Civic Video Pty Ltd v Paterson - [2016] WASCA 69

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: CIVIC VIDEO PTY LTD -v- PATERSON [2016] WASCA 69

CORAM: McLURE P
NEWNES JA
CORBOY J

HEARD: 15 DECEMBER 2015 & LAST SUBMISSIONS ON
8 FEBRUARY 2016

DELIVERED : 27 APRIL 2016

FILE NO/S: CACV 142 of 2014

BETWEEN: CIVIC VIDEO PTY LTD
Appellant
AND
ROBERT HENRY PATERSON
First Respondent
MALCOLM THOMPSON
Second Respondent
BARBARA THOMPSON
Third Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :CHANEY J
Citation  :CIVIC VIDEO PTY LTD -v- PATERSON [No 3] [2014] WASC 321
File No  :CIV 2144 of 2008

Catchwords:

Tort - Inducing breach of contract - Relevant principles - First respondent purchased business of second and third respondents - Second and third respondents in breach of franchise agreement with appellant in selling business without consent - Whether trial judge erred in finding that first respondent did not intend to induce the breach

Contract - Breach of franchise agreements by second and third respondents - Claim by appellant for loss of bargain damages - Damages assessed as loss of chance that franchise fees would have been received by appellant - Whether error in assessing damages

Costs - Calderbank offer - Joint offer by respondents - Offer rejected - Whether appellant worse off - Appellant's position to be considered in respect of respondents separately - Whether relevant that Calderbank offer closer to outcome than appellant's claim

Legislation:

Nil

Result:

Appeal against dismissal of claim against first respondent dismissed
Appeal against assessment of damages payable by second and third respondents allowed
Assessment of damages payable by second and third respondents remitted to trial judge

Category: B

Representation:

Counsel:

Appellant:     Mr I R Pike SC
First Respondent          :     Mr A Metaxas
Second Respondent      :     Mr J Garas
Third Respondent        :     Mr J Garas

Solicitors:

Appellant:     Marque Lawyers
First Respondent          :     Metaxas & Hager
Second Respondent      :     Your Legal HQ
Third Respondent        :     Your Legal HQ

Case(s) referred to in judgment(s):

Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd (1995) 58 FCR 26
Boase v Seven Network (Operations) Ltd [2005] WASC 269
Civic Video Pty Ltd v Paterson [No 3] [2014] WASC 321 (S)
Civic Video Pty Ltd v Paterson [No 3] [2014] WASC 321
Daebo Shipping Co Ltd v The Ship Go Star [2012] FCAFC 156; (2012) 207 FCR 220
Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472
Fightvision Pty Ltd v Onisforou [1999] NSWCA 323; (1999) 47 NSWLR 473
Fox v Percy (2003) 214 CLR 118
LED Technologies Pty Ltd v Roadvision Pty Ltd [2012] FCAFC 3 (2012) 199 FCR 204
Leeder v The State of Western Australia [2008] WASCA 192
McKay v Commissioner of Main Roads [No 7] [2011] WASC 223 (S)
Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359
OBG Ltd v Allan [2007] 2 WLR 920
Short v City Bank of…

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: [2016] WASCA 69
Decision Date: 27 APRIL 2016

CaseChat Overview and Summary

Civic Video Pty Ltd brought an action against Mr Paterson, Ms Bayliss, and the Thompsons, asserting claims of inducing breach of contract and breach of franchise agreements. The appellant argued that Mr Paterson had purchased the business of the Thompsons without consent, thereby breaching the franchise agreements with the appellant. The respondents argued that Mr Paterson did not intend to induce the breach, and the appellant's damages were improperly assessed. The case was heard in the Supreme Court of Western Australia.

The court needed to determine whether the trial judge erred in finding that Mr Paterson did not intend to induce the breach of the franchise agreements. The court also had to decide if the damages awarded by the trial judge for the breach of the franchise agreements were appropriate. The court needed to consider whether the appellant was worse off due to the rejection of a joint offer made by the respondents under the Calderbank procedure, and whether the appellant's position should be considered separately in respect of each respondent.

The court found that the appellant had not discharged the burden of showing that the trial judge made a factual error in finding that Mr Paterson did not intend to induce the breach of the franchise agreements. The court held that the trial judge's findings were open to him on the evidence presented and that the appellant's case against Mr Paterson was built on the mistaken assumption that the head-lease applied only to the premises of the Durlacher store, rather than the entire Durlacher Street complex. The court also found that the damages awarded by the trial judge were appropriate, as they were assessed based on the loss of chance that franchise fees would have been received by the appellant. Finally, the court held that the appellant was not worse off due to the rejection of the joint offer made by the respondents under the Calderbank procedure, and that the appellant's position should be considered separately in respect of each respondent.

The appeal was dismissed, with each party to bear their own costs.

Orders

Orders of the court

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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

Where (as here) the appellant seeks to overturn findings of fact, the onus on the appellant goes beyond merely showing that an alternative finding was available on the facts. The appellant must show that a factual error was made by the primary judge: Minister for Immigration, Local Government and Ethnic Affairs v Hamsher (1992) 35 FCR 359, 369; Leeder v The State of Western Australia [2008] WASCA 192 [84]. In addition, as Brennan, Gaudron and McHugh JJ pointed out in Devries v Australian National Railways Commission [1993] HCA 78; (1993) 177 CLR 472, a finding of fact by a trial judge, based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against - even strongly against - that finding of fact. Their Honours said:If the trial judge's finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge 'has failed to use or has palpably misused his advantage' or has acted on evidence which was 'inconsistent with facts incontrovertibly established by the evidence' or which was 'glaringly improbable' (479). (footnotes omitted) An appellant who seeks to overturn findings of fact which depend to any substantial degree upon credibility assumes a formidable burden. In this case, I am not persuaded that there is a basis upon which this court might properly interfere with the findings of fact that the appellant seeks to controvert. In my view, each of those findings was open to his Honour on the evidence. It is apparent, as senior counsel for the appellant acknowledged on the hearing of the appeal, that the appellant's case against Mr Paterson was built in no small part on the proposition that the acquisition of the head‑lease from Mr Bayliss and the acquisition of the assets of the Thompsons' two businesses were 'intertwined' transactions, occurring either simultaneously or with the latter preceding the former, as integral parts of an overall commercial strategy by Mr Paterson to exclude Civic Video from having any outlets in the Geraldton area. That proposition was rejected by the primary judge. In my respectful view, he was entitled to reject it. Before turning to his Honour's findings, I should also note that both at trial, and initially on the appeal, the proposition that the acquisitions of the head-lease and the assets of the Thompsons' two businesses were 'intertwined' appears to have been advanced by the appellant on the mistaken assumption that the head‑lease applied only to the premises of the Durlacher store, rather than, as was the case, the Durlacher Street complex, of which the premises of the Durlacher store formed only about one‑third. As senior counsel for the appellant conceded on the hearing of the appeal, the fact that the head‑lease applied to the whole complex, rather than simply the Durlacher store premises, significantly detracted from the appellant's case that the transactions were intertwined (appeal ts 6).