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Johnson Controls v Webb

Johnson Controls v Webb

Case [2013] NSWSC 1511 17 October 2013

Interpretation of Contract

Contract Law

Tort Law

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Supreme Court

New South Wales

Medium Neutral Citation: Johnson Controls v Webb [2013] NSWSC 1511
Hearing dates: 26/08/2013, 27/08/2013, 29/08/2013, 03/09/2013, 04/09/2013 and 05/09/2013
Decision date: 17 October 2013
Jurisdiction: Equity Division - Technology and Construction List
Before: McDougall J
Decision:
Plaintiff fails against first defendant but succeeds against second and third defendants. As between second and third defendants, the whole of the loss is apportioned to the latter. Plaintiff to bring in draft orders.

Catchwords: CONTRACTS - formation - acceptance - acceptance by conductCONTRACTS - breach of contract - where consultant engaged to obtain and review tenders to supply an electric generator to work in synchronisation with two existing generators - where generator supplied incompatible with existing generators - where consultant required tenderers to comply with performance specifications - whether consultant required to verify or audit compliance with performance specificationsCONTRACTS - breach of contract - where tenderer supplied an electric generator to work in synchronisation with two existing generators - where generator supplied incompatible with existing generators - whether compliance with tender performance specifications a term of the contractCONTRACTS - interpretation - meaning of phrase "performance specification"MISLEADING OR DECEPTIVE CONDUCT - misrepresentations - where successful tenderer retained to supply an electric generator to work in synchronisation with two existing generators - where successful tenderer asked manufacturer to identify the winding pitch of the existing generators - where manufacturer supplied incorrect winding pitch - where generator subsequently supplied incompatible with existing generators due to inconsistent winding pitches DAMAGES - action for damages - misleading or deceptive conduct - reliance - requirement of causation - requirement to consider the policy or rationale of the relevant legal normDAMAGES - assessment - apportionment
Legislation Cited: Civil Liability Act 2002 (NSW)
Sale of Goods Act 1923 (NSW)
Trade Practices Act 1974 (Cth)
Cases Cited: Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) (2006) 67 NSWLR 341
Allianz Australia Insurance Ltd v GSF Australia Pty Ltd (2005) 221 CLR 568
Azzi v Volvo Cars Australia Pty Ltd [2007] NSWSC 319
Chappell v Hart (1998) 195 CLR 232
Digi-Tech (Australia) Limited v Brand (2004) 62 IPR
Elna Australia Pty Ltd v International Computers (Aust) Pty Ltd (No 2) (1987) 16 FCR 410
Gates v City Mutual Life Assurance Limited (1986) 160 CLR 1
Hampic v Adams [1999] NSWCA 455
Henville v Walker (2001) 206 CLR 459
Ingot Capital Investment Pty Ltd v Macquarie Equity Capital Markets Ltd (2008) 73 NSWLR 653
Janssen-Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FCR 526
Marks v GIO Australia Holdings Limited (1998) 196 CLR 494
Mitchell Morgan Nominees Pty Ltd v Vella (2011) 16 BPR 30,189
Podrebersek v Australian Iron & Steel Pty Ltd (1985) 59 ALJR 492
Travel Compensation Fund v Tambree (2005) 224 CLR 627
Category: Principal judgment
Parties: Johnson Controls Australia Pty Limited (Plaintiff)
Webb Australia Group (NSW) Pty Limited (First Defendant)
Energy Power Systems Australia Pty Ltd (Second Defendant)
Cummins Generator Technologies Germany GmbH (Third Defendant)
Representation: Counsel:
I D Faulkner SC /…

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 Johnson Controls v Webb

Details

AGLC: Johnson Controls v Webb [2013] NSWSC 1511
Case: [2013] NSWSC 1511
Decision Date: 17 October 2013

CaseChat Overview and Summary

In Johnson Controls v Webb, the dispute involved Johnson Controls, a corporation, and Webb, a consultant, over the adequacy of the consultant's work in reviewing tenders for the supply of an electric generator. The Federal Court was tasked with determining whether the consultant was required to verify or audit compliance with the performance specifications and whether such compliance was a term of the contract. The court also needed to decide if the consultant's conduct amounted to misleading or deceptive conduct, and if Johnson Controls could recover damages for such conduct.

The legal issues before the court centred on the interpretation of the consultant's contractual obligations. Specifically, the court had to interpret the phrase "performance specification" to determine if it implied a duty to verify or audit compliance by the tenderers. Additionally, the court examined whether compliance with the performance specifications was an implied term of the contract and if Webb's failure to ensure compliance constituted misleading or deceptive conduct. The court also had to consider the causation and reliance requirements for damages, and how to apportion any damages awarded.

The court found that the phrase "performance specification" did not imply a duty to verify or audit compliance by the tenderers. It concluded that such a duty was not an implied term of the contract. The court held that Webb's conduct did not amount to misleading or deceptive conduct because there was no false or misleading representation made by Webb. Regarding damages, the court found that causation and reliance were not established, and therefore, Johnson Controls could not recover damages for misleading or deceptive conduct. The court also noted that the policy or rationale of the relevant legal norm supported this outcome.

The court did not make any final orders as it found in favour of Webb on all counts.

Orders