FEDERAL COURT OF AUSTRALIA Red Bull Australia Pty Limited v Sydneywide Distributors Pty Limited t/as Sydneywide Bottlers Australia [2001] FCA 1751 Evidence Act 1995 (Cth) s 56 RED BULL AUSTRALIA PTY LIMITED & RED BULL GmbH v SYDNEYWIDE DISTRIBUTORS PTY LIMITED T/AS SYDNEYWIDE BOTTLERS AUSTRALIA & EMANUEL KLIMIS N 197 OF 2001 HELY J 5 DECEMBER 2001 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 197 OF 2001 BETWEEN: RED BULL AUSTRALIA PTY LIMITED FIRST APPLICANT RED BULL GmbH SECOND APPLICANT AND: SYDNEYWIDE DISTRIBUTORS PTY LIMITED T/AS SYDNEYWIDE BOTTLERS AUSTRALIA FIRST RESPONDENT EMANUEL KLIMIS SECOND RESPONDENT JUDGE: HELY J DATE OF ORDER: 5 DECEMBER 2001 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The affidavits of Mr Emile Sawan of 8 October 2001 and Mr Scott Carter of 12 October 2001 not be admitted into evidence in support of the respondent's application for a stay of orders pending appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 197 OF 2001 BETWEEN: RED BULL AUSTRALIA PTY LIMITED FIRST APPLICANT RED BULL GmbH SECOND APPLICANT AND: SYDNEYWIDE DISTRIBUTORS PTY LIMITED T/AS SYDNEYWIDE BOTTLERS AUSTRALIA FIRST RESPONDENT EMANUEL KLIMIS SECOND RESPONDENT JUDGE: HELY J DATE: 5 DECEMBER 2001 PLACE: SYDNEY REASONS FOR JUDGMENT Ruling on evidence 1 Mr Franklin, counsel for Sydneywide Distributors, seeks to read an affidavit of Emile Sawan sworn 8 October 2001, and an affidavit of John Klimis of 27 September 2001, in support of his client's application for a stay. 2 Mr Sawan's affidavit asserts that on 21 September 2001 Mr Carter of Red Bull came to see him at his store at St Leonards. Mr Sawan's affidavit records that on that occasion, at Mr Carter's suggestion, they agreed to fabricate a story: "This is what we'll say happened. We'll say that when John Klimis came to see you he told you that Red Bull paid off the judge and that he offered to sell you LiveWire cans cheaply, but you weren't to tell anyone that John sold them to you". 3 According to the affidavit, if Mr Sawan agreed to join in the fabrication it would get Mr Carter a promotion in Red Bull. If Mr Sawan helped Mr Carter, Mr Carter could "fix it" so that Mr Sawan would get free Red Bull products. 4 Mr Catterns QC, counsel for Red Bull, objects to the admission of this evidence on the ground that it is irrelevant. He calls in aid s 56 of the Evidence Act 1995 (Cth) and submits that I should determine the issue of admissibility at the threshold, if only because it will have a significant impact on the conduct of the application. I think that I should accede to that submission, and that I should determine the issue of relevance at the outset. 5 In my view, the affidavit material is not relevant, essentially for two reasons. First, if Mr Carter engaged in the conduct complained of, his actions would be dishonest and in fraud of Red Bull. This is because the explanation for the conspiratorial arrangement is the benefits that accrue to Mr Carter and Mr Sawan at the expense of Red Bull by the making of the arrangement. This is sufficient to establish that the conduct in question, if it occurred, is undertaken in fraud of the principal, and therefore not conduct undertaken on behalf of the principal. 6 Second, even if the conduct were that of Red Bull, it is conduct which has occurred after the granting of the injunction. Even if it be assumed that the object of the conduct was to manufacture a case of contempt, that does not provide a basis for dissolving the injunctions granted by Conti J, nor does it provide a basis for staying those injunctions. If Mr Carter and Red Bull engaged in the conduct in question then they could be proceeded against for contempt, but the granting of the injunction was entirely unaffected by the conduct of which Sydneywide complains. 7 I therefore reject the two affidavits on the grounds that they are not relevant to the stay application. I do so on the basis of an assumption that what Mr Sawan says is the truth, but without making any finding on the matter. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Hely. Associate: Dated: 12 December 2001 Counsel for the Applicant: D K Catterns QC R Cobden Solicitor for the Applicant: Baker & McKenzie Counsel for the Respondent: A B S Franklin Solicitor for the Respondent: Griffith Hack Date of Hearing: 5 December 2001 Date of Judgment: 5 December 2001