Fendley & Anor v Owen - [2022] QDC 249

DISTRICT COURT OF QUEENSLAND

CITATION:

Fendley & Anor v Owen [2022] QDC 249

PARTIES:

IAN FENDLEY

(plaintiff)

and

ANGELA SPARROW

(plaintiff)

v

MURRAY JOHN OWEN

(defendant)

FILE NO/S:

555/22

DIVISION:

Civil

PROCEEDING:

Trial

ORIGINATING COURT:

Brisbane District Court

DELIVERED ON:

11 November 2022

DELIVERED AT:

Rockhampton

HEARING DATE:

4,5 & 7 October 2022

JUDGE:

Muir DCJ

ORDERS and
DIRECTIONS:

There is to be judgment for the plaintiffs in the sum of $559,124 together with interest from the dates each payment was made plus costs.

The plaintiffs are directed to bring in a Final Order.

CATCHWORDS:

TRADE AND COMMERCE – FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATION – CHARACTER OR ATTRIBUTES OF CONDUCT OR MISREPRESNTATION – MISLEADING OR DECEPTIVE CONDUCT: WHAT CONSTITUTES – where the plaintiffs entered into a contract with the defendant’s company for the construction of a catamaran – whether by conduct, the defendant represented to the plaintiffs that the company had capacity to meet the contract requirements when it did not – where the defendant represented the company was solvent when it was not.

TRADE AND COMMERCE – FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATION – CHARACTER OR ATTRIBUTES OF CONDUCT OR MISREPRESENTATION – whether the defendant had a basis for making the representations which led the plaintiffs to believe the contract requirements could be met – whether the representations amounted to misleading and deceptive conduct.

TRADE AND COMMERCE – FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATION – FALSE REPRESENTATIONS GENERALLY – whether the plaintiffs executed the contract on the basis that they were induced by the defendant’s representations.

TRADE AND COMMERCE – FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATION –MISLEADNG OR DECEPTIVE CONDUCT GENERALLY – PARTICULAR CASES – CAUSATION – whether the plaintiffs suffered loss and damage by making the payments under the contract or in reliance on the representations as to the capability of the defendant to perform the contract.

LEGISLATION:

Competition and Consumer Act 2010 (Cth), Schedule 2 (The Australian Consumer Law) ss 2, 4, 18, 236

Trade Practices Act 1974 (Cth), s 51A

Uniform Civil Procedure Rules 1999 (Qld), r 476(1), r 681

CASES:

Australian Competition and Consumer Commission (ACCC) v Michigan Group Pty Ltd [2002] FCA 1439
Australian Competition and Consumer Commission (ACCC) v TPG Internet Pty Ltd (2013) 250 CLR 640.
Australian Competition and Consumer Commission (ACCC) v Woolworths Group Ltd (formerly called Woolworths Ltd) (2020) 281 FCR 108
Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Cadbury-Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304
Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199
Global Sportsman…

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: [2022] QDC 249
Decision Date: 11 November 2022

CaseChat Overview and Summary

In the case of Fendley & Anor v Owen, the plaintiffs entered into a contract with the defendant’s company for the construction of a catamaran, which was intended to be larger and have additional features compared to their existing vessel. The plaintiffs alleged that the defendant made representations that the company had the capacity to meet the contract requirements, despite lacking the financial stability to do so. This led the plaintiffs to enter into the contract, believing that the defendant’s company could fulfil the obligations. The legal issues revolved around whether the defendant’s conduct constituted misleading or deceptive conduct under fair trading and consumer protection legislation and whether the plaintiffs were induced to enter into the contract based on these representations.

The court examined whether the defendant had a basis for the representations he made about the company's solvency and capability to complete the project. It also considered whether the plaintiffs were misled by these representations to their detriment. The plaintiffs had to demonstrate that they relied on the defendant’s representations and suffered loss and damage as a result. The court assessed the credibility of the plaintiffs’ evidence and their familiarity with the defendant’s business operations. Given the plaintiffs’ background in the industry and their observations of the defendant’s operations, the court found that the representations made by the defendant played a significant role in the plaintiffs’ decision to proceed with the contract.

After thorough analysis of the evidence and the applicable legal principles, the court concluded that the defendant’s conduct amounted to misleading and deceptive conduct. The representations regarding the company’s capacity to complete the project were false and misleading, as the company was not solvent and did not have the resources to fulfil the contractual obligations. The plaintiffs had reasonably relied on these representations, leading them to enter into the contract. Consequently, the court found that the defendant had engaged in misleading and deceptive conduct, and the plaintiffs were entitled to relief. The final orders included damages for reliance losses suffered by the plaintiffs due to the defendant’s misrepresentations.

Orders

Orders of the court

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Background

Background to the litigation

With these principles in mind, it is now convenient to set out the relevant factual matrix as elicited from the admissions on the pleadings and the unchallenged evidence of the plaintiffs - both of whom presented as savvy and intelligent business people who gave frank and honest evidence before me. As will emerge, I have generally accepted most of their evidence whilst taking into account that parts were presented through a reconstructed lens slightly distorted by (perhaps) “overmuch discussion of it with others”.[19][19]Onassis and Calogeropoulos v Vergottis [1968] 2 Lloyds Rep 403, 431.Relevant factual background The plaintiffs knew both the defendant and Mr McDonald-Smith from their successful collaboration with these men in 2015. Mr Fendley explained that he monitored the construction of the first vessel and he was generally aware of the steps involved in building a catamaran including the setting up of keels in a big shed, the bracing, welding and the material to be used (which in this case was aluminium). Sometime in 2019, the plaintiffs decided that they wanted a longer and roomier vessel. The plaintiffs were reasonably familiar with MEC’s business, which was located at Waterway Drive, Coomera as they visited the company office at the front of the Marina and the factories where vessels were constructed on a number of occasions. Mr Fendley was able to identify the factory areas that he had been to with the defendant and where he had observed MEC employees manufacturing boats, from a map of the Marina.[20] For example, he identified that the plaintiffs’ first vessel was built in shed D26. He also explained that he observed the defendant working out of another shed (H60) which he described as a “super yacht shed”. Mr Fendley observed that MEC had two boats under construction in sheds H60 and H61 in early 2020. He specifically recalled viewing these vessels and seeing “employees with their shirts and everything on working on them”.[21] He also recalled going into Shed D29 in February 2020 “to so see if we had any aluminium there, and he was constructing another boat in there.”[22] [20]Exhibit 9.[21]T1-65, l 44.[22]T1-66, ll 5-10. In November 2019, MEC advertised a half-finished 17 metre catamaran for sale which Mr Fendley inspected in Shed H60. But the plaintiffs wanted a bigger vessel with some additions that their current catamaran did not have. Around this time the plaintiffs commenced serious discussions with the defendant about MEC building them a new vessel. What transpired was several emails about possible vessels, and designs were exchanged between the parties. Mr Fendley’s evidence was that he and Ms Sparrow discussed the construction of the new vessel together and with the defendant by identifying changes to their current catamaran. These changes were then passed on to Mr McDonald-Smith. On 18 December 2019, the plaintiffs met with the defendant to discuss MEC building them an “18m Andrew McDonald-Smith Design catamaran.”[23] This meeting took place at a fabrication place for “yachts and repairs and everything”[24] called “The Yard” located at Hemmant in Brisbane. The plaintiffs, the defendant, his daughter and Mr McDonald-Smith were in attendance at this meeting. [23]Statement of claim filed 8 March 2020 “(SOC”) at [3]; Amended Defence (“AD”) filed 22 June 2022 at [3]. [24]T1-68, ll 7-10.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

CITATION:	Fendley & Anor v Owen [2022] QDC 249
PARTIES:	IAN FENDLEY (plaintiff) and ANGELA SPARROW (plaintiff) v MURRAY JOHN OWEN (defendant)
FILE NO/S:	555/22
DIVISION:	Civil
PROCEEDING:	Trial
ORIGINATING COURT:	Brisbane District Court
DELIVERED ON:	11 November 2022
DELIVERED AT:	Rockhampton
HEARING DATE:	4,5 & 7 October 2022
JUDGE:	Muir DCJ
ORDERS and DIRECTIONS:	There is to be judgment for the plaintiffs in the sum of $559,124 together with interest from the dates each payment was made plus costs. The plaintiffs are directed to bring in a Final Order.
CATCHWORDS:	TRADE AND COMMERCE – FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATION – CHARACTER OR ATTRIBUTES OF CONDUCT OR MISREPRESNTATION – MISLEADING OR DECEPTIVE CONDUCT: WHAT CONSTITUTES – where the plaintiffs entered into a contract with the defendant’s company for the construction of a catamaran – whether by conduct, the defendant represented to the plaintiffs that the company had capacity to meet the contract requirements when it did not – where the defendant represented the company was solvent when it was not. TRADE AND COMMERCE – FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATION – CHARACTER OR ATTRIBUTES OF CONDUCT OR MISREPRESENTATION – whether the defendant had a basis for making the representations which led the plaintiffs to believe the contract requirements could be met – whether the representations amounted to misleading and deceptive conduct. TRADE AND COMMERCE – FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATION – FALSE REPRESENTATIONS GENERALLY – whether the plaintiffs executed the contract on the basis that they were induced by the defendant’s representations. TRADE AND COMMERCE – FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATION –MISLEADNG OR DECEPTIVE CONDUCT GENERALLY – PARTICULAR CASES – CAUSATION – whether the plaintiffs suffered loss and damage by making the payments under the contract or in reliance on the representations as to the capability of the defendant to perform the contract.
LEGISLATION:	Competition and Consumer Act 2010 (Cth), Schedule 2 (The Australian Consumer Law) ss 2, 4, 18, 236 Trade Practices Act 1974 (Cth), s 51A Uniform Civil Procedure Rules 1999 (Qld), r 476(1), r 681
CASES:	Australian Competition and Consumer Commission (ACCC) v Michigan Group Pty Ltd [2002] FCA 1439 Australian Competition and Consumer Commission (ACCC) v TPG Internet Pty Ltd (2013) 250 CLR 640. Australian Competition and Consumer Commission (ACCC) v Woolworths Group Ltd (formerly called Woolworths Ltd) (2020) 281 FCR 108 Banque Commerciale SA En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 Cadbury-Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 Global Sportsman…