TI YUDGMENT No, lee ./ 3% IN THE FEDERAL COURT LIMITED DISTRIBUTION OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION No. WAG 33 of 1986 BETWEEN: GALLIENNE PTY LTD as Trustee for the J.D. Milne Family Trust Applicant and S.W. HART & CO. PTY LTD First Respondent and ANTHONY MARWICK Second Respondent MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 8 APRIL 1988 WHERE MADE: PERTH THE COURT ORDERS THAT: 1. The respondents do within 14 days provide an answer to interrogatories 1 and 3(a), (b)(i), (ii), (411)(1) and (2) and (iv) of the applicant's interrogatories. 2. The applicant to pay the respondents' costs of the directions hearing on 16 June 1987 insofar as it related to the provision of answers to interrogatories. The application be adjourned for further directions to 12 April 1988 at 9.15 am. Note: Settlement and entry of orders 1s dealt with in Order 36 of the Federal Court Rules. af - IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: LIMITED DISTRIBUTION er ee ee ee ee No. WAG 34 of 1986 PETARYN PTY LTD Applicant and S.W. HART & CO. PTY LTD First Respondent and ANTHONY MARWICK Second Respondent MINUTE OF ORDER JUDGE MAKING ORDER: FRENCH J. DATE OF ORDER: 8 APRIL 1988 WHERE MADE: PERTH THE COURT ORDERS THAT: The respondents do within 14 days provide an answer to interrogatories lL and 3(a), (b)(i), (ii) and the applicant's interrogatories. (iv) of — Ug re eSEEE Te EEEHRrerore rent se hie 4. The applicant to pay the respondents' costs of the directions hearing on 16 June 1987 insofar as it related to the provision of answers to interrogatories. The application be adjourned for further directions to 12 April 1988 at 9.15 am. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY BETWEEN: JUDGE MAKING ORDER: DATE OF ORDER: WHERE MADE: THE COURT ORDERS THAT: 1. The respondents do within 14 days provide an answer to interrogatories 2 and 6(a) and LIMITED DISTRIBUTION No. WAG 39 of 1986 JARKS PARTNERS (A Fixm) Applicant and S.W. HART & CO. PTY LTD First Respondent and ANTHONY MARWICK Second Respondent MINUTE OF ORDER FRENCH J. 8 APRIL 1988 PERTH (b) (i), (ii), (iii)(1) and (2) and (iv) of the applicant's interrogatories. — ahd 6. The applicant to pay the respondents' costs of the directions hearing on 16 June 1987 insofar as it related to the provision of answers to interrogatories. The application be adjourned for further directions to 12 April 1988 at 9.15 am. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. "Saree Mem. ee IN THE FEDERAL COURT OP AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: BETWEEN: eee ee LIMITED DISTRIBUTION No. WAG 33 of 1986 GALLIENNE PTY LTD as Trustee for the J.D. Family Trust Applicant and S.W. HART & CO. PTY LTD First Respondent and ANTHONY MARWICK Second Respondent No. WAG 34 of 1986 PETARYN PTY LTD Applicant and S.W. HART & CO. PTY LTD First Respondent and ANTHONY MARWICK Second Respondent Milne pe. oy trite Prt a7 ¥ on No. WAG 39 of 1986 BETWEE/N: JARKS PARTNERS (A Firm) Applicant and S.W. HART & CO. PTY LTD First Respondent and ANTHONY MARWICK Second Respondent CORAM: FRENCH J. 8 April 1988 REASONS FOR JUDGMENT S.W. Hart & Co. Pty Ltd ("Hart") carries on the business of manufacturing and selling, under the brand name "Solahart", a range of products for heating domestic water supplies and swimming pools and for space heating. The applications presently before the Court are brought by three disaffected Solahart dealers, Gallienne Pty Ltd ("Gallienne"), Petaryn Pty Ltd ("Petaryn") and Jaxks Partners ("Jarks"). Each had been appointed pursuant to a written agreement with Hart as its Solahaxrt dealer for a geographically defined area. In April 1984 Gallienne, by assignment from its predecessor, became the Solahart dealer in the Rockingham area. Petaryn was appointed for the Victoria Park area from 1 June 1985 and Jarks for the Osborne Park area from 24 August 1985. 3. Proceedings against Hart and its general manager, Marwick, were commenced in this Court by Gallienne and Petaryn on 17 April 1986 and by Jarks on 2 May 1986. While they are not identical, there are common elements in the claims brought by each of the applicants as set out in their amended statements of claim. In each case the pleadings have progressed to the point where a defence and reply have been filed. In the case of Gallienne, Hart has instituted a cross-claim and a defence to the cross-claim has been filed. On 6 October 1986 Toohey J. ordered that each party give discovery on or before 27 October 1986. The applicants each gave formal discovery by verified list filed on 10 November 1986. No such list was filed by the respondents, although it appears that there has been mutual discovery and inspection on an informal basis. No further steps were taken until the applications were brought on by the Court for mention in a callover on 5 March 1987. At that time the applicants sought leave to administer interrogatories, drafts of which were tendered. Leave was given to interrogate on matters peculiarly within the knowledge of the respondents. The respondents were given leave to administer interrogatories similarly limited by 19 Maxch 1987. Each party was to answer the interrogatories, saving all just objections, on ox before 14 April 1987. On 23 April 1987 the respondent was given further time until 30 April to administer its interrogatories and to answer those of the applicants. In the 4. . event, it administered interrogatories to the applicants on 30 April, although to this date none of them appear to have been answered. The respondents have, in each case, filed answers to the applicants' interrogatories taking objections to most of them and it 1s these which now fall for determination. On 13 May 1987, the respondents filed a motion in the Gallienne proceedings seeking to strike out various parts of the re-amended statement of claim. Axgument on this and on the xespondents' objections to the applicants' interrogatories was heard on 16 June 1987 and on 19 June 1987 orders were made striking out paras.8, 10 and 12 of the Gallienne statement of claim. The respondents foreshadowed strike out motions in relation to similar parts of the amended statements of claim in the Petaryn and Jarks proceedings. Counsel for Gallienne indicated that in light of the decision on the pleadings in that matter, he would seek leave to re-amend the statement of claim on each of the applications. Each of the applicants was then given leave to file and deliver an amended statement of claim on or before 3 July 1987 and the respondents were given leave to deliver an amended defence by 24 July. e On the question of the objections to the applicants' interrogatories, some of the matters raised related to paragraphs of the statement of claim which were struck out in the Gallienne 5. case and which it was anticipated would be the subject of amendment in the Petaryn and Jarks cases. I indicated that I might leave over the question of any decision on _ the interrogatories until the form of these amendments became clear. In the event, amended statements of claim were filed on 13 July 1987 and amended defences on 13 August and I deal with the interrogatories on the basis of those amended pleadings. The axrgument on 16 June dealt primarily with the objections taken by the respondents in the Jarks case, the interrogatories there administered being the fullest set and encompassing those objected to in Gallienne and Petaryn. The causes of action raised against Hart by Jaxrks may be summarized as follows:- 1. Fraud by means of pre-contractual misrepresentation (paras. 3D and 3E). 2. Misleading or deceptive conduct in contravention of s.52 of the Trade Practices Act constituted by the pre-contractual representations and failure to furnish relevant information (paras. 3F and 3G). 3. Breach of warranty or collateral contract axising from the pre-contractual representations (para.4A). 4. Breach of the dealership agreement by soliciting sales, retail selling and supplying Solahart products within the dealership area (para.7). 5. Abuse of market power in contravention of s.46 of the Trade Practices Act 1974 (para. 8). 6. Price discrimination in contravention of s.49 of the Trade Practices Act 1974 (paras.10 and 11). 6. Haxrt's general manager, Marwick, is drawn in under para.12 of the amended statement of claim, as one involved in each of the contraventions of the Trade Practices Act 1974 by vixtue of the provisions of s.75B of that Act. It is not necessary for present purposes to set out the defences to these pleas. They will be addressed to the extent necessary in dealing with each of the contentious interrogatories. I now turn to deal with those in order, Interrogatory 1 This relates to para.9 of the former defence which pleads that, by an addendum to the dealership agreement, specified builders were to "come under the full and direct control" of Hart's Building and Construction Services Division and that Jarks was to receive monetary compensation in respect of sales made to those builders. That plea is maintained in 9(b) of the amended defence. The interrogatory asks whether Jarks had received monetary compensation in respect of the sales to those builders and for details of the payments made. Objection was taken on the ground that the interrogatory was "ixrelevant, fishing, scandalous, oppressive, vague, and at best a matter for cross-examination only". The grounds of objection so stated discloses a failure to consider the provisions of 0.16 r.6(3) of the Federal Court Rules which provides:- 7. "(3) Subject to sub-rule (4), a party may object to answering any interrogatory on the following grounds but no other (a) where the answering is not required by an order, that the intexrrogatory does not relate to any matter in question between him and the party requiring the answer; (b) that the interrogatory is vexatious or oppressive; and {c) privilege." Although the objections taken were not framed in the language of this rule, relevance and oppression plainly come within the specified grounds and it 1s likely that the characterisation of an interrogatory as fishing can also be resolved into an objection as to relevance. As to an interrogatory being scandalous or vague, I am inclined to regard that as a special class of vexation or oppression. Jarks, in its reply, denies the existence of the addendum pleaded in para.9 of the defence, and there is no issue between the parties on the pleadings that any monetary compensation was actually paid pursuant to the addendum pleaded. The interrogatory does not, on the face of it, appear to be relevant. In any event it addresses a matter which is within Jarks' knowledge and thus outside the terms of the leave granted on 5 March 1987. No order will be made in respect of interrogatory l. Interrogatory 2 Paragraph 8 of the further amended statement of claim, like its predecessor, alleges an abuse of market power on the part of Hart in contravention of s.46 of the Trade Practices Act. It pleads, inter alia, that Hart conducts and at all material times conducted a business known as "Super Service Emergency Hot Water" under which it carried out the installation, supply, repair and sexvice of Solahart products. These services were said to have been provided to persons within the dealership area. By paras. 17 and 18 of the defence prior to amendment, Haxt pleaded that 1t owns, but does not operate that business, and that installation, supply, repair and service of Solahart products forms only a minor part of its activities. In the defence as amended, Hart denies this allegation in its entirety. Interrogatory 2 asks who operates the business and if it is not Hart, whether it is under Haxt's direction, management or control, and if it is an entity owned wholly or partly by Hart. Although I would not have been prepared to allow this interrogatory in light of the pleadings as they previously stood, I think that it is now appropriate to be answered and I will so order. Interrogatory 3 ¢ This goes to paxra.23 of the former defence, which again responds to a plea in para.8 of the amended statement of claim. That plea, inserted by way of particulars in support of the s.46 9. claim, asserts in substance that Hart competes with Jarks in the dealership area through businesses known as ""Solahart Melville" and "Solahart Morley". By para.23 Hart admitted that it has carried on these two businesses since 31 January 1985 and 9 November 1985 respectively, selling Solahart products, but otherwise denies the allegation that it carries on through them the installation, retail supply, repair and service of Solahart products. Interrogatory 3 asks whether the two businesses involve retail sale of Solahart products. As this was admitted, the question is pointless. Under the defence as amended, it is still admitted but more plainly. Nor in the circumstances could I see what further point is served in relation to the s.46 plea by requiring particulars of sales made by these entities. The position in this respect is not altered by the amendments. Interrogatory 4 This relates to para.29 of the former defence which denies allegations in particulars to the former para.8 that Hart is in a position to control or market the goods and services and goes on to say that the markets in which Hart competes are the "hot water service market; the pool heating market; and the space heating market". The interrogatory asks, inter alia, for a statement of "every act, fact, matter, circumstance or thing relied upon in support of the allegation that the markets in which the First Respondent competes are the hot water service market, the pool heating market, and the space heating market". The vem ee 10. question is, on the face of it, oppressively wide and will not be allowed. Without descending into detail, the sub-questions that follow as part of interrogatory 4 also fail for oppressive width and lack of relevance. Interrogatory 5 This interrogatory relates to para.30 of the former defence, which responds to former para.(iii) of the particulars to sub-para.8(2) of the amended statement of claim where it was alleged that:- "..ethe "goods" and "services" hereinbefore referred to are solar heating products and the marketing, installations and servicing of the same; or, alternatively, are Solahart products and the marketing, installation and servicing of the same respectively." This was denied in para.30 of the former defence which went on to say that the geographical markets in which Hart competes are limited by reference to the State of Western Australia, Australia and the world. Interrogatory 5(a) is by way of a request for particulars of the paragraph, an application of interrogatories which will not be allowed except in special circumstances ~ Conde v 2KY Broadcasters Pty Ltd (1982) 2 NSWLR 221. '%Interrogatories 5(b) and 5(c) ask for "all acts, facts, matters, circumstances and things relied upon for the allegations" identified in para.30. The request is too wide and in any event, appears to be seeking particulars. Interrogatory 5(d) asks about qe fi e ll. Market surveys prepared by Hart in respect of its solar hot water products and does not seem to be relevant to any issue. Interrogatory 5(e) which is linked to 1t, is objectionable for the same reason. Interrogatory 6 This xefers the respondents to a document annexed to the interrogatory. The document in question is an internal memorandum of Hart dated 27 February 1984, some 18 months before the dealership agreement. It refers to the desixability of a company policy regarding builders and trade sales to be implemented when existing dealerships change hands. The interrogatory asks what the proposed policy was and whether it became company policy and, if so, and whether it has been implemented. Various subsidiary questions follow. In my opinion parts of this interrogatory have become relevant by virtue of the addition of a new para.3B in the re-amended statement of claim and its denial by the respondents. In my opinion the respondents should answer interrogatories 6(a) and (b)(i), (ii), (iii)(1) and (2), and (iv). Interrogatory 7 This was answered, but, according to Jarks, not adequately. It refers to documents marked 2, 3 and 4 annexed to the interrogatories. The annexures comprise one pamphlet and two circular letters promoting Solahart products. The interrogatory 12. asks whether documents of such style and form were distributed within the dealership area during the currency of the dealership agreement. Hart answered by saying that No. 2 was sent to new home owners in the dealership area in August 1986, No. 3 was not distributed in the area and No. 4 may have been, but enquiries made did not reveal a definite answer. The interrogatory further asks whether the addressees for the documents responded. In answer to this question, Hart said that in respect of document No. 2, two new home owners must have responded but the deponent, the Chief Executive of Hart, did not know how. In answer to a further sub question, it was disclosed that two of the addressees had purchased Solahart units and these names, the sales order numbers and the dates were given. In my opinion, the question has been adequately answered and no further order is required. Interrogatory 8 This refers to documents 5 and 6 of the annexures. Document 5 is a copy of a letter dated 17 September 1985 to the Trade Practices Commission, pursuant to a notification under the Act, and enclosing a copy of an amended dealership agreement. Document 6 is a copy of an exclusive dealing notification form under s.93(1) of the Trade Practices Act dated 7 October 1985. It shows Hart as the "person giving natice" and identifies "Solahart solar hot water systems, other products, spare parts = and components" as the relevant goods and services. Interrogatory 8 asks for identification of the "new category of corporate 13. distributors referred to in the letter to the Trade Practices Commission and for details of where the original agreement and amended agreement might be inspected. It also sought details of existing dealerships and the agreement previously lodged. This relates to an exclusive dealing claim which has been abandoned by the amendment. No order will be made in respect to this interrogatory. Interrogatory 9 This interrogatory relates to further and better particulars of the defence provided by Hart on 27 October 1986. In para.A5 of the particulars, Hart provided two tables of sales made by it in the Jarks dealership area. The first did not include sales to builders and plumbers. The second did set out sales to builders. The particulars so provided specified the date, the customer's name and address, the type of unit sold, the sale price, any discount allowed and the name of the installer. The interrogatory asks which, if any, of the supplies of Solahart units and components particularised were made to:- (i) buildings already having a Solahart unit in place; (1i) buildings having in place an existing solar hot water unit of a make other than Solahart (and sought full particulars of such existing units by reference to brand, capacity, age, and mode of function); (iii)buildings having in place a hot water system other than a solar system (and sought full particulars of guch existing unit by reference to brand, capacity, age, and mode of function); a. Fe waht ty 14. (iv) new buildings. It also asked Hart to specify whether such matters were evidenced in writing and 1£ so, where and when such documents might be inspected. The particulars which inspired the interrogatory are said to relate to para.1ll of the defence. [In this paragraph, Hart admitted selling or supplying Solahart units within Jarks' dealership area to customers other than those described in clause 3.2 of the dealership agreement. Notwithstanding a careful perusal of the pleadings and re-reading counsel's submissions on the transcript, I was unable to appreciate the relevance of any of these questions. In any event, 9(ii) and (iii) seem, on the face of it, to be oppressive and of little benefit to Jarks' case. I would not have allowed the interrogatory under the pleadings as they previously stood and see no reason to do so now. Interrogatory 10 This relates to para.Al3 of the particulars of defence. Paragraph Al3 gave particulars of para.45 of the former defence which denied sub-para.D(iii) of the particulars to sub-para. 8(3) of the former amended statement of claim. That, in turn, had alleged abuse of market power by Hart to eliminate or substantially damage a competitor. It is an interrogatory which is, on the face of it, of marginal relevance, if relevant at all. 15. It is in that sense, I think, oppressive having regard to the extent of the investigation it would appear to require. Interrogatory 11 This interrogatory concerns para.Al4 of the particulars which related to a defence to the price discrimination claim brought under s.49, by para.9 of the amended statement of claim. That is in substance the same as paxra.10 of the Gallienne pleading which was struck out on 19 June and has been replaced by a new para.10 in the amended statement of claim in the Jarks case. The interrogatory in substance, seeks the provision of further and better particulars of the particulars given in para.Al4. To that extent, it is objectionable unless special circumstances can be shown to justify its use to, in effect, extract particulars. No order will be made on it. SUMMARY The effect of these reasons is that no order will be made for further answers to any of the interrogatories administered by Jarks to Hart save for interrogatories 2 and 6(a) and (b)(i), (ii), (141)(1) and (2) and (iv). As to the interrogatories in the Gallienne and Petaryn Matters, it was conceded by counsel that those still pursued by the applicants in those matters, did not raise any issues not 16. covered by the interrogatories in the Jarks proceedings. I will order that answers be given to interrogatory 1 in the Gallienne and Petaryn matters, it being in each case in the same terms as interrogatory 2 in the Jarks application. The respondents will also be required to answer interrogatories 3(a), (b)(i), (11), (iii)(1) and (2) and (iv) in the Gallienne and interrogatories 3(a), (b)(i), (ii) and (iv) in the Petaryn matter, these being the equivalents to the parts of interrogatory 6 which I consider xelevant. Otherwise I make no order for the provision of further answers to any of the interrogatories in any of the matters. The applicants in each case will have to bear the costs of so much of the directions hearing as was taken up with this question. I certify that this and the preceding fifteen (15) pages are a true copy of the Reasons for Judgment of his Honour Justice French. Associate: Depo Ute pate: §& Aent 1988. OR wen wos Dae ene ee ee ea 17. Counsel for the Applicants: Mr D. Solomon Solicitors for the Applicants: Phillips Fox Counsel for the Respondents: Mr P. Fitzpatrick Solicitors for the Respondents: Robinson Cox Date of Hearing: 16 June 1987 Date of Judgment: 8 April 1988