t+ pageo CATCHWORDS Practice and procedure - application to amend statement of claim - statement of claim alleging contraventions of, inter alia, s.52 Trade Practices Act, 1974 ("the Act") - proposed amendments relating to, inter alia, relief sought under ss.82(1) and 87(1A) of the Act - whether new relief sought statute-barred - operation of ss.82(2) and 87(1A). Trade Practices Act, 1974 ss.82, 87. Fenech v. Sterling, Full Federal Court, unreported, 29 October 1984 - con. INTERNATIONAL COMPUTERS (AUSTRALIA) PTY. LIMITED V. ERNEST WILLIAM BATE No. VG 237 of 1984 Northop, Davies and Beaumont, JJ. 22 February 1985. Melbourne. IN THE FEDERAL COURT OF AUSTRALIA VICTORIAN DISTKICT REGISTRY wee ven GENERAL DIVISION No. VG 237 of 1984 ON APPEAL from the Federal Court constituted by a single judge BETWEEN : INTERNATIGNAL COMPUTERS (AUSTRALIA) PTY. LIMITED Appellant AND: ERNEST WILLIAM BATE | kespondent Judges making vrder: Northrop, Davies and Beaumont. dd. Date order made: 22 February 1385. Where made: Melbourne. THE COURT CRDERS THAT: 1. That the appeal be allowed. Ww That the crders 1 and 2 made by a single judge of IN the Court on 3 August 1984 be set aside. 3. That the matter be remitted to the Court constituted by a single judge to be dealt with in accordance with these reasons and in the light of the further amendments now sought to be made to the statement of claim. 4. That there be no order for the costs of the motion before the single judge or of this appeal. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. No. G237 of 1984 GENERAL DIVISION ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA BETWEEN: INTERNATIONAL COMPUTERS (AUSTRALIA) PTY. LTD, Appellant and ° ERNEST WILLIAM BATE Respondent CORAM: Northrop, Davies and Beaumont JJ. DATE: 22 February 1985 PLACE: Melbourne REASONS FOR JUDGMENT NORTHROF J. I would dismiss the appeal for the reasons Given by Beaumont d. Wee ee 00 Seno Se me Toads at this 1S a true copy of the Torney, or gudemort busca of the igiouabls Mr. Justice RM MOLTHROP. TAOIST :ae§ Ans rate Prope, bo,~/ LN _THE FEDERAL COURT OF AUSTRALIA VICTORIAN DISTRICT REGISTRY No. VG.237 of 1984 QN APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN 3 INTERNATIONAL COMPUTERS (AUSTRALIA) PTY LIMITED Appellant AND : ERNEST WILLIAM BATE Respondent REASONS FOR JUDGMENT CORAM 3 Northrop, Davies and Beaumont JJ 22 February i968 DAVIES J : I have had the opportunity of reading the reasons prepared by Mr Justice Beaumont. I agree with them and with the orders proposed. Keay, that this andthe pacodiag pages ere a true copy of the reasons for judgment herein of The Honour- able Mr. Justice JY PAWES Associate 1¢/2/es Chk deo' Dated 1N THD FEDERAL COURT GF AUSTRALIA VICTORIAN DISTRICT REGISTRY GENERAL DIVISION No. VG 237 of 1984 ON APPEAL from the Federal Court constituted by a single judge BETWEEN ; INTERNATIONAL COMPUTERS (AUSTRALIA) PTY. LIMITED Appellant AND: ERNEST WILLIAM BATE Respondent CORAI: Northrop. Davies and Beaumont, dd. ATED: 22 February 1285. REASUNS FOR JUDGMENT BLAUMONT, d.: This 1s an appeal from an order of a single judge of the Court granting leave to the respondent (the plaintiff below), to amend his statement cof claim (which alleged contraventions of, inter alia. s.52 of the Trade Practices Act, 1974 ("the Act") and claimed damages and other consequential relief). by making additional allegations and by claiming additional relief under the Act against the appellant (the defendant below). Since the opposition to the amendments is grounded on the lateness and ba scope of the application to amend, 2t will be necessary to reter to the hastory of the matter in some detail. By his statement of claim delivered with the writ of summons issued on 21 September 1978, the plaintiff alleged that he was a pathologist; that the defendant carried on the business of supplying computer goods and services to the public; that between 14 May 1974 and 16 September 1977, the plaintiff and the defendant entered into a series of written agreements "for the supply and/or hire and/or service and/or licence of and/or relating to certain computer equipment" (therein referred to as ~ "the computer Agreements", particulars whereof were specifiea); that in the negotiations for the computer aoreements, the defendant engaged in conduct that was misleading or deceptive or likely to be so: that. an the negotiations, the defendant represented to the plaintiff that parts of the computer equipment and of the feervices had performance, characteristics, uses or benerits which they did not have (particulars whereof were given); that the statements and the presentations so particularised. especially statements made in the defendant's "Management Summary" in respect of ats I.C.L. 2903 computer systex, were untrue, misleading or deceptive or likely to be so in the particular respects then specified: that the said conduct was engaged in and repeated by the defendant from time tc time between the months of August 1973 and June 1377: thac in reliance on the conduct, 3. representations and statements alleged, the plaintiff entered into the agreements referred to; that the defendant, in purported compliance with the agreements, supplied goods and services to the plaintiff between September 1975 and June 1977; that the defendant has threatened to take possession of the computer equipment; and that as a result of the foregoing, the plaintiff has suffered loss and damaqe for which the defendant is liable "pursuant to the provisions of the (Act)". The particulars of damaqe were that the plaintiff's practice had sustained a substantiai and continuing loss of goodwill and a loss of profits. The following relief was claimed: a refund of monies paid by the plaintiff under the agreements: damages; relief fror liability to pay any further sums due under the agreements. pending payment of such damaces; an injunction restraining the detendant from selcing the computer and associated equipment; orders tor the re-writing of the agreements insofar as their terms are inconsistent with the orders sought; and such further orders. declarations or relief as the Court shall deem just. It seems that the relief was sought pursuant to both s5.82(1) and 87(1A) of the Act. The defendant delivered its defence on z1 May 1979. Although certain contracts were admittea, the defence substantially denied the allegations in the statement of claim. In addition, the defendant claimed that the plaintiff had failed to mitigate any loss. The defendant also raised a number of pleading points and pleaded a discretionary defence of laches, acquiescence and delay. By request dated 26 October 1979, the defendant requested further particulars of the statement of claim. On 3 November 1983, the defendant's solicitors wrote to the plaintiff's solicitors referring to the proceedings and to the plaintiff's failure to supply the further particulars sought, An application to have the proceeedinags disposed of was foreshadowed. Mention was also made of a writ issued by the defendant against the plaintiff in the Cupreme Court of Victoria, No service of the writ had been attempted, although 1t had issued on 17 March 1983. The claim endorsed on the writ was that pursuant to many agreements for hire and service between the present parties. the rperesent Plaintiff (as defendant in the Supreme Court) hired 2903 computer material and obtained service from the present defendant (the plaintiff ain the Supreme Court). It was further alleged that pursuant to an agreement for sale and maintenance made between the parties, the present plaintiff purchased computer equipment and agreed to take maintenance service from the present defendant and aadreed to pav the present defendant for the same. It was further alleged that the present plaintiff had broken the agreements. Damages were claimed. The defendant's solicitors' letter dated 3 November 1983 further explained that the Supreme Court proceedings had been instituted because of doubts that this Court had jurisdiction to entertain their client's claim. It was suggested that, (perhaps) after delivery of the defence in the Supreme Court, those proceedings should remain in abeyance pending the determination by this Court of its Jurisdiction to entertain a claim of the kind made in the supreme Court. The plaintiff''s solicitors did not respond until, by letter dated 23 March 1984, they sought clarification of the position and noted that no statement of claim had been delivered. On 26 March 1984, the statement of claim in the Supreme Court action was delivered. The present defendant sued the present plaintiff on a number cof agreements dated respectively 18 March 1977 (in two cases) and 30 June 1977 (in three cases) providing for the hire of computer equipment, for the provision of services, for the use of computer programs and for the sale of goods. It was alleged that on or about 6 Gctober 1977, before the installation of any of the computer equipment, the present plaintiff wrongfully repudiated the aoreements. It was further allegeé that by letter dated 4 April 1978, the present defendant accepted the repudiation. Loss of prcecfits was claimed. The present defendant further sued for monthly hiring, maintenance and service charges alleged to be due &. under a number of agreements bearing various dates between 8 May 1975 and 29 April 1977. On 3 November 1983, the defendant purported to file @ cross-claim in this Court, although out of time. The cross-claim was in substantially the same terms as the statement of claim filed in the Supreme Court action. By notice of motion filed on 17 February 1904, the defendant scught the dismissal of the plaintiff's statement of claim for want of prosecution. Alternatively, the defendant sought leave to deliver an amended defence and counterclaim and an order that the plaintiff supply the further particulars of his statement cof claim as requested on 26 October 1978. Orders for the delivery of interrogatories and for the fixing of a hearing date were also sought. On 22 February 1984, the hearing of the notice of motion was adtourned to 5 April 1964. On that date, a single audac af the Court refused the application to strike out the statement of claim and gave leave retrospectively (and without objection) for the filang of the cross-claim. The plaintiff having then foreshadowed an application for leave to amend his statement of claim, the further hearing of the notice of motion was adjourned to allow the plaintiff to frame the amendments proposed. ~I By an amended statement of claim dated 27 April 1984, the plaintiff sought to make a number of amendments, some of them significant. Iqnorina for the moment amendments of a cosmetic or merely drafting character, the plaintiff sought leave to make a number of fresh allegations as part of its general case that the defendant engaged in conduct which was misleading or deceptive or likely to be so within the meaning of s.52 of the Act. In the first place, the plaintiff now alleges that, in addition to the contracts of hire, service and program licensing already pleaded, the plaintiff and the defendant. between 21 September 1976 and 3060 June 1977, entered into further contracts. 12 an number, of that kind. Conduct Similar to that already alleged is sought to be pleaded in respect of the negotiation of these contracts. The plaintiff now also alleges further conduct said to be of a misleading or deceptive character in relation to the contracts or at least some of the contracts pleaded in the original statement of claim. On tne available material, it is not clear whether these alleqations fall within the general scope of the existing allegations cr travel beyond them, but, for reésons to be given, the point need not be pursued. The plaintiff also makes further allegations of a miscellaneous kind. For instance, cancellation of certain agreements by mutual agreement is pleaded. Further, a number of specific allegations are raised with respect toa computer system known as "2960", Again, on the limited anformation available, 1t 1s not clear how far, if at all, this 1s fresh material or merely matters put in explication of existing allegations. For reasons which will be given, 1t 15 also unnecessary to pursue this question. The relief now sought is different. It is now in these terns (the amendments are underlined): "A. A_declaration that the Defendant has contravened the Provisions cf Sections 52 and 53 of the Trade Practices Act 1974. B. An order that the Defendant refund to the Plaintiff moneys paid by the Plaintiff by way of rent, hire, and other considerations pursuant to the Computer Agreements. Cc. Damages. D. A dectaraticon that each of the Computer Agreements in Series 17, 19 and 20 was void ab initio or alternatively, rescinded bv the Plaintiff as from December 1977 or such other date as to the Court shall secm proper. E. An order that the Computer Agreements comprised in Series 2 to 20 inclusive (the 2963 and 2960 contracts) be varied in such manner as shall to the Court seem proper. wa KF, Such further orders, declarations, or relief as the Court shall deem just." (Again, it would seem that the relief is sought pursuant to both ss.82(1) and 87(1A) of the Act.) At the hearing of the application for leave to amend, the defendant objected to the Making of the amendments sought upon the ground that they raised fresh claims which were then statute-barred (see Weldon v. Neal £18871 19 0.B.D. 394; Renowden v. McMullan (1970) 123 C.L.R. 584). The learned iudge was of the view that two limitation periods were applicable to the litigation. First. so far as claims were made pursuant to s.82 and s.87 of the Act, a three year limit applied by virtue of s.82(2). The learned judge followed the decision on the point at first instance in Fenech v. Sterling (1983) 51 A.L-R. 205. Secondly, so far as the Court was exercising its accrued or attached jurisdiction in entertaining either the claim or the cross-claim, a Six year limit applied by virtue of the Limitation of Actions Act, 1958 (Vic.) as picked up by ss.79 and 80 of the Judiciary Act, 190 a) see John RKabertson & Co. Limited v. Feraquson Transforme.s Pty. Limited (1973) 129 C.L.R. 65). It was ccmmon ground before the learned judge that the 2903 computer was delivered to the plaintiff and used by him but that the 2960 computer had not been delivered to the lo. plaintiff at the time he repudiated any liability under the agreements relating to it. It was also common ground that the 2960 contract was not raised in the proceedings until the defendant filed its cross~claim. His Honour thought that the plaintiff's failure to rely upon the 2960 contract to that point indicated his intertion to abandon any claim on that account. But the learned judge did not regard this circumstance as determinative of the application because, in his view, the fact that, in its cross-claim, the defendant sought damages for breach of, anter alia, the 2960 computer agreements, was of itself decisive in the plaintiff's favour. In short, applyina the decision and reasoning of Menhennitt, dg. in Aurel Forras Ptv. Dimited v. Graham Karp Developneants Pty. Limited £19753 V.R. 202 at p.220), the learned judge was of the opinion that, within the meaning of s.30 or the Limitation of Actions Act, the plaintift was then seeking to counter-claim in respect of the 2960 computer. By that provision, a counter-claim 15 deemed to have been commenced on the sare date as the action in which 1t is pleaded. Because the events in question relate to a period before the commencenent of the action, the appropriate course for the pla:ntiff was to apply to amend the statement of claim rather than file a counter-claim or a reply. Since the decision of the learned judge was given, a Full Court has allowed an appeal from the decision at ll. first instance in Fenech v. Sterling (see Fenech v. Sterling, Full Federal Court. unreported, 29 October 1984). It was decided on appeal that, in an application under s.87(1A), although delay may be a relevant consideration in the exercise of the Court's discretion to refuse relief. there is no period of limitation applicable: the period prescribed by s.82(2) applies only to actions brought under s.82(1). Further, although the matter was not argued below, it is common ground betweeen the parties that 5.30 of the Limitation of Actions Act has no relevant application here. Another complication which has arisen since this appeal was instituted 1s that, during the hearing of the appeal, the plaintif1 indicated his wish to amend his statement of claim turther by making 1t clear that the claims now sought to he made by him in respect of the 2960 computer are made under s.87(12) of the Act only. In this way, the plaintiff hopes to avoid the time limit imposed by s.82(2). It 1s true that. in a written submission, the defendant has now argued that s.87(1A) does not authorise the commencement of an independent proceeding in the Court claiming relief of the Kind specified in s.87(2). Unfortunately, however, until the further amendments to the statement of claim are dyafted, the Court ais without material upon which it can adjudicate upon the issues now sought to be argued. Indeed, Gepending upon the terms of the fresh amendments. much of the araqunent before the learned judge and sefore us could well be academic. It 1s undesirable that the Court express any view on these matters. some of which could raise important questions of principle, until the plaintiff's pleading has reached 1ts final form. In the circumstances, in my opinion, the appropriate course 1s to allow the appeal and to remit the matter toa single judge of the Court to enable him to consider any objections which may be raised by the defendant to the amendments now foreshadowed to the statement of claim once those further amendments have been framed. The learned judge will then also be able to rule on the submission put on behalf of the defendant that the plaintiff has abandoned the claims now sought to be raised 'see Wentworth v. Woollahra Municipal Council, Full High Court, unreported, 12 Novembér 1984). Until the plaintiff has finally committed himself to the formulation of the amendments now indicated, it 15 inappropriate that any comment be made on this matter also. In the circumstances, there should be no order for costs of these proceedings before the learned judge or on this appeal. I would propose the following orders: 1. That the appeal be allowed. 2. That the orders 1 and 2 wade by a single judge of the Court on 3 August 1984 be set aside 3. That the matter be remitted to the Court constituted by a single judge to be dealt with in accordance with these reasons and ain the light of the further amendments now sought to be made to the statement of claim. 4. That there be no crder for the costs of the motion before the single judge or of this appeal. | certify that this and the ".2 preceding pages are a true copy of the reasons for judgment herein of The Honourable Mr Justice Beaumont. m4 Arter *CO" Associate Dated had Fibrac, GES