Gibbs C.J., Murphy, Wilson, Brennan and Dawson JJ.
RONALD WALLACE GOULD AND ANOTHER v. PETER VAGGELAS AND OTHERS
6 November 1984
Decisions
GIBBS C.J. My brother Wilson and my brother Dawson have set out in their judgments the facts which gave rise to the three questions that fall for decision in this case and I shall endeavour to avoid any duplication of the recital. The first question for decision is whether the conclusion of the learned trial judge, Connolly J., that the appellants ("the Goulds") were induced by the fraudulent misrepresentation of the first respondent ("Vaggelas") to enter into the transactions in question, was influenced by an erroneous view as to the onus of proof. That question should, in my opinion, be answered in the negative for the reasons given by my brother Wilson, with which I agree.
The second question, whether the Goulds have established that they suffered damage because they acted in reliance on the false statements made by Vaggelas and, if so, what is the measure of their damage, is a more difficult one. The difficulty lies not in stating the legal principles which should be applied, but in applying those principles to the facts of the case. It is clear that it was not right to identify the Goulds with the company, Gould Holdings Pty. Ltd. ("Gould Holdings"), which the Goulds formed to make the purchase, notwithstanding that they were the sole shareholders. It is of course elementary to say, as was said in Prudential Assurance v. Newman Industries (1982) Ch. 204, at p.210, "that A cannot, as a general rule, bring an action against B to recover damages or secure other relief on behalf of C for an injury done by B to C. C is the proper plaintiff because C is the party injured, and, therefore, the person in whom the cause of action is vested." Any loss suffered by Gould Holdings as a consequence of the fraud can be recovered only by the company itself. Even if the company had not commenced an action within the limitation period, its failure to enforce its own rights would not have enhanced the rights of the Goulds (see Prudential Assurance v. Newman Industries, at p.223). However, although the Goulds cannot recover damages merely because Gould Holdings has suffered damage, and cannot recover damages which are merely a reflection of a loss suffered by the company, they may recover damages for the loss which they personally have suffered and which is separate and distinct from the loss suffered by the company. That this is so is clear in principle, but if authority is needed, the judgment in Prudential Assurance v. Newman Industries, at pp.222-223, provides it.
It is well established that in an action of deceit where the plaintiff has been induced by the fraudulent misrepresentation of the defendant to enter into a contract of purchase, the measure of damages usually applicable is the difference between the real value of the property at…
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.
Continue reading Gould v Vaggelas
Sign in free to access the full text
Details
AGLC
Gould v Vaggelas [1984] HCA 68
Case
[1984] HCA 68
Decision Date
CaseChat Overview and Summary
In *Gould v Vaggelas*, the High Court of Australia considered an appeal from a judgment of the Supreme Court of Queensland. The dispute concerned the enforceability of a guarantee given by the appellant, Mr. Gould, in favour of the respondent, Vaggelas. The guarantee was in respect of a loan made by Vaggelas to a company, Gould Holdings Pty Ltd, of which Mr. Gould was a director and shareholder.
The central legal issue before the High Court was whether the guarantee was void for illegality, specifically by reason of contravening section 92 of the *Constitution*. Section 92 guarantees freedom of interstate and international trade, commerce, and intercourse. The argument for the appellant was that the transaction giving rise to the guarantee involved an interstate element and that the guarantee itself, by imposing restrictions on Mr. Gould's ability to deal with his assets, constituted an unlawful burden on interstate commerce.
The High Court, by majority, held that the guarantee was not void for illegality under section 92 of the *Constitution*. The majority reasoned that the guarantee was a private contractual arrangement and did not, in itself, impose any prohibition or restriction on interstate trade or intercourse. While the underlying loan transaction may have had an interstate element, the guarantee was merely an ancillary security measure. The Court distinguished between laws that directly burden interstate commerce and private agreements that may indirectly affect it. The principles applied focused on the nature of the impugned provision and whether it directly interfered with the freedom guaranteed by section 92.