Dib Group Pty Ltd v Coolabah Tree Aust-Wide Pty Ltd

Link copied
Case Copied 86 min read

FEDERAL COURT OF AUSTRALIA

Dib Group Pty Ltd v Coolabah Tree Aust-Wide Pty Ltd [2011] FCAFC 57

Citation: Dib Group Pty Ltd v Coolabah Tree Aust-Wide Pty Ltd [2011] FCAFC 57
Appeal from: Coolabah Tree Aust-Wide Pty Ltd v Dib Group Pty Limited [2010] FCA 805
Parties: DIB GROUP PTY LTD v COOLABAH TREE AUST-WIDE PTY LTD
File number(s): NSD 1046 of 2010
Judges: GRAY, LANDER AND KATZMANN JJ
Date of judgment: 3 May 2011
Corrigendum: 30 May 2011
Catchwords:

PRACTICE AND PROCEDURE – power to vary judgment or order pursuant to Federal Court Rules O 35 r 7 – publication of supplementary reasons for judgment and new orders

DAMAGES – whether primary judge erred in assessment of damages for repudiation of lease

APPEAL AND NEW TRIAL – witness for one party preferred to those of another – circumstances under which credibility findings made by primary judge may be revisited on appeal

TRADE PRACTICES – misleading and deceptive conduct – representations as to future matters – whether representations made in terms alleged – whether representations were misleading or deceptive – circumstances under which representations are adopted or endorsed – application of test in Butcher v Lachlan Elder Realty Pty Ltd  (2004) 218 CLR 592 – reliance – whether company relied on representations regarding predicted turnover of business – whether inferences should have been drawn in favour of cross-appellant

EVIDENCE – credibility – where witness not called by cross-respondent – whether primary judge failed to draw Jones v Dunkel inference despite saying he would

PRACTICE AND PROCEDURE – argument on appeal not put in court below – not entertained

Legislation: Trade Practices Act 1974 (Cth) ss 51A, 52, 87(2)
Federal Court Rules O 35
Cases cited:

Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Australian Fisheries Management Authority v P W Adams Pty Ltd (No 2) (1996) 66 FCR 349
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
Branir v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424; [2001] FCA 1833
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60
Caboolture Park Shopping Centre Pty Ltd (in liq) v White Industries (Qld) Pty Ltd (1993) 45 FCR 224
Como Investments Pty Ltd (in liq) v Yenald Nominees Pty Ltd [1997] ATPR ¶41-550
Coulton v Holcombe (1986) 162 CLR 1
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Gardam v George Wills & Co Ltd (1988) 82 ALR 415
Gould v Vaggelas (1985) 157 CLR 215
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No 1) (1998) 39 FCR 546
Heydon v NRMA Ltd (2000) 51 NSWLR 1; [2000] NSWCA 374
Jones v Dunkel (1959) 101 CLR 298
Mifsud v Campbell (1991) 21 NSWLR 725
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited (2010) 241 CLR 357; [2010] HCA 31
Milson v Carter [1893] AC 638
Preston Banking Co…

CaseChat AU logo

Keep reading for free

Create a free CaseChat account to read Dib Group Pty Ltd v Coolabah Tree Aust-Wide Pty Ltd and more:

  • Read every judgment in full
  • Ask AI and get answers linked to paragraphs
  • See how each paragraph was cited in later cases
  • Download judgments as PDF or Word
Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details
Case
[2011] FCAFC 57
Decision Date

CaseChat Overview and Summary

Dib Group Pty Ltd and Coolabah Tree Aust-Wide Pty Ltd were engaged in litigation concerning alleged misleading and deceptive conduct, breaches of the Australian Consumer Law, and breaches of contract. The case was heard by the Federal Court of Australia, with subsequent appeals and cross-appeals. The primary issues involved the assessment of damages for the repudiation of a lease, the credibility of witnesses, and the reliance on certain representations made during negotiations.

The court needed to determine whether the primary judge erred in his assessment of damages for the repudiation of the lease and whether the credibility findings made by the primary judge regarding the witnesses could be revisited on appeal. Furthermore, the court had to examine whether the representations made by Dib Group were misleading or deceptive and whether Coolabah relied on these representations. The assessment of damages included considering the lost rent and the loss of bargain damages after the site was vacated.

The court found that the primary judge's assessment of damages for the repudiation of the lease was correct, but there was a minor arithmetic error in the calculation. The court noted that the credibility of witnesses not called by a party cannot be assumed, and the primary judge's failure to draw an inference in favour of a party whose witness did not testify was not a ground for appeal. The court also held that the representations made by Dib Group were not misleading or deceptive and that Coolabah did not rely on these representations as alleged. The appeal was allowed in part to correct the arithmetic error in the damages calculation, while the cross-appeal was dismissed.

The final orders of the court included allowing the appeal in part to correct the damages amount, dismissing the cross-appeal, and ordering the cross-appellant to pay the cross-respondent's costs of the cross-appeal. The costs of the appeal were not ordered.

Orders

Orders of the court

1. The appeal be allowed in part.

2. The order made on 2 August 2010 be varied by substituting for the amount “$133,026.50”, the amount “$140,326.50”.

3. There be no order as to the costs of the appeal.

4. The cross-appeal be dismissed.

5. The cross-appellant pay the cross-respondent’s costs of the cross-appeal.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

In the cross-appeal Coolabah challenged the findings of the primary judge about the two representations allegedly made at the 4 May meeting concerning projected fuel and convenience store sales; the representations allegedly made in the George Dib email; the credit of Mr Grant and Mr Haddad; and the question of reliance.The evidence about the representations The evidence was that the 4 May meeting was attended by the following people: Mr Roycroft, his wife Deborah (who was the operations manager of Coolabah), Mr Grant, Mr Dib, and Louis Haddad (Dib Group’s franchise manager). Three other officers or employees of Dib Group – John Dib, Ross Morris and Gary Tong – entered the meeting from time to time but, on the primary judge’s finding, which is not challenged, did not participate in the discussions. Coolabah called as witnesses Mr and Mrs Roycroft and Mr Grant. Dib Group called only Mr Haddad. Coolabah’s first witness was Mrs Roycroft. She testified that it was Mr Haddad who did most of the talking at the meeting. In her evidence in chief she said on two occasions that a turnover of 400 litres a month of fuel (not 400,000, the figure the subject of the representation alleged by Coolabah) was mentioned. She attributed this statement to Mr Haddad. Only after counsel for Coolabah referred to the figure of 400,000 twice in introductions to questions did she say, first that Mr Haddad “estimated”, and then (in response to a leading question) that the site would “do” 400,000 a month. She adhered to that in cross-examination, insisting that her evidence was not a reconstruction based on what other people had told her about the meeting, but was an account of what she herself had heard at the meeting. Mr Roycroft was the next to give evidence. He confirmed that it was Louis Haddad who “gave all the answers”. He said that Mr Haddad had cited figures of “400,000 litres a month, $100,000 in the convenience store”. He stated that Mr Dib made encouraging comments about how profitable the enterprise would be and he said he thought that Mr Dib also offered to supply relevant information about the bottle shop. Nevertheless, Mr Roycroft insisted that “Louis [Haddad] was mainly the speaker, and he offered all the information”. Like his wife, Mr Roycroft also insisted under cross-examination that Mr Haddad told him that the site would sell 400,000 litres of fuel a month and that no range was given. Mr Grant’s evidence was to the same effect. He said that Mr Haddad was “one of the main talkers” from Dib Group and that “George [Dib] tended to sit back and let Louis [Haddad] do the talking”. Mr Grant said it was “advised” to the Coolabah representatives that “there were [scil.] conservative figures of 400,000 litres of fuel per month expected for the site”. He also said that that what was said in relation to the convenience store was that there would be “conservative sales figures of around $100,000 a month”. Mr Grant made some brief notes at the meeting and also sent an email to Mr Roycroft on 8 May 2007 purporting to give “a snapshot of the meeting”. As we mentioned earlier, the email was said to support Coolabah’s claim that the oral representations had been made as alleged.

Decision

Reasons for decision

He also found that Coolabah had not relied on Dib Group’s representation that LPG AutoGas would be available at the site, because at the time of executing the sublease and the fuel reselling agreement Mr Roycroft and Mr Grant knew that there was no LPG AutoGas tank or associated equipment there; that there would be no such equipment at the site when Coolabah commenced trading; and that “the installation of these facilities [might] not take place for some considerable time”.Judgment on Dib Group’s cross-claimRepudiation of the sublease As noted above, the primary judge found that Coolabah wrongfully repudiated the sublease when it abandoned the site on 1 July 2008 and refused thereafter to pay rent. He held that Coolabah’s repudiation entitled Dib Group to claim damages for the losses it incurred.Damages (first reasons) At trial, Dib Group submitted that the Court should simply award Dib Group any amount it was required to pay to Kevmark by way of damages for Dib Group’s repudiation of the head lease. The primary judge rejected that submission. In his reasons for judgment published on 30 July 2010 (“the first reasons”), the primary judge said that the correct approach to the assessment of damages in a case of this kind was to give judgment for:(a)such amounts as were payable under the sublease but remained unpaid as at the date of termination of the lease;(b) the amount of lost rent for the period when the premises were vacant; and(c)the quantum of damages for the lost rent thereafter (loss of bargain damages). The primary judge found that the sublease was validly renewed on 29 April 2008 for a period from 16 July 2008 to 15 July 2013, and that the rent payable during this period was $250,000 per year plus GST and was subject to annual CPI increases. As noted above, he found that the site was abandoned on 1 July 2008 and were vacant until 30 September 2008, a period of exactly 3 months. The loss under paragraph (b) above was therefore calculated at $62,500. The primary judge said that interest on that amount was payable from 1 July 2008. He calculated that interest at $11,145.55. Under paragraph (a) above, the primary judge calculated the rent payable for the period from 1 October 2008 to 15 July 2013 (a period of four years and 288 days) at $1,197,260. His Honour then took account of the fact that the new lessee, who took up occupation of the site on 1 October 2008, would pay $900,325.47 to Dib Group in rent by 15 July 2013, leaving a loss of $296,934.80. In general terms, the primary judge said that he did not apply a discounted cash flow analysis but took a “relatively broad view of the damages claim”. The damages were measured in part by what the new lessee would pay after taking up occupation on 1 October 2008. In sum, the primary judge set out his assessment of Dib Group’s damages as follows: At [123] of the first reasons, the primary judge said that Dib Group would have judgment for that amount against Coolabah.Damages (second reasons)

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.