Tenji v Henneberry & Associates Pty Ltd (includes corrigendum dated 10 September 1999) [1999] FCA 1259 (10 September 1999)

Last Updated: 15 September 1999

FEDERAL COURT OF AUSTRALIA

Tenji v Henneberry & Associates Pty Ltd [1999] FCA 1259

FRANK TENJI & MATTHEW TENJI v HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 & ORS and HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 v PALERMO NOMINEES PTY LTD ACN 008 871 618 & ANOR and PALERMO NOMINEES PY LTD ACN 008 871 618 & GAETANO PALERMO v HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629

WG 44 of 1997

LEE J

10 SEPTEMBER 1999

PERTH

GENERAL DISTRIBUTION

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY WG 44 OF 1997

BETWEEN: FRANK TENJI & MATTHEW TENJI

Applicants

AND: HENNEBERRY & ASSOCIATES PTY LTD

ACN 009 168 629

First Respondent

PALERMO NOMINEES PTY LTD

ACN 008 871 618

Second Respondent

GAETANO PALERMO

Third Respondent

BETWEEN: HENNEBERRY & ASSOCIATES PTY LTD

ACN 009 168 629

Cross-Applicant in First Cross-Claim

AND: PALERMO NOMINEES PTY LTD

ACN 008 871 618

First Cross-Respondent in First Cross-Claim

GAETANO PALERMO

Second Cross-Respondent in First Cross-Claim

BETWEEN: PALERMO NOMINEES PTY LTD

ACN 008 871 618 & GAETANO PALERMO

Cross-Applicants in Second Cross-Claim

AND: HENNEBERRY & ASSOCIATES PTY LTD

ACN 009 168 629

Cross-Respondent in Second Cross-Claim

JUDGE: LEE J

DATE: 10 SEPTEMBER 1999

PLACE: PERTH

CORRIGENDUM

Please note that at the end of Item 1 of the minute of orders should be added: "without reduction under O 62, r 36A(1)."

Associate:

Date:

FEDERAL COURT OF AUSTRALIA

Tenji v Henneberry & Associates Pty Ltd [1999] FCA 1259

COSTS - judgment for less than $100,000 - whether proceeding could "more suitably have been brought in another court" - whether Court should order that costs of successful party not be reduced.

Trade Practices Act 1974 (Cth) Pt V (ss 51AF - 75A); ss 75, 86A(1), 86(2), 87

District Court of Western Australia Act 1969 (WA) s 55

Fair Trading Act 1987 (WA) s 77

Federal Court Rules O 62 r 36A

Hannpost Pty Ltd v Mita Copiers Australia Pty Ltd (1996) 67 FCR 416 cited

Hughes v Western Australia Cricket Association Inc (1986) ATPR 40,748 cited

ACCC v Nationwide News Pty Ltd (1996) ATPR 41,519 cited

Hondros & Tholet v Chesson [1981] WAR 146 cited

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) [1988] FCA 40; (1988) 39 FCR 546 cited

Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 cited

Fasold v Roberts (1997) 70 FCR 489 cited

FRANK TENJI & MATTHEW TENJI v HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 & ORS and HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 v PALERMO NOMINEES PTY LTD ACN 008 871 618 & ANOR and PALERMO NOMINEES PTY LTD ACN 008 871 618 & GAETANO PALERMO v HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629

WG 44 OF 1997

LEE J

10 SEPTEMBER 1999

PERTH

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WG 44 OF 1997

BETWEEN:	FRANK TENJI & MATTHEW TENJI Applicants
AND: BETWEEN: AND: BETWEEN: AND:	HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 First Respondent PALERMO NOMINEES PTY LTD ACN 008 871 618 Second Respondent GAETANO PALERMO Third Respondent HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 Cross-Applicant in First Cross-Claim PALERMO NOMINEES PTY LTD ACN 008 871 618 First Cross-Respondent in First Cross-Claim GAETANO PALERMO Second Cross-Respondent in First Cross-Claim PALERMO NOMINEES PTY LTD ACN 008 871 618 & GAETANO PALERMO Cross-Applicants in Second Cross-Claim HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 Cross-Respondent in Second Cross-Claim
JUDGE:	LEE J
DATE OF ORDER:	10 SEPTEMBER 1999
WHERE MADE:	PERTH

THE COURT ORDERS THAT:

1. The respondents pay the applicants' costs of the application.

2. The first and second cross-claims be dismissed with no order as to costs.

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

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WG 44 OF 1997

BETWEEN:

FRANK TENJI & MATTHEW TENJI Applicants

AND: BETWEEN: AND: BETWEEN: AND:

HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 First Respondent PALERMO NOMINEES PTY LTD ACN 008 871 618 Second Respondent GAETANO PALERMO Third Respondent HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 Cross-Applicant in First Cross-Claim PALERMO NOMINEES PTY LTD ACN 008 871 618 First Cross-Respondent in First Cross-Claim GAETANO PALERMO Second Cross-Respondent in First Cross-Claim PALERMO NOMINEES PTY LTD ACN 008 871 618 & GAETANO PALERMO Cross-Applicants in Second Cross-Claim HENNEBERRY & ASSOCIATES PTY LTD ACN 009 168 629 Cross-Respondent in Second Cross-Claim

JUDGE:	LEE J
DATE:	10 SEPTEMBER 1999
PLACE:	PERTH

REASONS FOR JUDGMENT

1 On 30 July 1999 an order was made in this matter that the respondents pay the applicants the sum of $13,005. The applicants and respondents were invited to file submissions in respect of any order to be made in relation to the costs of the proceeding.

2 The applicants seeks an order that the respondents pay the applicants costs without the reduction provided in O 62 r 36A of the Federal Court Rules. The first respondent submits that the applicants recovered only a "nominal" part of its claim and should recover only a minor award of costs. The second and third respondents submit that the applicants' costs be limited to the scale applied in the Local Court of Western Australia.

3 No submissions were made by the respondents as to costs of the cross-claims each brought against the other.

4 The Court has a discretion to award costs as it thinks appropriate, such a discretion to be exercised judicially. (See: Hannpost Pty Ltd v Mita Copiers Australia Pty Ltd (1996) 67 FCR 416; Hughes v Western Australia Cricket Association Inc (1986) ATPR 40,748; ACCC v Nationwide News Pty Ltd (1996) ATPR 41,519.)

5 Order 62 rr 36A(1) and (2) of the Federal Court Rules provide as follows:

"36A(1) Where a party is awarded judgment for less than $100,000 on a claim (not including a cross-claim) for a money sum or damages any costs ordered to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable under this Order unless the Court or a Judge otherwise orders.

36A(2) If the Court or a Judge is of the opinion that a proceeding (including a cross-claim for a money sum or damages) brought in this Court could more suitably have been brought in another court or in a tribunal and so declares, then any costs to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable under this Order."

6 Rule 36A(1) will apply in this case unless an order is made to the contrary.

7 With respect to r 36A(2), the proceeding brought in this Court may have been brought in the District Court pursuant to the jurisdiction conferred on that Court by s 86(2) of the Trade Practices Act 1974 (Cth) ("the Act"). Under s 77 of the Fair Trading Act 1987 (WA) the District Court has power to grant similar remedies to those sought in this matter under s 87 of the Act. Under s 75 of the Act, Pt V of the Act (ss 51AF - 75A) does not exclude, or limit, the concurrent operation of any law of a State. The Fair Trading Act 1987 (WA) is a law which has concurrent operation. Therefore, subject to the District Court being able to grant an order for rescission sought by the applicants in equity, the matter may have been transferred to the District Court under s 86A(1) of the Act if this Court were satisfied that it was in the interests of justice that the matter be determined in the District Court. Section 55 of the District Court of Western Australia Act 1969 (WA) states that the District Court has power to make orders in equity and that power would include an order for rescission. (See: Hondros & Tholet v Chesson [1981] WAR 146.)

8 Either the applicants or the respondents could have applied to have the matter transferred to the District Court. Neither did so. The applicants sought an order under s 87 of the Act for the reconveyance of the service station to the second and third respondents and repayment to the applicants of the purchase price and any consequential losses or outgoings. Alternatively, the applicants sought an order that the respondents pay to the applicants the loss they had suffered by purchasing the service station.

9 At all times the claim for relief under s 87 of the Act was a live issue. The applicants did not succeed in obtaining such an order but did establish that the Court was able to exercise a discretion to make such an order if it considered that it was appropriate to do so in all the circumstances.

10 The principles on which orders are to be made under s 87 are still being developed in this Court. (See: Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) [1988] FCA 40; (1988) 39 FCR 546; Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 at 286 - 288.) Accordingly, where a claim for relief under s 87 is a substantial part of a proceeding brought under the Act, it is likely that in many of those cases this Court will be the appropriate Court for that proceeding.

11 On the facts of this case, I am unable to form the opinion that the proceeding could "more suitably have been brought" in the District Court. Although the applicants did not obtain an order under s 87 of the Act, they did establish a contravention of the Act in respect of which such an order could have been made. If follows that r 36A(2) will not apply.

12 If it is accepted that the bringing of the proceeding in this Court was not inappropriate, having regard to all the circumstances, it is likely to be appropriate that an order be made under r 36A(1) that there be no reduction in the costs and disbursements ordered to be paid in the proceeding. (See: Fasold v Roberts (1997) 70 FCR 489.) If the respondents wished to protect themselves against such a costs order, they could have made an appropriate offer of compromise or payment into Court. They chose to do neither.

13 The applicants established, in all substantive respects, that they were entitled to relief for loss suffered by reason of misleading or deceptive conduct of the respondents in trade or commerce and it is of no consequence that particular conduct of the respondents was not found to have been part of the conduct that contravened the Act.

14 The second and third respondents further submit that the applicants should be "deprived of the costs of adducing expert evidence". It was submitted that the expert evidence adduced by the applicants as to the value of the service station was rejected.

15 As stated in the reasons delivered on 30 July 1999, the expert evidence relied on by the first respondent was preferred to that of the applicants but as is made obvious by the conclusion that the applicants suffered loss greater than that opined in the evidence of the first respondent's expert, the evidence adduced by the applicants has been accepted to that extent.

16 The applicants seek an order that the respondents pay the cost of a copy of the transcript. That is a matter for the taxing officer to consider when he/she determines whether that outgoing qualifies as a disbursement to be included in the taxed costs.

17 It will be ordered that the respondents pay the applicants' costs of the application and that the cross-claims of the respondents be dismissed with no order as to costs.

I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lee.

Associate:

Dated:

Counsel for the Applicants:	C B Edmonds
Solicitors for the Applicants:	Jackson McDonald
Counsel for the First Respondent, Cross-Applicant in First Cross-Claim, and Cross-Respondent in Second Cross-Claim:	P G McGowan
Solicitors for the First Respondent, Cross-Applicant in First Cross-Claim, and Cross-Respondent in Second Cross-Claim:	Corser & Corser
Counsel for the Second and Third Respondents, Cross-Respondents in First Cross-Claim, and Cross-Applicants in Second Cross-Claim:	A Metaxas
Solicitor for the Second and Third Respondents, Cross-Respondents in First Cross-Claim, and Cross-Applicants in Second Cross-Claim:	Arthur Metaxas
Submissions filed 10, 20, 27 August 1999.
Date of Judgment:	10 September 1999