Transatlantic Freight Services Pty Ltd v Olympic Airways S.A

[1989] FCA 674

JUDGMENT No, 674, $ 9

R. b-=-<.s?-'

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. NG318 of 1987

t~

1   2 :

GENERAL DIVISION )

BETWEEN:

TRANSATLANTIC FREIGHT SERVICES

PTY. LIMITED

Applicant

AND :

OLYMPIC AIRWAYS S.A.

Respondent

CORAM: SHEPPARD J.

DATE : 5 OCTOBER 1989

REASONS FOR JUDGMENT

HIS HONOUR: To be dealt with is a notice of motion filed on 10 August last by which the applicant seeks to have set aside an order made by Gummow J. on 11 February 1988. The order which his Honour made was that the proceedings be dismissed and that the applicant pay the respondent's costs including reserved costs of the proceedings. That order has not been taken out.

application sought relief by way of injunction and damages. In

The proceedings were instituted by an application which was filed on 15 July 1987. It was accompanied by a statement of claim which was subsequently struck out. An amended application and statement of claim were filed on 9 September 1987. The

the amended statement of clalm it was alleged by the applicant that in or about December 1984 the respondent made representations to the applicant whlch included a representation that the respondent would pay to the applicant a rebate or bonus for the sale of the respondent's airline tickets during the course of the applicant's travel agency busrness. Further representations were that discounts passed on by the applicant to purchasers of the respondent's airline tickets would be refunded by the appllcant by way of bonus or additional commission; that the respondent would pay commissions known as overrides or kick-backs to the applicant in return for sale by the applicant of the respondent's airline tickets; and that the respondent would pay to the applicant commissron at a percentage level in accordance with alrline company practice.

It was alleged that the representations were material representations of fact and were made by the respondent without any belle£ in the accuracy of the representations or with reckless indifference as to their accuracy.

which was lower than it otherwise would have been. The	the respondent's airline tickets at a percentage profit margin It was also alleged that the applicant was induced to sell
representations were said to be false and untrue in that the respondent did not pay override or kick-back commissions at a rate equal to commissions pald or payable by the respondent to other travel agents, reimburse or refund the applicant in respect of discounts passed on by the appllcant to purchasers of the respondent's airline tickets, or pay to the applicant commission at the level as promised or in accordance with the respondent's practice. The conduct of the respondent was said to be mlsleadlng and deceptive and a breach of S. 52 of the Trade Practices Act 1974. An alternative cause of action pleaded upon the same facts was breach of contract on the basis that each of the representations was promissory in character.
The defence to the amended statement of claim denied each of the critical allegations made in it to whlch I have referred. Paragraph 3 of the defence put the respondent's positive case which, amongst other things, alleged that on or about 15 February
1985 the respondent informed the applicant that in addition to
the commisslon payable and paid by the respondent to the applicant in pursuance of the agreement which the respondent alleged the respondent would pay to the applicant an additional override commission in an amount determined from a sliding scale with reference to forelgn revenue earned by the respondent from tickets issued by the applicant for alr transportation by the respondent. Paragraph 3 alleged that the respondent had paid that additional override commission. The amount was said to be determined according to a sliding scale employed by the
commisslon paid to all travel agents who sold tickets for air respondent to calculate the amount of the additional override
transportation by the respondent.
In paragraph 4 of the amended defence it was alleged that between February 1985 and January 1987 the applicant did not itself issue tickets for air transportation by the respondent and that the respondent was by reason thereof under no obligation to pay to the applicant commission either in accordance with the agreement alleged in paragraph 3(a) or override commission as alleged in paragraph 3 ( b ) .
Those were the issues which arose for determination on the pleadings. The applicant took out a motion for an interlocutory injunction. This came before Burchett J. on 10 August 1987. The motion was dismissed. His Honour delivered reasons for his decision. Amongst other things his Honour said:-

"It is easy to sympathize with the applicant's commercial plight but, quite apart from the question whether the position was ever misrepresented to him, he faces the difficulty that it is admitted he was told clearly, by Mr. Joannides (an executive of Olympic) by February 1985, that commissions were paid according to a scale depending upon ticket sales and upon flown revenue. As at that date, a relatively small amount of business had been done; sufficient, on the applicant's own case, to entitle him to no more than about $15,000 additional commissions. The answer to this difficulty, proffered by Mr. Milne, is that he was already in a position from which he could not extricate himself; but after February 1985, and for nearly two years, he did in fact cease to act as an agent buying directly from Olympic, and it is admitted that on the

tickets sold by him during that period. It evidence he has no claim in respect of	appears that he ceased to act directly for
Olympic for reasons which are quite unrelated to the present claim.
When the applicant resumed selling for Olympic in 1987, on the terms on which he did sell, it seems to me the evidence simply does not, at this interlocutory stage, permit me to conclude that he was doing so as a result, direct or indirect, of the alleged misrepresentation. In those circumstances, I do not think a sufficient case has been made out to justify the relief sought. This conclusion makes it unnecessary for me to deal with certain other submissions put on behalf of Olympic, though I should add that it seems to me beyond argument that the Court would have had power to grant appropriate relief against Olympic if a case had been made out. For these reasons I dismiss the application."

It is important, of course, to note the qualification which his Honour makes to his ultimate conclusion, namely, that his conclusion is reached upon the basis of the evidence which he had before him, as his Honour said, at that interlocutory stage.

A number of documents were tendered in evidence. I do not

need to refer to the entirety of them but it is pertinent at this point to refer to a letter dated 29 April 1986 written by the applicant to the respondent. Amongst other things Mr. Adamopoulos, who wrote the letter on behalf of the applicant, said that the applicant never had a direct promise from the airline, just an lmplied promlse. He continued:-

"That is the way these matters are usually being arranged between carriers and agents and always the carriers show their integrity by fulfilling their obligations although not bound by them."

That of course is only one piece of evidence and there is a great deal of other material but I mention it at this point because it seems to be consistent, at least to a degree, with the way the matter was approached by Burchett J. in his judgment.

After the application for interlocutory relief had been

dismissed the matter came before me for directions on 19 August

1987. I gave leave to the applicant to file an amended

application and directed the respondent to file its defence on or before 23 September 1987. The proceedings were stood over for further directions to 29 October 1987. On that day the proceedings came again before Burchett J. A solicitor, Mr. Vardas, appeared on behalf of the applicant. He advised the Court that his client was in Greece and that he had no instructions regarding the further prosecution of the matter. Burchett J. ordered that the proceedings be stood out of the list to be restored on seven days' notice. In default of earlier restoration, the proceedings were to be listed for further directions on a date in 1988 to be fixed by the Registrar.

On 8 December 1987 notice was given by the Court that the
matter had been relisted for directions at 9.30 a-m. on 11
February 1988. That was the day upon whlch it came before Gummow

J. Both parties were represented, 14r. Vardas again representing the applicant. According to the affidavit of Mr. L.14. Powers, the solicitor for the respondent, Mr. Vardas ind~cated to the Court that his client was stlll in Greece and that he had no instructions to either consent or to oppose an application to

have the proceedings dismissed. It was in those circumstances	that Gummow J. made the order which it is now sought to have set
aside.
Nothing further appears to have been done in the matter, at least so far as the Court is concerned, until 31 May 1989, over 15 months after Gummow J.'s order, when the Registry received a memorandum from Itr. Adamopoulos on behalf of the applicant in which he requested a date to be set for a hearing of the action. The memorandum said:-

"On the 9th August 1987 I received a telephone call from Athens regarding a serious and urgent personal family matter concerning my daughter and grandson. Therefore I had to depart immediately as I also had to attend to other important matters. As I had the pending Court hearing I delayed my departure for three days and I left on the 12th August 1987 expecting to return back soon. A couple of days after my arrlval in Athens I recelved a telephone call from one of my employees in Sydney who told me that at that day he went as usual to the office and saw the Receivers who without any previous warning or advlce had come to the office and had taken the arbitrary action of tearing the place down, spreading to the floor the contents of all drawers, cupboards, cabinets, etc. and rlpping down everything hanging on the walls."

There was more to the same effect. The memorandum ultimately said that the goodwill and value of a travel agency depended on its public relations. Mr. Adamopoulos continued:-

"At the time besides my other ailments, due to the prevalent situation I was also suffering from strong headaches due to anxiety and mental stress. The news from my employee immediately hit me so hard that I

bedridden and mentally incapacitated for suddenly suffered a shock and remained

about three weeks. Before my breakdown I

intended to return in due time and attend to this case but after the setback to my health my only worry and that of my family at that time was for my health and my life. The reason for the delay in filing this application with the Federal Court is due to the fact that I was continually requested to appear at the Supreme Court. I had to constantly prepare my case for the Supreme Court appearances which was extremely difficult and strenuous for me due to my continuous and present ill health."

Some medical certificates were produced.

It would appear from the evidence that Mr. Adamopoulos in

fact returned to Australia in June 1988, over three months after

Gummow J s : order.

The sending by Mr. Adamopoulos to the Registry of the memorandum, which the Registry received on 31 May 1989, led, so far as the evidence discloses, to his learning for the first time that the applicant's action had been dismissed by Gummow J. on 11 February 1988. He filed, on 15 June 1989, an application for an extension of time to file and serve notice of appeal. Paragraph

1 of the application sought an order for an extension of time in

which to file and serve a notice of appeal from the judgment of Gummow J., given on 11 February 1988. The appeal would then, if it had been instituted, have been almost 15 months out of time. Mr. Adamopoulos had been in Australia for some 12 months of that period.

The matter came on for directions before me as a consequence not been taken out. It was in these circumstances that I	that I perceived that the order which was complained about had of the filing of the application on 15 June 1989 and it was then
suggested that an appropriate course would be to apply to have the order set aside rather than to seek leave to appeal against it so long after it was made. The suggestion I made has apparently led to the filing of the notice of motion of 10 ~ugust
1989, which is now to be dealt with.
nmongst the documents in evldence are letters passing between the applicant, written by Mr. Adamopoulos, and the applicant's solicitor, Mr. Vardas. An undated letter which was apparently received in Mr. Vardas' office on 9 June 1989 sent a copy of the request for a date for hearing to which I have referred. Amongst other things, the letter said:-

"I cannot understand how and why, in your

presence, you allowed the Court to dismiss (strike out) our clalm when you could have easlly requested for an adjournment.

During the hearing of that dismissal I was your client and you were in Court representing me. You knew well that at the time, firstly, I was away in Greece and secondly, during the 6 months of my necessary absence we had often communicated, both from my slde and your side, by phone by Fax and by letter and you knew that because of my illness my return had been delayed and that I was returning soon.

You never at any moment, whether verbally or in writing, you informed me that you were going to allow my claim to be struck out, something I would never have accepted and allowed you to do, because I know that I have a very valid claim in which I believe I will succeed.

Moreover, you have never, not even eventually, advised me or informed me of your

only learned about it from the Registrar on action which was never authorised by me. I	the 30 May 1989 when I went to submit a
request for a date to be set for a Court hearing."

The letter went on to say that Mr. Adamopoulos was extremely upset and annoyed by Mr. Vardas' unauthorised arbitrary action.

Mr. Vardas replied on 9 June 1989. Amongst other things he said that the other side moved to have the proceedings struck out

and in the absence of instructions he neither opposed nor	i
consented to such an action. Mr. Vardas also said:-

"The truth of the matter, Mr. Adamopoulos, is that you left Australia when both cases were about to crumble. You left your solicitors wlthout instructions and your attempt now to resurrect the action by blaming your lawyers appears, with respect, to be an attempt to get back into court through the back door."

Mr. Adamopoulos replied to that letter on 23 June 1989, again remonstrating with Mr. Vardas. Mr. Adamopoulos suggested that Mr. Vardas was not telling the truth and accused him of misconduct. A facsimile transmission to which Mr. Adamopoulos referred In that letter was one sent on 17 August 1987 from Mr. Vardas to Mr. Adamopoulos in which it was said:-

"Dino [Mr. Adamopoulos] the case for injunction against A.N.Z. has been adjourned until 18 August 1987. We will send you power of attorney through post."

The case there being referred to was not a case in this Court but

a case which was instituted in the Supreme Court of New South

. ,

Wales.

..

On 11 July 1989 Mr. Vardas denied the allegations which Mr. Adamopoulos had made in his letter of 23 June. On 17 July Mr.	r
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Vardas wrote informing him that the case had been relisted before	F .
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me on 21 July and that they were attending to file a notice of	!

ceasing to act.	It would appear, however, that no such notice	j
i-

has been filed, so that Mr. Vardas, so far as I can tell from the	I- .
I ;'
, .
papers, remains on the record. Effectively, however, he no longer appears for the applicant and #r. Adamopoulos today was given leave by me to appear for it.
In all these circumstances the question arises what should be done. It seems to me that the principles which I should apply are, broadly speaking, those propounded in Evans v. Bartlam
[l9371 A.C. 473. I should look to see whether there is some
strength or some basls for the appllcantts case and I should lnquire whether the applicant has given a satisfactory explanation for the delay which has occurred. Evans v. Bartlam ltself, and cases to which it has over the years been applied, are more usually cases involving £allure by defendants to appear or to put on defences, and who seek that judgments entered as a result of this neglect be set aside; but I do not see why similar principles do not apply here.
On the face of the evidence it has ta be said that any case which the applicant has is not a strong one. I emphasize the words "on the face of the evidence". The case was not
bear in mrnd of course that that was an interlocutory hearing and	established even on a prima facle basis before Burchett J. I
that there may not have been time to put on sufficient of the evidence which mlght eventually be available to the applicant on a final hearing. Nevertheless, what Burchett J. said is a relevant factor.
A further relevant factor is the paragraph from the letter written by Mr. Adamopoulos to whlch I have referred. It is by no means conclusive and one needs to read the correspondence as a
whole. Thls I have done, and again it seems to me that the paragraph is a further slgn of substantial weakness in the applicant's case. I am not prepared, however, to say that the applicant has no case whatever; what I am prepared to say is that as the evidence stands at the moment it is by no means a strong
one.	It is, as I have said, weak.

Then there is the question of delay. There is evidence that Mr. Adamopoulos has over a perlod suffered serious bouts of ill health. There can be no question about that. But there does seem to be some significance in the fact that he left Australia two days after the interlocutory hearlng. Furthermore, the matters put to the Court in the request he made in May 1989 for a fixture do not explain, and there is no explanation otherwise, of how it was that he did not return to Australia until June 1988. By that I mean there is no clear evidence of what kept him in Greece during that time. Furthermore and perhaps more importantly, there is no satisfactory explanation why he did not attempt to communicate with his legal advlsers in the period, if

not up to February 1988, then between then and June when he returned to Australia.

Even more significant is the delay which then occurred covering a period of almost 12 months between the time that he returned to Australia and the tune he sought to have this matter restored to the list at the end of May 1989. In that period he undoubtedly suffered from ill health and had to have medical treatment, but there is no explanation why he did not instruct his solicltor to do something about the matter or himself do something about the matter at least to see that it was being prosecuted or, if not, why it was not.

A judge dealing with an application of this kind has to do justlce as between the parties. The Court is always concerned about an unrepresented party and endeavours to make allowances for that party's predicament, but it must do justlce and be fair to both parties. It must never be diverted from this course. The respondent in thls matter has had an order which put an end to the proceedings for over 15 months. That has been lost. If the matter were now allowed to proceed the case would have to be prepared, evidence would have to be obtained from witnesses whose recollections, particularly of conversations, is not likely to be as accurate as it may have been if the evidence had been given in 1988 when the case could have been heard. That is not an overwhelming factor but it is another factor.

In all the circumstances I have reached the conclusion that

the weakness of the applicant's case to which I have referred,

coupled with the long and unexplained delays, should persuade me	to refuse the relief which the applicant seeks. I do not think
that any other order would do justice as between the parties to this litigation. There is a public interest in litigation coming to an end and this litigation came to an end over 18 months ago. The order made should not be disturbed; the application is dismissed with costs.

' .

I certify that-&%+-m+ the /3 preceding t

pages are a true copy of the reasons for	I,'
judgment herein of The Honourable 13r.
J U S ~ ~ C ~	Sheppard.

Associate	i ,	C	(
i	.	b

Dated 5 O ~ ; f o y ~ &	/?a9	I
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