Combulk Pty Ltd v TNT Management Pty Ltd

Re: COMBULK PTY. LIMITED
And: TNT MANAGEMENT PTY. LIMITED
No. G569 of 1992
FED No. 126
Number of pages - 20
Principal and Agent - Trade Practices
(1993) 113 ALR 214
(1993) 41 FCR 59

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Neaves(1), Beaumont(1) and Burchett(1) JJ.

CATCHWORDS

Principal and Agent - agent acting in own interest does not bind the principal where third party had notice.

Trade Practices - representation - misleading and deceptive conduct - whether conduct of agent was conduct of principal.

Trade Practices Act 1974, ss.52(1), 84(2).

Companies (Vic.) Code s.68A(3)(c) and (d)

Lysaght Bros. and Co. Ltd. v. Falk (1905) 2 CLR 424.

Trade Practices Commission v. Queensland Aggregates Pty. Ltd. (No. 3) (1982) 61 FLR 52.

HEARING

SYDNEY, 22 February 1993

#DATE 12:3:1993

Counsel and Solicitors for Appellant: Mr A.S. Martin instructed by

Townsend and Partners

Counsel and Solicitors for Respondent: Mr W.H. Nicholas QC with

Mr M.A. Pembroke instructed by Ebsworth and Ebsworth

ORDER

THE COURT ORDERS:

Appeal dismissed, with costs.

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

JUDGE1

INTRODUCTION

NEAVES, BEAUMONT AND BURCHETT JJ. This is an appeal from orders made by Einfeld J. dismissing a claim for damages made in proceedings alleging contraventions of ss.52(1) and 53(g) of the Trade Practices Act 1974 ("the Act"). (See (1992) 37 FCR 45).

1. By its amended statement of claim, the appellant, Combulk Pty. Limited, alleged that, by letter dated 28 August 1987, the respondent, TNT Management Pty. Limited -
   

"by its agent and employee one Walter Gardin, Manager, Resources and Development, Latrobe Valley" -

represented to Dr. Bowman Irani, Combulk's managing director and principal shareholder, that:

(i) The respondent, and other members of its group of companies, carried on the business of bulk loading of goods into ships;

(ii) all of the bulk loadings into ships effected by the respondent or by its group would be carried out by utilising a loading system known as the "Rocon" system;

(iii) the approximate loading needs of the respondent and its group in the period from 1988 to 1995, together with the rates of remuneration offered to Combulk, would be as specified in the letter. (The terms of the letter are set out below.)

1. Combulk alleged that, at the time, the respondent knew or ought to have known that Combulk was proposing to acquire the Rocon loading system for use at ports in the State of Victoria; that, in reliance upon the representations, Dr. Irani caused Combulk to be incorporated on 31 August 1987; and that in further reliance upon the representations, Combulk exercised an option to purchase a Rocon loading system and took certain other action.

2. It was then alleged that, contrary to the provisions of s.52(1) of the Act, the making of the representations alleged was misleading or deceptive conduct in that:
   

"(i) the respondent and other companies in the TNT group of companies did…