Stationers Supply Pty Ltd v Victorian Authorised Newsagents Association Ltd

[1991] FCA 852

THE FEDERAL COURT OF AUSTRALIA	)	UUDGMENT NO. .S.?.]..q.!	...,..
1

VICTORIA DISTRICT REGISTRY	1	VG 256/91
1
m	DIVISION	)

BETWEEN: STATIONERS SUPPLY PTY LTD

Applicant

m:  THE VICTORIAN AUTHORISED NEWSAGENTS
ASSOCIATION LIMITED

First Respondent

m:  NEWSPOWER (VICTORIA) PTY LTD

Second Respondent

m:  VICSTAT PTY LTD (trading as Victorian
Newsagent Supplies)

Third Respondent

m:	BRIAN GEOFFREY O'MALLEY Fourth Respondent
z!!u:	JOHN RUSSEL REITH

Fifth Respondent -

m:  HENRY JUSTIN SLOANE

Sixth Respondent

m:	Ryan J	3 0 DEC 1991
m:	13 December 1991	FEDERAL COURT OF  AUSTRALIA PRINCIPAL
warehouse of the third respondent,	("Vicstat"), on the

REGISTRY

Place:  Melbourne

EX TEWORE RULING ON APPLICATION FOR LEAVE M AEIE ND

§TA= NT OF CLAIM

The hearing of this matter, which by direction of Olney J., has been confined to questions of liability, began on last

Monday, 9 December. The court undertook an inspection of the

afternoon of 9 December and of the warehouse of the applicant

on the morning of 10 December.

Evidence-in-chief has been substantially by affidavit, and
cross-examination of those deponents of whom that was required
was completed during the morning of l1 December. It was then
agreed between counsel that written submissions on behalf of
the applicant should be prepared and provided to counsel for
the respondents by 7 pm on 11 December and that answering
written submissions on behalf of the respondents should be
provided to counsel for the applicant by 5 pm on 12 December.
The agreement further contemplated that counsel should speak

to the written submissions this morning, and that the hearing

should conclude today. The agreement between counsel has

been carried out, and the court has been furnished with
extensive written submissions by each of counsel for the
applicant, counsel for the first, second, fourth, fifth and
sixth respondents, and counsel for the third respondent. As

well, counsel for the applicant have annotated in handwriting

by way of reply to the submissions on behalf of the

respondents, a copy of each of those respective submissions.

However, at the commencement of the hearing this morning application was made on behalf of the applicant for leave to

amend its statement of claim. That application has been

strenuously opposed by counsel for the respondents.

I take the principles to be applied to an application of this

kind to be those expounded by Bowen L.J. in c r o ~ ~ e r v Smith

(1884) 26 Ch. D. 700 at 710 where his Lordship said:

"Now, I think it is a well-established principle that the object of
Courts is to decide the rights of the parties, and not to punish them

for mistakes they make in the conduct of their cases by deciding

otherwise than in accordance with their rights. Speaking for

myself, and in conformity with what I have heard laid down by the other division of the Court of Appeal and by myself as a member of it, I know of no kind of error or mistake which, if not fraudulent or

intended to overreach, the Court ought not to correct if it can be

done without injustice to the other party. Courts do not exist for

the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendments as a matter of

favour or of grace. Order XXVIII, rule 1 of the Rules of 1883 which

follows previous legislation on the subject says that,

"All such amendments shall be made as may be necessary for the

purpose of determining the real questions in controversy between the

partiee . "

I interpolate to say that I discern no different effect in the terms of 0.13 r.2 of the rules of this Court which, so far as relevant, provides:

"1. The court may, at any stage of any proceeding, on application

by any party or of its own motion, order that any document in the
proceed~ng be amended, or that any party have leave to amend any
document in the proceeding, in either case in such manner as the
court thinks fit.

2.    All necessary amendments shall be made for the purpose of

determining the real questions raised by or otherwise depending on

the proceeding, or of correcting any defect or error in any

proceeding, or of avoiding multiplicity of proceedings."

His Lordship in c r o ~ ~ e r v Smith continued at 711:

"It seems to me that as soon as it appears that the way in which a
party has framed his case will not lead to a decision of the real
matter in controversy, it is as much a matter of right on his part to

have it corrected, if it can be done without injustice, as anything

else in the case am a matter of right. It was said by Mr Barber in

his very powerful speech to us, "You are taking away an advantage

from the Plaintiffs who have got judgment below by making an

amendment at the last moment.n In one sense we should be taking away

an advantage from them, but only an advantage which they have
obtained by a mistake of the other side, contrary to the true bearing

of the law on the rights of the parties.

The question seems to me to be this. Can you, by the imposition of

any terms place the other side in as good a position for the purpose
of having the question of right determined as they were in at the

time when the mistake of judgment was committed? It does not seem

to me material to consider whether the mistake of judgment was

accidental or not, if not intended to overreach. There is no rule

that only slips or accidental errors are to be corrected. The rule

says, "All such amendments shall be made as may be necessary for the

purpose of determining the real questions in controversy." I have

found in my experience that there is one panacea which heals every

sore in litigation, and that is costs. I have very seldom, if ever.

been unfortunate enough to come across an instance where a person has
made a mistake in his pleadings which has put the other side to such
a disadvantage as that it cannot be cured by the application of that

healing medicine."

I have examined the note of Loutfi v C. Czarnikow Ltd. [l9521
2 All E.R 823 to which Mr Mandie QC, on behalf of the
respondents other than the third respondent, referred me, but
I do not understand Sellars J in that case to have attempted

to restrict the general principles enunciated in GroDDer v

smith. Indeed his Lordship, in houtfi v C. Czarnikow,

exercised his discretion by permitting an amendment after the

conclusion of final addresses, and he said this at 824:

"The proposed amendment id is very simple. In fact, it was

canvasaed in the course of the case but counsel for the defendants
has said that, rf he had appreciated that this was being relied on as
one of the ways of proving the contract - the offer and acceptance -
he might have called Mr Gargour, or cross-examined some of the
plaintiff's witnesses more fully. I accept that submission, which

makes it more doubtful whether the second amendment should be

allowed. But it would be making it very difficult for the court

which has heard such evidence as has been given and must draw certain inferences from it to decide the case without its being open to it to

arrive, if it thought fit, at a view that that which is pleaded in
para. Id is a right interpretation of the facts.	I think there was

a sufficient indication in the course of the trial and in the

evidence, that that was a matter in controversy. I think it is

unfortunate that the matter was not clarified at the commencement of
the proceedings, as well it might have been, because it was in the
mind of learned counsel for the plaintiff when he was opening the
case. Not without some doubt, looking at the matter which has now to
be decided and contemplating that it may have to be considered by
other courts in the future, I feel it is undesirable that it should
go forward for further consideration without this matter being open.
Therefore I will allow the second amendment, ld, but even at this
late stage, having regard to the fact that the defendants might have
dealt with the evidence differently, I shall give leave for this
particular matter to be re-opened and give leave for the defendants

to call Mr Gargour, but I think he is the only witness who can be

called - if they wish.	I think the best course is to reserve the
costs of calling him.	Prima facie the costs of and occasioned by an

amendment should be at the expense of the party asking for it, but
that is only a prima facie position, and I think it would be better
if I were to reserve a final decision as to the costs of the
amendment. "

I propose to consider in order each part of the proposed

amendment to the statement of claim in the light of the
principles which I have distilled from the two authorities
cited, and on the basis that the applicant does not propose to
reopen its case to adduce further evidence to support the

allegations which will be added if leave to amend be granted.

1. gro~osed amendment to oaraara~h 1:-

It is desired to add to paragraph 1 of the statement of claim
an alternative allegation that the applicant has been a
"wholesale provider of newsagents' supplies including
'Headline' stationery".

I regard that as merely a re-formulation of a description of the applicant's business which is incontrovertible in the light of the evidence and I allow that amendment unconditionally.

2. Pro~osed additions to ~araara~hs 2. 3 and 4:-

It is sought to add to each of those paragraphs the following new subparagraph (d) to the effect that each of the first, second and third respondents is and has at all material times

been :

"a trading corporation formed within the l imi t s of Australia and
therefore a corporation within the meaning of the Trade Practices A c t

1974."

The matter raised by that allegation is an essential part of a

cause of action based on s.45 or 8.47 (6) of the Trade

W t i c e s Act. insofar as that cause of action depends on establishing that the first respondent ("V.A.N.A.") or the second respondent ("Newspower") has made or given effect to a contract, arrangement or understanding, a provision of which had the purpose, or would have or be likely to have the effect of substantially lessening competition.

Accordingly, I propose to pennit those amendments on terms that there be an adjournment to allow the respondents, other than the third respondent, the opportunity to consider whether they wish to join issue on those allegations and adduce evidence in support of them. In respect of the corresponding amendment to paragraph 4 of the statement of claim, counsel for Vicstat conceded that he could not realistically put in issue the corresponding allegation against his client which would be made if a similar subparagraph were added to paragraph 4 of the statement of claim. I therefore allow, unconditionally, the amendment of paragraph 4 by the addition

of the proposed new subparagraph (d).

3. Fr0~0Sed amendment to ~ a r a a r a ~ h 4Ib):-

As far as the other amendment to paragraph 4 is concerned,
that involves the amendment of sub-paragraph (b), and for
reasons given in respect of the amendment discussed under (1)
above, I allow unconditionally the corresponding amendment of
paragraph 4(b) to allege alternatively that Vicstat is and at
all relevant times has been *a wholesale provider of
newsagents' supplies including 'Logo' brand stationery."
The amendments to this paragraph merely correct an obvious

omission and an obvious misprint.	They are allowed
unconditionally.
5. pro~osed	amendment bv insertion of DaraaraDh 6A:-

This involves reproducing what is paragraph 9 of the statement

of claim as it presently stands. I would allow that

amendment unconditionally, except for the addition of sub-
paragraph (d) as to which the respondents should be allowed an
adjournment to consider whether they wish to put it in issue

and adduce evidence in respect of it.

6. pro~osed amendments to Daraara~h 7:-

As I understand them, these amendments restrict the area of
factual controversy raised by the original pleading.	I
therefore allow them unconditionally.

7. gro~osed amendments to ~ a r a a r a ~ h 10. . -

With the exception of the words added to the end of sub- paragraph (b), these amendments appear to me to be merely consequential upon the proposed amendments to paragraph 7.

Accordingly, they are allowed unconditionally. However, the

addition to sub-paragraph (b) raises a new potential area of

factual controversy, as well as a difficult question of

statutory construction. That amendment is therefore allowed

subject to an adjournment for the purposes which I have

already indicated.

8. pro~osed amendments to ~araara~hs 11 and 12:-

I regard these as mere verbal reformulations of the

description of the market sought to be established by the

applicant. I do not consider that the respondents can have been under any real misapprehension as to the nature and ambit

of that market from the time when this case was opened.	I
therefore allow these amendments, unconditionally.
9. pro~osed	amendments to DaraaraDh 14:-

This involves the proposed expansion of the allegations in

sub-paragraph (a) of this paragraph by the insertion of the
words, "and/or Vicstat and/or "V.A.N.A.".	That amendment

possibly raises new factual issues which the respondents, or

one or more of them, may wish-to identify more precisely by a

request for particulars. The respondents may also wish to

consider a consequential amendment of their defences and the

calling of further evidence. To afford them that facility I

propose to allow that amendment, subject to an appropriate
adjournment. The insertion of further words towards the end
of sub-paragraph (a) of paragraph 14 involves the same verbal
reformulation discussed under (8) above and is accordingly
allowed unconditionally.

10. ~ o ~ o s e d amendments to ~araara~hs 15 and 16:-

As the deletion of paragraphs 15 and 16 is not opposed, it is

allowed. Counsel for the applicant have not persisted in the

insertion of proposed new paragraphs 16A and 16B and
accordingly that amendment is not allowed.

11. pro~osed insertion of new ~araara~hs 16C and 16D;-

In order to obtain clarification of the meaning of these paragraphs, I discussed the form of them with Counsel for the applicant immediately after the luncheon adjournment, and the form in which they are finally proposed is this:

"16C Fur ther -

accordance with paragraph 6A were i n competition wi th in t h e meaning (a ) t h e newsagents with whom Newspower V i c t o r i a made agreements i n

of s e c t i o n 4 D ( l ) ( a ) i n respect of t h e sub jec t mat ter r e fe r red t o i n

sub-paragraph (b) of t h i s paragraph.

( b ) V.A.N.A. and Newspower Vic tor ia have made arrangements, o r gave

e f f e c t t o arrangements with member newsagents f o r t h e e n t r y i n t o

agreements with Vics ta t a s al leged i n paragraph 6A hereof, agreements

which p r o h i b i t o r hinder t h e acqu i s i t ion o r supply of "Headline" and

" ~ o g o " promotional goods.

16D I n t h e Premises. V.A.N.A. and NewsDower V i c t o r i a have acted i n

contravention	of	eec t ion	45 ( 2 ) ( a ) (i)	o f - t h e	Trade	Prac t i ces ACS
1974. "

With some hesitation, because of the difficulties which I feel may etill be inherent in the form of that pleading, I have decided to allow the amendment, subject again to an adjournment to enable the respondents, if so advised, to formulate an appropriate request for particulars and to

consider whether any amendment to their defences is required
and whether they wish to adduce further evidence bearing on
the matters raised by those new paragraphs.

12. pro~osed insertion of new DaraaraDhs 16E. 16F and 166:- These proposed new paragraphs are as follows:-

"16E Further, in the course of the conduct of the Newspower
enterprise and in accordance with the terms of the appointment of
Vicatat as the preferred warehouse. Vicstat acquired the right to use
the name Newspower and its attendant comercial advantages on
condition that such a right benefit or privilege would not be

provided to the applicant, a competitor of Vicstat.

16F The conduct alleged in paragraph 16E was done with the purpose
of, or has or is likely to have the effect of substantially lessening

competition in the market for the provision of newsagents' auppliee.

160 Accordingly, Vicstat has engaged in the practice of exclusive
dealing in contravention of section 47 (4) of the Trade Practices Act
1974. "

The insertion of those paragraphs clearly raises a new cause of, action, which is not disclosed by the statement of claim in its present form. Consistently with what I have said in respect of other similar amendments, I propose to allow that amendment, but on terms that there should be an adjournment to

enable the respondents to consider those amendments, to seek

further and better particulars of the allegations, and to
consider whether any amendment of their defences is required
and whether they wish to call further evidence or further to
cross-examine any deponents who have given evidence on behalf

of the applicant.

13. pro~osed insertion of new DaraaraDh.5 16H and 161:-

Finally, a discrete amendment involves the insertion of new paragraphs 16H and 161 in these terms.

"16H Further, as part of the tenns on which Vicstat was appointed as

the preferred warehouse for V.A.N.A.	and Newspower Victoria,
Vicstat -

a) requires non-advertising members of the Newspower group to pay a

premium price for Newspower promotional goods; and

(b) refuses non-advertising members a discount or allowance because
such members have not agreed to become advertising members of the

Newspower group and to acquire the services offered or provided to

advertising tmmbera by V.A.N.A. and Newspower Victoria.

161 By reason of the above facts, Vicstat has engaged in the practice
of exclusive dealing in contravention of section 47 (7) of the
practices Act 1974."

The terms of 8.47 (7) of the Trade Practices Act are as follows:

"A corporation also engages in the practice of exclusive dealing if

the corporation refuses -

(a) to supply goods or services to a person;

(b) to supply gooda or services at a particular price to a person;

(C) to give or allow a discount, allowance, rebate or credit in relation to the supply of gooda or services to a person for the reason that the person, or if the person is a body corporate, a body

corporate related to that body corporate, has not acqurred or has not
agreed to acquire, goods or services of a particular kind or

description directly or indirectly from another parson."

The language of that sub-section reveals that the proposed new

paragraphs 16H and 161 are elliptical, to say the least, in
pleading a cause of action under 8.47 (7).	With considerable

hesitation, I have decided to allow this amendment, again
subject to an adjournment to permit the respondents to
formulate, if so advised, a request for further and better
particulars, and any consequential amendments to their
defences and to consider whether they wish to adduce any

further evidence.

- ' I '

Consistently with the observations made in U o ~ ~ e r v Smith,

(supra) about the panacea afforded by costs, the applicant
must pay the respondents' costs thrown away as a result of the

leave which I have indicated I shall grant to amend the

statement of claim. I reserve the possibility of making a

more refined order in respect of those costs when the matter
comes back to me and a more accurate assessment can be made of
the impact of the adjournment and the consequences of the

grant of leave to amend.

I propose therefore to adjourn this matter to 10.15 next

Tuesday when I shall hear counsel for the respondents on the course that they desire to take in the light of the amendments which I have allowed. I shall then give further directions for the continued or resumed hearing of this matter, in the light of those intimations and any submissions that I might receive from counsel for the applicants.

I certify that this and the preceding

eleven (11) pages are a true copy of
the Reasons for Judgment of His
Honour Mr Justice Ryan.

Associate: &-A

Date: 13 Qecembw 1991

Counsel for the Applicant	Mr C A Sweeney QC with
Mr N Mukhtar
Solicitor for the
Applicant	Minter Ellison
Counsel for the First,
Second, Fourth, Fifth and
Sixth Respondents	Mr P Mandle QC wiith
Mr D J O'Callaghan
Solicitor for the First,
Second, Fourth, Fifth and
Sixth Respondents	Arthur Robinson &

Hedderwicks

Counsel for the Third

Respondent	:	Mr D J Martin
Solicitor for the Third
Respondent	Lucas Baron

Dates of Hearing:	9, 10, 11, 13 December 1991
Date of Judgment:	13 December 1991