SST Consulting Services Pty Limited v Riesen - [2001] NSWSC 804

CITATION: SST Consulting Services Pty Limited v Riesen & anor [2001] NSWSC 804

FILE NUMBER(S): SC 10938/01

HEARING DATE(S): 4 September 2001

JUDGMENT DATE:
13 September 2001

PARTIES :

SST Consulting Services Pty Limited
Steven Charles Riesen & anor.

JUDGMENT OF: Sully J at 1

COUNSEL : J. C. Thompson - Plaintiff
R. Lilley - Defendants

SOLICITORS: Mansfield Switzer - Plaintiff
Deacons - Defendants

LEGISLATION CITED: Trade Practices Act 1974 (C'th)

CASES CITED: Pont Data Australia Pty Limited v ASX Operations Pty Limited & anor. [1989] 21 FCR 385 at 425, 426
Yango Pastoral Company Pty Limited & ors. v. First Chicago Australia Limited & ors [1978] 139 CLR 4104

DECISION: (1) that paragraphs 5, 6, 7 and 8 of the Further Amended Defence and the whole of the defendants' cross- claim be struck out; (2) that the defendants pay the plaintiff's costs of the plaintiff's Notice of Motion filed on 24 Augusut 2001 as amended on 4 September 2001; (3) that the Notice of Motion of the defendants filed on 17 August 2001 be dismissed with costs; (4) that the plaintiff and the defendants pay respectively its and their costs of the defendants' Notice of Motion filed in Court on 4 September 2001

IN THE SUPREME COURT
COMMON LAW DIVISION

10938/01

SULLY J

Thursday 13 September 2001

SST CONSULTING SERVICES PTY LIMITED v Steven Charles RIESEN & anor.

JUDGMENT

There are current in the Court principal proceedings that were commenced by the filing on 2 April 2001 of a Statement of Liquidated Claim in which SST Consulting Services Pty Limited, [“SST”], as plaintiff sues Mr. Steven Charles Riesen as first defendant and Mr. Scott Murray Bell as second defendant for the payment of almost $800,000, together with accruing interest. SST alleges that Mr. Riesen and Mr. Bell are liable as guarantors of loans made by SST to A.F.S. Freight Management (USA) Inc. [“AFS”], a company incorporated in the State of California in the United States of America.

2 On 7 May 2001 the two defendants filed a joint defence. No more need be said about it than that it does not plead any defence or cross-claim based upon the provisions of the Trade Practices Act 1974 (C’th).

3 On 29 June 2001 both defendants filed an amended defence. That amended defence pleads, relevantly:

“5. At all times material to this action:

5.1 The lender in the loan agreement who was undisclosed but is now asserted to be the plaintiff was a trading corporation within the meaning of the Trade Practices Act 1974 (“the TPA”).

5.2 The lending of money pursuant to the loan agreement was a service within the meaning of that term in the TPA.

5.3 The requirements pleaded in subparagraphs 4.4 and 4.5 were requirements whereby AFSL and AFSUS was required to acquire services (within the meaning of the TPA) from those persons or corporations who provided those services at the Port Botany/MPG and Pitkin facilities in Sydney, Melbourne and Brisbane.

5.4 AFSUS…

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: [2001] NSWSC 804
Decision Date: 13 September 2001

CaseChat Overview and Summary

The case of SST Consulting Services Pty Limited v Riesen and another involved a claim for almost $800,000 by the plaintiff, SST Consulting Services Pty Limited, against the defendants, Mr. Steven Charles Riesen and Mr. Scott Murray Bell. SST alleged that the defendants were liable as guarantors of loans made by SST to AFS Freight Management (USA) Inc., a company incorporated in the United States of America. The defendants filed a joint defence which was later amended to include arguments based on the Trade Practices Act 1974 (C’th), claiming that the loan agreement was illegal and unenforceable due to exclusive dealing requirements. Subsequently, the defendants filed a Notice of Motion seeking to transfer the proceedings to the Federal Court of Australia.

The legal issues before the court were whether the defendants could rely on the provisions of the Trade Practices Act as a defence, and if so, whether the entire loan agreement and guarantee should be deemed unenforceable. The court had to decide if the illegal provisions of the loan agreement were severable from the rest of the agreement, and if SST was entitled to enforce the remaining lawful terms of the guarantee. The court also had to consider the costs associated with the various Notices of Motion filed by both parties.

The court concluded that the illegal provisions of the loan agreement were severable and did not render the entire agreement unenforceable. The court held that SST was entitled to enforce the lawful terms of the guarantee, as denying them recourse would result in unjust enrichment of the guarantors. Consequently, the court struck out paragraphs 5, 6, 7, and 8 of the Further Amended Defence and the defendants' cross-claim. The court also ordered the defendants to pay SST's costs of the Notice of Motion filed on 24 August 2001, dismissed the defendants' Notice of Motion filed on 17 August 2001 with costs, and ordered the parties to bear their respective costs of the defendants' Notice of Motion filed on 4 September 2001.

Orders