JUDGMENT No. 22mm! wt NB : NOT APPROPRIATE FOR REPORTING OR FOR GENERAL CIRCULATION. / >, Trade Practices - misleading and deceptive conduct - application for ainterlocutory injunction - parailel Supreme Court proceedings Trade Practices Act 1974 (Cth) ss.52, 82, 87 Companies Act 1961 (WA) s.67 HUGH CARNEGIE HALLIDAY V COX _ INVESTMENTS PTY LIMITED. GORDON DAVID COX, CECILIA ALICE MARY COX. KEVIN JAMES ANDREWS and LEONARD VICTOR MADDOCKS No. WA G.47 of 1984 Davies, J 18 September 1984 Perth IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY No. WA G.47 of 1984 wee vvun GENERAL DIVISION BETWEEN 3 HUGH CARNEGIE HALLIDAY Applicant AND : COX INVESTMENTS PTY LIMITED, GORDON DAVID COX, CECILIA ALICE MARY COX, KEVIN JAMES ANDREWS and LEONARD VICTOR MADDOCKS Respondents ORDER JUDGE MAKING ORDER 3 Davies, J DATE OF ORDER 3 18 September 1984 WHERE MADE : Perth UPON the applicant, Hugh Carnegie Halliday, undertaking by his counsel that 1. These proceedings in the Federal Court of Australia will be prosecuted expeditiously as against Cox Investments Pty Limited. 2. Within twentv-eight (28) days the applicant will pay to Cox Investments Pty Lamited $5,000, being the agreed costs of Action No.2843 of 1983 in the Supreme Court of Western Australia. THE COURT ORDERS 1. Until further order Cox Investments Pty Limited, Gordon David Cox and Cecilia Alice Mary Cox be restrained from further prosecuting Action WNo.2843 of 1983 in _ the Supreme Court of Western Australia. Liberty is reserved to apply for variation or termination of this order. These proceedings shall be listed for hearing commencing Tuesday, 20 November 1984, and five (5) days are allocated. The costs of this application shall be costs in the cause. IN THE FEDERAL COURT OF AUSTRALIA REGISTRY ) ) WESTERN AUSTRALIA DISTRICT ) } No. WA G.47 of 1984 ) ) GENERAL DIVISTON BETWEEN 3 HUGH CARNEGIE HALLIDAY Applicant AND : COX INVESTMENTS PTY LIMITED, GORDON DAVID COX, CECILTA ALICE MARY COX, KEVIN JAMES ANDREWS and LEONARD VICTOR MADDOCKS Respondents REASONS FOR JUDGMENT (ex tempore) Coram 3 Davies, J 18 September 1984 In this matter, there is an application to stay proceedings which have been commenced in the Supreme Court of Western Australia. That action was commenced in 1983 and is now ready for trial. The action and the present proceedings arose out of a sale of shares in the company J.L. Burley Pty Limited from Cox Investments Pty Limited tv International Leather Products Pty Limited. As part of the arrangements for the sale of those shares, the applicant in these proceedings, Mr H.C. Halliday, gave a guarantee for the payment of the purchase price. In the Supreme Court action, Cox Investments Pty Limited sued International Leather Products Pty Limited, three directors of International Leather Products Pty Limited, Kevin James Andrews, Leonard Victor Maddocks and the applicant in these proceedings. The writ sought relief against Mr Halliday on the basis of the guarantee given. Default judgment has been obtained in the action against all parties other than Mr Halliday. Mr Halliday's defence has relied upon an allegation that the arrangement breached s.67 of the Companies Act 1961 (WA). In the proceedings which have now been brought in the Federal Court of Australia by Mr Halliday against Cox Investments Pty Limited, two members of that company and against Mr Andrews and Mr Maddocks, other principles of law have been relied upon in addition to the s.67 principle. Mr Halliday has relied upon warranties and representations, upon unconscionable conduct by persons who were under a fiduciary duty, and upon s.52 of the Trade Practices Act 1974 (Cth). Mr Halliday, in raising those issues, is putting the defence which he raised in the Supreme Court proceedings on a different basis. It appears that, in substance, he wishes to say that, even if s.67 of the Companies Act 1961 (WA) does not avoid the quarantee itself but only the collateral arrangement whereby the company J.L. Burley Pty Limited would assist in the financing of the purchase of shares in itself, nevertheless, the circumstances under which the guarantee was given were such as to mislead or deceive him. or were likely to mislead or deceive him, by reason of the fact that he entered into the arrangement on the understanding that International Leather Products Pty Limited was able itself to finance the purchase of the shares and he was misled by the other parties to the arrangement into thinking that that was the situation. I have put the matter in simplistic terms. The principles upon which Mr Halliday will rely at any trial are more complex than that, but I think that is the substance of the matter. In the proceedings in the Federal Court of Australia he seeks to rely in substance upon the same facts as he relies upon in the Supreme Court, but he wishes to rely on all principles of state and federal law which may give him the relief he seeks. Ir he succeeds in establishing that s.52 of the Trade Practices Act was breached, he wishes to rely for relief upon ss.82 and 87 of the Trade Practices Act, and particularly upon s.87 with a view to having the guarantee set aside pursuant to the discretionary power conferred by that section. It seems to me, therefore, that the issues all arise out of substantially the same facts and that it is desirable that Mr Halliday be given an opportunity to rely upon all relevant state and federal laws, provided that that can be achieved without undue injustice to Cox Investments Pty Limited. I should make it clear before going further that I have not formed the view that Mr Halliday can succeed in establishing a Breach of s.52. I simply regard that matter as arquable, as indeed are all the other matters upon which Mr Halliday wishes to rely. In particular, Mr Halliday will have to face the hurdles of establishing that, if there was any relevant act done by Cox Investments Pty Limited, that it was done in trade or commerce. Clearly that, in itself, will be a matter for argument. It seems to me that the s.52 issue stands so far as merit is concerned on the same footing as the other issues which arise under state law. There is no issue which clearly is more favourable to Mr Halliday than any other issue. Looking at convenience, it is clear that the Federal Court of Australia is the only court in which all the 1ssues which Mr Halliday wishes to raise can be litigated. I would not issue an injunction with regard to the Supreme Court action unless I were satisfied that the proceedings in this court could be disposed of promptly and that the costs thrown away would be borne by Mr Halliday. However, Mr J.G. Fitzgerald, who now appears for Mr Halliday, has indicated that he will give appropriate undertakings as to these two matters, and I am therefore of the view that it is desirable that the matter proceed in this court so that all relevant issues of federal and state law may be litigated in the one hearing. | certify that this and the 3 , preceding pages are a true copy of the "reasons for judgment herein of The Honour- able Mr, Justice J.D DAWES Associate Codec ~ Dated A/lo/sg & AR 32) NB: NOT APPROPRIATE FOR REPORTING OR FOR GENERAL - CIRCULATION. nO een L Trade Practices - misleading and deceptive conduct - application 'for interlocutory injunction - parallel Supreme Court proceedings Trade Practices Act 1974 (Cth) ss.52, 82, 87 Companies Act 1961 (WA) s.67 HUGH CARNEGIE HALLIDAY V COX INVESTMENTS PTY LIMITED, GORDON DAVID COX, CECILIA ALICE MARY COX, KEVIN JAMES ANDREWS and LEONARD VICTOR MADDOCKS No. WA G.47 of 1984 Davies, J 18 Septemper 1984 Perth IN THE FEDERAL COURT OF AUSTRALIA REGISTRY ) ) WESTERN -AUSTRALIA DISTRICT ) ) ) ) No. WA G.47 of 1984 GENERAL DIVISION BETWEEN : HUGH CARNEGIE HALLIDAY Applicant AND 3 COX INVESTMENTS PTY LIMITED, GORDON DAVID COX, CECILIA ALICE MARY COX, KEVIN JAMES ANDREWS and LEONARD VICTOR MADDOCKS Respondents ORDER JUDGE MAKING ORDER : Davies, J DATE _OF ORDER : 18 September 1984 WHERE MADE : Perth UPON the applicant, Hugh Carnegie Halliday, undertaking by nis counsel that i. These proceedings in the Federal Court of Austrailia will be prosecuted expeditiously as against Cox Investments Pty Limited. Within twenty-eight (28) days the applicant will vay to Cox Investments Pty Limited $5,000. being the aqreea costs of Action No.2843 of 1983 in the Supreme Court of Western Australia. THE COURT ORDERS 1. Unt1l further order Cox Investments Pty Limited, Gordon David Cox and Cecilia Alice Mary Cox be restrained from further prosecuting Action No.2843 of 1983 un the Supreme Court of Western Australia. Liberty 1s reserved to apply for var1ation or termination of this order. These proceedings shall be listed for hearing commencing Tuesday, 20 November 1984, and five (5) days are allocated. The costs of this application shall be costs in tne cause. IN THE FEDERAL COURT OF AUSTRALIA ) ) WESTERN AUSTRALIA DISTRICT ) REGISTRY ) No. WA G.47 of 1984 ) ) GENERAL DIVISION BETWEEN 3 HUGH CARNEGIE HALLIDAY Applicant AND : COX INVESTMENTS PTY LIMITED, GORDON DAVID COX, CECILTA ALICE MARY TH a AR IC and LEONARD VICTOR MADDOCKS Respondents REASONS FOR JUDGMENT (ex tempore) Coram 3 Davies, J 18 September 1984 In this matter, tnere is an application to stay proceedings which have peen commenced in the Supreme Court or Western Australia. That action was commenced in 1983 and 1s now ready for trial. The action and the present proceedings arose out of a sale of shares in the company J.L. Burley Pty Lamitea from Cox Investments Pty Limited tu International Leather Proaucts Pty Limited. As vart of the arrangements for the sale of those shares, the applicant in these proceedings. Mr H.C. dHalliaay, gave a guarantee for the payment of tne purchase price. n In the Supreme Court action, Cox Investments Pty Limited sued International Leather Products Pty Limited, three directors of International Leather Products Pty Limited, Kevin James Andrews, Leonard Victor Maddocks and the applicant in these proceedings. The writ sought relief against Mr Halliday on the basis of the guarantee given. Default judgment has been obtained un the action against all parties other than Mr Haliiday. Mr Halliday's derence has relied upon an allegation that che arrangement breached s.67 of the Companies Act 1961 (WA). In the proceedings which have Gvww been brought in the Federal Court of Australia by Mr Halliday against Cox Investments Pty Limited, two members of that company and against Mr Andrews and Mr Maddocks, other principles of law have been relied upon in addition to the s.67 principle. Mr Halliday has relied upon warranties and representations, upon unconscionable conduct by persons who were under a fiduciary duty, and upon s.52 of the Trade Practices Act 1974 (Cth). Mr Halliday, in raising those issues, 1S putting the defence wnich he raised 1n the Supreme Court proceedings on a different basis. Tt appears that, in substance, he wishes to say that. even if s.67 of tne Companies Act 1961 (WA) does not avoid tne guarantee itself but oniv the collateral arrangement whereby the company J.L. Burley Pty Limited would assist in the financing of the purchase of shares in aitself, nevertheless, the circumstances under which the quarantee was qiven were such as to mislead or deceive him, or were likely to mislead or deceive nim. by reason of the fact that ne entered into tne arrangement on the understanding tnat International Leather Products Pty Limited was aple itself to finance the purchase of the shares and he was misled by the otner parties- to the arrangement into thinking that that was. the situation. I have put the matter in simplistic terms. The principles upon which Mr Halliday will rely at any trial are more complex than that, but I think that is the substance of the matter. [In the proceedings in the Federal Court of Australia he seeks to rely in substance upon the same facts as he relies upon in tne Supreme Court, but he wishes to rely on all principles of state and federal lat? Which may give him the relief he seeks. If he succeeds in establishing that s.52 of the Trade Practices Act was breached, he wishes to rely for relief upon ss.82 and 87 of the Trade Practices Act, and particularly upon s.87 with a view to having the guarantee set aside pursuant to the discretionary power conferred by that section. It seems to me, therefore, that the 1ssues all arise out of substantially the same facts and that it 1s desirable that Mr Halliday be given an opportunity to reiy upon all relevant state and federal laws, provided that that can be achieved without undue injustice to Cox Investments Pty Limited. I should maxe it clear before going further that I have not rormed the view that Mr Halliday can succeed in establisning a breach of s.52. I simply regard that matter as arquable, as undeed are all the otner matters upon wnich Mr Halliday wisnes to rely. In particular, Mr Halliday will have to face the hurdle of establisning that, 1m there was any relevant act done py Cox Investments Pty Limited, that 1t was done in trade or commerce. Clearly that, in itself, will be a matter for argument. [It seems to me that the s.52 1ssue stands so far as merit 1s concerned on the same footing as the other issues which arise under state law. There 1s no issue which clearly 1s more favourable to Mr Halliday than any other issue. Looking at convenience, 1t 1s clear that the Federal Court of Australia 1s the only court in which all the issues which Mr Halliday wishes to raise can be latigated. I would not issue an injunction with regard to the Supreme Court action unless I were satisfied that the proceedings in this court could be disposed of promptly and that the costs thrown away would be borne by Mr Halliday. However, Mr J.G. Fitzgerald, who now appears for Mr Halliday, has indicated that he will give appropriate undertakings as to these two matters, and I am therefore of tne view that it 1s desirable that the matter proceed in tnis court so that all relevant issues of federal and state law may be litigated in the one hearing. i cernéy that this and the 3 ' preceding pages are true copy of the reasons for judgment herein of The Honour- able Mr Justice J.D DAWES Associate Coder — Dated Alu/s¢