Murphy v Overton Investments Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Murphy v Overton Investments Pty Limited [2001] FCA 500

TRADE PRACTICES – Trade Practices Act 1974 (Cth) s 82 – “loss or damage” – requirement of causal link between loss or damage and conduct done in contravention of the Trade Practices Act – measure of damage not to be confined by analogy to other causes of action – measure of damage calculated on the basis of loss actually suffered or likely to be suffered – no compensation for a mere loss of expectation – misleading conduct found by primary judge in representations regarding lease of property to appellants by respondent retirement village – unchallenged evidence of appellants that had they not entered lease with respondent they would have entered lease with another retirement village – whether sufficient evidence before primary judge to calculate loss, if any, to appellants on the basis of misleading conduct – relevance of “rule” in Potts v Miller (1940) 64 CLR 282

TRADE PRACTICES – cause of action – when accrued

ESTOPPEL – equitable estoppel – identification of assumption adopted – whether reasonable and whether sufficiently precise – whether conduct of respondent unconscionable

JURISDICTION – whether s 7(1) of the Contracts Review Act1980 (NSW) is capable of being exercised by the Federal Court sitting in NSW by virtue of s 79 of the Judiciary Act 1903 (Cth)

WORDS AND PHRASES – “loss or damage” – “injury”

Trade Practices Act 1974 (Cth) ss 4K, 52, 82, 87
Judiciary Act 1903 (Cth) s 79
Contracts Review Act 1980 (NSW) s 7
Misrepresentation Act 1967 (UK)

Potts v Miller (1940) 64 CLR 282, discussed
Hawkins v Clayton (1988) 164 CLR 539, cited
Pritchard v Racecage Pty Ltd (1997) 72 FCR 203, referred to
Marks v GIO Australia Holdings Limited (1998) 196 CLR 494, followed
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1, considered
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514, considered
Kizbeau Pty Ltd v WG & B Pty Ltd (1995) 184 CLR 281, cited
Toteff v Antonas (1952) 87 CLR 647, considered
Gould v Vaggelas (1985) 157 CLR 215, cited
Smith New Court Securities Ltd v Citibank NA [1997] AC 254, cited
Blacker v National Australia Bank Ltd [2001] FCA 254, referred to
Australian Securities and Investment Commission v Edensor Nominees Pty Ltd [2001] HCA 1, followed
Smith v Smith (1986) 161 CLR 217, distinguished
Waltons Stores (Interstate) Limited v Maher (1988) 164 CLR 387, followed
Legione v Hateley (1983) 152 CLR 406, considered
Commonwealth v Verwayen (1990) 170 CLR 394, followed
Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1972] AC 741, cited
Blomley v Ryan (1956) 99 CLR 362, cited
Australian Securities Commission v Marlborough Gold Mines Ltd (1993) 177 CLR 485, cited
Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, considered
Christopoulos v Angelos (1996) 41…

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Details
Case
[2001] FCA 500
Decision Date

CaseChat Overview and Summary

In the case of Murphy v Overton Investments Pty Ltd, the dispute centred on the interpretation and application of a lease agreement between the plaintiffs, Mr and Mrs Murphy, and the defendant, Overton Investments Pty Ltd. The plaintiffs sought relief under the Contracts Review Act, alleging that they were not afforded adequate disclosure of the terms of the lease agreement, and that the defendants took advantage of their perceived special disadvantage. The matter was heard in the Supreme Court of Victoria, with the appeal being heard by a Full Court. The primary issue for the court was whether the plaintiffs were under a "special disadvantage" during the negotiation of the lease agreement, which would warrant relief under the Contracts Review Act. The court considered whether the plaintiffs were in a position of special disadvantage as defined by previous case law, specifically Commercial Bank of Australia Ltd v Amadio. The Full Court found that the evidence did not support a finding that the plaintiffs were under a special disadvantage, and thus, the lower court's dismissal of the plaintiffs' application for relief under the Contracts Review Act was upheld. The Full Court allowed the appeal for the limited purpose of remitting the matter to the lower court for further consideration of the plaintiffs' claim for relief. The court did not set aside other orders made by the lower court without specific submissions on their status, directing the parties to seek agreement on any additional orders, including costs, and to file submissions if no agreement could be reached.

Orders

Orders of the court

1. The appeal be stood over until 16 May 2001 for the purpose of making orders giving effect to these reasons, including orders as to costs.

2. The parties provide to the Associate of Branson J, by 9 May 2001, an agreed minute of the orders to be made (including the orders to be made as to costs) and if agreement has not by then been reached, the minutes of orders for which they will respectively contend and brief outlines of submissions in support of the orders.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

His Honour’s findings were, in my view, fairly open to him and ought not to be disturbed. It was not demonstrated before his Honour that Mr and Mrs Murphy were under any “special disadvantage” (as that expression was used by Mason J in Commercial Bank of Australia Ltd v Amadio) in negotiating with Overton.CONCLUSION In my view the appeal should be allowed for the limited purpose identified above. In each matter the order that the application be dismissed should be set aside and the matter remitted to Emmett J for further consideration of the applicant’s claim for relief under the Contracts Review Act. No submissions were made to this Court as to the present status of the other orders made by Emmett J on 16 June 2000 and as to the appropriateness or otherwise of their now being set aside. I would direct the parties to seek to reach agreement as to what additional orders, including orders as to costs, ought to be made in the light of this Court’s reasons for judgment. If agreement cannot be reached, the parties should file and serve short minutes of the orders for which they will contend together with brief submissions in support of such orders. I have had the benefit of reading in draft the reasons prepared by Branson J and by Gyles J. I rely on the statement there made of relevant facts and findings. The following states my reasons on each of the issues addressed in those reasons.NOTICE OF CONTENTION I join with Gyles J in agreeing with Branson J that, for the reasons stated by her, the notice fails.CLAIMS UNDER THE TRADE PRACTICES ACT 1974 (CTH) This case points to the existence of some difficulty in reconciling the principles stated by the High Court in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 with the statement of principles in Marks v GIO Australia Holdings Limited (1998) 196 CLR 494. On the face of cl 5 of the Lease, there is scope for the application of the approach dictated by Wardley. While the liability to pay contributions is incurred upon execution of the Lease, that liability is one determined by the application of cl 5. Matters which are unknown from cl 5 itself are:(a)the items in respect of which contribution is sought; (b)the period in respect of which any notification of estimated contribution is payable;(c)the intervals, dates and amounts of payments if other than monthly;(d)whether interest is payable or waived;(e)whether any right of set-off has to be exercised;(f)whether any amount is payable different from the initial contribution.This is not therefore a case where the amount of money to be paid pursuant to the assumed obligation in the agreement is qualified by no factors extrinsic to the agreement save the passing of time: Wardley at 538 per Brennan J. Extrinsic factors here are decisions by the Lessor in respect of the matters in pars (a) – (f) above. Those are not matters upon which the Lease does more than provide a process: it does not itself provide for the mode of its application in respect of each of those matters.

Ratio Decidendi

Legal Principle Established

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