EMCL v Esanda Finance Corp Ltd - [2000] FCA 612

FEDERAL COURT OF AUSTRALIA
EMCL v Esanda Finance Corp Ltd [2000] FCA 612
EMCL PTY LTD & ANOR v ESANDA FINANCE CORPORATION LTD
NO. V 18 OF 1999
HEEREY J
5 MAY 2000
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V18 OF 1999

BETWEEN:

EMCL PTY LTD and ANOTHER
(ACN 007 347 622)
Applicant

AND:

ESANDA FINANCE CORPORATION LTD
(ACN 004 346 043)
Respondent

JUDGE:

HEEREY J

DATE:

5 MAY 2000

PLACE:

MELBOURNE

CORRIGENDUM
In the reasons for judgment handed down on 5 May 2000 on the Orders page
replace the following:
1.There will …. sum of “$689,345.00” replace with “$680,345.00”.
2.The Court ……..referred to in par “43.7” replace with “4.7”.

Serge Martinez
Associate to Justice Heerey
16 May 2000

FEDERAL COURT OF AUSTRALIA
EMCL v Esanda Finance Corp Ltd [2000] FCA 612
EMCL PTY LTD & ANOR v ESANDA FINANCE CORPORATION LTD
NO. V 18 OF 1999
HEEREY J
5 MAY 2000
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V18 OF 1999

BETWEEN:

EMCL PTY LTD and ANOTHER
(ACN 007 347 622)
Applicant

AND:

ESANDA FINANCE CORPORATION LTD
(ACN 004 346 043)
Respondent

JUDGE:

HEEREY J

DATE OF ORDER:

5 MAY 2000

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1.There be judgment for the second applicant against the respondent for the sum of $689,345.00.
2.The Court declares that calculation of any amounts due pursuant to cl 4(b) of the Master Discount Agreement between the first applicant and the respondent dated 2 January 1990 be made in accordance with the joint report of John Richard Cumpston and John Howard Day dated 10 December 1998 and the supplement thereto dated 17 December 1998, on the express basis that the interest rates to be used for the purposes of the calculations are to be the contract interest rates referred to in par 43.7 of the Joint Report.
3.The respondent pay the applicants’ costs of the matter remitted to a single Judge by the Full Court by its orders made 20 July 1999 in proceeding No V18 of 1999.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V18 OF 1999

BETWEEN:

EMCL PTY LTD and ANOTHER
(ACN 007 347 622)
Applicant

AND:

ESANDA FINANCE CORPORATION LTD
(ACN 004 346 043)
Respondent

JUDGE:

HEEREY J

DATE:

5 MAY 2000

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The Full Court has remitted the question whether the appropriate discount rate for the purposes of cl 4(b) of the Master Discount Agreement should be chosen (i) on the basis of the interest rates agreed by experts and used in connection with the calculations appearing at appeal book 1663 to 1664, or (ii) using discount rates based on a rate or rates derived from the agreement and from the leases entered into pursuant thereto.
The context in which this question arises and the relevant terms of the agreement and lease are fully set out in the reasons…

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] FCA 612
Decision Date: 5 MAY 2000

CaseChat Overview and Summary

The matter before the court involved two applicants, EMCL and Esanda Finance Corp Ltd, with the dispute centering around a Master Discount Agreement dated 2 January 1990. The applicants sought relief including a declaration that the calculation of amounts due under a specific clause of the agreement should adhere to a particular methodology, and they also sought damages from the respondent. The case was heard and determined in the Supreme Court of Victoria.

The primary legal issue before the court was the interpretation of clause 4(b) of the Master Discount Agreement. The applicants argued that the calculations for determining amounts due should follow the joint report by Cumpston and Day, and specifically, the contract interest rates should be those outlined in paragraph 43.7 of that report. The court had to decide whether the contract terms indeed required adherence to the methodology proposed by the applicants and whether the damages claimed were justified.

In rendering its decision, the court found in favour of the applicants on both counts. It determined that the calculation of amounts due under the agreement should indeed follow the joint report by Cumpston and Day, with the contract interest rates as specified. The court also held that the second applicant was entitled to the sum of $689,345.00 in damages. The respondent was further ordered to pay the applicants’ costs associated with the matter.

The court's orders included a judgment in favour of the second applicant for the specified amount of damages. Additionally, the court mandated that future calculations under the agreement must be made in accordance with the Cumpston and Day report, using the specified interest rates. Finally, the respondent was ordered to pay the applicants' costs.

Orders

Orders of the court

1. There be judgment for the second applicant against the respondent for the sum of $689,345.00.

2. The Court declares that calculation of any amounts due pursuant to cl 4(b) of the Master Discount Agreement between the first applicant and the respondent dated 2 January 1990 be made in accordance with the joint report of John Richard Cumpston and John Howard Day dated 10 December 1998 and the supplement thereto dated 17 December 1998, on the express basis that the interest rates to be used for the purposes of the calculations are to be the contract interest rates referred to in par 43.7 of the Joint Report.

3. The respondent pay the applicants’ costs of the matter remitted to a single Judge by the Full Court by its orders made 20 July 1999 in proceeding No V18 of 1999.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

HEEREY J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: HEEREY J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V18 OF 1999

BETWEEN:	EMCL PTY LTD and ANOTHER (ACN 007 347 622) Applicant
AND:	ESANDA FINANCE CORPORATION LTD (ACN 004 346 043) Respondent

JUDGE:	HEEREY J
DATE:	5 MAY 2000
PLACE:	MELBOURNE