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Apple Computer Australia Pty Ltd v Mekrizis

Apple Computer Australia Pty Ltd v Mekrizis

Case [2003] NSWSC 126 11 March 2003

Unjust Enrichment

Breach of Contract

Misrepresentation

Unconscionable Conduct

Contract Law

Commercial Law

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Reported Decision:
(2003) 44 ACSR 518

Supreme Court

CITATION: Apple Computer Australia Pty Ltd v George Mekrizis and Ors [2003] NSWSC 126 revised - 11/03/2003

HEARING DATE(S): 24, 26, 27 and 28 June 2002
1, 2, 3, 4, 5 and 9 July 2002
26 and 30 August 2002
20 September 2002
17, 22 and 25 October 2002
15, 22, 25, 26, 27 and 29 November 2002

JUDGMENT DATE:
11 March 2003

JURISDICTION:
Equity Division
Commercial List

JUDGMENT OF: Bergin J

DECISION: See par [410].

CATCHWORDS: [GUARANTEE] - Whether the Guarantee was unjust within the meaning of that term in the Contracts Review Act 1980 (NSW) - Substantive and procedural injustice - Whether the Guarantors are entitled to a reduction in amount guaranteed by reason of: (a) receipts from other guarantors - (b) alleged prejudicial conduct by creditor - and (c) by reason of provisions of A New Tax System (Goods and Services Tax) Act 1999 (Cth) - [FRANCHISE] - Whether agreements were franchise agreements - Definition of franchise agreement under Franchising Code of Conduct - Duty of disclosure - Consideration of section 51AC of the Trade Practices Act 1974 (Cth) - [MISLEADING OR DECEPTIVE CONDUCT] - Whether the plaintiff made certain representations or whether representations should be implied - Whether representations were misleading or deceptive - Whether reliance was placed on representations to enter into Merger

LEGISLATION CITED: A New Tax System (Goods and Services Tax) Act 1999 (Cth)
Contracts Review Act 1980 (NSW)
Conveyancing Act 1919 (NSW)
Fair Trading Act 1987 (NSW)
Trade Practices Act 1974 (Cth)

CASES CITED: Agro Holdings Ltd v Flexi-Coil (Australia) Pty Ltd [1999] FCA 1658, unreported, Nicholson J, 26/11/1999
Ankar Proprietary Limited v National Westminster Finance (Australia) Limited (1987) 162 CLR 549
Apple Computer Australia Pty Ltd v George Mekrizis and Ors [2002] NSWSC 982, unreported, Bergin J, 22/10/2002
Australian Competition and Consumer Commission v Simply No-Knead (Franchising) Pty Ltd (2000) 104 FCR 253
Behan v Obelon Pty Ltd [1984] 2 NSWLR 637
Black v The Ottoman Bank (1862) 15 Moo PCC 472; 15 ER 573
BP Refinery (Westernport) Pty Limited v Shire of Hastings (1977) 180 CLR 266
Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337
Commercial Bank of Australia Limited v Amadio & Anor (1983) 151 CLR 447
Comptroller of Stamps (Victoria) v Howard-Smith (1936) 54 CLR 614
Dobbs v National Bank of Australasia Limited (1935) 53 CLR 643
Federal Wharf Company Limited v The Deputy Federal Commissioner of Taxation (1930) 44 CLR 24
Fitzwood v Unique Goal Pty Ltd (in liq) (2001) 188 ALR 566
Holder & Anor v Commissioners of Inland Revenue [1932] AC 624
Hurley v McDonald's Australia Ltd (2000) ATPR 41-741
Je Maintiendrai Pty Ltd v Australia and New Zealand Banking Group (1985) 38 SASR 70
Riches v Westminster Bank Limited [1947] AC 390
Subway Systems Australia Pty Ltd v Thorpe [2000] QSC 099, unreported, Muir J, 28/4/2000
West v AGC (Advances) Ltd & Ors (1986)…

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 Apple Computer Australia Pty Ltd v Mekrizis

Details

AGLC: Apple Computer Australia Pty Ltd v Mekrizis [2003] NSWSC 126
Case: [2003] NSWSC 126
Decision Date: 11 March 2003

CaseChat Overview and Summary

Apple Computer Australia Pty Ltd has commenced proceedings against Mekrizis and others, seeking to enforce a guarantee provided by the defendants to secure a loan to a related entity. The defendants contend that the guarantee is void, arguing it is unjust under the Contracts Review Act 1980 (NSW) due to various factors including prejudicial conduct by the plaintiff and the impact of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Additionally, Mekrizis argues that agreements between the parties should be considered as franchise agreements, raising issues about disclosure duties under the Franchising Code of Conduct and potential misleading or deceptive conduct under the Trade Practices Act 1974 (Cth).

The court was required to determine if the guarantee was unjust within the meaning of the Contracts Review Act 1980 (NSW). This involved assessing whether the guarantee constituted a substantive or procedural injustice, and if so, whether the defendants were entitled to a reduction in the guaranteed amount due to receipts from other guarantors, alleged prejudicial conduct by the plaintiff, or the impact of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Furthermore, the court had to examine whether the agreements between the parties qualified as franchise agreements under the Franchising Code of Conduct and if there were any breaches of disclosure duties. Lastly, the court needed to decide if the plaintiff made any misleading or deceptive representations that led to the defendants entering into the agreements.

The court found that the guarantee was not unjust and thus enforceable. It held that the defendants were not entitled to a reduction in the guaranteed amount due to the reasons they cited, including the alleged prejudicial conduct and the impact of the A New Tax System (Goods and Services Tax) Act 1999 (Cth). Additionally, the court determined that the agreements were not franchise agreements under the Franchising Code of Conduct, and therefore, there were no disclosure duties breached. The court also concluded that the plaintiff did not make any misleading or deceptive representations, and the defendants did not rely on any such representations to enter into the agreements.

The court ordered Mekrizis to pay the amounts guaranteed under the guarantee, along with interest and costs. The other defendants were ordered to pay their respective amounts guaranteed, also with interest and costs. The court dismissed Mekrizis's counterclaims and any other relief sought by the defendants.

Orders