Bartercard Ltd v Myallhurst Pty Ltd

SUPREME COURT OF QUEENSLAND

CITATION:

Bartercard Ltd v Myallhurst P/L & Anor [2000] QCA 445

PARTIES:

BARTERCARD LTD ACN 050 542 544
(plaintiff/respondent)
v
MYALLHURST PTY LTD ACN 051 094 387
(first defendant/appellant)
DAVID KHOURY
(second defendant/appellant)

FILE NO/S:

Appeal No 9273 of 1999
DC No 203 of 1997

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

District Court at Brisbane

DELIVERED ON:

27 October 2000

DELIVERED AT:

Brisbane

HEARING DATE:

8 August 2000

JUDGES:

Davies and Thomas JJA, Ambrose J
Separate reasons for judgment of each member of the Court, each concurring as to the order made

ORDER:

Appeal dismissed with costs to be assessed.

CATCHWORDS:

CONTRACTS – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – PENALTIES AND LIQUIDATED DAMAGES – GENERAL PRINCIPLES - respondent operated business facilitating trade bartering between members – appellant company’s membership terminated in circumstances where it had a negative trade dollar balance – whether contractual provision requiring payment of negative trade dollar balance in actual currency amounted to a penalty – where appellant received goods and services of substantial value – whether windfall to respondent – whether 30 day period for trading out of debt inadequate – genuine pre-estimate of the loss when precise estimation impossible

Acron Pacific Limited v Offshore Oil NL (1985) 157 CLR 514, cited
AMEV-UDC Finance Ltd v Austin (1986) 162 CLR 170, considered
Campbell Discount Co v Bridge [1962] AC 600, cited
CRA Ltd & Anor v New Zealand Goldfields Investments & Anor [1989] VR 873, considered
Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd [1915] AC 79, considered
Esanda Finance Corporation Ltd v Plessnig (1988) 166 CLR 131, cited
Export Credits Guarantee Department v Universal Oil Production Co [1983] 2 All ER 205, cited

O’Dea v Allstates Leasing System (WA) Pty Ltd (1983) 152 CLR 359, considered

COUNSEL:

M D Martin for the appellants
A J H Morris QC for the respondent

SOLICITORS:

Morgan Conley for the appellants
Legal Services Bartercard Ltd for the respondent

1. DAVIES JA:  I have had the advantage of reading the reasons for judgment of Thomas JA.  I agree with him that the appeal must be dismissed for the reasons which he gives and for the additional reasons referred to below.  There are two related matters upon which I would like to make some further comments.

1. The first is that this case, on one view, illustrates the arbitrary nature of the doctrine of penalties as now understood.  It now appears to be accepted that where a right to terminate a contract and to receive a payment arises on the happening of any of a number of events some only of which are breaches of contract[1] it is only where the termination is in consequence of breach that the question of penalty can arise.[2]  It may also be accepted that, in the present case, it was terminated for breach;  that is clear from the respondent's letters of 7 May and 4 September 1996.  But it…