PRACTICE AND PROCEDURE - Trade Practices - misleading and deceptive conduct - passing off - use of names similar to "Burswood Casino" - previous hearing vacated - relisted 18 months later - respondents' last minute instruction of new solicitor - trial commencing in 2 weeks - motion to amend defence - general principles governing leave to amend - relationship to question on strike out application - motion for leave to file cross claim - $7 million claim for compensation re interlocutory injunction - leave denied - leave to interrogate denied. Trade Practices Act 1974 ss. 52, 82 Cropper v Smith (1884) 26 Ch.D.700 Commonwealth Dairy Produce Equalisation Committee Limited v McCabe (1938) SR{NSW) 397 BURSWOOD MANAGEMENT LIMITED and WEST AUSTRALIAN TRUSTEES LIMITED v BURSWOOD CASINO MOTEL/HOTEL PTY LTD, FRANCESCO BEMPASCIUTO and AUSTRALIAN TELECOMMUNICATIONS COMMISSION No. WAG 54 of 1985 FRENCH J. 30 JULY 1987 PERTH — Be err re set: cane en IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: wesw No. WAG 54 of 1985 BURSWOOD MANAGEMENT LIMITED and WEST AUSTRALIAN TRUSTEES LIMITED Applicants and BURSWOOD CASINO MOTEL/HOTEL PTY LTD First Respondent and FRANCESCO BEMPASCIUTO Second Respondent and AUSTRALIAN TELECOMMUNICATIONS COMMISSION Third Respondent MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 30 July 1987 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The First and Second Respondents have leave to amend their defence in accordance with the following parts of the minute of amended defence filed with their motion of 23 July 1987:- (i) Paragraph 2 subject to the substitution of the word "say" for the word "admit". va rv ou. Se reac ee are amt re aay "3 eer eae ope ae. ' x oon " at a ra 2. (ii) Paragraph 3 subject to the substitution of the word "say" for the word "admit" and the deletion of all words from "section 21 of which..." to the end of the proposed amended paragraph. (ii1l)Paragraph 4A but only to the extent of the admissions and denials embodied therein so that it may read:- "As to paragraph 12 of the Statement of Claim the Respondents admit that the Applicants are entitled to develop a second hotel on the resort site but otherwise denies the contents of the said paragraph." (iv) Paragraph 6A insofar as it admits paragraphs 15, 16 and 17 of the Statement of Claim. (v) Paragraph 7 to and including the words "14th day of January 1985" and subject to the deletion of the word "substantially". (vi) Paragraph 15. (vi1)Paragraph 17. eT ear en see ——-——; ee ee eten, pee toa y meee 3. (viii) Paragraph 21A. (ix) Paragraph 22. The First and Second Respondents do before close of business on Monday, 3 August 1987 file and deliver their defence amended pursuant to the leave granted in paragraph l. Insofar as it seeks leave to introduce a cross claim and to administer interrogatories the motion 1s dismissed. The costs of the motion will be the applicants in any event together with any costs thrown away by reason of the amendments. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. aroce, ~o ad wey omer op eee te. STF o CRaegnmmem ene mm 5 sepa, wey oe yee pee IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: CORAM: FRENCH J. 30 July 1987 No. WAG 54 of 1985 BURSWOOD MANAGEMENT LIMITED and WEST AUSTRALIAN TRUSTEES LIMITED Applicants and BURSWOOD CASINO MOTEL/HOTEL PTY LTD First Respondent and FRANCESCO BEMPASCIUTO Second Respondent and AUSTRALIAN TELECOMMUNICATIONS COMMISSION Third Respondent REASONS FOR JUDGMENT (On Motion to Amend Defence, File Crossclaim and for Leave to Interrogate) on 4 June 1985 Burswood Management Limited ("BML") and West Australian Trustees proceedings in this court against Burswood Casino Motel/Hotel Pty Ltd ("BCMH"), Francesco Bempasciuto, one of its directors, and the Limited ("WA Trustee") instituted Australian Telecommunications Commission. Sh oe oe 2. W.A. Trustee is the trustee of a publicly listed unit trust known as the Burswood Property Trust. In that capacity it claims to be the holder of an exclusive licence to operate a casino at Burswood Island in Perth. BML is the manager of the Trust and at the time the proceedings were commenced described 1tself as project manager for the development of the Burswood Casino. The applicants allege that in February 1985 Bempasciuto had registered in his name the business name "Burswood Casino Motel/Hotel". By registering the name and allegedly engaging in the hotel trade he was said to have held himself out as owner and/or operator of the Burswood Casino and to have engaged in misleading and deceptive conduct contrary to s.52 of the Trade Practices Act 1974. On 29 March 1985 the first respondent, then known as Esjay Shelf Co. (No. 99) Pty Ltd, allegedly changed its name to Burswood Casino Motel/Hotel Pty Ltd. BCMH's choice of name is also said to constitute a contravention of s.52 of the Trade Practices Act. Under that name it is said in May and June 1985 to have offered for sale strata title motel units 1n a 266 room motel/hotel complex. mere ee oe 7 f 3 wean ce we 3. The advertisements it placed in that regard were also alleged to constitute misleading and deceptive conduct, suggesting to their readers that BCMH was in fact the owner and/or operator of the Burswood Casino. The attempted placement of an entry in the 1986 White Pages Telephone Directory was similarly characterised. The statement of claim also alleged conduct amounting to passing off on the part of BCMH. The applicants claimed against both respondents damages under s.82 of the Trade Practices Act 1974 and final and interlocutory injunctive relief. on the day following the institution of these proceedings a first directions hearing and claim for interlocutory relief came before Toohey J. Upon various undertakings by the respondents not to use the names "Burswood Casino Motel/Hotel Pty Ltd" and various related names the claim for interlocutory relief was adjourned to 12 June. On 12 June Lawton Gillon and Walters filed an appearance as solicitors of record for the respondents, replacing a firm called McKinlays who had instructed counsel who appeared on 5 June. Se coop en a ml Yoh I rt et ren ern re ae ne eee err ene a 4. The claim for interlocutory relief was argued and his Honour reserved his decision until 13 June when he made various restraining orders which, inter alia, prevented the use by the respondent of the names Burswood Casino Motel/Hotel Pty Ltd, Burswood Casino Motel/Hotel, Burswood Casino Motel, Burswood Casino Hotel or Burswood Casino. The usual undertaking as to damages was given by the applicants. On 2 August 1985 directions were given requiring the respondents to file defences and any cross claim within 7 days of that date and otherwise programming the action through to administration and answering of interrogatories by 31 October 1985. The respondents filed their defence on 9 August 1985. In that defence they denied that a casino licence was granted exclusively to W.A. Trustee or that BML was engaged, as was pleaded, in the trading and commercial activities of the entertainment, casino, tourist and hotel industries. They denied allegations as to the interstate and international reputation of the Burswood Casino and Resort complex and that the resort was invariably known as "The Burswood Casino". wae Se a, ot ee et a eee ot Sm rn we mm ne i r i Htw be > 5. They denied that their conduct amounted to misleading and deceptive conduct in contravention of s.52 of the Trade Practices Act 1974. They also denied the reputation claimed by the applicants in connection with the Burswood Casino. The newspaper advertisements in relation to the sale of strata titled motel units were defended as being neither misleading nor deceptive. Discovery was given by the applicants on 14 October 1985 and by the respondents on 25 October 1985. Nothing further happened on the record until 20 December 1985 when the matter was listed by the Court for callover. Counsel then appearing for the applicants and_ the respondents agreed that the matter could be listed for trial and Toohey J. directed the Registrar to list it for hearing on a date to be fixed. The trial was fixed for 2 days commencing on 26 February 1986. The matter however came on before Toohey J. on 25 February at which time his Honour was informed by Mr Lawton of Be mere, oe: i Vw = spas aye - Tur es ~a qe ws cee Lee o- 2 aw ee a re lee el ee wolens ferme 6. Lawton Gillon and Walters that his firm's instructions had then been terminated. Counsel appeared on behalf of the controlling trustee of Mr Bempasciuto under Part X of the Bankruptcy Act. Mr Bempasciuto appeared in person. Mr Shortland, a director of BCMH appeared on behalf of the company. His Honour made an order declaring that Messrs. Lawton Gillon & Walters had ceased to be solicitors for the first and second respondents. He also adjourned the hearing of the application to a date to be fixed with an order that the respondents pay the applicants' costs thrown away. No further action occurred on the record until 5 March 1987 when the Court brought the matter up for callover once again, and listed it for a directions hearing on 5 May. On that day counsel appeared for the applicants but there was no appearance for the respondents and the hearing was further adjourned to 5 June. On 5 June the applicants appeared again by counsel and Mr Bempasciuto appeared in person and in his capacity as a director of BCMH. Sr y foot 7 ames Ba Phe en an ei oe eee ne pen nao 7. An order was made directing the applicant within 7 days~- to make an appointment with the Registrar to fix a date for the hearing of the application. On 16 June 1987 the Registrar set the application down to be heard over 2 days commencing Monday 10 August 1987 at ll aM. The third respondent who was joined in respect of the White Pages entry in the Perth Telephone Directory, filed an appearance by the Australian Government Solicitor on 15 June. Nothing further happened until 23 July when there was a sudden flurry of activity. The respondents filed a notice of appointment of B.F. Stokes & Associates as their solicitors and contemporaneously a motion seeking leave to file and serve:- (a) an amended defence; (b) a counterclaim (sic); and (c) interrogatories. With the motion there were filed a minute of amended defence and counterclaim and a minute of proposed interrogatories. At the same time the respondents also filed a request for further discovery and a document entitled "First and Second -r qc sya es es Spy em ewe, une ow , tres ome ee aor an ae ete whe aM rerrs a coma z "_e 8. Respondents' Informal Discovery Re Counterclaim", They also procured the issue by the Deputy Registrar of some 16 subpoenas. On 29 July Mr Stokes appeared for the respondents to argue the motion and I heard extensive argument from him and from Mr Archer for the applicants in relation to it. I turn first to the proposed amendments to the defence. The power to order an amendment to any document in a proceeding is to be found in 0.13 r.2 which provides:- "(1) The Court may, at any stage of any proceeding, on application by any party or of its own motion, order that any document in the proceeding be amended, or that any party have leave to amend any document in the proceeding, in either case in such manner as the Court thinks fit. (2) All necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings." ow An often cited statement of the approach that should be taken by a court in deciding whether or not to allow an amendment to a pleading is to be found in the judgment of Bowen LJ in Cropper v Smith (1884) 26 Ch.D.700 at 710 where it was said:- "Now, I think it is a well established principle that the object of Courts is to decide the rights of the parties, and not to punish them for mistakes they make in the conduct of their cases by deciding otherwise than in accordance with their rights...I know of no kind of 9. error or mistake which, 1f£ not fraudulent or intended to overreach, the Court ought not to correct, if 1t can be done without injustice to the other party. Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy, and I do not regard such amendment as a matter of favour or of grace...It seems to me that as soon as 1t appears that the way in which a party has framed his case will not lead to a decision of the real matter in controversy, it is as much a matter of right on his part to have it corrected, if 1t can be done without injustice, as anything else in the case is a matter of right." As to amendments sought at a late stage, it is plain that 0.13 allows amendment "at any stage of any proceeding". Of course if the matters then subject to the amendment could conveniently be separately litigated the amendment may be refused - Commonwealth Dairy Produce Equalisation Committee Limited v McCabe (1938) SR(NSW) 397 at 400. An amendment which would be liable to be struck out as, for example, having a tendency to cause prejudice, embarrassment or delay in the proceedings, should not be allowed although amendments may sometimes be allowed subject to"an application to strike out. In considering the amendments to the defence proposed in this case, I also have regard to the requirements of 0.11 and in particular r.2 and 3 thereof which are as follows:- "2(a) A pleading of a party shall contain, and contain only, a statement in a summary form of the material facts on which he relies, but not the evidence by which those facts are to be proved; and aA owen sea ee t eo see etek wentraetas eiieerat seve g 10. (b) paragraph (a) has effect subject to this Order and to Order 4 (which relates to commencement of proceedings) and to Order 12 (which relates to particulars). 3. A pleading shall be as brief as the nature of the case admits." A failure to comply with these and other requirements of the rules might not always be fatal to a pleading on a striking out application. However where leave to amend is sought the court is seised of the responsibility to consider the amendments against that background. It would not lend its authority to a pleading which failed to comply with its own rules. Turning to the proposed amendments and having these principles in mind, I will deal with them in sequence. 1. Amendment to Paragraph 2 of the Defence Paragraph 2 in substance denies the allegation in paragraph 7 of the statement of claim that the Burswood Property Trust was granted an exclusive licence to operate a casino in Western Australia. The amendment adds an admission of the grant of an exclusive licence to conduct the playing of authorised games in the Burswood Casino. nse seen ne pee at Lowe we ye ep ore en eee wor — ower - ll. It is an admission to a plea which is not made in the statement of claim. Insofar as it 1S an assertion that the exclusive licence granted did not have the precise character pleaded but another character, 1t may conceivably help to narrow the issue on this rather peripheral aspect of the case. Subject therefore to the substitution of the word "say" for the word "admit" I will allow the amendment to paragraph 2. 2. Amendment to Paragraph 3 This paragraph denies the plea in paragraph 8 of the statement of claim that the casino licence was granted exclusively to W.A. Trustee for a period of 15 years. The amendment adds an admission of a somewhat similar character to that in paragraph 2. It also includes unnecessary comment which is merely embarrassing and adds nothing further to the case. Subject therefore to the substitution of the word "say" for the word "admit" and the deletion of all words from "section 21 of which ..." to the end of the paragraph, I will allow the amendment. me t Ree ere wee ee are om wee oe eee cares bo mee ee soe pera ry; 12. 3. Amendment to Paragraph 4 Paragraph 4 responds to para. 11 of the statement of claim which alleges that BML was at all material times engaged in trade and commerce and the trading and commercial activities of, inter alia, the entertainment, casino, tourist and hotel industries. This is denied in the existing para. 4, but the respondents wish to add an allegation as to the capacity of BML as Manager of the Trust and that Genting (Western Australia) Pty Ltd had the commercial operation of the casino from 30 December 1985. In my Opinion the denial as pleaded is sufficient and the addition of these allegations as to other activities in which BML was engaged 1s unnecessary and merely likely to delay the proceedings. I therefore disallow the amendment to para. 4. 4, Addition of Paragraph 4A This paragraph is added to respond to paragraph 12 of the statement of claim which alleges simply that construction of the casino by BML commenced in or about March 1985 and that the resort complex in which the casino is located 1s to be comprised of various elements there set out. It also contends, I think unnecessarily, that the applicants are entitled to develop a second hotel on the Island. Fd Bs T a "5 ae ne eo green 13. The new paragraph 4A would embody an admission that the applicants are entitled to develop a second hotel and a denial of the rest of the paragraph. The other matters raised are unnecessary to deal with paragraph 12 and on the face of it merely embarrass and are likely to delay the trial of the action. I will therefore allow the respondents to plead a new para. 4A to the extent of the admissions and denial already embodied therein. The amendment will otherwise be disallowed. 5. Amendment to Paragraph 5 As it stands, paragraph 5 admits paragraph 13 of the statement of claim where it is alleged that BML 1s the registered proprietor of the business name "Burswood Casino" and "Burswood Hotel". The additional material sought to be introduced into this paragraph is in my opinion quite unnecessary in light of the admission which stands. The allegation of a "breach of the trust deed" raised in the amendment is quite unintelligible. The amendment is disallowed. 6. Substitution of Paragraph 6 Paragraph 6 responds to the plea in paragraph 14 of the statement of claim that the applicants have in connection with the a pote rice ee rome Pa SUE ty wt 14. Burswood Casino an@ the resort complex been the subject of a great amount of publicity and that the resort has become widely known in Western Australia, interstate and overseas and has invariably been and is referred to as "the Burswood Casino". Paragraph 6 as it stands denies this plea. The new para. 6 says that para. 14 is "substantially admitted" save for various matters which are then alleged. In my opinion the additional matters may have some role as evidence, but not as part of a pleading having regard to the rules requiring brevity and confinement to material facts. The amendment to para. 6 is disallowed. 7. Addition of New Paragraph 6A Previously, apart from a general denial ""seriatim", the respondents had not expressly pleaded to paragraphs 15, 16 and 17 of the statement of claim. These paragraphs whose role in the statement of claim is rather obscure plead in essence the public float of the Burswood Property Trust and the listing of its units on the Australian Stock Exchanges. The new paragraph admits paras. 15, 16 and 17, save to say that the date of issue to the public was 27 April 1985 and to poecccc ee pee nae row ree crepe — ee eater eee ote qos 15. allege argumentatively that the pleading in these paragraphs is irrelevant to the applicants' claim. I will allow the insertion of a new para. 6A in the defence only insofar as 1t admits paras. 15, 16 and 17 and pleads the date of issue to the public. 8. Amendment to Paragraph 7 This paragraph is in response to para. 18 of the statement of claim, which alleges that Bempasciuto applied for and registered the name "Burswood Casino Motel/Hotel" on 4 April 1985. The defence presently admits the paragraph. The amendment would "substantially" admit 1t, save to say that the sald business name was applied for on 14 January 1985. The balance of the amendment is unnecessary as 1t relates to other unsuccessful registrations for which Bempasciuto applied. I will allow the respondents to amend para. 7 as proposed down to the words "14th day of January 1985" and subject to the deletion of the word "substantially". 9. Amendment to Paragraph 8 This denies the allegation that by registering the business name Burswood Casino Motel/Hotel, Bempasciuto held eeral Scaiemamnantenrioteatie tic atieds ao 16. himself out as owner and/or operator of the casino and engaged in misleading and deceptive conduct. The amendment in my opinion, introduces additional material which is unnecessary and embarrassing and it will be disallowed. 10. Amendment to Paragraph 10 This amendment introduces a pleading of events occurring on 13 March 1987 which at most could only bear on the question of injunctive relief and which it is not necessary to plead. The amendment is disallowed. ll. Amendment to Paragraph 11 As it stands this paragraph denies allegations of misleading and deceptive conduct and passing off raised in para.23. The amendment seeks to introduce additional material which is evidentiary in character. This amendment is also disallowed. 12. Amendment to Paragraph 12 The addition of the words "in the motel/hotel industry" proposed in this paragraph do not disclose any issue relevant to the plea in para. 24 of the statement of claim to which para. 12 responds,. a a ow peg cers Sted Sheree aah ceca ee ee eee 17. This amendment is disallowed. 13. Amendment to Paragraph 14 This paragraph denies that the advertisements published by BCMH were, as alleged in the statement of claim at para. 26, misleading and deceptive. The additional material proposed is, I think, evidentiary in character and need not be pleaded. The amendment 1s also disallowed. 14. Amendment to Paragraph 15 This amendment will be allowed. 15. Amendment to Paragaph 16 This amendment seeks to add an unconscionably long recitation of facts, some of which may be relied upon to support the existing plea in this paragraph that BCMH has not contravened s.52 or made the representations alleged in paras. 26 and 27 of the statement of claim. It is disallowed. 16. Amendment to Paragraph 17 This amendment will be allowed. ary ee re we eee se en mee . f ve Rae ns aad ene oe A -a 18. 17. Amendment to Paragraph 18 This paragraph responds to the allegation in para. 30 of the statement of claim that BCMH sought to enter the name Burswood Casino Motel/Hotel Pty Ltd in the 1986 Perth White Pages Telephone Directory. As 1t stands para. 18 admits the fact but goes on to deny the consequences pleaded in para. 13 that this constituted misleading and deceptive conduct. The amendment would refer to other entries in the White Pages embodying the word "Burswood". It has no place in the pleading and will be disallowed. 18. Addition of Paragraph 21A This new paragraph expressly denies para. 31 to 35 of the statement of claim. However this is effectively done by the existing para. 24. As it makes for a more specific denial however, the amendment will be allowed. 19. Addition of Paragraph 21B This new paragraph seeks to plead that the applicants did not acquire the sole right to the use of the words "Burswood Casino" or "Burswood Hotel". The pleading is in its form argumentative and, to the extent it raises questions of law, is unnecessary. It will be disallowed. was Ae reas ras nn ar sr " 19. 20. Substitution of Paragraph 22 The new paragraph 22 raises defences to the allegation of passing off. While I have reservations about some aspects of this proposed amendment, I am disposed to allow it and will do so. The Crossclaim I will now move to the proposed crossclaim. In uts terms it seeks damages said to have been incurred by reason of the interlocutory injunction granted to the applicants, which damages are said to exceed $7.6 million. In the event and having regard to the history and late stage of this proposed amendment, I would not allow' the respondents to raise a cross claim at this late stage. Insofar as there may be a claim for compensation if the applicants should fail, then that can be dealt with in that event and in accordance with usual practice. Interrogatories I have perused the draft of the proposed interrogatories. A number of them are quite unacceptable in their form. But in any event, in my opinion and having regard to the .e ee % flo. Weer 5 . aialied bitetrte oes 20. history of the matter, it is far too late in the day to be administering interrogatories. Leave to interrogate is denied. I certify that this and the preceding nineteen (19) pages are a true copy of the Reasons for Judgment of his Honour Mr Justice French. ~ Q AAR Associate: Cae VES. WR pate: 3O Seo, A &7, Counsel: »for the Applicant: Mr S. Archer instructed by Robinson Cox efor the First and Second Respondent: Mr B.F. Stokes instructed by B.F. Stokes & Associates Date of Hearing: 29 July 1987 Date of Judgment: 30 July 1987 BT greene een ae comme ee eae