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Dandaven v Harbeth Holdings Pty Ltd

Dandaven v Harbeth Holdings Pty Ltd

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FEDERAL COURT OF AUSTRALIA
Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955
PRACTICE AND PROCEDURE – motions for dismissal of proceedings pursuant to Federal Court of Australia Act 1976 (Cth) s 31A – alternatively for statement of claim to be struck out – Federal Court Rules Order 11 rule 16 or Order 20 rule 2 – construction of option in Contract to Lease and subsequent Deed of Lease – consideration of evidence of extrinsic material in aid of construction – common intention unilateral mistake – estoppel – equitable estoppel – breach of warranty – unconscionable conduct – ss 51AA and 51AC of Trade Practices Act 1974 (Cth) –misleading and deceptive conduct – ss 6(3) and 52 Trade Practices Act and s 10 Fair Trading Act 1987 (WA).
Federal Court of Australia Act 1976 (Cth) s 31A
Federal Court Rules 1976 (Cth) O 11 r 16, O 20, r 2
Trade Practices Act 1974 (Cth) ss 51AA and 51AC, 52, 87(1A)
Fair Trading Act 1987 (WA) s 10
Planning and Development Act 2005 (WA) s 136
Ankar Pty Ltd & Arnick Holdings Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549 cited
Australian Broadcasting Commission v Australian Performing Right Association Limited (1973) 129 CLR 99 cited
Bond v Barry (2007) 73 IPR 490 cited
Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 70 IPR 146 referred to
Codelfa Constructions Proprietary Limited v State Rail Authority (NSW) (1982) 149 CLR 337 cited
Colby Corporation Pty Ltd v Commissioner of Taxation (2008) 165 FCR 133 cited
Commonwealth Bank of Australia v ACN 000 247 601 Pty Ltd (in Liq) (formerly Stanley Thompson Valuers Pty Ltd) [2006] FCA 1416 cited
Fitzgerald v Masters (1956) 95 CLR 420 cited
Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 cited
Genovese v BGC Construction Pty Ltd [2007] FCA 923 cited
Hicks v Ruddock (2007) 156 FCR 574 cited
International Air Transport Association v Ansett Australia Holdings Ltd (2008) 242 ALR 47 cited
Jefferson Ford Pty Ltd v Ford Motor Co of Australia Ltd [2008] FCAFC 60 cited
Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd (2006) 156 FCR 1 cited
Meehan v Jones (1982) 149 CLR 571 cited
Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 cited
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 cited
Westminster Properties Pty Ltd v Comco Constructions Pty Ltd (1991) 5 WAR 191 cited
White Industries Australia Ltd v Commissioner of Taxation (2007) 160 FCR 298 cited
DANDAVEN PTY LTD AS TRUSTEE FOR THE SIGNS AHEAD TRUST and DAVID JOHN REYNOLDS AS TRUSTEE FOR THE REYNOLDS PROPERTY INVESTMENT TRUST v HARBETH HOLDINGS PTY LTD, KEVIN ERNEST HEALEY and PA (2004) PTY LTD
WAD 213 OF 2007
GILMOUR J
25 JUNE 2008
PERTH

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

WAD 213 OF 2007

BETWEEN:

DANDAVEN PTY LTD (ACN 118 333 770) AS TRUSTEE FOR THE SIGNS AHEAD TRUST
First…

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: [2008] FCA 955
Decision Date: 25 June 2008

CaseChat Overview and Summary

Dandaven v Harbeth Holdings Pty Ltd is a case that arose from a failed attempt by the applicants to purchase a business known as "Signs Ahead" from the respondents. The applicants sought to enforce a purported agreement for sale and purchase of the business and its premises. The respondents, however, challenged the applicants' claim under section 31A of the Federal Court of Australia Act 1976, arguing that the claim had no reasonable prospects of success.

The primary legal issue before the court was whether the applicants' claim had reasonable prospects of success, and if not, whether it should be dismissed under section 31A. The court had to determine whether the applicants' case was bound to fail, considering the principles of caution and the importance of allowing genuine disputes to go to trial. The respondents argued that the applicants had no reasonable prospect of proving the existence of a binding contract for the sale of the business and its premises.

In delivering the judgment, the court held that the applicants' claim did not lack reasonable prospects of success. The court drew all reasonable inferences in favour of the applicants, noting that there was a genuine dispute over the terms of the sale and the existence of a binding contract. The court found that the applicants had provided sufficient evidence to warrant a trial, and the matter could not be determined on an interlocutory basis. The court also held that the applicants' case should not be dismissed simply because there was room for doubt on a proposition of law. The court emphasised that the principles of caution and the importance of allowing genuine disputes to go to trial meant that the applicants' claim should not be dismissed.

As a result, the court dismissed the respondents' motions for summary dismissal and ordered the respondents to pay the costs associated with the motions. The applicants' claim was allowed to proceed to trial, where the merits of the case could be fully heard and determined.

Orders

Orders of the court

1. The motion of the first respondent dated 21 December 2007 and the motion of the second and third respondents dated 21 December 2007 each be dismissed.

2. The respondents pay the costs associated with the motions.

Background

Background to the litigation

Success under s 31A does not require a demonstration that the case is hopeless or bound to fail. The following principles are of general application to an application under s 31A: (a)the Court must be very cautious not to do a party an injustice by summarily dismissing proceedings;(b) the Court ought not dismiss a claim based on a predictive assessment of prospects, where it is possible that if the claim went to trial, it may succeed; (c) in a case where evidence can give colour and content to allegations, and where questions of fact and degree are important, the Court should be more reluctant to dismiss a proceeding on the face of a pleading; (d) it is not Parliament's intention to require the Court to engage in lengthy and elaborate trials on an interlocutory basis for the purposes of determining whether or not a proceeding has no reasonable prospects of success. It may be necessary for the opposing party to provide no more than an outline of evidence, sufficient to show that there is a genuine dispute, to prevent the summary application becoming a trial;(e) if there is a real issue of fact or law to be decided, and the rights of the parties depend upon it, it is obviously appropriate that the matter goes to trial. It cannot be said that where there is a real factual dispute and that factual dispute must be resolved to determine whether the claim succeeds that there is ‘no reasonable prospect of success’; (g)it ought not be used to shut out proceedings where, on a proposition of law, there may be room for doubt. On questions of law, an inquiry as to their merit should not be for the purpose of resolving them and also not simply to determine whether the argument is hopeless, but in order to decide if it is sufficiently strong to warrant a trial;(h)evidence of an ambivalent character will usually be sufficient to amount to reasonable prospects; (i)in determining if there are real issues of fact in issue so as to preclude summary judgment the courts must draw all reasonable inferences in favour of the non-moving party. See Genovese v BGC Construction Pty Ltd [2007] FCA 923 at [5]; Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd (2006) 70 IPR 146 at [42]-[48]; Hicks v Ruddock (2007) 156 FCR 574 at [13]; Bond v Barry (2007) 73 IPR 490 at [46]; Commonwealth Bank of Australia v ACN 000 247 601 Pty Ltd (in Liq) (formerly Stanley Thompson Valuers Pty Ltd) [2006] FCA 1416 at [30]; Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 at [21]; Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60. . Background Harbeth was the owner of a signs business known as “Signs Ahead”, which was conducted on the Land. It advertised the sale of its business in January 2006 through Russell Lyon of Performance Business Brokers. Mr Lyon provided to Mr Reynolds an advertising brochure for the sale of the business which stated “The premises and the land on which they stand are or [sic] owned by the vendor and the freehold is for sale along with the business.” It is not disputed that such a brochure was given to Mr Reynolds, but it is said that a later brochure was prepared which simply stated “Freehold price: TBA”. It is not said that Mr Reynolds or anyone else on behalf of the applicants was given this new brochure.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GILMOUR J

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Ratio Decidendi

Legal Principle Established

Established by: GILMOUR J

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IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY	WAD 213 OF 2007