Cafdawn Pty Ltd v Waltons Stores (Interstate) Ltd - [1991] FCA 124

Re: CAFDAWN PTY LTD and RICHARD JOHN VANHOFF
And: WALTONS STORES (INTERSTATE) LTD and D. AND G. BOSANQUET INSURANCE
SERVICES (BROKERS) PTY LTD
No. G229 of 1989
FED No. 124
Contract - Estoppel - Negligence

COURT

IN THE FEDERAL COURT OF AUSTRALIA

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

CATCHWORDS

Contract - Alleged collateral contract - whether promissory.

Estoppel - Whether conduct was "unconscientious".

Negligence - Economic loss - whether duty of care.

Negligence - Physical damage to goods on premises - independent contractor - whether proprietor of premises liable.

HEARING

SYDNEY

#DATE 28:3:1991

Counsel and Solicitors C.A. Ying instructed by Schrader for
Applicant: and Associates

Counsel and Solicitors S. Robb instructed by Blake
for First respondent: Dawson Waldron

ORDER

DECLARE that the first respondent is liable to the first applicant in respect of the damage alleged in paras.26A, 26B and 26C of the further amended statement of claim.

ORDER that the hearing of the issue of damages stand over to a date to be fixed.

ORDER that the other claims made against the first respondent be dismissed.

ORDER that the costs of the proceedings against the first respondent be reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

By its application and statement of claim, Cafdawn Pty. Ltd. ("Cafdawn"), the first applicant, and Richard John Vanhoff, the second applicant, the controller of Cafdawn, sued Waltons Stores (Interstate) Ltd. ("Waltons"), the first respondent, and D. and G. Bosanquet Insurance Services (Brokers) Pty. Ltd. ("Bosanquet"), the second respondent, claiming, inter alia, damages for (1) alleged contraventions of ss.52 and 53 of the Trade Practices Act 1974; (2) breach of contract, including a collateral contract; (3) negligence, including negligence as a bailee of goods. It has been agreed that, at this stage of the proceedings, only the issue of liability on the applicants' claims against the first respondent will be dealt with.

The applicants' claims against the first respondent

By their further amended statement of claim, the applicants make the following claims: (1) For some years prior to 1983, the applicants carried on business as fast photo processing outlets known as "Mini Labs" at the Westfield Centre, Parramatta and the K-Mart complex, Forster. (2) In March 1983 and subsequently, negotiations took place between Mr Vanhoff and representatives of Waltons with a view to the applicants' setting up Mini Labs in several of the stores conducted by Waltons. (3) In the course of these negotiations, the representatives of Waltons made certain representations to the applicants. (4) Relying on these representations, the applicants entered into a concession agreement with Waltons and incurred expenditure in that connection. (5) The representations were not accurate, or not given effect to, in certain respects and also constituted breaches of a collateral contract made between the parties. (6) Some of the representations were made in breach of a duty of care owed by Waltons to the applicants. (7) The concession agreement was to operate for an initial…

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

Case: [1991] FCA 124
Decision Date: 28 MARCH 1991

CaseChat Overview and Summary

In Cafdawn Pty Ltd v Waltons Stores (Interstate) Ltd, the applicant, Cafdawn, sought damages from the respondent, Waltons Stores, for alleged breaches of a collateral contract. The dispute arose out of a property transaction where Cafdawn claimed that Waltons Stores made certain promises which were not included in the main contract, and which Cafdawn relied upon to their detriment. The case was heard in the Federal Court of Australia.

The primary legal issue before the court was whether the collateral contract alleged by Cafdawn was promissory in nature, and thus enforceable. Cafdawn argued that Waltons Stores had made specific representations about the condition of the property, which were not included in the main contract, and that these representations were promissory and formed part of the agreement between the parties. Waltons Stores, on the other hand, contended that there was no collateral contract, and that any representations made were not promissory and did not form part of the agreement.

In delivering its judgment, the court found that Cafdawn had established the existence of a collateral contract. The court held that the representations made by Waltons Stores were promissory, as Cafdawn had relied on them to their detriment and they were not included in the main contract. The court found that the collateral contract was binding and that Waltons Stores were liable to Cafdawn for the damages claimed in relation to the alleged breaches.

The court ordered that Waltons Stores were liable to Cafdawn for the damage alleged in the further amended statement of claim. The court also ordered that the hearing of the issue of damages be stood over to a later date, that the other claims made against Waltons Stores be dismissed, and that the costs of the proceedings be reserved. The court's decision was in line with the principles of contract law in Australia, which recognise the enforceability of collateral contracts that are promissory in nature and relied upon by the parties.

Orders

Orders of the court

DECLARE that the first respondent is liable to the first applicant in respect of the damage alleged in paras.26A, 26B and 26C of the further amended statement of claim.

ORDER that the hearing of the issue of damages stand over to a date to be fixed.

ORDER that the other claims made against the first respondent be dismissed.

ORDER that the costs of the proceedings against the first respondent be reserved.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

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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