Gallagher v Associated Equipment Pty Ltd

Case [2020] QCA 183

SUPREME COURT OF QUEENSLAND

CITATION:

Gallagher v Associated Equipment Pty Ltd [2020] QCA 183

PARTIES:

PATRICK ROBERT GALLAGHER
(applicant)
v
ASSOCIATED EQUIPMENT PTY LTD
ACN 131 092 290
(respondent)

FILE NO/S:

Appeal No 49 of 2020
DC No 2640 of 2017

DIVISION:

Court of Appeal

PROCEEDING:

Application for Leave s 118 DCA (Civil)

ORIGINATING COURT:


District Court at Brisbane – [2019] QDC 249 (Porter QC DCJ)

DELIVERED ON:

1 September 2020

DELIVERED AT:

Brisbane

HEARING DATE:

8 May 2020

JUDGES:

Morrison JA and Ryan and Wilson JJ

ORDERS:

1.   Leave to appeal is refused.

2.   The applicant pay the respondent’s costs of and incidental to the application.

CATCHWORDS:

APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – WHEN APPEAL LIES – FROM DISTRICT COURT – BY LEAVE OF COURT – where the applicant seeks leave pursuant to s 118(3) of the District Court of Queensland Act 1967 (Qld), to challenge a judgment that found him to have caused loss by engaging in misleading or deceptive conduct – where the relevant conduct was the provision of a tax invoice by Evolution Piling Pty Ltd, of which the applicant was the director, which was held to have falsely represented that there had been an unconditional sale of four pieces of drilling equipment – where leave to appeal is granted as a matter of discretion and usually only where: (i) there is an important point of law or question of general or public importance, and (ii) there is a reasonable argument that there is an error to be corrected, because it is necessary to correct a substantial injustice to the applicant – whether leave to appeal should be granted

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS – where the learned trial judge made two central findings: (a) the Evolution tax invoice was misleading because it falsely represented that there had been an unconditional sale of the equipment effective to confer title on Slap; and (b) Mr Spong (and therefore Associated) relied upon the Evolution tax invoice, and it caused him to decide to have Associated purchase the equipment from Slap and borrow money to facilitate that purchase – where the appeal seeks to challenge those two findings – whether those grounds of appeal lack merit

District Court of Queensland Act 1967 (Qld), s 118(3)

Arnold Electrical & Data Installations Pty Ltd v Logan Area Group Apprenticeship/Traineeship Scheme Ltd[2008] QCA 100, cited
Associated Equipment Pty Ltd v Evolution Piling Pty Ltd (in liq) & Ors [2019] QDC 249, approved
Gould v Vaggelas (1985) 157 CLR 215; [1985] HCA 75, cited
Hobson & Anor v Taylor & Anor[2019] QCA 265, cited
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; [1982] HCA 44, cited
Pickering v McArthur[2005] QCA 294, cited
Smith v Ash [2011] 2 Qd R 175; [2010] QCA 112, cited

COUNSEL:

N…

Continue reading Gallagher v Associated Equipment Pty Ltd

Sign in free to access the full text

Details
AGLC
Gallagher v Associated Equipment Pty Ltd [2020] QCA 183
Case
[2020] QCA 183
Decision Date

CaseChat Overview and Summary

The matter of Gallagher v Associated Equipment Pty Ltd involved the applicant, Mr Gallagher, seeking leave to appeal against a judgment from the District Court of Queensland. The judgment found Mr Gallagher liable for loss caused by misleading or deceptive conduct. The relevant conduct was the issuance of a tax invoice by Evolution Piling Pty Ltd, of which Mr Gallagher was a director, that falsely represented an unconditional sale of four pieces of drilling equipment. Mr Gallagher sought leave to appeal, arguing the trial judge made errors in concluding that the tax invoice was misleading and that it caused the respondent, Associated Equipment Pty Ltd, to purchase the equipment and borrow money.

The central legal issues before the court were whether leave to appeal should be granted and whether the grounds of appeal had merit. The court considered whether there was an important point of law or question of general or public importance and if there was a reasonable argument of an error that would correct a substantial injustice to Mr Gallagher. The trial judge had found that the tax invoice was misleading as it falsely represented an unconditional sale, and that Mr Spong, a director of Associated, relied on the invoice when deciding to have Associated purchase the equipment from Slap and borrow money to facilitate the purchase.

The court held that both proposed grounds of appeal lacked merit as the evidence and objective circumstances supported the trial judge's findings. The court concluded that there was no error on the part of the trial judge in analysing the issue of misleading or deceptive conduct. Consequently, leave to appeal was refused, and the applicant was ordered to pay the respondent's costs of and incidental to the application. The judges unanimously agreed with the reasons provided by Morrison JA.

Orders

Orders of the court

1. Leave to appeal is refused.

2. The applicant pay the respondent’s costs of and incidental to the application.

Background

Background to the litigation

Leave to appeal is granted as a matter of discretion and usually only where: (i) there is an important point of law or question of general or public importance, and (ii) there is a reasonable argument that there is an error to be corrected, because it is necessary to correct a substantial injustice to the applicant.[2][2]Pickering v McArthur [2005] QCA 294; Smith v Ash [2011] 2 Qd R 175; [2010] QCA 112 at [50]; Arnold Electrical & Data Installations Pty Ltd v Logan Area Group Apprenticeship/Traineeship Scheme Ltd [2008] QCA 100 at [5].Some background facts In 2015 Associated Equipment Pty Ltd (Associated) conducted an equipment hire business, assisting clients to obtain equipment hire with an option to purchase. Associated acted as broker, arranging hire agreements with larger financiers, and, at times, as a financier and hirer in its own right. Mr Spong was a director and shareholder of Associated, and involved in its day to day management. At the same time, Evolution Piling Pty Ltd (Evolution) was a civil engineering contractor which was in possession of certain drilling equipment. A director of Evolution was the appellant, Mr Gallagher, who had a long career in civil engineering work, particularly tunnelling, on and off-shore drilling, and piling. He started Evolution in 2010, working in the piling and special foundation industry. Evolution went into liquidation in 2016. Mr Gallagher employed a Mr Suarez as a manager. Mr Suarez used his own company, Slap Corporation Pty Ltd (Slap). All three men knew each other from previous business dealings. Mr Spong knew Mr Suarez in his capacity as a representative of Evolution and also as a representative of Slap. In 2015 Mr Suarez began discussions with Mr Spong and Mr Gallagher about the potential purchase of a company called Argon Aluminium Pty Ltd. There were separate conversations between Mr Suarez and Mr Spong, and Mr Suarez and Mr Gallagher. Mr Spong was to arrange the finance for the purchase. The original view was that Slap would purchase Argon, and for that purpose obtain finance in Slap’s name. However, that could not be arranged. Eventually Mr Spong and Mr Suarez decided to obtain finance by using the sale of certain drilling equipment from one of their entities to another, then putting that equipment forward as security for a loan. Mr Suarez told Mr Spong that the equipment was owned by Slap and could be used as security for finance. The evidence concerning just how the arrangement was structured was complicated but the essential steps were: (a) Evolution would sell some of its drilling equipment to Slap; (b) Slap would then on-sell that equipment to Associated; (c) Associated would offer the equipment to a lender as security for a loan, ostensibly to be used to purchase Argon; and (d) Associated would lease the equipment back to Evolution, thus generating a cash flow to service the loan. On 11 March 2015 Evolution produced a tax invoice addressed to Slap.[3] It was signed by Mr Gallagher and listed four pieces of drilling equipment.[3]Exhibit 2.2, tab 29, AB 220.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

In my respectful view, both the direct evidence and the objective circumstances compel the conclusion which the learned trial judge reached, namely that the misleading or deceptive conduct was a substantial cause of Associated’s loss. No error has been demonstrated on the part of the learned trial judge in the relevant analysis of this issue. This proposed ground lacks merit.Conclusion As both of the proposed grounds of appeal lack merit, leave to appeal should be refused. I propose the following orders:1. Leave to appeal is refused.2. The applicant pay the respondent’s costs of and incidental to the application. RYAN J: I agree. WILSON J: I agree with the reasons of Morrison JA.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.