ACD Tridon Inc v Tridon Australia & Ors

Supreme Court of NSW|2003-12-19|Before: Smart AJ, Bergin J

CITATION : ACD Tridon Inc v Tridon Australia & Ors [2003] NSWSC 1230 HEARING DATE(S) : Determined on the papers JUDGMENT DATE : 19 December 2003

JUDGMENT OF : Smart AJ at 1 DECISION : Dismiss the summons for leave to enforce the award. TAPL and TNZL must pay the costs of that application. This is without prejudice to any application to enforce a later award. See also para 18.

LEGISLATION CITED : Commercial Arbitration Act 1984 Supreme Court Act 1970 CASES CITED : Practice Note 100 Ritchie 75.2 & 75.3 PARTIES : ACD Tridon Inc (ACDT) v Tridon Australia Pty Limited (TAPL), Tridon New Zealand (TNZL) and The Hon Andrew Rogers FILE NUMBER(S) : SC 50100/03 COUNSEL : (P) T G R Parker (D) M Jacobs QC & Mr Bambagiotti SOLICITORS : (P) Allens Arthur Robinson (D) Cutler Hughes & Harris

IN THE SUPREME COURT OF NEW SOUTH WALES SYDNEY REGISTRY COMMERCIAL LIST

50100/03: ACD TRIDON INC (ACDT) v TRIDON AUSTRALIA PTY LIMITED (TAPL) TRIDON NEW ZEALAND (TNZL) and THE HON ANDREW ROGERS QC

JUDGMENT

Subsequent to my delivering judgment on 5 November 2003 and the orders made that day, TAPL and TNZL sought further relief by its solicitors FAX of 11 November 2003 namely: "1. That the Partial Award of 30 June 2003 be enforced pursuant to s33 of the Commercial Arbitration Act 1984 with respect to issues 2 and 3 as identified by the Arbitrator in that Award.

That the Orders in respect of costs set out in the appeal judgment of 5 November 2003 be stated to include all costs incurred in relation to the hearings before her Honour Justice Bergin on 13 and 29 August 2003."
By its summons of 6 August 2003 TAPL and TNZL had sought "the enforcement of the Partial Award of 30 June 2003 in respect to issues 2 and 3 as identified by the Arbitrator and referred to in that Award."

On 12 November 2003 I caused a FAX to be sent to TAPL's solicitors in these terms: 1. Costs

On 28 August 2003 Justice Bergin, by consent, in chambers, made an order that the plaintiff pay all of the first and second defendant's costs of the application for security of costs up to and including 20 August 2003. That would appear to cover the costs of 13 August 2003. Is there any need for a further order on this aspect.

On 29 August 2003, there appears to have been a directions hearing during which a timetable was set for filing affidavits and submissions and a hearing date was fixed. The costs were reserved. Usually, they would follow the event.

The judge will await any submissions from the solicitors for ACD Tridon Inc before making any orders.

The Arbitrator has in essence made five declarations at the end of his Award.

The judge doubts if it would be appropriate to grant leave to enforce the award in the terms suggested by you. While the Arbitrator identified the issues for preliminary determination in para 101 of his Award the relief he granted appears at the end of his Award.

Are you only seeking leave to enforce declarations 2 and 3 (subject to the minor typographical correction in declaration 2, setting out what is stated in para 7(e)(i) to (iv) of the Defence and fleshing out the formal details so that what is written is informative to anyone reading the document)?

Again, I will await any further submissions from you and submissions from the solicitors for ACD Tridon Inc." 4. The solicitors for ACDT were advised of these FAXES and their terms. 5. About 13 November 2003 counsel for TAPL amended the relief sought and sought these orders and declarations:

"1. … the conduct referred to in paragraph 7(e)(i) to (iv) of the Defence … did not constitute a breach of the DA on the part of the Distributor.

… the purported termination of the DA by (a) notice dated 7 March 2003 (b) by the Defence dated 18 March 2003 was not effective

… the letter dated 3 July 2000 from ACDT to the Distributor under the DA was not valid or effective for the purposes of clause 9(b) of the DA.

… the Defendant as Distributor is not bound by clause 7(b) of the DA.

ACDT pay the Distributors' costs of this application to enforce the said award."

Except for paragraph 5 the relief now sought corresponds with the relief granted by the Arbitrator in paragraphs 2 to 5 at the end of his Partial Award.

At T159 of 17 October 2003 Senior Counsel for TAPL and TNZL reminded the Court of the summons for leave to enforce the award. This arose if the applications of ACDT for leave to appeal were dismissed. At that stage the relief sought was in terms of the summons of 6 August 2003. It was after my FAX of 12 November 2003 that I was advised that the relief sought was refined.

The originating summons seeking an order under s.42 of the Commercial Arbitration Act 1984 was filed on 28 July 2003, entered in the Commercial List and made returnable on 8 August 2003.

On 8 August 2003 TAPL and TNZL filed a motion seeking security for costs. By arrangement the matter came before Bergin J on 13 August 2003. On that day she made these orders: 1. The defendants' Motion for security for costs filed on 8 August 2003 is listed for hearing at 2.00pm on 29 August 2003;

I direct the defendants to file and serve any affidavit evidence in support of that application by 15 August 2003;

I direct the plaintiff to file and serve any evidence in response by 25 August 2003;

The defendant is to file and serve any evidence in response by noon on 28 August 2003;

The parties are to exchange submissions and file them with my Associate by 4.00pm on 28 August 2003 by facsimile on 9230 8836;

The matter is adjourned generally to 2.00pm on 29 August 2003."

An order was made on 28 August 2003, by consent, by Bergin J that the plaintiff (ACDT) pay all of the first and second defendants' costs of the application for security of costs up to and including 20 August 2003.

On 21 August 2003 TAPL and TNZL filed a motion returnable on 29 August 2003 seeking an expedited hearing of the summons of 28 July 2003.

On 28 August 2003 TAPL and TNZL lodged detailed submissions extending over 7 pages in support of their expedition application.

On 29 August 2003 Bergin J made these orders: "1. The plaintiffs are to file their evidence by 26 September 2003; 2. Any evidence in reply is to be filed by 8 October 2003; 3. All submissions in relation to both parties' cases are to be filed with my Associate by 13 October 2003; 4. The matter is listed for hearing on 15 and 16 October 2003; 5. I grant liberty to restore the matter to the List on one days' notice; 6. The costs of today are reserved."
On 13 August 2003 the Court and the parties were concerned with the issue of security for costs. The costs order already made as to the application for security costs will cover the costs of TAPL and TNZL of their appearance on 13 August 2003.

The reserved costs of 29 August 2003 follow the event: Ritchie, 52A.11.6 and are payable by ACDT.

I would not include in the reserved costs, the costs of the application for an expedited hearing. Such an application was unnecessary. As envisaged by Practice Note 100 the originating summons came on for a directions hearing at an early date. The necessary preparatory directions were given once the issue of security for costs was resolved and that was resolved promptly and by consent. It is the practice in the Commercial List to allot early hearing dates for applications under ss.42 and 38 of the Commercial Arbitration Act, 1984. This happened in the present case. Hearing dates are dealt with at directions hearings. No surprisingly, the judge made no order for expedition but in accordance with the usual practice fixed early hearing dates.

A party seeking an expedited hearing seeks an indulgence. The motion for an expedited hearing has not materially increased the costs of ACDT. It had to appear at the directions hearing and participate in the fixing of a timetable and hearing dates.

It will be sufficient for me to order that the costs reserved on 29 August 2003, including the costs of the directions hearing and the preparation therefor are to be paid by ACDT, but that such costs do not include the costs of the application for expedition as to which no order is made. I so order.

Section 33 of the Commercial Arbitration Act 1984 reads: "An award made under an arbitration agreement may, by leave of the Court, be enforced in the same manner as a judgment or order of the Court to the same effect, and where leave is so given, judgment may be entered in terms of the award." 20. ACDT contended that under s.33 judgment may only be entered in terms of the award if the award is capable of being enforced in the same manner as a judgment of the Court. ACDT submitted that the Partial Award was in the nature of a declaration and that such an award could not be the subject of "enforcement", a process which involves the making of an order which is backed by the coercive powers of the Court such as the entry of judgment or (perhaps) the grant of an injunction.

ACDT submitted that TAPL and TNZL were seeking to have the determinations made by the Arbitrator enrolled as a formal declaration of the Court.

I would not hold that declarations made by Arbitrators would never be enforced by an order of the Court. Section 75 of the Supreme Court Act 1970 provides: "No proceedings will be open to objection on the ground that a merely declaratory judgment or order is sought thereby and the Court may make binding declarations of right whether any consequential relief is or could be claimed or not." Ritchie at 75.2 and 75.3 (pp1142-1143) gives many examples of when declarations should be made and when they should be refused. Section 75, is read in conjunction with s.63 of the Supreme Court Act which provides: "63. The Court shall grant, either absolutely or on terms, all such remedies as any party may appear to be entitled to in respect of any legal or equitable claim brought forward in the proceedings so that, as far as possible, all matters in controversy between the parties may be completely and finally determined, and all multiplicity of legal proceedings concerning any of those matters avoided."
It is possible to envisage cases where one or more declarations may finally resolve the disputes between the parties and their rights, for example, that an agreement between the parties has been lawfully rescinded and that neither party is entitled to claim damages or seek any remedy against the other.

The Declarations made by the Arbitrator resolve important intermediate issues between the parties and set the course for the remainder of the Arbitration. There is some distance to travel and probably a considerable volume of evidence to be taken. Damages have yet to be considered and, possibly, assessed. This will involve reflecting upon a significant number of contingencies. The term of the Distribution Agreement was 99 years from 1988.

Declarations 2 and 3 relate to the issues of whether there had been a reach of the Agreement because of the trademark applications of TAPL and TNZL and whether ACDT was entitled to terminate the Distribution Agreement on that account. Those issues having been resolved they are unlikely to arise again or have any ongoing effect.

As to Declaration 4 the requisite period of notice had not been given. There was the further issue whether ACDT was entitled to withdraw all products from the Second Schedule of the Distribution Agreement. The Arbitrator's decision does not preclude a further notice being given but it would have to be in somewhat different terms from the one previously given. That is an issue for another day. While Declaration 4 resolves a present issue it does no more.

Declaration 5 depends upon the term implied into the Distribution Agreement and to which the covenant in clause 7(b) is subject. While Declaration 5 is adequate for the purpose of the Arbitration and when read in the light of the award, the Court would not make a declaration in that bald form.

At the present time there does not seem to be sufficient utility in the Court making Declarations in terms of paragraphs 2 to 5 at the end of the Partial Award. However, depending on the terms of a later award or the final award, that position could change.

I dismiss the summons for leave to enforce the award. TAPL and TNZL must pay the costs of that application. This is without prejudice to any application to enforce a later award.

Last Modified: 12/23/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

At a glance

Court

Decision date

Before

Source

Judgment (47 paragraphs)

Parties