FEDERAL COURT OF AUSTRALIA

GMA Garnet Pty Ltd v Barton International Inc (No 2) [2010] FCAFC 42

THE COURT ORDERS THAT:

1.                  The appeal is allowed in part.

2.                  The orders made by Barker J on 5 May 2009 are set aside and in lieu thereof:

The Court declares that properly construed, the Garnet Supply Agreement executed by the parties on or about 31 March 2005 relevantly provides by clause 2.5, that all garnet which is purchased under the said agreement (in packaged or loose bulk form) and distributed or sold by the respondent to any person (including related entities), and which is 100% Product as defined in the agreement, must be branded by the respondent with the first-named appellant’s name and logo.

3.                  The question of the costs of the application and cross-application heard and determined by Barker J be remitted to Barker J for determination by him.

4.                  The parties bear their own costs of the appeal including the costs of the hearing on 10 May 2010.

UPON THE UNDERTAKING BY THE RESPONDENT TO SUBMIT TO THE JURISDICTION OF AN AUSTRALIAN COURT FOR THE DETERMINATION OF THE LEGALITY OF THE TERMINATION OF THE GARNET SUPPLY AGREEMENT, THE COURT ORDERS THAT:

5.         The application of the appellants for leave to amend the statement of claim and to           remit to the trial judge the matters the subject of the amendment is dismissed.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

the court:

introduction

1                     Reasons for judgment were delivered in this appeal on 4 May 2010 (GMA Garnet Pty Ltd v Barton International Inc [2010] FCAFC 38).  On that occasion the appellants foreshadowed an application for leave to amend the statement of claim and to remit the matters the subject of the amendment to the trial judge.  In view of the proposed application, no orders were made disposing of the appeal.  Rather the application for leave to amend the statement of claim and for remittal was listed for a hearing before the Court.  At the same time the Court heard argument on the question of who should pay the costs of the trial in view of the conclusions reached on the appeal.  Each of those matters will now be addressed.

THe application for leave to amend the statement of claim

2                     The appellants have applied for leave to amend the statement of claim and to remit to the trial judge the question as to whether the first appellant has the right to terminate the Supply Agreement.  The respondent opposes the application on the basis, firstly, that the Court does not have power to make such an order in the present circumstances, or, alternatively, that as a matter of discretion the Court should not make such an order.

3                     It is not necessary to decide the question of power, because the application should be refused as a matter of discretion.  A significant basis upon which the application was brought concerned the convenience of litigating this further issue in Australia and in this Court.  One aspect is answered by the undertaking given by counsel for the respondent to submit to the jurisdiction of an Australian court for the determination of the legality of the notice of termination of the Supply Agreement.  We are not satisfied that the new issue should necessarily be dealt with by this Court.

4                     The application should be refused on the basis that the event which has given rise to the particular issue for which the amendment is sought post-dated the issuing of proceedings.  That issue arose as a result of the service of a notice of termination of the Supply Agreement which occurred a few days ago.  This raises new matters which are appropriately dealt with in a new proceeding.  It should be noted that the appellants expressly elected not to raise the legality of the notices of breach of the Supply Agreement save for the specific questions which the Court ultimately answered.  This matter is referred to at [113] of the reasons for judgment of North and Siopis JJ.  Thus, the application to amend the statement of claim and remit the matters the subject of the amendments to the trial judge should be dismissed.

the costs of the trial

5                     The proper determination of the costs of the trial depend on an understanding of the way in which the trial unfolded and of the evidence which was given at the trial.  In particular, an understanding is required as to the significance of the evidence called in relation to the issues which have ultimately been determined by the Court on appeal.  The trial judge is in the best position to determine these matters.  Consequently, the question of the costs of the trial will be remitted to the trial judge for determination by him.

6                     North and Buchanan JJ would order that each side bear their own costs of this application on the basis that it constitutes a part of the appeal proceeding.  Siopis J would

order that so much of the costs of this application as relate to the issue of the costs of the trial should be costs in the cause of the remitted issue.

Associate:

Dated:         19 May 2010