SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0027
| KEYS CONSULTING PTY LTD (ACN 069 620 686) | First Applicant |
| and | |
| ANTONIO SCATURCHIO | Second Applicant |
| v | |
| CAT ENTERPRISES PTY LTD (ACN 100 325 460) & ORS (according to the attached Schedule) | Respondents |
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| JUDGES: | MAXWELL ACJ, NIALL JA and MACAULAY AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 30 October 2018 |
| DATE OF JUDGMENT: | 19 June 2019 |
| MEDIUM NEUTRAL CITATION: | [2019] VSCA 136 |
| JUDGMENT APPEALED FROM: | [2017] VCC 1661 (Judge Macnamara) |
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CONTRACT – Misleading or deceptive conduct – Sale of business – Whether representations induced entry into agreement – Measure of damages – Whether judge erred in valuing business at nil – Whether judge erred in deducting post-sale benefit – Onus on purchaser to establish value at date of sale – Appeal allowed – Damages award set aside – Australian Consumer Law (Competition and Consumer Act 2010, sch 2) ss 18, 236, 237, 243.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr D J Williams QC with Mr R L Moore | McNab McNab & Starke |
| For the Respondents | Mr D G Robertson QC with Mr A W Sandbach | Goldsmith Lawyers |
MAXWELL ACJ
NIALL JA
MACAULAY AJA:
Introduction and summary
In July 2013, Keys Consulting Pty Ltd (‘Keys’)[1] sold a business to CAT Enterprises Pty Ltd (‘CAT’).[2] A dispute about that sale was determined by judgment in the County Court on 5 February 2018, following the publication of reasons for judgment, in two parts, in late 2017 and early 2018.[3] From that judgment the applicants sought leave to appeal.
[1]The first applicant.
[2]The first respondent.
[3]Reasons for findings concerning liability were published on 16 November 2017: Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd [2017] VCC 1661 (‘Liability reasons’). Following a further hearing on 12 December 2017 on the appropriate relief to be granted, reasons concerning the remedies to be granted were published on 24 January 2018: Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd [2017] VCC 1912 (‘Remedy reasons’).
Since around the mid-1990s, Antonio (Tony) Scaturchio[4] had conducted a business installing and removing signs for real estate and other commercial purposes within the metropolitan area of Melbourne. He conducted that business through the medium of several companies which he controlled, one being Keys and another being Sign Install Pty Ltd (‘Sign Install’).
[4]The second applicant.
Most of the sign installation work was done for an advertising firm, Briner Ads Pty Ltd (‘Briner’). Keys was the contracting party with Briner but Sign Install carried out much of the work on Keys’ behalf.
Keys undertook two types of sign installation work for Briner. One type was residential real estate signage (‘residential signage’); the other was general commercial signage (‘commercial signage’). The commercial signage often involved larger signs and more complex installations than was required for the residential signage.
Keys was not Briner’s only installer of signs. For the commercial signage, there were two or three other contractors that Briner used regularly. Generally speaking, Briner would seek quotations…
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- Case
- [2019] VSCA 136
- Decision Date
CaseChat Overview and Summary
The primary legal issues before the court were whether the defendant's representations constituted misleading or deceptive conduct under the Australian Consumer Law, and if so, what the appropriate measure of damages should be. The court had to consider whether the judge at first instance erred in valuing the business at nil and whether it was appropriate to deduct a post-sale benefit from the damages award. The onus was on the plaintiff to establish the value of the business at the date of sale.
The court found that the defendant had indeed engaged in misleading or deceptive conduct, which induced the plaintiff to enter into the sale agreement. However, it was held that the judge erred in valuing the business at nil at the date of sale. The court determined that the onus was on the plaintiff to establish the value of the business at the time of the sale, which the plaintiff failed to do. Furthermore, the court found that it was inappropriate to deduct a post-sale benefit from the damages award. Consequently, the appeal was allowed, and the damages award was set aside. The case was remitted to the court of first instance for a re-assessment of the damages.
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