Bonney Forge Pty Ltd (formerly called Arvo Pty Ltd) v Press & Shear Machinery Pty Ltd - [1988] FCA 135

Re: BONNEY FORGE PTY. LIMITED (formerly called ARVO PTY. LIMITED)
And: PRESS & SHEAR MACHINERY PTY. LIMITED
No. G608 of 1986
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Foster J.(1)

CATCHWORDS

Trade Practices - misleading or deceptive conduct - alleged representations that Respondent's English principal able to construct and supply a machine to conform to the specifications and performance of a machine produced by another manufacturer - whether representations as to existing fact or future intent - application for declaration voiding agreement for sale - assessment of consequential damages.

Trade Practices Act, 1974 s. 52

HEARING

SYDNEY

#DATE 21:4:1988

Applicant: A. S. Martin, Esq.

Instructed by Messrs. Carneys.

Respondent: A. J. Meagher, Esq.

Instructed by Messrs. Blake Dawson Waldron.

ORDER

Declaration that the agreement between the applicant and the respondent of the 28th June, 1985 is void.

The respondent to pay to the applicant by way of return of deposit, damages and interest in the sum of $23,027.00.

The respondent to pay the applicant's costs of the application.

Each party to pay its own costs of the cross-claim.

JUDGE1

By its Application and Statement of Claim in these proceedings the Applicant, Bonney Forge Pty. Limited (formerly called ARVO PTY. LIMITED) ("Bonney Forge"), seeks declarations that a certain agreement entered into by it with the respondent, Press and Shear Machinery Pty. Limited ("Press and Shear"), on or about the 2nd of July, 1985 be declared void or void ab initio. It also seeks consequential damages.

The agreement was for the purchase of a machine, ultimately described in a quotation provided to the applicant by Press and Shear on the 14th June, 1985 as an "Engel Spin Collar Machine Model 8". In that quotation, the machine was further described as "generally as per Lockformer to accept maximum stock width of eight inches by 24G. Speed 40 fpm. 3/4 hp motor and electrix".
The machine was required to produce a certain product known as a "Spin Collar", an article forming a component part of certain types of air-conditioning ducting installations. The machine was not manufactured by the respondent but was purchased by it from an English manufacturing company with whom it regularly did business. That company was Engel Europa Pty. Limited ("Engel"). The evidence clearly establishes, that the production of the spin collar product was to be a critical part of the operations of the applicant, which at the time of the placing of the order in July, 1985 was about to enter into the business of providing various components for air-conditioning ducting installations. The spin collar component was to be its main product. It was, apparently, a new type of product and was to be used as a significant drawcard for the attraction of custom to the new business enterprise. There was considerable urgency in the obtaining of the machine. Agreed delivery dates would have involved the machine being delivered about the 1st October, 1985. However, this delivery date was far exceeded, the…

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.

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Details

AGLC: Bonney Forge Pty Ltd (formerly called Arvo Pty Ltd) v. Press & Shear Machinery Pty Ltd [1988] FCA 135
Case: [1988] FCA 135
Decision Date: 21 APRIL 1988

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Bonney Forge Pty Ltd, formerly known as Arvo Pty Ltd, against Press & Shear Machinery Pty Ltd, revolved around allegations of misleading or deceptive conduct in the context of a sale agreement. The applicant, Bonney Forge, sought a declaration that the agreement dated 28 June 1985 was void, along with compensation for consequential damages, arguing that the respondent had misrepresented the capability of its English principal to construct and supply a machine that would meet the specifications and performance of a machine produced by another manufacturer. The dispute centred on whether the respondent's statements were assertions of existing facts or expressions of future intent, and if they constituted misleading or deceptive conduct under the Trade Practices Act.

The court was required to determine whether the statements made by the respondent regarding the capabilities of its English principal constituted misleading or deceptive conduct. This involved examining the nature of the representations and whether they were factual assertions or expressions of intent. The court had to consider whether these statements were made with the requisite intention to mislead or deceive, and whether such conduct occurred in trade or commerce, as required by the Trade Practices Act. Furthermore, the court needed to assess the scope of any consequential damages and the appropriate remedy for the applicant.

The court concluded that the respondent's representations amounted to misleading or deceptive conduct as they were made with the intention to mislead and deceive the applicant. The statements were not mere expressions of future intent but rather assertions of existing capabilities that were not substantiated. The court found that the respondent's conduct fell within the scope of the Trade Practices Act, and thus, the agreement was void. The court ordered that the agreement be declared void, that the respondent pay the applicant a sum of $23,027.00 as return of deposit, damages, and interest, and that the respondent also pay the applicant's costs of the application. Each party was to bear its own costs of the cross-claim.

Orders

Orders of the court

Declaration that the agreement between the applicant and the respondent of the 28th June, 1985 is void.

The respondent to pay to the applicant by way of return of deposit, damages and interest in the sum of $23,027.00.

The respondent to pay the applicant's costs of the application.

Each party to pay its own costs of the cross-claim.

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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