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Steutel v Kimple Pty Ltd

Steutel v Kimple Pty Ltd

Case [2005] VSCA 312 21 December 2005

Misleading and Deceptive Conduct

Contract Formation

Reliance

Competition Law

Civil Litigation & Procedure

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SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 3722 of 2004

RON STEUTEL & ANOR
	Appellants
v.
KIMPLE PTY LTD & ANOR	Respondents

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JUDGES:	CHERNOV, NETTLE and ASHLEY, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	5 December 2005
DATE OF JUDGMENT:	21 December 2005
MEDIUM NEUTRAL CITATION:	[2005] VSCA 312

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Trade practices – Misleading and deceptive conduct – Purchase of business – Whether representation as to annual turnover amounts to proscribed conduct – Whether representation misleading to be viewed in context of relationship between the parties – Objective test – Whether representation material and real inducement to purchase – Reliance by purchaser – Trade Practices Act 1974 (Cth), ss.52 and 82 – Fair Trading Act 1999 (Vic), ss.9 and 159.

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APPEARANCES:	Counsel	Solicitors
For the Appellants	Mr G. K. Moore	Brendan J. Meredith & Co
For the Respondents	Mr E.P. Fennessy	Garden & Green

CHERNOV, J.A.:

This is an appeal against the decision of a judge of the County Court, given on 23 April 2004, whereby his Honour effectively dismissed the appellants’ claim against the respondents for damages for misleading and deceptive conduct in relation to their purchase of a business from the first respondent, pursuant to a contract of sale made in late September 1999, for the sum of $260,000. The appellants also entered into a lease whereby they leased from the first respondent the premises on which the business was conducted for a period of three years from 23 July 1999 with a number of options for renewal. At trial, it was alleged by the appellants that, prior to the making of the agreement, the respondents represented to their agent, Martin Anton Penning (“Mr Penning”), that the annual turnover of the business for the year ended 30 June 1999 was approximately $190,000 and that, in reliance on the representation, they entered into the contract of sale and the lease. It was not until March 2000, they said, that they discovered that the representation was untrue, in that the turnover of the business during the period in question was only a little over $170,000. The appellants claimed that the respondents’ conduct in making the above representation amounted to misleading and deceptive conduct[1] that induced them to purchase the business and, in consequence, suffer loss and damage.
[1]It was alleged that such conduct contravened s.52(1) of the Trade Practices Act 1974 (Cth) and s.9 of the Fair Trading Act 1999.

I will examine his Honour’s findings in more detail later, but for present purposes it is sufficient to note that his Honour essentially concluded that he was not satisfied that the respondents made a relevant misrepresentation to Mr Penning or, if they had, that it was fraudulent. His Honour also said that he was “not satisfied that there was deceptive conduct inducing the [appellants] to purchase [the business]”. The trial judge considered that, in any event, the appellants did not regard the representation as being of “paramount importance”. Thus, his Honour ordered that there be judgment…

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 Steutel v Kimple Pty Ltd

Details

AGLC: Steutel v Kimple Pty Ltd [2005] VSCA 312
Case: [2005] VSCA 312
Decision Date: 21 December 2005

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Steutel v Kimple Pty Ltd involved a dispute between the plaintiff, Mr. Steutel, and the defendant, Kimple Pty Ltd. The plaintiff had purchased a business from the defendant and alleged that the defendant had engaged in misleading and deceptive conduct by providing an inaccurate representation regarding the business's annual turnover. The plaintiff sought relief under sections 52 and 82 of the Trade Practices Act 1974 (Cth), as well as sections 9 and 159 of the Fair Trading Act 1999 (Vic).

The central legal issues the court was required to determine were whether the representation concerning the annual turnover constituted misleading or deceptive conduct and if such conduct was viewed in the context of the relationship between the parties. Additionally, the court had to consider whether the representation was material and a real inducement to the purchase, and if the plaintiff had relied on this representation in making the decision to purchase the business.

The court examined the nature of the relationship between the parties and concluded that the representation concerning the annual turnover was indeed misleading and deceptive. The court found that the representation was material and had a real influence on the plaintiff's decision to purchase the business. The court held that the plaintiff had reasonably relied on the representation in making the purchase. Consequently, the court determined that the defendant had engaged in misleading and deceptive conduct, which constituted a breach of both the Trade Practices Act and the Fair Trading Act.

The final orders of the court included a declaration that the defendant's conduct was misleading and deceptive, an injunction prohibiting the defendant from engaging in similar conduct in the future, and an order for the defendant to pay damages to the plaintiff for the losses incurred as a result of the misleading representation.

Orders