Maylord Equity Management Pty Ltd v Parazelsus Ltd - [2014] FCA 979

FEDERAL COURT OF AUSTRALIA
Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979

Citation: Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979

Parties: MAYLORD EQUITY MANAGEMENT PTY LTD (ACN 094 852 892) v PARAZELSUS LIMITED

File number(s): VID 1123 of 2011

Judge(s): GLEESON J

Date of judgment: 12 September 2014

Catchwords:
CONTRACT – breach of contract regarding shareholding structure – wrongful termination of contract for advisory services – damages

CONSUMER LAW – misleading and deceptive conduct – where no relevant causal connection between conduct and damages claimed

PRACTICE AND PROCEDURE – application for default judgment under r 5.23(2)(c) of the Federal Court Rules 2011 – where respondent is in default within the meaning of r 5.22 – application granted

Legislation: Australian Consumer Law, schedule 2 to the Competition and Consumer Act 2010 (Cth)
Federal Court Rules 2011 (Cth) r 5.22, 5.23(2)(c), 5.23(2)(d)
Trade Practices Act 1974 (Cth)

Cases cited: ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559
Clayton v Thomas C Denton & Co Pty Ltd [1972] VR 46
Competition and Consumer Commission v Dataline Net AU Pty Ltd (2006) 236 ALR 665, [2006] FCA 1427
Luna Park Sydney Pty Ltd v Bose [2006] FCA 94
Macquarie Bank Ltd v Seagle (2005) 146 FCR 400
Macquarie Bank Ltd v Seagle (2008) 79 IPR 7, [2008] FCA 1417
Maylord Equity Management Pty Ltd v Parazelsus Limited [2013] FCA 1219
Speedo Holdings BV v Evans (No 2) [2011] FCA 1227
The Commonwealth of Australia v Amann Aviation Pty Ltd 174 CLR 64
Yeo v Damos Earthmoving Pty Ltd, Re Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129

Date of hearing: 13 June 2014

Date of last submissions: 19 June 2014

Place: Sydney

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 80

Counsel for the Applicant: Mr James Loxton

Counsel for the Respondent: The respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

VID 1123 of 2011

BETWEEN:
MAYLORD EQUITY MANAGEMENT PTY LTD (ACN 094 852 892)
Applicant

AND:
PARAZELSUS LIMITED
Respondent

JUDGE:

GLEESON J

DATE OF ORDER:

12 SEPTEMBER 2014

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.There be judgment for the applicant in the sum of $952,775.
2.The respondent pay the applicant’s costs.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

VID 1123 of 2011

BETWEEN:
MAYLORD EQUITY MANAGEMENT PTY LTD (ACN 094 852 892)
Applicant

AND:
PARAZELSUS LIMITED
Respondent

JUDGE:

GLEESON J

DATE:

12 SEPTEMBER 2014

PLACE:

SYDNEY

REASONS FOR JUDGMENT

On 2 June 2014, I made a declaration that the respondent (“Parazelsus”) was in default within the meaning of rule 5.22 of the Federal Court Rules 2011 (Cth) (“Rules”). The applicant (“Maylord”) now applies for default judgment for the relief claimed in the further amended statement of claim filed on 28 November 2013 (“statement of claim”),…

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: [2014] FCA 979
Decision Date: 12 September 2014

CaseChat Overview and Summary

In the Federal Court of Australia, Maylord Equity Management Pty Ltd (applicant) brought proceedings against Parazelsus Ltd (respondent) seeking compensation for breach of contract and misleading and deceptive conduct. The applicant claimed that the respondent had wrongfully terminated a contract for advisory services and engaged in misleading and deceptive conduct that led to the applicant’s loss of profits. The respondent defaulted in responding to the proceedings, leading to an application for default judgment.

The court was required to determine if the applicant’s claim for damages was valid, specifically whether there was a causal connection between the respondent's conduct and the applicant’s claimed loss of profits. Additionally, the court needed to assess if the applicant was entitled to default judgment under rule 5.23(2)(c) of the Federal Court Rules 2011, given the respondent's default.

The court found that there was no relevant causal connection between the respondent’s conduct and the applicant’s claimed loss of profits, thus dismissing the claim for damages based on misleading and deceptive conduct. However, the court determined that the applicant was entitled to default judgment for the breach of contract claim. The court held that the respondent's default under rule 5.22 justified the granting of judgment in the applicant's favour for the sum of $952,775. The respondent was also ordered to pay the applicant’s costs.

The final orders of the court were that judgment be entered for the applicant in the sum of $952,775, and that the respondent pay the applicant’s costs. These orders reflect the court’s decision that the applicant was entitled to compensation for the breach of contract but not for the misleading and deceptive conduct claim.

Orders

Orders of the court

1. There be judgment for the applicant in the sum of $952,775.

2. The respondent pay the applicant’s costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

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

Accordingly, there is no basis for the relief claimed by paragraph 54 of the statement of claim.Conclusion I am satisfied, under rule 5.23(2)(c) of the Federal Court Rules that Maylord is entitled to judgment in its favour in the sum of $952,775.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Citation:	Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979
Parties:	MAYLORD EQUITY MANAGEMENT PTY LTD (ACN 094 852 892) v PARAZELSUS LIMITED
File number(s):	VID 1123 of 2011
Judge(s):	GLEESON J
Date of judgment:	12 September 2014
Catchwords:	CONTRACT – breach of contract regarding shareholding structure – wrongful termination of contract for advisory services – damages CONSUMER LAW – misleading and deceptive conduct – where no relevant causal connection between conduct and damages claimed PRACTICE AND PROCEDURE – application for default judgment under r 5.23(2)(c) of the Federal Court Rules 2011 – where respondent is in default within the meaning of r 5.22 – application granted
Legislation:	Australian Consumer Law, schedule 2 to the Competition and Consumer Act 2010 (Cth) Federal Court Rules 2011 (Cth) r 5.22, 5.23(2)(c), 5.23(2)(d) Trade Practices Act 1974 (Cth)
Cases cited:	ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 Clayton v Thomas C Denton & Co Pty Ltd [1972] VR 46 Competition and Consumer Commission v Dataline Net AU Pty Ltd (2006) 236 ALR 665, [2006] FCA 1427 Luna Park Sydney Pty Ltd v Bose [2006] FCA 94 Macquarie Bank Ltd v Seagle (2005) 146 FCR 400 Macquarie Bank Ltd v Seagle (2008) 79 IPR 7, [2008] FCA 1417 Maylord Equity Management Pty Ltd v Parazelsus Limited [2013] FCA 1219 Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 The Commonwealth of Australia v Amann Aviation Pty Ltd 174 CLR 64 Yeo v Damos Earthmoving Pty Ltd, Re Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129
Date of hearing:	13 June 2014
Date of last submissions:	19 June 2014
Place:	Sydney
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	80
Counsel for the Applicant:	Mr James Loxton
Counsel for the Respondent:	The respondent did not appear

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	VID 1123 of 2011

BETWEEN:	MAYLORD EQUITY MANAGEMENT PTY LTD (ACN 094 852 892) Applicant
AND:	PARAZELSUS LIMITED Respondent

JUDGE:	GLEESON J
DATE OF ORDER:	12 SEPTEMBER 2014
WHERE MADE:	SYDNEY

JUDGE:	GLEESON J
DATE:	12 SEPTEMBER 2014
PLACE:	SYDNEY