BBB Constructions Pty Ltd v Aldi Foods Pty Ltd

[2012] NSWCA 224

NSW Court of Appeal

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Interrogate

Catchwords

1. Trade and Commerce
2. › Misleading or deceptive conduct
3. › Negotiations for agreement for lease
4. › Whether withdrawal from negotiations after extended dealings constituted misleading or deceptive conduct
5. › Whether representations as to commitment were misleading where subject to board approval condition
6. › Whether reliance established where claimant simultaneously negotiated with competitor
7. › Trade Practices Act 1974 (Cth), ss 52, 82
1. Trade and Commerce
2. › Unconscionable conduct
3. › Statutory unconscionability
4. › Negotiations for agreement for lease
5. › Whether withdrawal from negotiations unconscionable where both parties commercially sophisticated
6. › Whether failure to notify of internal 'on hold' decision constituted unconscionable conduct
7. › Trade Practices Act 1974 (Cth), ss 51AA, 51AC
1. Estoppel
2. › Equitable estoppel
3. › Negotiations for agreement for lease
4. › Whether representations during negotiations induced assumption that binding agreement would be entered
5. › Whether unconscionable for party to resile where commitment always subject to board approval
1. Estoppel
2. › Estoppel by convention
3. › Negotiations for agreement for lease
4. › Whether mutual or shared assumption existed that party would enter binding agreement
5. › Whether only shared assumption was that negotiations would continue

Quick Take

A party that incurs expenditure during pre-contractual negotiations cannot establish reliance for the purposes of misleading or deceptive conduct, unconscionable conduct, or estoppel claims where: (a) the party knew that the other's commitment was subject to an unsatisfied condition precedent (such as board approval); (b) the party simultaneously negotiated with a competitor for the same opportunity; and (c) the expenditure served the party's own independent commercial interests. The existence of an unsatisfied condition precedent to commitment, known to both parties, is a powerful answer to claims based on representations made during negotiations that a binding agreement was imminent.