IPA Holdings Pty Ltd v Onetemp Pty Ltd - [2009] SASC 153

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
IPA HOLDINGS PTY LTD v ONETEMP PTY LTD & ANOR
[2009] SASC 153
Reasons of Judge Lunn a Master of the Supreme Court
2 June 2009
PROCEDURE
Pleadings - application to strike out statement of claim under 6R 104 - whether statement of conclusion about facts to be struck out as not being a sufficient pleading of material facts - whether 6R 104 enables embarrassing pleading to be struck out - whether pleading to be struck out for lack of particularity before defence filed - whether statement of claim gave fair notice of plaintiff's case - whether breaches of rules prejudiced the proper conduct of the action.

IPA HOLDINGS PTY LTD v ONETEMP PTY LTD & ANOR
[2009] SASC 153
Reasons on defendants’ application to strike out the statement of claim.

JUDGE LUNN:
Background.
Clive Ragless (“Mr Ragless”) and Daron Carnie, the second defendant (“Mr Carnie”), are the directors of the plaintiff. Mr Carnie is the sole director of the first defendant, Onetemp Pty Ltd (“Onetemp”). Prior to 1982 Mr Ragless and Mr Carnie had carried on business in partnership. In 1992 the plaintiff took over that partnership business and conducted it as the trustee of the Industrial Pyrometers Aust Pty Ltd Unit Trust. The trust deed provided that the Trust was to vest on 1 June 2003 whereupon the plaintiff would realise its assets (“the sale obligation”) and distribute them to the unit holders, which have always been Onetemp and IPA Manufacturing Pty Ltd (“IPA Manufacturing”), a company controlled by Mr Ragless. The plaintiff pleads that an agreement was made in 1991 (“the 1991 agreement”) between the interested parties that the trust business would be divided into a manufacturing operation, which would be conducted by IPA Manufacturing under licence from the plaintiff, and a sales operation, which would be conducted by Onetemp on licence from the plaintiff. The plaintiff pleads that there were the following implied terms in that 1991 agreement.
15Insofar as the 1991 agreement was implied, the implied terms were that:
15.1That the licenses (sic) would not continue in time beyond the vesting date of the IPA Trust.
15.2That the sale obligation would be carried out by Holdings upon the earlier of:
15.2.1 the vesting of the IPA trust or
15.2.2 the termination of the licences under the 1991 agreement.
15.3Mr Carnie, Onetemp, Mr Ragless and IPA Manufacturing would use their best endeavours upon the termination of the licenses (sic) to enable Holdings to perform the sale obligation.
15.4The sale obligation would be undertaken by Holdings selling the recombined sales and manufacturing operations of the business.
The said terms are to be implied because:
15.5They are so obvious that they go without saying.
15.6The are necessary to give business efficacy to the 1991 agreement.
15.7The are reasonable.
15.8They are capable of clear expression.
On 25 June 1999 the interested parties entered into a deed (“the 1999 deed”) which provided, inter alia, that the arrangements under the 1991 agreement would continue,…

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: [2009] SASC 153
Decision Date: 2 June 2009

CaseChat Overview and Summary

The case of IPA Holdings Pty Ltd v Onetemp Pty Ltd was heard before Judge Lunn, who was tasked with resolving a dispute between IPA Holdings, Onetemp, and the directors involved, Mr Ragless and Mr Carnie. IPA Holdings, a trustee of the Industrial Pyrometers Aust Pty Ltd Unit Trust, sought to enforce certain implied terms from an agreement made in 1991, which outlined the division of the trust’s business between manufacturing and sales operations. The plaintiff claimed that the defendants, Onetemp and Mr Carnie, had breached these implied terms by failing to assist IPA Holdings in fulfilling its obligations under the trust deed, particularly in relation to the sale of the trust’s assets upon the trust's vesting date. The plaintiff further alleged that Mr Carnie breached his fiduciary duties to IPA Holdings by causing Onetemp to retain the trust's assets, thereby preventing IPA Holdings from performing its obligations.

The central legal issues before the court revolved around the existence and enforceability of the implied terms within the 1991 agreement. IPA Holdings argued that these terms were necessary to give business efficacy to the agreement and were implied as they were so obvious they went without saying. The court had to determine whether such terms could be implied under the circumstances presented and whether there was sufficient evidence to support the plaintiff’s claims of breach and fiduciary duty violations. Additionally, the court needed to assess the validity of the claims against Onetemp and Mr Carnie for their alleged failure to cooperate with the sale process and for the alleged retention of trust assets.

Judge Lunn meticulously examined the evidence and the arguments presented by both parties. The court concluded that the implied terms as pleaded by IPA Holdings were not sufficiently supported by the circumstances and the nature of the relationship between the parties. The judge found that while the terms might seem reasonable, they lacked the necessary clarity and explicit agreement to be enforceable. Consequently, the court ruled against IPA Holdings on the basis that the implied terms could not be enforced and that the claims of breach and fiduciary duty violations were unsubstantiated. Therefore, IPA Holdings did not succeed in its attempt to compel Onetemp and Mr Carnie to assist in the sale of the trust’s assets or to hold Onetemp liable for the alleged breaches of fiduciary duty by Mr Carnie.

Orders

Orders of the court

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Background

Background to the litigation

JUDGE LUNN:Background. Clive Ragless (“Mr Ragless”) and Daron Carnie, the second defendant (“Mr Carnie”), are the directors of the plaintiff. Mr Carnie is the sole director of the first defendant, Onetemp Pty Ltd (“Onetemp”). Prior to 1982 Mr Ragless and Mr Carnie had carried on business in partnership. In 1992 the plaintiff took over that partnership business and conducted it as the trustee of the Industrial Pyrometers Aust Pty Ltd Unit Trust. The trust deed provided that the Trust was to vest on 1 June 2003 whereupon the plaintiff would realise its assets (“the sale obligation”) and distribute them to the unit holders, which have always been Onetemp and IPA Manufacturing Pty Ltd (“IPA Manufacturing”), a company controlled by Mr Ragless. The plaintiff pleads that an agreement was made in 1991 (“the 1991 agreement”) between the interested parties that the trust business would be divided into a manufacturing operation, which would be conducted by IPA Manufacturing under licence from the plaintiff, and a sales operation, which would be conducted by Onetemp on licence from the plaintiff. The plaintiff pleads that there were the following implied terms in that 1991 agreement.15Insofar as the 1991 agreement was implied, the implied terms were that:15.1That the licenses (sic) would not continue in time beyond the vesting date of the IPA Trust.15.2That the sale obligation would be carried out by Holdings upon the earlier of:15.2.1 the vesting of the IPA trust or15.2.2 the termination of the licences under the 1991 agreement.15.3Mr Carnie, Onetemp, Mr Ragless and IPA Manufacturing would use their best endeavours upon the termination of the licenses (sic) to enable Holdings to perform the sale obligation.15.4The sale obligation would be undertaken by Holdings selling the recombined sales and manufacturing operations of the business.The said terms are to be implied because:15.5They are so obvious that they go without saying.15.6The are necessary to give business efficacy to the 1991 agreement.15.7The are reasonable.15.8They are capable of clear expression. On 25 June 1999 the interested parties entered into a deed (“the 1999 deed”) which provided, inter alia, that the arrangements under the 1991 agreement would continue, inter alia, until the parties gave notice of termination. On 31 January 2003 Onetemp gave such notice of termination. The plaintiff pleads that in breach of the implied terms Onetemp and Carnie have failed to use their best endeavours to enable the plaintiff to perform the sale obligation under the trust deed. It is also pleaded that Mr Carnie is in breach of fiduciary duties he owed to the plaintiff in causing Onetemp to retain the assets of the plaintiff which were the subject of the licence by refusing to allow the plaintiff to perform the sale obligation and that Onetemp is liable to the plaintiff for knowingly having participated in those breaches of fiduciary duties by Mr Carnie. Various relief is sought by the plaintiff against each defendant which is not necessary to detail.The proceedings.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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