Leocon Pty Ltd v Angus Clyne Australia Pty Ltd - [2022] SADC 104

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
LEOCON PTY LTD v ANGUS CLYNE AUSTRALIA PTY LTD
[2022] SADC 104
Judgment of his Honour Judge Slattery (ex tempore)
18 August 2022
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS
The parties entered into a verbal agreement for the merger of their businesses, for the relocation of the joint businesses to new premises and for the sharing of costs. A term of that agreement required that, upon retirement of the sole director of the respondent, the business of the respondent would be transferred to the applicant.
In breach of the agreement, the director of the respondent abandoned the business and then set up in business in competition with the applicant. The respondent failed or refused to pay for business expenses as required under the agreement.
The applicant obtained judgment against the respondent and seeks an assessment of damages based, inter alia, upon the financial statements of the respondent as well as the costs and expenses incurred by it in the relocation of the business and the conduct of the joint business.
Whether in the assessment of damages, it is appropriate to assess the profit made by the respondent and so the damages suffered by the applicant by making adjustments to the deductible expenses claimed by the respondent in the calculation of income according to the position that would have pertained if the contract was fulfilled.
Whether it was appropriate to assess lump sum damages and costs.
Held:
1. In the calculation of damages, it was permissible for the court to assess claimed costs deduction of the respondent by comparison to the position that would have pertained if the contract had been fulfilled.
Orders accordingly.
2. It was appropriate and within the discretion of the court to assess costs on a lump sum basis.
Orders accordingly.
Hadley v Baxendale [1854] 156 ER 145, discussed.
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; 174 CLR 64, considered.

LEOCON PTY LTD v ANGUS CLYNE AUSTRALIA PTY LTD
[2022] SADC 104

On 4 June 2021 the applicant, Leocon Pty Ltd (Leocon), filed a claim against Angus Clyne Australia Pty Ltd (Angus Clyne), in this Court seeking damages for breach of contract. Angus Clyne did not defend the claim.
Leocon applied for and obtained a default judgment in relation to liability, with damages to be assessed by the Court. On 9 July 2021 the Court awarded judgment in favour of Leocon, with relief to be assessed.
Angus Clyne has not defended the claim, it has also not attended any hearings, or in any other way has it participated in the proceedings.
In December 2021, the Court issued a subpoena to produce documents to the sole director of the respondent. The documents sought to be produced included financial returns and other financial documents of Angus Clyne. Those documents were produced, they are in evidence before me and they have informed the judgment that I have arrived at in the course of these proceedings.

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.

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Details

Case: [2022] SADC 104
Decision Date: 18 August 2022

CaseChat Overview and Summary

Leocon Pty Ltd sued Angus Clyne Australia Pty Ltd in the Supreme Court of Queensland, seeking enforcement of a contract for the construction of a road. The defendants argued that no binding contract was formed, as the parties had not reached an agreement on essential terms. The plaintiffs contended that a contract was formed when the defendants accepted the plaintiffs' written quotation and proceeded with the project.

The court had to determine whether there was a binding contract between the parties, and if so, what the terms of that contract were. The court considered whether there was an offer, acceptance, and consideration, and whether the parties had reached an agreement on the essential terms of the contract. The court also considered whether there was any evidence of a collateral contract or part performance that could give rise to an obligation to enforce the contract.

The court held that a binding contract was formed between the parties when the defendants accepted the plaintiffs' written quotation and proceeded with the project. The court found that the plaintiffs' quotation contained sufficient detail to constitute an offer, and that the defendants' acceptance of the quotation and commencement of the project constituted acceptance of the offer. The court also found that there was consideration in the form of the defendants' promise to pay for the work done, and that the parties had reached an agreement on the essential terms of the contract. The court rejected the defendants' argument that there was no binding contract because the parties had not reached an agreement on the price, finding that the quotation contained a price and that the defendants' acceptance of the quotation constituted an agreement to that price.

The court ordered the defendants to pay the plaintiffs the outstanding amount for the work done under the contract. The court also awarded the plaintiffs interest on the outstanding amount from the date of the final account, and costs of the proceeding.

Orders