Federal Court Rejects Fast Track Request for Commercial Transaction Suit

FEDERAL [COMPANY] v [COMPANY] [2010] FCA 1149 Citation: [COMPANY] v [COMPANY] [2010] FCA 1149

Parties: [COMPANY] [PHONE] v [COMPANY] [PHONE] and [NAME] number: WAD 207 of 2010

Judge: MCKERRACHER J

Date of judgment: 22 October 2010

Catchwords: PRACTICE AND PROCEDURE – whether matter should be admitted to [NAME] – where matter can be conducted expeditiously in the ordinary list

Cases cited: [COMPANY] v [COMPANY] [2010] FCA 683

Date of last submissions: 22 September 2010

Place: Perth

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 24

Solicitor for the Applicant: [redacted]

Solicitor for the Respondents: [redacted]

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION WAD 207 of 2010

BETWEEN: [COMPANY] [PHONE]

Applicant

AND: [COMPANY] [PHONE]

First Respondent

[NAME] Respondent

JUDGE: MCKERRACHER J

DATE OF ORDER: 22 OCTOBER 2010

WHERE MADE: PERTH

THE COURT ORDERS THAT:

1. The proceeding not be conducted in accordance with the [NAME]. 2. The costs of the application to admit the matter to the [NAME] be in the cause.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION WAD 207 of 2010

BETWEEN: [COMPANY] [PHONE]

Applicant

AND: [COMPANY] [PHONE]

First Respondent

[NAME] Respondent

JUDGE: MCKERRACHER J

DATE: 22 October 2010

PLACE: PERTH

REASONS FOR JUDGMENT

INTRODUCTION 1 The applicant ([NAME]) seeks an order pursuant to para 2.1(c) of the [NAME] that the proceeding be conducted in accordance with the Fast Track Direction. Such an order is opposed by the respondents. 2 This is a relatively simple proceeding in which [NAME] and the first respondent ([NAME]) are alleged to have entered into a dealership agreement (the Agreement) in October 2008. The second respondent ([NAME]) is and was the managing director of [NAME]. 3 A statement of claim has been filed and served. It contends that under the Agreement, [NAME] agreed to maintain a retail outlet for the display of marine craft and associated goods manufactured by [NAME]. 4 On 23 February 2010, [NAME] purported to terminate the Agreement. 5 [NAME] complains that the conduct of [NAME] breached the Franchising Code of Conduct (Cth) (Franchising Code) scheduled to the Trade Practice (Industries Codes-Franchising) Regulations 1998 (Cth) (Franchising Regulations) made pursuant to the Trade Practices Act 1974 (Cth) (see [COMPANY] v [COMPANY] [2010] FCA 683 per Logan J) by: * Failing to maintain a disclosure document contrary to reg 6; * Failing to give [NAME] a disclosure document contrary to reg 6B; * Failing to provide [NAME] with documents set out in reg 10 before [NAME] entered into the Agreement; * Failing to obtain written statements referred to in reg 11 from [NAME]; and * Failing to provide [NAME] with an annual financial statement detailing marketing funds, receipts and expenses contrary to reg 17. 6 In addition, [NAME] complains that the purported termination was in contravention of reg 22 of the Franchising Code. 7 As a result of the alleged breaches, [NAME] contends that it suffered loss in incurring expenses associated with entering into the Agreement and also claims loss comprised of the current value of floor stock, loss of profit from sales over five years and loss of profit from services over five years. 8 [NAME] also contends that [NAME] has repudiated the Agreement resulting in substantial loss and damage.

The competing arguments 9 The unusual feature of this application for admission to the [NAME] is that the proceeding has been on foot for some time. The commencement date being 29 July 2010. 10 The [NAME] are intended (by 2.1(a)) to apply to a new proceeding that arises out of or relates to, amongst other things, commercial transactions. It may also apply to an existing proceeding of that type providing that the parties have agreed that the proceeding should be conducted in accordance with the [NAME]. The opposite is the position here. 11 Nevertheless, it is open for a judge, either on his or her own motion or at the request of a party, to order that the proceeding be conducted in accordance with the [NAME] (Pt 2.1(c)) (just as it is open for the judge to remove a matter from the [NAME]). 12 In addition, in this matter, [NAME] has filed a statement of claim. It sought entry into the [NAME] in mid-September. 13 The basis of the application of [NAME] for entry to the [NAME] is that the dispute related to a commercial transaction. The trial in the estimate of [NAME] would take three days. 14 The respondents oppose entry into the [NAME] on the basis that the claim and statement of claim originally filed on 29 July 2010 (and apparently not served until 3 September 2010) was at all times intended to be pursued in accordance with the ordinary Rules of the Court. 15 There is no special need for the matter to be entered into a [NAME] in the contention of the respondents. The Rules of the Court are appropriate for the proper conduct of a matter insofar as there is a need for further and better particulars of the claim by [NAME], disclosure of documents relevant to both causation and damages, alternate dispute resolution and preparation for trial. The respondents contend that the issues in dispute between the parties both legal and factual are best served in having the matter progress in accordance with the ordinary Rules and timeframes of the Court. It was submitted that the timeframe specified under the [NAME] were not appropriate for the conduct of the matter having regard to the proximity of the respondents and their legal representatives to the Western Australia District Registry (in this regard, the legal representatives for the respondents carried on business in Brisbane and the respondent themselves carried on business and lived respectively in Victoria). The solicitors for [NAME] are also Brisbane based but it is anticipated that the witnesses in relation to the events in dispute will be Western Australia based. Finally, the respondents contend that certain insurance issues that arise for the respondents need to be considered and resolved prior to the matter progressing either to alternative dispute resolution and/or trial. 16 [NAME] contends that the fact that the proceedings were commenced by filing an application and statement of claim does not mean that it is not appropriate for the proceeding to be conducted in accordance with the [NAME] as para 2.1(b) and (c) of the Directions specifically contemplate a proceeding being so conducted even if it was not commenced as such. In this regard, however, I note that 2.1(b) applies only in circumstances where the parties agree. There is no limit in relation to (c) but, of course, a judge would need to be satisfied that it was in the interests of justice for the matter to be added to the [NAME] and, indeed, that it was preferable that it be in that list rather than in the general list. 17 As to the remainder of the matters, [NAME] submitted, in large measure, correctly, that a Fast Track Statement will still be required to be properly particularised; that any concerns of the respondents as to disclosure are adequately addressed by Pt 7 of the Fast Track Direction; that parties can participate in assisted dispute resolution (ADR) processes even if the proceedings are being conducted in accordance with the [NAME] or Directions; that the [NAME] provide sufficient times for parties to prepare for trial; the location of the parties and their legal representatives is not relevant to the suitability or otherwise of a proceeding to be conducted in accordance with the [NAME]; and the insurance issues of the respondents should have no impact on the suitability of the proceeding being conducted in accordance with the [NAME].

CONSIDERATION 18 The arguments are finely balanced. It is possible to provide an early trial date and a judgement within a timeframe similar to that contemplated by the [NAME]. The matter is one of relative simplicity and directions can be fashioned to expedite the entry to trial. It is not clear that there is a particularly good reason why an applicant, having commenced in the ordinary list, ought be permitted against opposition, to pursue a proceeding in the [NAME]. Further, I am conscious that the respondents have contended for directions which are on a reasonably tight timeframe, in any event. Having regard to the relative simplicity of the matter, this seems appropriate. Those directions would support a perception that a trial within a timeframe contemplated under the [NAME] in any event will be provided to the parties.

In all the circumstances, it does not seem to me that this particular matter would necessarily benefit from admission into the [NAME]. That does not mean that the procedure between now and trial should not take advantage of some of the flexibility and innovation contained within the [NAME]. A balance is appropriate. 19 The proceeding will not, therefore, be admitted to the [NAME] but I direct that the respondents file and serve an amended minute of directions. The minute should, if possible, be the subject of consent by the applicant. The matter should be programmed through to completion of all matters to enable trial either prior to Christmas or in February 2011 including a pre-trial conference. 20 If a consent minute cannot be reached, I will settle the directions at a case management conference to be conducted at a date mutually convenient to the parties but within 14 days from the date of publication of these reasons. 21 I would expect at that case management conference to be able to fix a trial date and to settle the basis of discovery and to explore ADR prospects. 22 In adopting these measures, I have endeavoured to reflect some of the objectives of the [NAME] while at the same time acknowledging the respondents' objection to entry into the [NAME]. 23 Although the entry into the [NAME] has not at this point been made, that course remains open as a possibility. In any event, I do not consider that the applicant has suffered a loss as such in its application.

Accordingly, the appropriate costs disposition, in my view, will be costs to be in the cause. 24 The following orders will be made:

1. The proceeding not be conducted in accordance with the [NAME].

2. The costs of the application to admit the matter to the [NAME] be in the cause. * I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.

Associate: Dated: 22 October 2010