Traffic Calming Australia Pty Ltd v CTS Creative Traffic Solutions - [2015] VSC 741

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S CI 2013 06417

TRAFFIC CALMING AUSTRALIA PTY LTD (ACN 160 258 471)	Plaintiff
v
CTS CREATIVE TRAFFIC SOLUTIONS PTY LTD (ACN 160 120 810) & ORS	Defendants

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JUDGE:	ALMOND J
WHERE HELD:	Melbourne
DATES OF HEARING:	21-23, 27-30 July, 3 August, 6 August 2015.
DATE OF JUDGMENT:	17 December 2015
CASE MAY BE CITED AS:	Traffic Calming Australia Pty Ltd v CTS Creative Traffic Solutions & ors
MEDIUM NEUTRAL CITATION:	[2015] VSC 741

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TORT – Inducement of breach of contract – Existence of contracts between the plaintiff and overseas suppliers – Defendants had a ‘fairly good idea’ of the existence of the contracts – Defendants intended to induce overseas suppliers to breach contracts with plaintiff – Breach of contract by overseas suppliers – Tortious conduct found – Assessment of quantum of damage.

EVIDENCE – Admissibility – Authenticity of documents - Whether documents business records – Evidence Act 2008 (Vic) ss 48(1)(e), 58, 69, 183.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	S Parmenter D Snyder	Russo Pellicano Carlei Lawyers
For the Defendants	P Bingham	Falcone & Adams Lawyers

HIS HONOUR:

At its foundation this case concerns a falling out between former business partners.

Until about 31 August 2012, David and Josie Goedheer and Richard McKie together operated TCA Traffic Calming Australia Pty Ltd (‘Old TCA’) which supplied products such as roundabouts, speed cushions and kerbing fabricated from moulds kept at factories in China. The products were shipped to Australia. Mr McKie was a director and the general manager. Mr Goedheer was the other director. Ms Goedheer was the administration and finance manager.

In about mid-2012, the Goedheers and Mr McKie agreed to go their separate ways.

To facilitate the commercial separation, a voluntary liquidator was appointed to Old TCA. Among other things the liquidator conducted an auction of Old TCA’s assets based on an agreed and signed list of items. These items included ‘moulds held overseas’. It was not disputed that this description was a reference to moulds kept at the factories in China for Old TCA.

The only bidders at the auction were the Goedheers and Mr McKie. The Goedheers successfully bid $530,000 for Old TCA’s assets. This was subsequently documented in an asset sale agreement (‘Asset Sale Agreement’) between Old TCA and the plaintiff, Traffic Calming Australia Pty Ltd (‘TCA’).

TCA alleges that after the sale to TCA the first and second defendants, Creative Traffic Solutions Pty Ltd (‘CTS’) and Mr McKie knowingly procured the unauthorised use of TCA’s moulds by ordering the manufacture of products from the factories knowing that the supply of such products would be inconsistent with the contractual obligation of the respective factories to hold the moulds for TCA’s exclusive use.

Alternatively, TCA claims that by signing the list of assets Mr McKie represented that the ‘moulds held overseas’ (which were part of Old TCA’s assets to be sold at the auction) were to be for the exclusive use…

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: [2015] VSC 741
Decision Date: 17 December 2015

CaseChat Overview and Summary

In Traffic Calming Australia Pty Ltd v CTS Creative Traffic Solutions, the Federal Court of Australia addressed a dispute concerning the inducement of breach of contract and the admissibility of documentary evidence. The plaintiff, Traffic Calming Australia, alleged that the defendants, CTS Creative Traffic Solutions, had induced overseas suppliers to breach their contractual obligations with the plaintiff. The plaintiff sought damages for the losses incurred as a result of the alleged inducement.

The central legal issues before the court were whether the defendants had intentionally induced the overseas suppliers to breach their contracts with the plaintiff and the admissibility of the documentary evidence provided by the plaintiff. The court was required to determine if the defendants had a "fairly good idea" of the existence of the contracts between the plaintiff and the overseas suppliers and whether the defendants intended to induce the suppliers to breach those contracts. Additionally, the court had to assess the quantum of damages the plaintiff suffered due to the alleged inducement.

The court found that the defendants had a "fairly good idea" of the existence of the contracts between the plaintiff and the overseas suppliers and that they intended to induce the suppliers to breach those contracts. This constituted the tort of inducement of breach of contract. Regarding the admissibility of evidence, the court held that the documents provided by the plaintiff were admissible under the Evidence Act 2008 (Vic). The court accepted that the documents were business records and met the requirements of authenticity under sections 48(1)(e), 58, 69, and 183 of the Act. The court determined the quantum of damages suffered by the plaintiff and awarded compensation accordingly.

The final orders of the court included a declaration that the defendants had intentionally induced the overseas suppliers to breach their contracts with the plaintiff, an award of damages to the plaintiff for the losses incurred due to the inducement, and costs of the proceedings. The court's decision emphasised the importance of contractual relationships and the legal consequences of intentionally interfering with those relationships.

Orders