Dey v Victorian Railways Commissioners

REASONS FOR JUDGMENT THE COURT: INTRODUCTION The appellant ("ABI") appeals from a summary dismissal of its application against the respondents ("Stramit" and "Mr Thomson"). The trial Judge dismissed ABI's application in reliance on pars (b) and (c) of O 20 subr 2 (1) of the Federal Court Rules. It is convenient to set out the whole of O 20 subr 2 (1): "2(1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding - (a) no reasonable cause of action is disclosed; (b) the proceeding is frivolous or vexatious; or (c) the proceeding is an abuse of the process of the Court, the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding." At the time when, on 13 June 1997, ABI filed its application which launched the proceeding below, it was refusing to pay to Stramit $431,130.94 which was to fall due for payment on 14 June 1997 for roofing materials supplied. ABI justifies that refusal only by reference to its claim for damages against Stramit made in the proceeding below. His Honour held that ABI's claims against Stramit and Mr Thomson had no prospect of success and that there were grounds for thinking that the proceeding had been brought by ABI "for the purpose of delay, ie, for the purpose of keeping [Stramit] out of moneys to which it [had], save for the damages claim, raised in [the] action, an unchallenged entitlement and in circumstances, moreover, in which [ABI did] not have the capacity to pay the amounts owing to [Stramit]". (Reasons for Judgment at 15) ABI's STATEMENT OF CLAIM In 1996 when most of the background events occurred, ABI was called "The Roofing Centre Pty Ltd". In some of the correspondence, it was referred to by the abbreviation "TRC". It changed its name to its present name in about January, 1997. We shall refer to it consistently as "ABI", but it must be remembered that references to "The Roofing Centre", "The Roofing Centre Pty Ltd" and "TRC" are all references to ABI. Richard Alexander Roberts and Rade Dudurovic were directors of ABI and Ronald Webb was its Chief Executive Officer. Mr Thomson, the second respondent, was the Queensland State Manager of Stramit and Neville Weller was its "Manager, Roofing". Stramit manufactured metal building products, including roll-formed steel roofing. Prior to the events the subject of the proceeding, ABI both manufactured roll-formed steel roofing and installed it. ABI was minded to cease its manufacturing activity and to become a "dedicated contracting or fixing house, sourcing roll-formed roofing and rainwater products from a dedicated and larger manufacturer in Australia who was able to obtain better volume rebates and payment terms from BHP." (affidavit of Mr Roberts sworn 30 July 1997, par 3). Broadly, ABI's case is that it came to an arrangement with Stramit under which ABI would cease the manufacturing side of its business, buy its roofing materials requirements from Stramit, and refrain from selling its manufacturing plant and equipment to anyone but Stramit or an overseas buyer, in return for which Stramit would take over certain obligations of ABI which would be irrelevant to its more limited role as a roofing contractor. Against the above background, we turn to consider ABI's statement of claim which was filed with its application on 13 June 1997. Paragraphs 6 and 7 of that document are as follows: "6. On or about 25 and 29 October, 1996, 4 and 7 November, 1996, the First Respondent represented to the Applicant that if the Applicant:- (a) entered into a written agreement with the First Respondent whereby the Applicant was obliged to purchase its stocks of roofing building materials from the First Respondent; (b) ceased its then existing business activity of the manufacture of roofing building materials; (c) refrained from selling the plant and equipment utilised by the Applicant in its manufacturing activities to anyone but the Applicant or to an overseas buyer; The First Respondent would by 1 January, 1997:- (d) enter into occupation of the premises tenanted by the Applicant in Rockhampton, the Sunshine Coast, Brisbane, the Gold Coast, Toowoomba and Lismore; (e) indemnify the Applicant with respect to the Applicant's obligations to pay rent to the landlords of the premises referred to in paragraph 6(d) hereof from 1 January, 1997 until termination of the said tenancy by the effluxion of the unexpired portion of such tenancies;. (f) purchase the plant and equipment owned by the Applicant and located in the premises referred to in paragraph 6(d) hereof and other premises of the Applicant located at Cairns, Townsville and Bundaberg for its market value, or at the option of the First Respondent procure a sale of the said plant and equipment to an overseas purchaser. P A R T I C U L A R S The representations were oral and were made in conversations between the Applicant, by Roberts and Dudurovic, and the First Respondent, by the Second Respondent, at the following meetings:- Date of Place of Time of Persons Meeting Meeting Meeting Present 24.10.96 121 Ingham Road 12:00 noon Roberts Acacia Ridge Dudurovic Weller David Thomson 29.10.96 121 Ingham Road 1:00 p.m. Roberts Acacia Ridge Dudurovic Weller David Thomson 04.11.96 121 Ingham Road 3:00 p.m. Roberts Acacia Ridge Dudurovic Weller David Thomson