Volkov v Kinetic Technology International Pty Ltd

[2005] FCA 565

FEDERAL COURT OF AUSTRALIA

Volkov v Kinetic Technology International Pty Ltd [2005] FCA 565

VIKTOR VOKLOV AND VADIM VOLKOV v KINETIC TECHNOLOGY INTERNATIONAL PTY LTD

QUD 239 OF 2004

DOWSETT J
1 APRIL 2005
BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 239 OF 2004

BETWEEN:

VIKTOR VOLKOV
FIRST APPLICANT

VADIM VOKLOV
SECOND APPLICANT

AND:

KINETIC TECHNOLOGY INTERNATIONAL PTY LTD
RESPONDENT

JUDGE:

DOWSETT J

DATE OF ORDER:

1 APRIL 2005

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:

1.The applicants file and serve any proposed amended statement of claim, verified by affidavit, within 21 days, that is on or before 22 April 2005.

2.The application be adjourned to a date to be fixed.

3.The statement of claim filed 25 November 2004 be struck out.

4.Leave be given to the respondent to issue requests for non-party discovery of the following entities:

(i)the South Australian Police Force;

(ii)the Millicent Hospital;

(iii)the South Australian Ambulance Service;

(iv)Taylor Marine at Port Adelaide;

(v)Australian Maritime Authority;

(vi)Oasis Medical Centre;

(vii)Australian Quarantine Inspection Service;

(viii)Environmental Protection Authority;

(ix)Department of Primary Industries;

(x)South Australian Ambulance Service;

(xi)Australian Search & Rescue;

(xii)Dr David Roberts;

(xiii)Dr Orozco;

(xiv)Dr Gregory Peek, oral and maxillofacial surgeon;

(xv)Dr Boulnois;

(xvi)Dr Bruce Hogbin; and

(xvii)Dr Clinton Laurence.

5.The respondent, if so advised, be granted leave to request the applicants to be independently medically examined.

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

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	QUD 239 OF 2004

BETWEEN:

VIKTOR VOLKOV
FIRST APPLICANT

VADIM VOKLOV
SECOND APPLICANT

AND:

KINETIC TECHNOLOGY INTERNATIONAL PTY LTD
RESPONDENT

JUDGE:	DOWSETT J
DATE:	1 APRIL 2005
PLACE:	BRISBANE

REASONS FOR JUDGMENT

1. I will give brief reasons.  This is an application pursuant to O 20 r 2, Federal Court Rules to strike out proceedings upon the basis that they are frivolous or vexatious or otherwise an abuse of process.  The proceedings arise out of the purchase by the applicants of an EPRIB Pains Wessex beacon designed to emit a radio signal in order to facilitate the location of a vessel in trouble or persons abandoning such vessel. 

2. The applicants had purchased or agreed to purchase to purchase a fishing vessel and were in the process of transferring it from South Australia to Queensland when the vessel was apparently swamped and they abandoned ship.  At about 12.45 pm on the day in question, the beacon was activated.  The signal was received by satellite and by terrestrial receivers at about 1.02 pm.  The applicants abandoned their life raft at about 1.30 pm, after it had been washed onto rocks.  The first applicant was subsequently washed on to those rocks but subsequently made landfall. He left the water at about 3.05 pm.  The second applicant was found in the rocks a little later, at about 3.45 pm on the same day. 

3. Notwithstanding the relatively rapid detection of the signal from the beacon, the signal was lost shortly thereafter and radio contact with it was not re-established.  Nonetheless the relevant authorities commenced search procedures.  Those procedures were, at a later stage, abandoned because of the inability to re-locate the signal.  In any event, even if radio contact had been maintained, it would not have been possible to have the appropriate helicopter in the area until about 4.30 pm on the day in question, well after the applicants had been taken from the water. 

4. The applicants’ cause of action depends upon certain representations made by the respondent to them in connection with the capacity of the beacon.  In summary it is said in par 9 of the statement of claim that the applicants relied upon a representation that:

   ‘As to the detection of the marine distress beacon as providing to the Applicants security for detection and rescue in the event of any harm coming to the vessel.’

5. That allegation is more particularly spelled out in par 8 where it is said that at the time of purchase it was represented:

   ‘That the average satellite detection times for the marine distress beacon in an area off South Australia was approximately 1 hour for detection of the beacon's signal.’

6. In par 20 it is alleged that the respondent had made such representations in trade or commerce within the meaning of s 52 Trade Practices Act 1974 (Cth) (the “Act”) and that the representations were, contrary to that section, misleading or deceptive. Particulars of this allegation are:

   ‘The marine distress safety beacon did not perform in accordance with the representations made to the Applicants by the Respondent in that there was a failure to detect the signal of the beacon to determine the locations of the Applicant either within 1 hour of activating the beacon or at all.’

7. The difficulty with this allegation is that the available evidence demonstrates that the beacon’s signal was identified and its location fixed within one hour of its being activated.  Thus it would seem that the case as pleaded cannot be made out. 

8. There are numerous other difficulties with the cause of action.  In particular, the applicants inevitably ended up in the water and therefore were at risk of suffering much of the loss for which they now claim, presumably upon the basis that they should have been rescued more quickly.  They would therefore have to show that they suffered additional loss as a result of being in the water for a longer time.  Given that they were only in the water for a relatively short time in any event, one cannot be optimistic about their prospects.  I should say that various aspects of the claim concerning lost business opportunities and, possibly, the loss of the vessel and equipment have not been pursued. 

9. In argument the applicants’ solicitor submitted that the real case to be advanced is different from that which appears in the statement of claim.  It is said that the relevant representations should be interpreted as meaning, not that the signal would be detected and located within an hour, but rather that any person would be rescued within an hour.  The relevant documents demonstrate a representation that the average time for identification and location of the signal would be, in the relevant area, one hour.  However such an average obviously assumes both longer and shorter periods in actual practice.  There is, as far as I can see, nothing in the material which would justify the applicants’ claim that the respondent represented to them by that material that they would be rescued within one hour.  It is also relatively clear from the material that the respondent was not itself to be the rescuing agent and that various other agencies would be involved in that process. 

10. It is impossible to imagine any reasonably intelligent person construing these representations as meaning that they would, in all cases, be rescued within one hour.  Quite apart from anything else the variety of circumstances in which rescue might be necessary would prevent any sensible prediction as to the length of time likely to be necessary to achieve that result.  In my view, the representation was purely as to identification of the signal and, from that signal, of the geographical location from which it was emanating. 

11. I understand that the solicitor for the applicants accepts that the statement of claim in its present form cannot be upheld and that it should be struck out.  I doubt whether the alternative basis to which I have referred could be successfully pleaded. 

12. Another possible cause of action has been ventilated in the course of argument. It is said that the fact that neither satellites nor other detection means were able to identify a signal from the beacon for other than a relatively short time after its activation indicates that its operation was, in some way, defective. There was some suggestion that the aerial may have been damaged in the incident, but the applicants vehemently deny this. In any event, it is said that the respondent represented that the beacon would continue to operate for four days. This seems to be correct. It is asserted that the fact that its signal was received for only a short time indicates that the representation was false and in breach of s 52 of the Act.

13. There is no evidence as to the circumstances in which the beacon ceased to operate.  There is no present pleading that had the beacon continued to operate, the emergency procedures would have led to the applicants being removed from the water at any earlier time than was the case, nor is there any evidence to that effect.  Such evidence as there is indicates that authorities decided that a winch-equipped helicopter was necessary and that such an aircraft would not have been in the area until about 4.30 pm, well after the time at which the applicants were removed from the water.

14. The applicants wish to try to salvage some form of claim in this case.  In the circumstances I am willing to allow them a further opportunity to do so.  However I am willing to do so only on the basis that any further proposed statement of claim is verified by affidavit from persons able to swear to the relevant facts.  If that cannot be done, then no good point would be served by allowing any amendment.  The matter is further complicated by two factors.  Firstly, the trial is scheduled for the end of May.  Time is short if the trial dates are to be maintained.  The respondent obviously has an interest in bringing the proceedings to a speedy conclusion as they no doubt have the potential to cause damage, quite possibly unfair damage, to the reputation of its product.  On the other hand, if the applicants are able to formulate a claim which is worthy of ventilation, they should not be prevented from doing so.  It will be for the respondent to decide whether it wishes to take its chances on a speedy disposition of the matter at the end of May in the event that an appropriate statement of claim is forthcoming, or alternatively to seek an adjournment at that late stage.  Secondly, the applicants’ claim is now well within the jurisdiction of the Federal Magistrates Court and probably should go there.  I am, however, unwilling to remit it if that means that the further resolution of the matter is likely to be delayed, as it probably would be.  Again, it will be very much a matter for the respondent to determine how it wishes to proceed in the event that any viable statement of claim is forthcoming.

15. The solicitor for the applicants has asked for a relatively long period in which to re-formulate the claim.  As it seems that much of the respondent’s preparation has already been completed, I suspect that I can allow the applicants a reasonable time in which to formulate their claim and still save the trial dates.  I therefore order that the applicants file and serve any proposed amended statement of claim, verified by affidavit, within 21 days, that is on or before 22 April 2005.  I adjourn this application to a date to be fixed.

16. There will be an order that the statement of claim be struck out.  There will be further orders in terms of pars 3(b) and 3(c)(vi) of the motion.  The matter will otherwise be adjourned to a date to be fixed. 

I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett.

Associate:

Dated:             5 May 2005

Solicitor for the Applicant:	Carter Green Lawyers
Counsel for the Respondent:	Mr T Matthews
Solicitor for the Respondent:	Quinlan Miller & Treston
Date of Hearing:	1 April 2005
Date of Judgment:	1 April 2005