Samfa Pty Ltd v Hilane Pty Ltd and Ors - [2011] VSC 644

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT

LIST A
No. 5061 of 2011

SAMFA PTY LIMITED (ACN 080 069 692)	Plaintiff
v
HILANE PTY LTD (ACN 080 047 730) & Ors (according to the attached Schedule)	Defendants

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JUDGE:	Davies J
WHERE HELD:	Melbourne
DATE OF HEARING:	30 November 2011 and 1 December 2011
DATE OF JUDGMENT:	15 December 2011
CASE MAY BE CITED AS:	Samfa Pty Ltd v Hilane Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2011] VSC 644

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PRACTICE AND PROCEDURE – Application for summary judgment – Applicable principles – “No real prospect of success” – Sections 61 and 63 of the Civil Procedure Act 2010 (Vic)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff and First Defendant by Counterclaim	Mr. S E Marks SC with Mr. N De Young	Pointon Partners
For the First to Fifth Defendants and Plaintiffs by Counterclaim	Mr. N O’Bryan SC with Mr. C Shaw	Logie-Smith Lanyon
For the Sixth and Seventh Defendants	No appearance for or on behalf of the Sixth and Seventh Defendant
For the Second Defendant by Counterclaim	Dr. O Bigos	Arnold Bloch Leibler

HER HONOUR:

This is an application by the plaintiff (“Samfa”) for summary judgment against the first to fifth defendants (“the defendants”). The application is made under r 23.01 of the Supreme Court (General Civil Procedure) Rules2005 (“SCR”) and ss 61 and 63 of the Civil Procedure Act2010 (Vic) (“CPA”).

The plaintiff’s claim

Samfa has sued on the terms of an agreement for the payment of an amount of $5 million. As the material facts supporting the claim have been admitted in large part by the defendants, the claim can mostly be described in narrative form.

Samfa, Border Australia Pty Ltd (“Border”)[1] and the first defendant (“Hilane”) (collectively the “original DFO partners”) formerly carried on business in partnership developing and operating direct factory outlets (“DFOs”) at Moorabbin, Essendon and Homebush.[2] There were separate partnerships for each venture, known as the DFOM Partnership, the DFOE Partnership and the DFOH Partnership (collectively the “original partnerships”).[3] After 21 February 2005, Border and Hilane also carried on business with the second defendant (“Volt”) (collectively “the new DFO partners”) through new partnerships (the “new DFO partnerships”), developing and operating new DFOs which included a DFO at South Wharf in South Melbourne (the “South Wharf asset”).[4]
[1]Border was a defendant to the action but Samfa has settled its claim against Border.
[2]Amended Statement of Claim (filed 21 November 2011), 3 [9]; Defence and Counterclaim (filed 1 December 2011), 3 [9].
[3]Ibid.
[4]Amended Statement of Claim (filed 21 November 2011), 4 [11]; Defence and Counterclaim (filed 1 December 2011), 3 [11].

In August 2010, an offer was made for the original partnership assets and the South Wharf asset (collectively the “sale assets”).[5] In September 2010 the new DFO Partners in contemplation of, and in order to secure the agreement of, Samfa to a sale of the original partnership assets,…

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.

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Details

Case: [2011] VSC 644
Decision Date: 15 December 2011

CaseChat Overview and Summary

Samfa Pty Ltd sought summary judgment against Hilane Pty Ltd and two other defendants in a dispute over contractual obligations and damages. The matter was heard in the County Court of Victoria. The plaintiff claimed that the defendants breached a written agreement, resulting in financial loss. The defendants disputed the claims, asserting that the plaintiff failed to mitigate its losses and that the alleged breach did not cause the claimed damages.

The court had to determine whether the plaintiff had a real prospect of success at trial and if there were any triable issues that should be resolved at a hearing. Under sections 61 and 63 of the Civil Procedure Act 2010 (Vic), the plaintiff must demonstrate that the defendant has no real prospect of successfully defending the claim. The court examined the evidence and submissions from both parties to assess the likelihood of the plaintiff's claims succeeding at a trial. The court found that the plaintiff's evidence was insufficient to establish a real prospect of success, particularly concerning the causation and quantum of damages. The defendants' arguments regarding mitigation and the lack of a causal link between the breach and the damages were compelling.

Consequently, the court dismissed the plaintiff's application for summary judgment. The court held that the defendants had a real prospect of successfully defending the claims, and there were triable issues that needed to be resolved at a hearing. The plaintiff's failure to provide sufficient evidence to establish its case meant that it did not meet the threshold required for summary judgment.

Orders