Gough & Gilmour Holdings Pty Ltd v Caterpillar of Australia Pty Ltd [2009] FCA 1429 (2 December 2009)

Last Updated: 7 December 2009

FEDERAL COURT OF AUSTRALIA

Gough & Gilmour Holdings Pty Ltd v Caterpillar of Australia Pty Ltd [2009] FCA 1429

PRACTICE AND PROCEDURE — leave to serve originating process overseas — need for pleadings to be further amended — question as to jurisdiction of Court to entertain all claims — discretion to refuse leave

CONTRACT — implied term of good faith

Held: leave refused

Trade Practices Act 1974 (Cth) ss 51A, 52
Federal Court Rules O 8 rr 2, 3, O 11 r 2

Ackers v Austcorp International Ltd [2009] FCA 432, cited
Applecross Pte Ltd v Lim [2009] FCA 1102, cited
Australian Competition and Consumer Commission v European City Guide SL [2009] FCA 1206, cited
Best Australia Ltd v Aquagas Marketing Pty Ltd (1988) 83 ALR 217, referred to
Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365, cited
H 1976 Nominees Pty Ltd v Galli (1979) 30 ALR 18, cited
Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2006] FCAFC 116, 154 FCR 425, referred to
McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2, 165 FCR 230, referred to
Merpro Montassa Ltd v Conoco Speciality Productions Inc [1991] FCA 70; (1991) 28 FCR 387, cited
Sides Engineering Pty Ltd v Energetech Australia Pty Ltd [2005] FCA 1672, cited
Skiwing Pty Ltd t/as Café Tiffany’s v Trust Co of Australia Ltd (Stockland Property Management Ltd) [2009] FCA 347, 255 ALR 339, referred to
Ting v Blanche [1993] FCA 524; (1993) 118 ALR 543, applied
Trade Practices Commission v The Gillette Company (No 1) [1993] FCA 496; (1993) 45 FCR 366, cited
West v TWG Services Ltd [2009] FCA 1052, cited
Western Australia v Vetter Trittler Pty Ltd (In liq) (Receiver and Manager Appointed) (1991) 30 FCR 102, referred to
WSGAL Pty Ltd v Trade Practices Commission [1992] FCA 510; (1992) 39 FCR 472, applied

Carter J, Peden E and Tolhurst G, Contract Law in Australia (5th ed, LexisNexis Butterworths, 2007)

GOUGH & GILMOUR HOLDINGS PTY LTD (ACN 008 646 259) v CATERPILLAR OF AUSTRALIA PTY LTD (ACN 004 332 469) AND ORS)
NSD 1123 of 2009

FLICK J
2 DECEMBER 2009
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY
GENERAL DIVISION	NSD 1123 of 2009

BETWEEN:

GOUGH & GILMOUR HOLDINGS PTY LTD (ACN 008 646 259) Applicant

AND:	CATERPILLAR OF AUSTRALIA PTY LTD (ACN 004 332 469) First Respondent CATERPILLAR INC Second Respondent CATERPILLAR OVERSEAS CREDIT CORPORATION S.A. Third Respondent CATERPILLAR S.A.R.L. Fourth Respondent

JUDGE:	FLICK J
DATE OF ORDER:	2 DECEMBER 2009
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The Notice of Motion as filed in Court on 30 November 2009 is dismissed.
2. Any Amended Application and any Further Amended Statement of Claim is to be filed and served on or before midday on 11 December 2009.
3. Any further Notice of Motion seeking leave pursuant to O 8 r 3 of the Federal Court Rules in respect to any such Amended Application and any Further Amended Statement of Claim is to be filed on or before midday on 11 December 2009.
4. The proceeding is stood over to 9.30 am on 15 December 2009 for further mention or the hearing of any such further Notice of Motion seeking the grant of leave pursuant to O 8 r 3.
5. Costs reserved.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
NSW DISTRICT REGISTRY
GENERAL DIVISION	NSD 1123 of 2009

BETWEEN:	GOUGH & GILMOUR HOLDINGS PTY LTD (ACN 008 646 259) Applicant
AND:	CATERPILLAR OF AUSTRALIA PTY LTD (ACN 004 332 469) First Respondent CATERPILLAR INC Second Respondent CATERPILLAR OVERSEAS CREDIT CORPORATION S.A. Third Respondent CATERPILLAR S.A.R.L. Fourth Respondent

JUDGE:	FLICK J
DATE:	2 DECEMBER 2009
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(Revised from Transcript)

1. On 6 October 2009 the Applicant filed in this Court an Application and a Statement of Claim.
2. On 2 November 2009 the proceeding first came before the Court. Directions were then made for the filing and service of an Amended Application and an Amended Statement of Claim. An Amended Statement of Claim was filed on 6 November 2009. No Amended Application has as yet been filed.
3. The proceeding came back before the Court on 30 November 2009 when a Notice of Motion was then filed seeking leave “to serve the Application and Statement of Claim” on the Second, Third and Fourth Respondents overseas.
4. No Defences have as yet been filed.
5. The Applicant essentially seeks relief in respect to the termination of “Dealership Agreements” whereby an exclusive dealership was said to have been conferred for the sale of Caterpillar machines in New South Wales and the Australian Capital Territory. There was apparently an agreement executed in 1989 as between a wholly owned subsidiary of the Applicant, Gough & Gilmour Pty Ltd, and the First Respondent. A second agreement is also relied upon, being one executed on 1 July 1991 between the Applicant and the First Respondent. This second agreement is said to have “replaced the earlier such agreements executed in 1989 ...”. A further agreement is said to have been executed as between the Applicant and the First Respondent on 12 November 1997. The 1991 and 1997 agreements are defined in the Amended Statement of Claim as being the “Dealership Agreements”. Notice of termination is said to have been given on 7 October 2003 and the Dealership Agreements are said to have been terminated “on [or] around 6 April 2004”.
6. The Applicant contends in its Amended Statement of Claim that the Dealership Agreements contain a term implied as a matter of law that in respect to the agreements “the parties ... would exercise their rights ... reasonably and in good faith”. The manner in which it is said that the First, Third and/or Fourth Respondents “failed to act reasonably and in good faith, with due regard to the objects of the Dealership Agreements, and thereby breached this term of the Dealership Agreements” is said to be particularised in Schedule A to the Amended Statement of Claim. That Schedule provides in relevant part as follows:
   1. Acting to terminate the Dealership without regard to the possibility of permitting the Dealership to remain on foot on terms which would have allowed G&G to enjoy the trust and confidence of COA, CAT, COCC and CSARL.
      
   2. Failing to engage in good faith negotiations with G&G for the Dealership to remain on foot on terms which would have preserved to both G&G and COA, CAT, COCC and CSARL the commercial benefits of the Dealership.
      

“G&G” is a reference to the Applicant; “COA” is a reference to the First Respondent; “CAT” is a reference to the Second Respondent; “COCC” is a reference to the Third Respondent and “CSARL” is a reference to the Fourth Respondent.

7. It is further alleged that the First and Second Respondents engaged in conduct which is said to be the making of representations as to future matters within the meaning of s 51A of the Trade Practices Act 1974 (Cth) (the “Trade Practices Act”). Reliance is also placed upon s 52 of that Act. Equitable estoppel and unconscionable conduct are also alleged in the Amended Statement of Claim.
8. The First Respondent is Caterpillar of Australia Pty Ltd. The First Respondent has been served and a Notice of Appearance was filed on its behalf on 9 November 2009. The Second Respondent, Caterpillar Inc, is said to be “one of the world’s largest manufacturers of engines, tractors, trucks, bulldozers and similar earth-moving and materials handling equipment”. The Third Respondent is Caterpillar Overseas Credit Corporation S.A. The Fourth Respondent is Caterpillar S.A.R.L.
9. Now before the Court is the Notice of Motion filed on 30 November 2009 seeking orders pursuant to O 8 r 3(2) of the Federal Court Rules to serve “the Application and the Statement of Claim”:
   • on the Second Respondent in the United States of America;
   • on the Third Respondent in Switzerland; and
   • on the Fourth Respondent in Switzerland.

Presumably the relief which is sought is the grant of leave to serve any Amended Application that may be filed and the Amended Statement of Claim on those Respondents. The Motion is supported by two Affidavits of Mr Michael Harmer — one affirmed on 30 November 2009 and the other on 2 December 2009. A number of the Exhibits to the former Affidavit of Mr Harmer have also been tendered. Notwithstanding service on the First Respondent, that Respondent did not seek to appear on the hearing of the present Motion and the application thus proceeded ex parte.

ORDER 8 — RULE 3

10. Order 8 r 3(2) and (3) provide as follows:

(2) The Court may give leave to a party to serve an originating process on a person in a foreign country in accordance with a convention or the law of the foreign country, on such terms and conditions as it considers appropriate, if the Court is satisfied that:

(a) the Court has jurisdiction in the proceeding; and
(b) the proceeding is of a kind mentioned in rule 2; and
(c) the person seeking leave has a prima facie case for the relief claimed by the person in the proceeding.

(3) The evidence on an application for leave under subrule (2) must include the following:

(a) the name of the foreign country where the person to be served is or is likely to be;
(b) the proposed method of service;
(c) a statement that the proposed method of service is permitted by:

(i) if a convention applies  — the convention; or
(ii) in any other case — the law of the foreign country.

Order 8 r 2 sets forth by way of a number of “items” the “[k]ind of proceeding in which originating process may be served on a person outside Australia”. Those “items” now relied upon by the Applicant are the following:

2	Proceeding based on a breach of a contract in Australia
3	Proceeding in relation to a contract that: (a) is made in Australia; or (b) ...; or (c) is governed by the law of the Commonwealth or of a State or Territory; in which the applicant seeks: (d) ...; or (e) ...; or (f) an order for damages or other relief in relation to a breach of the contract
11	Proceeding based on a breach of a provision of an Act that is committed in Australia
12	Proceeding based on a breach of a provision of an Act (wherever occurring) seeking relief in relation to damage suffered wholly or partly in Australia

11. The “originating process” is relevantly defined by O 8 r 1 as meaning “an application commencing a proceeding ...”. Order 4 r 1 provides that proceedings are to be commenced “by filing an application” and O 4 r 6 provides that an application is to be filed and served together with “either an affidavit ... or a statement of claim ...”.
12. Notwithstanding compliance with O 8 r 3(2) the Court retains a discretion as to whether leave should be granted to serve a respondent outside Australia. So much follows from the use of the term “may”. It has thus been observed that “... the power given by O 8 r 3(2) is clearly a discretionary power”: West v TWG Services Ltd [2009] FCA 1052 at [10]. His Honour Justice Gray was there satisfied that the requirements of O 8 r 3(2) had been satisfied but nevertheless concluded as follows:

[61] This being the case, my view is that I should refuse the leave sought to serve the amended application and the amended statement of claim on the respondent in England. To serve those documents in their present form would be to visit upon the respondent a proceeding in Australia involving a significant number of claims, with only a small number of those claims justifying the grant of leave for such service. Although technically the proceeding as a whole might fall within O 8 r 2 of the Federal Court Rules, because of the presence of the small number of claims, this is not enough to persuade me to exercise the discretion to permit service out of the jurisdiction in respect of the whole proceeding. To do so would be to allow the tail to wag the dog.

See also: Best Australia Ltd v Aquagas Marketing Pty Ltd (1988) 83 ALR 217 at 222 to 223. The ambit of those considerations relevant to the exercise of the discretion may, however, be open to some debate and differences of opinion: e.g. Humane Society International Inc v Kyodo Senpaku Kaisha Ltd [2006] FCAFC 116, 154 FCR 425.

13. And, when considering whether an Applicant has made out a “prima facie case”, the kind of evidence adduced need only be “in proportion to the nature of such an interlocutory issue”: WSGAL Pty Ltd v Trade Practices Commission [1992] FCA 510; (1992) 39 FCR 472 at 476 per Beaumont J. As the requirement is imposed at the outset of proceedings, it does not require the kind of scrutiny that would occur (for example) in a submission of “no case to answer” following the closure of an applicant’s case at trial: Merpro Montassa Ltd v Conoco Speciality Productions Inc [1991] FCA 70; (1991) 28 FCR 387 (“Merpro”) at 390. It may be appropriate to draw inferences more readily in favour of an applicant, bearing in mind that the applicant will not have had the advantage of discovery, subpoena and other procedural aids to the making out of a “prima facie case”: Western Australia v Vetter Trittler Pty Ltd (In liq) (Receiver and Manager Appointed) (1991) 30 FCR 102 (“Vetter Trittler”) at 110 per French J, citing Merpro. This “threshold requirement” of a “prima facie case ... is met where material is placed before the Court from which inferences are open which, if translated into findings of fact, would support the relief claimed”: Australian Competition and Consumer Commission v European City Guide SL [2009] FCA 1206 at [4] per Moore J, applying Vetter Trittler. But “[a]ctual evidence rather than mere allegations are required”: Applecross Pte Ltd v Lim [2009] FCA 1102 at [6] per McKerracher J.
14. It should also be noted that if a “prima facie case” for relief has been made out in respect to one cause of action, it is immaterial that a “prima facie case” for relief has not been made out in respect to another cause of action: Cell Tech Communications Pty Ltd v Nokia Mobile Phones (UK) Ltd (1995) 58 FCR 365 at 373 per Lindgren J. See also: Trade Practices Commission v The Gillette Company (No 1) [1993] FCA 496; (1993) 45 FCR 366 at 371 per Burchett J. This was, of course, the issue that divided the Full Court in Bray v F Hoffman-La Roche Ltd [2003] FCAFC 153, 130 FCR 317.

THE ALLEGATIONS BEING ADVANCED

15. Insofar as leave is sought in respect to the Second Respondent, the Amended Statement of Claim seeks no relief against that Respondent by reason of any alleged termination of the Dealership Agreements. But relief is claimed against that Respondent by reason of:
    • conduct or representations which are said to be misleading or deceptive for the purposes of the Trade Practices Act; and
    • equitable estoppel and unconscionable conduct
16. Insofar as the Third and Fourth Respondents are concerned, the Applicant does not seek to rely upon any conduct or representation being misleading or deceptive but relief is claimed by reason of:
    • the alleged wrongful termination of the Dealership Agreements; and again
    • equitable estoppel and unconscionable conduct
17. For the purposes of considering the present application, it is not necessary to consider the manner in which the Applicant seeks to make out its case of equitable estoppel or what it phrases as “unconscionable conduct”.

The Claim in Contract

18. Insofar as relief is claimed in the Amended Statement of Claim in respect to contract arising out of the alleged wrongful termination of the Dealership Agreements, the following paragraphs of the Amended Statement of Claim assume prominence, namely:

16. By deeds of assignment dated on or around 1 January 2003:

1. COA assigned its rights, interests and obligations under the Dealership Agreements to COCC;
2. With effect from on or around 1 January 2003, COCC agreed to be bound by and to discharge the obligations of COA under the Dealership Agreement;

100. COCC unconditionally and irrevocably indemnified COA against all liability or loss arising from, and any costs, charges or expenses incurred in connection with any breach by COA of the Dealership Agreement prior to 1 January 2003;

4. COCC reassigned those rights, interests and obligations to CSARL;
5. With effect from on or around 1 January 2003, CSARL agreed to be bound by and to discharge the obligations of COCC under the Dealership Agreement; and
6. CSARL unconditionally and irrevocably indemnified COCC against all liability or loss arising from, and any costs, charges or expenses incurred in connection with any breach by COCC of the Dealership Agreement prior to 1 January 2003.
   

16A. In the premises:

1. COCC and CSARL were bound in conscience to assume the burdens of the Dealership Agreement with effect from around 1 January 2003;
2. On and after around 1 January 2003 COCC held its right, title and interest in and to the Dealership Agreement on express or constructive trust to observe the burdens under the Dealership Agreement; and

100. On and after around 1 January 2003 CSARL held its right, title and interest in and to the Dealership Agreement on express or constructive trust to observe the burdens under the Dealership Agreement.
     

17. On 7 October 2003, notice was given to terminate the Dealership Agreements (the Notice of Termination).
    
18. On around 6 April 2004, the Dealership Agreements were terminated and the Dealership came to an end.
    

Contract

19. It was a term of the Dealership Agreements that the parties thereto would exercise their rights under the Dealership Agreements reasonably and in good faith, with due regard to the objects of those agreements.
    

Particulars
This term is implied by law.

20. In giving the Notice of Termination and terminating the Dealership, COA and/or COCC and/or CSARL, failed to act reasonably and in good faith, with due regard to the objects of the Dealership Agreements, and thereby breached this term of the Dealership Agreements.
    

Particulars

Particulars of the respects in which COA or COCC or CSARL failed to act reasonably and in
good faith, with due regard to the objects of the Dealership Agreements are set out in
Schedule A hereto.

21. G&G has suffered loss and damage by this breach of the Dealership Agreements.
    

Particulars of loss and damage

1. Loss of profits from the Dealership from around October 2003.
2. Loss of monies invested in the Dealership unable to be recouped from profits of the Dealership after April 2004.

100. Losses incurred in connection with closing down the Dealership.
     

Thereafter, when addressing those allegations relevant to equitable estoppel and unconscionable conduct, the Amended Statement of Claim also states:

67. In giving the Notice of Termination and terminating the Dealership, COA, acting both for itself and on behalf of CAT, COCC and CSARL, departed from the Relevant Understandings and acted contrary to the Relevant Representations.
    
19. It would thus appear that the claim in contract sought to be advanced on behalf of the Applicant is as follows:

(i) the parties to the Dealership Agreements are the Applicant and the First Respondent;

(ii) the “rights, interests and obligations under the Dealership Agreements” are said to have been first assigned “on or around 1 January 2003” from the First Respondent to the Third Respondent and thereafter (but at the same time) from the Third Respondent to the Fourth Respondent; and

(iii) the First Respondent was the entity that is said to have given the notice of termination on 7 October 2003.

With reference to the implied duty of good faith, it is then said that:

(iv) the giving of the notice of termination “breached this term of the Dealership Agreements”.

The allegation is that those entities that “failed to act reasonably and in good faith” and without “due regard to the objects of the Dealership Agreements” are:

(v) the First, Third and Fourth Respondents.

20. Notwithstanding the amendments effected by the Amended Statement of Claim, the following difficulties nevertheless remain, namely:

(i) how can it be said that the Third and Fourth Respondents acted in breach of a term of agreements, namely the Dealership Agreements, to which they were not a party?

Moreover, and assuming that there were at least two “deeds of assignment” and that the parties to those “deeds” were one or other of the First, Third and Fourth Respondents:

(ii) how can it be said that the Third Respondent remains exposed to liability to the Applicant if the Third Respondent “reassigned” the “rights, interests and obligations” to the Fourth Respondent?

No novation agreement of the Dealership Agreements to which the Applicant is a party is apparently relied upon. Reservation may also be expressed as to whether the Applicant is correct in its allegations as to the manner in which the “deeds of assignment” operated. That which may be exposed in due course remains the commercial objective sought to be achieved by the two “deeds” being executed on apparently one and the same day “assigning” and thereafter “reassigning” the same “rights, interests and obligations”. But that is not a matter which need be further addressed at this stage. Nor need attention presently be given to whether it is possible to unilaterally assign the “obligations” or burden of an agreement in a manner which binds the other contracting party without its consent: Carter J, Peden E and Tolhurst G, Contract Law in Australia (5th ed, LexisNexis Butterworths, 2007) at [17-37]. At least one further difficulty in relation to the contract claim is:

(iii) a manner of pleading whereby the draftsman seeks to set forth the manner in which the First, Third and Fourth Respondents “failed to act reasonably and in good faith” by way of “Particulars” rather than by way of a statement of “material facts” as required by O 11 r 2.

Sections 51A and 52

21. Section 51A, it has been recognised, “is a qualified and complex deeming provision”: Ackers v Austcorp International Ltd [2009] FCA 432 at [354] per Rares J. It is, however, properly characterised as an interpretation provision and does not of itself create a cause of action: Ting v Blanche [1993] FCA 524; (1993) 118 ALR 543 at 552. Section 51A provides as follows:

Interpretation

(1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

(2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.

(3) Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.

In Ting, supra, Hill J observed of this provision:

The section is but an interpretation section; it does not of itself create a cause of action, nor define a norm of conduct. The relevant cause of action is to be found in s 82(1) of the Act by reference to the norm of conduct laid down in s 52 of the Act. What s 51A does, in a practical sense, in cases where it applies, is to cast the burden of proof upon the respondent corporation who has made a representation about a future matter to show that in making that representation it had reasonable grounds for so doing. In the language of Sheppard and Neaves JJ in Cummings v Lewis (1993) 113 ALR 285; ATPR (Digest) 46-103, s 51A is “designed to facilitate proof” (at ALR 294; ATPR 53,450).

In the present proceeding, the course pursued by the draftsman has been to expressly plead reliance upon s 51A where it has been considered appropriate to do so. Whether it was necessary to pursue such a course may be left to one side. That which may also be presently left to one side is whether each of the representations which the Applicant presently maintains are representations in respect “to any future matter” truly falls within that description. Of present relevance is the importance assumed by s 51A in casting the “burden of proof” upon the Respondents. Different views have also been expressed as to the manner of operation of s 51A and the nature of the evidence to be adduced by a respondent before the “deeming” effect of s 51A ceases to operate: McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2, 165 FCR 230; Skiwing Pty Ltd t/as Café Tiffany’s v Trust Co of Australia Ltd (Stockland Property Management Ltd) [2009] FCA 347 at [21] to [24][2009] FCA 347; , 255 ALR 339 at 343 to 344 per Buchanan J. But all of these matters may be left to be resolved at a later date.

22. Before leave is granted to serve an originating process outside the jurisdiction, it nevertheless remains desirable that there be an appropriate degree of certainty as to the burden sought to be imposed upon a respondent and an appropriate degree of certainty as to those representations in respect to which s 51A is sought to be invoked.
23. In the present proceeding a number of difficulties, it is considered, arise in relation to those parts of the Amended Statement of Claim that expressly seek to invoke s 51A and also those parts which seek to simply place reliance upon alleged misleading and deceptive conduct.
24. A series of representations are said to have been made by the First and Second Respondents as to “future matters” within the meaning of s 51A, including representations:

(i) in relation to conduct occurring “[d]uring the 1980s and 1990s”, being conduct said to be “particularised in Schedule B”;

(ii) in relation to a “draft report” prepared by the First Respondent “[d]uring 1997” and a representation “that the 1997 Report would be destroyed and not used by” the First or Second Respondents “as a basis for measuring or assessing the performance of” the Applicant. “Particulars of this representation” are said to be set forth in Schedule D; and

(iii) in relation to representations “[d]uring the second half of 1999 and in 2000” by the First and Second Respondents that (inter alia) the Second Respondent “had made a firm and irreversible decision to bring the relationship” with the Applicant to an end, being conduct particularised in Schedule F.

There are also contained within the Amended Statement of Claim allegations as to:

(iv) conduct “from at least 1998” whereby the Second Respondent “[r]esolved to hold itself free to conduct itself on a basis inconsistent with” earlier “understandings” said to have been reached; and

(v) the making of representations said to be “contained” within a report “sent” by the First Respondent to the Second Respondent “[in] around March 1999” — the “representations” being said to be set forth in Schedule E.

25. Difficulties in respect to such allegations, it is considered, include such matters as:

(i) the imprecision in allegations expressed in such broad terms as “[d]uring the 1980s and 1990s” — especially in circumstances where some of the “Particulars” provided do not give further content as to when such conduct is said to have occurred, but some of those “Particulars” (it must be recognised) do provide greater certainty;

(ii) the fact that some of the matters set forth in Schedule B do not seem relevant to any representation being made as to any “future matter”;

(iii) the lack of any precision in the manner in which it is said the First Respondent “[r]esolved to hold itself free to conduct itself on a basis inconsistent with” understandings said to have been reached and uncertainty as to whether such allegations seek to place reliance upon s 51A or perhaps s 52;

(iv) the fact that the “Particulars” of the representation said to be set forth in Schedule D are more appropriate to be expressed as statements of “material facts” rather than as “Particulars”; and

(v) the fact that the “Particulars” provided in Schedules E and F are more appropriate to be expressed as statements of “material facts” rather than as “Particulars” — but, more relevantly, to the extent that the representations there set forth are said to be “implied” — the absence of any basis upon which any such implication is said to arise.

The existing pleading, it is considered, remains fundamentally deficient — even when recognition is given to the fact that it has been drafted in advance of (for example) discovery. If the Amended Statement of Claim remains in its present form, it would be open to one or other of the Respondents to (for example) deny or not admit a material fact. The purpose to be served by the provision of “Particulars”, it is to be recalled, is fundamentally different to the requirement to plead “material facts”: H 1976 Nominees Pty Ltd v Galli [1979] FCA 74; (1979) 30 ALR 181 at 186 to 187; Sides Engineering Pty Ltd v Energetech Australia Pty Ltd [2005] FCA 1672 at [6] to [7]. There is no requirement that a Respondent plead to a matter set forth in “Particulars”. To endorse at the outset a course whereby the issues are not clearly joined as between the protagonists is not a course which should be encouraged.

THE REFUSAL OF LEAVE

26. For the purposes of O 8 r 3(2)(c), no state of satisfaction can be reached that the Applicant has a “prima facie case” as against the Third or Fourth Respondents that either has “breached” any implied term as to good faith. But, in seeking leave, Counsel on behalf of the Applicant expressly disclaimed reliance upon such allegations as have presently been made in this respect as against those Respondents. But reliance is sought to be placed upon the estoppel and unconscionable conduct allegations made against those Respondents.
27. Although it may be appreciated that an applicant for leave need not establish a “prima facie case” in respect to each of the causes of action relied upon, in the present case it is considered that the preferable exercise of discretion is to refuse to presently grant leave to serve the Third and Fourth Respondents abroad.
28. If the Applicant wishes to pursue its claims as against these Respondents for any claim in respect to the alleged wrongful termination of the Dealership Agreements, further amendment is considered necessary.
29. Nor has any attempt been made to otherwise set forth all of the other perceived deficiencies in the existing Amended Statement of Claim. No criticism is necessarily made of the drafting course whereby some matters may conveniently be included in a Schedule. But the present pleading, it is respectfully considered, suffers from such a number of deficiencies that it should be further amended before any further application is made for the grant of leave pursuant to O 8 r 3. Some of the perceived deficiencies which have been identified may well be regarded as more important than others. Some may be accepted — and others rejected — by the draftsman who undertakes any future redrafting exercise. It remains a matter for the draftsman to make such further amendments as is seen fit.
30. In so concluding it must be recognised that a point may be reached where a pleading may not be in as precise a form as may be desirable but where the discretion conferred by O 8 r 3(2) is to be exercised in favour of granting the leave sought. Even if there are outstanding potential deficiencies in a statement of claim, a point may be reached where an applicant has made out a “prima facie case” for the purposes of r 3(2)(c) and where it can thereafter properly be left to a respondent to file such a defence as is considered appropriate.
31. A further reason for refusing, at least at this stage, the grant of leave to serve the Third and/or Fourth Respondents overseas is that reservation is expressed as to the jurisdiction of this Court to entertain and resolve any breach of contract case that may ultimately be pleaded as against those Respondents. Given the reliance placed upon s 51A as against the First and Second Respondents, it may be that the First and Second Respondents’ involvement in any breach of any implied term may form part of the same “matter” such that this Court has jurisdiction in respect to all causes of actions. But the same conclusion may not be open in respect to the Third and Fourth Respondents.
32. Moreover, in circumstances where it is apparent that a Statement of Claim seeks to make out a cause of action or a number of causes of action against a number of respondents which are in some way related, the preferable course may be to await the filing of a Further Amended Statement of Claim which makes the corporate interrelationship clear and the involvement of each respondent in the alleged wrongdoing equally clear. Related corporate respondents may then be better placed to determine whether there will be common legal representation and possibly agreement as to method of service. Such a course is considered the preferable course in the present proceeding.
33. The manner in which an originating process is expressed, whether this Court has jurisdiction and how a case is to proceed to hearing are matters relevant to the exercise of the discretion now to be exercised.
34. The Applicant may make any such further application for leave pursuant to O 8 r 3, albeit not in relation to the existing Amended Statement of Claim, as and when it sees fit.

ORDERS

35. The Orders of the Court are:
    1. The Notice of Motion as filed in Court on 30 November 2009 is dismissed.
    2. Any Amended Application and any Further Amended Statement of Claim is to be filed and served on or before midday on 11 December 2009.
    3. Any further Notice of Motion seeking leave pursuant to O 8 r 3 of the Federal Court Rules in respect to any such Amended Application and any Further Amended Statement of Claim is to be filed on or before midday on 11 December 2009.
    4. The proceeding is stood over to 9.30 am on 15 December 2009 for further mention or the hearing of any such further Notice of Motion seeking the grant of leave pursuant to O 8 r 3.
    5. Costs reserved.
       

I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick.

Associate:

Dated: 7 December 2009

Counsel for the Applicant:	Mr MJ Steele
Solicitor for the Applicant	Harmers Workplace Lawyers

Date of Hearing:	2 December 2009
Date of Judgment:	2 December 2009