Williams v FAI Home Security Pty Ltd (No 3) [2000] FCA 1438

FEDERAL COURT OF AUSTRALIA

Williams v FAI Home Security Pty Ltd (No 3) [2000] FCA 1438 REPRESENTATIVE PROCEEDING – a respondent made public statements about status of proceeding and solicitors – statements inaccurate – effect of statements – whether publication of a correction notice necessary – whether publication of opt out notice would remove need for correction notice. REPRESENTATIVE PROCEEDING – direct communication with group members by a respondent – effect of communication – whether injunction warranted. Federal Court of Australia Act 1976 (Cth): Pt IVA, s 33X, s 33Y

State of Victoria v The Australian Building Construction Employees' and Builders Labourers' Federation (1982) 152 CLR 25 referred to TIMOTHY WILLIAMS and SUSAN WILLIAMS v FAI HOME SECURITY PTY LTD & ANOR (No 3) V 383 of 1999 GOLDBERG J 13 OCTOBER 2000 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 383 of 1999

BETWEEN: TIMOTHY WILLIAMS and SUSAN WILLIAMS

Applicants

AND: FAI HOME SECURITY PTY LTD

(ACN 050 064 214)

First Respondent

FAI FINANCE PTY LTD

(ACN 053 262 561)

Second Respondent

JUDGE: GOLDBERG J

DATE: 13 OCTOBER 2000

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 By a notice of motion filed 26 July 2000 the applicants sought an order that the respondents be ordered to send a "Correction Notice" to persons who received documents headed "A FAIR GO", published and distributed by the first respondent and that they be restrained from communicating with group members in relation to the proceeding. They also sought other injunctive and procedural relief. In order to understand how the issue arises it is necessary to rehearse some of the events which have occurred since this proceeding commenced. 2 On 9 July 1999 the applicants filed an application, bringing a proceeding pursuant to Pt IVA of the Federal Court of Australia Act 1976 (Cth) ("the Act"), as a representative party. The group members to whom the proceeding relates are persons who on or after 1 July 1993 purchased home alarm systems known as Security Guard I and Security Guard II from the first respondent ("FAI Home Security"), who entered into loan contracts with the second respondent ("FAI Finance") to finance the purchase of the systems and to whom representations in respect of the systems were alleged to have been made and who acted on the faith of the representations, entered into the sales contracts and loan contracts and thereby suffered loss and damage. The application claimed relief by way of damages and ancillary relief against the respondents on the grounds set out in the statement of claim, which was filed at the same time as the application. It was alleged in the statement of claim that FAI Home Security established a network of distributors to sell the systems and that the distributors made representations that the systems were the best on the market, the latest technology and for sale at much less than comparable systems. It was alleged that the representations were made by the distributors as agents for the respondents and that the representations were false. 3 On 16 November 1999 the applicants filed an amended application and amended statement of claim in which they alleged that it was represented to all group members that the systems were the latest technology available and that it was represented to some of the group members that the systems were the best on the market and for sale at a price much less than comparable systems. On 19 November 1999 the respondents filed a motion seeking an order that the amended application and amended statement of claim be struck out or alternatively that certain paragraphs of the amended statement of claim be struck out. On 30 November 1999 the respondents filed an amended notice of motion seeking an order that the amended application and amended statement of claim be struck out and the proceeding be dismissed or alternatively that certain paragraphs of the amended statement of claim be struck out. The amended notice of motion came on for hearing on 14 December 1999 when I ordered that: "1. The applicants have leave to file and serve a further amended statement of claim by 4.00 pm on 22 December 1999. 2. The applicants file and serve by 4.00 pm on 22 December 1999 further and better particulars of paras 9, 11, 16 and 18 of the amended statement of claim or of such paragraphs as are equivalent paragraphs in any further amended statement of claim. 3. The respondents file and serve an amended defence by 4.00 pm on 31 January 2000. 4. The directions hearing be adjourned to 2 February 2000. 5. Any costs thrown away by the filing and service of a further amended statement of claim be reserved. 6. The applicants pay the respondents' costs of the amended notice of motion filed 30 November 1999." 4 On 22 December 1999 the applicants filed and served a further amended statement of claim and further and better particulars of the statement of claim. On 14 February 2000 the respondents filed a motion seeking orders that certain paragraphs in the further amended statement of claim be struck out and that further and better particulars of certain other paragraphs be provided. On 7 June 2000 I ordered, inter alia, that the applicants have leave to deliver an amended statement of claim on or before 19 June 2000. That statement of claim was delivered on 22 June 2000 and the respondents delivered their defences to it on 2 August 2000. 5 At a directions hearing on 2 August 2000 the form of the proposed "opt out" notice for the purpose of complying with s 33X of the Act was raised and the form of that notice was substantially settled. At a further hearing on 3 October 2000 I approved the form and content of the notice to be given to group members pursuant to s 33X of the Act and made orders providing for notice to be given to group members by way of publication in a number of daily newspapers throughout Australia on 14 and 21 November 2000. Group members will have the right to opt out of the proceeding before 20 December 2000.