Observations to counsel

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Gervais Andrews
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1 Bar Practice Course Federal Court of Australia District Registry: New South Wales Division: General No. NSD8429 of [CURRENT YEAR] Fast Tyres Pty Ltd Applicant Getup Pty Ltd Respondent Observations to counsel 1. Counsel is briefed to appear on the interlocutory application filed by the respondent for an order for security for costs and consequential orders. 2. As you are aware, the applicant s statement of claim pleads causes of action in contract and under the Australian Consumer Law. In general terms, the allegations are that there was an implied contractual term in the contract of supply between the applicant and respondent that the goods supplied would be of a suitable quality and fit for purpose and that the respondent engaged in misleading or deceptive conduct by impliedly representing that the goods supplied were of suitable quality and fit for purpose, when that was not the case. It should not be necessary for you to consider the substance of those claims in detail for the purpose of this interlocutory hearing. 3. You will be able to identify your opponent from the court schedule. We have already served the evidence on which our client proposes to rely. 4. If you consider it appropriate to object to any part of the other side s evidence, would you please provide opposing counsel as soon as possible with a list of your objections (setting out the particular passage objected to and the basis of the objection so they can consider how they wish to proceed. Regards 30 [LAST MONTH]

2 2 Instruction to Readers: If you are undertaking the May course, please use the first referred date in each paragraph where it appears. If you are undertaking the September course, please use the second referred date. For example, where dates appear as November [2 years ago] / August [last year], May readers are to read it as November, 2 years ago and September readers are to use the August last year.

3 Form 35 Rule 17.01(1 Interlocutory application Federal Court of Australia District Registry: New South Wales Division: General No. NSD8249 of [CURRENT YEAR] Fast Tyres Pty Ltd Applicant Getup Pty Ltd Respondent To Fast Tyres Pty Ltd The respondent applies for the interlocutory orders set out in this application. The Court will hear this application, or make orders for the conduct of the proceeding, at the time and place stated below. If you or your lawyer do not attend, then the Court may make orders in your absence. Time and date for hearing: 4.30 pm on Thursday [THIS WEEK] Place: Law Courts Building, Queen s Square, Sydney Date: 28 [LAST MONTH] Signed by an officer acting with the authority of the District Registrar Filed on behalf of (name & role of party Getup Pty Ltd, respondent Prepared by (name of person/lawyer Jessica Stewart Law firm (if applicable Peter Altman & Co Tel ( Tel ( jess@peteraltman.com.au Address for service (include state and postcode Level 2, Macquarie Tower 5 Farrer Place, Sydney NSW [Form approved 01/08/2011]

4 2 Interlocutory orders sought 1. The applicant provide security for the respondent s costs of the proceeding in the amount of $200,000 in a form acceptable to the Registrar of the Court. 2. The proceeding be stayed until such time as that security is provided. 3. The applicant pay the respondent s costs of and incidental to this application. Service on the applicant It is intended to serve this application on the applicant. Date: 28 [LAST MONTH] Jessica Stewart Signed by Jessica Mary Stewart Lawyer for the respondent

5 1 Form 59 Rule 29.02(1 Federal Court of Australia District Registry: New South Wales Division: General Affidavit No. NSD8429 of [CURRENT YEAR] Fast Tyres Pty Ltd Applicant Getup Pty Ltd Respondent Affidavit of: Samantha Grey Address: 21 Point Street, Point Piper NSW 2027 Occupation: Director Date: 28 [LAST MONTH] I Samantha Grey, of 21 Point Street, Point Piper NSW 2027, director, say on oath: 1. I am a director of the applicant and I am authorised to make this affidavit on the applicant s behalf. The matters to which I depose in this affidavit are true based on my own knowledge unless stated otherwise. 2. The applicant conducts a retail tyre business called Fast Tyres (Business. The applicant has commenced the proceedings to recover costs incurred and loss of profits arising from the supply by the respondent of two defective hoists, details of which are set out below. Background 3. From August [15 years ago] to August [3 years ago], I conducted a similar retail tyre business in Tempe. I sold that business in August [3 years ago], purchased my current home in Point Piper and decided to retire from employment. Filed on behalf of (name & role of party Fast Tyres Pty Ltd, applicant Prepared by (name of person/lawyer Elle Woods Law firm (if applicable Deanes Lawyers Tel ( Fax ( ewoods@deaneslawyers.com.au Address for service (include state and postcode 10 Alfred Street SYDNEY NSW 2000 SG EW. [Form approved 01/08/2011]

6 2 4. In November [2 years ago] / August [last year], I decided that there was a need for a similar business, but a more stylish one, in the upper North Shore. The Business commenced operations in February [last year] / November [last year]. The Business was a one-stop shop for people needing new tyres or wheels. 5. I developed a drive through system where customers could drive in and their cars were immediately driven onto a hoist. A team of four people would attend to the changing of the wheels or tyres depending on what needed to be done. Each car was then lowered and driven through to the other side of the work area ready for collection. The process took 10 to 15 minutes. The customers were able to wait in a coffee shop on the other side of the work area. An independent company unrelated to the applicant ran the coffee shop. 6. To establish the business, the applicant advertised its opening, leased premises at Wahroonga, and bought stock. The stock included a large selection of wheels and tyres. 7. From my previous business interests, I was aware that the respondent was a supplier of plant and machinery to the tyre industry. In early December [2 years ago] / September [last year], I contacted the respondent and arranged for the purchase of two hoists suitable for the Business. The combined cost was $500,000 and the hoists were installed by the respondent in late January [last year] / October [last year]. The respondent s defective hoists 8. The Business then commenced. However, by the sixth week, one of the hoists started jamming. Soon afterwards, the second hoist started to be affected in a similar manner. 9. At first, the hoists stopped working only once or twice a week. However, this still caused significant disruption, because the fault only occurred when lowering a vehicle. This meant that a customer s car was stuck on a hoist and could not be lowered. Further, no other cars could be attended to. 10. Each time this occurred, a representative of the respondent would attend to fix the problem. 11. The problem with the hoists gradually increased to occurring once a day. The Business was losing clients we were not able to live up to the name of Fast Tyres. 12. In late May [last year] / February [this year], I rang the respondent and spoke to Mr Wilton, who I believe is the managing director of the respondent. I said words to the following effect: I want these hoists removed from the premises and for you to replace them with new, suitable hoists. EW SG

7 3 13. He replied to the effect of: Those hoists are suitable for the purpose you requested. You did not require hoists that could manage the very large number of 4WDs that you are now servicing. If we had known that was the case we would have changed the specifications. I will arrange for the hoists to be removed and will see what we can do with them to assist you, but as this is your problem, we won't be making new ones for you. 14. The problem with the hoists became progressively worse until, in early July [last year] / April [this year] both hoists were out of action. At that time the applicant leased two more hoists on an urgent basis so that the Business could continue to be carried on. Consequences to financial position 15. Eventually, in late August [last year] / May [this year] the respondent removed the original hoists. I refused to allow them to be brought back again. In early December [last year] / June [this year], I had alternative hoists installed (in place of the temporary leased hoists in the parking area and the applicant is now in a leasing agreement in relation to those new hoists. The new hoists come from a different supplier and do not come from the respondent. 16. The records of the applicant show that in the six months to 31 December [this year] / 30 June [this year], the applicant made a profit of $10,000. I am told by my accountant and verily believe that the applicant s profit is projected at least to exceed $10,000 in the six months to 30 June [this year] / 31 December [this year]. Indeed, now that there are two effective hoists, I anticipate this figure to be higher. Sworn by the deponent at Sydney in New South Wales on 28 [last month] Before me: Samantha Grey Signature of deponent E Woods Signature of witness Elle Woods Solicitor

8 1 Form 59 Rule 29.02(1 Federal Court of Australia District Registry: New South Wales Division: General Affidavit No. NSD8429 of 2015 Fast Tyres Pty Ltd Applicant Getup Pty Ltd Respondent Affidavit of: Jessica Mary Stewart Address: 180 Elizabeth Street, Sydney NSW 2000 Occupation: Solicitor Date: 4 [CURRENT MONTH] I Jessica Mary Stewart, of 180 Elizabeth Street, Sydney NSW 2000, solicitor, affirm: 1. I am the solicitor for the respondent in this proceeding and I have the daily carriage of this matter. 2. I am informed by Peter Wilton, the managing director of the Respondent, and verily believe that in December [2 years ago] / September [last year] the respondent sold to the applicant two vehicle hoists, model VHII, for use at the applicant s premises at the business known as Fast Tyres. 3. On or about 3 March [current year] / 3 July [current year], the applicant commenced proceedings against the respondent for the sum of $1.5 million alleging that the VHII hoists supplied were defective and not fit for the purpose for which they were purchased. The proceedings are defended by the respondent on the basis that the hoists were not defective and were selected by the applicant as suitable for its purposes. Filed on behalf of (name & role of party Getup Pty Ltd, respondent Prepared by (name of person/lawyer Jessica Stewart Law firm (if applicable Peter Altman & Co Tel ( Fax ( jess@peteraltman.com.au Address for service (include state and postcode Level 2, Macquarie Tower 5 Farrer Place, Sydney NSW 2000 JS DD. [Form approved 01/08/2011]

9 2 4. I undertook an ASIC search of the applicant in the first week after I received the applicant s claim. This search did not cause me to consider that there was any need to make this application at that time. 5. The applicant s evidence in this matter was served on 7 April [this year] / 7 August [this year]. The evidence included a profit and loss statement and balance sheet for the six months ending on 31 December [last year] / 30 June [this year]. Annexed and marked JMS1 and JMS2 are copies of those documents. 6. I wrote to the applicant on the same day as follows: The financial information you have provided in these proceedings discloses that the applicant made minimal profit in the six months to 31 December [last year] / 30 June [this year]. Could you please provide details of your asset base in order show that you are in a position to pay a costs order in the event the respondent is successful at trial. 7. On 10 April [this year] / 10 August [this year], the applicant replied by sending me a copy of a letter from its accountant setting out the projected income for the current financial year to 31 December [this year] / 30 June [this year], disclosing a profit of only $20, On 14 April [this year] / 14 August [this year], I then wrote to the applicant in response to the applicant s letter. The following is an extract from that letter: The evidence you have provided thus far is not sufficient to determine that you are in a position to meet any costs order that might be awarded. Please confirm that you have sufficient assets to pay such order. If you fail to do so, the respondent shall make an application for security for its costs. 9. I have received no response to that request. 10. I have been a solicitor for 10 years and, in my experience, a hearing of this nature will take 15 hearing days and will cost in the order of $300,000. In my experience the respondent could expect to recover $200,000. To date our costs are about $100,000. Affirmed by the deponent at Sydney in New South Wales on 4 [this month] Before me: Jessica Stewart Signature of deponent D Denuto Signature of witness D Denuto Solicitor

10 3 Annexure JMS1 Fast Tyres Pty Limited Balance Sheet for the six months ending 31 December [last year] / 30 June [current year] Current Assets $ Cash 1,000 Receivables 400,000 Total Current Assets 401,000 Non Current Assets Investments Property, plant and equipment 100,000 Total Non Current Assets 100,000 Total Assets 501,000 Current Liabilities Creditors and borrowings 485,000 Total Current Liabilities 485,000 Total Liabilities 485,000 Net Assets $16,000

11 4 Annexure JMS2 Fast Tyres Pty Limited Profit and Loss Account for the six months ending 31 December [last year] / 30 June [current year] Operating profit 15,000 $ Income tax attributable to operating profit 5,000 Operating profit after income tax 10,000 Retained profits 10,000

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION No NSD 842 of 2012

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION No NSD 842 of 2012 FAST TYRES PTY LIMITED Applicant GETUP PTY LIMITED Respondent OBSERVATIONS TO COUNSEL Counsel is