mur JUDE IN THE FEDERAL COURT OF AUSTRALIA ) s DI IcT ISTRY ) QLD G8 of 1986 GENERAL DIVISION ) BETWEEN: AUSTRALIAN UNIT ADMINISTRATION PTY LTD Applicant AND: TUDOR COMPUTER SYSTEMS PTY LTD First Respondent AND: SQUIRREL DATABASE MANAGEMENT PTY LTD Second Respondent AND: TUDOR COMPUTER SYSTEMS PTY LTD First Cross-Claimant AND: SQUIRREL DATA BASE MANAGEMENT PTY LTD Second Cross-Claimant AND: AUSTRALIAN UNIT ADMINISTRATION PTY LTD Cross-Respondent MINUTES OF ORDER JUDGE MAKING ORDER: PINCUS J. DATE OF ORDER: 15 APRIL 1988 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. the further hearing of the trial be adjourned to a date to be fixed by the Registrar on application to hin; 2. the costs of yesterday's hearing and today be costs in the proceedings. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G8 of 1986 GENERAL DIVISION ) BETWEEN: AUSTRALIAN UNIT ADMINISTRATION PTY LTD Applicant AND: TUDOR COMPUTER SYSTEMS PTY LTD First Respondent AND: SQUIRREL DATABASE MANAGEMENT PTY LTD Second Respondent AND: TUDOR COMPUTER SYSTEMS PTY LTD First Cross-Claimant AND: SQUIRREL DATA BASE MANAGEMENT PTY LID Second Cross-Claimant AND: AUSTRALIAN UNIT ADMINISTRATION PTY LTD Cross-Respondent PINCUS J. 15 APRIL 1988 EX TEMPORE REASONS FOR JUDGMENT In this matter the respondents did not appear at the trial which was set down to begin yesterday, and the applicant adduced evidence in support of an application for judgment against both respondents. The application seeks an order pursuant to the Trade Practices Act 1974 requiring the respondents to repurchase from the applicant for the sum of $28,000 the computer system referred to in para.7 of the statement of clain. In the alternative, the application seeks an order directing the respondents to pay the applicant the amount of loss and damage suffered by the applicant, and, further or alternatively, damages on other bases, as well as interest. The statement of claim alleges that misleading statements were made, according to para.5, on behalf of one or both of the respondents. The evidence on that point 18s not entirely satisfactory, but the prima facie inference I draw from the documents is that Mr Whitmee said what he said on behalf of both the respondents and, in the absence of contrary evidence, I so find. Then the question arises whether a misrepresentation was made as to an existing fact. The representations pleaded speak of capabilities which the system would have whereas ss.52 and 53, as one can see from their terms and from the authorities, make it clear that they are directed to representations of present fact. Nevertheless, reading the statement of claim as a whole, and in particular the terms of para.14, it seems to me sufficiently to allege representations of present fact. Further, 1t is my opinion that the evidence sufficiently supports a prima facie inference that at the time the representations complained of were made they were untrue. It does not seem, from the material, to be disputed that the equipment was incapable of performing as it was contemplated and had there been representations here on behalf of the respondents, one might have expected the argument to revolve about the point whether the representations made were in truth ones as to existing facts or merely promises. The view I have expressed above is in favour of the applicant. The essential difficulty, however, in which I have had the assistance of counsel for the applicant, is the relief. An affidavit has been filed and read before me which suggests that a loan was made for the purpose of the acquisition of the equipment in question. To be more specific, the affidavit says that pursuant to that lease agreement "Kimberley N.Z.I. Leasing Pty. Ltd. advanced to Australian Unit Administration Pty. Ltd. the sum of $40,388.00 on the 24th April, 1985." Despite that plain statement, and with some hesitation, I draw the inference that there was no such loan. The ordinary way, as I understand it, in which such a transaction as this would be implemented is not by means of a loan, but by a payment of the price of the goods from Kimberley N.Z.I. Leasing Pty Ltd to the respondents, to one or both of them. The evidence of Mr McMonigal to which I have referred somewhat confuses the questions which I have to determine, but I think I should proceed on the basis that, as the lease agreement discloses, there was an acquisition of the goods, to use that expression loosely, by the applicant by way of lease and not otherwise. Had there been a loan, of course, one would have expected a purchase to follow - that is, a purchase by the applicant. The obligation on the applicant under the lease was to Pay $652.59 per calendar month commencing on 24 April 1985, thereafter on the 24th day of each calendar month until the end of the lease, which was a five-year lease. Suggestions were made by Mr Morris as to what relief might properly be ordered. The basic problem with which his submissions attempted to deal was, of course, that the claim made in the application for rescission of a sale agreement cannot succeed in the light of the evidence that there was no purchase by the applicant from the respondents, or either of them. Under clause 3.01 of the lease agreement, the total rent for the whole term was due upon execution, but there was a proviso entitling the lessee to pay by monthly instalments and that, on the evidence, has been done. There appears to be no obligation to pay the lease out in advance. I inquired about that possibility and it emerged from instructions given to Mr Morris that to do so would be disadvantageous, since the lessor proposed to make no discount for early payment. One way of satisfying the applicant's claim would be to require the respondents to pay the applicant the whole of the sum which is mentioned in clause 3.01 - that 1s, the sum for which the applicant will ultimately be liable, on the basis of an undertaking by the applicant to discharge in full its present and future obligations and obtain title, thus placing itself in a position to restore the goods to the respondents or one of them. I appreciate that, as a matter of commercial reality, one may assume the title will be transferred in full by Kimberley N.Z.I. Leasing Pty Ltd once payment is made; but it appears to me wrong for the Court to decide the case on the basis that there is such a right with a view to enabling the applicant to obtain an order to which it would not otherwise be entitled. My undersanding of the reason for the framing of the lease in this way ~- that is, so as not to give a right to obtain title - is that it is thought to give some tax advantage; however that may be Iam obliged, as it seems to me, to deal with the parties' rights as they appear, not as one might assume them to be taken to be. A further difficulty is that the application does not give notice of an intention to seek such an order as was contemplated. The order which Mr Morris suggested I might make was put forward on the basis that an undertaking would be extracted that upon receipt of payment from the respondents, or either of them, the applicant would apply the payment so far as it would go to reducing the sum payable by it to the leasing company, and that upon payment of the whole sum would, putting it simply, hand the goods back, and also hand over any rebate that might be obtained from the leasing company. The essential point is that what I am being asked to do is something which is quite different from the relief sought in the application. It has the same general purpose, but it 1s an order of a different legal character and, of course, involves a substantially higher liability being imposed on the respondents. A third obstacle in the way of making such an order as is proposed - that is, in addition to the two which I have just mentioned ~ is that, as I read the lease, there is no present obligation on the applicant to make any such payment as is suggested should be required to be made by the respondents to the applicant. It is not, under clause 3.01, incumbent upon the applicant to do anything other than pay the monthly instalments, and it would be an odd course for the Court to force, in effect, an acceleration of the obligations which presently accrue monthly. The position would be otherwise - that is, the difficuities which I have mentioned other than the one about lack of notice to the respondents would not exist - if the applicant had title. As I have mentioned, there is a practical disadvantage in the applicant's now obtaining title, namely, that as the leasing company appears to see the matter, the early payment redounds to the disadvantage of the applicant and to the advantage of the leasing company. The application also claims damages, and Mr Morris pointed out that, on the evidence, in addition to the loss suffered by obtaining this equipment which turned out not to be of any use to the applicant, other losses were incurred which were not quantified. The essential point, however, about the damages is that I cannot assess damages without some evidence of value. One's limited experience of this sort of equipment is that it depreciates pretty quickly, but I could only guess to what the value is now. I have concluded, on the basis of the findings I have mentioned above, that the respondents are liable to the applicant as for breach of ss.52 and 53 of the Trade Practices Act. I will adjourn the further hearing of the trial to a date to be fixed, to enable the applicant's advisers to consider its position further; I direct that a further date of hearing, to enable the trial to be resumed, is to be fixed by the Registrar on application to him. Costs will be costs in the proceedings. 1 certify that this and the 2 preceding panes are a true copy of the reasons for jud-ment herein of His Honour Mr Justice Pincus ha Gur, Associate Dated/SApvi! 1988