Enterprise Finance Solutions Pty Ltd v Austec Pty Ltd - [2013] FCA 491

FEDERAL COURT OF AUSTRALIA
Enterprise Finance Solutions Pty Limited v Austec Pty Limited [2013] FCA 491

Citation: Enterprise Finance Solutions Pty Limited v Austec Pty Limited [2013] FCA 491

Parties: ENTERPRISE FINANCE SOLUTIONS PTY LIMITED v AUSTEC PTY LIMITED and JOHN HARRISON and LYNETTE HARRISON; AUSTEC PTY LIMITED and JOHN HARRISON and LYNETTE HARRISON v
ENTERPRISE FINANCE SOLUTIONS PTY LIMITED and AUSTRALIAN EQUIPMENT RENTALS PTY LIMITED

File Number: NSD 1192 of 2010

Parties: QUIKFUND (AUSTRALIA) PTY LIMITED v AIRMARK CONSOLIDATORS PTY LIMITED and MARK GONSALVES; AIRMARK CONSOLIDATORS PTY LIMITED and MARK GONSALVES v QUIKFUND (AUSTRALIA) PTY LIMITED

File Number: NSD 1206 of 2010

Parties: QUIKFUND (AUSTRALIA) PTY LIMITED v AIRMARK CONSOLIDATORS PTY LIMITED and MARK GONSALVES; AIRMARK CONSOLIDATORS PTY LIMITED and MARK GONSALVES v QUIKFUND (AUSTRALIA) PTY LIMITED

File Number: NSD 1207 of 2010

Judge: NICHOLAS J

Date of judgment: 24 May 2013

Catchwords:
TRADE PRACTICES – where equipment supplier made misrepresentation to consumer concerning price of goods – where finance company acquired goods for hire to consumer – where equipment hired to consumer by finance company – whether finance company “linked credit provider” for purposes of s 73 of the Trade Practices Act 1974 (Cth) (TP Act) – whether s 51AF of TP Act operated to exclude application of s 73 because misrepresentation made by equipment supplier related to financial services.
AGENCY – where equipment supplier made misrepresentation concerning price of goods – where finance company acquired goods for hire to consumer – where finance company “linked credit provider” for purposes of s 73 of TP Act – whether equipment supplier agent of linked credit provider under general law – whether equipment supplier possessed ostensible authority to make representation on behalf of linked credit provider – significance of documents in nature of applications for finance provided by finance company for use by equipment supplier.

CONSUMER LAW – where director of company entered into contract of guarantee and indemnity guaranteeing company’s obligations under rental agreement with finance company – whether such contract was unjust in the circumstances relating to contract at the time it was made for purposes of Contracts Review Act 1980 (NSW) – whether there should be declaration that contract of guarantee and indemnity void with effect from time it was made.

Legislation:
Australian Securities and Investments Commission Act 2001 (Cth) s 12BAA, s 12BAB, s 12DA, s 12ED

Australian Securities and Investments Commission Regulations 2001 (Cth) Reg 2B

Contracts Review Act 1980 (NSW) s 7, s 9
Financial Sector Reform (Consequential Amendments) Act 1998 (Cth) Sch 2, Items 27, 28 and 29
Trade Practices Act 1974 (Cth) s 4, s 4B, s 46, s 51AB, s 51AC, s 51AF, s 52, s 73

Cases cited: Australian Securities and Investments Commission v Bank of Queensland Limited (2011) 86 ACSR 258
Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552
NMFM Property Pty Ltd v Citibank Ltd (No 10) (2000) 107 FCR 270
Technology Leasing Ltd v Lennmar Pty Ltd [2012] FCA 709
Quikfund (Australia) Pty…

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: [2013] FCA 491
Decision Date: 24 May 2013

CaseChat Overview and Summary

Enterprise Finance Solutions Pty Ltd sued Austec Pty Ltd in the Federal Court. Enterprise Finance Solutions is a finance company that acquired equipment from Austec for hire to a consumer. Austec, an equipment supplier, made a misrepresentation to the consumer concerning the price of the goods. Enterprise Finance Solutions sought to determine if it was a “linked credit provider” for the purposes of section 73 of the Trade Practices Act 1974 (Cth), and whether section 51AF of the Act excluded the application of section 73 because the misrepresentation related to financial services.

The court needed to decide if Enterprise Finance Solutions was a linked credit provider under section 73 of the Trade Practices Act 1974, and if Austec was an agent of Enterprise Finance Solutions under general law, with ostensible authority to make representations on behalf of Enterprise Finance Solutions. The significance of the documents in the nature of applications for finance provided by Enterprise Finance Solutions for use by Austec was also considered. Additionally, the court had to determine whether a contract of guarantee and indemnity entered into by the director of Austec was unjust under the Contracts Review Act 1980 (NSW).

The court found that Enterprise Finance Solutions was a linked credit provider for the purposes of section 73 of the Trade Practices Act 1974. It also determined that Austec did not possess ostensible authority to make representations on behalf of Enterprise Finance Solutions. Therefore, the court did not need to consider whether Austec was an agent of Enterprise Finance Solutions under general law. The court further found that the contract of guarantee and indemnity entered into by the director of Austec was not unjust under the Contracts Review Act 1980 (NSW). Consequently, the claims made by Enterprise Finance Solutions against Austec were dismissed.

The court ordered that the cross-claimants in each matter file and serve within 7 days short minutes of proposed declarations and orders that give effect to these reasons for judgment. The court also ordered that the proceeding be stood over to a date to be fixed for the purpose of making declarations and orders, including in relation to costs.

Orders

Orders of the court

1. The cross-claimants are to file and serve within 7 days short minutes of proposed declarations and orders that give effect to these reasons for judgment.

2. This proceeding is stood over to a date to be fixed for the purpose of making declarations and orders (including in relation to costs).

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

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

There were various other claims pleaded by both Airmark and Mr Gonsalves based upon s 51AB and s 51AC of the TP Act. In light of the other conclusions reached by me in relation to their claims under s 73 of the TP Act and the Contracts Review Act it is not necessary for me to fully consider these claims. None of them was the subject of any detailed submissions on the part of Airmark and Mr Gonsalves. In any event, I am not satisfied that the evidence established that Quikfund engaged in conduct that was, in all the circumstances, unconscionable. DECLARATIONS AND ORDERS I will direct the cross-claimants in each matter to file and serve within 7 days short minutes of proposed declarations and orders that give effect to my reasons for judgment. These should include declarations in relation to each of the relevant guarantees, orders dismissing the applicants’ claims in each matter, and orders otherwise dismissing the cross-claimant’s cross-claims. I will then hear the parties in relation to those and any further declarations or orders which they contend should be made, including in relation to costs. The proceedings will be stood over to a date to be fixed for that purpose by arrangement with my associate.

Citation:	Enterprise Finance Solutions Pty Limited v Austec Pty Limited [2013] FCA 491
Parties:	ENTERPRISE FINANCE SOLUTIONS PTY LIMITED v AUSTEC PTY LIMITED and JOHN HARRISON and LYNETTE HARRISON; AUSTEC PTY LIMITED and JOHN HARRISON and LYNETTE HARRISON v ENTERPRISE FINANCE SOLUTIONS PTY LIMITED and AUSTRALIAN EQUIPMENT RENTALS PTY LIMITED
File Number:	NSD 1192 of 2010
Parties:	QUIKFUND (AUSTRALIA) PTY LIMITED v AIRMARK CONSOLIDATORS PTY LIMITED and MARK GONSALVES; AIRMARK CONSOLIDATORS PTY LIMITED and MARK GONSALVES v QUIKFUND (AUSTRALIA) PTY LIMITED
File Number:	NSD 1206 of 2010
Parties:	QUIKFUND (AUSTRALIA) PTY LIMITED v AIRMARK CONSOLIDATORS PTY LIMITED and MARK GONSALVES; AIRMARK CONSOLIDATORS PTY LIMITED and MARK GONSALVES v QUIKFUND (AUSTRALIA) PTY LIMITED
File Number:	NSD 1207 of 2010
Judge:	NICHOLAS J
Date of judgment:	24 May 2013
Catchwords:	TRADE PRACTICES – where equipment supplier made misrepresentation to consumer concerning price of goods – where finance company acquired goods for hire to consumer – where equipment hired to consumer by finance company – whether finance company “linked credit provider” for purposes of s 73 of the Trade Practices Act 1974 (Cth) (TP Act) – whether s 51AF of TP Act operated to exclude application of s 73 because misrepresentation made by equipment supplier related to financial services. AGENCY – where equipment supplier made misrepresentation concerning price of goods – where finance company acquired goods for hire to consumer – where finance company “linked credit provider” for purposes of s 73 of TP Act – whether equipment supplier agent of linked credit provider under general law – whether equipment supplier possessed ostensible authority to make representation on behalf of linked credit provider – significance of documents in nature of applications for finance provided by finance company for use by equipment supplier. CONSUMER LAW – where director of company entered into contract of guarantee and indemnity guaranteeing company’s obligations under rental agreement with finance company – whether such contract was unjust in the circumstances relating to contract at the time it was made for purposes of Contracts Review Act 1980 (NSW) – whether there should be declaration that contract of guarantee and indemnity void with effect from time it was made.
Legislation:	Australian Securities and Investments Commission Act 2001 (Cth) s 12BAA, s 12BAB, s 12DA, s 12ED Australian Securities and Investments Commission Regulations 2001 (Cth) Reg 2B Contracts Review Act 1980 (NSW) s 7, s 9 Financial Sector Reform (Consequential Amendments) Act 1998 (Cth) Sch 2, Items 27, 28 and 29 Trade Practices Act 1974 (Cth) s 4, s 4B, s 46, s 51AB, s 51AC, s 51AF, s 52, s 73
Cases cited:	Australian Securities and Investments Commission v Bank of Queensland Limited (2011) 86 ACSR 258 Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552 NMFM Property Pty Ltd v Citibank Ltd (No 10) (2000) 107 FCR 270 Technology Leasing Ltd v Lennmar Pty Ltd [2012] FCA 709 Quikfund (Australia) Pty…