Re Bell Group Limited; Bell Brothers Pty Ltd; Bell Basic Industries Ltd; Bell Tyres Pty Ltd and Bell Freightlines Pty Ltd v Facom Australia Limited; Policy Nominees Pty Ltd Trading As Access Computer Consultants; Anthony Errington and Martin A Tho [1987] FCA 29 (11 February 1987)

FEDERAL COURT OF AUSTRALIA

Re: THE BELL GROUP LIMITED; BELL BROTHERS PTY LTD; BELL BASIC INDUSTRIES LTD;
BELL TYRES PTY LTD and BELL FREIGHTLINES PTY LTD
And: FACOM AUSTRALIA LIMITED; POLICY NOMINEES PTY LTD trading as ACCESS
COMPUTER CONSULTANTS; ANTHONY ERRINGTON AND MARTIN A. THOMAS and FACOM
AUSTRALIA LIMITED (Cross Claimant)
And: THE BELL GROUP LIMITED, BELL BROTHERS PTY LTD, BELL BASIC INDUSTRIES LTD;
BELL TYPRES PTY LTD and BELL FREIGHTLINES PTY LTD (Cross Respondent)
No. WA G9 of 1985
Practice and Procedure

COURT

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.

CATCHWORDS

Practice and Procedure - application entered for trial - motion by second and third respondents for leave to file cross claim against first respondent and another party - to set aside entry for trial - no third party notice or statement of claim in support - leave previously given not acted on - desirability of resolving all disputes together - s.22 Federal Court Act - need for expedition in instituting third party proceedings - O.5 Federal Court Rules - interlocutory steps almost complete - inconvenience to applicant outweighing inconvenience to respondent - motion dismissed.

Trade Practices Act 1974 ss.52, 53

Federal Court Act 1976 s.22

Federal Court Rules O.5 r.9

Wosley v Frost (1974) 7 SASR 506

HEARING

PERTH
11:2:1987

ORDER

That the applicants do by 4 pm on Friday, 13 February 1987 produce for the second and third respondents inspection of the document enumerated as number 4 in Schedule 1 Part 2 of the list dated 30 January 1986 and the documents enumerated as number 2(1),(2), (3) and (4) in Schedule 1 Part 2 of the applicants' list dated 18 April 1986.

The applicants do by 4 pm on Friday, 13 February 1987 serve the second and third respondents with a copy of each set of interrogatories together with the documents referred to therein administered by the applicants on the first respondent.

The first respondent do by 4 pm on Friday, 13 February 1987 serve the second and third respondents a copy of each interrogatory together with the documents referred to therein served by the first respondent on the applicants.

The applicants do by 4 pm on Friday, 13 February 1987 serve on the second and third respondents a true copy of each answer to the interrogatories filed by the applicants.

The first respondent do by 4 pm on Friday, 13 February 1987 serve on the second and third respondents a true copy of each answer to interrogatories filed by the first respondent.

The motion is otherwise dismissed.

The second and third respondents are to pay the applicant's costs of the motion in any event and the second and third respondents are also to pay the first respondent's costs of the motion in any event.

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

DECISION

These proceedings were instituted by the applicants on 22 January 1985. According to the statement of claim as amended by order of Burchett J. on 27 August 1986 the first respondent is a supplier of computing and data processing equipment. The second respondent is a consultant in relation to the evaluation, selection, purchase and implementation of computer hardware and software. The third respondents were at all material times officers of the second respondent.

2. The second respondent was engaged by the applicants to carry out a feasibility study for the applicant and to recommend and select computer hardware and software in accordance with their requirements.

3. The second respondent by the third respondent Errington, is said to have prepared a specification for the supply of computing facilities to the applicant. The first respondent subsequently submitted a written proposal to the second respondent.

4. Various representations were allegedly made by the first respondent, in particular relating to the compatibility of certain software produced by Management Science of America Inc. ("MSA") with the first respondent's hardware and operating systems. MSA representatives were also alleged to have represented to the applicant that MSA had worked with the first respondent in computer installation and that the question of compatibility had been adequately addressed. It was said, however, that the first respondent was or should have been aware that MSA software would not be compatible with the first respondent's hardware and programme products.

5. The second respondent allegedly recommended to the applicants that they purchase the first respondent's hardware and operating systems and the MSA software. The recommendation report was said to have been written by the third respondent, Errington, with certain officers of the applicants.

6. Subsequently the applicants entered into contracts with the first respondent and MSA for the purchase of hardware and certain software systems and also into an agreement for the maintenance of the first respondent's data processing equipment.

7. It is alleged in the statement of claim that the first respondent's hardware and operating systems were incompatible with and unable to perform in conjunction with the MSA software.

8. The statement of claim pleads contraventions of ss.52 and 53 of the Trade Practices Act 1974 by the first respondent and second respondent together with breach of contract and negligence. The third respondents are also said to have been in breach of s.52.

9. The applicants claim damages under s.52 of the Trade Practices Act and various other orders under s.87.

10. At a directions hearing before Toohey J. on 28 February 1985 the second respondent sought and obtained leave to file and serve within 14 days third party notices and a statement of claim in third party proceedings against the first respondent and MSA. Directions were also then given setting out a timetable for the third party proceedings.

11. On 22 May 1985 a further order was made by his Honour, extending the time within which the second respondent had leave to file third party notices against the first respondent and MSA by a further 14 days from the date of that order.

12. At a callover heard before his Honour on 22 December 1985, the solicitor who appeared for the second and third respondents was evidently not aware of the order made with respect to third party proceedings earlier as he had not then had the conduct of the file in his office. In the event no such proceedings have been instituted.

13. In the meantime the application has progressed to the point where discovery has been given and interrogatories administered and answered between the parties. Without recounting detail there seems to have been a good deal of interlocutory skirmishing along the way. It appears, however, that the matter is close to the point of readiness for trial if not actually ready for trial.

14. On 16 January 1987 the applicant filed a notice of trial under O.30 r.1 of the Federal Court Rules. As yet no date for trial has been fixed.

15. The motion filed by the second and third respondents which comes before me for determination seeks various orders, the most important of which are set out in paragraphs 4, 5 and 10 of the motion in the following terms:-

"4. The Second and Third Respondents have leave to file

a cross claim for contribution or indemnity on the
First Respondent.

5. The Second and Third Respondents have leave to file
a cross claim for contribution or indemnity upon
the company Management Science America (Australia)
Pty Limited -
(I interpolate, evidently a subsidiary of MSA)

10. Any notice of cross claim filed by the Second and
Third Respondents be filed within 14 days after the
service on the Second and Third Respondents of
interrogatories and answers to interrogatories
referred to herein."

16. The motion seeks to set aside the entry for trial filed by the applicants.

17. No proposed third party notice or statement of claim is tendered in support of the motion. At best, vague statements have been made to the effect that the pleadings as amended show that the second and third respondents would have a strong case against the first respondent and MSA's Australian subsidiary. It is contended that it would be in the interests of all concerned to have one rather than separate pieces of litigation. So much is true and is recognised by s.22 of the Federal Court Act which provides:-

"The court shall in every matter before the court grant
either absolutely or on such terms and conditions as the
court thinks just all remedies to which any of the
parties appears to be entitled in respect of a legal or
equitable claim properly brought forward by him in the
matter so that as far as possible all matters in
controversy between the parties may be completely and
finally determined and all multiplicity of proceedings
concerning any of those matters avoided."

18. On the other hand, the need for expedition in instituting cross claims is emphasizd by o.5 r.9 of the Federal Court Rules which provides:-

"9(1) A respondent desiring to cross claim after the
directions hearing shall obtain all necessary
directions at the directions hearing in relation to
the cross claim including the time within which the
cross claim is to be filed.

(2) A respondent who does not obtain directions
pursuant to subrule 1 shall not cross claim after
the directions hearing without the leave of the
court."

In that regard 0.5 r.11(1) is also relevant:-

"11(1) Subject to this order and to order 11 a
proceeding on a cross claim shall follow as nearly
as may be the course of the proceeding on the
originating process in respect of which the cross
claim is filed."

19. Leave to issue a third party notice should generally not be granted if, by reason of the lateness of the application, the inconvenience to a plaintiff through the consequent delay outweighs the inconvenience to a defendant in not having a principal proceeding and the third party claim heard at the same time - Wosley v Frost (1974) 7 SASR 506.

20. These proceedings have lurched rather than progressed towards trial, but like the rough beast of the poet, their hour has now come round.

21. To accede to the second and third respondents' motion at this stage would institute a fresh train of interlocutory steps by way of pleadings, discovery and possibly interrogatories before any third party proceedings would be ready for trial.

22. In all the circumstances it would, in my opinion, be quite unjust to grant the orders sought in paragraphs 4, 5, 10 and 11 of the second and third respondents' motion.

23. Paragraphs 1 and 2 of the motion are not pressed by the second and third respondents, nor can I accede to the order with respect to interrogatories in paragraph 12 which seeks the following:-

"Alternatively in paragraphs 1 to 3 hereof the second
and third respondents have leave to interrogate the
applicants within 14 days requesting that the applicants
identify those parts of the documents which are claimed
by them or which are said by them to relate to the
matters in question between the applicants and the
second respondent and the applicants and the third
respondents."

24. Such a subject is not, in my opinion, appropriate matter for interrogatories. By consent however, I am prepared to make the orders sought in paragraphs 3, 6 and 7 of the motion subject to hearing from counsel as to time limits.