Lindrum v Staged Developments Australia Pty Ltd

[1998] FCA 1745

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 720 OF 1998

BETWEEN:

JANNE CLARA LINDRUM
FIRST APPLICANT

JOYCE DOREEN LINDRUM-GILLAN
SECOND APPLICANT

MICHAEL ROSS LINDRUM-SHORTALL
THIRD APPLICANT

AND:

STAGED DEVELOPMENTS AUSTRALIA PTY LTD
(ACN 058 626 761)
RESPONDENT

JUDGE:	SACKVILLE J
DATE:	11 DECEMBER 1998
PLACE:	SYDNEY

REASONS FOR JUDGMENT

These proceedings were commenced by an application and statement of claim filed on 17 July 1998.  Initially there were three applicants.  I have granted leave to the third applicant to discontinue the proceedings.  Subject to making formal orders and dealing with the question of costs, no more need be said about his position.

The first applicant is the older daughter of Horace Lindrum, while the second applicant is the widow of Horace Lindrum.  Horace Lindrum was a renowned billiards and snooker player who, according to the evidence, died in 1974.  The second applicant is the executrix of his estate, but she does not sue in that capacity.  At present, the only respondent is Staged Developments Australia Pty Limited (“SDA”).  It proposes to utilise the name “The Lindrum Hotel” in connection with a boutique hotel to be developed on a site in Flinders Lane, Melbourne.

SDA proposes to adopt a theme for its boutique hotel, using sporting memorabilia obtained from the family of the late Walter Lindrum.  Walter Lindrum, the nephew of Horace Lindrum, was also a champion billiards player.  Walter died in 1960.

The statement of claim originally filed in the proceedings is not well pleaded. In substance, it pleads that SDA’s conduct, in publicly announcing its intention to establish a hotel at the Flinders Lane site, was calculated to lead the public into the belief that the hotel was endorsed by "the interests represented by the applicants". SDA’s conduct is said to have been misleading and deceptive, thereby contravening s 52 of the Trade Practices Act 1974 (Cth). The statement of claim pleads a further cause of action, but it is not necessary to deal with it here.

SDA has filed three notices of motion.  The first, filed on 14 September 1998, seeks an order transferring the proceedings to the Victorian District Registry of the Court.  The second, filed on 20 October 1998, seeks further particulars of the applicants’ statement of claim.  The third, filed on 17 November 1998 seeks summary dismissal of the proceedings pursuant to Federal Court Rules (“FCR”), Order 20, r 2.

Faced with these motions, the applicants filed their own notice of motion. They seek orders granting leave to amend the application and statement of claim in accordance with a draft application and statement of claim annexed to an affidavit of Mr Yandell. I refer to these documents respectively as “the proposed application” and “the proposed statement of claim”.

The proposed statement of claim alleges, inter alia, that Walter Lindrum conducted a billiard parlour business at the Flinders Lane site under the name “Lindrums”.  It further alleges that, after Walter’s death, the business was operated and conducted by (among others) Horace Lindrum.  It is said that after Horace’s death the business was carried on by a niece and nephew of Walter at new premises and that this was done with the consent of the second applicant (Horace’s widow).

By reason of these and other circumstances, the proposed statement of claim pleads (par 25) that:

“use of the name ‘Lindrum’ as part of the description of a business conducted on the Flinder’s Lane [sic] premises is likely to lead members of the public to conclude that the person or corporation so using the name has obtained the license [sic] and consent of the estates and families of the late Walter Lindrum and the late Horace Lindrum to do so.”

The pleading continues as follows:

“26.The first respondent [SDA] was at the date of institution of these proceedings proposing to open a hotel business in the redeveloped site of the premises previous [sic] occupied by the business known as ‘Lindrums’ in Flinder’s Lane [sic] Melbourne.

27.The first respondent proposes:

a)   to adopt the name ‘The Lindrum Hotel’ for its hotel; and

b)   to utilise furnishings and memorabilia adopting a theme related to the sports of snooker and billiards for its hotel.

28.The use by the first respondent of the name ‘The Hotel Lindrum’ for its hotel to be located on the said premises and the use by the first respondent of such furnishings and memorabilia will represent to the members of the public:

a)   that the first respondent has obtained the license [sic] and consent of the estates and families of the late Walter Lindrum and the late Horace Lindrum to use of the name of its business; and

b)   that its hotel is endorsed or approved by the families and estates of the late Walter and Horace Lindrum as the former proprietors of the Melbourne Business which operated in or near the proposed hotel, since at least 1923.

29.The conduct of the first respondent identified in paragraph 27 above is misleading and deceptive.”

The proposed pleading seeks to join a Mr Marriner as the second respondent. He is alleged to have been a person who aided, abetted, counselled and procured the contravention by SDA of s 52 of the Trade Practices Act.  The applicants propose to seek injunctive relief and damages against both SDA and Mr Marriner.

At the outset of the hearing, Mr Ireland QC, who appeared on behalf of the applicants, indicated that they did not wish to persevere with the statement of claim as originally filed. Rather, they wished to rely only on the proposed application and the proposed statement of claim.  Mr Garnsey QC, who appeared with Ms Baird for SDA, accepted that, in these circumstances, subject only to the question of costs, SDA’s second motion (relating to particulars) had been superseded.

The parties agreed that I should hear SDA’s two remaining motions and the applicants’ motion for leave to file the amended application and statement of claim together.  Orders were made having this effect.

The basis of SDA’s summary dismissal motion is that the case the applicants propose to plead cannot succeed because certain members of the Lindrum family have now consented in writing to SDA’s hotel being established on the Flinders Lane site.  As Mr Ireland pointed out, these written consents were obtained by SDA after the proceedings had been commenced.  Nonetheless, Mr Garnsey relied upon the consents to support SDA’s contention that the proceedings were doomed to fail.

The evidence establishes that Horace Lindrum's younger daughter, Tammy, has consented to the construction and operation of SDA’s hotel, as have Walter Lindrum's niece and nephew.  It appears that Walter had no children and that his widow died in 1966.  According to Mr Garnsey, it follows that the allegation of misleading and deceptive conduct pleaded in par 29 of the proposed statement of claim cannot succeed.  Mr Garnsey argued, in the alternative, that pars 25, 28 and 29 of the proposed statement of claim are embarrassing and that, for that reason, leave to file the proposed statement of claim should be refused. He argued that the references to the "estates" of the late Walter Lindrum and the late Horace Lindrum and to the "families" of the late Walter Lindrum and the late Horace Lindrum lack specificity and, for that reason, SDA is unable to follow the case made against it.

In the course of oral argument, Mr Ireland conceded that pars 25 and 28 of the proposed statement of claim are ambiguous.  As he explained the applicants’ case, the matters pleaded in pars 1 to 24 of the proposed statement of claim have the consequence that the use of the name "Lindrum" as part of the description of a business to be conducted at the Flinders Lane site is likely to lead members of the public to conclude that the person using the name had obtained the consent of all relevant members of the respective families and of the estates of each of Walter and Horace Lindrum.  Mr Ireland identified the relevant members of Horace Lindrum's family as Horace’s widow and his two children.  In other words, the applicants wish to make out a case that SDA, by its conduct, has represented that it has obtained the consent of all three members of Horace Lindrum’s family.  On the case as outlined by Mr Ireland, these representations were false, because SDA has obtained the consent of only one member of Horace’s family and, indeed, at the commencement of the proceedings had not obtained the consent of any member of Horace’s family.

For his part, Mr Garnsey accepted that if the applicants’ case were to be repleaded in this way, it would answer SDA’s summary dismissal argument.  It would also address the pleading objections to the proposed statement of claim, subject to the need for the applicants to plead properly their claims for damages.

In these circumstances, Mr Ireland stated that he was prepared to reformulate the applicants’ proposed pleading.  Prior to the conclusion of the hearing, he handed up a further proposed amended application and a further proposed amended statement of claim.

The proposed amended application omits any claim for damages.  The proposed amended statement of claim addresses the ambiguities I have identified in pars 25 and 28 of the earlier version of the proposed statement of claim.  Mr Garnsey does not oppose the filing of the proposed amended application and the proposed amended statement of claim, subject to any questions of cost that may remain.

There was some discussion concerning the motion for transfer of the proceedings to Victoria.  However, the parties, in substance, agreed that this motion should not be finally dealt with until the nature of the applicants’ evidence becomes clearer.   This will enable an informed judgment to be made about the likely number of contentious witnesses who are resident in Victoria.

In the circumstances, it seems to me that the following are the appropriate orders:

1. Dismiss SDA's motion filed on 20 October 1998 (relating to further particulars).

2. Dismiss SDA’s motion filed on 17 November 1998 (relating to dismissal of the proceedings).

3. Stand over to 22.4.99 SDA’s motion filed on 14 September 1998 (relating to transfer of the proceedings to Victoria).

4. (a)       Grant leave to the third applicant to discontinue the proceedings. 

   (b)Order the third applicant to pay SDA’s costs thrown away by reason of the discontinuance of the proceedings.

   (c)Otherwise dismiss the applicants’ motion filed on 7 December 1998 (seeking leave to file amended pleadings).

5. Grant leave to the applicants to make an oral application to file an amended application and an amended statement of claim in the form handed up by Mr Ireland and initialled by me and placed with the papers (“the proposed pleadings”).

6. Grant leave to the applicants to file and serve the proposed pleadings on or before 18 December 1998.

7. Stand over the proceedings for further directions until 22 April 1999.

Costs

The only matter now outstanding concerns the costs of the various motions.  To some extent it is artificial to deal with each of the motions separately.  As both senior counsel have pointed out, the issues involved in argument have tended to overlap.  Even so, it may be helpful to consider each of the motions in turn and then address what overall costs order ought to be made.

As I have already indicated, SDA’s motion seeking further particulars has been overtaken by subsequent events.  Although the motion has been dismissed, I think that SDA was justified in bringing it, having regard to the state of the pleadings at the time the motion was filed.  The costs of the motion are likely to be very modest, since the argument concerning particulars was not pursued.  Nonetheless, I think the appropriate course is that the applicants should pay SDA’s costs of that motion.

SDA has not succeeded in obtaining the relief sought in its motion for summary dismissal of the proceedings.  It would not be a profitable exercise to attempt to determine whether SDA would have succeeded on the basis of the pleadings at the time the motion was filed.  It is, however, fair to say that the pleadings at that time had serious defects.  It is true, as Mr Ireland has said, that SDA had not obtained the written consents at the time the applicants instituted the proceedings.  However, as Mr Garnsey has pointed out, it is equally true that SDA notified the applicants of the co-operation of two of the persons who subsequently consented to the establishment of SDA’s hotel. In the circumstances, there should be no order for costs on SDA’s motion for summary dismissal.

I have dismissed the applicants' motion, filed on 7 December 1998, seeking leave to file an amended application and an amended statement of claim. The dismissal of that motion, in substance, reflects the pleading difficulties to which I have referred.  I think the appropriate course, having regard to the fate of the proposed pleading (prior to the most recent amendments), is that the applicants should pay SDA’s costs of this motion.  As the applicants' motion for leave to amend the pleading has been dismissed with costs, the effect of FCR O 62, r 71(1)(c) is that SDA may tax the costs, without any order specifically being made directing taxation.

The final motion is that seeking transfer of the proceedings to Victoria.  The costs of that motion can be dealt with at the time the motion is finally resolved.

Having regard to the overlap among the various motions and the difficulty of attributing costs to particular motions, I think that the following orders should be made with respect to costs:

1. Subject to Order 4, order the applicants to pay 50 per cent of SDA’s costs of

   (a)SDA’s motion filed on 20 October 1998 (relating to further particulars);

   (b)SDA’s motion filed on 17 November 1998 (relating to dismissal of the proceedings); and

   (c)the applicants’ motion filed on 7 December (seeking leave to file amended pleadings).

2. I direct, pursuant to FCR, O 62, r 3(3), that SDA may have the bill of costs taxed forthwith, notwithstanding that the principal proceedings have not concluded.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville

Associate:

Dated:             11 December 1998

Counsel for the Applicant:	Mr J Ireland QC
Solicitor for the Applicant:	Tzovaras Yandell
Counsel for the Respondent:	Mr J Garnsey QC Ms Julia Baird
Solicitor for the Respondent:	Freehill Hollingdale & Page
Date of Hearing:	11 December 1998
Date of Judgment:	11 December 1998