DAN v MIKE GAFFIKIN MARINE PTY LTD and ANOR [1997] NSWCA 85

DAN v MIKE GAFFIKIN MARINE PTY LTD and ANOR [1997] NSWCA 85

The appropriate loss for misleading conduct is the difference between the price the mortgagee did in fact obtain ($45,000) and the price it should have obtained had there been no misrepresentation ($165,000), i.e., $120,000. Because Barclays satisfied this amount, Mr Dan's liability was also satisfied, and the...

Source-derived case information.

Parties
Respondent: Mike Gaffikin Marine Pty Ltd; Appellant/third Defendant: Dr Alexander Morven Dan; Respondent/fifth Defendant: Barclays Australia Finance Pty Ltd; First Defendant: Princes Street Marina Pty Ltd; Fourth Defendant: Circuit Investments Pty Ltd; Third Defendant: Peter Morven Dan
Jurisdiction
Australia
Judgment Date
17 December 1997
Procedural Posture
Appeal / Court of Appeal
Outcome
Appeal upheld
Legal Topics
Misleading and Deceptive Conduct, Calculation of Damages, Valuation of Shares, Duty of Mortgagee, Minority Shareholdings
Commercial Law Equity Trade Practices Misleading and Deceptive Conduct Calculation of Damages Valuation of Shares Duty of Mortgagee Minority Shareholdings

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Summary, issues, holding and outcome

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Parties

Mike Gaffikin Marine Pty Ltd

Respondent

Dr Alexander Morven Dan

Appellant/third Defendant

Barclays Australia Finance Pty Ltd

Respondent/fifth Defendant

Princes Street Marina Pty Ltd

First Defendant

Circuit Investments Pty Ltd

Fourth Defendant

Peter Morven Dan

Third Defendant

Procedural Posture

Appeal / Court of Appeal

Legal Issues

  1. 1 Whether Mr Dan engaged in misleading and deceptive conduct under s52 Trade Practices Act or s42 Fair Trading Act
  2. 2 The proper measure of damages for loss resulting from misleading and deceptive conduct in sale of shares by a mortgagee
  3. 3 Correct valuation of minority shareholding for damage assessment

Ratio Decidendi

The appropriate loss for misleading conduct is the difference between the price the mortgagee did in fact obtain ($45,000) and the price it should have obtained had there been no misrepresentation ($165,000), i.e., $120,000. Because Barclays satisfied this amount, Mr Dan's liability was also satisfied, and the higher amount initially ordered by the trial judge was not sustainable.

Court Disposition

Appeal upheld

Orders

  • Order that third defendant pay plaintiff sum of $152,783 with interest set aside; instead, judgment entered against Peter Morven Dan in the sum of $120,000 with interest at Supreme Court rates up to and including 18 July 1995 (noting satisfaction of this judgment by Barclays Australia Finance Pty Ltd).
  • First respondent to pay costs of the appellant of the appeal, subject to potential certificate under Suitors Fund Act 1951.