Bevans Illawarra Pty Ltd v Carlindi Pty Ltd [2005] FCA 60

FEDERAL COURT OF AUSTRALIA

Bevans Illawarra Pty Ltd v Carlindi Pty Ltd [2005] FCA 60 BEVANS ILLAWARRA PTY LTD v CARLINDI PTY LTD AND OTHERS NSD 1910 of 2004 ALLSOP J 9 FEBRUARY 2005 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 1910 of 2004

BETWEEN: BEVANS ILLAWARRA PTY LTD

APPLICANT

AND: CARLINIDI PTY LIMITED

FIRST RESPONDENT

MARNIE DEL BEAUCHAMP

SECOND RESPONDENT

STEVEN LEIGH BEAUCHAMP

THIRD RESPONDENT

PROPERTY IMAGES PTY LTD T/AS RAY WHITE REAL ESTATE KIAMA

FOURTH RESPONDENT

JUDGE: ALLSOP J

DATE OF ORDER: 9 FEBRUARY 2005

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The notice of motion brought by the first and second respondents and filed in court on 8 February 2005 be dismissed.

2. The question of the costs of the second day of the hearing of the motion be reserved.

3. Subject to the determination of the question of costs of the second day of the hearing of the motion, the question of costs of the applicant to the proceedings (being the respondent to the first an d second respondents' motion) be reserved.

4. There be no order as to the costs of the first and second respondents being the applicant to the motion.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 1910 of 2004

BETWEEN: BEVANS ILLAWARRA PTY LTD

APPLICANT

AND: CARLINIDI PTY LIMITED

FIRST RESPONDENT

MARNIE DEL BEAUCHAMP

SECOND RESPONDENT

STEVEN LEIGH BEAUCHAMP

THIRD RESPONDENT

PROPERTY IMAGES PTY LTD T/AS RAY WHITE REAL ESTATE KIAMA

FOURTH RESPONDENT

JUDGE: ALLSOP J

DATE: 9 FEBRUARY 2005

PLACE: SYDNEY

REASONS FOR JUDGMENT 1 In this matter, orders were made on 22 December 2004 by Jacobson J. Those orders had been agreed between the parties after his Honour urged that they undertake a course to resolve their disputes of an interlocutory nature. The dispute concerns allegations made by the applicant for various alleged breaches of a franchise agreement and various breaches of the Trade Practices Act 1974 (Cth), concerning the undertaking of the real estate agency in the town of Kiama on the South Coast. Briefly and only superficially, it can be said that the applicant and the first and second respondents most recently and relevantly had an agreement in relation to the conduct of the real estate agency in Kiama as, what might be termed a Bevans Real Estate Agency . 2 Late last year, the business was, in effect, sold by the first and second respondents to the fourth respondent which is a company that intends to carry on a business from the premises in question as a Ray White Real Estate Agency. Both Bevans and Ray White are real estate agencies that are carried on in that general area of New South Wales. It is unnecessary to go into the detail of the assertions and counter-assertions made in the evidence thus far and in the statement of claim, which has been filed. I have made detailed orders for the preparation of this case to commence on 21 March of this year as an expedited final hearing. 3 The orders made on 22 December were a composite. Part of that composite was the abandonment by the applicant of its motion for interlocutory relief. It may be as Mr Watts indicated, that Jacobson J had some views as to the likely success of that application, particularly in the light of the fact that the sale had been completed the day before the matter came before his Honour on 22 December 2004 on a contested basis. On 20 December 2004, on behalf of the applicant, Mr King had made an application ex parte for short service. 4 Mr Watts, on behalf of the first and second respondents, moves the Court by notice of motion filed in court yesterday that order number 3 be varied, vacated or set aside so as to permit the second respondent to undertake employment with the fourth respondent. 5 I should at this point interpose that the third respondent, the former partner of the second respondent, is a guarantor. He has taken no part in these proceedings to date although orders are sought against him and I have indicated to Mr King that it is important that Steven Leigh Beauchamp, be given unequivocal notice of the potential monetary impact upon his affairs of the proceedings so that he should not be left in any doubt that these proceedings concern him. 6 In effect, as I would understand the evidence, and if I am wrong about this it is of no real consequence to today's application, Ms Beauchamp, the second respondent through the first respondent, Carlindi, ran the real estate agency latterly in 2004 and having sold the business to the fourth respondent, now wishes to work there under the Ray White banner. Significant issues are alleged in the statement of claim about the proper understanding and construction of the franchise agreement and relationship and a real issue for trial will be the impairment to the goodwill of the applicant. 7 This judgment should not be taken in any way as reflecting in the slightest upon the merits of the case. 8 In the interests of both parties and in the interests of saving time of the Court, the purpose of the orders on 22 December was bilaterally to resolve the issues for another day. The solicitor for the first and second respondents, Mr Sherley, had the view that the undertaking in order 3 was only, in effect, up to the next directions hearing in early February 2005. With respect to Mr Sherley, that is not reflected by the terms of the orders. The orders were until further order or agreement and there was a notation of course, as one would expect in cases such as this, that the orders and undertakings by the first and second respondents were made without admission or prejudice to their position in the applications for interlocutory relief and the proceedings generally. Such cautionary qualifications are only to be expected perfectly properly in matters such as this. It does not provide a ground with respect to the view that the undertaking was only up until February. Nevertheless, I accept Mr Sherley's evidence without qualification and I do not criticise him for what appears to have been to me a view of the matter not entirely in conformity with the documentation. Everyone's experience with dealing with urgent interlocutory matters in the heat of the moment with a client on the phone can lead in the best practitioners to views as to the meaning of orders which are not, with the benefit of hindsight, entirely in conformity with what is written and not in conformity with what the other side thinks. 9 While I accept that Mr Sherley had that view and communicated it to the second respondent, the fact is the interlocutory proceedings were resolved. It seems to me that it is therefore difficult in these sorts of cases to unravel only part of a fabric of arrangement that was reached to dispose of an interlocutory matter. Nevertheless, I accept Mr Watts' submission that, what I think is, if not a mistake then the misunderstanding certainly, appropriately opens up the question as to whether the orders though entered, should not be varied pursuant to their own terms, that is until further order. In my view, they should not be. 10 This appears to be likely to be if not resolved, unfortunately perhaps to a degree, a hard fought matter in which personal animosity is involved. While directed partly to Mr Soeterboek, who is in Court, I would urge all parties, to recognise that whatever personal considerations may have intruded to date, the use of the court system provided as an arm of government at public expense and the best use of their own time and money should only take place for what might be termed reasonable commercial reasons. The Court is not the place for the playing out of personal emotions. 11 The case is coming on for hearing in March 2005. I have given it an expedited date because I think it is a matter which should be dealt with expeditiously and resolved once and for all. My views as to varying order 3 might be different if an extended period of time were to elapse before the case came on for hearing. 12 The second respondent gave evidence, as did Mr Sherley, by affidavit. The only evidence of hardship referred to is in Mr Sherley's affidavit, which, if I may say respectfully, is fairly general in its terms. I have not been assisted by any particular evidence of hardship from the second respondent. I am not persuaded that in all the circumstances, the framework reached to resolve a contested interlocutory motion should be upset by reason of any variation and I am not persuaded that the circumstances of the second respondent demand that course to be taken in the interests of justice. 13 There is a public policy question involved. Orders are made and if by consent, generally speaking they should be adhered to, in particular, undertakings to the Court the seriousness of which I think is recognised by all parties in these proceedings. In circumstances where the applicant abandoned its application for interlocutory relief in circumstances where it is now almost impossible to revive that application, I do not think it appropriate to vary the undertaking. It is said that damages are an adequate remedy. I am not persuaded of that. In circumstances where the issue is the damage to the goodwill of a rival brand, if I may use that expression, the keen and diligent working of a person who, I will assume to be a skilled and knowledgeable local participant, is not necessarily particularly easy to ascertain. 14 The reverse of that is that both the first and second respondents have an undertaking as to damages. To the extent that it would be identifiable what work or services are likely to have been undertaken, it will be a relatively straightforward matter, should the applicant lose, to have the damages from that undertaking quantified. 15 It is put that the clause in the franchise agreement, that is, clause 7.3(c) is not in a form to support the undertaking. For the purposes of this judgment, I can readily accept all of Mr Watts' arguments about that matter, but to go into that requires me to unravel what the parties did in December 2004 and I am not prepared to do that. 16 There was some discussion yesterday, though it has not been put in address, but I think it is appropriate that I deal with it, that the mistake of Mr Sherley as to the meaning and purport of paragraph 3 in some fashion can be sheeted home to the legal representatives of the applicant by, I think the suggestion was, the dismissal of the interlocutory relief being a matter propounded late and surprisingly by the applicant's legal representatives. I do not see how this really touches the matter. Mr Sherley may have believed and Mr Watts may have believed, they being persons to appear on behalf of the first and second respondents, that the interlocutory relief was going to be re-agitated before me as the docket Judge in February 2005. 17 That may, I understand, have given some further strength to the view Mr Sherley had of order 3, but I really do not think that any suggestion can be made that any conduct of the applicant or its advisers has led to any misunderstanding. 18 In those circumstances, and because of the importance of not re-opening interlocutory hearings when it is too late and because in my view there are insufficient grounds upon which I could conclude that the interests of justice demanded a change because of hardship, I do not propose to vary the undertaking to the Court in any way. 19 Should the matter not proceed for any reason on 21 March 2005, an eventuality which I do not foresee, the second respondent should not assume that if the case went off for some reason into the future that her position in relation to working may not be open to revision on other evidence. 20 For those reasons, I dismiss the notice of motion brought by the first and second respondents filed in Court on 8 February 2005. 21 The question of costs has been debated. My first inclination is to simply order costs to follow the usual event, that is, the first and second respondents as applicants to the motion to pay the costs. However, I do not propose to do that for the following reasons. To a degree I want to understand the case somewhat better before I finally deal with costs. Secondly, there is an issue about the second day which may confuse matters if I make orders of that kind today. Thirdly, given the fact that I am going to hear the case on an urgent basis, it is unlikely that orders that I make today in favour of anyone will be ultimately of importance prior to the resolution of the case. 22 Therefore, the course that I propose to adopt, hopefully without causing any additional costs in the future by confusion, is the following. I reserve the question of costs of the second day of the motion and I reserve the costs of the applicant to the proceedings, the respondent to the motion to the hearing. Subject to the second day of the hearing I propose to make no order as to costs as to the costs of the first and second respondents being the applicants to the motion.