IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION BETWEEN: JUDGE MAKING ORDER: DATE OF ORDER: WHERE MADE: THE COURT ORDERS THAT: JUDGMINT No. 2A. | Bre LIMITEO DISTRIBUTION NO. WAG 113 of 1987 MULLINS INVESTMENTS PTY LTD Applicant and AIRFLITE PTY LTD First Respondent and REX AVIATION SALES (NSW) PTY LTD Second Respondent MINUTE OF ORDER FRENCH J. 7 JUNE 1988 PERTH 1. The first respondent is refused leave to interrogate in terms of its draft interrogatories filed 20 May 1988. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. FEDERAL_CQUET OF AUSTRALIA ' . \ INCIPAL, wa PRINS BiSIhY . AS REGIST ' \ 7 po \ ae me IN THE FEDERAL COURT OF AUSTRALIA ) LIMITED DISTRIBUTION ) WESTERN AUSTRALIA ) ) ) DISTRICT REGISTRY GENERAL DIVISION NO. WAG 113 OF 1987 BETWEEN: MULLINS INVESTMENTS PTY LTD Applicant and AIRFLITE PTY LTD First Respondent and REX AVIATION SALES (NSW) PTY LTD Second Respondent CORAM: FRENCH J. 7 June 1988 REASONS FOR JUDGMENT ON APPLICATION FOR LEAVE TO INTERROGATE In this case the applicant sues the first respondent for damages under s.82 of the Trade Practices Act 1974, for breach of fiduciary duty, breach of contract and for negligence and negligent mis-statement. The action arises out of the alleged purchase by the applicant in December 1986 of a Cessna jet aeroplane VH-FSQ and certain avionic equipment. The applicant alleges that at or about that time, the first respondent offered to procure the sale to it of the aircraft and equipment' then located at Brisbane from an undisclosed vendor for $550,000 and that it appointed the first respondent to act as its agent for that purpose. The applicant complains that the first respondent falsely represented that necessary repairs could be carried out on the aircraft for a price not exceeding $150,000 and that, if an order were placed on or before 15 December 1986, the plane could be delivered with all work done by 1 February 1987. The first respondent, it is said, intended to first purchase the aircraft itself for $510,000 and then sell it to the applicant for $550,000, thus profiting to the extent of $40,000, a breach of its fiduciary duty to the applicant. Further it is contended that the first respondent did not disclose to the applicant that' the aircraft had been grounded and lying idle for some eight months, and that a company called Rex Aviation (Qld) Pty Ltd was acting as agent for the undisclosed vendor and stood to make a commission on the sale of the plane. Rex Aviation, it is said, was a corporation "associated with" the second respondent. The first respondent is said to have advised the applicant that the second respondent should inspect and report upon the plane so that' the applicant could decide whether or not to purchase it. This proposal, it was said, would place the second respondent in a position of conflict of interest. The purchase proceeded but delivery did not occur until 26 March 1987. One of the required works, the fitting of a gravel kit, was not completed until 23 June 1987. The aircraft, it is said, was defective in various respects which are scheduled to the statement of claim. The cost of necessary repairs is alleged to have amounted to $212,837.41, exceeding the represented maximum by $62,837.41. The applicant also complains that by reason of late delivery of the aircraft it incurred wasted loan charges of $22,947.99 and administrative time to a total value of $20,000. It accuses the first respondent of misleading and deceptive conduct in contravention of 5.52 of the Trade Practices Act. It raises against the first respondent a distinct claim based upon its written agreement with the first respondent for the purchase of the aircraft and complains that in breach of that agreement the first respondent failed to deliver a VHF radio and distance measuring device, as a result of which the appellant suffered damage to the extent of their total value, said to be $20,000. It alleges also a breach by the first respondent of an implied term that the aircraft would be delivered with repair works completed on or about 1 February 1987. As a result of that breach, it says, it suffered damage. The first respondent is also said to have made its representations to the applicant negligently. The application has now reached the stage where the parties are seeking leave to interrogate. The leave question has been determined except as to the first respondent's interrogatories. The first of those interrogatories asks whether the applicant was aware that the first respondent had to purchase the aircraft and equipment from the vendor in Brisbane through Rex Aviation (Qld) Pty Ltd. On the face of it, the interrogatory does not relate to any question in issue between the parties. No 4. allegation is raised in the defence that the first respondent had to purchase through Rex Aviation and it is difficult at the moment to see what bearing such a plea would have on the matters in issue. I am not persuaded that leave should be granted to interrogate in terms of question 1. Questions 2, 3 and 4 are all concerned with the same point, and leave is refused with respect to them also. Interrogatory 5 asks whether the applicant was free to engage someone other than the second respondent to inspect and report upon the condition of the aircraft. On the face of the pleadings there is nothing to suggest that the applicant could not have chosen some other party. The point of the plea in the statement of claim is that the first respondent did not inform the applicant of the relationship between Rex Aviation in Queensland and the second respondent. The question does not arise in any way on the pleadings and leave is refused in respect of it. Interrogatory 6 asks whether the applicant's decision to accept the recommendation of the first respondent that it engage the second respondent was not based upon any representation made by the first respondent. Although it is alleged that the applicant was induced by representation on the part of the second respondent to enter into an agreement with that company, there is no plea that the applicant was induced to do so by = any representation made by the first respondent. I will not give leave to administer interrogatory 6, nor the connected interrogatory 7. 5. Interrogatory 8 concerns a conversation in October 1987 between Mullins of the applicant and Messrs. Mahon and Allen for the first respondent and asks whether Mullins informed Mahon and Allen that a Mr Ron Bastin of the second respondent had represented that the aircraft would be repaired to "better than new" condition and that the applicant was only interested in taking action against the second respondent for alleged defective work. The second limb of the interrogatory might raise an incidental point in cross-examination but does not bear upon the issue of liability. As to the first limb, it in essence asks the applicant to agree that it made a _ relevant admission sometime after the transaction the subject of this action. In the ordinary course the making of the admission is a matter of which the first respondent can give evidence. The trial of the action will not be expedited in any way by the interrogatory and leave is declined. Interrogatory 9 falls into a similar category. Interrogatory 10 does not seem to bear upon any matter in issue. I therefore refuse leave to the first respondent to interrogate as proposed in its draft dated 20 May 1988. I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment of his Honour Justice French. Associate: De yore Wes Date: 7 Fun \9 &% Counsel for the Applicant: Mr D. Stone Solicitors for the Applicant: Messrs. Northmore Hale Davy & Leake Counsel for the First Respondent: Mr C. Tan Solicitors for the First Respondent: Messrs. Charles Tan & Co. Counsel for the Second Respondent: Mr I. Curlewis Solicitors for the Second Respondent: Messrs. Parker & Parker Date of Hearing: 2 June 1988 Date of Judgment: 7 June 1988