Ezy-Fit Engineering Group Pty Limited v Microm Nominees Pty Limited

There be judgment for the first applicant against the first respondent on the first applicant's claim for damages for breach of contract in the sum of $772,435 plus interest pursuant to s 51A of the Federal Court of Australia Act 1976 (Cth) in the sum of $111,517, being a total sum of $883,952.
There be judgment for the first applicant against the first respondent on the first applicant's claim for damages for breach of s 18 of the Australian Consumer Law in the sum of $115,865 plus interest pursuant to s 51A of the Federal Court of Australia Act in the sum of $16,728, being a total sum of $132,593.
There be judgment in favour of the first applicant against the second respondent on the first applicant's claim for damages for breach of s 18 of the Australian Consumer Law in the sum of $656,570 plus interest pursuant to s 51A of the Federal Court of Australia Act in the sum of $94,789, being a total sum of $751,359.
The first applicant is not entitled to recover pursuant to orders 1 to 3 more than a total judgment sum of $883,952.
All other claims of the first applicant and the second applicant are dismissed.
All claims made by the second respondent in its cross-claim are dismissed. Costs
The respondents are to file written submissions on the issue of costs by 14 February 2025 limited to eight pages, size 12 Times New Roman font, 1.5 line spacing, 2.5cm margins.
The applicants are to file written submissions in response on the issue of costs by 14 March 2025 limited to eight pages, size 12 Times New Roman font, 1.5 line spacing, 2.5cm margins.
The respondents are to file written submissions in reply on the issue of costs by 28 March 2025 limited to four pages, size 12 Times New Roman font, 1.5 line spacing, 2.5cm margins. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BANKS-SMITH J: 1 These reasons are supplementary to the liability reasons (Ezy-Fit Engineering Group Pty Limited v Microm Nominees Pty Limited [2024] FCA 441 (Ezy-Fit No 1)) and the reasons published on 27 November 2024 determining matters relevant to the inputs for assessment of damages (Ezy-Fit Engineering Group Pty Limited v Microm Nominees Pty Limited (No 2) [2024] FCA 1367 (Ezy-Fit No 2)). 2 The parties have conferred as required by the orders made in Ezy-Fit No 2 and have agreed the quantum for the purpose of the orders. Only one aspect of the orders relevantly was not agreed. That is the question of election. 3 In Ezy-Fit No 1 I observed that: [737] Ezy-Fit alleges that each of a number of representations made by FAT HACO (directly or through Ron Mack) or, in the alternative, by Ron Mack, were false, misleading or deceptive or likely to mislead or deceive contrary to s 18 of the ACL. I take that to be a plea that FAT HACO or Ron Mack engaged in conduct contrary to s 18 by making representations which were misleading or deceptive or likely to mislead or deceive. … [873] It will be necessary to consider apportionment of liability as between FAT HACO and Ron Mack in due course. It will also be necessary to understand what, if anything, is said to flow from the difference between Ezy-Fit's submissions (that provide for both FAT HACO and Ron Mack to be liable) and the pleaded case which purported to plead liability under the ACL by FAT HACO or Ron Mack in the alternative. 4 In Ezy-Fit No 2 I referred to the fact the issue in this passage remained outstanding, stating: [87] Two further matters will need to be addressed in the final orders. [88] First, Ezy-Fit's further amended statement of claim pleads that relevant representations which were found to be misleading or deceptive were made by FAT HACO or in the alternative Ron Mack. This aspect of the pleading was referred to in Ezy-Fit No 1 at [873] and Ezy-Fit has been on notice of the issue since (at least) reasons were delivered. At the quantum hearing senior counsel for Ezy-Fit appeared to accept on the basis of the pleading that an election will be required. 5 In short, Ezy-Fit has been aware of the issue created by its pleading since May 2024. In its written submissions for the purpose of the quantum hearing, Ron Mack raised the issue, referring to the inconsistency between the pleading on liability and the submissions (as referred to at [873] of Ezy-Fit No 1) and also noting the same inconsistency with the pleading as to damages. Ron Mack submitted that Ezy-Fit must make an election for the purpose of the judgment orders as to which entity is responsible for damages under s 236 of the Australian Consumer Law (ACL). Ezy-Fit did not address this in its reply submissions. 6 At the quantum hearing I invited senior counsel to address the point. Counsel indicated that he was not in a position to do so but would confirm the position on election shortly after the hearing so that orders could be drafted. I observed during the hearing that from my perspective 'nobody really ran the case on [the basis of liability in the alternative]'. However, I indicated that the pleading could be amended to clarify the position or otherwise an election might be made. Counsel conceded that the inconsistent pleading was not deliberate. 7 On 5 December 2024 my chambers received from Ezy-Fit's solicitors an email the content of which was in effect supplementary submissions on the inconsistent pleading point. It is not appropriate to provide de facto submissions by an email to chambers. Putting that to the side, I note that the substance of the email was to the effect that Ezy-Fit contended it was not required to make an election and that it was 'clear' from [873] of the reasons that the parties proceeded on the basis that both respondents were liable in relation to the s 18 ACL breaches, and that therefore the pleadings in that regard should be 'disregarded'. To my mind, absent consent to amend the pleading, the appropriate course where there was inconsistency was to seek leave to amend the pleading to tidy the inconsistency: see generally the principles referred to in EIX20 v State of Western Australia [2022] FCA 1357 at [19]-[25]. However, as my observation referred to at [6] above indicates, I also consider the case was not run on the basis of alternative liability for the ACL damages. Ron Mack did not participate in the trial and was not in a position to contend otherwise. FAT HACO actively and thoroughly defended the proceeding but indicated at the quantum hearing that it would abide the decision of the Court on this issue. 8 I consider that, absent any indication of prejudice and in circumstances where the respondents had the opportunity to address the pleading issue, it is inevitable that had it been sought, I would have granted Ezy-Fit leave to amend its pleading to remove the inconsistency and clarify that it contended both Ron Mack and Ezy-Fit were liable for the loss relating to the breaches of s 18 of the ACL. In these circumstances I will proceed as if an application had been brought and leave granted, and the orders will therefore reflect this outcome, rather than an election. I consider this is the efficient and fair way in which to deal with this issue so late in the proceeding. The manner in which the inconsistency gave rise to additional costs for Ron Mack and FAT HACO (requiring them to address the inconsistency at the quantum hearing) will be taken into account on the question of costs. 9 The other remaining matter is that of costs. The parties proposed programming orders for addressing costs. What was proposed was that the respondents file submissions limited to 25 pages, the applicants then file submission limited to 25 pages, and the respondents file written submissions in reply limited to 15 pages. 10 Even accepting that there may be some complexities involved in the questions of costs, I consider these suggested page limits excessive. The suggested limits exceed the limits routinely applied for trials and appeals. The principles in relation to costs are well known, even where there are a number of issues in play: see, for example, Ridge Estate Pty Ltd v Fairfield Pastoral Holdings Pty Ltd [2024] FCAFC 17; (2024) 302 FCR 375 at [211]. 11 I consider the parties should be able to address their arguments on costs concisely and efficiently with much shorter submissions. I will direct limits of eight pages for submissions in chief and four pages for submissions in reply. 12 There will be orders reflecting the outcome of the proceeding and programming submissions on costs accordingly. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (2 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (5)