mdroth/huggingface-course_section-5_zst huggingface dataset:
Case: Seven Network Limited v News Limited [2007] FCA 1062
Outcome: cited
draft agreement, or statements made in correspondence, in some cases may be ultimately characterised as representations. In other cases they may not: eg, Seven Network Limited v News Limited [2007] FCA 1062 at [3211]. For the purposes of the present application, it is accepted that the provision of a draft agreement and statements made in letters forwarded from the Respondent to the Applicant may be characterised as the making of a representation. An application for interlocutory relief, or an application under s 31A , may in an appropriate case require a review of detailed factual material. In the present proceeding, however, it is considered that that review should be undertaken at a final hearing. It is only at a final hearing that the conduct of the parties, both prior to and during the course of the Agreement, can be fully understood. Notwithstanding the conclusion that it is appropriate to grant interlocutory relief, it should further be recognised even at this stage that it may be questioned whether: the representations were relied upon by the Applicant; any of the conduct of the Respondent was " misleading or deceptive "; and the Respondent acted in any manner contrary to any term which may be implied constraining it to act in good faith. For present purposes, it is nevertheless considered that the Applicant has satisfied each of these requirements on a prima facie basis.
Case: Re Wakim; Ex parte McNally [1999] HCA 27 , 198 CLR 511
Outcome: applied
it is not considered that such matters should be resolved in advance of a final hearing. As a matter of " impression " the best judgment that can presently be made is that there is a sufficient jurisdictional basis upon which this Court should presently proceed: Re Wakim; Ex parte McNally [1999] HCA 27 at [140] , [1999] HCA 27 ; 198 CLR 511 at 585 per Gummow and Hayne JJ. For present purposes, it is considered that a serious question arises as to whether or not there has been a breach of s 52 of the 1974 Act. On balance, it is considered that interlocutory relief should be granted but that the final hearing should be expedited and set down for hearing in early July 2009. A date can hopefully then be set which accommodates the convenience of both existing Counsel and the parties. The parties are to bring in short minutes of order which formulate the interlocutory orders to be made and a timetable to ensure that a final hearing can then take place. That timetable should obviously accommodate (if necessary) any request for particulars, the provision of such particulars and the filing of a defence, the filing of evidence, including an agreed bundle of documents, and discovery limited only to that material necessary for a resolution of the issues. On such materials as are presently before the Court, there is no reason to question the fact that the period between now and a final hearing, a period of about eight weeks, is more than adequate to prepare this case for final hearing. The costs of both interlocutory applications are to be reserved, including the costs of the Respondent's Notice of Motion seeking an order under s 31A of the 1976 Act. The Respondent's Motion is certainly not a Motion without merit. A staged exchange of submissions should also be addressed in the short minutes of order, with all steps concluding no less than one week prior to hearing. Given an assessment, however, that the Applicant's entitlement to interlocutory relief is certainly not an entitlement free from legitimate and substantive argument, liberty to apply should be expressly reserved to the Respondent to apply to have the interlocutory orders varied (or discharged) should events subsequently emerge warranting the making of any such further order in advance of a final hearing. Any further delay on the part of the Applicant may, for instance, warrant the discharge of interlocutory relief. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. Associate: Dated: 1 May 2009 Counsel for the Applicant: Mr A J Sullivan QC with Mr B A M Connell Solicitor for the Applicant: PMF Legal Counsel for the Respondent: Mr A J L Bannon SC with Mr N R Murray Solicitor for the Respondent: Freehills Date of Hearing: 27, 29 April 2009 Date of Judgment: 29 April 2009 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2009/426.html
Case: White Industries Australia Ltd v Commissioner of Taxation [2007] FCA 511 , 160 FCR 298
Outcome: cited
the outset it should be recognised that s 31A has been said to be a provision which " lowers the bar for obtaining summary judgment ": Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955 at [5] per Gilmour J. A " reasonable prospect of success " for the purposes of the section is one which is real and not fanciful or merely arguable: White Industries Australia Ltd v Commissioner of Taxation [2007] FCA 511 at [59] , [2007] FCA 511 ; 160 FCR 298 at 312 per Lindgren J; Rogers v Asset Loan Co Pty Ltd [2008] FCA 1305 at [41] , [2008] FCA 1305 ; 250 ALR 82 at 92. And, unlike an application pursuant to O 11 r 16 of the Federal Court Rules 1979 (Cth) that a matter be struck out, where it is the adequacy of the pleadings which is in issue, an action pursuant to s 31A " not only permits, but requires, a consideration of matters outside the pleadings ": Imobilari Pty Ltd v Opes Prime Stockbroking Ltd (in liq) [2008] FCA 1920 at [3] to [8] [2008] FCA 1920 ; , 252 ALR 41 at 43 to 45 per Finkelstein J.
Case: IRAF Pty Ltd v Graham (1982) 41 ALR 209
Outcome: cited
Section 51(2) provides for present purposes: "(2) In determining whether a contravention of [s 45] ... has been committed, regard shall not be had: ... (e) in the case of a contract for the sale of a business or of shares in the capital of a body corporate carrying on a business to any provision of the contract that is solely for the protection of the purchaser in respect of the goodwill of the business". I simply note in passing that there is a live issue between the parties as to whether the transaction of which the impugned deed poll was part, was itself a sale contract of a type envisaged by subpara (3). The subpara also gives rise to the question whether, if the deed contained restraints that did not offend the common law of restraint of trade, it would for that reason fall within s 51(2)(e) (assuming the transaction was of the relevant type and the restraints related to the protection of goodwill): cf IRAF Pty Ltd v Graham (1982) 41 ALR 209 at 216. 83 (ix) Protection of customer connection equally can contrive what is the acceptable duration of a restraint, hence the emphasis in the cases on the period reasonably to be allowed (a) to give the covenantee the opportunity "of cementing an old connection and of profiting from an established reputation": Brown v Brown , 490; and to establish a relationship with the customers of the business Carlton &amp; United Breweries Ltd v Tooth &amp; Co Ltd (1986) 7 IPR 581 at 614; and (b) for severing the relationship between the covenantor and those who would patronize the business of the sale: IRAF Pty Ltd v Graham , at 218. 127 In the present case, though, guidance is to be found in s 51(2)(e) in that, as I noted at the beginning of these reasons, it exempts from s 45's purview, any provision of a contract for the sale of a business or of shares in the capital of a body corporate carrying on a business, "that is solely for the protection of the purchaser in respect of the goodwill of the business". It is unsurprising that the view has been expressed that: "[t]he test provided by s 51(2)(e) seems ... to encapsulate the conditions which by the common law are required to bring a restraint relating to a business within the policy of the law": see IRAF Pty Ltd v Graham , at 216."
Case: I &amp; L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 ; (2002) 210 CLR 109
Outcome: cited
Section 87(3) relevantly provides that: "(3) Where: (a) a provision of a contract made, or a covenant given, whether before or after the commencement of the Trade Practices Amendment Act 1977 : (i) in the case of a provision of a contract, is unenforceable by reason of section 45 in so far as it confers rights or benefits or imposes duties or obligations on a corporation; ... the Court may, on the application of a party to the contract ... make an order: (c) varying the contract ... or a collateral arrangement relating to the contract ... in such manner as the Court considers just and equitable." I would again note in passing that the subsection unqualifiedly permits any party to the contract to apply for an order under it whether or not in a separate application. It is not limited to a party burdened by a provision that contravenes s 45 , let alone a party who has suffered, or is likely to suffer, loss or damage by the contravening conduct. In this last respect the subsection appears to be quite unlike s 87(1), (1A), (1B) and (2), each of which conditions the making of their respective orders "upon the court finding that a party to the proceeding has suffered, or is likely to suffer, loss or damage" (emphasis in original): I &amp; L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 ; (2002) 210 CLR 109 at [46] . The manifest object of s 87(3) is to permit the "restructuring on a just and equitable basis the rights and obligations of parties to contracts which have contravened certain sections [i.e. s 45 , s 45B and s 47] of the Act": Heydon, Trade Practices Law , [18.1830]. The utility of a power so to do is obvious enough. Section 87(3)'s object contrasts with the object of s 87(1), (1A), (1B) and (2) which confer powers to make orders compensating, preventing or reducing loss or damage arising from breaches of the Act: ibid. I would note in passing that s 87(2)(b) would thus envisage that that object may in fact be furthered by an order varying a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the contravening conduct.
Case: Re A &amp; K Holdings Pty Ltd [1964] VR 257
Outcome: cited
I should also note that the Deed Poll of Restraint is, as its name signifies, a deed poll. The covenant of restraint is made in favour of, and for the benefit of, the first seven respondents who are named in the deed. As such, the covenant is enforceable by those respondents: see Re A &amp; K Holdings Pty Ltd [1964] VR 257 at 261-262; Sunderland Marine Insurance Co v Kearney (1851) 16 QB 925 at 938. It is unnecessary for present purposes to enter upon the questions (a) whether a deed poll is properly to be called a "contract" at law at all: cf Chitty on Contracts , Vol 1 at 2-003 (29 th ed, 2004); Furmston (ed), The Law of Contract , 2.135 (2 nd ed, 2003); or (b) whether this deed poll in fact embodies a contract supported by consideration: cf cl 3 of the Deed (not reproduced here); or else is properly to be regarded as a part of the performance of the Heads of Agreement or as part of an entire transaction: cf Norton on Deeds 86-88 (2 nd ed, 1928). Given that the restraints are contained in an enforceable instrument that reflect what has been agreed by all relevant parties, if they are found to be unenforceable because they are exclusionary provisions that contravene s 45(2)(a) , I can see no reason consistent with the purpose and policy of s 87(3) for not treating them as provisions in a "contract" to which the covenantees are parties. To interpret s 87(3) in this way is to do no more than to give it a purposive and contextual interpretation: see CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2 ; (1997) 187 CLR 384 at 408; Acts Interpretation Act 1901 (Cth), s 15AB.
Case: Sunderland Marine Insurance Co v Kearney (1851) 16 QB 925
Outcome: cited
I should also note that the Deed Poll of Restraint is, as its name signifies, a deed poll. The covenant of restraint is made in favour of, and for the benefit of, the first seven respondents who are named in the deed. As such, the covenant is enforceable by those respondents: see Re A &amp; K Holdings Pty Ltd [1964] VR 257 at 261-262; Sunderland Marine Insurance Co v Kearney (1851) 16 QB 925 at 938. It is unnecessary for present purposes to enter upon the questions (a) whether a deed poll is properly to be called a "contract" at law at all: cf Chitty on Contracts , Vol 1 at 2-003 (29 th ed, 2004); Furmston (ed), The Law of Contract , 2.135 (2 nd ed, 2003); or (b) whether this deed poll in fact embodies a contract supported by consideration: cf cl 3 of the Deed (not reproduced here); or else is properly to be regarded as a part of the performance of the Heads of Agreement or as part of an entire transaction: cf Norton on Deeds 86-88 (2 nd ed, 1928). Given that the restraints are contained in an enforceable instrument that reflect what has been agreed by all relevant parties, if they are found to be unenforceable because they are exclusionary provisions that contravene s 45(2)(a) , I can see no reason consistent with the purpose and policy of s 87(3) for not treating them as provisions in a "contract" to which the covenantees are parties. To interpret s 87(3) in this way is to do no more than to give it a purposive and contextual interpretation: see CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2 ; (1997) 187 CLR 384 at 408; Acts Interpretation Act 1901 (Cth), s 15AB.
Case: CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2 ; (1997) 187 CLR 384
Outcome: cited
I should also note that the Deed Poll of Restraint is, as its name signifies, a deed poll. The covenant of restraint is made in favour of, and for the benefit of, the first seven respondents who are named in the deed. As such, the covenant is enforceable by those respondents: see Re A &amp; K Holdings Pty Ltd [1964] VR 257 at 261-262; Sunderland Marine Insurance Co v Kearney (1851) 16 QB 925 at 938. It is unnecessary for present purposes to enter upon the questions (a) whether a deed poll is properly to be called a "contract" at law at all: cf Chitty on Contracts , Vol 1 at 2-003 (29 th ed, 2004); Furmston (ed), The Law of Contract , 2.135 (2 nd ed, 2003); or (b) whether this deed poll in fact embodies a contract supported by consideration: cf cl 3 of the Deed (not reproduced here); or else is properly to be regarded as a part of the performance of the Heads of Agreement or as part of an entire transaction: cf Norton on Deeds 86-88 (2 nd ed, 1928). Given that the restraints are contained in an enforceable instrument that reflect what has been agreed by all relevant parties, if they are found to be unenforceable because they are exclusionary provisions that contravene s 45(2)(a) , I can see no reason consistent with the purpose and policy of s 87(3) for not treating them as provisions in a "contract" to which the covenantees are parties. To interpret s 87(3) in this way is to do no more than to give it a purposive and contextual interpretation: see CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2 ; (1997) 187 CLR 384 at 408; Acts Interpretation Act 1901 (Cth), s 15AB.
Case: O'Neil v Mann [2000] FCA 1180 ; (2000) 175 ALR 742
Outcome: cited
It may be accepted that where a common law claim alone is made (usually, but not necessarily, not in federal jurisdiction: cf O'Neil v Mann [2000] FCA 1180 ; (2000) 175 ALR 742 at [29] ), a respondent would not characteristically put in issue the possible incapability of the common law operating concurrently with the Act. Often the Act would be of no conceivable relevance in a simple common law claim. But when incapability is properly put in issue, the common law (including its remedies) will be displaced by the operation of the Act (including its remedies and relief) to the extent of that incapability.
Case: Federal Commissioner of Taxation v Murry [1998] HCA 42 ; (1998) 193 CLR 605
Outcome: cited
In their final written submissions, the respondents appear to have taken a new tack in relation to goodwill. Relying upon Old Co's 30 June 2005 balance sheet it was annexed to a 29 November 2005 side agreement between Tiger, Mr James and PJMJ they now advance the following figures for (a) current assets of $12.47 million; (b) fixed assets of $6.53 million including $1.73 million for goodwill; and net equity of $3.74 million. It has not been explained what I am to make of these figures or what the $1.73 million figure should be taken actually to signify by reference to then contemporary accounting standards: cf Federal Commissioner of Taxation v Murry [1998] HCA 42 ; (1998) 193 CLR 605 at [13] - [14] . 73 Though I am of the view that, given the provisions of s 4M of the TP Act, it would ordinarily be appropriate first to deal with the TP Act claim before a common law claim, because of the way in which this matter was prosecuted by the applicants and because of the dispute over the respondents' amendments to its defence, I am content to deal with the common law claim first and without regard to any possible impact of the TP Act upon it in the circumstances. 74 Save in one respect to which I will refer below, there is no obvious disagreement between the parties as to the general principles to be applied in testing the validity of covenants in restraint of trade. There are, predictably, differences in matters of emphases and in the alleged utility of analogies selected from the rich bazaar of decided case law. 80 (vi) The most recent elaboration of the legal nature of goodwill by the High Court was in Federal Commissioner of Taxation v Murry at [12] ff. It is unnecessary for present purposes to enlarge upon what was there said other than to note that one of the definitions endorsed by the joint judgment was that of Lord Macnaghten in Inland Revenue Commissioners v Meuller &amp; Co's Margarine Ltd [1901] AC 217 at 223-224 where it was said: "What is goodwill? It is a thing very easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source. However widely extended or diffused its influence may be, goodwill is worth nothing unless it has power of attraction sufficient to bring customers home to the source from which it emanates. Goodwill is composed of a variety of elements. It differs in its composition in different trades and in different businesses in the same trade."
Case: Buckley v Tutty [1971] HCA 71 ; (1971) 125 CLR 353
Outcome: cited
(i) Public policy lies at the root of the rule that contracts in restraint of trade are, prima facie, unenforceable: see Amoco Australia Pty Ltd v Rocca Brothers Motor Engineering Co Pty Ltd [1973] HCA 40 ; (1973) 133 CLR 288 at 307; Peters (WA) Ltd v Petersville Ltd [2001] HCA 45 ; (2001) 205 CLR 126 at [27] . The only justification for a restraint is if it is reasonable in reference to the interests of the parties and reasonable in the interests of the public: Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 at 565; Buckley v Tutty [1971] HCA 71 ; (1971) 125 CLR 353 at 376. The two requirements merge to some extent. As Walsh J observed in Amoco (at 307): "... if a restraint is imposed which is more than that which is required (in the judgment of the court) to protect the interests of the parties, that is a matter which is relevant to the considerations of public policy which underlie the whole doctrine, since to that extent the deprivation of a person of his liberty of action is regarded as detrimental to the public interests ... I acknowledge that the consequence of what I have just stated is that there is to some extent a merging of the second branch of the Nordenfelt formulation of the applicable principle with its first branch. But this does not mean that the distinction between them is wholly obliterated. In order to justify a restraint of trade both tests must be satisfied. The restraint must be reasonable in the interests of the parties in that it affords no more than adequate protection to the covenantee 'while at the same time it is in no way injurious to the public' (see the Nordenfelt Case ). It may be that although a restraint satisfies the first requirement it is injurious to the public for some reason other than being in excess of what is reasonable in the interests of the parties."
Case: Brown v Brown [1980] 1 NZLR 484
Outcome: cited
(ii) The onus of establishing that a restraint is reasonable as between the parties rests with the party who puts forward the restraint, while the onus of establishing that it is contrary to the public interest is on the party alleging this: Amoco , at 317. (iii) "The fact that the parties have bargained from a position of equality is ... one of the circumstances to be considered in determining whether the covenants were reasonable, but it does not save from invalidity a covenant found to be unreasonable or contrary to the public interest (see also Creamoata Ltd v Rice Equalization Association Ltd [(1953) [1953] HCA 40 ; 89 CLR 286 at 318]." Per Gibbs J in Amoco , at 317. This is a proposition upon which the parties divide, the respondents emphasising that significant weight should be given in this regard to a commercial agreement reached "after hard bargaining" by parties, which each finds in its interests to accept: Amoco , per Menzies J (in dissent). Whether or not the observations of Menzies J accurately reflects Australian law is not a matter that I need consider as I do not consider that the Heads of Agreement represented "an ordinary transaction between a willing vendor and a willing purchaser": Brown v Brown [1980] 1 NZLR 484 at 489 per Cooke J. I will later return to this matter. 83 (ix) Protection of customer connection equally can contrive what is the acceptable duration of a restraint, hence the emphasis in the cases on the period reasonably to be allowed (a) to give the covenantee the opportunity "of cementing an old connection and of profiting from an established reputation": Brown v Brown , 490; and to establish a relationship with the customers of the business Carlton &amp; United Breweries Ltd v Tooth &amp; Co Ltd (1986) 7 IPR 581 at 614; and (b) for severing the relationship between the covenantor and those who would patronize the business of the sale: IRAF Pty Ltd v Graham , at 218. 89 The 5 August 2005 agreement cannot on the evidence meaningfully be characterised as embodying an ordinary transaction between a willing vendor and a willing purchaser. The character Mr James gave the dealing which I accept "a walk in walk out on the basis of a quick clear severance so they didn't have to look at each other much longer" comes closer to the transaction described in Brown v Brown , between two brothers who carried on a business together through a corporate vehicle but who could no longer continue in business together (at 489): "... it was a transaction forced on the parties, in effect a case of one partner buying out the other because unhappy differences had made co-operation impossible." I mention this, not for the purpose of inquiring into the adequacy of the consideration for the restraint: cf Amoco , at 316; but rather to indicate that the circumstances surrounding the transaction do not warrant its being characterised as having been "bargained from a position of equality": cf Amoco , 317; and hence to be so considered in determining whether the restraints were reasonable.