CATCHWORDS Trade Practices - whether misleading and deceptive conduct or fraudulent misrepresentation - sale in N.S.W. to a N.S.W. resident of imported motor car registered in Victoria - inability to register in N.5.W. in absence of compliance plate - misrepresentation as to capability to effect registration - whether Bullock Order appropriate. Trade Practices Act 1974 ss.52, 53. N.S.W. Gl12 of 1986 J.L.T. SCAFFOLDING PTY. LIMITED v. ALLIANCE ACCEPTANCE CO. LTD. and POLTAZ PTY. LIMITED & ORS Sweeney J. Sydney 10 October, 1986 IN THE FEDERAL COURT OF AUSTRALIA SYDNEY DISTRICT REGISTRY No. G112 of 1986 we eee GENERAL DIVISION BETWEEN: J.L.T. SCAFFOLDING PTY. LIMITED Applicant and Firstnamed Cross Defendant AND: ALLIANCE ACCEPTANCE CO. LIMITED Firstnamed Respondent and Cross Claimant AND: POLTAGZ PTY. LIMITED Secondnamed Respondent AND Pry SOHN LESLIE TRACEY AND JANICE TRACEY Second and Thirdnamed Cross Defendants THE COURT: Sweeney J. DATE: 10 October 1986 PLACE: Sydney MINUTE OF ORDER COURT ORDERS THAT: There be judgment for the applicant against the second respondent in the sum of thirty-eight thousand three hundred and eighteen dollars seventy-six cents ($38,318.76). There be judgment for the cross-claimant against the cross defendants in the sum of twenty-one thousand eight hundred and thirty-one dollars seventy-six cents ($21,831.76) with interest in the sum of one thousand five hundred dollars +$1,500.00). The second respondent to pay the applicants's costs of the applicant in so far as those costs related to the case against the second respondent. The cross defendants to pay the cross claimants' costs of the cross claim. The applicant to pay the first respondent's costs of the application in so far as those costs relate to the case against the first respondent. The Orders made-as to security for costs against the applicant in favour of the second respondent be discharged, The Orders made as to security for costs against the applicant in favour of the first respondent be discharged upon payment by the applicant of the first respondent's costs of the application. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. oh me 'Pate? ' r , ' a4 Counsel tor the Applicant and Cross Defendants Solicitors for the Applicant and Cross Defendants Counsel for the Firstnamed Respondent and Cross Claimant Solicitors for the Firstnamed Respondent and Cross Claimant counsel for the Secondnamed Respondent Solicitors for the Secondnamed Respondent Mr. J. De Meyrick Teakle, Ormsby & Associates Or. G.S. Flick Minter Simpson A.G. Robinson & Associates Dates of hearing: 11, 12, 13 & 14 August 1986 IN THE FEDERAL COURT OF AUSTRALIA ) ) SYDNEY DISTRICT REGISTRY ) No. Gl12 of 1986 ) GENERAL DIVISTON ) BETWEEN: J.L.T. SCAFFOLDING PTY. LIMITED Applicant and Firstnamed Cross Defendant AND: ALLIANCE ACCEPTANCE CO. LIMITED Firstnamed Respondent and Cross Claimant AND: POLTAZ PTY. LIMITED Secondnamed Respondent AND: JGHN LESLIE TRACEY AND JANICE TRACEY Second and Thirdnamed Cross Defendants THE COURT: Sweeney J. DATE: 10 October 1986 PLACE: Sydney REASGNS FOR JUDGMENT J.L.T. Scaffolding Pty. Limited ("J.L.T.") is a company the sole shareholders and directors of which are Mr. John Leslie Tracey ("Tracey") and his wife Mrs. Janice Tracey ("Mrs. Tracey"). g.L.T. ais engaged in the construction and erection of scaffolding and rigging and for the past five years has operated at oil refineries in New South Wales, principally in and around Sydney. Alliance Acceptance Co. Limited ("Alliance") is a finance company which in the normal course of its business provides finance for the purchase of motor vehicles commonly by means of hire purchase agreements. Poltaz Pty. Limited ("Poltaz") carries on business as a financier for the retail sale of secondhand motor vehicles in conjunction with a motor dealer's business, trading under the name "Tony Jeans Used Cars", which operated under a motor dealers licence held by Mr. John Anthony Jeans ("Jeans") a director of Poltaz. Tracey and Jeans have been acquainted for some time as in recent years Tracey has purchased several secondhand motor vehicles through Tony Jeans Used Cars. In early October, 1983, Tracey enquired of Jeans about the possible purchase by J.L.T. of a current style Mercedes Benz motor car. At that time J.L.T. owned a brown Mercedes Benz 450SE which 1t had purchased and financed through Poltaz, in the middle of 1982, as a used car. Tracey asked Jeans to locate for J.L.T. a new shaped Mercedes Benz "S"" class vehicle. Jeans later telephoned Tracey and told him that he had been able to locate such a vehicle in Victoria, a 1981 model, blue, with mag wheels and a sunroof and which had travelled 32,000 kilometres. Tracey indicated that he was interested and told Jeans to bring the vehicle up from Victoria and he would have a look at 1t. The car was railed to Sydney by Brents Motors of Melbourne and collected by Jeans on approval. At the trial 1t was conceded by counsel for Poltaz that the car was a1982 South African assembled Mercedes Benz imported into and registered in Victoria, and that when it arrived in Sydney it had Victorian number plates and did not have a compliance plate. He also conceded that, without anything further being done, the car could not be registered in New South Wales. These concessions were properly made, being fully justified by the evidence, which showed that a compliance plate affixed toa Mercedes Benz, whether assembled in South Africa or elsewhere, evidenced the fact that it complied with Australian Design Rules current at the time of its manufacture. It was at all material times an offence under s.5 of the New South Wales Motor Traffic Act 1909 to drive upon any public street a motor vehicle which was not registered in accordance with the Motor Traffic Regulations. A visiting motor vehicle was, by virtue of Regulation 33A, exempted from registration. Under Regulation 2 a visiting motor vehicle was defined as "any motor vehicle which 1s owned by a person ordinarily residing outside this State or, being a corporate body, carrying on business outside the State" and which 15 brought for temporary use within the State. New South Wales Motor Vehicles (Third Party Insurance) Regulations, by Regulation 17, exempted from the requirement to have a New South Wales third party insurance cover vehicles owned by persons ordinarily resident outside that State where they were temporarily in that State. Otherwise vehicles would not be covered for third party insurance in New South Wales under the statutory scheme. The evidence clearly showed that, to the knowledge of Jeans, Tracey was not ordinarily resident outside New South Wales. J.L.T. carried on business in New South Wales, as Jeans' knew. There was a conflict of evidence as to whether J.L.T. also carried on business outside New South Wales, to which reference will later be made. The presence or absence of a compliance plate was thus a matter of great importance to any intending New South Wales resident contemplating the purchase of such a vehicle. Clifford Kemmett, a used car dealer called on behalf of Poltaz, deposed that in 1986 there could have been a difference in the retail price of the subject car of up to $20,000, and in its wholesale price of up to $10,000, if it had had a compliance plate. Kemmett purchased the car from Alliance in February, 1986 for the wholesale price of $30,000. In its application, J.L.T. alleges, amongst other things, that Poltaz and Alliance have contravened s.52 of the Trade Practices Act 1974 ("the Act"). J.L.T. alleges that Poltaz, to induce J.L.T. to make and enter into a commercial hire purchase agreement ("the hiring agreement") with Alliance in respect of the subject vehicle ("the car"), by or through Jeans represented to J.L.T., and in consideration of J.L.T doing so, warranted - (i) that the car was able to be registered in New South Wales, and to be used accordingly as a motor vehicle within the meaning of the Motor Traffic Act, 1909, as amended; (11) that the car was able to be registered in New South Wales after an examination by the Department of Motor Transport as to the mechanical soundworthiness of the car; and (i1i) upon being apprised by the servant and/or agent of g.L.T., namely Tracey, of the intended purpose to use the car for driving in and around the Sydney metropolitan area, and generally throughout New South Wales, the car was represented by Poltaz as suitable for those purposes. J.L.T. asserts that acting on the faith and truth of the said representations and warranties, and induced thereby, dg.L.T. made, completed and executed the hiring agreement with Alliance and paid the moneys provided therein. J.L.T. alleges that each of the representations was untrue, and that each of the warranties was broken, in that - (a) the car was not suitable for use on New South Wales roads; (b) the car was not capable of being registered as a vehicle in New South Wales; (c) the car did not have affixed to it a compliance plate as required pursuant to the Motor Traffic Regulations made pursuant to the Motor Traffic Act 1909, as amended; (d) the car does not have a compliance plate as required by the Australian Design Rules, and accordingly cannot be registered 1n New South Wales; (e) the car has been refused registration on two occasions by the Department of Motor Transport; and (f) the car, as at the date of the Statement of Claim, was unregisterable and incapable of use on New South Wales roads. J.L.T. states that the representations were falsely made by Alliance, and by Jeans on behalf of Poltaz and - (a) constituted conduct which was misleading or deceptive and/or was likely to mislead or deceive in contravention of the provisions of s.52 of the Act; (b) constituted false representations 1n connection with the provision, in particular the standard, quality, style or model and the use, of the car in contravention of s.53(a) of the Act; and further (c) constituted misrepresentations that the car had within the meaning of $.53 a performance and/or characteristics, use and/or benefits which it did not have in the circumstances in contravention of s.53(c) of the Act, and that Alliance and Poltaz and their agents and/or servants were under a duty to take care in the making of the representations but were guilty of negligence in the making of the representations. J.L.T. claims that by reason of the foregoing J.L.T. has been deprived of the full use, benefit and value of the car, resulting in a severe diminution in the value of the car, and has been put to considerable expense trouble and inconvenience to hire an alternative vehicle thereby suffering loss and damage. Alliance cross claims against J.L.T. and against Tracey and Mrs Tracey (the guarantors under the hiring agreement) in respect of moneys allegedly owing but unpaid in the terms of the hiring agreement, being the monthly rental for the period from April 1985 to January 1986 and other moneys and legal fees due under, or incurred in the terms of, the hiring agreement, in the amount, as agreed between the parties, of $21,831.76, with interest thereon and costs. Tracey, Mrs Tracey and Mr. Jeffrey Ronald Cooney ("Cooney"), an employee of J.L.T., gave evidence in support of the allegations by J.L.T.. Mrs. Tracey said that when the car was brought to their home by Jeans on 16 October, 1983, she noticed that 1t had Victorian number plates and said to Jeans "Is there any problem with the Victorian plates?" to which Jeans allegedly replied "Oh no! It is great for sort of parking in Sydney because you do not have to worry about getting parking fines". When asked by Mrs. Tracey "What about when the registration runs out?" Jeans 1s alleged to have said "Oh well, we just put it over the pits". It became clear that this was a reference to the car being examined by officers of the New South Wales Motor Registries. Tracey stated that Jeans said "All you have got to do is put 1t over the pits when the registration runs out and they will give you New South Wales number plates". Tracey took delivery of the car on 26 October, 1983 and stated that he drove the car for about six months at which stage "registration was running out in Victoria". He said that he then made arrangements with his manager, Cooney, to come to Parramatta to help him get the car registered, and do the paper work for him. Tracey said that he could not read or write very well, that he could "just about read, but not that well". ry Tracey stated that subsequently he telephoned Jeans and the following conversation took place - "'Tony, this car cannot be registered' Tony Jeans said 'Why not?' and I said 'Because it hasn't got a compliance plate'. Tony replied to me 'That's rubbish, it doesn't need a compliance plate'. I said 'Well, I'm telling you ait does. I have come from the motor registry' or, 'Jeffrey has just come from the motor registry and 1t does need a compliance plate. They won't register 1t without one'." Tracey said that after obtaining from the registry a typed form "saying about compliance plates and why cars are not registerable without them" he contacted his solicitor and then telephoned Jeans, to reiterate that he could not get the car registered in New South Wales. deans told him that he would get 1t registered in Victoria, Cooney testified that "just prior to the expiration of the vehicle's then registration", which he thought could have been June 1984, he and Tracey failed inan attempt to get the car registered at the Parramatta Motor Registry. Cooney further said that on another occasion, which he thought was in September, 1985, he, accompanied by Tracey, took the car to the Mt Druitt Motor Registry and made an unsuccessful application for the car to be registered in New South Wales. The Registry officers gave Tracey a document headed 'Unregistered Vehicle Inspection Report', dated 16 July 1985, and signed by aMr. J. Bedall. The report listed the reasons for rejection which including, inter alia, the following requirement - "Show compliance to all Australian Design Rules applicable to date of manufacture Have affixed an approved A.D.R. Plate or a suitable letter of compliance from M'Benz Aust" Jean's version of the events was that, at the meeting on 16 October, 1983, in reply to a question from Tracey concerning the Victorian registration, he said "Well, you would have to have work or an office in Victoria to enable you to keep it registered in Victoria". He alleges that Tracey then said he had a large job coming up with the Shell Oi1 Refinery in Victoria which would mean that he would be travelling backwards and forwards, and that did not concern him at all. Miss Jennifer Gaye Aylett, a close friend of Jeans, who was also present at the meeting of 16 October, gave evidence that Jeans said to Tracey "Although you can't register the car in New South Wales do you have an address in Victoria?" to which Tracey replied "Oh yes, yes, yes, that is no problen. We have constructions going on down there all the time. That is no problem at all". However, both Tracey and Mrs. Tracey testified that J.L.T. had.never had a job in Victoria. Miss Aylett also stated that in reply to a question by Tracey "Why can't I register it 1n New South Wales?" Jeans said "Because 1t does not have a compliance plate!". li Mr. David Anthony Ross ("Ross"), then employed by Poltaz as a dealer and motor salesman, said that at the time of Tracey taking delivery of the car, Ross, at the request of Tracey, opened the bonnet of the car and Tracey said to him "Tony tells me it does not have a compliance plate. Does that affect the running of the car?". Ross states that he replied "It does not affect the performance as such but that you should check with the department about its registration". Tracey, 1n the course of cross examination, denied that Ross lifted the bonnet of the car or that the above conversation took place. Jeans gtated that he quoted the purchase price of the car as $48,000 but, when Tracey wished to obtain the car without the payment of additional moneys, he arranged for the provision of finance through Alliance for a total of $55,000 under the hiring agreement. The hiring agreement was executed under seal by J.L.T. and was signed by Tracey and Mrs. Tracey. Jeans further testified that on or about 14 June, 1984, he had a conversation with Tracey as follows - "Mr. Tracey told me that he had been trying to register the car in Victoria and wanted to know how he could do it because the registration had expired or was about to expire. I told him that I would see what I could arrange for him and have the registration paper sent back to me and in turn I would hand them over to him but he would have to bring the cheque to me for the amount of the registration when I found it out, that I in the short term would pay the due registration so 1t could be done straight away". Jeans went on to say that on the same day he contacted Brents Motors in Melbourne to arrange for registration of the car and sent to that firm by courier a cheque for $200 payable to the Road Traffic Authority. The evidence of both Tracey and Jeans establishes that there were gome further telephone conversations between them as_ to whether or not the car was actually registered in Victoria. The registration label ultimately was received by Tracey and affixed to the car in or about September, 1984. Jeans gaid that on 30 June, 1984, he and Ross had a meeting with Tracey and Mrs. Tracey saying - "Mr Tracey said that he was very unhappy about the whole situation, that he wanted to get his car registered so that he could drive it, that there was no proof that the car was registered, that he had contacted the Victorian registration authorities and they had no record of it and that all he wanted to do was get his car registered and then try and get it registered in New South Wales." He went on to say - "I told them that I was prepared to buy the car back, trade the car back, assist them in an attempt to get the car registered in New South Wales at which time I wouid lend them a car while we tried to do that. Mrs Tracey sald she was not prepared to listen to any offers, that she would have to speak to her solicitor before she considered anything that I said." Mrs Tracey recalled the meeting but stated that Ross was not present. Tracey said he remembered calling in to see Ross but did not recall Jeans being there, although in the course of cross examination seemed to agree that Jeans was present. Tracey stated that in August/September, 1984, he was stopped by a policeman for speeding at which time he was informed by the policeman that it was an offence to drive a Victorian registered car in New South Wales when a resident of the latter State. Tracey testified that he then contacted Jeans who offered to buy or trade the car back. Tracey also acknowledged that Jeans subsequently offered alternative vehicles in exchange for the car on payment of various amounts but that he "was not interested in any amounts because I did not feel I should pay any money". Jeans said that on 20 July, 1984 he had a conversation with Tracey 1n the course of which he offered an alternative vehicle, and that he had previously offered another vehicle. Tracey said that in April 1985 "on instructions of my solicitor I was told to stop paying for it because that was the only way I might get some further action on the matter. So that is what I done. I stopped paying for it. They told me to park it, so I parked it". The car initially was parked in the driveway of Tracey's home but subsequently was moved to Cooney's home from which 1t was repossessed by Alliance in or about August, 1985. The accounts of the facts given by the parties cannot be reconciled by any explanation of misunderstanding or honest mistake. As counsel agreed, the case 15 one in which it 1s necessary to decide which account is to be accepted as truthful. It was common ground between counsel for J.L.T. and counsel for Poltaz and the Traceys that if the evidence of the witnesses called in support of the application were accepted, there should be judgment for J.L.T. against Poltaz on the basis of breach of s.52 of the Act. Counsel for Poltaz made a number of criticisms of the evidence given by the witnesses for J.L.T. but having heard the witnessess, observed their demeanour and having read the transcript I am satisfied that their account of the facts was truthful and accurate. Tracey's attempts to effect registration of the car in New South Wales were sincere and were consistent with his having been assured that this could be done. Where the evidence given on behalf of Poltaz conflicts with that given by the witnesses for J.L.T. I reject it as false. I am satisfied that Jeans knew the true position in relation to the question of the registration of the car in New South Wales by J.G.T. ov Tracey, that he lied to the Traceys about it, and that his evidence to the Court was false to his knowledge. I reject the evidence of Ross and Miss Aylett where 1t conflicts with that of the witnesses for J.L.T. I am satisfied that J.L.T. has made out its case based on breach of s.52 of the Act. I am also satisfied that J.L.T. was induced to purchase the car by fraudulent misrepresentations made on behalf of Poltaz. I do not find 1t necessary to consider any of the other causes of action alleged against Poltaz. In its amended Statement of Claim J.L.T. alleged against Alliance fraudulent misrepresentation and breaches of ss.52 and 53 of the Act based on an allegation that Poltaz and Jeans were its agents. In his final address, counsel for J.L.T. conceded that Alliance had acted at arms length from Poltaz and Jeans and that there was no agency relationship between Alliance and them. He submitted that a term should be implied into the hire purchase agreement that the car was capable of being registered in New South Wales and of being lawfully driven there by a_ resident of that State. In my opinion, there is no justification for any such implication. The car had a current Victorian registration and it was reasonable to anticipate that its registration was capable of being renewed in that State. There was nothing in the evidence to justify the conclusion that Alliance was made aware that the value of the car to J.L.T. depended upon its being capable of registration in New South Wales. The applicant cannot satisfy any of the five tests laid down in B.P. Refinery (Westernport) Pty Ltd v Hastings Shire Council (1978) 52 A.L.J.R. 20 at p.26. The case against Alliance fails. There is simply no evidence that Alliance was guilty of any misrepresentation let alone fraudulent misrepresentation, or of any breach of the Act. Alliance is entitled to judgment against J.L.T. and the Traceys upon its cross-claim. The amount for which judgment should be entered is as follows: Amount payable in total pursuant to the hiring agreement - (60 x $1,194.52 + $16,500 88,171.20 Less payments received (18 x $1,194.52) 21,501.36 66,669.84 Less rebate of charges - 16,368.08 Sale price of vehicle - 30,000.00 46,368.08 20,301.76 Plus - legal fees - 750.00 transport costs - 300.00 valuation fee - 100.00 repossession & transport costs - 300.00 N.R.M.A. inspection — 80.00 1,530.00 $21,831.76 The question of any interest which should be awarded to Alliance should be considered by the parties. If they agree upon the question, a suitable provision could be included in short minutes of orders to be made. Poltaz well knew that J.L.T. was entering into the hire purchase agreement with Alliance on the faith of its representation that the subject car was registrable by J.L.T. in New South Wales. It 1s, generally speaking, proper that J.L.T. should recover from Poltaz the payments which it made to Alliance under the agreement which it would not have bound itself to make but for that represenation, subject to the question of the obligation of J.L.T. to mitigate its damages, and to considering any benefit enjoyed by J.L.T. during the time when it used the car. J.L.T., on the advice of its solicitors, ceased to pay the monthly instalments due under the hiring agreement in April 1985. It would appear that at this stage it fully appreciated that the car, in its then condition, could not be registered in New South Wales and could not legally be driven in that State by Tracey in the absence of such registration. By that time the discussions between J.L.T. and Poltaz as to a possible exchange for another car had broken down. If it had then sought to reach agreement with Alliance, the probability is that it could have reduced its loss below the figure of $21,831.76. The car would have been sold much earlier than February 1986 and would have been likely to attract a higher price than the $30,000 which was then obtained for it. Some items of the costs of repossession could have been avoided or reduced. In these respects, part of the loss suffered by J.L.T. resulted from its action in merely parking the car and waiting for it to be repossessed, while deciding to bring aclaim against Alliance which has been held to be unfounded. It 1s dafficult to quantity the reduction which should be made, but doing the best that I can, I place it a figure ot $4,000 upon it. Accordingly, J.L.T. should recover against Poltaz $17,831.76 in respect of the sum awarded to Alliance. After entering into the hire purchase agreement on 26 October 1983 3.L.T. made 18 monthly payments of $1,194.52 totalling $21,501.36. During the time when used the car, it was driven a distance of some 43,000 kilometres. On the basis of the value of this use and the willingness of J.L.T. to pay the equivalent of $2,050 per month for the hire of substitute cars of lesser qualities, counsel for Poltaz submitted that J.L.T. should recover nothing in respect of the payment of $21,501.36. However, J.L.T. wished to become the hire-purchaser of a modern Mercedes Benz and was prepared to enter into substantial obligations extending over 5 years to enable it to do so. But for the conduct of Poltaz it would have been entitled to the undisturbed use of the car for 5 years and would have been in the position in October 1988 whereby, upon the payment of an instalment of $16,500, which was euphemistically described in the agreement as being "for the last month of the period of the hiring", 1t would have become the owner of the car. During the currency of the hire purchase agreement it would have been able to use its interest under the hire purchase agreement to trade up to another car. Had the subject car been registrable in New South Wales, any such change-over could have been made by J.L.T. on more favourable terms. It was deprived of those opportunities by the wrongful conduct of Poltaz. It was also put to the effort and expense of obtaining another car in Place of the subject car. The Court must do its best to place a figure upon the value of that loss as at April 1985. In my opinion an amount of $11,000 is appropriate to compensate J.L.T. for this loss. J.L.T. should recover the cost of hiring substitute vehicles, namely $8,200. An amount of $2,700 was claimed as damages in respect of the time fruitlessly spent by Tracey and Cooney in visits to the Motor Registries and to York Star Motors. Some of this expense related to the preparation of the case for trial and would be appropriate to be considered upon the taxation of costs. fT allow the amount of $1,000 as referable to the first attempt to register, made in reliance upon the representations of Poltaz. The expenses in relation to the second attempt should be considered as part of the costs of preparing the case for trial. The cost of insuring the car during its use by J.L.T. was also claimed but this would have been payable in any event and I disallow 1t as an item of damages. J.L.T. has not led evidence which would, in my opinion, justify the award of any sum in respect of payments of $600.00 to Telecom for installation, removal and other charges of a car telephone service. It is not possible to dissect out of this amount a sum which would represent any payment greater than that which would have, in any event, been payable to Telecom. The claim of $150 for towing of the car for inspection and report seems more appropriate to be considered under the heading of costs. Half of the claim for $28.00 for registration inspections is allowed. The $273 registration fees were paid to maintain the Victorian registration as a direct consequence of the inability to register the car in New South Wales. In the known circumstances of J.L.T. and Tracey, that registration exposed them to the risk of prosecution and of driving an uninsured vehicle. Accordingly the fee of $273 should be allowed as part of the damages to be awarded to J.L.T. In the result, in addition to the finding of fraudulent misrepresentation, there should be a declaration that Poltaz, in trade or commerce, engaged in conduct that was misleading or deceptive or was likely to mislead or deceive in contravention of s.52(1) of the Act and that there should be judgment for J.L.T. against Poltaz in the sum of $38,318.76 with costs to be taxed, including any reserved costs. This amount is made up as follows: An amount in respect of the sum awarded to Alliance against J.L.T. 17,831.76 An amount in respect of the instalments paid to Alliance by J.L.T. 11,000.00 Hire of substitute vehicles 8,200.00 Expenses of first attempt to register the subject car 1,000.00 Fee for registration inspection 14.00 Registration fees 273.00 $38,318.76 The question of any interest which should be awarded to J.L.T. should be considered by the parties. If they agree upon a tigure 1t could be included in short minutes of orders to be made. If there should be any unresolved questions relating to interest as between Alliance and J.L.T. or as between J.L.T. and Poltaz I will hear counsel upon those questions and upon the form of the orders to be made generally at 10-15 a.m. on 15 October 1986, when the case will be listed to enable orders to be made. Counsel for Alliance submitted that, because of the novelty of the application by J.L.T. and the fact that there were no reasonable grounds for pursuing the claim against Alliance, costs in favour of Alliance should be awarded on a solicitor and client, rather than on a party and party, basis. However I do not consider the circumstances to be sufficiently exceptional to make an order in those terms and accordingly J.L.T. should pay the costs of Alliance upon a party and party basis of and incidental to the application and to its cross-claim, including any reserved costs. J.L.T. sought a "Bullock Order", whereby Poltaz should be ordered to pay the costs of Alliance. Counsel for Poltaz submitted that such an order was not appropriate and cited Gould & Anor. v. Vaggelas & Ors. (1984) 56 A.L.R. 31 as authority. In that case, Gibbs C.J. at page 41, in considering, in those proceedings, whether a Bullock Order was appropriate, said - "Obviously a judge should make a Bullock Order only if he considers 1t just that the costs of the successful defendant should be borne by the unsuccessful defendant, and if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it 1s difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff's error or overcaution"". The Chief Justice went on to say - "The ground on which a Bullock Order may be made is, in my Opinion, more accurately stated in a passage in Sanderson v. Blyth Theatre Co. (1903) 2 K.B. 533 at 539, which was cited with approval in Bullock v. London General Omnibus Co. (1907) 1 K.B. 264 at 272 and Hong v. A & R Brown Ltd. (1948) 1 K.B. 515 at 522, viz, that the costs which the plaintiff has been ordered to pay to the defendant who succeeded, 'and which the plaintiff recovers from the defendant who failed 'are ordered to be paid by the unsuccessful defendant, on the ground that . . . those costs have been reasonably and properly incurred by the plaintiff as between him and the (unsuccessful) defendant'". In the same case Brennan J. said, at page 64, - "Although the making of a Bullock Order is in the discretion of the trial judge, the mere joinder of two causes of action against separate defendants in the one action 1s insufficient to support the making of an order against the unsuccessful defendant when the other defendant is exonerated. A judicial discretion can be exercised to make a Bullock Order against an unsuccessful defendant in an action brought against two or more defendants for substantially the same damages only 1f the conduct of the unsuccessful defendant in relation to the plaintiff's claim against him showed that the joinder of the successful defendant was resonable and proper to ensure recovery of the damages sought (cf. Johnsons Tyne Foundary Pty. Ltd. v. Maffra Corporation (1948) 77 C.L.R. 544 at 566)". In my opinion, the circumstances of the present case do not justify the making of a Bullock Order. I certify that this and the preceding twentytwo (22) pages are a true copy of the Reasons for Judgment herein of The Honourable Mr. Justice Sweeney Dated: 10 Octob 1986 Aux Associate