FRASER v LESLEY WILLIAM PICKUP AND COLONIAL BUSINESS BROKERS PTY LTD [1997] NSWCA 117

FRASER vy LESLEY WILLIAM PICKUP & COLONIAL BUSINESS BROKERS PTY LTD

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MASON P; MEAGHER JA and SMART AJA 11 June 1997, 24 June 1997

[1997] NSWCA 117

SALE OF "BUSINESS" — WHETHER GOODWILL EXISTED — RIGHTS OF RE-SALE

The vendor of a lucrative sub-contract courier business comprising a truck and goodwill with an allocated run entered into an agreement for its sale. There was no dispute about the truck but there was about goodwill.

Under the agreement between the sub-contractor and the principal there were to be separate delivery contracts for each job. In practice, the principal gave the sub-contractor jobs each week day. The driver of the truck had to be approved by the principal. The sub-contractor provided the truck, kept it in good working order and met all outgoings and overheads.

The purchaser knew that upon sale, an existing sub-contractor surrendered his sub-contract and his run and the principal re-allocated the sub-contract and the run to the purchaser, the principal having to approve the purchaser and new driver. Any re-sale required the approval or acquiescence of the principal.

HELD:

1. There was a business, goodwill existed and there was no breach of contract by the vendor. Goodwill includes whatever adds value to a business: Box v The Commissioner of Taxation 86 CLR 387 at 396-397 applied;

2. There were no false or misleading representations by the vendor or the business broker;

3. Appeal by purchaser dismissed.

Mason P I agree with Smart AJA Meagher JA I agree with Smart AJA.

Smart AJA Phillip Nelson Fraser appeals against the judgment of the District Court entering a verdict for the defendant respondents in proceedings brought by him to recover damages for breach of contract and for false and misleading misrepresentations made in trade and commerce against Pickup, the vendor of a carrying business, and for false and misleading representations made in trade and commerce against Colonial Business Brokers Pty Ltd (Colonial) (per Mr Street, its Managing Director), the business broker which negotiated the sale of the business on Pickup's behalf to Fraser. Fraser contends that Pickup had neither a business nor goodwill to sell.