RGM Graphic Services Pty Ltd v Moon [2001] FCA 1913

FEDERAL COURT OF AUSTRALIA

RGM Graphic Services Pty Ltd v Moon [2001] FCA 1913

RGM GRAPHIC SERVICES PTY LTD & ORS v ROBERT GEORGE MOON & ANOR N1128 of 2001

MADGWICK J 13 DECEMBER 2001 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1128 of 2001

BETWEEN: RGM GRAPHIC SERVICES PTY LTD (ACN 083 056 777)

FIRST APPLICANT

IAN FORRESTER KERR SECOND APPLICANT WAYNE PATRICK BONHAM THIRD APPLICANT AND: ROBERT GEORGE MOON

FIRST RESPONDENT

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION

SECOND RESPONDENT

JUDGE: MADGWICK J

DATE OF ORDER: 13 DECEMBER 2001

WHERE MADE: SYDNEY

THE COURT ORDERS THAT: 1. The first respondent's notice of motion be dismissed. 2. The first respondent pay the applicants' costs of the motion. 3. The matter be listed for further directions before Emmett J on 28 March 2002 at 9:30am.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY N 1128 of 2001

BETWEEN: RGM GRAPHIC SERVICES PTY LTD (ACN 083 056 777)

FIRST APPLICANT

IAN FORRESTER KERR SECOND APPLICANT WAYNE PATRICK BONHAM THIRD APPLICANT AND: ROBERT GEORGE MOON

FIRST RESPONDENT

AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION

SECOND RESPONDENT

JUDGE: MADGWICK J

DATE: 13 DECEMBER 2001

PLACE: SYDNEY

REASONS FOR JUDGMENT (revised from transcript) HIS HONOUR: 1 The applicants in the principal proceedings are a company RGM Graphic Services Pty Ltd, which it will be convenient to refer to simply as "the company" and two individuals. The respondents are a natural person, Mr Moon, and the Australian Securities and Investment Commission ("ASIC"), which is a party for the purposes of enabling regard to be had to the conduct of a deregistered company which Mr Moon had controlled. 2 On 6 July 1998, the company entered into an agreement for the purchase of a printing business from the formerly registered company (which I will call, the vendor) that the vendor had conducted. Negotiations were conducted between Mr Moon on behalf of the vendor and Mr Kerr and Mr Bonham, on behalf of the company. 3 According to the applicants, Mr Moon made representations from about February 1998 until 6 July 1998 on a continuing basis that: (a) the gross turnover of the vendor's business for the 1997 tax year had been in the order of $450,000; (b) that for the period 1 July 1997 to 16 February 1998 the gross turnover was about $280,000 so that the average monthly turnover of the business was approximately $37,000; and (c) that after the sale of the vendor's business, the turnover would be about $4,000 per month less than that referred to in (b) because part of the vendor's business, being a mail order printing venture, would not be sold but would be operated by Mr Moon and his daughter, although the actual printing work would be sub-contracted to the company. 4 It was also represented, according to the applicants, that Mr Moon would introduce the applicants to and assist them in the retention of the vendor's customers. The applicants sue for loss and damage arising from representations alleged to be in contravention of ss 51A and 52 of the Trade Practices Act 1974 (Cth) and/or ss 41 and 42 of the Fair Trading Act 1987 (NSW). Further or in the alternative, the applicants frame their case on causes of action alleging negligent misrepresentation and breach of contract, alleging that Mr Moon, contrary to a provision in the agreement, refused to make himself available for the introduction of the vendor's customers to the applicants and gave no appreciable assistance to the applicant in the retention of such customers. 5 The principal proceedings were instituted by the applicants on 26 July 2001. The agreement provided that it would be completed on 31 July 1998, time being of the essence. The agreement provides for a purchase price of $234,800 allocated as to $54,000 for goodwill and as to $180,000 for plant and chattels. A deposit of $20,000 was to be paid (and, I take it, was paid). The agreement provided that the vendor would lease to the purchaser certain premises for two years at $750 per week. There was also a special condition that the sum of $34,800 would not be paid on settlement but would be secured by a fixed and floating charge over the assets of the purchaser. 6 Settlement, including entry into the charge of debenture, is alleged to have occurred on 31 July 1998 as the contract had contemplated. Mr Moon, the first respondent moves to strike out the statement of claim so far as it depends on the Trade Practices Act and/or the Fair Trading Act. 7 It is convenient to deal with the matter by reference only to the Trade Practices Act 1974 ("the Act"). The first respondent has also brought a motion seeking security for costs.