FEDERAL COURT OF AUSTRALIA Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979 Citation: Maylord Equity Management Pty Ltd v Parazelsus Ltd [2014] FCA 979 Parties: MAYLORD EQUITY MANAGEMENT PTY LTD (ACN 094 852 892) v PARAZELSUS LIMITED File number(s): VID 1123 of 2011 Judge(s): GLEESON J Date of judgment: 12 September 2014 Catchwords: CONTRACT – breach of contract regarding shareholding structure – wrongful termination of contract for advisory services – damages CONSUMER LAW – misleading and deceptive conduct – where no relevant causal connection between conduct and damages claimed PRACTICE AND PROCEDURE – application for default judgment under r 5.23(2)(c) of the Federal Court Rules 2011 – where respondent is in default within the meaning of r 5.22 – application granted Legislation: Australian Consumer Law, schedule 2 to the Competition and Consumer Act 2010 (Cth) Federal Court Rules 2011 (Cth) r 5.22, 5.23(2)(c), 5.23(2)(d) Trade Practices Act 1974 (Cth) Cases cited: ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 Clayton v Thomas C Denton & Co Pty Ltd [1972] VR 46 Competition and Consumer Commission v Dataline Net AU Pty Ltd (2006) 236 ALR 665, [2006] FCA 1427 Luna Park Sydney Pty Ltd v Bose [2006] FCA 94 Macquarie Bank Ltd v Seagle (2005) 146 FCR 400 Macquarie Bank Ltd v Seagle (2008) 79 IPR 7, [2008] FCA 1417 Maylord Equity Management Pty Ltd v Parazelsus Limited [2013] FCA 1219 Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 The Commonwealth of Australia v Amann Aviation Pty Ltd 174 CLR 64 Yeo v Damos Earthmoving Pty Ltd, Re Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129 Date of hearing: 13 June 2014 Date of last submissions: 19 June 2014 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 80 Counsel for the Applicant: Mr James Loxton Counsel for the Respondent: The respondent did not appear IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION VID 1123 of 2011 BETWEEN: MAYLORD EQUITY MANAGEMENT PTY LTD (ACN 094 852 892) Applicant AND: PARAZELSUS LIMITED Respondent JUDGE: GLEESON J DATE OF ORDER: 12 SEPTEMBER 2014 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. There be judgment for the applicant in the sum of $952,775. 2. The respondent pay the applicant's costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION VID 1123 of 2011 BETWEEN: MAYLORD EQUITY MANAGEMENT PTY LTD (ACN 094 852 892) Applicant AND: PARAZELSUS LIMITED Respondent JUDGE: GLEESON J DATE: 12 SEPTEMBER 2014 PLACE: SYDNEY REASONS FOR JUDGMENT 1 On 2 June 2014, I made a declaration that the respondent ("Parazelsus") was in default within the meaning of rule 5.22 of the Federal Court Rules 2011 (Cth) ("Rules"). The applicant ("Maylord") now applies for default judgment for the relief claimed in the further amended statement of claim filed on 28 November 2013 ("statement of claim"), pursuant to rule 5.23(2)(c) of the Rules. In the alternative, Maylord seeks an order pursuant to rule 5.23(2)(d) giving judgment against Parazelsus for damages to be assessed. 2 Maylord is the trustee of the Batterham Retirement Fund. Peter Batterham is the sole director of Maylord. At all relevant times, Maylord carried on a business as an intermediary by providing services which included introducing financiers, investors and other persons interested in investing in particular sectors of industry to companies operating in those sectors which were in need of funding or which were desirous of investment. 3 Parazelsus is a company incorporated in accordance with the law of the Hong Kong Special Administrative Region of the People's Republic of China ("Hong Kong"). 4 A dispute arose between Maylord and Parazelsus concerning the acquisition of a company called Victoria Body Corporate Services Pty Ltd ("VBCS"). The dispute arose in the context of an alleged venture between Maylord and Parazelsus ("the venture") which is described in the statement of claim as: …a project to develop a business to acquire and merge companies carrying on business as providers of services to body corporates of strata title developments, with a particular first step of acquiring control of [VBCS]. 5 Maylord claims damages under two heads, namely: a. Damages for breach of an agreement made on 7 September 2010; b. Damages for breach of an agreement to provide advisory services. 6 As to the first head of damages, Maylord claims: a. $2,181,501.00 being 10% of the value of "the project" less $450,000 or, alternatively b. $1,315,275, being 5.7% of the value of "the project" less $450,000. 7 As to the second head of damages, Maylord claims $325,000. 8 In support of its claims, Maylord relies on affidavits of Mr Batterham sworn on 22 September 2011 and 24 October 2012. Legal principles 9 Rule 5.23(2)(c) of the Federal Court Rules provides: (2) If a respondent is in default, an applicant may apply to the Court for: … (c) if the proceeding was started by an originating application supported by a statement of claim, or if the Court has ordered that the proceeding continue on pleadings — an order giving judgment against the respondent for the relief claimed in the statement of claim to which the Court is satisfied that the applicant is entitled. 10 The condition in rule 5.23(2)(c) of the Rules, that the Court be satisfied that the applicant is entitled to relief before judgment is entered against the respondent, does not require proof by way of evidence of the applicant's claim, although evidence may be adduced: Australian Competition and Consumer Commission v Dataline Net AU Pty Ltd (2006) 236 ALR 665, [2006] FCA 1427 at [44]; Yeo v Damos Earthmoving Pty Ltd, Re Beachwood Developments Pty Ltd (in liq) [2011] FCA 1129 at [9]. 11 However, the applicant must demonstrate, on the face of the statement of claim: a. a claim for relief sought; and b. that the court has jurisdiction to grant that relief. See Luna Park Sydney Pty Ltd v Bose [2006] FCA 94 at [20]. 12 An applicant will appear to be entitled to the relief sought in the statement of claim if each element of the relevant civil wrong is properly and discretely pleaded: Macquarie Bank Ltd v Seagle (2005) 146 FCR 400 at [24]; Macquarie Bank Ltd v Seagle (2008) 79 IPR 7, [2008] FCA 1417 at [20]. 13 The Court may permit recourse to further limited evidence but cannot admit evidence that would alter the case as pleaded: Speedo Holdings BV v Evans (No 2) [2011] FCA 1227 at [25] ("Speedo"). 14 If an order for relief under rule 5.23(2)(c) is made, it gives the applicant a special privilege to gain judgment without proof of the applicant's claim – a severe disadvantage to the respondent. As a result, the rules governing default judgment are strictly construed and the discretion must be exercised cautiously: Clayton v Thomas C Denton & Co Pty Ltd [1972] VR 46 at 49; Speedo at [20]. Jurisdiction 15 The statement of claim includes claims under the Trade Practices Act 1974 (Cth) and the Australian Consumer Law in schedule 2 to the Competition and Consumer Act 2010 (Cth) ("Australian Consumer Law"). Where the Court has jurisdiction to determine a matter of a particular kind, it has accrued jurisdiction to determine the whole of the controversy: ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559. I am satisfied that the Court has jurisdiction to determine the whole of the controversy the subject of the statement of claim. Claims for relief sought 16 In Maylord Equity Management Pty Ltd v Parazelsus Limited [2013] FCA 1219, Cowdroy J said that the pleaded facts (then set out in an amended statement of claim) were "at best convoluted". The position is not improved by the further amended statement of claim now relied upon. As a result, it is not easy to determine whether on the face of the statement of claim there are claims for the relief sought. 17 The claims are analysed under the following headings: a. Breach of contract by failing to ensure that Maylord would receive shares in VBCS; b. Breach of contract by failing to compensate Maylord for acquisition of additional businesses introduced by Maylord to the venture; c. Wrongful termination of contract for acquisition of advisory services; d. Wrongful failure to account to Maylord for the sale of the Ztrata Capital Shares; e. Misleading or deceptive conduct. Breach of contract by failing to ensure that Maylord would receive shares in VBCS 18 Although the applicant claims damages for breach of an undertaking, a mere breach of an undertaking without more does not sound in damages. I understand this claim to be based on breach of contract. Formation of contract 19 The relevant undertaking was allegedly made in a document dated 7 September 2010, headed "agreement", and purportedly signed on behalf of each of Maylord and Parazelsus ("the 7 September 2010 document"). 20 The 7 September 2010 document provides relevantly: Whereas: 1) Maylord introduced and promoted the acquisition of [VBCS] to Parazelsus; 2) Maylord is offering its advisory services to Parazelsus and VBCS; 3) Parazelsus together with other investors led and completed the acquisition of VBCS – and 4) Parazelsus and VBCS are prepared to receive Maylord's advisory services. Now, therefore, it is hereby agreed as follows: Shareholding As consideration for Maylord introducing and promoting VBCS, Parazelsus arranges for Maylord to receive a Shareholding of beneficially 5.7% in VBCS with a paid in capital of AUD 5.0 million. The Shareholding is provided to Maylord free of charge. The Shareholding is held in two offshore entities as per the structure chart in Annex 1. Should the offshore structure be unwound, Maylord will own the Shareholding directly in VBCS. Listing on Stock Exchange VBCS or a group VBCS will form part of ("Group") with the goal to list on the Stock Exchange within 3 years. Upon the listing on the Stock Exchange, Maylord shall hold the Shareholding directly in the Group. … Advisory Services Maylord will provide Advisory Services to Parazelsus and VBCS to further the growth, development, quality and efficiency of the VBCS business. The Advisory Services will be provided from 1 April 2010 until VBCS is listed on the Stock Exchange but at least for a minimum period of 12 months. The consideration for providing the Advisory Service is AUD 12,500 per month. 21 The 7 September 2010 document does not refer to the venture. 22 The claim pleaded can be understood as a claim that Maylord and Parazelsus entered into a contract, a term of which was that Parazelsus would ensure, in the event that the shareholding structure of the venture was "undone," that Maylord would be granted shares in VBCS in substitution for Maylord's interest in the venture ("VBCS shares promise"). 23 Paragraph 3H of the statement of claim pleads that the undertakings were given in compensation for a breach by Parazelsus in issuing certain shares to Maylord, by which Maylord received only a 6% interest in the venture, despite its entitlement to receive a 10% interest in the venture. This pleading implies that the consideration for the VBCS shares promise was that Maylord agreed not to claim a further 4% interest in the venture to which it was otherwise entitled. 24 Consistent with such an implication, an earlier entitlement to receive a 10% interest in the venture is pleaded in paragraph 3F of the statement of claim ("10% stake promise"). The pleaded consideration for 10% stake promise is Maylord's "work towards the entry into the 'Entire Agreement' and the execution of the [venture]". The pleading is unclear as to precisely when the agreement including the 10% stake promise was made. On one reading, the 10% stake promise was made as part of an agreement entered into in late 2008 or early 2009. This reading is supported by Mr Batterham's evidence that, from the time of his introduction to the venture until Parazelsus sold its shares, he relied on "the undertaking and agreement made by the respondent to the applicant as pleaded in the Statement of Claim filed in these proceedings, that the applicant would hold a 10% stake in the venture". 25 An email dated 5 February 2009 records negotiations, apparently between Mr Batterham on behalf of Maylord and Markus Haefeli on behalf of Parazelsus, as to the terms of a transaction referred to as "Strata Opportunity" ("the 2009 email"). It appears that Maylord sought to receive shares in an unidentified entity as part of the transaction. In the email, Mr Haefeli comments: 5) Transaction costs - Maylord share: proposed at 20%. This would have to be reduced to a lower level; 10%. Please see the comment under point 6) - However, the concept to give Maylord free shares is understood and accepted. - To avoid that Maylord gets diluted through subsequent transactions we could have an agreement that additional free shares are provided to you… 6) Management and transition - This is a key concern and risk factor - To prevent any misunderstanding, we would come in as the manager of the business; probably different from what you were expecting, namely that a financial investor puts in the equity and appoints you as the management including 20% management shares. - However, having the right resources on the ground is a deal maker and we -should have an open discussion on what transition support you could provide. - We have not ear-marked a manager for the business and are open for any suggestions. 7) Growth plans - It is understood that the acquisition of VBCS is part of a larger opportunity and this is what ultimately makes this proposition interesting. - We need to better understand why this transaction should be done through a Newco I hope you don't mind me raising a number of thorny and possibly unpleasant issues upfront. Thank you for your understanding. … Looking forward to working with you and Rob on this project. 26 Mr Batterham's evidence is that he took the 2009 email to be confirmation that Parazelsus would proceed with the venture and of the essential terms on which Maylord would be engaged in carrying out its role in the venture. 27 The pleading does not specify how many shares in VBCS were agreed to be granted in substitution for Maylord's interest in the venture. However, the 7 September 2010 document says "Should the offshore structure be unwound, Maylord will own the Shareholding directly in VBCS". The "Shareholding" is described as a shareholding "of beneficially 5.7% in VBCS with a paid in capital of AUD 5.0 million". 28 I am satisfied that the statement of claim sufficiently pleads as a term of the alleged contract a promise by Parazelsus that, if the shareholding structure of the venture was undone, Maylord would receive shares in VBCS. The evidence supports an inference that, in the event, Maylord would secure 5.7% of the total shareholding in VBCS. 29 The acceptance of the VBCS shares promise is pleaded to be "without prejudice to [Maylord's] claim for 10% of the venture in the event the undertakings were breached". This makes it clear that the VBCS shares promise was not a promise to give Maylord 10% of the total shareholding in VBCS. 30 On this basis, I am satisfied that the statement of claim pleads sufficiently a contract pursuant to which the VBCS shares promise was made. Breach of VBCS shares promise 31 At paragraph 3J of the statement of claim, the breach of this term of the contract is pleaded as follows: …Parazelsus unwound the shareholding structure when on or about 7 January 2011 it agreed to sell shares in PBCS held by Ztrata Limited to Vesture Limited without converting Maylord's shares in Ztrata Limited and Ztrata Capital Limited into shares in VBCS. 32 At paragraph 3K of the statement of claim, the breach is pleaded further and in the alternative as follows: …Parazelsus unwound the shareholding when it agreed to sell shares in Ztrata Capital Limited to Vesture without converting Maylord's shares in Ztrata Limited and Ztrata Capital Limited into shares in VBCS. 33 It is necessary to decide whether either of these allegation constitutes a distinct pleading of facts amounting to a breach of the VBCS shares promise. That is, do the events pleaded in paragraphs 3J and 3K amount to an "undoing" of the share structure of the venture? 34 Paragraph 3E contains an allegation that Ztrata Limited, Ztrata Capital Limited and PBCS were incorporated for the purpose of carrying out the venture. 35 I am satisfied that the "share structure of the [Venture]" pleaded in paragraph 3H of the statement of claim is a reference to the holding of interests in the venture through share ownership in Ztrata Limited, Ztrata Capital Limited and PBCS. 36 Accordingly, I am satisfied that the allegations in paragraphs 3J and 3K plead matters that could amount to a breach of the VBCS shares promise. Damages for breach of the VBCS shares promise 37 Damages for breach of contract are compensatory. "[W]here a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed": The Commonwealth of Australia v Amann Aviation Pty Ltd 174 CLR 64 at 80, 98, 117, 134, 148 and 161 citing Robinson v Harman (1848) 154 ER 363 at 365. 38 If the VBCS shares promise had been kept, then Parazselsus would have ensured that Maylord obtained a 5.7% shareholding of VBCS. This did not happen. 39 The general rule in contract is that damages are assessed, on a once and for all basis, as at the date of breach: Carter JW, Peden E, Tolhurst G, Contract Law in Australia (5th ed, LexisNexis Butterworths, 2007) at [35-14]. 40 The statement of claim alleges that the date of the breach was 7 January 2011 or 17 February 2011. 41 The particulars to paragraph 12 of the statement of claim state: In about January 2011, the capitalized value of VBCS was approximately $21,904,000.00 [excluding debt owed to Macquarie Bank]. Therefore, 5.7% of the issued share capital of VBCS to which Maylord is entitled is equivalent in amount to approximately $1,248,528.00. 42 In the statement of claim Maylord quantified its damages in mitigation of its loss as $798,528, being $1,248,528.00 (the amount for which its beneficial interest in VBCS was sold on or about 4 July 2011) less $450,000 (subsequently received in mitigation of Maylord's loss). 43 Maylord contends that, based upon published information (being statements released to the Australian Stock Exchange by Vesture Limited on 7 January 2011 and 17 February 2011), there was, in effect, a sale of 95% of the business of VBCS for $21,904,000. This means that the total value of VBCS was $23,075,013.00. 44 The 7 January 2011 ASX announcement states relevantly Vesture had signed a term sheet to purchase 65.44% of the shares in PBCS for certain specified consideration. 45 The 17 February 2011 ASX announcement states relevantly that Vesture had signed a share purchase agreement which would result in it having a 63.07% economic interest in VBCS. 46 The terms set out in the 17 February 2011 announcement were: Vesture will acquire 66.39% of the issued capital of [Ztrata]. The current shareholders of Ztrata will retain the balance of 33.61% of Ztrata. Ztrata owns 95% of [PBCS]. The remaining 5% of PBCS is owned by Patrik Bruhlmann. PBCS owns 100% of [VBCS]. The consideration for Vesture's acquisition is: - Cash of $7,750,329; - Issue of convertible notes in the amount of $4,574,612; - Issue of 17,260,860 Vesture shares at an issue price of 15c per share; and - Options over 33,500,000 Vesture shares exercisable at 8.5c per share expiring two years from the date of issue. Completion of the acquisition is scheduled for 25 February 2011 (or a later date by mutual agreement between the parties). The announcement also stated that the cash consideration was payable on completion. 47 Maylord also relied on an email from Parazelsus to Mr Batterham dated 17 January 2011 which stated that "the beneficial take of Maylord from selling its stakes stands at AUD1'124'052". This email is relied on as an admission that Maylord's interest in the venture as at 17 January 2011 was not less than $1,124,052, putting Maylord's damages at no less than $1,124,052 less $450,000, which equals $674,052 (assuming no material change in the value of VBCS between January and February 2011). 48 Based on the February 2011 ASX announcement, Maylord contends that the value of VBCS as at 17 February 2011 can be calculated as follows. An economic interest of 66.39% of Ztrata Limited was valued at $14,553,527: $7,750,329 Cash $4,574,612 Convertible notes in the amount; $1,726,086 17,260,860 Vesture shares at an issue price of 15c per share less $863,043; and $502,500 Options over 33,500,000 Vesture shares exercisable at 8.5c per share expiring two years from the date of issue 49 Accordingly the total value of Ztrata Limited was $21,921,263. 50 As Ztrata held a 95% interest in VBCS and it was submitted that Ztrata did not hold any other interests, it followed that the total value of VBCS was $23,075,013. 51 The value of a 5.7% shareholding in VBCS was therefore $1,315,275. 52 I am satisfied on the evidence that it is appropriate to give default judgment for breach of the implied undertaking assessed at $1,315,275 less $450,000, which equals $865,275. Breach of contract by failing to compensate Maylord for acquisition of additional businesses 53 The statement of claim pleads that Maylord and Parazelsus entered into a contract, a term of which was that "upon any acquisition of additional businesses introduced by Maylord [to Parazelsus]," Maylord would be paid by Parazelsus "on the formula 3.5% × (5 × EBITDA)". 54 The statement of claim does not allege that there was any acquisition of additional businesses introduced by Maylord. Since no breach is pleaded, it is not necessary to examine this claim further. Wrongful termination of contract for acquisition of advisory services 55 The appointment is pleaded in paragraph 3C of the statement of claim as an appointment "as an adviser to the Venture". 56 The particulars to paragraph 3C state that the appointment was set out in two emails from Parazelsus to Maylord dated 3 February 2010 and 13 April 2010, together with an attachment to the latter email headed "Maylord Advisor Agreement". 57 The 3 February 2010 email states relevantly: Agree that you/we need to draft the engagement for an annual compensation of $150k. The arrangement, which provides you with an exclusive, incremental upside was proposed in an email to you dated 28th of December. I interpreted your reply dated 30th of December as positive. 58 The 13 April 2010 email simply attaches a document headed "Maylord Advisor agreement". That document states: To provide the services of Peter Batterham to act as Head of Corporate Development reporting to the Board of Directors with the overall responsibility of collaborating with the CEO to develop current and long term business objectives, implement strategic plans and process management. 59 The document sets out a list of "key responsibilities" which include acting as a joint adviser to Vesture and VBCS to facilitate a merger of the two companies. 60 The particulars to paragraph 3C also state that the appointment was confirmed by the payments of advisory fees to Mr Batterham from time to time up to January 2011. 61 Paragraph 3E of the statement of claim pleads an agreement (referred to as the "Entire Agreement") which includes the appointment of Mr Batterham as an adviser to "Parazelsus and VBCS" for a period of 3 years from 1 April 2010 or up to the date of listing of VBCS but with a minimum period of 12 months. The particulars to paragraph 3E refer back to paragraph 3C. 62 Paragraph 3I alleges: In breach of the appointment of Mr Batterham as an advisor to Parazelsus and VBCS referred to in paragraph 3E(iv) Parazelsus wrongfully rescinded the appointment which rescission was accepted by Maylord by Maylord terminating the advisory agreement when it withdrew Mr Batterham's services. Particulars i. Maylord relies on the letter from Parazelsus dated 11 March 2010 as if the whole of the document was set out herein; and ii. VBCS did not list. 63 The reference to a letter dated 11 March 2010 appears to be an error, and should refer to a letter dated 11 March 2011. 64 The damages for the breach are claimed to be "the amount to be paid to Maylord for the provision of advisory services by Maylord pursuant to the Entire Agreement for the balance of the term of the Entire Agreement, being $325,000". 65 In support of the claim, I was referred to an email dated 29 December 2009 from Mr Haefeli to Mr Batterham which relevantly stated: It is proposed that you serve as a Senior Advisor to the Board of Directors and the Company. The annual remuneration is proposed at AUD 150,000. I assume this arrangement could be structured with you or with Maylord. 66 I was also referred to an email dated 6 April 2010 attaching a draft agreement. The draft agreement does not specify the proposed duration of the agreement. 67 The 7 September 2010 document provides relevantly: Advisory Services Maylord will provide Advisory Services to Parazelsus and VBCS to further the growth, development, quality and efficiency of the VBCS business. The Advisory Services will be provided from 1 April 2010 until VBCS is listed on the Stock Exchange but at least for a minimum period of 12 months. The consideration for providing the Advisory Service is AUD 12,500 per month. 68 The document contains a handwritten note "This has been paid". I was informed by Maylord's counsel that payments were made over a 10 month period from April 2010 to January 2011. 69 The statement of claim sufficiently pleads a contract between Maylord and Parazelsus pursuant to which Parazelsus agreed to pay Maylord for advisory services and a recission of that contract in May 2011. 70 There is nothing in the pleading or the documents which supports a quantification of the damages for breach of the contract at $325,000. Based on the 7 September 2010 document and the admission that payments were made up until January 2011, I assess the damages at seven months × $12,500 per month, which equals $87,500. Failure to account to Maylord for the sale of the Ztrata Capital Shares 71 The statement of claim does not specify any basis on which it is alleged that Parazelsus had an obligation to account to Maylord. The only relevant paragraph is paragraph 3L which states: Further and in the alternative, in breach of the undertaking referred to in paragraph 3H, Parazelsus caused to be sold to Vesture Limited shares in Ztrata Limited held by Ztrata Capital Limited without accounting for the proceeds of the sale of those shares to Maylord, a shareholder of Ztrata Capital Limited. 72 There is nothing in either of the undertakings pleaded in paragraph 3H to support the finding of a contractual obligation to account. 73 No oral submissions were directed to the issue. 74 I am not satisfied that there is any entitlement to relief based on this claim. Paragraphs 45 to 54 of the statement of claim 75 Paragraphs 13 to 44 of the statement of claim have been deleted. 76 Paragraphs 45 to 54 plead a claim for the same damages as sought by the claims already examined. The cause of action is based on misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth), s 9 of the Fair Trading Act 1987 (NSW) and s 18(1) of the Australian Consumer Law. 77 The pleading is structured in the following way: a. Paragraphs 45 sets out some background facts concerning the knowledge of Maylord; b. Paragraph 46 sets out the alleged representations; c. Paragraph 47 alleges that the known facts and the representations pleaded in paragraph 45 and 46 induced Maylord to assume certain matters; d. Paragraph 48 alleges that Parazelsus was "uniquely placed" to be able to contract, correct or qualify the representations in paragraph 46 and the consequent assumptions in paragraph 47; e. Paragraph 49 alleges that in reliance on the representations and assumptions, Maylord acted upon their trust by doing certain things; f. Paragraph 50 pleads that Parazelsus knew or ought to have known that: 1. Maylord would rely on and was likely to act and in fact acted on the representations and the assumptions; and 2. If Maylord acted on the representations and assumptions and they proved to be untrue, Maylord may suffer loss and damage; g. Paragraph 51 pleads that the representations were false in various respects, but essentially because Parazelsus did not do what it had promised to do; h. Paragraph 52 alleges that Parazelsus failed to correct or contract the representations and assumptions, and failed to make good the representations; i. Paragraph 53 alleged that, in the premises, Parazelsus's conduct in paragraph 52 was misleading or deceptive or likely to mislead or deceive. 78 It might be implied from paragraph 49 of the statement of claim that Maylord would allege that it would not have done the things pleaded in that paragraph in the absence of the misleading or deceptive conduct. However, to claim successfully that Maylord suffered compensable loss by organising its business affairs on the pleaded basis would require Maylord also to establish either that there was a cost involved in organising Maylord's business affairs on that basis or, alternatively that by doing so Maylord lost some opportunity to do something for which it would have received a benefit. The damages claimed do not include any amount that could be referrable to a loss of either of these kinds. 79 Accordingly, there is no basis for the relief claimed by paragraph 54 of the statement of claim. Conclusion 80 I am satisfied, under rule 5.23(2)(c) of the Federal Court Rules that Maylord is entitled to judgment in its favour in the sum of $952,775. I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 12 September 2014