JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: MOTIUM PTY LTD -v- ARROW ELECTRONICS AUSTRALIA PTY LTD [2011] WASCA 65
CORAM: McLURE P
NEWNES JA
MURPHY JA
HEARD: 13 SEPTEMBER 2010
DELIVERED : 18 MARCH 2011
FILE NO/S: CACV 5 of 2010
BETWEEN: MOTIUM PTY LTD
Appellant
AND
ARROW ELECTRONICS AUSTRALIA PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : DISTRICT COURT OF WESTERN AUSTRALIA
Coram :SCOTT DCJ
Citation :MOTIUM PTY LTD -v- ARROW ELECTRONICS AUSTRALIA PTY LTD [2009] WADC 184
File No :CIV 2346 of 2007
Catchwords:
Contract - Sale of goods - Respondent agreed to supply specified brand of electronic components to appellant - Appellant manufactured electronic equipment - Appellant incorporated components supplied by respondent in electronic equipment sold to third party - Components supplied by respondent were imitations of specified components - Electronic equipment delivered to third party replaced by appellant because of unrelated faults - Whether respondent liable in damages for failure to supply specified components - Appellant replaced some of the components in electronic equipment before delivery to third party - Whether entitled to damages for cost of replacement - Failure of appellant to prove damage
Trade practices - Misleading or deceptive conduct - Representation as to nature of product to be supplied - Whether representation as to future matter
Legislation:
Goods Act 1958 (Vic), s 16(3), s 18, s 59(2)
Trade Practices Act 1974 (Cth), s 51A, s 52
Result:
Appeal allowed in part
Appellant awarded nominal damages for breach of contract
Category: B
Representation:
Counsel:
Appellant: Mr A Metaxas
Respondent: Mr D C Harrison
Solicitors:
Appellant: Metaxas & Hager
Respondent: Cooper Mills Lawyers
Case(s) referred to in judgment(s):
Adams v Classic Autocraft (Australia) Pty Ltd (1985) ATPR 40‑612
Auspac Trade International Pty Ltd v Victorian Dairy Industry Authority & Campberdown‑Glenormiston Dairy Co (Unreported, VSCA, 22 February 1994)
Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344
Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613
Bence Graphics International Ltd v Fasson UK Ltd [1998] QB 87
Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422
Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171
Burns v MAN Automotive (Aust) Pty Ltd [1986] HCA 81; (1986) 161 CLR 653
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Commonwealth of Australia v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
Concrete Constructions Group Ltd v Litevale Pty Ltd [2002] NSWSC 670; (2002) 170 FLR 290
Dexters Ltd v Hill Crest Oil Co (Bradford) Ltd [1926] 1 KB 348
Gerrard v Slamar [2004] WASCA 253
Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82
H Parsons (Livestock) Ltd v Uttley Ingham & Co Ltd [1978] QB 791
Hadley v Baxendale (1854) 9 Exch 341; (1854) 156 ER 145
Hammond & Co v Bussey (1887) 20 QBD 79
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- Case
- [2011] WASCA 65
- Decision Date
CaseChat Overview and Summary
The court needed to determine whether the respondent's failure to supply the correct components constituted a breach of contract and if the appellant had suffered any loss as a result. The court also had to decide if the respondent's representations about the future supply of components were misleading or deceptive. The appellant argued that it was entitled to substantial damages, while the respondent contended that the appellant had not suffered any loss and thus was not entitled to any damages. Furthermore, the court had to consider whether the respondent's conduct was misleading or deceptive based on the representations made about the nature of the components to be supplied.
The court found that the respondent had breached the contract by supplying imitation components instead of the specified ones. However, the primary judge concluded that the appellant had failed to prove that it had suffered any loss as a result of the breach. The court also held that the representations made by the respondent were not misleading or deceptive as they related to future matters. Consequently, the court dismissed the appellant's claims for damages and costs. The court did not order nominal damages as the appellant's case was based on substantial damages, which it had failed to prove.
The court ordered that no substantive orders be made regarding the costs of the trial and the appeal. The parties were directed to file a minute of the orders they sought and submissions as to why those were the appropriate orders. The court did not grant the appellant's request for nominal damages, as it was not part of the appellant's case at trial or on appeal.
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
Ratio Decidendi
Legal Principle Established
Whether a representation is misleading or deceptive is to be judged at the time the representation is made: Bill Acceptance Corporation Ltd v GWA Ltd (1983) 78 FLR 171, 178 ‑ 179. Where it is alleged that a corporation made a representation as to an existing state of affairs the question is whether, at the time it was made, the representation was misleading or deceptive as to that state of affairs. Where, on the other hand, it is alleged that a corporation made a representation with respect to a future matter, the representation will be misleading or deceptive if, at the time it was made, the corporation did not have reasonable grounds for making it. Where such a case is alleged, the onus of establishing that it had reasonable grounds for making it lies on the corporation: s 51A. But a representation that a corporation will do something in the future will not be shown to be misleading or deceptive at the time it was made simply by showing that when the time came to do that thing the corporation did not do it: Bill Acceptance Corporation Ltd (179); Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82, 88; Concrete Constructions Group Ltd v Litevale Pty Ltd [2002] NSWSC 670; (2002) 170 FLR 290 [155]. It is clear, however, that a representation as to something which is to occur in the future may convey a representation of existing fact that is misleading: Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 [36]. Thus in Westsub Discounts Pty Ltd v Idaps Australia Ltd (1990) 17 IPR 185, a representation that certain computer equipment and software would fulfil the requirements of the applicant's business was held to convey statements of fact about the system's capabilities and suitability for the applicant's purposes which were untrue. Similarly, in Adams v Classic Autocraft (Australia) Pty Ltd (1985) ATPR 40‑612, a quotation for the cost of restoring a car was held to convey an incorrect statement of fact as to the extent of work necessary to restore the car. In my opinion, the primary judge correctly found that the representations alleged by the appellant related to future matters, not to existing facts. Although the representation pleaded in par 8.1(a) is not worded as clearly as it might have been, in the context the plea that 'the [mosfets] to be supplied had been manufactured by Vishay' is explicable only as a plea as to a future matter. The appellant's claim was not based on a contention that the respondent's conduct was misleading or deceptive because, at the time the representation was made, the respondent did not in fact have in its possession mosfets meeting the description in the contract, or that the mosfets which were in the respondent's overseas warehouse were not in fact Vishay mosfets. The appellant's case was that the respondent's conduct was misleading or deceptive because it had represented that it would supply Vishay mosfets, but, contrary to that representation, it subsequently supplied mosfets which had been manufactured by someone other than Vishay: par 16.1 of the statement of claim. It was the respondent's conduct in supplying 'grey market' mosfets which it was alleged had caused the appellant to suffer loss and damage: par 17. That loss and damage was, in substance, the cost of replacing the power supply units because the mosfets which were supplied did not conform to the description in the contract.