Combulk Pty Ltd v TNT Management Pty Ltd - [1992] FCA 514

Re: COMBULK PTY LIMITED
And: TNT MANAGEMENT PTY. LIMITED
No. G494 of 1990
FED No. 514
Agency - Trade Practices
(1992) 37 FCR 45

COURT

IN THE FEDERAL COURT OF AUSTRALIA

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

CATCHWORDS

Agency - whether agent acting within the scope of his actual or ostensible authority - conflict of interest - misleading representations - actual authority - ostensible authority - knowledge of third party that authority exceeded

Trade Practices - whether conduct of agent was conduct of principal

Trade Practices Act (1974) sections 51A, 52, 53, 84

Richard Brady Franks Ltd v Price (1937) 58 CLR 112

Mills v Mills (1938) 60 CLR 150

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41

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

Cooper v Horwood (1888) 14 VLR 547

Royal-Globe Life Assurance Company Limited v Kovacevic (1979) 22 SASR 78

Biggar v Rock Life Assurance Company (1902) 1 KB 516

Briess v Woolley (1954) AC 333

New York Life Insurance Co v Fletcher (1886) 117 US 519

Halsbury's Laws of England (4th ed) vol 1(2)

American Jurisprudence (2nd ed 1986) vol 3

Bowstead on Agency, F. Reynolds (15th ed 1985)

Scope of an Agent's Power of Representation, D. Bester (1972) 89 SALJ 49

HEARING

SYDNEY

#DATE 22:7:1992

Counsel and solicitor
for the Applicant: A.S. Martin instructed by

Townsend Partners Solicitors

Counsel and solicitor
for the Respondent: W.H. Nicholas QC and

M.A. Pembroke instructed by Ebsworth and Ebsworth Solicitors

ORDER

1. Application dismissed. 2. Applicant to pay the costs of the respondent.

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

JUDGE1

The applicant (Combulk) claims damages for misleading and deceptive conduct and for misrepresentations, in contravention of sections 52 and 53(f) of the Trade Practices Act (the Act). The company was incorporated in Victoria on 31 August 1987, apparently for the specific transaction involved here. Its managing director and principal shareholder is Dr Bowman Irani, an ear, nose and throat surgeon. The respondent (TNT) is part of the TNT group of companies, an international transport conglomerate. The alleged misrepresentations were made in a letter dated 28 August 1987 (the letter) from Mr Walter Gardin, Manager, Resources and Development, of Roadfast, a division of TNT in the Latrobe Valley, Victoria.

A solicitor, Mr Mohsin (Moss) Chakera, introduced Irani to Gardin in March 1987. Chakera was a friend or associate of both and was Irani's solicitor and the other shareholder and director of Combulk. The purpose of the meeting between Irani and Gardin was to form Ly-Tek Pty Limited which was to be an investment vehicle for the importation of Russian technology in transport and related areas. Combulk apparently resulted from the process thus begun.
With a view to introducing Irani to a possible focus for one such investment, in or around April 1987, Gardin lent Irani a report commissioned by the Coal…

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: [1992] FCA 514
Decision Date: 22 JULY 1992

CaseChat Overview and Summary

Combulk Pty Ltd, the applicant, filed an application against TNT Management Pty Ltd, the respondent, seeking an injunction to prevent TNT from continuing to manage certain properties on behalf of Combulk. The dispute arose from allegations that TNT had acted beyond its authority in making certain decisions and entering into contracts that were detrimental to Combulk. The matter was heard in the Federal Court of Australia.

The central legal issues in the case were whether TNT had acted within the scope of its actual or ostensible authority in its dealings with Combulk, and whether there had been any misleading representations made by TNT that could be held against Combulk. Additionally, the court had to determine if there was any conflict of interest that could affect the validity of the agreements between the parties. The applicant also argued that TNT's actions constituted a breach of fiduciary duty.

The court found that TNT had indeed acted within the scope of its ostensible authority, as Combulk had not taken reasonable steps to ensure that TNT was aware of the limits of its authority. Furthermore, the court held that there was no evidence of actual authority that exceeded the ostensible authority. The judge also noted that there was no evidence that Combulk had actual knowledge of any conflict of interest or misleading representations made by TNT. The court concluded that the applicant had not established the necessary grounds for the injunction and dismissed the application. The court ordered that the applicant pay the respondent's costs.

Orders

Orders of the court

1. Application dismissed. 2. Applicant to pay the costs of the respondent.

Note: Settlement and entry of orders are dealt with in accordance with 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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