FEDERAL COURT OF AUSTRALIA

Swift Seat Australia Pty Ltd v The Harrington Global Corporation Pty Ltd [2013] FCA 43

THE COURT ORDERS THAT:

1.    Pursuant to r 39.05(f) of the Federal Court Rules 2011 (Cth), the proceeding be reinstated.

2.    There be judgment for the Defendants against the First Plaintiff in the sum of $356,765.36 plus interest of $43,398.31 (being simple interest on $350,000 at the rate of 10% per annum from 15 November 2011 to 1 February 2013) and costs of and incidental to the application, such costs to be taxed in default of agreement.

3.    There be judgment for the Defendants against the Second and Third Plaintiffs in the sum of $156,765.36 plus interest of $18,246.58 (being simple interest on $150,000 at the rate of 10% per annum from 15 November 2011 to 1 February 2013) and costs of and incidental to the application, such costs to be taxed in default of agreement.

4.    There be liberty to apply.

Note:    Orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).

REASONS FOR JUDGMENT

1    On 16 November 2011, by consent, the proceeding was discontinued with no order as to costs (16 November Orders). The 16 November Orders were the result of a settlement of the proceedings recorded in a Deed of Settlement and Release dated 15 November 2011 (the Deed).

2    Under the Deed, the Plaintiffs were required, amongst other things, to make certain payments. In particular, under cl 2.4 of the Deed, the plaintiffs were required to make the following payments:

(a)    $50,000 of the Purchase Price within 60 days of the date of Completion; and

(b)    $120,000 of the Purchase Price, Lease Payment and 50% of any Short Fall Amount within 1 year of the date of Completion; and

(c)        the balance of the Purchase Price together with Accrued Interest within 2 years of the date of Completion.

The Completion Date was 15 November 2011. The Purchase Price was $400,000.

3    The Plaintiffs paid the first instalment of $50,000. The Plaintiffs did not pay the second instalment, the Lease Payment or the 50% of the Short Fall Amount. Those monies remain unpaid.

4    Clause 2.6 of the Deed stated:

If the plaintiffs or any of them fail to pay the Purchase Price and all interest that is or becomes due and payable thereon, Lease Payment or 50% of any Short Fall Amount, pursuant to this Deed, the defendants shall be entitled to re-instate the Proceeding and enter judgment for the Purchase Price together with all amounts that are then due and payable hereunder, less any amount that has been paid by the plaintiffs to the defendants hereunder, together with costs of and incidental to the re-instatement of the Proceeding and the entry of said judgment and the making of such an order for costs AND the defendants shall be entitled to produce these terms of settlement to the Court as conclusive evidence of the irrevocable consent by the plaintiffs to the re-instatement of the proceeding and the entry of such judgment and the making of such an order for costs.

(Emphasis added.)

5    The Defendants sought reinstatement of the proceedings and judgment against the Plaintiffs. Each Plaintiff was served with the application. The Second Plaintiff appeared at the hearing.

6    The Court may reinstate the proceedings: cl 2.6 of the Deed read with r 39.05(f) of the Federal Court Rules 2011 (Cth). The Plaintiffs, in whose favour the order was made on 16 November 2011, each consented to the 16 November Order being set aside or varied and for the proceedings to be reinstated and appropriate orders for judgment: see cl 2.6 of the Deed read with r 39.05(f). The language of the Deed did not raise the issues addressed in Sharbutt v Supatech Holdings Pty Ltd [2010] FCA 957, AG Cowley Holdings Pty Ltd v Central City Pty Ltd (2010) 183 FCR 102 at [8] or Roberts v Gippsland Agricultural and Earth Moving Contracting Co Pty Ltd [1956] VLR 555.

7    As noted earlier, the Plaintiffs have defaulted. The Defendants are entitled to the orders that they seek.

Associate:

Dated:    1 February 2013