Re Trade Practices Commission v Queensland Aggregates Pty Ltd and Brian White [1981] FCA 21; (1981) 51 FLR 356 (10 March 1981)

FEDERAL COURT OF AUSTRALIA

Re: TRADE PRACTICES COMMISSION
And: QUEENSLAND AGGREGATES PTY. LTD. and BRIAN WHITE [1981] FCA 21; (1981) 51 FLR 356
No. G3 of 1981
Trade Practices - Practice

COURT

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Franki J.(1)

CATCHWORDS

Trade Practices - Proceedings for alleged contraventions of s.47 by Trade Practices Commission - Application for injunction and pecuniary penalty - Application seeking joinder as respondents by persons alleged to have suffered damage - Application refused.

Trade Practices Act, 1974 (Cth.) s.47.

Federal Court Rules, 1979 o.6 r.2, o.5 r.2

Trade Practices - Proceedings by Trade Practices Commission for injunction and imposition of pecuniary penalty - Persons alleging damage seeking joinder as parties - Whether applicants engaged in one transaction - Damages recoverable in separate action - Trade Practices Act 1974 (Cth), ss. 47, 80, 82, 83, 87 - Federal Court Rules, O.5, r. 1 (2); O. 6.

Practice - Joinder of parties. In proceedings brought by the Trade Practices Commission seeking, inter alia, the imposition of a pecuniary penalty upon and an injunction against the first respondent for breaching s. 47 of the Trade Practices Act 1974 and against the second respondent for aiding and abetting those breaches, five parties sought to be joined as parties to the action. Those parties claimed to have suffered damages as a result of the conduct of the first and second respondents which was the basis of the Commission's action and stated that they wished to preserve their right to compensation under s. 87 of the Act.

Held: The applications should be refused because: (1) The applicants sought only damages as a remedy and these could be awarded in an appropriate action under s. 82 of the Act.

(2) Order 6, r. 2 (a) of the Federal Court Rules did not apply because the applicants were not engaged in one transaction or one series of transactions.

Payne v. Young [1980] HCA 54; (1980), 54 ALJR 448, applied.

(3) Leave should not be granted to the applicants under O. 6, r. 2 (b) as they would not then be joined as respondents for the purpose of enabling respondents, properly made respondents by the person initiating the proceeding to obtain relief against another party or a third party. The addition of the applicants as respondents would introduce into the litigation detailed questions of damages, all of a somewhat different nature, which would more conveniently be dealt with in separate actions.

HEARING

Brisbane, 1981, February 13; March 10. 10:3:1981
APPLICATIONS.

B. H. McPherson Q.C. and R. Cooper, for the applicant.

M. Pope, for the first respondent.

D. Drummond, for the second respondent.

I. Hangar, for the applicants seeking joinder as parties.

Solicitor for the applicant: B. J. O'Donovan, Commonwealth Crown Solicitor.

Solicitors for the first respondent: Morris Fletcher & Cross.

Solicitors for the second respondent: Chambers McNab & Co.

Solicitors for the applicants seeking joinder as parties: Andrew Brown & Associates.
T. J. GINNANE

ORDER

1. The application is refused.

2. The applicants are to pay the costs of the first and second respondent in the notice of motion.

Orders accordingly.

DECISION

This is an application which is before me to add third, fourth, fifth, sixth and seventh respondents in an action by the Trade Practices Commission against Queensland Aggregates Pty. Ltd. and one Brian White. I propose to deliver oral judgment in this matter rather than delay to deliver a written judgment with my reasons more fully expressed.

The Trade Practices Commission seeks the relief set out in its application, namely:

(1) An order for a pecuniary penalty to be paid by the first respondent and the second respondent pursuant to sections 76 and 77 of the Trade Practices Act 1974 ("the Act").

(2) An injunction pursuant to section 80 of the Act restraining the first respondent from offering to supply work as a cartage contractor in contravention of section 47(1) of the Act on condition that the offeree acquire a truck of a particular description from a third person.

(3) An injunction pursuant to section 80 of the Act restraining the second respondent from, inter alia, aiding, abetting, counselling or procuring a person to act as it is sought to restrain the first respondent.

(4) Costs.

(5) Such further or other order as to the Court shall seem meet.

The allegations against the first respondent are based on alleged contraventions of s.47(1) and (6) of the Act. Each contravention is alleged to be an offer to supply work as a cartage contractor to a named person or persons on condition that that person or persons acquire a Ford Louisville truck from Denmac Ford Pty. Ltd. The second respondent is alleged to have, inter alia, aided, abetted, counselled or procured each contravention alleged.

So far as is relevant, s.47(1) of the Act provides that a corporation shall not in trade or commerce engage in the practice of exclusive dealing, and s.47(6) that a corporation engages in exclusive dealing if it supplies or offers to supply goods or services on the condition that the person to whom the corporation supplies or offers to supply the goods or services will acquire goods or services of a particular kind or description directly or indirectly from another person.

The offerees and the dates of the respective offers alleged are:

(1) G.A. Ahlquist in or about May 1979.

(2) M.W. Hardy or alternatively M.W. Hardy and P.J. Hardy in or about May 1979.

(3) L.A. Romeo or alternatively L.A. Romeo and K.J. Romeo in or about May 1979.

(4) P.J. Coulson or alternatively P.J. Coulson and P.W. Coulson in or about May 1979.

(5) D.R. Tritton and A.F. Tritton in or about May 1979.

(6) D.C. Stewart or alternatively D.C. Stewart and J.M. Stewart in or about late May or June 1979.

(7) E.K. Peck or alternatively Apslawn Holdings Co. Pty. Ltd. in or about June 1979.

(8) E.J. King in or about July or August 1979.

(9) K.D. Kalczuk and P.J. Kalczuk in or about August 1979.

When the summons for directions first came before me a notice of motion had been filed by the persons numbered 1, 2, 4, 5 and 6 seeking to be joined as further applicants in the proceedings. The applicants in support of the notice of motion, hereinafter called "the applicant" or "the applicants", alleged that they had accepted the offers made to them respectively as alleged in the statement of claim and they had suffered loss or damage.

The affidavit was by the solicitor for these applicants and it alleged:

"My clients seek to be joined as parties to these proceedings in order to preserve their right to compensation or other relief under section 87(1) of the Trade Practices Act 1974, in the event that the Court might otherwise be disposed to make an order thereunder in their favour."

So far as appears to be relevant, s.87(1) of the Act provides:

"Where, in a proceeding instituded under . . . this Part, the Court finds that a person who is a party to the proceeding has suffered . . . loss or damage by conduct of another person that was engaged in . . . in contravention of a provision of Part IV . . . the Court may, whether or not it grants an injunction under section 80 or makes an order under section 80A or 82, make such order or orders as it thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention . . . if the Court considers that the order or orders concerned will compensate the first-mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage."

Sub-section 2 of s.87 sets out the orders which may be made under s.87(1), one of which is:

"(d) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage."

Initially all parties stated that they were prepared to consent to the joinder sought by the applicants, but consent by counsel for the first respondent and by counsel for the second respondent was qualified to some extent. Early in the hearing counsel for the applicants stated that "it might be appropriate to add my clients as respondents rather than applicants". He relied on order 6 rule 2 of the Rules of this Court. He then submitted that the applicants could cross-claim against the first and second respondents under order 5 rule 2. At that stage senior counsel for the Trade Practices Commission supported the application of the applicants to be added as respondents and added "because it may result in the saving of costs".

Counsel for the applicants also submitted that the measure of damage, if any, proved to have been suffered by his clients would be relevant on the question of any penalty the Court might fix. I said that I was not then satisfied that I should join the applicants in the action, but that I wished to see the form of the claim which they would seek to make if I did so join them. Counsel for the applicants then proposed that he would file a draft of the proposed statement of claim against the first and second respondents. I then adjourned the matter for this to be done.

The solicitor for the applicants has now made a further affidavit setting out the draft of the proposed statement of claim of the applicants against the first and second respondents if joinder is ordered. The affidavit also alleges that the applicants are not financially well off and that some further particulars of the damage claimed could be given later.

The draft statement of claim of the applicants alleges offers to the respective applicants in the same terms as are alleged in the statement of claim of the Trade Practices Commission and each offence is alleged to have been in contravention of s.47(1) of the Act by the first respondent. The second respondent is also alleged to have been in breach of s.47(1) of the Act by, inter alia, aiding, abetting, counselling or procuring the alleged conduct of the first respondent.

The damage alleged by the applicants is specified separately in relation to each respondent or respondents sought to be added. As an example, the claim by G.A. Ahlquist is:

"(a) He entered into the Lease of a Ford Louisville Truck which he would not otherwise have done.

(b) He entered into a Lease of the said truck resulting in higher lease payments than he would have entered into had he arranged for the finance company to purchase the truck from a dealer other than Denmac Ford Pty. Ltd.

(c) He was unable to enter into a contract of insurance with a company of his choice, was unable to pay more expensive premiums than should have been payable and was unable to claim for damage to the said truck whilst uninsured.

(d) He suffered loss of income by reason of the first and second respondents not providing the quantity of work which they had represented was available to the said respondents and the said respondents purchased the said Ford Louisville Truck from Denmac Ford Pty. Ltd.

(e) He leased the said Ford Louisville Truck which was represented to him as bearing a 1979 compliance plate whereas the compliance plate was dated March 1977 and the truck was thereby worth less than the price at which it was purchased by the lessor and the lease payments paid by the respondent should have been correspondingly less.

(f) He leased a truck with capacity larger than could lawfully be carried on Queensland roads."

In the case of P.J. Coulson and P.W. Coulson, D.R. Tritton and A.F. Tritton and D.C. Stewart and J.M. Stewart, somewhat similar damage was alleged and, in addition it was alleged that the trucks were defective necessitating expensive repairs and causing loss of income.

Order 6 rule 2 as amended by statutory rule 87 of 1980 provides:

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

(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

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

This order permits persons to be joined as applicants or as respondents where the terms of rule 2(a)(i) and (ii) are satisfied, or where the Court gives leave to do so.

When the matter resumed before me, counsel for the applicants, while not abandoning arguments based on order 6 rule 2(a) relied particularly on order 6 rule 2(b), arguing that I should give leave to the applicants to be joined, if that course was just and convenient in all the circumstances.

Counsel for the applicants also argued that the question of damage was relevant in relation to any penalty which might be fixed by the Court, and that the legislative intention of s.87(1) contemplated that persons seeking remedies provided by s.87(2) should be able to become parties to an existing action within that section.

He also submitted that s.83 of the Act was not necessarily of value to his clients, since in the existing proceedings the Commission did not represent the applicants, and might or might not seek findings of fact which would assist the applicants. He also submitted that the question of procedure would be one for the judge hearing the matter, and the provisions of order 6 rule 6 could also be used to ensure separate trials if the Court should so decide at any time.

Senior counsel for the Trade Practices Commission now took the attitude that it neither supported nor opposed the application, and he said that he did not wish to offer any argument concerning any possible advantage or possible disadvantage of the joinder sought by the applicants.

Counsel for the second respondent opposed the application, arguing that the statement of claim proposed by the applicants against the first and second respondents raised a whole new series of different causes of action, dependant on different breaches of the Act than those alleged. He relied, for example, on the matters referred to under (b), (c) and (d) of the damage claimed by G.A. Ahlquist; the terms of which I have already set out.

He also cited the additional damage to which I have referred alleged by several applicants, namely that the trucks involved were defective, necessitating expensive repairs and causing loss of income.

However, I think it is appropriate to say that I would regard any joinder as being only for the purpose of permitting the applicants to set up against the first and second respondents claims for damages for any breaches of the Act alleged to have been constituted by the conduct charged.

The damages particularized could only be claimed to the extent that s.87 of the Act warranted their recovery. Counsel for the second respondent argued that order 6 rule 2(a) did not apply and relied upon Payne v. Young in the High Court[1980] HCA 54; , (1980) 54 A.L.J.R. 448.

He argued that joinder should not be ordered under order 6 rule 2(b) because that would only complicate and delay the trial.

Counsel for the first respondent adopted the arguments of counsel for the second respondent and opposed the application.

I will consider first the position under order 6 rule 2(a). The question of whether all rights to relief claimed in a proceeding are in respect of or arise out of the same transaction or series of transactions was considered in Payne v. Young, to which I have just referred. Order 16 rule 1 of the High Court Rules was then being considered, and it is in substantially the same terms as order 6 rule 2(a) of the Rules of this Court. At page 451 Mason J. said:

"The consequence is that under par.(a) of the rule joinder of separate causes of action accruing to different plaintiffs is authorized when the relief claimed is in respect of, or arises out of, the same or a particular series of transactions. Joinder is not authorized when the relief claimed is in respect of, or arises out of, two or more different series of transactions, when the participation of each individual plaintiff is limited to participation in one series of transactions, the other plaintiffs not participating in that series."

In the case before me the applicants were not, so far as the evidence before me goes, engaged in one transaction or one series of transactions. Apparently they were engaged in transactions peculiar to each individual applicant. I am satisfied that order 6 rule 2(a) does not authorize the grant of the application.

The question then arises whether I should grant leave under order 6 rule 2(b). The leave I could give is for joinder as applicants or respondents. The application is for joinder as respondents.

It seems odd to join parties as respondents for the purpose of making claims against other respondents under order 5 rule 2. That rule appears to be for the purpose of enabling respondents, properly made respondents by the person initiating the proceeding, to obtain relief against "another party or a third party", thus facilitating the policy set out in s.22 of the Federal Court of Australia Act 1976.

However, no detailed submissions were directed to the provisions of order 5 rule 2. It is not entirely clear that if the applicants were joined the proposed statement of claim against the first and second respondents would fall within order 5 rule 2.

In my opinion, the facts of this case are not such as to warrant my granting the application. The applicants do not seek an injunction under s.80 and could not seek a penalty under s.76 of the Act. They merely seek to be added to obtain damages.

The orders they seek do not fall under any of the rather specialized orders under s.87(2), but they appear to seek only such damages as could be awarded under s.87(2)(d).

As at present advised, it appears to me that the measure of damages which could be awarded in an appropriate case under s.82 of the Act does not differ from the measure which could be awarded under s.87(2)(d).

The issues in the claim for damages by each applicant are distinct from the issues in the claim for damages by each other applicant. The right to any damage depends upon the proof of each separate offer alleged and the proof of the particular damage suffered by each individual applicant. No proof of a course of conduct appears to be relevant.

Any applicant, once joined, would be a party for all purposes, and in my opinion the granting of the application would only introduce into the litigation detailed questions of damages, all of a different nature or somewhat different nature, which would more conveniently be dealt with in separate action.s

Counsel for the applicants could not direct me to any authority where a court had exercised a discretion to join a person so that that person could get relief against one of the parties in an existing action. Such a case in my view is to be distinguished from the case of an existing party in an action seeking to join another person so that relief can be obtained by one of the existing parties against that other person.

If the test be, as counsel for the applicant submitted, that joinder should be made where it is just and convenient to do so, in my opinion the joinder sought would not satisfy this test. Counsel for the applicant said that he did not rely on order 6 rule 8 of the Rules of this Court. No detailed examination of the appropriate procedure for the conduct of the case, if joinder was permitted, was before me.

However, I consider very real difficulties might arise, but it is unnecessary to consider this aspect.

I have in mind the various matters to which I have referred and in the exercise of my discretion, I refuse the application.

What is the position with costs?

(Submissions as to costs. First and second respondent sought costs. Trade Practices Commission did not seek costs.)

The order that I make is that the applicants are to pay the costs of the first and second respondent in the notice of motion and no order as to the costs of the Trade Practices Commission in the notice of motion.