North East Equity Pty Ltd (ACN 009 248 819) v Proud Nominees Pty Ltd (ACN 074 270 938) [2010] FCAFC 60

FEDERAL COURT OF AUSTRALIA

North East Equity Pty Ltd (ACN 009 248 819) v Proud Nominees Pty Ltd (ACN 074 270 938) [2010] FCAFC 60 Citation: North East Equity Pty Ltd (ACN 009 248 819) v Proud Nominees Pty Ltd (ACN 074 270 938) [2010] FCAFC 60

Appeal from: North East Equity Pty Ltd v Proud Nominees Pty Ltd (No 2) [2008] FCA 1189

Parties: NORTH EAST EQUITY PTY LTD (ACN 009 248 819) v PROUD NOMINEES PTY LTD (ACN 074 270 938) and DAVID LEWIS PROUD

File number: WAD 220 of 2008

Judges: SUNDBERG, SIOPIS AND GREENWOOD JJ

Date of judgment: 8 June 2010

Catchwords: TRADE PRACTICES – misleading and deceptive conduct – contract for supply and installation of plant and equipment to improve carrot processing plant – pre‑contractual representations – identification of representations – whether false – representations as to future matters without reasonable cause deemed to be misleading – construction of s 51A of Trade Practices Act 1974 (Cth) – evidential burden on representor – persuasive burden not reversed – failure of trial judge to determine whether representations made without reasonable cause – consequence of failure – loss and damage – causation – "no transaction" damages – alternative methods of calculating damages – whether appropriate measure of damages the difference between price paid for plant and true value at purchase – assessment where representee locked into retention of plant.

Legislation: Trade Practices Act 1974 (Cth) ss 51A and 52

Cases cited: Australian Competition and Consumer Commission v Universal Sports Challenge [2002] FCA 1276 applied Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592 applied Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 considered Fubilian Catering Services Ltd v Compass Group (Australia) Pty Ltd [2008] FCAFC 53 cited Fubilian Catering Services Ltd v Compass Group (Australia) Pty Ltd [2007] FCA 1205 applied Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 cited Gould v Vaggelas (1985) 157 CLR 215 applied Henville v Walker (2001) 206 CLR 459 applied HTW Valuers v Astonland Pty Ltd (2004) 217 CLR 640 applied I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 cited Johnson v Perez (1988) 166 CLR 351 cited Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 cited Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 cited McAllister v Richmond Brewing Co. (NSW) Pty Ltd (1942) 42 SR (NSW) 187 cited Mount Lawley Pty Ltd v Western Australia Planning Commission (2004) 29 WAR 273 distinguished Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 cited North East Equity Pty Ltd v Proud Nominees Pty Ltd [2007] FCA 1587 discussed North East Equity Pty Ltd v Proud Nominees Pty Ltd (No 2) [2008] FCA 1189 cited Peek v Derry (1887) 37 Ch D 541 cited Potts v Miller (1940) 64 CLR 282 considered Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 cited Smith New Court Securities Ltd v Citibank NA [1997] AC 254 considered Toteff v Antonas (1952) 87 CLR 647 considered Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 cited