Hardy v Your Tabs Pty Ltd (in liq)

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CITATION: Hardy v Your Tabs Pty Limited [2000] NSWCA 150
FILE NUMBER(S): CA 40451/99
HEARING DATE(S): 5, 6 June 2000
JUDGMENT DATE:
22 June 2000

PARTIES :
Alan Douglas Hardy, Noeleen Beryl Hardy and A & N Hardy Pty Limited (Appellants)
Your Tabs Pty Limited (In Liquidation), Roy Matthews and Gladys Joyce Matthews (Respondents)
JUDGMENT OF: Meagher JA at 1; Heydon JA at 2; Foster AJA at 154
LOWER COURT JURISDICTION : District Court
LOWER COURT
FILE NUMBER(S) : 		7114/97
LOWER COURT
JUDICIAL OFFICER :		 Naughton DCJ
COUNSEL: Ms C Needham/P Russell (Appellants)
Mr R S Angyal (Respondents)
SOLICITORS: Brian Muir & Company (Appellants)
Keith Hurst & Company (Respondents)
CATCHWORDS: TRADE PRACTICES - Failure by vendor of Pizza Haven franchise business to disclose to purchaser that development consent had been granted for a Pizza Hut business in the area - non-disclosure held to constitute misleading or deceptive conduct in breach of s 52 Trade Practices Act 1974 (Cth) - materiality of undisclosed information - held to be immaterial that undisclosed information was known by some members of the public - Appeal allowed to the extent of reducing the pre-interest figure for that component of damages which reflects the difference between the price and value by $5,000, and reducing the figure for accounting fees by $800 - ND.
LEGISLATION CITED: Trade Practices Act 1974 (Cth)
Evidence Act 1995 (NSW)
CASES CITED:
 Gauci v Federal Commissioner of Taxation (1975) 135 CLR 81
Chamberlain v R (No 2) (1984) 153 CLR 521
Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31
Wheeler Grace & Pierucci Pty Ltd v Wright (1989) ATPR 40-940
Famel Pty Ltd v Burswood Management Ltd (1989) ATPR 40-962
Bowler v Hilda Pty Ltd (1998) ATPR 41-625
Eatten's Pty Ltd v JLW (NSW) Pty Ltd (1998) ATPR 41-619
Browne v Dunn (1894) 6R 67
Anema E Core Pty Ltd v Aromas Pty Ltd (1999) FCA 904
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83
Kimberley NZ Finance Ltd v Torero Pty Ltd (1989) ATPR (Digest) 46-054
Lamb v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458
Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281
Clark v Ryan (196) 103 CLR 486
DECISION: See paragraph 153



      THE SUPREME COURT
      OF NEW SOUTH WALES
      COURT OF APPEAL

      CA 40451/99
      DC 7114/97

      MEAGHER JA
      HEYDON JA
      FOSTER AJA

      Thursday, 22 June 2000


      ALAN DOUGLAS HARDY & ORS v
      YOUR TABS PTY LIMITED (IN LIQUIDATION) & ORS
      JUDGMENT
1    MEAGHER JA:
      I agree with Heydon JA
2    HEYDON JA:
      Background
      On 13 September 1996 Your Tabs Pty Ltd contracted with A & N Hardy Pty Ltd to purchase a home delivery pizza business at Castle Hill at a price of $550,000. On 23 October 1996 the transaction was completed. Your Tabs Pty Ltd succeeded to A & N Hardy Pty Ltd as a franchisee of the business, the franchisor being Glev Franchises Pty Ltd.

3    The business traded badly…

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Details
Case
[2000] NSWCA 150
Decision Date

CaseChat Overview and Summary

The appeal concerned a dispute between the purchaser of a Pizza Haven franchise business and the vendor, Your Tabs Pty Ltd (in liq). The purchaser alleged that the vendor engaged in misleading or deceptive conduct in breach of section 52 of the *Trade Practices Act 1974* (Cth) by failing to disclose that development consent had been granted for a competing Pizza Hut business in the same area. The primary court had found in favour of the purchaser.

The central legal issue before the Court of Appeal was whether the vendor's non-disclosure of the development consent for the Pizza Hut constituted misleading or deceptive conduct. This required the court to consider the materiality of the undisclosed information, particularly in light of the fact that some members of the public may have been aware of the Pizza Hut development. The court also had to determine the appropriate measure of damages arising from this breach.

The Court of Appeal, comprising Meagher and Heydon JJA and Foster AJA, allowed the appeal in part. The court reasoned that while the non-disclosure was indeed misleading or deceptive conduct, the undisclosed information was not entirely material in the way the primary judge had assessed. Consequently, the court reduced the pre-interest component of the damages awarded to the purchaser, specifically the portion reflecting the difference between the purchase price and the business's value, by $5,000. Furthermore, the court reduced the award for accounting fees by $800. The final orders reflected these adjustments to the damages awarded.

Orders

Orders of the court

See paragraph 153

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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