Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) (No 2) [2006] FCA 157

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) (No 2) [2006] FCA 157

TRADE PRACTICES – form of relief – indemnity for likely loss and damage pursuant to s 87

Trade Practices Act 1974 (Cth), s 87

Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) [2006] FCA 146)related Leda Holdings Pty Ltd v Oraka Pty Ltd (1998) ATPR 41-601 cited Oraka Pty Ltd v Leda Holdings Pty Ltd (1997) ATPR 41-558cited State of Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 cited Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 cited

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (IN LIQUIDATION), IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (IN LIQUIDATION), NICHOLAS YATES, FRANK YATES, NICHOLAS RHODIN, DANIEL ALBERT AND RUSSELL FIELDING

NSD 328 OF 2003

GYLES J

27 FEBRUARY 2006 SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY NSD 328 OF 2003

BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

APPLICANT

AND: GLOBAL PREPAID COMMUNICATIONS PTY LTD (ACN 095 154 108) (IN LIQUIDATION)

FIRST RESPONDENT

IN TOUCH NETWORKS PTY LTD (ACN 098 279 746) (IN LIQUIDATION)

SECOND RESPONDENT

NICHOLAS YATES

THIRD RESPONDENT

FRANK YATES

FOURTH RESPONDENT

NICHOLAS RHODIN

FIFTH RESPONDENT

DANIEL ALBERT

SIXTH RESPONDENT

RUSSELL FIELDING

SEVENTH RESPONDENT

JUDGE: GYLES J

DATE: 27 FEBRUARY 2006

PLACE: SYDNEY

SUPPLEMENTARY REASONS FOR JUDGMENT 1 I delivered reasons for judgment in this matter on 24 February 2006 (Australian Competition and Consumer Commission v Global Prepaid Communications Pty Ltd (ACN 095 154 108) (in liquidation) [2006] FCA 146) and stood the matter over until today to enable orders to be made. My attention has been drawn to the fact that I did not explicitly deal with the form of order for compensation to be made in respect of Loncaric and Carlon Pty Limited insofar as there was a claim for contingent loss. 2 Loncaric negotiated the appointment of two sub-distributors by Carlon Pty Limited by passing on to those potential sub-distributors the misrepresentations made to him by the relevant respondents. The consideration received from those sub-distributors has been included in the calculation of the actual loss claimed by Loncaric and Carlon Pty Limited. Each sub-distributor has demanded compensation from Loncaric and Carlon Pty Limited – $55,000 in one case and $85,000 in another. That led to deeds being entered into between Carlon Pty limited, on the one hand, and each of the sub-distributors, on the other. The gist of the deed is that sub-distributors would refrain from suing and would release Carlon Pty Limited from liability on the basis that Carlon Pty Limited would include the claim from the sub-distributors in the claim made against the respondents. 3 I am satisfied that the terms of s 87 are wide enough to authorise the inclusion of orders which have the effect of indemnifying Carlon Pty Limited from claims by the sub-distributors. Burchett J made a similar order in Oraka Pty Ltd v Leda Holdings Pty Ltd (1997) ATPR 41-558. That judgment was set aside on appeal but not because of any fault in the relief granted (Leda Holdings Pty Ltd v Oraka Pty Ltd (1998) ATPR 41-601). Beaumont J, who dissented in the Full Court, expressly approved that order (at 40,509). It was supported by the authorities referred to by Burchett J. (See also State of Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 at 261 and Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 at 545). Whether such an order should be made is for the discretion of the Court in each case. 4 In my opinion, the claims made by the sub-distributors mean that Carlon Pty Limited is likely to suffer loss or damage by the conduct of the relevant respondents. It seems to me that an order based upon the quantified claims is appropriate. Whilst there may be some debate about the legal effect of the deed between the parties, the overall intent is clear enough. There is no reason to limit the liability of the respondents on that account. The order will be framed to ensure that the amount in question will be passed on to the sub-distributors if and when received. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.