Covcat Pty Ltd & Ors v. Clark Equipment Australia Ltd & Ors [1986] FCA 276

Covcat Pty Ltd & Ors v. Clark Equipment Australia Ltd & Ors [1986] FCA 276

Clark Equipment Australia Limited, by its employee Mr McMurray, made untrue and misleading representations as to the suitability and productivity of the 1080 feller buncher for cutting ironbark in a natural forest. These representations induced the applicants to enter into the lease of the machine and thereby incur loss. Damages are recoverable under s.52 of the Trade Practices Act 1974. The amount owing on the lease is not penalty and is recoverable by Clark Equipment Credit, but Clark Equipment Australia Limited is liable in damages to Covcat and the applicants for their liability under the lease and other proved losses.

Parties
First Applicant / First Cross Respondent / Second Cross Claimant: Covcat Pty Limited; Second Applicant / Second Cross Respondent: Carl Ross Covington; Third Applicant / Third Cross Respondent: Lorraine Fay Covington; First Respondent: Clark Equipment Australia Limited; Second Respondent / Cross Claimant / Fourth Cross Respondent: Clark Equipment Credit of Australia Limited
Jurisdiction
Australia
Judgment Date
09 July 1986
Procedural Posture
Federal Court Proceeding (including Cross Claims) / Judgment With Reasons, Orders Determining Liability and Quantum
Outcome
Judgment for the applicants against the first respondent (Clark Equipment Australia Limited). Judgment for the cross-claimant (Clark Equipment Credit of Australia Limited) on the cross-claim. Second cross-claim dismissed. Costs awarded as specified.
Legal Topics
Misleading Conduct, Negligent Misrepresentation, Damages, Lease Agreements, Recovery Under Cross Claim, Penalty Clauses
Trade Practices Contracts Torts Misleading Conduct Negligent Misrepresentation Damages Lease Agreements Recovery Under Cross Claim +1 more

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Parties

Covcat Pty Limited

First Applicant / First Cross Respondent / Second Cross Claimant

Carl Ross Covington

Second Applicant / Second Cross Respondent

Lorraine Fay Covington

Third Applicant / Third Cross Respondent

Clark Equipment Australia Limited

First Respondent

Clark Equipment Credit of Australia Limited

Second Respondent / Cross Claimant / Fourth Cross Respondent

Procedural Posture

Federal Court Proceeding (including Cross Claims) / Judgment With Reasons, Orders Determining Liability and Quantum

Legal Issues

  1. 1 Whether the first respondent engaged in misleading conduct contrary to s.52 of the Trade Practices Act 1974 by making representations as to the suitability and performance of the 1080 feller buncher for selective cutting of ironbark in natural forests
  2. 2 Whether the representations constituted negligent misrepresentation under general law
  3. 3 Whether the applicants' losses were caused by reliance on the representations

Ratio Decidendi

Clark Equipment Australia Limited, by its employee Mr McMurray, made untrue and misleading representations as to the suitability and productivity of the 1080 feller buncher for cutting ironbark in a natural forest. These representations induced the applicants to enter into the lease of the machine and thereby incur loss. Damages are recoverable under s.52 of the Trade Practices Act 1974. The amount owing on the lease is not penalty and is recoverable by Clark Equipment Credit, but Clark Equipment Australia Limited is liable in damages to Covcat and the applicants for their liability under the lease and other proved losses.

Court Disposition

Judgment for the applicants against the first respondent (Clark Equipment Australia Limited). Judgment for the cross-claimant (Clark Equipment Credit of Australia Limited) on the cross-claim. Second cross-claim dismissed. Costs awarded as specified.

Orders

  • Judgment to Covcat Pty Limited against Clark Equipment Australia Limited for $81,146.74
  • Judgment to Carl Ross Covington and Lorraine Fay Covington against Clark Equipment Australia Limited for $55,947.46 each