Ultimo Document Storage v Liquid Vision [2003] NSWSC 1175

New South Wales Supreme Court

CITATION : Ultimo Document Storage v Liquid Vision [2003] NSWSC 1175 HEARING DATE(S) : 16/09/03, 17/09/03, 18/09/03, 22/09/03 JUDGMENT DATE : 12 December 2003 JURISDICTION: Equity JUDGMENT OF : Barrett J DECISION : Plaintiff's claims dismissed. First defendant entitled to judgment on cross-claim.

CATCHWORDS : CONTRACTS - general contractual principles - whether particular terms included in contract - no question of principle - TRADE AND COMMERCE - statutes relating to misleading or deceptive conduct in trade - whether representations made - whether relied upon - no question of principle LEGISLATION CITED : Fair Trading Act 1987 Trade Practices Act 1974 (Cth) Metalcorp Recyclers Pty Ltd v Metal Manufactures Ltd [2003] NSWCA 213 CASES CITED : Peters (WA) Ltd v Petersville Ltd (2001) 205 CLR 126 Shepherd v Felt & Textile of Australia Ltd (1931) 45 CLR 359 Ultimo Document Centre Storage Pty Limited - Plaintiff PARTIES : Liquid Vision New Media Pty Limited - First Defendant Richard Steyn - Second Defendant Peter McNamara - Third Defendant FILE NUMBER(S) : SC 4817/01 COUNSEL : Mr G P F Rundle - Plaintiff Mr M R Pesman - Defendants SOLICITORS : Milne Berry & Berger - Plaintiff Allens Arthur Robinson - Defendants

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

FRIDAY, 12 DECEMBER 2003

4817/01 – ULTIMO DOCUMENT STORAGE CENTRE PTY LIMITED v LIQUID VISION NEW MEDIA PTY LIMITED & 2 ORS JUDGMENT 1 The plaintiff operates a document storage business. Commercial and other organisations maintaining large quantities of paper records not immediately required in their operations may arrange for those records to be stored at the plaintiff's warehouses. An essential feature of the plaintiff's business is the ability to track down particular documents of a particular customer in a short time as and when customers wish to retrieve documents. Generally speaking, if a customer request is received by 10am, the plaintiff will make the requested documents available on the same day. 2 The plaintiff's ability to provide this prompt service depends on the maintenance of an efficient database in which document boxes are identified and tracked by a system of barcodes. Before the events central to these proceedings, the plaintiff used a computer operating system known as Paradox. By 1996, the Paradox operating system was seen to be in need of replacement. Mr Zimmer, the principal of the plaintiff, had been in contact with the second defendant, Mr Steyn, then an employee of another company, about the plaintiff's need to make improvements to the plaintiff's computer operating system. In August 1999, Mr Steyn left the service of that other company and became a shareholder and director of the first defendant, Liquid Vision New Media Pty Limited. It is common ground that, in or about November 1999, the first defendant, through Mr Steyn, agreed to undertake certain work on the plaintiff's computer system. There were, in essence, three components: first, maintenance of the Paradox operating system in a form suitable for the plaintiff's needs pending completion of the third component about to be mentioned; second, improvement of the system by which transmission of customers' retrieval requests and other communications was effected via the Internet; and, third, replacement of the Paradox operating system by Microsoft SQL. 3 It is not disputed that a contract came into existence between the plaintiff and the first defendant under which the latter agreed to perform work in relation to the former's computer systems. The plaintiff alleges breach of that contract by the first defendant and sues for damages accordingly. The plaintiff also sues the second and third defendants (officers of the first defendant) on the footing that representations made by them to the plaintiff amounted to conduct proscribed by ss.51A and 52 of the Trade Practices Act 1974 (Cth) or ss.41 and 42 of the Fair Trading Act 1987. 4 By its amended statement of claim filed on 25 September 2002, the plaintiff pleads, so far as its contract claim against the first defendant is concerned, among other things: