JLV Constructions Pty Ltd v JLV Earthmoving Pty Ltd

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JUDGMENT

I	IN THE FEDERAL COURT	1	NOT INTENDED FOR GENERAL DISTRIBUTION
OF AUSTRALIA	1
!	WESTERN	AUST ALIA	1

DISTRICT

REGISTRY

GENERAL

DIVISION

NO. WAG 4 7 Of 1987

I I

B E T W E E N :

JLV CONSTRUCTORS PTY LTD

Applicant

and

JLV EARTHMOVING PTY LTD

First Respondent

CAMBALLIN FARMS PTY LTD

Second Respondent

GRAHAM ST JOHN SPENCER-LAITT and

DARRYL JOHN CALLIGARO

Third Respondents

and	. .
CAMBALLIN FARMS PTY LTD	,.

Cross Applicant

I .I

and

JLV CONSTRUCTORS

PTY LTD

First Cross Respondent

and

JAMES PATRICK JOHNSON

Second Cross Respondent

MINUTE OF ORDER

THE COURT

ORDERS THAT:

The First

Respondent h

ave 1

eave to cross-claim against

the Applicant, JLV Corporation Pty Ltd and James Patrick

Johnson.

2 .

The Cross-Applicant have leave to amend its

Defence and

Cross-Claim in the terms of the Minute of Proposed

Amended Defence and Cross-Claim filed herewith.	.-
!

3 . The costs of this motion, and the costs if any thrown

away by the

amendments

the

Cross-Claim

the

Cross-Applicant, be costs in the Cross-Claim.

Note: Settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT

NOT INTENDED FOR GENERAL DISTRIBUTION

OF AUSTRALIA

)

WESTERN AUSTRALIA

DISTRICT REGISTRY

GENERAL DIVISION

)	No. WAG 47 of 1987

B E T W E E N :

JLV CONSTRUCTORS PTY LTD

Applicant

and

JLV EARTHMOVING PTY LTD

First Respondent

CAMBALLIN FARMS PTY LTD

Second Respondent

GRAHAM ST JOHN SPENCER-LAITT and

DARRYL JOHN CALLIGARO

Third Respondents

and

CAMBALLIN FARMS PTY LTD

Cross Applicant

and

JLV CONSTRUCTORS PTY LTD

First Cross Respondent

and

JAMES PATRICK JOHNSON

Second Cross Respondent

CORAM:

FRENCH

28 October 1987

EX TEMPORE REASONS FOR

JUDGMENT

These proceedings arise out of a dispute over a joint venture agreement between the applicant,

JLV Constructors Pty Ltd,

and the second respondent, Cambal

. in Farms

Pty Lt

d ( "Camballin").

As it emerges from the pleadings, 1t appears that

on or

about 30 August 1985 Camballin and JLV Constructors agreed to carry on the buslness of earthmovlng contractors as a "joint

, .

venture" wlth each other.

They subsequently carried on that

5 ,

business

together through a company called "JLV Earthmoving Pty

Ltd".

Camballln and JLV Constructors were the only shareholders

in JLV Earthmoving.

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1.'

On 24 June 1986, JLV Constructors and Camballin agreed

to terminate the joint	venture.	This was done by a written
agreement.

JLV Constructors alleges that it agreed to sell its interest as joint venturer to Camballin on various terms	!
,..

and	i
t:

conditions which are

set out in the amended statement

of claim.

One of

those terms was that it would procure that the

!:-.

name "JLV Earthmoving" be changed to one which

did not include the

name

style

"JLV".

Camballin

has, according to JLV

Constructors, failed to

do this.

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JLV Earthmoving is also attacked on the basis that its failure to change its name constitutes conduct

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in trade or

commerce whlch is misleading or deceptive or likely to mislead

deceive in contraventlon of s .52 of the Trade Practices Act

1974.

3. ..,

It 1s further said to be in contravention of s.53(d)	of that Act.	t ?.
!- ,

By retaining and trading under the name or style "JLV"

it is

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alleged to have represented that

it has the sponsorship

approval of JLV Constructors. Camballin and its directors, Spencer-Laitt and Calligaro, are sald to have been party to the s.53(d) conduct.

JLV Constructors says it has suffered damage

thereby.

Credit managers of varlous plant hire companies are said to have assumed that JLV Earthmoving 1s associated with it.

Upon the failure of JLV Earthmoving to meet payments of

accounts due, legal

action has been

instituted

against

JLV

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Constructors and it has suffered termination or limitation of credit facilities and loss of tender opportunities. Damages are claimed for the alleged contraventions and at common law. JLV Constructors also claims an order for specific performance against

Camballin and for damages.

Camballin has cross-claimed

against JLV Constructors and

Johnson, who is one of its directors and shareholders.

It pleads the agreement of 2 4 June 1986 under which it says it paid to JLV Constructors the sum of $100,000.00

for that

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company's share in JLV Earthmoving and $1.7 million for various

items of plant and equipment. It says that	it was induced to	L ' .
. ,

enter into the agreement by various false representations made

Johnson on behalf of JLV Constructors. These related to the existing financial position of JLV Earthmoving, its financial prognosis and the cost of completion of a contract with Worsley Alumina Pty Ltd. The representations are said to have been made

negligently

and

breach

of warranty.

Breaches of covenants under the agreement concerning

provision of financial information relating to JLV Earthmoving are

also pleaded.

the

Camballin

alleges

that

by reason of these

various

' I

matters,

JLV Constructors

has

engaged

in conduct

which is

misleading or deceptive or likely to mislead or deceive

, .

contravention of s.52 of the Trade Practices

Act. Johnson is said

to have been

an accessory to these contraventions.

It also alleges a breach of fiduciary duty by JLV Constructors arising out of failure to fully disclose information

relevant to the flnancial position

f JLV Earthmoving.

By notice of motion Camballin seeks to extend

its

cross-claim and JLV Earthmoving seeks leave to cross-claim against

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another company called

JLV Corporation Ltd, and Johnson.

So far as the extension

of the Camballin cross-claim

reflected in paras. 4 4 and 45 of the proposed amended cross-clalm

is concerned; there

is no real controversy. By this amendment,

,-.

Camballin raises a fresh allegation that it was a term of the agreement of 2 4 June 1986 that J L V Constructors would deliver to Camballin various documents and records relating to J L V

Earthmoving.

This, it is said, has not been done.

Camballin seeks orders €or the delivery up of

the

documents.

There is no difficulty with that amendment to

the

cross-claim and I will give leave accordingly.

The cross-claim which

J L V Earthmoving now seeks to

bring

against J L V Corporation is embodied in new paragraphs 33 to 4 3 of	'I
the proposed amended cross-claim.

The relationship

between

J L V

Corporation

and

J L V

Constructors is not spelt out with clarity in the pleading. However, it appears to be suggested that J L V Corporation has

somehow "incorporated"

J L V

Constructors.

In any

event,

J L V

Earthmoving

alleges

that

JLV

Corporation has put itself forward to the Australian Federation of

Building Constructors ("AFBC")

as a candidate for

its Construction

' ..

Achievement Award for

1987.

In its submission to the AFBC,

it is said that

J L V

Corporation represented that:-

(a)	Notwithstanding the sale of its interest in J L V Earthmoving to Camballin, J L V Constructors had

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I . .

retained the rlght to any benefit from construction

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that was

performed by J L V Earthmoving : and

(b)

By reason of the fact that J L V Constructors had been "incorporated" into JLV Corporatlon, J L V

Corporation

had

the

right

submit

the

constructlon of the

Boddington

Gold

Mine,

Freshwater Dam for consideration in the AFBC's

Construction Achievement Award for 1987.

These representations are said to have been false

that after the agreement

of 24 June 1986, J L V Constructors had "no

right to any benefit for construction that had been performed

J L V Earthmoving".

The conduct is said to be in contravention of

s.52 of the Trade Practices Act. Johnson is named

as an accessory

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in this contravention,

as is JLV Constructors.

Further, J L V Corporation is alleged to have used certain	.-
I

charts in the AFBC submission.

J L V Earthmoving claims to be the owner

of the copyright

these

charts and says that

heir

eproduction

is an

infringement of copyright.

The relevant provisions of rhe Federal Court Rules are

0. 5 r. l, 0.5 r.8 and 0.5 r.9:-

"l.(l)

respondent

may

cross-claim

against

applicant for any relief to which the respondent

would be entitled against the applicant

if the

applicant

were

a spondent

separate

proceeding commenced in the Court by the respondent

for that purpose.

1 .

(2)	A respondent may cross-claim against any person

whether another party or a third party for any

relief which is related to or connected with the

subject of the proceeding.

( 3 )

Without prejudice to the generality of sub-rule

( 2 1 ,

a respondent may cross-claim for contribution

or indemnity.

8.(1)

Subject to sub-rules 9(1) and ( 2 1 , a respondent

may cross-claim against an applicant or any other

party without the leave of the Court, but may not

cross-claim against any other person not being a

party without such leave.

( 2 )

Sub~ect

to sub-rule

( 4 1 ,

a respondent shall not

cross-claim against an applicant before he has filed an affidavit in reply to the applicant's claim.

( 3 )

A cross-claim shall be in

or substantially in

the forms numbered 8 or 9 in the First Schedule, and shall be accompanied by an affidavit stating -

(a)	the nature of the cross-claim:
(b)	the material facts on which the cross-claimant relies: and
(c)	the facts showing that the cross-claim is one

to which rule 1 of.this Order applies.

( 4 )

respondent who cross-claims against an

applicant only may include the matters referred to

in sub-rule

( 3 ) in

his affidavit in reply to the

applicant's claim, and need not file a separate

affidavit in support of the cross-claim.

9 . (1)

respondent desiring to cross-claim after the

directions

hearing

shall

obtain

all

necessary

directions at the directions hearlng

in relation to

the cross-claim, including the time within which

the cross-claim is to be filed.

( 2 )

A respondent who does not obtaln directions

pursuant to sub-rule (1) shall not cross-claim after the directions hearing without the leave of

the Court

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8. 1.'

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It is obviously In the interests

of all concerned to

have one rather than separate pieces

o € litlgation.

So much is

recognised in s.22 of the Federal Court

Act.

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On the other hand, there is impliclt in 0.5 r.9 and r.11, a recognitlon of the need for expedition in instituting	I .
cross-claims. In Wasley v Frost (1974) 7 SASR 5 0 6 , it was sald that leave to issue a third party notice should generally not be

granted if by

reason of the lateness of the application, there

would

inconvenience to a defendant in not havlng a principal

proceeding	and the third party claim heard at	one and the same
time .

These proceedings were commenced

on 28 April 1987. They

have

only

just

reached

the

stage

where

pleadings

could

considered closed.

Particulars have been requested and supplied.

No discovery has, as yet, been given, although this was to have

been done by 7 October 1987 and inspection was to have been

completed by 13 October.

I refer to my directions

of 29 July and

25 September in that regard.

While the JLV Earthmoving cross-claim seems

at first

glance to be a fairly minor

and makeweight element of the overall

dispute, it is, I think, sufficiently connected to the matters

already in issue between the parties to justify the

leave sought

in this case. I am not satisfied that the leave sought will result in such delay or inconvenience to the applicant as to

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I	warrant its refusal and I propose to accede to the application.	I
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i	am therefore prepared	to make the	orders which are sought	in the
I
notice of motion.

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I certify that this and the preceding

eight (8) pages are a true copy of the

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Reasons for Judgment	of his Honour
Justice French.
Associate:

Counsel for the Applicant and Cross Respondents:

Mr A. Goldfinch

Solicitors for

the

Applicant

and Cross

Respondents:

Warren

McDonald French & Harrison

Counsel for the Respondents

and Cross Applicant: Mr S. Penglis

Solicitors for the Respondents and Cross Applicant: Freehill

Hollingdale & Page

Date of Hearing:	27 October 1987
Date of Judgment:	28 October 1987

[1987] FCA 647

28 Oct 1987