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DSE (Holdings) Pty Ltd v InterTAN Inc

DSE (Holdings) Pty Ltd v InterTAN Inc

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FEDERAL COURT OF AUSTRALIA
DSE (Holdings) Pty Limited v InterTAN Inc [2004] FCA 1251
DSE (HOLDINGS) PTY LTD v INTERTAN INC AND ANOR
N 3011 of 2002
ALLSOP J
22 SEPTEMBER 2004
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 3011 of 2002

BETWEEN:

DSE (HOLDINGS) PTY LIMITED
APPLICANT

AND:

INTERTAN INC
FIRST RESPONDENT

INTERTAN CANADA LIMITED
SECOND RESPONDENT

JUDGE:

ALLSOP J

DATE OF ORDER:

22 SEPTEMBER 2004

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.THE COURT DECLARES THAT upon the proper construction of the written agreement entitled "Share Acquisition Agreement" and executed on 10 April 2001, the expression "December Accounts" means or refers to the document entitled: "Corporate Pack - Intertan Australia Subsidiary/Division for the period ending December 2000" and referred to by the parties in these proceedings as "the December Corporate Pack".
2.THE COURT ORDERS THAT judgment be entered in favour of the applicant against the first and second respondents in the sum of $4,208,602.06 inclusive of interest up to and including 22 September 2004.
3.THE COURT ORDERS THAT the first and second respondents pay to the applicant the sum referred to in order 2.
4.THE COURT ORDERS THAT the amended cross-claim be dismissed.
5.THE COURT DISCHARGES orders 3 and 4 made on 9 September 2004.
6.THE COURT ORDERS THAT the first and second respondents pay the applicants costs of the proceedings, including the costs of the amended cross-claim, any reserved costs and the costs of the third party discovery order made against SalomonSmithBarney on 19 December 2002 as agreed or taxed on an indemnity basis save that the costs of three days of hearing are to be paid as agreed or taxed on a party/party basis.
7.THE COURT ORDERS THAT the first and second respondents pay the third party’s costs and expenses of the discovery order made against SalomonSmithBarney on 19 December 2002.
8.If it be necessary, THE COURT ORDERS THAT time for the filing and service of a notice of appeal be extended to a day commencing today, 22 September 2004.

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

N 3011 of 2002

BETWEEN:

DSE (HOLDINGS) PTY LIMITED
APPLICANT

AND:

INTERTAN INC
FIRST RESPONDENT

INTERTAN CANADA LIMITED
SECOND RESPONDENT

JUDGE:

ALLSOP J

DATE:

22 SEPTEMBER 2004

PLACE:

SYDNEY

REASONS FOR JUDGMENT

This is an application in relation to the making of final orders consequent upon my reasons published and orders otherwise made on 9 September 2004. Both parties request that I consolidate in today's orders, such orders as are in the nature of final orders that are outstanding. Therefore, in due course, when I pronounce the final orders, I will discharge some of the orders made on 9 September.
The substantive dispute today rests on the issue of whether the applicant should have its costs at a higher level than party/party costs.…

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: [2004] FCA 1251
Decision Date: 22 SEPTEMBER 2004

CaseChat Overview and Summary

In the Federal Court of Australia, the case of DSE (Holdings) Pty Ltd v InterTAN Inc involved a complex dispute centred around the interpretation of a Share Acquisition Agreement dated 10 April 2001. The primary issue was whether the expression "December Accounts" in the agreement referred to specific financial documents, namely the "Corporate Pack - Intertan Australia Subsidiary/Division for the period ending December 2000". The case also included claims for estoppel, rectification, and misleading and deceptive conduct.

The legal issues before the court included determining the proper construction of the contract and the meaning of certain terms within it, as well as assessing whether the respondents' conduct in defending the case warranted an indemnity costs order. The court had to consider whether the respondents' actions were in "wilful disregard of known facts or clearly established law" and whether there was a valid offer to settle the case under the court rules.

In delivering judgment, the court found that the term "December Accounts" in the agreement did indeed refer to the specified financial documents. The court also noted that the respondents' conduct did not warrant an indemnity costs order, despite their failure to comply with certain procedural requirements. The court, however, ordered the respondents to pay the applicant's costs on an indemnity basis, except for three days of hearing costs, which were to be paid on a party/party basis. Additionally, the respondents were ordered to pay the costs of a third party in relation to a discovery order.

The final orders of the court included declaring the meaning of the term "December Accounts", ordering judgment in favour of the applicant for a specific sum inclusive of interest, and directing the respondents to pay various costs associated with the proceedings. The court also provided for the possibility of extending the time for filing a notice of appeal if necessary.

Orders

Orders of the court

1. THE COURT DECLARES THAT upon the proper construction of the written agreement entitled "Share Acquisition Agreement" and executed on 10 April 2001, the expression "December Accounts" means or refers to the document entitled: "Corporate Pack - Intertan Australia Subsidiary/Division for the period ending December 2000" and referred to by the parties in these proceedings as "the December Corporate Pack".

2. THE COURT ORDERS THAT judgment be entered in favour of the applicant against the first and second respondents in the sum of $4,208,602.06 inclusive of interest up to and including 22 September 2004.

3. THE COURT ORDERS THAT the first and second respondents pay to the applicant the sum referred to in order 2.

4. THE COURT ORDERS THAT the amended cross-claim be dismissed.

5. THE COURT DISCHARGES orders 3 and 4 made on 9 September 2004.

6. THE COURT ORDERS THAT the first and second respondents pay the applicants costs of the proceedings, including the costs of the amended cross-claim, any reserved costs and the costs of the third party discovery order made against SalomonSmithBarney on 19 December 2002 as agreed or taxed on an indemnity basis save that the costs of three days of hearing are to be paid as agreed or taxed on a party/party basis.

7. THE COURT ORDERS THAT the first and second respondents pay the third party’s costs and expenses of the discovery order made against SalomonSmithBarney on 19 December 2002.

8. If it be necessary, THE COURT ORDERS THAT time for the filing and service of a notice of appeal be extended to a day commencing today, 22 September 2004.

Background

Background to the litigation

Mr Smith's submissions as to indemnity costs relied significantly upon the contents of paragraph 198 of my reasons for judgment. I do not repeat what I said there. That was a statement of knowledge of Mr Gingerich, in large part, derived from his cross-examination. Mr Smith's submissions were to the effect that if that was the respondents’ knowledge, as it was, it must have been available to the respondents if the case was conducted prudently, as it no doubt was, within a reasonable time after the commencement of the suit and, in those circumstances, to fight the case as it was fought, was in the words of Sheppard J in Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 233:the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v Hutchinson (1987) 10 NSWLR 525; Maitland Hospital v Fisher (No 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal); Crisp v Kent (SC(NSW)(CA), 27 Sept 1993, unreported) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records).[emphasis added] Mr Smith points to my reasoning in my judgment to the effect that not only would the contract case be lost but also the estoppel and rectification and misleading and deceptive conduct. Mr Studdy resists those submissions indicating or relying on the parts of my judgment in which I refer to the complexity of a matter, the difficulty of a matter, and the need to understand all the facts in the context. I will come back to that question, that is, the question of indemnity costs from the commencement, in a moment. As to the offer, I think there are difficulties with it as an offer under the rules. Order 23 rule 4 makes a difference between the permissive in sub-rule (1) and the mandatory in sub-rule (2). There was no specification here of the sum of interest. However, on the contract claim propounded by the applicant here, there was a contractual interest sum, which might be able to be seen not as interest for the purpose of sub-rule (2). However, the monetary claim under other heads, such as the damages recoverable under the Corporations Act 2001 (Cth) or other bases as pleaded, might be seen to contain a count or a claim for interest under section 51A of the Act. I do not propose to deal with the matter on the basis of Order 23. I think there is sufficient ground to conclude that Order 32 rule 4 (2) was not complied with. If I am wrong about that I can be corrected on appeal, but that is not to say that the offer was not relevant to considering the general discretion under s 43 of the Federal Court of Australia Act 1974 (Cth) and what might be called the Calderbank letter. There is authority collected by Finn J in GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 201 ALR 55 at 63, which would support the proposition that a so-called "all up" offer should not be considered in the same way as a Calderbank letter. See also Smallacombe v Lockyer Investment Co Pty Ltd (1993) 42 FCR 97; Hanave Pty Ltd v LFOT Pty Limited (Moore J, Federal Court, unreported, 11 November 1998) and Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd [2000] FCA 602.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

ALLSOP J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: ALLSOP J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 3011 of 2002

BETWEEN:	DSE (HOLDINGS) PTY LIMITED APPLICANT
AND:	INTERTAN INC FIRST RESPONDENT INTERTAN CANADA LIMITED SECOND RESPONDENT
JUDGE:	ALLSOP J
DATE OF ORDER:	22 SEPTEMBER 2004
WHERE MADE:	SYDNEY

JUDGE:	ALLSOP J
DATE:	22 SEPTEMBER 2004
PLACE:	SYDNEY