Poultry Pty,Limited v Russell Hockhing, number 107 of

'*NOTE: This judament relates predominantly to 1ts own facts and is not of sufficient general interest to justify circulation)

) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G.8 of 1985 ) GENERAL DIVISTON )

BETWEEN : RUSSELL HOCKHING TRADING AS LAKEMBA POULTRY AND FROZEN FOODS

AND: RUSSELL HOCKHING TRADING 2.3 LAKEMBA POULTRY AND FROZEN FOODS

ZOPAM: WILCOX g. DATE: 15 AUGUST 1585 PLACE: SYDNEY

This is the hearing of a Notice of Motion filed on behalf cf a respondent to proceedings said to have been

brought pursuant to $ss.52 and 53 of the Trade Practices Act

1974, The Application, which was filed on 21 January 1985, claimed orders that the respondent had contravened those sections and it also claimed orders in respect of negligence and breach of contract. The Application sought damages and

On 25 March 1985 a Statement of Claim was filed. In that Statement of Claim the applicant alleged that he carries on the business of a wholesaler and distributor of frozen poultry and operates through the whole of the Sydney redion providing and selling frozen poultry to butchers' shops and to clubs. This allegation is not in issue. He further alleged that the respondent is a company duly incorporated and liable ta be sued in its corporate name; and this also is not in

The applicant further alleged that the respondent supplied and sceld to him frozen chickens: that the cespandent held atself out to the applicant as being able to supply frozen chickens which were properly frozen and af gaod quality; that the respondent agreed to supply certain frozen chickens of good quality to the applicant and undertook to deliver same in a frozen condition to the applicant's

The substance of these allegations was net in issue; but there was dispute hetween the parties, as appeared when the respondent's Defence was filed, as to the subsequent alleqations by the applicant that chickens which were supplied were not of good quality. In particular, the allegation was made Chat some of the chickens were not frozen. It was said that 10 per cent of the frozen chickens delivered to the applicant were not of good quality and had not been properly frozen by the respondent; were thawed out prior to delivery to the applicant; and were rotten and misshapen and qenerally not fit for human consumption. The Statement of Claim alleged that the respondent's conduct was such as to contravene the

provisions of ss.52 and 52 of the Trade Practices Act.

On 1 March 1985 the matter came before Sheppard J. at a directions hearing. On that day his Honour directed that the matter be tried on affidavit evidence supplemented by oral evidence and he gave directions for the filing of the affidavits of the applicant and of the respondent respectively

Prior to that date the respondent had filed a Cross Claim in which it sought to recover the sum of $74.983.44, being the claimed balance of account in respect of the supply by it toa the applicant cf chickens. The Cro¢ea Claim alleged

fotal deliveries worth $391,914.82 less payments of

Particulars were sought by the solicitors for the respondent in relation to the allegation of the delivery cf rotten and misshapen chickens, and by letter of 3 June 1985 the applicant's solicitors identified three deliveries being those of 25 August 1984, 28 October 1984 and 5 November 1984,

The total value of these deliveries is some $27,000.

The matter was again in the directions list on 14 June 1985, before Lockhart J., when a variation was made ag to the dates upon which affidavits were to be filed. Pursuant toa the directions of his Honour, affidavits have been filed on each side of the matter, apparently in an attempt to put Sach party's case fully on affidavit, as I am sure was the intent

The present Application was filed on 9 August 1985. It seeks to have the proceedings of the applicant dismissed with consequential orders or, alternatively, to have the present Statement of Claim struck out for failure to disclose A proper cause of action with leave being reserved to the

framed, it seems to me clear bevond yuestion that the present

document is defective. As I have said, the case purports to

be based upon ss.52 and 53 of the Trade Practices Act, but

there is nowhere to be found in the Statement of Claim any allegation of anv representation having been made by or on behalf of the respondent. What is alleged is that an agreement was made between the parties for the supply of frozen chicken and that chicken was supplied which was not frozen or, alternatively, was of unacceptable quality. I do nat see in the Statement of Claim any conduct which can be said to answer the description of misleading or deceptive conduct -- s.52 -- and I do not see any alleqation of conduct

simply to recover damages for breach of a promise made by a

eceporation in the course of trade and commerce: see Bi

Acceptance Corporation v G WA Limited (1983) 59 A.L.R. 242.

In respect of the Statement of Claim as framed. Mr Evatt on behalf of the applicant has referred to para.5 in which the allegation 1s made that the respondent "agreed to supply certain frozen chickens". He says that this is tapable of being read as a reference to existing frozen chickens and as containing an allegation that the respondent made cepresentations as to the then existence and nature of such

T am unable to read the paragraph in that wav and I think it 1s sufficient to sav, without being too pedantic on

the point, that if an allegation is made of misleading or

deceptive conduct in making representations, or if an

allegation is made of the making of a statement or representation under s.53 then this needs to be stated in terms. It cannot be sufficient that it is not inconsistent with a cause of action pleaded in a quite different way that

some statement may have been made between the parties at the

Mr Evatt also refers to para.11 of the Statement of Claim, but this does no more than refer to ss.52 and 53; it contains no allegation of fact to bring the case within the

For these reasons it seems to me clear that the present Statement of Claim is demurrable and should be struck out. Ordinarily. 1f an applicant sought leave to amend, some opportunity would be given for this to be done. In the present case, however, the parties and the Court have the advantage of the affidavits which are on file and which are

intended to show the nature of the dispute and the nature of

Mr Evatt has sought an adjournment of the matter to allow him to obtain further instructions against the possibility that additional evidence is available, but I would not be disposed to take this course. Under the directions

made by Lockhart J., the applicant's affidavits were suppesd

to be filed on or before 28 June 1985. It would in my view be an incorrect exercise of discretion to allow counsel a further adjournment, some six weeks after the expiry of that time. in order to obtain instructions with a view to determinind

whether or not there may be a case available to him under the

I have read the evidence filed on behalf of the applicant. For the purposes of the present application, the applicant is entitled to have that evidence read in his farrour in the sense that any ambiguity should be resolved favourably fo him and any conflict between his evidence and that of the respondent should be resolved in his favour. Even so, there

is no material whatever to bring the case within either s.52

The essence of the applicant's case is that in relation ta three out of a considerable number of deliveries chicken was delivered from the respondent's works in Melbourne to the applicant's premises in Sydney which, upon delivery, turned out not to be frozen. On each occasion there was telephonic communication between the parties. as a rasult of "which the applicant agreed to accept the material. According fo the applicant. that chicken turned out to be of unacceptable quality when passed on to customers of the

There 1s an issue between the parties both as to the extent of unfrozen chicken delivered and also on the question whether the chicken, whether frozen or otherwise. was of merchantable quality. But taking the applicant's case at its highest. it seems to me that it amounts to no more -- and of course no less -- than a claim that in respect of certain goods ordered by the applicant from the respondent the product delivered was not of merchantable quality and therefore was product in relation to which he was not liable to pay the supplier, that ig the respondent. The applicant goes further and says that he suffered consequential loss in that his reputation with his customers was adversely affected. All this may have justification -- I make no finding on that -- but I simply say that it has nothing to do with either s.52 or s.53 of the Trade Practices Act. The claim is simply one for breach of contract to supply chicken which was both frozen and

Having regard to the nature of the case which the applicant has disclosed in his affidavits. it appears to me that no good purpose would be served either by an adiournment of the matter or by permitting any amendment. It seems to me that the reality is that this 15 not a trade practices case, It may or may not be a good contracts case, but there is no basis for the applicant's case remaining in this Court. I therefore propose to accede to the submission on behalf of the

This leaves the question of the disposition of the Cross Claim. At a very early stage of these proceedings an order was made by consent staving further proceedings by the respondent in relation to an action for debt which it had then recently commenced in the Supreme Court of Victoria. I am informed that this action had got no further than the issue of originating process and it seems that the originating process may not even have been served. However, the fact is that the jurisdiction of the Supreme Court of Victoria was invoked and the only reason why no further steps have been taken in

relation to the action is the stay directed by this Court.

There has been discussion before me as to whether the respondent's claim should proceed by way of Cross Claim in this Court or by way of action in the Supreme Court of Victoria. There are some advantages in the matter being dealt wih in this Court, having regard to the stage which the matter has reached, but in the absence of an application by the respondent that its claim remain in, and be determined bv, this Court, I do not propos? to consider whether there 15 jurisdiction in the Court to permit that course to be taken or. if so. whether it is a course which is proper as a matter of discretion. I think that the respondent 1s entitled to elect the course to be taken. It commenced proceedings in the Supreme Court of Victoria and they were staved only because of

the application brought in this Court. If the respondent

wishes to have its claim dealt with in the Supreme Court of

Yictoria, assuming that that court has jurisdiction -- a matter about which I make no comment -- then that is a matter for 1t.

It will, of coursé, be open to the present applicant

to raise by way of defence and/or cross claim any matter of

contract which is open to it in answer to that claim.

The respondent seeks an order for payment by the applicant of its costs in this Court. I am of the opinion that such an order should be made. The respondent seeks that in respect of part of the work that has been done, namely, all work done in relation to an analysis of each of all the

particulars of the applicant's claim furnished by the

applicant to 1t, the costs be taxed on a solicitor and client

I appreciate that a considerable amount of work was involved in this task, but I do not know of any reason which would justify me making a special order for taxation on a solicitor/client basis. It will be for the taxing master te

quantify the work and to allow costs in accordance with the

Counsel for the respondent has also sought a special order in regard to counsel's fees, pointing out that the

preparation of the argument today has involved a considerable

amount of time in relation to the jurisdiction of the Court. I do not think that it is proper for me to make any order or give any direction, but I will simply note for the benefit of the taxing master that counsel for the respondent did come to Court ready to argue in some detail the extent of the ancilliary jurisdiction of the Court and in my view, it was

(3) Rescind the order made by me on 1 March 1985 whereby it was ordered that the proceedings entitled Lefkas Poultry Pty Limited v Russell Hockhing, number 107 of 1985, in the Supreme Court of Victoria be stayed;

(4) The applicant pay to the respondent its costs of

the proceedings, including the costs of this motion.

For the avoidance of any doubt or even argument on the question, I make it clear that the dismissal of both the Application and the Cross Claim is without prejudice to the entitlement of the applicant and the respondent respectively to bring or to maintain such other or further proceedings as he or it respectively may desire to bring in relation to the claims the subject of the Application and the Cross Claim

I certify that the eleven (11) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Wilcox.

Date: 29 August 1985 Counsel for the applicant: Mr C Evatt with

Mr AJ J Renshaw Solicitors for the applicant: Messrs Newman & Associates Counsel for the respondent: Mr DH Hill

Solicitors for the respondent: Messrs Sly & Russell