FEDERAL COURT OF AUSTRALIA

Mayne Nickless Limited v Multigroup Distribution Services Pty Limited

[2001] FCA 1620

TRADE PRACTICES - remedies - damages - time limitations - anti-competitive conduct - claim for injunctive relief under s 80 Trade Practices Act 1974 (Cth) - claim for damages under s 87(1) Trade Practices Act - whether claim for damages time barred - construction of s 87(1) - leave to appeal - criteria.

Trade Practices Act 1974 (Cth) s 80, s 82, s 87

Trade Practices Legislation Amendment Act 1992 (No 222 of 1992), Schedule 1

Trade Practices Amendment (Fair Trading) Act 1998 (No 36 of 1998).

Sent v Jet Corporation of Australia Pty Ltd (1986) 160 CLR 540 cited

Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334 cited

Johnson Tiles Pty Ltd v Esso Australia Ltd (2001) 104 FCR 564 cited

Ex parte Bucknell (1936) 56 CLR 221 cited

Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 cited

Minogue v Williams [2000] FCA 125 cited

Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd [2001] FCA 703 cited

Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514 cited

Trade Practices Commission v Milreis Pty Ltd (1977) 29 FLR 144 cited

Fenech v Sterling (1984) 4 FCR 372 cited

McKain v RW Miller & Company (South Australia) Pty Ltd (1991) 174 CLR 1 cited

Australian Iron & Steel Ltd v Hoogland (1962) 108 CLR 471 cited

David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 cited

Rudolphy v Lightfoot (1999) 197 CLR 500 cited

Nirmalan v Minister for Immigration and Multicultural Affairs [1998] FCA 672 cited

Hocine v Minister for Immigration and Multicultural Affairs (2000) 99 FCR 269cited

Re La Rosa; Ex parte Norgard v Rodpat Nominees Pty Ltd (1991) 31 FCR 83 cited

Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535 cited

Bialkower v Acohs Pty Ltd (1998) 83 FCR 1 cited

Commonwealth v Mewett (1995) 59 FCR 391 cited

MAYNE NICKLESS LIMITED v MULTIGROUP DISTRIBUTION SERVICES PTY LIMITED, TNT AUSTRALIA PTY LIMITED, ANSETT TRANSPORT INDUSTRIES (OPERATIONS) PROPRIETARY LIMITED and J McPHEE & SON (AUSTRALIA) PTY LTD

NG 786 OF 1995

WILCOX, FRENCH and DRUMMOND JJ

16 NOVEMBER 2001

SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG786 OF 1995

BETWEEN:	MAYNE NICKLESS LIMITED (ACN 004 073 410) APPELLANT
AND:	MULTIGROUP DISTRIBUTION SERVICES PTY LIMITED (ACN 001 227 890) FIRST RESPONDENT TNT AUSTRALIA PTY LIMITED (ACN 000 495 269) SECOND RESPONDENT ANSETT TRANSPORT INDUSTRIES (OPERATIONS) PROPRIETARY LIMITED (ACN 004 209 410) THIRD RESPONDENT J McPHEE & SON (AUSTRALIA) PTY LTD (ACN 001 856 111) FOURTH RESPONDENT
JUDGE:	WILCOX, FRENCH and DRUMMOND JJ
DATE OF ORDER:	16 NOVEMBER 2001
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1. The Appellant have leave to appeal.

2. The appeal be dismissed.

3. The Appellant pay the First Respondent's costs of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG786 OF 1995

BETWEEN:

MAYNE NICKLESS LIMITED

(ACN 004 073 410)

APPELLANT

AND:

MULTIGROUP DISTRIBUTION

SERVICES PTY LIMITED

(ACN 001 227 890)

FIRST RESPONDENT

TNT AUSTRALIA PTY LIMITED

(ACN 000 495 269)

SECOND RESPONDENT

ANSETT TRANSPORT INDUSTRIES

(OPERATIONS) PROPRIETARY LIMITED

(ACN 004 209 410)

THIRD RESPONDENT

J McPHEE & SON (AUSTRALIA) PTY LTD

(ACN 001 856 111)

FOURTH RESPONDENT

JUDGE:	WILCOX, FRENCH and DRUMMOND JJ
DATE:	16 NOVEMBER 2001
PLACE:	SYDNEY

REASONS FOR JUDGMENT

THE COURT:

Introduction

1 This proceeding was commenced in the Supreme Court of South Australia in 1995, following judgment in this Court in an earlier proceeding brought by the Trade Practices Commission against Mayne Nickless Limited, TNT Australia Pty Limited and Ansett Australia Limited. In the current proceeding Multigroup Distribution Services Pty Limited ("Multigroup") claimed relief under the Trade Practices Act 1974 (Cth) by way of damages and an account of profits against four companies which it alleged had engaged in anti-competitive conduct in periods from 1987 to 1990. The four companies were Mayne Nickless Limited, TNT Australia Pty Limited, Ansett Transport Industries (Operations) Pty Ltd (formerly Ansett Australia Limited) and J McPhee & Son (Australia) Pty Ltd. The four companies are collectively referred to as "the Transport Group" to avoid confusion with party designations in the original pleadings and in this appeal.

2 On 10 October 1995, the present proceeding was transferred to this Court. Amendments were made to the statement of claim in 1996 and 1997. The 1997 amendment introduced a claim for injunctive relief for the first time. By way of defence it is asserted by members of the Transport Group that the claim for damages was out of time having regard to the provisions of s 82(2) and s 87(1CA) of the Trade Practices Act. However, Multigroup relied upon s 87(1) to maintain its damages claim on the basis that it was relief claimed in proceedings for an injunction under s 80 which are not time limited.

3 Gyles J at first instance decided to deal with this aspect of the litigation and the availability of an order for an account of profits as preliminary issues. He held that s 87(1) was not, as contended by the members of the Transport Group, time limited. He also held that an account of profits was not available as relief. Mayne Nickless sought leave to appeal from his Honour's decision. Multigroup, as applicant in the proceedings, and the other members of the Transport Group, were named as respondents to the application for leave. The proposed appeal would raise an important question about the operation of s 87(1) of the Trade Practices Act when it is invoked in support of a claim for damages.

The Current Statement of Claim

4 Multigroup is a company incorporated in New South Wales which describes its business as including the supply of express freight transportation services in Australia under the business name “Discount Freight Express”. TNT Australia Pty Limited, Mayne Nickless Limited and J McPhee & Son (Australia) Pty Ltd, all carry on like businesses in Australia under a variety of business names. At least until the recent collapse of the Ansett group, Ansett Transport Industries (Operations) Pty Ltd carried on a like business.

5 The members of the Transport Group are alleged by Multigroup to have been parties to a series of anti-competitive arrangements or understandings variously made and/or given effect to from “…at least since 1987” (par 9), “… between January and April 1987” and “…after October 1987” (par 10), “in the period between June 1987 and December 1987” and “after October 1987” (par 11), “…between January 1988 and December 1988” (par 12) and “in or about November 1990” (par 13). The making of the arrangements or understandings and giving effect to them are said to constitute contraventions of s 45(2)(a)(ii) and s 45(2)(b)(ii) of the Trade Practices Act. In addition, it is alleged that by virtue of their conduct the members of the Transport Group and each of them took advantage of their market power for the purpose of eliminating or substantially damaging Multigroup and/or deterring or preventing it from engaging in competitive conduct in the market in contravention of s 46 of the Act. The conduct is also said to amount to an unlawful conspiracy made between them for the purpose of injuring Multigroup by unlawful means and action in furtherance of that conspiracy. The arrangements and understandings relied upon are extensively particularised. It is not necessary for the purposes of this appeal to refer to the content of those particulars.

6 The making and giving effect to the arrangements or understandings, it is said, “…has caused [Multigroup] loss and damage and continues to cause it loss and damage…” (par 20). Loss and damage is said to have been suffered as a result of the contravention of s 46 (par 24) and the conspiracy (pars 25 and 26). The heads of loss and damage relied upon are set out in par 28 as follows:

“By reason of the matters alleged in paragraphs 20, 24, and 26 the Applicant has suffered loss and damage consisting of:

(a) the loss of customers;

(b) the restriction of the Applicant’s ability to win customers and increase market share;

(d) the deprivation and limitation of the ability of the Applicant to offer competitive rates to customers of the Respondents;

(e) the restriction on the ability of the Applicant to obtain access to economies of scope and scale;

(f) the reduction and limitation of the profits of the Applicant;

(g) the restriction of the financial resources available to the Applicant;

(h) additional costs and expenses incurred by the Applicant;

(i) the restriction of the growth of the Applicant’s business;

(j) the suppression of the value of the goodwill of the Applicant; and

(k) the restriction of the value of business of the Applicant.”

7 In anticipation of a suggestion that its claim may be barred by s 487 of the Limitations of Actions Act 1936 (SA), Multigroup says in par 29 that the material facts were not known to it until 25 July 1994, when the respondents to the earlier proceeding withdrew their defences to the Trade Practices Commission proceedings against them. This claim is expanded in Multigroup's replies to the defences of members of the Transport Group. It seems the allegation is that all members of the Transport Group concealed from their competitors and customers the fact that arrangements and understandings had been entered into and given effect. The steps said to constitute that concealment include the denial of liability in the Trade Practices Commission proceedings at the time of filing of defences and instructions given by officers of the Transport Group members to the effect that the arrangements or understandings must be kept secret and that certain documents, including diaries of officers of the Transport Group members, were to be destroyed (par 27).

8 The relief claimed in this proceeding is set out in par 30 of the further amended statement of claim:

“30. The Applicant claims:

30.1 Damages;

30.2 Account of profits;

30.3 Interest;

30.4 An order restraining the Respondents from offering to supply or supplying express freight transportation services to organisations or entities known by them to be customers of the Applicant on terms more favourable than the terms for the time being offered or proposed to be offered to other customers of the Respondents for the same or substantially similar transportation services;

30.5 Such further or order orders as the Court may think fit; and

30.6 Costs.”

9 The claim for injunctive relief made by par 30.4 was only introduced into the proceedings on 3 February 1997 when the further amended statement of claim was filed. When the proceeding was instituted the only relief sought was damages, an account of profits, interest, "[s]uch further or other orders as the Court may think fit” and costs. The amended statement of claim filed on 25 October 1996 sought the same relief.

10 In their defences to the further amended statement of claim the Transport Group members, who deny the arrangements and understandings, also deny having concealed them and that the doctrine of concealed fraud has any application to a claim under the Trade Practices Act. In addition, they assert that the claims are partly time-barred by the provisions of the Trade Practices Act. TNT, Ansett and J McPhee & Son each plead their defence in this respect as follows:

“13. In further answer to the whole of the Further Amended Statement of Claim, the …Respondent says:

(a) to the extent the Applicant claims damages or other relief in respect of any cause of action arising under the Trade Practices Act 1974:

(i) insofar as the material facts relating to that cause of action were first pleaded in the Statement of Claim, any such cause of action is barred or extinguished by virtue of sections 82(2) and 87(1CA) of the Trade Practices Act 1974 to the extent that it accrued before 21 July 1992;

(ii) insofar as the material facts relating to that cause of action were first pleaded in the Further Amended Statement of Claim, any such cause of action is barred or extinguished by virtue of sections 82(2) and 87(1CA) of the Trade Practices Act 1974 to the extent it accrued before 3 February 1994;”

Mayne Nickless pleads the limitation point thus:

“21. In further answer to the whole of the Further Amended Statement of Claim, the Third Respondent says that if, which is denied, the Applicant has suffered any otherwise recoverable loss or damage:

(a) as a result of contraventions of the Trade Practices Act 1974 as alleged in the Further Amended Statement of Claim, such loss or damage was first suffered more than 3 years prior to the commencement of these proceedings and any claim for damages to that extent is accordingly statute barred;

(b) as a result of tortious or other conduct as alleged in the Further Amended Statement of Claim, such loss or damage was first suffered more than 6 years prior to the commencement of these proceedings and any claim for damages is to that extent accordingly statute barred.”

11 In its replies, Multigroup contends that by reason of fraudulent concealment of facts giving rise to its cause of action, the statutory time limitation provisions relied upon by the Transport Group did not operate as a bar to, or in extinguishment of, its causes of action either arising under the Trade Practices Act or at law. Further, and alternatively, it is asserted that the Transport Group members engaged in conduct by way of concealment of their anti-competitive conduct by reason of which it would be unconscionable for them to seek to rely upon the statutory limitations and that they were estopped from doing so.

The Preliminary Questions

12 On 8 September 2000, Gyles J made an order for the hearing of certain questions to be determined separately from and before the rest of the proceedings. The questions were:

· What (if any) limitation period applies in law to a claim for relief under s 87(1) of the Trade Practices Act 1974 (Cth)?

· Is an account of profits a remedy available in respect of any of the kinds of causes of action pleaded in the further amended statement of claim?

13 In deciding to hear and determine these questions separately, his Honour characterised the prosecution and defence of the proceedings as “a mammoth undertaking”. He adjudged the case as “far from ready for hearing” and observed that “much evidence remains to be filed”. Hearing of the proceedings has been tentatively fixed for the commencement of sittings in 2002, but whether that can be met is not yet certain. The hearing of the case will, in his Honour’s opinion, take many months. He said:

“In this setting, I decided to accede to an application for the separate and early determination of several questions. Those which remain live relate partly to issues relating to time barriers and, secondly, to the claim for account of profits. I did so because of the impact that these questions have upon the management of the case from the point of view of the parties and the Court. It is desirable that in litigation on this scale all concerned should know, as far as possible, where they are going. The issues to which these questions relate have the capacity to involve months of hearing time and the necessity for considerable preparation.”

Gyles J acknowledged that there are undoubtedly problems with separately determining particular issues but the procedure being available, the decision whether to use it was one for the judge “managing the practicalities of the case”.

14 His Honour heard and determined the issues raised by the two questions, albeit he ultimately reformulated them and answered them as follows:

“Q1 What if any limitation period does the Trade Practices Act 1974 (“the Act”) impose on the Applicant’s claims for orders under section 87(1) of the Act, based on the claims for relief made and the matters pleaded in the Applicant’s Second Further Amended Statement of Claim?

Answer: None

Q2 Does the Applicant’s Second Further Amended Statement of Claim disclose any cause of action for an account of profits?

Answer: No”

15 Mayne Nickless, by a motion filed on 20 April 2001, seeks leave to appeal in relation to the first question. The other members of the Transport Group have not sought to challenge Gyles J's answer to this question. No application has been made in relation to the second question.

The Grounds of Appeal

16 In support of its application for leave, Mayne Nickless formulated its proposed grounds of appeal. They are ten in number but all reflect a single proposition. That is, that any claim for relief under s 87(1) of the Trade Practices Act which could have been made under s 82, if within the time limited for such actions under s 82(2), attracts that time limitation which is three years from the date upon which the cause of action accrued.

The Statutory Framework

17 Part VI of the Trade Practices Act is entitled “Enforcement and Remedies”. Relevant for present purposes are the sections which provide for injunctive relief (s 80), damages (s 82) and other orders (s 87) as they stood prior to the amendments effected by the Trade Practices Act Amendment Act (No 1) 2001:

“(1) Subject to subsections (1A), (1AAA) and (1B), where, on the application of the Commission or any other person, the Court is satisfied that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute:

(a) a contravention of any part of the following provisions:

(i) a provision of Part IV, IVA, IVB or V;

(ii) section 75AU or 75AYA;

…

the Court may grant an injunction in such terms as the Court determines to be appropriate.

…

(4) The power of the Court to grant an injunction restraining a person from engaging in conduct may be exercised:

(a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind;

(b) whether or not the person has previously engaged in conduct of that kind; and

(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engages in conduct of that kind.

(5) The power of the Court to grant an injunction requiring a person to do an act or thing may be exercised:

(a) whether or not it appears to the Court that the person intends to refuse or fail again, or to continue to refuse or fail, to do that act or thing;

(b) whether or not the person has previously refused or failed to do that act or thing; and

(c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person refuses or fails to do that act or thing.”

18 Section 82 dealt with actions for damages. It read:

“(1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV, IVB or V or section 51AC may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.

(2) An action under subsection (1) may be commenced at any time within 3 years after the date on which the cause of action accrued.”

19 Section 87 is lengthy. It is necessary to set out only certain provisions.

“(1) Without limiting the generality of section 80, where, in a proceeding instituted under, or for an offence against, this Part, the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in (whether before or after the commencement of this subsection) in contravention of a provision of Part IV, IVA, IVB or V, the Court may, whether or not it grants an injunction under section 80 or makes an order under section 80A or 82, make such order or orders as it thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (2) of this section) if the Court considers that the order or orders concerned will compensate the first-mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage.

(1A) Without limiting the generality of section 80, the Court may, on the application of a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in (whether before or after the commencement of this subsection) in contravention of a provision of Part IVA, IVB or V or on the application of the Commission in accordance with subsection (1B) on behalf of such a person or 2 or more such persons, make such order or orders as the Court thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (2)) if the Court considers that the order or orders concerned will compensate the person who made the application, or the person or any of the persons on whose behalf the application was made, in whole or in part for the loss or damage, or will prevent or reduce the loss or damage suffered, or likely to be suffered, by such person.

(1B) …

(1C) An application may be made under subsection (1A) in relation to a contravention of Part IVA, IVB or V notwithstanding that a proceeding has not been instituted under another provision of this Part in relation to that contravention.

(1CA) An application under subsection (1A) may be commenced:

(a) in the case of conduct in contravention of Part IVA – at any time within 2 years after the day on which the cause of action accrued; or

(b) in any other case – at any time within 3 years after the day on which the cause of action accrued.

(1D) …

(2) The orders referred to in subsection (1) and (1A) are:

(a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Court thinks fit, to have been void ab initio or at all times on and after such date before the date on which the order is made as is specified in the order;

(b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after such date before the date on which the order is made as is so specified;

(ba) an order refusing to enforce any or all of the provisions of such a contract;

(c) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage;

(d) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage;

(e) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at his or her own expense, to repair, or provide parts for, goods that had been supplied by the person who engaged in the conduct to the person who suffered, or is likely to suffer, the loss or damage;

(f) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at his or her own expense, to supply specified services to the person who suffered, or is likely to suffer, the loss or damage; and

(g) an order, in relation to an instrument creating or transferring an interest in land, directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to execute an instrument that:

(i) varies, or has the effect of varying, the first-mentioned instrument; or

(ii) terminates or otherwise affects, or has the effect of terminating or otherwise affecting, the operation or effect of the first-mentioned instrument.”

Subsections (3) to (6) of s 87 are not relevant for present purposes. The changes to s 87 effected by the 2001 amendments are referred to later in these reasons.

The Reasons of Gyles J

20 Having set out the history of the proceedings and the relevant statutory framework, his Honour turned to the limitation question. He observed that no limitation period in terms applies to orders made pursuant to s 87(1). This contrasts with the limitation periods expressly applying to claims for damages under s 82 and s 87(1CA). However, his Honour thought it was not surprising that there is no time limit to enjoining persons to obey the law. He pointed out that s 87(1) assumes a proceeding is on foot for relief other than that available under s 87(1) itself. His Honour referred to the decision of the High Court in Sent v Jet Corporation of Australia Pty Ltd (1986) 160 CLR 540 and the observation that:

"Although s 87 contains no time limitation, the proceeding on which the power to grant relief under s 87 depends will be barred if it is instituted outside the time, if any, limited for instituting that proceeding."

Gyles J noted that the preliminary question as framed was not apt to give a useful result because it assumed there could be a claim for relief under s 87(1). Time bar questions were to be decided having regard to the proceedings upon which the s 87(1) relief was parasitic.

21 His Honour then referred to case law supportive of the proposition that no time limit attaches to proceedings claiming relief under s 87(1) when the primary relief was claimed under a provision to which no time limit applied.

22 His Honour then said (at par 31):

"In my opinion, it follows from the decision of the High Court in Sent that as there is no time provision in relation to the commencement of proceedings pursuant to s 80, then there is no time provision in relation to the grant of relief pursuant to s 87(1) in a proceeding brought pursuant to s 80. If it were not for the words in s 87 "including all of the orders mentioned in subsection (2) of this section" and the express terms of s 87(2), I would be inclined to read s 87(1) as not authorising orders in the nature of those encompassed by s 82. This would result in a coherent construction of Part VI. With some misgivings, I do not believe that s 87(1) can be so read in view of the express provisions of s 82(2)(d)."

23 In the event his Honour answered what he called "the gist of the question" in the negative. The question as posed, however, was not apt as it proceeded upon a false premise. Furthermore, it was framed as a purely academic question without being tied back to the proceeding - Bass v Permanent Trustee Co Ltd (1999) 198 CLR 334. He therefore indicated that the parties should agree upon a revised question with those considerations in mind. The questions were reformulated and answered as set out earlier in these reasons.

Whether Leave to Appeal Should Be Granted

24 It was not in dispute that Gyles J’s decision in dealing with the preliminary question relating to the existence of a limitation period was interlocutory in character and that the leave of the Court is necessary before the appeal against his Honour’s decision can be entertained. As a matter of convenience, the merits of the appeal were fully argued during the hearing of the application for leave to appeal.

25 The considerations relevant to the grant of leave to appeal from interlocutory orders were recently considered by the Full Court in Johnson Tiles Pty Ltd v Esso Australia Ltd (2001) 104 FCR 364. The policy of the leave requirement is plain enough. The time and resources of the Court and the parties are not lightly to be taken up with appeals against decisions which do not finally determine the rights of the parties. Interlocutory orders, however, range from those concerned with the mechanics of case management and pre-trial preparation to those which determine legal or factual issues potentially having a significant impact upon the scope and outcome of the proceedings. In relation to case management and procedural orders, the scales are weighted against the grant of leave. However, if while interlocutory in character a decision has the practical operation of finally determining rights, then “… a prima facie case exists for granting leave to appeal” – Ex parte Bucknell (1936) 56 CLR 221 at 225; Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397 at 400; Minogue v Williams [2000] FCA 125 at par 18.

26 In the ordinary course it is not appropriate to determine a limitation issue as a separate question. Generally speaking a statutory time limitation will not support an order striking out a claim for failure to disclose a reasonable cause of action or on the basis that the proceeding is frivolous or vexatious or an abuse of the process of the Court – see Carey-Hazell v Getz Bros & Co (Aust) Pty Ltd [2001] FCA 703 and the cases reviewed there. The High Court in the joint judgment in Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 533 said:

“We should…state in the plainest of terms that we regard it as undesirable that limitation questions of the kind under consideration should be decided in interlocutory proceedings in advance of the hearing of the action, except in the clearest of cases.”

That warning, which would extend to the hearing of a limitation point as a preliminary issue. is of general application to cases which may turn upon contentious characterisation of matters of fact.

27 Where a preliminary determination has been made inappropriately, this Court could entertain an application for leave to appeal on the basis that the order for separate hearing and determination should be set aside together with the answer and, alternatively, that the answer to the question be set aside and substituted with “not appropriate to answer”.

28 In this case, however, the decision to hear and determine the limitation point separately was within the reasonable discretion of the judge seised of the management of the case. The question was one whose resolution did not depend upon contested matters of fact, nor even upon contentious characterisation of undisputed fact. It was a question of law about the relationship between two statutory provisions:: s 82 and s 87(1).

29 It can be argued that its resolution either way may not have a major impact upon the length of the trial. For if the limitation period prescribed in s 82(2) does apply to these proceedings in so far as they involve a claim for damages through s 87(1), the pleadings foreshadow debate about the significance of the alleged concealed fraud, whether or not it would be unconscionable on the part of the members of the Transport Group to rely upon the limitation, and whether they are thereby estopped from doing so. That in turn may depend upon whether the limitation is characterised as extinguishing the cause of action or merely barring the remedy – see Carey-Hazell v Getz Bros.

30 If leave to appeal is refused, the matter will proceed upon the basis of the trial judge’s determination that the limitation period under s 82(2) does not apply. It is likely to be argued then that, as a matter of discretion, the Court should not award relief by way of damages under s 87(1) which would not have been available under s 82 because of the expiry of the three year time limit. It is reasonably predictable that, in that event, the allegations of concealed fraud and unconscionable conduct would be raised and relied upon in answer to such a contention and as a counter-weight in the exercise of the Court’s discretion under s 87.

31 If leave were not granted, and Multigroup were ultimately to succeed, an appeal against the first judgment could raise the question of the application of the limitation period under s 82(2) and the correctness of his Honour’s determination about that matter. Were that appeal to succeed either in the Full Court or in the High Court, then the probability is that the matter would be remitted for a new trial on the basis that the limitation period applied. In that event the issues of fraudulent concealment, unconscionability and associated estoppel would have to be canvassed again in a different legal context.

32 Considering those possibilities, and given its impact upon the way in which the trial may be conducted, even though it may not shorten the trial, it is better that the limited point be determined at the appellate level sooner rather than later.

33 The tests for grant of leave against an interlocutory determination were set out by the Full Court in Décor Corporation and also in Minogue: the decision at first instance be attended with sufficient doubt to warrant its reconsideration on appeal and that substantial injustice would result if leave were refused. Those tests should not be regarded as exhaustive. It may not be necessary to characterise the decision appealed against as one “attended with … doubt” where it involves the resolution of an important legal issue in the case. The importance of that issue and its impact on the conduct of the case can inform the exercise of the discretion to grant leave. The present question falls within that category and it is appropriate for the grant of leave to appeal.

The History of Section 87 – An Overview

34 In its original form in 1974, s 87 conditioned the grant of the remedies for which it provided entirely upon a finding that there had been a contravention of Pt IV or Pt V of the Act and upon the imposition of a penalty under s 79 or the grant of relief under ss 80 or 82. The orders that could be made were “such other orders as [the Court] thinks fit to redress injury to persons caused by any conduct to which the proceeding relates or any like conduct engaged in by the defendant”. Subsection (2) allowed then, as it does now, for a variety of orders although only in the forms covered by pars (a) to (d). Paragraphs (e), (f) and (g) were added by later amendment.

35 The remedies available under s 87 have been described from the early years of the Act as sui generis - Donald and Heydon, Trade Practices Law, Law Book Co, (1978) p 851. In Trade Practices Commission v Milreis Pty Ltd (1977) 29 FLR 144, Bowen CJ described subss 87(1) and (2) as:

“…ancillary provisions, which would only occasionally be found appropriate to be applied.”

See also Brennan J at 157 and Deane J at 167.

36 The Swanson Report, placed discussion of s 87 under the heading “Ancillary Orders”. However it recommended the decoupling of s 87 relief from the grant of primary relief under other provisions of the Act – Trade Practices Review Committee, Report to the Minister for Business and Consumer Affairs, August 1976 pars 9.158-9.159. This recommendation was reflected in the Trade Practices Act Amendment Act 1977 (Cth) (No 81 of 1977). By that amendment, subss (1), (2) and (3) were replaced by new subsections bearing those numbers and subs (1A) was introduced. The power under subs 87(1) to make orders was conditioned upon a finding by the Court that a party to proceedings under Pt VI of the Act had suffered or was likely to suffer loss by the conduct of another person engaged in the contravention of a provision of Pt IV or Pt V of the Act. The power was expressly stated not to depend upon whether an order had been made under s 80 or s 82. In lieu of the reference to “redress” the condition of the exercise of the power was that the Court considered that the order or orders concerned would compensate the parties suffering loss or damage in whole or in part for that loss or damage.

37 The new subs (1A) allowed orders under s 87 to be made in proceedings, in which a contravention was established, on the application of a person not a party, who had suffered or was likely to suffer loss or damage by conduct of another person in contravention of Pt V. Subsection (2)(a) and (b) as enacted in 1977 were in the same terms as at present. Subsection (2)(ba) and (g) were introduced by later amendment. The words “without limiting the generality of section 80” were inserted at the beginning of subss (1) and (1A) by the Statute Law (Miscellaneous Provisions) (No 1) Act 1983, (Number 39 of 1983, see Schedule 1).

38 The severance of the right to relief under s 87 from the grant of primary relief under ss 79, 80 and 82 did not mean that the section could provide stand-alone remedies. Sections 87(1) and (1A) provided respectively for the discretionary grant of compensatory relief for parties and others applying in proceedings for primary relief under a provision of Pt VI of the Act other than s 87 – Sent v Jet Corporation of Australia Pty Ltd at 545. In that case the High Court disapproved the decision of the Full Court of the Federal Court in Fenech v Sterling (1984) 4 FCR 372 in so far as the Full Court in that case took the view that s 87(1A) was a stand alone remedial provision.

39 In 1986 subs (1A) was amended to include provision for applications to be made by the Commission on behalf of persons who had suffered loss or damage or were likely to suffer loss or damage, by the conduct of another person in contravention of Pt V. Subsections (1B) to (1E) inclusive were introduced at that time as were pars (ba) and (g) of subs (2) – Trade Practices Revision Act 1986 (No 17 of 1986) s 55.

40 The decision of the High Court in Sent which prevented non-parties from seeking relief under s 87(1A) as a stand alone remedy was overcome with the substitution of a new subs 87(1C) by the Statute Law (Miscellaneous Provisions) (No 2) Act 1986, (No 168 of 1986). The subsection which was inserted by that amendment is substantially as it stands today subject to further amendment which widens it to cover actions based on contraventions of Pts IVA and IVB. These amendments were consequential upon the enactment of Pt IVA relating to unconscionable conduct, and Pt IVB concerning Industry Codes: see Trade Practices Legislation Amendment Act 1992 (No 222 of 1992), Schedule 1 and Trade Practices Amendment (Fair Trading) Act 1998 (No 36 of 1998).

41 Section 87 was further amended by the Trade Practices Act Amendment Act (No 1) 2001. The operation of s 87(1) is unaffected by those amendments which came into effect on 26 July 2001. The subsection is, however, now stated to apply not only irrespective of whether an order is made under ss 80 and 82, but also irrespective of whether an order is made under new ss 86C and 86D. Those new sections relate to non-punitive orders such as community service and probation orders (s 86C) and punitive adverse publicity orders (86D).

42 The recent amendments repealed subss 87(1A) and (1B) and substituted new subsections. The new subs 87(1A) is largely a rewrite of the old into separate paragraphs to make it more readable. The power of the Commission under s 87(1B) to make an application on behalf of persons affected by a contravention is now freestanding being no longer conditioned on the existence of a proceeding instituted by the Commission under s 79 or 80. The time limited for proceedings under subs 87(1A) is extended to six years where previously it was two years for contraventions of Pt IVA and three years for other contraventions. A new section 87CA is introduced providing for the Commission, with the leave of the Court, to intervene in any proceeding under the Act. These amendments, however, do not affect the outcome of the present case which turns upon s 87 as it was prior to their coming into effect.

Remedies, Powers and Jurisdiction under Part VI of the Trade Practices Act

43 The statement of claim makes no reference to s 87 of the Act. It claims an injunction and damages and other relief. The first reference to s 87 in the pleadings comes in the defences. It is said that the claim for "damages or other relief in respect of any cause of action arising under the Trade Practices Act" is barred or extinguished by virtue of s 82(2) and s 87(1CA) of the Act. The reply to each defence joins issue with it and goes on to raise fraudulent concealment. Implicit in the joinder of issue is the proposition that the claims for damages are not time barred.

44 Accepting that an assumed basis for the relief claimed is the power of the Court under s 87(1) it is necessary to consider how that subsection operates within the field of the Court's jurisdiction under the Act. The jurisdiction of the Court in this case derives from s 86 of the Act. It is jurisdiction "…in any matter arising under this Act in respect of which a civil proceeding has, whether before or after the commencement of this section, been instituted under this Part." The authority of the Parliament to confer this jurisdiction upon the Court derives from s 77 of the Constitution read with s 76(ii). The jurisdiction of a federal court may be defined with respect to matters arising under any laws made by the parliament. A matter in this context means a controversy which parties bring for determination by the Court. The class of matter in respect of which jurisdiction is conferred on the Federal Court under Pt VI of the Trade Practices Act is defined by reference to a civil proceeding having been instituted under that Part. This definition makes the institution of such a proceeding logically antecedent to the conferral of jurisdiction for its resolution.

45 It is necessary to keep in mind the distinction between "jurisdiction", which is the authority of the Court to adjudicate upon matters, and "power" which describes the remedies the Court may award or the other orders it may make in the exercise of its jurisdiction. As Toohey J said in Wardley Australia Ltd v The State of Western Australia at 561:

"'Jurisdiction' … means 'the authority which a court has to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision'. In the exercise of its jurisdiction, a court has powers expressly or impliedly conferred by the legislation governing it and 'such powers as are incidental and necessary to the exercise of the jurisdiction or the power so conferred'."

46 Because of the way in which s 86 defines the jurisdiction of the Court some of the provisions of Pt VI fulfil the dual role of defining jurisdiction and conferring remedial powers. Section 80 empowers the Court to grant injunctions in the circumstances to which it applies. However, an application for an injunction is within jurisdiction, not because of the operation of s 80, but because of the operation of s 86. So too is a claim for damages under s 82.

47 It follows that the time limit for which s 82 provides does not go to jurisdiction. The jurisdiction conferred on the Court by s 86 is defined by reference to the matters in respect of which proceedings are brought under the remedial provisions of Pt VI. The time limitation in s 82 does not go to the definition of the subject matter of the proceeding. If it were definitive of the cause of action then it might also be seen as going to the jurisdiction of the Court to entertain that cause of action - see generally on the distinction between procedural and jurisdictional time limitations - McKain v RW Miller & Company (South Australia) Pty Ltd (1991) 174 CLR 1; Carey-Hazell v Getz Bros. Insofar as s 87 creates a 'stand alone' cause of action, as it does under s 87(1A), it defines an element of the jurisdiction of the Court under Pt VI.

48 A time limitation may be a condition which is of the essence of a right - Australian Iron & Steel Ltd v Hoogland (1962) 108 CLR 471 at 476 (Dixon CJ), 480 (Kitto J), 488 (Windeyer J). A closely related concept is that of the time limitation which confines the jurisdiction of the Court - David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265 at 277; Rudolphy v Lightfoot (1999) 197 CLR 500 at 507; Nirmalan v Minister for Immigration and Multicultural Affairs [1998] FCA 672; Hocine v Minister for Immigration and Multicultural Affairs (2000) 99 FCR 269 at 280.

The Construction of Section 87(1)

49 Section 87(1) confers a power upon the Court to make orders subject to the following conditions:

1. The orders are made in a proceeding instituted under or for an offence against Part VI.

2. The Court finds that a party to the proceeding has suffered or is likely to suffer loss or damage by conduct of another person in contravention of a provision of Part IV, IVA, IVB or V of the Act.

3. The orders are made against the person who engaged in the conduct.

4. The Court thinks the orders are appropriate.

5. In the case of a person who has suffered loss or damage the Court considers the order or orders will compensate the person in whole or in part for the loss or damage.

6. In the case of a person who is likely to suffer loss or damage the Court considers that the order or orders will prevent or reduce the loss or damage.

50 The order or orders that may be made under subs 87(1) include those which may be made under subs 87(2). The orders cannot be made for the benefit of a person who is a party to or knowingly involved in the relevant contravention. Hence the section cannot be used to support orders for contribution - Re La Rosa; Ex parte Norgard v Rodpat Nominees Pty Ltd (1991) 31 FCR 83; Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535; Bialkower v Acohs Pty Ltd (1998) 83 FCR 1 at 9-11.

51 The orders made under s 87(1) are to be directed to compensating loss or damage which has been suffered or preventing or reducing likely loss or damage. The relevant loss or damage must be loss or damage flowing from conduct which has already occurred. The subsection does not provide for orders based upon apprehended conduct giving rise to apprehended loss or damage. So, unlike s 80, s 87(1) does not authorise injunctive relief in relation to proposed conduct unless such relief could somehow prevent or reduce loss or damage flowing from past conduct. It is to be noted that the definition provision of the Act, s 4(2), which covers references to "engaging in conduct", does not extend that term to proposed conduct. If proposed conduct is to be covered by a provision of the Act that must be specified as it is in s 80.

52 Compensatory orders which may be made under s 87(1) include orders under s 87(2) for the refund of money or the payment of damages to the person who suffered the relevant loss or damage (s 87(2)(c) and (d)). Each of these orders is only able to be directed to a person who has engaged or was involved in contravening conduct.

53 The power in s 87(1) can only be exercised in a proceeding instituted under or for an offence against Pt VI of the Act. The language of the subsection presupposes the existence of a proceeding claiming relief based upon some other provision of Pt VI. The power it confers is in aid of the jurisdiction defined by s 86 read with the other provisions of Pt VI. In this respect s 87(1) contrasts with s 87(1A) which operates as a stand alone provision. It is not surprising therefore that s 87(1A) attracts specified limitation periods under s 87(1CA). In contrast no time limitation is specified in relation to the exercise of the powers confirmed by s 87(1). That is because the subsection provides for ancillary relief. In an action in which it is invoked the only relevant time limitations are those which affect the proceedings, under some other provision of Pt VI, in which orders under s 87(1) are sought.

54 If a proceeding is brought out of time under s 82 and the limitation is pleaded and the application dismissed, then there will have been no finding of a contravention which is a necessary condition of the exercise of the power under s 87(1). If the time limitation under s 82(2) is not pleaded or is waived, or if the respondent is estopped from raising it, then a finding of contravention may be made and damages awarded under s 82. Such other orders as may be open under s 87 can also be made. That possibility is open as the time limitation imposed by s 82(2) does not in terms operate as a jurisdictional limitation but rather as a procedural bar. The cause of action under s 82 is defined in s 82(1). The time bar under s 82(2) presupposes the existence of that cause of action. As Cooper J observed of such provisions in Commonwealth v Mewett (1995) 59 FCR 391 at 398:

"Once a relevant limitation period has expired it is irrelevant until such time as a defendant raises the plea in bar to the remedy. Otherwise the question of limitation does not arise for consideration by the court."

55 It follows that the time limitation under s 82 does not exclude the possibility of orders being made under s 87(1) in a proceeding commenced after the expiration of three years from the date when the cause of action occurred. It may be that the time limitation is not pleaded or for one reason or another cannot successfully be invoked. The question whether a claim for relief under s 87(1) is affected by a time limitation is entirely dependent upon the question whether the proceedings in which it is raised are so affected. In the case of proceedings for injunctive relief under s 80 there is no time limitation albeit discretionary considerations may arise in relation to undue delay in seeking that relief.

56 It may be true to say that the absence of any time limitation under s 87 itself, in relation to claims for damages under s 87(1), renders the time limit imposed by s 82(2) too easily avoidable. It may also be said that this construction detracts from the logical consistency of Pt VI. So much may be accepted but does not provide a basis for writing into s 87(1) words that are not there. Indeed, to import into the subsection a time limitation on claims for damages under it would be to introduce an element inconsistent with its character as providing relief ancillary to a primary cause of action. The same is true of any attempt to import by analogy or otherwise the time limits imposed on claims for relief under s 87(1A) by s 87(1CA).

57 There are, in any event, significant differences between the relief which may be awarded under s 87(1) and that which is recoverable under s 82. The primary difference is that the relief awarded under s 87(1) is discretionary. In the exercise of that discretion, a court would be entitled to have regard to whether the subsection had been invoked merely to overcome a time problem in proceedings that could, absent that problem, have been brought under s 82. The answer to the question whether proceedings have been brought on that basis may be informed by the extent to which the primary injunctive relief would be of any utility. If the primary injunctive relief were to be refused on discretionary grounds, including lack of utility, then there would be a real issue as to whether any award for damages should be made particularly where the case is one in which a claim under s 82 would have been out of time.

58 It is also to be noted that the relief that may be awarded under s 87(1) includes relief which compensates only in part for loss or damage suffered. Section 82 on the other hand provides a right to complete recovery of loss or damage. Section 87(1) also allows for orders to be made to reduce or prevent likely loss or damage, a remedy not available under s 82. Having regard to the range of ancillary remedies available under s 87(1) and the range of circumstances to which it may be applied there is no warrant for importing into it any selective time limitation for any class of the relief available under it.

59 These proceedings began their life in 1995 in the Supreme Court of South Australia with a claim for damages and an account of profits. They maintained that character following amendment in 1996. The claim for injunctive relief was introduced in February 1997. Plainly, the claim in its original form was for damages under s 82 and for other relief. The claim for injunctive orders was seen by the learned primary judge as "… obviously based on s 80". The consequence of its introduction appears to have been that the claim for damages previously relying on s 82 has assumed (at least partly) the character of a claim for damages relying on s 87(1), read with s 87(2)(d). That change in character may have some relevance to the question whether, as a matter of discretion, damages should be awarded under s 87(2)(d) if the relevant contraventions and losses are established. It does not negate, however, the correctness of his Honour's answer to the first preliminary question as reformulated. The question is widely expressed to refer to "…the applicant's claim for orders under s 87(1) of this Act." The only relevant claim is that for damages. There was no contention that the claim should not be treated as brought under s 87(1).

Conclusion

60 His Honour was correct in the answer he provided to the reformulated question. Accordingly, the appeal should be dismissed with costs.

I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Associate:

Dated: 16 November 2001

Counsel for the Appellant:	Mr RC McDougall QC and Mr GH Brandis

Solicitor for the Appellant:	Phillips Fox

Counsel for the First, Second and Fourth Respondents:	Mr MR Speakman

Solicitors for the First, Second and Fourth Respondents	Clayton Utz


Counsel for the Third Respondent:	Mr JS Sheahan SC and Mr RJ Wright

Solicitor for the Third Respondent:	Blake Dawson Waldron

Date of Hearing:	20 June 2001

Date of Judgment:	16 November 2001

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