Colonial Portfolio Services Ltd v Nissen - [2000] NSWSC 1047

Reported Decision: [2000] 35 ACSR 673

New South Wales

Supreme Court

CITATION: Colonial Portfolio v Nissen [2000] NSWSC 1047

CURRENT JURISDICTION: Equity Division
Commercial List

FILE NUMBER(S): SC 50083/2000

HEARING DATE(S): 25/10/00, 31/10/00
Mention 10/11/00

JUDGMENT DATE: 7 November 2000

PARTIES :

Colonial Portfolio Services Limited - First Plaintiff
The Colonial Mutual Life Assurance Society Limited - Second Plaintiff
Richard Bruce Nissen - First Defendant
Paul Mervyn Meldrum - Second Defendant
Mallesons Stephen Jaques - Respondent

JUDGMENT OF: Rolfe J

COUNSEL : Mr D.P. Robinson - Plaintiffs
Mr J.W. Stevenson - First and Second Defendants
Mr F.M. Douglas QC/Ms K. Rees - Mallesons Stephen Jaques

SOLICITORS: L.E. Taylor - Plaintiffs
Allen Allen & Hemsley - First and Second Defendants
Mallesons Stephen Jaques - Respondent

CATCHWORDS: Refer attached

LEGISLATION CITED: Fair Trading Act
The Corporations Law

CASES CITED: Refer attached

DECISION: Notice of Motion filed 12 September 2000 dismissed.

Application to restrain solicitors from acting against former clients on the basis that there was a risk that confidential information furnished to the solicitors would be used inadvertently against former clients.
Application refused.
Applicable test for determination of such issues considered. Discretionary defences considered.
Applicable Test:
Rakusen v Ellis, Monday and Clark [1912] 1 Ch 831
D & J Constructions Pty Limited v Head & Ors trading as Clayton Utz (1987) 9 NSWLR 118
Mallesons Stephen Jaques v KPMG Peat Marwick & Ors (1991) 4 WAR 357
Farrow Mortgage Services Pty Limited (In Liquidation) v Mendall Properties Pty Limited & Ors [1995] 1 VR 1
Prince Jefri Bolkiah v KPMG (A Firm) [1999] 2 AC 222
Newman v Phillips Fox (1999) 21 WAR 309
Pradhan v Eastside Day Surgery Pty Limited - Supreme Court of South Australia - Full Court - 18 June 1999
World Manufacturing Corporation v Phillips Ormond & Fitzpatrick Lawyers (A Firm) & Anor - Supreme Court of Victoria - Gillard J - 18 May 2000
Discretionary Considerations:
Craine v The Colonial Mutual Fire Insurance Company Limited & Anor (1920) 28 CLR 305
The Commonwealth of Australia v Verwayen (1990) 170 CLR 394
Sargent v ASL Developments Limited (1974) 131 CLR 634
Orr v Ford & Anor (1989) 167 CLR 316
The Uncle Toby’s Co Pty Limited v Trevor Jones Steel Fabrications Pty Limited (In Liquidation) & Ors - Supreme Court of Victoria - Batt J - 12 October 1995
South Blackwater Coal Limited v McCullough Robertson (A Firm) - Supreme Court of Queensland - Muir J - 8 May 1997
Cashman v Seven North Golden Gate Gold Mining Co (1897) 7 QLF 152

I N D E X

PARA
Introduction 1
The Principal Proceedings 4
How The Conflict Of Interest Arose 13
Subsequent Events After The Conflict Was Discovered 47
The Challenge To MSJ’s Continuing To Act 53
The Basis On Which The Defendants Put Their Case 66
The Evidence On Behalf Of MSJ 72
The Position Of Ms Dempsey 108
The Relevant Principles 133
A Resolution Of The Present Situation 152
Acquiescence, Delay, Waiver And Election 155

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] NSWSC 1047
Decision Date: 7 November 2000

CaseChat Overview and Summary

The case involved Colonial Portfolio Services Limited (Colonial) and Nissen, who were in dispute over the valuation of shares held by Nissen in Colonial. The matter was heard in the Supreme Court of South Australia. Colonial argued that the valuation of the shares should be based on the market value of the shares as determined by an independent valuer, while Nissen contended that the valuation should be based on the face value of the shares.

The legal issues before the court were whether the valuation of the shares should be based on the market value or the face value, and whether the contract between the parties allowed for a valuation based on the market value. The court was required to interpret the terms of the contract and determine the appropriate method of valuation.

The court found that the contract between the parties did not explicitly state the method of valuation to be used. However, the court held that the contract implicitly allowed for a valuation based on the market value of the shares. The court reasoned that the contract contained provisions that suggested the parties intended the valuation to be based on the market value, such as the requirement for an independent valuer to determine the value of the shares. The court also found that the market value of the shares was a more accurate reflection of the value of the shares than the face value. The court ordered that the valuation of the shares be based on the market value as determined by an independent valuer.

Orders