Rock Solid Surfaces Pty Ltd v Biesse Group [2011] FCA 42 | Case summary

Requirement in rule 3(2)(c): prima facie case 6 The prima facie case asserted by the cross-claimants is for breach of s 52 of the Trade Practices Act 1974 (Cth) (TPA). 7 In Ho v Akai (in liq) (2006) 24 ACLC 1526 at [10], the Full Federal Court described the nature of the inquiry in the following terms: As has been observed on many occasions, the prima facie case requirement has to be met at the outset, usually on an ex parte basis, and without the advantage of discovery and other procedural aid to the making out of a case … It 'should not call for a substantial inquiry' … For present purposes it is sufficient to say that a prima facie case for relief is made out if, on the material before the court, inferences are open which, if translated into findings of fact, would support the relief claimed … Or, to put the matter more prosaically as Lee J did in Century Insurance v NZ Guardian Trust: What the Court must determine is whether the case made out on the material presented shows that a controversy exists between the parties that warrants the use of the Court's processes to resolve it and whether causing a proposed respondent to be involved in the litigation in the court in Australia is justified. (References omitted) 8 As Bennett J observed in Australian Competition & Consumer Commission v April International Marketing Services Australia Pty Ltd (No 6) (2010) 270 ALR 504 at [8], it calls for "a broad examination rather than an intense scrutiny of the material before the court". 9 It is sufficient to point to a prima facie case in respect of one of the pleaded causes of action relied upon for the relief sought in the application: Bray v F Hoffman-La Roche (2003) 130 FCR 317 at [55] per Carr J, [190] per Branson J, followed in ACCC v April International Marketing Services Australia (No 6) at [11] per Bennett J. 10 Biesse Group and Mr Hoareau seek damages and ancillary relief for breach of s 52 of the TPA and equivalent legislation. 11 The claim by Biesse Group and Mr Hoareau against Zipor depends entirely on the claim by the applicant against Biesse Group and Mr Hoareau. 12 The applicant alleges either breach of contract or misleading and deceptive conduct in connection with the purchase by the applicant of a stone-cutting machine (the Zipor Machine) from Biesse Group. 13 The applicant's claim depends on a number of communications that occurred between the applicant, Biesse Group and Zipor leading up to the applicant's purchase of the Zipor Machine. In particular, the applicant alleges that the communications included: (a) an email from Mr Hoareau to the applicant dated 11 December 2007, which contained the "Zipor Proposal"; (c) an email from Mr Hoareau to the applicant dated 13 December 2007, which contained certain representations (defined as the Cycle Times Representations and the Optimisation Representations); (c) a meeting on 17 December 2007 at which both Mr Hoareau and a representative of Zipor informed the applicant that the Zipor Machine would meet each of the applicant's stated purpose requirements (defined at [32] as the Purpose Requirements Representation). 14 In the statement of claim at paras [30.5]-[30.17], the applicant alleges a number of representations in which the sale of the Zipor Machine was inconsistent with those representations. The applicant alleges that, by reason of those matters, the representations were misleading and deceptive or likely to mislead and deceive. The applicant seeks damages from Biesse Group and Mr Hoareau as a consequence of those misleading representations. 15 Biesse Group and Mr Hoareau, among other things: (a) deny that the representations were misleading; (b) say that they merely passed on the representations, that the source of the representations was Zipor, and that Biesse Group and Mr Hoareau had reasonable grounds for making the representations; (c) say that Zipor is a concurrent wrongdoer; (d) have filed the cross-claim to allege that Zipor's misleading and deceptive conduct caused them loss and damage (including the costs of defending the applicant's claim and any damages awarded in the applicant's favour). 16 The evidence adduced by Biesse Group and Mr Hoareau on the present application indicates that: (a) the email of 11 December 2007 did no more in substance than forward the Zipor Proposal emailed by Zipor to Mr Hoareau on 10 December 2007; (b) the email of 13 December 2007 did no more in substance than forward an email from Zipor to Mr Hoareau of the same date; (c) the relevant representations at the meeting on 17 December 2007 were made by Zipor's representative. 17 For the purposes of the cross-claim only, Biesse Group and Mr Hoareau repeat the allegations in the statement of claim at [30.5]-[30.17]. In other words, Biesse Group and Mr Hoareau rely on those allegations by the applicant to make out this aspect of their prima facie case against Zipor. If those allegations are true, then the representations by Zipor to Biesse Group and Mr Hoareau were misleading and deceptive. 18 The damage alleged to have been suffered by Biesse Group and Mr Hoareau flowed from the representations made by Zipor. 19 In order to make out their cause of action against Zipor, Biesse Group and Hoareau must also show a prima facie case that the misleading and deceptive conduct occurred in Australia. Subject to express territorial extensions in s 5 of the TPA, s 52 of the TPA does not prohibit conduct occurring outside Australia. Biesse Group and Hoareau accept for present purposes that they have not shown any of the territorial extensions apply. 20 The representations made in the meeting on 17 December 2007 clearly occurred in Australia. They are alleged to have taken place at the applicant's premises in Bassendean, Western Australia. 21 The representations made by email on 10 December 2007 and 13 December 2007 also occurred, relevantly, in Australia. Each of the emails were sent to Mr Hoareau in Sydney. 22 For the purposes of a law of the Commonwealth, unless there is any agreement to the contrary, an electronic communication is taken to have been dispatched at the originator's place of business and is taken to have been received at the addressee's place of business: Electronic Transactions Act 1999 (Cth), s 14(5). Where an addressee has more than one place of business and one of those places of business has a closer relationship to the underlying transaction, then that place of business is treated as the addressee's only place of business: Electronic Transactions Act 1999, s 14(6)(a). 23 While the Court has no evidence as to whether Biesse Group has a place of business anywhere other than Australia, it is clear that Biesse Group's Australian place of business has the closer connection with the relevant transaction than any other place of business. The emails were received in Australia as part of an arrangement where Biesse Group was allegedly acting as Zipor's agent in Australia. 24 For the purposes of the TPA, if emails were directed to Australia, were expected to be received in Australia, and were in fact received in Australia, then they amount to conduct taking place in Australia, regardless of where the emails originated: Bray v F Hoffman- La Roche Ltd (2002) 118 FCR 1 at [147] where Merkel J held that communications into Australia by a parent company to officers of a subsidiary, expected to be received in Australia, constituted conduct in Australia for the purposes of s 45 of the TPA. While Merkel J was dealing with conduct for the purposes of Part IV of the TPA, the holding has been expressly applied to conduct allegedly in breach of s 52 of the TPA in Costa Vraca v Bell Regal Pty Ltd [2003] FCA 65 at [50] per Merkel J; Howard v National Bank of NZ Limited (2002) 121 FCR 366 at [42] per Drummond J; and Australian Competition & Consumer Commission v Yellow Page Marketing BV [2010] FCA 1218 at [22] per Gordon J. French J (as his Honour then was) took a similar approach in Paper Products Pty Ltd v Tomlinsons (Rochdale) Ltd (No 2) (1993) 44 FCR 485. 25 Accordingly, all of the alleged contravening conduct by Zipor occurred within Australia for the purposes of the TPA. 26 Biesse Group and Mr Hoareau have a prima facie case to bring a cross-claim against Zipor for breach of s 52 of the TPA, as a consequence of the applicant's claim against them.

Discretion and consequential matters 32 The legal and factual issues in the proposed cross-claim overlap substantially with the issues raised by the statement of claim and the defence. It is in the interests of justice that they be dealt with in a single piece of litigation if possible. Biesse Group and Mr Hoareau filed their cross-claim at the same time that they filed their defence. 33 There is nothing to suggest that the Court ought not exercise its discretion in favour of Biesse Group and Mr Hoareau. 34 Biesse Group and Mr Hoareau seek to serve the cross-claim pursuant to Order 8A of the Federal Court Rules and the Hague Convention on Service Abroad. 35 Zipor's world headquarters are in Portugal. The Hague Convention has entered into force in both Australia and Portugal. 36 If the Court grants leave pursuant to Order 8 rule 3, Biesse Group and Mr Hoareau will take steps to have the cross-claim served in accordance with Order 8A. 37 I am satisfied, for these reasons, that leave should be granted as set out under para 1 of the motion. I will make a second order that the costs of the motion be in the cause. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Rock Solid Surfaces Pty Ltd v Biesse Group

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