Newark Pty Ltd v Civil & Civic Pty Ltd

[1988] FCA 85

,’*. ,

C A ’ r C H W O R D S

PRACTICE - shadowy claim - varying bases of c l a m put forward -

federal basls of	claim originally made groundless	-	struck
out.

PRACTICE - security for costs - appllcant company insolvent -

undertaking by llquidator to pay costs requlred.

Trade Practlces Act 1974, 5.52

Newark PtV. Ltd. (Receivers Appointed)(In Llquldatlon)
v. Civll & Clvlc Pty. Ltd. & Anor.

Qld G86 of 1927

IN THE FEDERAL COURT OF AUSTRALIA )

OUEENSLAND DISTRICT REGISTRY ) QLD G86 of 1987

GENERAL DIVISION )

BETWEEN:  NEWARK PTY. LTD. (RECEIVERS APPOINTED)(IN
LIOUIDATION)

Applicant

AND: CIVIL & CIVIC PTY. LTD.

Flrst Respondent

AND:  JOSEPH MICHAEL THORPY

Second Respondent

MINUTES OF ORDER

PINCUS ORDER: MAKIN JUDGE J.

DATE OF ORDER:  9 MARCH 1988

MADE:	WHERE	BR I	S EANE
THE COURT ORDERS THAT:

1. the principal appllcatlon be struck out; and

2. the applicant pay the respondents’ costs of and

incldental to the proceedmgs, to be taxed.

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

QLD G86 of 1987

BETWEEN:	NEWARK PTY. LTD. (RECEIVERS APPOINTED)(IN
LIOUIDATION)

Applicant

AND:  CIVIL & CIVIC PTY. LTD.

Flrst Respondent

AND:  JOSEPH MICHAEL THORPY

Second Respondent

PINCUS J. 9 MARCH 1988

REASONS FOR JUDGMENT

There are before me appllcatlons for securlty for costs

by each of the two respondents, and a motion for ~udgment by the

first respondent, the latter being supported by the second

respondent. The appllcatlons I have mentloned were flled in that

order, but it is convenlent to conslder the latter flrst

Mr H. Fraser, for the flrst respondent, argued that the

appllcant has no case on Its present pleadlng whlch claims relief

under 5.52 of the Trade Practices Act	1974.	He sald, in effect,
that the Court	has before It two reports,	and only two, by experts

selected by the applicant and each makes it plain that the
applicant's case is misconceived.

The flrst of the reports to which I refer was obtained

from a Court-appointed expert. The second was obtalned by the

applicant, apparently as a counter to the first respondent's

attempt to have the claim struck out.

The first step in analysis of the problem 15, of course, to define what the applicant's case is. That is no easy task.

The applicant is a tlllng contractor, whlch did work on

a large buildlng recently erected in Brisbane. Putting the matter

very broadly, its case is based on an assertion that sheets of

tlles supplied to it to	do the	work were slightly larger than
those promlsed it.

The statement of clam 1 s a falrly elaborate document,

but I wlll try to epltomlse It. The appllcant pleads that it was invited to tender to supply and flx ceramlc wall and floor tlles

and cement rer.der	In respect of a certaln buildlng, and that It
was falsely told that the second respondent would supply sheets	of
tiles of a certaln slze. A sample was produced	to the appllcant's

agent, so the pleadlng says, of 48 mm X 48 mm tiles afflxed to a

sheet measurlng in total 300 mm X 300 mm. Further, the pleadng

says that the tlles to be supplled were described ln the relevant

contract as "Nommal 50 mm X 50 mm 300 mm square sheets".

The pleading says that the applicant complamed that the

tiles actually supplled measured 304 mm	X 304 mm. so presumably
one is Intended to infer that that is the applicant's case	- that
is, a comp1,aint of the difference between	300 X 300 and 304 X 304
mm sheets.

It is not, of course, immediately obvious to one

unversed In the matter, why the extra 4 mm should have made any

difference and the pleadlng glves no h m t about that. It was at

one stage asserted on behalf of the applicant that the 300 mm	X
300 mm sheets would have	fltted wlthout cuttlng in the spaces to

be tlled, but that (rather improbable, on the face of it)

assertion has been abandoned.	The case now appears to relate to
the extent and nature	of the cutting requlred; it still puts
forward the idea that the appllcant expected sheets of	"nominal"
300 mm X 300 mm size to be exactly that	s1z.e - surely an
absurdity.

I should mentlon that something was sought to be made,

on behalf of the appllcant, of the fact that no particulars of

loss were sought by the respondents, beyond those supplled. In	my
oplnlon, that clrcumstance nelther excuses the absence from the
pleadlng of any allegatlon as to what difference the extra	4 mm 1 s

s a d to have made, nor bears upon the present resolution	of that
questlon.

The Court-appolnted expert sald In hls report that the

term "nominal" in the expression "nominal 50 mm X 50 mm on 300 mm

square sheets" means that the tile sheets are approxmately the

sizes stated. If you looked at the tiles laid, he said, they would measure about 304 mm over six tiles - i.e. over one sheet. That expert thought they could be described as "nominal 50 mm X

50 mm in 300 mm square sheets", and that the extra	4 mm would not
be likely to add to the cost	f laying.

It should be added that before the Court-appointed

expert gave his report, sollcitors for the appllcant wrote to hlm

saying:

"Our cllent's case is for the delays occasloned by

the dissatlsfactlon of Civil & Civic Pty. Ltd. with

the set out of the tilmg work undertaken by our

cllent. "

(Civll & Clvlc Pty. Ltd. 1 s the first respondent. ) If that is the

applicant's case, it	1 s dlfflcult to understand	the form of the
statement of	clalm which, m 18 pages,	together with long

partlculars of loss, makes no such suggestion.

In the second report, to which I have referred above, ~t

1 s said In effect that "nomlnal" means "modular". That 1s

obvlously Incorrect, but ln my	oplnlon,	the	polnt is	of	no
consequence.

The second expert sald he had a sample of part of a

sheet "stated as belng submitted to a meetmg on 5 December 1984".

That 1s the date on whlch, according to the pleading, the sample

relied on by the applicant was produced. He thought a whole sheet of the tiles as per sample would be 303.6 mm - not 300 mm as the pleading appears to say. The report goes on to explain that if the tiles had been supplied in accordance with the sample "cutting

of tiles was inevltable". The expert says that if the

draftsperson had drawn the building	up differently, there would
have been no	need for cuts, but nothlng In the pleading attacks

the drafting of the plans. Again, he says that the first

respondent should not have directed (as it apparently dld) certain

tiles to be pulled up and relaid.	There	is no complaint about
that in the pleading, either.

There is also elaborate analysis, in the report, of how

certain tile samples fitted Into certam spaces, but the expert

does not say that over the	work as a whole, tiles of exactly
300 mm X 300 mm would have been better, or worse,	than those
actually supplied.

In the course of discusslng the matter, however, counsel

for the appllcant told	me that it was to be asserted that a chaln
of causatlon could be relied	on by the appllcant along these
lines: if the sheets supplled	had been smaller, then the flrst

respondent would not have glven the wrongful dlrectlon mentioned

above and therefore (indirectly) the wrongful directlon can be

sued for as a consequence of supply of the wrong size of sheets of

tlles.

It appears to me that the case based on the sample 1 s

gone. There is no suggestion that any evidence might be available

to counter the clear evidence	from the applicant's expert	that the
sample supplied was of a sheet exceedlng 300 mm	X 300 mm.	The
case has to	be that the word	"nominal" really means "exact" and

that if the contract had been complied wlth and sheets of

. . 6

preclsely 300 mm X 300 mm been supplied, a better result for the

applicant would have ensued.

It seems plain that the applicant has no evidence to

show that. It would lndeed be dlfficult to prove,	as a matter of
common sense.

The applicant's case in this Court seems to me to have

no substance. It may be that it has a good claim agalnst the

flrst respondent for glvlng	a wrong direction under the contract,
but It has not made that claim, nor	has it made the delay claim

whlch It told the Court-appointed expert was its case.

Mr Morrls, for the appllcant, argued, In effect, that

there must be a very strong case to warrant strlklng a clalm out

on such a basls as 1s set up; I agree. Some remarks made by

Sheppard J. relevant to thls sub~ect are In the recent, but

unreported, declslon of Tytel Pty Llmlted v. Australlan

Telecommunlcatlons Commlsslon ( 1 2 February 1988). In considering

the question whether ~olnder of a particular party should be

allowed, hls Honour remarked: 

"It is	no light matter to prevent	a	party from
pursuing a case at the	threshold	of	the

proceedings. On the other hand, if the case is

clear, as I believe this one IS, the Court should

not hesitate to bring litigatlon to an end. As it

is, this case will take months of preparatlon and

many weeks of hearing. A n order for costs will not

provide the successful party wlth a complete

indemnity. Solicltor and client costs usually

substantially exceed party and party costs. ...

the cost of litigation is so great, the burden of

it on parties' time is so substantial and the lists

of Courts such as this are so congested that, if

the case is an appropriate case, the Court should

not shrink from	making the appropriate order."
This case is not	as weighty as that of which Sheppard J.

spoke. Nevertheless, in my n e w , the respondents should not be

pestered with thls strange litiqatlon any more. In its inceptlon, it was founded (as a matter of jurisdiction) on the idea that the

sample sheet of tiles was 300 mm X 300 mm. The sult's reason for

bemq now 1 s the theory that if the sheets of tlles had been

slightly smaller, there would have been less likelihood of the

flrst respondents (In breach of contract) making an improper

direction. It should be added that there appears to be no

suggestion that the work covered by the direction was not paid

for.

In my oplnxon, the proceedlnqs should be struck out

because :

1. The Trade Practlces ACE foundatlon of the case has no

substance.

2. The claim whlch the applicant now appears to wish to brlng 1 s

for damages for breach of contract for qlvinq a wrong

directlon - a clalm not made in the present pleadlnq, and one
having nothmg to do with federal law.

3 .    It is said that if the tile sheets had been sllghtly smaller, there would have been less likelihood of that breach of contract; that case has never been pleaded and seems to me fanciful. No application for amendment is made.

a .

The conclusion at which I have arrived makes It

unnecessary to consider the appllcations for security. However,

In the clrcumstances it is desirable to say what	I would have done
with them.

The case is one in which the respondents' right to

security could not	be disputed; the appllcant	1s Insolvent and in
liquldation. There	1s no need to	have resort to the shadowy

nature of the clalm, as analysed above, in exerclslng discretlon.

There has been some debate before me as to the

approprlate sum and it has been suggested that a cash security

should be put up. Had I not been of the view that the application

should slrnply be struck	out, I would have ordered that the
proceedings be forever stayed unless there were flled wlthln	21

days an undertaklng under seal by the llquldator Desmond Wllllam Xnlght, mentloned in par.l(c) of the statement of clalm, to pay

any costs ordered to be pald to the respondents but not recovered

from the appllcant company.

The order wlll be that the prlncipal appllcatlon be

struck out and that the applicant pay the respondents' costs of

and incldental to the proceedlngs, to be taxed.

f certlfy that this and the 7 prc:cedlng

pages are a true copy of rhe reasons for

luc'gment hcreln of His Honour

M r Justlce Pincus +