Caple v All Fasteners (WA) (A Firm)

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FEDERAL COURT OF AUSTRALIA

Caple v All Fasteners (WA) (A Firm) [2005] FCA 1558

TRADE PRACTICES – appeal – misleading and deceptive conduct – accessorial liability – alleged representations in Business Report and Purchase Agreement – whether primary finding of inferred actual knowledge in error of law – rule in Browne v Dunn not assist appellant – issues of causal connection unnecessary to decide – absence of evidence that representations were put in cross-examination – absence of foundation for inferences – no basis of direct liability

Fair Trading Act 1985 (WA) ss 4, 10
Trade Practices Act 1974 (Cth) ss 52, 75B, 82, 87

All Fasteners (WA) v Grant Caple Pty Ltd & Ors [2003] FMCA 430 referred to
Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation [1983] 1 NSWLR 1 cited
Arktos Pty Ltd v Idyllic Nominees Pty Ltd [2004] FCAFC 119 distinguished
Browne v Dunn (1893) 6 R 67 considered
Commercial Union Assurance Company of Australia Ltd v Ferrcom (1991) 22 NSWLR 389 distinguished
Costa Vraca Pty Ltd v Derrigan Weed and Pest Control Pty Ltd (1998) 155 ALR 714 referred to
Doney & Anor v Palmview Sawmill Pty Ltd & Ors [2005] QSC 62 referred to
Henville v Walker (2001) 206 CLR 459 referred to
Jones v Dunkel (1959) 101 CLR 298 considered
Micarone v Perpetual Trustees [1999] SASC 265 distinguished
Quinlivan v Australian Competition & Consumer Commission [2004] FCAFC 175 followed
Rinbridge Marketing Pty Ltd v Walsh [2000] FCA 1738 cited
Sutton v A J Thompson Pty Ltd (in liq) & Ors (1987) 73 ALR 233 referred to
Trade Practices Commission v Mobil Oil Australia Ltd (1984) 3 FCR 168 considered
Yorke v Lucas (1985) 158 CLR 661 followed

MICHELLE CAPLE v ALL FASTENERS (WA) (A FIRM)
WAD 13 of 2005

NICHOLSON J
4 NOVEMBER 2005
PERTH


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 13 OF 2005

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

MICHELLE CAPLE
APPELLANT

AND:

ALL FASTENERS (WA) (A FIRM)
RESPONDENT

JUDGE:

NICHOLSON J

DATE OF ORDER:

4 NOVEMBER 2005

WHERE MADE:

PERTH

THE COURT ORDERS THAT:

1.The appeal be allowed.

2(a)Order 1 made by Federal Magistrate McInnis dated 10 December 2004 be set aside.

(b)     Orders 3 and 4 be set aside so far as they relate to the appellant.

3.In lieu of Order 1 it is ordered:

(a)the respondent’s amended application in respect of the appellant be dismissed.

(b)the respondent pay the appellant’s costs of the application and the appeal, to be taxed.

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


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 13 OF 2005

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:

MICHELLE CAPLE
APPELLANT

AND:

ALL FASTENERS (WA) (A FIRM)
RESPONDENT

JUDGE:

NICHOLSON J

DATE:

4 NOVEMBER 2005

PLACE:

PERTH

REASONS FOR JUDGMENT

  1. This is an appeal from a judgment of a Federal Magistrate given on 10 December 2004.…

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Details
Case
[2005] FCA 1558
Decision Date

CaseChat Overview and Summary

Caple v All Fasteners (WA) (A Firm) is a case that involved a dispute between the parties regarding certain representations made in relation to the supply of nails from Thailand and the retirement of a sales representative. The case was heard in the Federal Court of Australia. The appellant, Caple, sought to appeal against the decision of the Federal Magistrate that certain misrepresentations had been made by the respondents, All Fasteners. The central legal issues in the case were whether the appellant had actual knowledge of the misrepresentations and their falsity. The court examined the evidence provided by the parties, including the affidavits and the Business Report, to determine whether there was sufficient evidence to support the findings of the Federal Magistrate.

The court found that there was insufficient evidence to support the findings of the Federal Magistrate regarding the Thai nails representation and the retirement of the sales representative. The court noted that there was no evidence that the appellant was aware of the contents of the Business Report or that she had actual knowledge of the misrepresentations and their falsity. The court also found that there was no evidence that the appellant had been told that the sales representative was retiring or that he would be joining a competitor. The court concluded that the appellant's dissatisfaction with the quality of the product from Thailand did not establish that she had actual knowledge of the misrepresentation and its falsity.

Based on the above findings, the court allowed the appeal and set aside the orders made by the Federal Magistrate. The court dismissed the respondents' amended application in respect of the appellant and ordered the respondents to pay the appellant's costs of the application and the appeal.

Orders

Orders of the court

1. The appeal be allowed.

2(a) Order 1 made by Federal Magistrate McInnis dated 10 December 2004 be set aside.

(b) Orders 3 and 4 be set aside so far as they relate to the appellant.

3. In lieu of Order 1 it is ordered:

(a) the respondent’s amended application in respect of the appellant be dismissed.

(b) the respondent pay the appellant’s costs of the application and the appeal, to be taxed.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

It will be recalled from the above examination of the pleadings that the Thai nails representation in 6.9 was particularised as being contained in the Business Report. The only relevant representation in the Business Report was that appearing under item 24 ‘Details of Suppliers’ where it was stated:‘The vendor has acquired a source of nails and staples from Thailand and currently holds stock. This import offers significantly better profit margins than from the above suppliers, and can be used to either replace existing suppliers or development new markets. The vendor will retain the agency rights and will be prepared to continue supplying Allfasteners (WA) Pty Ltd.’There was no evidence that the appellant was aware of that wording or had seen the Business Report. Appellant’s affidavit evidence In his reasons at [85] his Honour said it was clear from the affidavit evidence of the appellant that she had been told that the product from Thailand was ‘rubbish’ by Mr McCaughan. That was sourced as being a reference to par 22.2 of the appellant’s affidavit sworn 19 May 2003 where the appellant referred to the affidavit of Mr McCaughan sworn 20 February 2003 and stated:‘22.2Ron McCaughan did, on at least one occasion tell me that he thought that some of the product from Thailand was rubbish. I do not recall speaking to the Second Respondent about it. I believe from discussions with the Second Respondent and with our son Travers, that Travers spoke to the Second Respondent about the product from Thailand, and that the Second Respondent told Travers that the product would work in all new nail guns although not in some of the old nail guns.’I agree with the submission for the appellant that this evidence does not itself provide a foundation for the Thai nails representation in 6.9 nor does it establish that the appellant had actual knowledge of such representation having been made and actual knowledge of its falsity. Dissatisfaction with the product The appellant’s evidence in her affidavit in response to Mr McCaughan’s affidavit was also that she believed from speaking to Mr Caple that on many occasions Mr McCaughan expressed his dissatisfaction about the product which was brought in from Thailand. Her evidence does not contain any evidence concerning the date on which Mr Caple had spoken to her nor evidence of actual knowledge of the making of the representation and its falsity.Credit note The next aspect relied upon by his Honour was that Mr McCaughan confirmed he had told the appellant that Mr Caple should get a credit note for the product from Thailand. This was a reference to par 10 of the affidavit of Mr McCaughan sworn on 20 February 2003 in which he said:‘In either late 2001 to early 2002, product from Thailand arrived at All Fasteners’ Midvale factory. When I saw the product it appeared some of the nails were ok, but the other product was rubbish. I told [the appellant] she should call Grant in Thailand to get a credit note for it.’

Decision

Reasons for decision

NICHOLSON J
As a consequence of par 6A.3 of the re-amended statement of claim, the representation in par 6.17 of the statement of claim is said to have been made by Mr Caple and Mr Hall in meetings with Mr McKenzie of the appellant during May and June 2002. As has been seen there is no evidence of the appellant having been present at or having knowledge of what transpired at such meetings. Conclusion on these representations It follows that there was no foundation from which the inferences made by his Honour at [85] – [87] of his reasons in relation to the Thai nails representations. The grounds of appeal directed to that issue therefore succeed.THE McCAUGHAN REPRESENTATION In the reasons of his Honour at [75] he said that the McCaughan representation was arrived at by a combination of the Business Report, the affidavit of Mr Hall sworn on 2 May 2003 and the background to which he had referred. In relation to the Business Report, as has been seen, there is no evidence that the appellant actually knew of the contents of the representations made in it nor actually knew of their falsity. The relevant portion of Mr Hall’s affidavit appears in par 15(e). There, Mr Hall stated that when he had met with the appellant and Mr Caple on 4 April 2002 he was told that the company’s current sales representative was in his 60s and retiring on 30 June 2002. At par 34 of the same affidavit he stated that he had passed on information which he had received from the company either through Mr Caple, the appellant, Travers Caple or the company’s accountants, including that the sales representative would be leaving the business to retire and would not be continuing in an active sales position in the industry or otherwise. At par 46 he said that the appellant had stated that ‘we told Glenn McKenzie about the sales rep prior to settlement’ and that he was certain these were her actual words. In her affidavit sworn on 19 May 2003 the appellant stated that it had not been said that the company’s then current sales representative (Mr McCaughan) was in his 60s as he was at that time still in his 50s. She also stated that she had no recollection of Mr Hall being told that Mr McCaughan was retiring and this was not said to Mr Hall in her presence. Under cross-examination Mr Hall stated that Mr Caple stated those things to him at the meeting on 4 April 2002. There is no evidence that at the date of the meeting on 4 April 2002 the appellant had been told that Mr McCaughan was to join a competitor. In cross-examination she had no recollection of Mr Hall being told that Mr McCaughan was retiring. The evidence simply does not disclose whether before the meeting on 4 April 2002 the appellant had become aware of Mr McCaughan’s intention to leave Grant Caple Pty Ltd and join a competitor. Mr McCaughan’s evidence was that he communicated his alleged intention to Mr Caple and Travers Caple early in April 2002. There was no evidence that he communicated his intention to the appellant. He alleged he met them to give one month’s notice to enable him to commence work for another company on the first Monday in May 2002. The first Monday in that month was 6 May 2002, one month prior thereto being 5 April 2002. The meeting took place on 4 April 2002.

Ratio Decidendi

Legal Principle Established

Established by: NICHOLSON J

Full text does not contain this section.