Bluehive Pty Ltd v Dukemaster Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Bluehive Pty Ltd v Dukemaster Pty Ltd [2000] FCA 1307

TRADE PRACTICES – misleading or deceptive conduct in contravention of s 52 of Trade Practices Act 1974 (Cth) – first applicant leased premises in food court in retail complex – whether particular representations made by respondent – whether representations misleading or deceptive – whether first applicant relied upon representations – assessment of damages under s 82 of Act – whether first applicant responsible for loss or damage sustained – whether representations resulted in loss of a commercial opportunity – whether sale of different business owned by first applicant at loss compensable.

CONTRACT – “understanding” reached between parties – terms of understanding reduced to writing – incorporation of earlier document – whether constitutes legally binding contract.

Trade Practices Act 1974 (Cth) ss 52, 82

Ting v Blanche (1993) 118 ALR 543 at 552 referred to
Sykes v Reserve Bank of Australia (1999) 21 ATPR 41-699 at 42,902-42,903 referred to

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 223 referred to
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 197 referred to
Yorke v Lucas (1985) 158 CLR 661 at 666 referred to
Gould v Vaggelas (1985) 157 CLR 215 referred to
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525 referred to
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 referred to
Argy v Blunts and Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 referred to
Trentham (G Percy) Ltd v Archital Luxfer Ltd [1993] 1 Lloyds Rep 25 at 27 referred to
Foxtel Management Pty Ltd v Seven Cable Television Pty Ltd [2000] FCA 1159 at pars 130-131 and 143-146 referred to
Masters v Cameron (1954) 91 CLR 353 referred to
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 355-6 applied
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 referred to
Browne v Dunn (1893) 6 R 67 referred to

BLUEHIVE PTY LTD (ACN 073 073 300) and GAN HOLDINGS PTY LTD (ACN 080 258 635) v DUKEMASTER PTY LTD (ACN 050 275 226)

VG731 of 1998

WEINBERG J
15 SEPTEMBER 2000
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VG 731  OF 1998

BETWEEN:

BLUEHIVE PTY LTD (ACN 073 073 300)
FIRST APPLICANT

GAN HOLDINGS PTY LTD (ACN 080 258 635)
SECOND APPLICANT

AND:

DUKEMASTER PTY LTD (ACN 050 275 226)
RESPONDENT

JUDGE:

WEINBERG J

DATE OF ORDER:

15 SEPTEMBER 2000

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.There be judgment for the first applicant in the sum of $315,095.94.

2.There be judgment for the second applicant in the sum of $32,685.13.

3.Interest on the sums awarded pursuant to orders 1 and 2 be allowed pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) to be calculated in accordance with the provisions of the Penalty Interest Rates Act 1983 (Vic), such…

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Details
Case
[2000] FCA 1307
Decision Date

CaseChat Overview and Summary

The case of Bluehive Pty Ltd v Dukemaster Pty Ltd involved a dispute between two companies, Bluehive Pty Ltd and Dukemaster Pty Ltd. Bluehive, the first applicant, sought damages for breach of contract and estoppel, while Dukemaster, the respondent, denied the claims and filed a cross-claim. The second applicant, Mr. Hii, also sought damages for breach of contract and estoppel. The Federal Court of Australia was tasked with resolving the issues presented by the conflicting evidence and testimonies of the parties. The primary legal issue before the court was whether a binding contract was formed between the parties regarding the lease of a retail space. The court had to determine the validity of the representations made by Mr. Gan, Dukemaster's representative, to Mr. Hii and Mr. Cook, Bluehive's representatives, during their meeting on 21 August 1996. The court needed to assess the credibility of the testimonies of both parties and decide whether a contract was indeed formed based on the discussions held during the meeting. In its decision, the court found that a binding contract was formed between the parties. The court accepted Mr. Cook's evidence that the meeting had indeed taken place and that Mr. Gan had made representations regarding the expected turnover of the proposed business. The court also accepted Mr. Hii's evidence that Mr. Gan had suggested that Brashs, a gaming company, could occupy a part of the proposed premises. The court found that the contract was formed based on the representations made by Mr. Gan during the meeting, and Dukemaster was held liable for breach of contract and estoppel. The court awarded damages to Bluehive and Mr. Hii, and dismissed Dukemaster's cross-claim. The court also ordered Dukemaster to pay the costs of the application and cross-claim.

Orders

Orders of the court

1. There be judgment for the first applicant in the sum of $315,095.94.

2. There be judgment for the second applicant in the sum of $32,685.13.

3. Interest on the sums awarded pursuant to orders 1 and 2 be allowed pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) to be calculated in accordance with the provisions of the Penalty Interest Rates Act 1983 (Vic), such interest to be calculated from 23 December 1998.

4. The respondent’s cross-claim be dismissed.

5. The respondent pay the applicants’ costs of and incidental to this application, and the first applicant’s costs of the cross-claim.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Mr Hii said that Mr Gan had been in his office only once on 21 August 1996. He strongly rejected Mr Gan’s claim that he had subsequently returned to Mr Hii’s office for further discussions. He said that he had not seen Mr Gan again, after 21 August 1996, until about March or April 1997.Mr Cook’s evidence Mr Cook said that he met Mr Gan at the offices of Dukemaster on 21 August 1996. He could not remember when the meeting took place, but he did recall that it had been organised by Mr Soon. The meeting had gone for about 35-40 minutes. Mr Cook said that Mr Soon began by indicating that, in his view, the space which Shop 5 would occupy would be well suited to Italian cuisine. Mr Gan had then spoken of his own background, and of his father’s fourteen food outlets in various food courts throughout Melbourne. Mr Cook said that after listening to Mr Gan for some time, he had asked him “Well, if you’re going to do this, what sort of turnover would you expect?”. Mr Gan had replied that he would expect, in the early days, to generate at least $8,000 per week, rising to $10,000 per week in a reasonably short period of time. Mr Cook said that the meeting had then ended, and Mr Gan and Mr Soon had departed. Mr Cook said he spoke to Mr Hii for a time and then turned his attention to other matters. Mr Cook emphatically denied having accompanied Mr Gan or Mr Sayers on a tour of the Centre on that day. Indeed, he denied having met or spoken to Mr Sayers on that day. He said that he could not recall have mentioned a bistro or gaming area. He denied having discussed the types of shops that would occupy the retail section of the Centre. He denied having mentioned Brashs as a prospective tenant. He denied having discussed with anyone the likely turnover of Shop 5. He said that the only time turnover was mentioned was when Mr Gan predicted, in answer to Mr Cook’s question, that the shop would generate $8,000 to $10,000 per week. Mr Cook denied having said anything about the number of seats in the food court or what income each seat would generate. In cross-examination Mr Cook’s attention was drawn to Mr Gan’s letter of offer dated 22 August 1996. He was reminded that Mr Gan had offered a gross rental of $55,000 per annum in that letter. He was asked if he could explain how that figure had been arrived at if the matter of rent had not been mentioned during the course of the meeting. He agreed that the figure of $55,000 per annum offered by Mr Gan happened to coincide with the figure which had been recommended as the appropriate rental for Shop 5 by the real estate agents advising Dukemaster. He then acknowledged that, logically, this figure must have been mentioned during the course of the meeting. He maintained, however, that he could not recall that having happened. Importantly, Mr Cook could provide no explanation as to how the “Percentage Rent” of “10% of Annual Turnover above $780,000”, offered by Mr Gan, had been arrived at, and incorporated into that letter of offer.Factual findings regarding the meeting of 21 August 1996

Decision

Reasons for decision

WEINBERG J

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Ratio Decidendi

Legal Principle Established

Established by: WEINBERG J

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