Nock Son & Co Pty Ltd v Seymour Holdings Pty Ltd
[1990] FCA 539
•03 SEPTEMBER 1990
Re: NOCK SON and CO PTY LIMITED and GRAHAM NOCK
And: SEYMOUR HOLDINGS PTY LIMITED; DONALD WILLIAM SEYMOUR; PETER J. WALLIS;
JOHN C. CURWEN-WALKER; HENRY C. CURWEN-WALKER (all T/A CURWEN-WALKER, WALLIS
and CO)
No. NG97 of 1989
FED No. 539
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.(1)
HEARING
SYDNEY
#DATE 3:9:1990
Counsel for the Applicant: F.G. Lever
Solicitors for the Applicant: A.G. Robinson and Associates
ORDER
Judgment be entered in favour of the first applicant against the first and second respondents in the sum of six hundred and seventy five thousand four hundred and ninety dollars ($675,490).
Judgment be entered in favour of the second applicant against the first and second respondents in the sum of three hundred and thirty thousand and seventy dollars ($330,070).
The first and second respondents pay to the applicants their costs of the proceeding.
The Application be dismissed as against the third respondents.
The applicants and the third respondents each pay their own costs of the proceeding, so far as those costs relate to the issues between those parties.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
In this matter an order was made by me on 16 March 1990 striking out the defences of the first and second respondents and giving leave to the applicants to enter judgment against those respondents for damages to be assessed. At that time there were two cross-claims on the record. Subsequently those cross-claims were dismissed by order of Sheppard J.
So far as the third respondents are concerned, the matter has been settled between the applicants and the third respondents. Terms of settlement have been handed to me today, signed by the solicitors for those parties. Pursuant thereto I make the following orders by consent:
1. That the Application be dismissed so far as it claims relief against the third respondents;
2. that the applicants and third respondents pay their own costs of the proceedings, so far as they relate to issues between those parties.
This then leaves the matter of damages payable by the first respondent and the second respondent. The first respondent is a company called Seymour Holdings Pty Limited. It is apparently controlled by the second respondent, Donald William Seymour.
A statement setting out the history of the transaction has been prepared by Graham Norman Nock who is a director of the first applicant company, Nock Son and Company Pty Limited. This statement was verified in oral evidence by Mr Nock.
Stating the matter very shortly, it appears that the first applicant was a shareholder in a company called Haddonfield Holdings Pty Limited, which company was a shareholder in Haddonfield (Trading) Pty Limited. That company conducted the business of retailing and also a franchise operation. By a deed made on 6 January 1986, the first applicant contracted to sell its share in Haddonfield Holdings to Mr Seymour, that transaction being guaranteed by Seymour Holdings, the first respondent. The deed provided for a purchase price of $400,000. Completion was to take place immediately on execution of the deed but payment was to be deferred until the first occurring of a number of events. As events turned out, the first of those events was the effluxion of two years from the date of the sale, so that the purchase price became payable on 6 January 1988. It was not in fact paid; and according to Mr Nock's affidavit, sworn today, has never been paid.
In addition, the second applicant received the benefit of a covenant from the purchaser regarding certain guarantees which had been given by him in connection with an indebtedness to a company known as National Mutual RBC Limited. That creditor subsequently called upon the second applicant to make payment and a total sum of $196,131 has been paid. This took place in two instalments: the first of $146,131 on 11 November 1986 and the balance of $50,000 on 23 March 1988. Neither of the respondents has indemnified the second applicant in connection with those payments, right up until the present time.
The case made by the applicants was that the transaction was induced by the giving to the applicant of a balance sheet which was incorrect. Reliance was placed upon s.52 of the Trade Practices Act 1974. With the striking out of the defence and the entry of judgment this is, in effect, all conceded. The Court is only concerned with the matter of damages.
It seems clear that the sum of $400,000, being the balance of purchase price, is payable and should be included in the damages. Also the two payments totalling $196,131 should be included in the damages.
In addition to that, the applicants are entitled to interest. The deed provided for interest at the rate of 10 per cent per annum during the period between the date of the deed and payment. However, that obligation was to commence only on 6 July 1986. So there is payable interest at 10 per cent per annum for 18 months on $400,000; a total of $60,000.
The deed further provided that, if the purchase price was not paid on or before 3 January 1988, then the purchase price should attract interest at the Commonwealth Bank overdraft rate for debts over $100,000 plus 1.5 per cent. At the present time there is no evidence before the Court as to what the rate is. I have indicated to counsel that, if an affidavit from a bank officer is filed together with a calculation, I will take that into account in fixing the amount of the judgment, which can be dealt with in chambers.
The other element is that the second applicant claims interest on the amounts which were paid by him to National Mutual RBC Limited. I think that this interest should be calculated on the basis of the bank overdraft rate from time to time. Once again, that amount can be calculated and will be taken into account in fixing the final amount.
I will defer making orders for the present time and indicate that I will make orders in chambers when the interest calculations are available.
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