Telnet P/L v Takapana Investments P/L

[1994] FCA 329

JUDGMENT No. ..$.....-.. 2 9 ~ &

IN THE FEDERAL COURT OF AUSTRALIA	)
VICTORIA DISTRICT REGISTRY	) No. NG126 of 1992
GENERAL DIVISION	)

BETWEEN:  TELNET PTY. LTD. and OSBORNE COMPUTERS AUSTRALIA PTY. LIMITED

Applicant

AND:  TAKAPANA INVESTMENTS PTY.
LIMITED

Respondent

C O W :	Jenkinson J.
m:	Melbourne
DATE :	30 May, 1994

.DERAL COURT OF

AUSTRALIA 0YIlNClPAL

MINUTES OF ORDER

,'---- -

THE COURT ORDERS THAT:

1.        Upon the cause of action pleaded in paragraphs 1, 2, 3, 4, 5, 18, 19 and 20 of the further amended statement of claim filed 16 February 1993 there be judgment for the respondent.

2.        The respondent's costs of the proceeding (including costs reserved) other than costs incurred solely in respect of the said cause of action be taxed.

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

3.        The costs incurred by the applicants in procuring the attendance of Andrew William Evans as a witness at the trial of the proceeding be taxed.

4.        The aggregate of the said costs of the applicants and the other costs of the applicants incurred in respect of the said cause of action which are hereby fixed in the sum of $4,000 be set off against the said costs of the respondent and the balance due to the respondent be certified.

IN THE FEDERAL COURT OF AUSTRALIA	)
VICTORIA DISTRICT REGISTRY	) No. NG126 of 1992
GENERAL DIVISION	)

BETWEEN:  TELNET PTY. LTD. and OSBORNE COMPUTERS AUSTRALIA PTY. LIMITED

Applicant

AND :

- TAKAPANA INVESTMENTS PTY.
LIMITED

Respondent

CORAM:  Jenkinson J.

PLACE	:	Melbourne
W:	30 May, 1994

REASONS FOR JUDGMENT

On 10 March 1994 orders disposing of most of the matters in dlspute in the proceeding were made. The elements of one of the causes of action, other than the element of damage, were established and a declaration was made in respect of that cause of action. The reasons for the orders made on

further orders now to be made. The issue of damages had not	10 March 1994 are to be read with these reasons for the
been a question tried. When on 13 May 1994 the proceeding came on for further consideration counsel for the applicants announced that the applicants did not seek to prove damage. Upon that cause of action there must therefore be judgment for the respondent, damage being of the gist of the cause of action given by s.82(1) of the T r a d e P r a c t i c e s A c t 1974 (See
J . L . W . ( V i e . ) P t v . L t d . v . T s i l o a l o u [l9941 1 V.R. 237 and

cases there cited.) I consider that the applicant should have an order that will recompense it the costs incurred in establishing the other elements of the cause of action. It was submitted by counsel for the respondent that the applicant's legal advisers knew when the cause of action was pleaded that Mr. Evans had disbelieved the false representations made to hlm by Mr. Kirchner, which grounded the cause of action, and therefore had no reasonable expectation of proving damage. But the applicant claimed in its amended application filed 5 February 1993 injunctions restraining the making of those representations, a form of relief whlch s.80 of the Trade Practices Act 1974 authorises the Court to grant when satisfied that the elements of such a cause of action, other than damage, have been established. It is nothing to the point, in relation to costs, that in the event the applicant has been content that the declaration was made, and has not pressed for an injunctive order. It was further submitted that, because so llttle time and expense had been dedicated to this cause of action, in comparison with the

this cause of action should not be made the subject of a costs	time and expense dedicated to all the other causes of action,
order. Relatively small as the applicant's costs of prosecuting this cause of action may be, those costs should in my opinion be paid by the respondent.
Evidence given on the trial of the proceeding suggested that Mr. Schwalb may have incited employees of the applicant in Queensland to use, in furtherance of the

respondent's commercial interests, ~nformation acqu~red in the course of their employment by the applicant, in breach of duties they owed to the applicant to keep that information confidential. During the tr~al of this proceeding applications for leave to amend the statement of claim by adding causes of action framed upon that suggestion were refused. The trial concluded on 15 July 1993. On 21 July

1993 a proceeding (No. VG297 of 1993) was commenced in the

Court which was founded on that suggestion. That proceeding is pending. Mr. Jacobs Q.C. submitted that the conduct alleged in the second proceeding was the principal, as well as the most reprehensible, cause of controversy between the parties, although the applicant had not secured evidence of that conduct in time to make it a subject of the first proceeding. In those circumstances it was in Mr. Jacobs' submission right that conslderat~on of the costs of the first proceeding be deferred until the second proceeding has been determined, so that the discretion as to the costs of the first proceeding may be exercised in the light of the Court's

judgment of the whole of the conduct of the parties.

It is posslble that the Court's judgment in the second proceeding will reveal morally reprehensible conduct of the kind alleged. But it seems unlikely that anything will be revealed in that proceeding to cast doubt on the findings of fact in accordance with which the first proceeding was determined, and Mr. Jacobs did not submit to the contrary. In the first proceeding a substantial issue of fact was the

principal matter of controversy. The first fifteen paragraphs of my reasons for judgment are devoted to the resolution of that issue. The allegations upon which that issue was joined were based on information furnished to the applicants by a man who was, when he furnished the information, a senior employee of theirs. The applicants chose to litigate that issue, notwithstanding some indications that they might not succeed. whatever may be the outcome of the proceeding now pending, which concerns different issues, the weight to be given to the conduct alleged against the respondent in that pending proceeding, if it be conduct considered as giving rise to the underlying dispute between the parties, would not be sufficient, in my judgment, to justify departure from the normal allowance of costs to the successful respondent in this proceeding.

There will be an order that the respondent's costs
of the proceeding (including costs reserved) other than costs

incurred solely in respect of the cause of action alleged in

paragraphs 1, 2, 3, 4, 5, 18, 19 and 20 of the further amended

statement of claim filed 16 February 1993 be taxed. There

will be an order that the costs incurred by the applicants in procuring the attendance of Andrew William Evans as a witness at the trial of the proceeding be taxed. There will be an order that the aggregate of the said costs of the applicants and the other costs incurred by the applicants in respect of the said cause of action which are hereby fixed in the sum of $4,000 be set off against the said costs of the respondent and

the balance due to the respondent be certified.

I certlfy that this and the 4

preceding pages are a true copy of the Reasons for Judgment of the Honourable Mr. Justice Jenkinson.

Dated: 30 May, 1994

Counsel for the Applicants	Mr. M.S. Jacobs Q.C
Counsel for the Respondent	Mr. J.W. Burnslde Q.C. and Mr. S. Anderson
Solicitors for the Applicants	Levingstons
Solicltors for the Respondent	Roth Warren
Date of Hearlng	13 May, 1994

18 July 1994

Please replace this attached judgment of 330-94 with the previously dlstrlbuted one.

Thank you

Judgments Clerk