case_text: I would note that an exclusionary provision of a contract, for present purposes, is one having the purpose of preventing, restricting or limiting supply or acquisition of services to or from particular persons or classes of person and the contract itself is between bodies corporate which, but for that provision, would be or be likely to be in competition in relation to the supply or acquisition of the services or goods to which the provision relates: s 4D and see News Ltd v South Sydney District Rugby League Football Club Ltd [2003] HCA 45 ; (2003) 215 CLR 563. Unless other, not presently relevant, requirements are not complied with, or unless another provision of the Act (including a subsection of s 45 itself) makes s 45 inapplicable in the circumstances: see e.g. s 51(2) and s 88(1); s 45 declares such a provision to contravene the Act regardless of its actual effect on competition. That it so operates, notwithstanding the object of the TP Act is to enhance the welfare of Australians through (inter alia) the promotion of competition and fair trading: s 2; gives little guidance as to how, consistently with the Act's object, the s 87(3) discretion ought be informed.


case_outcome: referred to

case_text: In Australian Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1134 Sackville J considered it appropriate to award costs against an unsuccessful applicant for an interlocutory injunction where the applicant had failed, not only on the balance of convenience ground, but also on the serious question to be tried ground. 11 Orrcon submits that it succeeded on a substantial matter involved in its interlocutory application in that it succeeded in establishing that there was a serious question to be tried in relation to the allegation that the pipe was defective. (See [42]-[49] of my previous reasons.) However, the fact is that in terms of the interlocutory relief it sought, Orrcon failed to establish a serious question to be tried and, in any event, the balance of convenience favoured the refusal of relief. In addition, my decision means that Orrcon's claim for final relief in relation to the Westpac letter of credit is otiose. In those circumstances, I think it is appropriate to order that Orrcon pay Capital Steel's costs of the application for interlocutory relief. 12 Orrcon submits that if, contrary to its primary submission, I award costs in favour of Capital Steel, then I should reflect in any such order the fact that it succeeded in establishing a serious question to be tried in relation to the allegation that the pipe was defective. Three experts who gave evidence in support of that allegation were cross-examined by counsel for Capital Steel and the issue occupied some time. I could reflect Orrcon's success on that particular matter by making different costs orders with respect to different issues, or I could reduce the costs otherwise payable to Capital Steel by Orrcon. 21 In Australian Agricultural Co Ltd v AMP Life Ltd [2003] FCA 1134 , Sackville J held that the case before him came within the first and third categories. His Honour said (at [14]-[16]): In the present case, I think the application for an interlocutory injunction can fairly be regarded as a self-contained part of the proceedings. The failure of the application for an injunction effectively means that the claim for this form of relief has been finally disposed of. While it is open to AACo to pursue other relief against AMP, such as its claim for damages, the overwhelming likelihood is that the Stanbroke Shares have now been transferred to Nebo as the purchaser. Moreover, there is nothing in the proceedings to indicate that AACo intends to seek relief against Nebo in these proceedings. In addition, if AACo does pursue claims against AMP, it would seem that the litigation will take a considerable period of time to resolve. Unless an order is made for the payment of costs forthwith, AMP is unlikely, in the ordinary course of events, to recover its costs in respect of the interlocutory proceedings for a lengthy period. I think that each of these factors justifies making an order in terms of FCR, O 62 r 3(3). In my opinion, the demands of justice require that there be a departure from the general practice that an order for costs of an interlocutory proceeding should not entitle a party to have a bill of costs taxed until the principal proceedings have been concluded. Accordingly, I propose to order that AACo pay AMP's costs of the interlocutory proceedings forthwith and that AMP be entitled to have its bill of costs taxed forthwith. 22 Capital Steel's success on the application for interlocutory relief means that Orrcon's claim for final relief in relation to the Westpac letter of credit is otiose. That is a significant factor in favour of the order sought by Capital Steel. Capital Steel submits that Orrcon's conduct was unreasonable in the following ways: 1. The refusal, or at least failure, by Orrcon to particularise its plea of unconscionable conduct; 2. Orrcon's failure to establish a serious question to be tried; 3. The fact that the orders sought by Orrcon would have involved a substantial interference in the commercial relationship between Capital Steel and the Commonwealth Bank (see [108] of my previous reasons); 4. The fact (so it is said by Capital Steel) that Orrcon has not quantified its claim against it (see [105] of my previous reasons); and 5. The fact (so it is said by Capital Steel) that Orrcon has unlawfully refused to make payment of a separate amount due by it to Capital Steel (see [105] of my previous reasons). 23 I do not think that any of these matters constitute unreasonable conduct in the relevant sense.


case_text: Capital Steel submits that there is no case in which an order that costs be paid forthwith has been refused on the ground that the unsuccessful party may thereby lose a right of set off. Whether that be so or not, there is no doubt that the effect on a possible right of set off is a relevant matter, the precise weight to be placed on it is to be determined having regard to the circumstances of the case. In Bailey v Beagle Management Pty Ltd [2001] FCA 60 ; (2001) 105 FCR 136 the Full Court of this Court said (at 145 [37]): The applicants must pay the respondents' costs. We also think this an appropriate case for an order under O 62, r 3(2) that these costs be paid forthwith. The policy behind O 62, r 3 is that, in the ordinary course of litigation, costs awarded in interlocutory proceedings need not be paid until the conclusion of the proceedings when set-offs can be made in the light of the ultimate orders for costs. There is an access to justice aspect in this. Impecunious litigants who have a meritorious claim or defence should not be forced out of court because of inability to meet interlocutory costs orders. However, applications for leave to appeal in interlocutory matters of practice and procedure stand on a different footing. There is a strong public policy against the proliferation of such applications, for the reasons given by Jordan CJ and endorsed by the High Court in [ Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39 ; (1981) 148 CLR 170]. The applicants in the present case having failed in this application, the respondents should not have to wait for a year or more before being paid. 26 In my opinion, weighing up the relevant considerations, I do not think an order that the costs be taxed and paid forthwith should be made. 27 I turn now to consider Capital Steel's application that there be an order that the costs be taxed on an indemnity basis.


case_text: The principles by which a court proceeds in determining whether costs should be awarded on a basis other than a party and party basis are well known and I will not repeat them: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234 per Sheppard J; Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151; NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480 ; (2001) 109 FCR 77 (" NMFM "). Various circumstances have been identified in the cases as warranting a special order. It is trite to say that the discretion is a broad one, no two cases are alike, and the categories or circumstances in which a court will make a special order are not closed.


case_title: Cretazzo v Lombardi (1975) 13 SASR 4

case_text: There is no doubt that I have the power to proceed in one or other of the ways I have identified. The power is contained in s 43(2) of the Federal Court of Australia Act 1976 (Cth): Inn Leisure Industries Pty Ltd (Provisional Liquidator Appointed) v DF McCloy Pty Ltd (No 2) (1991) 28 FCR 172. Some caution is to be exercised before splitting costs in accordance with the success of the parties on various disputed questions of fact and law: Cretazzo v Lombardi (1975) 13 SASR 4 at 12 per Jacobs J; Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201 at 208 per Fisher J.


case_text: Capital Steel referred to the decision of Barrett J in Fiduciary Limited v Morning Star Research Pty Ltd [2002] NSWSC 432 ; (2002) 55 NSWLR 1. In that case, Barrett J identified three categories of case in which the court might order that costs be paid forthwith under Pt 52A, r 9 of the Supreme Court Rules 1970 (NSW) namely, 1. where the decision on the application determines a separately identifiable matter or the completion of a discrete aspect; 2. where there has been unreasonable conduct on the part of the unsuccessful party; or 3. where there is likely to be a considerable lapse of time between the application and the final determination of the proceeding.


case_text: Orrcon referred to His Eminence Metropolitan Petar Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand v The Macedonian Orthodox Community Church St Petka Inc (No 2) [2007] NSWCA 142 in support of its submission. However, the discussion in that case (at [16]-[32]) focused on the question of whether there was a general rule in circumstances where an applicant for an interlocutory injunction succeeds, and not where he or she fails.


case_title: Inn Leisure Industries Pty Ltd (Provisional Liquidator Appointed) v DF McCloy Pty Ltd (No 2) (1991) 28 FCR 172


case_text: A person ought to have been joined under this rule if a judgment of the Court will have a direct affect on the rights and liabilities of that person. This is to be contrasted with a judgment which will have an effect which is no more than indirect or inconsequential: News Limited v Australian Rugby Football League Limited (1996) 64 FCR 410 at 523-525. 36 I have no doubt that having regard to the reformulated orders and the matters referred to in my previous reasons, the Commonwealth Bank fell within the terms of this rule. I did not understand Orrcon to suggest the contrary. Orrcon's submission was that the Commonwealth Bank was not required to be present at the hearing and that all submissions which were properly made in opposition to its application for interlocutory relief either were or could have been made by Capital Steel. Orrcon submits that the Commonwealth Bank provided no assistance to the Court. 37 I reject this submission. The evidence filed by the Commonwealth Bank was of considerable assistance as my previous reasons indicate, and in my opinion, it would be a counsel of perfection to say that the Commonwealth should have provided this information to Capital Steel who could have presented it on its behalf. Furthermore, the Commonwealth Bank was entitled to be at the hearing to protect its interests, particularly as the orders sought by Orrcon were reformulated as the hearing proceeded. In my opinion, it cannot be said that it was not appropriate for the Commonwealth Bank to appear and to be heard. In my opinion, it follows that an order should be made that the applicant pay the fourth respondent's costs of and incidental to the application for interlocutory relief. In view of that conclusion, it is not necessary for me to address the rival submissions made by Capital Steel and the Commonwealth Bank regarding Capital Steel's application for a declaration as against the Commonwealth Bank in the event that I did not order that Orrcon pay the costs of the Commonwealth Bank. In that event, Capital Steel sought a declaration that the Commonwealth Bank was not entitled to recover the costs of the application for interlocutory relief under the securities it holds from Capital Steel.


case_text: The principles by which a court proceeds in determining whether costs should be awarded on a basis other than a party and party basis are well known and I will not repeat them: Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234 per Sheppard J; Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151; NMFM Property Pty Ltd v Citibank Ltd (No 11) [2001] FCA 480 ; (2001) 109 FCR 77 (" NMFM "). Various circumstances have been identified in the cases as warranting a special order. It is trite to say that the discretion is a broad one, no two cases are alike, and the categories or circumstances in which a court will make a special order are not closed. 31 Capital Steel submits that Orrcon's case was hopeless and it should have known that. In this context, I am mindful of the following observations of Lindgren J in NMFM at [72]-[73]. In Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, Woodward J stated in an oft-cited passage (at 401): "I believe that it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion." The expression "where the applicant, properly advised, should have known that he had no chance of success" should not be allowed to give rise to difficulty. It might be suggested, with the benefit of hindsight, that in every case "proper advice" would be advice in accordance with the reasons for judgment delivered by the Court. Accordingly, it might be suggested in the present case that NM, properly advised, would have been advised in accordance with Reasons for Judgment (No 10). Clearly, this is not what Woodward J had in mind. On the other hand, his Honour's expression "properly advised" was intended to introduce an objective notion: it would "set the bar too high" to insist that the party have actually known that there was no chance of success. Of course, questions will arise in relation to sets of circumstances falling between the two extremes. What assumed knowledge of the facts is the party's litigious conduct to be measured against? What factual inquiries is the party "deemed" to have made? What level of legal advice is the party "assumed" to have had? I do not attempt to answer these general questions. 32 I would not put Orrcon's application in the category of a hopeless case. The application came on quickly and it was complex, both legally and factually. It has to be said that views may reasonably differ as to the precise scope of the doctrine of unconscionable conduct. I realise there is an element of impression here, but I would not characterise Orrcon's case as a hopeless one for the purposes of a special order as to costs. 33 I refuse to order that Capital Steel's costs be taxed on an indemnity basis.


case_text: Orrcon Operations Pty Ltd ("Orrcon") issued a proceeding in this Court on 13 July 2007. In its application Orrcon sought both interlocutory relief and final relief. The claim for interlocutory relief came on for hearing before me on 14, 15 and 16 August 2007. On 22 August 2007, I made an order that the application for interlocutory relief be dismissed. I delivered reasons: Orrcon Operations Pty Ltd v Capital Steel & Pipe Pty Ltd [2007] FCA 1319. I reserved the question of costs and these reasons deal with the question of costs. 2 Capital Steel & Pipe Pty Ltd ("Capital Steel") seeks the following orders: 1. That Orrcon pay its costs of the interlocutory application; 2. That such costs be taxed and paid forthwith before the principal proceeding is concluded; and 3. That such costs be taxed on an indemnity basis. 3 In support of its application, Capital Steel tendered an affidavit of Paul Joseph Dillon sworn on 30 August 2007. Mr Dillon is a solicitor acting on behalf of Capital Steel.


case_title: Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201


case_title: Wilcox, Re; Ex parte Venture Industries Pty Ltd (No 2 ) (1996) 72 FCR 151


case_outcome: followed

case_text: Chappell wrote much of the wording of the brochure. He wrote letters to the investors saying that Austcorp was the developer. While he may not have done this with any intention to mislead people, he did it to publicise the fact that Austcorp was the active parent company responsible for the Austcorp group's overall development activities throughout Australia, including that of the resort. Austcorp was prepared to allow a loose and ambiguous representation, connecting Austcorp with the development, to be made in the brochure. In my opinion, this is a case where it is clear that any Austcorp company which in fact had an association with the development could be taken to have published the brochure: Webb v Bloch (1928) 41 CLR 331 at 363-366 per Issacs J; see also Abigail v Lapin [1934] UKPCHCA 1 ; (1934) 51 CLR 58 at 70-71 per Lord Wright.


case_outcome: applied

case_text: is important for this purpose to have regard to the statutory subject, scope and purpose of the Trade Practices Act , as Gummow, Hayne and Heydon JJ observed in Allianz Australia Insurance Limited v GSF Australian Pty Limited [2005] HCA 26 ; (2005) 221 CLR 568 at 597 [99] . Thus, s 2 of the Act states: "The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provisions of consumer protection." Their Honours explained the principles of assessment of loss under s 82 as follows ( Allianz 221 CLR at 597-598 [100]): " [100] In I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41 ; (2002) 210 CLR 109 at 119 [26] ), Gleeson CJ said of the construction of s 82: 'When a court assesses an amount of loss or damage for the purpose of making an order under s 82 , it is not merely engaged in the factual, or historical, exercise of explaining, and calculating the financial consequences of, a sequence of events, of which the contravention forms part. It is attributing legal responsibility; blame. This is not done in a conceptual vacuum. It is done in order to give effect to a statute with a discernible purpose; and that purpose provides a guide as to the requirements of justice and equity in the case. Those requirements are not determined by a visceral response on the part of the judge assessing damages, but by the judge's concept of principle and of the statutory purpose.' The upshot in I & L Securities was the holding stated by Gaudron, Gummow and Hayne JJ ( I & L Securities [2002] HCA 41 ; (2002) 210 CLR 109 at 128 [57] (footnotes omitted)). (See also at 121-122 [33], per Gleeson CJ; at 132 [69] per McHugh J.): '[T]he question presented by s 82 of [the TP Act] is not what was the (sole) cause of the loss or damage which has allegedly been sustained. It is enough to demonstrate that contravention of a relevant provision of [that] Act was a cause of the loss or damage sustained.' (Original emphasis.)" A large number of apartments in the resort were sold after Mustara collapsed. Some were comparable with Ms Tan-Bounkeua's apartment. The pattern that emerged after Mustara's collapse until about mid 2004 was that market prices realised for apartments in the resort were generally greater than the purchase prices. In about mid 2004 they became similar. However, considerable difficulty was experienced in achieving sales of quite a number of units, including Mr Owers'. And, the number of properties which had been listed for sale, but not sold, had increased markedly since the turn of the market in mid 2004. By mid 2005 the market had turned down and almost all the properties in the resort were sold at a price less, and sometimes up to about 25% less, than their acquisition cost. Mr Dupont noted that the more recent sales results were in marked contrast to movements in median sale prices of apartments in Wyong Shire during the period between 2000 and 2007. He said that, although sale prices in the resort were slightly erratic, there was a general weighting indicating an increase in value of apartments in the resort of around 40%-50% from 2000 to the peak of the market in 2004. In comparison, median values of ordinary residential units (without a restriction on use similar to that affecting the resort) in Wyong Shire increased by 84% in the same period. He said that the reduction in values in recent years was partly a result of over supply in The Entrance unit market, as well as a general softening of the property market due to interest rate rises, affordability and macro economic conditions.


case_outcome: cited

case_title: Australian Breeders Co-Operative Society Ltd v Jones (1997) 150 ALR 488

case_text: Australian Breeders Co-operative Society Ltd v Jones (1997) 150 ALR 488 at 543-545 Wilcox and Lindgren JJ (with whom Lee J agreed on this point (at 560)) noted that the trial judge (Davies J) found that taxation benefits, which applicant investors in a horse breeding syndicate had obtained, should be taken into account in reduction of damages for their losses up to the time at which they terminated the breeding partnership. However, in that case, Davies J had refused to make an allowance for those taxation benefits in relation to the years of income after termination and awarded compensation on the basis that those damages not be taxable in the hands of the applicants. There was no issue in the appeal as to the question of taking into account taxation benefits.


case_outcome: discussed

case_text: argued that it was unreasonable for the applicants not to have sold because the market was apparently rising when they realised that the representations had been falsified on Mustara's collapse. I reject this argument. It seeks to have things both ways, when Austcorp itself created the difficulty for the applicants. In Banco de Portugal v Waterlow & Sons Limited [1932] UKHL 1 ; [1932] AC 452 at 506 Lord Macmillan tellingly observed that it was often easy, after an emergency had passed, to criticise the steps which had been taken to meet it, but that such criticism did not come well from those who themselves had created the emergency. He said: "The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures, and he will not be held disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken." Although his Lordship spoke of the principle apposite to an action for damages for a breach of contract, I am of opinion that his remarks also apply to an action to recover loss or damage under s 82. That principle accords with the statutory purpose. It would be unreal to argue that every purchaser who had been misled, as the present three applicants claim, into buying an apartment in the resort should have put their property on the market in 2003 for sale. The market would have been flooded as it was from 2004 onwards. In my opinion, Mr Owers acted reasonably in his decision to offer the property for sale when he did and the steps he took in the difficult situation in which he found himself. 7.2 Ms Tan-Bounkeua's position


case_text: argued that it could not be liable for Mr Walker's or PRD's conduct in distributing the brochure or leaflet or making the representations in the promotional material simply because of its involvement in their preparation or printing. It contended that Saatchi 134 FCR at 585 [32]-[39] supported this argument. Nothing that Moore and Mansfield JJ said there suggested that a promoter or principal (as opposed to an advertising agency that was an independent contractor) could not be liable in circumstances like the present. Nor does any delay between Austcorp's design of the brochure and leaflet, and their dissemination to the applicants prevent Austcorp being held to have made the representations complained of. Austcorp's conduct, when viewed as a whole, taking account of all the surrounding circumstances, brought about what it wanted; namely that the promotional material would be given to persons in the position of the applicants and that they would be induced to purchase an apartment: Barton v Croner Trading Pty Ltd [1984] FCA 195 ; (1984) 3 FCR 95 at 106-107 per Bowen CJ, Beaumont and Wilcox JJ. PRD and Mr Walker, as much as Austcorp's subsidiaries, were intermediaries in Austcorp's marketing plan: Barton 3 FCR at 107.


case_text: is a question of fact whether a disclaimer or a contractual provision modified the antecedent or other conduct as Gleeson CJ, Hayne and Heydon JJ illustrated in Butcher 218 CLR at 613-614 [70]-[72] in discussing what Burchett J had said in Benlist Pty Ltd v Olivetti Australia Pty Limited [1990] ATPR p41-043 at 51,590. In both those cases there were disclaimers in marketing material. Burchett J said: "It has been held on many occasions that the perpetrator of misleading conduct cannot, by resorting to such a clause, evade the operation of [the Act]. Of course, if the clause actually has the effect [of] erasing whatever is misleading in the conduct, the clause will be effective , not by any independent force of its own, but by actually modifying the conduct . However, I should think it would only be in rare cases that a formal disclaimer would have that effect. ... In the present case, the suggestion of the suitability of the building for strata title conversion might continue to influence the mind of a prospective purchaser notwithstanding his awareness of the existence of a disclaimer clause, which did not single out the particular representation, but purported to apply generally to every detail stated in the investment report. If it were permissible to avoid the operation of [the Act] by such a clause, it would be all too easy to make representations in the confidence that they would be acted upon, and then withdraw them in the confidence (equally important for the securing of the desired business) that the withdrawal would not be acted upon ." (emphasis in bold added)


case_text: submitted that an adverse inference should be drawn against the applicants for failing to call their solicitors: Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 ; Blatch v Archer [1774] EngR 2 ; (1774) 1 Cowp 63. Austcorp argued that the applicants could and should have called the solicitors who acted for them on the transactions and that their failure to do so could be used, not only to support the proposition that the solicitors' evidence would not advance their cases but also to suggest that they had not discharged their onus of proof. It that it was within the applicants' power to call their solicitors and their evidence should be assessed as Lord Mansfield CJ described in Blatch 1 Cowp at 65: "[i]t is certainly a maxim that all evidence is to be weighed according to the proof which it was within the power of one side to have produced, and in the power of the other to have contradicted."


case_text: am satisfied that when making each of the representations complained of Austcorp was engaged in conduct in trade or commerce within the meaning of s 52 of the Act. The promotion and sale of developments in which it had an interest was a fundamental business activity of Austcorp. That conduct was quintessentially of a trading and commercial character. It included promotional activities in relation to, or for the purposes of, the supply of goods or services including land: Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17 ; (1990) 169 CLR 594 at 604 per Mason CJ, Deane, Dawson and Gaudron JJ; see too Braverus Maritime Inc v Port Kembla Coal Terminal Ltd [2005] FCAFC 256 ; (2005) 148 FCR 68 at 108 [142] per Tamberlin, Mansfield and Allsop JJ.


case_title: Briess v Woolley [1954] AC 333

case_text: is important to assess whether a misrepresentation was an operative cause of the decision of a person to enter into a contract. Ordinarily, a person who has made a false representation is under a duty to correct it before the representee acts to his or her detriment in reliance upon it. This is so in cases of fraudulent misrepresentation as Lord Reid explained in Briess v Woolley [1954] AC 333 at 349. Equally, in cases of unintentional contraventions of s 52 of the Act, a representee who relies on an uncorrected misleading representation (even where the representor does not know of the facts which make the representation incorrect) is entitled to relief under Pt VI of the Act: Campomar 202 CLR at 85 [103]. Whether something is a cause of something else is ultimately a question of fact although it can involve considering and applying difficult value judgments. This representation was false too. Mustara, itself, had no qualifications in the conduct or operation of hotels or resorts and was wholly reliant on its connection with Pacific International Hotels. Mustara was a corporate shell and had never traded. It had no financial substance independent of Pacific International Hotels' limited support in cl 20.9 and what it might earn in the future from operating the resort. Moreover, Mustara was not a subsidiary of Pacific International when each of the applicants entered into the lease and, with the exception of Ms Tan-Bounkeua, when they entered into their contracts to purchase. Austcorp failed in its duty to correct this representation to Ms Tan-Bounkeua after it had become falsified on 23 December 1999 when Mustara was taken over by Mr Wong's group: cf: Briess [1954] AC at 349. Representation (d): the entity that would lease the apartments in the resort was a leading manager of resort and apartment As I have found Mustara was not a leading manager of resorts and apartments. And, after 23 December 1999 it was not a subsidiary of Pacific International Hotels. Therefore, the representation was false by the time each of Ms Tan-Bounkeua and Mr Owers acted on it by completing their contracts. Mr Wong's group were financers, not resort or hotel operators. And cl 20.9 significantly limited the financial responsibility of Pacific International Hotels in respect of Mustara. Thus, there was a real separation between the two so that Mustara could not be said to be the same entity as Pacific International Hotels. Had they known the true position created by cl 20.9, neither Mr Owers nor Ms Tan-Bounkeua would have regarded the two companies, in a lay sense, as the same entity. As I have found, they would not have been troubled, and would have regarded Mustara and Pacific International Hotels as one entity, if there were no limitation of the latter's responsibility for Mustara's financial commitment to them as found in cl 20.9 of the lease. Of course, as a matter of law the two companies were different legal persons. Ms Tan-Bounkeua was not told of the change of Mustara's relationship to Pacific International Hotels following her entery into the contract, when the representation had been substantively accurate. In fact, at the time Mr Owers entered into his contract and at the time he and Ms Tan-Bounkeua completed, Mustara was not a subsidiary of Pacific International Hotels. Thus, this representation was also false. Representation (e): the purchase of an apartment in the resort would be an outstanding investment with no hidden risks


case_text: was the guiding hand and ultimately benefited from what its subsidiaries did. It argued that its conduct vis a vis its subsidiaries should be viewed as akin to a real estate agent who passes on the vendor's instructions. I reject that argument. Austcorp did not confine itself to communicating what its subsidiary said, did or represented, without adopting or endorsing it: cf: Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592 at 605 [38] - [40] per Gleeson CJ, Hayne and Heydon JJ. To the contrary, the reality was that the subsidiaries were Austcorp's vehicle for realising its investment in the project. The subsidiaries acted as Austcorp caused them to act. While each of Austcorp and its subsidiaries was a separate legal person, acting through the individuals who were employees of Austcorp, all acted in dual capacities: cf: Hamilton v Whitehead [1988] HCA 65 ; (1988) 166 CLR 121 at 128 per Mason CJ, Wilson and Toohey JJ. The activities of each member of the Austcorp group involved in the development and marketing of the resort were interlocking and Austcorp controlled each of them: cf: NSW Mutual Real Estate Fund Ltd v Brookhouse [1979] FCA 7 ; (1978) 38 FLR 257 at 263 per Franki J, 264 per St John J, 266 per Deane J. The brochure was a document prepared for distribution to the public, but in circumstances where particular members of the public would read it and, as a consequence, be interested in pursuing the "prime investment opportunity" which it promoted. In Butcher 218 CLR at 604-605 [36]-[40], Gleeson CJ, Hayne and Heydon JJ discussed the principles to be applied where an alleged misrepresentation is made to a particular individual, even though the individual is one of a class of other persons to whom the same representation may have been made. They held that even though a representation may have been made to a class of persons, in a case like the present it is the individuals who claim to have been mislead and the person by whom they claim they were mislead whose relationship must be examined. The applicant for relief must establish a causal link between the impugned conduct and the loss that is claimed. They said that this depended on analysing the conduct of the alleged wrongdoer in relation to the applicant alone and continued ( Butcher 218 CLR at 604-605 [37]): "So here, it is necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known. Indeed, counsel for the purchasers conceded that the mere fact that a person had engaged in the conduct of supplying a document containing misleading information did not mean that that person had engaged in misleading conduct: it was crucial to examine the role of the person in question." And, Gleeson CJ, Hayne and Heydon JJ observed that it was relevant to consider the circumstances of the representor: Butcher 218 CLR at 604 [42]. Here, the claim against Austcorp was not alleged simply to be that it passed on to PRD and Mr Walker or through him to the applicants information from a vendor. Rather, the applicants alleged that Austcorp itself engaged in the conduct of making the representations to them through the promotional material (including what Mr Walker told them). In June 1999, Mr Walker had written to Mr Chappell saying that "the guaranteed return on investment is a prime consideration to prospective purchasers". And, Mr Chappell agreed with that assessment based on his then experience in selling property over nearly three decades. Mr Chappell considered a guaranteed return on an investment was obviously attractive to potential purchasers and sent a message to them that their investment was secure. He said that, based on his experience, he held the view in 1999 that marketing an investment as having a guaranteed return was a very powerful and forceful means of marketing. He acknowledged that one reason why it was attractive to investors to have a guaranteed return was because it told the investor that whatever happened in the market they would get the guaranteed return, even if there were some unforeseen circumstance. I accept that evidence. Before the brochure's wording was settled, Austcorp had used Coudert Bros, solicitors, to discuss with ASIC the use of the word "guarantee" and "net return 7%p.a. guaranteed ten years minimum lease" in an earlier form of marketing of the resort. With Mr Hung's approval, Coudert Bros had told the Commission, in August 1999 that the word "guarantee" was often used colloquially simply to mean '"assured" "a sure thing"'. They told the Commission that, in a strict sense, the return was guaranteed. That was because the lease which was accepted from each purchaser would provide the agreed percentage return in the amount of the rent identified by the contract (being 7% of the purchase price, payable each year). The Commission was told that "the rent (as with all lessee obligations) is guaranteed by Pacific International Hotels Pty Limited", although Coudert Bros did not mention that guarantee was limited to a maximum of 12 months of the initial rent. Coudert Bros addressed a concern of the Commission about a sticker that asserted a net guaranteed return with a 10 year minimum lease saying: "Further the return is guaranteed (assured) in the colloquial sense. The rent payable is a predetermined amount in no way dependant on the serviced apartment business of others. We suggest there is no sense in which the 'sticker' can be seen as making a claim which is not backed up on sale." In Butcher 218 CLR at 606 [43] Gleeson CJ, Hayne and Heydon JJ observed that it was a matter of common experience that questions of title to land could be complex, both legally and factually. Dealing with legal complexity was the role of solicitors, acting, where appropriate, on the advice of other specialists, such as surveyors. The question in that case was whether purchasers were entitled to rely upon a diagrammatic plan of the land being sold in a brochure prepared by a real estate agent. The brochure contained an express disclaimer by the agent of any belief in, or guarantee of, the accuracy of the information in it. Their Honours held that the brochure, read as a whole, in effect told the purchasers to rely upon their own enquiries and that it would then be plain to a reasonable purchaser that the agent was not the source of the information alleged to be misleading. They said that the agent there did not purport to do anything more than pass on information supplied by another or others and expressly, as well as implicitly, disclaim any belief in the truth or falsity of that information: Butcher 218 CLR at 608-609 [50]-[51]. Their Honours also observed that in a situation where a purchaser was intending to make use of statements or representations made in a brochure before entering into an important transaction, it was not inappropriate to look closely at the contents of the brochure before deciding whether a particular representation was made and by whom: Butcher 218 CLR at 616 [76]. In his dissenting judgment, McHugh J also said that in determining whether a contravention of s 52 has occurred, the task of the Court is to examine the relevant course of conduct as a whole, by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. He observed that the Court was not confined to examining a document, relied on as being the conduct or conveying a representation amounting to the conduct alleged to have contravened s 52 , in isolation, saying that the Court "... must have regard to all of the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document": Butcher 218 CLR at 625 [109]. Austcorp submitted that the effect of Butcher [2004] HCA 60 ; 218 CLR 592 was that whatever had been pleaded as the cause of action by an applicant or plaintiff, the Court nonetheless had to look outside that, at all of the conduct of the respondent or defendant corporation to determine whether or not a contravention of s 52 had occurred. However, here, this issue does not arise because Austcorp had pleaded expressly the need to do so. It pleaded, in its defence, that the consideration of what was represented or not disclosed to the applicants by the brochure needed to be considered in the context of the applicants' actual knowledge and the knowledge of those acting on their behalf as to the nature and character and investments proposed, including in the particular apartment in the resort, the nature and character of the brochure and the entire course of dealings between the applicants, and their advisors in relation to the nature and characteristics of an investment in an apartment in the resort including the contract of sale and, where relevant, a disclosure statement. Austcorp asserted that when viewed as a whole, assuming that it had been involved in the making of the representations alleged, its conduct could not be described as misleading or deceptive. This was because the applicants could be expected to have a solicitor act for them and advise them as to the terms of the contract for sale, including the lease and the disclosure statement, thus disabusing them of any misconception which may have been generated by reading the brochure by itself. I am of opinion that on the evidence here the mere fact that the contract may have set out the full terms and conditions of the relationship which was to exist between the purchaser and the various parties with whom it was proposed the purchaser would enter into a relationship (the vendor (Landillo), the lessee (Mustara) and guarantor (Pacific International Hotels)) cannot, of itself, be enough to break a chain of causation from representations or impressions made by the brochure. Obviously, context is critical. But where the method for inducing persons to enter into consideration of a business proposition is to make assertions and valuations of the proposition in the form in which the brochure was expressed, a person who promotes the sale through the brochure cannot complain if a purchaser takes the promoter at his word. The whole point of having the brochure was to make people interested in the commercial proposition of the purchase of an apartment in the resort. What was the commercial proposition if not a promise or assurance that that the investment would return 7%p.a. net for 10 years to the purchaser? And, lest the intending purchaser might think otherwise, he or she was assured by the statement that "its hard to imagine a real estate investment offering so much. From day one your return will be a guaranteed 7%p.a.". It is a question of fact whether a disclaimer or a contractual provision modified the antecedent or other conduct as Gleeson CJ, Hayne and Heydon JJ illustrated in Butcher 218 CLR at 613-614 [70]-[72] in discussing what Burchett J had said in Benlist Pty Ltd v Olivetti Australia Pty Limited [1990] ATPR p41-043 at 51,590. In both those cases there were disclaimers in marketing material. Burchett J said: "It has been held on many occasions that the perpetrator of misleading conduct cannot, by resorting to such a clause, evade the operation of [the Act]. Of course, if the clause actually has the effect [of] erasing whatever is misleading in the conduct, the clause will be effective , not by any independent force of its own, but by actually modifying the conduct . However, I should think it would only be in rare cases that a formal disclaimer would have that effect. ... In the present case, the suggestion of the suitability of the building for strata title conversion might continue to influence the mind of a prospective purchaser notwithstanding his awareness of the existence of a disclaimer clause, which did not single out the particular representation, but purported to apply generally to every detail stated in the investment report. If it were permissible to avoid the operation of [the Act] by such a clause, it would be all too easy to make representations in the confidence that they would be acted upon, and then withdraw them in the confidence (equally important for the securing of the desired business) that the withdrawal would not be acted upon ." (emphasis in bold added) As explained above, it is necessary to consider whether Austcorp's conduct in making each representation to each of Mr Owers and Ms Tan-Bounkeua was misleading or deceptive: Butcher 218 CLR at 604-605 [36]-[37]; Campomar 202 CLR at 85 [103]. It is not necessary to consider the position of Mr and Mrs Di Giulio and Mr Luciani because I have not accepted their evidence that they relied on any of the representations. 5. WERE THE REPRESENTATIONS RELIED ON AND WERE THEY MISLEADING OR DECEPTIVE Representations (a) and (h): each applicant would be assured of a 7% p.a. net rental return of the purchase price for 10 years


case_text: all, a fundamental purpose of the Parliament prescribing the norm of conduct enacted in s 52 of the Act is to ensure the protection of the public, particularly consumers. I reject Austcorp's argument that it did not engage in the conduct of providing to the applicants the brochure, leaflet and their repetitions by Mr Walker. Austcorp was the hands and brains of its subsidiaries' conduct and Austcorp cannot evade responsibility for any contravention of s 52 by seeking to draw down between itself and them a corporate veil for the contraventions it perpetrated: cf: Hamilton 166 CLR at 128; Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at 88 [108] . It is important to assess whether a misrepresentation was an operative cause of the decision of a person to enter into a contract. Ordinarily, a person who has made a false representation is under a duty to correct it before the representee acts to his or her detriment in reliance upon it. This is so in cases of fraudulent misrepresentation as Lord Reid explained in Briess v Woolley [1954] AC 333 at 349. Equally, in cases of unintentional contraventions of s 52 of the Act, a representee who relies on an uncorrected misleading representation (even where the representor does not know of the facts which make the representation incorrect) is entitled to relief under Pt VI of the Act: Campomar 202 CLR at 85 [103]. Whether something is a cause of something else is ultimately a question of fact although it can involve considering and applying difficult value judgments. As Gibbs CJ said in Puxu 149 CLR at 199 (see also Campomar (2000) 202 CLR at 85 [102]-[103] per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ): "The heavy burdens which [s 52] create cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will of course depend on all the circumstances." The issue for consideration is whether any contravention of s 52 has arisen by the conduct of the promoters in putting forward the brochure and leaflet and authorising Mr Walker to speak as he did consistently with them, when the contract appears to contain different provisions, materially as to the identity of the lessee and the nature of Pacific International Hotels' financial and commercial confidence in the venture promoted. In Campomar 202 CLR at 83 [98], Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ emphasised the need to enquire why any misconception had arisen in the mind of the person claiming have been misled or deceived. A sufficient nexus must exist between the conduct complained of and the misconception or deception. Austcorp argued that the nexus was, in effect, broken because the contract was a legal document which set out with considerable precision and at length the actual relationship that would exist if a person entered into the contract and the lease. For example, it argued that it was not reasonable for a person in the position of Ms Tan-Bounkeua not to have had a solicitor advising her and that, had she done so, the solicitor would have broken the chain of causation, even if he or she negligently failed to advise the purchaser of the provisions of cl 20.9 or the existence of Mustara. I discuss this specific issue below [See 2.18]. Gibbs CJ observed in Puxu [1982] HCA 44 ; 149 CLR 191 at 199 that the Act did not impose burdens which operated for the benefit of persons who failed to take reasonable care of their own interests: see too Campomar 202 CLR at 85 [102]. As explained above, it is necessary to consider whether Austcorp's conduct in making each representation to each of Mr Owers and Ms Tan-Bounkeua was misleading or deceptive: Butcher 218 CLR at 604-605 [36]-[37]; Campomar 202 CLR at 85 [103]. It is not necessary to consider the position of Mr and Mrs Di Giulio and Mr Luciani because I have not accepted their evidence that they relied on any of the representations. 5. WERE THE REPRESENTATIONS RELIED ON AND WERE THEY MISLEADING OR DECEPTIVE Representations (a) and (h): each applicant would be assured of a 7% p.a. net rental return of the purchase price for 10 years


case_text: Courts have long employed commonsense in determining whether or not a statement is a mere puff, as Lindley LJ explained in the great case of Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256 at 261 in relation to the defendant's assertion that its promise to pay a £100 reward to anyone who contracted influenza after having used its smoke ball was a mere puff which meant nothing. He said ( Carlill [1893] 1 QB at 261-262): "Was it a mere puff? My answer to that question is No, and I base my answer upon this passage: '1000 l . is deposited with the Alliance Bank, shewing our sincerity in the matter'. Now, for what was that money deposited or that statement made except to negative the suggestion that this was a mere puff and meant nothing at all. The deposit is called in aid by the advertiser as proof of his sincerity in the matter that is, the sincerity of his promise to pay this 100 l . in the event he has specified. I say this for the purpose of giving point to the observation that we are not inferring a promise; there is the promise, as plain as words can make it." (emphasis added) AL Smith LJ dismissed the suggestion that the reference to the deposit of £1,000 could be construed as a mere expression of confidence in the wares which the defendant had to sell: Carlill [1893] 1 QB at 273. And, as Black CJ, von Doussa and Cooper JJ said in Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 483E-G, the use of an expression such as "free" in connection with shares, depending on the context, can create a notion that the shares might be acquired without significant loss or outgoing, even though in other contexts in ordinary life people might understand similar usages differently. It depends on the context in which words are used as to whether or not their use is misleading or deceptive or likely to mislead or deceive.


case_text: significance of this method of doing business, which had a number of practical attractions to Austcorp as Mr Tan explained, is that third parties with whom it dealt may not always have been aware of the underlying web of relationships. Austcorp was the apparent contracting and paying party. The invoices were addressed to and paid by it. But more significantly, the various individuals acting for Austcorp, were in fact its actual officers or employees and gave people with whom they dealt their personalised Austcorp business cards. Hence, Mr Walker wrote to Mr Chappell in the capacity that his business card identified, namely the managing director of Austcorp. Of course, the mere fact that Austcorp did not disclose to the third party the name of any subsidiary for which it was acting as an agent, did not mean that Austcorp necessarily became a party to the contract provided it disclosed that it was acting as an agent: Carminco Gold & Resources Ltd v Findlay & Co Stockbrokers (Underwriters) Pty Ltd [2007] FCAFC 194 ; (2007) 243 ALR 472 at 473 [1] , 479 [22]-[23] per Finn, Rares and Besanko JJ. If a person is to be found objectively to have no personal liability as a party under a contract he, she or it has made, it is because the person has disclosed at or before the time of contracting that they do so as an agent, even if the identity of the principal is not then disclosed. The general principle in contract is that " ... if a man signs a written contract, he is considered as the contracting party, unless it clearly appears that he executes it as agent only": Cooke v Wilson [1856] EngR 883 ; (1856) 1 CB (NS) 153 at 164 per Crowder J, see too at 162 per Cresswell J; Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 at 558E-F per McHugh JA; H O Brandt & Co v H N Morris & Co Ltd [1917] 2 KB 784 at 793-794 per Viscount Reading CJ, 796-797 per Scrutton LJ. The same principle must apply where the contract is made orally. The question of whether a person so acts as to be a party is determined objectively: Carminco 243 ALR at 479 [23].


case_text: may be so but its consequence is that Austcorp's submission fails at its threshold. Austcorp conducted itself in trade and commerce as a promoter of the resort. It did so in clear language using its exact name. It also associated itself by the use of the logo on the promotional material. The logo was not used in a legal document by lawyers. It was used in trade or commerce by Austcorp to convey its association with the project, whatever may have been the legal formalities and structures in which subsidiaries of Austcorp may have participated. The message which Austcorp wished to pass to the public was, that it, as the ultimate owner of the brand, was responsible for the development. It cannot accept the credit and refuse to take responsibility under the Trade Practices Act for its conduct: cf: see Gardam v George Wills & Co [1988] FCA 194 ; (1988) 82 ALR 415 at 427-428 per French J; Cassidy v Saatchi & Saatchi Australia Pty Ltd [2004] FCAFC 34 ; (2004) 134 FCR 585 at 593 [39] per Moore and Mansfield JJ, 599 [65] per Stone J; see too Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 at [40] , [48] per Keane JA (Williams JA and Atkinson J agreeing at [1], [145]). As Keane JA observed the presence of a logo and name in a brochure or similar material can mean that a reader will be entitled to conclude that the contents of the brochure state the reasons for the involvement of the person whose logo and name were used. I am satisfied that Austcorp made the representations even if one or more of its subsidiaries did too. Two entities can contravene s 52 of the Act simultaneously: Cassidy v Saatchi & Saatchi 134 FCR at 592 [31], [37] per Moore and Mansfield JJ, see too at 588 [13], 591 [28], 599 [65] per Stone J. Austcorp argued that it could not be liable for Mr Walker's or PRD's conduct in distributing the brochure or leaflet or making the representations in the promotional material simply because of its involvement in their preparation or printing. It contended that Saatchi 134 FCR at 585 [32]-[39] supported this argument. Nothing that Moore and Mansfield JJ said there suggested that a promoter or principal (as opposed to an advertising agency that was an independent contractor) could not be liable in circumstances like the present. Nor does any delay between Austcorp's design of the brochure and leaflet, and their dissemination to the applicants prevent Austcorp being held to have made the representations complained of. Austcorp's conduct, when viewed as a whole, taking account of all the surrounding circumstances, brought about what it wanted; namely that the promotional material would be given to persons in the position of the applicants and that they would be induced to purchase an apartment: Barton v Croner Trading Pty Ltd [1984] FCA 195 ; (1984) 3 FCR 95 at 106-107 per Bowen CJ, Beaumont and Wilcox JJ. PRD and Mr Walker, as much as Austcorp's subsidiaries, were intermediaries in Austcorp's marketing plan: Barton 3 FCR at 107.


case_title: Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17 ; (1990) 169 CLR 594


case_text: general principle in contract is that " ... if a man signs a written contract, he is considered as the contracting party, unless it clearly appears that he executes it as agent only": Cooke v Wilson [1856] EngR 883 ; (1856) 1 CB (NS) 153 at 164 per Crowder J, see too at 162 per Cresswell J; Minister for Youth and Community Services v Health and Research Employees' Association of Australia, NSW Branch (1987) 10 NSWLR 543 at 558E-F per McHugh JA; H O Brandt & Co v H N Morris & Co Ltd [1917] 2 KB 784 at 793-794 per Viscount Reading CJ, 796-797 per Scrutton LJ. The same principle must apply where the contract is made orally. The question of whether a person so acts as to be a party is determined objectively: Carminco 243 ALR at 479 [23].


case_title: Cummings v Lewis (1993) 41 FCR 559

case_text: or honest belief in a representation is not sufficient to amount to having reasonable grounds for making it: Cummings v Lewis (1993) 41 FCR 559 at 565 per Sheppard and Neaves JJ. They said in obiter dicta ( Cummings 41 FCR at 566): "Evidence of reasonable grounds may be established by evidence other than that of the persons who are alleged to have made particular representations as to a future matter. Indeed, as in so many other areas, a court may find the overall probabilities to which the circumstances of a given case give rise, the background to it and the conduct of parties prior to conversations taking place as providing better guides to whether or not they had particular states of mind or whether particular factors existed which would establish evidence of something such as reasonable grounds. It was the overall circumstances of the case which enabled his Honour to say, in relation to both Mr Leckie and Mr Lewis, that each genuinely believed the encouraging assertions which his Honour found them to have made. If one changes the exercise to an inquiry, not into genuine or honest belief, but into whether there were reasonable grounds, it is again the overall circumstances of the case which will provide more reliable guidance than would oral evidence on the part of interested parties." I have considered the overall circumstances of what Austcorp did and the information which it had at the time of making the representations. I am satisfied that Austcorp did not have reasonable grounds for making any of the representations as to future matters. As Sheppard and Neaves JJ indicated the inquiry is still directed to the representor's state of mind or to the existence of particular factors which would establish something as to the representor's reasonable grounds: Cummings 41 FCR at 566. 7. SALES ATTEMPTS BY THE APPLICANTS 7.1 Mr Owers' attempts to sell his apartment After the collapse of Mustara, Mr Owers decided to accept the recommendation of the owners corporation of the resort to lease his apartment to operators it had found including Mirvac and later the Oaks group. In early October 2003 Mr Owers approached Mr Bignold of Raine & Horne at The Entrance to assist him in selling the property. Mr Bignold advised him that he was confident of achieving a sale at over $400,000 and would be working to achieve a price of around $450,000. Mr Owers signed an agency agreement shortly afterwards in which the agent's opinion as to the apartment's current estimated selling price was given as that range. However, when the property was put to auction before Christmas in 2003, it was passed at about $400,000 in with no registered bidders and no interest shown in it.


case_text: Gould v Vaggelas (1984) 157 CLR 215 at 236 Wilson J identified four principles which are frequently used as a practical guide to assess the issue of whether a person has been induced to contract based on a misrepresentation (cf: Ricochet Pty Ltd v Equity Trustees Executors and Agency Company Ltd [1993] FCA 99 ; (1993) 41 FCR 229 at 234 per Lockhart, Gummow and French JJ; Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd [1992] FCA 550 ; (1992) 38 FCR 471 at 482-483 per Beaumont, Foster and Hill JJ; Sutton v AJ Thompson Pty Ltd (1987) 73 ALR 233 at 240 per Forster, Woodward and Wilcox JJ), namely: "1. Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case. If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation. The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation. The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract."


case_text: may be so but its consequence is that Austcorp's submission fails at its threshold. Austcorp conducted itself in trade and commerce as a promoter of the resort. It did so in clear language using its exact name. It also associated itself by the use of the logo on the promotional material. The logo was not used in a legal document by lawyers. It was used in trade or commerce by Austcorp to convey its association with the project, whatever may have been the legal formalities and structures in which subsidiaries of Austcorp may have participated. The message which Austcorp wished to pass to the public was, that it, as the ultimate owner of the brand, was responsible for the development. It cannot accept the credit and refuse to take responsibility under the Trade Practices Act for its conduct: cf: see Gardam v George Wills & Co [1988] FCA 194 ; (1988) 82 ALR 415 at 427-428 per French J; Cassidy v Saatchi & Saatchi Australia Pty Ltd [2004] FCAFC 34 ; (2004) 134 FCR 585 at 593 [39] per Moore and Mansfield JJ, 599 [65] per Stone J; see too Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 at [40] , [48] per Keane JA (Williams JA and Atkinson J agreeing at [1], [145]). As Keane JA observed the presence of a logo and name in a brochure or similar material can mean that a reader will be entitled to conclude that the contents of the brochure state the reasons for the involvement of the person whose logo and name were used. Yet, despite the care and deliberation with which it was prepared, Austcorp submitted that the brochure was marketing material that contained a degree of puffery in the sense that Davies and Einfeld JJ had explained in General Newspapers Pty Limited v Telstra Corporation [1993] FCA 473 ; (1993) 45 FCR 164 at 178; Gummow J agreeing at 194. They said that in the ordinary course of commercial dealings, "... a certain degree of 'puffing' or exaggeration is to be expected. Indeed, puffery is part of the ordinary stuff of commerce". A puff is something that is not meant to be taken seriously or acted on: see also Downey [2005] QCA 199 at [92] per Keane JA. So, the confidence which the brochure exuded could not reasonably have been understood as boundless or applicable in all circumstances. The applicants relied on the analysis by Keane JA in Downey [2005] QCA 199 at [107] - [108] where he found that a representation that an established hotel operator, Radisson, considered the project was a guaranteed success would have been easily seen as of importance to an investor. The role which a representation can play in the formation of a state of mind is critical. The brochure was designed by Austcorp, with the considerable expertise of Mr Chappell and Mr Hung with a view to attracting investors. Indeed, it was critical for Austcorp's purposes to obtain sales of the remaining 30% of the units referred to in the brochure to make their project a commercial success. The brochure was not a mere puff intended to be treated by purchasers or potential purchasers as something which could be put to one side when the contract for sale arrived. The brochure, rather, was expressed in unqualified, optimistic and prospective terms. It was intended to lead investors to make a decision to purchase based on the belief that the investment was a sound one. I agree with the observations of Keane JA in Downey [2005] QCA 199 at [92] : "In the ordinary course of commercial behaviour some results are guaranteed and some are not. The concept of "guaranteeing a result" is not something that is usually associated with puffery but with the making of a firm commitment for which responsibility will be taken. The phrase 'guaranteed success' cannot be construed as a puff." After extensively reviewing the authorities in NMFM Property Pty Ltd v Citibank Ltd [2000] FCA 1558 ; (2000) 107 FCR 270 at 550 [1244] Lindgren J concluded that an act is done "on behalf of" a corporation for the purpose of s 84(2) if either the actor engaged in the conduct intending to do so as representative of or for the corporation, or the actor did so in the course of the corporation's business, affairs or activities. He also concluded that it is not necessary to show that the actor engaged in the conduct for the benefit of the corporation: see too Walplan Pty Ltd v Wallace [1985] FCA 479 ; (1985) 8 FCR 27 at 37-38 per Lockhart J, (Sweeney and Neaves JJ agreeing); Downey [2005] QCA 199 at [56] - [60] per Keane JA. In the context of the unqualified powerful assertions in the representations, the terms of cl 20.9 were inconspicuous and part of the "fine print" of the contract in the sense referred to by Mason J in Puxu 149 CLR at 210-211. As Jacobson and Bennett JJ said in National Exchange 61 IPR at 437 [50] (applied by Keane JA in Downey [2005] QCA 199 at [83] ): "A document which, when read as a whole, is factually true and accurate may still be capable of being misleading if it contains a potentially misleading primary statement which is corrected elsewhere in the document but without the reader's attention being adequately drawn to the correction."


case_text: Smith LJ dismissed the suggestion that the reference to the deposit of £1,000 could be construed as a mere expression of confidence in the wares which the defendant had to sell: Carlill [1893] 1 QB at 273. And, as Black CJ, von Doussa and Cooper JJ said in Fraser v NRMA Holdings Ltd (1995) 55 FCR 452 at 483E-G, the use of an expression such as "free" in connection with shares, depending on the context, can create a notion that the shares might be acquired without significant loss or outgoing, even though in other contexts in ordinary life people might understand similar usages differently. It depends on the context in which words are used as to whether or not their use is misleading or deceptive or likely to mislead or deceive.


case_text: may be so but its consequence is that Austcorp's submission fails at its threshold. Austcorp conducted itself in trade and commerce as a promoter of the resort. It did so in clear language using its exact name. It also associated itself by the use of the logo on the promotional material. The logo was not used in a legal document by lawyers. It was used in trade or commerce by Austcorp to convey its association with the project, whatever may have been the legal formalities and structures in which subsidiaries of Austcorp may have participated. The message which Austcorp wished to pass to the public was, that it, as the ultimate owner of the brand, was responsible for the development. It cannot accept the credit and refuse to take responsibility under the Trade Practices Act for its conduct: cf: see Gardam v George Wills & Co [1988] FCA 194 ; (1988) 82 ALR 415 at 427-428 per French J; Cassidy v Saatchi & Saatchi Australia Pty Ltd [2004] FCAFC 34 ; (2004) 134 FCR 585 at 593 [39] per Moore and Mansfield JJ, 599 [65] per Stone J; see too Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 at [40] , [48] per Keane JA (Williams JA and Atkinson J agreeing at [1], [145]). As Keane JA observed the presence of a logo and name in a brochure or similar material can mean that a reader will be entitled to conclude that the contents of the brochure state the reasons for the involvement of the person whose logo and name were used.


case_text: despite the care and deliberation with which it was prepared, Austcorp submitted that the brochure was marketing material that contained a degree of puffery in the sense that Davies and Einfeld JJ had explained in General Newspapers Pty Limited v Telstra Corporation [1993] FCA 473 ; (1993) 45 FCR 164 at 178; Gummow J agreeing at 194. They said that in the ordinary course of commercial dealings, "... a certain degree of 'puffing' or exaggeration is to be expected. Indeed, puffery is part of the ordinary stuff of commerce". A puff is something that is not meant to be taken seriously or acted on: see also Downey [2005] QCA 199 at [92] per Keane JA.


case_text: I am satisfied that it would be unreasonable to read the brochure as offering an assurance against anything that might happen in the market, the use of an apparently reputable hotel operator's name, Pacific International Hotels, in connection with the promise of a 7% p.a. return for 10 years from the investment was calculated to induce confidence that the promoters of the venture had a foundation for the confidence expressed concerning future matters. Those who were named in the brochure as organisations, rather than particular identified corporate identities, included the hotel operator, as "Pacific International", and a developer, "Austcorp". Ordinarily, a statement which involves the state of mind of the maker will convey the meaning expressly, or by implication, that the maker of the statement had a particular state of mind when it was made and, commonly, that there was a basis for that state of mind: Global Sportsman Pty Limited v Mirror Newspapers Limited [1984] FCA 180 ; (1984) 2 FCR 82 at 88 per Bowen CJ, Lockhart and Fitzgerald JJ; RAIA Insurance Brokers Limited v FAI General Insurance Co Limited [1993] FCA 92 ; (1993) 41 FCR 164 at 172-175 per Beaumont and Spender JJ, with whom Davies J generally agreed at 165-166.


case_title: Gluckstein v Barnes [1900] AC 240

case_text: course here, I must consider the impression that the words of the brochure made upon each of the applicants, in light of the context, including the fact that there would be a contract sent to them or their solicitor. And, in the ordinary course it could be expected that a solicitor would act, although in Ms Tan-Bounkeua's case that did not eventuate. But a solicitor is not a commercial advisor. Having set out to assure people that the guaranteed return would be earned, it ill lies in the mouth of Austcorp to say that they should not have believed that when they entered into the contract because their solicitors should have disabused them of those impressions. I reject that submission. It is reminiscent of Lord Macnaghten's characterisation of a similar argument in Gluckstein v Barnes [1900] AC 240 at 251-252 where he said: "But then," says Mr. Gluckstein, "there is something in the prospectus about 'interim investments,' and if you had only distrusted us properly and read the prospectus with the caution with which all prospectuses ought to be read, and sifted the matter to the bottom, you might have found a clue to our meaning. You might have discovered that what we call 'interim investments' was really the abatement in price effected by purchasing charges on the property at a discount." My Lords, I decline altogether to take any notice of such an argument. I think the statement in the prospectus as to the price of the property was deliberately intended to mislead the shareholders and to conceal the truth from them." The norm of conduct provided by s 52 is intended to require corporations to adhere to an appropriate level of behaviour in trade or commerce. Austcorp was prohibited from engaging in conduct which was misleading or deceptive or likely to mislead in this trade or commerce, namely the sale of apartments in the resort. The brochure was not a mere puff. The statements about the resort, the quality of the investment and the prospective earnings to be achieved from it were advanced as serious business propositions. Moreover, it is difficult to see how the brochure could have been read in any other way. If, on examination, the nature of the project or the returns promised in the brochure were overstated or not supported, the investor would not proceed. He or she would then mistrust the promoters. I have had regard to Austcorp's arguments in assessing each applicant's evidence. Of course, each transaction was important to the individual applicants. But Austcorp was asserting that other people (solicitors) or other factors (the full contractual documentation and, where relevant, the disclosure statement when read and properly understood) would undo completely the very state of mind its marketing activities had induced by conveying the representations complained of so as to induce the applicants to proceed. It is not an attractive argument. Marketing messages are simple and powerful. While legal fine print may be contractually decisive, it is usually far less interesting to a lay person. The six lucid pages of the brochure (and the equally lucid other promotional material) had no fine print or qualifications. Austcorp was using the same forensic tactic as Mr Gluckstein did a century ago it was asking the applicants to read, in court in 2008, with distrust and cynicism what it wanted them to read, believe and act on in late 1999 and 2000. Lord Macnaghten's rejection of that approach remains entirely apposite: Gluckstein [1900] AC at 251-252. In effect, Austcorp in its defence asserted that it should not have been taken at its word in the representations it made to sell the apartments to the applicants, including Ms Tan-Bounkeua. Austcorp's argument is no sounder than the unsuccessful promoter's in Gluckstein [1900] AC at 251-252. The argument must fail. A person in Ms Tan-Bounkeua's position was entitled to assume, as I find she was, that those who put forward the promotional material she received knew what they were saying in it and were telling her that an investment in an apartment in the resort was a sound one with the characteristics in the representations complained of. Of course, she would realise that the contract, when she received it, was a complex legal document. But there was nothing to alert her that the contract propounded a relationship with the significant differences between the representations complained of and her legal rights if she signed. Ordinarily a solicitor would explain the effect of the contract to his or her client. This might have led to Ms Tan-Bounkeua being informed of the true position before she entered into the contract and lease, although, on the evidence before me, some solicitors did not highlight or inform their clients of the existence or effect of cl 20.9. The question remains why that true position was not in any of the promotional material.


case_title: Gould v Vaggelas (1984) 157 CLR 215


case_title: H O Brandt & Co v H N Morris & Co [1917] 2 KB 784


case_text: was the guiding hand and ultimately benefited from what its subsidiaries did. It argued that its conduct vis a vis its subsidiaries should be viewed as akin to a real estate agent who passes on the vendor's instructions. I reject that argument. Austcorp did not confine itself to communicating what its subsidiary said, did or represented, without adopting or endorsing it: cf: Butcher v Lachlan Elder Realty Pty Limited [2004] HCA 60 ; (2004) 218 CLR 592 at 605 [38] - [40] per Gleeson CJ, Hayne and Heydon JJ. To the contrary, the reality was that the subsidiaries were Austcorp's vehicle for realising its investment in the project. The subsidiaries acted as Austcorp caused them to act. While each of Austcorp and its subsidiaries was a separate legal person, acting through the individuals who were employees of Austcorp, all acted in dual capacities: cf: Hamilton v Whitehead [1988] HCA 65 ; (1988) 166 CLR 121 at 128 per Mason CJ, Wilson and Toohey JJ. The activities of each member of the Austcorp group involved in the development and marketing of the resort were interlocking and Austcorp controlled each of them: cf: NSW Mutual Real Estate Fund Ltd v Brookhouse [1979] FCA 7 ; (1978) 38 FLR 257 at 263 per Franki J, 264 per St John J, 266 per Deane J. After all, a fundamental purpose of the Parliament prescribing the norm of conduct enacted in s 52 of the Act is to ensure the protection of the public, particularly consumers. I reject Austcorp's argument that it did not engage in the conduct of providing to the applicants the brochure, leaflet and their repetitions by Mr Walker. Austcorp was the hands and brains of its subsidiaries' conduct and Austcorp cannot evade responsibility for any contravention of s 52 by seeking to draw down between itself and them a corporate veil for the contraventions it perpetrated: cf: Hamilton 166 CLR at 128; Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at 88 [108] .


case_text: Owers had continued to incur the expenses in order to hold the asset that he acquired "by" the misleading conduct for which Austcorp is liable. He expended money because of the position in which he had been placed by Austcorp's contravention of s 52 of the Act. Although Mr Owers has achieved a small net taxation saving over a number of years that has come at the expense of his being involved in an investment which he would not otherwise have pursued. I am of opinion that it is not appropriate to require Mr Owers to use his own money to pay the cost of financing a venture he would not have undertaken had he not been misled by Austcorp's contraventions of the Act: see also Henderson v Amadio Pty Limited (No 1) (1995) 62 FCR 1 at 200A-D per Heerey J. He has lost the opportunity of using the $48,837 paid by him for which he claimed tax deductions and received a net benefit, in other ways. He is entitled to damages in the whole sum claimed, without making allowance for taxation benefits. (b) Mr Owers $33,000 cash deposit Mr Owers said that he would have invested in another long term income producing property had he not been induced to purchase the apartment. I accept that evidence. Instead of borrowing the whole of the purchase price, he used initially $33,000 of his cash savings to pay the deposit. Ultimately, he borrowed $31,000 from his bank and paid about $10,000 of that to pay back into his other bank account. Thus, he borrowed about $31,000 of the $330,000 price, and claimed damages for the loss of opportunity to invest the balance of either $20,000 or $30,000 in a better investment. Originally, Mr Owers sought damages for loss of a chance to obtain a better investment outcome from a possible purchase of investment property in Lithgow for this sum. But in the applicants' written submissions in reply, Mr Owers abandoned that argument and sought compensation such as simple interest on that sum. He does not now claim any substantive damages for the loss of the opportunity to invest beyond the amount which Austcorp agreed he should be allowed as interest on the net capital sum he invested from his own savings. Austcorp conceded in final address that if he were entitled to recover damages, some sum in the nature of interest should be awarded on the $20,000 to $30,000 figure.


case_text: 82(1) of the Act permits recovery by an applicant for loss or damage notwithstanding his, her or its failure to mitigate or contributory negligence unless the applicant's own carelessness or disregard of his, her or its interests is the cause of some or all of the loss or damage: Munchies Management Pty Ltd v Belperio (1988) 58 FCR 274 at 286G-287C per Fisher, Gummow and Lee JJ applying what French J had said in Pavich v Boira Nominees Pty Ltd [1988] ANZ Conv R 556 at p 23; see too Sykes v Reserve Bank of Australia (1998) 88 FCR 511 at 517B-E per Heerey J, Sundberg J agreeing at 521F. The misrepresentations were a link in the causal chain between Mr Owers' entry into the transaction and his loss: cf: Henville v Walker [2001] HCA 52 ; (2001) 206 CLR 459 at 469 [14] per Gleeson CJ. At best, from Austcorp's perspective, there may have been two concurrent causes of the imprudent decisions of Mr Owers and Ms Tan-Bounkeua to buy their apartments and lease them to Mustara. Austcorp's conduct was one of the causes, the other being those applicants' failure to receive legal advice exposing to them the effect of cl 20.9. 3.1 THE APPLICANTS 3.1.1 BRIAN OWERS


case_text: the two experts gave evidence about a range of rates. Neither explained in detail exactly how he arrived at his conclusion, yet each looked at a number of properties and had years of experience in forming such views. In that context is their evidence, though imperfect in the legally technical sense, worthless? The best expert in a field may not be able to give a textbook explanation of the basis for his or her opinion; does the Court discard it as worthless evidence? A reasoning process provides transparency as to how the conclusion has been revealed. Often a tribunal of fact will say that a witness was not satisfactory or reliable. That conveys a conclusion based on an overall assessment of the person as seen and heard. Yet a fully transparent reassessing process for the conclusion is not always possible because, in part, it may depend on the values, perceptions and prejudices of the fact finder, some known by that person, some not. Courts recognise this in the way discretionary judgments are treated on appeal: House v The King [1936] HCA 40 ; (1936) 55 CLR 499. I have been conscious that the two experts have not given enough reasoning to enable me to dissect or analyse which end of the range is more likely to be correct. On the other hand, I am satisfied that the market for apartments in the resort between 1999 and 2004 was not operating in a fully informed manner and that the prices paid then did not reflect the true value of the asset. And I am satisfied that the more recent 2006 to early 2008 sales were reflective of the, then, current true values. (There was no suggestion that conditions in the Australian or world economies were deteriorating at this time or otherwise having an impact on these values of the disportion they reveal as against movements in value in the area around the resort.) That is, I am satisfied the influences which distorted the market earlier for apartments in the resort were no longer operative at the time of the more recent sales in evidence. Mr Tew's approach had a number of flaws which were exposed by his attempt to assess comparable properties outside the resort. He chose properties as his comparable sales in established four star holiday destinations, such as Nelson Bay, when they were not reasonably comparable. His principal choices were two resort apartments in the Landmark at Nelson Bay. However, unlike The Entrance as Mr Tew was aware, in 2000 Nelson Bay had both about four or five established 4 star resorts together with a reputation for that class of accommodation and appropriate local restaurants for such a market. He said that he gave consideration to the income streams of the two Landmark apartments (104 and 117) he used as comparators for the two larger apartments of Mr Owers and Luciani/Taldarmar. But, he said that he did not refer to their income streams in his reports because he used the direct comparison method. At the hearing, he said these two apartments "... are the two most reliable" for his comparable sales analysis. Mr Tew agreed that a sample of two was not ideal to use as basis for a comparable sales analysis.


case_text: applicants seek damages for their capital loss assessed as the difference between the price paid for their units and their true value at the time of the transaction. This is a common measure of damage in claims under s 82 of the Act where land has been acquired in consequence of a contravention of s 52: see HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd [2004] HCA 54 ; (2004) 217 CLR 640 at 656 [35] . However, the rule is not inflexible or rigid and, as Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ went on to point out, the test depends on the difference between price and the real or fair or intrinsic value of the asset, as opposed to its market value: Astonland 217 CLR at 656-657 [35]-[36]. In Astonland 217 CLR 658-659 [38]-[40] the Court indicated that subsequent events could be used to arrive at an assessment of the real value of an asset for the purposes of calculating compensation under s 82 of the Act in respect of a claim of overpayment at the time of acquisition. Events after the date of acquisition can be taken into account but when that is done care must be taken in distinguishing among possible causes of the decline in value of what had been bought. Thus, there is a fundamental distinction between causes inherent in the property acquired, and independent or extrinsic causes. To the extent that the latter causes have affected the value, then loss flowing from them would not have been caused by the inducement of the misleading or deceptive conduct. But if the value of the property acquired was always going to fall when some inherent cause began to operate (e.g. when a competing property, not adverted to by the negligent valuer in performing the valuation for the acquisition, commenced operation) that would be indicative of the true value. Such a loss in the value was, accordingly, inherent in the nature of what was purchased namely, that it would decline in value because of the operation of the competing property in close proximity: Astonland 217 CLR at 660 [43]. Their Honours said that the rental levels and, therefore the value of, Astonland's property were doomed from the start because, so long as the construction of the neighbouring shopping centre continued to completion, the plaintiff's loss would be inevitable. In such a case the court is not limited to the assessment of risk of loss at the time of purchase "... but is entitled to take account of how those risks had evolved into certainties at dates after the date on which the comparison of price and true value was being made": Astonland 217 CLR at 661 [45]-[46]. The Court continued: " [46] Figures worked out by analysing what willing but not anxious buyers and willing but not anxious sellers would agree on, without taking account of subsequent events, may correspond with market value; but they do not necessarily correspond with true value because the market can operate under some material mistakes. In particular, some material factor may not be apparent to it. A mistake of this kind, it seems likely, was present here. Though the market value on 21 April 1997 was $400,000, and in July 1997 it was $375,000, one matter was not apparent then which was apparent later. The trial judge found that $130,000 was "the value of the land more or less since it became apparent that tenants were largely unavailable except at minimal rentals" (footnote omitted). That unavailability was an inevitable consequence of the Beach Road Shopping Centre once it was completed, but the perception of the likely effect of that completion was obscure in 1997, and only became clearer from the latter part of 1998 on." Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ considered an alternative approach to the assessment of damages under s 82. That approach was to allow a plaintiff to recover the purchase price of the asset less whatever was "left in its hands": Astonland 217 CLR at 666-668 [63]-[67]. They concluded that once the plaintiff had been induced to buy the property "... at a time when it was perceived to be valuable, and was forced to retain it because it increasingly became to be perceived as being of declining utility and value": Astonland 217 CLR at 668 [67]. In such a situation the plaintiff's property was not a readily marketable asset. Austcorp pleaded that the claims were time barred because each applicant entered into the contract more than six years before the commencement of the proceedings. Austcorp also argued that the applicants had become committed to, first, the contracts which they had entered prior to 1 August 2000 and, secondly prior to that date, to paying legal fees incurred and other costs. However, the applicants did not claim any damages in respect of transaction costs incurred before the registration of the strata plan. Austcorp argued that an applicant will be found to suffer loss immediately upon entering into a contract for the purchase of land if the true value of the land at that time is less than the contract price. Accordingly, it contended that the applicants' causes of action under s 52 of the Act accrued at that moment relying on Astonland 217 CLR at 654-655 [28] and 656 [33] per Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ. In Astonland the plaintiff had relied on the advice of a valuer before entering into a contract to purchase an income producing shopping arcade. The valuer advised that the construction of a new shopping centre nearby was not likely to affect adversely the arcade's existing retail tenancy levels. But, there was unchallenged evidence that on the date of the contract, and the date of completion, the land was worth less than the price payable or paid under the contract. That was because the valuer on whose valuation the plaintiff had relied advised the plaintiff incorrectly: Astonland 217 CLR at 655 [28]-[29]. Their Honours distinguished that situation from the category of case where a contingency, which might or might not come to pass, was hidden by a representor's conduct. They said that the plaintiff could have found out at once that the market value of the arcade was less than it had agreed to pay. Thus, the risk of the catastrophic effect on rent levels of the plaintiff's land to which the defendant valuer had not alerted the plaintiff, in fact, had already had an impact on the value of the plaintiff's land at the time of the purchase. Austcorp argued that on the applicants' cases, their apartments must have been worth less than the price paid for them at the dates of entry into the contracts for sale. I reject that argument. The applicants were not obliged to complete the contracts until after registration of the strata plan pursuant to cl 33 of the contract which provided the following: "33.1 Completion of this contract is conditional on the consent of the Council to, and the registration of, the Strata Plan. 33.2 If the Strata Plan is not registered by the Registration Date [defined as 31 December 2000] either party may at any time after the Registration Date until registration rescind this contract by written notice to the other."


case_text: submitted that an adverse inference should be drawn against the applicants for failing to call their solicitors: Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 ; Blatch v Archer [1774] EngR 2 ; (1774) 1 Cowp 63. Austcorp argued that the applicants could and should have called the solicitors who acted for them on the transactions and that their failure to do so could be used, not only to support the proposition that the solicitors' evidence would not advance their cases but also to suggest that they had not discharged their onus of proof. It that it was within the applicants' power to call their solicitors and their evidence should be assessed as Lord Mansfield CJ described in Blatch 1 Cowp at 65: "[i]t is certainly a maxim that all evidence is to be weighed according to the proof which it was within the power of one side to have produced, and in the power of the other to have contradicted."


case_text: Wardley 175 CLR at 527 Mason CJ, Dawson, Gaudron and McHugh JJ explained the distinction between detriment, in a general sense, and damage suffered on entry into an agreement induced by a misrepresentation which is, or proves to be, to an applicant's disadvantage. The applicant will sustain a detriment in a general sense because the agreement subjects him, her or it to obligations and liabilities which exceed the value or worth of the benefits which it conferred on that person. But such a detriment will not necessarily amount to more than a contingency of future loss. In general, it is only when the contingency is fulfilled that an applicant will be found to have suffered loss or damage sufficient to infringe his, her or its economic interests for the purposes of an action under s 82(1): Wardley 175 CLR at 533. It is self-evident that the applicants would not have been able to sue for damages in respect of the losses they claim here before they completed or were legally bound to complete their contracts. Risk of loss is not actual loss. The mere entry into the contract did not, of itself, require each applicant to complete it since that obligation would only arise, or be able to be enforced by or against the applicant, once the strata plan was registered: Murphy v Overton Investments Pty Ltd [2004] HCA 3 ; (2004) 216 CLR 388 at 407-409 [46] - [54] . In Karedis Enterprises Pty Ltd v Antoniou (1995) 59 FCR 35 at 43C-D Burchett and Hill JJ (Sackville J agreed at 45C; see too at 48E) held that where a lessee had been induced by the lessor's misrepresentations as to takings into entering into a lease, the question for limitation purposes was " ... when was it that the loss which the [applicants] ultimately suffered (or a more than negligible part of it ) was either ascertained by them or reasonably ascertainable? "


case_text: all, the intended market for this investment were people holidaying at The Entrance who were attracted to walk into PRD's office at the site, as each of the applicants here did. These applicants were ordinary members of the public, not professional landlords or real estate investors or developers. They were the very class of persons who were intended to be attracted by the brochure viz: namely the kind of investor who would be looking for a return in something which it was hard to imagine could be offered at that level. In another context, to do with the law of defamation, Lord Devlin once observed tellingly in Lewis v Daily Telegraph Limited [1964] AC 234 at 285 (and see also Mirror Newspapers Limited v Harrison [1982] HCA 50 ; (1982) 149 CLR 293 at 304 per Brennan J): "A man who wants to talk at large about smoke may have to pick his words very carefully if he wants to exclude the suggestion that there is also fire; but it can be done. One always gets back to the fundamental question: what is the meaning that the words convey to the ordinary man: you cannot make a rule about that ." (emphasis added) Just as the ascertainment of whether a particular representation was made to a representee, or any other issue concerning the meaning of words, the task of evaluating whether s 51A(1) applies to a representation requires the Court to ascertain the meaning conveyed by the words in the context. There can be no prescriptive rule that any particular form of expression must be, or not be, a representation with respect to a future matter: cf: Lewis [1964] AC at 285 per Lord Devlin. And, for the purposes of evaluating the issues arising under s 51A , in a case like the present, the understanding of each applicant is crucial. First, the representation objectively must be capable of being characterised as made with respect to a future matter. Secondly, the applicant must have understood it in that way. Thirdly, if the applicant did understand the representation to be with respect to a future matter, he, she or it will need to establish that, understood, in that way, he, she or it suffered loss of damage "by" the contravening conduct under s 82. Section 51A recognises that representations with respect to a future matter can be objectively misleading or deceptive if the prediction turns out in due course to be wrong. If s 52 operated in that unqualified way, because of the consequence of future error it would create liability for every representation about future matters, however responsibly the representation may have been made at the time. So, s 51A ordinarily affords a representor an important protection in making such a wrong prediction if, when making it, the representor had reasonable grounds for doing so.


case_text: Tew chose significantly larger apartments in a different market with different amenities (including the neighbouring golf course) with which to make his comparisons, even though there was no apparent justification for doing so. He made no allowance in his valuation as at 2000 for actual and pending competing development at The Entrance. I am not prepared to accept his evidence as being reliable: see Maurici v Chief Commissioner of State Revenue [2003] HCA 8 ; (2003) 212 CLR 111 at 121 [18] per McHugh, Gummow, Kirby, Hayne and Callinan JJ. I consider that it indicates that Mr Tew did not select appropriately the properties which he used to arrive at or support his valuations. His approach did not identify properties that reasonably assist in indicating values of a comparable kind to those in the resort. In addition, because the apartments in the resort were purchased for the, or a, purpose of earning investment returns, I am of opinion that Mr Dupont's approach is generally to be preferred. Austcorp criticised Mr Dupont's methodology in his valuation according to known factors. It argued that the method produced a different value depending on when the exercise was done and that he had arbitrarily selected an unspecified date in 2007 and an unreasoned sale price for the purposes of preparing this valuation. I think there is force in these criticisms. Mr Dupont made a calculation of the 2007 net present value of cash flows from each applicant's apartment. But he said that in order to assess the apartments' values based on events that became known after their purchases, it was necessary to take into account both the actual income they guaranteed from 2001 to 2007 and the apartment's "potential value at today's date". Those potential values were, in the case of Mr Owers $300,000 (as compared to a $330,000 purchase price in 2000), Luciani/Taldarmar $310,000 (as compared to a purchase price of $340,000 in 2000) and $190,000 for Ms Tan-Bounkeua (the same as her purchase price in 2000). His valuation was made in March 2008. Mr Dupont gave no basis explaining how he arrived at those potential values for three properties on this assumed basis. Mr Dupont's failure to set out in full his reasoning process for selecting the potential values which he put into his value according to known factors calculation undermined the alternative methodology he adopted. I am not satisfied that this was an appropriately explained or reasoned methodology and I reject it.