Australian Competition and Consumer Commission v INFO4PC.com Pty Ltd

REASONS FOR JUDGMENT 1 The second respondent brings a notice of motion dated and filed on 8 July 2005 in which he seeks the Court to make the following orders: 1. an order in accordance with O 6 r 9(a) of the Federal Court Rules ('FCR') removing him from the present proceedings on the grounds of improper joinder; 2. an order against the applicant for contempt on the grounds set out in the second respondent's statement of charge dated and filed on 8 July 2005; and 3. an order striking out the applicant's bill of costs. 2 The second respondent's notice of motion must be considered in the context of matters dealt with in reasons previously delivered. These are as follows: Australian Competition and Consumer Commission v INFO4PC.com Pty Ltd [2001] FCA 258; Australian Competition and Consumer Commission v INFO4PC.com (2002) 121 FCR 24; Australian Competition and Consumer Commission v Info4PC.com Pty Ltd [2002] FCA 1017; Australian Competition and Consumer Commission v INFO4PC.com [2003] FCA 290; Australian Competition and Consumer Commission v INFO4PC.com [2003] FCA 641 with corrigendum 3 The second respondent admitted into evidence in support his notice of motion an affidavit of Karen Joanne Rae sworn on 7 July 2005. The applicant supported its motion by an affidavit of a solicitor from the Australian Government Solicitor sworn on 3 August 2005.

improper joinder 4 The application by the second respondent to be removed as a party is one which is required to satisfy the requirements of FCR O 6 r 9 under which it is brought. That rule reads: 'If a person: (a) has been improperly or unnecessarily joined as a party to a proceeding; or (b) has ceased to be a proper or necessary party to a proceeding; the Court may order that the person cease to be a party and make orders for the further conduct of the proceeding.' 5 This proceeding was initiated by the issue of process in respect of the first respondent alone. That occurred on 23 January 2001 in the South Australian Registry. On 24 January 2001, von Doussa J ordered that the proceeding be transferred to the Western Australian Registry. On 13 February 2001 the Court ordered that the applicant file and serve any motion to amend its application and statement of claim forthwith. On 14 February 2001 the applicant filed a notice of motion seeking leave to amend its application in terms of a minute filed and an order that such minute stand as the amended application. On 15 February 2001 the Court granted leave to amend the application in the terms of the minute thereby adding the second respondent as a party. 6 In the minute of proposed amended application it was stated that the applicant sought orders and declarations, including the following: '4. A declaration that the second respondent has been directly or indirectly, knowingly concerned in, or party to, the contraventions of the [Trade Practices Act 1974 (Cth)] by the first respondent set out in paragraphs 1 to 3 above.' 7 On 15 February 2001, the applicant filed an amended statement of claim pursuant to its entitlement to do so under FCR O 13 r 3(1). That amended statement of claim showed the addition of the second respondent as a party and it pleaded: '3. The second respondent is and was at all material times a director of the first respondent.' Additionally under the heading 'Liability of second respondent' it was further pleaded: '17. The second respondent was directly or indirectly knowingly concerned in, or party to, the contraventions alleged in paragraphs 8 to 16.' The particulars were said to be ones which would be provided after discovery and interrogatories. 8 The second respondent has sought and obtained a copy of the transcript of the proceedings on 15 February 2001. He says that certain circumstances pertaining then show that he ought not to have been joined as a party and that in particular, he was improperly or unnecessarily joined as a party to the proceeding: FCR O 6 r 9(a). His first complaint is that the joinder was one which should have taken place with regard to FCR O 6 r 8(1). That reads: 'Where a person who is not a party: (a) ought to have been joined as a party; or (b) is a person whose joinder as a party is necessary to ensure that all matters in dispute in the proceeding may be effectually and completely determined and adjudicated upon; the Court may order that the person be added as a party and make orders for the further conduct of the proceeding.' The second respondent's submission is that the applicant failed to indicate which part of O 6 r 8 was being relied upon. His submission is that this had the inherent danger that the Court may have thought that a party could be joined when it is 'just and convenient to do so', when the law is to the contrary: All Fasteners (WA) v Grant Caple Pty Ltd [2003] FMCA 430 at [24]; Australian Competition and Consumer Commission v News Corporation Ltd & Ors (1997) 79 FCR 116 per Hill J; Vandervell Trustees Ltd v White [1971] AC 912 at 936. 9 Given the content of the amended application and of the amended statement of claim it is quite impossible to see how any of the considerations required by the rule can establish that the second respondent was improperly or unnecessarily joined. The application sought orders against him as a person 'knowingly concerned'. There was a necessary link between the issues raised against him and the issues raised against the first respondent. It was therefore appropriate that orders were made that such issues be effectually and completely determined and adjudicated upon on one occasion. Reference to the previously reported reasons in this proceeding substantiate that such proved to be the case. 10 The second respondent also complains that the joinder occurred ex parte. That was necessarily so because he was not then a party to the proceeding. His solicitor had not appeared and although the Court was apparently told that he would be attending subsequently, there was no reason in the context of the amended application and the amended statement of claim to not make the orders for joinder. In any event, when the solicitor did appear for the second respondent, he took no steps to recommit the order of joinder. 11 At the heart of the second respondent's submissions in this respect is a reliance by him on the statement in the amended statement of claim alleging that he was a director of the first respondent, a matter subsequently not pursued against him. He seems to assume that the issue of joinder must therefore have been improper because the allegation of directorship was not made out. Such is not the case. The amended application made its allegation against the second respondent of being 'knowingly concerned' without reference to any directorship in the first respondent. Likewise, the claims in the amended statement of claim were not hinged in their terms on him being such a director. 12 The second respondent also relies on FCR O 6 r 9(b) by contending that even if it was proper and necessary to join him as a party (perhaps when it was alleged he was a director of the first respondent) it has now ceased to be proper or necessary for him to be a party to the proceeding. This is because he says that the proceedings against him whereby he may assume the liability of the first respondent for extensive monetary payments is a fruitless exercise causing undue stress upon him and his family and therefore is frivolous and an abuse of the court process. Reference, however, to the prior published reasons will exemplify the fact that the second respondent has not ceased to be a proper or necessary party to the proceedings. 13 Whether reliance is placed by the second respondent on par (a) or par (b) of FCR O 6 r 9, the fact remains that since his joinder as a party on 15 February 2001 he has continued to participate as a party in this litigation. He has acquiesced in being a party. It is only now, when a bill of costs is pending against him as a party jointly liable with the first respondent, that he seeks to disassociate himself from the litigation. He claims that this is because he has only just obtained access to the transcript of the proceedings on 15 February 2001. However, as I have set out above, I do not see anything in those proceedings which brings into operation the provisions of FCR O 6 r 9. The fact is that the second respondent has acquiesced in the proceedings and has never contested the appropriateness of his joinder until this notice of motion. In those circumstances it is simply not open to the Court in the exercise of its discretion under FCR O 6 r 9 to accede to an order that the second respondent cease to be a party.