Allianz v Cervantes - [2012] NSWCA 224

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: BBB Constructions Pty Ltd v Aldi Foods Pty Ltd [2012] NSWCA 224
Hearing dates: 19, 20, 21 March 2012
Decision date: 26 July 2012
Before: Basten JA at [1]; Barrett JA at [2]; Sackville AJA at [189]
Decision:
1. Appeal dismissed.
2. That the appellant pay the respondent's costs of the appeal.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords: TRADE AND COMMERCE - misleading or deceptive conduct - unconscionable conduct - prospective lessee withdraws from negotiations for agreement for lease - whether misconduct of either type committed - ESTOPPEL - equitable estoppel - estoppel by convention - prospective lessee withdraws from negotiations for agreement for lease - whether estoppel of either type arises
Legislation Cited: Environmental Planning and Assessment Act 1979, s 96
Trade Practices Act 1974 (Cth), ss 51AA, 51AC, 52, 82
Cases Cited: BBB Constructions Pty Ltd v Aldi Foods Pty Ltd [2010] NSWSC 1352
Category: Principal judgment
Parties: BBB Constructions Pty Ltd - Appellant
Aldi Foods Pty Ltd - Respondent
Representation: F C Corsaro SC/F G Kalyk - Appellant
R J H Darke SC/J B Spinak - Respondent
Colin Biggers & Paisley - Appellant
Carroll & O'Dea - Respondent

File Number(s): 2007/00266522
Decision under appeal

Citation:

BBB Constructions Pty Ltd v Aldi Foods Pty Ltd [2010] NSWSC 1352

Date of Decision:

2010-12-02 00:00:00

Before:

McDougall J

File Number(s):

2007/266522

Judgment

BASTEN JA: I agree with Barrett JA that the appeal in this matter should be dismissed with costs. I also agree with his reasons and the additional reasons of Sackville AJA.

BARRETT JA: In early 2006, the appellant, BBB Constructions Pty Ltd ("BBB"), obtained development approval for a residential and commercial development on land on the corner of Botany Road and Retreat Street, Alexandria. For approximately twelve months, between July 2006 and August 2007, BBB negotiated with the respondent, Aldi Foods Pty Ltd ("Aldi"), with respect to the terms of a proposed agreement whereby Aldi would take a lease of a basement in the building, which it would operate as a supermarket. In May 2007, while negotiations were still underway, BBB commenced construction of a second basement to the building, which would have been necessary to accommodate the proposed supermarket then being considered by Aldi. When Aldi terminated negotiations in August 2007, BBB claimed that it had incurred expenditure in developing the second basement in reliance on representations or other conduct on the part of Aldi that it would take a lease of the area.

In proceedings determined in the Commercial List of the Equity Division in December 2010, McDougall J dismissed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Allianz v Cervantes

Details

AGLC: Allianz v Cervantes [2012] NSWCA 224
Case: [2012] NSWCA 224
Decision Date: 26 July 2012

CaseChat Overview and Summary

The appeal concerned a dispute between Allianz Australia Insurance Limited (the appellant) and Mr. Cervantes (the respondent) arising from Mr. Cervantes' withdrawal from negotiations for an agreement for a lease. The primary legal questions before the court were whether the appellant's conduct constituted misleading or deceptive conduct, or unconscionable conduct, within the meaning of the relevant legislation, and whether the appellant was estopped from denying the existence of an agreement for lease, either by convention or in equity.

The court was required to determine whether the appellant's actions, in withdrawing from lease negotiations, amounted to misleading or deceptive conduct under section 52 of the Trade Practices Act 1974 (Cth) or unconscionable conduct under section 51AA of the Trade Practices Act 1974 (Cth). Additionally, the court had to consider whether the appellant was precluded from denying the existence of a concluded agreement for lease due to the doctrine of estoppel, specifically estoppel by convention or equitable estoppel.

The court found that the appellant's conduct did not meet the threshold for misleading, deceptive, or unconscionable conduct. It reasoned that the communications between the parties did not create a reasonable expectation that the lease would be entered into, nor did they demonstrate any unconscionable exploitation of Mr. Cervantes' vulnerability. Furthermore, the court held that the elements of estoppel were not established, as there was no shared assumption of fact or law upon which the parties acted to their detriment, nor conduct that would make it unconscionable for the appellant to resile from its previous representations. Consequently, the appeal was dismissed, and the appellant was ordered to pay the respondent's costs.

Orders

Orders of the court

1. Appeal dismissed.

2. That the appellant pay the respondent's costs of the appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

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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Medium Neutral Citation:	BBB Constructions Pty Ltd v Aldi Foods Pty Ltd [2012] NSWCA 224
Hearing dates:	19, 20, 21 March 2012
Decision date:	26 July 2012
Before:	Basten JA at [1]; Barrett JA at [2]; Sackville AJA at [189]
Decision:	1. Appeal dismissed. 2. That the appellant pay the respondent's costs of the appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	TRADE AND COMMERCE - misleading or deceptive conduct - unconscionable conduct - prospective lessee withdraws from negotiations for agreement for lease - whether misconduct of either type committed - ESTOPPEL - equitable estoppel - estoppel by convention - prospective lessee withdraws from negotiations for agreement for lease - whether estoppel of either type arises
Legislation Cited:	Environmental Planning and Assessment Act 1979, s 96 Trade Practices Act 1974 (Cth), ss 51AA, 51AC, 52, 82
Cases Cited:	BBB Constructions Pty Ltd v Aldi Foods Pty Ltd [2010] NSWSC 1352
Category:	Principal judgment
Parties:	BBB Constructions Pty Ltd - Appellant Aldi Foods Pty Ltd - Respondent
Representation:	F C Corsaro SC/F G Kalyk - Appellant R J H Darke SC/J B Spinak - Respondent Colin Biggers & Paisley - Appellant Carroll & O'Dea - Respondent
File Number(s):	2007/00266522
Decision under appeal	Citation: BBB Constructions Pty Ltd v Aldi Foods Pty Ltd [2010] NSWSC 1352 Date of Decision: 2010-12-02 00:00:00 Before: McDougall J File Number(s): 2007/266522