TROULIS and ANOR v VAMVOUKAKIS and ANOR [1998] NSWCA 237

TROULIS v VAMVOUKAKIS SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, MASON P and STEIN JA 10 and 11 February 1998, 27 February 1998

[1998] NSWCA 237

DAMAGES — FAIR TRADING ACT — Sale of business — valuation of goodwill — no evidence permitting rational assessment.

PRACTICE AND PROCEDURE — arbitration.

DAMAGES — Assessment of Damages — Fair Trading Act 1987 — Sale of business — measure of damages difference between value of goodwill and price paid for goodwill — no reliable evidence as to takings or profitability of business — no evidence of valuation or as to how value should be assessed — no evidentiary basis for rational assessment of damages — HELD — no damages should be awarded.

PRACTICE AND PROCEDURE — District Court — Arbitration — observations on undesirability of sending relatively lengthy cases to arbitration over objection of parties.

JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237, Ted Brown Quarries Pty Ltd v General Quarries (Gilston) Pty Ltd (19978) 16 ALR 23, Newark Engineering (NZ) Ltd v Jenkin [1980] 1 NZLR 504 followed.

Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167 distinguished.

Gleeson CJ In December 1992 the respondents, Mr and Mrs Vamvoukakis, purchased from the appellants, Mr and Mrs Troulis, the business of a take-away food shop. The subject matter of the sale included the goodwill of the business, and certain plant and equipment listed in the agreement for sale. The purchase price was $80,000. That amount was not apportioned between goodwill and plant and equipment. However, in circumstances which will be explained below, it was agreed between the parties that in October 1994 the value of the plant and equipment was $24,667. It seems not unreasonable to infer that this was at least its approximate value at the date of the agreement, which was 11 December 1992. On that basis, the respondents may be taken to have paid approximately $55,300 for the goodwill.