FEDERAL COURT OF AUSTRALIA Gibson v Swan Hardware & Staff Pty Ltd [2015] FCA 387 Citation: Gibson v Swan Hardware & Staff Pty Ltd [2015] FCA 387 Parties: PETER GIBSON and PETER GIBSON DEVELOPMENTS PTY LTD v SWAN HARDWARE & STAFF PTY LTD (ACN 005 273 165) File number: VID 385 of 2014 Judge: MURPHY J Date of judgment: 23 April 2015 Legislation: Trade Practices Act 1974 (Cth) Date of hearing: 23 April 2015 Place: Melbourne Division: GENERAL DIVISION Category: No Catchwords Number of paragraphs: 11 Counsel for the Applicants: The Applicants did not appear Counsel for the Respondent: Mr P Wallis Solicitor for the Respondent: Norris Coates IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 385 of 2014 BETWEEN: PETER GIBSON First Applicant PETER GIBSON DEVELOPMENTS PTY LTD Second Applicant AND: SWAN HARDWARE & STAFF PTY LTD (ACN 005 273 165) Respondent JUDGE: MURPHY J DATE OF ORDER: 23 APRIL 2015 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Pursuant to r 20.23(1) of the Federal Court Rules 2011 (Cth), Shinda International Pty Limited ACN 074 452 207 of Unit 7, 9-11 Mavis Street, Revesby NSW 2212 ("Shinda") by its proper officer make discovery of the documents and categories of documents listed in Annexure A to these orders as follows: (a) Shinda to file a list of documents, in accordance with r 20.17 by 14 May 2015; and (b) Shinda to make available for inspection at the offices of its lawyers, Chapman Thackeray Law, Level 6, 89 York Street, Sydney NSW 2000, those documents included in Shinda's list of documents that are within Shinda's control, by 21 May 2015. 2. The Respondent pay: (a) the reasonable costs incurred by Shinda in respect to searching for, identifying, reviewing and extracting the documents to be disclosed and produced by Shinda to the Respondent pursuant to the terms of these orders; and (b) the reasonable legal costs of Shinda in considering and responding to the application for non-party discovery, including preparation of any lists of documents in respect to the non-party discovery to be made pursuant to these orders and any reasonable costs in respect to any hearings or court appearances, on the application. 3. The costs of the application of this order as between the Applicants and the Respondent be costs in the cause. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. Annexure A 1. Documents recording or referring to the negotiations between Shinda and Panyu Shiqiao Products Co Ltd ("Panyu") for Shinda to accept and process orders from Australian hardware suppliers for products manufactured by Panyu. 2. Documents recording or referring to the terms and conditions agreed between Shinda and Panyu for Shinda to accept and process orders from Australian hardware suppliers for products manufactured by Panyu. 3. All correspondence between Shinda and Panyu in relation to Shinda having accepted and processed orders from Australian hardware suppliers for products manufactured by Panyu between January 2006 and April 2008. 4. Documents recording or referring to the transfer of funds between Panyu and Shinda relating to Shinda having accepted and processed orders from Australian hardware suppliers for products manufactured by Panyu between January 2006 and April 2008. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY GENERAL DIVISION VID 385 of 2014 BETWEEN: PETER GIBSON First Applicant PETER GIBSON DEVELOPMENTS PTY LTD Second Applicant AND: SWAN HARDWARE & STAFF PTY LTD (ACN 005 273 165) Respondent JUDGE: MURPHY J DATE: 23 APRIL 2015 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 In this proceeding the respondent, Swan Hardware & Staff Pty Ltd ("Swan Hardware"), seeks an order by way of interlocutory application filed 7 April 2015 that a non-party to the proceeding, Shinda International Pty Ltd ("Shinda"), make discovery of certain documents pursuant to r 20.23(1) of the Federal Court Rules 2011 (Cth) ("the Rules"). 2 In the substantive proceeding the applicants Peter Gibson and his company, Peter Gibson Developments Pty Ltd, claim loss and damage alleged to have been suffered to their premises in July 2011 when black plastic water pipe bearing the trademark "Pex Plus" ("Pex Plus Pipe"), which had been supplied by Swan Hardware to a plumber for installation at the applicants' premises, spontaneously ruptured which resulted in water escaping and flowing into and through the premises. 3 It is common ground between the applicants and Swan Hardware that a Chinese company, Panyu Shiqiao Products Co Ltd ("Panyu"), is the manufacturer of the Pex Plus Pipe. The applicants allege that Panyu did not have a place of business in Australia and that Swan imported the Pex Plus Pipe into Australia. They allege that Swan Hardware is therefore deemed to have manufactured the Pex Plus Pipe pursuant to ss 74A(4) and 75AB of the Trade Practices Act 1974 (Cth) ("TPA") with the ultimate result that Swan Hardware is liable to the applicants for the alleged loss following from contraventions of ss 74B, 74D, 75AF and 75AG of the TPA. 4 Swan Hardware denies that Panyu did not have a place of business in Australia and denies that Swan Hardware imported the Pex Plus Pipe into Australia. It put on evidence through its solicitor, Christian Viti, that Swan Hardware purchased Pex Plus Pipe through Shinda, that it had no direct dealings with Panyu, and argues that Shinda was acting as Panyu's agent in Australia. It argues that Shinda's premises in Revesby, New South Wales are Panyu's place of business in Australia within the meaning of s 74A(4) of the TPA. 5 Rule 20.23(1) allows a party to a proceeding to apply for an order that a non-party make discovery of documents in the non-party's control that are "directly relevant to an issue raised on the pleadings". 6 Swan Hardware seeks orders that Shinda discover the following categories of documents, relevant to its allegation that Shinda was acting as Panyu's agent in Australia, and that Shinda's premises in Revesby, New South Wales are Panyu's place of business in Australia: 1. Documents recording or referring to the negotiations between Shinda and Panyu Shiqiao Products Co Ltd ("Panyu") for Shinda to accept and process orders from Australian hardware suppliers for products manufactured by Panyu. 2. Documents recording or referring to the terms and conditions agreed between Shinda and Panyu for Shinda to accept and process orders from Australian hardware suppliers for products manufactured by Panyu. 3. All correspondence between Shinda and Panyu in relation to Shinda having accepted and processed orders from Australian hardware suppliers for products manufactured by Panyu between January 2006 and April 2008. 4. Documents recording or referring to the transfer of funds between Panyu and Shinda relating to Shinda having accepted and processed orders from Australian hardware suppliers for products manufactured by Panyu between January 2006 and April 2008. 7 The application and the supporting affidavit of Mr Viti were served on Shinda but for reasons of cost Shinda elected not to appear at the hearing. However, at Shinda's request, Swan Hardware tendered a letter by Shinda's solicitors, Chapman Thackeray Law, in which Shinda accepted the categories but sought to limit them by restricting: (a) the dates of the documents in the first and second categories to the period between January 2006 and April 2008; and (b) the products referred to or recorded in the documents to Pex pipe products. 8 I accept Swan Hardware's submissions that Shinda's proposed limitations are inappropriate. 9 First, Swan Hardware is not aware as to when the negotiations for Shinda to accept and process orders on behalf of Panyu took place and there is some evidence that the negotiations may have taken place before January 2006. Nor did Shinda put on any evidence or submissions to show that it was unduly burdensome for Shinda to discover documents responding to the categories without the date restriction sought. 10 Secondly, in respect of the proposed limitation to Pex Plus Pipes, the question as to whether Shinda was acting as Panyu's agent and whether Shinda's office is Panyu's place of business in Australia, is likely to be determined by reference to Shinda's accepting and processing orders for all Panyu products rather than Pex Plus Pipes alone. Again, Shinda did not put on evidence or submissions to show that it was unduly burdensome for Shinda to discover documents in relation to all Panyu products rather than Pex pipes. 11 I have made the attached discovery orders which are in the terms proposed by Swan Hardware, including orders in relation to the costs of Shinda's discovery in the terms proposed by Swan Hardware. Orders in those terms are preferable to the orders proposed in the letter from Shinda's solicitors. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Murphy. Associate: Dated: 23 April 2015