FBHS (Aust) Pty Ltd v Stone Homes Pty Ltd

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Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: FBHS (Aust) Pty Ltd v Stone Homes Pty Ltd [2014] NSWCA 312
Hearing dates:21 August 2014
Decision date: 10 September 2014
Before: Barrett JA at [1];
Gleeson JA at [2];
Leeming JA at [3]
Decision:

Appeal dismissed, with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

APPEAL - whether appellate deference given to construction given by primary judge - Galcif Pty Ltd v Dudley's Corner Pty Ltd (1995) 6 BPR 14,134 explained

CONTRACT - construction - covenant in restraint of trade - meaning of prohibition on engaging in "similar" concept - reliance on text and purpose and object of transaction - distinction between sale of business agreement and distributor agreement - construction of contract as a whole - whether clause breached

PRACTICE - refusal of amendment late in the hearing - no error shown
Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56-60, 64
Cases Cited: Branir v Owston Nominees (No 2) [2001] FCA 1833; 117 FCR 424
Carmichael v National Power Plc [1999] UKHL 47; [1999] 1 WLR 2042
Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184
Corporation of the City of Enfield v Development Assessment Corporation [2000] HCA 5; 199 CLR 135
Daily Examiner Pty Ltd v Mundine [2012] NSWCA 195
DSG Holdings Australia Pty Ltd v Helenic Pty Ltd [2014] NSWCA 96
Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 88 ALJR 447
Foley v Ellis [2008] NSWCA 288
Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603
Galcif Pty Ltd v Dudley's Corner Pty Ltd (1995) 6 BPR 14,134
Hannaford v Commonwealth Bank of Australia [2014] NSWCA 297
House v The King (1936) 55 CLR 499
KA & C Smith Pty Ltd v Ward (1998) 45 NSWLR 702
Kelly v Mina [2014] NSWCA 9
Life Insurance Co of Australia Ltd v Phillips (1925) 36 CLR 60
Marshall v NM Financial Management Pty Ltd [1995] 4 All ER 785
North v Marina [2003] NSWSC 64
Richards v Cornford (No 3) [2010] NSWCA 134
Smalley v Motor Accident Authority of New South Wales [2013] NSWCA 318; 85 NSWLR 580
Warren v Coombes (1979) 142 CLR 531
Texts Cited: J D Heydon, The Restraint of Trade Doctrine (LexisNexis, 3rd ed, 2008)
Category:Principal judgment
Parties: FBHS (Aust) Pty Ltd (First Appellant)
Stramit Corporation Pty Limited (Second Appellant)
Stone Homes Pty Ltd (First Respondent)
Dennis Malcolm McFadden (Second Respondent)
Gai Ann McFadden (Third Respondent)
Best Sheds Pty Ltd (Fourth Respondent)
Representation: Counsel:
A Moses SC with…
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Details
Case
[2014] NSWCA 312
Decision Date

CaseChat Overview and Summary

FBHS (Aust) Pty Ltd appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning the construction of a contract. The dispute centred on whether Stone Homes Pty Ltd had breached a covenant in restraint of trade by engaging in "similar" business activities.

The Court of Appeal was required to determine two primary legal issues. First, it had to consider the appropriate level of appellate deference to be given to the primary judge's construction of the contract, particularly in light of the principles established in *Galcif Pty Ltd v Dudley's Corner Pty Ltd*. Second, the Court had to construe the meaning of the prohibition on engaging in "similar" concepts within the restraint of trade clause, considering the text, purpose, and object of the transaction, and distinguishing between a sale of business agreement and a distributor agreement. The Court also considered whether the primary judge erred in refusing an amendment late in the hearing.

The Court of Appeal applied principles of contractual construction, emphasising the importance of considering the contract as a whole and its commercial context. It held that the primary judge's construction was correct, finding that the activities undertaken by Stone Homes did not breach the restraint of trade covenant. The Court also found no error in the refusal of the late amendment.

The appeal was dismissed, and FBHS (Aust) Pty Ltd was ordered to pay the costs of the appeal.

Orders

Orders of the court

Appeal dismissed, with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

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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