Miles v Luneburger Franchising Pty Ltd

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Court of Appeal


Supreme Court


New South Wales

Medium Neutral Citation: Miles v Luneburger Franchising Pty Ltd [2021] NSWCA 248
Hearing dates: 17 September 2021
Date of orders: 14 October 2021
Decision date: 14 October 2021
Before: Macfarlan JA at [1]
Gleeson JA at [2]
Simpson AJA at [105]
Decision:

(1)   Direct that the name of the respondent be changed to “Luneburger Franchising Pty Ltd as trustee for Luneburger Franchising Trust”.

(2)   Appeal dismissed.

(3)   Appellant to pay the respondent’s costs.

Catchwords:

CONTRACT — construction — interpretation — debt collection agreement — meaning of ‘collect’ — where agent obtained judgment debt against debtor — where debtor deregistered company — no monies collected from debtor — whether agent entitled to fee — whether agreement authorised agent to pursue other alleged debtors not specified in agreement

CONTRACT — breach — where debt collection agreement prohibited principal taking any steps in relation to specified debt — where principal withdrew instructions of solicitors retained on behalf of principal by agent — whether breach of debt collection agreement

DAMAGES — damages in contract — causation — loss of commercial opportunity — chance of obtaining fee for collecting a debt — where debtor company deregistered and likely insolvent — whether causation established — whether chance of acquiring fee had some value other than negligible or speculative

Legislation Cited:

Corporations Act 2001 (Cth), s 601AD(2)

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

ACCC v ASIC [2000] NSWSC 316; (2000) 34 ACSR 232

Allied Maples Group Ltd v Simmons & Simmons (a Firm) [1995] 1 WLR 1602

Badenach v Calvert (2016) 257 CLR 440; [2016] HCA 18

Bofinger v Kingsway Group Ltd (2009) 239 CLR 269; [2009] HCA 44

Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd (2017) 261 CLR 544; [2017] HCA 12

Electricity General Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7

Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323

House v The King (1936) 55 CLR 499; [1936] HCA 40

Jowitt v Callaghan (1938) 38 SR (NSW) 512

Malec v JC Hutton Pty Ltd (1990) 169 CLR 638; [1990] HCA 20

Mal Owen Consulting Pty Ltd v Ashcroft (2018) 97 NSWLR 1163; [2018] NSWCA 135

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37

Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631

Paterson v Clarke [2002] NSWSC 1206

Perry v Raleys Solicitors [2020] AC 352; [2019] UKSC 5

Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4

Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85; [2016] HCA 47

Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245; [1988] HCA 11

Turner Manufacturing Co Pty Ltd v Senes [1964] NSWR 692
Victoria v Tatts Group Ltd [2016] HCA 5; (2016) 90 ALJR 392

Water Board v…

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Details
Case
[2021] NSWCA 248
Decision Date

CaseChat Overview and Summary

Miles appealed from a decision of the Supreme Court of New South Wales concerning a debt collection agreement between the appellant, Miles, and the respondent, Luneburger Franchising Pty Ltd. The dispute arose from the respondent's claim for fees under the agreement, which Miles disputed.

The primary legal issues before the Court of Appeal were the proper construction of the debt collection agreement, specifically the meaning of "collect" in the context of the agreement and whether the respondent was entitled to a fee when it had obtained a judgment debt against a deregistered company from which no monies were actually collected. Further, the court considered whether the agreement authorised the respondent to pursue alleged debtors not specifically identified in the agreement. The court also had to determine if the respondent had breached the agreement by withdrawing instructions to solicitors previously retained on behalf of the respondent by the appellant, and whether the appellant had suffered actionable loss due to a loss of commercial opportunity, given the debtor company was deregistered and likely insolvent.

The Court of Appeal held that the term "collect" in the agreement did not require the actual receipt of monies by the respondent, but rather the successful completion of the debt recovery process, including obtaining judgment. The court found that the respondent had fulfilled its obligations under the agreement by obtaining judgment against the debtor company, even though no funds were ultimately recovered due to the company's deregistration and insolvency. Regarding the alleged breach, the court found that the respondent's actions did not constitute a breach of the agreement. Furthermore, the court determined that the appellant had not established a causal link between any breach by the respondent and a loss of commercial opportunity, as any chance of acquiring a fee was negligible or speculative.

Consequently, the appeal was dismissed, and the appellant was ordered to pay the respondent's costs. The court also ordered that the name of the respondent be changed to “Luneburger Franchising Pty Ltd as trustee for Luneburger Franchising Trust”.

Orders

Orders of the court

(1) Direct that the name of the respondent be changed to “Luneburger Franchising Pty Ltd as trustee for Luneburger Franchising Trust”.

(2) Appeal dismissed.

(3) Appellant to pay the respondent’s costs.

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

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