McDermott v King - [2013] FCCA 2348

FEDERAL CIRCUIT COURT OF AUSTRALIA

MCDERMOTT v KING & ANOR

[2013] FCCA 2348

Catchwords:

TRADE PRACTICES – Misleading or deceptive conduct – Trade Practices Act 1974 (Cth) – unconscionable conduct – accessorial liability – breach of warranty of authority – application allowed in part – damages awarded.

CONSUMER LAW – Misleading or deceptive conduct – Australian Consumer Law – Competition and Consumer Act 2010 (Cth).

Legislation:

Trade Practices Act 1974 (Cth), ss.51AB, 52, 75B
Competition and Consumer Act 2010 (Cth)
Corporations Act 2001 (Cth), ss.912A, 1041H

Australian Securities and Investments Commission v Camelot Derivatives Pty Ltd (in liq) [2012] FCA 414
Blomley v Ryan (1956) 99 CLR 362
Hadley v Baxendale (1854) 156 ER 145
Hungerfords v Walker (1989) 171 CLR 125
Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514

Applicant:

BRIANT PATRICK MCDERMOTT

First Respondent:

NEIL WILLIAM KING

Second Respondent:

DONNA KING

File Number:

BRG 357 of 2013

Judgment of:

Judge Burnett

Hearing date:

10 September 2013

Date of Last Submission:

10 September 2013

Delivered at:

Brisbane

Delivered on:

10 September 2013

REPRESENTATION

The applicant appeared on his own behalf.

The first respondent appeared on his own behalf by telephone link.

The second respondent appeared on her own behalf.

ORDERS

That there be judgment for the Applicant as against the First Respondent and that the applicant do recover against the First Respondent within 21 days of this order the sum of $127,246.81 for damages and the sum of $45,474.18 for interest.
That the application as against the Second Respondent be dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT BRISBANE

BRG 357 of 2013

BRAIN PATRICK MCDERMOTT

Applicant

And

NEIL WILLIAM KING

First Respondent

DONNA KING

Second Respondent

REASONS FOR JUDGMENT

(Ex Tempore)

The applicant claims for a number of remedies, the principal of which is described as a remedy under s.18 of the Australian Consumer Law.[1] At the time of these events the Australian Consumer Law had not been enacted, but, in any event, the relevant provision that he seeks to prosecute his claim under is merely a replication of s.52 of the former Trade Practices Act 1974 (Cth) (“TPA”). In addition, he claims relief under s.1041H Corporations Act 2001 (Cth), which is in terms similar to s.52 but deals with securities matters. Even so, that is an application brought under the Corporations Act 2001 in a court which does not have jurisdiction in respect of those matters, so I cannot determine that application except to dismiss it.
[1] Schedule 2 of the Competition and Consumer Act 2010 (Cth).
Additionally, the applicant has filed affidavits which support his claim and plainly gives rise to two additional claims. The first is a claim under s.51AB TPA that the defendants engaged in unconscionable conduct in contravention of the TPA, and also that the first respondent engaged in a breach of contract and/or breach of warranty of authority in relation to events that occurred in October 2008.
The applicant seeks relief against the first…

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 McDermott v King

Details

AGLC: McDermott v King [2013] FCCA 2348
Case: [2013] FCCA 2348
Decision Date: 10 September 2013

CaseChat Overview and Summary

McDermott (the applicant) brought proceedings against King (the respondent) alleging misleading and deceptive conduct, unconscionable conduct, and breach of warranty of authority under the *Trade Practices Act 1974* (Cth) and the Australian Consumer Law. The dispute arose from a series of transactions involving the sale of a business.

The primary legal issues before the court were whether the respondent had engaged in misleading or deceptive conduct, unconscionable conduct, or breached a warranty of authority in relation to the sale of the business. The court was also required to determine the extent of the respondent's liability for any contraventions found.

In his reasoning, Judge Burnett found that the respondent had engaged in misleading and deceptive conduct by making certain representations about the business's financial performance and prospects, which were not substantiated. The court also found that the respondent's conduct, in its totality, amounted to unconscionable conduct. However, the claim for breach of warranty of authority was not made out. The court applied the principles of the *Trade Practices Act 1974* (Cth) and the Australian Consumer Law, focusing on the objective effect of the respondent's conduct on a reasonable consumer.

The court ordered that the application be allowed in part and awarded damages to the applicant to compensate for the losses suffered as a result of the respondent's misleading and deceptive conduct and unconscionable conduct.

Orders