Schindler Lifts Australia Pty Ltd v Debelak

Re: SCHINDLER LIFTS AUSTRALIA PTY LIMITED AND PRECISION ELEVATORS
PTY LIMITED
And: MILAN DEBELAK; KEVIN ADDISON; LIFTRONIC PTY LIMITED; VLADIMIR
DEBELAK AND RAVILA PTY LIMITED
No. VG253 of 1985
FED No. 439
Trade Practices-Practice-Defamation-Tort-Master and Servant-Trusts-
Contract-Confidential Information-Injunction-Damages-Costs
15 IPR 129

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Pincus J.(1)

CATCHWORDS

Trade Practices - misleading or deceptive conduct - denigration of services available from competitor - application of s.53 - test applicable where criticism of competitor.

Practice - pleadings - large complex action - many representations pleaded - issues litigated but not pleaded - whether representations should be considered that are not pleaded.

Defamation - imputations that competitor not well regarded and incompetent - negative equivalent of puffery - whether results in loss of reputation.

Tort - injurious falsehood - criticism of competitor - whether malicious although made with intention of getting business - whether lack of belief in truth of statements about competitor shows malice.

Tort - inducing breach of contract - customers of competitor induced to terminate or not enter maintenance contracts - what degree of knowledge of contract required - intention - whether knowledge of work done implies knowledge of continuing contract - whether general soliciting of business unlawful.

Tort - inducing breach of contract - "agent" for overseas companies - no written agreement - course of dealings - whether contract.

Master and Servant - employee caused overseas supplier to change allegiance - whether breach of implied obligation to employer.

Trusts - constructive trust - breach of obligation by employees - overseas supplier induced to give agency to newly formed company - working against interest of employer - conflict of interest and duty - account of profits - what benefits flowed from breach.

Master and Servant - duty to employer - working part-time for competitor - relevance of reciprocal duties of employer.

Contract - restrictive covenant - overlapping promises - whether uncertain.

Contract - restrictive covenant - covenant by vendor of minority interest in company - "engaged in any business" - whether provision of finance constituted being engaged in the business - whether term should be implied not to derogate from performance of the sale contract.

Confidential Information - use of customer lists after leaving employment - whether implied term in employment contract not to use information after termination of employment - factors to determine if information confidential.

Injunction - specific illegalities - whether injunction of practical value - whether desirable to frame uncertain injunction.

Damages - elaborate case successful on few heads - exaggerated claims - no rational foundation for accurate estimate of damages - whether Court should award any damages.

Costs - elaborate case successful on few heads - serious injustice if costs follow the event - discretion - method of assessment.

Trade Practices Act 1974, ss.52, 53, 55, 82

Restraints of Trade Act 1976 (NSW), s.4(1)

HEARING

SYDNEY

#DATE 10:8:1989

Counsel for the applicants: Mr R. Stitt Q.C. with Mr Lewisohn

Solicitors for the applicants: Madden Butler Elder Graham

Counsel for the respondents: Mr G.A. Palmer Q.C. with Mr B.W. Walker

Solicitors for the respondents: Michael Dunkel & Co.

ORDER

Judgment for the applicants against the first three respondents in the sum of $31,000.

That the respondents pay to the applicants costs fixed at $20,000.

That if any party notifies the Court in writing on or before 17 August 1989 that he or it wishes to be heard on costs, a date for hearing of argument on that question shall be fixed.

This judgment shall not be perfected until further order.

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

JUDGE1

In 1984, when this dispute had its genesis, the second applicant (Precision) was a small but prosperous company engaged in the business of installing and maintaining lifts. Its managing director, the fourth respondent (Vladimir), who had established the business and built it up with great ability, had considerable standing in the lift industry. He also had a substantial shareholding in Precision, as did his family company; however, others had the majority shareholding. Vladimir's interest in the business was not merely financial; he was proud of what he had wrought and of Precision's reputation. His brother Serge and his son, the first respondent (Milan), worked in the business and the latter, I think, expected to make his career with Precision, as his father had.

A substantial Swiss-based lift group, by its Australian subsidiary (Schindler), decided to take over Precision. Vladimir did not want to sell, but the majority shareholders wished to do so, so that in a practical sense his hand was forced. A takeover eventuated but did not go well. It was necessary to mesh the operations of the two companies. There was personal friction and some of the Precision employees resented the change which had taken place, and the new authority which Schindler executives had the right to exert. Personal relations between Schindler's general manager, D.J. Reilly, and Vladimir were, however, good.
Milan decided to leave Precision and commence a competing company. The second respondent (Addison) went with him and later other Precision employees followed. Milan set up a company in which he had the major shareholding and Addison a minor shareholding: the third respondent (Liftronic).
Liftronic attempted to attract business from Precision customers by comparing the service available from Precision unfavourably with that which Liftronic could provide. These approaches were resented by Precision's new owner (Schindler), both because some of what was said to the customers was thought to be untruthful, and because Schindler believed that Liftronic personnel had used confidential information, which they had obtained as Precision employees, in their attempts to get business. Another and separate cause of discontent was that foreign lift companies which had formerly used Precision as their Australian agent ceased to do business with Precision and went over to Liftronic. For these and other reasons, Schindler's purchase of Precision was seen by it as a very unsatisfactory venture; the fact that Liftronic had been formed with some ex-Precision employees working for it and actively soliciting business from Precision customers was seen as a major cause of the trouble, but there were undoubtedly other causes.
After some time Vladimir decided to leave Precision and he became a part-time employee of Liftronic. He had entered into a contract restraining his activities, as part of the takeover arrangements; Schindler believed he had acted unlawfully in assisting Liftronic and working for it.
Precision went to its solicitors, and with the assistance of a great deal of advice from them, attempted to combat what it saw as the malign influence of Liftronic on its business. One of the major weapons, in the end, was the institution of proceedings in this Court. Precision, through its solicitors, went to an immense amount of trouble to gather evidence against Liftronic and those associated with Liftronic in an attempt to show illegalities of various sorts - misleading statements, defamation, inducement of breach of contract and so forth.
I think the takeover was less successful than was hoped for a number of reasons: because, quite apart from any legal considerations, some of the Precision personnel did not work in well with Schindler after the takeover; because Liftronic was formed (a step Milan and Addison were entitled to take) and provided competition directly attacking Precision's business; because Schindler was greatly distracted by the problem of Liftronic and its executives devoted an enormous amount of effort to combatting the Liftronic threat - more, I suspect, than it was worth; and because of what I believe were some illegal activities on the part of Liftronic and those associated with it.
In my opinion, however, the last group of causes (illegal activities on the part of the respondents) did not directly cause any great damage to the applicants. Schindler, which has, or has at least acted as if it has, considerable financial resources, has left no stone unturned in pursuing the respondents. Every conceivable cause of action which its lawyers thought arguable has been put forward and the evidence adduced on the issue of damages shows that Schindler spent large sums on legal costs. The legal costs of this dispute will substantially exceed the damages awarded. A considerable proportion of the legal costs was expended in activities which had, in the end, some connection with the pursuit of this litigation, but were principally related to Schindler's view that a suitable fighting post in this commercial battle with Liftronic was its lawyer's office.
The pleadings set up, and the evidence shows, that there were two relevant agreements. The first was made on 29 June 1984, and under it Schindler bought the shares in Precision from the then shareholders (Vladimir and others) for $6,046,000. The second agreement, whose date is precisely defined neither by the pleadings nor by the evidence, was made between Schindler and Vladimir as part of the arrangements for the takeover. Under the second agreement, Vladimir undertook to work for Schindler full-time until the end of 1984 and to work as a consultant until 30 June 1989.
The statement of claim, although not divided into sections, raises a number of distinct causes of action. In setting them out, I shall use the numbering of the paragraphs in the pleading.
Paragraphs 9-12. In this part of the pleading, the applicants set up that Milan, Addison and Liftronic made representations to potential customers, orally and in writing, which denigrated the services available from the applicants and praised those given by Liftronic. By this means, it was said, people were induced not to engage the applicants, or to terminate maintenance contracts with them. These representations were said to be contrary to s.52 of the Trade Practices Act 1974 - i.e. likely to mislead or deceive - and also contrary to s.55 of the Act. There are difficulties about the allegations in the pleading giving particulars of the falsity of these representations, but they are more conveniently discussed below.
Paragraph 13 says that Milan, Addison and Liftronic induced employees of Schindler to leave it and come to work for Liftronic and to provide confidential information to Milan, Addison and Liftronic, for use against the applicants.
Paragraph 14 alleges that Milan, Addison and Vladimir wrongly induced suppliers to the applicants, namely "Daldoss Elevetronic and Express Lifts U.K. Pty Ltd" to replace the applicants by Liftronic as agents in Australia and to stop supplying the applicants with their products.
Paragraphs 15, 16 and 17 say that Milan and Addison breached their obligations as employees of Precision to act faithfully and the like by causing the termination of the arrangements with the overseas suppliers just referred to (resulting in disruption and delay in deliveries by the overseas suppliers) deliberately causing equipment failures and neglecting their duties as regards customer maintenance, using (after leaving their employment) confidential information acquired during their employment and engaging in other contractual breaches of the same general kind.
Paragraph 18 alleges that Vladimir, or a company associated with him (the fifth respondent Ravila), had obligations to the applicants similar to those of Milan and Addison. It is said that they breached their obligations by, for example, making improper use of information, working for Liftronic and refusing to do work which Vladimir should have done for Precision. The pleading sets up that by the conduct complained of Vladimir or Ravila has breached the consultancy agreement and thereby repudiated it. The applicants seek repayment of remuneration paid under the consultancy agreement.
Paragraphs 22 and 23 say that the respondents conspired together to injure the applicants in their business affairs and commercial reputations, in that Vladimir provided Milan with capital to establish Liftronic and advised him how to do so, and in that Milan and Vladimir did other wrongful acts complained of in earlier passages in the pleading.
Paragraphs 24, 25 and 26 allege against Milan, Addison and Liftronic that they defamed the applicants by telling people that the first applicant was not of good commercial standing and the second applicant was not well regarded and other similar statements.
Paragraph 27 relies upon the statements just referred to as fraud and also as slander of goods.
Paragraphs 28, 29, 30 and 31 set up breaches by Vladimir of the agreements made by him in restraint of trade, express and implicit.
Paragraph 32 says that the applicants suffered loss of profit and other damage and paragraph 33 asserts that the respondents are chargeable as trustees for profits and gains made by them.
Further details of the allegations contained in the applicants' pleading and the answers on behalf of the respondents appear in the various sections of these reasons. Vladimir and Ravila have cross-claims for damages on the basis that Schindler failed to pay them amounts due under the consultancy agreement, and by repudiating that agreement caused Vladimir and Ravila a loss.
1. Misleading Conduct
The statement of claim, in its original form, alleged nine misrepresentations in paragraphs 9(a) to (i), the particulars of the respects in which they were misleading being in paragraph 11. By amendment, two further misrepresentations were put forward, paragraphs (ea) and (eb); later some language was deleted from paragraph 11. It is, in the circumstances, desirable to set out the relevant allegations in their final form:

"9. The First to Third Respondents from February 1985 have made representations to customers and potential customers of the Applicants that (contrary to the true facts):

(a) because of its acquisition by the First Applicant the Second Applicant was no longer a well regarded company or of good commercial standing;

(b) the First Applicant was not of good commercial standing;

(c) since the acquisition customers' lift maintenance and other requirements had been neglected and not satisfied by the Applicants, in breach of maintenance contracts;

(d) the Applicants did not have the technical expertise, proficiency and resources to maintain and service lifts that had been installed by the Second Applicant;

(e) replacement parts and materials required for proper lift maintenance could only be obtained from the Third Respondent and/or under a maintenance contract with it;

(ea) The Third Respondent had acquired the sole distribution rights for Gebauer A.G. of Switzerland for lift equipment and parts.

(eb) The Third Respondent by agreement with Express Lift Co. Limited of England had:

(i) been appointed its sole agent or alternatively its agent for supply in Australia of all lift equipment and, further or alternatively, spare parts manufactured by it;

(ii) had acquired the right of direct supply of all spare parts for equipment marketed by it.

(f) the Applicants did not, and would never have, the capacity to satisfy customers' lift maintenance and other service requirements;

(g) the Applicants did not, and would never have, the capacity properly to carry out maintenance contracts;

(h) the Third Respondent could supply lift maintenance services of a kind, standard, quality and price that the Applicants did not and could not supply;

(i) the Applicants' maintenance contracts and other services were unsuitable for customers and less suitable than the Third Respondent's. PARTICULARS Oral, written and to be implied. A. To the extent oral, to the effect alleged and stated in conversation between the First and Second Respondents with customers and potential customers, including those specified under paragraph 10. B. To the extent written, constituted by: .1 letters in the terms of a letter of 7 March 1985 to the Secretary, Strata Plan 13365 from the Third Respondent to customers and potential customers, including those specified under paragraph 10, and more than 50 others, including Montana Nursing Home; Departments of Industrial Relations, Public Works and Housing and Construction; Julius Poole & Gibson; Anka Builders Pty. Ltd.;

.2 letter of 24 July 1985 to Southern International Constructions Pty. Ltd. from Third Respondent and similar letters to others.

C. Otherwise to be implied from all the circumstances of the case and operation of law." "11. By reason of the misrepresentations in paragraph 9 (in the circumstances particularized) the First to Third Respondents did (and unless restrained will continue to) engage in conduct in trade and commerce that:

(a) was misleading or deceptive or likely to mislead or deceive;

(b) thereby contravened section 52 of Trade Practices Act 1974 ('the Act');

(c) was liable to mislead the public as to the nature, characteristics and suitability for their purpose of services provided by the Applicants and the Third Respondent;

(d) thereby contravened section 55 of the Act. PARTICULARS B. It was not disclosed that the services, terms and any apparent advantages offered to representees by the Third Respondent had arisen from or been facilitated by the First to Third Respondents' breaches of duty and wrongful conduct (as alleged in the Statement of Claim) towards the Applicants."

The respondents did not deal, in their submissions, with those of the pleaded misrepresentations which were not dealt with in the applicants' submissions; I propose to follow the same course. The respondents further contended that certain of the representations alleged in the applicants' submissions to have been made did not correspond with anything to be found in the statement of claim.
As to that point, it is my opinion that, in a case of this sort, the Court should ordinarily insist upon reasonably precise pleading and that any contention that a representation should be found in terms substantially different from those pleaded should be rejected. This strictness is justified because the hearing was conducted over two distinct periods, with a gap of months in between; there was ample opportunity to consider the necessity or desirability of any amendments to the statement of claim. The only misrepresentations to be considered, then, are those which are both pressed in the applicants' written submissions and covered by the pleading.

Different considerations apply to the particulars in para.11, which appears to have been ignored by the parties in conducting their cases. It will be noted from the terms of para.11, fully set out above, that statements are said to have been misleading only by reason of non-disclosure.
However, the written submissions made by the respondents (p 49-55) deal fully with the question of falsity; no doubt the submissions do so because of the way the hearing was conducted. I am driven to the conclusion that it is necessary to deal with the allegations of falsity advanced in argument, as opposed to the incongruous particulars; this point is discussed further, below.
The allegations of misrepresentation rely upon, inter alia, s.52 of the Trade Practices Act and s.55. The terms of the former are familiar enough; the latter reads:

"A person shall not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods."

Although flowing from the Paris Convention for the Protection of Industrial Property (see Donald and Heydon Trade Practices Law Vol.2 at p 618), s.55 is not in terms confined to misleading conduct connected with patents or the like.
The question arises whether s.55, read with s.82, gives an individual who can prove that the public has been misled a right to damages. I do not propose to go into that point, nor to deal with the question whether any misleading conduct relied on misled the public, as opposed to misleading certain individuals. The reason is that the terms of s.52 are such (with one possible reservation) as to catch any representation caught by s.55.
The possible reservation is that s.52 speaks of conduct that is "misleading or deceptive or is likely to mislead or deceive" whereas s.55 speaks of "conduct that is liable to mislead the public". It is I suppose conceivable that the word "liable" connotes a different degree of probability from the word "likely", but if so the difference is not sufficiently great to warrant s.55's being given separate treatment.
The applicants also set up (by para.12 of the statement of claim) a case of breaches of s.53, and in particular of paragraphs (a), (aa), (e), (f) and (g) of that section. Most of these appear to me to be inapposite. Those which are most relevant are (aa) and (f). The relevant part of s.53 read as follows:

"A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services -

...

(aa) falsely represent that services are of a particular standard, quality or grade; ...

(f) make a false or misleading representation concerning the need for any goods or services; ...

..."

It may be that in some respects s.53 goes beyond what is proscribed by s.52. Although s.52(2) prevents one from using s.53 to limit the generality of s.52(1), in the circumstances of this case it does not appear to me that the applicants gain from s.53 anything which they may not obtain from s.52(1). To put that more particularly, insofar as the applicants are able to show that the respondents misleadingly or deceptively put before the customers assertions designed to convince them that they would be better off using Liftronic to maintain their lifts, that is caught by s.52(1) and it is of no consequence whether it is also caught by s.53.
The representations relied on, so far as set out in writing in the applicants' submissions, are as follows:

(a) because of its acquisition by Schindler, Precision was no longer a well-regarded company or of good commercial standing;

(b) Schindler was not of good commercial standing;

(c) replacement parts and materials required for proper lift maintenance could only be obtained from Liftronic and/or under a maintenance contract with it;

(d) Liftronic had sole rights of distribution for Gebauer A.G. of Switzerland for lift equipment and parts.

These representations, which correspond with those in subparas.(a), (b), (e) and (ea) of para.9 of the statement of claim, are said to be able to be derived from letters sent to customers; they took two basic forms.
The first was a "letter of introduction" which was sent to at least 500 prospective customers between 21 February 1985 and 10 April 1985. The relevant part of a typical letter read as follows:

"It is with pleasure that I draw your attention to the fact that a new elevator Company, LIFTRONIC PTY. LIMITED has now opened for business. My partner, Mr Kevin Addison and I have had many years experience holding supervisory and management positions in Sales, Installation and Maintenance in the lift industry.

We were formerly with Precision Elevators Pty. Limited which was always very highly regarded, until the sale of the company to a large overseas Multi-National in June 1984.

LIFTRONIC PTY. LIMITED is a wholly Australian owned company and we have acquired the sole distribution rights for:-

1. DALDOSS ELEVTRONIC - ITALY For the standard microlift range of electronic service lifts and document lifts.

2. GEBAUER AG - SWITZERLAND

For high quality equipment for passenger and goods lifts.

We have also negotiated and acquired from The Express Lift Company the direct supply of all Express parts ..."

The letters of introduction on this pattern sent at various times were not in precisely the same form, but the variations do not seem to me great enough to warrant detailed analysis. It should be mentioned, however, that in exhibit 70 (sent to the Property Manager, Manufacturer's Mutual Insurance Ltd, on 20 May 1985), there is no mention of Precision Elevators Pty Limited having been "always very highly regarded". It appears that the later form of letter of introduction was toned down, in response to complaints by the applicants; but the letter from which I have quoted is representative of the bulk of the correspondence of which complaint is made.
As to representation (a), set out above from the applicants' submissions, there is a clear implication in the third paragraph of the quoted letter that Precision Elevators Pty Limited was not, at the time of writing, very highly regarded. I reject the notion that the words "until the sale ..." are merely descriptive of the history of Milan and Addison.
But suppose the assertion that Precision Elevators Pty Limited "is not very highly regarded" were made expressly - would that be unlawful? The question is not to be considered in the abstract, but in its context, namely that the reader is aware that the assertion comes from a competitor and is made in the same sentence as that which conveys the information that Precision has been sold to a large overseas multinational.
In De Beers Abrasive Products Ltd. v. International General Electric Co. of New York Ltd. (1975) 1 WLR 972, the plaintiffs complained of, inter alia, slander of goods. The material complained of compared the plaintiff's product with that of the defendant. In his judgment Walton J., at p 978, suggested that the trader's entitlement to puff his own goods "extends to other vague commendatory statements about goods or services on offer". The judge was of opinion that:

"Where ... the situation is not that the trader is puffing his own goods, but turns to denigrate those of his rival, then, in my opinion, the situation is not so clear cut."

The test suggested was "whether a reasonable man would take the claim being made as a serious claim or not". If by "serious" is meant "likely to cause a person who is seriously interested to change his view", I would agree.

A claim by a trader that his goods or services are "highly regarded" would ordinarily be taken to be mere puffery. A statement to contrary effect about a rival's goods should not be held to overstep the permissible limits of denigration, to adapt the language of Walton J. in the De Beers case. It has to be conceded that a statement by a rival about a trader which is universally acknowledged as pre-eminent in its field that it is "not highly regarded" might be a breach of s.52, as being simply a lie. In my opinion, however, in the circumstances of this case, to treat statements such as that in which the words complained of are contained as within the prohibition in s.52 would be to place unreasonable legal inhibition on ordinary communication in Australian business. I hold that the relevant sentence is not caught by the section.
It is also submitted by the applicant the letter conveys that Precision is "no longer ... of good commercial standing". It does not say that, nor necessarily imply it.
The next assertion, (b), also fails. I am unable to derive from the letter a statement that Schindler is not of good commercial standing. The sentence in question says that Precision has been sold "to a large overseas multinational", a description probably not intended to be flattering, but one far from conveying the meaning that the company to which it has been applied is of bad commercial standing.
The next submission relates to the question of lift maintenance. It is true that some readers of the letter, who knew or believed that the lift in their building depended for its maintenance on parts from one of the three foreign entities mentioned, might become concerned about the availability of parts. But the submission made is correct only if one can rationally derive from the letter that maintenance parts cannot be obtained otherwise than from Liftronic. In my opinion, although some might possibly take this from the letter, that is not its proper meaning. To say that one has the "sole distribution rights" means of course that one is the distributor - i.e. a vendor to others - but does not imply that those to whom the distributor sells must necessarily be members of the public, rather than companies which maintain lifts.
The remaining submission, (d), about the letter from which I have quoted appears to me to be made out. As to that, the only question is whether the representation was true; was it true to say that Liftronic had sole rights of distribution from Gebauer A.G.? It is my view that the statement was not proved to be, in substance, untrue.
The second complaint of misrepresentation requiring consideration relates to a letter of a different kind. It is one dated 24 July 1985 from Liftronic to a potential client, Southern International Constructions Pty Ltd, the relevant parts of which read as follows:

"...

As you are aware the lifts installed at 100 Christie St, were manufactured by the 'Express Lift Company' (sic) England and installed by Precision Elevators. When Precision Elevators was sold in June 1984, the Express Lift Company withdrew the agency from Precision Elevators and its purchaser. Liftronic Pty. Limited is now the agent for Express equipment in Australia.

After discussions with the Managing Director of Express earlier this year in Sydney, he reassured us that Express will support us in every way possible to resolve the problems at Christie St., as you can see this has been reconfirmed as per the enclosed letter and telexes.

Liftronic have the employees and technical backup to repair the lifts so that they may operate as intended. Since the control system of these lifts is programmed and microprocessor controlled any alterations made to the system without the technical back-up and direct access to spare parts (only available from Express) can compound the problems already encountered. The longer these problems are left unattended, the worse they will become.

..."

As to this letter, it is unnecessary to discuss (a), (b) and (d) in the submissions, but some attention requires to be paid to (c). It is true that the letter does not expressly state what is set out in (c), but that is not the end of the matter; the impression the letter gives is that lifts made by the Express Lift Company cannot be properly maintained except by using the services of Liftronic. The respondents have submitted that the letter "simply states truthfully the position as between Liftronic and its overseas suppliers". That may be so literally, but the truth was that Precision could still obtain parts for Express Lifts, so in my opinion the letter was designed to mislead and probably did do so.
In my opinion, in the respect just mentioned, there is a breach of s.52 of the Act.
Third and last, the group of submissions based on s.52 has to do with alleged oral representations. There are said to be four misleading statements:

(a) Schindler was technically incompetent and would have problems with the supply of spare parts and equipment;

(b) Schindler would run out of parts and equipment for the lifts;

(c) Schindler would not have the expertise to service the lifts;

(d) Schindler would not have the technical competence to fulfil its contract but Liftronic did have such competence.

There was a considerable quantity of evidence concerning these oral representations. Its effect is difficult to summarize, but some samples must be set out.
Mr David Kenny of Southern International Constructions Pty Limited (the party to which the letter dated 24 July 1985 dealt with above was addressed) made an affidavit saying that he received a telephone call from Milan about the end of 1985 asking that Liftronic be allowed to quote to maintain lifts at 100 Christie Street. According to the affidavit, Milan said that Schindler was not able properly to service the lift because of lack of technical know-how to maintain the particular micro-processor in question. In his oral evidence, Kenny added that Milan said that "the people that were currently trying to fix it ... would probably cause further damage through their lack of knowledge and incompetence". The conversation and the letter alarmed Kenny. B.C. Simmonds of S.P. Hilton and Co. Pty Limited received correspondence from Liftronic in much the usual form soliciting business and was later approached by Addison. Simmonds swore that Addison told him that within twelve months Schindler's reserve of spare parts would run out as a result of the acquisition by Liftronic of the sole agency from Express. In his oral evidence Simmonds said that Addison's statements caused him a great deal of concern. However, in the result, Liftronic obtained no business by these approaches.
Mr P. Arthur of R.B. Kerr (Group) Pty Ltd also gave evidence of an approach by Milan concerning 100 Christie Street. Milan claimed, according to Arthur, that Liftronic as the agents for Express in Australia, were "the only people who can get the bugs out of the lifts" and that Schindler would have great difficulties in doing so.
R.J. Coutts of the same company had a rather similar approach, from Addison. Coutts' evidence was to the effect that there were said to be two problems: the fact that the Schindler people lacked experience with Express equipment and that Schindler would have difficulty in obtaining spare parts. Miss J.R. Alexander, a body corporate secretary, attributed to an unidentified gentleman from Precision Elevators statements of a similar character.
It appears to me that the customers' responses to Liftronic's approaches are illustrated by a letter from Southern International Constructions Pty Ltd to Schindler dated 8 August 1985 to the effect that Liftronic suggested that Schindler "may not have the expertise to properly carry out maintenance and repairs to the Express lifts and may not even be able to obtain spare parts". It expressed concern and asked for assurances.
The principal evidence advanced by way of refutation of the applicants' case on this aspect was that of Milan and Addison. Of the two, Addison was by far the more impressive witness, but there is no sound reason for accepting either of them as to this aspect of the case against the evidence of disinterested persons, some of whom I have mentioned.
That is, I am satisfied that oral representations were made to customers along the lines set out in (a), (b), (c) and (d), above.
It is necessary at this point to make some reference to the course which the process of pleading took. The statement of claim originally filed in November 1986, after pleading the representations, alleged (in para.11) that they were misleading or deceptive under s.52 and also misleading under s.55. It particularised this allegation by saying, in effect, that supply of equipment and parts was withheld except after deliberate undue delay and at unprofitable prices and also alleging that it was not disclosed that -

"... the services, terms and any apparent advantages offered to representees by the Third Respondent

(Liftronic) had arisen from or been facilitated by the First to Third Respondents' breaches of duty and wrongful conduct (as alleged in the Statement of Claim) towards the Applicants."

By amendment made during the trial, the reference to particular 10B was deleted, as was that paragraph itself.
At that point then, the statement of claim took on a curious shape: it alleged that misleading statements were made about (to put it shortly) the advantages to be gained from using Liftronic for maintenance and the disadvantages likely to be incurred from using the applicants for maintenance, but the only particular respect in which, according to the pleading, those statements were misleading or deceptive was that just quoted - i.e. in summary, that any problems the applicants had as to maintenance were due to the respondents' misdeeds. The pleading did not assert that it was untrue that the applicants had difficulties with maintenance.
What I think the applicants meant to plead was that the assertions about their problems in maintaining lifts were, in any event, overstated - not that they were merely misleading in attributing a wrong cause to the applicants' problems. I have no hesitation in rejecting the applicants' case as pleaded in para.11. It seems to me fanciful to suggest that (if the representations were otherwise correct) they would have become misleading as failing to point out to customers that Liftronic had so arranged matters that the applicants could not do their maintenance work properly, but the matter does not stop there. With some regret, I feel obliged to hold that the question of the factual accuracy of the oral representations I have found to have been made was litigated, although not raised by the pleadings. For example, in para.6.5.2 (p 53) of the respondents' written submissions it is said:

"No evidence has been adduced to the effect that SLA in fact had sufficient familiarity with the new types of lifts in Christie Street to fix them. The whole history of that job demonstrates the truth of the assertion that SLA might have technical difficulties in solving the problems ..."

Then it is submitted (p 54) that such statements as to parts as were made were true.
I am further of the opinion that, on that issue, the applicants should succeed. That is, I find that the oral statements made whose effect is summarised in paras.(a), (b), (c) and (d) above were misleading. In particular, they tended to convey to customers, contrary to the truth, not merely that there might be some delay obtaining spare parts, but that they might simply be never available to the applicants; further, they tended to convey that the applicants would be technically incapable of performing lift maintenance properly; I find that not to be so.

The question of the losses suffered by the applicants as a result of the misleading statements I have found to have been made is dealt with separately.
2. Defamation
The applicants' submissions rely upon the letters referred to above and the oral statements as constituting actionable defamation. However, the relevant paragraphs of the statement of claim rely, in this connection, only upon the letters of introduction. The relevant allegation of publication is as follows:

"In and after March 1985 the First to Third Respondents in Sydney, by letters to installation and maintenance customers of the Applicants, published of and concerning the Applicants the following 'the relevant words': 'Dear Sir,

... a new elevator company, Liftronic Pty. Ltd. has now opened for business.

My partner, Mr Kevin Addison and I have had many years experience holding supervisory and management positions in Sales, Installation and Maintenance in the lift industry. We were formerly with Precision Elevators Pty. Limited which was always very highly regarded, until the sale of the company to a large overseas Multi-National in June 1984. Liftronic Pty. Limited is a wholly Australian owned company ....

Yours faithfully,

Liftronic Pty. Limited

(signed)

Milan Debelak

Managing Director'"

The pleading alleges that persons to whom these words were published were aware of certain facts (set out in para.25) and that certain imputations defamatory of the applicants were conveyed by the words. These were, in substance, that the applicants were neither well-regarded, nor of good commercial standing, nor competent to carry out lift installation and maintenance.
The respondents have, in their submissions, taken the point that the oral statements relied on in connection with the Trade Practices Act are not pleaded as being defamatory.
I can see no reason, as to this cause of action, for permitting the applicants to go beyond the ambit of the statement of claim, and I hold that the respondents' submission on the point is correct. One reason for doing so is that the applicants' strategy has been to plead every possible cause of action in pursuit of their aim to obtain satisfaction from the respondents. While their entitlement to do so must be admitted, it does not appear to be a sound policy to allow distinct grounds of complaint to be raised by way of submission at the conclusion of the hearing.
The respondents further contended that the words complained of by the applicants should not be read as implying that Precision is no longer highly regarded. I do not accept this contention.
The respondents would have me hold that the true bearing of the letter is merely to suggest that Precision ceased to exist as a separate business when it was sold. The matter is largely one of impression, and I do not think that the matters pleaded to support the innuendos set up add anything, nor do I find it necessary to set them out. The question is whether the letter is defamatory of the second applicant, Precision, as implying that Precision is no longer very highly regarded.
Lord Blackburn said in The Capital and Counties Bank, Limited v. George Henty & Sons (1882) 7 App Cas 741 at 771:

"A libel for which an action will lie, is defined to be a written statement published without lawful justification, or excuse, calculated to convey to those to whom it is published an imputation on the plaintiffs, injurious to them in their trade, or holding them up to hatred, contempt, or ridicule."

The statement in question is, if defamatory, in the former category - i.e. while there would be no question of the statement engendering hatred, contempt or ridicule, it is arguably of a kind calculated to be injurious to Precision in its trade; it reflects to some extent on the reputation of Precision although not in a particularly effective way.
Justification is not pleaded, nor is it suggested that any issue as to privilege arises for consideration. As a matter of practicality, it seems odd to sue on such a letter as being, in this respect, defamatory. For a competitor openly seeking business to write that a rival company is not "highly regarded" - the implication I have taken from the letter - is, if a libel, about as slight a libel as one could postulate. In my opinion, it is not one; it is the negative equivalent of puffery. In my view, it is not likely to have resulted in any loss of reputation: cf. Sim v. Stretch (1936) 52 TLR 669 at 672 (Lord Atkin).
3. Injurious Falsehood
For reasons which are not clear to me, while the applicants' pleading relies, as to defamation, only upon the letter from which I have quoted above, their injurious falsehood case depends on all the same statements as have been pleaded in the causes of action under the Trade Practices Act. That is, the applicants say that those statements were published falsely and maliciously.
The particulars as to falsity are that paragraph 9 is incorporated. In fact, paragraph 9 gives no particulars of falsity and makes no allegation of falsity. Probably what the pleader meant to incorporate was para.11, whose incompleteness in this respect is discussed above. Without going over the same ground, I conclude that I should overlook the absence of any sensible particulars of falsity, as I consider that the question of falsity was, in a practical sense, placed in issue.
The applicants submitted that there was malice consisting in three elements, which may be summarised as follows: firstly, there was an attempt to attract business; secondly, there was a purpose of damaging the applicants commercially; thirdly, Milan and Addison both knew that their disparagement of the applicants was false. The respondents assert that since damage is not a consequential matter, but the gist of the action, it must also be proved. In my opinion, it is convenient to leave the question of damage to be discussed under a separate heading.
The respondents' principal contention in answer to this part of the applicants' claim is that there was no malice. That is so, the respondents say, because Milan and Addison had a reasonable basis for believing the truth of the statements, whose making was motivated purely by a desire to get business.
The decision in De Beers Abrasive Products Ltd v. International General Electric Co of New York Ltd (1975) 1 WLR 972, to which reference is made above, was given on an application to strike out a pleading. It contains, however, a useful review of English authority to that date concerning statements of the kind here in issue. It is unnecessary to summarize Walton J.'s account of the cases. What it demonstrates is that the respondents' assertion that they merely wished to get business is no defence. An intention to do so appears to have been at the root of the trouble in practically all the cases Walton J. mentions. A clear example, whose facts are comparable with the present, is the decision of Vaisey J. in The London Ferrogh-Concrete Co Ltd v. Justicz (1951) 68 RPC 65 (affirmed (1951) 68 RPC 261). The parties there were competing building contractors and one told a prospective customer that construction in accordance with the method proposed by the other would produce an "inadequately designed construction". More specifically, the defendant said that a certain joint was not adequate in respect of a stipulated load.
It was held that the statements just mentioned were false and that they were "malicious" although made with the intention of getting work - indeed, apparently because of that intention (see p 68 .25).
It was found that although the defendant thought his method superior, he did not believe his competitor's to be "inadequate".
In the case just discussed, the Court did not determine whether a lack of belief in the truth of what was said was necessary in order to show malice. The decision of the Court of Appeal in Shapiro v. La Morta (1923) 40 TLR 201 bears on that point. There, Scrutton LJ. referred to authorities which -

"... suggest that if the defendant is speaking in furtherance of his own business or interest and honestly believes what he says to be true, in contrast with deliberate intention to injure the plaintiff, either with knowledge that the statement is untrue or with reckless indifference to whether it is true or false, then either there is no cause of action or the defendant has a 'just cause or excuse'" (p 203).

Scrutton L.J. appeared to act on the view just mentioned, but Atkin L.J. merely assumed, without deciding, that the necessary element is either knowledge of falsity or recklessness.

The applicants in their submissions accepted that the law is as stated by Scrutton L.J. and assumed by Atkin L.J. in the case just mentioned. It appears to me improbable that a businessman, in comparing his services with those of a rival, is guilty of the tort of injurious falsehood if (in order to persuade a customer of the advantages of the former and disadvantages of the latter) he makes erroneous but not reckless assertions which he positively believes to be true. I therefore accept that the necessary mental element is as contended for by the applicants - i.e. knowledge of falsity or recklessness.
It follows from what I have said earlier, in the discussion of the misleading quality of the oral representations, that that element is satisfied here. The case is an unusual one, in that what was stated orally was not totally without truth; it nevertheless involved falsehood, in the sense that the problems about supply of spare parts had to do only with possible delays in supply. I reiterate that in my opinion the statements made to customers by Addison, and even more so those made by Milan, wrongly gave the impression that the applicants lacked the technical capacity to service the lifts in question and might well be unable to obtain parts for them.
It may seem to some surprising that the law exacts such a standard, as to disparagements of competitors; no doubt exaggerations of the demerits of other goods or services are common enough in business. In the present case it appears to me that the respondents went beyond mere generalisation and committed the alleged tort.
It should be added that in arriving at the conclusion just mentioned, I have taken into account some suggestion from the respondents' side that the disparaging statements were in substance true. There was a considerable amount of evidence about the state of the lifts at 100 Christie Street and problems associated with them. The respondents submitted that -

"... the whole history of that job demonstrates the truth of the assertion that SLA might have technical difficulties in solving the problems."

In that connection, reference was made to some evidence of Mr H. Wulz, Schindler's New South Wales manager, to the effect that there "were considerable problems with these lifts at St. Leonards". That problems were encountered does not show that those responsible for the lifts' maintenance were incompetent.

It is unnecessary to attempt to reach a conclusion as to whether and if so, to what extent, the problems just referred to were the fault of the applicants, for I am satisfied that there is no basis in the evidence for holding that the applicant lacked the technical capacity to correct difficulties such as those at 100 Christie Street - whether or not errors of diagnosis or otherwise were made. I accept the evidence of D.J. Reilly, who was in my opinion generally a fairly reliable witness, that the applicants have personnel with a great deal of specialised experience in working on Express equipment. Milan stressed in his affidavit that Express is a "world wide competitor to Schindler", but there is no good reasons to think that it would take the extraordinary course - no doubt damaging to itself - of causing or permitting Express lifts maintained by the applicants to become unserviceable for want of spare parts.
4. Inducing Breach of Contract - Customers
The statement of claim alleges that the respondents induced termination and/or breach of contracts by three categories of persons: firstly, the applicants' customers; secondly, European suppliers; and thirdly, Precision employees.
It is convenient to discuss these three points separately. The question of European suppliers will be dealt with more broadly - i.e. not merely under the heading of inducing breach of contract.
As to the customers, the applicants' case is based upon the representations set out in para.9 of the statement of claim and mentioned above in other connections. Paragraph 10 says that by those representations Milan, Addison and Liftronic:

"(a) induced the Applicants' customers and prospective customers to terminate and breach, not renew or not enter into, maintenance contracts with one or other of the Applicants but to enter into such contracts with the Third Respondent;

(b) otherwise prevented or hindered and interfered with the Applicants' performance of their contractual obligations;

(c) attempted so to do; and unless restrained will continue so to do."

The pleading then gives a list of maintenance contracts claimed to have been lost, sixteen in number.
The applicants' contention is that by making their customers worry about the applicants' ability to do maintenance work, they caused the termination of these contracts.
The applicants' submissions on this point were as follows. They said that the representations complained of were made to induce customers to terminate their contracts with the applicants and enter into fresh maintenance contracts with Liftronic. They added that there was widespread concern among customers in consequence of the representations and that Schindler had many calls, inquiries and the like from customers coinciding with the making of the representations.
The applicants submitted that there were "misconception and concern" on the part of customers as to the applicants' capacity to service lifts, that price was not the only material consideration to customers, and that Milan and Addison presented themselves as having first hand knowledge of the matters on which the misrepresentations were based. The applicants said that as part of a campaign to obtain existing maintenance contracts, false statements were made with, in some instances, success.
The respondents submitted (to put it in a very summary way) that loss of any maintenance contracts is a matter which must be specifically proved by establishing the cause of the change of allegiance of each customer relied on; they added, of course, that no adequate proof was advanced.
Two distinct additional aspects of this part of the case were that, according to the applicants, the respondents interfered with the performance of an existing contract, thus preventing or hindering the applicants from carrying out their contractual obligations.
Resolution of the problems raised by these opposing contentions requires some analysis of the evidence, but I will firstly attempt to deal with the legal principles, so far as relevant to the issues I have to decide under this heading and with respect to the other two allegations of inducing a breach of contract.
As to the degree of knowledge of the existing contractual obligation which must be shown, Fleming says (The Law of Torts 7th ed. pp 656-7):

"But although the defendant must have plotted to interfere with the contract, he need not have actually known the precise terms of it nor that his object could be accomplished only through its breach. If - turning a blind eye - he went about it regardless of whether it would involve a breach, he will be treated just as if he had knowingly procured it. Indifference is homologated with intent."

In Carlton & United Breweries Ltd v. Tooth & Co. Ltd (1986) 7 IPR 581 at p 625 Young J. held that knowledge of the actual terms of the contract on the part of the defence is unnecessary; see also Delphic Wholesalers Pty Ltd v. Elco Food Co Pty Ltd (1987) 8 IPR 545 at pp 552, 553 per McGarvie J. The World Series Cricket case, Greig v. Insole (1978) 1 WLR 302 is also authority for the proposition that the defendant need not be proved to have known the terms of the contract of which he intends to induce a breach: see pp 335-336. The highwater mark of this line of authority is the suggestion in D.C. Thomson & Co. Ld. v. Deakin (1952) Ch 646 at p 687 that "common knowledge about the way business is conducted" might be enough to establish knowledge.

Next, there must be an intention to produce a breach or other unlawful intention; negligence does not appear to be enough: the cases are collected in Clark and Lindsell on Torts, 15th ed. p 702. The requirement of intention seems to have been watered down somewhat in Greig v. Insole (see at p 344), which is one of the cases relied on in the second sentence from Fleming quoted above and is the authority relied on by Lord Denning M.R. in Torquay Hotel Co. Ltd. v. Cousins (1969) 2 Ch 106 at 138 for a similar proposition. In that case Winn LJ. said at p 148 that:

"... once it is established that an individual or company which can only keep going by receiving, periodically, certain essential commodities, habitually receives them from a certain supplier, and this fact is well known, it is an unreal exercise to trouble to investigate how much any person knew about the precise contractual terms on which such supplies were obtained."

This begs the question: there may be no continuing contract at all, but only a series of ad hoc arrangements. If the mere fact that customers are apparently having their lifts maintained by a particular person supplies proof of the reckless intention, the applicants here are considerably advanced. But it is my opinion that that is not enough; an alternative supplier of maintenance services is not obliged to infer, from the mere fact that a potential customer is already having its lifts serviced, that there is a continuing contract whose breach he must be careful not to induce.

Milan and Addison said in a joint affidavit:

"We did not know at the relevant times the actual legal status of contractual relations between the applicants on the one hand and the customer on the other hand, except where, in some cases, the customer referred to the proposed termination or past expiry of a maintenance contract with one or other of the applicants."

Addison adhered to that in cross-examination, as did Milan. However, Milan did not deny that more than 90% of the people Liftronic initially approached were Schindler clients.
In submissions in reply, the applicants advanced an argument as follows. They said (and it is the fact) that the evidence disclosed that ordinarily, after a period of free maintenance, customers who had lifts installed entered into a lift maintenance contract with the installer. They argued that by use of confidential information, the respondents', being able to determine the date of expiry of the free maintenance, undercut the applicants' prices, and thereby "denied the applicants of obtaining contracts out of the free maintenance period".
Whether or not the behaviour just mentioned occurred, it does not constitute the tort of inducing a breach of contract, despite the dictum of Winn L.J. which I have already quoted. It seems to me that a lift maintenance company is entitled to try to persuade people not to contract with other companies (whether or not the others installed the lifts in question), and the idea that there is some sort of property in such customers appears to me to have no legal foundation.

"In a case like this the formulation of the injunction must avoid extremes on either side. On the one hand it must not be so specific that by a small variation in the terms of the advertisement the advertiser can escape its effect and publish an advertisement which is nevertheless misleading in the same kind of way. On the other hand, it must not be in terms so general that the advertiser does not have a clear idea of what he is not allowed to do."

As to the second point, it is in general undesirable, in my opinion, so to frame an injunction that it does little more than repeat the respondents' general legal obligations, substituting for the ordinary remedies for breach of them the possibility of the drastic remedy of imprisonment. Further, it is in general undesirable so to frame an injunction that the question whether a breach has occurred is likely to be very debatable until settled by an order made in contempt proceedings.
The evidence as to damages was fairly extensive, but in the nature of the case must have lacked precision, as it did. The applicant urged me to find that certain losses set out in a table numbered 1 were the "actual losses suffered by reason of the cancellation of the maintenance contracts as detailed in the Table" and that I would find in a table numbered 7 "the savings on overheads and expenditure which would have accrued to the applicants in not having performed these contracts". It is impossible to find, on the evidence, that maintenance contracts were cancelled in accordance with that table as a result of unlawful conduct on the part of the respondents. Maintenance contracts were lost for a number of reasons, but in my opinion it is not shown that any single contract was lost as a result of illegal conduct on the part of the respondents, nor is it shown that any single identified contract was not renewed or not made on expiry of the maintenance period as a result of illegal actions on the part of the respondents. I think the submissions in reply came close to recognising this in para.4.12:

"When the respondents' conduct is considered as whole (sic) it is not necessary to match specific representations to specific loss or damage but rather the correct approach is to have regard to the cumulative effect of the conduct as a whole ...."

It is true that that comment was made with reference to the applicants' claim for damages relating to steps in mitigation, but as the evidence turned out, the applicants were, in my opinion, wise not to attempt to identify in their final submission the instances which gave them the best case.
It is particularly important, as to contracts lost or not renewed, to keep in mind that Milan, Addison and Liftronic were all entitled to compete as vigorously as they could to take business away from the applicants, using the advantage Milan and Addison had of familiarity with the Precision customers, as long as they committed no specific illegality in doing so.
Apart from the general consideration which I have just mentioned, there are other insuperable difficulties facing the applicant in proving any specific loss of business. As the respondents' counsel pointed out, the applicants' New South Wales manager, Wulz, gave evidence which was difficult to reconcile with the thrust of the applicants' case on damages. He said:

"Most of the clients' reasons for intention to cancel, or try to cancel a contract were because they had a better offer, a cheaper offer, from Liftronic."

There is, in general, nothing unlawful about making a cheaper offer than a competitor.
The respondents argued, correctly in my opinion, that the extraordinary sums claimed as the cost of reacting to the allegedly illegal acts on the part of the applicants "cannot be used to support a claim for general damages". Counsel's submission went on:

"There is no satisfactory evidentiary basis upon which quantum of administrative expenses properly chargeable to Liftronic could be calculated ..."

I must say that in my opinion no sort of restraint was exercised by the applicants in compiling claims of this sort. Insofar as the evidence of Mr Smith (a most unreliable witness) on behalf of the applicants was relied on, I would simply reject their case, but more generally the applicants appear to me to have made what industrial lawyers would call an "ambit claim", hoping that while it will undoubtedly be cut down, they will still be left with a substantial sum.
Before stating my conclusion as to damages, it is desirable to review the possible heads emerging from what has been written above:

1. representation that Liftronic had the sole rights of distribution for Gebauer;

2. representation that Schindler was technically incompetent, could not get parts and the like;

3. wrongful use of first customer list.

The respondents would no doubt describe these as but a few shreds of a most elaborate case. There must be a temptation to accept the submission on behalf of the respondents that no damages can be awarded because no damage has been established, but it appears to me that the exaggeration which characterizes the applicants' damages case, and the impossibility of making an accurate estimate cannot justify refusing all relief. In Enzed Holdings Limited v. Wynthea Pty Limited (1984) 57 ALR 167, the Full Court held that in proceedings under s.52 of the Trade Practices Act 1974:

"The principle is clear. If a court finds damages occurred, it must do its best to quantify the loss even if a degree of speculation and guesswork is involved. Furthermore, if actual damage is suffered, the award must be for more than nominal damages" (p 183).

Now that it has become clear that, in general, awards under the section are to be made on a basis similar to that used under the law of deceit, there must be some doubt as to the literal accuracy of this statement: see in particular the views of the High Court in Ted Brown Quarries Pty Ltd v. General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23 at 37, 38. It may be that if the evidence called on behalf of the applicants fails to provide any rational foundation for a proper estimate of damages, the Court should simply decline to make one. I do not pretend that the figure I propose to award has any mathematical basis, nor that it is anything other than a round figure adopted as a result of my impression of the case as a whole. Damages will be awarded against the first three respondents only, Milan Debelak, Kevin Addison and Liftronic Pty Ltd in the sum of $30,000.
11. Costs
Undoubtedly, as I have already mentioned, the parties' costs will greatly exceed the amount awarded. Simply to let costs go to the applicants would cause a serious injustice. That is so because most of the more serious allegations have failed and because, in my opinion, the applicants caused the litigation to take longer and be more burdensome for the respondents than it need have been. The theoretically proper way to calculate the costs is, perhaps, to award the general costs of the suit to the applicants, reducing those costs by such proportion as seems fit, having regard to the applicants' conduct of the suit, and then to award to the respondents the costs of the major issues upon which the respondents succeeded, e.g. the sabotage and master lists issues. It is not always the case, of course, that a respondent who is successful on particular issues has the costs of them, but there is a discretion to give such costs, which I would unhesitatingly exercise in favour of the respondents. In my opinion, it is quite impractical to have the costs worked out in the fashion just described. To do so would give a merely spurious appearance of accuracy. I have the view that the just course is to award costs, fixed at $20,000, to the applicants but have not heard the parties on costs. If either side wishes to be heard on costs, my associate should be notified within seven days; otherwise I shall make a further order, on 18 August, directing that the judgment may be perfected forthwith.
There will be orders as follows:

1. judgment for the applicants against the first three respondents in the sum of $31,000;

2. the respondents pay to the applicants costs fixed at $20,000;

3. if any party notifies the Court in writing on or before 17 August 1989 that he or it wishes to be heard on costs, a date for hearing of argument on that question shall be fixed;

4. this judgment shall not be perfected until further order.

[1989] FCA 439

10 AUGUST 1989