Zarr Trading Co Pty Ltd v Ken Done & Associates Pty Ltd

[1992] FCA 393

3Q3 Q2

JUDGMENT No. ......,,.. IJ , , ,

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WXES DISTRICT REGISTRY)	NO NG 41 of 1992
GENERAL DIVISION	)

BETWEEN ZARR TRADING CO PTY

LIMITED

Applicant

AND	KEN DONE & ASSOCIATES PTY LIMITED
First Respondent
KEN DONE INTERNATIONAL PTY LIMITED
Second Respondent
KEN DONE DOWN UNDER PTY LIMITED
Third Respondent KENNETH STEPHEN DONE Fourth Respondent

EX TEMPORE JUDGmNT

EINFELD J SYDNEY 1 MAY 1992

(a)	where:
(i)	if a separate proceeding were brought by or against each of them, as the case may be, some common question of law or of fact would arise in all the proceedings; and
(ii)	all rights to relief claimed in the proceeding (whether they are joint, several or alternative) are in respect of or arise out of the same transaction or series of transactions; or

There is before the Court a notice of motion by Zarr Trading Company Pty Limited (the applicant) under order 6 rule 2 for leave to join as respondents Hale Imports Pty Limited, Ink Group Pty Limited and Oroton Pty Limited (the proposed additional respondents). Order 6 rule 2 provides:

Two or more persons may be joined as applicants or respondents in any proceeding:

(b) where the Court gives leave so to do.

The basic allegation of the applicant is that the first four respondents, whom I shall describe as the Done parties, were in contravention of the Trade Practices Act 1974 in the practice of what is known as resale price maintenance concerning goods which the Done parties sell in shops which they themselves conduct. The overall assertion is that the applicant, who is in competition with the Done parties, was prevented from or hindered in gaining supplies of Done goods from the proposed additional respondents, due to the intervention or connivance of the Done parties.

The applicant commenced this action with a statement of claim	that was inappropriate and confused even in relation to the
matters it was seeking to allege against the Done parties. It has now produced an amended statement of claim in which it wishes to join the proposed additional respondents. Joinder should really have been a simple matter, but it has been made significantly more difficult than should have been the case because the amended statement of claim and the evidence brought in support of the motion fail adequately to particularise and clarify the nature of the allegations being
made against the proposed additional respondents. In particular they do not make clear that the contraventions sought to be established against the Done parties are the same as those made against the proposed additional respondents.
It would seem to me to be a fairly simple task but the amended statement of claim does not make it clear at all. The evidence brought on the motion was of a particularly general kind when it would have been possible to give particulars with some degree of precision. Indeed, when the director of the applicant was in the witness box, he spoke of being able to evidence the contentions he was making by a significant volume of correspondence, both facsimile and original letters, but none of it has been produced. As a consequence, although I suspect that there is a basis for joinder and that there are common questions of fact and law in the existing and proposed proceedings, I am unable to identify precisely what they are, except in the most general terms.
Written submissions produced by all the parties in the matter have cited authority. The first case referred to, the High
Court's decision in Pavne v Younq [1979-801 145 CLR 609, does not seem to be particularly helpful here because it dealt with quite a different set of circumstances and was decided on the basis that the matters to be joined really did not concern the same transaction or series of transactions. Justice Wilcox's decision in Bishop v Bridaelands Securities Limited [l9901 12 ATPR 41-060, is much closer to the present facts but was also a very special case of its own. His Honour appears to have sought to provide some helpful general principles but they seem to me to be directed to a rather specific kind of case, possibly specific to the case with which his Honour was dealing. With all respect, I have some reservations about the general applicability of the principles stated in the passage at 51,765:

The Court should t a k e whatever cour se seems t o be m o s t

conducive	t o	a	j u s t	r e s o l u t i o n	o f	the	d i s p u t e s	between
the	p a r t i e s ,	b u t	h a v i n g	regard	t o	t h e	d e s i r a b i l i t y	o f

l i m i t i n g , so f a r a s p r a c t i c a b l e , the costs and d e l a y o f

the l i t i g a t i o n .

Leave ought not t o be granted u n l e s s t h e Court i s

a f f i r m a t i v e l y s a t i s f i e d t h a t j o inder i s u n l i k e l y t o

r e s u l t i n u n f a i r n e s s t o a n y p a r t y .

The unfairness to which his Honour must have been referring was some form of procedural unfairness. In the present case, allegations of resale price maintenance or being an accessory are made here against all parties, present and proposed. As

whom the same case of this nature can be proved as is alleged	a general rule, joinder cannot be unfair to a party against
against the existing parties. Nor can it be unfair to the existing parties. Nor could it be unfair to join parties against whom a case of conspiracy can be proved as is alleged in this amended statement of claim. I speak here of unfairness in the overall sense of injustice.
To the contrary. Unfairness would result from the non-joinder of proposed CO-conspirators or CO-offenders in that certain parties not before the Court may well be saddled with findings that could be of serious consequence to their business reputations without their having been heard. This of course all assumes evidence of the requirements of rule 2(a) of order 6.
Justice Wilcox went on to state that joinder should only be granted where there is a single solicitor for the applicants. It is understandable that, on the facts in the particular case with which his Honour was dealing, that may have been an appropriate criterion. However, if joinder is appropriate from the point of view of efficiency, fairness and the interests of justice, I cannot see that it would matter that each party was represented by a different solicitor. The parties sought to be joined might in fact have different interests, in which case it would be impossible for a single solicitor to act for them. Nevertheless the facts may exist
which indicate that joinder was appropriate.
I am therefore not sure from these cases, or from others which have been quoted, that there are any as yet settled principles upon which joinder should be granted or refused.
Because of the matters I have mentioned and the inadequacy of the pleadings and evidence on the motion, I feel unable to determine this issue at present. The question therefore arises as to what I should do with the motion. It is true that the dismissal of one motion for joinder does not prevent the applying party trying again. Further, if the proposed additional respondents are not joined to this action, proceedings can be commenced against them and an application made at some other time for consolidation. As this has not been done, I do not need to deal definitively with the submission made on behalf of at least one of the proposed additional respondents that if joinder is not granted, consolidation is not appropriate either because similar principles would apply. I am not at all sure that the submission is correct although it is clear that there will be some similar concepts between the two types of decisions, including when one of the reasons for refusing joinder is that the cases would or might not be more conveniently dealt with together.
In addition to the principles mentioned by Justice Wilcox, I take into account the fact that the Court, and the public who
proceedings as well. It does not serve the public interest supply the funds to run the Courts, have an interest in these
that Court time be taken up with four cases when one is sufficient to do justice. The additional resources that the Court has to make available for four are considerably greater than have to be made available for one, although the one would undoubtedly become more complicated and a heavier burden than any of the four individual cases.
On the positive side, the public interest is also that litigation concerning the same or a similar set of facts and seeking similar relief, which can be conducted without injustice to the relevant parties, should be heard at the same time and place, before the same judge and in the same proceedings. My difficulty at the moment is that I am simply not able to make that finding on the applicant's allegations so far.
At this stage of the case I am obviously not making findings of fact. Therefore, in a motion for joinder it is certainly not necessary for an applicant to produce the evidence which would prove the allegations it wishes to make against any particular additional respondent. On the other hand, it is necessary for an applicant for joinder to demonstrate:
(i) that it does have relevant allegations to make against the proposed additional parties;

(ii)   that the allegations it wishes to make, and the relief it seeks, are the same or are closely similar to those it wishes to make or seek against the existing respondent(s) in the same action;

(iii) that the proposed joinder is bona fide in the sense that it is not done for some tactical or forensic reason but because the applicant has a real claim and a reasonable or arguable case for substantive relief against the proposed additional respondents.

Relief is a real problem in this case. On the material presently available, I do not know what the position is in this connection. The amended application seeks an order restraining the Done parties and the proposed additional respondents from engaging in the practice of resale price maintenance - in other words, an injunction to prevent general statutory contraventions. I know that this is occasionally sought, and has on a few occasions been granted, but it always seems to me that if the law itself does not stop people from acting unlawfully, an injunction by the Court is unlikely to make much difference. Contravention of the section or of the injunction will in most cases have the same result. This is also applicable to the injunction sought to restrain the respondents from being an accessory to a contravention of the Act. The Act itself restrains such offences and little would normally be gained by an injunction.

The amended application also seeks an order restraining conspiracy between the respondents. The conspiracy claim in	this case is sought to be established by the drawing of	inferences from the facts proved. In a criminal case it would
be a typical circumstantial case of conspiracy. The applicant's effort to plead this offence is significantly lacking in particularity or supporting allegations. It is only mentioned in the amended statement of claim as an alternative finding, at the conclusion of a lengthy document, and as an act which should be restrained by an injunction.
This is not to say that a conspiracy might not be able to be established. However, if a conspiracy is being alleged, it is not a passing event in the course of litigation, like the inadequacy of discovery or the failure to supply particulars. A conspiracy should be alleged substantively and with particularity. No party, no matter what it has done, should be required to answer a tort of conspiracy without some detail as to how, between whom, where and when the conspiracy is alleged to arise. As at present, I cannot see a basis upon which an injunction would be pronounced against a conspiracy.
There is a fourth injunction sought, a mandatory injunction, that the respondents should be required to supply the applicant with products of the Done parties so long as and in the form in which they are supplied and sold to other retailers. I have never seen an injunction in that form before, which is not to say that it is necessarily wrong by reason of that fact. However, it is hard to imagine any circumstances, let alone on the evidence at the moment, which
would persuade the Court to enter the marketplace so as to require parties to do business with the applicant on a defined
basis, such as on the same basis as the applicant does business with other persons.
There may be all sorts of reasons why the respondents should not be required to supply the applicant with these products which are quite unrelated to the Trade Practices Act. For example, the applicant may be a bad payer, it may not market

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the goods properly, or it may promote the sale of the goods so badly as to make their sale not feasible. I am not saying that any of those things exist here. I am merely saying that those matters would all have to be considered if the Court was going to become some type of tourist goods marketing authority, deciding who should sell what to whom.

The other major matter sought in the amended application is of course damages. By definition damages are likely to be quite different as between the Done parties and each of the other respondents, although any damage inflicted by the Done parties might amount to the sum total of the damage inflicted by the proposed additional respondents. If so, it would not be cumulative on, but alternative to, that damage, and few if any damages would be awarded against the joined parties.

No particulars of the damage have been given so none of this has been made clear. I am informed from the bar table that one of the proposed additional respondents no longer does

business with the Done parties. Thus whatever damage has been

inflicted on the applicant by this particular respondent is no

longer continuing. It was suggested on behalf of that party that any damage proved against his client would be a very small amount. There is no evidence either way as to whether it is, but accepting for the sake of argument the statement from the bar table as correct, it would certainly not be appropriate to involve a party in what would become complex proceedings if the only relief sought or available was a minor award of damages. The appropriate action then would be for the applicant to issue a fresh statement of claim against that party, which the Court would then refer to the Family Court or the District Court for determination.

In the circumstances, therefore, it seems to me that a case has not yet been made out for joinder of the proposed additional parties. As its text shows, order 6 rule 2 provides two bases for joinder. The observations which I have made so far have all gone to the first basis - common questions of law or of fact and similarly based relief. The second basis gives the Court a broad discretion to give leave. The reasons I have given will suffice for present purposes to indicate why I do not believe that it is appropriate at this stage to give leave to join the proposed additional respondents as a discretionary matter.

There are two options for what should now be done with the motion. The first is to dismiss it and allow the applicant to

make another application if and when its evidence permits. The other is to adjourn it to see if the applicant can do

anything to make its case for the joinder more substantial. In this regard I have to weigh up what are effectively three separate interests. The applicant's interests can be put to one side because it must stand or fall on its pleading and the evidence it has brought. It is in this position because of its own doings and I do not think it is appropriate to consider those interests any further.

The competing interests here are first the Done parties. They have been represented here by counsel and solicitor today but have not participated in the motion for obvious reasons. They have no relevant interest in either of the available options. Second, there are the proposed additional parties who have participated here in a substantial way. As I see the position, the interests of the proposed additional respondents are largely those of costs. They can be joined at any particular time by separate proceedings being taken against them and the actions consolidated, or they can be joined via another application for joinder. They would have to attend or be responsive to any of those initiatives and the only loss they would suffer would be the costs of the proceedings so far engaged in.

Third is the public interest. The public interest is that litigation should not be conducted by ambush, nor by visiting upon litigants who have legitimate interests to advance, any

by decisions made by lawyers. The public interest is also not technical deficiencies in pleadings or evidence brought about

served by multiplying litigation and involving more judges. It simply is not a proper use of public moneys and Court time to allow parties to use the Courts in such a haphazard way.

In my opinion, all these circumstances suggest that the proper decision is to adjourn the case to a later convenient date. There has been an application for indemnity costs of behalf of Hale Imports Pty Limited. On this issue I admit as Exhibit HI 1 a letter from the solicitors for that company to the solicitors for the applicant of 31 March 1992 forecasting this application, and the reply from the applicant's solicitors of 2 April 1992. Before deciding this application, the following directions are to be complied with:

(i)	Submissions on behalf of the applicant as to why indemnity costs should not be ordered are to be filed and served by not later than 4 pm on Wednesday 6 May.
(ii)	Any submissions in reply are to be filed and served by not later than 4 pm on Friday 8 May.

By filing I mean supplying to my associate, not filing in the Registry. The decision on indemnity costs will be reserved when these submissions are made available. I shall then consider whether any part of the costs should properly be

applicant itself. The parties will be advised when a judgment payable by the lawyers for the applicant, as opposed to the

is to be given.

In the meantime, the motion will stand part heard to 3 June 1992 at 9.15 am. I order that the costs of the motion to date be paid by the applicant. I c : 1 l: 3

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