TMAC Pty Ltd trading as Northstar Property Services v Thomas Ford Trading Pty Ltd trading as Fresh Telecoms

TMAC Pty Ltd trading as Northstar Property Services v Thomas Ford Trading Pty Ltd trading as Fresh Telecoms - [2010] FCA 445 - FCA 2010 case summary — Zoe

[23]

Submissions of Technology Leasing 10 In support of its motion, Technology Leasing refers to paragraph three of the SoC (filed in the Federal Court proceedings) which defines membership requirements of the Customer group. It defines a member of the Customer group as an entity who: (a) had one or more of the defined representations ('the class representations') made to them during the period between 27 May 2007 and 19 June 2008; (b) relied on such representations in signing documents provided to them by Fresh Telecoms to enter into an agreement with Fresh Telecoms and Technology Leasing; (c) has been sued by Technology Leasing in the Local Court or District Court of New South Wales; and (d) have suffered loss or damage as a result. Technology Leasing submits that to determine if any of the applicants or other parties are part of a class, it must first be determined if any of the class representations were made to them and further if they relied upon and were induced by such representations. 11 Technology Leasing refers to the seven class representations contained in the amended SoC. It submits that the representations alleged to have been made to two of the Customer group, namely TMAC and Divvie, each satisfy only one of the class representations, and that the representations claimed to have been made to Valentina do not conform to any of the class representations. Technology Leasing also submits that the representations alleged to have been made to the Customer and Guarantor groups in the Local Court pleadings are different to those alleged to have been made to those parties in the Federal Court pleadings. 12 Of the other lower court proceedings, one is a claim by Technology Leasing in the Local Court against Jaysen Whitbread (Proceedings No. 27318 of 2009). Those proceedings were heard in the Local Court on 23 and 24 February 2010. Such proceedings are now part-heard, the hearing having been stayed by order of the Local Court until 15 June 2010. Technology Leasing submits that the representations that are alleged to have been made by Fresh Telecoms to the Customer/Guarantor group in those proceedings are different to the representations alleged to have been made to TMAC, Divvie and Valentina in their cross-claims filed in the other lower court proceedings. 13 Accordingly it is submitted by Technology Leasing that there is no common thread linking the representations made by Fresh Telecoms to each of the applicants. Technology Leasing submits that to establish that commonality each potential member of the Customer group in any representative proceedings would need to give evidence of the particular representations made to them. The question would then arise as to whether, in respect of each member, the representation was in fact made, whether those individual members were induced by such representation and if so whether it was relied upon. 14 Technology Leasing submits that the observations of Hill J in Leung v American International Assurance Company (Australia) Limited [2004] FCA 1763 at [35]-[39] apply. At [37] his Honour said: However, the most significant point is that the facts in each case, whether those facts relate to the case sought to be made under s 52 or the case sought to be made of unconscionable conduct, are likely to be so diverse that to deal with the case as involving a representative proceeding together with numerous individual proceedings involving which applicant will ultimately involve greater time than would be the case if each application were treated as a separate proceeding and litigated as such.

[42]

Finding 27 The applicants allege that each applicant in these proceedings has a claim against the respondents arising out of very similar transactions. Whilst different contracts were entered into between Technology Leasing and each one of those persons, there is a clear similarity in respect of the facts giving rise to each claim. Technology Leasing's submission regarding the dissimilarity between the circumstances of each group member does not give sufficient weight to the core facts. Each member of the group signed a lease agreement containing identical terms which allegedly had been put to each member of the group in circumstances that were not materially different. In essence, the conduct relied upon arises out of similar circumstances in each case. It is such conduct that gives rise to all claims under the TPA. 28 Although the factual circumstances giving rise to the individual claims may vary, this fact is not sufficient to warrant the Court finding that the claims of the applicants do not arise out of the same, similar or related circumstances and give rise to a substantial common issue of law or fact within the meaning of s 33C(1) of the Court Act. These circumstances are not dissimilar to the circumstances in Pampered Paws Connection Pty Limited v Pets Paradise Franchise (Qld) Limited (No. 6) [2010] FCA 295 which also involved an application under s 33N of the Court Act. In that case, although the claims of each group member were not identical, Mansfield J at [39] found that there was 'extensive range of common issues'. The Court adopts a similar conclusion in the proceedings now before it. 29 The Court is satisfied that it has the requisite power to ensure that these proceedings are dealt with efficiently even though it may be necessary to hear separate evidence in relation to the individual claims concerning the circumstances in which the representations were made and the damages applicable to each individual. The Court is required to ensure that justice is administered efficiently and in the most cost effective manner. The most substantial claim by Technology Leasing in the Local Court is that against TMAC for a total sum of $61,580.15. The claim against Valentina is $15,701.89 and the claim against Divvie is $8,439.00. If this is broadly representative of the amounts claimed in the other lower court proceedings, it is clearly cost inefficient for those claims to all be heard separately if the claims have a common substratum. 30 The Court is satisfied that the conduct of separate proceedings is not the appropriate course in the interests of all the parties and that management of the Federal Court proceedings under Part IVA is preferable to each defendant having to face separate proceedings. 31 Accordingly the Court, in the exercise of its discretion, dismisses the claim made for an order under s 33N of the Court Act that the proceedings no longer continue as representative proceedings.

[51]

36 Such a statement of general principle must be applied having regard to the particular facts of each case to determine whether the institution of the latter proceedings can truly be categorised as an abuse of process. Although the Whitbread proceedings are part-heard, this Court has been informed that on the second day of the hearing before the Local Court, Technology Leasing belatedly produced two documents of vital relevance to the proceedings. The delayed production resulted in a claim by the defendant that the proceedings should begin afresh. As it currently stands, the evidence is incomplete, no findings have been made and as referred to in [12] above the proceedings have been stayed until 15 June 2010. It appears that the Whitbread proceedings may have to be re-commenced. 37 Technology Leasing acknowledges that the Local Court would not have jurisdiction to deal with certain issues arising under the TPA which are raised by the cross-claims in that jurisdiction. Accordingly, if the proceedings remain in the Local Court, those issues would need to be determined in this Court. Such a process would be unwieldy, costly and time consuming. Further, the parties joined as respondents in the proceedings in this Court are more extensive than those in the Local Court proceedings. For example Fresh Telecoms, Ford, Bower Finance and David Beat are not included in the Local Court proceedings as parties, yet their involvement appears to be material. Accordingly there is the real possibility that the litigation currently before the Local Court will not resolve all claims, and subsequent actions arising out of that Court's findings might be commenced against parties not joined. 38 Further, the Court is informed that the Local Court has no facilities for representative proceedings. As a result, the matters for determination arising from these facts are now scattered over more than forty-five proceedings and in three different jurisdictions. 39 The Court is satisfied that it is clearly in the interests of the parties for the resolution of all of the issues to be determined in the one forum. By virtue of Part IVA of the Court Act, this Court has the facilities to deal effectively with these circumstances. The Court concludes that the interests of justice warrant that the proceedings in this Court not be stayed.

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