FEDERAL COURT OF AUSTRALIA Australian Competition & Consumer Commission v Oceana Commercial Pty Ltd [2002] FCA 1309 PROCEDURE – whether paragraph in application pre-empting claim for compensation ought to be struck out – whether ACCC gave notice of intention to make compensation claim without applying for claim in same proceeding – whether specification of relief sought ought to be limited to that claimed in the proceedings - whether findings of fact and law precondition to compensation claim. PROCEDURE – whether cross claims ought to be struck out – whether leave ought to be granted for fourth respondent to discontinue cross claim – whether respondents ever had basis for indemnity or contribution. COSTS – whether applicant ought to pay costs associated with dismissal of cross-claims – whether cross claims always liable to be dismissed – whether respondents ought to have appreciated that the reference to a claim for compensation was a notification and not a claim. Statutes The Law Reform Act 1995 (Qld) Trade Practices Act 1974 (Cth) s 87, 82 Cases Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1998) 84 FCR 512 Cited Australian Competition and Consumer Commission v The Shell Company of Australia Limited (1997) 72 FLR 384 Cited Burke v LFOT Pty Limited (2002) 187 ALR 612 Cited Trade Practices Commission v Frendship[sic] Aloe Vera Pty Ltd (1988) ATPR 40-892 Cited AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v OCEANA COMMERCIAL PTY LTD, MARKFAIR PTY LTD, ADVANCED COMMERCIAL DEVELOPMENTS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA, CHRISTOPHER RUSSELL BILBOROUGH, DUDLEY JAMES QUINLIVAN, SHANE ANDREWS, MICHAEL BYROM, PETER EGGENHUIZEN, GREGORY POINTON, DEAN CORNISH, JOHN GROUNDS, RODNEY JOHANSON and SHORT PUNCH & GREATORIX Q232 of 2002 KIEFEL J BRISBANE 25 OCTOBER 2002 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q232 OF 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: OCEANA COMMERCIAL PTY LTD (ACN 070 287 991) FIRST RESPONDENT MARKFAIR PTY LTD (ACN 065 542 671) SECOND RESPONDENT ADVANCED COMMERCIAL DEVELOPMENTS PTY LTD (ACN 076 810 672) THIRD RESPONDENT COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) FOURTH RESPONDENT CHRISTOPHER RUSSELL BILBOROUGH FIFTH RESPONDENT DUDLEY JAMES QUINLIVAN SIXTH RESPONDENT SHANE ANDREWS SEVENTH RESPONDENT MICHAEL BYROM EIGHTH RESPONDENT PETER EGGENHUIZEN NINTH RESPONDENT GREGORY POINTON TENTH RESPONDENT DEAN CORNISH ELEVENTH RESPONDENT JOHN GROUNDS TWELFTH RESPONDENT RODNEY JOHANSON THIRTEENTH RESPONDENT SHORT PUNCH & GREATORIX TENTH CROSS-RESPONDENT JUDGE: KIEFEL J DATE OF ORDER: 25 OCTOBER 2002 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. Paragraph 25 of the application be struck out. 2. The cross-claims of the first, second and fifth respondents, the third, eleventh and twelfth respondents and the sixth respondent be dismissed. 3. The fourth respondent have leave to discontinue its cross-claim. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q232 OF 2002 BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPLICANT AND: OCEANA COMMERCIAL PTY LTD (ACN 070 287 991) FIRST RESPONDENT MARKFAIR PTY LTD (ACN 065 542 671) SECOND RESPONDENT ADVANCED COMMERCIAL DEVELOPMENTS PTY LTD (ACN 076 810 672) THIRD RESPONDENT COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) FOURTH RESPONDENT CHRISTOPHER RUSSELL BILBOROUGH FIFTH RESPONDENT DUDLEY JAMES QUINLIVAN SIXTH RESPONDENT SHANE ANDREWS SEVENTH RESPONDENT MICHAEL BYROM EIGHTH RESPONDENT PETER EGGENHUIZEN NINTH RESPONDENT GREGORY POINTON TENTH RESPONDENT DEAN CORNISH ELEVENTH RESPONDENT JOHN GROUNDS TWELFTH RESPONDENT RODNEY JOHANSON THIRTEENTH RESPONDENT SHORT PUNCH & GREATORIX TENTH CROSS-RESPONDENT JUDGE: KIEFEL J DATE: 25 OCTOBER 2002 PLACE: BRISBANE REASONS FOR JUDGMENT 1 The Commonwealth Bank of Australia, the fourth respondent, seeks orders that par 25 of the application be struck out and that the cross-claims of the first, second and fifth respondents, the third, eleventh and twelfth respondents, and the sixth respondent, be dismissed and that it be given leave to discontinue its cross-claim. 2 Paragraph 25 of the application, appears under the heading "Other orders". It states: "25. Upon the making by the Court of findings of contravention, the applicant proposes to apply pursuant to s 87(1A) of the Act, for orders to compensate persons who suffered loss or damage as a result of the contraventions." 3 Prior to the amendments which took effect on 26 July 2001 (Act No 63 of 2001),s 87(1A)(1B) and (1C) of the Trade Practices Act 1974 (Cth) were in these terms: "(1A) Without limiting the generality of section 80, the Court may, on the application of a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in (whether before or after the commencement of this subsection) in contravention of a provision of Part IVA, IVB or V or on the application of the Commission in accordance with subsection (1B) on behalf of such a person or 2 or more such persons, make such order or orders as the Court thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (2)) if the Court considers that the order or orders concerned will compensate the person who made the application, or the person or any of the persons on whose behalf the application was made, in whole or in part for the loss or damage, or will prevent or reduce the loss or damage suffered, or likely to be suffered, by such a person. (1B) Where, in a proceeding instituted for an offence against section 79 or instituted by the Commission or the Minister under section 80, a person is found to have engaged (whether before or after the commencement of this subsection) in conduct in contravention of a provision of Part IVA, IVB or V, the Commission may make an application under subsection (1A) on behalf of one or more persons identified in the application who have suffered, or are likely to suffer, loss or damage by the conduct, but the Commission shall not make such an application except with the consent in writing given before the application is made by the person, or by each of the persons, on whose behalf the application is made. (1C) An application may be made under subsection (1A) in relation to a contravention of Part IVA, IVB or V notwithstanding that a proceeding has not been instituted under another provision of this Part in relation to that contravention. " 4 In Trade Practices Commission v Frendship[sic] Aloe Vera Pty Ltd (1988) ATPR 40-892, 49-630, Pincus J held that the cause of action referred to in s 87(1B), and given to persons who have suffered, or are likely to suffer, damage does not accrue until a finding of contravention is made. The findings are a statutory precondition to the making of such a claim. Drummond J in Australian Competition and Consumer Commission v The Shell Company of Australia Limited (1997) 72 FLR 384, 392accepted that construction of the subsection but held that there was no requirement that the application made by the ACCC had to be brought in a separate, and following, proceeding. It might be brought on motion in the proceeding in which the finding was made. This decision was followed by Lindgren J in Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (1998) 84 FCR 512, 526 and 529. It is in that background that the ACCC here gave notice of its intention to make a number of claims, without applying for them in the same proceeding. The reference to a finding of contravention was removed from s 87(1B) by the amendments in July 2001. 5 It seems obvious that the cross-claims in those proceedings were brought in response to the foreshadowed claims. There was certainty, on the part of the ACCC, that they would be brought provided, of course, that the findings were made. Each of the parties has acquiesced in that course, it seems to me, despite the procedural requirement referred to in the above decisions. It was no doubt considered preferable to have them determined at the same time. If they were premature, in a strict sense, a fresh application could have been made once the finding was made. 6 During the course of a recent directions hearing, concern was expressed by some of the respondents, as to whether the ACCC intended to bring compensation claims on behalf of the twenty-six other purchasers, whose evidence was relied upon by it to make out the allegation that there had been a scheme in which the respondents participated. It was confirmed that this was not intended. The position with respect to Mr and Mrs Gleeson, whose purchase is pleaded in these proceedings, was unclear. They had now been awarded compensation by the Property Agents and Motor Dealers' Tribunal in Queensland. An appeal has been brought against that decision. Whilst some purchasers' appeals have been determined theirs has not. In a letter to the respondents dated 24 September 2002, the ACCC advised that a claim by Mr and Mrs Gleeson, or one on their behalf "might" be brought. 7 The fourth respondent submits that the claims foreshadowed in par 25 can now be seen to be purely hypothetical. It might be that no claim eventuates, but the stronger ground for striking par 25 from the application, in my view, is that it does not seek relief and cannot, therefore form part of an application: see O 4 r 3(1)(a). Further, a cross-claim for contribution cannot be said to be "related to or connected with the subject of the proceeding", as O 5 r 1(2) requires, if there is no issue about compensation or orders sought in that regard (see also O 5 r 1(3)). 8 The ACCC defends the retention of the paragraph on the ground that it serves a useful purpose. The submission is made despite the fact that it cannot say whether it will bring a claim on behalf of the Gleesons. Whilst there may be some merit in giving notification of such an intention by some means, if that is all that is possible, I do not accept the submission that the rules permit such a course because they do not expressly preclude it. There are good reasons why only the relief claimed in the proceedings should be specified, not only for the purposes of those proceedings but also for any future proceedings. 9 During the hearing of this application I raised the question whether a claim for compensation might be able to be brought before a finding was made, and a two-part process obviated. It seemed to me possible to view s 87(1B) as simply providing the ACCC with standing, in the event that consent was given, to bring an application under sub-s (1A). If that was the purpose of s 87(1B) it may be considered less likely to have been intended to condition the bringing of a claim in every case to the making of a finding of contravention. The cause of action remains the person's, not the ACCC's. The time limits for the bringing of a claim could be consistent if viewed in this way. It would be necessary to read the reference to the requirement of a finding as a condition to the grant of relief. An application brought by the ACCC at the outset would be conditional upon a finding being made. An order for compensation could then be sought or "applied" for. Having said this, I accept that the words of the subsection can be read so as to condition the bringing of an application in the first place. In any event, in these proceedings the ACCC does not contend for the right to make a claim in advance of a finding. It is therefore not appropriate for me to express a concluded view upon the matter. 10 The respondents who have brought cross-claims are agreed that if par 25 is struck out the cross-claims should be dismissed. The respondents did not contend that the cross-claims for contribution towards orders for costs, which might be made in the ACCC's favour, should be maintained. Clearly such claims would be premature and unnecessary. The matter could be the subject of submissions when orders for costs are ventilated. There will be orders in those terms. 11 The other aspect of the fourth respondent's submission would seem to me to be more relevant to the question of costs. It submits that the other respondents had no basis for claims for indemnity or contribution under s 82 and s 87 of the Trade Practices Act or the relevant legislation relating to tortfeasors in Queensland (The Law Reform Act 1995 (Qld), ss 6-7). The only basis would be that identified in Burke v LFOT Pty Limited (2002) 187 ALR 612, 616, a right to contribution which has its basis in common law and equity. That would seem to be correct. Many of the orders sought could not have been made, were the cross-claims otherwise able to be brought. 12 The fourth respondent seeks orders that the ACCC pay its costs on the motion to strike out par 25 of the application and the respondents named above each pay its costs associated with seeking dismissal of their claims. I would not be minded to make the last-mentioned order. The fourth respondent itself brought cross-claims without there being a basis for it in the case pleaded. It was not necessary for it to argue that the cross-claims also sought orders which could not be made. The cross-claims were always liable to be dismissed when consideration was given to par 25 of the application. 13 The ACCC submits that the fourth respondent and the other respondents cannot lay the responsibility for the bringing of the cross-claims upon it. They ought to have appreciated that par 25 was only a notification and that it had been held that no application for compensation could be brought before the requisite finding was made. In my view par 25 was a notification and not a claim and the respondents should be taken to have understood this. 14 The first, second and fifth respondents have recently also brought a motion seeking an order with respect to par 25 of the application, orders with respect to cross-claims brought against it and orders for costs against the ACCC, on an indemnity basis. Nothing in their submission persuades me to make either orders for costs. It is not necessary to make the other orders sought. 15 Not all of the parties have fully canvassed the question of costs. I shall allow for argument against the orders I presently propose. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. Associate: Dated: 25 October 2002 Counsel for the Applicant: Mr S Couper QC and Mr K Wilson Solicitor for the Applicant: Australian Government Solicitor Solicitor for the First, Second and Fifth Respondents: Lynch & Co Counsel for the Third, Eleventh and Twelfth Respondents: Mr T Carmody SC Solicitor for the Third, Eleventh and Twelfth Respondents: Hopgood & Ganim Counsel for the Fourth Respondent: Mr J Hilton and Mr C Wilson Solicitor for the Fourth Respondent: AJ Mullumby Counsel for the Sixth Respondent: Mr A Morris QC and Mr Atkinson Solicitor for the Sixth Respondent: Quinn & Box The Seventh Respondent: In Person Solicitor for the Eighth Respondent: No Appearance Solicitor for the Ninth Respondent: No Appearance Counsel for the Tenth Respondent: Mr N Thompson Solicitor for the Tenth Respondent: Grays Lawyers Counsel for the Thirteenth Respondent and Tenth Cross-Respondent: Mr J Griffin QC with Mr C Carrigan Solicitor for the Thirteenth and Tenth Cross-Respondent Respondent: McCullough Robertson Date of Hearing: 16 October 2002 Date of Judgment: 25 October 2002