Sport Fashion Pty Ltd v Lectra Systems Pty Ltd

[1991] FCA 623

NOT SUITABLE FOR DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA	)
1

FEW SOUTH W= DISTRICT REGIST Ry 1 NG 655 of 1990

GENERAL DIVISION 1

BETWEEN:  SPORT FASHIONS PTY LIMITED

Applicant

AND :  LECTRA SYSTEMS PTY LIMITED

Respondent

CORAM: Burchett J.
PLACE: Sydney

DATE : 11 October 1991

EX TEMPORE REASONS FOR JUDGMENT

BURCHETT J. :

This case is complex and likely, I fear, to take some time to try. It commenced with an application for I

interlocutory relief, the situation being that the applicants	i
had given a bill of exchange in respect of the purchase price	1 :
. ,
of expensive and complicated machinery which they were	!
alleging was useless, and they sought an injunction against the full purchase price being obtained by the presentation of the bill of exchange. That was opposed and I refused the relief sought. So that left the applicants in the position of pursuing other remedies and particularly damages, and/or a rescission of the contract, but after they had already paid the purchase price.

That all started late last year. The preparation of the

matter for hearing has been delayed, largely because of technical difficulties in relation to expert evidence, the machine having been shut down, and indeed, I think, dismantled, as a result of the applicant's claim that it was useless and was cluttering up their factory. There were then delays in the obtaining of expert evidence because of the difficulty of conducting any experimentation.

The matter, however, is now almost ready to be placed in the long causes call over, and at this late stage the respondent seeks to bring a cross-claim - or rather, I should say, a number of cross-claims. One, which has been referred to in argument as the Felsrange claim, is that Felsrange (as it has been convenient to call the company) misrepresented to the first applicant that the machine failed to perform, and this misrepresentation was the cause of the first applicant purporting to terminate the contract, and of the litigation that has ensued. Felsrange is not presently a party to the action, but it, I am told, was the operator, on behalf of the first applicant, of the machine, during the brief period when

Felsrange would therefore involve, if I permitted it, an	the machine was in operation. The cross-claim against
additional party, and quite obviously considerable delay. Both because of the extent of the delay that would be involved, and the rather separate nature of the claim, although it plainly has a nexus with the existing action, it does not seem to me that it is appropriate to permit that cross-claim. And I refuse leave with respect to it.

The next cross-claim with which I must deal is one referred to as the Supre claim. That relates to a proposed contract of sale by the cross-claimant which, it is said, was aborted by reason of misrepresentations of the first cross- respondent in respect of the performance of the machine. Although the first cross-respondent is already a party to the action, and to that extent this claim would have a less disruptive effect upon the programme towards hearing of the action, on the other hand, the claim is itself quite remote from the claim the subject of the present action. It would plainly raise a whole lot of separate issues, notwithstanding that the truth or otherwise of the representations alleged to have been made would be an issue common to both sets of proceedings. In my opinion, in all the circumstances of this case, the applicants, who have already been considerably delayed, and have provided substantially the whole purchase price of a machine they allege to be useless, should not in justice have inflicted upon them the further considerable delay and cost that would be involved in allowing this cross-

claim. And I will not allow it.

The next cross-claim that is sought to be raised is under a maintenance contract, which was said to have been entered into in connection with the purchase of the machine. That seems to me to be part and parcel of the transaction between the parties to the present action in relation to the acquisition of the machine. I do not think, although it is now being raised rather late, that the raising of it is likely

to cause any disruption of the present timetable, and if any delay at all is caused, it is likely to be small. The issues raised are likely to be closely bound up with the issues in the present action, and I think it is only just to permit this cross-claim to be raised. Accordingly, I will grant leave for the cross-claim in respect of the maintenance contract.

The remaining issues sought to be raised are very small

in monetary value. They relate to some $5000 worth of

invoices in respect of miscellaneous services - invoices

ranging between $85 and about $3000. It is not clear to me whether there is any defence to these claims or not. If a letter of demand was sent, it apparently has been mislaid, and there appears to be little information which I can be given by counsel for the applicants, at the present time, concerning these miscellaneous small claims. In addition to the $5000- odd worth of invoices, there is a claim of $2200 in respect of the provision of technical services, as I understand it, related to the dismantling of the machine after the dispute

unlikely to be any defence in respect of the $2200, except developed. On the face of it, one may speculate that there is	that it might be claimed to be part of the applicant's
damages.
What I will do about all of those claims is direct, and I do direct, that the applicants, within 21 days, file an affidavit setting out in short form their response to these claims, so that a decision can be made as to whether

conveniently they can be joined into the present proceeding, not on the footing that the disputes are necessarily common to the issues in dispute in the main proceedings, but rather on the footing that financially it is desirable that one resultant figure be reached, whether the applicants win or the respondents win, expressing a total liability in respect of the issues in the application, and these particular issues as well.

That leaves the question of directions in respect of the cross-claim raising the maintenance contract. I direct that this cross-claim, if it is to be pursued, for which I have given leave, be filed and served within 3 days. I direct that any additional evidence to be called on behalf of the cross- claimants necessitated by it be put on affidavit to be filed and served within 14 days. I direct that the cross- respondent's defence be filed within 14 days. And I defer to the next directions hearing, which has already been fixed, the question of time for the filing of any evidence in reply,

that, if the applicants want an early hearing date, and if	should that turn out to be required. But I simply point out
there is a need for such evidence, they should put it on without waiting for the directions. I reserve the costs of < this motion at this stage.

I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of his Honour Mr Justice Burchett. m

Associate:
Date: 11 October 1991