Digi-Tech (Australia) Ltd v Brand & 5 Ors; Digi-Tech (Australia) Ltd v Kelliher & 3 Ors; Kalifair Pty Ltd & 3 Ors v Digi-Tech (Australia) Ltd & 3 Ors; McLean Tecnic Pty Ltd & 1 Or v Digi-Tech (Australia) Ltd & 3 Ors [2004] NSWCA 58

62 IPR 184 Reported Decision : (2004) ATPR (Digest) 46-248 (2004) Aust Contract Reports 90-196

New South Wales Court of Appeal

CITATION : Digi-Tech (Australia) Ltd v Brand & 5 Ors; Digi-Tech (Australia) Ltd v Kelliher & 3 Ors; Kalifair Pty Ltd & 3 Ors v Digi-Tech (Australia) Ltd & 3 Ors; McLean Tecnic Pty Ltd & 1 Or v Digi-Tech (Australia) Ltd & 3 Ors [2004] NSWCA 58 HEARING DATE(S) : 21/07/03, 22/07/03, 23/07/03, 24/07/03, 25/07/03 JUDGMENT DATE : 23 March 2004

JUDGMENT OF : Sheller JA; Ipp JA; McColl JA DECISION : The parties should, within 21 days, file a list of orders that are common ground, a minute of proposed orders in regard to those orders that are in dispute (including costs), and written submissions in support of their respective contentions.

CATCHWORDS : PRACTICE AND PROCEDURE - Pleading referring to s 51A of the Trade Practices Act 1974 (Cth) - Particulars giving specificity to the alleged representation - Utility of trial judge's finding where proceeded on an incorrect assumption - Question of fact involving credibility findings - Where credibility findings made, reliance not to be determined on a Gould v Vaggelas (1983) 157 CLR 215 presumptive basis - Lack of authority must be pleaded to prevent surprise - TRADE PRACTICES - Whether representation with respect to a future matter - Approach in Miba Pty Ltd v Nescor Industries Group Pty Ltd (1966) 141 ALR 525 not adopted - Relevance of expression of belief - Proper approach to s 51A of the Trade Practices Act 1974 (Cth) - Whether representation was misleading and deceptive - Where no evidence of reasonable grounds for the representation - Whether parties had relied on the representation - Indirect causation under s 82(1) of the Trade Practices Act 1974 (Cth) - Relief under s 82 of the Trade Practices Act 1974 (Cth) - TAXATION AND REVENUE - Whether liable for withholding tax - Definition of royalty - COURTS AND JUDICIAL SYSTEM - Lengthy judgments - Importance of confining judgment to essential submissions and reasoning. D Fair Trading Act 1992 (ACT) LEGISLATION CITED : Income Tax Assessment Act 1936 (Cth), ss 6(1), 128(1)(AA), 128B(5)(A), 128B(2)(B), Div 10B Pt 3 Trade Practices Act 1974 (Cth), ss 51A, 82, 87 Trade Practices Revision Act 1986 (Cth) Bond Corporation Pty Limited v Thiess Contractors Pty Limited (1987) 14 FCR 215 City of Botany Bay Council v Jazabas Pty Limited [2001] NSWCA 94 Customs and Excise Commissioners v A [2003] 2 All ER 736 Esso Petroleum v Marden [1976] QB 801 Federal Commissioner of Taxation v Franklin Mint Pty Limited (1993) 44 FCR 109 Federal Commissioner of Taxation v Sherritt Gordon Mines Limited (1977) 137 CLR 612 Gould v Vaggelas (1983) 157 CLR 215 Hampic Pty Ltd v Adams [1999] NSWCA 455 Janssen-Cilag Pty Limited v Pfizer Pty Limited (1992) 37 FCR 526 Kenny & Good Pty Limited v MGICA (1992) Ltd (1999) 199 CLR 413 March v Stramare (E & MH) Pty Limited (1991) 171 CLR 506 Marks v GIO Australia Holdings Limited (1998) 196 CLR 494 Miba Pty Ltd v Nescor Industries Group Limited (1966) 141 ALR 525 CASES CITED : Nowegijick v R (1983) 144 CLR (3d) 193 PanContinental Mining Limited v Commissioner of Stamp Duties [1999] 1 Qd R 310 Ronpibon Tin NL v Federal Comissioner of Taxation (1949) 78 CLR 47 Shaddock & Associates Pty Ltd v Parramatta City Council [No 1] (1981) 150 CLR 225 Smith v FCT (1987) 164 CLR 513 Stanton v Federal Commissioner of Taxation (1955) 92 CLR 630 Stockland (Constructors) Pty Ltd v Retail Design Group (International) Pty Ltd [2003] NSWCA 84 Sydney Harbour Casino Properties Pty Limited v Coluzzi & Anor [2002] NSWCA 74 Sykes v Reserve Bank of Australia (1988) 88 FCR 511 Thompson v Mastertouch TV Services Pty Limited (No 2) (1977) 15 ALR 487 Ting v Blanche (1993) 118 ALR 543 Trident General Insurance Company Limited v McNeice Bros Pty Limited (1988) 165 CLR 107 Wardley Australia Limited v Western Australia (1992) 175 CLR 514 Wright v TNT Management Pty Limited (1989) 15 NSWLR 679 (CA 40832/02) Digi-Tech (Australia) Ltd (Appellant) Graham Leonard Brand (First Respondent) Robert Edward Chambers (Second Respondent) Christopher Gerard Kelliher (Third Respondent) Roeturn Pty Limited (Fourth Respondent) Morrow No 1 Pty Ltd (Fifth Respondent) Nesyear Pty Limited (Sixth Respondent) (CA 40833/02) Digi-Tech (Australia) Ltd (Appellant) Christopher Gerard Kelliher (First Respondent) Ian Michael Smith (Second Respondent) Hametron Pty Limited (Third Respondent) Dellfan Pty Limited (Fourth Respondent) PARTIES : (CA 40838/02) Kalifair Pty Ltd (First Appellant) Kalinick Pty Limited (Second Appellant) Divome Properties Pty Limited (Third Appellant) Toltex Human Resources Pty Limited (Fourth Appellant) Digi-Tech (Australia) Ltd (First Respondent) Digi-Tech Equities Limited (Second Respondent) Digi-Tech Communications Limited (Third Respondent) John Anthony Reid (Fourth Respondent) (CA 40840/02) McLean Tecnic Pty Ltd (First Appellant) A I McLean Pty Limited (Second Appellant) Digi-Tech (Australia) Ltd (First Respondent) Digi-Tech Equities Limited (Second Respondent) Digi-Tech Communications Limited (Third Respondent) John Anthony Reid (Fourth Respondent) FILE NUMBER(S) : CA 40832/02; 40833/02; 40838/02; 40840/02 (CA 40832/02 & CA 40833/02) John C Sheahan SC/M Christie (Appellant) A J Meagher SC/I M Jackman SC (Respondents) (CA 40838/02) COUNSEL : A J Meagher SC/I M Jackman SC (Appellants) John C Sheahan SC/M Christie (Respondents) (CA 40840/02) A J Sullivan QC/H Stowe (Appellants) John C Sheahan SC/M Christie (Respondents) (CA 40832/02 & CA 40833/02) Blake Dawson Waldron (Appellant) Atanaskovic Hartnell (Respondents) (CA 40838/02) SOLICITORS : Atanaskovic Hartnell (Appellants) Blake Dawson Waldron (Respondents) (CA 40840/02) Gillis Delaney Brown (Appellants) Blake Dawson Waldron (Respondents)