NOT FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V. No. G 109 of 1982 GENERAL DIVISION BETWEEN : JOHN LATORRE and VINCENT LATORRE Applicants and CALDWELL & PITHER PTY. LTD., HENDERSON SEED CO. PTY. LTD., JACK ARCHIBALD JAMES PITHER, IVO KEITH CALDWELL, BARBARA JOAN PITHER, PETER RICHARD MOUNTJOY and HENDERSON SEED PRODUCTS PTY. LTD. (trading as HENDERSON'S SEED PRODUCTS PTY. LTD.) Respondents COURT: NORTHROP J. DATE: 11 SEPTEMBER 1986 Q tC Red oO ry MELBOURNE EX TEMPORE REASONS FOR JUDGMENT There is before the Court a motion on behalf of the applicants for orders that the applicants have leave to amend the Statement of Claim in the terms of the accompanying proposed amended Statement of Claim, and an order that the applicants have leave to amend the application in the terms of the accompanying proposed amended application. 29 SEP 1986 FEDERAL GOURT OF AUSTRALIA PRINCIPAL REGISTRY The history of these proceedings shows a sad lack of any sense of urgency. The application was issued in August 1982; a number of steps were taken and there was a re-amended Statement of Claim filed on the 12th day of May 1983. There were certain other steps taken by September 1983, but then nothing happened until about the middle of this year. The motion before the Court, notice of which was given on the lst day of August 1986, is ina form which on the face of it is to substitute an amended Statement of Claim for the existing re-amended Statement of Claim. It is not directed to what may be said to be defects in the existing re-amended Statement of Claim, which in any event remains in existence. The proposed amended Statement of Claim is in a form which can only be described as rambling and embarrassing. On the face of it, it appears to be directed to a claim for damages arising out of a breach of contract entered into between the applicants and one group of the respondents during the period August to October 1981, and claims for damages arising out of that breach of contract, damages which, at the latest, had arisen by August 1982. The applicants, by the proposed amended Statement of Claim, apparently carry on business as growers of vegetables. One group of the respondents, Caldwell and Pither Pty. Ltd., and certain of the named individual respondents, are retailers of vegetable seeds. The other group of respondents, Henderson Seed Company Pty. Ltd. and Henderson's Seed Products Pty. Ltd., are in the nature either of wholesalers or possibly manufacturers of seed providing seed to the first group of respondents who, in this case, sold retail to the applicants. The proposed amended Statement of Claim is in a form which is said to be based on claims under ss.52 and 53 of the Trade Practices Act 1974. In addition, 1t sets out a large number of other causes of action, being causes of action which normally come within the jurisdiction of the Supreme Court or the County Court, and not directly within the jurisdiction of the Federal Court of Australia. Those claims relate to breaches of contract, negligence, breaches of warranty under the Trade Practices Act, Division 2 of Part V, under the Seeds Act 1971 (Vic) and other types of actions, but for present purposes it 15 necessary to see whether the proposed amended Statement of Claim discloses any cause of action based on the Trade Practices Act which comes within the jurisdiction of this Court. In the absence of any such cause of action it is not necessary to consider the further question of whether the claims based upon common law and Division 2 of Part V of the Trade Practices Act are appropriate to be dealt with in this Court under its accrued jurisdiction. Likewise, ait would not be necessary to consider whether, applying the principle of Weldon v. Neale (1887) 19 Q0.B. 334, as explained and applied in Cutrona v. Harnischfeger of Australia Pty. Ltd. (1577) V.R. 306, leave should be refused having regard to the fact that any claim for damages under ss.52 and 53 of the Trade Practices Act must be brought within three years of the date of the cause of action accruing. In this case that date, of necessity, must have been before August 1982, which 15 more than three years from the date of the hearing of this motion. Accordingly, the Court will look only at the primary question of whether the proposed amended Statement of Claim discloses any cause of action based on s.52 and/or s.53 of the Trade Practices Act. Under 0.13 ©.2 of the Federal Court Rules, the Court has power, at any stage of the proceedings, to amend any pleadings. Normally, the Court would allow an amendment sought if the amendment is a genuine amendment, if it discloses a cause of action, and if it does not cause any prejudice to opposing parties which cannot be overcome by appropriate orders for costs. In my opinion, a prejudice to an opposing party, and a very real prejudice, would arise if the amendments sought, in this case the proposed amended Statement of Claim, disclosed no cause of action justiciable by this Court justifying a refusal to give leave to amend the Statement of Claim and application. Accordingly, I propose to look at the proposed amended Statement of Claim to see if it does disclose any cause of action which can be brought in this Court. Most of the submissions by counsel for the applicants were directed to paragraphs 6 to 10, insofar as they apply to the first group of respondents, that is the retailers, and paragraphs 10A to 11D of the Statement of Claim insofar as they apply to the second group of respondents, the wholesalers. In substance, paragraph 6 alleges that between August 1981 and October 1981 the applicants entered into three contracts with the retailers, or some or other of them, whereby they purchased and the retailers sold and supplied certain eggplant seed in three lots of sealed tins. Particulars are then given of those three contracts. Paragraph 7 1s crucial. It reads:~ "7. The seed supplied pursuant to the first and second contracts in paragraph 6 ('the first seed') was:" and there are then set out a number of sub-paragraphs, (a), (b), (c), (dad) and the relevant one is (e):- "(e) represented to the Applicants by the retailer as being: (i) MS 5eed; further or alternatively (121i) standard MS seed." MS 1s to be read as Market Supreme variety seed. The other sSub-paragraphs of paragraph 7 are all directed to issues in relation to the seeds supplied, but 1t was submitted on behalf of the applicants that sub-paragraph (e) on its proper construction alleged conduct entered into by the first group of respondents which was deceptive or misleading or likely to mislead or deceive within the meaning of 5.52 of the Trade Practices Act. It was argued that this was a pleading alleging that prior to the contracts alleged in paragraph 6 there were representations made that the goods supplied under the agreement were of a certain kind. Grammatically, in my opinion, that is a completely untenable construction of the Paragraph. On its face and in my opinion, what is being alleged is that in purported compliance with the contracts, the reta1ller respondents supplied goods which did not comply with the terms of the contract. It is clearly an allegation of breach of contract and nothing more. The use of the word "represented" in sub-paragraph (e) cannot, in my opinion, be used to found an argument that it is an allegation of conduct engaged in prior to the contracts and conduct which was misleading or deceptive or likely to mislead or deceive hy reason of the fact that goods supplied pursuant to the contract were not of that kind. Paragraph 7A 1s of a similar kind in relation to the third of the contracts referred to in paragraph 6 and there are a number of sub-paragraphs to that paragraph of a similar kind to those in paragraph 7. The only relevant one for present purposes is as follows, and I read:- "7K. The seed supplied pursuant to the third contract in paragraph 6 ('the last seed') was: (e) represented to the Applicants by the retailer as being: {1) eggplant seed yielding fruit of the kind 1n sub-paragraphs (a}(1), (11) and/or (iii) ('alternative seed' and 'alternative fruit'); further or alternatively (ii) HB seed; further or alternatively (iii) standard BB seed." BR is to be read as Black Beauty variety seed. What I have said in relation to paragraph 7 has equal application as far a5 paragraph 7A is concerned. Paragraph 8 alleges that none of the seed supplied pursuant to the first or second agreement was MS seed or of a standard variety, and other matters of that kind, again matters which one would expect to find in a breach of contract case. Paragraph 8A 15 a similar type of allegation in relation to the seed supplied pursuant to the third contract. Paragraph 9 reads, and I quote the whole paragraph:-~ "9, By reason of the matters in paragraphs 6, 7 and 8 and further or aiternatively, in paragraphs 6, 7A and 8A the retailer engaged aun conduct in trade and commerce that was: (a) misleading or deceptive or likely to mislead or deceive; (b) ain contravention of section 52 of the Trade Practices Act 1974 ('the Act')." On my reading of the Statement of Claim there is nothing in any of those paragraphs which alleges any facts giving rise to an allegation of misleading or deceptive conduct or conduct that is likely to maisiead or deceive. Under the Federal Court Rules, O.1l1, a pleading 1s required to contain statements in a summary form of the material facts upon which the party relies, but not the evidence by which those facts are to he proved. In the present case, the Statement of Claim, in my opinion, does not allege any material fact supporting an allegation that the first group of respondents engaged in conduct that was misleading or deceptive or likely to mislead or deceive under s.52 of the Trade Practices Act. The mere reference to that section and the use of the words contained in that section of the Trade Practices Act of themselves are not a sufficient pleading to import allegations of fact which could amount to conduct which was misleading or deceptive or likely to mislead or deceive. There was and is no allegation at all that the applicants were induced to enter into any one or more of the three contracts referred to in paragraph 6 by reason of conduct of- the first group of respondents which was misleading or deceptive or likely to mislead or deceive. Accordingly, in my Opinion, the proposed amended Statement of Claim on the face of it shows no cause of action at all against the first group of respondents based upon s.52 of the Trade Practices Act. Similar opinions and conclusions are reached in relation to paragraph 10, which is an additional or alternative claim, that hy yeason of the matters in paragraphs 6, 7 and 8 or 6, 7A and 8A, the retailers in trade and commerce made false representations to the applicants in relation to a number of matters in contravention of Paragraphs 53(a), (c) and/or (f) of the Trade Practices Act. The views I have expressed already have equal application to the allegations contained in paragraph 10. They simply do not allege any conduct by the first group of respondents leading up to the making of the contract from which the applicants are now claiming damages. The claims against-the wholesalers, Hendersons, are in an even more tenuous position. There was no direct contact alleged as between the wholesalers and the applicants, except the fact that they had delivered to them by the retailers tins of seed containing on them notices to - 10 - the effect that the seeds contained in them were of a certain kind. These tins were supplied by the retailers to the applicants, and the allegation is that those seeds were not of the type described. There is just no allegation at all that the wholesalers engaged in conduct of the kind referred to in 55.52 or 53 of the Trade Practices Act and that a5 a result of that conduct the applicants suffered damage. Accordingly, in my opinion, the applicant has failed to show that the proposed amended statement of claim discloses any cause of action against any of the respondents. In those circumstances, if the amended Statement of Claim is allowed 1t would be a case where the respondents would hbe prejudiced in that they would have to apply to the Court by motion to have the Statement of Claim struck out. Again, this is a case where having formed the views I have, it is not necessary for me to look at the other claims which are sought to be included in the present proceedings pursuant to the accrued jurisdiction, but Ido make some additional comments. Having regard to the authorities in this matter and particularly the recent decision of the High Court in Stack v. Coast Securities (No. 9) Pty. Ltd. (1983-84) 154 C.L.R. 261, this appears to be a case where it would not be appropriate for this Court to embark upon a jurisdiction under the accrued jurisdictions concept on such a tenuous base as 1s alleged and as arising from a s.52 and s.53 case. This is a case where there has been long delays in the - li - prosecution of the matter. It 1s a case which on the face of it sould be heard in the State Courts and is a case which has grave dirtficulties ain its way of being heard in all its aspects in this Court. To force the respondents to have ta. plead to an amended Statement of Claim or take proceedings to try and determine those matters by having them struck out, to ancur all these additional costs on the parties would in my opinion be unfair to the respondents. On the face of it, there is no reason to believe there are grounds whereby the matter could not be litigated in the Supreme Court or County Court, except possibly those claims which are brought under Division 2 Part 5 of the Trade Practices Act, with the limitation period of three years. Accordingly, the motion to have leave to amend the Statement of Claim in the terms of the accompanying proposed amended Statement of Claim is refused. Likewise the claim for the order for leave to amend the application in the terms of the accompanying proposed amended application is refused. In the circumstances, as I said earlier, I do not propose to make any comments on the question of whether the limitation period has any application in this case, nor do I propose to say anything further about the other claims. I have dealt with the Statement of Claim in a broad way because of the embarrassing nature of the way it 1s framed at the present time. It would he completely inappropriate to go through and deal with each word or -~ 12 - paragraph or sub-paragraph contained in a very, very long, complex and confused document when the matter can be dealt with in this broad manner. What has been said leaves the proceedings in the position that the existing pleadings are still in existence. The matter can proceed on these pleadings. I suppose there is nothing to stop the applicants from seeking leave to amend their Statement of Claim further. They are all matters which will need to be considered if and when the matter comes on for hearing in the future. The only order I propose to make at the moment is that the motion be refused. This is a case where the appropriate orders should be that the applicants pay the respondents' costs of the motion. The applicants were seeking an indulgence of the Court. They have failed and there is no reason why the ordinary course of events should not follow, namely that the successful party or parties are charged with their costs. Accordingly, the formal orders are:- il. The motion is refused. 2. The applicants to pay the respondents' costs of the motion. I certify that this and the Eleven Clo pieceding pages are a true copy of the Reasons for Judsyment herein of the Honourable Mr. Justice Kiem \ | a oN 'Ascoein cL feu cMle. ociate Dated: \\ AV SE | ERT SAC ESE eames