cand __--JUDGMENT No. (8/8. NOT FOR GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSW G.431 of 1987 GENERAL DIVISION BETWEEN: ASSOCIATED NEWSAGENTS CO-OPERATIVE LIMITED (MANAGER AND RECEIVER APPOINTED ) Applicant AND: HONEYWELL PTY LIMITED First Respondent BERSAND ONLINE SERVICES PTY LIMITED Second Respondent BERNARD J DAWSON Third Respondent EXATRON PTY LIMITED Fourth Respondent CORAM : WILCOX J PLACE: SYDNEY DATE: 19 NOVEMBER 1987 MINUTES OF ORDER ey er emenas See THE COURT ORDERS THAT: Note: Pending the determination of these proceedings or further order of the Court, the fourth respondent, Exatron Pty Limited, be restrained from prosecuting or continuing proceedings No.19947 of 1986 in the Commercial List of the Common Law Division of the Supreme Court of New South Wales between the said fourth respondent and the applicant, Associated Newsagents Co-Operative Limited (Manager and Receiver Appointed). Liberty be granted to the said fourth respondent to apply on 7 days' notice for a dissolution of order 1 in the event that the applicant is in default in any way in compliance with the directions made this day. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. a toe Se . a Re me re ene we Sole La Bova ee ree " NOT FOR GENERAL DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) NSW G.431 of 1987 ) ) CORAM: PLACE: DATE: GENERAL DIVISION BETWEEN: ASSOCIATED NEWSAGENTS CO-OPERATIVE LIMITED (MANAGER AND RECEIVER APPOINTED) Applicant AND: HONEYWELL PTY LIMITED First Respondent BERSAND ONLINE SERVICES PTY LIMITED Second Respondent BERNARD J DAWSON Third Respondent EXATRON PTY LIMITED Fourth Respondent WILCOX J SYDNEY 19 NOVEMBER 1987 EXTEMPORE REASONS FOR JUDGMENT mre The matter presently before me is an application made on notice by the applicant, Associated Newsagents Co-Operative Limited (Manager and Receiver Appointed), by which it seeks to obtain orders against the fourth respondent, Exatron Pty Limited in connection with proceedings instituted by Exatron in the Supreme Court of New South Wales, being No.19947 of 1986. Those proceedings are listed in the Commercial List of the Common Law Division of the Supreme Court. Associated Newsagents seek an order that, pending the determination of the proceedings in this Court, Exatron be restrained from prosecuting or continuing the Supreme Court proceedings or, alternatively, an order that, pending the determination of these proceedings, the Supreme Court proceedings be stayed. The Supreme Court proceedings were instituted on 10 November 1986. There have been numerous directions hearings and there has been default made in compliance with certain directions by Associated Newsagents, the defendant in those proceedings. The current position, as I understand it, is that a hearing date, which was previously fixed for 24 August 1987, has been vacated and a new hearing date has been nominated, being 20 November 1987. However, when this was done, it was said that the hearing would be limited to the plaintiff's claim. This has been described today by counsel for Exatron as being a quantification of the plaintiff's claim for goods sold and delivered and damages for failure to accept delivery. The claim relates to a contract for the supply of 400 computer terminals as part of a new computer system being Ne ne mtr omer . ae .7 ma . yon treeeese ee _ . veer oe c- wre mows set up by the applicant on behalf of its members, being approximately 1300 newsagents scattered throughout New South Wales. It appears from the material which has been put before me that the system as installed did not work satisfactorily. The letters which have been tendered suggest an acceptance by some people connected with Exatron that the terminals may have had something to do with the problem. I put this in tentative terms because only some of the correspondence is before the Court and it may well be that, when the whole of the correspondence is considered, a different impression would emerge. However, I think there is enough to show that there is a genuine claim made by Associated Newsagents against Exatron. Whether it turns out to be well founded in fact and in law are matters for consideration at a different time. The proceeding in this Court involves not only Exatron but three other respondents. The first respondent, Honeywell Pty Limited, supplied the hardware involved in the computer system together with operating software. The second respondent, Bersand Online Services Pty Limited, supplied application software and consultancy services. The third respondent, Mr Bernard Dawson, is a person associated with the second respondent and he is joined under s.79B of the Trade Practices Act 1974. It appears from what has been said, and stated in some of the documents which I have been shown, that ee t eecmtatal . Te et me erp se yp a at a trial there would be a degree of cross-blaming amongst the representatives of, and experts for, the various respondents. The current application is resisted by counsel for Exatron, primarily on the ground of delay. It is pointed out, with some force, that 13 months have elapsed since the Supreme Court proceedings were instituted. There is no reason why the proceedings in this Court could not have been instituted in October 1986 or at some subsequent period. It is true that the matter is extremely complex, depending as it does upon technical reports. It is also true that the amount of evidence is quite extensive and that there have been other problems over the last 13 months caused by the financial deterioration of the applicant, which deterioration is claimed by counsel for the applicant to be related to the problems of its computer system. Bearing all those matters in mind, I nonetheless take the view that the current proceeding should have been instituted at a much earlier date. The question is whether this should be decisive so that, as a result of the delay, I should take the view that this Court should not interfere in any way in the Supreme Court proceedings. But for one factor, I think that I would take that view. However, the countervailing factor is one of considerable importance in my mind: that is the question of fragmentation of the litigation. There are only two parties in the Supreme Court, Associated Newsagents and Exatron. In that proceeding it will =-50 'ainahtinamacantharmeamtnaniarl entehaliteteiemara SI permet ot fa se oy not be relevant for the Court to reach any conclusions as to the extent to which the problems have been occasioned by any default by either Honeywell or Bersand Online Services. It is quite possible that the litigation involving those parties will have to proceed, notwithstanding whatever happens in the Supreme Court, with a risk of repetition of evidence and the possibility that, because of different evidence, inconsistent results will be reached. There is a possibility that, because of inconsistent evidence, the applicant, although it established that the system which was installed was ineffective, would fail to make good a claim against any respondent. There is equally a possibility that the applicant would succeed, because of inconsistent evidence, in doubling up its claim. This is something which should not be allowed to occur. The other aspect of fragmentation is one which is very much in the hands of the Supreme Court; but it can hardly be ignored. The Supreme Court has taken the view that, because of various defaults by the present applicant, the action brought by the plaintiff in the Supreme Court should proceed in advance of consideration of the cross-claim and, indeed, as I understand it, of the claim by the defendant in those proceedings that the goods which were delivered were not of merchantable quality. The forthcoming hearing will leave those issues outstanding. If the Supreme Court proceeds to enter judgment for the plaintiff in advance of determining those issues, a difficulty would seem to arise in regard to enforcement. If, on the other hand, judgment is not entered, then from the point of view of Exatron, not much has been gained until the other matters are litigated. There is no reason apparent to me why those matters cannot be litigated in this Court as quickly as in the Supreme Court. However, to my mind, the critical matter is the need to avoid duplication of hearings and the possibility of inconsistent results. One matter which I raised during the course of discussion is whether this was a case suitable for transfer to the Supreme Court, that is to say, the transfer of the whole of the Federal Court proceedings, pursuant to s.86A of the Trade Practices Act. However, no such application has been made. It is a matter which involves all of the respondents. Their counsel have not had time to consider it; and I gather there would be some opposition to that course being taken. As there is no application in that regard, it is not an option to which I need give further thought. I am confronted with only two choices. One is to take action which will effectively stay the hearing in the Supreme Court and allow the whole matter to be dealt with here; or, alternatively, to refuse a stay with the problem of fragmentation to which I have referred. Under the circumstances, I think the appropriate course is for me to intervene. I think the appropriate order is that, pending the determination of these proceedings or further order of the Court, the fourth respondent be restrained from prosecuting or continuing proceedings No.19947 of 1986 in the Commercial List of the Common Law Division of the Supreme Court of New South aro f. Wales between the fourth respondent and the applicant. I propose, at a convenient time later today, to make directions to ensure the earliest possible trial of the proceeding in this Court. I indicate now that the Court would expect that there would be full compliance with those directions by all parties, and not least the applicant. There will also be liberty to apply on seven days' notice for a dissolution of the order to which I have just referred, in the event that the applicant is in default in any way in compliance with the directions. I do not think that Exatron should be put in the position of having 1ts action in the Supreme Court stayed but be left facing a prolonged delay in this Court. I certify this and the six (6) preceding pages to be a true copy of the Reasons for Judgment of his Honour Justice Wilcox. Associate: panne: <feee Date: 26 Novémber 1987 Counsel for the Applicant: Mx P M Wood Solicitors for the Applicant: J C Behm & Associates Counsel for the First Respondent: Mr P M Jacobson Solicitors for the First Respondent: Allen Allen & Hemsley Counsel for the Second and Third Respondents: Mr A G Todd Solicitors for the Second Third Respondents: Gregory J Halpin Counsel for the Fourth Respondent: Mr C Darvall QC with Mr G P Ellis Solicitors for the Fourth Respondent: Wilmot & Klimt Date(s) of hearing: 11 and 19 November 1987 TORT Ty oe Pome op "