Mark Sensing (Aust) Pty Ltd v Flammea - [2003] VSCA 41

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 4271 of 1996

MARK SENSING (AUST.) PTY. LTD. and

G. & J. POOLE PTY. LTD.

Appellants

FRANK FLAMMEA & ORS

Respondents

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JUDGES:	ORMISTON, CHARLES and BUCHANAN, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	19 March 2003
DATE OF JUDGMENT:	24 April 2003
MEDIUM NEUTRAL CITATION:	[2003] VSCA 41

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CONTRACT – Sale and exploitation of intellectual property – Guarantee by directors as to return of deposit or price – Debt including deposit assigned to second appellant – No direct evidence of terms of assignment – Whether assignment included benefit of guarantee – Course of evidence – Whether judge entitled to refuse to allow tender of document after close of case and during oral submissions.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr P.G. Cawthorn	Vadarlis & Assoc.
For the Respondents	Mr P.W. Collinson Mr M. Ravech	Fetter Gdanski

ORMISTON , J.A.:

In this matter I have had the benefit of reading the judgment of Charles, J.A. in draft form and, for the reasons he expresses, I consider that the appeal should be dismissed.

CHARLES, J.A.:

In early 1993 Dr John Siau Ho Tan (“Dr Tan”), a Sydney scientist, had developed a process by which foodstuffs might be preserved for in excess of two years without refrigeration. This method of food preservation was known as Cycloflash. To exploit this technology Dr Tan came to an arrangement with Frank Flammea, Vince Attana and Murray Jackel to exploit the technology through a company controlled by Messrs Flammea, Attana and Jackel called A La Carte to Go Pty. Ltd. (“ALC”). ALC, which had been incorporated in December 1992, was the trustee of the A La Carte Unit Trust which was dated 14 December 1992.

In late 1993 Mr Flammea and his associates caused to be incorporated two further companies for the purposes of exploiting the technology of Dr Tan, A La Carte to Go (Aust) Pty. Ltd. (“ALCA”) and A La Carte to Go International Pty. Ltd. (“ALCI”). The directors of these companies included Dr Tan, Mr Flammea, Mr Attana and Mr Jackel.

ALCA required capital to proceed with its food technology project. It came into contact with Mark Sensing (Aust) Pty. Ltd. (“MSA”), a wholly owned subsidiary of Just Australia China Holdings Ltd. (“JACH”). MSA later made three payments towards the project, $100,000 on 10 March 1994, $100,000 on 15 March 1994 and $172,000 on 18 March 1994. It is the first of these three payments that is in issue in this appeal.

The judge found that the payments were in fact made to ALCA, in one case at its request to Dr Tan’s company Shelf Stable Foods Pty. Ltd. (“SSF”). MSA, having been unable to recover these sums from the recipient sought to recover them from

Dr Tan, Mr Flammea, Mr Attana and Mr Jackel, who became the defendants to the proceedings, and alternatively the sum of $100,000 from the defendants under a guarantee dated 10 March 1994.

The circumstances in which…

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 Mark Sensing (Aust) Pty Ltd v Flammea

Details

AGLC: Mark Sensing (Aust) Pty Ltd v Flammea [2003] VSCA 41
Case: [2003] VSCA 41
Decision Date: 24 April 2003

CaseChat Overview and Summary

The case involved a dispute between Mark Sensing (Aust) Pty Ltd and Flammea. The issue centred on the sale and exploitation of intellectual property, specifically the guarantee by the directors of Mark Sensing concerning the return of a deposit or price. Additionally, there was a contention regarding the assignment of debt, including the deposit, to a second appellant, with no direct evidence of the terms of the assignment. The central legal questions were whether the assignment included the benefit of the guarantee and whether the course of evidence was such that the judge was entitled to refuse to allow the tender of a document after the close of the case and during oral submissions.

The court had to determine if the assignment of the debt to the second appellant included the benefit of the guarantee by the directors of Mark Sensing. The absence of direct evidence on the terms of the assignment complicated this issue. Furthermore, the court needed to examine the procedural fairness in the judge's decision to refuse the tender of a document presented after the close of the case and during oral submissions. The resolution of these issues was crucial for determining the enforceability of the guarantee and the rights of the parties involved in the assignment.

The court concluded that the assignment did not include the benefit of the guarantee by the directors. The reasoning was based on the lack of direct evidence showing that the assignment terms included the guarantee. Additionally, the court found that the judge was justified in refusing to allow the tender of the document during oral submissions as it was introduced late in the proceedings, which could have prejudiced the opposing party. This decision was grounded in the principles of procedural fairness and the preservation of the integrity of the trial process.

The final orders were that the assignment of the debt to the second appellant did not include the guarantee by the directors, and the judge's refusal to allow the tender of the document during oral submissions was upheld. This outcome clarified the rights and obligations of the parties concerning the sale and exploitation of the intellectual property and the enforceability of the guarantee.

Orders