- Unreported Judgment
SUPREME COURT OF QUEENSLAND
de JERSEY CJ
No 5375 of 2004
IGT HOLDINGS PTY LTD
INTELLIGENT IDEAS AND CONCEPTS
ADRIAN MORGANTE Second Defendant
INTELLIGENT IDEAS AND CONCEPTS
IGT HOLDINGS PTY LTD
IAN GLYNN THOMAS Second Defendant by
- THE CHIEF JUSTICE: The plaintiff sues for moneys allegedly owing by the first defendant under an investment agreement dated 11th February 2003 and a fixed and floating charge bearing the same date. The plaintiff claims the same amount against the second defendant, Mr Morgante, as guarantor of the first defendant's obligation.
- Mr Morgante is the sole director of the first defendant and has with leave appeared for the first defendant as well as representing himself here today.
- It is undisputed that the plaintiff, through the agency, as it were, of its director Mr Thomas, who gave evidence, advanced a total amount of $244,995 to the first defendant. The document Exhibit 1 sets out the components of that total amount and the dates of payment. There is a claim for interest on those components at the rate of seven per cent per annum, yielding a claim of $47,992.07 as detailed in Exhibit 1.
- Under the investment agreement, the total amount to be advanced was $200,000 and the term of that agreement, running from 11 February 2003, was 12 months.
- The deed of guarantee relates to the performance of the first defendant under both the investment agreement and the debenture. See clauses 2 and 4 of the guarantee.
- The debenture defines the term "secured money" in terms sufficiently broad to embrace all of the amounts advanced by the plaintiff. As to the first defendant's obligation to repay those sums, see clause 6.1 of the charge.
- The issue as between plaintiff and defendants emerges substantially from a letter dated 29th January 2004, which is at page 42 of the affidavit, including exhibits, of Ian Glynn Thomas, which is Exhibit 1.
- The parties view that letter differently. Mr Thomas gave evidence that it was intended as a precursor to a more comprehensive formally binding variation agreement to replace the original investment agreement. Mr Morgante, however, contends vigorously that it was intended to take effect in accordance with its terms without more.
- The resolution of this issue does not bear on the plaintiff's entitlement to judgment for the advance and interest. That is because on any view all of the amounts advanced had become repayable by a date well preceding the commencement of this proceeding. The date by which all sums were repayable, even under the letter of 29 January 2004, was 14 February 2005.
- The point drawn from the letter of 29 January 2004 by Mr Morgante concerns Mr Thomas's failure to advance a sum of $55,000 thereafter. Mr Morgante's contention is that his company was thereby denied the capacity to advertise the invention in the United States and reap profits from consequent sales. I will revert to that matter when dealing with the counterclaim.
- I should at this stage record that the defendant has at least formally asserted that the guarantee was discharged by a variation effected to the original investment agreement by the letter of 29 January 2004. In that regard, I mention clause 3(d) of the deed of guarantee which provides that:
"The guarantor shall not be released by any variation to the terms of the investment agreement or debenture."
- There is a substantial factual issue whether the letter of 29th January 2004 operated of its own force or whether, as I have said, it was a precursor to a broader recasting of the original agreement.
- Some support for the latter position is contained in its opening terms:
"We confirm the basis upon which Mr Ian Thomas is prepared to vary his current loan agreement with your company and to advance further funds to you."
- In any event, significantly for the present, under that document of 29 January 2004 Mr Morgante was to ensure the transfer to Mr Thomas of a further 2 per cent equity in Intelligent Ideas and Concepts Pty Ltd. No time limit is specified for the performance of that obligation. Accordingly, it was an obligation to be performed forthwith; that is, as soon as reasonably practicable after 29th January 2004. It was not performed.
- Mr Morgante's explanation is that he was assured by his advisors that nothing need be done to secure that transfer, but plainly it contemplated a transfer of shares in the company, which was not done.
- That gives rise to a substantial argument that Mr Thomas was for his part excused from any obligation to furnish the $55,000 now complained of. It also tends to put in context the further negotiations which thereafter took place between the parties for the variation of the investment agreement.
- I accept the evidence of Mr Thomas where in conflict with that of Mr Morgante.
- In my view, the plaintiff has established an entitlement to judgment in the amount of the unpaid advances together with 7 per cent interest.
- As to the counterclaim, as would be apparent from what I have said already, I do not consider that Mr Thomas, or his company, the plaintiff, was in the circumstances which emerged obliged to advance the further $55,000 upon which the counterclaim depends.
- In any event, the evidence given by Mr Morgante in an effort to establish the counterclaim, that is evidence about what would have been secured through the application of the $55,000 to fund an advertising campaign in respect of the product in the United States, was so vague as not to provide any basis for a conclusion on the balance of probabilities that any particular amount of profits was lost to the first defendant company and Mr Morgante in consequence. There is simply no evidence acceptable in that context establishing a loss or the amount of it.
- There will, therefore, be judgment for the plaintiff against the defendants respectively for the aggregate of the amounts of $244,995, being the amount of the advances, together with $47,992.07 interest, and costs to be assessed.
- I order that the counterclaim of the defendants be dismissed with costs to be assessed.
- There was an additional claim, I should record, for costs of a sum in excess of two and a half thousand dollars. I am not satisfied that that falls within the scope of the investment agreement or the debenture, such as would justify judgment for that sum against the guarantor or the company.
- THE CHIEF JUSTICE: I will substitute for the amount of $47,992.07, the amount of $42,742.25.
- Just to avoid any confusion, I will do a total.
- There will be judgment for the plaintiff against each of the defendants in the amount of $287,737.25 with costs, including any reserved costs, to be assessed.
- Published Case Name:
IGT Holdings Pty Ltd v Intelligent Ideas and Concepts Pty Ltd & Anor
- Shortened Case Name:
IGT Holdings Pty Ltd v Intelligent Ideas and Concepts Pty Ltd
 QSC 89
de Jersey CJ
15 Mar 2006
No Litigation History