FEDERAL COURT OF AUSTRALIA
Shah v Hagemrad [2018] FCA 91
File number: NSD 164 of 2016 Judge: NICHOLAS J Date of judgment: 16 February 2018 Catchwords: CONSUMER LAW – whether first and second respondents engaged in misleading or deceptive conduct in connection with the sale by them of a franchise business to the first applicant – whether first applicant was induced to purchase business by misrepresentations with respect to sales made
DAMAGES – whether first and second respondents’ conduct caused the first applicant loss – whether first applicant entitled to recover difference between the price paid for the business and its true value at the time of purchase – assessment of true value of business at time of purchase
EVIDENCE – significance of rejection of first respondent’s evidence – what inferences may be drawn in circumstances where key aspects of first respondent’s evidence disbelieved – whether disbelief in the evidence that one state of affairs exists supports the existence of another state of affairs
Legislation: Competition and Consumer Act 2010 (Cth) s 87CC(1)(b)
Corporations Act 2001 (Cth) s 471B
Federal Court of Australia Act 1976 (Cth) s 51A
Federal Court Rules 2011 (Cth) r 30.21
Cases cited: Briginshaw v Briginshaw (1938) 60 CLR 336
Broken Hill Proprietary Company Ltd v Waugh (1988) 14 NSWLR 360
Calvin v Carr [1977] 2 NSWLR 308
Campbell v Back Office Investments Pty Ltd (2009) 238 CLR 304
Kizbeau Pty Limited v WG & B Pty Limited (1995) 184 CLR 281
Lee v Russell [1961] WAR 103
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449
Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640
Date of hearing: 24, 25, 26 and 28 October 2016 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Commercial Contracts, Banking, Finance and Insurance Category: Catchwords Number of paragraphs: 119 Counsel for the Applicants: Dr A Greinke Solicitor for the Applicants: Lodhia Lawyers Counsel for the First Respondent: Mr CD Wood with Mr BJ Symons Solicitor for the First Respondent: Paramonte Legal Counsel for the Second and Third Respondents The second and third respondents did not appear
Table of Corrections 23 February 2018 Para [47], the date “21 October 2014” has been amended to read “21 October 2015” ORDERS
NSD 164 of 2016 BETWEEN: JIMITKUMAR BHUPESHKUMAR SHAH
First Applicant
RIVERSUB PTY LTD (ACN 164 963 544)
AS TRUSTEE OF THE TANDON FAMILY TRUSTSecond Applicant
AND: MAZEN HAGEMRAD
First Respondent
MICHAEL ALLOUCHE
Second Respondent
THE RETAIL GROUP (DARLINGHURST) PTY LTD
(ACN 145 281 732)Third Respondent
JUDGE:
NICHOLAS J
DATE OF ORDER:
16 February 2018
THE COURT ORDERS THAT:
1.The proceeding stand over to 9.30am on 23 February 2018 for the hearing of any argument in relation to costs and for the making of final orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
NICHOLAS J:
The first applicant (“Mr Shah”) is the sole director of the…
Continue reading Shah v Hagemrad
Sign in free to access the full text
- AGLC
- Shah v Hagemrad [2018] FCA 91
- Case
- [2018] FCA 91
- Decision Date
CaseChat Overview and Summary
The court's reasoning focused on the credibility of the evidence presented by the parties. It found that significant portions of the first respondent’s testimony were not believable, leading to a disbelief in certain key aspects of his account. The court inferred that the respondents' conduct was misleading or deceptive based on the rejected evidence, as well as other factors in the case. The court also determined that the applicant had indeed been induced to purchase the business by the misrepresentations made by the respondents. Furthermore, the court concluded that the applicant was entitled to recover the difference between the purchase price and the true value of the business at the time of purchase. This assessment was made after evaluating the evidence and considering expert opinions on the business's valuation.
The court's decision resulted in the proceeding being stood over to allow for any arguments regarding costs and the final orders. The orders, which are to be made in accordance with Rule 39.32 of the Federal Court Rules 2011, will likely include a determination on the amount of damages to be awarded to the applicant, reflecting the difference between the purchase price and the true value of the business at the time of sale. This case underscores the importance of accurate and honest representations in franchise sales and the potential legal consequences of misleading conduct.
Orders
Orders of the court
1. The proceeding stand over to 9.30am on 23 February 2018 for the hearing of any argument in relation to costs and for the making of final orders.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
Full text does not contain this section.
Evidence
Evidence Before The Court
Full text does not contain this section.
Decision
Reasons for decision
Full text does not contain this section.
Ratio Decidendi
Legal Principle Established
Full text does not contain this section.