Mr Georges Apparel P/L v Birkenhead Investments P/L

[1992] FCA 949

JUDGMENT No. ..g.k ~ . . . l . , . ~ . &

C A )

NEW SOUTH WALES DISTRICT REGISTRY) NG 416 of 1992

GENERAL DIVISION 1

Between: MR GEORGES APPAREL PTY

LIMITED

First Applicant

GEORGE W S O U R

Second Applicant

And: BIRKENHEAD INVESTMENTS PTY

LIMITED

Respondent

BIRKENHEAD INVESTMENTS PTP

LIMITED

Cross-claimant

-

LIMITED

First Cross-respondent

10 DEC 1992 GEORGE MANSOUR

v a i s l a C W R T a F

kxllopc~ Second Cross-respondent

EX TEMPORE JUDGMENT

collateral to them. It is said that the consideration for the

EINFELD J SYDNEY 24 SEPTEMBER 1992

The applicants move orally in Court to amend the statement of claim by adding a collateral agreement count. The allegation is that the representations and warranties in the lease and agreement for lease upon which the claim under section 52 of

the Trade Practices Act is based established an agreement

collateral agreement was the entry into the agreement for

lease itself and the lease.

The lease contains provisions which on their face appear to

exclude the possibility of any collateral agreement. Clause

2.2.19 represents an agreement between the parties that the

lease comprises the whole of the agreement between the parties

and there is no other agreement. Clause 5.3 of the lease

makes provision that the parties have agreed that the

applicants are entering into the lease without reliance upon	a
any promise, representation, warranty or undertaking given by or on behalf of the resgondent on matters relevant to this -
action.	.:s

,

Thus the assertion in the proposed amendment& th& statement of claim that there was an outside agreenient' Between the

. . 2 . :, .

parties, additional to the lease, apparently entde'd into orally conflicts with the terms of the written agreement upon which the action is presently based. It seems obvious enough •

that that is an illogical way to proceed. It is difficult to

imagine how an action could be sensibly run or conducted, or be successful, where the moving party is suggesting that there were two agreements, one of which is inconsistent with the other. It is perhaps, therefore, not surprising that the High Court has, on occasions, dismissed the possibility that claims can be advanced on such a basis. The leading case appears to be Hovts Ptv Limited v S~encer [l9191 27 CLR 133 where Isaacs

J said that a collateral contract cannot impinge on the main

contract or "alter its provisions or the rights created by
it".

This view was endorsed by Dixon CJ and Fullagar and Taylor JJ in Mavberrv v Atlantic Union Oil ComDanv Limited [l9531 89 CLR 507, a case which involved the former quiz master Bob Dyer. At page 518 their Honours accept the formulation of Isaacs J and in the particular case applied precisely the words which he used. They said:

a

W e t h e r e f o r e th ink t h a t the c o l l a t e r a l agreement

cannot s tand w i t h t h e main agreement and i s un-

en forceab l e . -

In Gates v The Citv Mutual Life Assurance Com~any [1985-61 160

CLR 1 at 11, Mason, Wilson and Dawson JJ again endorsed the views put forward in the earlier judgments and did not further discuss the matter, treating it as quite palpably established beyond debate.

been inclined not to resolve this matter at an interlocutory

In the ordinary course of events, I must say that I would have

stage at all largely because counsel for the applicants conceded that the real purpose of this amendment was to enable his clients to recover damages which might otherwise be excluded from the Trade Practices Act because the action was out of time or at least partly so. Moreover, there does not seem to be any particular reason why the inclusion of the amendment would lengthen the proceedings, at least not materially, or add complications, facts or evidence to it so as to make any material difference to the length or nature of either the interlocutory stages or the final hearing.

But as I am pressed to make a decision about the matter, and there seems to be no argument put on behalf of the applicants in response to the challenge to the amendment which is relevant to it and to the argument in support of its disallowance, I will accede to the submissions made on behalf of the respondent and reject the amendment.

In the course of argument on the amendment, the applicants presented what they expect to be the reply to be filed by them in response to an amended defence of the respondent to the amended statement of claim if the amendment is allowed. This draft reply in substantive terms raises two new and quite separate causes of action which are not at present pleaded, either in the statement of claim filed or even in the amended statement of claim before the Court today. They are not •

proper matters to raise in the reply, even making assumptions

about what any amended defence would be. In fact they raise matters not agitated by the expected defence but by the lease and the agreement to lease which form the substance of the present statement of claim. Thus if those allegations are to be pressed, they can only be pressed by way of further amendment to the statement of claim. Nothing I say today about the amendment submitted is any judgment or comment about the possibility that such assertions could be added to the statement of claim now. The rest of the draft reply is merely a denial of the actual or assumed matters raised in the defence and in substance joins issue with whatever it is the defence says or is likely to say.

In the circumstances, therefore, I will make no other comment about the possibility that the applicants might be entitled to file an amended statement of claim on some other basis but, so far as the amendment presently submitted is concerned, which seeks to add the collateral agreement to which I have referred, in my opinion such a claim would on the authorities be unarguable and ther-efore the amendment should not be

a1 lowed .

RECORDED . NOT TRANSCRIBED

The applicants will within seven days file a verification of the statement of damages submitted today which I have initialled and dated and placed with the Court papers. The

following directions will also apply:

1.	The parties are to file and serve supplementary lists of documents on or before 4 pm on Wednesday 25 November.
2.	The applicants' witnesses' statements will be filed on or before 4 pm on Wednesday 18 November.
3.	The respondents will serve their witnesses' statements on or before 4 pm on Wednesday 16 December.
4.	Subpoenas may be made returnable before a registrar on 9 December and the matter will be listed for directions again at 9.30 am on Thursday 17 December.

RECORDED .  . NOT TRANSCRIBED

The parties have made rather a meal of the directions hearings in this case. We have now had at least six hearings and the statement of claim is pot yet finalised. This conflicts rather agitatedly with the rule that the Court will normally expect the interlocutory proceedings in a case to be dealt with in four mentions or directions hearings. I notice that the verified lists of documents were originally to be supplied by 11 September, an order which was made on 5 August. Inspection was to have taken place by 17 September but we are still several weeks away from the completion of the discovery

process. On 18 September the discovery was extended, in the

case of the respondent, to 22 September and is still not

completed.

The applicants' witnesses' statements were to have been filed by 9 October later extended to 16 October. By today's orders they now are extended to 18 November. On 24 September there was an order that by the same date there be a verified and

particularised statement of damages and a list of other
discoverable documents.

It is quite impossible for the Court to control its lists and do justice to the parties in this case and in all the other cases waiting for hearing if there is such a lackadaisical approach to court orders, and the parties do not give consideration in a constructive way to precisely what they want to do with the litigation and in what form and when. All

a	that happens is that more and more time is allocated, including a special sitting today to accommodate counsel for the applicants, only to find that the damages statement handed up is still without verification, although it is nearly a month after the already twice extended time. That is not just accidental, it is simply neglect and unprofessional conduct and it should not go on.
The special sitting today was to deal primarily with the
•	proposed amendment to the statement of claim. That amendment
has failed and it should carry with it the usual consequences that the applicants pay the respondent's costs. In the
circumstances consideration should be given to, but I am not in possession of enough facts to determine, whether those costs should in fact not be borne by the applicants personally but by those who have been responsible for them.