ALEXIA MIA PTY LTD v WINDFARM PTY LTD & 2 ORS [2003] NSWSC 13

ALEXIA MIA PTY LTD v WINDFARM PTY LTD & 2 ORS [2003] NSWSC 13

The supplementary contract required Alexia to do what it could to procure assignment of the photocopier lease, but it did not expressly bind Alexia's directors to give personal guarantees. Alexia could not compel its directors to assume personal liability, so their refusal could not constitute Alexia's breach. Further, Alexia's subsequent failure to achieve assignment was not, without more, misleading or deceptive conduct; there was no obligation to notify Windfarm of subsequent events and no evidence of reliance by Windfarm. The magistrate therefore erred in finding liability against Alexia.

Jurisdiction
Australia
Judgment Date
03 January 2003
Procedural Posture
Appeal by Summons From a Local Court Decision / Supreme Court Appeal Judgment
Outcome
Appeal upheld; Local Court verdict against Alexia set aside; verdict entered for Alexia against Windfarm; costs awarded to Alexia; Suitors' Fund certificate granted to Windfarm.
Legal Topics
['assignment of Photocopier Lease' 'company Capacity to Bind Directors to Personal Guarantees' 'misleading or Deceptive Conduct' 'reliance' 'costs' "suitors' Fund Certificate"]
['contract Law' 'consumer Law' 'corporations Law' 'civil Procedure'] ['assignment of Photocopier Lease' 'company Capacity to Bind Directors to Personal Guarantees' 'misleading or Deceptive Conduct' 'reliance' 'costs' "suitors' Fund Certificate"]

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Procedural Posture

Appeal by Summons From a Local Court Decision / Supreme Court Appeal Judgment

Legal Issues

  1. 1 ["Whether Alexia breached the supplementary contract to do all things necessary to assign Windfarm's photocopier lease by reason of its directors not giving personal guarantees." "Whether a company can bind its directors to enter personal obligations such as directors' guarantees where that obligation is not expressly included in the contract." 'Whether Alexia engaged in misleading or deceptive conduct under s52 of the Trade Practices Act 1974 and s42 of the Fair Trading Act 1987.' 'Whether Windfarm relied on any conduct by Alexia so as to recover under the Trade Practices Act 1974 or the Fair Trading Act 1987.']

Ratio Decidendi

The supplementary contract required Alexia to do what it could to procure assignment of the photocopier lease, but it did not expressly bind Alexia's directors to give personal guarantees. Alexia could not compel its directors to assume personal liability, so their refusal could not constitute Alexia's breach. Further, Alexia's subsequent failure to achieve assignment was not, without more, misleading or deceptive conduct; there was no obligation to notify Windfarm of subsequent events and no evidence of reliance by Windfarm. The magistrate therefore erred in finding liability against Alexia.

Court Disposition

Appeal upheld; Local Court verdict against Alexia set aside; verdict entered for Alexia against Windfarm; costs awarded to Alexia; Suitors' Fund certificate granted to Windfarm.

Orders

  • ['The appeal is upheld.' 'The plaintiff should have an order for costs against the defendant.' 'In the proceedings below the verdict for "the defendant against the First Third Party" should be set aside and a verdict entered for "the First Third Party against the defendant".' 'The defendant should be ordered to pay...