Healthscope (Tasmania) Pty Ltd v Australian Hospital Care Pty Ltd

Case

[2011] VSC 132

7 April 2011


IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 9962 of 2008

BETWEEN

HEALTHSCOPE (TASMANIA) PTY LTD
(ACN 082 134 245) & ANOR
Plaintiffs
and
AUSTRALIAN HOSPITAL CARE PTY LIMITED
(ACN 072 273 931) & ANOR
Defendants

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JUDGE:

SIFRIS J

WHERE HELD:

Melbourne

DATE OF HEARING:

1 and 2 February 2011

DATE OF JUDGMENT:

7 April 2011

CASE MAY BE CITED AS:

Healthscope (Tasmania) Pty Ltd & Anor v Australian Hospital Care Pty Ltd & Anor

MEDIUM NEUTRAL CITATION:

[2011] VSC 132

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CONTRACT – Construction – Terms of Novation Deed - Clause entitled first plaintiff to recover from first defendant for liabilities and debts incurred before completion date - Meaning of ‘incur’ – Whether first plaintiff incurred a liability where debt paid by second plaintiff.

CONTRACT – Construction – Whether second plaintiff can recover from second defendant under guarantee for debt paid on behalf of first plaintiff – Where first plaintiff recovered against first defendant for same amount – Whether second plaintiff prevented from pursuing claim against second defendant guarantor because contractual time limit for bringing claims against principal creditor has expired.

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APPEARANCES:

Counsel Solicitors
For the Plaintiffs Mr M Osborne B2B Lawyers
For the First Defendant Mr N Evans Blake Dawson
For the Second Defendant Mr A Panna SC Herbert Geer

HIS HONOUR:

A.       Background

  1. Healthscope (Tasmania Finance) Pty Ltd (formerly HPH Developments Pty Ltd) (“HPHD”) entered into a number of agreements with the State of Tasmania on or about 30 June 1998 and on or about 20 November 1999.  The agreements concerned the privatisation of the Queen Alexandra Hospital, the Royal Hobart Hospital and St Helen’s Hospital.

  1. By a lease made on 20 November 1999, the State of Tasmania demised the land and buildings known as the Queen Alexandra Hospital to HPHD (“the Lease”).[1]  Pursuant to clause 5.4(f) of the Lease, HPHD undertook to pay to the State of Tasmania all costs in relation to Reticulation Services (as defined) and Security Services (as defined).

    [1]The parties had entered into an agreement for lease on or about 30 June 1998.

  1. Previously, on 30 June 1998, the same parties had entered into a Services Agreement.  Pursuant to clause 4(a) of the Services Agreement,[2] HPHD undertook to pay the State of Tasmania for various services as defined in the agreement. 

    [2]When read together with Schedule 1 of the Services Agreement.

  1. For convenience, the Lease and the Services Agreement are referred to as the “State Documents”. 

  1. In addition, on 30 June 1998, HPHD entered into an Operating and Management Agreement (“the O & M Agreement”) with:

(a)       Australian Hospital Care (HPH) Pty Limited (“AHC(HPH)”), the first plaintiff;

(b)      Australian Hospital Care Pty Limited (“AHC”), the first defendant; and

(c)       Perpetual Trustee Company Limited,

in relation to the operation and management of the Queen Alexandra Hospital and St Helen’s Hospital (together, the “Private Hospital”).

  1. Pursuant to the O & M Agreement, AHC(HPH) was appointed as operator and manager of the Private Hospital. AHC guaranteed the performance by AHC(HPH) of its obligations to HPHD under the O & M Agreement.

  1. Pursuant to clause 3.1 of the O & M Agreement, AHC(HPH) agreed to perform all  HPHD’s liabilities to the State of Tasmania under the State Documents.  This included the liability to pay for Reticulation Services and Security Services under the Lease and the various services under the Services Agreement.

  1. The arrangements referred to in summary form above continued until the beginning of 2003.  During this period, HPHD and AHC(HPH) were effectively controlled by AHC and ultimately, by Mayne Group Limited (now Symbion Health Limited) (“Mayne”), the second defendant. 

  1. Things changed at the beginning of 2003.  AHC sold its shares in AHC(HPH) and other assets to Healthscope Ltd (“Healthscope”), the second plaintiff in this proceeding.  The transaction took effect pursuant to a Share Sale Agreement dated 2 February 2003 (“the Share Sale Agreement”).  Under a separate agreement, Healthscope also acquired the shares in HPHD.  Consequently, effective control of AHC(HPH) and HPHD passed to Healthscope.[3]

    [3]Although the Share Sale Agreement was the main agreement, the parties and others entered into other related agreements in order to achieve a transfer of ownership and control.  Precise details are not relevant in order to resolve the present contractual dispute. 

  1. Settlement of the transaction took place on 13 April 2003. 

  1. On that day, the parties to this proceeding and others entered into a Novation and Amending Deed (“the Novation Deed”).  Pursuant to the deed, Healthscope, which was in effect the new ultimate controller, replaced AHC as guarantor of AHC(HPH)’s obligations under the O & M Agreement.  Significantly, under clause 2.3 of the Novation Deed, AHC undertook to be liable to various parties, including AHC(HPH) and HPHD, for all claims and debts which they paid, suffered, incurred  or were liable for in respect of the O & M Agreement prior to the completion date, being 13 April 2003.  The ambit and construction of this clause is central to the proceeding brought by AHC(HPH) against AHC.  The next paragraph explains how the claim arises.   

  1. After settlement on 13 April 2003, the State of Tasmania issued tax invoices demanding payment from HPHD of $282,557.05 for Reticulated Services under the Lease and $29,130.75 for services under the Services Agreement (“the Amounts”).  HPHD was entitled to indemnity from AHC(HPH) under the O & M Agreement and accordingly, referred the tax invoices to that party.  As the tax invoices related to the period prior to completion, AHC(HPH) took the view that they were properly the liability of AHC pursuant to clause 2.3 of the Novation Deed.  Following some at times acrimonious correspondence between the parties, AHC declined to pay the Amounts.  As a consequence and in response to increased pressure from the State of Tasmania, the Amounts were paid, not by AHC(HPH) (a beneficiary of the undertaking in clause 2.3), but by the ultimate controller, Healthscope.   AHC(HPH) now claims against AHC for the Amounts on the basis of clause 2.3 of the Novation Deed, even though payment was actually made by Healthscope.

  1. Healthscope was not a party to the Novation Deed or recipient of the undertaking given by AHC.  Consequently, it is not able to sue AHC for the Amounts under that deed.

  1. However, Healthscope was a party to the Share Sale Agreement and it now alleges that it is entitled to recover the Amounts from Mayne, as guarantor of the obligations of AHC under that agreement.

  1. Consequently, the claim by each plaintiff against each defendant is separate, distinct and based on different documents.  Each defendant is separately represented.  Indeed, the first defendant has commenced a separate proceeding against the second defendant seeking indemnity from the second defendant for any liability in this case (“the Related Proceeding”).  That proceeding and claim is based on an umbrella agreement entered into between the defendants.  It will be dealt with after determination of the defendants’ liability to any of the plaintiffs in the present case. 

B.       Liability of AHC (first defendant) to AHC(HPH) (first plaintiff)

  1. The construction of clause 2.3 of the Novation Deed is at the heart of AHC(HPH)’s case against AHC.  The clause is in the following terms:

2.3     Liability on or before Novation Date of Transferor

The Transferor [AHC] is liable to each of the Company [HPHD], Operator [AHC(HPH)], Trustee and State in respect of any Claim, damage, loss, cost, charge, expense, outgoing or payment which any of the Company, Operator, Trustee and State pay, suffer, incur or is liable for in respect of the O&M Agreement or any other Transaction Document, which occurred, or which arises out of or is caused by any act or omission by the Transferor which occurred, on or before the Novation Date.”

  1. The term “Claim”, as referred to in clause 2.3, is defined in the interpretation provisions contained in clause 15 of the Novation Deed.  The definition states:

Claim means any allegation, debt, cause of action, liability, claim, proceeding, suit or demand of any nature howsoever arising and whether present or future, fixed or unascertained, actual or contingent whether at law, in equity, under statute or otherwise and which any party may have against another in connection with the O&M Agreement, the Novated Agreement or this deed.”

  1. AHC(HPH) submits that clause 2.3 is extremely wide and sufficient to include the liability incurred by AHC(HPH) under the O & M Agreement, notwithstanding the fact that such liability was discharged by Healthscope.  It submits that as long as such liability was incurred, the section is attracted.

  1. The defendants submit that the Novation Deed does not expand AHC’s liability beyond that imposed by the O & M Agreement.  Accordingly, they submit that AHC’s liability under clause 2.3 is merely accessorial liability and not a principal or primary liability.  They point to the preamble to the Novation Deed and to the intention of the parties, namely that Healthscope, as buyer, was simply to step into the shoes of AHC.  They also point to the Share Sale Agreement, which they contend applies and on a proper construction severely restricts the operation of clause 2.3. 

  1. In my opinion, the wording of clause 2.3 is wide enough to cover the liability incurred by AHC(HPH) to HPHD for the Amounts.  Although originally AHC stood only as a guarantor for the obligations of AHC(HPH) pursuant to the O & M Agreement, AHC’s liability changed following the acquisition of shares by Healthscope pursuant to the Share Sale Agreement and the execution of the Novation Agreement.  This is made clear by the wide wording of clause 2.3.  It should be noted that the Novation  Deed and in particular, clause 2.3 (in exactly the same form), was specifically contemplated by the Share Sale Agreement and is not inconsistent with it.  The Novation Deed addresses a specific matter and is not, contrary to the submissions put on behalf of AHC, in any way inconsistent with the more general adjustment and completion provisions in the Share Sale Agreement.

  1. Clause 2.3 is, in my opinion, clear and unambiguous.  It says, in effect, that AHC is liable directly to AHC(HPH) in respect of any “Claim [which includes a liability], damage, loss, cost, charge, expense, outgoing or payment” which AHC(HPH) may incur in respect of the O & M Agreement.[4] 

    [4]Provided such liability occurred, arises out of or is caused by an act or omission by AHC which occurred on or before 13 April 2003.

  1. AHC(HPH) clearly did incur such a liability as a result of the operation of clause 3.1 of the O & M Agreement and clause 5.4(f) of the Lease.  As Kirby P said in Hawkins v Bank of China:[5]

“The act of ‘incurring’ happens when the corporation so acts as to expose itself contractually to an obligation to make a future payment of a sum of money as a debt”. [6]

[5](1992) 26 NSWLR 562, 576 (see also Gleeson CJ at 572 to similar effect).

[6]See also Standard Chartered Bank of Australia v AnticoLtd (1995) 38 NSWLR 290, 314 and Woodgate & Ors v Davis (2002) 55 NSWLR 222.

  1. This is precisely what AHC(HPH) did and it is entitled to invoke the clause.

  1. This construction of clause 2.3 is also entirely consistent with the commercial objectives of the parties, namely that AHC as the transferor/seller discharge any liability incurred before the Novation Date.

  1. Further, despite the forceful argument of Mr Evans, Counsel for the first defendant, I do not consider that as a matter of construction clause 2.3 is subject to any time bar.   Mr Evans submitted that the Novation Deed and the Share Sale Agreement formed part of a single transaction and should be read together.  He submitted that since clause 13.8 of the Share Sale Agreement places a time bar on claims under clause 7.2 of that agreement, there would be a conflict between the documents if clause 2.3 was not subject to the same limitation.  I consider that as a matter of construction, clause 2.3 is not expressed to be subject to any time bar and the relevant clauses in the Share Sale Agreement are not readily applicable.

  1. The final issue relates to the fact that having incurred the liability, AHC(HPH) did not discharge it.  Healthscope did.

  1. In my opinion, this does not affect the liability of AHC.  As a matter of construction, liability does not depend on payment, but rather on the incurring of a debt or liability to pay.  Such a liability or debt was incurred by AHC(HPH).

  1. The defendants do not suggest that no debt or liability was incurred.  Rather, they suggest that there is no loss and question why AHC(HPH) should recover if it did not pay?  However, this misses the point.  AHC(HPH) was the party liable to pay and that is all that is required by clause 2.3.  The fact that a related third party paid the debt does not mean AHC(HPH) was not liable or had not incurred a debt.  It was liable and had incurred a debt before the Novation Date, which triggered the operation of clause 2.3.

  1. I suggested to the parties[7] that Healthscope, having discharged the liability incurred by AHC(HPH) to HPHD (and as a consequence the liability to the State of Tasmania), in respect of which an indemnity was available from AHC, may be entitled to make a claim against AHC(HPH).  In this regard, AHC(HPH) may have incurred a liability to Healthscope in relation to the O & M Agreement.  I suggested that such a claim by Healthscope may fall within the scope of clause 2.3 and accordingly, AHC may be liable to AHC(HPH) on this alternative basis.  Despite inviting argument as to whether a claim or more particularly, a liability based on the doctrine of subrogation was available, the plaintiffs in further written submissions expressly rejected any such claim.  I will therefore not deal with this aspect any further.

    [7]In a note sent by my associate.

C.       Claim by Healthscope (second plaintiff) against Mayne (second defendant)

  1. The claim by Healthscope against Mayne is based on clauses 7.2 and 25 of the Share Sale Agreement.  Clause 7.2 is in the following terms:

7.2     Apportionment of outgoings

All other expenses and outgoings normally apportioned on the purchase of a Business similar to the business operated by the Company will be apportioned as at midnight on the Completion Date and each of the parties agree to pay to the other accordingly such expenses or other outgoings promptly on request for the same, except to the extent that such are adjusted for in the Completion Statement or are to be adjusted under the Property Agreement.”

  1. Clauses 25.1, 25.3, 25.4 and 25.5 are set out below:

25.1   Guarantee

Mayne Group Limited unconditionally and irrevocably guarantees to the Buyer [Healthscope] the due and punctual performance by:

(a)the Seller [AHC];

(b)Australian Hospital Care Limited (ABN 67 072 273 931);

(c)Australian Hospital Care (MSH) Pty Ltd (ABN 40 005 489 752);

(d)Australian Hospital Care (Pindara) Pty Ltd (ABN 005 288 095);

(e)Kalishaw Pty Ltd (ABN 19 078 763 916); and

(f)HPH Developments Pty Ltd (ABN 26 082 958 996);

(each a ‘Relevant Person’)

of their obligations (including warranties) under:

(g)this agreement;

(h)the Property Agreement;

(i)the Hobart Asset Sale Agreement;

(j)the HPH Developments Agreement; and

(k)assignments of the Property Leases (other than the lease in paragraph (a) in the definition of Property Leases) and the Property Sub-Leases.

(each a ‘Relevant Agreement’)

25.3   Nature of guarantee

Mayne Group Limited’s liability under this clause 25 (‘Mayne Group Guarantee’) is not affected by anything which might release or exonerate or otherwise affect it at law or in equity, including, one or more of the following:

(a)the Buyer granting time or other indulgence to, compromising with or partially releasing in any way a Relevant Person;

(b)laches, acquiescence, delay, acts or omissions on the part of the Buyer;

(c)any variation or novation of a right of the Buyer;

(d)any alteration of this agreement or any agreement entered into in the performance of this agreement, with or without the consent of Mayne Group Limited; and

(e)the invalidity or unenforceability of an obligation or Liability of a person other than Mayne Group Limited.

25.4   Continuing guarantee and indemnity

The guarantee and indemnity given under this clause 25 is a continuing guarantee and indemnity and is not discharged by any one payment.  The guarantee and indemnity does not merge on Completion.

25.5   Waiver

Mayne Group Limited waives any right it may have of first requiring the Buyer to commence proceedings or enforce its rights against a Relevant Person before Claiming under the Guarantee and Indemnity.”

  1. Healthscope contends that on the proper construction and application of these clauses Mayne, as guarantor, is liable to it in respect of the Amounts.  Healthscope submits that AHC was required to make an adjustment under clause 7.2 for the Amounts and since it failed to perform this obligation, Mayne is liable under the guarantee in clause 25 of the Share Sale Agreement.  The calculation is exactly the same as the claim made by AHC(HPH) against AHC. 

  1. No claim is made by Healthscope, as buyer, against AHC, as seller.  Rather, the claim is against Mayne, as guarantor.  Presumably, the reason for this is that any claim by Healthscope against AHC had to be made expeditiously in accordance with time limits set out in the Share Sale Agreement.  Healthscope was way out of time.  Whether this affects its claim against Mayne is the critical issue in this aspect of the case.  Healthscope contends that the guarantee may be enforced despite the time limit for claims as between buyer and seller.

  1. Various defences have been taken by Mayne in relation to its alleged liability as a guarantor, including that the claim is time barred and that AHC had not failed to perform a relevant obligation.

  1. Accordingly, the issues to be decided in this part of the case are as follows:

(a)Are the Amounts amenable to apportionment under clause 7.2?

(b)If yes and no apportionment is claimed by Healthscope as against AHC because of the time bar, can such a claim still be made by Healthscope as against Mayne, as guarantor?

Each of these matters is dealt with below.

(a) Are the Amounts amendable to apportionment under clause 7.2?

  1. Clause 6 of the Share Sale Agreement deals with the Completion Statement, which is defined as an “audited statement in the form of Schedule 4” to the agreement.  The Schedule 4 Completion Statement lists various items under Assets and Liabilities in order to arrive at an “Adjustment Amount”.  Clause 6 deals with the applicable principles and processes for the preparation, audit and treatment of such a Completion Statement.  In particular, clause 6.3 provides that the Completion Statement is final and binding unless disputed by Healthscope within 10 Business Days of receipt from the Accountants.[8]

    [8]Although the clause does provide an exception where there is a “manifest error” in the Completion Statement.

  1. Clause 7.2, as referred to above, deals with the apportionment of “ … outgoings normally apportioned on the purchase of a Business similar to the business operated by [AHC(HPH)]“.

  1. Clauses 6 and 7 are complimentary.  Clause 7.2 is a sort of catch all provision.  If an apportionment or adjustment is not made as contemplated by the more rigid and formulaic provisions of clause 6 (or under the Property Agreement as defined), the relevant adjustment can be done pursuant to clause 7.2.  However, clause 7 is subject to a time restriction.  Pursuant to clause 13.8, any claims by Healthscope must be made within 12 months of the Completion Date.

  1. In my opinion, the question of whether clause 7.2 is applicable in the circumstances of this case turns on the appropriate construction of that clause.  Consequently, the uncontradicted expert evidence of Jeremy McCarthy, an experienced solicitor in this area, to the effect that the Amounts claimed do in fact represent “outgoings normally apportioned on the purchase of a Business similar to the business operated by the Company [AHC(HPH)]” is of little relevance.[9]

    [9]During the course of the trial, the defendants objected to Mr McCarthy’s evidence on various grounds.  I ruled that the evidence was admissible and indicated that I would provide my reasons in the judgment.  However, given my finding that the resolution of this aspect of the case turns on construction of clause 7.2 rather than evidence given by Mr McCarthy, it is not necessary or efficient to provide reasons for admitting Mr McCarthy’s evidence.

  1. It is now well established that agreements should be considered as a whole and that the Court should strive to give effect to their commercial purpose and construe terms according to business commonsense.[10]

    [10]Maggbury Pty Limited v Hafele Australia Pty Limited (2001) 210 CLR 181 at 198; Toll (FGCT) Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 at [40]; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at [22]; International Air Transport Association v Ansett Australia Holdings Ltd (2008) 234 CLR 151 at [8]; Franklins Pty Ltd v Metcash Trading Ltd (2009) 264 ALR 15 at [19].

  1. Clause 7.2 of the Share Sale Agreement is a general clause.  It is designed to make necessary adjustments between buyer and seller.  Some complexity is added because the underlying subject matter of the sale comprised both shares and assets.  Nevertheless, the overall objective of the agreements was to transfer control of assets and shares from AHC to Healthscope.  The adjustments (including those provided for in clause 7.2) were designed to allocate relevant expenditure to the party in control of AHC(HPH) at the particular time, being the party incurring and liable for the expenditure.  Clause 2.3 of the Novation Deed achieved this purpose in relation to a specific matter.  It ensures, as I have found, that those in control of AHC(HPH) at a particular time pay the liabilities incurred at that time in respect of the O & M Agreement.  This is what AHC must do in respect of the Amounts.  Consequently, there is no need for further adjustment in the present case and clause 7.2 is not attracted.  It was not the objective intention of the parties that both the subsidiary (AHC(HPH)) and the holding company (Healthscope) obtain the benefit of the different adjustment provisions for the same sum.  Why should they?  A reasonable person would have understood that adjustment need only be done once, as a matter of business commonsense.

  1. Accordingly, although amounts payable under clause 2.3 are not expressly referred to in clause 7.2 like other exclusions (such as adjustments made under the Property Agreement and the Completion Statement), as a matter of construction such amounts are effectively excluded because they have been provided for elsewhere and separately.  In other words, if there is no need to adjust or apportion (in this case, because of another specific clause directed to the adjustment), clause 7.2 will have no application. 

  1. The position is not dissimilar to the case of Hewden Tower Cranes Limited v Yarm Road Limited & Anor[11].  In that case, an agreement in relation to the hire of a crane contained both a general indemnity clause and also a specific clause rendering the supplier liable for loss arising during the erection of the plant on site.  Laws LJ said:

“[W]hereas the clause 11 indemnity is perfectly general, clause 13 is dealing with the distribution of contractual responsibility in the specific context of the hiring of plant; and the rule, crisply expressed in the Latin maxim Generalia non specialibus derogant, is that the general is taken to give way to the specific.”

[11][2003] EWCA Civ 1127. See also Lewison, Kim, The Interpretation of Contracts (4th ed, 2007) at 253 – 254.

  1. Accordingly, in my opinion clause 7.2 is not attracted and it follows that Mayne is not liable to Healthscope.

(b) Does the guarantee survive?

  1. Given the answer to the first question, it is strictly not necessary to deal with the second question.  However, as there was argument about this issue, I will state my views on this aspect in short from. 

  1. Having missed the boat and not having made the claim against AHC on time, can Healthscope still make the claim against the guarantor (Mayne) or does the time bar carry over to and affect the enforcement of the guarantee?  Is the guarantee subject to the time bar?  After the expiry of the relevant time period is there any obligation to which the guarantee attaches?

  1. Ultimately, the answer depends on a proper construction of the guarantee in clause 25 of the Share Sale Agreement.  The relevant clauses are set out above. 

  1. Although the matter is not free from difficulty, in my opinion the better view is that the time bar in clause 13.8 of the Share Sale Agreement does not effect the guarantee in clause 25.  The context of clause 13.8 suggests that the claims referred to are those between buyer and seller.  Although, as conceded by Healthscope, the clause does not specify against whom the claim by the buyer is made, the heading and context suggest that it is between the immediate parties to the agreement, comprising buyer and seller.  On this construction, it is open to the buyer to make a claim against the guarantor after the expiry of the time limit, provided that clause 25 is otherwise attracted and the requirements for liability are present. 

  1. However, it is argued against Healthscope that notwithstanding the above analysis, the nature of the claim made against Mayne as guarantor arises out of an underlying transaction that is unenforceable between the principal debtor (AHC) and the creditor (Healthscope).  It was submitted that after the expiry of the time bar, AHC no longer had any enforceable obligation to account to Healthscope.  Consequently, there was no longer an obligation for Mayne to guarantee.

  1. In my opinion, clause 25 and in particular, clauses 25.3(e) (and to a lesser extent clauses 25.3(b) and 25.4), contains sufficient provisions to preserve and quarantine the liability of the guarantor, notwithstanding the unenforceability of the underlying indebtedness as between principal debtor (seller) and creditor (buyer).  The wording of clause 25.3(e), in the context of clause 25 as a whole, is sufficient to preserve the liability of Mayne.

D.       Evidence relating to the Amounts owing

  1. Both AHC and Mayne submitted that the plaintiffs had failed to prove the Amounts owing.  They attacked the adequacy of the evidence filed on behalf of the plaintiffs.  They submitted that the tax invoices filed only recorded estimates and were hearsay evidence that could not be relied on as proof of what was owed to the State of Tasmania.  Mayne submitted that the defendants’ liability did not arise simply because Healthscope paid the Amounts listed on the tax invoices.  Rather, liability only arose if it was established that the expenses were properly incurred.

  1. In my opinion, the evidence is adequate and establishes on a balance of probability the extent of the debt or liability incurred by AHC(HPH) and in respect of which indemnity is available.

  1. Mr Eaton, Healthscope’s general manager of finance, gave evidence of the amounts claimed.  He gave evidence of the sum of $282,557.05 claimed for Reticulation Services and $29,130.75 for other services.  The relevant tax invoices were tendered.  Tax invoice no 424190 in the sum of $282,557.05 is detailed.  The attachments set out the calculation with precision.  The tax invoice was received and eventually paid.  The tax invoice appears regular on its face and there is no reason to believe it is anything other than what it purports to be.  Evidence was also given of payment of the amount of $311,687.80 after demands had been made for payment.  The demands were tendered.

  1. I do not accept that the invoices were merely pieces of paper and that the original creditor should have been called to verify the amounts.  Mr Eaton gave evidence that Healthscope was not aware of any reason why the amounts should not be paid and the defendants, having been in control at the relevant time and having incurred the liability, did not call any evidence to dispute the amount claimed in the invoices.

E.        Disposition

  1. Accordingly, and subject to the remaining matters, I propose to enter judgment for AHC(HPH) against AHC in the sum of $311,687.80.  I propose to dismiss the claim made by Healthscope against Mayne.

  1. I will hear from the parties as to the further disposition of this proceeding, the Related Proceeding, interest and costs.