Lindfield NSW Pty Ltd v Netdeen Pty Ltd t/as G.J. Gardner Homes (No 3) [2024] NSWSC 1305

Supreme Court New South Wales

Medium Neutral Citation: Lindfield NSW Pty Ltd v Netdeen Pty Ltd t/as G.J. Gardner Homes (No 3) [2024] NSWSC 1305 Hearing dates: 29 July – 9 August 2024, 9 – 11 September 2024 Date of orders: 17 October 2024 Decision date: 17 October 2024 Jurisdiction: Common Law Before: Elkaim AJ Decision: 1. Judgment for the plaintiff against the defendant in the sum of $20 million. 2. The defendant is to pay the plaintiff's costs of the proceedings. 3. The parties have leave to make further submissions in respect of the costs order and interest. Catchwords: CONTRACTS — construction — interpretation — whether the use of the words 'and/or' in cl 4.7 meant that the defendant was bound to consider the best interests of the plaintiff — consideration of the commercial purpose of the clause, agreement and the commercial value an option to renew clause has for either party — application of test in H Lundbeck A/S v Sandoz Pty Ltd; CNS Pharma Pty Ltd v Sandoz Pty Ltd (2022) 276 CLR 170; [2022] HCA 4 — held the terms of cl 4.7 and the agreement as a whole required the defendant to consider the best interests of the plaintiff CONTRACTS — construction — interpretation — where under an alternative interpretation whereby cl 4.7 did not require the defendants to consider the best interests of the plaintiff — whether upon the defendant's construction of cl 4.7 they breached the contract — where defendant held a board meeting to consider the exercise of renewal and commissioned a report detailing the plaintiff's breaches to provide justification for the defendant's decision to refuse the renewal of the agreement — whether the report and board meeting was part of a genuine decision making process — held upon the defendant's construction of cl 4.7 the defendants actions were not in breach of the term CONSUMER LAW — unconscionable conduct — in connection with goods or services — discussion of principles of unconscionability involving some degree of moral obloquy — whether the defendant's conduct in allowing the plaintiff to believe that renewal of the agreement was possible constituted sharp practice — held that the defendant by not acting in good faith with the plaintiff engaged in unconscionable conduct CONSUMER LAW — industry codes — Franchising Code of Conduct — where matters raised in the code fall within the substantive claim EVIDENCE — expert evidence — where defendant's expert was retained to criticise the analysis of plaintiff's expert — where in oral evidence the defendant's expert's adopted a similar value and final damages amount to the plaintiff's expert — use of defendants valuation accepted CONTRACTS — remedies — damages — after breach — damages awarded for breach of contract using defendant's expert's valuation CONSUMER LAW — unconscionable conduct — assessment of damages — damages awarded Legislation Cited: Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, Chs 2, 3, ss 21, 22, 236 Competition and Consumer (Industry Codes – Franchising) Regulation 2014 (Cth), Sch 1 - Franchising Code of Conduct, Pt 5A, cll 6, 23, 27, 28, Cases Cited: Adani Abbot Point Terminal Pty Ltd v Lake Vermont Resources Pty Ltd [2021] QCA 187 AHG WA (2015) Pty Ltd v Mercedes-Benz Australia/Pacific Pty Ltd [2023] FCA 1022 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 H Lundbeck A/S v Sandoz Pty Ltd; CNS Pharma Pty Ltd v Sandoz Pty Ltd (2022) 276 CLR 170; [2022] HCA 4 Hungerfords v Walker (1989) 171 CLR 125; [1989] HCA 8 Hungry Jacks Pty Ltd v Burger King Corporation [1999] NSWSC 1029 Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 286; [1938] HCA 66 Master Homes Improvement Pty Ltd v North East Solution Pty Ltd [2017] VSCA 88 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Ogle v Comboyuro Investments Pty Ltd [1976] HCA 21; (1976) 136 CLR 444 Paciocco v Australia and New Zealand Banking Group Ltd (2015) 236 FCR 199; (2015) 321 ALR 584 Productivity Partners Pty Ltd (trading as Captain Cook College) & Anor v Australian Competition and Consumer Commission & Ors [2024] HCA 27 Sellars v Adelaide Petroleum NL (1994) 179 CLR 1386 Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (1977) 16 ALR 23 Category: Principal judgment Parties: Lindfield NSW Pty Ltd (Plaintiff) Netdeen Pty Ltd trading as GJ Gardner Homes (Defendant) Representation: Counsel: Mr T Castle SC (Plaintiff) Ms D Levi (Plaintiff) Mr A Schatz (Plaintiff) Mr S Couper KC (Defendant) Mr J Gooley (Defendant)