PS en CATCH WERNS Practice and procedure ~- application by reswendents for order that applicant shall provide security for cor.s - appliccrs 2 trustee - wnether suing "for the benefit of some other poreen" - Pedercl Court Rules Order 28 Pule 3(1)(b) RIOT NOUINELS PTY LTD v. SUZUKI AUSTRALIA PTY LED anc ofrers (VG No. 65 of 1981) Coram: KEELY J. 2te: 23 April 1981 Place: Melbourne IN THE FEDLRAL CCURT CF AUSTPALIA VICTORIA DISTRICT FEGISTRY VG No. 65 of 1981 . GEVERAL DIVISION BETWEEN: PIOT NOMINGSS PTY Lip Applicent AND: SUZUNI SNsTRALTA PTY LEP, SUAUYT SUSTP LIN (F ) pry LTD, SUZUKI COOMLE Ast otT Ts PTY Lid, SUallT "OSTPAra% (UUPOFVS) PTY Lit, SUAUKT COMME FT Bry Lip, CORVLLL, T° ITP) PUTTS A AY SPONCEL1, ne Its HARTI CORKS Resporijince JUDGE MAKING ORDER: KELLY J. DATE CF ORDER: 23 April 1981 WHERE NADE: Melbourne THE COURT OFEERS THAT: 1. Upon the applicant by its coursel undertcking to pay to any party adversely affected by this injunction such compensation (if any) as the court tninke just, in cucn morror as the court directs, it 1s ordercd that, until the hearirs en} determination of this action or further orcer: (a) the first and sccond responients ans cach ot ee re ee ne cen cee an er - ~ (b) 2. them by themsclves, their directors, officers, servants, agents or howsoever otherwise, be restrained from refusing to supply the epplicant with Suzuki motor cycles Spare parts and accessorics and the services assoclated therewitn (to the extent th7t the respondents are ehte to do so in the ordinary course of trade) on the same terms and conditions under whicn che first or second respondents supply other sellers of Suzuki motor cycles, spare parts and accessorics with any sucn goods (and such associeted services) for retall sale to the public in the metropolitan area of Melbourne; the third, fourth and fifth named respondents and each of them by themselves, their directors, officers, servants, agents or howsoever otherwisc, be restrained from doing or attempting to do ajJl or any of the following, that 1s to say: (1) giving effect to any agreement between the respondents cr two or more of then whereby the third, fourth and/or fifth respondents refuse to supply to the applicant Suzuki spare parts to the extent that tho responderts ire anle to supply in the ordinary course of trade; (ii) giving effect to any agreement between the respondents or two or more of them whereby the third, fourth and/or fifth respondents refuse to deal with or to supply Suzuki spare parts to the applicant oon the seme terms and conditions as apply to other sellers of Suzuki spare pverts in the metropclitan area of Melbourne. 2. Reserve liberty to any party to cpply. 3. The costs of all parties in respect of the directions hearing, the application for interim injunctions ana che application for security for costs shall be costs in the cause, eT ete mee ter Oe ee J IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG No. 65 of 1981 GENERAL DIVISION wees SS 23 April 1981 BETWEEN: PIO NOMINEES PTY LoD Applicant AND: SUZUKI AUSTRALIA PTY LTD, SUZURT AUSTFALTA (SALES) poy Lip, SUZUKT CAPNCLE AUSTESLI™ PRY LID, GUZUKT SCL Tr (THPORTS) PLY LTD, CUZUrI CGENLEL *0STRALI* "(PER RIL) PTY LID, GraAey Fririric CORNELL, TT CHIRO PUITT\, Pay SPENCER ano JCHM Hes MARTIN CCPNLLL Respondents REASONS FOR JUDGNLUT By its statement of claim Riot Nominees Pty Ltd applicant) alleges, inter alia, that: 7 Ee a se ee en "8. The first and second Respondents are ond at all material times from lst February 1931] or thereapouts have been carrying on the business of importing into Australia and selling by wholcsale motor cycles, spare pcerts and accessories manufactured by Suzuki "otor Cer Limited and distributed under the neme 'Suzuk.' 9. The third fourth ane@/or fifth Resvondents are and at all material times heve been carrying on the business of imoorting into Austreti1la and selling KELLY J. (the wae 2. inter alia by wholesale Suzuki spare parts. 10. The first and second Respondents on the one hand and tnird, fourth and/or fifth Fespencents on tne other hand are parties who are competitive with each other or are dsemea to be competitive with each other in relation to the supply of Suzuki motor cycles spare perts and accessories for the purpeses of Section 4D and Section 45 of the Trade Practices Act 1974. ll. At all times from in or abovt 1969 the Applicant has carried on the business of reteiling and dealing in Suzuki and other hbrer*s cf motor cycles, spare parts end accrssorics ana oft servicing Suzuki and other brands of motor cycles and in the course of cerrying on the said business under the neme of Peter Stevens Notor Cycles nes generated substantial goodwill in suzuki motor cycles spare parts and accessorics. 12. (a) At all material times prior to lst February 1981 or thereabouts Suzuki motor cycles snare parts and accessories were supplicd to the Applicant by the predecessor in business of the farst endfor secone Respondents at wholesale or better than wholesale prices. (b) At all material times prior to %th Febru7ry 1981 or thereabouts the Applicant was Supplied with Suzuki spare prrts and accessories by the third, fourth and turther or alternatively the fifth Pespondents at wholesale or better than wholesale prices. 13. On and from lst Februery 1931 or thereabouts the first and further or alternatively the second Respondents have refuse? end failed to suoply to the Applicant Suzuki motor cycles, genrre parts and accessories ordered or sought by the Applicant fer the reason that the Aoplacont was a retailer of and dealer in motor cycles spare parts and accessories of other brands in addition to Suzuki. 14. On and from 9th February 1981 or thereabouts the third, fourth and further or alternatively fifth Respondents have refused and Leiled to supply to the Applicant Suzuki Spare parts and accessories other tnzn and except at retail prices fer the reason that the Apojicant was a retailer of and Gealer in motor cycles, spare varts anc accessories of otner brands in oddition to Suzuki. 15. The engaging by the first ond second FOOT EY TTY Se ee wees te - SO enema meres = cee | 3. Respondents and by the third,, fourtn endfor fiftt Respondent in the conduct aforessid hes the purpose or, has or 1s likely to neve the etifect oF substantially lessening corpetition. 16. By reason of the foregoing the first end second Respondents have engaged in the precticc of exclusive dealing. 17. Further, on or about IJst February 1981 or alternatively 9tn February 1981 the first anc/or second Respondent made a contrect or arrangerent or entered into an understanding with the trird fourts and/or fiftn Respondent - (a) thet the first and second Respondents should refuse and fail to supcly to the Applicant Suzuki mctor cycles spare parts ena accessorles; (b) that the third, fourth and further or alternatively fiftn Responderts should refuse and fairl to supply spare parts to the Applicant other than at retail prices. 18. Thereafter —- (a) the first and second Fesnvendents have given effect to the sald contract crraraement Or understanding by refusing anc filing to supply to the Applicant Suzuki wrotror cycles Spare parts and accessories; {b) the third, fourth and further or alternatively the fifth Respondents have given effect to the sald contract, arrangement or understanding by refusing end failing to supply snare parts tc the Applicant other than at retail price. 19. By reason of the foregcing the first, second, third, fourth and fifth named Respondents {a) have made a contract, arrangement or understanding which contejns an exclusionery provision for the purposes of the Trade Practices Act 1974; (b) have given effect to a provision of 2 contrect, arrangement or understanding which 1S an exclusionary provision for the purpeses of the Trede Prectices Act 1974," ee ee as wee coho ane an ane te 4. The applicant was grented leave, without objection by the respondents, to amend its application under s.80 of the rede Practices Act 1974 (the Act) for injunctions (including interim injunctions - the subject ot the present proceeding) to reed as follows: "(1) Injunctions pursuant to Section 30 of the Trade Practices Act 1974 (including both anterim and interlocutory injunctions) restraining the first and second resgondents by themselves thoir directors officers servants agents or howsocvtr otherwise from doing or attempting to do all or eny of the following, that is to say, (a) refusing or failing to supply to the Applicant Suzuki motor cycles spare parts and accessories ordered or sought by the Applicant; (b) giving effect to euch ond every sgreement between the Respondents wuerepy - (1) the first end second Respondents vould refuse or fail to supply te the Applicant Suzuki motor cycles spare parts and accesscrics; (11) the third, fourth and further or olternatively fifth Respondents would refuse or frill to supply spare parts to the Applicant at other than retail price." "(1A) Injunctions pursuant to section 80 of the Trade Practices Act 1974 including both interim and interlocutory injunctions restreining the third, fourth and fifth respondents by thetselves, thoir directors, officers, servarts, agents or howsoever otherwise from Going or attempting to do all or any of the following, that 1s to say - (a) giving effect to each and every agreement between the respendents or two or more af them whereby the third, fourth and/or fiFtn respondents refuse or fail to supoly spare Parts to tne .pplicants at cther thor retril price; eee i ere soe ee - eee -- he ee 5. (b) giving effect to cech and every agreement between the respondents or two or more of . them whereby the third fourth and/or f1fth respondents refuse or fail to deal with or to supply spare parts to the applicant on the same terms and conditions as epply to other retaltlers of Suzuki spare parts." Mr Merralls Q.C. who appeared with Nr Loewenstcin for all of the respondents, handed up a form of order to which nis clients would be prepared to submit. The draft order, as amended in the course of the heering, was in the following terms: "Upon applicant giving the usual undertaking 45 to damages and upon its undertaking until tne trial of this application or further order that it will not by advertisement, sign or in any other wey or ky any other means held itself out as being an accredited agent or accredited dealer in Suzuki motor cycles thet tne first znd second respond2ncs and each of them be restrained from r-fusing to supply the applicant with Suzuki motor cycles spare Parts and accessories and the Services associated therewith (to the extent that the resvondents are able to do so in the ordinz2ry course of trade) on the same terms and conditions under which the first Or second respondents supplics other sellers of Suzuki motor cycles, spare parts and accessories with any such goods (and such associated services) for retail sele to the public in the metropoliten area of mieibourne. Reserve liberty to either party to apply." ix Castan Q.C., who appeared with Mr Archibald for tne applicant, stated that he would not press for en interin injunction in the terms of paragraph (1) of tne amended application if the court was orepared to méke an order in the terms put forward by Mr Merralls but omitting the = second rd "« 6. undertaking therein. Mr Merralls submitted that the court should rocuire the . giving of the second undertaking as a condition of the granting of an injunction. During the hearing he made it clear that the undertaking sought was intended to have the effect - and in his submission would have tne effect - of requiring the applicart to refrain from holding itself out by edvertisement, sign or in any other way or by any other means, as being an agent or dealor jn Suzuki motor cycles. In his submission, elthough the applicant would be a dealer in Suzuki motor cycles in a genera] sense, 1t would be prohibited by the proposed second undertaking from advertising that 21t was such a dealer because the worc "dealer" has acquired a special connotation. He conceded that there tac not a great deal of evidence before tne court at this stage és to the connotation in the trade of the woids "dealer" ani "agent". He submitted that: "The applicant has no right, by grant from us or under the Act, to describe himself or to reauire us to allow hin to describe himself as being én accredited agent or dealer. A great deal of the case when it comes for trial will be concerned with the significance of dealerships. The Act merely entitles a plaintiff or a person to protection against certain proscribed practices. Our refusal to allow the present applicant to describe himself as ean accredited agent or accredited dealcr 1s not a proscribed practice. So he would be doling something wnich 15 nis neither by contract nor by the operation of superior low if he were tc describe himself as an eccredited agent or accredited dealer." een et er ee ee - - = -- e - " wee - oe ee -e - Lempinemnenenns anteatadernanieted 7. I accept that submission, but I am not persuaged by the material before me that the applicant would be acting wrongly iu advertising itsclf as a "dealer" in Suzuki motor cycles. Further, I accept the submission put in reply by Mr Arcnibald on behalf otf the applicant that it has not been shown that the respondents are likely to suffcr any prejudice if the undertaking is not given. As this is an interlocutory proceeding it is not desirable that I should form any concluded view as to tnc evidence, In my opinion the applicant nas shown that, 1f£ the evidence remains as it is, there is a probability thet it will succeed at the trial and further, that 1t would he Jikely to suffer injury if an injunction were refused. On the other hand, the evidence does not show that the respondents woujJd suffer injury if an injunction were granted. I accept Mr Merralls' submissions as to the general principles to be applied in this matter, namely, that an interim injunction should be for the protection of tne applicant egzainst an apprehended wrong to ut, that it should not be exccssive and that it should be certain. In my opinion the form of order put forward by Mr Merralls, with the second proposed undertaking deleted from it, is consistent with those principles. I also consider that interim injunctions should be granted restreining the third, fourth and fifth named vows sme eee 8. respondents by themselves, their directors, officers, servants, agents or howsoever otnerwise from deine or attempting to do all or any of the following, that is to say - (a) giving effect to any agreement between the respondents or two or more -of them whereby the third, fourth and/or fifth respondents refuse to supply to the applicant Suzuki spare parts to the extent that the respondents are able to supply in the ordinary course of trade; (b) giving effect to any agreement between the respondents or two or more of them whereby the third, fourth and/cr fifth respondents refuse to deal with or to supply Suzurl sparc parts to the applicant on the same terms ard conditions as apply to other sellers of Suzuki sprre parts in the metropolitan area of Melbournc. Again, liberty is to be reserved to any party to apply. It was common ground that the applicant is not a trading company itsclf, but 1s a trustee which conducts business on behalf of a family trust. Mr Merralls on behalf of the respondents sought an order thet security for costs be given by the applicant. His application was expressly made not under $.363 of the Companies Act, but under Order 28, Rule 3(1)(b) of the Federal Court Rules which reeds as follows: wettene See ee - woe ee cee me ee ee -- - ae 9. "3.(1}) Where, in any proceeding, it appeers to the Court on the application of a respondent - (b) that an applicant is suing,' not for hic own . benefit, but for the benefit of some other person and there is rezson to believe thet the applicant will be unable to pay the costs of the respondent if ordered to do so; Mr Merralls submitted tnat the applicant was suing rot for its own benefit, but for the benefit of some other person within the meaning of that sub-rule. In White v. Butt (19099) 1 F.B. 50 at p.54, Buckley L.J. said that he was "startled by the contention set up by the defendant that trustees so suing can be called 'nominal plointiffs'." He pointed out that they "are the only possible plaintiffs" and are to be distinquishea from nominal plaintiffs or fictitious plaintiffs, seying (at po.55-56): "An example of the kind of case in which thet expression 'nominal plaintiff' is applicable is where a person in whom a ceuse of action was vested, not being minded to bring an acticn himself, has assigned that cause of action to anotner, whom he puts forward for the purpose of suing, but who has no beneficial interest in the subject-matter of the litigation. There are obvious reasons why in the case of @ person sc put forward to sue in respect of a cause of action in which he 1s not really interested, and who, being 2 pauper, is subetituted for the person reclly interested, in order to protect the latter from liability for costs, there should be an order for sccurity for costs. ... Thet is the class of case in which a plaintiff has been spoken of as @ 'nominal plaintiff.' When a piaintiff& is in that sense a nominal plaintiff end is insolvent, no doubt cccurity Lor costs cught te be ordered. Put I fail to see any resemblance between such cases and the present. ..." RE ERE ne ee ee ~- one we wee - - + - - Cee ants ee ee me | RN emcee ee pak Rone me ae ee ee FS 10. His Lordship added (at p.56): "This case has no analogy to one in which a person has substituted some one clse for himself as legal owner of a debt in order that tne transferee may sue for the benefit of the transferor. ... Jf this proposition were true, it would apply ecually to any trustees, whether of = marriaqe settlement or a will, or for debenture-holders, and 1t would follow that trustees could be ordered, 1f£ impecunious, to give security for costs in any action brought by them as trustees, on the ground thet they, personally, hed no bencficial interest in the subject-matter of the action. Such a proposition appears to me altogetner untenabic. TI am therefore of opinion that the appeal must be dismissed." Vaughan Williams L.J. said (at p.53) that trustees of "an ordinary settlement ... are not within the meaning' of the words "nominal pleintiffs". Kennedy L.J. agreed. The present Rules of the Supreme Court (U.K.) in Order 23 Rule 1 contain provisions which are virtually identical to the provisions in Order 28 Rule 3(1)(a), (c) and (d) of the Federal] Court Rules. However, as to paragraph (b), the comparable rule - contains additional words referring to "a nominal plaintiff". The paragraph, set out in the Annual Practice 1979, is in the following form: "(b) that the plaintiff (not being a plaintiff who is suing in a representotive capacity) 1s a nominal plaintiff who 1s suing for the penefit of some other person and that there is reason to believe that he will he ureble to pey the cosets of the detendant 1f ordered to do so, ..." nn ee = re ee cee ee ~——- wee eee -- -- - wee Ov et eee at ee ee een eee ee ee tee . a~- se ll. In his reply Mr Merralls asked: ""... the rhetorical question: if tnere 1s no difference, why is the languege not the samo? The language is different, and in our submission, the draftsman of the Federal court rules has sought to avoid tne ditficulty and limitation inherent in the phrase 'nominal plaintiff' in the English rules." However, tne note in the Annual Practice as to the score of the order is in the following terms: "This Order 1s taken from R. S. C. (Rev.), 1962, Oo. 23, whicn replaced tne former O. 65, rr.6, 6A, 6P and 7, and embodied the previous casc law dealing with tne power of the Court to orjer security for costs." The Annual Practice for botn 1907 and 1908 sets out the relevant provisions (Order 65 Rules 6 and 6A) which did not refer in terms to the case of a plaintiff suing for the benefit of some other person. The provisions were as follows: "6. In any cause or matter in which security for cests is required, the security shall be of such amount, and be given at such times, and in such Manner and form, as the court or a judge shell direct. 6A. A plaintiff ordinerily resident out of the jurisdiction may be ordered to give security for costs, though he may be temporarily resident within the jurisdiction." wrmmeewremmer ee ee ee -- eee - a e —~+- oe ee eek eS 12. It follows that the rule in the United Kingdom Suoreme Court Rules at .the time of White v. Butt did not contair the words "nominal plaintiffs" and that those words came from "the previous case law" - to use the words of the note in the Annual Practice. In my opinion Order 28 Rule 3(1)(b) Goes not show an intention to depart from the common law position and 1s net intended to apply to a proceeding instituted by a trustee, whose duty it 1s to carry out the terms of a trust. Furthec, I accept the submission put by tir Castan thet, on all of tne evidence - documentary and eral - before theo court, the respondents have failed to show thet there 1s rezeon to believe that the applicant would be unable to pay the costs of the respondents. In any event, I accent lir Castan's alternative submission that, as a matter of discretion, security for ccests should not be ordered on the material before whe court. Accordingly the application for security for costs 1s dismissed. As to costs, I accept Mr Merralls' submissions that the costs of the parties on all issues should be cests in the czurce. soos, I certify that this and t-e "4 ated vs ares 7 ecary er the Peer 4 muah eit here. of bas hnoneu: euwrtiee Keery nN Peer 23/4 /%