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 - NSWSC 2004 case summary — Zoe

NSWNSWSC

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

Supreme Court of NSW|2004-03-31|Before: Einstein J

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2004-03-31

Before

Einstein J

Source

Original judgment source is linked above.

Judgment (165 paragraphs)

[1]

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

[2]

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

[3]

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entities to meet financial commitments as and when they fall due and providing (2) that the letter would not be withdrawn before the Australian holding company and its controlled entities have sufficient means to meet their obligations without the support of the parent entity -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)

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· the Letter was misleading or deceptive or likely to mislead and deceive in contravention of section 52 of the Trade Practices Act 1974 (Cth) ["TPA"]; · by reason of the conduct of the Swiss parent, Messrs Boysen and Grolimund aided, abetted, counselled or procured the contravention by the Swiss parent of section 52 of the TPA and/or were knowingly concerned in, or party to, the contravention of section 52 of the TPA and/or are liable to a claim in damages pursuant to section 82 of the TPA; · the Swiss parent is estopped from departing from the express terms of the Letter. Dramatis personae 17 A short summary of several of the persons who came to be involved in material events is as follows: · Mr Engebretsen was the President of the Asia-Pacific division of the group. He was a director of the Australian trading company, the Australian holding company and the other Australian group subsidiaries, being Gate Gourmet Services Pty Limited, Gate Gourmet Services (NSW) Pty Limited and Gate Gourmet Property Pty Limited. Both Mr Engebretsen and Mr Larsen, in the ordinary course of their employment with the Swiss parent, looked after, effectively, globally, the Asia and Pacific aspects of the Swiss parent business. · Mr Grolimund was the former Executive Vice-President and Chief Financial Officer of the Swiss parent. He was a signatory to the Letter. · Mr Larsen was the Vice-President of Finance for the Asia-Pacific division of the group, based in Bangkok, Thailand. He was a director of the Australian trading company, the Australian holding company and the other Australian group subsidiaries referred to above. · Mr McIntyre was the Managing Director of the Australian trading company and former Australian director of all of the Australian group subsidiaries referred to above, based in Australia. · Mr Nielsen was the Vice-President of Finance of the Swiss parent. He was the former Vice-President of Finance of Gate Gourmet International AG. He was responsible for the supervision of the plaintiff's financial performance on behalf of the Swiss parent and was based in Zurich, Switzerland. · Mr Steininger was the Director of Finance and IT of the Australian trading company (although not a director of that company), on secondment from Zurich. He was the former Executive Vice-President and Chief Financial Officer of the Swiss parent and was Mr Grolimund's predecessor. He was a signatory to the first letter of support. · Mr Boysen was a former Chief Executive Officer of GG AG and is the present Chief Executive Officer of the Swiss parent. A signatory to the Letter, he was based in Zurich, Switzerland. 18 The following dramatis [provided by the plaintiffs' solicitor] identifies some other of the material persons and corporations referred to in the evidence: Name Role and description Ansett Airlines Former owner of 7 units acquired by the Plaintiff and the Plaintiff's largest customer. Baker & McKenzie Solicitors to the Gate Gourmet group in Australia. Former solicitors to the First, Second, Fifth and Sixth Defendants Cuthell, Victor Manager at PWC assigned to the Gate Gourmet audit in Australia Fouse, Jackie Senior executive officer of Swiss Air group. Fuchs, Robert Finance director of the Nuance group in Australia Gate Gourmet (Holdings) Pty Limited ("GGH") Second Defendant. Non trading holding company of GGA, Gate Gourmet Services, Gate Gourmet Services (NSW) and Gate Gourmet Property. Wholly owned subsidiary of Gate Gourmet Holding AG. Gate Gourmet International AG Member of the Gate Gourmet group and subsidiary of GG AG. Gate Gourmet Property Pty Limited Australian subsidiary of GGH formerly part of the Cathay Pacific catering group. Owner of land and buildings utilised by Gate Gourmet Services which did not otherwise trade. Gate Gourmet Services (NSW) Pty Limited Australian subsidiary of GGH formerly part of the Cathay Pacific catering group. Employment company for non-kitchen and head office staff. Gate Gourmet Services Pty Limited Australian subsidiary of GGH, formerly part of the Cathay Pacific catering group. Corporate vehicle for the purchase of Cathay Pacific's catering units in Darwin and Sydney. Goggi, Joseph Carmel Mario Company secretary of GGA and of all of the Australian Gate Gourmet group subsidiaries Hastie, Barry Audit partner at PWC and signing partner for the Gate Gourmet audit in Australia Kershaw, Scott Partner at KPMG retained briefly to assist in the proposed restructure of GGA and to liaise with Westpac KPMG Engaged briefly to assist in the proposed restructure of GGA and as replacement auditors for PWC McFadden, Chris General manager finance of the Nuance group in Australia. Nuance Group Sister group to Gate Gourmet and provider of airport retail services. PricewaterhouseCoopers Worldwide auditors to the Gate Gourmet group Roos, Dominik Former Treasurer of Gate Gourmet International AG and predecessor to Henrik Nielsen. Based in Zurich, Switzerland. Shearman, Don Senior manager at Westpac in charge of the Gate Gourmet and Nuance accounts. Sherman, Steven Former voluntary administrator and present liquidator of the Plaintiff. Westpac Banking Corporation Australian bankers to the Gate Gourmet group and the Nuance group. Witter, Frank Senior executive officer of Swiss Air group Yuen, Gloria Accountant at PWC assigned to Gate Gourmet audit in Australia

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(e) at the end of the first period of operation, which ran from 15 November 1999 to 30 June 2000, there was to be a two month period during which a reconciliation would be carried out and agreed. If Ansett had exceeded their previous year's expenditure (" base year expenditure "), Ansett would pay GGA an additional amount to make up the difference. If Ansett had reduced their base year expenditure, GGA would reimburse Ansett the difference between the amount paid to it during the relevant period and the amount actually owing." 30 Further, Mr McIntyre, in cross-examination, said that: · it took him and his team the best part of a year to start to come to grips with the Base Year Contract and understand how it worked (transcript, page 106, line 25); · there were a number of costs under the Base Year Contract that were not budgeted for initially which caused the need for further funding as working capital (transcript, page 112, line 23). 25 October 1999 31 Mr McIntyre is appointed Managing Director of the group in Australia and the sole Australian director of all of the group companies in Australia. Mr Engebretsen and Mr Larsen are the other two directors of each company and Mr Goggi is company secretary. [Goggi, paragraph 10; McIntyre, paragraphs 7 - 8] November 1999 32 On 15 November 1999, the plaintiff commences operations running the Ansett catering business. 33 Following that time the business of the group in Australia was conducted as follows: · the domestic in-flight catering business was conducted by the plaintiff [Exhibit P5, paragraph 5, Exhibit PX1/190]; · the international in-flight catering business was provided using the kitchens which had formerly belonged to Cathay Pacific but were now operated by Gate Gourmet Services Pty Ltd [Exhibit P5, paragraph 8(a), Exhibit PX1/190]; · the land and buildings used for the international in-flight catering business was owned by Gate Gourmet Property Pty Ltd [Exhibit P5, paragraph 8(b), Exhibit PX1/190]; and · the non-kitchen staff and head office staff in Australia were employed by Gate Gourmet Services Pty Ltd [Exhibit P5, paragraph 8(c), Exhibit PX1/190]. 34 The directors' questionnaire submitted by Messrs McIntyre, Engebretsen and Larsen (PX 2074, 2097 and 2108) records the following facilities being used by GGA initially: Date Draw down from banking facility Source Westpac cumulative total Standard Chartered cumulative total Combined cumulative total 1 December 1999 $5 million Westpac $5 million $5 million 7 January 2000 $25.311 million Standard Chartered $25.311 million $30.311 million 1 June 2000 $2 million Westpac $7 million $32.311 million 1 September 2000 $2.689 million Standard Chartered $28 million $35 million 1 September 2000 $2 million Standard Chartered $30 million $37 million 15 December 2000 $30 million Westpac to repay Standard Chartered $37 million $0 million $37 million

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By comparison with the statutory accounts of Gate Gourmet Services Pty Ltd [PX1 482], it appears that $5 million of the bank loan was available for GGA]. Subordinated loan 35 A subordinated parent company loan agreement is executed on 15 November 1999 by the Swiss parent (as lender) and GGA (as borrower) up to a maximum of $35 million. [McIntyre, tab 6] 36 The short position is that: · the Australian trading company commenced as a $2 company that had just acquired the business of Ansett's catering units at a gross cost of $35,883,277 (PX1, page 453); · the purchase monies were financed by bank borrowings, repaid by the Swiss parent, who then held a subordinated loan from the Australian trading company in the amount of $35 million [PX1 193); · the subordinated loan was valid from 15 November 1999 until further notice and could not be cancelled by the Swiss parent "as long as it owns at least 51% of the Borrower's shares"; · this subordinated loan was renewed from time to time (for example, PX1 1163); · the proof of debt submitted by the Swiss parent suggests that $25 million was drawn down; · in addition, the directors' questionnaire provided by Messrs McIntyre, Engebretsen and Larsen to Ferrier Hodgson records the following debits and credits (PX 2074, 2097 and 2108): Date Draw down from the subordinated loan Repayment to subordinated loan Cumulative total 15 November 1999 $25.311 million $25.311 million 15 November 1999 $5 million $30.311 million 7 January 2000 $25.311 million - drawn down from Standard Chartered loan facility $5 million 21 August 2001 $20 million $25 million TOTAL $25 million

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" Henning and I had discussed your proposal and would like you to focus on the following issue when preparing for the meeting on 15 Sept: Turnaround Australia: One key question is why it is so hard to return to a profitable operation. Do we have a problem with the Ansett pricing formula, is it more an efficiency problem (incl. new overhead) or did our assumptions during the due diligence completely fail?" 73 As the plaintiff contends, the presentation given by Mr McIntyre on 15 September 2000 in Zurich [PX 564] pulled no punches in responding to these enquiries [see, for example, PX 565, 566, 568, 570, 573, 592, 595]. [A copy of that presentation contains additional pages identifying $13.055 million of costs not included in the 2000 budget that GGA's management had identified as missing from the Base Year Contract [PX 609, 610, 618, 638, 682]. In principle approval of budget 74 The budget was approved, in principle, on 9 November 2000 [PX 701]. The plaintiff contends, and I accept, that in the light of the warnings of large losses, emanating from the budget presentation given to Zurich on 15 September 2000, above and beyond those budgeted for, which included: · a possible loss of $10 million arising from the Base Year Contract [PX 533] ; · the fact that the acquisition assumption in relation to Ansett was ill-founded and that there was approximately $13.055 million in costs that had not been accounted for [PX 609]; · there was a desperate need for tangible and intangible investment into GGA's infrastructure and management [PX 567, 631]; and · Ansett, GGA's main customer, was in a considerable state of flux [PX 514], it must have been apparent to all concerned that the budget was a document subject to large variations and which did not represent anything more than a "best endeavours" attempt to identify the cash flow requirements of GGA in the short term. 75 The plaintiff contends, and I accept, that coupled with this realisation, Zurich must have understood that there was a real and palpable risk that significant funds, in addition to the Westpac facility, would be required from Zurich during the course of 2001 and that GGA would be relying fully on financial support from its parent to meet its debts as and when they fell due. The known inaccuracies inherent in GGA's budget made the need for parental support a greater reality and make the perception of the need for a legally binding commitment for such support from GGA's directors more credible.

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27 November 2000 76 At a GGA board meeting, Mr Engebretsen confirms that the freeze on capital expenditure, consultants and permanent staff is to continue. [PX1 p708-709] 4 December 2000 77 The Swiss parent informs Westpac that they are not in a position to obtain an S Air Relations guarantee, although sometimes a letter of comfort is issued by the Swiss parent. Due to the relatively weak balance sheet of the group in Australia, the Swiss parent is willing to grant a guarantee instead of a letter of comfort, as requested. [McIntyre, paragraph 17 and PX1 p716-721] 8 December 2000 - $70 million bill acceptance and discount facility 78 A bill acceptance and discount facility in an amount of $70 million is offered by Westpac to GGA and Gate Gourmet Services Pty Ltd, which is accepted on 13 December 2000 and replaces both of the previous facilities offered by Standard Chartered Bank and Westpac. The facility is to be secured by guarantees and cross-guarantees. Cross-guarantees were to be provided by each of the plaintiff, GG Holdings, Gate Gourmet Services Pty Ltd and Gate Gourmet Property Pty Limited, and a guarantee was to be provided by the Swiss parent. [Goggi, paragraph 20 and tabs 10-13; McIntyre, paragraph 16 and tabs 10-14] [Exhibit P1, paragraph 20 and PX p706-707, 724-746, 747-764, 768-769; Exhibit P5, paragraph 16 and PX p706-707, 724-746, 747-764, 768-769, 711-714] 79 The terms and conditions of the facility, and the guarantee and indemnity, were accepted on behalf of the Australian companies by Mr McIntyre and Mr Goggi. Mr Steininger witnessed that acceptance. [McIntyre, tab 11] 13 December 2000 80 The Swiss parent provides a guarantee to Westpac which guarantees the obligation of GG Holdings and each of its wholly owned subsidiaries to a limit of $70 million. [McIntyre, paragraph 18 and tab 16; Goggi, paragraph 20 and tab 13] [Exhibit P5, paragraph 18 and PX p767-769; Exhibit P1, paragraph 20 and PX p768 - 769] 81 It is clear from the evidence that the negotiations with Westpac were handled on the Swiss parent's behalf by the Vice-President Finance of Gate Gourmet International AG, Mr Nielsen. The guarantee was signed on behalf of the Swiss parent by the fifth defendant, Mr Boysen and the Executive Vice-President, Mr Dankelman. 7 February 2001 - sample letter of support 82 Ms Gloria Yuen (PWC) e-mails a sample letter of support from GG International AG, noting that the format of the letter is the same as the letter PWC obtained last year. Ms Yuen requests that the letter be signed and returned to PWC. [Goggi, paragraphs 22 - 3 and tabs 14 - 15] [Exhibit P1, paragraphs 22 - 23 and PX p806 and 807] 8 February 2001 83 Mr Goggi forwards Ms Yuen's e-mail of 7 February 2001 to Mr Nielsen, and copies his e-mail to Mr Larsen. [Goggi, paragraph 24 and tabs 14 - 15; Larsen, paragraph 10] [Exhibit P1, paragraph 24 and PX p806 and 807; Exhibit D3, paragraph 10]

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21 March 2001 98 Mr Goggi sends an e-mail to Mr Engebretsen, Mr Larsen and Mr McIntyre stating that the statutory accounts are nearly ready for signing. [Goggi, paragraph 33 and tabs 21-2] End of first quarter - dramatic weakening of Ansett in domestic market 99 By the end of the first quarter, Mr McIntyre was pointing up the fact that GGA was struggling to meet its budget, due in part to a dramatic weakening of Ansett in the domestic market (PX1 889). April 2001 - September 2001 100 In the period between April 2001 and September 2001 the plaintiff continued to trade. The evidence establishes that the plaintiff's main source of income continued to be the Base Year Contract, but that the plaintiff continued to trade at a loss. 2 April 2001 - signing of GGA's accounts 101 Mr McIntyre signs GGA's statutory accounts for the financial year ended 31 December 2000. Mr McIntyre states that he relied upon the Letter in doing so. GGA's financial reports record that the net loss for the 16-month period from 2 September 1999 to 31 December 2000 was $16.53 million (page 1). The balance sheet records total assets of $70.076 million and total liabilities of $86.606 million. Note 1 to the accounts records that "the financial statements have been prepared on a going concern basis on the assumption that the related entities 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 not to call for repayment of the amounts owing to it until, and then only to the extent to which, sufficient funds are available" (page 7). The directors declare that there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable (p 16). [Goggi, paragraph 34 and tab 23; McIntyre, paragraphs 21 - 22 and tab 19] Directors' declaration signed 102 Mr McIntyre signs the directors' declaration to the consolidated accounts of GG Holdings, which records that the financial statements have been prepared on a going concern basis on the assumption that the 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 not to call for repayment of the amounts owing to it until, and then only to the extent to which, sufficient funds are available. [McIntyre, paragraph 24 and tab 20] April 2001 103 Meeting between Qantas representatives (including the Chief Executive Officer, Mr Dixon), Mr Boysen and Mr McIntyre in which the creation of a joint-venture between Gate Gourmet and Qantas is discussed. [McIntyre, paragraphs 27 - 28] 104 By 17 April 2001, Ansett's position had deteriorated to the extent that Mr McIntyre thought it necessary to seek formal advice from Baker & McKenzie in relation to GGA's position should Ansett either be restructured, sold in whole or in part or cease operations [PX1 957]. 105 On 27 April 2001, Mr Larsen sent a memorandum to Mr Steininger, copied to Mr McIntyre and Mr Engebretsen [PX1 1031] commenting on the poor operating results which commented:

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"One of the requirements at the end of the financial year is the "Letter of Support" which is provided by Gate Gourmet Holdings Pty Limited (sic) to the directors of Gate Gourmet Holdings Pty Limited in Australia. This certifies that GGH AG "will provide the financial support…". On this basis business can carry on as normal notwithstanding any thin capitalisation rules." [Goggi, paragraph 38 and tab 27] May 2001 - Westpac's nervousness 114 Mr McIntyre states that Westpac begins to get nervous about its exposure to the SwissAir group (the ultimate parent of the group) where it was a lender as part of a syndicated US$500,000,000 multi-currency revolving facility. [McIntyre, paragraph 31 and tabs 24 - 5] 115 In late May, SwissAir's internal auditors visited Australia. Following that visit, Mr Larsen prepared a memorandum to Mr Grolimund, copied to Mr Engebretsen, Mr McIntyre and Mr Steininger commenting on their report [PX1 1190]. At PX1 1192, Mr Larsen commented that there had been " a lot of turmoil in the Australian airline market the last 12 months and can expect more the next 6-12 months also". 14 June 2001 116 Westpac writes to the Chief Financial Officer of the SwissAir group, Mr Schroderet, noting that GGA's operations are under-capitalised and that Westpac is not prepared to fund the ongoing operating losses of GGA and thus will not extend GGA's facilities beyond the 15 December 2001 maturity date. Westpac requires a $50 million capital injection, the granting of a fixed and floating charge, for the Australian entities to agree not to remit funds to any SwissAir group company without Westpac's prior written consent and the continuation of the existing guarantee from the Swiss parent. [McIntyre, paragraph 32 and tab 2] 22 - 23 June 2001 117 Mr Larsen travels to Australia to begin the process of preparing GGA's budget for 2002 - 2003. [McIntyre in reply, paragraph 8] 2 July 2001 118 Meeting between Mr Shearman, Mr Parker and Mr Morgan of Westpac and Mr McIntyre and Mr Steininger. Mr McIntyre subsequently e-mails Mr Boysen, Mr Grolimund, Mr Nielsen, Mr Engebretsen and Mr Larsen informing them that Westpac are satisfied that GGA is in technical breach of the facility, and that the situation needs urgent action. [McIntyre, paragraph 34 and tab 27] 4/5 July 2001 119 Mr McIntyre retains Mr Kershaw [KPMG] to assist in the proposed capital injection into GGA required by Westpac and to assist in negotiations. [McIntyre in reply, paragraphs 22 and 23, tabs 27 and 28] 5 July 2001 120 Mr McIntyre e-mails Baker & McKenzie seeking advice about the appointment of an administrator. Mr McIntyre states that the purpose of his e-mail was to seek an understanding of the legal ramifications if the Swiss parent chose not to support GGA, either by reducing the facility or not standing by the Letter and his obligations as the sole Australian director. [McIntyre, paragraph 37 and tab 30] 6 July 2001 121 Mr McIntyre e-mails Mr Boysen, Mr Grolimund, Mr Engebretsen and Mr Larsen updating them on the position with Westpac and attaching the advice he has received from Baker & McKenzie setting out directors' responsibilities. [McIntyre, paragraph 38 and tab 31] 19 July 2001 122 On 19 July 2001, Mr McIntyre prepared a discussion document for GGA [PX1 1235]. Under "main findings" he commented:

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Gate Gourmet Holding AG will not withdraw such financial support without first giving GGA 30 days written notice of its intention to withdraw such support" 134 Mr McIntyre telephones one of Ansett's administrators and is informed that no guarantee of payment can be given. 135 Mr McIntyre then telephones Mr Boysen. Mr McIntyre's evidence on the conversation is accepted as reliable. He updates Mr Boysen on the Ansett situation, and then informs him that he does not think there is any chance of getting any money under the Base Year Contract, which means GGA is in real trouble. Mr McIntyre informs Mr Boysen that he is not prepared to let GGA trade on unless Westpac is paid off and Mr Boysen confirms that he is prepared to stand by the Letter and support GGA financially going forward until it can support itself. Mr Boysen tells Mr McIntyre that they can pay off Westpac but the Swiss parent does not have the money for anything else. Mr McIntyre tells Mr Boysen that he has no choice but to call a board meeting and to recommend that a voluntary administrator is appointed to GGA. [McIntyre, paragraph 48] 136 Mr McIntyre subsequently telephoned Mr Engebretsen and informed him that he would be calling a board meeting on the next day. 13 September 2001 137 Mr Engebretsen gave evidence that he spoke to Mr Boysen by telephone when he asked whether the necessary funding was available to allow GGA to continue to trade. Mr Engebretsen says that Mr Boysen said that the Swiss parent did not have the requisite funds and that he (Mr Engebretsen) should do whatever he thought was right. [Exhibit D2, paragraph 13] 138 A meeting took place in Mr McIntyre's office between Mr McIntyre, Mr Goggi, Mr Michael Smyth, (Baker & McKenzie), Mr Steininger and possibly also Mr Bishop (GGA's general commercial manager). Mr McIntyre informs the meeting that Mr Boysen has told him that the Swiss parent will pay out Westpac but there is no money for anyone else. Mr McIntyre notes that he is attempting to contact the Ansett administrator, but that if he does not hear from them by midday he will call a board meeting with Mr Engebretsen and Mr Larsen to see what they are going to do. [Goggi, paragraphs 41-2; McIntyre, paragraph 50] 139 Telephone conference between Mr McIntyre and Mr Goggi in Sydney and Mr Engebretsen and Mr Larsen in Bangkok. Mr Goggi states that Mr McIntyre informed the meeting that Mr Boysen had told him that the Swiss parent would pay Westpac but no one else, and that they had no choice but to place GGA into voluntary administration. Mr McIntyre gave evidence by statement that he told the meeting that Mr Boysen had said that the Swiss parent would not stand by the Letter. Mr Engebretsen and Mr Larsen agree to place GGA into voluntary administration and Mr Sherman of Ferrier Hodgson is appointed administrator. [Goggi, paragraphs 43 - 4 and tab 29; McIntyre, paragraph 50] 140 Mr Engebretsen denies that Mr McIntyre referred to or mentioned the existence of a letter of support during the telephone calls on 13 September 2001, contrary to paragraph 50 of Mr McIntyre's statement. Mr Engebretsen claims that at that time he was unaware of the existence of any letter of support. [Mr Engebretsen claims he only became aware of the existence of the Letter when he received the Ferrier Hodgson questionnaire from Mr McIntyre, which he eventually signed on 5 October 2001]. Mr Larsen also denies that Mr McIntyre referred to the existence of any letter of support during the telephone calls on 13 September 2001. [Engebretsen, paragraphs 16 & 18; Larsen, paragraph 15] 141 Mr McIntyre had said in his statement in reply that he is sure that he mentioned the Letter either during this meeting or during his earlier telephone call with Mr Engebretsen. [McIntyre in reply, paragraph 18]. 142 Mr McIntyre had said in his statement in reply that shortly after GGA was placed into voluntary administration, he asked Mr Goggi to provide a copy of the Letter to Mr Engebretsen and Mr Larsen [McIntyre in reply, paragraph 20] and that his reason for doing so was that he realised the relevance of the Letter to any questions Mr Sherman might have about why GGA had been allowed to trade [paragraph 21]. 143 Mr Goggi recalls Mr McIntyre asking him to provide Mr Engebretsen and Mr Larsen with a copy [Goggi in reply, paragraphs 6 and 9] either by fax, or in person, when Mr Engebretsen and Mr Larsen travelled to Australia shortly after GGA was placed into voluntary administration. 144 Specific findings in relation to this meeting and to the earlier conversation[s] between Mr McIntyre and Mr Engebretsen are given below. 20 September 2001 145 Westpac lodges a proof of debt in the amount of $35.135 million, but notes that the Swiss parent has remitted an amount of $35 million which is being held in a suspense account pending clarification of the terms on which the payment has been made. Proof of debt withdrawn by Westpac on 13 November 2001. [Sherman, paragraph 9 and tabs 11-12] 146 The Swiss parent lodges a proof of debt with the administrator of GGA in a total amount of $58 million. Gate Gourmet IP AG lodges a proof of debt in the total amount of $3.719 million. Gate Gourmet Services Pty Limited lodges a proof of debt in the total amount of $334,592.87. [Sherman, paragraph 16 and tab 17 - 19] 5 October 2001 147 Mr Engebretsen and Mr Larsen complete and sign a Ferrier Hodgson directors' questionnaire. Both state that the questionnaire had already been completed (in part) on receipt by them. Mr Engebretsen says that this is the first time he became aware of the existence of the Letter. Mr Larsen says this is the first time he became aware of a signed letter of support. [Sherman, tab 2; Engebretsen, paragraphs 17 and 18; Larsen, paragraphs 18 - 19] 7 November 2001 148 Clayton Utz write to Baker & McKenzie requesting formal confirmation that the Swiss parent will honour its obligations pursuant to the Letter. [Sherman, paragraph 6 and tab 8] 13 November 2001 149 Baker & McKenzie reply to Clayton Utz and deny that any binding obligations arise out of the Letter. [Sherman, paragraph 7 and tab 9] 15 November 2001 150 GGA is placed into liquidation with Mr Sherman as the liquidator. [Sherman, paragraph 8 and tab 10 ] 19 November 2001 151 Report as to affairs lodged with ASIC. [Sherman, paragraph 11 and tab 13] 10 December 2001 152 Mr Sherman writes to Mr Engebretsen and Mr Larsen requesting that they take steps to enforce the Letter. In accordance with advice received from Baker & McKenzie, Mr Engebretsen and Mr Larsen do not respond. [Engebretsen, paragraph 19; Larsen, paragraph 20 and annexure B] 14 December 2001 153 These proceedings commenced. Plaintiff's financial position on liquidation 154 The financial position of the plaintiff on liquidation is dealt with in the liquidator's statement in these proceedings. Its debts amount to approximately $97 million, of which general unsecured creditors amount to $75 million, including employee statutory entitlements of $23 million [Sherman, paras 12 and 13]. In the Report as to Affairs filed with ASIC in November 2001, Mr Sherman disclosed that there were some hundreds of employees with an unsatisfied entitlement to severance benefits [Sherman, tab 13] and also that approximately $30 million of the plaintiff's assets, namely, its debtors, related to companies associated with Ansett, which was at that time in administration. Although the plaintiff has lodged a proof of debt in the administration of Ansett, it is unlikely that any dividend will be paid to it. Evidentiary conflicts 155 It is convenient to next give findings where necessary insofar as particular evidentiary conflicts require resolution. 156 One may commence with the evidence given by Mr McIntyre. The Court accepts that he carried out his best endeavours to accurately recall what he now believes then occurred. In some instances his evidence was departed from during cross-examination or seems to be reflective of improbabilities. But that is not for a moment to suggest that his evidence was unreliable in relation to other matters. It is necessary in dealing with his evidence to look closely at the contemporaneous documentation, where relevant, and to compare his evidence to the evidence given by those who may have contradicted it. It is also necessary to take into account the whole of his cross-examination and any concessions or uncertainties which it revealed. 157 I accept as reliable the entirety of the evidence given by Mr McIntyre in each of his statements: · where dealing with his reliance upon the Letter in signing the directors' declaration, which to his mind, operated as a fully enforceable inter-company guarantee; · that if he had been aware that the Swiss parent did not intend to honour that guarantee, he would not have signed the declaration under any circumstances; · that he would not have signed the declaration had the Letter not been provided at all; · that had he been aware that the Swiss parent did not intend to honour the Letter he would have considered that the Australian trading company was "trading insolvent" and would have called a board meeting to discuss the position with Mr Engebretsen and Mr Larsen and taken steps to appoint a voluntary administrator and would not have permitted the Australian trading company to continue to trade and incur liabilities. 158 These evidentiary findings take into account Mr McIntyre's evidence, under cross-examination, as to his state of mind as at July 2001. This evidence was that he made the assumption that the Letter was in place, it being so obvious that "it went without saying": these being the reasons why, albeit perhaps being 'commercially naïve', he did not put to the persons with whom he was dealing in Zurich, that the Swiss parent was contractually obliged to assist the Australian trading company. 159 These findings are corroborated by Mr McIntyre's evidence that in signing the solvency acknowledgment [part of the 17 August 2001 amended Westpac facility agreement], he had in mind that the Letter was in place. 160 Nor does anything in the other conduct of Mr McIntyre following the signing of the Letter remove the basis for the above finding. His own understanding as to the form of any further support from the Swiss parent, in terms of formal facilities being negotiated and the like and then documented in a legally binding form, does not erode or displace or replace his sworn reliance [earlier referred to in this judgment] upon the Letter having been in place as foundational to his preparedness to sign the directors' declaration and to permit the Australian trading company to continue to trade and to incur debts. 161 An area of difficulty for Mr McIntyre concerns the suggested internal inconsistencies as between his statements, his evidence-in-chief and his cross-examination on the topic of whether or not and if so when, and in what terms, he, on the evening of 12 September 2001, or the next day at a telephone board meeting [at which were present Mr Goggi, Mr Steininger, Mr Bishop, Mr Smyth, Mr Engebretsen and Mr Larsen, the last two participants by telephone from Bangkok] referred to the Letter. The matter runs as follows: · in his first statement Mr McIntyre gave evidence that on hearing [on the evening of 12 September 2001] that Ansett was placed into voluntary administration and then speaking to one of the administrators, he telephoned Mr Boysen in Switzerland, the conversation being to the following effect: Mr McIntyre: "Henning, Ansett has gone into administration. I have spoken to one of the administrators who says that it's chaos. He hasn't been able to locate any cash at all. His unconfirmed view is that the company has been stripped of assets. They want to try and fly a normal schedule but there is no guarantee of anything at this stage. He wants catering to continue but he can't guarantee to me that we will get paid. I think either Ansett is going to fold or it will end up a low-cost airline. I don't think there's any chance of us getting any money now under the base year contract, which we were relying upon to pay down the Westpac facility. So that means GGA is in real trouble. The banking situation is a problem and as far as I can see, it means we won't be able to pay our debts. I'm telling you as a director of GGA that I am not prepared to let GGA trade on unless you pay off Westpac and you confirm that you are prepared to stand by the letter of comfort and support us financially going forward until we can support ourselves."

[80]

Q. What action did you take following this? A. A letter of comfort was put in place between Gate Holdings Pty Ltd and Gate Gourmet Holding AG." 165 In terms of the forensic approach taken by the cross-examiner, it is fair to say that: · it was not put to Mr Engebretsen that Mr McIntyre had mentioned the Letter in the telephone conversation before the 13 September 2001 board meeting. Rather, it was positively put to Mr Engebretsen that the Letter was mentioned during the meeting [transcript 165.32]. Mr Engebretsen's evidence was that Mr McIntyre had not referred to the Letter [transcript 165.32-43]; · insofar as the answers given by Mr Engebretsen and Mr Larsen to question 15 in the questionnaire may suggest that either of them was involved in the preparation of the Letter, such a suggestion is contrary to their evidence and to their denial of such involvement. The contrary was not put to them. No challenge was made to Mr Engebretsen's or Mr Larsen's evidence that the reference to the Letter in the questionnaire was already included when they received it from Mr McIntyre [Ex D-3 paragraph 18; Ex D-3(i) paragraph 19]. 166 Ultimately, I find it difficult to accept that Mr McIntyre's credit is significantly undermined in the above circumstances. The matter was of far more moment in terms of the plaintiff's cases against Mr Engebretsen and Mr Larsen which were settled on the last day of the hearing, for the reason that the whole of those cases would have had to fail if the evidence of these defendants that they had not seen the Letter had been accepted. In those circumstances it may well be unnecessary, as a matter of weight, for the Court to hand down a finding as to whether or not Mr McIntyre mentioned the Letter to Mr Engebretsen in the telephone conversation of the previous evening [as he seemed to recall whilst in the witness box] or as to whether, on the balance of probabilities, he only mentioned it during the telephone board meeting or whether he never mentioned it on either occasion. The issue of course involves the Court weighing the reliability of the evidence given by Mr Larsen and by Mr Engebretsen. 167 My own view is that in the circumstances of haste/extremis which obtained [on the day in question and on the previous evening], on the balance of probabilities the matter of the Letter is likely to have been mentioned in the conversation[s] with Mr Engebretsen and may or may not have been mentioned in the board meeting. The matter remains inchoate and is ultimately not finally determinative at all of the issues which still separate the plaintiff from the remaining defendants. However, I do not see that there is a Brown v Dunn point which can be taken because Mr McIntyre clearly, in his second statement [18], referred to having made reference to the Letter, either when discussing the position with Mr Engebretsen prior to the board meeting or at the meeting itself. 168 The simple fact is that Mr Larsen and Mr Engebretsen did sign to the questionnaire and although now disowning any intellectual input into the relevant answer, have some difficulty in that regard. Mr Larsen had been copied with the above-mentioned two e-mails in February 2001. I do not suggest that the present recollections of Mr Larsen and Mr Engebretsen are contrived or otherwise than their best now attempt to recall the position. But their recollections may easily be flawed. The matter is inchoate. Evidentiary issues 169 A number of evidentiary admissibility issues arose and in a limited number of cases rulings were reserved, principally because of difficulties which concern the pressing of a number of disparate causes of action so that a particular conversation or document may be admissible on one but not on another of those causes of action. The parties accepted that the efficient course was to reserve those rulings and to permit the parties to address on these matters as part of final address. The general principles 170 In Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153, Heydon JA set out succinctly the relevant conventional and accepted principles of the law of contract [at 164-165]:

[83]

The third relevant principle is that post-contractual conduct is not admissible on the question of what a contract means as distinct from the question of whether it was formed. As explained by Priestley JA (Meagher JA agreeing) in Hide & Skin Trading v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 326-330, the status of the relevant High Court authorities is unclear: hence unless it is demonstrated that the later decisions of the Victorian Full Court and Court of Appeal against admissibility, Ryan v Textile Clothing & Footwear Union of Australia [1996] 2 VR 235 and FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343, are clearly wrong or they are overruled, they should be followed in New South Wales. No attempt was made to demonstrate that they are clearly wrong. The fourth relevant principle is that the construction of a contract is an objective question for the court, and the subjective beliefs of the parties are generally irrelevant in the absence of any argument that a decree of rectification should be ordered or an estoppel by convention found." 171 Barrier Wharfs Ltd v W Scott Fell & Co Ltd (1908) 5 CLR 647; Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 548-549; Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd (1995) 7 BPR 14,551; Anaconda Nickel Holdings Pty Ltd, Re [2003] WASC 19; Taylor v Johnson (1983) 151 CLR 422 at 429 per Mason ACJ, Murphy and Deane JJ; Liquorland (Australia) Pty Ltd v GYG Holdings Pty Ltd (unreported, 28 October 1994, NSWCA, per Kirby P); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2003) 56 NSWLR 662 at 675 per Bryson J (paragraph 97) and Banque Brussels Lambert SA v Australian National Industries Ltd (1989) 21 NSWLR 502 at 524.D - E are also authorities supporting the proposition that in ascertaining the relevant intention, that is the intention to contract, relevant circumstances may include prior negotiation and subsequent conduct.

[89]

"In determining whether the communications between the parties constitute a contract the court is not confined to a consideration of the terms or manner in which the communications were made: they must be interpreted by reference to the subject matter and the surrounding circumstances including, inter alia, the nature of, and the relationship between, the parties, and previous communications between them, as well as to standards of reasonable conduct in the known circumstances ." [emphasis added] 179 I approach the evidentiary issues reserved for decision in the final judgment in precisely the way in which McLelland J approached the issues in Film Bars. In short, subsequent communications may have probative value depending upon the light they throw on the proper interpretation of earlier communications alleged to constitute the contract. Post-contractual conduct is not, however, admissible on the question of what a contract means as distinct from the question of whether it was formed. Contractual construction 180 It is convenient to examine in a little more depth the principles concerning contractual construction and the extent to which extrinsic evidence is admissible in relation to the construction exercise. Objectivity 181 The general test of objectivity is pervasive in the law of contract. As Gleeson CJ said in Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 549, two passages from speeches of Lord Diplock illustrate the point: · in Gissing v Gissing [1971] AC 886, his Lordship said [at 906]: "As in so many branches of English Law in which legal rights and obligations depend upon the intentions of the parties to a transaction, the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. " [emphasis added] · in Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441, his Lordship said [at 502]: "In each of the instant appeals the dispute is as to what the seller promised to the buyer by the words which he used in the contract itself and by his conduct in the course of the negotiations which led up to the contract. What he promised is determined by ascertaining what his words and his conduct would have led the buyer reasonably to believe that he was promising . That is what is meant in the English Law of contract by the common intention of the parties. The test is impersonal. It does not depend upon what the seller himself thought he was promising, if the words and conduct by which he communicated his intention to the seller would have led a reasonable man in the position of the buyer to a different belief as to the promise; nor does it depend upon the actual belief of the buyer himself as to what the seller's promise was, unless that belief would have been shared by a reasonable man in the position of the buyer. The result of the application of this test to the words themselves used in the contract is still "the construction of the contract"." [emphasis added] Extrinsic evidence/surrounding circumstances 182 Five propositions which are unexceptional may be put as follows: · Proposition 1

[95]

" It is often said that, in order to be admissible in aid of construction, these extrinsic facts must be within the knowledge of both parties to the contract, but this requirement should not be stated in too narrow a sense. When one speaks of the intention of the parties to the contract, one is speaking objectively-the parties cannot themselves give direct evidence of what their intention was-and what must be ascertained is what is to be taken as the intention which reasonable people would have had if placed in the situation of the parties. Similarly when one is speaking of aim, or object, or commercial purpose, one is speaking objectively of what reasonable persons would have in mind in the situation of the parties . It is in this sense and not in the sense of constructive notice or of estopping fact that judges are found using words like 'knew or must be taken to have known' (see, for example, … Brett L.J. in Lewis v Great Western Railway Co (1877) 3 QBD 195)… Particularly interesting are the speeches in Charrington and Co Limited v Wooder [1914] AC 71, the question being what was meant by 'fair market price'. Viscount Haldane L.C. uses once more the expression 'circumstances which the parties must be taken to have had in view' (p 77). Lord Kinnear, after explaining that the term had no fixed meaning, said at page 80 'Words of this kind must vary in their signification with the particular objects to which the language is directed' and continued, 80: '… it may be necessary to prove the relation of the document to facts; and I take to be sound doctrine that for this purpose evidence may be given to prove any fact to which it refers, or may probably refer….' And Lord Dunedin, at page 82: '… in order to construe a contract the court is always entitled to be so far instructed by evidence as to be able to place itself in thought in the same position as the parties to the contract were placed, in fact, when they made it -or, as it is sometimes phrased, to be informed as to the surrounding circumstances'."

[103]

Where a term is inherently ambiguous in this sense, the ambiguity may be removed by the context of its use in the document and the surrounding circumstances to which, in accordance with the Codelfa case, reference legitimately may be made. But I think it remains to be finally determined whether, where a term which is inherently ambiguous in the sense to which I have referred and is not made unambiguous by its context or the surrounding circumstances, evidence may be admitted to show in which of the alternative ordinary meanings of the term it was used in the particular document and the kind of evidence which may be adduced for that purpose". Dealing with the matter Letters of comfort/support 185 One may commence with a short discussion of letters of comfort/support as a general matter. 186 Letters of support such as the Letter have been frequently employed in international commerce over at least the last 20 years. Whether a particular letter of support imposes legal obligations on the parties ultimately turns on its terms: Banque Brussels at 520-1 per Rogers CJ, Comm D. 187 The leading authority in Australia is the decision of Rogers CJ, Comm D in Banque Brussels, supra. In that case the defendant provided a letter to the bank in which it stated, inter alia, that "it would not be our intention to reduce our shareholding in Spedley Holdings Limited….during the currency of this facility"; "we would, however, provide your Bank with 90 days notice of any subsequent decisions taken by us to dispose of this shareholding", and "we take this opportunity to confirm that it is our practice to ensure that our affiliate Spedley Securities Limited will at all times be in a position to meet its financial obligations as they fall due." [at 504] 188 Rogers CJ considered evidence of correspondence between the parties leading up to the sending of the letter, which included an initial request by the bank for a guarantee [at 507.C]. He held that the claim turned on the existence or otherwise of an intention to create legal obligations, and whether the terms of the letter were of a sufficiently promissory nature to be held to be contractual [521.C]. His Honour found that, consistently with the decision of Megaw J in Edwards v Skyways Ltd [1964] 1 WLR 349 at 355, there is a prima facie presumption that in commercial transactions there is an intention to create legal relations, and the onus of proving the absence of such intention, which is a heavy one, rests with the party asserting that matter [at 521.E]. 189 In holding that the letter had contractual force, his Honour observed that [at 523.B]:

[115]

it succeeds on both the intent to contract issue and on the related, albeit not identical, proper construction of the Letter issue. 200 The central proposition is that the plaintiff succeeds on each of these issues once the Court takes into account the following matters: · that the Corporations Law as it applied in 2001 included provisions imposing statutory duties of directors to prevent insolvent trading, and identifying the offences committed for breach of those duties: sections 588G (1), (2) and (3); · that the Corporations Law as it applied in 2001 included section 295 which was in the following terms: " SECTION 295 CONTENTS OF ANNUAL FINANCIAL REPORT 295(1) Basic contents . The financial report for a financial year consists of: (a) the financial statements for the year; and (b) the notes to the financial statements; and (c) the directors' declaration about the statements and notes. 295(2) Financial statements . The financial statements for the year are: (a) a profit and loss statement for the year; and (b) a balance sheet as at the end of the year; and (c) a statement of cash flows for the year; and (d) if required by the accounting standards - a consolidated profit and loss statement, balance sheet and statement of cash flows. 295(3) Notes to financial statements . The notes to the financial statements are: (a) disclosures required by the regulations; and (b) notes required by the accounting standards; and (c) any other information necessary to give a true and fair view (see section 297) 295(4) Directors' declaration . The directors' declaration is a declaration by the directors: (a) that the financial statements; and the notes referred to in paragraph (3)(b), comply with the accounting standards; and (b) that the financial statements and notes give a true and fair view (see section 297); and (c) whether, in the directors' opinion, there are reasonable grounds to believe that the company, registered scheme or disclosing entity will be able to pay its debts as and when they become due and payable ; and (d) whether, in the directors' opinion, the financial statement and notes are in accordance with this law, including: (i) section 296 (compliance with accounting standards); and (ii) section 297 (true and fair view). 295(5) [Requirements] The declaration must: (a) be made in accordance with a resolution of the directors; and (b) specify the date on which the declaration is made; and (c) be signed by a director." [emphasis added] · that, in terms of the ultimate analysis of the background facts, it is clear that the mutually known and understood circumstance was that each of the letters of support was required to enable the directors of the Australian trading company to be able to discharge their responsibilities and to allow that company to continue trading in order, if it was in fact unable to pay its debts, to avoid the severe sanctions of doing so. This is said to supply a very powerful and mutually known, understood and commonly accepted surrounding circumstance against which each of the letters of support and, in particular, the Letter, fall to be construed. It is put that of particular significance in this regard is the awareness of the Australian trading company's senior management of its financial position and of their professional obligations. 201 Whilst there are a number of disparate submissions put by the defendants in seeking to erode what I regard as the commonsense of the above reasoning, an emphasis was placed by them upon one matter. This is that a careful examination of the circumstances in which the first letter of support, and then the Letter, came into existence, is said to disclose almost no or at least only the very slightest of interest/involvement in the whole of the exercise on the part of the three common directors of the Australian holding company and the Swiss parent. The proposition is that all material communications were to or from Mr Goggi whose position was that of company secretary. Indeed, it is put that as to the Letter, the proper findings on the evidence are that: · neither Mr Engebretsen nor Mr Larsen had ever been made aware of its existence; · Mr McIntyre gave evidence that he had not seen it in February 2001 and although his evidence was that he had become aware of it by September 2001, there was just no evidence at all of how he became aware of it. 202 The defendants seize upon this central foundation in support of the proposition that this simply points up the difficulty in the Court inferring that the Swiss parent and the Australian trading company/ the Australian holding company had the necessary intent to enter legal relations. The defendants seek to add certain detail going back to the inception of the first of the letters of support by way of material said to confirm that there simply was no such intent to enter legal relations. In that regard, the defendants emphasise the findings which they seek from what they put as the evidence: · that the need for the first letter of support arose as a result of Mr Goggi's own assumption that it was necessary; · that his assumption was based on some undisclosed past experience of his with the Cathay Pacific group; · that he is said never to have asked any of the three directors nor his superior, Mr Steininger, if they required such a letter. [transcript 61-62] 203 The submission is that it was Mr Goggi who first raised with the auditors of the plaintiff, PWC, the topic of a letter of support: the proposition being that, on his evidence, at the time that he raised the letter of support with PWC, Mr Goggi had no expectation that the existing banking facilities and the subordinated parent loan would not be maintained. Mr Goggi's evidence therefore, so it is submitted, leaves open no conclusion but that his motivation for obtaining the first letter of comfort was his prior experience with the Cathay Pacific auditors and not any personally held belief that the plaintiff required the letter by reason of its financial position. 204 Other matters sought to be relied upon by the defendants include: · a close focus upon examples of the particular support given by the Swiss parent to the Australian trading company, including the loans earlier referred to and the giving of guarantees in support of the Westpac facilities; · the fact that by 31 December 1999 the plaintiff had only been trading for the 6 weeks commencing on 14 November 1999 (when the purchase of the Ansett catering business was completed) and for that reason did not complete formal accounts for the 1999 year. However, the Australian holding company did complete formal accounts which were prepared on a going concern basis. This is said to have meant that there was a reasonable expectation that the current loan facility and the subordinated parent loan would remain in place and that they would be sufficient to meet the anticipated working capital and other requirements of the company; · a very detailed focus put by the second defendant upon each and every aspect of the manner in which both the first and then the later letter of support came to be conceived and were in due course produced. 205 The plaintiff, on the other hand, highlights the defendants' failure to tackle the clear evidence given by Mr McIntyre as follows: · "On 2 April 2001, I signed the director's declaration to the statutory accounts of GGA (tab 19). The statutory accounts recorded that GGA suffered a net loss after income tax of $16,530,184 for the financial year ended 31 December 2000. In addition, the consolidated statutory accounts for GGH recorded a net loss after tax of $20,483,527 and those of Gate Gourmet Services a net loss after tax of $5,542,890. The existence of the Second letter of comfort was crucial to GGA's ability to be able to pay its debts as and when they fell due.

[122]

Q. You thought it was so obvious it went without saying? A. Yes." [transcript 121] Finding as to Mr McIntyre's awareness that the letters were in place 207 The Court's finding is that Mr McIntyre was at all material times aware that both the first letter of support and then later the Letter was in place and was so aware at or about the time, or very soon after, those letters came to be signed. It was never put to Mr McIntyre that he had not been aware of the letters of support. Under cross-examination in relation to the Letter, he gave evidence that he had asked to see it and had discussed it with Mr Steininger [transcript 141]. It seems to me plain as day that acceptance of his evidence earlier set out carries with it the proposition that his evidence under cross-examination be accepted as reliable in that, as he said, he worked on the assumption that each of the letters when signed and duly received was in place and, [I interpolate], to be taken at face value. Finding on intent to enter legal relations 208 Ultimately, the Court's finding is that the circumstances examined objectively, do throw up an intent to enter legal relations. The very terms of the Letter itself are a strong indicator in this regard, utilising, as it does, phrases and concepts having very clear technical legal significance. I refer here to the references to "it's controlled entities" and "[ability] to meet its financial commitments as and when they fall due" [emphasis added]. Likewise, the second paragraph of the Letter making plain that it would not be withdrawn before the Australian holding company and it's controlled entities had sufficient means to meet their obligations without the support of the parent entity, seems to me to clearly indicate a promissory intent to be bound in terms of legal relations. 209 As recently as 12 March 2004, the New South Wales Court of Appeal has had occasion to emphasise the significance of the text in any construction issue. In Optus Vision Pty Ltd v Australian Rugby Football Pty Ltd [2004] NSWCA 61, Santow JA [with whose reasons for judgment Meagher JA and Stein AJA agreed] put the matter as follows [at [24]]:

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"But resort to extrinsic evidence, here documentary, must not detract from the axiomatic proposition that the starting point when considering a point of interpretation must be the text itself. As Lord Steyn [a reference to the extra-judicial observation by his Lordship: "The Intractable Problem of the Interpretation of Legal Texts" (2003) SLR 1 at 7] observes: "The mandated point of departure must be the text itself. The primacy of the text is the first rule of legal interpretation for the judge considering a point of interpretation. Extrinsic materials are therefore subordinate to the text itself."" 210 Whilst of course the present issues at threshold require determination in terms of objectively discerned intent to contract [as opposed to the construction issue], the significance of the actual terms of the document put forward form an obvious integer proper to be taken into account, together with the other admissible evidence, going to intent to contract. 211 But at the end of the day it is the whole of the admissible evidence which is taken into account in terms of the finding as to an intent to enter legal relations. One only integer in that regard of course concerns precisely what, looking at the matter objectively, the parties to the Letter saw as its purpose insofar as the underlying reason for the directors' declaration as part of the financial reports for the particular year and the notes to the financial statements are concerned. Whilst it is certainly true that it is not necessary in order for directors to satisfy their statutory obligation [to have had reasonable grounds to expect that a company was solvent], that they be able to show that they took into account a legally binding promise to provide monies or financial assistance [Dunn v Shapowloff (1978) 2 NSWLR 235 at 244 per Mahoney JA], this is only one parameter of the matters which fall for current consideration. Here the directors were entitled to take the Letter into account for the purpose of permitting the Australian trading company to continue trading into the future. Regardless of what banking or other facilities may have been underwritten by the Swiss parent, the Australian trading company was entitled to anticipate a regular and formal compliance by the Swiss parent with the whole of the Letter and, in particular, with the terms of the important second paragraph of the Letter which, in terms, contained the promise/covenant that the Letter would not be withdrawn before the Australian holding company and its controlled entities had sufficient means to meet their obligations without the support of the parent entity. 212 The passage of 15 years since the handing down of the decision of Rogers CJ in Banque Brussels has not provided any basis for eroding the significance of giving proper effect to commercial transactions. If anything, the intervening years have served to underline that significance. Whilst there is of course an obvious need to follow the route of a principled examination of each particular fact and circumstance arising for curial determination [including close attention to the objective determination of intent to contract], where statements are appropriately promissory in character they should be enforced "when they are uttered in the course of business and there is no clear indication that they are not intended to be legally enforceable" [at 523.B] 213 In Banque Brussels, Rogers CJ adopted the approach that in commercial transactions there is a presumption of an intention to create legal relations and that the onus of proving the absence of such intention rests with the party asserting that matter [Edwards v Skyways Ltd [1964] 1 WLR 349 at 355 per Megaw J]. My own view is that this is not necessarily properly regarded as a matter of presumption. Rather, the court is simply looking in terms of the objective approach, to identify whether or not there was the requisite intent to contract in any given context. The context in a matter of a commercial communication is materially different to the context, for example, in a matter of a domestic communication. Applying the objective approach the high probability is that a commercial communication will generally be seen to have been intended to be regarded as a relatively formal matter both by the sender as well as by the recipient. 214 However, if and to the extent that the matter is properly to be approached upon the basis of a presumption of an intention to create legal relations, then that approach yields the same finding as to objective intent to contract in this case. What was the obligation? 215 The defendants contended that the Letter was simply too imprecise to throw up a binding legal obligation. In support of this contention, the submission was that the Letter fails to identify the form of financial support the subject of the promise. The defendants, inter alia, put the following rhetorical questions: · were the promisees entitled to a loan? · if so, on what terms was the loan to be made? · were the promisees entitled to compel the Swiss parent to subscribe for capital? 216 This is not the first time a court has been required to construe and reflect upon the context of a contract providing for alternative methods of performance. There is authority for the proposition that in that circumstance the law is not bound to adopt the fiction that a defendant would have adopted one method of performance rather than another. The principle appears to be that the court should infer that the defendant would have performed such a contract in the way least advantageous to the plaintiff and most advantageous to the defendant [cf discussion in TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130 at 150, 153, 154 per Hope JA]. For present purposes, the relevance of this line of general authority is to make plain that the mere fact that a contract may include a promise capable of being performed by alternative methods of performance does not necessarily render that contract void for uncertainty or for incompleteness. 217 As indicated above, the strong and plain terms of the Letter point up no conclusion but that the terms of the Letter are promissory. 218 In my view, properly construed, the Letter entitled the Australian trading company to be indemnified by the Swiss parent against its financial commitments, as and when they fell due, and to be so indemnified up to the point in time when the Australian trading company had sufficient means to meet those commitments without the support of the Swiss parent. Related questions 219 As already made plain the enforcement of the Letter is put by the Australian trading company on two bases: · First, it is said that it constitutes a contract between it and the Swiss parent; · Second, it is said that if it constitutes a contract between the Swiss parent and the Australian holding company, then the Australian holding company holds the benefit of the contractual promise on trust for the Australian trading company. Submissions of the second defendant 220 The parties for whom Mr Pembroke QC appears advanced a number of submissions with respect to the first claim, including: · the Letter is not addressed to the plaintiff, which was not a party; · even assuming the Letter constitutes a contract, the parties to it could only be the directors of the Australian holding company (to whom it is addressed) or, possibly, the Australian holding company itself (assuming that the directors received it on its behalf); · the view that the parties to the Letter are who they appear to be is consistent with the e-mail exchanges between Mr Goggi and Mr Nielsen of 14, 15 and 16 February 2001, where the issue of the identity of the persons to whom the Letter was to be addressed was considered expressly and in detail; · that material is consistent with no conclusion but that the persons intended to be parties to a contract constituted by the Letter were the Swiss parent and the directors of the Australian holding company. The suggestion that the plaintiff was a party to such a contract contradicts: - the express words of the Letter;

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the e-mail exchanges of 14, 15 and 16 February 2001 between Messrs Goggi and Nielsen. · in those circumstances, the plaintiff's case based on the suggestion that it was a party to any such contract ought be dismissed. Dealing with the issue 221 In what follows a number of the submissions of the plaintiff are accepted and generally adopted. Identity of promisees 222 The question as to whom was/were the intended promisee[s] in relation to a written promise is of course no more and no less than a question of construction of the document in question [cf Carter & Harland, Contract Law in Australia, 4th ed, pp 46 - 47, citing, inter alia, Carter v Hyde (1923) 33 CLR 115]. The instant circumstances, of course, involved an offer to supply financial support in consideration for what was, in effect, to be the incurring of the continued risks of trading. In that sense, plainly the Australian trading company [and no doubt the other relevant controlled entities] is seen to have accepted that offer: that acceptance is seen to have been effected by their undertaking trading activities without which support the directors would have been criminally liable. 223 As already indicated, the language of the Letter is certainly promissory. This is in essence a matter of impression. 224 The question which arises is as to the identity of the promisee[s] or offeree[s]: that is not necessarily the same as the "addressee". 225 Construed against the objective framework which produced it, the Letter strongly indicates that the promisees are each of "Gate Gourmet Holdings Pty Limited and its controlled entities". The factors which support this conclusion are: · since the Swiss parent was the ultimate beneficial owner of all of the companies in the Australian group, it would be sensible to suppose that it intended all of those companies to take the benefit of its promise; · the "support" promised is to meet the respective "financial commitments as and when they fall due" - thus indicating an obligation of a recurrent and continuing kind; · there would be no practical purpose in limiting the promise to the nominal "addressee", since the Australian holding company did not trade, and would not be seen as needing support for its ongoing financial commitments; · the nominal addressees were identified as "the directors Gate Gourmet Holdings Pty Limited", and the postal address given was the address of other companies in the group, including the plaintiff. The three directors were the same for all the companies in the Australian group, and those persons would reasonably be expected to require evidence of support for all of the companies concerned; · in this context, it is of some significance that the text of the Letter is not prefaced by any words of address or salutation. Nor is the Letter marked for the attention of any particular person. The words of the document do not exhibit any particular intention to confine the text of the Letter to the postal addressee or addressees. 226 In February 2001, the Letter replaced the earlier May 2000 letter of support [PX 223], which was addressed in general terms ("To Whom it May Concern"), and under which there could not have been any doubt as to the identity of the intended promisee, including the Australian trading company. It would, I accept, be quite artificial to regard the parties as having fixed upon a much more narrow operation for the Letter in the 2001 year (ie, by restricting it to the Australian holding company only), especially when it would have been apparent that the Australian holding company itself would be producing separate accounts for the 2000 financial year, and the Letter would be expected to have its part to play in the performance by its directors and auditors of their respective duties in connection with those separate accounts. 227 The communications preceding the issue of the Letter show objectively that its operation was not mutually understood as being restricted to the Australian holding company. In this respect: · the Letter was sought at the outset in order to "provide financial support to Aust. GG Holding Group" [PX 806]; · in further communications between Mr Goggi and Mr Nielsen [collected at PX 835-836], it was made clear by Mr Goggi that "the guarantee needs to be provided to the Directors of the company so they can carry on the business within the Australian statutory legislation" [emphasis added]; · these communications, I accept, demonstrate that the parties were anxious to ensure that the Letter inured for the Australian trading company's benefit, and that such support was not to be restricted or limited by the Letter's being addressed to PWC only. If anything, the specific focus of the communications was directed to the question of to whom the Letter should NOT be addressed. 228 Thus, given its background, the fact that the Letter was ultimately addressed to the directors of the Australian holding company can be seen to be no more than a matter of convenience, the sole purpose for which was the need to ensure that the ambit of the relevant financial commitment was not to be restricted by reason of its being addressed to PWC. There was no objective basis for supposing the parties intended to restrict the operation of the Letter to the Australian holding company. Such a conclusion would, I accept, be wholly artificial. The parties were not involved in a process of working towards achieving some limitation on the operation of the Letter. 229 The submission that the Australian trading company was not a party to the contract flies in the face of the obvious commercial intent of the Letter, which was to allow the directors to sign the accounts and, most particularly, to permit Mr McIntyre to sign the Australian trading company's statutory accounts for the financial year ended 31 December 2000. Mr McIntyre relied upon the Letter in doing so. On the courts findings, the intent to so rely was clearly something which, looking at the matter objectively, was at all material times common ground as between the Swiss parent and the Australian trading company [and for that matter the Australian holding company]. 230 It will be recalled that the Australian trading company's financial reports record that the net loss for the 16-month period from 2 September 1999 to 31 December 2000 was $16.53 million [page 1]. 231 The fact that the Australian trading company, apparently more than any other company in the Australian group, had sustained exceptional trading loses in the 2000 financial year [PX 965], and the course of trading throughout that year, must have made it abundantly obvious by at least February 2001 that the Australian trading company was an entity for whose benefit continued financial support would be likely to be necessary. The extent of such financial support would be difficult to specify [see for example Mr Goggi's observation at transcript page 62.35]. In this context, a construction of the Letter which excluded the plaintiff as a promisee of that support would really have made little commercial sense. 232 The balance sheet records total assets of $70.076 million and total liabilities of $86.606 million. Note 1 to the accounts records that "the financial statements have been prepared on a going concern basis on the assumption that the related entities 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 not to call for repayment of the amounts owing to it until, and then only to the extent to which, sufficient funds are available" [page 7]. The directors declared that there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable [p16]. 233 Mr Pembroke's submission that the obvious commercial intent of the Letter may be seen as no more than to allow the Australian holding company's directors to sign its accounts fails to recognise the substance of what was occurring. What was being accomplished was not simply a matter of compliance with the Corporations Law requirements for completion of financial statements, notes and the directors' declaration about those statements and notes. What was being accomplished by the production of the Letter was the underpinning for: · the directors being in a position to form, and to declare that they had formed, the opinion that there were reasonable grounds to believe that the Australian trading company would be able to pay its debts as and when they became due and payable; · the directors being in a position to declare an acceptable basis on which the financial statements had been able to be prepared on a going concern basis; · the Australian trading company, in the circumstances which prevailed, to be permitted to continue to trade at all. 234 The very words of note 1 to the accounts in terms of the assumption upon which the financial statements had been prepared, namely that the related entities would continue to provide the necessary financial support to enable the company to pay its debts as and when they became due and payable, tell the story. 235 The close submissions addressed by Mr Pembroke concerning the proposition that, on the evidence, it was Mr Goggi who is shown to have generally raised the issue at its inception and who engaged in the relevant communications with the Swiss parent and acted as intermediary with PWC [and the accompanying submission that these activities of Mr Goggi are not shown to have been known at material times to any of the three directors of the Australian holding company/the Australian trading company], are rejected on the evidence and, when necessary, by inferences drawn from the evidence. Certainly, there is no doubt but that Mr Goggi was the one who first raised with PWC the topic of a letter of support as appears from his own evidence. Further, all of the e-mails and relevant communications are self-explanatory as to his very detailed involvement in the receipt and sending of these communications. But, what cannot be lost sight of is: · that, in the ordinary course of events, it is appropriate for the Court to infer that, as company secretary [here also "day to day" financial controller: statement paragraph 12], in most matters of significance in relation to the affairs of a company in terms of regularity of office procedure and function, Mr Goggi would be expected to communicate with the relevant directors, here Mr McIntyre, who was the sole Australian director and the managing director and who worked in the same building. The inference that he so communicated on this topic is drawn; · precisely what Mr Goggi may have had in his mind in relation to the need for each of the letters of support (or for that matter Mr McIntyre's cross-examination about what he understood or expected the form of financial support would take), likely fall outside the parameter of evidence which is admissible on either - the question of intent to contract ; or

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Q. Well, you are anticipating my next question, so take heed of the judge's warning. Is it also correct to say that at that time, that is when you made the inquiry of the auditor, based upon your then estimate of the anticipated requirements for the group companies, that you were satisfied that the facilities available were sufficient, or if not sufficient would be re-negotiated? A. They would have been sufficient in the short-term ." [transcript 62] [emphasis added] 242 There is no doubt but that the surrounding circumstances in which the first and then the critical second letter came into existence critically concerned, as each letter in fact in terms acknowledges, the subject matter of the financial support which may be necessary to enable the Australian holding company and its controlled subsidiary to meet their financial commitments as and when they fell due. The acquisition of Ansett catering services was an entirely new initiative carrying with it, not only the prospects of real success, but also the risks associated with any such new major enterprise. Regardless of the change in wording [where the word "guarantee" was replaced in the second sentence with the words "letter of support"], the crystal clarity of the second sentence treated with the topic of the point in time when the Australian holding company and its controlled entities would have sufficient means to meet their obligations without the support of the Swiss parent. Up until that point in time arrived, the Swiss parent would not withdraw the Letter. The circumstances disclosed by the evidence, considered in terms of standards of reasonable conduct in the known circumstances, make very plain that the intention which reasonable people would have had if placed in the situation of the parties was that the Letter would give rise to legal rights and duties being intended to have contractual force. 243 The finding is that the Australian trading company was a promisee. Agency 244 The above analysis and findings make it unnecessary to deal with the case put in terms of agency. Arguably, the same result may be capable of being achieved under the rubric of the claimed agency. Loss and damage 245 It is beyond dispute that, on the evidence, the terms of the Letter were ultimately not honoured by the Swiss parent. I did not understand the defendants to contend to the contrary. 246 The plaintiff, having succeeded in establishing the existence of the contract upon which it sues, the facts clearly establish breaches of the express and clear terms of that contract. 247 The plaintiff has established a prima facie case of loss and damage, the current hearing not dealing with the issue otherwise than in principle. 248 As earlier indicated, the ambit of the hearing with which this judgment deals did not extend to embrace quantum, and it suffices for present purposes to note that a quantum hearing will follow when the parties have been able to prepare for that hearing and when the Court is able to provide Court time for that exercise. Benefit of the promise 249 In the event that the conclusion that the Australian trading company was a promisee be incorrect, it would be necessary to consider the benefit of the promise case. In deference to the detailed submissions which were advanced in this regard, I propose to consider this alternative claim pursued by the Australian trading company. 250 The claim arises if, on the true construction of the Letter, the only promisee/offeree is the Australian holding company. In that event, the Australian trading company contends that it is nevertheless entitled, in the particular circumstances of the case, to enforce the promise made for its own benefit. As before, the plaintiff's submissions are generally accepted as correct. 251 It is, of course, well settled that in the ordinary case a person who is not a party to a contract is not entitled to sue upon it so as directly to enforce the obligations it contains, even if for the party's own benefit [see, for example, Coulls v Bagot's Executor & Trustee Co Ltd (1967) 119 CLR 460 at 478, 487, 494]. 252 To this general rule, however, there are certain "exceptions". One such exception was identified in Trident General Insurance Co Limited v McNiece Bros Proprietary Limited (1987) 8 NSWLR 270; affirmed (1988) 165 CLR 107. For a number of reasons, both the judgments in the Court of Appeal, and in the High Court, are of importance. 253 In Trident, the Court of Appeal held that in the case of a policy of indemnity against a liability in damages at common law, a non-party beneficiary may sue directly on the policy without having to prove that the promise of indemnity was held in trust for it by the promisee party [at 288]. The High Court dismissed an appeal from the decision, although the reasons of the members of the Court differed. According to Mason CJ and Wilson J [at 123 - 124] and Toohey J [at 172], in general, a non-party beneficiary may sue directly on a policy of insurance without having to prove that the promise of indemnity was held in trust for it by the promisee party where: · it is the common intention of the parties that the non-party beneficiary benefit under the policy; and · the non-party beneficiary can be expected to order its affairs accordingly. 254 In the present case, the following factors justify a similar conclusion: · as indicated earlier in this judgment:

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on the faith of the Letter, the Australian trading company continued to trade; · the present case is an example of a contract of indemnity intended to benefit the controlled entities. Indeed, in one sense the present case is a clearer case than Trident, because the controlled entities were all in existence and ascertainable at the date of making of the contract; · while the contract in the present case is not a contract of insurance simpliciter, the features which distinguish this contract from that sort of contract of indemnity provide no valid point of distinction on any matter of principle relevant to the reasoning in Trident; · even if that is not so, the policy considerations applicable with respect to groups of companies in a commercial context are the same as those that were thought relevant in the specific sphere of liability insurance in Trident. The observations of the judges, both in the Court of Appeal and in the High Court, in connection with the need for some judicially inspired law reform, and the history of critical judicial opinion recounted in the Trident decisions [see, for example, at 8 NSWLR 284 ff, 165 CLR 113-122] remain matters of significance at the present time. 255 Thus, even if distinguishable on the basis that the contract of indemnity in the present case is not in all respects identical to that under consideration in Trident, the same considerations justify the relatively modest incremental step of declaring the now recognised exception to the privity rule as applicable in the present case. 256 Alternatively, if this be impermissible, resort may be had to the more traditional "exception" to the privity rule, where the named promisee holds the benefit of the promise on trust for the parties intended to benefit thereby. 257 In Wilson v Darling Island Stevedoring and Lighterage Co Ltd (1956) 95 CLR 43, Fullager J [at 67] observed that "it was difficult to understand the reluctance which courts have sometimes shown to infer a trust in such cases" [referring to contracts whereby a benefit is promised to a third party]. In relation to this observation, the High Court said in Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 618 - 619:

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"…the requisite intention [to create a trust of a contractual promise to benefit a third party] should be inferred if it clearly appears that it was the intention of the promisee that the third party should himself be entitled to insist upon performance of the promise and receipt of the benefit and if trust is, in the circumstances, the appropriate legal mechanism for giving effect to that intention. A fortiori, equity's requirement of an intention to create a trust will be at least prima facie satisfied if the terms of the contract expressly or impliedly manifest that intention as the joint intention of both promisor and promisee." 260 In Trident, a trust could not be identified, principally because the relevant "beneficiary" was not in existence at the time when the necessary intention had to be formed, and also because no such claim had been pleaded. Absent those considerations, there appears to have been every prospect that a trust would have been identified. 261 As the judgments referred to above point out, the relevant intention necessary to establish a trust must be the intention of the promisee. In the present case, as indicated above, it is clear from the language of the Letter, and the circumstances surrounding it, that the Australian holding company intended that the Australian trading company and the other trading entities obtain the benefit of the promises contained in the Letter. The relevant inference of intention can readily be drawn and I draw it. 262 Accordingly, if it be correct that the Australian holding company was the only promisee, it obtained the benefit of the promises in the Letter with the intention that they should subsist for the actual benefit of the Australian trading company and the other trading entities that were to incur the anticipated financial commitments. 263 It is fair to say that a close analysis of the pleadings may not permit the plaintiff to maintain a case that it is entitled to sue directly on any contract between the Swiss parent and the Australian holding company [as opposed to being entitled to sue as beneficiary of a promise held by the Australian holding company on trust for it]. 264 The plaintiff did put this case in submissions and no point was taken by the defendants that this submission went outside the pleaded case. To my mind, the matter having been litigated accordingly, the plaintiff had an entitlement to put this case. The Trade Practices Act causes of action General propositions 265 The following propositions appear to be clearly established: · whether particular conduct is misleading or deceptive is a question of fact to be determined in the context of the evidence as to the alleged conduct and as to the whole of the complex of relevant surrounding facts and circumstances; · effect should be given to the ordinary meaning of the words used which should not be qualified or (if it be possible) expanded by reference to established common law principles of liability: Brown v Jam Factory Pty Ltd (1981) ATPR 40-213 at 42,928 per Fox J; · "misleading" is a word which is capable of expressing various shades of meaning. Its meaning is apt to be decisively influenced by the context in which it is found: R v The Credit Tribunal; Ex parte General Motors Acceptance Corp, Australia (1977) 137 CLR 545 at 561 per Mason J; · the words "likely to mislead or deceive" make clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone. Conduct is likely to mislead or to deceive if there is a real or not remote chance or possibility regardless of whether it is less or more than 50%: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 at 87; · the question of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective question and is a matter for determination by the court for itself. Evidence that particular persons have been misled, although admissible and commonly likely to be very persuasive, will not be determinative of the issue; · an essential issue in determining whether a person's conduct has contravened section 52(1) is determining "what is to be taken from that conduct": Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 at 683 per Mahoney JA - cited with approval by Mason P in Sydney Harbour Casino Properties Pty Ltd v Coluzzi [2002] NSWCA 74 at [51]; · the intent of the defendant is not relevant under section 52; · it is necessary to inquire why any misconception has arisen for the reason that it is only by such an inquiry that the evidence of those shown to have been led into error can be evaluated to determine whether they were confused by misleading conduct of the defendant: Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177. Causation and Reliance 266 Section 82(1) of the TPA provides:

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"By the time that Henville v Walker reached the High Court it was not in issue that Walker had made a series of representations to Henville which breached s 52 of the TPA. The first of the representations was that there was a market for luxury, top of the range units in Albany, Western Australia. The second was that Walker had represented that the sale of these luxury units would be for between $250,000 and $280,000 each. Nor was it an issue that Henville bought the land that the units were to be built on for $190,000 and he constructed three units on this land. But as the representations were inaccurate, Henville sold the units for a joint amount of only $545,000. In total, including building costs, his loss on the project was $319,846.51. Before buying the land Henville had prepared a feasibility study, but with regard to the revenue side of it the figure that was employed was that supplied by Walker 's misrepresentation. With regard to cost, Henville estimated $551,000. However, both the revenue side of it and the cost side of the feasibility study were greatly inaccurate (the revenue side over-estimated the revenue, while the cost side greatly underestimated the cost). Henville brought an action against Walker in the Supreme Court of Western Australia for breach of s 52 and sought recovery of his loss under s 82. At first instance, Henville received most of the money he was seeking, but was not able to recover a certain amount because his own actions were the cause of that part of the overall loss. On appeal to the Full Court of the Supreme Court of Western Australia, Henville was not able to recover any of the loss as his own action, that is by preparing the feasibility study, broke the chain of causation. The question in the appeal was the amount of the recoverable loss under the action. All five members of the High Court allowed the appeal but their Honours wrote separate judgments, except for Gummow J who agreed with both McHugh and Hayne JJ." 271 In Henville, Gleeson CJ said [at [14]]:

[151]

"The conclusion that the appellants suffered loss requires comparison between the position in which the appellants found themselves after the project was finished, and the position in which they would have been if, instead of relying on what they were told by the respondents, they had not undertaken the project. It does not invite attention to what would have been their position if an accurate estimate of selling price had been given by the respondents ( Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 514-515 [48]-[52]). Moreover, the conclusion that the appellants suffered loss neither requires nor permits consideration of some third or intermediate position in which the appellants undertook some project or transaction other than the one they did. It is, therefore, not relevant to consider what the loss might have been if the costs had been estimated properly." 275 In order to establish an entitlement to damages flowing from a breach of s52, a plaintiff need only show that the contravening conduct was one of the causes of its loss, not that it was the sole, or principal cause: Henville, at [109] per McHugh J and [163] per Hayne J, Gummow J agreeing; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41, at [57] per Gaudron, Gummow and Hayne JJ. Section 51A 276 Section 51A(2) of the TPA provides that a corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making a representation as to a future matter. Section 51A(1) provides that where the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading. 277 Section 51A is of course an evidentiary, rather than a substantive, provision: Bowler v Hilda Pty Ltd (1998) 80 FCR 191 at 206 per Heerey J. 278 Clearly, section 51A does not prove that a representation as to a future matter was relied upon by the other contracting party [cf Concrete Constructions Group v Litevale Pty Ltd [2002] NSWSC 670 at [166] per Mason P]. Nor does it address whether, at the time of the representation as to the future matter, it was reasonable for the maker of the representation to have made it. The onus of proof having shifted, the representor must show objectively that it had reasonable grounds for making the representation: Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217 at 240, per Ormiston J, referred to with approval by Lockhart and Gummow JJ in Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470 at 506. Clearly also, the plaintiff has an onus of showing demonstrable loss which flowed from any reliance by the plaintiff upon the defendants section 51A deemed misleading conduct: Concrete Constructions at [160] per Mason P. 279 The section has recently been examined by the New South Wales Court of Appeal in 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, where the Court cited with approval the following passage from the dissenting judgment of McHugh JA in Wright v TNT Management Pty Limited (1989) 15 NSWLR 679 at 688ff [at [29]]:

[157]

It is clear that a representation may, depending upon the circumstances which occur following the date upon which the representation was made, become spent. A representation may become spent for different reasons. The case as pleaded 286 The case as pleaded alleges as follows: The alleged representation 287 The Letter is said to have been a representation made by the Swiss parent, in Australia, in the course of trade and commerce, that: · the Swiss parent would provide the financial support that might be necessary to enable the Australian holding company and its controlled entities to meet their financial commitments as and when they fell due [said to be an express representation]; · the Swiss parent would not withdraw its financial support before the Australian holding company and its controlled entities had sufficient means to meet their obligations without the support of the Swiss parent [said to be an express representation]; · the Swiss parent had a present intention of honouring the express terms of the Letter in the future, and had the capacity to do so [said to be an implied representation]; · the Swiss parent believed that there were reasonable grounds for making the express statements referred to above, and that there was no reason to qualify those statements in any way [said to be an implied representation]. Inducement 288 PWC, as auditors of the plaintiff, are said to have given an unqualified audit for the year ended 31 December 2000. 289 The directors of the plaintiff are said to have provided a directors' declaration and opinion pursuant to section 295(4) of the Corporations Law that the financial statements and notes of the plaintiff , inter alia: · complied with the accounting standards; · gave a true and fair view of the company's financial position as at 31 December 2000; · were in accordance with the Corporations Law and that there were reasonable grounds to believe that the company would be able to pay its debts as and when they became due and payable. 290 The plaintiff is said to have continued to trade and incur debts in circumstances where the company's financial position was such that, absent the Letter, the company would have ceased trading. Letter misleading and deceptive 291 The Letter is said to have been misleading or deceptive or likely to mislead and deceive in contravention of section 52 of the TPA in that the Swiss parent had no intention: · of providing the financial support that might be necessary to enable the plaintiff to meet its financial commitments as and when they fell due; · of maintaining its financial support until the plaintiff had sufficient means to meet its obligations without the support of the Swiss parent; or alternatively · the Swiss parent is said not to have given any consideration to whether it would honour the express terms of the Letter in the future, to whether there were reasonable grounds for making the express statements set out therein, and/or to whether the Letter should be qualified in any way. Future matters 292 Further, insofar as the Letter relates to future matters, the claim made is that at the time it was written the Swiss parent had no reasonable grounds for making the representations contained therein. Dealing with the issue 293 The case is pressed: · first, on the basis of the express representations contained within the Letter, namely, that the Swiss parent would provide the financial support that may be necessary to enable the Australian holding company and its controlled entities to meet their financial commitments as and when they fell due, and would not withdraw its financial support before the Australian holding company and its controlled entities had sufficient means to meet their obligations without the support of the Swiss parent;

[159]

294 It seems to me beyond doubt that the Letter contains the pleaded [express as well as implied] representations set out above. The terms of the Letter are clear and unequivocal. It provides that the Swiss parent will provide the financial support that may be necessary to enable the Australian holding company and its controlled entities to meet their financial commitments as and when they fall due, and that the Letter will not be withdrawn before the Australian holding company and its controlled entities have sufficient means to meet their obligations without the support of the Swiss parent. Those statements are unqualified. Nor can any qualification be discerned by reference to the circumstances surrounding the making of the representations: see the chain of e-mails between Mr Nielsen and Mr Goggi at TB 2/822-3, 835-6. 295 The representations contained in the Letter are properly characterised as representations "with respect to a future matter", namely, the provision in the future of financial support, and the maintenance of that position until the Australian holding company and its controlled entities could in essence 'stand on their own feet'. The terms of section 51A provide that a representation with respect to any future matter includes the doing of, or the refusing to do, any act: section 51A(1). Does the evidence establish that the Swiss parent had reasonable grounds for making the representations as to the future matters? 296 As already observed in Cummings, it is clear that a court faced with a lack of evidence of the persons alleged to have made particular representations as to a future matter may nonetheless find that the overall probabilities to which the circumstances of a given case give rise, the background to it and the conduct of parties prior to conversations taking place, provide better guides as to whether or not those persons had particular states of mind [or whether particular factors existed which would establish evidence of something such as reasonable grounds]. 297 The Court does not here have the benefit of any oral evidence given on behalf of the Swiss parent. 298 It is true that the Swiss parent has tendered materials proving that it did provide considerable support for the Australian trading company. The submission is that it has thereby established that it had reasonable grounds for making the representations. 299 In my view the submission should be rejected. The point in time at which this inquiry is focused concerns the state of affairs at the time when the representations were made. The Court is in the dark as to what circumstances, if any, gave reasonable grounds for the making of the implied representations. That void is not here capable of being filled by inference. At the least, the e-mail exchange between Mr Goggi and Mr Nielsen in February 2001, the apparently broad terms of the Letter, and the unequivocal departure, without notice, from the terms of the Letter on 13 September 2001, required an explanation from the relevant officers of the Swiss parent. That explanation should have addressed, at a minimum, the state of affairs at the time the Swiss parent made the representations, and the reasons why it decided in September 2001 to depart from their express terms. 300 Outside altogether of any need to invoke the rule in Jones v Dunkel (1959) 101 CLR 298, the matter simply stands by operation of section 51A of the TPA, whereby the Swiss parent is deemed not to have reasonable grounds for making the representations, and the representations are taken to be misleading. The failure of the Swiss parent to call any evidence as to the matters the Swiss parent actually relied upon in making the representations in the Letter has the result that they have not discharged the onus of proof in section 51A(2). 301 During final address, Mr Pembroke submitted that the Letter represented a genuine statement of commercial intent at the time it was made, the central purport of his oral submissions being the proposition that the evidence established that there were reasonable grounds for making the statement. [transcript 267, 270] 302 The short position is that the evidence simply does not go this distance. It was not that unequivocal. Mr Engebretsen's evidence was that "the Australian companies would normally get money from Switzerland" [transcript 160.40] [emphasis added]. Mr Larsen's evidence was that "it was normal practice that the Swiss company would make sure that the [subsidiary] had funds" [transcript 178.1] [emphasis added]. This evidence does not unequivocally establish that which had to be established. No doubt there are cases where a cushion of evidence comes forward from which the court is able, on the balance of probabilities, to infer that there were reasonable grounds for a particular belief being held, where representations as to a future matter have been made. This is not one of those cases. The raw requirement posed by the section has not been fulfilled.

[160]

303 The Australian trading company seeks to also rely upon the rule in Jones v Dunkel, the submission being that the failure by the defendants to adduce evidence from the signatories to the Letter, Messrs Boysen and Grolimund, and the person who conducted the negotiations with the plaintiff over its terms, Mr Nielsen, gives rise to an inference that their evidence would not have helped the defendants' case. 304 It is important to recall the principles laid down in Jones v Dunkel. The following extracts clarify the position in this regard: · "The unexplained failure by a party to give evidence, to call witnesses, or tender documents may - not must - in appropriate circumstances lead to an inference that the uncalled evidence would not have assisted that party's case. The appropriate circumstances exist where it was within the power of the party to tender the evidence which was not tendered." [JD Heydon, Cross on Evidence, 6th ed, Butterworths, Sydney, 2000 at [1215]] · "This instance of a Jones v Dunkel inference…, also available where there is unexplained failure by the party to call a witness or tender documentary evidence, can entitle the judge or jury more readily to accept the evidence of the opposite party which might have been contradicted, or more readily to draw any inference fairly available from the evidence called by the other party. A Jones v Dunkel inference cannot fill gaps in the evidence, or convert conjecture and suspicion into inference, but unless it is to be empty of content the inference if drawn may weigh the scales, however slightly, in favour of the opposing party." [Adler v Australian Securities and Investments Commission [2003] NSWCA 131 at [649] per Giles JA, Mason P and Beazley JA agreeing] · "[T]he rule [in Jones v Dunkel] only applies where a party is "required to explain or contradict" something. What a party is required to explain or contradict depends on the issues as thrown up in the pleadings and by the course of evidence in the case. No inference can be drawn unless evidence is given of facts "requiring an answer". [ Cross on Evidence , Butterworths, [6th Ed], D Byrne, JD Heydon, vol 1 at [1215]] [Passage quoted with approval in the joint judgment of Gleeson CJ and McHugh J in Schellenberg v Tunnel Holdings Pty Ltd (2000) 170 ALR 594 at 609] 305 The proper inference is that the failure of Messrs Boysen, Grolimund and Nielsen to give evidence on these matters suggests that the evidence they would have given would not have helped the Swiss parent defendants' case; they were "facts which required an answer": Jones v Dunkel; Schellenberg, supra. 306 The holding is that the Swiss parent has not established that it had reasonable grounds for making the representations as to the future matters. Inducement 307 The finding is that the representations were, in the circumstances, a real inducement to the Australian trading company continuing to trade. The plaintiff has established on the balance of probabilities that, in reliance upon the Letter, the unqualified audit for the year ended 31 December 2000 came forward, the plaintiff's directors provided the relevant directors' declaration and opinion and the Australian trading company continued to trade and incur debts in circumstances where its financial position was such that, absent the Letter, the company would have ceased trading. 308 Mr McIntyre's evidence was that the existence of the Letter was crucial to the plaintiff's ability to be able to pay its debts as and when they fell due [paragraph 22, Exhibit P5]. Further, if he had been aware that the Swiss parent did not intend to honour the Letter, he would have considered that the plaintiff was trading insolvent and would have called a board meeting and taken steps to appoint a voluntary administrator [paragraph 16, Exhibit P6].

[163]

The cases against Mr Boysen and Mr Grolimund 314 The plaintiff also further claims that, if the Court finds that the Swiss parent contravened section 52 of the TPA, then by reason of that conduct Messrs Boysen and Grolimund: · aided, abetted, counselled or procured that contravention; · were knowingly concerned in, or party to, that contravention; and · are therefore liable to a claim in damages pursuant to section 82 of the TPA. 315 In order to establish ancillary liability under section 82, it is essential, inter alia, to determine the subjective intent of the defendant (at least insofar as conduct identified in section 75B(1)(a) and (c) is concerned): Yorke v Lucas (1985) 158 CLR 661 at 669, per Mason ACJ, Wilson, Deane and Dawson JJ. Such liability cannot be established by proof of objective surrounding facts alone. 316 The plaintiff failed to lead evidence concerning the subjective state of mind and degree of involvement of Messrs Boysen and Grolimund in the production of the Letter. Accordingly, this aspect of the plaintiff's claim fails. Estoppel 317 In the light of the above holdings it is unnecessary for the Court to examine the further alternative claim put by the plaintiff by way of the estoppel cause of action. Reserved rulings 318 Evidence was taken in Victoria by myself sitting as an examiner. On that occasion, before Mr McIntyre entered the witness box, I indicated the rulings which would be appropriate in terms of objections to his statements. Orders of this Court are made in precisely the same terms. 319 An objection was taken to the admission into evidence of page 503 of the materials originally marked MFI PX. That page is rejected on the grounds of relevance. Short minutes of order 320 The parties are given leave to make submissions in relation to any matter which the Court may not yet have dealt with. Short minutes of order are required to be brought in. Costs will be dealt with at the same time. I certify that paragraphs 1 - 320 are a true copy of the reasons for judgment herein of the Hon. Justice Einstein given on 31 March 2004

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

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