IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD. G125 of 1982 GENERAL DIVISION ) BETWEEN: HARRY IKIN, MONICA MARGARET IKIN * and HARRY ANTHONY IKIN Applicants AND: SAME & LAMBORGHINI TRACTORS OF AUSTRALIA PTY.LTD. First Respondent AND: SAME TRATTORI_ S.p.A. - Second Respondent CORRIGENDA Amendment to the Reasons for Judgment of Spender J. delivered 5 July 1985: . Page 40 line 7, substitute "s.52" for "s.82" (yom a P.M. Jamieson Associate to Mr. Justice Spender Date: 10 September 1985 CATCHWORDS TRADE PRACTICES - misleading or deceptive conduct - distributorship agreement - sale by the applicants of their interest in the business - whether loss suffered by the applicants separate and distinct from that suffered by the purchaser of the business - whether breach of term of distributorship agreement - whether novation of the distributorship agreement by the purchaser of the business - measure of damages - Trade Practices Act 1974, ss.52, 82. Trade Practices Act (1974) ss.52, 82. Gould v. Vaggelas (1984) 56 A.L.R. 31 Pirelli General Cable Works v. Oscar Faber & Partners (a firm) £19833 2 A.C. 1 HARRY IKIN & ORS. v. SAME & LAMBORGHINI TRACTORS OF AUSTRALIA PTY.LTD.& ANOR. QLD. G125 of 1982 CORAM - Spender J. RECEIVED Brisbane iZ GUL 1683 5 July 1985. Vb tra ' PRDERAI COURT OF AUSTRALIA ; PRINCIPAL =" OA 8 Eecisrby IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G125 of 1982 GENERAL DIVISION ) BETWEEN : HARRY _IKIN, MONICA MARGARET IKIN and HARRY ANTHONY IKIN Applicants SAME & LAMBORGHINI TRACTORS OF AUSTRALIA PTY.LTD. First Respondent AND: SAME TRATTORI §.p.A. Second Respondent MINUTE OF ORDER JUDGE MAKING ORDER: Spender J. DATE OF ORDER: 5 July 1985 WHERE MADE: Brisbane THE COURT ORDERS THAT: The application be dismissed. Note: Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) QLD G125 of 1982 GENERAL DIVISION ) BETWEEN : HARRY IKIN, MONICA MARGARET IKIN and HARRY ANTHONY IKIN Applicants AND: SAME _& LAMBORGHINI TRACTORS OF AUSTRALIA PTY.LTD. First Respondent AND: SAME_TRATTORI. S.p.A. Second Respondent SPENDER J. 5 JULY, 1985 REASONS FOR JUDGMENT. This is an application claiming damages. The claim is presented in two parts. One part is for damages resulting from alleged breaches of s.52 of the Trade Practices Act 1974 ("the Act"). The second part is concerned with damages said to accrue as the result of breach of contract. The claims arise out of the operation of a dealership for tractors conducted by interests associated with Mr. Harry Ikin. 2. The primary assertion by the applicants is that they had a sole distributorship area which was centred on Mackay in Queensland, though also extending to Proserpine, Ayr, and Home Hill. The claim under the Act may be summarized by saying that the conduct of the first and second respondents was such as to mislead the applicants into believing that they had the distributor rights for the Ayr region. The ordering of tractors by the applicants reflected that this was their belief, a belief that the first respondent was aware the Ikins held. In August 1980, a distributor of Same Tractors in Ayr was appointed by the first respondent, acting as agent for the second respondent. Consequently, the applicants had over-ordered and tractor sales by the applicants in the Mackay region in 1981 were, therefore, at depressed prices. The argument for the applicants is that there was a diminution in prices caused by pressures of overstocking, the overstocking being a consequence of the loss of the Ayr market. The applicants had committed themselves to a larger tractor order on the assumption that Ayr would be available as an outlet. The claim for damages for the alleged breach of the Act is quantified in this way:- 3. (a) Damages arising from depression of prices at the Mackay market $61,769.00 Cost of spare parts purchased for Ayr $40,000.00 ~~ Additional expenses $10,088.27 Interest at the rate of 14% $15,660.00 $127,517.27 The damages claimed in respect of breach of contract are postulated on the basis that a term of a contract with the applicants gave them the right to be sole distributor of Same tractors in the Ayr region. The quantification of this claim for damages is formulated in this way:- (a) Damages arising from the profits of which the applicants were deprived in connection with the sales that would have been made to the Ayr distributor had the contract been fulfilled $188.425.00 Lost profits on sales of spare parts in Ayr , 6,400.00 Diminution of the value of the spare parts ordered for Ayr 44,800.00 Additional expenses 10,085.27 Interest at the rate of 14% 34,959.00 284,669.27 4. The Statement of Claim of the applicants in the course of this litigation has undergone many amendments. At the commencement of the trial of these proceedings, an application was made to join a company which is now called Harry Ikin Sales Pty.Ltd., as an applicant. This was on the basis that at the time that some of the loss was suffered, it was said to be both the operating company which incurred the loss and the other party to the distributor contract. I adjourned the matter for a short time but, prior to that adjournment, I released the respondents from an undertaking they had given to this Court not to prosecute their claim in the Supreme Court of Queensland to recover the balance of the purchase price of tractors that had been supplied. After the adjournment, Mr. Dowsett, senior counsel for the applicants, did not persist in his application to join the company as a party but, with leave, once again amended the Statement of Clain, seeking to plead a claim which took cognizance of the fact that the applicants disposed of the business of importing and distributing Same tractors on 9 March 1981 to a company. Same is a brand of tractor manufactured in Italy. At the relevant time with which these proceedings are concerned, a company, Same & Lamborghini Tractors of Australia Pty.Ltd., the first respondent, was the marketing representative in Australla for Same tractors; Same Trattori S.p.A., the second respondent, was the manufacturer of those tractors. Same S.p.A., as a result of a company restructuring that occurred in 1979, became the holding company of the Same organisation. In 1975, the tractors had been sold in Australia by Same S.p.A., a company which is not a party to these proceedings. The situation later changed so that they were sold into Australia by an Italian company, the second respondent, Same Trattori S.p.A. Before the formation of the second respondent, Same had been represented in Australia by an office called the Same Australian Liaison Office. In the latter part of 1975, the applicants were appointed an agent of Same S.p.A. in an area based in Mackay and Bowen. Mr. Ikin had commenced ina tractor repair business in 1969. The applicants, who are a partnership, carried on business under the firm name of "Harry Ikin & Co.". Harry Ikin & Co. were appointed the distributor for Same S.p.A. in the Mackay-Bowen area. In a letter of 28 November '1975, a representative of Same 5.p.A., Mr. C.W. Allbut, wrote to Mr. Ikin, attaching copies of the distributor contract, and stating:- «e+. relating to your appointment as Distributor for SAME, S.p.A., of Treviglio, Italy in the Mackay - Bowen area. The territory has been defined in this manner but further extension north will be a _ matter for discussion and no appointment will be made without conferring with you." N.B. (In reproducing letters, obvious errors have been corrected. ) The contract is very short, barely 3 pages. It is headed "DISTRIBUTION CONTRACT" and recites:- "SAME, S.p.A., Treviglio, Italy, appoints HARRY . IKIN & CO. 131 Waverley Street, BUCASIA, Queensland, 4741 as the Distributor for its agricultural tractors on the conditions which follow: 1. TERRITORY: Mackay - Bowen area 2. DURATION: This Contract is valid from lst November, 1975 for one year, after which date it is automatically renewed unless three months notice to the contrary is given in writing by either party. . 3. EXCLUSIVITY: The Distributorship shall be treated by each party hereto as mutually exclusive. 4. MINIMUM QUANTITY: The Distributor binds himself to a minimum purchase per year of 25 units. 10. TERMINATION: Should either party fail to perform any of its commitments under this Agreement, the other party may give written notice thereof to the party in default, and should such default not be corrected within ninety (90) days after the date of issue of such notice the party who sent such notice may terminate this Agreement immediately by a further written notice. In the event of the death/or bankruptcy of the Distributor SAME shall have the right to determine this Agreement and likewise if the Distributor being a Company goes into receivership or liquidation or undergoes changed control without consent." The proper construction of clause 2 was an issue between the parties. In my view, this distributor agreement between Harry Ikin & Co. and Same S.p.A. was a yearly contract which was automatically renewed on 1 November of each year, unless notice 7. had been given three months prior to that date. That interpretation is reinforced in my view from a consideration of both the minimum quantity clause and the payment conditions (which required 25% of the ex-factory price upon presentation in Italy of shipping documents and 75% payable 180 days from the date of the Bill of Lading). The length of time involved in the payment of stock supplied seems inconsistent with the existence of a contract which could be terminated simply on three months' notice. That interpretation also is inconsistent with the provisions of clause 10, which provided for termination 90 days after notice of default, if default in that time was not rectified. In my view, the contract is to be regarded as a yearly contract requiring three months' notice of non-renewal. However, it could be determined within 90 days of notice of default, if the default had not during that time been rectified. If the contention of the respondents ~ that the contract was determinable on three months' notice at any time - is correct, then clause 10 would have no effective operation, for the contract could be terminated in any event by 90 days' notice irrespective of default. As to the time of payment, Mr. Ikin said that, from the end of August 1980, the method of payment was 25% of the purchase price by Letter of Credit after the tractors came out of production, but before they were transhipped. The balance was to be paid within 120 days of shipment. Mr. Ikin stated that in 1976, there were 22 sales; in 1977, 24 sales; in 1978, 17 sales; in 1979, 30 sales, and in 8. 1980, 56 sales. The sales in 1976, 1977 and 1978 were in the Mackay - Proserpine - Bowen area. From Mackay, Proserpine lies 84 miles north, Ayr is some 200 miles north, and Bowen is 125 miles south. On 14 September 1976, Same S.p.A. wrote a letter to the applicants announcing the appointment of F.R. Ireland & Co. ('Ireland-Holden') as a distributor for Same tractors covering the Mossman, Cairns and Townsville area in North Queensland, effective from 1 September 1976. Mr. Ikin said that, before Ireland-Holden started as distributor, he had had a discussion in Mackay with both Mr. Allbut of Same S.p.A. and Mr. Ireland. He said that an agreement was reached between the three of them that Townsville would be the dividing line. He then approached a number of persons in Proserpine, Bowen and Ayr. However, it was not until towards 1979 and 1980 that he was able to establish any dealers. In particular, in 1976, 1977, 1978 and 1979, he did not have any dealer in the Ayr or Home Hill area. In a letter of 9 June 1977 headed "DEALER DEVELOPMENT', Mr. Allbut, on behalf of Same S.p.A., wrote to the applicants. That letter commenced: - "You recently requested information in respect to the subject of dealers and arrangements relating to them. Generally speaking, it is difficult to secure good dealers for tractors due to the strength of some of the bigger names." 9. On 25 October 1977, Mr. F. Laghi, on behalf of Same S.p.A., wrote to the applicants. He referred to his recent visit to Mackay and, in the course of that letter, said: - "In the further development of your activities in securing of two or three good Dealers is of very great importance. Proserpine, Bowen, and Ayr you were looking at. I will be looking forward to some news as to progress." On 5 December 1977, Same 5.p.A. wrote to the applicants in relation to the sales performance by the applicants as revealed in the June figures. These indicated that the applicants had a market share of 5.3% in the Mackay statistical division. The final paragraph of that letter read:- "We do hope with the extension of your network into Ayr and perhaps Proserpine as soon as possible, that we will be able to obtain the same share of the market in your total territory." On 13 April 1978, dealing with the sales performance in the September quarter, reference was made to the sales by the applicants of 11 units out of a total number of 91 units sold, giving a market share of just over 12%, although that quarter showed a substantial fall in total tractor sales, 91 in total being sold compared with 161 in 1976 and 176 in the September quarter in 1975. That letter included:- "Ahile it is necessary to ensure that sales are maintained in the Mackay retail area, the downturn in the market would point up the need of extending into the Proserpine, Ayr district." — 10. On 29 May 1978, Same S.p.A. wrote to the applicants. That letter, headed "ESTIMATED TRACTOR REQUIREMENTS - 1979", said in part:- a "To provide SAME with a basis for planning production in 1979 it is necessary to advise them by the end of June of Australia's estimated requirements for the yext year. SAME has made it clear that they expect Australian Distributors to take their estimated requirements and only in the event of them being able to place tractors in other markets will they accept a substantially lower total figure than that indicated." On 3 July 1978, Same S.p.A. wrote to the applicants concerning tractor sales for the October-December quarter of 1977. Attention was drawn to a downturn in the market and the observation was made:- "In the Northern Statistical Division covering the Home Hill, Proserpine area, the market has not been as severely affected as in the Mackay Statistical Division." On 6 November 1978, in respect of sales performance January to March 1978, Same 5.p.A. spoke of the serious downturn in the Mackay statistical division. The letter continued:- "The serious downturn in the market in the Mackay Statistical Division again highlight the need of extending your distribution outlets. In the Northern Statistical Division most of which falls in the Ikin territory, there were ''90 tractors delivered, three times more than in the Mackay Statistical Division." il. The letter ended by saying:- "We fully understand it is difficult to get dealers ~ when the market is suppressed but it would seem to be in your own interests to try and get to the Northern Statistical Division as soon as possible." On 23 January 1979, Same S.p.A. advised of a change in corporate structure in the Same organisation. It advised:- "SAME S.p.A. will become the Holding Company for the various subsidiaries within the SAME Group. The SAME tractor business will be conducted by a new Company known as SAME Trattori S.p.A. and all dealings in future as far as SAME tractors are concerned will be with this new Company, which will be under the Managing Directorship of Mr. P. Recanati, who was previously General Manager of SAME S.p.A. As far as Australia is concerned the rumoured establishment of a SAME Company has taken place with the incorporation of 5S. & IL. Tractors of Australia Pty.Ltd." The letter concluded:- "Meanwhile business will continue as previously. It should also be noted that the current method of operation will be continued under S. & L. Tractors of Australia Pty.Ltd." On 30 March 1979, a farewell letter from Same S.p.A. was sent to Mr. H. Ikin, (this and the earlier two letters had been addressed to Mr. Harry Ikin, Harry Ikin (Imports) Pty.Ltd. No such company was ever formed). The letter of 30 March included:- 12. "As from the 2nd April, SAME & Lamborghini Tractors of Australia Pty.Ltd. will commence to function through its Office at 99 York Street, Sydney - Telephone 290.2844." A telegram was sent advising that Mr. Franco Laghi would be travelling to Australia, and a general meeting of distributors would be held in Sydney towards the end of April or beginning of May in Sydney. Mr. Laghi, the General Manager of the first respondents, wrote a letter, on that company's letterhead, addressed to The Manager, Harry Ikin & Co., 131 Waverley Street, Bucasia on 7 May 1979. This apologized for not holding the meeting referred to in the telex and indicated that a general meeting would be held on 14 and 15 June in Sydney. On 9 May 1979, Mr. Ikin wrote to S. & L. Tractors of Australia Pty.Ltd., and said:- ",.. we enclose our orders & estimates for the Sept & Dec quarter. We apologize for the delay in sending this information as we were uncertain as to what extent our activities were going to be in the Ayr district. We are now negotiating with a prospective dealer in Ayr, and prospects for the remainder of this year and into the 1980's looks very promising. We hope the amount of tractors shown as estimates in the Oct & Dec period can be increased substantially when we know the outcome of negotiation with our prospective dealer in Ayr, and also the result of the Emerald area." The evidence in this case includes the minutes of the Distributors Meeting held on 14-15 June 1979 in Sydney. Mr. Ikin of Harry Ikin & Co. attended, as did a number of other distributors as well as personnel from the first respondent.Those minutes record, in an item headed "DISTRIBUTOR TERRITORY AND DEALER NETWORKS" that:- 13. "During visits made by Mr. Laghi there were certain comments about distributor/dealer areas. The law on this matter indicates that it is not possible to define the areas and there can only be a 'gentleman's agreement' regarding dealer - territory. The only exception is on the service side." Mr. Ikin agreed that he had read the minutes, which had been circulated to him after the meeting. He was asked by his counsel:- "And do they accurately record what was said there, do you recall?" He answered: "Oh, yes, that was what was said, yes." In an important letter dated 5 July 1979, Mr. Ikin wrote to Mr. Laghi and said:- "You will no doubt be pleased to learn that Mr. John Honeycombe of Ayr has agreed to sell 'SAME' tractors in the Burdekin area, but will be trading under the name of (White's Holden). We are very confident that they will be a great asset to 'SAME'. We have increased our orders to cover this area, and trust you will endeavour to fulfill these orders so that we can launch 'SAME' in Ayr in the same way as we did in Mackay. White Holden appointment will be from February, 1980, so as to allow for a reorganisation of the Honeycombe enterprises, and also to be able to import the extra tractors to supply this valuable area." 14. Mr. Laghi visited Harry Ikin & Co. in late January 1980 and, in the course of that discussion, Mr. Laghi reported that in respect of the potential of the Ayr dealership:- " "Ikin expects Ayr to take 17 tractors during 1980 building up to 30 tractors next year - tractors being Leopard, Panther, Tiger, and Buffalo. John Honeycombe of Honeycombe's Sales and Service of Ayr, advised that they were on 26.5 percent discount and 6 months free floor plan through JH." The various names are SAME tractors of different capacities, and the reference to John Honeycombe concerns a complaint, according to Mr. Ikin, that Honeycombe wanted more discount and complained that Ikin was getting more discount for the tractors than he. TH is a reference to International Harvester, another brand of tractor for which Whites Holden was a distributor. In the course of that discussion, Mr. Laghi also referred to Ikin's new premises. He said:- ""Ikin's new premises are under construction with the floor and bottom section of the wall having been laid. They plan to have an impressive set up and with John Honeycombe desiring to trade as Harry Ikin (Ayr) division Ikin's are looking forward to the complete establishment of SAME tractors from Mackay to Townsville." On 5 March 1980, Mr. Laghi advised concerning the Australian stock situation of Same tractors and indicated that, because of a world-wide demand, it would not be possible to obtain extra units; it was hoped that S. & L. would build upa 15. new buffer stock. On 13 March 1980, Mr. Laghi reminded Mr. Ikin that it was essential "that you let us have your forecast until the end of the year, with an indication of the orders you will be making for Leopards and Panthers." Mr. Laghi said:- "This is particularly important now that sales are increasing and, to avoid a shortage of tractors, we need to know now the number of tractors we wish to book for each production schedule. To be certain of getting the tractors, we need to book at least six months before the production schedule." By letter of 27 March 1980, Mr. Laghi wrote to Mr. Honeycombe, stating:- "Further to our discussions, I confirm the general agreement reached concerning the distributorship for the area south of Ingham to Proserpine and, as mentioned during our meeting, everything will be finalised on my return from Italy." And later, "I hope that this will be just a starting point for a mutually profitable co-operation between your Company and Same." On the same date, he wrote letters to Mr. Mario Pertot, the Managing Director of Whites Service Station Pty.Ltd.; to the Banco di Roma informing that bank that the first respondent "will be finalising a Distributorship Agreement for all the area around Ayr, North Queensland, with Whites' Service Station Pty.Ltd. ... AYR"; and to Brambles-Ruys Pty.Ltd. seeking a representative to explain to the Managing Director of Whites 16. Service Station Pty.Ltd. the procedures as far as shipping, freight, bills of lading, etc. were concerned. That letter contained the warning:- = "At this stage, I want to underline the fact that the matter is extremely confidential and I would appreciate your keeping me informed about the outcome of the discussions." On 8 April 1980, Mr. Pertot, under the 'Whites Holden' letterhead, placed an order for 3 Leopard, 3 Panther, 2 Tiger, 1 Buffalo, and 1 Hercules tractors. On 14 April 1980, Whites Holden ordered a total of 6 Same tractors from Harry Ikin. These were 1 Saturno, 3 Tiger and 3 Buffalo models. Mr. Ikin in evidence indicated that 5 were supplied to Whites Holden on that order and a further tractor was supplied in 1981. On 23 April 1980, a telegram was sent by Whites Holden to Mr. Laghi in Italy in respect of the 8 April order for 10 tractors and included the comment:- "THIS CANE GROWING AREA HAS VERY LARGE POTENTIAL FOR YOUR EXCELLENT TRACTORS. 'THIS WILL BE BIGGER THAN EXPECTED BECAUSE OF RISE IN SUGAR PRICES AND EXPANSION OF SUGAR INDUSTRY IN THIS STATE." John Honeycombe was advised that Same were able to supply 4 Panther, 5 Leopard, 2 Tiger Six, 1 Buffalo, I Hercules, andl Minitaurus tractors, and the Leopard E and Panther models would be supplied with modifications to suit sugar cane farming. 17. On 10 July 1980, the first respondent advised Whites Holden that orders labelled WH/4 to WH/7 inclusive, involving a4 total of 14 tractors, had been allocated to production but had not yet been confirmed by the factory. On 22 July 1980, Whites Holden wrote to Mr. Laghi and said:- "With reference to your telephone conversation on 22nd July, with John Honeycombe, I have today placed an order with Mr. H. Ikin of Mackay for the following Same Tractors: Leopard E DT - 5 Panther DT - 6 Tiger DT - 2 Hercules DT - 1 Hoping you will erase these tractors off Mr. Ikin's order when received as they have already been allocated for production for Whites Holden under order numbers: WH/4, WH/5, WH/6, and WH/7." This letter reflects less than honest dealing between Whites Holden and Mr. Laghi on the one hand and Mr. Ikin on the other. In a telex of 11 August 1980, Mr. Laghi communicated with Same in Italy and confirmed the appointment of Whites Holden as Same distributor in Ayr, Queensland. The telex advised:- " »+. THIS COMPANY WILL OPERATE IN THE AREA BETWEEN HARRY IKIN AND CO., AND IRELAND HOLDEN. IN THIS WAY WE WILL COVER THE NORTH OF QUEENSLAND FROM ROCKHAMPTON UP TO CAIRNS." 18. A telex of 13 August from Same to Mr. Laghi contains a reference te 10 tractors for Whites and a total of 27 tractors for Ikin. The communication indicates that Letters of Credit in respect of both lots of tractors were dated 29 August 1980. On 18 August 1980, Same & Lamborghini Tractors of Australia, Pty.Ltd. enclosed orders for a total of 10 tractors on behalf of Whites Holden to Same Trattori S.p.A. On 20 August 1980, a letter was sent to alli Same distributors, including Harry Ikin & Co., signed by Mr. Laghi announcing the appointment of Whites Holden, Ayr, as a new Same distributor. That letter indicated:- "Whites Holden will be responsible for the area located between the territory covered by Harry Ikin & Co., Mackay, and Ireland Holden, Cairns." Mr. Ikin received the letter from Mr. Laghi announcing the appointment of Whites Holden as Same distributor for the Ayr region on 27 August 1980. The Ikins supplied five tractors to Whites Holden pursuant to the order of 14 April 1980 after Mr. Ikin had notice of Whites Holden as a Same distributor. Those 5 and the later one supplied in 1981 were in fact the only tractors supplied by Mr. Ikin to Whites Holden. 19, Sugar cane had a very good year in 1980, as reflected in the Ikins's sales. Mr. Ikin was expecting 1981 would also be a good year and he ordered on that basis. = A Schedule, Exhibit 47 before me, deals with all tractors ordered by the Ikins from Same between 4 July 1979 and 28 March 1980. It specifies the date of the order, the date when sold, the date when the tractor arrived in Australia, the name of the purchaser, and the amount received for most of those tractors. The tractors arrived from 30 April 1980 until 16 September 1980. The last sale of those tractors occurred on 14 April 1981. Four of those vehicles are shown as sold to Whites Holden and, in addition, two of them were gold to individual purchasers in Proserpine. A further schedule, Exhibit 48, shows the tractors ordered from Same in March and April 1980, specifying the order number, date of order, date into stock, date of sale, purchaser and actual price received in respect of each tractor. There were 56 tractors in all ordered in March or April 1980. They arrived mainly in March and April 1981; 37 of them were sold in 1981, 12 in 1982, and 6 in 1983. One, a Tiger, was not received into stock until 17 May 1982 and was not sold. Of the 37 sold in 1981, 7 were sold to other distributors, including a Panther on 23 November 1981 to Whites Holden, Ayr. Mr. Ikin says that this was a higher proportion of dealer or distributor sales than usual. 20. Various price lists were tendered. The profit component in those list prices is 30%; 70% of the list price being the total cost price of the tractor, fittings, and all other expenses including freight, insurance and customs charges, and 3% of ex factory price for a warranty allowance. On 4 September 1980, orders totalling 20 tractors were placed. The tractors on those orders were never received, the orders being cancelled about May or dune of 1981. Soon after receiving notification of the appointment of Whites Holden as a Same distributor, Mr. Ikin phoned Mr. Laghi and complained to him about that appointment. I am satisfied that part of the complaint was the number of tractors the applicants had on order. I accept that Laghi told Ikin that he would help to move them; Ikin said he was upset about it, to which Laghi replied there was a shortage of tractors in Australia, the main thing was to get them to Australia. Laghi said that Honeycombe would need some tractors to get started. When Ikin said, "I think we should cancel them", Laghi replied "No; it is better to make a small profit on each one, even if you have to sell them to another distributor, rather than cancel then. We will not know what is going on if you cancel them." Laghi enquired whether Ikin was in a position to raise the Letter of Credit. Ikin said that he was not immediately able to do so, but would be able to within a couple of weeks. I accept that Laghi told Ikin, "Let's get them here. I''1l1 help you move them and I['11 get the factory to extend the time for payment until they've gone." 21. When Ikin asked Laghi why he had appointed the Ayr distributor, Laghi told him that he had thought that he could best cover the area with another distributor. On 17 November 1980, Ikin wrote to Laghi. In part, he said:- "We now feel very disappointed that after all the work we have put into establishing Ayr both you and our dealer, negotiated behind our back for our Gealer to import tractors direct." Mr. Ikin also .complained:-— "Our feelings are that you acted in an improper way in appointing White's Holden as an importer, when they were already established as our dealer." The letter asked for arrangements to be made for negotiation of a settlement to offset the financial loss to Mr. Ikin in that area. The letter from Mr. Ikin concluded:- "During the current boom in sugar, and after having talks with our accountants and solicitors, our financial loss would be in the region of $100,000.00." In 1980, the applicants sold a total of 56 tractors and the orders in March and April, which are referred to in Exhibit 48, were for a further 56 tractors which were expected to arrive from March onwards of 1981. As TI have said, 1980 had been a very good year for sugar cane farmers and, consequently, also for 22. the suppliers of equipment and machinery to cane farmers. I find that towards the end of 1980 there was a general expectation, shared by Mr. Ikin, that 1981 would similarly be a very good year. On 28 January 1981, Mr. Ikin telexed the first respondent in these terms:- "JAN SALES TO DATE 6 UNITS. WE HAVE ONLY 5 UNITS UNSOLD THESE WILL BE SOLD DURING FEB. TOTAL FEB AND MARCH SALES DEPEND ON ARRIVAL OF FRESH STOCK NOW IN TRANSIT TO US. WE ARE ALREADY PRE SELLING TRACTORS IN TRANSIT. IF TRACTORS ARRIVE ON TIME MARCH SALES COULD BE 12-15 UNITS. WE EXPECT TO SELL THE 56 TRACTORS ON THE WATER TOGETHER WITH THE 5 IN STOCK BEFORE JUNE 30TH. REGARDS HARRY IKIN." In March 1981, Mr. Franco Laghi and Mr. Mark Fabian in Mackay pressed Mr. Ikin for payment for tractors. It was accepted during the course of the hearing that more than $300,000 was owing in respect of the tractors which had been ordered in March and April by the applicants. Mr. Ikin in evidence was asked :- ",.. the amount you have not paid on the tractors is over $300,000, is it not? ... Yes. That is the only way I couid get them to talk." The optimism displayed in late 1980 and early 1981 was considerably dampened by later events. In July 1981, after only one week of cane crushing had occurred, there was a strike in the seven Mackay mills. Farmers refused to supply cane to the mills 23. for approximately 5 weeks. There were no strikes in the Ayr district. This, I find, generated an air of uncertainty amongst cane farmers as to equipment purchases and, moreover, towards the end of 1981, prospects for cane generally no longer were as rosy as had been the case in 1980 and 1981. Towards the end of December 1981, Mr. Ikin started selling Kubuto tractors. These are of Japanese manufacture. I have set out the history so far in detail, because it is on that material that the major issues fall to be determined. Fortunately, much of the evidence in this case is documentary. In addition to letters and other forms of communication between the various parties, assistance has been obtained from order forms, goods inwards books, service cards and other business records. There is some other material of an accounting kind relevant to the business of the Mackay distributorship. This includes some trading and profit and loss statements as well as balance sheets involving the Ikin interests. I have been greatly assisted by the preparation of many schedules, including tractors ordered and sold by Ikin and by Whites Holden, and I have had the benefit of analyses of tractor sales over time both by volume and area: Manzi v. Smith (1974-75) 132 C.L.R. 671. Some of this information is in graphical form. The schedules are the result of much industry and time and were of significant benefit. Before turning to the issues, there are some further matters with which I should specifically deal. Mr. Harry Ikin 24. was the principal witness for the applicants. His evidence occupied a considerable period of time, and he was submitted to lengthy and searching cross-examination. One important part of the claim is in relation to a loss claimed to have been made on spare parts. The original distributor contract between Same S.p.A. and Harry Ikin & Co. in clause 7 dealing with Service, provided:-— "The Distributor undertakes to grant to his customers a first class service both by means of fixed workshop and by mobile service units for service in the field. He also binds himself to carry a suitable stock of spare parts covering reasonable service needs." A Same Distributor Book, which was dated 1 September 1977 but which included replacement pages dated at various dates in 1978, was loaned to Harry Ikin & Co. by the Same Australian Liaison Office and also has some references to the obligations of distributors. A distributor is obliged to keep a stock of Same original spare parts - "such as to ensure the service and good performance of tractors in the territory allocated." and he also - "undertakes to order a spare parts stock proportionate to the number of machines he expects to sell in his territory." Mr. Ikin said that, prior to going into Ayr in July 1979, the level of his stocks of spare parts was of the order of $100,000 to $120,000. He says that that build-up of stocks 25. occurred over a number of years, and that, at one stage in 1981, the level of stocks was about $170,000. He was asked specifically - ~ "Was there any level of increase attributable to Ayr? «.. Yes. I would say the whole of the area. We have to keep spares. We did at one stage say there was $40,000 there. At one stage we thought $40,000 would be going to Ayr. ..." When asked how he would roughly calculate the level of spare parts for the Ayr sales in 1981, he answered that it was a question of experience. He agreed that the $40,000.00 was based on that sort of estimate. He said at that stage that the $170,000 in stock was at cost price to them. The Trading and Profit and Loss Statement for the year ending 30 June 1981 for Harry Ikin & Co., prepared by Whitson Dawson & Co., public accountants in Mackay, shows the stock-on-hand as at 30 June 1980 totalled $229,587.00, which was broken down into new and secondhand tractors $213,336.00 and spare parts stock $16,251.00. Mr. Ikin, having claimed that at the end of Jume 1981 there was around $170,000 worth of spares, when challenged with this figure ($16,251.00), gave an explanation that some of these were "fast-moving" parts and that there was some $150,000 worth of "slow-moving" parts which are not mentioned in the financial documents. In the set of accounts for June 1982 in the name of the Harry lkin Family Trust, the value of spare parts held by the company as trustee is shown as $57,388.00. His explanation for 26. that was the same. There is no material to suggest any large purchases of spare parts took place after the 36 June 1982 and it is impossible to accept that out of total stocks of some $57,000.00, $40,000.00 would have been earmarked for Ayr. In his evidence he said he wasn't able to say how many or what parts he received at any particular time. I accept that, if the value of the spare parts in the financial accounts only reflects those which are readily saleable and not obsolete, then the stock obsolescence did not arise in consequence of any alleged breach. On the question of what part, if any, of the level of stocks of spare parts was earmarked for Ayr, having regard to the evidence of Mr. Ikin, his explanations, and the written material, I can give no credence to his evidence on this aspect. Another area of dissatisfaction concerns the validity of the method used to quantify the damages for misleading or deceptive conduct. The method of calculation is to take the usual standard Sale price for 1981 and to subtract from it the prices actually received. The standard sale price is determined for this calculation by reducing the list price by 5 per cent. The assumption is that this is the price that would have been received but for the overstocking. Mr. Ikin, in his evidence, said:- 27. "We put a 5 per cent discount when we are calculating the price we would sell a tractor to a retail customer." Iam not satisfied that this was what in fact occurred during the overstocking. On the evidence of actual sales before this time, there does not permit a conclusion that this isa permissible basis on which to determine the non-depressed price. Also, the amount claimed as the actual price received in a number of examples was demonstrated as being erroneous because of questions as to what properly ought to be allowed as the value of trade-ins or the costs of extras. Mr. Ikin believed, and believes, that he and his family were shabbily treated by the respondents. I think there is justification for his holding that view. Perhaps, because of this, in giving evidence his prejudice was obvious as were his attempts at earnest self-justification. Generally, he was not an impressive witness and I confess I have sought to rely on documentary evidence wherever possible. I am not prepared generally to accept evidence from him that is not supported. The final aspect of the evidence to which I wish specifically to refer is that of Mr. Norbard, chartered accountant, called for the respondents. He impressed me, and I am in general agreement with his conclusions. I accept, in particular, the validity of his analysis of 'the sales by the applicants in 1981 and his conclusion that no loss was incurred in 1981 because of depressed prices. 28. I turn now to the issues. In these proceedings, there are, in my opinion, two serious difficulties in the path of a successful application by the applicants. The first of these is that the application is brought by Harry Ikin, his wife, and his son, Harry Anthony Ikin. Without notice to either the first or second respondents, either before or after the sale, and outside the knowledge of the first and second respondents at any material time, the applicants on 9 March 1981 sold their interest in the business which had been carried on under the firm name of "Harry Ikin & Co." to Fydell Nominees Pty.Ltd., which company subsequently changed its name to Harry Ikin Sales Pty.Ltd. The Statement of Claim alleges that this transfer was pursuant to an agreement between the applicants and the company, which agreement was partly oral and partly in writing. The company acquired the business as trustee pursuant to a deed of settlement dated 9 March 1981 and the applicants were three of the beneficiaries under that deed of settlement. The company then carried on business pursuant to the terms of the said deed. The sales of the tractors which are at the foundation of the Trade. Practices claim (being the 56 tractors ordered by the applicants in March and April 1980) occurred after the applicants had sola their business to Fydell Nominees Pty.Ltd. 29. It was said that the oral terms of that agreement were that tractors then on order in the name of the applicants would be purchased by the company, the company would assume the responsibility for paying the purchase price of those tractors, would indemnify the applicants in respect of payments already made by the applicants and for which the applicants had become liable in respect of the purchase of the tractors, and would purchase any spare parts on order, the company assuming responsibility for the payment for those spare parts. The difficulty is sought to be met in' the applicants' case by a claim that, immediately prior to that sale, the value of the business had been depressed by the misleading and deceptive conduct which the applicants claim had been engaged in by the first and second respondents. This was said to arise fron:- (a) the applicants having been committed to the purchase of an excessive number of tractors for sale in the Mackay area only, rendering it probable that the tractors would be sold at a reduced price and that further costs would be incurred in the sale of those tractors, in addition to the costs normally incidental to such sales; (b) the fact that the stock levels were excessive, resulting in probable delays and incurring additional holding charges; and (c) the fact that stocks of spare parts were virtually unsaleable because of the excessive levels. 30. The estimate of the depression in prices plus' the additional expenses and loss of spare parts and interest to which I have referred, is claimed as damages for misleading and deceptive conduct. The assertion is that, at the time of the sale, by reason of the factors enumerated above, the situation of the business was pregnant with loss. That loss eventually occurred, and the applicants, it is said, are entitled, as damages for misleading and deceptive conduct, to the estimate of the depression in prices and the other items indicated. In Pirelli General Cable Works v. Oscar Faber & Partners (a firm) (£19833 2 A.C.1, the House of Lords reaffirmed the view that the cause of action for damages in negligence accrues when the damage came into existence. In my opinion, the entitlement to damage under s.82 of the Act does not arise at a stage where there is a potentiality of loss: the statutory cause of action arises only when the damage occurs. The contract of sale was between the applicants and Fydell Nominees Pty.Ltd. What was sold included the slock-in-trade of the business and the plant and equipment. The purchase price was $142,430.00, apportioned as follows:~ 31. Stock $198,097.00 Plant and Equipment $29,078.00 Goodwill $500.00 " $227,675.00 Less liabilities assumed $85,245.00 $142,430.00 The vendors' interests in any book debts owing to the business as at the date of completion of the contract (which was 9 March 1981) were not included in the contract. The contract recited that - "All debts and liabilities in relation to the business 'Harry Ikin and company', shall be paid and discharged, and all contracts in relation to the business 'Harry Ikin and Company' entered into shall be performed by the parties as follows:- . if incurred or entered into before the date of possession, by the purchaser; and . 1f incurred or entered into after the date of possession, by the purchaser." I accept that:- (a) the value of stock-on-hand was at cost; (b) the value of plant and equipment was its written down value; and 32. (c) the amount owing to trade creditors was $31,480.00, and to Borg Warner Acceptances (with whom the applicants had a 'floor plan' " arrangement) was $53,765.00, giving a total of $85,245.00 for the liabilities assumed. There is, in my opinion, no evidence to suggest that the purchase price of the business to the company reflected any diminution in value of the business it had acquired. There is no suggestion in the evidence that possible "losses" or reduced profits were taken into account in determining the value of the business at the time of transfer. In my opinion, any diminution in profit because of depressed prices was suffered by the company, and any additional expenses or added holding charges were incurred by the company. Further, in this case it is not possible to ignore the fact that subsequent to 9 March 1981, the business was conducted by the company and any losses were suffered by it. This is not a case, such as Esso Petroleum Co.Ltd. v. Mardon £19761 1 Q.B. 801, where the Court of Appeal was able to disregard the fact that the capital sum lost was provided by a private limited company. In that case, Mr. Mardon heid the tenancy of the service station, but the initial capital of £6,270.00 was provided by a private company of which he and his wife held all the shares. As Lord Denning M.R. 'said at 821:- 33. "The business of this filling service station was undoubtedly the personal business of Mr. Mardon. The money put into it might be obtained by overdraft at the bank or by loan from his own private company - but wherever it came from, it . was a loss to him: and he can recover that loss." In Gould v. Vagqgelas (1984) 56 A.L.R. 31, Mr. & Mrs. Gould, induced by fraudulent misrepresentations by Mr. Vaggelas, agreed to purchase a tourist resort on behalf of a company to be incorporated, Gould Holdings Pty.Ltd. The purchase was made as agreed ata price of $2,315,000 with a mortgage back to the vendors. The obligation to pay $957,500 cash on completion was met by the transfer of property: Mrs. Gould transferred a shopping centre to Mrs. Vaggelas and the Goulds also sold to the vendor companies two shares in a company. The Goulds were the guarantors of due payment of Gould Holdings Pty.Ltd. under the mortgage. Gould Holdings Pty.Ltd. defaulted, but continued to operate the resort until the mortgagee entered into possession. The mortgagee ultimately sold the property, the amount realized being insufficient to satisfy the mortgage debt. Gould Holdings Pty.Ltd. went into liquidation. It had few assets and substantial liabilities apart from its liability to the Goulds. The Goulds were called on to honour their guarantees, and property having a net value of $266,273 was sold. A further $227,983 remained owing under the , guarantee. The Goulds lodged a proof of debt with the liquidator of Gould Holdings Pty.Ltd. 34. The mortgagee sued the Goulds as guarantors for the amount of the insufficiency. The Goulds delivered a defence and a counter-claim which joined Mr. & Mrs. Vaggelas and the vendor companies, seeking damages for deceit based on representations allegedly made by Mr. Vaggelas during the negotiation which preceded the purchase. The trial judge gave judgment for the Goulds in the sum of $1,427,500, constituted by - (a) the actual value of the property transferred by the Goulds to the vendor companies and to Mrs. Vaggelas which stood as cash paid on completion of the purchase of the tourist resort ($733,212.12); (b) the net value of the property put up by the Goulds as security in support of the personal guarantees given by the Goulds to raise money for Gould Holdings Pty.Ltd. ($266,273); (c) the amount the Goulds remained liable to pay under the guarantees, ($227,983); (d) interest of $200,000. The total of items (a), (b) and (c) was rounded to $1,227,500, making a total with interest of $1,427.500. On appeal to the Full Court of the Supreme Court of Queensland, a majority reduced the amount of the Goulds damages. The approach taken was to identify the Goulds with Gould Holdings Pty.Ltd. and to assess the Goulds' damages as the amount the company might have claimed, that is, the difference between the value of the resort at the time of purchase and the purchase price plus $50,000 for loss of interest, making a total of $700,000. Wilson and Dawson JJ. dissenting) 35. The High Court (Gibbs C.J., Murphy and Brennan JJ., held that the measure of damages by the trial judge should not have been disturbed and his order p.34:- "It is clear that it was not right to identify the Goulds with the company, Gould Holdings Pty.Ltd. (Gould Holdings), which the Goulds formed to make the purchase, notwithstanding that they were the sole shareholders. It is of course elementary to say, as was said in Prudential Assurance Co.Ltd. v. Newman Industries Ltd.(No.2) £19827 Ch.204 at 210, 'that A cannot, as a general rule, bring an action against B to recover damages or secure other relief on behalf of C for an injury done by Bto C. C is the proper plaintiff because C is the party injured, and, therefore, the person in whom the cause of action is vested'. Any loss suffered by Gould Holdings as a consequence of the fraud can be recovered only by the company itself. Even if the company had not commenced an action within the limitation period, its failure to enforce its own rights would not have enhanced the rights of the Goulds (see Prudential Assurance v. Newman Industries, at p.223). However, although the Goulds cannot recover damages merely because Gould Holdings has suffered damage, and cannot recover damages which are merely a reflection of a loss suffered by the company, they may recover damages for the loss which they personally have suffered and which is separate and distinct from the loss suffered by the company. That this is so is clear in principle, but if authority is needed, the judgment in Prudential Assurance v. Newman Industries (at pp.222-3) provides it." as to damages should be restored. Gibbs C.J. said at In this case, in my opinion, any of the damages claimed by the applicants with which I am presently dealing are "merely a reflection of the loss suffered by the company", and there is no "loss" which they personally have suffered and which is separate and distinct from the loss suffered by the company. 36. So far as the contractual claim is concerned, it is asserted by the applicants that there was a contract between the applicants and the second respondent, a term of which was that the applicants had exclusive distributor rights to Same Tractors and accessories extending to the Ayr district or, alternatively, that the second respondent would not enter into another distributorship agreement or appoint another distributor for Ayr without giving reasonable notice to the applicants, such notice said to be in excess of twelve months. It is then said that the appointment of Whites Holden Ayr, as distributor of Same tractors in Ayr on or about 20 August 1980 was a breach of that agreement; that from August 1980, the applicants were deprived of the right to act as distributor in the Ayr region; and that from April 1980 until 1 November 1981 the distributor, Whites Holden Ayr, sold 45 Same tractors in the Ayr region as distributor on behalf of the respondents. The claim by the applicants is that, had the respondents not breached the contract which they are said to have had with the applicants, the applicants would have sold the tractors as distributor using the said Whites Holden Ayr as dealer. As a consequence they would have derived profits of $188,425.00 to which I have earlier referred, as well as the other items in the contract claim. About the contractual claim based on the 45 tractors sold by Whites Holden, several things may be said. First, if there were such a term, in my opinion, it did not survive past 9 March 1981. In my opinion, Fydell Nominees 37. Pty.Ltd. did not acquire the benefit of any such term. There was no novation whereby the contract between the applicants and the second respondent was rescinded and a new contract on the same terms entered into between the company and the second respondent. Both respondents at ail material times were completely unaware of the sale of the business by the applicants to the company. Any sales after 9 March 1981 by Whites Holden cannot be regarded as a sale from which the applicants would have derived profit. Secondly, this part of the claim assumes that the sales Whites Holden effected as a distributor would have been effected by them if they were a dealer of the Ikins. The assumption is important to this part of the clein. I cannot accept it as valid. The proper assessment of damages for breach of a contract for exclusivity requires a determination of what would be the position of the applicants if the breach had not occurred. On the contractual claim, the questions of whether there was a contract between the applicants and the second respondent and, if so, whether there' was such a term as alleged must be addressed first. I will return to this aspect later. The second serious difficulty is in relation to the basis of the claim for misleading and deceptive conduct. 38. It is not suggested that any of the tractors involved in that claim were sold at a loss. It is merely a depression of the level of profit which founds the bulk of the claim under the Act? It is with that part of that claim that I wish now to deal. A serious question arises as to what damages, if any, in those circumstances the applicants are entitled pursuant to s.82 of the Act, which provides that:- ""(1L) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention. I considered this question in Shepherd v. Noyes Brothers Pty.Ltd. (4 July 1985, unreported.) I am of the view thata proper interpretation of s.82, the remedy given by the Act, does not enable an applicant to recover on the basis of "how much better off (the applicants) would have been if the statements had been true but how much worse off (they are) by reason of having taken the steps which (they) did in reliance on the statements," adopting the words of Fox, Lockhart and Fitzgerald JJ. in Gates v. City Mutual Life Assurance Society Ltd. (1983) 68 F.L.R. 101 at p.104. Accepting for the present purpose that the applicants were misled by the respondents into a belief that the territory to be supplied by them extended to Ayr, it is said that in 39. reliance on that representation, more tractors were ordered than 4£ that conduct had not occurred. Each of the tractors was sold at a profit. - The basis of the claim for damages under the Act, in my view, is not correct. It is based on how much better off the applicants would have been if the over-ordering had not occurred. I have approached the basis of computation in a way quite different from the impermissible approach adopted by the applicants. The applicants, in their Statement of Claim, say that they are unable to say the exact number of tractors estimated by them as being the likely number of tractors to be sold in Ayr during 1981. Taking 17 as a reasonable figure of the amount of over-ordering, {nearly one-third of the total of 56, and the number referred to in correspondence by Mr. Ikin), the applicants' contention would be that, because of the belief that they would be supplying Ayr, they ordered 17 more than they would have ordered had not they been misled. If they had not been so misled, they would have ordered 39, which, ex hypothesi, would have been sold at non-depressed prices in Mackay. Because they were misled, they ordered and sold 56 tractors, at depressed prices. Iam unable to conclude that the profit on the 39 at non-depressed prices would be greater than the profit on the 56 at depressed prices, reduced further by any extra expenses 40, involved in those sales. It follows that at is not established that because of the misleading conduct, the applicants are "worse off" by the alleged conduct. _ In my view, on the evidence in this case, in respect of any diminution in prices, and additional expenses, the applicants have not established any loss or damage suffered by them asa consequence of the alleged contravention of s.82 of the Act. As for the contractual relations between the parties, I have considered the undated communication from Same S.p.A. to Mr. Ikin which was Exhibit 52, and which included this statement:- "From Ist January 1979 therefore your existing relationships with our company are to be taken over by SAME Trattori S.p.A. and the Distributor contracts and sales agreements will be modified accordingly in due course. However, payments for tractor and engine spares accounts relating to purchases up to 31 December 1978 should be made to SAME S.p.A. " From that communication, together with both the notification from Same S.p.A. of 23 January 1979 to which [I have earlier referred and the subsequent conduct of the parties, I am of the view that the contract between the applicants and Same S.p.A. came to an end and was replaced by a contract on the same terms between the applicants and the second respondent. Mr. Laghi in his evidence said that it was the intention that when the first respondent took over the marketing the distributor network would be retained. 41. The material contained in the minutes of the Distributors Meeting of 14 and 15 June 1979 is strong evidence both that a novation occurred and of the subject matter of that novation. In my opinion, it was not a contractual term of the original Distributor Agreement either that the applicants' sole distributor rights with respect to Same tractors extended to Ayr, or that Same §.p.A. would not enter into another Distributorship Agreement or appoint another distributor for Ayr without first giving the applicants a reasonable period of notice, which they say inthe Statement of Claim is in excess of twelve months. Consequently, no such contractual term was part of the agreement between the applicants and the second respondent. This view, in my opinion, reflects the understanding of the respective parties and gains further support by the discussion about territories in the minutes of the Distributors Meeting held in Sydney to which I have referred and, in Particular, the passage dealing with distributor territory and dealer networks which records:- "During visits made by Mr. Laghi, there were certain comments about distributor/dealer areas. The law on this matter indicates that it is not possible to define the areas and there can only be a 'gentleman's agreement' regarding dealer territory. The only exception is on the service side." rte 42. Notwithstanding my conclusion that there was no contractual term that the Ikins had either exclusive rights to the Ayr region or an entitlement contractually to reasonable notice before the appointment of any distributor by the second respondent for that area, I am of the view that the respondents so conducted themselves as to mislead or deceive the applicants into the belief that the forward orders by the applicants for tractors could properly be based on the absence of a distributor appointed by the first respondent as agent for the second respondent for the Ayr region. The letter from Mr. Ikin of 5 July 1979 to Mr. Laghi fixes the first respondent with knowledge that the orders of the applicants had been increased to cover expected sales in the Burdekin area. It is unnecessary to retraverse the further correspondence to which I have earlier referred. However, it is plain to me that, in a period subsequent to that letter, Mr. Laghi, knowing this, not only failed to disabuse Mr. Ikin, but possibly acted to "white ant" this expectation by the appointment of Whites Holden as a Same distributor in its own right. This duplicity is nowhere more apparent than in the letter of 22 July 1980 where Mr. McLeod, as sales manager (Same Tractors) for Whites Holden, wrote to Mr. Laghi at Same and Lamborghini Tractors of Australia Pty.Ltd., saying:- "With reference to your telephone conversation on 22nd July, with John Honeycombe , I have today placed an order with mir. H. Ikin of Mackay for the following Same Tractors: 43. Leopard E DT - 5 Panther DT Tiger DT Hercules DT rN Hoping you will erase these tractors off Mr. Ikin's order when received as they have already been allocated for production for Whites Holden under order numbers: WH/4, WH/5, WH/6, WH/7." However, TI am of the view that no relevant loss or damage has been established as flowing from this misleading or deceptive conduct. There are two reasons for this. The first is that any loss or damage caused by the over-ordering was not sustained by the applicants. The second is that, on the view I take of the proper measure of damages under s.82 of the Act, it has not been proved that loss or damage was suffered by the conduct constituting a breach of s.52 of the Act. I dismiss the application. I will hear the parties on costs. \ certify that this and the yd preceding pages are a true copy of the reccans for judgenent here.n of His Honour Mr. Justice Spender Associate Dated 5° Tuy 48S fGen —