IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ») QLD G109, G11G & G112 of GENERAL DIVISTON ) 1983 BETWEEN : GLENN WAYNE MAISEY and JACOUSLINE ANNETTE MAISEY ELISABETH 3MEDLCY NICK JAMES PTV. LIMITED Applicants AND: FIRST Coast Pty LTD First Respondent SURETY INVESTMENTS PTY LTD secona kespondent AND: MUDGEERABA VILLAGE ESTATES PTY LTD Third Respondent AND: ZOLENE ELIZABETH PEPRY Fourth Respondent AND: STEPHEN JOSEPH ENGLISH Fifth Respondent AND: MUDGEEPABA VILLAGE ESTATES PTY LID First Cross Claimant AND: ZOLENE SLISARETH PERRY Second Cross Claimant AND: FIRST COAST PTY LTD First Cross Respondent AND- SURETY INVESTMENTS PTY LTT Second Cross Respondent AND: DAVID WHITE Third Cross Pespondent DATE Of HEARING: 13 FEBRUARY 1984 DATE JUDGMENT DELIVERED: Z1 PEBRUARY 1984 COUNSEL: . for the apolicant Mr D Cooper instcucred by Messrs MG. Lyons and Ca . for the respondent Ms DB. O'Donnell inetructed by Messrs Feez Ruthning and Ca 2i FEBRUARY 1984 3.M. XIFT ASSOCTATE TO FITZGERALD J. «wes oe Fu Fats ved tape doit pf nth ay, : - . Heed hts, ae Pee ' CATCHBWORDE JURISDICTION OF FEDERAL COURT - exercise of Court's discretion to entertain action - claims against all respondents related to single set af associated transactions - claims against fifth respondent wholly divorced from claame against other responients - entirely separate and severable nor-tederal controversy - potential disadvantages to fifth respondent. Trade Practices Act, $.52 GLENN WAYNE MAISEY and JACQUELINE ANNETTF MAISEV, ELIZABETH SMEDLEY, NICK JAMES PTY LIMITED (Applicants) -v- FIRST COAST PTV LTD AND ORS (Respondents) Qld G109, G119 and G11i2 of 1983 FIPTZGERALD J. BRISBANE 2] FEBRUARY 1984 IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QTM Gi09, Gli0 & G12 of GENERAL DIVISION fj 1983 BETWEEN : AND: AND: AND: AND: AND: AND: AND: AND: AND: GLENN WAYNE MATSEY and JACOMELTNE ANNE?TE MATSEY ELIZABETH SMEDLEY NICK JAMES Pry. LIMITED Applicants FIRST COAST PTY LTD First Respondent SURETY INVESTMENTS PTY LID Second Respondent MUDGEEPABA VILLAGE ESTATES PTY LTD Third Respondent GOLENE ELISABETH PERPY Fourth Respondent STEPHEN JOSEPH ENGLI5h Fifth Pespondent MUDGEERABA VILLAGE ESTATES PTY LTD First Cross Claimant 40LENE ELIZABETH PERRY Second Cross Claimant FIRST COAST PTY LTD First Cross Pespondent SURETY INVESTMENTS PTY LTD Second Cross Respondent DAVID WHITE Tniréd Cross Respondent ORDER JUDGE MAKING ORDER: FITZGERALD J. DATE OF ORDER: 21 FEBRUARY 1984 WHERE MADE: BRISBANE THE COURT ORDERS THAT: l. in each of Applications G199, G110 and Gl1l2Z of 1983, tans Application be struck out as against the Fifth Respondent, but without prejudice to the right of the Applicants to commence other appropriare proceedings against the Fifth Responaent. 2. The Applicants pay to the F h Respondent his taxed costs of each of Applications G109, G110 and G112 of 1983 including ceservea costs, if any. IN TRE FEDERAL COUPT OF A'IS'TRATIA ) QUEENSLAND DISTRICT FECISTRY ) QLD G109, G110 & G11l2 af GENEFAL DIVISION . 1983 BETWEEN : GLENN WAYNE MAISEY and JACQUELINE ANNETTE MAISLY ELIZABETH SMEDLEY NICK JAMES PTY. LIMITED Applicants AND: FIRST COAST PTY £TD Pirst Respondent AND: SURETY INVESTMENTS PTY CTD second Respondent AND: MUDGEERABA VILLAGE ESTATES Pu'y LID Third Respondent AND: ZOLENE ELTZARETH PERPY Fourth Respondent AND: STEPHEN JOSEPH ENGLISH Fifth Respondent AND: MULGEERARA VILLAGE ESTATES ETY LTD First Cross Claimant AND: ZOLENE ELIGABETH PERRY Second Cross Claimant AND: FIRST COAST PTY ~TD First Cross Respondent AND: SURETY INVESTMENTS PTY LTD Second Cross Respondent AND: DAVID WHITE Thira Cross Respondent PITZGERALD J. ei FEBRMAFY 1 re] pal fe REASONS FOR JUDGMENT Three separate proceedings were comnencea on 22 and 2 tat November 1983 by different applicants against the sare five respondents. In each case, the ciaim of the applicants against the farst, second, third and fourth respondents 1s for damages for breach of s.52 of the Trade Practices A oO ct 1974 ("the Act"), deceit, and neqligent misstatement. The fifth respondent 13 alleved to be the former solicitor of the various applicants ard their claims against him are for "damages for breach of duty and or breach of contract" and in the alternative "damages and or compensation for breach of duty and, in patticular, his duty of disclosure ...". There has been some delay in finalising directions with respect to the interiocutory course t- be roliowed in the proceedings because af question uh concerning service upon the first and second respondents and the applicaticns for directions 'T stani adjourned until next Wednes for ft ne) w re) February 1994. However, some steps have been taken. The third and fourth respondents entered appearances on 7 December 1983 and the fifth respondent entered an appearance on & December 1963 when the Aoplications first came before the Court for directions. On that occasion, the fifth ressondent by his solicitor foreshadowed a possible dispute as to the Court's jurisdiction and it was directed, inter alia. that on or before Friday 27 January 1984 the fifth respondent either deliver a defence and cross-claim, 1f any, or file and serve an application to have the oroceeaings against him dismissed or stayed. On 14 December 1923, the fifth resoondent ie} au Hr delivered requests for particulars of the Statement of Claim and the particulars were delivered shortly atcerwards. On 26 January 1984, the fifth respondent filed the Notices of Motion which are now before me by which he seeks to have the proceedings against him dismissed or stayed on the ground that they are outside the Court's jurisdiction or in the alternative in the exercise of the Court's discretion. No attention was directed to the questions whether the joinder was in any event proper and appropriate under the Vourt's Rules. At the conclusion of argument, I ordered that each Application be dismissed against the fifth respondent but without prejudice to the right of the respective asplicants ta commence other appropriate proceeaings against the firth respondent and TI ordered that the fifth ressondent recover his taxed costs, including reserved costs, oF each Application from the applicants. I then indicated that I would «aeliver these reasons for the orders made as soon as possible. Shortly stated, the applicants' allegations against the first to fourth respondents are that the third cespondent and/or the fourth respondent carried on ousiness as "Camelot Real Estate" which was the real estate agent fcr the first and second respondents in and about the sale o Ay shaces in ae limited partnership and the sale of units in a building to be constructed rs at Broadbeach in the State of Queensland, that cne David White was a real estate salesman ain the employ of Camelot Real Estate, that in about August 1981 White wade various mlsrepresentations to the applicants 'hich were made fraudulentiy, negligently, and aun breach of $.52 of the Act, that in reliance upon the misrepresentations the applicants contracted to purchase shares in the limited partnership and units in the proposed building and paid substantial sums of money, that the first respondent failed to pay deposits received from tne appli-ants in respect of the unit purchases into an interest-bearing trust account as required by the contracts, that in or about the oncth of December 1982 the contracts for the purchase by the firet respondent of the land upon which the unit-buriding was toa be constructed were terminated by the venders thereunder for breacn by the first respondent and the deposits thereunder were forfeited, that from in or about that month the building has not been possible and the shares in the Limited partnership have been worthless, and that the applicants have lost tue monies which they paid. There are some differences in the termg in which the alleged misrepresentations are pleaded in the various actions, Broadly, they are asserted to have concerned payments made by or on behalf of the first respondent fer the land upen which the unit building was to be constructed (in one case that the land had already been acquired by the first respondent), the use for which money paid by the applicants would be available and to which 1t would be put, the number and ctype of unics which had been sold, the possible consequences 1f the project (or the applicants) did not proceed, the limited nature of the risks to the applicants, and the character, reputation, experience and expertise of the respondents and those associated with them. The allegations against the fifth respondent in Application G1O09 of 1983 are as follows: "27,(a) The Fifth Respondent is and was at all times materiai to this action a Solicitor of the Supreme Ceurt c Queensland and Carried on cractice as cro wn ie) am > On or about the 23ra day of September, 1981, the Applicants orally retained the Fifth Respondent TD act as their Solicitor in and about the transaction referred to in paragesaphs 6 and 7 nereof; (c) Tne Fifth Respondent accepted the said cetainer and acted for the Applicants in the said transaction, (d) The Fifth Respondent at. all Limes material to this action acted for a vendor or vendors of the said land referred to in waragraph 1l(b) hereof to tne First Respondent; (e) By virtue of the Fifth Respondent's acting for such verdor or vendors he became avare on or prior to the date referred to in paragraph 27(b) or in the alternative on or hefore the date when the Applicants maae the payments referred to im paragraph 14 hereof that the First Respondent was having diftficuity in fulfilling 1t5 obligations under the said contract or contracts; spondent did not disciose the cred to in subparagrapns (a) ef ta the Applicants; (F) Tre Fitth BR facts rere and (@) her Ds iD Cg) in the premises, the Fifth Responaent had a duty to advise and warn the Apelicants as to: 28. (h) (1) (a) {b) (co) (d) (e) (f) y moneys paid ants in the nsaction were (1) the extent to which any or payable by the Applic course of the sald tra unsecured or at risk; (il) the nature and extent of the tisk assumed by the Applicants in comparison with 2 normal contract Tor the sale and surchase of land or units; (121) the finanerial status of tre First and/or Second Respondents. The Fifth Respondent in breacn of his said duty failed to advise or warn the Applicants as aforesaid; As aresult of the Fifth Respondent's said breach of duty the Applicants have suffered loss and damage. Further or alternatively: day of September, on or about the 2 Ct ally retained the 1981 the Applican oe Fifth Respondent Q act as the1s Solicitor ain and apaut the transaction referred to 1n vdaraqraphs 6 and 7 hereof and to advise in relation thereto; aie The Fifth Respondent accepted the said retainer and acted fer and advised the Applicants with resnect to the said transaction, The Fifth Fespondent awed a duty to the B ants TO enereise ail due professional care skiii and diligence in advising the Applicants ain relation te the sald transaction; the Fifth Pespondent knew or ought to nave known that he was being trusted to give such advice as a basis for action on the part of the Applicancs; the Applicants relicd uren the Fifth Respondent's advice in entering into the said transaction; the Fifth Respondent faiied to exercise all due professional care skili and diligence in advising the Applicants in that he:- fi) expressly or imeliedly advised the Applicants that the said transaction was sound and not attendant with any particular risx; (11) advised that the said project was a sound one and that if he himself had the resources he would invest in it; (111) fallied to advise the Applicants that the said investment they were propasing to maxe was unsecured and thereny was attendant with risk; and (iv) falled to acavise the Applicancs that the First Resvondent was having difficulty fuifilling its obligations under the cantract ot contracts referred to in paragraph l1l(b) hereof: (hh) the Applicarts, acting 1n reliance on the said advice have 3urlered loss ana damage." With minor and presently immaterial differences of detail, the allegations in paragraphs 27, supra, are repeatea in Applications G110 and G112 of 1983. In each of those matters, a paragraph substantially in the following terme appears in lieu cf paragraph 28, supra: "29, Further or alternatively: fa) The Fifth Responaent on or about the 25th day ot Sevreuber, 134i expressly or impliedly advised the Applicant that the said transacticn was sound and not attendant with any particular risk to the Applicant; (b) the Fifth Fespondent knew orf ought to have known that he was being trusted to give such advice as a basis for action on the part of the Applicant; (c) the Applicant relied «upon the Fitth Respondent's advice in entering into the said transaction; (d) the Fifth Responaent farled to exercise ail due professional care skill and diligence in the aiving of such advice. (e) the Applicant, acting 1n reliance on the said advice has suffered loss and damage." The claims against all respondents are lacking in any detail concerning the loss and damage alleged to have been suffered by the applicants but, in the course of argument, counsel for the applicants indicated tnat the applicants seek to recover from all respondents the amounts which they have paid away and incidental expenses, such as legal costs. In abroad sense, all claims in each proceeding are related to a single set of associated transactions. There there is a temporal coincidence or overlap between the various events and there are common elements to ve proved in each case in the claims against the first and fourth respondents on the one hand and, on the other, the claims against the fifth respondent. Thus, to succeed on any basis against any respondent, it will be necessary for the applicants to prove what they signed, what they paid, the termination of the contracts by which the first respondent was acquiring the lana upon which to build the building, and the applicants' loss of their money and any expenses which they seek to recover. Counsel for the taifth respondent sought to distinguish the claims against her citent from the claims against the other respondents on the basis that, in the assessment of any amount wnich might properly be awarded against the fifth respondent, it would be necessary to bring to account the applicants' prospects of recoverability and/or enforceability against the other respondents who were, she said, primarily responsible for any loss suifered by the applicants. However, I have not found i1t necessary to consider this submission and have placed no reliance upon it 1n arriving at my conclusion. Except to the extent which I have indicated, the claims against the fifth respondent are wnoliy divorced from the claims against the other respondents. The acts and omissions and state of mind alleged against the fifth respondent are entirely different from and unconnected witn those alleged against the other respondents. The knowledge attributed to the fifth respondent in the applicants' pleadings 15 not alleged to include knowledge of any aspect of the impugned conduct of the other respondents, with respect to the topics which are the subject matter of their alleged representations, or of the connection asserted between that conduct ana the steps taken by the applicants or other reasons for those steps, but 1s related only to the position of one of the respondents, tne first respondent, in relation to other transactions with strangers to the litigation, namely the first respondent 6 acquisition of the land upon which the building was to be constructed. The causes of action against the fifth respondent are both in nature and in most at least of their constituent elements quite separate and distinct from those pleaded against the other respondents. 10. In the c1lrcumstances, zncluding of course the circumstance that there 1s no overlap of parties between the two series of claims and no relationship between the fifth respondent and the other respondents, 1t seems to me that the claims against the fifth respondent could not properly be reqarded as othe: than an entirely separate and severable non-federal convroversy. It 1S unnecessary to pursue that fucthet because, however that may be, I feel no doubt but thar, if this Court has a discretion to permit the claims against the fifth sespondent to proceed in this Court or to require them to be raised in the State Courts, it should follow the latter course. As matters presently stand, the potential disadvantages to the fifth respondert if he is opliged to contest the respective proceedings in this Court, in most aspects of which he has no interest, with obvious increased cost and inconvenience, far outweight any legitimate advantage which might accrue to the applicants if they were permitted to continue as at present with the claims against the fifth respondent jo1ned with their claims against the other respondents. I snould add, since the point was mentioned by Counsel for the applicants, that I have not overlooked the steps taken thus far in the litigation hy the fifth respondent, but I have found what has been done of no significant assistance in determining how to exercise any discretion which I may have. ll. The one point which caused me any pause is the possibility that, with separate proceedings in different courts, the litigation in the different courts might be tried in an inappropriate order. However, any such possibility seems remote un the present instance and I am confident that, should the need arise, the respective courts can adequately centrol the cases before them to ensure that justice 15 done. Accordingly, as I have already indicated, I considered that the appropriate order was tor the dismissal of the applicants' claims in this Court against the fifth respondent. certify that this and the {O preceding pages are a true ceny of ihe reasons for judament herein of His Hervur Mr Justice Fitzgerald Nex. "Associate Dated «2( 2 Sy