a IN PHE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRT X = = a a Ba wo - Go mh, we wo Cu wm GENERAL DIVISTON BETWEEN : ~L. GROLLO & CO. PTY. LTD., REBLCO PTY. ULTD., GROFAM PITY. LTD., L. GROLLO CONSTRUCTIONS FIV. LTD., L. GROLLO EQUIPMENT PITY. LTD., L. GROLLQ ADMINISTRATION PTY, LTD., L. GROLLO PRE-MIX Fry. LID., L. GROLLO (A.¢.7.) ADMINISTRATION PIY. LTD., LE. GROLLG |DARWIN) ADMINISTRATION FIV. LTD., EL. GROLLO (DARNIN) MANAGEMENT PITY, LTD, L. GROLLO NOMINERS ETY. ETD. ana bL. GROLLO sALEs FIY. LTD. Applicants ard PALMDALE INSURANCE LIMITED (In Lixyuidation) and ASSOCIATED GENERAL CONTPACTORS INSURANCE CO. LTD. (In Liquieation) Respondents COURT: NORTHROP J. DATE: 22 SEPTEMBER 1986 PLACE: MELBOURNE EX TEMPORE REASONS FOR JUDGMENT There are pefcre the Court two motions, one brought hy the respondents which, for the gzake of clarity, I shall call Faimdale, ana sne on behaif of tae applicants which, the sake oF canvenlence, £f will call Grollo. zts motion, 1s seeking an order that this application commenced by Grolio ain December 1345 be stayed pending the hearing and determination of twa actions pending in the 5 respectively. The moticn Ey Grollo, for prasent purposes, 15 seeking on 'che face ar it orders having che earfrect of restraining Falmadaie from proceeding with =ither or those two actions in the Supreme Court 5 I Victoria pending the hearing and determination of the proceedings in this Court commenced in December 1935. During the course of submissions counsel for Grollo made it clear that in reality what was being sought was amore limited order which will become apparent shortly. The proceedings in the Supreme Court were brought by Falmdale seeking orders under contracts of insurance for wr indemnity in relation to workers compensation in Yictoria with respect to parsons employed by tCrolle. Sne oc those actions relates to three insurance years, 1576/77, L1377,78 and 1373/79 respectively, while the other action 15 for the insurance year 1979/80. In brief, those two actions are Similar in nature and arise from the fact that under the alleged agreements and relevant statutory regulations, premiums are based aon anticipated salaries paid by the insured to its employees, but at the end of each year, any necessary rectification is made to the amount of the premiums, having régard to the wages actually paid by the employer during the relevant insurance year. In @ach of those actions Palmdale 1s seeking relief based upon the contracts of insurance and the ralculation of amouncs sayable aryising from tne wages actually paic in reiation to éach of those years. By its pleadings in the Supreme Court actions, Grollo has raised a large number of defences based upon varlous common law and/or equity claims. Those defences unclude defences based upon non-compliance with the authorization requirements of the Commonwealth Insurance Act 1573, non-compliance with the Workers Compensation Regulations in 1ctoria, Special premium agreements between Grollo and Palmdale giving rise to Satisfaction, and accord and satisfaction, non-aisciosura of material facts by the iansurer, Faimaale, implied conditions of the agresment, mis-statement of fact, defences under the Instruments Act and absence of proper demands to inspect the records of Grollo. In addition, Grollo raises by way of defence claims based upon ss.52 and 58 of the Trade Practices Act 1974. Insofar as 5.52 18 concerned, the conduct which is alleged was misleading or deceptive or was likely to mislead to deceive, must, of necessity, have arisen before each contract was entered into. The 4.58 defence, however, is of a different mature. That section reads as follows:- "A corporation shali not, in trade or commerce, accept payment or other consideration for goods or services where at thea time of the acceptance it intends - (a) mot to supply the goods or services; or (b) to supply goods or services materially dafferent from the goods or services in respect oF which the payment or other consideration is accepted." In che present case, Faimdale 15 in liquidation and 1t 15 alleged at the lease that 1t 15 unaole, sr does not intend, to make any payments by way of indemnity with erfect to workers compensation claims made by empleyees of Grello. Some of these claims may extend For many years ints the future. Tnererore, if Palmdale does in fact succéed in its action in the Supreme Court and money 15 ordered to be paid to Palmdale, then Palmdale would be accepting that money ata time when 1t intended not to supply the services or was unable to supply the services of the kind arising under the contract. In their reply in the Supreme Court proceedings, Palmdale has alleged that the supreme Court has no jurisdiction to hear and determine those defences based upon the Trade Practices Act. In December 1985, Grollo commenced the present proceedings in the Federal Court and, by its amended Statement of Claim, 1s setting out facts which coincide with the claims raised by way of defence in its pleadings in the Supreme Court actions. Stated shortly, Grollo 1s seeking relief based upon ss.52 and 58 of the Trade Practices Act and, pursuant to the accrued jurisdiction concept, is seeking relief based upon the other matters raised in its defence in the Supreme Court proceedings, but in the Federal Court is raising those as causes of action. Tt is seeking declarations under 5s.163A cf the Trade Practices Act; it is seeking injunctions under s.80 of the Trade Practices Act and, insofar as 15 necessary, 15 seeking orders based upon 8.57 of the Trade Practices Act. I do not need to develov those orders for relief further, e@xcept to say that for present purposes, I am assuming that no question or limitation of actions arises in the proceedings in the Federal Court. In May of this year, in the case of Carlton and United Breweries Limited v. Castlemaine Tooneys Limited, the High Court announced its judgment un an appeal from the Supreme Court of New South Waies on matters similar to those presently before me and published auts reasons fcr that judgment on 30 July 1986. In that case, 1n procaedings in the Supreme Court of New South Wales, claims were made arising from an agreement. Carlton and United Breweries, being the defendants, raised in their defence a claim that the agreement was contrary to provisions of the Trade Practices Act, Part IV, and therefore could not be enforced. In its reply, the plaintiff raised the question whether the Supreme Court had jurzrsdiction co determine the defences raised by Carlton and United Breweries. Later, there was a separate hearing limited to the question of Whether the Supreme Court had jurisdiction to determine that defence and some other related matters. The Supreme Court, constituted by a single Judge, determined that question in the form that the Supreme Court had jurisdiction and, as a matter oF discretion, ought not to refuse or decline to exercise its jurisdiction. Carlton and United Breweries, by special leave, appealed to the High Court, which dismissed the appeal. Ido not need to go through in detail the reasons for judgment of the High Court. It 15 a snort judgment. In of the m substance, 1¢ depends on the peculiar woras of 5.¢ Trade Fractices Act, which refer to actions being brought under the Trade Fractices Act as distincr from matters arising under the Trade Practices Act. In my opinion, Similar types of reasons should apply in the present case. Counsel for Grollo has urged that there are differences in the matter presently before the Court in that Grollo has commenced these proceedings in the Federal Court, whereas in the Carlton and United Breweries case, there were mo concurrent proceedings in the Federal Court. Counsel referred to dicta to the effect that that might make a material difference to che jurisdiction of the Supreme Court. I do not see how that could arise, having regard to what the High Court said in ats reasons for judgment. Having regard also to the fact that the proceedings in the Supreme Court have been pending for a long time, in fact a number of years, that there have been a number of separate hearing of matters arising in those proceedings, and to the possibility that the hearing of that matter might start in the not too far distant future, 1t seems, prima facie, desirable that the Supreme Court should continue with the hearing of that matter. It is argued further that the question of 5.583 was amatter which should be heard by the Federal Court because of the fact that 1t applies to presant facts, receipts for money, aS apposed to matters occurring in the past. Counsel argued that this matter could be 1s50lated from the whole mass of the facts giving rise to the Supreme Court action, and that 1f the s.58 claim was found to be a good cause of action by Grollo in the Federal Court action, at would, ot necessity, save a large amount of costs in unnecessary Supreme Court proceedings because the Supreme Court proceedings would no longer be of any importance if 5.53 prevented Palmdale from receiving any of the monies claimed by 1¢t. That is a persuasive argument and one which the Court, in the appropriate case, would Le disposed to accept. But looking at all the facts and the history of the matter and the decisin of the High Court in the Carlton and United Breweries Limited matter and the fact that in law there 15 no reason, 1£ at is appropriate, why this question of the jurisdiction of the Supreme Court could not be tried as a separate issue a5 1t was in the New South Wales proceedings, 1t seems to me that the best course to adopt is to refrain from making any order preventing Paimdale from proceeding with 1ts actions in the Supreme Court. In order to avoid duplication of proceedings, it is desirable that the proceedings in the Federal Court should be stayed pending the hearing and determination of the actions in the Supreme Court or until further order. I make the order in that form because it may well be that other things may arise which require this Court to continue the hearing of the proceedings by Grollo even before the final determination of the Supreme Court proceedings. Accordingly, the motion on behalf of Grollo is refused at the praesent time but leave 1s given to Grolla to renew the motion on notice aif the carcumstances so warrant. On the motion by Palimdale, 1t 1s ordered that the application be stayed pending the hearing and determination of action number 1503 of 1981 ain the Supreme Court of Victoria and action number 2733 of 1985 an the Supreme Court of Victoria or until further order, and liberty to apply is granted in that motion also. In the circumstances there has been at this stage a substantial success for Palmdale on its motion and [ see na réason to depart from the normal course of ordering that Grollo pay Palmdale's costs of its motion. But insofar as the motion by Grollo is concerned, to some extent 1t might arise again and I merely reserve costs of that motion. Tverh"y dict this and the Sevron (7) # ptrvediog pages are a true copy of the Fieasons for Judgment herein of the Honcmable Mr. Juctica Nortvop Vig Wardle, Associate