JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: NEA PTY LTD -v- MAGENTA MINING PTY LTD [2007] WASCA 70
CORAM: MARTIN CJ
WHEELER JA
BUSS JA
HEARD: 17 OCTOBER 2006
DELIVERED : 29 MARCH 2007
FILE NO/S: CACV 71 of 2005
BETWEEN: NEA PTY LTD
Appellant
AND
MAGENTA MINING PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :EM HEENAN J
Citation :NEA PTY LTD -v- MAGENTA MINING PTY LTD [2005] WASC 106
File No :CIV 2348 of 1996
Catchwords:
Contract - Agreement for hire of equipment for the extraction of gold - Breach of contract - Counterclaim for damages or alternatively misleading and deceptive conduct - Test for misleading and deceptive conduct - Effect that an exclusion or exemption clause has on a statutory claim for damages
Legislation:
Trade Practices Act 1974 (Cth), s 52, s 82, s 87
Result:
Appeal dismissed
Category: B
Representation:
Counsel:
Appellant: Mr C P Shanahan SC
Respondent: Mr P C Doherty
Solicitors:
Appellant: Tottle Partners
Respondent: Corser & Corser
Case(s) referred to in judgment(s):
Benlist Pty Ltd v Olivetti Australia Pty Ltd (1990) ATPR 41‑043
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592
Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199
Gould v Vaggelas (1984) 157 CLR 215
Henville v Walker (2001) 206 CLR 459
I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109
IOOF Australia Trustees (NSW) Ltd v Tantipech (1998) 156 ALR 470
Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1989) ATPR 46‑048
Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413
Kewside Pty Ltd v Warman International Ltd (1990) ASC 55‑964
Lezam Pty Ltd v Seabridge Australia Pty Ltd (1992) 35 FCR 535
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494
Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174
MARTIN CJ:
Summary
In July 1995, following negotiations between the parties, the respondent, Magenta Mining Pty Ltd ("Magenta"), agreed to hire crushing and ancillary equipment from the appellant, Nea Pty Ltd ("Nea"), for use at Magenta's gold recovery operation then being undertaken at the Hawkins Find mining lease near Ora Banda in the Goldfields. Following the agreement for hire, it took about seven weeks for Nea to rehabilitate and modify the crushing plant and to procure and adapt some of the associated treatment plant. The equipment was taken from Perth to Hawkins Find in mid September 1995. The plant was commissioned on 18 September 1995. Although there were a number of initial problems experienced in commissioning the plant, after about a week, the plant was made operational. However, thereafter it worked for only a few short periods and by mid October 1995, after a…
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- Case
- [2007] WASCA 70
- Decision Date
CaseChat Overview and Summary
The legal issues that the court had to address included whether the conduct of NEA Pty Ltd constituted misleading or deceptive conduct and whether the exemption clause in the contract precluded the plaintiff from recovering damages. The court also had to determine the effect that the exemption clause had on the plaintiff's statutory claim for damages.
The court held that whether conduct is misleading or deceptive depends on the specific facts of each case. The court also held that an exemption clause cannot be used to negate the effect of misleading or deceptive conduct that occurred before the contract was signed. In this case, the court found that the exemption clause did not preclude the plaintiff from recovering damages for the defendant's misleading and deceptive conduct. The court found that the plaintiff had suffered loss as a result of the defendant's conduct and awarded damages to the plaintiff.
The court ordered NEA Pty Ltd to pay Magenta Mining Pty Ltd damages in the amount of $2,433,000 plus interest and costs.
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
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Ratio Decidendi
Legal Principle Established
In Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1989) ATPR 46‑048, tenants leased shops in a shopping centre. Representations were allegedly made to the tenants by a real estate agent on behalf of the landlord. Before the tenants signed the lease agreements they were required by the landlord to specify in a deed any representations that had been made to them concerning the premises which they proposed to lease. The tenants signed the deeds after consulting with solicitors. The tenants suffered losses during their period of occupancy of the premises and brought proceedings against the landlord and others which alleged that the representations constituted misleading or deceptive conduct in contravention of s 52 of the TPA. In the Full Court of the Federal Court, Morling and Wilcox JJ held, at 53,146, that an exemption clause in a lease cannot be relied upon by the lessor in answer to a cause of action under s 82(1) of the TPA in that the conduct upon which such a cause of action is based occurs before the execution of the lease and commonly will have induced the lessee to have entered the lease. Their Honours then added, however, that:" … the fact that a claimant states, in an agreement into which he claims to have been induced to enter by misleading conduct, that he was not so induced may bear upon the question whether he should be believed in asserting that the misleading conduct was an inducement."Similarly, Spender J said, at 53,161, that if, in fact, a defendant's misleading or deceptive conduct has induced the plaintiff to enter a contract, that inducement is not negated because, in a document separate from the contract itself, the plaintiff says to the contrary. His Honour then noted that such a document may, in the circumstances, be of evidentiary significance:"That a deed of acknowledgment has some value as evidence on the question of whether the representations did in fact induce the leases is accepted. Equally, however, it cannot be conclusive on the question of inducement. So to hold would in many cases be a convenient roundabout route of circumventing the policy of the statute."Also see IOOF Australia Trustees (NSW) Ltd v Tantipech (1998) 156 ALR 470 at 480. In the present case, the learned trial Judge articulated, at [259], what he described as the "essential question" concerning:(a)Nea's alleged misleading or deceptive conduct before the parties entered the contract for the supply and hire of the Hazemag Impactor (and the other equipment);(b)Magenta's alleged loss or damage; and(c)whether cl 8 precluded Nea's alleged conduct from being characterised as misleading or deceptive or precluded Magenta from establishing that the alleged conduct in question was a cause of its alleged loss or damage.His Honour said:"The essential question, therefore, must be whether or not the conduct complained of is misleading or deceptive in causing the party seeking relief from the court, to suffer damage. Is it misleading or deceptive to induce a party to enter a contract believing that it conferred upon him the benefit of a promise or assurance implied from the negotiations between the parties that equipment supplied would be of merchantable quality or fit for the purpose made known when, in reality, a disclaimer or exclusion clause in the contract documents prevented any such contractual obligation arising? No answer of general application can be given to this question because whether an individual contracting party was misled or deceived will depend on the facts of the particular case. There may have been misleading or deceptive conduct but the contracting party was aware of this or did not rely upon it because of making his or her own inquiries. Or there may be no misleading or deceptive conduct but the contracting party may have misled himself through misconstruing, entirely on his or her own account, the obligations which were being accepted. The decision in Butcher v Lachlan Elder Realty Pty Ltd (supra) is readily explained by the conclusion of the majority that it was not the selling agent (who had merely distributed a brochure containing erroneous survey information prepared from other disclosed sources) who was engaged in misleading or deceptive conduct. In different circumstances, a rejection of a purchaser's claim could equally be justified by concluding that, despite the existence of erroneous and potentially misleading and deceptive information, this had not caused the purchaser to enter the contract. Other possibilities consistent with that result can also be readily supposed."