FEDERAL COURT OF AUSTRALIA Cairnsmore Holdings Pty Ltd v Bearsden Holdings Pty Ltd (No. 2) [2007] FCA2060 CAIRNSMORE HOLDINGS PTY LTD (ACN 109 826 404) AS TRUSTEE FOR THE CAIRNSMORE TRUST AND VERNON HOWLAND v BEARSDEN HOLDINGS PTY LTD (ACN 002 836 133) AND JAMES PEARSON HODGE NSD 2183 OF 2005 JACOBSON J 20 December 2007 SYDNEY NO QUESTION OF PRINCIPLE IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALESDISTRICT REGISTRY NSD 2183 of 2006 BETWEEN: CAIRNSMORE HOLDINGS PTY LTD (ACN 109 826 404) AS TRUSTEE FOR THE CAIRNSMORE TRUST First Applicant VERNON HOWLAND Second Applicant AND: BEARSDEN HOLDINGS PTY LTD (ACN 002 836 133) First Respondent JAMES PEARSON HODGE Second Respondent JUDGE: Jacobson J DATE OF ORDER: 20 December 2007 WHERE MADE: SYDNEY THE COURT ORDERS: 1. Judgment for the first applicant against the first respondent for $727,898.03. 2. Judgment for the applicants against the first and second respondents in the sum of $351,835.00 plus interest from 16 July 2005 to date pursuant to Schedule 5 of the Uniform Civil Procedure Rules 2005 (NSW). 3. The judgment for $727,898.03 under Order 1 includes the sum of $351,835.00 plus interest referred to in Order 2, and the first and second respondents are not liable for more than $727,898.03 under both of those judgments. 4. Order 2 made on 29 October 2007 is vacated. 5. The respondents' request for stay of execution of judgment is refused. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALESDISTRICT REGISTRY NSD 2183 of 2006 BETWEEN: CAIRNSMORE HOLDINGS PTY LTD (ACN 109 826 404) AS TRUSTEE OF THE CAIRNSMORE TRUST First Applicant VERNON HOWLAND Second Applicant AND: BEARSDEN HOLDINGS PTY LTD (ACN 002 836 133) First Respondent JAMES PEARSON HODGE Second Respondent JUDGE: Jacobson J DATE: 20 December 2007 PLACE: SYDNEY REASONS FOR JUDGMENT 1 I gave an oral judgment in this matter on 29 October 2007. The proofed judgment was forwarded to the parties on 27 November 2007. 2 The parties have been in dispute as to a number of issues arising from the judgment. Accordingly, final orders have not been made or entered. The parties filed written submissions on the outstanding questions on 13 December 2007. 3 I will deal with the matters in dispute under the following sub-headings. Costs 4 On 29 October 2007, I ordered that the first respondent pay the first applicant's costs on an indemnity basis under cl 28.2 of the Sale of Business Agreement ("the SBA"). 5 In my view, this order does not bring into play the Rules of Court and assessment procedures enlivened by an order for indemnity costs made pursuant to s 43 of the Federal Court of Australia Act 1976 (Cth). Whether Cairnsmore's claim for expenditure should be reduced by $194,000 6 Both parties approached this matter on the basis that these expenses would be recoverable only to the extent that they exceeded the amount of $194,000 received by Cairnsmore during the life of the SBA. 7 This is reflected in what I said in Cairnsmore Holdings Pty Ltd v Bearsden Holdings Pty Ltd [2007] FCA 1822 at [121]. Cairnsmore referred me to [122] – [125] of those reasons for judgment. Those paragraphs are to be read in light of what I said at [121] and [124]. The resolution of this issue is separate from "Issue three" which I dealt with in [100] to [108]. Stay of Execution 8 The respondents requested a stay to consider their prospects of appeal. In my view, they have had ample time to attend to this. I decline to order a stay. Orders 9 I will make the following orders: (i) Judgment for the first applicant against the first respondent for $727,898.03. (ii) Judgment for the applicants against the first and second respondents in the sum of $351,835.00 plus interest from 16 July 2005 to date pursuant to Schedule 5 of the Uniform Civil Procedure Rules 2005 (NSW). (iii) The judgment for $727,898.03 under Order 1 includes the sum of $351,835.00 plus interest referred to in Order 2, and the first and second respondents are not liable for more than $727,898.03 under both of those judgments. (iv) Order 2 made on 29 October 2007 be vacated. 10 I have vacated Order 2 of 29 October 2007 because the amount payable for costs and expenses is reflected in Order 1 above. 11 Order 3 made on 29 October 2007 remains in force. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. Associate: Dated: 20 December 2007 Counsel for the Applicant: J Svehla Solicitor for the Applicant: Parry Carroll Counsel for the Respondent: S Galitsky Solicitor for the Respondent: Haylen McKenzie Date of Judgment: 20 December 2007