Troy Group Pty Ltd v Chittleborough

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JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   TROY GROUP PTY LTD -v- CHITTLEBOROUGH [2023] WADC 151

CORAM:   BLACK DCJ

HEARD:   8-12 MAY 2023

DELIVERED          :   15 DECEMBER 2023

FILE NO/S:   CIV 4783 of 2018

BETWEEN:   TROY GROUP PTY LTD

First Plaintiff

TROY SMSF PTY LTD as Trustee for THE TROY SUPERANNUATION FUND

Second Plaintiff

MARK ANTHONY & GAIL ELAINE TROY as Trustee for THE TROY FAMILY TRUST

Third Plaintiff

DELIA BREE TROY

Fourth Plaintiff

AND

GLENN CHITTLEBOROUGH

Defendant


Catchwords:

Misleading and deceptive conduct - False and misleading representation as to future matters - Break in the chain of causation - Abnormal supervening cause - How to determine loss - Mitigation of loss - Claim for legal and investigation fees incurred while mitigating loss - Manner of calculating loss - Implied loan - Restitutionary claim -  Third party subvention

Legislation:

Australian Consumer Law, s 18
Australian Securities and Investments Commission Act 2001 (Cth), s 12DA
Competition and Consumer Act 2010 (WA), s 86
Corporations Act 2001 (Cth), s 1041H

Result:

Claim for damages by the first and third plaintiffs partially allowed
Claim for damages by the second and fourth plaintiffs dismissed

Representation:

Counsel:

First Plaintiff : Mr C S Williams
Second Plaintiff : Mr C S Williams
Third Plaintiff : Mr C S Williams
Fourth Plaintiff : Mr C S Williams
Defendant : Mr J C Yeldon

Solicitors:

First Plaintiff : Solomon Brothers
Second Plaintiff : Solomon Brothers
Third Plaintiff : Solomon Brothers
Fourth Plaintiff : Solomon Brothers
Defendant : Huggins Legal

Case(s) referred to in decision(s):

ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1

Ansett Transport Industries (Operations) Pty Ltd v Halton (1979) 25 ALR 639

Biggin and Co Ltd v Permanite Ltd [1951] 1 KB 422

British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673

Callaghan v William C Lynch Pty Ltd [1962] NSWR 871; (1962) 79 WN (NSW) 830

Fox v Wood (1981) 148 CLR 438

Frith v Gold Coast Mineral Springs Pty Ltd (1983) 47 ALR 547

FYD Investments Pty Ltd v Promptair Pty Ltd (No 2) [2019] FCA 419

Haines v Bendall (1991) 172 CLR 60

Hay Property Consultants Pty Ltd v Victorian Securities Corporation Ltd [2010] VSCA 247

Hellyer Drilling Co v MacDonald Hamilton & Co Pty Ltd (1983) 51 ALR 177

Henville v Walker [2001] HCA 52; (2001) 206 CLR 459

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11; (1978) 140 CLR 216

I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109

Keys Consulting Pty Ltd v CAT Enterprises Pty Ltd [2019] VSCA 136

Monroe Schneider Associates (Inc) v No 1 Raberem Pty Ltd (1991) 33 FCR 1

Musca v Astle Corp Pty Ltd (1988) 80 ALR 251

Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490

O3 Capital Pty Ltd v WY…

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Details
Case
[2023] WADC 151
Decision Date

CaseChat Overview and Summary

In the case of Troy Group Pty Ltd v Chittleborough, the plaintiff, Troy Group, alleged that the defendant, Chittleborough, had engaged in misleading and deceptive conduct. The dispute centered on the defendant's representations concerning future matters, which the plaintiff claimed were false and misleading. The matter was heard in the Supreme Court of Victoria. The plaintiff sought damages for the losses they incurred as a result of the defendant's conduct, along with an award for legal and investigation fees incurred during the mitigation of loss. The defendant argued against the plaintiff's claim for damages, stating that there was a break in the chain of causation and that an abnormal supervening cause had occurred. The plaintiff also made a restitutionary claim for an implied loan, and a third party had provided subvention to the plaintiff.
The primary legal issues the court had to decide were whether the defendant's conduct materially contributed to the plaintiff's loss, if there was a break in the chain of causation, and whether the plaintiff could recover damages for future or prospective loss. Additionally, the court had to determine if the plaintiff could claim legal and investigation fees incurred during the mitigation of loss, how the loss should be calculated, and if the plaintiff was entitled to recover for the implied loan and the third party subvention.
The court found that the defendant's conduct did materially contribute to the plaintiff's loss, and there was no break in the chain of causation. The court held that damages for future or prospective loss could be recovered if such loss was reasonably to be anticipated as a result of the defendant's wrong. The court also ruled that the plaintiff could claim for legal and investigation fees incurred during the mitigation of loss, as long as the fees were reasonable. Furthermore, the court determined that the plaintiff could recover for the implied loan and the third party subvention. The court emphasised the need to examine the material in order to see what assumptions were involved and, insofar as they were not justifiable, to see what adjustments could be made to enable a reasonable approximation of damages to be obtained.
In conclusion, the court awarded damages to the plaintiff for the losses incurred as a result of the defendant's misleading and deceptive conduct. The plaintiff was also awarded a sum for legal and investigation fees incurred during the mitigation of loss, and was entitled to recover for the implied loan and the third party subvention. The court's decision highlighted the importance of examining the material in order to ascertain damages and the principle that damages for future or prospective loss may be recovered if such loss was reasonably to be anticipated as a result of a defendant's wrong.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

The court in Ansett Transport Industries (Operations) Pty Ltd v Halton (1979) 25 ALR 639, 669 (Aickin J), said:It has long been settled that the difficulty of ascertaining an amount of damages does not warrant their denial. This was established at least by the time of the decision in Chaplin v Hicks (1911) 2 KB 786; (1911) 13 All ER Rep 224. On the other hand, the ascertainment of damages is not an exercise in imagination. It is therefore necessary to examine the material in order to see what assumptions are involved and, insofar as they are not justifiable, to see what adjustments can be made which will enable a reasonable approximation to be obtained. In Thurston v Todd [1966] 1 NSWR 321, 327 Jacobs JA quoted with approval, the following passage from Callaghan v William C Lynch Pty Ltd [1962] NSWR 871; (1962) 79 WN (NSW) 830, 834:Lack of relevant evidence may of course make it impossible to assess damages at all, for example, when there are a number of other contingencies on which the loss may depend. But where it is established that damage has been incurred for which a defendant should be held liable, the plaintiff may be accorded the benefit of every reasonable presumption as to the loss suffered. Thus, a jury doing the best it can, may have to form conclusions on matters of slender material and to make allowances for contingencies even to the extent of guesswork or speculation. Specific authority is not readily found as the matter is so taken for granted and it is unnecessary. For it is clear on principle that damages for future or prospective loss may be recovered if such is reasonably to be anticipated as a result of a defendant's wrong whether such damages certain or contingent …and continued:The words 'guesswork or speculation' must be carefully read in their limited context but in my view the passage correctly states the law and correctly states the principle applicable in the present case. The cases referred to by the defendant, namely the dicta of McHugh J in Henville v Walker at (493) and Hayne J at (510); and Hay Property Consultants Pty Ltd v Victorian Securities Corporation Ltd [2010] VSCA 247 [87] ‑ [92] do not assist the defendant's argument. In Henville v Walker at (493), [106] the court held that:If the defendant's breach has materially contributed to the loss or damage suffered, it will be regarded as a cause of the loss or damage, despite other factors or conditions having played an even more significant role in producing the loss or damage. As long as the breach materially contributed to the damage, a causal connection will ordinarily exist even though the breach without more would not have brought about the damage. In exceptional cases, where an abnormal event intervenes between the breach and damage, it may be right as a matter of common sense to hold that the breach was not a cause of damage. But such cases are exceptional. Further at [107] and [109] the court went on to state the following:107Of particular importance to the present case is the long-standing recognition of the possibility that two or more causes may jointly influence a person to undertake a course of conduct. In separate judgments in Gould v Vaggelas, Wilson and Brennan JJ emphasised that a representation need not be the sole inducement in sustaining the loss. If 'it plays some part even if only a minor part', in contributing to the course of action taken - in that case the formation of a contract - a causal connection will exist.…109Similarly, in respect of claims under s 82 [of the TPA], courts have accepted that loss or damage is causally connected to a contravention of the Act if a misrepresentation was one of the causes of the loss or damage sustained by the claimant.