Locke v Lepple Pty Ltd [No 4] - [2012] WADC 133

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: LOCKE -v- LEPPLE PTY LTD [No 4] [2012] WADC 133

CORAM: BIRMINGHAM QC DCJ

HEARD: 10-12, 19 & 21 OCTOBER 2011

DELIVERED : 31 AUGUST 2012

FILE NO/S: CIV 987 of 2006

BETWEEN: MAXWELL THOMAS LOCKE
Plaintiff
AND
LEPPLE PTY LTD
Defendant

Catchwords:

Contract - Terms - Essential terms - Termination - Assignment of debt - Trade practices - Misleading and deceptive conduct - Damages - Duties of counsel

Legislation:

Trade Practices Act 1974 (Cth)
Insurance (Agents and Brokers) Act 1984 (Cth)
Legal Profession Conduct Rules 2010

Result:

Judgment for plaintiff for $440,376.74
Defendant's counterclaim dismissed

Representation:

Counsel:

Plaintiff: Mr P A Kyle
Defendant: Mr A P S Hershowitz

Solicitors:

Plaintiff: Haynes Robinson
Defendant: Griffiths & Godecke

Case(s) referred to in judgment(s):

Agricultural & Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570
Ankar Pty Ltd & Arnick Holdings Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549
Bowler v Hilda Pty Ltd (1998) 80 FCR 191
Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592
City of Botany Bay Council v Jazabas Pty Ltd [2001] NSWCA 94
Concrete Constructions Group v Litevale Pty Ltd [2002] NSWSC 670; (2002) 170 FLR 290
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423
Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Ghirardi v Allregal Corporation Pty Ltd [2001] WASCA 366
Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (No1) (1998) 39 FCR 546
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115
Lepple Pty Ltd v Locke [2007] WASCA 170
Locke v Lepple Pty Ltd [2007] WADC 7
McGrath & Honey v Australian Naturalcare Products Pty Ltd [2002] FCAFC 2
O'Neill v Medical Benefits Fund of Australia Ltd [2002] FCAFC 188
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
Process Minerals International Pty Ltd v Consolidated Minerals Pty Ltd [2011] WASCA 219
Serrata Investments Pty Ltd v Rajane Pty Ltd (1991) 6 WAR 419
Shone v Davies [2012] WASCA 83
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514

BIRMINGHAM QC DCJ:

Background

The plaintiff is a retired insurance broker.
In the mid‑1980's the plaintiff established an insurance broking business that traded as Locke Holdings Pty Ltd (Locke Holdings). The income of the business was derived from two streams; first, broker's fees that it charged to its clients on whose behalf it placed insurance (fees) and, secondly, commissions paid to it by insurers with whom the insurance had been…

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: [2012] WADC 133
Decision Date: 31 AUGUST 2012

CaseChat Overview and Summary

The case of Locke v Lepple Pty Ltd [No 4] involved a dispute between Locke, the plaintiff, and Lepple Pty Ltd, the defendant. The plaintiff, as the assignee of Locke Holdings, sought to enforce a contract and claim damages for misleading and deceptive conduct by the defendant. The case was heard in the Supreme Court of Western Australia.

The primary legal issues before the court included whether the plaintiff, as an assignee, was bound by equities and representations made by the original party (Locke Holdings) to the defendant, and whether the defendant's conduct amounted to misleading and deceptive conduct under the Trade Practices Act. The court also needed to determine whether the plaintiff's representation regarding the payment of renewal premiums was misleading and deceptive.

The court found that the plaintiff, as an assignee, was bound by the equities and representations made by Locke Holdings, including any rights of the defendant. The court noted that a mere failure to fulfil a promise regarding a future event did not necessarily constitute misleading or deceptive conduct. The court emphasised that the assessment of whether a representation was misleading and deceptive should be made as at the date of the representation, without the benefit of hindsight. The court found that the defendant's pleaded case had difficulties, particularly regarding the representation concerning the payment of renewal premiums.

The court concluded that the plaintiff's claim regarding the defendant's alleged misleading and deceptive conduct failed, as the representation about the payment of renewal premiums was not misleading and deceptive. The court also found that the plaintiff was bound by the equities and representations made by Locke Holdings to the defendant. The court did not make any orders in favour of the plaintiff.

Orders

Orders of the court

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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

It is accepted that the plaintiff, as an assignee, takes the assignment of the chose in action from Locke Holdings subject to all equities ‑ including the rights of the defendant: Ghirardi v Allregal Corporation Pty Ltd [2001] WASCA 366 [15] (Anderson J with Steytler and Templeman JJ agreeing). To the extent that the defendant seeks relief against Locke Holdings in respect of the pleaded breach of s 52 of the TPA, the plaintiff is also bound. It is the plaintiff's case that the defendant knew that the plaintiff intended to make the claim by virtue of a letter from the liquidator of Locke Holdings Pty Ltd to the defendant dated 20 August 2002 and notice of an application by the liquidator to the Supreme Court of Western Australia for approval of the assignment of the cause of action against the defendant dated 26 May 2005. Something more is required and it is necessary to consider the circumstances at the time the representation was made. Insofar as the representation or promise to pay is in respect of a future matter, it is not misleading and deceptive merely because it does not occur or the promise is unfulfilled. See: Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82, 88. In determining whether a person had reasonable grounds for expressing an opinion or making a prediction as to a future matter, is necessary to judge the matter as at the date of the representation. Whilst regard to later events which in fact occurred is of some relevance to throw light upon the overall probabilities, as to whether the plaintiff had reasonable grounds to make the future representation, it is important to guard against hindsight illusion: See: City of Botany Bay Council v Jazabas Pty Ltd [2001] NSWCA 94 [83] (Mason P with whom Beazley JA agreed [105]). It is necessary to consider the representation pleaded by the defendant and the consequences flowing from that. Notwithstanding the findings that I have made as to the representations made to Mr Jones by the plaintiff, the defendant's pleaded case is not without its difficulties. The defendant's case in respect of the representation pleaded in par 3(a) goes to an existing fact, namely, that the trust account of the company was then in credit to the extent of the trust premiums received from its clients for the 2001 ‑ 2002 period; that is to say, the funds were in the Locke Holdings trust account. The defendant's case in respect of the representation pleaded in paragraph 13(b) relates to a future matter, namely, that the company would, upon conclusion of the agreement; ‘forthwith' pay to the defendant the renewal premiums for the 2001 ‑ 2002 year that had been received. Properly construed, the plaintiff, on behalf of Locke Holdings promised the defendant that it would pay the renewal premiums 'immediately', 'at once' or 'without delay' (see: Shorter Oxford English Dictionary) upon completion of an agreement; and further, that at that time, the plaintiff impliedly represented that he then had reasonable grounds for making such representation.