Re: FAMEL PTY LTD and STEVEN P.H. LUNN
And: BURSWOOD MANAGEMENT LIMITED; DALLAS REGINALD DEMPSTER; LIM KOK THAY;
WESTERN AUSTRALIAN TRUSTEES LIMITED and RIDER HUNT & PARTNERS
No. WAG 121 of 1988
FED No. 284
Trade Practices - Practice and Procedure
COURT
IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
French J.(1)
CATCHWORDS
Trade Practices - misleading or deceptive conduct - estimates of Casino construction costs in Prospectus - allegedly misleading - fraudulent and in breach of fiduciary duty - predictive statements - whether necessary to identify representations of past or existing fact - whether purely predictive statement actionable - Trustee of Unit Trust - inviting subscriptions - whether fiduciary duty owed to prospective beneficiaries.
Practice and Procedure - security for costs - action under consumer protection legislation - public interest - respondents' ability to pay - quantum - factors relevant to fixing quantum.
Casino Control Act 1984
Companies (Western Australia) Code
Trade Practices Act 1974 s.52, s.75B, s.82
Federal Court Act 1976 s.56
Federal Court Rules O.28
Judiciary Act 1903 s.79
Finn - Fiduciary Obligations (1977) p 201
Lehane - Fiduciaries in a Commercial Context
Essays in Equity Finn (Ed.) p 104, p 246
Mason J. - Themes and Prospects - Essays in Equity p 246
A Lawyer's Guide to Misleading and Deceptive Conduct (1989) 63 ALJR 250
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Taco Co. of Australia Inc. v Taco Bell Pty Ltd (1982) 42 ALR 177
Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82
Chase Manhattan Overseas Corporation v Chase Corporation Ltd (1985) 9 FCR 129
Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83
Wheeler Grace & Pierucci Pty Ltd v Wright (unrep Full Court; 13/4/89)
Cooke v Gill (1873) LR 8 CP 107
Arcadi v Colonial Mutual Life Assurance Society Ltd (1984) ATPR 40-473
Fenech v Sterling (1983) 79 FLR 244
Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367
Bryan E. Fencott & Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497
Smail v Burton (1975) VR 776
Jet Corporation of Australia Pty Ltd v Petres Pty Ltd (1983) 50 ALR 722
Irwin Alsop Services v Mercantile Mutual Insurance Co. Ltd (1986) VR 61
Cowell v Taylor (1985) 31 Ch D 34
Mackie v Clough (1891) 17 VLR 201
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- Case
- [1989] FCA 284
- Decision Date
CaseChat Overview and Summary
The court was required to determine whether the estimates of future costs in the prospectus constituted misleading or deceptive conduct under the Trade Practices Act, whether the statements were purely predictive and thus not actionable, and if the trustee owed a fiduciary duty to prospective beneficiaries. The court examined the nature of the representations made in the prospectus, whether they were past or existing facts or future predictions, and if they were misleading or deceptive.
The court held that the estimates of future construction costs in the prospectus were not misleading or deceptive conduct under the Trade Practices Act, as they did not identify past or existing facts but were purely predictive statements. The court found that the trustee did not owe a fiduciary duty to prospective beneficiaries until they became unitholders. The court struck out certain parts of the statement of claim and ordered the plaintiffs to provide security for costs to the defendants. The court dismissed the motions for the dismissal of the claims and for security of costs by some of the defendants.
The court ordered that certain parts of the statement of claim be struck out, granted leave to the plaintiffs to file an amended statement of claim, and dismissed the motions for the dismissal of the claims and for security of costs by some of the defendants. The court also ordered the plaintiffs to provide security for costs to the defendants in the form of bank guarantees. The costs of the motions were reserved.
Orders
Orders of the court
On the motion by the first, second and third respondents filed 3 October 1988 to strike out the applicants' statement of claim:
1. The following parts of the statement of claim be struck out:
(i) the second sentence of paragraph 1;
(ii) the whole of paragraph 19;
(iii) the third sentence in paragraph 20.
2. There be leave to the applicants to file and serve an amended statement of claim on or before 21 June 1989.
3. The motion be otherwise dismissed.
4. The costs of the motion are reserved.
On the motion by the fourth respondent filed 3 October 1988 for the dismissal of the claim against it:
1. The motion is dismissed.
2. The costs of the motion are reserved.
On the first, second and third respondents' motion for security of costs filed 3 October 1988:
1. The first applicant do on or before 28 June 1989 provide security for the first, second and third respondents' costs of the application in the sum of $30,000 by way of bank guarantee to be lodged with the Registrar.
2. In the event that the security ordered herein is not provided on or before 28 June 1989 the proceedings by the first applicant against the first, second and third respondents be thereafter stayed until such security is provided or until further order.
3. There be liberty to apply.
4. The costs of the motion are reserved.
On the fourth respondent's motion for security for costs filed 3 October 1988:
1. The first applicant do on or before 28 June 1989 provide security for the fourth respondent's costs of the application in the sum of $15,000 by way of bank guarantee to be lodged with the Registrar.
2. In the event that the security ordered herein is not provided on or before 28 June 1989 the proceedings by the first applicant against the fourth respondent be thereafter stayed until such security is provided or until further order.
3. There be liberty to apply.
4. The costs of the motion are reserved.
On the fifth respondent's motion for security for costs filed 3 October 1988:
1. The first applicant do on or before 28 June 1989 provide security for the fifth respondent's costs of the application in the sum of $30,000 by way of bank guarantee to be lodged with the Registrar.
2. In the event that the security ordered herein is not provided on or before 28 June 1989 the proceedings by the first applicant against the fifth respondent be thereafter stayed until such security is provided or until further order.
3. There be liberty to apply.
4. The costs of the motion are reserved.
NOTE: Settlement and entry of orders is dealt with in 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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