Ellby Trading Pty Ltd v Bathurst Coaches Pty Ltd (Administrators appointed) & Ors [2004] NSWSC 698

New South Wales Supreme Court

CITATION : Ellby Trading Pty Ltd v Bathurst Coaches Pty Ltd (Administrators appointed) & Ors [2004] NSWSC 698 HEARING DATE(S) : 26/07/04, 27/07/04 JUDGMENT DATE : 10 August 2004 JURISDICTION: Equity JUDGMENT OF : Cripps AJ DECISION : Summons dismissed. Plaintiff to pay defendants' costs.

CATCHWORDS : Contract - Misrepresentation LEGISLATION CITED : Trade Practices Act 1974 s52 EllbyTrading Pty Ltd - plaintiff Bathurst Coaches Pty Ltd (Administrators apptd) - first defendant PARTIES : 3F Pty Ltd (Administrators apptd) - second defendant Anthony Warner - third defendant Morgan Lane - fourth defenant FILE NUMBER(S) : SC 4055/04 COUNSEL : Mr J J Garnsey QC and Mr James Miller for plaintiff Mr C R C Newlinds SC and Mr D Jay for defendants SOLICITORS : Leary & Company for plaintiff PMF Legal Lawyers for defendants

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

CRIPPS AJ

Tuesday 10 August 2004

4055/04 ELLBY TRADING PTY LTD v BATHURST COACHES PTY LTD (Administrators appointed), 3F PTY LTD (Administrators appointed) & 2 ORS JUDGMENT 1 CRIPPS AJ: By summons dated 16 July 2004 Ellby Trading Pty Ltd (the plaintiff) sought an order that Mr Warner and Mr Lane (the third and fourth defendants) the voluntary administrators of Bathurst Coaches Pty Ltd and 3F Pty Ltd (the first and second defendants) be restrained from accepting any tender or offer received in their capacity as voluntary administrators for the assets of the first and second defendants unless the third and fourth defendants shall have provided the plaintiff with full details of all other offers or tenders for the assets and shall have given the plaintiff a reasonable opportunity to submit "a further offer and tender in respect thereof". 2 Although not stated in the summons it seeks an order that the contract it claims to have been entered into between it and Mr Warner in his capacity as administrator on 10 June 2004 be specifically performed. The contract claimed is that in consideration of the plaintiff making and agreeing to keep open an offer it made to purchase the assets of the first and second defendants Mr Warner in his capacity as administrator agreed to keep the plaintiff informed of all higher offers received, the amount of such offers and, prior to effecting any sale of the assets to afford the plaintiff an opportunity to increase its offer. 3 It also sought a negative injunction consequent upon its allegation that Mr Warner had engaged in misleading and deceptive conduct within the meaning of s52 of the Trade Practices Act 1974 (or its New South Wales equivalent). The relief, if granted, would effectively compel specific performance of what was the alleged agreement. 4 He sought an order of the Court setting aside any disposition of property by Mr Warner to any person other than the plaintiff. However as at the date of hearing Mr Warner had not disposed of the assets of the companies. 5 The matter came on for hearing as a matter of urgency on Monday 26 July. On 27 July I informed the parties that I had come to the conclusion that the summons should be dismissed with costs and I would publish my reasons as soon as practicable. 6 The Bathurst Coaches (the first defendant) has been operating bus services from Bathurst for many years. In 1998 it became a wholly owned subsidiary of 3F (the second defendant) which operated bus and coach transport services in New South Wales and Queensland. 7 The plaintiff conducts its business through Mr Bultitude and Mr Maley who are and were at all relevant times the directors of it. 8 On 22 March 2004 3F entered into voluntary administration and Mr Warner and Mr Lane were appointed administrators. Mr Lane has played no part in the circumstances and events giving rise to this litigation. 9 In June 2004 Bathurst Coaches also went into liquidation and Mr Warner and Mr Lane were appointed administrators. On 12 July 3F entered into a Deed of Company Arrangement. 10 On 16 June the plaintiff submitted a formal offer to Mr Warner to acquire the assets of Bathurst Coaches and 3F. I shall refer to the letter of offer in detail in due course. The present dispute concerns an allegation by the plaintiff that on 10 June 2004 it promised to keep its offer open and Mr Warner promised it that it would not enter into any contract for the sale of the assets without informing the plaintiff of the details of other offers and giving it the opportunity to submit a further offer. 11 As is apparent on the plaintiff's version of the arrangement Mr Warner was not obliged to accept either the original offer or the subsequent offer it was permitted to make and the plaintiff was not compelled to increase its offer. 12 Its claim under the Trade Practices Act 1974 is that on 10 June 2004 Mr Warner falsely represented to the plaintiff that if it would keep open its offer to purchase the business assets of the companies Mr Warner would grant it the right to be a final bidder for those assets. 13 On 7 July Mr Warner called for tenderers. Those interested were told that the three top bidders would be given the opportunity (without knowing the details of the other two bids) of revising their bids. The plaintiff submitted a bid on 9 July. Later it was informed it was not one of the three top bids. 14 Mr Warner does not dispute that he had discussions with Mr Bultitude and Mr Maley in his capacity as administrator concerning the sale of the assets of Bathurst Coaches and 3F. What he does dispute is that he promised or made a representation to Mr Bultitude or Mr Maley on 10 June 2004 or at any other time that if they would keep their offer on the table (that offer being the one which was reduced to writing by the letter of 16 June 2004) that he, Mr Warner, would give the plaintiff an opportunity to outbid the highest bidder. 15 There was a discussion on 10 June concerning the sale of assets in which Mr Warner asked whether the offer of $7.2 million (previously made by the plaintiff) still stood. He was told it did not and Mr Maley told him that the plaintiff was looking to pay "around $500,000 all up". Although Mr Bultitude denied it in cross-examination in his affidavit in chief he said that on that occasion Mr Warner had said he could not accept any offer at that time and that he would want all potential bidders in by 25 June.