EMCL v Esanda Finance Corp Ltd [2000] FCA 612

FEDERAL COURT OF AUSTRALIA

EMCL v Esanda Finance Corp Ltd [2000] FCA 612

EMCL PTY LTD & ANOR v ESANDA FINANCE CORPORATION LTD NO. V 18 OF 1999 HEEREY J 5 MAY 2000 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V18 OF 1999

BETWEEN: EMCL PTY LTD and ANOTHER

(ACN 007 347 622)

Applicant

AND: ESANDA FINANCE CORPORATION LTD

(ACN 004 346 043)

Respondent

JUDGE: HEEREY J

DATE OF ORDER: 5 MAY 2000

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT: 1. There be judgment for the second applicant against the respondent for the sum of $689,345.00. 2. The Court declares that calculation of any amounts due pursuant to cl 4(b) of the Master Discount Agreement between the first applicant and the respondent dated 2 January 1990 be made in accordance with the joint report of John Richard Cumpston and John Howard Day dated 10 December 1998 and the supplement thereto dated 17 December 1998, on the express basis that the interest rates to be used for the purposes of the calculations are to be the contract interest rates referred to in par 43.7 of the Joint Report. 3. The respondent pay the applicants' costs of the matter remitted to a single Judge by the Full Court by its orders made 20 July 1999 in proceeding No V18 of 1999. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V18 OF 1999

BETWEEN: EMCL PTY LTD and ANOTHER

(ACN 007 347 622)

Applicant

AND: ESANDA FINANCE CORPORATION LTD

(ACN 004 346 043)

Respondent

JUDGE: HEEREY J

DATE: 5 MAY 2000

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The Full Court has remitted the question whether the appropriate discount rate for the purposes of cl 4(b) of the Master Discount Agreement should be chosen (i) on the basis of the interest rates agreed by experts and used in connection with the calculations appearing at appeal book 1663 to 1664, or (ii) using discount rates based on a rate or rates derived from the agreement and from the leases entered into pursuant thereto. 2 The context in which this question arises and the relevant terms of the agreement and lease are fully set out in the reasons for judgment of the Full Court delivered on 20 July 1999 [1999] FCA 978 and it is not necessary to repeat them. Likewise, I shall not repeat the detailed and helpful written submissions which have been filed by the parties. 3 I do not agree with Esanda's submission that "net present value" is a technical term which the court cannot define for itself. On the contrary, it is in my opinion an expression of ordinary commercial usage, like "written down value", "FOB" or "sinking fund". The concept conveyed by the expression is that of the value today of a payment or payments that will not be received until some time in the future. Of necessity, the net present value is less than the face value of such payment or payments. The question I have to decide is how the expression operates in the particular context of this case. 4 I do not think the word "present" has the significance for which Esanda contends. It does no more than direct attention to the point in time at which cl 4 operates.