Enron Australia Finance Pty Limited (in Liquidation) v Integral Energy Australia [2002] NSWSC 817

New South Wales Supreme Court

CITATION : Enron Australia Finance Pty Limited (in Liquidation) v Integral Energy Australia [2002] NSWSC 817 FILE NUMBER(S) : SC 50042/02 HEARING DATE(S) : 19/8/02, 20/08/02 JUDGMENT DATE : 20 August 2002

PARTIES : Enron Australia Finance Pty Limited (in Liquidation (Plaintiff) Integral Energy Australia (Defendant) JUDGMENT OF : Einstein J

COUNSEL : Mr D Hammelschlag SC, Mr V Kerr (Plaintiff) Mr R Ellicott QC, Mr D Knoll (Defendant) SOLICITORS : Blake Dawson Waldron (Plaintiff) Corrs Chambers Westgarth (Defendant) CATCHWORDS : Practice and Procedure - Application for leave to amend LEGISLATION CITED : Supreme Court Rules Supreme Court Act Clough & Rogers v Frog (1974) 48 ALJR 481 CASES CITED : Cropper v Smith (1884) 26 Ch D 700 Idoport Pty Ltd & Anor v National Australia Bank & Ors [2000] NSWSC 1141 State of Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146 DECISION : Leave granted.

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

Einstein J

Tuesday 20 August 2002 ex tempore Revised 4 September 2002

50042/02 Enron Australia Finance Pty Limited (in liquidation) & Anor v Integral Energy Australia JUDGMENT

The applications for leave in respect of further or amended pleadings 1 These proceedings were fixed for hearing to commence on 19 August 2002. An immediate issue has arisen concerning the pleadings. Both parties have live applications before the Court in this regard. The plaintiffs' application for leave to amend the amended summons 2 The amended summons representing the present state of the pleading was filed on 24 July 2002. The summons identifies the issues likely to arise as: · The proper meaning of "quotations" as that term is used in the definition of "Market Quotation" in clause 14 of the ISDA Master Agreement dated 10 September 1999 between Enron and Integral. · Whether the quotations given to Integral by Macquarie Risk Advisory Services, Ernst & Young (Vic), Accenture Australia Ltd and Deloitte Touche Tohmatsu are "quotations" within the proper meaning of that term. 3 The summons identifies the nature of the dispute as follows: · The plaintiff (Enron) and the defendant (Integral) entered into a series of electricity swap contracts under an umbrella agreement known as the ISDA Master Agreement. · In December 2001 Enron was placed in administration. · Integral then purported to "close out" all outstanding electricity swap contracts by appointing certain experts to determine the value of the outstanding electricity swap contracts under the ISDA Master Agreement. · Three of the four experts: (a) valued the outstanding contracts in which Integral was the "seller" at the prevailing "bid" or "buy" price