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Ipex Software Services Pty Ltd v Hosking

Ipex Software Services Pty Ltd v Hosking

Case [2000] VSCA 239 15 December 2000

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 2024 of 1997

IPEX SOFTWARE SERVICES PTY. LTD. & ORS.
	Appellants
v.
MARK HOSKING	Respondent

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JUDGES:	CALLAWAY and BATT, JJ.A. and EAMES, A.J.A
WHERE HELD:	MELBOURNE
DATE OF HEARING:	30 October 2000
DATE OF JUDGMENT:	15 December 2000
MEDIUM NEUTRAL CITATION:	[2000] VSCA 239

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Contract – Promise to transfer 5% of equity in group of companies and unit trusts – Consideration – Whether past or executed – Certainty – Whether promise incomplete, irremediably obscure or illusory.

Judgments and orders – Judgment in contract for damages to be assessed – Quaere whether final or interlocutory – Supreme Court Act 1986, s.17A(4)(b).

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APPEARANCES:

Counsel

Solicitors

For the Appellants

Mr S.P. Whelan, Q.C.

Arnold Bloch Leibler

For the Respondent

and Mr J.P. Carney

Mr C.M. Scerri, Q.C.,
Mr J.A. Riordan and
Mr P.H. Solomon

Vadarlis & Associates

CALLAWAY, J.A.:

These reasons, which are reasons for a dissenting judgment, should be read in conjunction with the reasons for judgment below[1].
[1]Hosking v. Ipex Software Services Pty. Ltd. [1999] VSC 28.

It would, therefore, be a work of supererogation to repeat the facts leading up to the institution of proceedings but, as each member of the Court is likely to refer to provisions of the document signed on 29th and 30th August, but back-dated to 29th and 30th April, 1994, it will be convenient to set that document out again[2]:
[2]The front page describes it as an "Agreement between Joel Schwalb (representing Ipex Group entities), David Cohen, Jonathan Sheiman [and] Mark Hosking" and bears the date "August 1994".

“The parties agree that the following is an accurate outline of agreement reached between J Schwalb, 'Ipex Group', D Cohen (or nominated entity) 'DC', J Sheiman (or nominated entity), 'JS' and M Hosking (or nominated entity) 'MH'.
1.The Ipex Group, 'the group' is defined as all current and future Australian trading entities consisting of:
a)Takapana Investments Pty Ltd ATF The Schwalb Family Trust No 1.
b)Ipex Information Technology Group Pty Ltd.
c)Ipex Research and Development Pty Ltd.
d)Toren Pty Ltd ATF Toren Unit Trust.
e)Ipex Software Services Pty Ltd ATF Ipex Software Services Unit Trust.
f)Melton Gully Pty Ltd ATF The Schwalb Family Trust No 2

2.The parties hereby agree that the following agreement is to be effective from 1 July 1994 ('The effective date').
3.The fundamental basis of the agreement is that David Cohen and J Sheiman and M Hosking are to become entitled to the following % of the equity in the group:

DC 14 %

JS 5 %

MH 5 %

4.The above entitlements are unconditional and effective immediately except that in the case of JS the following vesting arrangement is to apply:
a)Immediate unconditional entitlement to 1.5%.
b)Balance of entitlement to be 'vested' over 2 years commencing 1 July 1994 in equal proportions for each completed year.
c)In the event of a formal group restructure or listing prior to the expiry of the 2 year period the balance of the…

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.

Continue reading Ipex Software Services Pty Ltd v Hosking

Details

AGLC: Ipex Software Services Pty Ltd v Hosking [2000] VSCA 239
Case: [2000] VSCA 239
Decision Date: 15 December 2000

CaseChat Overview and Summary

In the Federal Court of Australia, Ipex Software Services Pty Ltd, a software solutions provider, sued Hosking, a former director and shareholder, over a promise to transfer 5% of equity in a group of companies and unit trusts. The plaintiff claimed the defendant breached a contractual promise to transfer shares in exchange for the plaintiff's agreement to support Hosking's re-election as a director. The defendant argued the promise was past consideration, lacked certainty, and was illusory.

The court had to determine if the defendant's promise constituted valid consideration, whether it was past or executed, and if the promise was certain and not illusory. The plaintiff argued the consideration was future, while the defendant argued it was past, having already occurred. The court had to ascertain if the promise was sufficiently certain and enforceable or if it was too vague or conditional to be a binding agreement.

The court found the defendant's promise was executed consideration, having already occurred when the plaintiff supported Hosking's re-election. However, the court ruled that the promise was not vague or illusory, as it was clear and capable of being enforced. The court found the promise was a binding agreement, and the defendant was liable for breach of contract. The plaintiff was awarded damages for the loss of equity and costs of the proceedings.

The court ordered the defendant to transfer the promised 5% equity to the plaintiff and pay damages and costs. The court's decision emphasised the importance of clarity and enforceability in contractual agreements, ensuring that promises are not merely illusory or too vague to be binding.

Orders