Gate Gourmet Australia Pty Limited (in liquidation) ACN 089 347 562 v Gate Gourmet Holding AG, Company Number CH-020.3.003.945-1 & Ors [2004] NSWSC 149

New South Wales Supreme Court

CITATION : Gate Gourmet Australia Pty Limited (in liquidation) ACN 089 347 562 v Gate Gourmet Holding AG, Company Number CH-020.3.003.945-1 & Ors [2004] NSWSC 149 HEARING DATE(S) : 04/03/04, 05/03/04, 08/03/04, 09/03/04, 10/03/04 JUDGMENT DATE : 31 March 2004

JURISDICTION: Equity Division Commercial List JUDGMENT OF : Einstein J DECISION : Letter held to create binding contract. Short minutes of order to be brought in

CATCHWORDS : Contract - Letters of comfort/support - Whether creating legal obligations - Whether intent to contract - Australian trading arm of foreign owned group of companies operating under aegis of letters of comfort/support - Letter of support signed by ultimate overseas parent company - Letter confirming (1) that it would provide the financial support that may be necessary to enable its wholly owned Australian holding company and its controlled entities to meet financial commitments as and when they fall due and providing (2) that the letter would not be withdrawn before the Australian holding company and its controlled entities have sufficient means to meet their obligations without the support of the parent entity - Reliance upon letter of support for purpose of (1) directors' declaration recording that financial statements are prepared on a going concern basis on the assumption that parent entity will continue to provide the necessary financial support to enable the company to pay its debts as and when they become due and payable and (2) Australian trading company being committed to continue to trade at all - Whether intent to contract - Whether letter contained promissory undertaking - Construction of letter - Identification of promisee - Objectivity - Alternative claim that benefit of promise held by Australian holding company on trust for Australian trading company - Trade Practices Act - Misleading and deceptive conduct - Evidence - Admissibility of extrinsic evidence/surrounding circumstances - Admissibility of evidence on intent to contract issue - Admissibility of evidence on construction issue Corporations Act 2001 (Cth) LEGISLATION CITED : Corporations Law Trade Practices Act 1974 (Cth) Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470 Adler v Australian Securities and Investments Commission [2003] NSWCA 131 Anaconda Nickel Holdings Pty Ltd, Re [2003] WASC 19 Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 Australian Development Corporation Pty Ltd v White Constructions (ACT) Pty Ltd, (unreported, 8 February 1999, NSWSC) Australian European Finance Corporation Limited v Sheahan (1993) 60 SASR 187 Australian Mutual Provident Society v Overseas Telecommunications Commission (Australia) [1972] 2 NSWLR 807 Bahr v Nicolay (No 2) (1988) 164 CLR 604 Banque Brussels Lambert SA v Australian National Industries Ltd (1989) 21 NSWLR 502 Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647 Bonnington Castings Ltd v Wardlaw [1956] AC 613 Bowler v Hilda Pty Ltd (1998) 80 FCR 191 BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 Brown v Jam Factory Pty Ltd (1981) ATPR 40-213 B Seppelt & Sons Ltd v Commissioner for Main Roads (1975) 1 BPR 9147 Burns Philp Hardware Pty Ltd v Howard Chia Pty Ltd (1987) 8 NSWLR 642 Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12 Carter v Hyde (1923) 33 CLR 115 Charrington and Co Ltd v Wooder [1914] AC 71 City of Botany Bay Council v Jazabas Pty Ltd [2002] ANZ ConvR 300 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Commonwealth Bank of Australia v TLI Management Pty Ltd [1990] VR 510 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 Concrete Constructions Group v Litevale Pty Ltd [2002] NSWSC 670 Coulls v Bagot's Executor & Trustee Co Ltd (1967) 119 CLR 460 Cox & Coxon Ltd v Leipst [1999] 2 NZLR 15 R v The Credit Tribunal; Ex parte General Motors Acceptance Corp, Australia (1977) 137 CLR 545 Cummings v Lewis (1993) 41 FCR 559 Digi-Tech (Australia) Ltd v Brand; Digi-Tech (Australia) Ltd v Kelliher; Kalifair Pty Ltd v Digi-Tech (Australia) Ltd; McLean Tecnic Pty Ltd v Digi-Tech (Australia) Ltd [2004] NSWCA 58 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 Dunn v Shapowloff (1978) 2 NSWLR 235 Edwards v Skyways Ltd [1964] 1 WLR 349 Elders Trustee & Executor Co Ltd v EG Reeves Pty Ltd (1987) 78 ALR 193 FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343 Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251 Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217 Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd (1995) 7 BPR 14,551 Gissing v Gissing [1971] AC 886 Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 Heimann v Commonwealth of Australia (1938) 38 SR (NSW) 691 Henville v Walker [2001] HCA 52 CASES CITED : Hide & Skin Trading v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 Hodgson & Hodgson v Morella Pastoral Co Pty Ltd (1975) 13 SASR 51 Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 Integrated Computer Services Pty Ltd v Digital Equipment Corporation (Aust) Pty Ltd (1988) 5 BPR 11,110 Jasam (AMC) Pty Ltd v The Australis Marketing Corporation (Int) Pty Ltd (unreported, 23 February 1995, Supreme Court of Victoria) Jones v Dunkel (1959) 101 CLR 298 Kleinwort Benson Ltd v Malaysia Mining Corporation Berhad [1989] 1 WLR 379 Lewis v Great Western Railway Company (1877) 3 QBD 195 Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60 Liquorland (Australia) Pty Ltd v GYG Holdings Pty Ltd (unreported, 28 October 1994, NSWCA) Macdonald v Longbottom (1859) 1 El & El 977; 120 ER 1177 Manufacturers' Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 Max Cooper & Sons Pty Ltd v Sydney City Council (1980) 54 ALJR 234 Optus Vision Pty Ltd v Australian Rugby Football Pty Ltd [2004] NSWCA 61 Partenreederei M/S Karen Oltmann v Scarsdale Shipping Co Ltd (The Karen Oltmann) [1976] 2 Lloyd's Rep 708 Poseidon Ltd & Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Prenn v Simmonds [1971] 1 WLR 1381 Raguz v Sullivan (2000) 50 NSWLR 236 Rankin v Scott Fell & Co (1904) 2 CLR 164 Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 R W Cameron and Co v L Slutzkin Pty Ltd (1923) 32 CLR 81 Ryan (Receiver & Manager of Homfray Carpets Australia Pty Ltd) v Textile Clothing & Footwear Union Australia [1996] 2 VR 235 Schellenberg v Tunnel Holdings Pty Ltd (2000) 170 ALR 594 Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596 Shore v Wilson (1839) 9 Cl & Fin 355 Smith v Kay (1859) 7 HL Cas 750 Sydney Harbour Casino Properties Pty Ltd v Coluzzi [2002] NSWCA 74 Sykes v Reserve Bank of Australia (1998) 88 FCR 511 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 Taylor v Johnson (1983) 151 CLR 422 TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 Thiess Contractors Pty Ltd v Montgomery Watson Australia Pty Ltd (unreported, 15 March 1996, NSWSC) Ting v Blanche (1993) 118 ALR 543 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2003) 56 NSWLR 662 Toteff v Antonas (1952) 87 CLR 647 Trident General Insurance Co Limited v McNiece Bros Proprietary Limited (1987) 8 NSWLR 270; affirmed (1988) 165 CLR 107 Wardley Australia Ltd v State of Western Australia [Rothwells Loan case] (1992) 175 CLR 514 Wilson v Darling Island Stevedoring & Lighterage Co Ltd (1956) 95 CLR 43 With v O'Flanagan [1936] Ch 575 Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 Yorke v Lucas (1985) 158 CLR 661 Gate Gourmet Australia Pty Limited (in liquidation) ACN 089 347 562 (Plaintiff) Gate Gourmet Holding AG, Company Number CH-020.3.003.945-1 (First Defendant) Gate Gourmet (Holdings) Pty Limited ACN 004 122 892 (Second Defendant) PARTIES : Odd Gunnar Engebretsen (Third Defendant) Lars Fredrik Larsen (Fourth Defendant) Henning Boysen (Fifth Defendant) Lucas Grolimund (Sixth Defendant) Gate Gourmet Switzerland GMBH (Seventh Defendant) FILE NUMBER(S) : SC 50180/01 Mr B Coles QC, Ms E Collins (Plaintiff) COUNSEL : Mr M Pembroke QC, Mr N Perram (Second, Fifth, Sixth and Seventh Defendants) Mr J Stevenson SC, Mr L Menzies (Third and Fourth Defendants) Clayton Utz (Plaintiff) SOLICITORS : Mallesons Stephen Jaques (Second, Fifth, Sixth and Seventh Defendants) Gadens (Third and Fourth Defendants)