BELL SOUTH AUSTRALIA PTY LTD v MATRIX TELECOMMUNICATIONS LTD [1991] NSWCA 23

BELL SOUTH AUSTRALIA PTY LTD v MATRIX TELECOMMUNICATIONS LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, SAMUELS JA and WADDELL AJA 23 November 1990, 8 February 1991

[1991] NSWCA 23

Contracts "liabilities" CONTRACT — agreements for sale of shares in companies carrying on a radio paging business — issue as to meaning and effect of the defined term "liabilities' — HELD — the trial judge erred in his conclusion as to the construction of the agreements — no question of general principle involved.

Gleeson CJ This is an appeal from a decision of Brownie J in the Commercial Division. The respondent, the plaintiff at first instance, claimed successfully that it had been underpaid by the appellant following a sale by the respondent to the appellant of the whole of the issued shares in the capital of a company named Voicecall Telecommunications Pty Ltd ("Communications"). In order to explain the nature of the dispute between the parties concerning the appropriate amount to be paid as the purchase price of the shares it will be necessary to say something about the kind of business carried on by Communications. Before doing so, however, it is convenient to outline the transaction between the appellant and the respondent.

In August 1988 Communications, and another company named Page Alert Pty Ltd ("Page"), both carried on similar businesses which have been described as radio paging businesses. The nature of those businesses was explained in a statement of Mr GM Lorentz in the following terms:

"(3) (Communications) conducted a business of radio paging, by which messages and information for subscribers to the service were received by (Communications) and relayed to subscribers by frequency modulation radio transmissions, being received by subscribers through paging devices. These paging devices were sometimes rented from (Conlmunications) or a company associated with (Communications) or they were purchased outright by subscribers.