COMPAQ COMPUTER AUSTRALIA PTY LTD v MERRY [1998] FCA 1818

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IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY NG 520 of 1994

BETWEEN: COMPAQ COMPUTER AUSTRALIA PTY LTD Applicant

AND: HOWARD MERRY DAVID PAYES COLIN BUNNETT MICHAEL SHARP ROBERT BASSATT ALAN JEFFREY KRAS IAN HORMAN and GREG THOMSON Respondents

JUDGE: FINKELSTEIN J DATE: 28 JULY 1998 PLACE: MELBOURNE RULING NO 1

HIS HONOUR: The applicant seeks to tender an affidavit sworn this day by Mr Vaughan Richard Sharp who was the financial controller of the applicant. Much of Mr Sharp's affidavit deals with conversations said to have taken place before the agency agreement, that is the subject of this litigation, was executed on 5 June 1992. Objection is taken to those parts of the affidavit that refer to conversations which occurred before 5 June 1992 on the

basis that their content is not relevant to any issue raised by the pleadings.

The tender is supported on the ground that the conversations relate to that part of the applicant's case where it seeks relief under the Trade Practices Act 1974 (Cth). To summarise, the allegation in the proceeding is that Hisoft on and after 5 June 1992 made certain false representations to the applicant in connection with the supply of stock by the applicant to Hisoft Computers Pty Ltd ("Hisoft") under the agency agreement namely: (i) that Hisoft would sell the stock only to nominated customers; (ii) that Hisoft would hold the proceeds of the sale of stock on trust for the applicant; and (iii) immediately upon receipt of the proceeds of the sale of the stock Hisoft would pay the same into the applicant's bank

account.

It is contended that certain of the respondents, in particular, first, third, seventh and eighth

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respondents, were knowingly involved in Hisoft making those false representations and accordingly are liable in damages to the applicant by reason of that involvement. It is said that the pre-agreement conversations will throw light on the conduct of the respondents thereafter. It is also possible, although the tender was not supported on this ground, that the applicant will seek to argue that the conversations that took place before 5 June will bear upon another question raised in this litigation, namely in what way was Hisoft obliged to deal with the money that it received from purchases of the applicant's computers that were sold by Hisoft under the agency agreement. That issue arises in connection with the cause of action wherein it is alleged that some of the respondents assisted Hisoft to breach its fiduciary