Tradesman Technologies Pty Ltd v Ameduri
[2010] FMCA 1011
•24 December 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TRADESMAN TECHNOLOGIES PTY LTD v AMEDURI | [2010] FMCA 1011 |
| TRADE PRACTICES – Misleading and deceptive conduct – supply and payment for traffic products. PRACTICE AND PROCEDURE – Summary dismissal or stay of proceedings – where related proceedings in District Court of Western Australia – whether related proceedings similar to proceedings in Federal Magistrates Court – principles to be applied. COURTS AND JURISDICTION – Trade practices – jurisdiction – District Court of Western Australia – Federal Magistrates Court of Australia –whether District Court of Western Australia exercising powers of Supreme Court of Western Australia. |
| County Court Act 1958 (Vic), s.49 District Court of Western Australia Act 1969 (WA), ss.50(1), 55, 57, 58 District Courts Act 1967 (Queensland) ss.66(1)(a), 67(2)(b) Fair Trading Act 1987 (WA), ss.10, 77, 79 Federal Court of Australia Act 1976 (Cth), s.31A Federal Magistrates Act 1999 (Cth), ss.17A, 18, 45 Federal Magistrates Court Rules 2001 (Cth), rr.13.08, 13.10, Schedule 1 Local and District Criminal Courts Act 1926 (SA), ss.5ab, 35b, 259(1) Rules of the Supreme Court 1971 (WA), O.83 Trade Practices Act 1974 (Cth), ss.51AC, 52, 75B(2)(a), 82, 86(1A), (2) and (3), 86A, 86AA, 87 |
| Abrahams v Qantas Airways Limited (2007) 210 FLR 314; [2007] FMCA 639 Balding v Ten Talents Pty Ltd (2007) 162 IR 17; [2007] FMCA 145 Brava Soft Furnishing Pty Ltd v TRW Carr Pty Ltd (unreported, Federal Court of Australia, 4 September 1989) Chianti Pty Ltd v Leume Pty Ltd [2007] WASCA 270 Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers’ Compensation) Limited (1991) 5 WAR 208 Consolidated Exploration Ltd v Ord Minnett Ltd (unreported, Supreme Court of Victoria, 15 April 1993) Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 Dey v Victorian Railways Commissioners (1949) 78 CLR 62 Doukidis v Williamson (2008) 6 ABC(NS) 717; [2008] FMCA 1352 GB Lifestyles Pty Ltd v Resene Paints (Australia) Limited [2010] FMCA 773 General Steel Industries Inc v Commissioner for Railways (NSW) & Ors (1964) 112 CLR 125 George v Fletcher(Trustee) [2010] FCAFC 53 Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372; [2008] FCAFC 60 Kinna v National Australia Bank Limited (1988) 81 ALR 410 Lawrenson Light Metal Die Casting Pty Ltd (in liq) v Cosmick Pty Ltd [2006] FCA 753 Melros Developments Pty Ltd v Ribble Pty Ltd (1996) 16 SR (WA) 143 Pegasus Leasing Limited v Cadoroll Pty Limited & Ors (1996) 59 FCR 152 Pierson’s Pro-Health Pty Ltd & Ors v Silvex Nominees Pty Ltd & Anor (No. 3) [2010] FMCA 250 Skipworth v State of Western Australia (No.2) (2008) 218 FLR 16; [2008] FMCA 544 Startune Pty Ltd v Ultra-Tune Systems (Aust.) Pty Ltd [1991] 1 Qd R 192 The Lunching Pad Pty Ltd v Minister for Culture and the Arts & Anor [2001] WASC 299 Tipperary Developments Pty Ltd v The State of Western Australia [2005] WASC 75 Westpac Banking Corp & Ors v Eltran Pty Ltd & Ors (1987) 14 FCR 541 White Industries Australia Ltd v Commissioner of Taxation (2007) 160 FCR 298; [2007] FCA 511 |
| Applicant: | TRADESMAN TECHNOLOGIES PTY LTD |
| Respondent: | JOHN AMEDURI |
| File Number: | PEG 88 of 2010 |
| Judgment of: | Lucev FM |
| Hearing date: | 16 July 2010 |
| Date of Last Submission: | 16 July 2010 |
| Delivered at: | Perth |
| Delivered on: | 24 December 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr P J Hannan |
| Solicitors for the Applicant: | De Vita + Dixon Lawyers |
| Counsel for the Respondent: | Mr N Dillon |
| Solicitors for the Respondent: | McDonald Pynt Lawyers |
ORDERS
That proceedings in matter PEG 88 of 2010 be stayed pending further order of this Court.
That the matter otherwise be adjourned to 9.00am on 27 June 2011 for mention.
There be liberty to apply on three days notice.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 88 of 2010
| TRADESMAN TECHNOLOGIES PTY LTD |
Applicant
And
| JOHN AMEDURI |
Respondent
REASONS FOR JUDGMENT
Application in a case
In this matter the respondent, John Ameduri, has made an application in a case to have the proceedings dismissed or permanently stayed.
Essentially, the basis for the application in a case is that there are proceedings afoot in the District Court of Western Australia[1] in relation to matters allegedly the same or similar to the matters the subject of the substantive application in this Court.
The proceedings
[1] “District Court Proceedings” and “District Court” respectively.
The District Court Proceedings
The District Court Proceedings were commenced on 14 December 2009 by Mr Ameduri and Mrs Ameduri against Mr Cotellessa personally by the filing of a generally indorsed writ. The writ seeks the recovery of $150,000 plus interest pursuant to an alleged loan agreement made on 9 April 2009. A statement of claim was filed in the District Court Proceedings on 22 March 2010.
Mr Sergio Cotellessa is the sole director and secretary of the applicant, Tradesman Technologies Pty Ltd.[2] One hundred per cent of the shares in Tradesman Technologies are held by Maribel Pty Ltd, a company of which:
a)Mr Cotellessa and his wife, Mrs Cotellessa, are directors; and
b)Mr Cotellessa is secretary.
[2] “Tradesman Technologies”.
Tradesman Technologies alleges that Mr Ameduri was authorised to place orders for traffic products with Tradesman Technologies on behalf of Allpack Signs Pty Ltd,[3] now known as Signs All Pty Ltd.[4]
[3] “Allpack Signs”.
[4] “Signs All”.
In the District Court Proceedings it is alleged that:
a)on 19 January 2009 Tradesman Technologies and Allpack Signs entered into a Restricted Supply Agreement;
b)on 8 April 2009 Mr Cotellessa, Allpack Signs and Mrs Ameduri entered into the Continuing Supply Agreement;
c)on 9 April 2009 Mr Cotellessa entered into a loan agreement[5] with Mr and Mrs Ameduri for an amount of $150,000;
d)on 9 April 2009 the $150,000 the subject of the Loan Agreement was advanced by Mr and Mrs Ameduri to Tradesman Technologies at the direction of Mr Cotellessa; and
e)from 30 November 2009 Mr Cotellessa was obliged to repay the $150,000 the subject of the Loan Agreement.
[5] “Loan Agreement”
On 23 April 2010 Mr Cotellessa filed a defence in the District Court Proceedings.
Mr Cotellessa’s defence in the District Court is as follows:
a)the loan was by Mrs Ameduri to Tradesman Technologies, with Mr Cotellessa, subject to the fulfilment of various conditions, being responsible for repayment of that loan;
b)the loan was part of a wider agreement to which Mr Cotellessa, Tradesman Technologies, Mrs Ameduri and Allpack Signs were party, that agreement being the Continuing Supply Agreement;
c)Mr Ameduri was the agent for Allpack Signs;
d)the Continuing Supply Agreement required Tradesman Technologies to continue to abide by a previous agreement, that is, the Restricted Supply Agreement, the parties to which included Tradesman Technologies and Allpack Signs;
e)Mr Cotellessa was not obliged to pay the $150,000 to Mrs Ameduri unless and until Allpack Signs paid in full all outstanding invoices for traffic products which Tradesman Technologies had previously supplied, and would thereafter supply, to Allpack Signs; and
f)Allpack Signs has not paid in full all outstanding invoices for traffic products which Tradesman Technologies supplied to Allpack Signs.
Allpack Signs has since gone into liquidation.
In the District Court Proceedings discovery and inspection have been completed. The District Court Proceedings were required to be entered for trial by 21 August 2010, and according to the timetable set by the District Court a trial is required by 7 February 2011.
There is no suggestion that Mr Cotellessa as a defendant in the District Court Proceedings has done anything to hinder the progress of those proceedings.
The District Court Proceedings revolve around a simple issue, namely whether $150,000 was advanced to Mr Cotellessa under the alleged loan agreement with a requirement to repay by 30 November 2009.
The issues in the District Court Proceedings are:
a)what was agreed between the parties to the Loan Agreement? and
b)if repayment of the loan was conditional, have the relevant conditions been satisfied?
The proceedings in this Court
These proceedings were commenced on 11 June 2010 by the filing of the substantive application and a statement of claim.[6] On 9 July 2010 the first directions hearing in the FMC Proceedings took place.
[6] “FMC Proceedings”.
In the statement of claim it is alleged that:
a)Mr Ameduri was the agent of Allpack Signs;
b)Tradesman Technologies pleads the existence of the Restricted Supply Agreement;
c)Tradesman Technologies pleads the existence of the Continuing Supply Agreement and the various terms thereof;
d)Mr Ameduri made representations as to the financial capacity of Allpack Signs to pay for traffic products supplied by Tradesman Technologies after the Continuing Supply Agreement was entered into;
e)Tradesman Technologies relied on the representations referred to immediately above by continuing to supply traffic products to Allpack Signs on credit and to abide by the Restricted Supply Agreement;
f)Mr Ameduri represented to Tradesman Technologies that if Allpack Signs did not pay for traffic products supplied by Tradesman Technologies after the Continuing Supply Agreement was entered into then Mr Ameduri would make that payment;
g)Tradesman Technologies has suffered loss and damage related to the non-payment by Allpack Signs for traffic products supplied by Tradesman Technologies on credit; and
h)Tradesman Technologies has suffered loss and damage relating to income from customers foregone by reason of abiding by the Restricted Supply Agreement.
Tradesman Technologies says that notwithstanding that there is some overlap in relation to the existence of the Restricted Supply Agreement and the Continuing Supply Agreement, the essential allegations in the FMC Proceedings relate to the representations allegedly made by Mr Ameduri to Tradesman Technologies set out above, and the loss and damage allegedly suffered by Tradesman Technologies as a result of those representations proving to be false.
These proceedings and the District Court Proceedings
In the District Court Proceedings Mr Ameduri’s statement of claim raises a straightforward claim of debt based on the Loan Agreement entered into partially in writing and partially orally.[7] The loan was advanced not to Mr Cotellessa, the defendant in the District Court Proceedings, but to the applicant in the FMC Proceedings, Tradesman Technologies.
[7] “Loan Agreement”.
In both the District Court Proceedings and the FMC Proceedings Mr Ameduri argues that Mr Cotellessa and Tradesman Technologies respectively have filed “lengthy and complex” pleadings, by way of defence in the District Court Proceedings and by way of statement of claim in the FMC Proceedings.
Mr Ameduri argues that Mr Cotellessa’s defence in the District Court Proceedings and Tradesman Technologies’ statement of claim in the FMC Proceedings raise a number of common issues or matters, including:
a)that significant portions of the statement of claim in the FMC Proceedings and the defence in the District Court Proceedings are in exactly the same terms, and will therefore mean that exactly the same issues will be pleaded to in both proceedings or put into contest in both proceedings;
b)paragraph 6 of the statement of claim in the FMC Proceedings and paragraph 6 of the defence in the District Court Proceedings plead that Mr Cotellessa is the sole director of Tradesman Technologies;
c)in the opening paragraphs of both the statement of claim in the FMC Proceedings and the defence in the District Court Proceedings, corporate ownership and other arrangements are pleaded in relation to companies which are alleged to impact upon the proper terms or interpretation of the Loan Agreement and other alleged contracts;
d)at paragraph 21 of the statement of claim in the FMC Proceedings and paragraph 14 of the defence in the District Court Proceedings it is pleaded that Tradesman Technologies had certain financial or financing arrangements with the National Australia Bank, and it is therefore likely that a bank officer will have to be called in both proceedings to give evidence of the relationship with Mr Cotellessa and Tradesman Technologies, and the terms of any facilities or agreement on facilities;
e)paragraph 24 of the statement of claim in the FMC Proceedings and paragraph 17 of the defence in the District Court Proceedings plead that Signs All Pty Ltd / Allpack Signs Pty Ltd owed $129,354.60 to Tradesman Technologies;
f)at paragraph 22 of the statement of claim in the FMC Proceedings and paragraph 19 of the defence in the District Court Proceedings it is pleaded that Signs All Pty Ltd / Allpack Signs Pty Ltd and Tradesman Technologies are parties to an agreement dated 19 January 2009 for the supply of traffic products to Signs All Pty Ltd / Allpack Signs Pty Ltd, which agreement is alleged to have been entered into by Mr Cotellessa on behalf of Tradesman Technologies;
g)in paragraph 26 of the statement of claim in the FMC Proceedings and paragraph 21 of the defence in the District Court Proceedings it is pleaded that Mr Cotellessa, Tradesman Technologies, Mrs Ameduri and Signs All Pty Ltd / Allpack Signs Pty Ltd entered into an agreement entitled “Continuing Supply Agreement”;
h)in paragraph 27 of the statement of claim in the FMC Proceedings and paragraph 22 of the defence in the District Court Proceedings Tradesman Technologies / Mr Cotellessa plead the terms of the alleged “Continuing Supply Agreement”. Mr Ameduri says there will be a significant issue between the parties in relation to the terms of the Continuing Supply Agreement, and that the terms of that agreement as pleaded in paragraph 27 of the statement of claim in the FMC Proceedings is different to those pleaded in paragraph 22 of the defence in the District Court Proceedings, and that there will be a contest in relation to the additional terms pleaded at paragraphs 22(5)-(8) of the defence in the District Court Proceedings;
i)the Loan Agreement as contended for by Mr and Mrs Ameduri in the District Court Proceedings is the Continuing Supply Agreement alleged in the statement of claim in the FMC Proceedings, and if necessary, Mr Ameduri will plead the Loan Agreement in the FMC Proceedings so that exactly the same contentions will be in contest in both proceedings;
j)that it is significant that paragraph 22(1) of the Continuing Supply Agreement pleaded in the defence in the District Court Proceedings by Mr Cotellessa pleads that it was a term that Mrs Ameduri promised to advance $150,000 to Tradesman Technologies, making Tradesman Technologies the beneficiary of the loan made under the Continuing Supply Agreement / Loan Agreement, and the respondent therefore says that it is open to Mr Ameduri or Mr Cotellessa to claim restitution from Tradesman Technologies for the benefit received by Tradesman Technologies; and
k)paragraphs 28 to 77 of the statement of claim in the FMC Proceedings relate to allegations that Mr Ameduri made promises he would be responsible for debts incurred by Signs All Pty Ltd / Allpack Signs Pty Ltd if that company did not make payments to Tradesman Technologies for traffic products supplied, and that given the matters pleaded in paragraphs 1 to 27 of the statement of claim in the FMC Proceedings, which matters are equally pleaded in the defence in the District Court Proceedings, Tradesman Technologies acknowledges that the balance of its claim relates to, and is subject to, establishing the contractual relationship which it contends is the factual matrix to the misleading and deceptive conduct claims made in the balance of the statement of claim, that is, Tradesman Technologies accepts the issues are related, otherwise they would not be pleaded.
Tradesman Technologies says that the District Court Proceedings are different in that Mr Cotellessa’s defence in the District Court Proceedings is different to the causes of action pleaded in the statement of claim in the FMC Proceedings, and in particular:
a)Mr Cotellessa’s defence in the District Court Proceedings is contractual, alleging non-satisfaction of a condition upon which the obligation to pay Mrs Ameduri $150,000 depended; and
b)the causes of action pleaded in the statement of claim in the FMC Proceedings are as follows:
i)misleading and deceptive conduct contrary to s.52 of the Trade Practices Act 1974 (Cth),[8] alternatively, s.10 of the Fair Trading Act 1987 (WA);[9]
ii)estoppel; and
iii)unconscionable conduct contrary to s.51AC(2)(a) of the TP Act.
[8] “TP Act”.
[9] “FT Act”.
Tradesman Technologies also says that the parties in the District Court Proceedings are not the same parties as in the FMC Proceedings, and, most notably, that Tradesman Technologies is not a party to the District Court Proceedings.
Mr Ameduri submits that:
a)Tradesman Technologies, as Mr Cotellessa’s alter ego, could have commenced the FMC Proceedings in the District Court and then applied for the proceedings to be consolidated or heard together;[10]
[10] Rules of the Supreme Court 1971 (WA), O.83.
b)in choosing to commence the FMC Proceedings, Mr Cotellessa / Tradesman Technologies have selected a jurisdiction that they prefer rather than the most convenient jurisdiction for the determination of the issues between the parties;
c)it is onerous on Mr Ameduri to be required to contest two separate proceedings in two separate jurisdictions when, conveniently and in accordance with ordinary practice, the two sets of proceedings could have been consolidated or joined in the District Court Proceedings;
d)there are now two parallel streams of litigation in two separate jurisdictions requiring two separate courts to determine the same issues of fact, law and credit, and any differentiation whatsoever between the two relevant judicial officers will result in inconsistency or confusion;
e)similar considerations will apply in the event that any appeal is taken in either the District Court Proceedings or as a consequence of the FMC Proceedings;
f)in contemporary practice it is incumbent upon litigants, and is required by courts, that court resources are to be used in the most convenient and cost effective way, and that the running of two parallel proceedings defeats that practice and the requirement by the courts to protect resources;
g)practical inconveniences may arise from the two proceedings, such as:
i)if the hearing of one proceeding takes place and original documents are admitted in those proceedings, then those original documents may not be available for the second hearing;
ii)witnesses will be required to give evidence at two hearings and at any second hearing it is likely that the transcript of the first hearing will be used to seek to challenge any inconsistency in evidence given in the second hearing; and
iii)any second hearing is therefore likely to be overlain with complexity which the court system does not accommodate given the principle of seeking to have one hearing to determine all matters in issue between the parties;
h)in the District Court Proceedings the discovery process has already been completed with discovery given and inspection undertaken;
i)in the FMC Proceedings discovery is only allowed in limited circumstances;
j)the documents discovered by Mr Cotellessa in the District Court Proceedings are relevant to the same issues pleaded by Tradesman Technologies in the FMC Proceedings;
k)having undertaken the discovery process in the District Court Proceedings it would be oppressive to Mr Ameduri to have to undertake the same process or partial process in the FMC Proceedings; and
l)Mr Ameduri elected to commence his proceedings in the jurisdiction which allowed a discovery process, and it would be oppressive for Mr Ameduri to be required to litigate the same issues in a jurisdiction where that discovery process and its results were not immediately available.
Tradesman Technologies argues, assuming:
a)no question as to the jurisdiction of the District Court to entertain an action in the same terms as the proceedings in this Court; and
b)that Tradesman Technologies had sued Mr Ameduri by way of a fresh writ issued out of the District Court,
it is not necessarily the case that the District Court Proceedings would then be consolidated or otherwise heard together with the further proceedings in the District Court.
Tradesman Technologies argues that the possibility of inconsistent findings of fact does not, in and of itself require:
a)a claim and a counterclaim;
b)a claim and a third party claim;
c)two actions which might potentially be consolidated; and
d)two actions which might be potentially tried together with evidence in one action being evidence in the other, and tried at the same time.[11]
[11] Citing Tipperary Developments Pty Ltd v The State of Western Australia [2005] WASC 75 at para.24 per Murray J.
Tradesman Technologies also says that even in the context of a claim and a third party claim, it does not necessarily follow that both claims will be tried together, and it may be that the main claim is permitted to be tried before the third party claim.[12]
Consideration
[12] Citing Consolidated Exploration Ltd v Ord Minnett Ltd (unreported, Supreme Court of Victoria, Ormiston J, 15 April 1993), and Melros Developments Pty Ltd v Ribble Pty Ltd (1996) 16 SR (WA) 143.
Summary dismissal and stay – legislation and cases
Section 17A(2) and (3) of the Federal Magistrates Act 1999 (Cth)[13] provides as follows:
[13] “FM Act”.
(2) The Federal Magistrates Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:
(a) the first party is defending the proceeding or that part of the proceeding; and
(b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.
(3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:
(a) hopeless; or
(b) bound to fail;
for it to have no reasonable prospect of success.
Rules 13.08 and 13.10 of the FMC Rules provide as follows:
13.08 Residue of proceeding
(1) This rule applies if in a proceeding:
(a) a party applies for judgment or an order for stay or dismissal under this Division; and
(b) the proceeding is not wholly disposed of by judgment or dismissal or is not wholly stayed.
(2) The proceeding may be continued in relation to any claim or part of a claim not disposed of by judgment or dismissal and not stayed.
(3) The Court may give directions for the further conduct of the proceeding.
13.10 Disposal by summary dismissal
The Court may order that a proceeding be stayed, or dismissed generally or in relation to any claim for relief in the proceeding, if the Court is satisfied that:
(a) the party prosecuting the proceeding or claim for relief has no reasonable prospect of successfully prosecuting the proceeding or claim; or
(b) the proceeding or claim for relief is frivolous or vexatious; or
(c) the proceeding or claim for relief is an abuse of the process of the Court.
The Federal Court possesses a like power to that under s.17A(2) of the FM Act under s.31A(2) of the Federal Court of Australia Act 1976 (Cth).[14] In relation to the power under s.31A(2) of the FC Act it has been observed that:
a)a court must be satisfied that the applicant has no reasonable prospect of success;
b)the court need not be satisfied that the proceeding is hopeless or bound to fail;
c)the legislature’s intention in introducing these provisions was to lower the bar for obtaining summary judgment (including summary dismissal) below the level that had been fixed by authorities like Dey v Victorian Railways Commissioners[15] and General Steel Industries Inc v Commissioner for Railways (NSW) & Ors[16] which required that the allegations be quite clearly so untenable that they could not possibly succeed;
d)there was not an intention on the part of the legislature to remove the bar completely;
e)the mere presence of a trifling, implausible, tenuous or tangentially relevant factual controversy is not a bar to the exercise of the summary dismissal power; and
f)what is required is a prediction of the outcome of a trial on the merits but not an actual adjudication of those merits.[17]
[14] “FC Act”.
[15] (1949) 78 CLR 62 at 91-92 per Dixon J.
[16] (1964) 112 CLR 125 at 129-130 per Barwick CJ.
[17] George v Fletcher (Trustee) [2010] FCAFC 53 at para.75 per Ryan and Logan JJ (“George”) citing White Industries Australia Ltd v Commissioner of Taxation (2007) 160 FCR 298 at 310 per Lindgren J; [2007] FCA 511 at paras.50-54 per Lindgren J; and George at paras.99-105 per Marshall J, and in particular at para.102 citing Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 at 387-388 per Rares J; [2008] FCAFC 60 at para.45 per Rares J; Lawrenson Light Metal Die Casting Pty Ltd (in liq) v Cosmick Pty Ltd [2006] FCA 753 at para.15 per Heerey J; Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955.
Section 31A of the FC Act and s.17A of the FM Act are equivalents,[18] and likewise r.13.10(a) of the FMC Rules which is in essentially the same terms as the abovementioned sections, insofar as it applies to summary dismissal on the basis of no reasonable prospect of success, and to which the same principles ought to apply.[19]
[18] George at para.75 per Ryan and Logan JJ.
[19]
No reasonable prospect of success
With respect to the application to summarily dismiss the FMC Proceedings it was not seriously contended that the FMC Proceedings had no reasonable prospects of success in the sense necessary to warrant their summary dismissal. Indeed the contrary is posited by reason of the fact that it is suggested that the FMC Proceedings ought to have been, or ought to be, commenced in the District Court, and then joined or heard together with the District Court Proceedings. There is nothing in the pleadings, or the factual material before the Court, to indicate that the claims made in the FMC Proceedings are anything other than contestable, and in those circumstances, there is no basis for them to be dismissed summarily, whether under s.17A of the FM Act or r.13.10(a) of the FMC Rules.
Frivolous or vexatious claim
At no stage was it suggested that the claims made in the FMC Proceedings were frivolous or vexatious.[20]
[20] FMC Rules, r.13.10(b)
Abuse of process
Essentially, what was put by Mr Ameduri was that having two competing proceedings, the FMC Proceedings and the District Court Proceedings, constituted an abuse of process necessitating the dismissal, or the staying, of the FMC Proceedings.[21]
[21] FMC Rules, r.13.10(c).
In the event that the Court determines that there is an abuse of process by reason of the FMC Proceedings, the question of whether the FMC Proceedings ought to be dismissed or stayed will need to be determined.
In determining whether or not there is an abuse of process the Court has regard to a number of factors.
Comity
Comity between Federal and State courts is an important consideration. Generally, the courts:
a)ought not be seen to be competing for litigation business; and
b)should not be hearing the same matters, or matters which are substantially similar, at or about the same time.
Comity is therefore a matter to which appropriate weight must be given in determining where the litigation is to be conducted, having regard to the overall practicalities of the interests of the administration of justice.[22]
[22] Pegasus Leasing Limited v Cadoroll Pty Limited & Ors (1996) 59 FCR 152 at 157 per Lee and Tamberlin JJ (“Pegasus Leasing”).
Federal – State court comity is one aspect of the public interest which must be considered when determining whether or not the institution of the FMC Proceedings constitutes an abuse of process having regard to the previously instituted District Court Proceedings.[23]
[23] Pegasus Leasing at 158 per Lee and Tamberlin JJ.
Because:
a)the District Court Proceedings are so advanced;
b)there is a considerable degree of overlap in relation to the factual matrix relevant to both the FMC Proceedings and the District Court Proceedings; and
c)the FMC Proceedings were commenced second, but more particularly after the District Court Proceedings were significantly advanced,
considerations of comity favour a stay of the FMC Proceedings.
First in time
It is not appropriate to simply determine the issue on the basis of which proceedings were instituted first in time,[24] but it is nevertheless a factor which warrants some consideration and weighing in the balance. In that regard it is relevant that the District Court Proceedings came first, and, albeit a minor factor, it is one which weighs in the balance in favour of a stay of the FMC Proceedings.
[24] Pegasus Leasing at 160 per Lee and Tamberlin JJ; Westpac Banking Corporation & Ors v Eltran Pty Ltd & Ors (1987) 14 FCR 541 at 548 per Fox and Burchett JJ (“Eltran”).
Jurisdiction
Jurisdiction, and in particular exclusivity of jurisdiction, is an important consideration because of the implications that it has for the choice to be made as to which court is appropriate to hear a matter.[25]
[25] Eltran at 548 per Fox and Burchett JJ; Pegasus Leasing at 157-158 per Lee and Tamberlin JJ.
There is no dispute that:
a)this Court has the jurisdiction to grant the relief sought under the TP Act, the FT Act, and the common law and equitable claims in the action in this Court because the claims under ss.51AC and 52 of the TP Act are within the original jurisdiction of this Court,[26] and the other claims are within the associated jurisdiction of the Court under s.18 of the FM Act;[27] and
b)the District Court has jurisdiction to deal with the claims based on contraventions of ss.51AC and 52 of the TP Act, and to grant damages under s.82 in respect of those contraventions. Likewise, with the claims in relation to ss.10, 77 and 79 of the FT Act.
[26] TP Act, ss.86(1A) and 86AA.
[27] Skipworth v State of Western Australia (No. 2) (2008) 218 FLR 16 at 27-28 per Lucev FM; [2008] FMCA 544 at para.37 per Lucev FM; GB Lifestyles Pty Ltd v Resene Paints (Australia) Limited [2010] FMCA 773 at paras.21-34 per Lucev FM.
Tradesman Technologies however argues that the ability of the District Court to grant relief:
a)under s.87 of the TP Act; and
b)in relation to estoppel,
is “open to doubt”. Interestingly, it is put no higher than that.
Mr Ameduri says that there is no jurisdictional difficulty in both sets of proceedings being litigated in the District Court which has jurisdiction to determine claims made under the FT Act and/or the TP Act, particularly in circumstances where it appears from the statement of claim in the FMC Proceedings that Tradesman Technologies accepts that the issues between the parties revolve around or are associated with the correct interpretation of the Continuing Supply Agreement / Loan Agreement.
It is necessary to consider in detail the arguments put by the parties with respect to the jurisdiction of the District Court.
Section 86 of the TP Act provides, relevantly, that:
(2) The several courts of the States are invested with federal jurisdiction within the limits of their several jurisdictions, whether those limits are as to locality, subject‑matter or otherwise, and, subject to the Constitution, jurisdiction is conferred on the several courts of the Territories, with respect to any matter arising under Part IVA or IVB or Division 1, 1A or 1AA of Part V, or a provision of the Australian Consumer Law, in respect of which a civil proceeding is instituted by a person other than the Minister or the Commission.
(3) Nothing in subsection (2) shall be taken to enable an inferior court of a State or Territory to grant a remedy other than a remedy of a kind that the court is able to grant under the law of that State or Territory.
It is not in dispute that the District Court is “an inferior court of a State”.
The District Court of Western Australia Act 1969 (WA)[28] provides in ss.50(1), 55, 57 and 58 as follows:
[28] “DCWA Act”.
50. Civil jurisdiction
(1) Subject to section 51 the Court has the same jurisdiction to hear and determine and may exercise all the powers and authority that the Supreme Court has and may exercise from time to time, in relation to —
(a) all personal actions, other than those of the kind referred to in subsection (2), where the amount, value or damages sought to be recovered is not more than the jurisdictional limit, whether on the original claim or demand or a balance after allowing payment on account, or the amount of any set off admitted by the plaintiff;
(aa) an action brought claiming an indemnity where the action arises from or relates to another action that is before the Court or that has been heard and determined by the Court;
(b) … than the jurisdictional limit which is the whole or part of the unliquidated balance of a partnership account, including in any such action jurisdiction, powers and authority relating to … ;
(bb) an action for specific performance of or for the rectifying, delivering up, or cancelling of any agreement whatever, where the amount in dispute or the value of the property affected is not more than the jurisdictional limit;
55. Court has powers of Supreme Court
The Court or a District Court judge has, as regards any action or matter within its or his jurisdiction for the time being, power —
(a) to grant, and shall grant, in the action or matter such relief, redress or remedy, or combination of remedies, either absolute or conditional; and
(b) to make any order that could be made in regard to any action or matter, and shall in each such action or matter give such and the like effect to every ground of defence or counterclaim equitable or legal,
in a full and ample manner as might and ought to be done in the like case by the Supreme Court or a judge thereof.
57. Rules of law and equity applicable to the Court
(1) The several rules of law and equity enacted and declared by the Supreme Court Act 1935, shall, unless express provision is otherwise made in this Act, be in force and take effect in the Court, as far as the matters to which those rules relate are respectively cognizable by the Court.
(2) Without affecting the generality of subsection (1), but subject to the express provisions of any other Act, in every action or matter commenced in the Court, law and equity shall be administered according to the provisions of section 25 of the Supreme Court Act 1935 as though that section were enacted in this Act and in terms made applicable to the Court.
58. Defences or counterclaims in the Court and transfers from the Court
(1) Where in an action before the Court any defence or counterclaim of the defendant involves matters beyond the jurisdiction of the Court, that defence or counterclaim does not affect the competence of the Court to dispose of the whole matter in controversy, so far as it relates to the demand of the plaintiff and the defence thereto, but no relief exceeding that which the Court has jurisdiction to administer shall, subject to section 51, be given to the defendant upon that counter claim.
(2) In any action to which subsection (1) applies a judge of the Supreme Court may, if he thinks fit, on the application of any party, order on such terms and conditions as he thinks fit, that the whole action be transferred to the Supreme Court.
The Court was referred to judgments of the Supreme Court of Western Australia in relation to the question of the equitable jurisdiction of the inferior courts in the Western Australian judicial system, namely the District Court and the then Local Court of Western Australia.[29] Those judgments do not however touch upon the District Court’s jurisdiction under the TP Act.
[29] Commercial Developments Pty Ltd (t/as Don Rogers Motors Pty Ltd) v Mercantile Mutual Insurance (Workers’ Compensation) Limited (1991) 5 WAR 208 (“Commercial Developments”); The Lunching Pad Pty Ltd v Minister for Culture and the Arts & Anor [2001] WASC 299; Chianti Pty Ltd v Leume Pty Ltd [2007] WASCA 270.
The ultimate answer to the issue of jurisdiction however, lies in two judgments of the Federal Court, which are generally binding on this Court, in relation to s.86(2) and (3) of the TP Act and its effect, and a helpful and persuasive judgment of the Full Court of the Queensland Supreme Court, each of which is dealt with below.
Kinna
In Kinna v National Australia Bank Limited[30] the Federal Court had before it an application, by the applicant, to transfer, under s.86A of the TP Act, proceedings in the Federal Court to the Victorian County Court at Warrnambool.[31] In Kinna the applicant alleged that it entered into guarantees as a result of conduct by the respondent in contravention of s.52 of the TP Act, as well as making claims based upon Victorian law. In respect of the latter it did so relying upon the accrued jurisdiction of the Federal Court. The applicant made a claim for damages under s.82 of the TP Act, but also sought an order under s.87 of the TP Act for a declaration that the relevant guarantee was void ab initio as against the applicant. The respondent cross-claimed, basing its cross-claim on the guarantees.[32]
[30] (1988) 81 ALR 410 (“Kinna”).
[31] Kinna at 410 per Northrop J.
[32] Kinna at 411 per Northrop J.
The respondent opposed the transfer of the application to the Victorian County Court.[33] The respondent contended that s.86(3) of the TP Act meant that the Victorian County Court did not have power to grant the remedy sought by the applicant under the TP Act for a declaration that the relevant guarantee was void ab initio; and, specifically, that the declaration which was sought was not a remedy of a kind that the County Court was able to grant under the law of the State of Victoria, and thus s.86(2) of the TP Act did not enable the Victorian County Court to grant that declaration.[34]
[33] Kinna at 410 per Northrop J.
[34] Kinna at 413-414 per Northrop J.
It does not appear to have been in dispute that the application in issue was within the monetary jurisdiction or limit of the Victorian County Court, and that a claim under s.52 of the TP Act, absent the declaration sought by way of relief, would have been within the general jurisdiction of the Victorian County Court.[35]
[35] Kinna at 411 per Northrop J.
The Federal Court in Kinna noted the importance of the terms of s.49 of the County Court Act 1958 (Vic)[36] which provided as follows:
“The Court or a judge shall as regards any action or matter within its or his jurisdiction for the time being have power to grant, and shall grant, in any action or matter, such relief, redress or remedy, or combination of remedies, either absolute or conditional, and shall have power to make any order that could be made in regard to any action or matter, and shall in every such action or matter give such and the like effect to every ground of defence or counter-claim, equitable or legal, in as full and ample a manner as might and ought to be done in a like case, by the Supreme Court.”
[36] “CCV Act”.
The Court observes that, save for setting out, and minor but irrelevant word changes, s.49 of the CCV Act is identical to s.55 of the DCWA Act.
In Kinna, the Federal Court observed that s.75B(2)(a) of the TP Act provided (as it still provides):
“a reference to the Court in relation to a matter is a reference to any court having jurisdiction in the matter”
and then went on to set out the terms of ss.86 and 86A of the TP Act, the latter being relevant because the application was an application to transfer the proceeding from the Federal Court to the Victorian County Court. The Federal Court went on to observe that:
“A number of sections in Pt VI of the Trade Practices Act confer powers enabling a court to exercise the jurisdiction conferred by s 86. Thus s 80 enables a court, whether the Federal Court or a State court, to grant injunctions in conformity with the provisions of that section. Section 82 enables a court, whether the Federal Court or a State court, to award damages in conformity with the provisions of that section. Section 87 enables a court, whether the Federal Court or a State court to “make such order or orders as it thinks appropriate … (including all or any of the orders mentioned in sub-section (2) …)” in conformity with the provisions of that section: see s 87(1). Section 87(2) enumerates a number of orders that may be made …
By the proceeding in this court the applicants are seeking relief with respect to a matter arising under Div 1 of Pt V of the Trade Practices Act. That matter is within the limits of the jurisdiction of the County Court both as to locality and subject matter. Therefore, by s 86(2) the County Court is invested with federal jurisdiction to hear and determine that matter. In addition, the County Court has jurisdiction to hear and determine the other matters with respect to which the applicants are seeking remedies either because those matters arise under State law or because they come within federal jurisdiction being within the accrued jurisdiction. It is not necessary to determine which. The County Court has jurisdiction to hear and determine the cross-claim made by the respondent with respect to enforcing the guarantee.”[37]
and
Section 86(2) confers jurisdiction on the County Court to hear and determine the matter arising under s. 52 of the Trade Practices Act. It was not disputed that the County Court has power to award damages under s 82 of the Trade Practices Act in favour of the applicants if they make out their case against the respondent. A number of sections contained in Pt VI confer specific power on courts to grant specified remedies: see for example s 80 with respect to injunctions and s 87 and in particular s 87(1) and (2) with respect to declarations. One of the remedies specified is that referred to in s 87(2)(a), a power to declare the whole or any part of a contract to be void and, if the court thinks fit “to have been void ab initio or at all times on and after such date before the date on which the order is made as is specified in the order”.
Counsel for the respondent did not dispute that the County Court has power to grant injunctions and to make declarations. Section 49 of the County Court Act makes that very clear. Counsel contended, however, that the power to make equitable declarations was limited to prospective conduct and that an equitable declaration could not be made to operate retrospectively. For present purposes, I will assume that contention to be correct.
The issue is whether the jurisdiction conferred on the County Court by s 86(2) to make the declaration sought is taken away by s 86(3). That sub-section is a limitation imposed on the amplitude of the powers conferred on State courts by s 86(2). The limitation does not apply to superior courts of a State. Thus the Supreme Court of Victoria has jurisdiction to exercise all the powers conferred by the Trade Practices Act. Under s 49 of the County Court Act, the County Court has power to make any order that could be made by the Supreme Court. In those circumstances, it would be strange if the County Court did not have power to make the declaration sought by the applicants.
Further, the limitation contained in s 86(3) applies to a remedy “other than a remedy of a kind that the court is able to grant under the law of that State” (emphasis added). The County Court has power to make declarations. It is true that a declaration that can be made under s 87(2)(a) is one which cannot be made under State law, but it is of a kind that the County Court is able to grant under State law in as full and ample a manner as might and ought to be granted by the Supreme Court. The County Court has power under State law to grant injunctions and declarations. A declaration under s 87(2)(a) is a particular kind of declaration within the generic concept of declarations.”[38]
[37] Kinna at 413 per Northrop J.
[38] Kinna at 414 per Northrop J.
In Kinna, the proceeding was ordered to be transferred to the County Court of Victoria at Warnambool.[39]
[39] Kinna at 416 per Northrop J.
Brava Soft Furnishing
In Brava Soft Furnishing Pty Ltd v TRW Carr Pty Ltd[40] there was an application to transfer proceedings in the Federal Court to the District Court of South Australia. The application, under s.52 of the TP Act, sought relief including an order under s.87 of the TP Act declaring a contract entered into by the applicant to be void ab initio. An argument was raised by the applicant, in opposition to the application to transfer the matter to the District Court of South Australia, that the District Court of South Australia had no jurisdiction to grant declaratory relief of the kind sought, as it was not “a remedy of a kind” within the meaning of s.86(3) of the TP Act.
[40] Unreported, Federal Court of Australia, Sheppard J, 4 September 1989 (“Brava Soft Furnishing”).
The applicant’s argument was based on s.35b of The Local and District Criminal Courts Act 1926 (SA)[41] which provided as follows:
[41] “LCSA Act”.
“(1)A local court shall recognize and take notice of all equitable estates, titles, and rights, and all equitable duties and liabilities appearing incidentally in the course of any cause or matter pending before it, in the same manner in which a court having equitable jurisdiction would formerly have recognized and taken notice of the same in any suit or proceeding duly instituted therein.
(2)A local court shall have –
(a)jurisdiction to pronounce any declaratory judgment; and
(b)jurisdiction in equity to pronounce or make any judgment, decree or order,
that is, in the opinion of the court, incidental or ancillary to, and necessary or expedient for the just determination of, proceedings before the court.
(3)This section does not confer on a local court jurisdiction to entertain any principal claim for declaratory or equitable relief that it would not otherwise have had jurisdiction to entertain, or in any event, jurisdiction to make any order or adjudication otherwise than in accordance with established principles upon which declaratory or equitable relief may be granted.
(4)The provisions of subs(2) of this section are supplementary to, and do not derogate from, the equitable jurisdiction otherwise conferred upon a local court under this Act.”[42]
[42] The Federal Court proceeded on the assumption that the South Australian District Court was a local court of full jurisdiction as referred to by s.5ab of the LCSA Act which provided that each local court to which full jurisdiction had been assigned shall, insofar as it is a local court of full jurisdiction, be known as a “District Court”.
The submission for the applicant was that the jurisdiction of the South Australian District Court to pronounce a declaratory judgment was limited to cases where the South Australian District Court was of the opinion that such relief was incidental or ancillary to and necessary for the just determination of the proceedings before that court, as emphasised by s.35b(3) of the LCSA Act. Having referred to Kinna the Federal Court observed that:
“This case is distinguishable from Kinna’s case because of the more restricted power which the South Australian Court has to grant declaratory relief. The Victorian County Court had the unfettered power of the Supreme Court of Victoria to grant declaratory relief. The District Court here does not.[43]
If the only relevant provision in the Local Courts Act were s.35b, I would conclude that this court was not empowered to transfer the matter to the District Court. That is because the jurisdiction conferred on a local court by that provision needs to be incidental or ancillary to the just determination of proceedings before the court. The relief for which s.87 in its various subsections and paragraphs provides is not necessarily relief which is granted as incidental or ancillary relief but will usually be primary relief. That is so in the present case. The declaration which the applicant seeks is by way of primary relief.
In my opinion this case is distinguishable from Kinna’s case … because the provisions of the Victorian Act there in question conferred unrestricted power on the Victorian County Court to give declaratory relief. I do not think that a provision such as subs86(3) of the Act should be subjected to any narrow construction. That would defeat the object of the legislature which was to enable this Court to transfer to State courts matters which were appropriate to be dealt with by courts of more limited jurisdiction. Nevertheless, if the matter were governed entirely by s35b of the Local Courts Act, I do not think that it could be said that the District Court was empowered to grant relief of a kind which is contemplated by para87(2)(a) of the Act.”[44]
[43] Brava Soft Furnishing at 9 per Sheppard J.
[44] Brava Soft Furnishing at 10-11 per Sheppard J.
The respondent however also relied on s.259(1)V of the LCSA Act which provided that the South Australian District Court had the jurisdiction and exercised the powers and authorities of the Supreme Court of South Australia and the Judges thereof in a number of specified actions, including actions:
“for specific performance of, or for delivering up, or cancelling of, any agreement for the sale, purchase, or lease of any property where, in the case of a sale or purchase, the purchase money, or in the case of a lease, the value of the property, does not exceed the sum of $40,000.”[45]
[45] Brava Soft Furnishing at 9-10 per Sheppard J.
The Federal Court observed that s.259(1)V of the LCSA Act was in a part of the LCSA Act which was entitled “Special Equitable Jurisdiction of Local Courts”.[46] The Federal Court then went on to observe as follows:
“s 259(1) confers on judges, in effect of the District Court, the jurisdiction, powers and authority of the Supreme Court of South Australia and the judges thereof in a number of specified actions including those specified in paraV. These include actions for the cancelling of any agreement for the lease of any property where the value of the property does not exceed $40,000. As mentioned, that is the case here. In my opinion that paragraph (whether read alone or in conjunction with s35b), within the meaning of subs86(3) of the Act, does empower the District Court to grant a remedy of a kind that the Court is able to grant under the law of South Australia. Again, I emphasise the use of the words “remedy of a kind”. They are wide words. There is no warrant for construing them narrowly and they embrace, in my opinion, relief which may be granted under para87(2)(a) of the Act.[47]
… The critical question is the nature of the relief or remedy which the District Court can give. It may be equitable in character, but relief under s87 is nevertheless relief of a kind which the District Court can give. Counsel also submitted that the words of paraV of s259(1) were to be distinguished from the words of para87(2)(a) of the Act. I agree that, in terms, they are different. The former speaks of the cancelling of any agreement for the lease of any property. The latter speaks of an order declaring the whole or any part of a contract between the parties void ab initio or void at all times on and after a date specified in the order. In substance, however, the two provisions cover the same ground.”[48]
[46] Brava Soft Furnishing at 11 per Sheppard J.
[47] Brava Soft Furnishing at 11-12 per Sheppard J.
[48] Brava Soft Furnishing at 12 per Sheppard J.
The Federal Court found that it therefore had power to transfer the matter to the South Australian District Court.[49]
[49] Brava Soft Furnishing at 12 per Sheppard J.
Startune
In Startune Pty Ltd v Ultra-Tune Systems (Aust.) Pty Ltd[50] the Full Court of the Queensland Supreme Court had before it an appeal from a decision of a Queensland District Court granting an interlocutory injunction restraining a defendant in an action where the relief sought was “injunctive relief, damages and other relief for contravention of s.52 of the Trade Practices Act 1974”.[51]
[50] [1991] 1 Qd R 192 (“Startune”).
[51] Startune at 192 per McPherson J.
The Queensland Supreme Court observed that the District Courts Act 1967 (Queensland)[52] enabled a Queensland District Court, under s.67(2)(b) of the DCQ Act in proceedings in which it had jurisdiction, to grant relief by way of injunction in the proceedings, and that for present purposes that meant proceedings of a kind prescribed in s.66(1)(a) of the DCQ Act which were “personal actions, where the amount … sought to be recovered does not exceed the monetary limit …”.[53]
[52] “DCQ Act”.
[53] Startune at 197 per McPherson J.
In Startune the plaint in its original form did not claim any particular amount, and the Queensland Supreme Court therefore found that there was not demonstrably a case within the jurisdiction conferred so as to be capable of attracting the power to grant relief by way of injunction.[54] The Queensland Supreme Court observed that:
“ … in the state of the plaint as it then stood, an injunction was not “a remedy of a kind” that a District Court was “able to grant under the law of” this State, so as to attract the authority conferred by s 86(2) and s 86(3) of the Trade Practices Act 1974 (Cth).”[55]
and
“… it was open to [the Queensland District Court] … on application to amend, or to accept an undertaking to amend, the plaint so as to demonstrate jurisdiction … and so attract the power of granting injunctions that is conferred … [and] that if the plaint had been so amended, or if the necessary undertaking to do so had been given, … [the Queensland District Court] could legitimately have proceeded with the hearing.”[56]
[54] Startune at 197 per McPherson J.
[55] Startune at 197 per McPherson J (with whom de Jersey and Lee JJ agreed: at 200). On this point the Queensland Supreme Court adopted the reasoning in Brava Soft Furnishing.
[56] Startune at 197 per McPherson J (with whom de Jersey and Lee JJ agreed: at 200).
By the time the matter came on for appeal in Startune an amended plaint had been filed claiming a specific sum of damages for breach of s.52 of the TP Act, within the jurisdictional limit of the Queensland District Court, and the Queensland Supreme Court found that the amendment removed the objection to jurisdiction and enabled an injunction to be granted in the action for damages as a proceeding in which jurisdiction was conferred.[57]
[57] Startune at 198 per McPherson J (with whom de Jersey and Lee JJ agreed: at 200).
The relief sought by way of declaration, and an order for indemnity, is “relief of a kind” which the District Court of Western Australia could grant if a claim were made to it in the terms, or terms similar to, those made in the application and statement of claim in the FMC Proceedings. That is because, by reason of s.55 of the DCWA Act, the District Court of Western Australia exercises the power of the Supreme Court of Western Australia, and therefore of the Federal Court, which enables it to grant the declaratory relief claimed. The relief claimed is “relief of a kind” obtainable under s.87(2) of the TP Act, and is therefore a matter within the jurisdiction of the District Court of Western Australia under s.86(2) of the TP Act (supported by s.75B(2)(a) of the TP Act) and not precluded by s.86(3) of the TP Act for reasons explained in Kinna, Brava Soft Furnishing and Startune, as set out above. Similarly, the indemnity claim would be within jurisdiction on the application of the same principles, but appears to be within jurisdiction in any event by reason of s.50(1)(aa) of the DCWA Act.
For the above reasons, the Court is of the view that Tradesman Technologies could have brought the claim brought in this Court by writ and statement of claim in the District Court of Western Australia, and that the District Court of Western Australia would have jurisdiction to hear those proceedings. Jurisdictional issues do not therefore preclude the claims brought in the FMC Proceedings from being brought in the District Court.
Joinder and hearing together
In relation to possible joinder, or hearing together, with the District Court Proceedings of any proceedings commenced in the District Court of Western Australia by Tradesman Technologies it suffices to observe that presently there are no such proceedings, but given the Court’s conclusion with respect to jurisdiction there would be nothing to preclude their being brought in the District Court. On usual principles such proceedings ought then be joined or heard together with the District Court Proceedings.[58] These issues do not preclude the claims brought in the FMC Proceedings from being brought in the District Court.
[58] Commercial Developments at 214 per Malcolm CJ.
If those proceedings were brought in the District Court it would, of course, be a matter for the District Court to determine how any application (assuming one were to be made) for joinder or hearing together is to be dealt with, but if the usual principles were applied that would favour the grant of a stay of the FMC Proceedings.
Expense and convenience: parties and witnesses
Generally
The Court must have regard to the expense and convenience of the parties and witnesses.[59] In this case Mr Ameduri, the respondent in the FMC Proceedings, has, as applicant in the District Court Proceedings been involved since December 2009 in instituting, and then preparing the District Court Proceedings to go to hearing, with a hearing due, according to the District Court “milestones” in February 2011 and with a judgment due in April 2011. All interlocutory steps have apparently been completed in the District Court Proceedings, including a discovery which runs to some 800 documents. Thus, in the District Court Proceedings the matter is, the Court is so informed, ready for entry for trial. Taken together, those matters indicate that the District Court Proceedings are well advanced, and favour a granting of a stay of the FMC Proceedings.
[59] Pegasus Leasing at 158 per Lee and Tamberlin JJ.
Costs
In submissions in the FMC Proceedings, Tradesman Technologies suggested that the additional costs of proceeding in this Court would not be significant, and that to a certain, if not considerable degree, costs incurred in the District Court Proceedings would not be lost because the content of the District Court Proceedings would largely be able to be replicated in the FMC Proceedings. It was seriously suggested that there was not significant work involved in Mr Ameduri preparing a defence for the FMC Proceedings, and that it effectively only involved replicating the statement of claim in the District Court Proceedings. That, however, ignores the fact that in the FMC Proceedings there are representations pleaded, which are said to constitute misleading and deceptive conduct under s.52 of the TP Act, which is not pleaded in the District Court Proceedings. Likewise, there is an estoppel pleaded which is not pleaded in the District Court Proceedings, and which, on Tradesman Technologies’ argument, cannot be the subject of relief in the District Court Proceedings, as well as an indemnity pleaded. Manifestly, if the FMC Proceedings were to proceed there would be significant additional work involved in preparing a defence, as well as the obtaining of appropriate instructions with respect to the pleaded representations, estoppel and indemnity.
If the FMC Proceedings were to proceed, either in respect of the present application, or, if, somehow, the District Court Proceedings were able to be replicated and brought into this Court (whether by way of defence and counterclaim to the present statement of claim, or a separate application, joined or heard together with the current application) the actual cost to the parties would, in the Court’s view, be, save perhaps for some lesser amount in filing fees in this Court, the same as if the FMC Proceedings were able to be replicated in the District Court of Western Australia (for example by the issuance of a writ and statement of claim by Tradesman Technologies against Mr Ameduri).
The suggestion that the District Court Proceedings could be replicated in this Court at little cost to Mr Ameduri also ignores other relevant issues. Firstly, given the stage which the District Court Proceedings have reached it is evident that considerable costs have been incurred. Even though there is no direct evidence of that fact before the Court, the Court is prepared to find, by necessary implication, that that is the case. Secondly, if Mr Ameduri is successful in the FMC Proceedings, and there were to be a discontinuance of the District Court Proceedings with no order as to costs (as suggested by Tradesman Technologies) so as to allow the District Court Proceedings to be replicated in this Court, Mr Ameduri would not, in the event that he is successful in this Court, be likely to recover costs on the same basis as he would have done if the District Court Proceedings proceeded and he was successful in those proceedings. Costs in this Court are based on a fixed sum for certain events which occur in the course of the litigation. Often, there is a significant disparity, or a more significant disparity than is usual in litigation, between the actual costs incurred by the parties and the sum recoverable as costs in this Court. A good example of the disparity between costs incurred by parties and costs able to be recovered by parties in this Court by reason of a successful party’s costs generally being restricted to those payable under Schedule 1 of the FMC Rules is Pierson’s Pro-Health Pty Ltd & Ors v Silvex Nominees Pty Ltd & Anor (No. 3)[60] where, following a five day hearing of a trademarks, torts and trade practices case the Court ordered that the successful parties’ costs be paid in the sum of $34,734 in circumstances where it was said that the costs and disbursements for Counsel, solicitors and experts totalled $281,922.65.[61] Thus, the replication of the District Court Proceedings in this Court may, in the event that Mr Ameduri were to be successful in this Court, leave him significantly out of pocket in relation to the costs already incurred in the District Court Proceedings, and in a less advantageous position in relation to costs incurred in proceedings in this Court.
[60] [2010] FMCA 250 (“Pierson’s Pro-Health (No. 3)”).
[61] Pierson’s Pro-Health (No. 3) at para.154 per Lucev FM.
Given that:
a)the level of costs recoverable in this Court may be lower than in the District Court Proceedings;
b)both this Court and the District Court have jurisdiction to deal with all of the matters in issue between Tradesman Technologies, Mr Cotellessa and Mr and Mrs Ameduri; and
c)significant costs have already been incurred by the parties to the District Court Proceedings, which costs would not be recoverable if Tradesman Technologies’ proposal that the totality of the matters proceed in this Court, and that there be no order as to costs in the District Court Proceedings, were adopted,
it appears to the Court that the more equitable course, at least with respect to costs, and particularly given the costs already incurred, would be for the District Court Proceedings to remain on foot, and for the FMC Proceedings to be stayed.
Discovery
With respect to discovery, Tradesman Technologies says that it is prepared to consent to the making of a declaration under s.45 of the FM Act that it is in the interests of the administration of justice that there be discovery in the FMC Proceedings, and that that will alleviate the necessity for costs to be incurred with respect to discovery. That submission, however, fails to account for two significant matters. Firstly, it is still necessary for the Court to determine whether or not it is in the interests of the administration of justice for such a declaration to be made. In order to make the necessary declaration it is necessary for the Court to hear the parties and to satisfy itself that the declaration is appropriate in the interests of the administration of justice.[62] That process will result in each party incurring costs associated with the preparation of submissions and a hearing (whether oral or on the papers). Secondly, additional costs would be incurred in any event (that is, even if the declaration were to be made by the Court) because it would be necessary to copy the documents for the purposes of the proceedings in this Court. The discovery issue, albeit not a major issue, favours a stay of the FMC Proceedings.
[62] The relevant principles in that regard are set out in Doukidis v Williamson (2008) 6 ABC(NS) 717 at 725-726 per Lucev FM; [2008] FMCA 1352 at paras.35-37 per Lucev FM, and Abrahams v Qantas Airways Limited (2007) 210 FLR 314 at 321 per Lucev FM; [2007] FMCA 639 at para.25 per Lucev FM.
Witnesses
If the District Court Proceedings and the FMC Proceedings were to continue then primary witnesses, such as Mr Cotellessa and Mr and Mrs Ameduri, and other witnesses such as bank officers would all have to give their evidence twice, that is, once in each set of proceedings. Albeit that the duplication of evidence from witnesses does periodically occur in civil litigation, it is undesirable, and would obviously be inconvenient for the witnesses. Furthermore, it gives rise to the possibility of different factual findings on evidence, which it could be expected would be the same or largely similar in each of the proceedings, and different findings on credit, which may be affected by the witnesses’ demeanour on a particular day, and the degree to which Counsel cross-examining might be prepared for the answers, and more prepared to challenge those answers, in the second set of proceedings. Therefore, there is likely to be significant inconvenience to witnesses, and the possibility of different fact and credit findings arising in relation to the same, or substantially the same, evidence given in each court.
The problem with witnesses giving evidence twice will, however, only be resolved if there is a single set of proceedings dealing with all of the issues in the District Court or this Court. At the moment, that is not possible because neither party has made the necessary applications to facilitate that course. In the absence of such applications it appears that it will be necessary for witnesses to give evidence in both set of proceedings. The grant of a stay of the FMC Proceedings may defer the giving of evidence by witnesses for a second time, but will not preclude it, unless there is a resolution out of court, or the District Court Proceedings, or other proceedings in the District Court (not yet filed or necessarily contemplated by the relevant parties), result in the resolution of these matters in the District Court.
Overall, this factor is therefore one which is neutral in evaluating whether the stay ought to be granted.
Degree of progress in proceedings
The rate of progress, or likely progress, in the District Court Proceedings and the FMC Proceedings is a matter requiring consideration in determining whether to grant a stay of the FMC Proceedings.
The District Court Proceedings are ready for trial on the information presently before the Court. The FMC Proceedings are just beginning, and Mr Ameduri has not yet been required to file a Defence.
The maturity of the District Court Proceedings is a powerful consideration favouring Mr Ameduri. It would, in the Court’s view, be unfair for mature proceedings such as the District Court Proceedings to be required to be conducted while other proceedings which involve substantially the same factual matrix and the same witnesses are brought on and progressed in this Court.
Dependent upon future developments it is still conceivable that, notwithstanding the lapse of time since this Court’s hearing of the stay application there could be concurrent proceedings and hearings in the District Court and in this Court in respect of the proceedings in each court. Obviously, that would be undesirable and impractical for the parties.
Whilst a powerful factor in favour of the grant of a stay, the progress of the District Court Proceedings is nevertheless still one factor which requires balancing with the other factors that the Court is required to consider.
Consideration – summary
On an overall consideration of relevant factors, which factors do not and need not carry equal weight, the Court considers that it is appropriate to grant a stay of the FMC Proceedings, on the basis that those proceedings are presently an abuse of process, with comity and the degree of progress in the District Court Proceedings being primary factors in that conclusion. The Court’s conclusion that the District Court has jurisdiction to deal with the subject matter was also important, but even if the Court had determined that the District Court did not have jurisdiction to deal with the totality of the FMC Proceedings, the primary factors referred to above, and other factors considered, would still have led the Court to conclude that a stay of the FMC Proceedings was appropriate.
Although the Court has considered the above factors in the context of a stay, it has also considered whether dismissal is appropriate. The Court does not consider dismissal appropriate because:
a)if the Court’s view with respect to jurisdiction is wrong it is possible that there may still be matters for this Court to determine in the FMC Proceedings; and
b)Tradesman Technologies is not, presently, a party to the District Court Proceedings, or any related proceedings in the District Court, and its right to pursue the FMC Proceedings ought not be foreclosed at this stage.
Conclusion
The Court has concluded that the Respondent’s application in a case ought to be granted insofar as it seeks a stay of the FMC Proceedings. Therefore the FMC Proceedings will be stayed pending further order of this Court. The matter will otherwise be adjourned to 9.00am on 27 June 2011 for mention. There will be liberty to apply, so as to leave open an option for the parties to return to this Court in the event that difficulties arise in respect of the District Court Proceedings.
The Court will hear the parties as to costs.
I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of Lucev FM
Date: 24 December 2010
Balding v Ten Talents Pty Ltd (2007) 162 IR 17 at 24 per Lucev FM; [2007] FMCA 145 at
paras.15-18 per Lucev FM.
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