case involving a logical connection between conduct and alleged error will result in the conduct being regarded as misleading or deceptive for the purposes of s 52. There is an evaluative judgment involved. As the Full Court said in SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1 at 14:
"The characterisation of conduct as `misleading or deceptive or likely to mislead or deceive' involves a judgment of a notional cause and effect relationship between the conduct and the putative consumer's state of mind. Implicit in that judgment is a selection process which can reject some causal connections, which, although theoretically open, are too tenuous or impose responsibility otherwise than in accordance with the policy of the legislation.” [45]
[44] Johnson Tiles Pty Ltd & Ors v Esso Australia Pty Ltd & Anor (2000) 104 FCR 564 at 589 per French J; [2000] FCA 1572 at para. 63 per French J (“Johnson Tiles”).
[45] Johnson Tiles FCR at 589-590 per French J; FCA at paras. 63-64 per French J.
Determination of whether particular conduct is misleading or deceptive requires consideration of the evidence in context, and is a question of fact.[46] So long as the conduct is in trade or commerce private negotiations between two parties may fall within the ambit of s.52 of the TP Act.[47] In determining whether a person is or is likely to be misled or deceived, that is to be led into error or labour under some erroneous assumption, it has to be remembered that there may be more than one reasonable response to particular conduct, and therefore different people, acting reasonably, may respond in different ways to the same conduct. The test of reasonableness requires a consideration of the boundaries of the range of those responses.[48] Where spoken words are said to have given rise to the misleading or deceptive conduct the Court needs to take particular care that the words are proven with sufficient precision to enable the Court to be reasonably satisfied that they were in fact misleading in the circumstances. This entails a consideration of the spoken words themselves, and the various meanings, nuances and qualifications which might be attached to them, overlain by the circumstances in which they were said, and having regard for the fallibility of human memory and the colouring of perceptions by self-interest.[49] In WJ Green & Co (1984) Pty Ltd v Wilden Pty Ltd two interpretations were open in relation to statements made by Senior Counsel in the course of a mediation. Senior Counsel intended the first meaning. The Applicant understood the second meaning. The statements were found not to be misleading because Senior Counsel had intended the first meaning which was not misleading. The communication was held not to be in trade or commerce.[50] Similar errors can arise with respect to the meaning of written terms of a contract. Where the plaintiff had an erroneous view of the meaning of a limitation clause relied upon by a defendant, and nothing the defendant had said had induced that error, and where the defendant was under no general duty to explain the provision to the plaintiff, the defendant was entitled to rely on the clause.[51]
[46] Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177.
[47] Bevaner Pty Ltd v Lubidineuse (1985) 7 FCR 325.
[48] National Exchange Pty Ltd v ASIC (2004) 64 IPR 420; [2004] FCAFC 90.
[49] Watson v Foxman (2000) 49 NSWLR 315 at 318-319 per McLelland CJ.
[50] Unreported, CIV 1478/1996, Supreme Court of Western Australia, 24 April 1997 at p.32 per Parker J.
[51] Halton Pty Ltd v Stewart Bros Drilling Contractors Pty Ltd (1992) ATPR 41-158. See also Kavanagh v Blissett [2001] NSWSC 79.
Regard must also be had to the fact that this is a case commenced, and thus far conducted, in a manner not dissimilar to that described by the Federal Court in Rana v University of South Australia:
“In my view, because the FMC Rules do not require pleadings; the parties are not obliged to tender all their evidence when the application and response is filed; there are few, if any, interlocutory processes available; and the Federal Magistrates Court is a low cost court, the Federal Magistrates Court should be very cautious about summarily dismissing an applicant's proceeding. That course should only be adopted when it is clear, beyond any doubt, that the applicant has not, and cannot, articulate in writing a reasonable cause of action. As I have already said, the philosophy of the Federal Magistrates Court is to provide inexpensive justice and a streamlined dispute resolution process. Litigants will often be self-represented and the documents they rely on as founding their claim will no doubt often be imprecisely articulated. In those circumstances, there is even more reason for the Federal Magistrates Court to be cautious before summarily dismissing an applicant's claim.”[52]
[52] (2004) 136 FCR 344 at 355 per Lander J; [2004] FCA 559 at para. 75 per Lander J (“Rana”).
Much has changed in this Court since the judgment in Rana. Traditionally, as Rana articulates, this Court was not a court of pleadings. The FMC Rules were however amended in 2007 to provide that no affidavit was required where a person filing an application also files a Statement of Claim or Points of Claim, and if that occurred, a respondent was entitled to file a Defence or Points of Defence instead of an affidavit, and may file a cross-claim.[53] It is fair to observe that, at least in the Court’s Perth Registry, most TP Act claims not involving self-represented litigants are conducted on pleadings, but that where there are self-represented litigants (particularly as applicants) the approach set out in Rana still prevails. In this case the Rana approach is apposite. In any event, but for the dismissal orders the Applicant (and the Respondents) would, if the matter had otherwise proceeded normally, been afforded the opportunity to file further affidavit evidence.
[53] FMC Rules, r.4.05(2)(b) and (3).
Against that general background it is necessary to consider whether the Applicant has an arguable case.
Misleading and deceptive conduct might arguably arise from the Applicant’s allegations because:
a)he was told that the tender was successful, when it had not been, giving rise to the erroneous assumption that he would be paid, or that if he continued to work on the tender he would be paid;
b)he was told that further changes were required for the tender to be successful, giving rise to the erroneous assumption that if those changes were made, and made without payment to the Applicant, that the tender would be successful and that he would be paid;
c)changes were made with the concurrence of the Respondents thereby creating the erroneous assumption that, as the changes were allowed to be made, the tender would be successful, and that the Applicant would be paid; and
d)he was advised that the tender had been unsuccessful, thereby creating the erroneous assumption that he would not be paid, when in fact it was “successful”, in that the same builder (Highline) and the same, or substantially the same, design as that prepared, or prepared and changed, by the Applicant, was used, and it might be argued that he should have been paid.
Consistent with the evidence led by the Respondents, the Respondents argued that there was an agreement, or contract, between the Applicant and Highline under which there would be no payment if the tender submitted jointly by Highline and the Applicant was unsuccessful, and that because the tender was unsuccessful the Applicant was not entitled to be paid. However, that argument does not necessarily address the Applicant’s case that he was misled and deceived in trade and commerce by the conduct of both Respondents.
Unsurprisingly, much of the evidence at this stage comprises assertion and counter-assertion contained in the initial affidavits filed by the Applicant and each Respondent in each Application. Two examples will suffice:
a)whether the Applicant was told that the tender was successful;[54] and
b)whether the Applicant’s design was “taken” and then “used” by one or both of the Respondents subsequent to the Applicant finally being told that the tender was unsuccessful.[55]
No safe conclusions for or against any party can be drawn on these matters at this stage.
[54] See paras. 24(b) and 29(f) above.
[55] See paras. 24(d), 28 and 29(j) above.
Some of the relevant evidence in relation to alleged conduct by the Respondents is, as yet, either unanswered or not the subject of sufficient additional evidence (that is in addition to the assertion and counter-assertion) to enable any safe conclusion to be drawn at this stage. For example:
a)neither the original design nor the further design are yet in evidence thus precluding any conclusion about the alleged similarity of the design;
b)the persons said to have prepared the further design are not identified thus precluding any conclusion as to whether they did in fact prepare a further design;[56]
c)it is not denied that the Applicant was asked to submit his design to the Gosnells Shire Council for development approval from which it might be inferred that the design was part of a successful tender;[57] and
d)it is not denied that the Applicant was invited to meet representatives of the Gosnells Shire Council to discuss the Applicant’s design from which it might be inferred that the design was part of a successful tender.[58]
[56] See paras.28 and 29(j) above.
[57] See para. 29(e) above.
[58] See para. 29(g) above.
The observation that:
“Experience of forensic contests should confirm the truth of the common saying that one story is good until another is told”[59]
was used in Boston Commercial to buttress the observation that:
“Experience shows that there are cases which appear to be almost bound to fail yet succeed.”[60]
[59] Pontifical Society for the Propogation of the Faith v Scales (1962) 107 CLR 9 at 20 per Dixon CJ.
[60] Boston Commercial, FCR at 156 per Rares J; FCA at para. 42 per Rares J.
For the Court to find a case unarguable the evidence must be all one way, and such that the outcome of the litigation is so manifestly obvious that there be only one outcome predictable with “a high degree of certainty.”[61] This is not such a case. The contrary assertions in the evidence and the evidence of the Applicant not denied by either Respondent mean that the allegations of misleading and deceptive conduct are arguable. The express terms of the Tender Agreement stand against the Applicant’s case, and, ultimately, must be taken as authoritative if the alleged misrepresentations or conduct cannot be proven,[62] but whether those terms ultimately prevail will depend upon the view the Court takes of all of the evidence, because for present purposes there is sufficient evidence before the Court to make the Applicant’s allegations arguable.
[61] Agar v Hyde (2000) 201 CLR 552 at 576 per Gaudron, McHugh, Gummow and Hayne JJ; [2000] HCA 41 at para. 57 (see also para. 58) per Gaudron, McHugh, Gummow and Hayne JJ.
[62] Boston Commercial FCR at 161 per Rares J; FCA at para. 62, and cases there cited.
The Court is satisfied, having regard to the foregoing reasons, that the Applicant has an arguable case on the merits. It follows that in relation to each Application that order 1 of the Court’s orders of 19 May 2008 dismissing each Application ought to be set aside under r.16.05(2)(a) of the FMC Rules.
Costs orders – should they be set aside or varied
In each Application orders were made awarding the Respondent to each Application costs in the sum of $2210 under Schedule 1 of the FMC Rules. Those costs consisted of Stage 1 costs of $2005 (lump sum) plus the court attendance daily hearing fee for a short mention of $205. Those costs compensated the Respondents for costs incurred up to the time of the First Court Date, and including the First Court Date, in circumstances where the Applications were dismissed because of the non-attendance of the Applicant. Those costs must necessarily include the cost of preparing a Response and any associated affidavits. In each Application each of the Respondents has prepared a Response and answering affidavit. In circumstances where an Application is dismissed because of non-attendance the costs of preparing the Response and accompanying affidavits are costs unnecessarily incurred by the Respondents. However, where, as here, the Court has determined that the dismissal orders ought to be set aside it can no longer be said that the costs of the preparation of the Response and accompanying affidavits were unnecessary or wasted. In the above circumstances, the costs unnecessarily incurred by the Respondents appear to be limited to the costs of the Court attendance on the date the dismissal orders were made.
In the above circumstances, the Court considers it appropriate to vary the costs orders made in each Application on 19 May 2008 to provide that costs of $205 be awarded to each Respondent in each of the Applications in lieu of the existing sum of $2210 ordered in each Application. It is also appropriate to prescribe a time by which those costs must be paid, which will be by 4.00pm on 31 October 2008.
Further Application in a Case
The Further Application in a Case was filed on 8 August 2008. It was filed in the Worken matter only. It was not supported by an affidavit. It sought that the Applicant’s resubmission be accepted, or that the matter be listed for a new hearing about the issue of deception or that the Respondent be allowed to file a Response. The Applicant filed written submissions in support of the Further Application in a Case, and the Court ordered that the Respondent also file written submissions, which it did on 20 August 2008.[63]
[63] Initially, the Further Application in a Case had been listed for hearing on 20 August 2008, but that hearing was vacated following discussions involving the Applicant, the Respondent and Court officers.
The Court has considered the Further Application in a Case and the written submissions filed, and makes the following observations:
a)the nature and effect of the orders sought by the Applicant are vague;
b)there is no affidavit in support;
c)the Applicant’s written submissions:
i)in some respects, refer to matters not otherwise in evidence, such as the details of the similarities of the plan (design);[64]
ii)re-argue matters which were argued or adverted to in the hearing on 7 August 2008; and
iii)raise new arguments not raised at the hearing on 7 August 2008;
d)the matter was reserved for judgment on 7 August 2008, following argument on the evidence presently before the Court; and
e)the Respondent (Worken) cannot properly be expected to respond to alleged matters of fact raised for the first time, in written submissions filed without leave after judgment has been reserved.
[64] See Applicant’s Written Submission, filed 8 August 2008, para. 15.
For the above reasons the Court would have dismissed the Further Application in a Case, in any event.[65] In this case however there is a further reason why the Further Application in a Case ought to be dismissed, and that is that it is unnecessary to determine the Further Application in a Case because of the conclusions reached on the Application in a Case.
[65] Chu v Telstra Corporation Ltd [2008] FMCA 645 at paras. 96-98 per Riley FM (“Chu”), and cases there cited.
The Court will dismiss the Further Application in a Case and hear the parties as to costs.
Applicant’s Further Written Submissions
On 25 August 2008 the Applicant purported to file the Applicant’s Further Written Submissions. They were purported to be filed:
a)without leave of the Court;
b)without an Application or Application in a Case setting out grounds or orders sought from the Applicant’s Further Written Submissions or seeking leave of the Court for them to be filed; and
c)without a supporting affidavit.
The Applicant’s Further Written Submissions were returned to the Applicant by the Registry.
The Applicant’s Further Written Submissions were therefore not considered by the Court.[66] It was unnecessary to do so, given that the conclusions reached on the Application in a Case had, by 25 August 2008, already been reached and reduced to writing in draft Reasons for Judgment in preparation for the publication of the Reasons for Judgment, which had already been listed for delivery today.
[66] Chu at paras. 98-98 per Riley FM, and cases there cited.
Conclusions
The Application in a Case in the Worken matter will be dismissed for the reasons set out above,[67] and the Court will hear the parties as to costs.
[67] See paras. 50-51 above.
The Applicant has satisfied the Court that the principles upon which this Court will set aside or vary an order made for dismissal of an application because of the non-attendance of an applicant have been satisfied, for the reasons set out above,[68] and that:
a)the dismissal orders of 19 May 2008 should be set aside; and
b)the costs orders of 19 May 2008 ought to be varied so that the costs now payable by the Applicant in respect of each Application are reduced to $205, with those costs payable by 4.00pm on 31 October 2008.
[68] See paras. 33-51 above.
The matter will be adjourned to a directions hearing at 10.30am on 8 September 2008. The Applicant and the solicitors for the Respondent are to confer with respect to appropriate orders to be made at the adjourned directions hearing on 8 September 2008.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: S. Gough
Date: 29 August 2008
[10] [2008] FMCA 521 at para. 19 per Lucev FM.
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