Devon v Madgwicks (A Firm) - [2016] FCA 875

FEDERAL COURT OF AUSTRALIA
Devon v Madgwicks (A Firm) [2016] FCA 875

File number: VID 436 of 2015

Judge: DAVIES J

Date of judgment: 4 August 2016

Catchwords:
PRACTICE AND PROCEDURE – res judicata – liability for legal fees –previous adjudication as to liability in Magistrates’ Court – dispute as to identity of client – res judicata established

PRACTICE AND PROCEDURE – Anshun estoppel – liability for legal fees – previous adjudication as to liability in Magistrates’ Court – further allegations of unconscionable conduct and misleading and deceptive conduct – whether unreasonable not to have raised such allegations in previous action – Anshun estoppel established

CONTRACTS – services relating to sale of franchise business – whether solicitors breached contract with client – whether franchise agent breached contract with client – no breach established – no causation established

CONTRACTS – identity of parties to contract – liability of agent’s representatives – Estate Agents Act 1980 (Vic) s 13A – assignment – whether terms of assignment included right to sue for breach of agency agreement

TORTS – services relating to sale of franchise business – whether solicitors breached duty to client – whether franchise agent breached duty to client – whether materialisation of inherent risk – Wrongs Act 1958 (Vic) s 55 provides complete defence – no causation established

Legislation:
Estate Agents Act 1980 (Vic) ss 4, 13A, 59

Wrongs Act 1958 (Vic) ss 43, 44, 55

Cases cited:
Badenach v Calvert [2016] HCA 18

Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287

Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33

Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54

Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (in liq) (1993) 43 FCR 510

Goldsbrough, Mort & Co Ltd v Tolson (1909) 10 CLR 470; [1909] HCA 80

Hill v Van Erp (1997) 188 CLR 159; [1997] HCA 9

Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; [2003] HCA 10

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45

Date of hearing: 20–21 April 2016 and 28 April 2016

Registry: Victoria

Division: General

National Practice Area: Commercial and Corporations

Sub-area: Commercial Contracts, Banking, Finance and Insurance

Category: Catchwords

Number of paragraphs: 108

Counsel for the Applicant: The Applicant appeared in person

Counsel for the First and Third Respondents: D Snyder

Solicitor for the First and Third Respondents: Colin, Biggers & Paisley

Counsel for the Second and Fourth Respondents: M O’Sullivan

Solicitor for the Second and Fourth Respondents: Furman Legal

ORDERS

VID 436 of 2015

BETWEEN:
HUGH DEVON
Applicant

AND:
MADGWICKS (A FIRM)
First Respondent

BERNARD PATRICK CARROLL
Second Respondent

PETER ROBERT KENNEDY (and another named in the Schedule)
Third Respondent

JUDGE:

DAVIES J

DATE OF ORDER:

4 AUGUST 2016

THE COURT ORDERS THAT:
1.The proceeding be dismissed.
2.The applicant pay the first respondent's costs and third respondent's costs, including reserved costs,…

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] FCA 875
Decision Date: 4 August 2016

CaseChat Overview and Summary

Mr Devon brought a claim against Madgwicks (A Firm) in the Federal Court of Australia, asserting breaches of contract and tortious liability in relation to services provided during the sale of a franchise business. The defendants, Madgwicks (A Firm), contested the claims, arguing that the matters were precluded by previous decisions in the Magistrates’ Court. The court had to determine whether the principles of res judicata and Anshun estoppel applied to bar the claims and whether the defendants were liable for the alleged breaches.

The court examined whether the previous adjudication in the Magistrates’ Court could be invoked to bar the current claims. It found that the issues in the Magistrates’ Court and the Federal Court were essentially the same, and thus, res judicata applied. Additionally, the court ruled that the Anshun estoppel applied, as the defendants had the opportunity to raise the allegations of unconscionable and misleading conduct in the earlier proceedings, and it would have been unreasonable not to do so. Consequently, the claims were barred by these doctrines. The court further found that the defendants were not liable for breaches of contract or duty as the claims were not substantiated. Specifically, the defendants were not liable for any inherent risks associated with the franchise business sale, as these were adequately disclosed.

The Federal Court of Australia dismissed the proceeding, finding that Mr Devon failed to establish any of his claims. The court ordered that the proceeding be dismissed and that Mr Devon pay the defendants' costs on specified bases. The specific details of the costs and their taxation were to be handled in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The proceeding be dismissed.

2. The applicant pay the first respondent's costs and third respondent's costs, including reserved costs, on a party‑party basis, such costs to be taxed in default of agreement.

3. The applicant pay the second respondent's costs and the fourth respondent's costs, including reserved costs, on an indemnity basis, such costs to be taxed in default of agreement.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In this case, Mr Carroll waited until he received notification from MSBC’s solicitor that the contract had been terminated before he disbursed the deposit. Mr Carroll was, in the circumstances, expressly authorised by cl 12.2 to disburse the deposit. CONCLUSION Mr Devon has failed to establish any of the claims made and accordingly the proceeding must be dismissed.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number:	VID 436 of 2015
Judge:	DAVIES J
Date of judgment:	4 August 2016
Catchwords:	PRACTICE AND PROCEDURE – res judicata – liability for legal fees –previous adjudication as to liability in Magistrates’ Court – dispute as to identity of client – res judicata established PRACTICE AND PROCEDURE – Anshun estoppel – liability for legal fees – previous adjudication as to liability in Magistrates’ Court – further allegations of unconscionable conduct and misleading and deceptive conduct – whether unreasonable not to have raised such allegations in previous action – Anshun estoppel established CONTRACTS – services relating to sale of franchise business – whether solicitors breached contract with client – whether franchise agent breached contract with client – no breach established – no causation established CONTRACTS – identity of parties to contract – liability of agent’s representatives – Estate Agents Act 1980 (Vic) s 13A – assignment – whether terms of assignment included right to sue for breach of agency agreement TORTS – services relating to sale of franchise business – whether solicitors breached duty to client – whether franchise agent breached duty to client – whether materialisation of inherent risk – Wrongs Act 1958 (Vic) s 55 provides complete defence – no causation established
Legislation:	Estate Agents Act 1980 (Vic) ss 4, 13A, 59 Wrongs Act 1958 (Vic) ss 43, 44, 55
Cases cited:	Badenach v Calvert [2016] HCA 18 Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Effem Foods Pty Ltd v Trawl Industries of Australia Pty Ltd (in liq) (1993) 43 FCR 510 Goldsbrough, Mort & Co Ltd v Tolson (1909) 10 CLR 470; [1909] HCA 80 Hill v Van Erp (1997) 188 CLR 159; [1997] HCA 9 Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 77 ALJR 768; [2003] HCA 10 Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45
Date of hearing:	20–21 April 2016 and 28 April 2016
Registry:	Victoria
Division:	General
National Practice Area:	Commercial and Corporations
Sub-area:	Commercial Contracts, Banking, Finance and Insurance
Category:	Catchwords
Number of paragraphs:	108
Counsel for the Applicant:	The Applicant appeared in person
Counsel for the First and Third Respondents:	D Snyder
Solicitor for the First and Third Respondents:	Colin, Biggers & Paisley
Counsel for the Second and Fourth Respondents:	M O’Sullivan
Solicitor for the Second and Fourth Respondents:	Furman Legal