Makrenos v Papaioannou - [2008] VSC 83

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 6763 of 2007

IN THE MATTER of Section 148 of the Victorian Civil and Administrative Tribunal Act 1998

STEVEN MAKRENOS AND STAM MAKRENOS	Appellants
V
KONSTANTINOS PAPAIOANNOU, EVRIDIKI PAPAIONNOU AND BARNABAS PAPAIONNOU	Respondents

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JUDGE:	KAYE J
WHERE HELD:	Melbourne
DATE OF HEARING:	26 March 2008
DATE OF JUDGMENT:	31 March 2008
CASE MAY BE CITED AS:	Makrenos & Anor v Papaioannou & Ors
MEDIUM NEUTRAL CITATION:	[2008] VSC 83

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TRADE PRACTICES – Misleading or deceptive conduct – Fair Trading Act 1999 (Vic) s 9(1) – Causation of damages – Appeal from decision of Victorian Civil and Administration Tribunal – Decision of Tribunal refusing leave to appellants to amend claim to allege loss caused by misrepresentation made to third party – Whether claim arguable.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr D Collins SC and A Herskope	Noble Lawyers
For the Respondents	Mr J Twigg	Giannakopoulos Solicitors

HIS HONOUR:

This is an appeal against a decision of a senior member of the Victorian Civil and Administrative Tribunal made on 31 May 2007, refusing to grant leave to the appellants to amend their points of claim against the first and second respondents. The appeal was brought under s 148(1)(b) of the Victorian Civil and Administrative Tribunal Act 1998, and pursuant to leave given by a master.

Background

In January 2003, the appellants entered into a contract for the construction of a home at their property at 109 Ponyara Road, Mount Martha. The builder was described in the contract as “Arista Construction Barney Papaioannou”. On 13 May 2005 the appellants issued proceedings in the tribunal against the three respondents to this appeal, Konstantinos Papaioannou, Evridiki Papaioannou and Barnabas Papaioannou. By their points of claim, dated 16 May 2005, the appellants alleged that the respondents were carrying on business as partners under the unregistered trading names of “Arista Construction” and “K, E and B Papaioannou”, that the first named respondent was registered with the Building Commission as a registered building practitioner, and that the appellants had entered into a building contract with the respondents engaging the respondents to construct a house at their property at 109 Ponyara Road, Mount Martha. The points of claim alleged a number of breaches by the respondents. The appellants claimed damages, consisting of the costs of rectification then estimated at $200,000, less the outstanding contract sum.

On 8 August 2005, the respondents delivered a document entitled “points of defence and counterclaim”. Relevantly, by that document, all three respondents admitted the allegations that they were carrying on business as partners under the unregistered trading names of Arista Construction and K, E and B Papaioannou, and that the appellants had entered into a building contract with them engaging them to build the house. Subsequently, the appellants delivered “amended points of claim”, the principal purpose of which was to amend the amount of damages claimed to $311,646.70. In response, the respondents delivered “amended points…

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: [2008] VSC 83
Decision Date: 31 March 2008

CaseChat Overview and Summary

The case of Makrenos v Papaioannou involved the appellants, who were seeking to amend their claim against the respondents, to allege that the respondents had engaged in misleading or deceptive conduct under section 9(1) of the Fair Trading Act 1999 (Vic). The dispute arose from allegations that the respondents had made misrepresentations to a third party, leading to the appellants incurring damages. The matter was appealed from a decision of the Victorian Civil and Administrative Tribunal, which had refused the appellants leave to amend their claim to include the alleged misrepresentation made to the third party.

The central legal issues before the court were whether the appellants' proposed amended claim was arguable and whether the tribunal had correctly exercised its discretion in refusing leave to amend. Specifically, the court needed to determine if the appellants' proposed claim had a reasonable prospect of success and if the tribunal had adequately considered all relevant factors in denying the amendment.

The court found that the appellants' proposed amended claim was not arguable as it was based on a misrepresentation made to a third party, which did not directly cause the appellants' damages. The court held that for a claim under section 9(1) of the Act to succeed, the misleading or deceptive conduct must have caused the loss or damage to the plaintiff. Since the appellants did not allege that they were directly affected by the misrepresentation to the third party, their proposed amended claim lacked a reasonable prospect of success. Furthermore, the court concluded that the tribunal had exercised its discretion appropriately in refusing leave to amend the claim.

The court upheld the decision of the tribunal and dismissed the appeal. The appellants were not granted leave to amend their claim to include the alleged misrepresentation made to the third party.

Orders