Aardwolf Industries LLC v Tayeh

Case [2020] NSWCA 301

Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Aardwolf Industries LLC v Tayeh [2020] NSWCA 301
Hearing dates: 13 October 2020
Date of orders: 20 November 2020
Decision date: 20 November 2020
Before: Bell P at [1];
Macfarlan JA at [2];
Leeming JA at [87]
Decision:

(1)   Leave to appeal granted.

(2)   The applicants are directed to file a Notice of Appeal conforming with the draft supplied to the Court within 14 days of today’s date.

(3)   Dismiss the appeal with costs.

Catchwords:

NEGLIGENCE – duty of care to avoid economic loss – whether vulnerability required – applicants pleaded vulnerability as an essential element of duty – no obligation on primary judge to consider alternatives to that position – no relevant vulnerability due to applicants’ ability to protect themselves from consequences of liquidators’ actions

CONSUMER LAW – misleading or deceptive conduct – whether reliance on accuracy of recitals to deed – clear inference from evidence that person knew of true position

CONSUMER LAW – misleading or deceptive conduct – whether conduct “in trade or commerce” – court-appointed liquidators performing statutory functions – assignment of property with view to facilitating business interests of purchaser arguably had an essentially trading or commercial character

CORPORATIONS – leave to commence action against court-appointed liquidators – governing principles – relevance of lengthy and inadequately explained delay

Legislation Cited:

Corporations Act 2001 (Cth)

Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth), s 7

Trade Marks Act 1955 (Cth)

Trade Marks Act 1995 (Cth)

Cases Cited:

ASIC v Hellicar (2012) 247 CLR 345; [2012] HCA 17

Aston v Heron (1834) 2 My & K 390; 39 ER 993

Australian Health & Nutrition Association Ltd v Hive Marketing Group Pty Ltd (2019) 99 NSWLR 419; [2019] NSWCA 61

Bramco Electronics Pty Ltd v ATF Mining Electrics Pty Ltd (2013) 86 NSWLR 115; [2013] NSWCA 392

Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25

Caltex Refineries (Qld) Pty Ltd v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258

Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17

Ex parte Bucknell (1936) 56 CLR 221; [1936] HCA 67

Houghton v Arms (2006) 225 CLR 553; [2006] HCA 59

Hunter and New England Local Health District v McKenna (2014) 253 CLR 270; [2014] HCA 44

In re Maidstone Palace of Varieties Ltd [1909] 2 Ch 283

In the matter of Worldwide Speciality Property Services Ltd (in liq) [2017] NSWSC 1851; 35 ACLC 17-063

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

Karlsson v Griffith University [2020] NSWCA 176

Macedonian Church v Eminence Petar (2008) 237 CLR 66; [2008] HCA 42

Mamone v Pantzer [2001] NSWSC 26; (2001) 36 ACSR 743

McGowan v Chadwick [2002] EWCA Civ 1758

Mills v Sheahan (2007) 99 SASR 357; [2007] SASC 365

Perera v Genworth Financial Mortgage Insurance Pty Ltd (2017) 94 NSWLR 83; [2017] NSWCA…

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AGLC
Aardwolf Industries LLC v Tayeh [2020] NSWCA 301
Case
[2020] NSWCA 301
Decision Date

CaseChat Overview and Summary

The applicants, Aardwolf Industries LLC and others, sought to appeal a decision of the primary judge concerning claims of negligence and breaches of consumer law against Mr Tayeh, a liquidator. The dispute arose from the assignment of property by the liquidator, which the applicants alleged caused them economic loss. The applicants had sought leave to commence proceedings against the liquidator, which was refused by the primary judge.

The Court of Appeal was required to determine whether the primary judge erred in refusing leave to commence proceedings against the liquidator, considering the applicants' claims of negligence and misleading or deceptive conduct. Specifically, the court considered whether vulnerability was a necessary element for establishing a duty of care in negligence in this context, and whether the liquidator's conduct in assigning the property was "in trade or commerce" for the purposes of consumer law. The court also examined whether the applicants had relied on the accuracy of recitals within a deed and whether their delay in seeking leave was relevant.

The Court of Appeal found that the applicants had not established the necessary vulnerability to support a claim in negligence, as they possessed the ability to protect themselves from the consequences of the liquidator's actions. Regarding the consumer law claims, the court inferred from the evidence that the applicants were aware of the true position and therefore did not rely on the accuracy of the recitals. While acknowledging that the assignment of property by a liquidator could, in certain circumstances, have a trading or commercial character, the court ultimately dismissed the appeal, noting the significant and inadequately explained delay in the applicants' pursuit of their claims.

Consequently, the Court of Appeal granted leave to appeal but dismissed the appeal itself, ordering the applicants to pay the costs.

Orders

Orders of the court

(1) Leave to appeal granted.

(2) The applicants are directed to file a Notice of Appeal conforming with the draft supplied to the Court within 14 days of today’s date.

(3) Dismiss the appeal with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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