Westfield Management Ltd & Ors v Direct Factory Outlets Homebush Pty Limited & Ors

Land and Environment Court (NSW)|2003-09-15|Before: Pain J, Mr J

Introduction 1. Direct Factory Outlets Homebush Pty Limited ("DFO"), the First Respondent, is seeking an order staying these proceedings until the determination of Federal Court proceedings brought by DFO against the Applicants in these Land and Environment Court proceedings. The Applicants in the Land and Environment Court proceedings are the Respondents to DFO's Notice of Motion for a stay order.

The Federal Court proceedings are based on ss 45D, 45DA and 80 of the Trade Practices Act 1974 (Cth). The nature of the claims pursuant to s 45D and s 45DA are set out at par 4 of the First Respondent's written submissions. Section 80 allows the Federal Court to grant injunctions and interlocutory injunctions in relation to the contravention of ss 45D and 45DA.

In relation to the other Respondents in these proceedings, the Second, Fourth and Fifth Respondents neither support nor oppose the application for a stay. The Third Respondent consents to it.

The Land and Environment Court proceedings were commenced on 7 November 2002. The Land and Environment Court Rules 1996 (the Court Rules) Pt 12 r 1 empowers the Court to stay proceedings on terms at any stage of the proceedings. DFO argued the Land and Environment Court proceedings should be stayed because firstly, if the Land and Environment Court proceedings are heard first the subject matter of the Federal Court proceedings will be destroyed. Secondly, it is contrary to the interests of justice and unjust to DFO to allow the Land and Environment Court proceedings to continue in circumstances in which DFO alleges the Applicants are breaching a Commonwealth statute by maintaining those proceedings. Thirdly, the Land and Environment Court action is contrary to the proper administration of justice because if DFO is correct in the Federal Court claim these Land and Environment Court proceedings are a manifest abuse of process by the Applicants.

It was emphasised in argument that DFO is not seeking a permanent but rather a temporary stay of these Land and Environment Court proceedings. DFO argued that it had no alternative but to commence the Federal Court proceedings because this Court has no jurisdiction to entertain matters under the Trade Practices Act 1974 (Cth) so that those matters could not be raised in the Land and Environment Court proceedings. That is certainly true.

At this stage a Statement of Claim has been filed in the Federal Court proceedings and the Applicants, Respondents in those proceedings, have sought particulars in relation to that Statement of Claim. No evidence has been filed.

What factors must DFO satisfy in order to obtain a stay of proceedings from the Land and Environment Court? The Applicants argued that the principles relevant to a stay are very similar to those to be considered for an interlocutory injunction, relying on the Minister for Local Government v South Sydney City Council (No 3) [2002] NSWCA 327. The relevant principles are firstly, is there a serious question to be tried and, related to that, what are the likely prospects of success of the action? Secondly, does the balance of convenience favour a stay? Thirdly, is there an undertaking to pay damages offered?

The Court Rules Pt 12 r 1 contain no limitations on when a stay ought to be granted. I consider it is appropriate to approach the application on the basis argued by the Applicants in relation to the principles I have outlined in the previous paragraph. 1. Is there a serious question to be tried and what are the likely prospects of success? 10. Firstly, turning to whether or not there is a serious question to be tried and what can be said about the likely prospects of success of the action, I accept the submission of the Applicants that as no evidence has been filed in the Federal Court proceedings, it is not sufficient to rely on pleadings filed in the Federal Court to argue there is a serious question to be tried or to identify the prospects of success in the Federal Court proceedings.

DFO argued that there was clearly a serious question to be tried as there had been no strike out application in the Federal Court proceedings, but this submission completely overlooks the fact that the onus is on DFO to show there is a serious question to be tried. The fact that another party has not applied to strike out a matter does not discharge that onus.

I have also been asked by DFO to draw the inference, in the absence of any evidence, that because the Applicants in the Land and Environment Court proceedings are trade competitors operating in the same trade area as DFO then there is impliedly certain behaviour which may give rise to a successful claim under s 45D and s 45DA of the Trade Practices Act 1974 (Cth). I draw no such inference. I can draw no conclusion on what the likely prospects of success in the Federal Court proceedings is likely to be. DFO's application for a stay essentially fails at the first hurdle.

Balance of convenience 13. The second matter to which I would have had to have regard is the balance of convenience. If I had had to decide on the balance of convenience, applying the factors set out in Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited (1992) 34 FCR 287 I would hold the balance of convenience favours the continuation of the Land and Environment Court proceedings. These were commenced first, they have already had substantial interlocutory hearings before this Court and considerable costs have been incurred by the parties.

I also agree with the Applicants' submission that they logically precede the Federal Court proceedings. The Land and Environment Court decision will be determinative of the Federal Court proceedings. The Federal Court proceedings will not determine the Land and Environment Court proceedings.

Undertaking to pay damages 15. It is unnecessary that I deal with the issue of an undertaking to pay damages, but I note that in any event one was not offered by DFO.

Interests of justice and abuse of process 16. The argument was put to me by counsel for DFO that a stay was necessary in the interests of justice and also to prevent an abuse of process. DFO argued that its Statement of Claim in the Federal Court proceedings demonstrated that it was in the interests of justice that a stay of these proceedings be granted. Not granting a stay means that the relief sought in prayer 1 of the Statement of Claim in the Federal Court proceedings will be otiose. Further, these proceedings could be an abuse of process if the Federal Court action is successful. 17. The Land and Environment Court proceedings are commenced pursuant to s 123 of the Environmental Planning Assessment Act 1979 (the EP&A Act) and assert that DFO and the other Respondents are operating a discount factory outlet in such a way that the relevant development consent issued under the EP&A Act is not being complied with. Proceedings of this nature are legally unremarkable and commonly argued in the Land and Environment Court. There has been no attempt to argue in the Land and Environment Court proceedings that there was an abuse of process in the commencement of these proceedings.

The outcome of these proceedings if this stay is not granted and if the Applicants are successful is that DFO and the other Respondents will be found to have breached the Environmental Planning & Assessment Act, a public planning law in New South Wales. Presumably that decision will also decide whether DFO and the other respondents in the Land and Environment Court proceedings are trading lawfully, an issue highly relevant to the Federal Court proceedings. If the Applicants are unsuccessful, the Respondents will be entitled to costs, as in most litigation of this nature. DFO does not allege that this Court's order would constitute or give rise to a breach of the Trade Practices Act 1974 (Cth). Such an allegation could have no legal foundation in any event.

A further difficulty I have with DFO's submission that it is in the interests of justice to grant a stay is that it does not deal with the nature of actions under s 123 of the EP&A Act. That provision provides broad standing rights and can be exercised by any individual, group or corporate body who wishes to enforce the planning laws. It is well recognised that such provisions are to enable enforcement of the planning laws and that this is in the public interest: see F Hannan Pty Ltd v Electricity Commission of New South Wales [No 3] (1985) 66 LGRA 307. The fact that business competitors rather than individuals or entities without a financial interest join together to take action seeking enforcement of the EP&A Act is immaterial under s 123 of that Act.

DFO has not established there is a serious question to be tried nor do I accept that it is in the interests of justice that these proceedings be stayed. I do not therefore intend to make the order sought in DFO's Notice of Motion dated 1 July 2003 seeking a stay of these proceedings.

I make an order that costs follow the event so that the Applicant on the motion, DFO, is required to pay the costs of the Respondents on this motion. I will stay that order for two days to provide the opportunity to either party to raise issues in relation to this costs order.

Orders 22. The Court makes the following orders: 1. The First Respondent's Notice of Motion dated 1 July 2003 seeking a stay of the proceedings is refused. 2. The exhibits may be returned. 3. The First Respondent is to pay the Applicants' costs of the First Respondent's Notice of Motion dated 1 July 2003. 4. Order 3 is stayed for two (2) days from the date of these orders to enable the parties to raise an issue in relation to Order 3 if they choose. 5. The matter is listed for mention before Pain J at 9.30 am on 24 September 2003.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.

Trade Practices Act 1974(Cth)s 45D, s

CITATION : Westfield Management Ltd & Ors v Direct Factory Outlets Homebush Pty Limited & Ors [2003] NSWLEC 258 APPLICANT Westfield Management Ltd & Ors PARTIES : RESPONDENTS Direct Factory Outlets Homebush Pty Limited & Ors FILE NUMBER(S) : 40871 of 2002 CORAM: Pain J KEY ISSUES: Practice and Procedure :- application for stay of proceedings until proceedings in the Federal Court based on the Trade Practices Act 1974 (Cth) are determined - whether factors required to satisfy granting of stay have been met - whether there is a serious question to be tried and what are the likely prospects of success - balance of convenience - no undertaking to pay damages - whether stay should be refused in interests of justice and to prevent an abuse of process Environmental Planning and Assessment Act 1979 s 123 LEGISLATION CITED: Land and Environment Court Rules 1996 Pt 12 r 1 Trade Practices Act 1974 (Cth) s 45D, s 45DA, s 80 F Hannan Pty Ltd v Electricity Commission of New South Wales [No 3] (1985) 66 LGRA 307; CASES CITED: Minister for Local Government v South Sydney City Council (No 3) [2002] NSWCA 327; Sterling Pharmaceuticals Pty Limited v The Boots Company (Australia) Pty Limited (1992) 34 FCR 287 DATES OF HEARING: 12/09/2003 DATE OF JUDGMENT: 09/15/2003

(2003) 133 LGERA 114

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