National Auto Glass Supplies (Australia) Pty Limited v Nielsen and Moller Autoglass (NSW) Pty Limited (No 2)

[2006] FCA 1717

FEDERAL COURT OF AUSTRALIA

National Auto Glass Supplies (Australia) Pty Limited v Nielsen & Moller Autoglass (NSW) Pty Limited (No 2) [2006] FCA 1717

NATIONAL AUTO GLASS SUPPLIES (AUSTRALIA) PTY LIMITED ACN 081 814 342, MAGGIE YEUNG LO AND HARVEY HUI OUYANG v NIELSEN & MOLLER AUTOGLASS (NSW) PTY LIMITED ACN 107 721 595, JACK J MOLLER AND CARL MOLLER
NSD 2596 OF 2005

GRAHAM J
6 DECEMBER 2006
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2596 OF 2005

BETWEEN:

NATIONAL AUTO GLASS SUPPLIES (AUSTRALIA) PTY LIMITED ACN 081 814 342
First Applicant

MAGGIE YEUNG LO
Second Applicant

HARVEY HUI OUYANG
Third Applicant

AND:

NIELSEN & MOLLER AUTOGLASS (NSW) PTY LIMITED ACN 107 721 595
First Respondent

JACK J MOLLER
Second Respondent

CARL MOLLER
Third Respondent

JUDGE:	GRAHAM J
DATE OF ORDER:	6 DECEMBER 2006
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The objection to paragraph 62(i) of the affidavit of the second applicant sworn 30 October 2006 be upheld.

2.The evidence contained in the said paragraph 62(i) be rejected.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NSD 2596 OF 2005

BETWEEN:

NATIONAL AUTO GLASS SUPPLIES (AUSTRALIA) PTY LIMITED ACN 081 814 342
First Applicant

MAGGIE YEUNG LO
Second Applicant

HARVEY HUI OUYANG
Third Applicant

AND:

NIELSEN & MOLLER AUTOGLASS (NSW) PTY LIMITED ACN 107 721 595
First Respondent

JACK J MOLLER
Second Respondent

CARL MOLLER
Third Respondent

JUDGE:	GRAHAM J
DATE:	6 DECEMBER 2006
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. In these proceedings, relief is sought in relation to three publications said to have been made on 13 September 2005 and 15 September 2005 or thereabouts.  The publication which, as I understand it, is given the greatest emphasis by the applicants in their case is a form of facsimile transmission which was made to a number of persons on or about 13 September 2005.  That facsimile transmission was constituted by a facsimile cover sheet bearing the signature of the third respondent and a two-page communication directed to Mr Scott Eldridge, Regional Coordinator, Australian Taxation Office, bearing the signature on the second page thereof of the second respondent. 

2. The first applicant and the first respondent are competitors in business in relation to the supply of what is called auto glass, such as motor vehicle windscreens.  The applicants’ case is brought under the Trade Practices Act 1974 (Cth) (‘the Trade Practices Act’) and the Fair Trading Act1987 (NSW) (‘the Fair Trading Act’). Relief is also sought in respect of the publications on the basis of the law of defamation. In relation to the alleged contraventions of the Trade Practices Act and the Fair Trading Act, senior counsel for the applicants has indicated that no relief is sought by way of damages under s 82 of the Trade Practices Act, or the comparable provision in the Fair Trading Act. The only relief that is sought in respect of the alleged contraventions of the Trade Practices Act and the Fair Trading Act is injunctive relief.

3. In respect of the alleged defamation, it has been indicated that the first applicant seeks no relief by way of damages in respect of defamation in New South Wales, such relief being unavailable to it in that State. 

4. The applicants have pleaded that by the facsimile, certain representations were made.  One such representation said to have been made and recorded in paragraph 7(b) of the Third Further Amended Statement of Claim (‘the Statement of Claim’) filed 27 October 2006 was a representation:

   ‘That the First applicant conducted its business unfairly, in that it sold products at unrealistic prices that were below cost in order to gain market control;’

5. The paragraph which I have just quoted is taken from that part of the Statement of Claim which bears the marginal heading ‘Trade Practices Action’.

6. In the section of the statement of claim bearing the marginal heading ‘Defamation Action’, it is said that the facsimile conveyed an imputation in identical terms to that pleaded as a representation.  It is said that the imputation was conveyed by the entirety of the facsimile, but in particular the paragraphs within the facsimile cover sheet which have been identified for the purposes of these proceedings as paragraphs [1] [2] [3] and [6] and paragraphs [8] and [10] of the letter which was attached to the facsimile cover sheet.

7. Paragraph [6], so identified, provided the heading for the facsimile cover sheet:

   ‘Re: NAGS/FYG Background in Australia Since 1998’

8. The words used in the facsimile were:

   ‘[1]     Please see relevant info about NAGS/FYG activities in Australia, since 1998 start business.

   [2]     This information and report has been instigated by me, and sent to relevant authorities, on behalf of the Australian Independent autoglass industry, in the interests of fair play and legal business trading activities, required for all Australian companies and company directors and associated parties, suppliers, under Australian company laws.

   [3]     The wholesale supply industry has become unsustainable, due to unrealistic low supply prices that are by far the lowest in the world.  With Australia now selling below costs for last 6 maths (sic) all suppliers.
   …’

9. The attached copy letter contained the following:

   ‘[8]     I am acting on behalf of N & M AUTOGLASS and PGI WINDSCREENS and would point out that NAGS at the moment has embarked on predatory pricing policy to control the Australian replacement market by selling product below cost.
   …

   [10]    The situation of the devious and criminal nature of MAGGIE and NAGS operations need to be investigated urgently to avoid CHO, FYG, MAGGIE and NAGS controlling the Australian replacement autoglass market, using it as a platform for money laundering.’

10. The first respondent filed an appearance and was represented until 29 November 2006 when the solicitor for the first respondent filed a Notice of Ceasing to Act.  There has been no appearance for the first respondent on the hearing of the proceedings.  The second and third respondents were formerly represented by the same solicitor but he has ceased to act for them also. 

11. The second and third respondents have appeared in person on the hearing of the proceedings.  In Malouf v Malouf (2006) 65 NSWLR 449 at [183], Bryson JA said amongst other things:

    ‘Courts should not go so far in accommodating the positions of unrepresented litigants as to make it an advantageous procedural step to dismiss one's lawyers, or to retain none.’

    I am conscious of the observation made by Bryson JA to which reference has been made. 

12. In relation to the admissibility of parts of the affidavit of the second applicant sworn 30 October 2006, which is presently being read by counsel for the applicants, the second and third respondents have taken objection to parts of the affidavit by handing up to the Court and making available for inspection by the applicants a marked copy of the affidavit of the second applicant against which words have been recorded indicating which parts of the affidavit are objected to and the relevant grounds of objection.

13. In the affidavit of the second applicant there are a number of separate paragraphs appearing under the marginal heading ‘Representations’.  In respect of an objection which has been taken to paragraph 62(i) of the affidavit a notation appears in blue ink on the marked copy of the affidavit reading ‘entire section - opinion s 76 no basis for each statement of the facts supporting each assertion need to be proved’.  There is a further notation ‘s 135 no facts to support assertions’.  There is on the following page, still dealing with paragraph 62 of the affidavit, the words in blue ink ‘she cannot speak on behalf of NAGS’ and there is then an arrow indicating ‘not an authorised officer’. 

14. It would appear that the second applicant is, or holds herself out to be the financial controller of the first applicant and she was, according to her evidence, a director of the first applicant until February 2005.  It will be appreciated that, at the time when the relevant publication was made, she was not in such a position.  I have been informed by senior counsel for the applicants that one of the reasons why the second applicant ceased to be a director was that she, by virtue of a conviction for a customs offence, had became disqualified from holding an office in relation to the company in accordance with the Corporations Act 2001 (Cth).

15. In the relevant part of the affidavit to which objection has been taken the deponent did not purport to record facts from which conclusions might be drawn in relation to the manner in which the first applicant conducted its business.  Rather, the relevant paragraph addressed what the applicants in their pleading asserted to be the representations or imputations, said to arise from the facsimile, and dealt with the matters not by reference even to the terms of the representation as alleged and did so in a conclusory form.  The relevant part to which objection is taken in the affidavit reads:

    ‘62.As to each of the (relevant) representations in paragraph 7 of the Third Further Amended Statement of Claim:

    (i)Representation 7(b) is not true.  NAGS did not conduct its business unfairly and was not selling products at unrealistic prices nor below costs in order to gain market control.’

16. In my opinion the material to which objection has been taken falls foul of the opinion evidence rule (s 76 Evidence Act 1995 (Cth) (‘the Evidence Act’). It does not come within the exception for which lay opinion is permitted under s 78 of the Evidence Act and it does not record the facts upon which the opinion is based or, applying a Makita (Australia) Pty Ltd v Sproules (2001) 52 NSWLR 705 approach, any reasoning to support the conclusion which is expressed.

17. An observation that a company did not conduct its business unfairly is plainly a matter of opinion, and, were it otherwise admissible, I would exercise my discretion under s 135 of the Evidence Act to exclude it. In relation to the expression that the first respondent ‘was not selling products at unrealistic prices nor below costs in order to gain market control’ in my opinion it is again a matter of opinion which is excluded by the opinion rule. It is not covered by the exception for which s 78 provides and again, were it a matter of discretion, I would reject the evidence under s 135 of the Evidence Act.

18. From the very terms of the affidavit itself it is evident that it was not within the competence of a person who was the financial controller to express an opinion as to what was the purpose of the company in setting prices at whatever level it may have set those prices. 

19. Accordingly I reject subparagraph 62(i) of the affidavit of the second applicant and, to the extent to which it is necessary to do so, I would reject the preamble but the preamble, may have some appropriate evidentiary quality in respect of other parts of the paragraph.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham.

Associate:
Dated:        6 December 2006

Counsel for the Applicants:	S M Littlemore QC and A A Henskens
Solicitors for the Applicants:	Robert Yip & Co
The first respondent did not appear
The second respondent appeared in person
The third respondent appeared in person
Dates of Hearing:	4, 5, 6 December 2006
Date of Judgment:	6 December 2006