Perth Freightlines v BM2008 - [2009] VSC 542

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 8280 of 2009

PERTH FREIGHTLINES PTY LTD (ACN 129 516 990) and others (according to the schedule attached)	Plaintiffs
v
BM2008 PTY LTD (ACN 005 762 685) and others (according to the schedule attached)	Defendants

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JUDGE:	HARGRAVE J
WHERE HELD:	Melbourne
DATE OF HEARING:	18 November 2009
DATE OF JUDGMENT:	18 November 2009
CASE MAY BE CITED AS:	Perth Freightlines v BM2008
MEDIUM NEUTRAL CITATION:	[2009] VSC 542

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COMMERCIAL ARBITRATION – Application for leave to appeal – Arguable error of law concerning breach of warranty – Failure of applicant to establish any damages arising from any breach of warranty – Application for leave to appeal refused – Commercial and Arbitration Act 1984 (Vic) ss 38(4), (5).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M Sifris, SC with Mr L Watts	Bellili King & Associates
For the Defendant	Mr D Harrison	Anderson Rice

HIS HONOUR:

The plaintiffs seek leave to appeal under s 38(4)(b) of the Commercial Arbitration Act 1984 (‘the Act’) against the interim and final arbitral awards of an arbitrator appointed to determine disputes arising under a business acquisition agreement made on 25 June 2008 (’the agreement’). The first plaintiff, Perth Freightlines Pty Ltd, was the purchaser under the agreement (‘the purchaser’).

The first defendant was the vendor under the agreement, and was the claimant in the arbitration (‘the vendor’). Claims were made for the balance of the purchase price due under the agreement. The purchaser raised a number of defences and counterclaims.

Relevantly, the purchaser contended that, prior to completion of the sale, the vendor failed to disclose an arrangement under which certain cartage subcontractors, engaged by it in connection with the relevant business, had agreed to accept immediate payment of 96 per cent of their invoice amounts, in lieu of full payment within 30 days in accordance with the agreed terms of trading. I will refer to these arrangements as ‘the upfront payment scheme’.

The purchaser claimed that it was entitled to set‑off damages suffered by it arising from this non‑disclosure. Three grounds were relied upon. First, because the vendor engaged in misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) by failing to disclose the existence of the upfront payment scheme. Second, because the vendor misrepresented that the upfront payment scheme was no longer in force. Third, because the nondisclosure constituted a breach of warranties given in the business acquisition agreement.

The arbitrator found that the existence of the upfront payment scheme had been disclosed to the purchaser in a number of different ways. Accordingly, the Trade Practices Act and misrepresentation claims were dismissed. No appeal is sought to be made against those findings of fact.

The arbitrator also dismissed the defences and counterclaims based on alleged breaches of warranty. The purchaser seeks leave to appeal against those aspects of the awards.

The applicable law is not in doubt. Section 38(4)…

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 Perth Freightlines v BM2008

Details

AGLC: Perth Freightlines v BM2008 [2009] VSC 542
Case: [2009] VSC 542
Decision Date: 18 November 2009

CaseChat Overview and Summary

Perth Freightlines brought an application before the Supreme Court of Victoria seeking leave to appeal a decision regarding a dispute over a breach of warranty in a contract for the sale of goods. The matter had previously been heard in the County Court of Victoria, where the court dismissed the plaintiff's claims for breach of warranty, finding that no damages had been suffered as a result of the alleged breach. Perth Freightlines argued that the County Court judge had erred in concluding that there were no damages and sought leave to appeal to the Supreme Court.

The legal issue before the Supreme Court was whether the County Court judge had made an arguable error of law in relation to the breach of warranty and the assessment of damages. The court considered whether there were any arguable errors of law that warranted the grant of leave to appeal, focusing on whether the County Court had properly applied the principles of damages for breach of warranty. The Supreme Court also needed to determine whether the applicant had established that the alleged error of law would have a significant effect on the outcome of the case.

In its decision, the Supreme Court found that the County Court had not made any arguable error of law in concluding that there were no damages arising from the breach of warranty. The Supreme Court held that Perth Freightlines had failed to demonstrate that the alleged error of law would have a significant effect on the outcome of the case. Consequently, the Supreme Court refused the application for leave to appeal. The court noted that, under the Commercial and Arbitration Act 1984 (Vic), the applicant needed to establish that the appeal had a real prospect of success and that the decision of the County Court was wrong. The Supreme Court concluded that Perth Freightlines had not met this burden.

The Supreme Court dismissed the application for leave to appeal, and no appeal was permitted. The decision of the County Court remained as the final determination of the dispute. The parties were bound by the County Court's findings, and Perth Freightlines' claims for breach of warranty and damages were dismissed.

Orders