Beckmann v Turnbull [1994] QSC 356

4';).~,.£ se H/35b ~l'f6 State Reporting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) l REVISED COPIES iSSUED ! 1 State Reporting Bureau SUPREME COURT OF QUEENSLAND !Date 13 1 ;;z_,· q 1 I CIVIL JURISDICTION WILLIAMS J No 1675 of 1992 KENNETH WILSON BECKMANN Plaintiff and LEIGH GEOFFREY TURNBULL Defendant BRISBANE .. DATE 21/11/94 JUDGMENT -- 1 of 5 -- 211194 (Williams J) HIS HONOUR: By agreement dated 4 December 1986 Kenneth Wilson Beckmann, the plaintiff, purchased the Fitzroy Hotel, Nanango, from its previous owners for the sum of $725,000. Leigh Geoffrey Turnbull, the defendant, acted as the hotel broker with respect to that transaction. The plaintiff, by writ issued 12 November 1992, claimed against the defendant damages 10 for misrepresentation including consequential loss of assets and income; there was also a claim for other damages suffered by the plaintiff. At all times throughout the action the plaintiff has acted on his own behalf. 20 The writ was served on the defendant on 7 December 1992. No c-'appearance was entered by or on behalf of the defendant. In accordance with the Rules of Court, the plaintiff filed a statement of claim on 12 May 1994 and on that date obtained 30 default judgment against the defendant for damages to be assessed. In due course the assessment was assigned a date for hearing and the defendant was given notice thereof. Having considered the letters, Exhibits 1 , 2 and 3, I am satisfied that the defendant had due notice of today's hearing, but there was no appearance of or on behalf of the 40 ( ·· defendant. In consequence, the plain tiff conducted his own case in the absence of the defendant and submitted that on the evidence placed before me I should assess damages with respect to the causes of action referred to in the endorsement on the 50 writ and the statement of claim. In the statement of claim the plaintiff claims by way of damages the loss on the resale of the hotel, losses occasioned because of the forced sale of other properties he owned which 60 2 JUDGMENT -- 2 of 5 -- 211194 (Williams J) were put up as security for borrowings to enable him to purchase the hotel, and finally compensation for certain personal injuries or deterioration in health which he says he has suffered as a result of the transactions in question. I pointed out to him that there may well be difficulties in proving damages flowing from his loss of other assets and from 10 the state of his health. He was not in a position today to lead, for example, medical evidence which would be relevant to the claim based on his health. When I pointed those matters out to the plaintiff, he agreed to proceed on the basis of his establishing the misrepresentations Hotel. losses as to directly associated the profitability of with 20 the the Fitzroy In the course of his oral evidence he placed a large number of documents before me. I am satisfied from those documents that the defendant Turnbull represented that the Fitzroy Hotel, in the year 1 986, was in fact returning $220, 000 net profit to the proprietors each year. I am also satisfied that he represented that that profit was based on bar sales of 14 kegs per week and the sale of 350 cartons of packaged beer per week. To support those representations Turnbull provided the plaintiff with various sets of trading figures. The plaintiff was induced to purchase the hotel by Turnbull's representation as to the profitability and by his representation that the trading figures supplied were accurate. In consequence of those representations the plain tiff signed the memorandum of agreement dated 4 December 1986, which is Exhibit 12. He entered into possession of the hotel on 23 3 JUDGMENT 30 40 50 60 -- 3 of 5 -- 211194 (Williams J) December 1986. He immediately observed that bar takings were substantially less than represented. Initially he believed this may have been due to the holiday period in late December and January, but figures for February and subsequent months showed that the hotel was not capable of earning anything like the figures represented. On average during 1987 the bar trade was eight kegs per week. That represented about $4,000 per week income as against the $7,000 per week represented. The evidence from the plaintiff is to the effect that bottle sales were about in accordance with the representation. I am satisfied on the evidence that, though the plaintiff did not have prior hotel experience, he engaged competent staff and conducted the hotel in an appropriate manner. I am satisfied that the trading figures of about eight kegs per week represented fair market share for this particular hotel. That conclusion is confirmed by the trading figures obtained by the agent appointed by the mortgagee to run the hotel from 8 December 1987. I am satisfied that the hotel was properly run during the year 1987 and that the plaintiff took all reasonable steps with a view to trying to increase bar trade. As already observed, on 8 December 1987 the mortgagee entered into possession of the hotel premises and ultimately the hotel was sold by the mortgagee on 30 June 1 989 for $390,000. A valuation obtained at about that time indicated a market value for the hotel of $385,000. I am satisfied on the evidence that the difference between the $725,000 originally paid by the plaintiff for the hotel and the $390,000 for which it was sold was reflected in the difference between trading figures 4 JUDGMENT -- 4 of 5 -- 211194 (Williams J) as represented by the capacity of the hotel. defendant and the actual trading That is the difference between the figures as represented by the defendant to the plaintiff and the true trading returns. It follows from that that the plaintiff suffered a loss of at least the difference between $725,000 and $390,000. Undoubtedly his loss would have been greater than that but the evidence does not enable me to calculate any further loss with precision. In the circumstances I assess the damages sustained by the plaintiff in consequence of the misrepresentation of the defendant in the sum of $335,000. I will therefore give judgment for the plaintiff against the defendant for $335,000. 5 JUDGMENT -- 5 of 5 --