Natwest Information Systems Pty Ltd v Dealing Information Systems Pty Ltd

[1992] FCA 1068

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. NG 640 of 1992

)

GENERAL DIVISION )

BETWEEN:NATWEST INFORMATION SYSTEMS PTY

LIMITED

Applicant

AND:DEALING INFORMATION SYSTEMS PTY LIMITED

and ORS

Respondent

24 April 1992

REASONS FOR JUDGMENT

LOCKHART J.

There is before the Court a notice of motion issued by the third cross respondent, Paxus Australia Pty Limited, seeking, in the alternative, orders that the third cross claim be dismissed or struck out or that certain particulars be provided. Primarily, the third cross respondent seeks dismissal of the third cross claim pursuant to Order 20 rule 2(a). The third cross claimant is Dealing Information Systems Pty Limited which is also the first respondent to the principal proceeding. The

third cross respondent is not involved as a party to the

proceedings, save as the third cross respondent.

The third cross claim joins only one respondent, namely, the third cross respondent and that cross claim asserts that there is an agreement between the third cross claimant and the third cross respondent. This agreement is constituted by two letters, one of 12 December 1990 from the third cross respondent

to the applicant (Natwest Australia Bank Limited) and the reply to that letter of 14 December 1990 from the applicant to the third cross respondent, but which is also signed on behalf of the third cross claimant as required by the last paragraph of the letter of 14 December 1990.

The third cross claimant also pleads that there is an

implied term of the contract between the third cross claimant

and the third cross respondent that the third cross respondent would use all necessary skill, care and diligence in and about carrying out the various work in relation to the delivery and installation of the computer program known as the Matrix

Computer Program which is the subject of the third cross claim.

In essence, the third cross claimant says that the contract

between itself and the third cross respondent is one whereby the

third cross respondent was to carry out full quality assurance and testing of the Matrix Computer Program as converted to IBM AS400 for the applicant.

The third cross respondent, therefore, says that the only material as pleaded that could constitute a contract between the third cross claimant and the third cross respondent are the two letters to which I have referred. It is not suggested on

behalf of the third cross claimant that the implied term has any

relevance in relation to the matter before the Court today, save that if the Court is of the view that the letters constitute a contract then the implied term will arise to give it business

- 3 -

efficacy. At this stage that seems to be a sound submission and

the contrary is not disputed by counsel for the third cross

respondent.

The question is whether those two letters, without aid to any other material, because no oral terms are pleaded by the third cross claimant against the third cross respondent, can constitute the contract as pleaded in the third cross claim. Reference is made throughout the letter of 12 December to the third cross claimant in various contexts; in particular in relation to what is described as funding in item 1.7, and reference is made to the role of the third cross claimant in the second letter, that is the 14 December letter, the last paragraph of which says this:

"I will require confirmation from DIS [the third cross claimant] - and from you [the third cross respondent] - on behalf of Paxus that both DIS and Paxus are in agreement with all matters set out in this letter and in your letter of 12 December 1990. I accordingly enclose copy letter to be signed as confirmation by yourself on behalf of Paxus. I am also sending a copy letter to Wendy Penn of DIS to be signed in confirmation on behalf of DIS."

As mentioned earlier, that is then followed, after the execution of the letter by the applicant, by the signature of somebody on behalf of the third cross claimant.

- 4 -

In my opinion the two letters pleaded cannot constitute a contract between the third cross claimant and the third cross respondent and the third cross claim should therefore be struck out. However, the discussion that has ensued leaves me with the firm impression that those letters are part of a wider matrix of fact which may or may not found some contractual relationship between the third cross claimant and the third cross respondent. Glimmers of this occur from the letters themselves and from certain of the assertions made in the statement of claim, including paragraphs 31 and 32.

This leads me to conclude that judgment should not be entered in favour of the third cross respondent against the third cross claimant, but that the cross claim should be struck out. The third cross claimant can then, if it wishes, replead its case and then it will be known whether there could be any

conceivable basis for a cause of action of the third cross claimant against the third cross respondent other than that which has been presently pleaded which, as I say, does not disclose a cause of action. I should add that the principles I

have applied in directing the striking out of the third cost

claim are those that are too well known to need restatement but it is sufficient to refer to the oft cited passages from Sir

Garfield Barwick's judgment in General Steel.

Accordingly, the Court orders that:

- 5 -

1.The third cross claim be struck out.

2.The third cross claimant shall pay the costs of the third cross respondent of this motion and of any other costs associated with the third cross claim.

3.The Court grants leave to the third cross claimant to file any

amended third cross claim, provided the same is filed and

served on or before 15 May, 1992.

I certify that this and the preceding four (4) pages are a true copy of the reasons for judgment herein of the Honourable Mr. Justice Lockhart.

Associate

Dated: 24 April 1992

Counsel for the Third Cross Claimant : Solicitors for the Third Cross Claimant : Counsel for the Third Cross Respondent : Solicitors for the Third Cross Respondent: Date of Hearing : 24 April 1992

Date of Judgment : 24 April 1992