L. Grollo & Co. Pty Ltd v Palmdale Insurance Ltd

[1986] FCA 429

BETGEEN :

L. GROLLO .5 CO. PTY. LTD. ,

REBLCO PTY. LTD. ,

GROFAM FTY . LTD. ,

L . GROLLO CON3TRUCTION3 FTY. LTD. ,

L. GROLLO EQUIFMENT FTY. LTD. ,

L . GROLLO dDMINISTRATION PT'I. LTD. ,

L. GWLLO FRE-MIX Fri. LTD. ,

L . GROLLO (d.1Z.T. I XJMINISTRATI~?J FT?. LTD.,

L . GRQLLG \DAFihli!i> ~ M I N I ~ T R A T I O K FT[. LTI j . ,

L. G k O L i G I DI.Ij.lUN I f+iA.IjAGEE.ENT FTY. LTD,

L . GROLLd NGMINEE:" FT?. LTD. ana

L. ZROLi.0 :ALES FT';. LTD.

ard

m: NOHTHROP J.

DATE:	22 SEPTEMBER 19a6
PLACE:	MELBOURNE

EX TEMPIJRE RWSONS F O R JUIjGMENT

Its motlon, 1s seeking an oraer rhat thls appllcatlan

commenced by G r o l l o I n December 13Y5 be stayed pendlng the

The proceedlngs In the Supreme Court xere brought

by Falmdale seeklng orders under contt-acts of insurance isr

lndrrnnlty I n relatron to worksrs cnmpenaaclcn I n ',':ctoria

xlth respect to persons cmployed by Gr4:llo. Gns of zhsse

actlons relates C D thi-ee insLrancE years, 1'37G,'77, 1 3 7 7 , 7 Z

and 1373/79 r e s p s c t l v e l y , w n ~ l e the 0tii2r actls.r, l a ~ G L - rtz

lnzuranse year 1973/E0. in brlef, - d L k = e .-- c z a actlons are

similar In nature and ar15e from the fact chac uncier the

alleged agreements and reicvant statucor;- regulaclons,

premlums are based on antlcipaced salarrea pald by the

znsured to lts employees, but at the end of each year, any necessary rectlilcatlon 1 s made to the amount of the

prem~ums, having regard to the vages actually pald by the

employer durlng the relevant lnsurance yehr. In each of

those actlons Palmdale 1 s seeklng rellei based upon the

those years. By Its pleadings I n rhe Supreme Court acc:1ons, Grollo has raised a large number of defences bassd upon

various common lax andfor equlty clalms.

Those defences include dsr'ences based upon

non-compllance wlth the autharlzatlsn requlrernents of the Commonwealth Insurarxe Act 1373, non-compllancs zlth the

Workers Uompensatlon hegulatlcns I n v l z t o r l a , special - _

?rEmlum aqieements betxeen i r o l l o and Falmaale y lvmq rlze t o

aac:siacklon, and accord and satxafast:on, n o n - a l s c l o z u r e or'

macerLa1 facts by the Insurer, Fairmale, Irnplld c ~ n z l c i o n s

of the ayrerrnenc, mls-atacemenc zf fact, defences under che Instruments Act and absence of proper demands to Inspect: the records of Grollo. I n addition, Grollo raises by way of

defence clalms based upon 55.52 and 5 8 of the Trade F r a c t l c e s

Act 1974. Insofar as 5.52 1 s concerned. the conduct whcn 1 5

alleged was mlsleadlng ot- deceptlvr or was llkely to mlslead to deceive, must, of necessity, have arisen before each contract was entered Into. The 5.58 defence, however. 1s of

a different nature. That sectlon reads as follows:-

"A corporatlon shaii not, LL trade ot- sosmerce,

accept payment or other tzonaldet-aclon for gl;ods or services xlnere at the cime of the acceptance It lt-ttsnds -

(a) not t o supply the gssds or ser-acss; or

Ib) C O supply goods or set-v1ces materlally

different from the goods or set-vices m respact o f xhlch t h e payment o r other consl2eratlon 1s accepted."

In the grssenz case, Falmdale 1s lr. llyuldatlcn arid

It 1s slleqed at the least tiiat 1r 1s ~ n a r s l r , , r : does n o t

lntsnd, c c makc any saymenta h:; ;ay ~f Indernnlty xltn s r f e c t

to xorksrs c~mpenaaclon c l a m s nadz b>- emplcyess cf IGrcilo.

Some of these clalms may exten8i for many Tears Into the

future. Triet-efore, if Palmdale doe; I n fart succeea ln lts

action In the Supreme Court and mmey l a ordered to be pald

to Palmdale, then Palmdale would be acceptlng that money at a

time when It lntended not to s u p p l y the servlces or xas

unable to supply the services of the kind arlslng under the

contract. In thelr reply In the Supreme Court proceedlnqs,

Palmdale has alleged that the Supreme Court has no

~urlsdict~on to hear and determlne those defences based upun

the Trade Practlces Act.

In SesEmber 1935. (Groll~ commenced the presenc

proceedings I n the Federal C.aut-t and, by Its amendd Statement of Clam, 1s settxny out facts whlch colnclde with the clalms ralsed by xay of aefance in Its pleadlngs In ths

Supreme Court actlons. Stated shortly, Grollo 1s seeking

rellef based upon ss.52 and 58 of the Trade Practlces Act

and, pursuant to the accrued jurisdlctlon concept, is seeking

rellef based upon the other matters raised in its defence In

the Supreme Court proceedings, but m the Federal Court 1 s

rasing those as causes a€ a z t i o n . It is seeking

declarations under s.163A oE the Trade Fractlces Act; it 1 s

seeklnq inlunctlons under 5 . 8 0 of the Trade Practlces Act

and, Insofar as 1 s wcessary , 1s seeking orders based upon

s.37 t f : the Trade Pracclcea Act. I do not: need to develr;?

tnose orders for relief further, except t o bay that f o r

present purposes, I am assumlng that no que5,tlon of

llmltatlon of actlons	arlses In the	proceedlngs	~n the
Federal <-‘.JUKt.

In May uf thls year, m the case of Carlton and

Unlted Erewerles Llmltsd v. Castlcmalne TGG%VS Llmltzd, the

Hlgh Court announced Its ludgment ln a n appeal from th2

Supreme Court US New South Waiss on matters almllar to those

presently	beisre me and publlshed Its rea50ns for thac
~udgment	on 30 July 1986. In that case, In proceedlngs In

the Supreme Court of New South Wales, claims were made

arising from an agreement. Carlton and Unxted Brswrries,

being the defendants, ralsed m thelr defence a claLm that

the agreement was contrary to pruvlslons of the T r a d e

Practices Bit, Part IV, and therefore could not be enforced.

In Its reply, the plaintlfl ralsed the question whether the

Supreme Court had jurlsdictim CO determlne the defences r a s e d by Carlton and Unlted Erewerles. Later, there was a

separate hearlng llmlted to the question of whether the

Supreme Court had ~urlsdicc~on tu determlne chat defence and

same othsr relatscl matters. The Supreme C o u r t , constltuted

by a slngle Judgs, determlned that questlun In ths form thar,

the Supreme Court had lurlsdlctlon and, as a macter of

dlscretlon, ought not to refuse or decllne to exerclse its

~urlsdiction. Carlton and ITnlted Ereweries, by speclal

leave, appealed to the High Court, which dismissed the

appeal. I do not need to go through In detarl the reasons

Trade F r a c t l c r s .b.rt, xhlch refet- tG actzons belng brouylit

under the Trade Fractlces Act as dlstln,:r: from matters

arlslng under the Trade Practlces Act. In my opznlon,

slmllar types of reasons should apply m the present case.

Counsel for Grollo has urged that there are

differences m the matter presently before the Court m that

Grollo has commenced these proceedings in the Federal Court, xhereas m the Carlton and Unlted Breweries case, there were

no concurrent	proceedings zn the Federal Court. Counsel
referred to	iiilcta tu the effect chat that m i ? i i r : make a

matrrlal d l f f e r snce to che jurlsdlctlon of the Supreme Court.

i do not see how that could a t - l s e , having regard to what the

tilgh Court sald in Its reasons for ludgment. Has-lnq regard

also to tnne fact that t h e proczeaznqs in the Supreme Court

have been pendlng f o r a long tlme, in fact a number of years,

that there have been a number of separate hearmg U S matters

arising in those proceedings, and to the posslblllty that the

hearing of that matter might start In the not too far dlstant

future, it seems, prima iacle, deslrable that the Supreme

Court should continue with the hearlng of that mattsr.

It is argued further that the questlon of 5 . 5 8 w a s

a matter which should be heard PT the Federal Court because

of the fact tliat It applies to pres'int facts, receipts for

money, as opposed to matters oczurrlng In the past. Caunsel

argued chat thls matter coulsi be ljolated from the &ale mass

'4 of the fasts qlvlng r:se to the Supreme Court asclon, ana

. that lf the 5.58 clalm was faund to be a qood causs of actlon

by Grolla In the Federal Court artlon, ~t xould, of

necessity, save a large amount of costs In unnecessary

;upreme Court procesdlngs becauze the Supk-emr Court

proceedlngs would no longer be of any lmportance ~f 5 . 5 3

prevented Palmdale from rrcelvlng any or' che monies slalmed

by l t .

That is a persuasive arqumene and one whlch the

Court, ln th? appropriate case, would Le dlspossd to accept.

But looklng at all the facts and the hlstory of the matter

and the decisln of the Hlgh Court in the Carlton and United

Brewerles Limlted matter and the fact that In law there 1 s no

reason, If lt is appropriate, why this question of the

~urlsdictlon of the Supreme Court could not be trled as a

separate issue a5 It was ln the New South Wale5 proceedings,

It seems to me that thz best course to adopc 1s to rzfrain

from maklng any order preventlng Paimdale from proceeding

wltn Its actions In the Supreme Court.

In order to avoid dupllcatlon of proceedlngs, it 1 s

desirable that the proceedlngs In the Federal Court should be

stayed pendlng the hearlng and determlnatlon of the actions

In the Supreme Court or untll further order. I make the order in that form because It may well be that other thlngs

may arise whlch require this Court to cisntinue the hearlng of

the proceedlngs by Grollo even before the Ilnal determlnation

of the Supreme Court pruceedings. Accordlngly, the motlon on

* beha:f zf Grollo IS refused dt ti.z present tlme but l ?avz 1 5

L

given to Grollo to renew che rnotlon un	notlce 1s ths
clrcumstancss d o warrant.

on the motlon by Palmdale. lt 1 s ordered that the

appllcatlon be stayed pending the heat-mg and determinatlun

of action number 1503 of 1981 In the Supreme Court of

Vlctorla and actlon number 2733 of 1985 In the Supreme Court

of Victorla or until further	order, and llberty to apply	16
granted ~n that rnotlon also.

In the clrcumstancs S there has been at this staq 'e a

substantial success f o r Palmdale on Its motlon and I see no

reason to depart from the normal course oi orliermg that

Grollo pay Palmdale's costs of its motion. But lnsofar as

the motlon by Grollo 1 s concerned, to some extent It rnlght

arise again and I merely reserve costs of that mutmn.