Café Du Liban Pty Ltd v Bespoke Garage Pty Ltd [2017] NSWSC 779

Café Du Liban Pty Ltd v Bespoke Garage Pty Ltd [2017] NSWSC 779

The credit challenge failed because it raised no question of law. The Magistrate erred in law by failing to address the appellants' case that the probation period in the 13 October 2014 letter formed part of the Supply Contract, but, on the accepted facts, the executed Supply Contract was not part of a fuller agreement containing that probation term. The Magistrate also erred in assessing clause 11.3 by comparing the amount payable with the total price payable over the contract term rather than Bespoke's loss or protected interests. Clause 11.3(a) was a penalty because the amount payable, $42,432, was out of all proportion to Bespoke's maximum lost profit interest and operated...

Jurisdiction
Australia
Judgment Date
16 June 2017
Procedural Posture
Local Court Appeal / Appeal to the Supreme Court of New South Wales From a Local Court Judgment and Related Costs Order
Outcome
Appeal allowed in part; grounds concerning clause 11.3 of the Supply Contract succeeded, but the credit challenge, probation period challenge, and challenge to clause 12 of the Loan Contract failed. Parties were directed to bring in proposed orders to give effect to the reasons.
Legal Topics
['supply of Coffee Agreement' 'loan or Hire of Coffee Machine' 'contract Repudiation' 'contractual Penalties' 'probation Period Term' 'credit Findings on Appeal' 'questions of Law and Mixed Law and Fact']
['contract Law' 'civil Procedure' 'local Court Appeals'] ['supply of Coffee Agreement' 'loan or Hire of Coffee Machine' 'contract Repudiation' 'contractual Penalties' 'probation Period Term' 'credit Findings on Appeal' 'questions of Law and Mixed Law and Fact']

Case Brief

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Procedural Posture

Local Court Appeal / Appeal to the Supreme Court of New South Wales From a Local Court Judgment and Related Costs Order

Legal Issues

  1. 1 ['Whether the Local Court credit finding raised a question of law on appeal.' 'Whether the Supply Contract included a three month probation period referred to in an earlier letter dated 13 October 2014.' 'Whether clause 11.3(a) of the Supply Contract was an unenforceable penalty.' 'Whether clause 12(b) of the Loan Contract was an unenforceable penalty.' "Whether Bespoke's alternative claim for lost profits under the Supply Contract could be resolved without remittal."]

Ratio Decidendi

The credit challenge failed because it raised no question of law. The Magistrate erred in law by failing to address the appellants' case that the probation period in the 13 October 2014 letter formed part of the Supply Contract, but, on the accepted facts, the executed Supply Contract was not part of a fuller agreement containing that probation term. The Magistrate also erred in assessing clause 11.3 by comparing the amount payable with the total price payable over the contract term rather than Bespoke's loss or protected interests. Clause 11.3(a) was a penalty because the amount payable, $42,432, was out of all proportion to Bespoke's maximum lost profit interest and operated...

Court Disposition

Appeal allowed in part; grounds concerning clause 11.3 of the Supply Contract succeeded, but the credit challenge, probation period challenge, and challenge to clause 12 of the Loan Contract failed. Parties were directed to bring in proposed orders to give effect to the reasons.

Orders

  • ['On or before 31 July 2017 the parties file and serve draft forms of order to give effect to these reasons together with submissions in support which are not to exceed 5 pages.' 'The proceedings be listed for mention on 6 September 2017 at 9.30am.']