191 Bells Pty Ltd v WJ & HL Crittle Pty Ltd

Introduction

1. On 23 March 2022, the plaintiff as purchaser (Purchaser) and the first defendant as vendor executed a put and call option deed (Option Deed) with respect to the land located at 191 Bells Lane, Meroo Meadow in New South Wales (the Land). Pursuant to the Option Deed, the Purchaser was granted a call option to purchase the Land. The option is required to be exercised, if not extended at the option of the Purchaser, by 23 March 2024. By these proceedings, the Purchaser seeks a declaration that the Option Deed be declared void by reason of certain misleading or deceptive conduct of the defendants in breach of the Australian Consumer Law (ACL). The alleged misleading or deceptive conduct concerns the failure to disclose contamination of the Land that was subsequently identified by the Purchaser.
2. An alternative claim in fraudulent concealment is also made against the defendants. Mr Fernon SC for the Purchaser conceded at the hearing that the fraud claim did not add anything to the ACL claims in the sense that the fraud claim could succeed where the ACL claims fail.
3. The proceedings were commenced on 19 September 2023 and were originally listed for a three-day hearing commencing on 19 February 2024. On 8 December 2023, this dated was vacated and the matter listed for hearing to commence on 12 March 2024. It was also ordered on 8 December 2023 that the hearing was not to involve "the question of damages".
4. The proceedings were heard on 12 to 15 March 2024, with A Fernon SC, G Farland, and M Keene appearing for the plaintiff and S Robertson SC and B Douglas-Baker appearing for the defendants.
5. In circumstances where the option, if the Option Deed is not declared void, is required to be exercised or extended by 23 March 2024, these reasons have been prepared on an urgent basis. Many issues were raised by the parties at the hearing. Given the urgent nature of the case, it has not been possible for all of the issues litigated to be considered in detail. In these reasons, I have endeavoured to sort the wheat from the chaff and to focus on the important issues relevant to the relief claimed - namely that the Option Deed be declared void.
6. For the reasons set out below, the Purchaser's claim fails. There was no misleading or deceptive conduct or fraudulent concealment in the circumstances and accordingly, the claim should be dismissed with costs.

A brief overview

1. The first defendant, WJ & HJ Crittle Pty Ltd (the Vendor) is the registered proprietor of the Land, which is more particularly known as Lot 1 in DP 1191186. It is parcel of around 63.6 hectares. The Vendor purchased the land on 30 April 2014 (pursuant to a contract entered into in December 2013) for $1.6 million. The Land apparently has two to three residences on it.
2. The second defendant, Mr Crittle, is a director of the Vendor.
3. The Purchaser is part of the Mayrin Group, which carries out property development in mainland China and Australia. The Mayrin Group has developed or is in the process of developing a number of properties in Australia. The Purchaser was incorporated in about March 2022 just prior to the Option Deed being entered into. Prior to that time, investigations and other activities were carried out by other entities in the Mayrin Group.
4. On or around 23 March 2022, the parties entered into the Option Deed. Under the Option Deed, in return for the payment of a fee, the Vendor granted the Purchaser a call option over the Land. The call option fee was $26.4 million, payable over four instalments. All four instalments have now been paid.
5. The call option is able to be exercised any time between 30 September 2023 and 23 March 2024. The Purchaser also has the ability to extend the call option exercise period to 23 September 2024, although the Option Deed provides for an adjustment of the purchase price if this occurs.
6. If the call option is not exercised or extended by 23 March 2024, it lapses. The Vendor has seven days after the expiry of the call option to exercise the put option and require the Purchaser to purchase the Land.
7. If the call option is exercised, there will come into existence a contract for the sale of the Land between the Vendor and the Purchaser with a sale price of $88 million with a six-week settlement and a 10% deposit. The form of the contract for sale of the Land is annexed to the Option Deed.
8. In the event of exercise of the call option, the fourth and final instalment of $8.8 million is to be applied in satisfaction of the obligation to pay the deposit and, on completion, the remaining call option fee instalments will be applied to the purchase price resulting in the balance of the purchase price being $61.6 million (excluding the usual adjustments).
9. After entry into the Option Deed, the Purchaser contends that it became aware that the Land was contaminated. The contamination is contained in three "pits" located on the Land that were previously used as silage pits and, in more recent times as explained below, were used to dump rubbish and other items until they were filled in by Mr Crittle.
10. The pits were described in evidence as the northern pit (or pit 1), the central pit (or pit 2) and the southern pit (or pit 3) (together, the Pits).
11. The extent of the contamination is purportedly most fully set out in a report issued by Environment & Natural Resource Solutions (ENRS) dated on or about 11 July 2023.
12. The Purchaser contends that the ENRS report issued on or about 11 July 2023 disclosed that there was contamination of the Land by reason of filling operations and waste deposition, to approximately three metres in depth. Soil samples indicated that: there were exceedances of the adopted Site Assessment Criteria (SAC); including for: C16-C34 Hydrocarbons; benzo(a)pyrene; benzo(a)pyrene TEQ (24.9mg/kg >3mg/kg SAC); arsenic and lead, being in excess of the site assessment criteria and high enough to trigger management as Restricted Solid Waste. There was asbestos contamination identified, including chrysotile asbestos - which exceeded the HSL and which requires removal under supervision of a licensed asbestos contractor.
13. One of the many issues agitated between the parties at the hearing was whether the Land was in fact contaminated and, if so, to what extent and the necessary work that should be undertaken for remediation. I deal with this issue below.
14. The essence of the claim advanced by the Purchaser is that, prior to entry into the Option Deed, and indeed the receipt of the first of the reports disclosing the contamination, it was not aware of any contamination and would not have entered into the Option Deed if it were so aware. It is contended that the Vendor and Mr Crittle were aware of the contamination and in fact concealed it, between about November 2017 and June 2021. This is said to found claims for misleading or deceptive conduct and fraudulent concealment.

Detailed factual narrative

1. Many of the background material facts were not in dispute. I summarise them below. One of the central factual issues of the hearing concerned the content of the Pits and Mr Crittle's knowledge of the contents. This is dealt with in a separate section of these reasons below.
2. As set out above, the Vendor purchased the Land in April 2014 for $1.6 million (pursuant to a contract exchanged in December 2013). Prior to then, and as early as October 2006, there were plans in place for the purposes of rezoning the area, which included the Land, for the purposes of permitting greater density of residential development.
3. With the commencement of the Shoalhaven Local Environmental Plan 2014 (Shoalhaven LEP) on 22 April 2014, the land which was the subject of the Shoalhaven LEP and consisted of 17 lots located in the Shoalhaven City Council area, which included the Land, was rezoned from 1A Rural to predominantly R1 General Residential. Mr Crittle gave evidence that at the time that he entered into the contract to buy the Land in December 2013, the prospect of the Land being rezoned was known.
4. The Vendor and Mr Crittle have at all times used the Land for farming purposes including the grazing of beef cattle and running of horses. Although there are houses on the Land, Mr Crittle gave evidence that he and his wife would only stay at the house occasionally, although it would appear that one of their sons began living at the house in 2015 and another son also moved there in 2017, and both continue to live there together with one of their partners.
5. After the rezoning brought about by the 2014 amendments to the Shoalhaven LEP, the defendants, together with surrounding landowners, formed the Moss Vale Road North Owners Group (the Owners Group) to make representations to the Shoalhaven City Council (Council) with a view to having further changes made to the Shoalhaven LEP to enable greater density of residential development. Mr Crittle agreed in cross-examination that he was a member of the Owners Group for a period and that his land holding was the largest land holding of the members of the Owners Group. Mr Crittle says that at some stage, he ceased to be a member of the Owners Group, although he could not recall precisely when.
6. On 6 October 2020, the Development and Environment Committee of the Council held a meeting at which a proposal was considered and passed for the purposes of seeking gateway approval from the NSW Government to enable changes to be made to the Shoalhaven LEP. The minutes of this meeting, made available on the Council website, record that a deputation in favour of progressing planning for release of land in the Moss Vale Road North Urban Release Area (which includes the Land) was made by Mr Crittle. In cross-examination, Mr Crittle said that he could not recall making this deputation, apparently due to the fact that at some point, which Mr Crittle could not recall, he ceased to be a member of the Owners Group. This evidence appeared to me to be an instance of Mr Crittle seeking to downplay his involvement in and knowledge of the attempts being made to increase the residential potential of the Land.
7. The consequence of that proposal being passed was that a gateway determination report was prepared and lodged with the Department of Planning, Industry and Environment. The gateway determination report records that the Owners Group had submitted an alternative outcome which had the potential to increase the number of new dwellings from 1,300 to about 2,500 to 3,000. The report also records as an historical fact that after the Shoalhaven LEP and in "April 2019, five landowners comprising the [Owners Group] submitted an alternative outcome for the release area". Again, Mr Crittle was unsure in cross-examination as to whether he was one of the five owners referred to in this report. This appeared to me to be another attempt by Mr Crittle to downplay his involvement in and knowledge of the efforts to increase the residential density of the Land. As will appear below, this was during a period where Mr Crittle was carrying out works to fill in the Pits.
8. The gateway determination was approved by the NSW Government on 21 December 2020. An amendment to the Shoalhaven LEP was approved in December 2023 and is still awaiting regulatory approval.
9. In connection with their efforts to amend the Shoalhaven LEP, the Owners Group obtained their own contamination report in relation to the Land, dated 22 February 2019. The report, prepared by Construction Sciences, concluded that there were no contamination sources that were perceived to exist, and that contamination of groundwater, or contamination moving offsite, was considered to be unlikely. Again, Mr Crittle claimed in cross-examination to not having any knowledge of the report.
10. The Vendor determined to put the Land up for sale in or about November 2020. The selling agent, Ray White, was retained. Marketing material was produced by Ray White, which included a number of colour photographs of the Land and the structures on it. The photographs include what appears to be one historical photograph which shows the three purportedly contaminated Pits from a distance. The Pits appear to be uncovered, i.e. depicting the position prior to the work of Mr Crittle involving filling in the Pits, which concluded in 2020.
11. The Mayrin Group was introduced to the Land in early 2022 through an agent (Savills) retained by the Mayrin Group to source suitable sites for property development.
12. Mr Wenhao (William) Wu, the Chief Executive Officer of the Purchaser and the broader Mayrin Group, gave evidence that in or about December 2021, he spoke to Neil Cook and Stuart Cox of Savills. During these conversations, Mr Wu indicated that the Mayrin Group was looking to buy a large parcel of land suitable for residential development within 2.5 hours of Sydney and, in response to this, Savills indicated that it had unlocked a potential opportunity near Nowra.
13. Savills then told Mr Wu that Mr Crittle was interested in the Mayrin Group acquiring the Land to develop it for residential housing and that the Mayrin Group would need to build trust and then give an offer before the Mayrin Group would be permitted to look at the Land in person.
14. The Mayrin Group then commenced substantial negotiations with Savills in relation to the purchase of the Land.
15. On 4 February 2022, Savills emailed Mr Wu regarding the details of the potential sale of the Land, with planning attachments including a draft DCP, a draft subdivision layout and a slide presentation to the Shoalhaven City Council.
16. The covering email states, among other things: The MOSS VALE ROAD NORTH (MRVN) Land Release Area - Total area 266 Ha Area consists of 17 separate landholdings (5 owners, apparently all 5 owners have contracted however none of the sites have settled yet) They have joined together as MVNOG (Owners Group) to advance the planning The subject site is approximately 40% of the total area and is the main project contributor to the precinct
17. The covering email also included a photograph of the Land which, whilst not entirely clear, depicts the three Pits in their covered state, i.e. after Mr Crittle had filled them in.
18. On 28 February 2022, Mr Wu sent to the Vendor a "Notice of Offer to Purchase Land" offering to acquire the Land for $88 million. The letter was in the following terms: NOTICE OF OFFER TO PURCHASE LAND Warren Crittle WJ & HL CRITTLE PTY LTD 191 Bells Lane Meroo Meadow NSW 2540 C/o Neil Cooke Director Residential Site Sales Savills Australia RE: 191 Bells Lane, Meroo Meadow NSW 2540 - Lot 1, DP11911186 [sic] Dear Mr Crittle, We write to you in relation to your circa 63.6 ha land holding at Meroo Meadow. We have undertaken significant due diligence on the precinct with the vision of developing the land with our partners Walkercorp and wish to acquire the site on the following terms: Purchase Price - $ 88,000,000 (assuming no GST applicable) Exclusive Due Diligence Period - 2 weeks from receipt of the legal Sales Contract and Put and Call Agreement - we are happy to prepare this if required to fast track an exchange This is a substantial acquisition and therefore we are of the opinion a 2 week exclusive legal due diligence/contract negotiation is a reasonable request Initial Deposit - $8,800,000 payable upon exchange - unconditionally released Settlement - 18 months from exchange Our Solicitor Details are: Chi Chau Chi.chau@hicksons.com.au Hicksons Lawyers One International Towers L24, 100 Baranagaroo [sic] Avenue Sydney NSW 2000 We confirm our capacity to complete the transaction particularly raising a substantial deposit in such a short time frame however we do wish to advise we are currently investigating a number of opportunities in regional NSW and therefore will require written confirmation of acceptance of the offer before 5pm Wednesday 2nd March 2022. Upon acceptance of the terms above, our lawyer will be instructed to commence legal due diligence immediately. We look forward to hearing from you. Kind regards William Wu 28/02/2022
19. Mr Wu gave evidence that he had wanted a longer due diligence period - two months - but that he had a conversation with Savills where he was told that two months was "not ok" with "the vendor" and that he would have to shorten the period to three weeks in order to get the deal.
20. It was during this time that the Mayrin Group engaged Hicksons Lawyers to assist with the purchase and to prepare and assist with the settlement of appropriate legal documentation relevant to the transaction.
21. On 1 March 2022, Mr Wu (and other Mayrin Group representatives) met with Neil Cook and Stuart Cox and Mr and Mrs Crittle at the Land to inspect it and to enter into commercial negotiations. This was the first occasion that Mr Wu, or anyone from the Mayrin Group, had visited the Land. The inspection lasted for approximately one hour. Mr Wu and the other Mayrin Group representatives then left the Land and the Savills representatives remained at the Land and conducted commercial negotiations with Mr Crittle. When an agreement was reached between Savills and Mr Crittle, Mr Wu returned to the Land. According to the unchallenged evidence of Mr Wu, Mr Crittle said to him at this time: You are going to make a lot of money. In cross-examination, Mr Crittle gave evidence that he did not recall saying words to this effect.
22. On 2 March 2022, Mr Cooke of Savills provided to Mr Crittle by email, amongst other things, a draft "Exclusivity Deed" that had been prepared by the Purchaser's solicitors. Mr Crittle's solicitor was copied on the communication.
23. On 2 March 2022 the Vendor and an entity in the Mayrin Group entered into an Exclusivity Agreement which provided for a three-week exclusivity period during which the Vendor agreed not to engage with any other party in relation to the sale of the Land. The Mayrin Group paid the Vendor $30,000 for this exclusivity period. The terms of that Agreement included, in clause 3: … (a) the Vendor must: (i) within a period of one (1) week after the commencement of the Exclusivity Period, provide to Mayrin a proposed draft contract for sale of the Property; (ii) allow Mayrin and its agents and authorised representatives access to such information held by the Vendor as is necessary to complete due diligence in relation to the proposed purchase of the Property; (iii) assist Mayrin and its agents and authorised representatives as far as possible in the due diligence process; (iv) ensure that the information provided to Mayrin for the purposes of completing its audits and enquiries in relation to the Property is accurate and not misleading; and (v) subject to Mayrin providing reasonable prior notice to the Vendor (being not less than one (1) days' notice) provide to Mayrin and its agents and authorised representatives (including consultants engaged by Mayrin) physical access to the Property for the purpose of carrying out on-site due diligence and investigation on the Property; and …
24. In or around early March 2022, JK Environments Pty Ltd (JKE) was engaged on behalf of the Purchaser to conduct a contamination and dry land salinity screening for due diligence purposes with respect to the proposed acquisition of the Land by the Purchaser.
25. The proposal provided by JKE to the Mayrin Group dated 3 March 2022, prior to JKE's engagement, notes that the client brief requested JKE to: - Provide environmental site assessment and salinity assessment and advise on the implication on future development; and - Review if there is any contamination on site, and advise if any remedial work is required and of the indicative costs.
26. The Proposal then stated: Due to the very short due diligence timeframe, a thorough investigation is not achievable and we cannot address parts of the brief, notably, whether remedial works are required and what the approximate costs of such work would be. In order to establish whether remediation is required there would be a need for a detailed investigation involving hundreds of boreholes which is not achievable in the two-week timeframe.
27. The proposal then set out the work that JKE proposed to do. The price quoted for the work was $24,500.
28. Pursuant to the terms of the Exclusivity Agreement, the Vendor was required to provide JKE with access to the Land so that it could carry out the necessary investigations. The Vendor acted in accordance with this obligation, and access was provided.
29. On 16 March 2022, JKE sent to the Mayrin Group a Due Diligence Report - marked "Draft" - which stated, inter alia, that the Land was being used for rural/residential services and there were no visual or olfactory indicators of contamination observed during the site inspection, such as "fragments of fibre cement, stored chemicals, imported fill/fly-tipped waste, or staining/odours on the ground surfaces" and relevantly, that "[a]lthough there was no evidence of widespread filling or fly-tipping on site based on a review of the historical aerial photographs and the site walkover inspection, localised impacts from these activities could exist."
30. Under the heading 'Contamination' in the Executive Summary to the draft report, it was stated: All concentration of the CoPC were below the SAC in the soil samples analysed for the screening. Contamination was not identified that poses a risk to the human or ecological receptors. Based on the findings of the screening, it is our opinion that the potential for significant, widespread site contamination is relatively low and we do not foresee contamination being a major constraint to a residential subdivision development at the site. Localised impacts from contamination could be present, primarily around the existing/former buildings and structures, timber power poles, or from localised filling or fly-tipping etc. A Detailed Site Investigation (DSI) would be required to assess these AEC and the associated contamination risks.
31. Attached to this draft report were a series of aerial photographs of the Land dated between 4 and 8 March 2022.
32. On 23 March 2022, the parties entered into the Option Deed.
33. Attached to the Option Deed was a proposed Contract for Sale of Land which included amongst other attachments, certain disclosure documents. It was not in dispute that none of these documents disclosed any relevant contamination of the Land.
34. Special Conditions 10 to 17 and 20 of the proposed Contract for Sale of Land were as follows: 10. Warranties by and on behalf of the Vendor 10.1 The Purchaser acknowledges that this Contract sets out all the terms, conditions, warranties and arrangements between the parties and accepts this contract as a whole contract between the parties. 10.2 The Purchaser cannot make a claim, objection, requisition or rescind or terminate in respect of any representations, inducements or warranties, whether made by the Vendor or any person or on behalf of the vendor except those expressly contained in this contract or those implied by a law which cannot excluded by private contract. 11. Condition of the Property 11.1 The purchaser acknowledges that the purchaser has inspected the property and improvements being purchased and that the purchaser has satisfied itself as to its condition and state of repair and accepts it in its present condition and state of repair. 11.2 Without limiting the generality of special condition 11.1 the vendor discloses and the purchaser is aware that the structures situated on the property may not have council approval. The purchaser warrants that they have satisfied themselves as to the status of all structures. The vendors do not know and cannot warrant that the following structures have been approved by Council: (a) Improvements to the Farm House (b) Garage to the Farm House (Annexure "A" item number 4) (c) The Weatherboard cottage, garage and awning (Annexure "A" item numbers 2 and 3) (d) The Farm Shed no 1 (Annexure "A" item number 9) (e) The Farm Shed no 2 (Annexure "A" item number 7) (f) The Dairy (Annexure "A" item number 10a and 10b) (g) The Old Dairy (Annexure "A" item number 6) (h) The Old Silos (Annexure "A" item number 8) (i) The Studio (Annexure "A" item number 5) 11.3 Without limiting the generality of special condition 11.1 the vendor discloses and the purchaser is aware that the following improvements situated on the land are in a state of disrepair: (a) The Weatherboard Cottage, the Garage and awning (Annexure "A" item numbers 2 and 3) (b) The Farm Shed No 1 (Annexure "A" item number 9) (c) The Farm Shed No 2 (Annexure "A" item number 7) (d) The Old Dairy (Annexure "A" item number 6) (e) The Old Silos (Annexure "A" item number 8) 11.4 The purchaser cannot make a claim, objection or requisition or rescind or terminate in respect of anything disclosed in this special condition 11.5 The disclosures made in this clause are made for the purpose of Section 55 of the Conveyancing Act 1919 and the Conveyancing (Sale of Land) Regulation 2017. 12. Livestock and/or Agricultural Capacity The vendor does not guarantee or warrant the livestock carrying capacity and/or agricultural capacity of the subject property or any part or parts thereof. 13. State of repair of plant and equipment The purchaser has inspected the items of plant and equipment set out in Annexure "C" and purchases these in their present condition and state of repair provided always that the vendor is entitled to use in a normal fashion prior to the date of completion all the items in the conduct of the vendor's business upon the land the purchaser cannot make a claim, requisition, rescind or terminate or delay completion because of reasonable wear and tear suffered by the items or by any breakages damages or deterioration of them because of the normal and proper use of them by the vendor in the business prior to completion. 14. Inspection by the Purchaser 14.1 The Purchaser has satisfied himself by inspection as to the condition, description, boundaries, cropping and stock-carrying capacity of the property sold without reference to any statement or advertisement made or published prior to the signing of this Contract and the Vendor makes no warranty in respect of these matters apart from those implied by Section 52A(2)(b) of the Conveyancing Act 1919 and the regulations under the Act. 14.2 All improvements on the property are sold in their present condition and location in relation to boundaries and the Purchaser cannot make a claim, objection or requisition or rescind or terminate in relation to these matters apart from any right to rescind arising pursuant to Section 52A of the Conveyancing Act 1919 and the regulations made under the Act. 15. Fencing, Damage and Service Lines Subject to the rights given to the Purchaser by Section 52A(2)(b) of the Conveyancing Act 1919 and the regulations made under the Act the Purchaser cannot make any claim objection or requisition, rescind or terminate: 15.1 If any of the fences or any parts of them are off correct boundaries or if any of the boundaries are not completely fenced or if any of the fences are give and take fences. 15.2 In relation to any loss or damage to the property or to any fencing or improvements arising from fire storm tempest or flood or any cause which may take place between the date of this contract and completion. 15.3 In relation to any telephone or electricity lines whether the property of an authorised telephone authority or other Public Authority or third parties, or any posts, fittings or fixtures for these erected on or passing over or through the property or to any easements for these or in absence of any easements. 16. Access to Property The Purchaser has satisfied himself that satisfactory access is available to the property and cannot make a claim, objection or requisition or rescind or terminate in respect of access. 17. Purchaser's Acknowledgments and Warranties 17.1 The purchaser acknowledges and warrants that: 17.1.1 The purchaser enters into this contract after satisfactory personal inspection and investigation of the Property and after having perused those public records relating to the Property as the purchaser has desired to inspect; 17.1.2 The purchaser has not relied upon any representations made by the vendor or by any person on behalf of the vendor in entering into this contract except in so far as those representations are reflected in the express terms of this contract. 17.2 The purchaser has satisfied itself as to the approved and capable uses of the Property; 17.3 Notwithstanding clause 10 of the general provisions of the contract, or any principle of law or equity to the contrary the purchaser cannot make a claim or requisition or rescind or terminate in respect of any of the matters referred to this special condition 17. 17.4 The purchaser agrees to identify the vendor and keep the vendor indemnified against all consequences to the vendor of any breach by the purchaser of the warranties contained in this special condition 17. 17.5 The provisions of this special condition 17 shall not merge on completion. … 20. Warranty regarding Septic (a) The purchaser acknowledges that the property includes a septic tank or other onsite wastewater management system (Septic Tank). (b) Attached to this contract is a copy of the following documents issued by Shoalhaven City Council in respect of the Septic Tank: (i) Annual Approval to Operate a Sewage Management Facility under section 68 of the Local Government Act 1993 dated 22 May 2019; and (ii) letter specifying non-compliance dated 22 May 2019 (Non-Compliance Letter). The Non-Compliance Letter discloses that the absorption trench of the Septic Tank must be fenced to provide a dedicated area free from livestock (Non-Compliance Works). (c) The vendor warrants that it has undertaken the Non-Compliance Works to the satisfaction of Shoalhaven City Council. This clause does not merge on completion.
35. On 20 May 2022, JKE sent an email to the Mayrin Group in connection with further work to be carried out in relation to the Land - referred to as a Detailed Site Inspection (DSI). The email stated: Further to our correspondence yesterday, please see our fee proposal attached for the alternative DSI scope. Let me know if you have any further questions or if you would like to discuss any aspect of the proposals. For your information, when preparing this proposal I found an aerial photograph on‐line that suggested there are likely to be some localised pits in the central area of the site where waste materials were likely buried. The date of the on‐line photograph happened to fall between the dates of the aerial photos reviewed for our initial due diligence screening report, and it has become clearer with this new information that there is likely to be some localised waste burial areas in the central area of the site. This has been factored into our alternative proposal in any case, and it would not alter the original proposal/scope.
36. This was apparently the first time that Mr Wu became aware of potential contamination issues. It is clear, however, that the March 2022 aerial photographs attached to the draft JKE report show the existence of the Pits, albeit covered over.
37. A final report was issued by JKE dated 14 June 2022. The Executive Summary was slightly different (being the underlined words below) to that contained in the draft report sent on 16 March 2022. In relation to "Fly-tipping/imported fill" the report stated: Although there was no evidence of widespread filling or widespread fly-tipping on site based on a review of the historical aerial photographs and the site walkover inspection, localised impacts from these activities could exist. Two localised waste burial pits were evident to the south of the buildings on the 191 Bells Lane property circa 2012 (see Figure 2a). These pits appear to have been covered over with material to conceal the waste circa 2020.
38. Under the heading "Contamination", the report stated: Based on the findings of the screening, it is our opinion that the potential for significant, widespread site contamination is relatively low and we do not foresee contamination being a major constraint to a residential subdivision development at the site. Localised impacts from contamination could be present, primarily around the existing/former buildings and structures, timber power poles, or from localised filling or fly-tipping etc (including the waste burial pits on the 191 Bells Lane property). A Detailed Site Investigation (DSI) would be required to assess these AEC and the associated contamination risks.
39. JKE was not retained to carry out a detailed site investigation. ENRS was retained. Mr Rohan Last, together with colleagues from ENRS, attended the Land on a number of occasions. ENRS prepared two reports: 1. A report dated 19 December 2022 entitled "Preliminary Summary of Detailed Site Investigation Results 191 Bells Lane, Meroo Meadow NSW 2540" (Summary DSI Works Report); and 2. A report dated 11 July 2023 entitled "Data Gap Investigation Report" (DGI Report or 11 July 2023 Report).
40. During the course of his work, Mr Last analysed the contents of the Pits including by excavating a number of test pits, some of which were laboratory analysed.
41. The outcome of that work is summarised at section 9 of the ENRS report (revised) of 11 July 2023 which provided (the area of the Pits being defined in the ENRS report as Area of Environmental Concern 03 or AEC 03): Based on this review of aerial imagery, test pit observations, and the results of NATA accredited laboratory soil analysis, the following discussion are conclusions are provided regarding AEC03: Test pit investigations indicate the lateral extent of fill is relatively consistent with the pre-filling imagery. The quantity of fill in AEC03 is estimated to comprise approximately 3,000 m3 or 6,000 Tonnes based on the following primary areas and depths: Northern Pit 1 approximately 600 m2 with average depth of 3 m, equivalent to ~1,800 m3. Central Pit 2, approximately 561 m3 comprised of: o deep fill area approximately 105 m2 with average depth of 3.3 m, equivalent to ~346.5 m3. o shallower fill area approximately 165 m2 with average depth of 1.3 m equivalent to ~214.5 m3. Southern Pit 3 approximately 390 m2 with average depth of 1.4 m, equivalent to ~558 m3. Adjacent areas of disturbance approximately 1,500 m2 with average depth of ~0.05 m, equivalent to ~75 m3. Soil samples were submitted for analysis of potential contaminants of concern including TRH, BTEX, PAHs, heavy metals, pesticides, PCBs, phenols, and asbestos. Laboratory results identified exceedances of the Site Assessment Criteria (SAC) in the Northern Pit 1 for F3 TRH (C16-C34), BaP, and arsenic. Chemical exceedances were not reported in Pit 2, whilst the southern Pit 3 reported a high result for lead which exceeds the SAC and triggers management as Restricted Solid Waste. Asbestos was uncovered in TP16 near the centre of Pit 2 comprising a large quantity of sheeting and fragments estimated to be greater than 10m2 or 100kg of asbestos in soil which requires removal under supervision of a licensed asbestos contractor. Asbestos was also observed in TP12/0.4m in the southern Pit 3 which exceeded the HSL and was within the accessible surface, being at a depth less than 0.5m. Fill in all three (3) bury pits comprised foreign materials characteristic of excavated road materials, building waste and agricultural waste including: large portions of concrete up to 1 m in diameter; angular gravel with bitumen; brick, ceramic, glass, plastic, steel, wire, carpet, orange geotextile material, PVC, and plastic end caps. Waste Tyres were also encountered in the base of Pit 1 and Pit 2 which are pre-classified special waste. Buried animal bodies and bones from cows were encountered near the base of fill in Pit 1 and Pit 2 which was consistent with anecdotal information provided by the landowner. Dead animals and parts are pre-classified as General Solid Waste (putrescible). Water seepage was observed near the base of test pits with wet silt and clay at depths greater than approximately 2.5m. The results indicate potential for the fill to generate leachate which may impact on groundwater and the adjacent water course noted to be within approximately 40 m of the fill areas. Further groundwater investigations would be required to assess for impacts from leachate on groundwater. In summary the investigation results document the bury pits comprise uncontrolled fill with exceedances of the SAC, foreign materials inconsistent with aesthetic considerations, and pre-classified wastes including waste tyres, special waste (asbestos) and animal waste (GSW). The results require the area must be remediated to remove unsuitable fill and waste for management under the Protection of the Environment Operations Act 1997 (POEO Act) and the Contaminated Land Management Act 1997. A Site Remediation and Validation Report (SRVR) will be required to document the remediation results and validate the AEC03 bury pits have been made suitable for the sensitive land use and proposed residential development. Remediation must be conducted in accordance with a Remediation Action Plan (RAP) prepared in accordance with the NSW EPA (2020) guidelines for consultants reporting on contaminated land.
42. Mr Last estimated that the cost of remediating the contamination in the Pits, in a worse case scenario that all of the contaminated material must be moved off-site, is $4.2 million.
43. It is against this general background - namely the discovery of contamination of the Land of which they were not aware at the time of entry into the Option Deed - that the Purchaser contends that the Vendor and Mr Crittle engaged in misleading or deceptive conduct in contravention of the ACL and fraudulent concealment.
44. Mr Wu, and his mother Jing Wang, the sole director of the Purchaser and one of two directors of the Mayrin Group, each gave unchallenged evidence that they were not aware at the time of execution of the Option Deed that the Land was contaminated and had they been so aware they would not have caused the Purchaser to enter into the Option Deed.

Is the land contaminated - the evidence of Mr Last and Mr Stuckey

1. The parties were at odds as to the extent to which the Land was contaminated.
2. The Purchaser relied on the evidence of Mr Rohan Last of ENRS. Mr Last is a hydrogeologist and environmental scientist who has over 20 years' experience in hydrogeology and contamination. Mr Last, together with colleagues from ENRS, attended the Land on several occasions. He prepared two reports setting out his observations and results. Mr Last also made two affidavits.
3. The defendants relied on the evidence of Mark Stuckey, a Senior Principal Soil Scientist, Hydrogeologist and Risk Assessor with Environmental Earth Sciences NSW. Mr Stuckey prepared a report dated 29 February 2024. Mr Stuckey has apparently visited the Land but none of the opinions expressed by him appeared to be based on anything observed when he visited the Land.
4. Mr Last and Mr Stuckey gave evidence in concurrent session which lasted for approximately half a day. Each was cross-examined by opposing counsel during this session.
5. Both Mr Last and Mr Stuckey were highly qualified and impressive witnesses.
6. The essential debate between Mr Last and Mr Stuckey was whether any conclusions could properly be reached now as to the extent to which the Land was contaminated and, consequently, the extent to which it would need to be remediated.
7. The launching point for this argument is an understanding of the National Environmental Protection (Assessment of Site Contamination) Measure 1999 (NEPM). Section 14 of the National Environment Protection Council Act 1994 (Cth) and the equivalent provision of the corresponding act of each participating State and Territory provides for the making of measures by the National Environment Protection Council and the matters to which they relate. The NEPM was made pursuant to this power.
8. Clause 5(i) of the NEPM provides that its purpose is to establish a nationally consistent approach to the assessment of site contamination to ensure sound environmental management practices by the community which includes regulators, site assessors, environmental auditors, landowners, developers and industry.
9. The NEPM provides for a staged site assessment process as set out in Schedule A to the NEPM. Mr Last admitted that, as a general rule, the NEPM represents best industry practice when it comes to the assessment of a site for potential contamination. It is clear however, that the NEPM is not a statute and should not be construed as such. The NEPM only provides guidelines and is not a rule book required to be followed to the letter.
10. Schedule A to the NEPM sets out the recommended general process for assessment of site contamination. That process includes: 1. Tier 1 - Preliminary site investigation (PSI). 2. Tier 1 - Detailed site investigation (DSI). 3. Tier 2 or 3 - Site specific risk assessment.
11. In the present case, it was not in dispute that the initial work performed by JKE could properly be described as a PSI. Further work was also carried out by ENRS when it was first engaged which would also ordinarily be part of a PSI, including further review of aerial photography.
12. The further work carried out by ENRS was part of a DSI. Mr Last in cross-examination confirmed on several occasions that he had completed all of the work involved in a DSI of AEC 03, but he had not yet written up his report which would also ordinarily be part of a DSI. In essence, the work was done but the report writing was not. This was because he was not instructed to carry out any further work after his 11 July 2023 report, pending the determination of the proceedings.
13. Mr Last agreed that he had not yet carried out a Tier 2 or 3 Site specific assessment. He also admitted in cross-examination that in relation to the chemical exceedances recorded in his 11 July 2023 report for arsenic, he had not performed all of the statistical work set out at 3.2.1 of Schedule B1 to the NEPM.
14. Nonetheless, Mr Last maintained his opinion that the Land (being relevantly AEC 03) was contaminated and needed to be remediated. In Mr Last's words, in response to a question as to whether there is sufficient information to "devise risk-based remediation strategies" (being the last aspect of a Tier 1 DSI under Schedule A to the NEPM, an affirmative answer to which obviates the need to carry out a Tier 2 or 3 Site specific risk assessment): [T]here's enough information to know that there's contamination there and remediation needs to be done, and then it's a matter of deciding what remediation method.
15. Mr Last went on to explain that he thought it would be unlikely that regulators would allow the asbestos to remain on site and be capped, and would require its removal, although the remediation method would be a matter required to be discussed with the client as to whether they wished to explore on-site remediation as an option.
16. An important matter to Mr Last in relation to whether the Land was contaminated and would need to be remediated were the aesthetic considerations called into play by 3.6.3 of Schedule B1 to the NEPM. At 3.6.3 it is observed that there are no specific numeric aesthetic guidelines and that "[c]aution should be used for assessing sensitive land uses, such as residential, when large quantities of various fill types and demolition rubble are present."
17. Based on his observation and testing, this was the situation at the Pits on the Land - there were large quantities of uncontrolled fill.
18. The essence of the criticism levelled by Mr Stuckey against Mr Last's conclusion that there was contamination in the Pits which needed to be remediated, was that it was not until all of the work identified in Schedule A to the NEPM, and in particular a Tier 2 or 3 Site specific risk assessment was performed that any conclusion could be reached as to whether the Land was contaminated and, if so, whether it needed to be remediated and in what way.
19. Mr Stuckey also referred to not having sighted certain supporting documentation required by the NEPM in relation to the work which Mr Last contends he carried out, although this criticism can be easily dealt with as Mr Last confirmed that he had the required supporting documentation and the defendants had not asked for it to be provided.
20. In an affidavit made 8 March 2024, Mr Last responded to Mr Stuckey's report. In that affidavit Mr Last included further photographic evidence of multiple broken asbestos sheets mixed in with clay fill at the Land. He also emphasised that his approach was heavily influenced by the facts that at least part of the Pits is contained in area zoned environmental and in any event are close to the creek.
21. Notwithstanding the matters raised by Mr Stuckey - particularly as to a Tier 2 or 3 Site specific risk assessment not having yet been carried out - I accept Mr Last's conclusion that it can be concluded that the Land is contaminated and will need to be remediated in some way. The contamination is not de minimis.
22. Mr Last visited the Land on several occasions and performed considerable work to seek to identify the extent of the contamination. Whilst Mr Stuckey has apparently visited the Land he does not appear, among other things, to have performed any testing and none of the opinions he expressed were based on anything he saw on the Land. Rather, the essence of Mr Stuckey's evidence was to criticise what Mr Last did. Mr Stuckey frankly admitted that the fact that Mr Last had attended the Land and performed certain works, gave him an advantage over Mr Stuckey in expressing opinions in relation to the aesthetic issues and completing an assessment of whether remediation is required.
23. Further, Mr Stuckey's report and the opinions expressed in it proceed on the basis that only two fragments of asbestos were identified in AEC 03. This ignores the observational evidence of Mr Last - on which he was not challenged - of having exposed what he estimated to be over 100 kilograms of bonded asbestos and having then terminated the work of further exposing that asbestos for safety concerns.
24. I found Mr Last to be an impressive, qualified expert who had performed significant work on the Land to estimate the extent of the contamination. Whilst I accept that not all of the work which the NEPM sets out has been carried out - which Mr Last also accepted - I accept his ultimate conclusion that, in effect, he has seen enough to come to the conclusions that he did. There is nothing in the NEPM which prevents this conclusion being reached, even if the NEPM was to be regarded as a rule book, which it is not. The fact that Mr Last is not unable to make a definitive determination that the asbestos and other contamination will need to be removed - although he said this was likely - does not significantly undermine the Purchaser's case in this regard, particularly having regard to the view that I take as to the scope of the pleaded case as set out elsewhere in these reasons - namely that the pleaded case is not as narrow as that contended by the defendants.

Objection to without prejudice communications

1. The Vendor took objection, at the hearing, to the receipt into evidence of certain statements made at a meeting that occurred on 3 May 2023 at the Berry Garden Café in Berry and thereafter at the Land. The Vendor contended that the statements were without prejudice communications and thus rendered inadmissible by s 131(1) of the Evidence Act 1995 (NSW) (the Act). Section 131(1) provides: (1) Evidence is not to be adduced of - (a) a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute, or (b) a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.
2. The essential dispute between the parties concerned whether the communications were in connection with an attempt to negotiate a settlement of a dispute. Evidence was admitted on the voir dire at the hearing. Mr Fernon SC for the Purchaser made it quite clear that he would not contend that by adducing evidence on the voir dire the Vendor was waiving any without prejudice privilege that would otherwise attach to the communications. I ruled at the hearing that I rejected the admission of the rejected to communications. These are my reasons for so doing.

The background to the meeting

1. On 7 March 2023, the Purchaser's solicitors wrote to the Vendor's solicitors a letter sent by email, headed "without prejudice save as to costs". The letter stated: We are instructed that the Grantee has discovered evidence of extensive filling operations and deposition of over 30,000 tonnes of waste (including potential asbestos containing materials) occurring throughout the Property between 2010 and 2021 (Contamination).
2. The letter went on to state that the Purchaser required the Vendor to immediately, and by the call option commencement date, carry out certain matters to remediate the Land. The letter also stated that if the Vendor was not prepared to carry out that remediation, the Purchaser was prepared to assume all responsibility in respect of the Contamination, as defined in the email above, provided certain amendments were made to the parties' contractual arrangements, including a reduction of the purchase price in respect of the Land approximating some $16 million. These were described in the letter as either the remediation option or the price adjustment option. The letter concluded by notifying the Vendor that if no agreement could be reached between the parties in relation to the above options, the Purchaser would have no choice but to consider its options, including reporting the Contamination to the relevant authority to ensure that the Contamination would be fully and properly remediated.
3. Attached to the letter was a quotation prepared by ENRS for site remediation and validation dated 23 February 2023.
4. In response to the letter of 7 March 2023, the Vendor's then solicitors sent a letter dated 9 March 2023. The letter was not marked without prejudice. The letter stated that the Vendor was not aware of any contamination and that "[b]efore our client can consider the matter further, we repeat our request for copies of the reports upon which your client is relying. A site map of the areas in question would also be very beneficial".
5. A copy of a report was forwarded by the Purchaser's solicitors to the Vendor's solicitors by email dated 16 March 2023. On 7 April 2023 a further communication was sent by the Purchaser's solicitors to the Vendor's solicitors asking whether the Vendor's solicitors have received instructions regarding the Vendor's position and warning that if no substantive response was received by 20 April 2023, the Purchaser will consider its options and take action including, reporting the issue to the relevant authority. By email dated 17 April 2023, the Vendor's solicitors responded to the effect that "our client has made preliminary investigations and requires an on-site meeting with your client prior to taking the matter any further." The communication requested some dates and times for that on-site meeting to occur.
6. The Purchaser's solicitors responded on 18 April 2023 stating: We are instructed that our client agrees to meet with your client on-site to discuss this matter. Our client is available on 1 May or 3 May at 11 am. Please confirm if either of these dates suits your client. Please also confirm that the meeting is intended to be between our respective clients only (i.e. without solicitors or consultants).
7. In response, the Vendor's solicitors indicated that the Vendor nominated 3 May 2023 at 11am.
8. A further email communication confirmed the time and that there were to be no lawyers or consultants present.
9. It is in that context that the meeting at the café in Berry occurred, followed by the parties attending the Land.
10. It is not in dispute that no party mentioned at the café meeting or thereafter on the Land that the discussions that were taking place or were to take place were on a without prejudice basis. This perhaps went without saying given the circumstances in which the meeting was arranged and that no lawyers were in attendance. Mr Crittle gave evidence that his understanding was that the meeting was held to discuss the Purchaser's allegation of the presence of Contamination in the Pits.
11. According to Mr Wu, at the meeting at the café at Berry, the following conversation occurred: Warren: Do you still want the site? Me: I want a clean site. The way the site is now with the contamination is not what we had agreed to when signing that deed... where did those pits come from? Warren: I filled that [the pits] in. It was a safety concern to me. There was a huge height difference to fill it in and make it flat so people can be safe. I was doing the wrong thing for the right reasons. [During this time Warren gesticulated with his hands to indicate the shape of the pits where bill had been buried]. Me: We found asbestos and tyres, and other things at the property when we were undertaking our most recent due diligence that we didn't know about before. Do you know anything about that?" Warren: I didn't know it was contamination...it was a safety concern so that is the reason it was filled in Warren: Do you want me to remediate the 2 pits or the entire site? Me: I am not law enforcement. I just want a clearance certificate so we can proceed with DA preparation. As you know, we want residential blocks to be put on the site. When will you formally respond to us? Warren: I will go back, chat to my lawyer and respond. Let's go for a drive around the site and I can show you the site whilst you are here.

1. When the parties then visited the Land, Mr Crittle apparently showed Mr Wu the pit area and said: Yes. You know I really tried to do the right thing and make it flat.
2. Mr Lu also gave evidence to a similar effect.
3. It appears as though the meeting on the Land ended by Mr Wu asking Mr Crittle when Mr Crittle's solicitors were proposing to respond to the 7 March 2023 letter. The Purchaser's solicitors followed up later that day with an email which stated: We understand that your client will provide a formal response to our letter of 7 March 2023 next week.
4. Mr Crittle in an affidavit, part of which was read on the voir dire, said that during the Land meeting Mr Wu said that he would not pay any more instalments on the property purchase unless Mr Crittle paid the $16,500,000 alleged cost of remediation or deducted that cost from the purchase price. (This was obviously a reference to the figure mentioned in the 7 March 2023 letter). He apparently also said words to the effect of: "That's final. No negotiations." Mr Crittle did not agree to this position. Mr Wu said that he had no recollection of saying the words "That's final. No negotiations.", although he agrees that he gave Mr Crittle the option of either giving him a clean site or deducting approximately $16,500,000 and that there was discussion during the meeting about whether Mr Crittle was going to remediate the site.

Relevant legal principles

1. The principles relevant to whether a communication is protected under s 131(1) of the Act were considered by Bromberg J in Barrett Property Group Pty Ltd (ACN 088 015 267) & Anor v Dennis Family Homes Pty Ltd (No 2) (2011) 279 ALR 12 at [31], [33]-[34] and [36]-[39]. His Honour relevantly stated: [31] Whether or not there was an attempt to negotiate a settlement involves an analysis of the communications made, taking into account the content of each communication and the context in which each was made. The starting point, however, is what s 131(1) means by the phrase "negotiate a settlement". For that purpose, reference should be made to the purpose and policy objectives of s 131. … [33] It is in the public interest that disputes be quelled or resolved. A dispute may be resolved through one or both parties compromising their positions. Equally, a dispute may be resolved by one party fully conceding the claim of the other including by the claimant withdrawing its claim. Resolution of a dispute does not necessarily require compromise by each party. Disputes are regularly resolved without any compromise, including by a claimant withdrawing its legal proceeding or the threat thereof. [34] Section 131(1) speaks of an attempt to negotiate a settlement. It does not require an attempt to negotiate a compromise in which some middle ground is found. The applicants emphasise the word "negotiate", as though it necessarily connotes a willingness by every party to the dispute to compromise. In the context of the phrase "in connection with an attempt to negotiate the settlement of the dispute", the word "negotiate" simply means to arrange for or bring about a settlement: see Macquarie Dictionary (5th ed, 2009). … [36] The applicants relied upon Buckinghamshire County Council v Moran (1989) 3 WLR 152, where the English Court of Appeal held that a particular communication did not amount to an offer to negotiate, but simply to an assertion of the defendant's rights. However, the judgment is not to be read as suggesting that an assertion by a person of its rights or an expression of its position, can never amount to an attempt to negotiate a settlement. Any suggestion of that kind would defy both common sense and common experience. [37] As Spigelman CJ observed in Bhagat at [29], much depends upon context and characterisation. A communication denying or dismissing a claim may invite litigation rather than settlement. The letter from the respondent's solicitors of 13 July 2005 is an example of a communication which asserted the respondent's rights and or its position but did not contemplate any kind of negotiation at all. [38] Conversely, the impugned communications accompanied the assertion of the respondent's rights and its position with an invitation to negotiate. That is, an invitation to arrange for or bring about a settlement. [39] The communications in question involved a without prejudice letter, followed up on the same day with an invitation to attend a meeting; the meeting of 25 July 2005; and a further without prejudice letter. Whilst not conclusive, the presence of the words "without prejudice" on written communications is prima facie evidence that the communication was intended to be a negotiating document: Amos at [344]. That prima facie position has not been dispelled by any other evidence. To the contrary, that what was contemplated was a negotiation is confirmed by the other evidence. That evidence includes the invitation to attend and the participation of the parties in the meeting of 25 July. Additionally, the personal nature of the communications, occurring as they did, between clients on a personal level and without their respective lawyers, is an added indicator that settlement, rather than litigation, was in contemplation. (See also Galafassi v Kelly (2014) 87 NSWLR 119 at [115]-[122] per Gleeson JA (with whom Ward JA agreed)).
2. In Slea Pty Ltd v Connective Services Pty Ltd & Ors [2017] VSC 232, Almond J stated at [20] and [24]: [20]…The words "in connection with" are to be construed broadly. … [24] It is important to emphasise that these sections of the Act further the public interest that parties engaged in an attempt to compromise litigation (for example, at a mediation) feel free to communicate openly and honestly with one other without the risk of subsequent embarrassment or liability. To overly dissect or disaggregate statements made at a mediation to determine whether particular statements were made in connection with an attempt to negotiate a settlement would undermine this purpose. This case is an example where context is crucial to the analysis.

Determination of without prejudice privilege claim

1. In my view, the communications that took place on 3 May 2023 had the relevant nexus to an attempt to negotiate a settlement of the dispute so as to be protected by without prejudice privilege. What was being discussed on that occasion was, clearly, the respective positions of the parties in relation to the contention of contamination that had been raised by the letter from the Purchaser's solicitors dated 7 March 2023. This was done in a meeting between clients only without their solicitors present, in an attempt to resolve the dispute.
2. The objected to evidence suggests a relatively frank exchange of positions by both parties. The position that was adopted by the Purchaser was that set out in the letter dated 7 March 2023, namely for the Vendor to remediate the site or for the purchase price to be reduced by approximately $16.5 million. Mr Crittle did not agree with this position.
3. The fact that there was no negotiation or compromise on either side does not gainsay the relevant nexus between the communications and the attempted settlement of the dispute.
4. The policy underlying the privilege and the relevant provisions of the Act strongly supports upholding the application of the privilege to the communications in the present case. The circumstances of the meeting were such that that the law, through the upholding of the privilege, encourages the parties to exchange views and positions freely without fear of statements made being later used against a party.
5. I should also add that nothing in the material that I rejected would have altered the conclusion I have reached that there was no misleading or deceptive conduct. The rejected evidence is in substance no different to the evidence that Mr Crittle gave in chief that he filled in the Pits out of concerns for safety.

The Credit of Mr Crittle

1. The only lay witness to be cross-examined at the hearing was the second defendant, Mr Crittle. I treat Mr Last as an expert witness, notwithstanding that some of his evidence was observational. None of the Purchaser's lay witnesses were required for cross-examination.
2. Mr Crittle was cross-examined for nearly a full day, the transcript of his cross-examination running to approximately 90 pages. Mr Crittle was subject to a sustained credit attack and it was ultimately submitted that I should not accept his evidence.
3. I found Mr Crittle to be an unsatisfactory witness in a number of respects. He frequently gave non-responsive answers. I formed the distinct impression that, on occasion, he was not being completely frank with the Court in answering questions.
4. Example of the evidence given by Mr Crittle that fall into this category are: 1. Mr Crittle's contention that he had no knowledge of the waste in the Pits at particular times even though it is clear that at the times in question work was being carried out filling in the Pits and Mr Crittle was the person driving the bulldozer that was carrying out that work. One example is the existence of tyres in 2017, another is the waste present in August 2020. 2. Mr Crittle's denial that he was aware that the Purchaser was purchasing the Land to undertake a residential sub-division. Mr Crittle's response was to refer the cross-examiner to the contract for sale of land which made it clear that the Land was being sold as farming land. It was also clear from the provisions of the contract that it was the Vendor/Mr Crittle that was to continue the farming pursuant to a licence granted by the Purchaser. The objective material all favours Mr Crittle being aware that the Land was being bought for residential sub-development. This includes the rezoning; the information provided to the Purchaser by Savills, which referred to the planning status of the Land; the original offer from the Purchaser addressed to Mr Crittle, which made it clear that the Purchaser was partnering with Walker Corporation, a well-known property development company, known to Mr Crittle as he admitted they were interested for a period in buying the Land; the substantial increase in the purchase price from $1.6 million to $88 million; the unchallenged evidence that Mr Wu was told by Mr Cook of Savills that Mr Crittle was interested in the Mayrin Group acquiring the Land to develop it for residential housing; and the statement made by Mr Crittle to Mr Wu at the time of agreeing the terms of sale to the effect "[y]ou are going to make a lot of money". 3. That Mr Crittle lost interest in the development issues and was only interested in farming. This coincided with Mr Crittle's evidence about leaving the Owners Group which originally Mr Crittle said he was unable to recall when, but later he said this was "midstream" which seemed to be an attempt to move his involvement in and knowledge of what was going on with the Land from a development perspective to as far away from 2020 when he decided to sell. The objective material makes it clear that Mr Crittle was making deputations to Council some time shortly prior to 6 October 2020. 4. Mr Crittle's refusal to admit that the increase in price for the Land from the $1.6 million that he paid for it to $85/88 million was because of changes to the Shoalhaven LEP permitting residential development of the Land. 5. Inconsistent answers given by Mr Crittle about whether he was aware an intending purchaser would be concerned to understand if there was any potential contamination on the Land.
5. Mr Robertson SC for the defendants contended that in considering Mr Crittle's credit and evidence overall, I should have regard to the fact that in the afternoon of his cross-examination I was faced with a tired and cranky witness which was understandable in what for Mr Crittle and his family was "bet the farm litigation". He was in an unfamiliar environment with "people wearing funny wigs and robes" and he was being called a liar and a fraud.
6. I take all of these matters into account in assessing Mr Crittle's evidence. I am still left with some concerns. Ultimately, I treat his evidence with caution and consider each aspect of it on its merits.
7. As set out elsewhere in these reasons, there are a number of matters where I do accept Mr Crittle's evidence including: 1. His knowledge as to what was in the Pits, either at the time that he purchased the Land or what he put into the Pits. 2. His denial that he was aware that asbestos was contained in the Pits. 3. His denial that he filled in the Pits so as to cover up the contaminated material that he knew was in them so as to avoid a purchaser of the Land discovering the contamination.

The Pits, their contents and Mr Crittle's knowledge

1. Central to the alleged misleading or deceptive conduct is the contents of the Pits located on the Land. The area of the Pits was generally referred to in the expert reports of ENRS and Mr Stuckey (for the defendants) as Area of Environmental Concern 3 or AEC03.
2. Mr Last and his colleagues at ENRS estimated that the northern pit was approximately 600 square metres in size with an average depth of 3 metres. The central pit was approximately 105 square metres with an average depth of 3.3 metres and the southern pit was approximately 390 square metres with an average depth of 1.43 metres. His 11 July 2023 report also sets out the contents of the Pits. I have dealt elsewhere in these reasons with whether the contents meant that the Land has contaminated and needed to be remediated. The more important issue is Mr Crittle's knowledge of the contents, to which I now turn.
3. A number of aerial photos of the Pits were in evidence. It appeared to be common ground that, apart from the material that Mr Crittle admitted he placed into the Pits during his period of ownership, it was not possible to determine when the material was placed in them.
4. An aerial photograph from July 2012 clearly shows the existence of the Pits with rubbish material in the northern and southern pits with the central pit being heavily grassed over. This photo appears to be closest in time to when the Vendor purchased the Land.
5. Mr Crittle gave evidence that at the time of the purchase of the Land "there were three existing silage pits" located approximately 160-170 metres southwest of the principal dwelling on the Land. Mr Crittle believed the Pits were originally designed as storage for silage and hay to feed cattle in times of drought and during winter.
6. He agreed in cross-examination that at the time of the purchase, the Pits were not being used as silage pits but rather contained general farm building waste. This appears consistent with the aerial photos. Mr Crittle was adamant that he did not observe any asbestos in the Pits. I accept this evidence.
7. It is not possible to draw from an examination of the aerial photographs any firm conclusions as to what material may have been placed into the Pits after the Vendor purchased the Land, apart from what Mr Crittle admitted to placing in the Pits. The photographs are not of sufficient quality.
8. Mr Crittle gave evidence in chief that between 2017 to 2020, in addition to using the old road base to fill in the Pits, he carried out several works which slowly contributed to the filling of the Pits, being: (a) Re-installing fencing to enable the management of livestock. Although I reused most of the old star post fencing, steel posts, and wires already on the Farm when Crittle P/L bought it, some of those fencing materials were too old or damaged for repair or re-use. I disposed of the unusable fencing materials into the Pits. This would not have been a significant amount of fill. (b) Dam cleaning and soil erosion control works. This required the digging out of materials and waste (mainly organic waste such as rocks and soil) that is carried by water into the dams and which builds up over time. This material, as well as similar materials from the banks of the dams, was removed and placed by me in the Pits. (c) As noted above, over time, the Pits themselves were badly eroding, particularly the North Pit as it was the largest with the steepest and biggest drop. The erosion weakened the walls of the Pits and caused an unstable, increasingly vertical drop in each of the Pits. As a result, I would occasionally use a dozer to sure up the walls of a Pit, even if that meant pushing some of the wall down to make something of a batter to sure up the wall to limit erosion. (d) Helen would occasionally put rose bush cuttings and other general organic garden waste into the North Pit, being the pit nearest to the farmhouse and the gardens on the Farm. Although Helen worked on the farm with me, we did not live on the Farm, and more than that, Helen did not operate any of the machinery, including tractors, dozers, and trucks. So far as I am aware, Helen did not have any dealings with the Pits, other than to place occasional household waste in them, nor did she have any role in the filling of any of the Pits. (e) In 2018, twelve cows were poisoned from ingesting hay purchased during the drought from a third party which contained traces of nitrate, resulting in them dying. The cows were inspected by a veterinarian, and we were instructed to bury their carcases. I buried their carcasses in the North Pit and covered them using the old road base and material derived from cleaning up the dams.
9. As of 2017, the aerial photographs appear to show a number of tyres in the northern pit, but the quality of the earlier photos does not allow a firm conclusion to be reached as to when they were placed there. Mr Crittle gave evidence that he did not place them in the Pits and that they were present when he purchased the Land.
10. Work to fill in the Pits appears to have commenced in late 2017 in the northern pit. This work was carried out by Mr Crittle using his own bulldozer and a number of the aerial photographs depict the bulldozer at or near the northern pit at various stages of it being filled in.
11. Mr Crittle gave evidence in his affidavit that he filled in the Pits out of safety concerns - both for his friends and family and the animals on the Land. His evidence in chief was that he intended to fill the Pits in from the time that the Vendor purchased the Land. Although he says he became increasingly concerned over time, it was not until 'around 2017' that work commenced. According to Mr Crittle he was 'unable to fill the Pits in immediately as other more pressing tasks on the Farm took precedence.'
12. Work in filling in the Pits apparently coincided with the necessity to construct a new driveway into the Land as the old driveway was deteriorating. Mr Crittle was able to use the "tarry, loose gravel road base" from the old driveway as fill for the Pits. This work of replacing the old driveway apparently took several years and was not completed until around 2020. This timing coincides with the aerial photographs which show that the filling in of the Pits was completed in 2020 shortly prior to the Vendor placing the Land on the market for sale.
13. Mr Crittle was heavily challenged on this evidence in cross-examination - it being suggested to Mr Crittle that he filled the Pits in, not out of any concern for safety, but rather to conceal the existence of the Pits in connection with a plan to sell the Land. It was also suggested that Mr Crittle did not use the material from the driveway for fill but rather sourced fill from off site.
14. I have some difficulty with Mr Crittle's evidence as to why he filled in the Pits.
15. The delay in carrying out the work, if indeed the Pits were filled in due to safety concerns, is a little difficult to understand, particularly where those concerns related to both children and animals. There was also no probative evidence put forward by the defendants as to the length of the driveway and the work involved in replacing it to support the contention that the replacement work took several years.
16. I am conscious, however, not to be infected by hindsight or the fact that these proceedings are focussing on the filling in of the Pits as if this was the most important matter at the time. The Land was a working farm where no doubt there were a number of competing priorities and finite resources.
17. I also bear in mind that at the time that Mr Crittle commenced filling in the Pits in 2017 there was nothing to indicate that a sale of the Land was imminent. Put another way, there is nothing to really link the filling in of the Pits with a desire to conceal their contents so that those contents would likely not be uncovered by any intending purchaser.
18. Further, whilst it is clear that the work filling in the Pits was completed in 2020 and that the putting of the Land on the market occurred in November 2020 shortly after the Council meeting in October 2020 at which it was resolved to endorse the preparation of a planning proposal to amend the provisions of the Shoalhaven LEP relating to the Moss Vale Road North Urban Release Area and to submit that planning proposal to the NSW Department of Planning, Industry and Development for a gateway determination, there is nothing to link these events clearly together as was, in effect, contended by the Purchaser.
19. It was not clearly demonstrated that the Council resolution on 6 October 2020 would necessarily add significantly to the likely value of the Land as opposed to other lots the subject of the rezoning, so as to link it to the decision to sell.
20. With some hesitation, I accept Mr Crittle's evidence that he filled the Pits in out of safety concerns. I also reject the contention that he filled them in because he knew they contained contaminated material which he wished to conceal from intending purchasers.
21. I accept, however, that Mr Crittle did not have any precise knowledge of what was in the Pits, save for what he says he put into them (as set out above) and save for the tyres which are clearly evident in the photos of the northern pit from 2017 and 2018. In particular, I accept Mr Crittle's evidence to the effect that he was not aware that the Pits contained asbestos. There is nothing to suggest that the asbestos was exposed at any stage and Mr Last gave evidence of a statement made by Mr Crittle at the time that Mr Last discovered the asbestos when he was carrying out excavation work to assess the contents of the Pits to the effect that he (Mr Crittle) was not aware of any asbestos. Mr Crittle also gave evidence of disposing of some material that he thought, but did not know, might have been asbestos when he demolished a structure on the Land. He took it to a waste transfer station which demonstrates a responsible and not cavalier approach to asbestos.
22. I also accept Mr Crittle's evidence that he did not believe that the contents of the Pits raised any substantial contamination concerns at the time that he filled them in and thus accept his denial that he filled them in to hide their contents being contaminated waste.
23. Whilst I found Mr Crittle to be an unsatisfactory witness in a number of respects as I have outlined above, he did not strike me as a person with a cavalier attitude towards matters of land contamination. In relation to the substance which he suspected, but did not know, was asbestos, he disposed of it in an appropriate manner. He was not otherwise aware there was asbestos in the Pits.
24. He gave quite clear evidence that he did not investigate what was in the Pits because he did not have any concerns about contamination. I do not regard this as demonstrating a lack of care or, worse still, wilful blindness. Rather, I accept that Mr Crittle did not regard what was in the Pits - the farm building waste and the tyres that were apparently in the Pits when he purchased the Land and what he or his wife put in them - as of any real concern. I keep in mind that this was a working farm at which, from about 2015 onwards, at least one of Mr Crittle's adult children resided at. At all times Mr Crittle's cattle and horses were able to traverse the Land including the area of the Pits and to drink from the creek or the casual water course near the Pits. It is unlikely in these circumstances that Mr Crittle would allow what he knew to be an environmental hazard to go unremedied or wilfully avert his eyes to the issue for fear of finding out that it was a major problem.
25. Insofar as the tyres in the Pits are concerned, Mr Crittle gave evidence that he did not regard them as posing a contamination risk. Tyres were, in Mr Crittle's experience, used in a number of applications on farms including controlling soil erosion or holding down tarpaulins used in silage pits. It was not demonstrated by the Purchasers that the position in relation to tyres is so obvious that Mr Crittle's evidence in relation to tyres should not be accepted.
26. The same may be said about the dead cows and the tarry loose gravel road base. On Mr Crittle's evidence the tarry road base came from the driveway at the Land. The Purchaser appeared to contend that it must have come from off-site, although this has not been demonstrated. Mr Crittle's evidence was that he was instructed to bury the twelve dead cows.
27. It is also of some relevance that although filling in the Pits and grassing them over would have some effect in hiding their existence and, more importantly, contents, there would still be a significant chance that their existence and contents would be uncovered as the work, initially of JKE and more recently of ENRS shows. The historical aerial photographs show the existence of the Pits in their uncovered state. They were readily available online. Ordinary contamination testing involves some sub-surface testing. The ineffectiveness of the so-called covering over bears on the likelihood that concealment of known contamination was the motive for filling them in.

Dispute in relation to the pleaded case

1. A dispute arose at the commencement of the hearing as to the scope of the Purchaser's case, and in particular whether the case advanced was confined to the concept of "Contamination" as pleaded in the statement of claim filed 19 September 2023 (Statement of Claim) and the failure to disclose the "Contamination", as opposed to some broader case such as a failure to disclose the existence of the silage pits simpliciter. Mr Robertson SC made it clear in opening and throughout the hearing that he was conducting the case on the pleadings and was not consenting to any case being conducted outside the pleadings.
2. In Miller & Associates v BMW Australia (2010) 241 CLR 351 (Miller v BMW Australia), French CJ and Kiefel J stated at [5]: The cause of action for contravention of statutory prohibitions against conduct in trade or commerce that is misleading or deceptive or is likely to mislead or deceive has become a staple of civil litigation in Australian courts at all levels. Its frequent invocation, in cases to which it is applicable, reflects its simplicity relative to the torts of negligence, deceit and passing off. Its pleading, however, requires consideration of the words of the relevant statute and their judicial exposition since the cause of action first entered Australian law in 1974. It requires a clear identification of the conduct said to be misleading or deceptive. Where silence or non-disclosure is relied upon, the pleading should identify whether it is alleged of itself to be, in the circumstances of the case, misleading or deceptive conduct or whether it is an element of conduct, including other acts or omissions, said to be misleading or deceptive. (emphasis added)
3. As with the pleading of BMW's case, the Purchaser's pleading in the present case was not a model of clarity.
4. Central to the pleading, and indeed to the dispute as to the scope of the case, was paragraph [12] of the Statement of Claim. It provides: Following the execution of Call Option, on or about 11 July 2023, Environment & Natural Resource Solutions (ENRS) issued a report which detailed that there was significant contamination of the Land by reason of extensive filling operations and waste deposition, to approximately three (3) metres in depth. Soil samples taken indicated that: (a) there were exceedances of the adopted Site Assessment Criteria (SAC); including for: C16-C34 Hydrocarbons; Benzo(a)pyrene TEQ (24.9mg/kg>3mg/kg SAC); arsenic and lead, being in excess of the site assessment criteria and high enough to trigger management as Restricted Solid Waste; and (b) there was asbestos contamination identified, including chrysotile asbestos - which exceeded the HSL and which requires removal under supervision of a licensed asbestos contractor; Particulars (A) Report of ENRS dated 11 July 2023, section 8.1 and 8.3, pages 6-7; (B) Report of ENRS dated 11 July 2023, section 5, page 3 and section 8.2 and 8.3, page 7; (Contamination).
5. Paragraphs [13] and [14] are also relevant to the scope dispute. They provide: [13] The Contamination was also identified in lesser detail in the Report of JK Environments dated 14 June 2022 and the Report of ENRS dated 19 December 2022. Particulars Report of ENRS dated 19 December 2022 at section 8.3, 8.6, 8.8 and 8.9, page 5 and Report of ENRS dated 19 December at 8.3, 8.5, 8.6, and 8.8, page 6. [14] Between about November 2017 and June 2021, the Vendor concealed the Contamination, as the location of the pits has been made level with the surrounding ground and was largely covered by grass (the Concealment). Particulars (A) Report of ENRS dated 19 December 2022 at section 5, page 3 and Reports ENRS dated 11 July 2023, section 5, page 3; (B) statements made by Mr Crittle to the Chief Executive Officer of the plaintiff, William Wu (Mr Wu), including "I filled that in. It was a safety concern to me. There was a huge height difference to fill it in and make it flat so people can be safe. I was doing the wrong thing for the right reasons."
6. Paragraph [16] was relied on by the defendants as giving context to what was meant by "significant contamination" in paragraph [12]. Paragraph [16] provides: [16] As a consequence of the Contamination, the Land must be remediated to remove unsuitable fill and waste for management under the Protection of the Environment Operations Act 1997 and the Contaminated Land Management Act 1997 and further, a site remediation and validation report would be required to document the remediation results and validate that the filling and waste deposition pits had been made suitable for ongoing land use and proposed residential development. Particulars Report of ENRS dated 11 July 2023 at section 9, page 9.
7. The Statement of Claim then alleges three non-disclosures, defined as Non-Disclosure 1 at [28], Non-Disclosure 2 at [32], and Non-Disclosure 3 at [34], in the following terms: [28] Notwithstanding that knowledge, as described in the immediately preceding paragraph, the Vendor did not at any time before, during or after the carrying out of the Due Diligence Enquiries or Due Diligence Actions, provide information to the Purchaser or JK with respect to the Contamination (Non-Disclosure 1). [32] During the negotiation of the Call Option, the parties were communicating with regard to a certificate of non-compliance for sewerage drainage and septic tanks and during those communications, in circumstances where issues impacting the quality of the Land were positively being discussed, the Vendor did not disclose the Contamination (Non-Disclosure 2). [34] The Vendor did not include in any of the 'Disclosure Documents', or any document the subject of the Contract for Sale of Land, any matter connected to, or arising from, the Contamination notwithstanding the knowledge of the Development Purpose (Non-Disclosure 3). Particulars Email from Hicksons to representative of the Purchaser dated 11 March 2022.
8. Paragraph [36] to [39] then allege: [36] In the premises, by reason of the Purchaser expressly making known to the Vendor the Development Purpose, particularly in the context of the Re-zoning, the Due Diligence Enquiries Actions, the circumstances were such that the Purchaser had the reasonable expectation that the Contamination would be disclosed to it prior to it executing the Call Option (Reasonable Expectation of Disclosure). [37] As a consequence of the Reasonable Expectation of Disclosure, the Vendor and Mr Crittle ought to have disclosed the nature of the Contamination, before the execution of the Call Option, but failed to do so (Failure to Disclose). [38] The Vendor carried out, or alternatively instructed others to carry out, or alternatively knew of, the Concealment, instead of disclosing the subject nature of the Contamination. [39] The Failure to Disclose and the Concealment constituted conduct which did, or was likely to, mislead the Purchaser because of the Reasonable Expectation of Disclosure (Misleading and Deceptive Conduct).
9. Paragraph [40] then alleges that in the premises of paragraphs [17] to [39], Mr Crittle and/or the Vendor engaged in misleading and deceptive conduct or Mr Crittle was involved in the Vendor's contravention.
10. Central to the dispute appears to be whether the last sentence of paragraph [12] of the Statement of Claim in effect limits the case being run to the results of the soil samples as to the exceedances of the adopted Site Assessment Criteria and asbestos contamination was identified which requires removal under supervision of a licensed asbestos contractor.
11. Mr Fernon SC for the Purchaser contended that this was an overly narrow or pedantic reading of the pleading and that the case set out in the Statement of Claim focusses on the extensive filling operations and waste deposition. The soil samples were simply one characteristic of the waste. It was contended that this was supported by the Particulars provided to both paragraphs [12] and [13] which refer to the relevant ENRS reports - which refer more broadly to the contents of the Pits than the soil samples, and also, by a common-sense ordinary reading of paragraph [14] of the Statement of Claim. On no such reading of paragraph [14] could it be referring to concealing test results by levelling the Pits and covering them with grass. Self-evidently, the test results were not known at the time of the alleged concealment.
12. Alternatively, Mr Fernon SC contended that even if paragraph [12] of the Statement of Claim was to be construed narrowly, as contended by the Vendor, paragraphs [28] and [34] were sufficiently broad to encapsulate the need to disclose the existence of the Pits and their contents as those matters are "with respect to" the Contamination, as in paragraph [28], or are "connected to, or arise from" the Contamination, as in paragraph [34].
13. Mr Fernon SC also contended that the case propounded by the Purchaser relied on both positive misrepresentation and a failure to disclose in circumstances where the Purchaser had a reasonable expectation that the contamination would be disclosed.
14. Mr Robertson SC for the defendants contended that the Statement of Claim, properly construed, alleged that the contamination that should have been disclosed, was that alleged in subparagraphs (a) and (b) of paragraph [12], namely the exceedances alleged in subparagraph (a) and, in the case of subparagraph (b), was asbestos which exceeded the HSL and which requires removal under supervision of a licensed asbestos contractor. Reliance was also placed, in this regard, on the allegation in paragraph [12] that the contamination was 'significant contamination', paragraph [16] which alleges that the Land must be remediated to remove unsuitable fill and waste, and paragraph [37] which alleges a failure to disclose 'the nature' of the contamination.
15. As I understand the defendants' contentions, if the Statement of Claim is construed as they contend, then unless the Purchaser can demonstrate, for example, the chemical exceedances alleged in paragraph [12(a)] of the Statement of Claim, or that the asbestos is required to be removed from the Land as alleged in paragraph [12(b)] (and the defendants contend that the Purchaser has not demonstrated either) then the Purchaser's case will fail as it will fail to establish anything was misleading or deceptive.
16. I do not accept that the case propounded is as narrow as that alleged by the defendants. As set out above, the Statement of Claim is far from a model of clarity. Construing the Statement of Claim as a whole and in a common sense way (see Shell Company of Australia Co Ltd v Esso Australia Ltd [1987] VR 317 at 342 per Nathan J), including in light of the ENRS reports particularised, the case advanced by the Purchaser focusses on the contamination found by ENRS, being significant contamination in the sense that it was not nominal or trivial. I do not read the characteristics alleged in sub-paragraphs [a] and [b] of paragraph [12] as identifying essential matters such that, if they are not proved, then the Purchaser's claim must fail. These sub-paragraphs are relied on as characteristics of the contamination and why it is significant. The Purchaser relies on the sections of the ENRS reports particularised as to the nature of the contamination. The matters there set out go beyond the chemical exceedances and need for removal of asbestos, as opposed to the existence of asbestos in the Pits.
17. I do not accept, however, that the Purchaser's case is as broad as a failure to disclose the existence of the Pits simpliciter. Rather, the case is one about the contents of the Pits - containing significant contamination, including asbestos.
18. The claim also seems to me to be one clearly pleaded on the basis of non-disclosure, rather than any positive misrepresentation as contended for by Mr Fernon SC. No positive misrepresentation case is pleaded in the Statement of Claim. Nevertheless, I am not sure that much turns on this last point in circumstances where essentially the same conduct is relied upon by the Purchaser as giving rise to the alleged positive misrepresentation and the circumstances in which it was alleged that the Purchaser had a reasonable expectation of disclosure. Also, the authorities make it clear that all of the circumstances must be considered.

Misleading or Deceptive Conduct - Relevant Principles

1. Section 18 of the ACL prohibits a person in trade or commerce from engaging in conduct that is misleading or deceptive or is likely to mislead or deceive. Such a prohibition has been part of the law now for 50 years.
2. In Miller v BMW Australia at [14]-[15], French CJ and Kiefel J said in the context of s 18's predecessor: [14] In determining whether there has been a contravention of s 52 of the Trade Practices Act, it is necessary to determine "whether in the light of all relevant circumstances constituted by acts, omissions, statements or silence, there has been conduct which is or is likely to be misleading or deceptive". The term "conduct" is to be understood according to its definition in s 4(2)(a) and (b) of the Trade Practices Act, which includes a reference to "refusing to do any act". That, in turn, includes a reference to "refraining (otherwise than inadvertently) from doing that act". [15] For conduct to be misleading or deceptive it is not necessary that it convey express or implied representations.26 It suffices that it leads or is likely to lead into error.
3. In circumstances where the alleged misleading or deceptive conduct includes silence, French CJ and Kiefel J cited at [18], with approval, the concurring judgment of Black CJ in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 (Demagogue v Ramensky), in which it was stated at 32 that there was no such thing as mere silence, silence was to be assessed as a circumstance like any other: …the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or likely to mislead or deceive.
4. In Wormald v Maradaca Pty Ltd [2020] NSWCA 289 (Maradaca) at [111], Bell P (with whom Bathurst CJ and Payne JA agreed) identified certain key propositions to emerge from the High Court's decision in Miller v BMW Australia which bear repeating: Key propositions to emerge from the High Court's important decision in Miller include the following: • the language of reasonable expectation [found in cases such as Demagogue] is not statutory: at [19]; • in commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context: at [20]; • close analysis of all of the circumstances of a transaction embraces a consideration of the sophistication of the parties and their experience in their fields: at [91]; • the knowledge of the person to whom the conduct is directed may be relevant: at [20]. See also Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 319; [2009] HCA 25 at [26]; • the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business may also be relevant: at [20]; • the analysis is objective: at [20]; • the analysis is to be "unmediated by" high moral expectations exceeding the requirements of the general law: at [21]; • the statutory prohibition on misleading or deceptive conduct does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party: at [22]; and • the failure to make reasonable inquiries, whilst not automatically defeating a statutory claim for damages for misleading or deceptive conduct, is a circumstance that is relevant to a consideration as to whether a failure to make disclosure is correctly characterised as misleading: at [91].
5. Allied to the last two bullet points it is worth repeating what Gleeson CJ stated in Lam v Ausintel Investments Pty Ltd (1989) 97 FLR 458 (Lam v Ausintel) at 475: Where parties are dealing at arm's length in a commercial situation in which they have conflicting interests it will often be the case that one party will be aware of information which, if known to the other, would or might cause that other party to take a different negotiating stance. This does not of itself impose any obligation on the first party to bring the information to the attention of the other party, and failure to do so would not, without more, ordinarily be regarded as dishonesty or even sharp practice. It would normally only be if there were an obligation of full disclosure that a different result would follow. That would occur, for example, by reason of some feature of the relationship between the parties, or because previous communications between them gave rise to a duty to add to or correct earlier information.
6. As Bell P observed in [112] in Maradaca, Lam v Ausintel remains an important authority in this context.
7. To similar effect are the following observations of Macfarlan JA with whom Beazley ACJ and Payne JA agreed in Jewelsnloo Pty Ltd v Sengos [2016] NSWCA 309 (Jewelsnloo) at [86]: …the normal competitive basis upon which arm's length commercial parties deal with each other is not abrogated by statutory prohibitions on misleading and deceptive conduct. Such parties are not obliged to volunteer information to the others with whom they are dealing simply because they realise, or should realise, that it is of importance to the commercial interests of the others. There has to be something more that renders their silence misleading or deceptive.
8. I am also conscious of the observations of McHugh J in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at [111] to the effect that a corporation does not avoid liability for misleading or deceptive conduct because a person who has been the subject of misleading or deceptive conduct could have discovered the misleading or deceptive conduct by proper inquiries.
9. The parties were at odds in the present case as to whether, in the present case, it was necessary for the Purchaser to establish that the Vendor or Mr Crittle had actual knowledge of the matters which it was alleged were not disclosed.
10. I proceed on the basis that the law that I am to apply in this regard is as stated by Gleeson JA (with whom Macfarlan and Leeming JJA agreed) in OXS Pty Ltd v Sydney Harbour Foreshore Authority [2016] NSWCA 120 at [215]: The correct position is that the knowledge of the person whose failure to disclose is alleged to be misleading or deceptive will be relevant, but not necessarily decisive as to whether the non-disclosure is misleading. Thus in BMW Australia, the knowledge of the insurance broker, Miller, that the policy was not cancellable, was relevant to whether Miller's conduct in failing to disclose its knowledge of the policy to BMW was correctly characterised as misleading.
11. In Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 104 FCR 564, French J (with whom Beaumont and Finkelstein JJ agreed) said at [66]: In a case where disclosure would reasonably be expected of a fact if that fact were known to a corporation, failure to make disclosure may convey the implication that that fact is not known. (see also Fabcot Pty Ltd & Anor v Port Macquarie-Hastings Council [2011] NSWCA 167 at [209] per Sackville AJA with whom Beazley and Campbell JJA agreed).
12. The Purchaser also relied on the cases which demonstrate that actual knowledge may be proved by inference where it is shown that there was reckless indifference or a failure to make inquiry in combination with suspicious circumstances: see, for example, Pereira v Director of Public Prosecutions (1988) 82 ALR 217 at 220.
13. I did not understand the defendants to dispute that actual knowledge might be inferred. The defendants contended that what was necessary was 'blind-eye knowledge' in the sense discussed by Lord Clyde in Manifest Shipping Co v Uni-Polaris Insurance Co [2003] 1 AC 469 at 481 [3], of 'at least a suspicion of a truth about which you do not want to know and which you refuse to investigate'.
14. I do not regard it as necessary for a plaintiff such as the Purchaser to prove that any non-disclosure was other than inadvertent, i.e., it was intended not to be disclosed.
15. As Nettle JA said in CCP Australia Airships Ltd v Primus Telecommunications Pty Ltd [2004] VSCA 232 (with whom Batt and Vincent JJA agreed) at [34]: …As to the law, the misleading and deceptive quality of remaining silent inheres in the non-disclosure of information; not in any refusal to provide it. Consequently, it does not follow from the fact that a failure to act must be intentional in order to be actionable, that silence must be intentional in order to be actionable. It is plain in principle and authority that it is not necessary that silence be intentional in order that it may constitute misleading and deceptive conduct for the purposes of s 52….

Did the defendants engage in misleading or deceptive conduct?

1. For the reasons set out below, neither of the defendants engaged in misleading or deceptive conduct.
2. As set out above, there was a lack of clarity as to how the Purchaser put is case. The Statement of Claim alleges three non-disclosures and concealment by filling in the Pits. The written submissions and closing oral submissions contended that the case was put on two bases - positive misrepresentation and non-disclosure in circumstances where there was a reasonable expectation of disclosure. The positive misrepresentation case was, as I understood it, a case purportedly based on a half-truth - what was said or done in the circumstances gave the impression that there was no contamination and in those circumstances the failure to correct the impression and disclose the contamination was misleading or deceptive.
3. Cases of half-truth are simply a species of misleading conduct by silence by where what is said or done gives rise to a reasonable expectation that if certain facts exist, they will be disclosed: see The Law of Misleading and Deceptive Conduct, 6th ed by Colin Lockhart at [5.21].
4. Having regard to the authorities referred to above, I propose to analyse the alleged misleading or deceptive conduct in light of all relevant circumstances including acts, omissions, statements or silence. In so doing, I will seek to deal with the separate bases contended for by the Purchaser.
5. The starting point is a consideration of the parties. The Purchaser is part of a large and experienced property development group. It had access to various professionals, including lawyers and environmental consultants, to assist it in relation to the transaction.
6. The parties were dealing with each other on an arm's length commercial basis.
7. Their interests were not aligned but rather were opposing.
8. Second, both parties utilised their own lawyers to document the two transactions they engaged in - first the Exclusivity Agreement and then the Option Deed which attached the Contract for Sale of Land.
9. It was the Purchaser that wanted an exclusivity period in which to carry out due diligence. The terms of the Exclusivity Agreement were, self-evidently, negotiated and then agreed between the parties. The fact that this negotiation appears to have occurred over a short period of time or that the exclusivity period was perhaps shorter than what Mr Wu and the Mayrin Group wanted, is of no moment. There is nothing in the circumstances of this case to suggest that the position adopted by the defendants on this timing somehow gave rise to some reasonable expectation on the part of the Purchaser that the defendants would disclose all that they knew in relation to the Land so that the Purchaser could be comfortable in accepting a shorter due diligence period than they otherwise would have wanted. Put another way, there was no quid pro quo for the shorter due diligence period of the defendants disclosing certain matters such as any knowledge of contamination.
10. The Purchaser was also squarely on notice from the proposal provided by JKE that the short due diligence period significantly curtailed the work that could be done to investigate contamination. So much would be obvious to an experienced property developer like the Mayrin Group.
11. Turning now to the terms of the Exclusivity Agreement. The Purchaser contended that the terms of the Exclusivity Agreement, properly construed, gave rise to an obligation on the part of the Vendor to disclose the existence of the contamination in the Pits. Principal reliance was placed on clauses 3(a)(ii), (iii) and (iv) of the Exclusivity Agreement which I have extracted above. I do not accept this contention. The terms of the Exclusivity Agreement do no more than impose obligations on the Vendor in relation to any due diligence which the Purchaser chose to carry out. They do not give rise to an obligation to disclose.
12. It was a matter for the Purchaser to determine the due diligence that it wished to carry out in relation to the purchase. Clause 3(a)(ii) of the Exclusivity Agreement imposed an obligation on the Vendor to allow the Purchaser access to such information held by the Vendor as is necessary to complete due diligence. It was self-evidently for the Purchaser to determine what information that the Vendor had which was necessary for the Purchaser to complete due diligence. It was not for the Vendor to guess and disclose what it thought was relevant. The sub-clause required the Vendor to allow access to that information - being what was required by the Purchaser - to the Purchaser. Sub-clause 3(a)(iv) imposed an obligation on the Vendor to ensure that such information provided (being that provided to the Mayrin Group for the purposes of completing its audits and enquiries) was accurate and not misleading.
13. Those two sub-clauses clearly complement each other. Read together, it is clear that the clauses relate to audits and enquiries made by the Purchaser as part of its due diligence, rather than imposing an obligation on the Vendor to divulge information.
14. The fact that Mr Crittle may have had his own views as to what may have been important to a purchaser of the Land, and that this may have included whether the Land was contaminated or not, does not alter the position.
15. Sub-clause 3(a)(iii) provides that the Vendor must assist the Mayrin Group and its agents as far as possible in the due diligence process. Again, this obligation is directed at the Vendor's conduct in the due diligence to be carried out by the Purchaser rather than being directed to the matters that the Vendor is required to disclose.
16. If it was intended that the Vendor was required to disclose certain information to the Mayrin Group during the exclusivity period, then a clause to this effect could easily have been included in the Exclusivity Agreement.
17. The Purchaser contended the disclosure was required under the Exclusivity Agreement because it was clear - and Mr Crittle ultimately admitted as much - that the due diligence process was about assessing whether or not there is a risk of contamination, and any knowledge Mr Crittle has about that subject should be disclosed because such disclosure would assist in the due diligence process. The submission was further developed by reference to the obligation being to assist 'as far as possible' - it being contended that it was obviously possible for Mr Crittle to disclose what he knew. Disclosure of the location of the contamination would clearly assist the due diligence process as it would allow the tester to take the samples and do the tests that are considered necessary in that particular area of concern.
18. I do not accept these submissions. The terms of the Exclusivity Agreement, properly construed, do not work this way in imposing such an obligation. Properly construed, the obligation is to assist (including not hinder) the due diligence audits and inquiries made by the Purchaser.
19. The terms of the Exclusivity Agreement make it clear that the Purchaser was wanting to carry out its own inquiries/due diligence and was not looking to Vendor and Mr Crittle to disclose, without more, what was known about matters which either might have thought were relevant to the Purchaser.
20. This conclusion is reinforced when regard is had to what occurred after execution of the Exclusivity Agreement. The Purchaser engaged JKE to carry out work in relation to contamination. Mr Crittle was not asked to disclose any information.
21. The Purchaser placed some reliance on the decision of Barker J in Metz Holdings Pty Ltd v Simmac Pty Ltd (No 2) [2011] FCA 981 (Metz) at [642]-[648].
22. Metz does not assist the Purchaser's case and is somewhat against it. In Metz, there was a contractual warranty to the effect that the first respondent warranted that it is not in possession of any knowledge or information which: 1. If unrevealed, could at a later date prove detrimental to or adversely affect the normal trading of the business; and 2. If revealed, could cause the first applicants to modify substantially the terms of the offer or withdraw the offer.
23. Barker J held (at [647]) that, in light of the contractual warranty, the respondents represented, quite independently of the sale agreement, that they were not in possession of such material information or knowledge mentioned in the warranty and that the first respondent represented it had disclosed to the applicants all material information relating to the business.
24. The Purchaser accepted that there was no equivalent warranty, or anything approaching it, in the present case. The absence of such a clause is, in my view, important in understanding what was conveyed by the defendants or what the Purchaser could reasonably expect to be disclosed. Absent a clause requiring that the Vendor would disclose information as part of the due diligence, it is difficult to derive any reasonable expectation of disclosure, particularly against the usual backdrop of caveat emptor which is apparent from the terms of the Contract for Sale of Land and given the opposing commercial interests of the parties.
25. Reference was also made to the decision of Hoeben J in Noor Al Houda Islamic College Pty Ltd & Anor v Bankstown Airport Ltd (2005) 215 ALR 625; [2005] NSWSC 20, where it was found that a tenant had a reasonable expectation that, had there been a risk of contamination, they would have been told by the landlord. Like all cases in this area, they ultimately depend quintessentially on their facts. Central to Hoeben J's conclusion that there was a reasonable expectation of disclosure was the approach taken in the discussions between the parties: see [183]. The facts of the present case show that quite a different approach was taken.
26. I turn next to consider the terms of the Option Deed and, more importantly, the form of Contract for Sale of Land annexed to the Option Deed. Clause 3(a)(i) of the Exclusivity Agreement required the Vendor to provide to the Mayrin Group a proposed draft contract for sale of the Land within one week of the date of the Exclusivity Agreement. The terms of the contract provide important context in considering what the Purchaser could reasonably expect the Vendor/Mr Crittle to disclose during the Exclusivity period.
27. The Purchaser contended that the terms of the contract supported the Purchaser's case. As I understood the submission, it centred on the matters that were disclosed by the Vendor in clause 11 of the contract and in the disclosure documents annexed to the contracts. So the argument ran, the fact that matters were disclosed, but not the contamination, meant that there were no other matters, and relevantly no contamination, to disclose.
28. I do not accept this submission. The terms of the contract do not assist the Purchaser's case and are in fact contrary to it. The contract makes it quite clear that the Land is being sold on an "as is" basis and the Purchaser acknowledges that it has inspected the Land and improvements being purchased and has satisfied itself as to its condition and state of repair and accepts it in its present condition and state of repair (cl 11.1). Clause 17.1 is to like effect.
29. Whilst it is clear that no reliance clauses such as are contained in clause 17.1 do not exclude a claim for misleading or deceptive conduct being brought, they go to the characterisation of the conduct: see Campbell v Backoffice Investments (2009) 238 CLR 304 at [29] per French CJ; at [130] per Gummow, Hayne, Heydon and Kiefel JJ.
30. The disclosures that are then made in clause 11 are clearly made "without limiting the generality of special condition 11.1". The contract makes it clear that these disclosures are being made by the Vendor for the purposes of s 55 of the Conveyancing Act 1919 (NSW) and the Conveyancing (Sale of Land) Regulation 2017. None of this avails the Purchaser.
31. The terms of the contract proceed on the ordinary basis of buyer beware. The fact that the clauses would only come into effect if the option was exercised - a matter relied upon by the Purchaser - is not to the point. The contract was on the table during the exclusivity period and the parties were locked into that contract once the Option Deed was executed. Having regard to the terms of the contract, any expectation by a Purchaser that they would be told matters contrary to the terms of the contract, would not be a reasonable one.
32. The other matters relied upon by the Purchaser as giving rise to a reasonable expectation that the contamination would be disclosed can be dealt with briefly.
33. First, the fact that the Land had been rezoned and that, as rezoned, it was required to be assessed for the potential of ground contamination, and that the Vendor was aware that the Purchaser intended to develop the Land for residential purposes, does not, in and of itself, give rise to any reasonable expectation. The terms of the Exclusivity Agreement and the proposed contract for the sale of land are more important.
34. Second, the fact that the Vendor was aware that the Purchaser wanted to carry out due diligence with respect to the Land does not take matters too far. The Exclusivity Agreement set out the rights and obligations of the parties in relation to the due diligence. Those terms do not assist the Purchaser for the reasons set out above.
35. Third, the Vendor's knowledge that the Purchaser was carrying out due diligence, and that this included an environmental expert attending the Land to investigate whether it was contaminated, does not give rise to any reasonable expectation in circumstances where the contract entered into between the parties setting out their respective rights and obligations did not oblige the Vendor to positively disclose anything.
36. The fact that the Vendor provided access to the Land for JKE to carry out testing in relation to, amongst other things, contamination, does not imply a positive representation that there is no contamination, or give rise to a reasonable expectation that if contamination did exist, it would be disclosed. Allowing access was doing no more than complying with the Vendor's obligations under the Exclusivity Agreement.
37. Finally, the fact that, as alleged at paragraph [32] of the Statement of Claim there were communications between the parties with regard to a certificate of non-compliance for sewerage drainage and septic tanks, does not go anywhere in circumstances there was nothing in the evidence to suggest those communications as reflected in the terms of the contract for sale of land (special condition 20) were part of a request for, or volunteering of, a general disclosure about issues impacting the quality of the Land. The communications were in the context of the contract which clearly proceeds on the basis of buyer beware/purchase on an 'as-is' basis.
38. In my view, there is nothing in the circumstances that gave rise to any reasonable expectation that the contamination would be disclosed. There was nothing to take the case out of the ordinary situation discussed in Miller v BMW, Lam v Ausintel and Jewelsnloo above.
39. I am conscious that each of Mr Wu and Ms Wang gave evidence - which was unchallenged - that they had an expectation that the contamination would be disclosed to them. The test is not, however, a subjective one. Rather, it is objective.
40. Further, even on the expanded case propounded by the Purchaser at the hearing, there was no positive representation by the Vendor that it had disclosed, in effect, that there was no contamination, or no contamination know to the Vendor/Mr Crittle.
41. There was, for example, no evidence of any dealings between the Purchaser and the Vendor where the Vendor was asked to disclose any matters or where the Vendor volunteered any such disclosure in circumstances where that conveyed that there was no other disclosure.
42. Insofar as the concealment claim is concerned, I did not understand this to involve any separate elements to the non-disclosure claim. In any event, in circumstances where there was no positive misrepresentation as to no contamination, no reasonable expectation that contamination would be disclosed and that the Land was being bought on an "as is" basis by the Purchaser, I cannot see how the actions of the Vendor and Mr Crittle in filling the Pits in involved any misleading or deceptive conduct.
43. The analysis set out above is sufficient for the misleading or deceptive conduct claims to be dismissed. It is thus not strictly necessary to consider issues in relation to Mr Crittle's knowledge of the contamination ultimately found on the Land. Had it been necessary to consider this issue I would have found that there was nothing in the circumstances to require disclosure of anything other than what Mr Crittle knew in relation to the contamination. I have set out my findings above in relation to what Mr Crittle knew and the scope of the pleaded case. I have found that Mr Crittle was not aware of the asbestos ultimately found in the Pits and also rejected the Purchaser's contention that the case as pleaded was broad enough to require disclosure of the existence of the Pits simpliciter. These findings provide a further reason as to why the misleading or deceptive conduct claims fail.
44. Mr Crittle's knowledge really went no further than that the Pits had been used to deposit some rubbish which, in substance, was really no different to what JKE alerted the Mayrin Group to the possibility of in the draft JKE report dated 16 March 2022.

The claims against Mr Crittle personally

1. Mr Crittle was also alleged to have engaged in misleading or deceptive conduct and to have fraudulently concealed the existence of the contamination.
2. Whilst there was no issue at the hearing that any conduct engaged in by Mr Crittle could be attributed to the Vendor, there was an issue as to whether Mr Crittle personally engaged in misleading or deceptive conduct or fraudulent concealment even if I was satisfied that the Vendor was in contravention.
3. In circumstances where it was the Vendor that was the party to the Option Deed and not Mr Crittle, and the present hearing concerns whether or not the Option Deed should be declared void as opposed to any claim for pecuniary relief, there is no utility in considering the separate claims against Mr Crittle. In any event, because the claims against the Vendor fail, the claims against Mr Crittle must also fail.

The claim of fraudulent concealment

1. In addition to alleging that the defendants engaged in misleading or deceptive conduct, the Purchaser also alleged that each of the defendants fraudulently concealed the existence of the Contamination (as defined at paragraph [12] of the Statement of Claim) and that accordingly the Purchaser is entitled to rescind the Option Deed.
2. In written submissions provided as part of the Purchaser's closing submissions the claim was framed in accordance with the principles of the tort of deceit. There was then some debate as to whether such a characterisation as to the legal basis for the claim was open on the pleadings or whether the claim should be understood as a common law fraudulent misrepresentation case.
3. It is not necessary to resolve this debate. Mr Fernon SC for the Purchaser conceded in closing address that the fraud claim adds nothing to the misleading or deceptive conduct claims in that the fraud claim has additional elements that must be made out to those that must be satisfied in relation to the misleading or deceptive conduct claims. It was conceded that there was no basis on which the fraud claim could succeed if the misleading or deceptive conduct claims failed.
4. Accordingly, I do not consider the fraud claims any further.

No damage means no power to order under s 243?

1. The power invoked by the Purchaser for the Court to declare the Option Deed void was that set out in ss 237 and 243 of the ACL. It was not in dispute that for the Court to have power to make such an order it was necessary for the Purchaser in this case to establish that it had suffered, or is likely to suffer, loss and damage because of, in this case, the misleading or deceptive conduct of the defendants.
2. Mr Robertson SC for the defendants commenced his closing oral submissions by contending that there was a "short way home" for his clients' to succeed in the proceedings which involved the Court ignoring all of the defendants' evidence and taking the Purchaser's evidence at its highest. The contention was that the Purchaser has not established that it suffered damage or is likely to suffer damage. The consequence was that the Court has no power to grant the relief sought under the ACL, even if the Court was satisfied that the ACL had been contravened.
3. The defendants contended that the factual position of the Purchaser is that it has the right (call option), and potentially the duty (put option), to purchase the Land for $88 million. The value of the counterfactual has not been established. The missing link was apparently any evidence of the value of the Land, either today (being the time of exercise of the option) or at the time of the execution of the Option Deed. The contention was that if the Land was worth, for example, $100 million and the contamination was able to be remediated at a cost of $4 million, then the Purchaser has not suffered any loss or damage. On the other hand, if the Land is valued at only $60 million, then loss or damage has been established.
4. In support of the contention the defendants relied on the decision in PPK Willoughby v Baird [2021] NSWCA 312 (PPK v Baird) at [75]-[81] and [93] per Leeming JA with whom Basten JA and Simpson AJA agreed.
5. PPK purchased land at Willoughby which it was obliged, by the terms of the tender, to carry out a development in accordance with a 'Refined Master Plan'. As events transpired, it developed the land and made a profit on the development. PPK sued its lawyer, in contract, negligence and misleading or deceptive conduct in circumstances where the lawyer had represented in a due diligence report that the land to be purchased was unaffected by flood related development controls. That was not correct.
6. PPK's case was that had it known the true position it would have submitted a lower tender price and would not have been the successful tenderer. The case was thus a no transaction case. PPK relevantly claimed damages on the difference between the price paid for the land and its 'true value' at the time of purchase.
7. The trial judge considered only the claim for damages for misleading or deceptive conduct under the then equivalent of s 236 of the ACL, and held that PPK had failed to prove that it suffered any loss because it was clear that it made a profit on the overall development. That conclusion of no loss was upheld in the Court of Appeal.
8. Mr Fernon SC for the Purchaser contended that it was not open to the defendants to raise this issue, apparently for the first time, in closing address. Attention was drawn to paragraph [43] of the Defence filed 21 November 2023 in which the defendants responded to the claim for relief pleaded at paragraph [43] of the Statement of Claim in the following terms: The Defendants deny paragraph 43 of the SoC and further say that Court has no power to grant the relief sought in circumstances where neither of the Defendants contravened cl 16 [sic] of the ACL (Cth) (or, if it be relevant, cl 16 [sic] of Sch 2 to the CCA in its application as a law of the State of New South Wales pursuant to s 28 of the Fair Trading Act 1987 (NSW)).
9. The short point was that the only matter raised by the defendants as to why the Court has no power is because neither of the defendants breached the ACL. To put the Purchaser squarely on notice of the no damage point, the defendants should have pleaded it. The defendants' rejoinder was that the matter went to the power of the Court and the Court must satisfy itself that it has power.
10. The Purchaser also provided supplementary written submissions on the point after the conclusion of the hearing on 15 March 2024. Those written submissions were to the effect that PPK v Baird was a case concerning the predecessor of s 236 of the ACL and was not a case concerning ss 237 and 243 of the ACL. Relying on authorities which considered the predecessor provision of s 237, which have been picked up under s 237, it was contended that the section drew a distinction between the actual suffering of loss or damage and the likelihood (or contingency) that loss or damage will be suffered in the future. Loss or damage for the purposes of s 237 was not the same as under s 236.
11. The Purchaser contended that, for the purposes of s 237, it was sufficient to establish detriment by reason of being induced to enter into a contract on the basis of misleading conduct - being forced to conclude a contract that it would not have entered into other than because of the misleading or deceptive conduct was said to sufficient. Reliance was placed on two recent decisions of the Full Court of the Federal Court of Australia: Harvard Nominees Pty Ltd v Tiller (2020) 385 ALR 595 (Harvard Nominees) and Century Legend Pty Ltd v Ripani [2022] FCAFC 191.
12. Reliance was also placed by the Purchaser on Jonval Builders Pty Ltd v Commissioner for Fair Trading (2020) 104 NSWLR 1 at [38]-[48] where Leeming JA (with whom Bathurst CJ and Meagher JA agreed) observed that whilst it is necessary before making orders pursuant to s 237 of the ACL to identify the actual or likely sustaining of loss or damage caused by contravening conduct, it is not necessary to quantify that loss or damage.
13. The relevant authorities as to what constitutes loss or damage for the purposes of ss 237 and 243 were comprehensively reviewed in Harvard Nominees. The court concluded that the dictum in Demagogue v Ramensky remains good law and is to the effect that the loss or damage contemplated by the now s 237 of the ACL includes the detriment suffered by being bound to a contract unconscionably induced, or that it includes the disadvantage of incurring contractual obligations which would not have been incurred but for the conduct complained of.
14. Given that I have concluded above that there was no misleading or deceptive conduct by the defendants, the issue does not strictly arise. Had it been necessary for me to decide the issue I would not have upheld the defendants' contention. Having regard to the distinction between ss 236 and 237 as set out in the decisions relied on by the Purchaser, and the broader concept of detriment identified in those authorities that are applicable under s 237, I would have been satisfied that the Purchaser was likely to suffer the necessary detriment by being forced to complete on a contract that it otherwise would not have entered into, being a contract to purchase the Land which is contaminated to the extend found by Mr Last and which would need to be remediated.
15. It is also not necessary for me to consider the pleading point - namely whether the defendants should have positively pleaded that the Plaintiff had not suffered loss or damage and thus there was no power for the Court to make orders under ss 237 and 243 of the ACL.

Conclusion

1. For the reasons set out above, there was no misleading or deceptive conduct engaged in by the Vendor. Senior Counsel for the Purchaser also accepted that if the misleading or deceptive conduct claim did not succeed, the fraudulent concealment claim also could not succeed.
2. Although I have not expressly considered the claims against Mr Crittle personally because they are irrelevant to the relief presently sought there was no suggestion that any personal claims had any prospects of success separate from the claims made against the Vendor. Rather, any debate was likely to be as to whether there was any personal liability of Mr Crittle in addition to the liability of the Vendor. In circumstances where there is no liability of the Vendor the claims against Mr Crittle also fail.
3. The appropriate order in these circumstances is that the Statement of Claim be dismissed. There is no reason why costs should not follow the event.
4. The orders of the Court are: 1. Statement of Claim dismissed. 2. The plaintiff pay the defendants' costs of the proceedings.

Amendments 22 March 2024 - added "it" to paragraph 244 after the word "that" and before the word "otherwise" DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 March 2024