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1. Between about late 2017 and 2020, a large residential development (the Development) ultimately called Grand Central Towers (GCT) was constructed at Block 5, Section 35, Phillip, in the ACT, and known as 15 Bowes Street, Phillip (the Land).

2. The Development comprised two towers, one of 16 floors and the other of 24 floors, with a total of about 431 apartments (the Units) and accompanying common property.

3. The five defendants were involved in the Development in the various ways described later in this judgment.

4. The Units were advertised for sale in various mediums which made various representations about the Development.

5. The Commissioner’s case was that some of the representations made in some of the promotional materials were misleading or deceptive, or likely to mislead or deceive, or were false within the meaning of those terms in ss 18, and 29(1)(b) and (g) of the Competition and Consumer Act 2010 (Cth), sch 2 (the Australian Consumer Law or ACL), which is applied in the Territory pursuant to the provisions of the Fair Trading (Australian Consumer Law) Act 1992 (ACT) (the FTACT).

6. The promotional materials which contained the representations that are the subject of this case were alleged to have been published from around February or March 2018. They were contained in the following six mediums (together, the Promotional Materials): (a) two large billboards located on the site of the Development (the Billboards); (b) a 36-page brochure disseminated in hard and soft copy (the Brochure); (c) a 2-page double-sided colour flyer distributed in hardcopy and electronically (the Flyer); (d) a 3 minute and 26 second video available uploaded to YouTube, Allhomes.com.au, Realestate.com.au, and Vimeo.com (the Promotional Video); (e) promotional emails sent to prospective buyers (the Promotional Emails); and (f) advertisements published on real estate websites (the Real Estate Websites Advertising).

7. The offending representations in the Promotional Materials concerned the ACT Government’s proposal to extend the existing light rail system (Gungahlin to Canberra City, Stage 1) to the Woden town centre in Philip. Eventually, that proposal was divided into two sections. Stage 2A would extend the light rail from Canberra City to Commonwealth Park. Stage 2B would extend the light rail from Commonwealth Park to Woden Town Centre. This case concerns Stage 2B. Where I refer to “Stage 2” at times below, I include both Stages 2A and 2B in that expression.

8. The Commissioner’s case was that the following representations were made in one or more of the Promotional Materials (collectively, the Representations), namely that: (a) the light rail to Woden Town Centre had received planning approval or such approval as was required by law (the Approval Representation); (b) the light rail would be extended to Woden Town Centre, and/or stop at, adjacent to or proximate to the Land (the Light Rail Location Representations); (c) the travel time from the Land to Canberra City on the light rail would be under 10 minutes and/or that the light rail service would provide light rail every five minutes between Woden Town Centre and Canberra City (the Travel Times Representations); and (d) a purchaser of a unit on the Land would be able to rent out their unit and obtain a seven percent gross rental yield from a lessee (the Rental Yield Representation).

9. All defendants disputed that the representations alleged were conveyed by the Promotional Material, were misleading, deceptive or false, and contended that there were reasonable grounds for the making of the representations as to future matters with one exception. Geocon Bowes Street JV Pty Limited (Geocon Bowes), GZ Developments Pty Limited (GZ), and GRE Sales Pty Limited (GRE) (the second, fourth, and fifth defendants) accepted that there were no reasonable grounds for making the representation that the travel time from the Land to Canberra City on the light rail would be under 10 minutes. Bowes Street Developments Pty Limited (BSD), and Zapari Property Bowes Street Pty Limited (Zapari) (the first and third defendants) submitted to the contrary.

10. By an order made on 22 November 2022 by Kennett J, the case was split between a hearing on “liability” (which I am determining in this judgment) and, separately and later, what relief or penalties (if any) should flow from my judgment on liability. The word “liability” really means “breach”. That is, was there misleading or deceptive conduct (s 18 of the ACL) or misleading or false representations (s 29 of the ACL), or both, and, if there was some wrongdoing, is one or more of the defendants liable for that conduct.

11. Put shortly, the five central questions in this liability part of the case are these: (a) First, whether some or all of the identified representations were made. That is, were the Representations alleged conveyed by the Promotional Materials. (b) Second, whether some or all of the Representations were misleading, deceptive or false. (c) Third, who made the Representations. (d) Fourth, whilst the Approval Representation was a representation as to a past fact, the remaining Representations were as to future matters. Under the Australian Consumer Law, representations as to future matters are deemed to be misleading unless the person making the representation has reasonable grounds for making the representation. In this case, the defendants called a number of witnesses who gave evidence to the effect that there were reasonable grounds for the Representations as to future matters. Whether the grounds were reasonable, and whether the evidence of those witnesses should be accepted, were very much in dispute. (e) Fifth, if one or more of the Representations was misleading, deceptive or false, which of the defendants, if any, is or are liable for those Representations. This issue had two parts. First, who had engaged in the conduct. Second, were the remaining defendants liable on agency principles.

12. There was no dispute that the Representations were made in trade or commerce.

13. The underlying premise of the Commissioner’s case was, although it need not be determined in this judgment, that the Representations allowed higher prices to be obtained from the sale of the Units than if the Representations had not been made.

14. The path needed to be taken to answer those apparently simple questions is not so short given the large amount of evidence, submissions, the complexity of the commercial relationships between the defendants and the legal issues which arose. The case was listed for 10 days and took 17. The Court sat extended hours most days. The Court expresses its gratitude to all counsel and solicitors for their cooperation and endurance in sitting extended hours in order to complete the case as expeditiously as possible.

15. Not every piece of evidence, submission made, or authority referred to is mentioned in this judgment. I have only mentioned the evidence, submissions and authorities which I considered relevant or significant in determining the issues before me, and some evidence which, although not strictly relevant to the issues determined by this judgment, is relevant to what orders and penalties I may later make in that they give colour and context to the relevant conduct. The parties and dramatis personae

Messrs Georgalis and Skepev

16. Nikolaos Georgalis was born in Canberra and has lived in Canberra or the surrounding region all his life. He obtained a qualification in construction management in 1999. He is a licensed builder. He worked as a senior site engineer and construction manager at Bovis Lend Lease and was responsible for running construction projects in the ACT. He has over 25 years' experience in the building and construction industry and over 20 years' experience as a property developer.

17. He founded Geocon in 2007 (the shorthand name used to describe a group of companies which included Geocon Bowes and GRE at the time of the events in question), and he is the sole director and sole shareholder of Geocon Group Pty Limited (Geocon Group). Geocon Group was not a party to the proceedings, but played a role that featured in the evidence and is relevant to the matters I must determine.

18. In these reasons I shall sometimes refer to “Geocon” where it is unnecessary to specify which Geocon corporation was involved, or where the evidence referred to “Geocon” without specifying which Geocon entity was involved.

19. Mr Georgalis was and is: (a) the sole director of Geocon Bowes, the second defendant; (b) one of two directors and the company secretary of GZ, the fourth defendant; and (c) one of two directors of GRE, the fifth defendant in this proceeding.

20. Nicholas Skepev studied law and commerce and started work in the Commercial Division of St. George Bank. Through that work, he developed an interest in the property market in Canberra. As a result, he commenced purchasing businesses and properties, performing small projects, developments, and fit outs in and around the Canberra region.

21. Mr Skepev is: (a) the sole director and company secretary of BSD, the first defendant; and (b) the sole director and company secretary of Zapari, the third defendant. The corporations involved

22. BSD, the first defendant, is ultimately owned by Mr Skepev and is what I will call his private development vehicle for the Development. It had no employees.

23. Geocon Bowes, the second defendant, is ultimately owned by Mr Georgalis and was his private development vehicle for the Development. It had no employees.

24. Zapari, the third defendant, was ultimately owned by Mr Skepev, and was the corporate vehicle he used to purchase the Land. As such, it was the vendor of all of the Units when sold upon the completion of the Development. It had no employees.

25. GZ, the fourth defendant, was incorporated on 20 December 2017, and was the special purpose development vehicle utilised by Messrs Georgalis and Skepev to undertake the Development. It had two issued shares. One share was owned by Geocon Bowes. The other share was owned by BSD. GZ had no employees.

26. GRE, the fifth defendant, was ultimately owned by Mr Georgalis. Its general business was to sell units in residential developments undertaken by Geocon. It was first registered in 2013. It has one issued share which is owned by Georgalis Investments Pty Ltd (Georgalis Investments). Mr Georgalis is the sole director and shareholder of Georgalis Investments. GRE had no employees.

27. With particular reference to GRE having no employees, Geocon Group was the primary vehicle used by Geocon to employ people performing work for Geocon entities. Geocon Group would commonly provide, share, or assign Geocon Group employees to other Geocon entities so that those entities could perform their functions. Sometimes this was done informally, sometimes it was done pursuant to a written agreement.

28. Geocon Constructors (ACT) Pty Ltd (Geocon Constructors) was the builder of the Development. It is owned by Geocon Constructors Investments Pty Ltd. Mr Georgalis is the sole director and secretary of Geocon Constructors.

29. There Pty Ltd (There PL), 3Deep Pty Ltd (3Deep) and The Mark Agency (TMA) were external marketing agencies, for want of a better expression, engaged by the Marketing Team (which is described below at [34]) for specialist expertise in relation to aspects of the Promotional Material, such as the “look and feel”, and content (the content being subject to others’ approval). Others involved

30. Christopher Dalton was a purchaser of one of the Units and was called as a witness in the Commissioner’s case.

31. Peter Micalos was the General Manager of Developments at Geocon Group from April 2012 until December 2019. He reported directly to Mr Georgalis. He was in charge of the Marketing Team, and he approved all of the marketing used for the Development. Mr Georgalis said that Mr Micalos was responsible for managing each of Geocon’s developments for Geocon and was responsible for the marketing functions for the Development.

32. Thomas Stephens was the other director of GRE in addition to Mr Georgalis. He was a real estate agent licenced under the Agents Act 2003 (ACT) and was an employee of Geocon Group. In substance, Mr Stephens was a director in name only (although that does not excuse him from his legal obligations as a director), in that Mr Georgalis made all significant decisions on behalf of GRE. An example of this passive role is that the first time Mr Stephens saw the Services Agreement between GRE and Geocon Group (an important agreement in this case) was when the solicitors for GRE sent it to him to take instructions for these proceedings.

33. Adam Morgan was described by Mr Stephens as a Sales Executive of Geocon Group. Mr Morgan had an “@geocon.com.au” email address, and Mr Micalos said that Mr Morgan was an employee of Geocon Group providing services to GRE as a sales agent. In a reply to particulars, solicitors then acting for the first to fourth defendants said that: Adam Morgan is and was at all material times an employee and representative of Geocon Group Pty Ltd. At the time that the Billboards were posted, Mr Morgan was working for GRE Sales pursuant to a Service Agreement dated 30 June 2018 (“Service Agreement”) under which staff of Geocon Group Pty Ltd provided services to GRE Sales.

34. Geocon Group had what was called the “Marketing Team”. The members of the Marketing Team were employed by Geocon Group and consisted of: (a) Peter Micalos, General Manager, Developments; (b) Melanie Hindson, Marketing Director; (c) Karen Coe, Marketing and Events Manager; (d) Alex Dickens, Marketing Coordinator; (e) Myfanwy Galloway, Marketing Coordinator; and (f) Adam Gill, Marketing Manager.

35. Meyer Vandenberg Lawyers is a law firm located in Canberra. Its name appears on the cover sheets of several of the various agreements entered into between the defendants (described later in these reasons) and acted for all defendants for a period of time in dealings with the Commissioner. Meyer Vandenberg is mentioned in the evidence and mentioned in this judgment, but it should be made clear that there is no allegation of wrongdoing by that firm, nor is there any suggestion of wrongdoing by that firm in the evidence.

The main issues and findings in summary

36. There was no issue that the relevant conduct was the making of representations in the Promotional Material. There was no issue that the Promotional Material was published and its contents communicated to consumers, nor that the Representations were made in trade or commerce.

37. There was no issue that whatever was on the Billboards, in the Promotional Video and in the Real Estate Websites Advertising, it was communicated to consumers. Their contents were plain to see in person and online.

38. There was no issue that seven Promotional Emails were sent to consumers (five being admitted on the pleadings, and an additional two being admitted by Messrs Georgalis and Micalos in their evidence).

39. There was some debate about the exact extent to which the Brochure and the Flyer were communicated to consumers, but it is not necessary for me to resolve those factual issues. There was no dispute that both were given to consumers in some ways by sales agents acting on behalf of GRE, and that admitted fact is sufficient to decide the issues before me.

40. There was no dispute that the Marketing Team (consisting of employees of Geocon Group) created and published the Promotional Material. That is, with the assistance of the external agencies, the Marketing Team developed and created the content of the Promotional Materials, had them drafted, created, printed, installed, and uploaded as appropriate.

41. The Commissioner alleged that the Marketing Team did those things on behalf of GRE and thus GRE had engaged in the relevant conduct. Alternatively, the Commissioner alleged that Geocon Group had done those things and had engaged in the relevant conduct.

42. I have found below that the Marketing Team was hired to GRE by Geocon Group pursuant to a labour hire Services Agreement to undertake the creation and publishing of the Promotional Material. Therefore, I have found that the Marketing Team’s conduct in relation to the marketing matters the subject of this case was done on behalf of GRE. Therefore, when added to GRE’s distribution of the hard copy Brochure and the Flyer, it was GRE that engaged in the relevant conduct for the purposes of ss 18 and 29(1) of the ACL.

43. The Commissioner described her agency case as having two “tiers”. The Commissioner’s first tier agency case was that what GRE did was done as agent for GZ or Zapari, or both. I have found below that GRE was the agent of GZ for the purposes of marketing but was not the agent of Zapari. Therefore GZ, but not Zapari, is liable as principal for GRE’s conduct.

44. The Commissioner’s second tier agency case was that BSD, Zapari and Geocon Bowes were the principals of GZ in relation to the relevant conduct and are therefore liable for GZ’s misconduct. The case against Zapari was not pursued and I have not accepted the balance of the second tier agency case. That is, I am not persuaded that BSD or Geocon Bowes were the principals of GZ in relation to the alleged conduct.

45. Turning to the Representations, the Approval Representation was a representation of past fact. It was conveyed by the Brochure, and I have found that it was misleading, deceptive and false per ss 18 and 29(1) of the ACL.

46. The Light Rail Location Representations, Travel Times Representations, and Rental Yield Representations were representations with respect to future matters.

47. In relation to the representations as to future matters, four witnesses gave evidence that they, and therefore GRE, had in their possession and relied on certain facts and circumstances which amounted to reasonable grounds for making these Representations with respect to future matters.

48. I have not accepted the evidence of those witnesses that they had in their possession and relied on the facts and circumstances asserted. This was because the witnesses’ evidence lacked any contemporaneous, objective, or credible independent corroboration, and because of credit issues.

49. Alternatively, if GRE did have and did rely on the facts and circumstances asserted, I have found that the facts and circumstances allegedly relied on did not constitute reasonable grounds for the making of the Representations with respect to future matters, and those Representations were misleading, deceptive, and false per ss 18 and 29(1) of the ACL.

50. Turning to what Representations were made by which Promotional Materials, I have found that the Billboards conveyed the Light Rail Location and Rental Yield Representations, but not the Approval Representation.

51. I have found that the Brochure conveyed the Approval, Light Rail Location, and Rental Yield Representations.

52. I have found that the Flyer conveyed the Light Rail Location and Rental Yield Representations, but not the Approval Representation.

53. I have found that the Promotional Video conveyed one, but not both, of the Light Rail Location Representations, and conveyed both Travel Times Representations.

54. Seven Promotional Emails were admitted having been sent. For reasons given later, I have not determined whether any more emails were sent, as the precise number alleged to have been sent was more relevant to penalty than liability. Of the seven admitted having been sent, one email conveyed the Approval Representation, five conveyed both Light Rail Location Representations, and two conveyed one Light Rail Location Representation. Only three emails were alleged to have conveyed the Rental Yield Representation, but I have found that there is insufficient evidence to prove that those emails were ever sent.

55. I have found that two of the three Real Estate Websites Advertising website listings conveyed one Light Rail Location Representation, and the other website listing conveyed both.

56. In relation to s 29(1) of the ACL, I have found that the sale of the Units was a “service” within the meaning of that term in the ACL. I have found all four Representations breached s 29(1)(b) and (g) in certain respects as detailed below.

Background

57. In this part of the judgment, I shall set out those facts which are generally admitted or non-contentious.

58. In May 2014, Mr Skepev and Mr Georgalis met after a commercial transaction between them, and their acquaintance continued thereafter.

59. In 2016, Zapari purchased the Land. It completed its purchase on 2 August 2016.

60. At that time, the improvements on the Land consisted of a commercial office building.

61. Mr Skepev explored various development options for the Land, including the option of re-tenanting the commercial office building and performing a development to the side of that building. Ultimately, he decided against those options and instead chose a residential development option.

62. In or about September 2016, the ACT Government announced a proposal to extend the Canberra Metro Light Rail to Woden Town Centre.

63. That announcement was reported in the Canberra Times on 1 September 2016 and the ABC Online on 2 September 2016. Both of those articles made clear that the proposal was an election policy. That is, the then Government was saying that if re-elected, its policy was to extend the light rail to Woden.

64. In October 2016, construction of Stage 1 commenced.

65. On 15 October 2016, polling for the ACT Legislative Assembly election took place.

66. On 24 May 2017, Zapari lodged a development application for a mixed use 430-unit residential development encompassing the Land (the Original DA).

67. In or about May or June 2017, the ACT Government first commenced community consultations for the proposed Stage 2.

68. Following lodgement of the Original DA, Mr Skepev discussed the pricing of the units in the proposed development with employees of LJ Hooker Canberra City (LJ Hooker). LJ Hooker provided him with market rental appraisals dated 25 October 2017 (the 2017 LJ Hooker appraisals) in respect of the proposed development for a one bedroom unit, a one bedroom/study unit and a two bedroom unit. The rentals referred to in the appraisals were for 2017 and not for when the development was expected to be completed.

69. These 2017 LJ Hooker appraisals were based on the plans submitted as part of the Original DA. Subsequently, after agreement had been reached for the joint venture, an amended development application was lodged and later approved. Whilst the precise changes were not the subject of evidence, Mr Skepev said that one floor was deleted from one tower, the internal layouts and dimensions of the Units changed slightly, and a number of three bedroom Units were added together with at least one penthouse.

70. These 2017 LJ Hooker appraisals were important documents in the case and so it is worth showing one example. The 2017 LJ Hooker appraisal for a one bedroom unit was in the following form:

71. The other two appraisals were in identical form and terms except for the line in bold specifying the unit type and the rent. In those other two appraisals they said: (a) One bedroom/study $420 to $440 per week unfurnished; and (b) Two bedroom $560 to $590 per week unfurnished.

72. Mr Skepev thought the appraisals were too cheap and engaged in discussions with LJ Hooker about them. During these discussions, he spoke with Mr Georgalis who had asked him how the Development was progressing. Mr Skepev informed him that he was pricing the Development with LJ Hooker and that, in his view, LJ Hooker had under-priced the Development.

73. At that time, Mr Georgalis told Mr Skepev that he was expanding his in-house sales and marketing team. I infer that this was a reference to membership of the Marketing Team and to GRE, the latter having acted as sales agent for a number of earlier Geocon developments.

74. Mr Skepev was particularly interested in Mr Georgalis’ in-house sales and marketing team because he knew that GRE was looking to recruit two real estate agents (Mr Morgan and Mr Nicholls) whom Mr Skepev thought were two of the highest selling agents in the Woden and Canberra region. Mr Skepev thought that if GRE succeeded in attracting those two agents, then it would be a good reason to use Mr Georgalis' in-house sales team.

75. Negotiations for a joint venture to develop the Land took place, and as part of the due diligence process, Mr Georgalis was provided with copies of the Original DA and the 2017 LJ Hooker appraisals as well as a range of other documents to enable himself and other Geocon employees to assess the viability of the project.

76. In or around mid-December 2017, Messrs Georgalis and Skepev agreed to undertake a joint venture in respect of the development of the Land. Zapari would make available the Land, while Geocon entities would take on the roles of builder, development manager and sales and marketing agent, and a special purpose vehicle (GZ) would be incorporated to act as the developer.

77. To formalise the arrangement, GZ was incorporated on 20 December 2017, and a number of written contracts were entered into two days later on 22 December 2017. Those agreements were: (a) the Bowes Street Joint Venture Agreement between GZ Developments, BSD, Geocon Bowes, Messrs Georgalis and Skepev (the Joint Venture Agreement); (b) the Bowes Street Development Management Agreement between Geocon Bowes and GZ (the Development Management Agreement); (c) the Bowes Street Development Agreement between Zapari, GZ, Pari Pari Pty Ltd, Geocon Bowes and BSD (the Development Agreement); (d) the Agency Agreement between Zapari, GZ and GRE (the Agency Agreement); (e) a building contract between GZ and Geocon Constructors (ACT) Pty Ltd.

78. The terms of some of those agreements are relevant to issues in this case and will need to be considered in more detail later in these reasons, but suffice to say for present purposes that, in general terms, Messrs Georgalis’ and Skepev’s private development vehicles (BSD and Geocon Bowes) each owned 50 percent of the issued shares in the special purpose development vehicle, GZ. By this mechanism their respective interests would share profits from the eventual sale of the Units.

79. The Development Agreement was the agreement pursuant to which GZ agreed with the owner of the Land (Zapari) to undertake the Development.

80. GZ in turn entered into the Development Management Agreement with Geocon Bowes for Geocon Bowes to act as development manager of the Development.

81. GZ and Zapari also entered into the Agency Agreement with GRE for GRE to act as the marketing (as I have found below) and sales agent in relation to the Development.

82. What bears mentioning at this point is that under the Joint Venture Agreement there was defined what was called “Project Control Matters”. Those matters were set out in Schedule 1 to the Joint Venture Agreement. There were 13 such matters which concerned, in summary, the appointment of the builder and development manager, staff, consultants, operating account, development applications and plans, construction, sales, units, project finance, additional equity, disposal, legal action and reserved matters.

83. Under cl 26 of the Joint Venture Agreement, there was to be formed what was called the Project Control Group (PCG). The PCG consisted of one representative of Geocon Bowes and one representative of BSD, with other persons able to attend (but not vote) at its meetings. In short, the PCG was given the responsibility of providing the development manager (Geocon Bowes) with “guidance and direction” in respect of Project Control Matters, and additional responsibilities if delegated to the PCG by Geocon Bowes and BSD. By this mechanism, in substance, BSD was given an equal seat at the table in making decisions about significant matters involving the Development. The clause went on to set out how the PCG was to be informed of relevant matters, how meetings were to be conducted, how any deadlocks could be resolved and like matters.

84. Mr Skepev was nominated by BSD to be its representative on the PCG. Mr Georgalis was nominated as the representative of Geocon Bowes, although more often than not Mr Micalos attended in his stead (as allowed for under cl 26).

85. There are two other relevant agreements that should be mentioned at this chronological point.

86. The second in time was a Service Agreement (the Service Agreement) between Geocon Group and GRE dated 30 June 2018, which had a term of five years. Pursuant to the terms of that agreement Geocon Group agreed to provide appropriately qualified and trained staff to GRE for a fee. Those staff were to include “clerical, accounting, marketing and legal staff” (emphasis added). In substance, it was a labour hire agreement.

87. The first in time of these two agreements was, I find, an agreement by conduct between the same entities and on the same terms (except perhaps as to fees). As Mr Georgalis put it, up until 30 June 2018, there had been no “formal” agreement in place for the assignment, sharing or hiring of Geocon Group employees to other Geocon entities, although this was the practice before the signing of the Service Agreement. I infer that the word “formal” meant “in writing”. In cross-examination Mr Georgalis said that whilst the Service Agreement was dated 30 June 2018, the arrangements it sets out were in place prior to that date. Therefore, at the time the suite of joint venture agreements were entered into in late December 2017, and thereafter, there was an agreement in place between Geocon Group and GRE for Geocon Group to provide marketing staff to GRE.

88. As I find later in this judgment, the Geocon Group Marketing Team was hired to GRE pursuant to these two agreements, and that Marketing Team were the people who created and published the Promotional Material with the assistance of the external agencies.

89. The Marketing Team commenced their work on the Promotional Materials sometime in January 2018.

90. By 16 January 2018, plans were afoot to alter the design of the Development.

91. On 23 January 2018, the development application submitted by Zapari was approved, subject to conditions. The approval was for a mixed-use development comprising two towers (up to 18 and 26 storeys) with 430 units.

92. By 30 January 2018, a re-design of the Development was progressing which included the addition of the three-bedroom Units and at least one penthouse. The significance of that fact was that the 2017 LJ Hooker appraisals did not include any rental appraisals for those unit types.

93. The Bowes Street Project Marketing Timeline (the Marketing Timeline), tendered in evidence, set out the general anticipated course of events (confirmed by Mr Stephens).

94. The marketing campaign spanned a six-month period. It covered a number of phases described by Mr Stephens as the "coming soon" phase, relevant events and public release. Mr Stephens said that during these phases, a variety of marketing assets were developed, published and provided to GRE Sales. These marketing assets included the Billboard, the Brochure, planbooks, investor reports, websites, artists' impressions, Allhomes and portal listings, social platform marketing, letterbox mailouts, radio ads, tv ads, and physical site display and wayfinding signage.

95. According to the Marketing Timeline, there would be an ROI (return on inquiry) campaign from 29 January to 12 March 2018, a VIP event on 19 March 2018, followed by a public release of the Units to the market on 26 March 2018. An ROI campaign is where certain selected potential purchasers are sent marketing material and invited to purchase Units before the Development is released to the general public.

96. An internal Geocon Grand Central Towers Monthly Marketing Report dated February 2018 revealed that digital advertising across a variety of platforms (Facebook, Instagram, the Canberra Times, Allhomes and EDM (electronic direct mails)) commenced in February 2018.

97. The Marketing Timeline showed that the Billboards were installed on 5 February, the Brochure was printed on 12 March and the balance of the marketing assets referred to in that Marketing Timeline were completed by 19 March. Mr Micalos agreed in cross-examination that the Billboards were erected in early March 2018, the Brochure and Flyer were available (for prospective purchasers) by early March 2018, and (at least) one Promotional Email was sent on 1 March 2018.

98. On or about 8 February 2018, Mr Stephens asked the Marketing Team to produce some investor collateral. The investor collateral included a calculation of both net yield and gross yield (being annual rental income divided by the purchase price). In respect of the gross yield on all unit types, he said he used a conservative per week rental amount which was less than the 2017 LJ Hooker appraisals (the Stephens Yield Report).

99. On 12 February 2018, Mr Skepev emailed the 2017 LJ Hooker rental appraisals to Mr Stephens and Ms Hindson.

100. In or around February 2018, Mr Stephens met with Messrs Micalos and Morgan to set the prices for the Units on release of the Development to the market. A Release Pricing Schedule was generated which contained the release prices for the Units.

101. Around 15 February 2018 there was email correspondence between There PL and Ms Coe about a draft layout for a ½ page press layout which, in draft form, had the words “7% rental yield” on it. Ms Coe emailed Ms Hindson and said: With the roll out of the 7% - do we need to say *indicative or anything like that? Or its fine to be simply what it is.

102. Mr Stephens agreed that about this time there were advertisements prepared which had “seven percent rental yield” written on them. He said he suggested to Ms Hindson and her direct reports that the statement “seven per cent rental yield” be qualified because Mr Stephens thought that not all “departments within the project” (which I took to mean Units) “would achieve seven per cent”. He said his suggestion was not taken up.

103. The Billboards were erected on the Land on or about 19 March 2018 and were removed on or about 10 September 2018.

104. The Brochure was made available to consumers in hard copy between about 22 March 2018 and at least October 2019 and was available in soft copy for about the same period.

105. The Flyer was made available to consumers between at least March and November 2018.

106. The Promotional Video was published on about 22 March 2018 and remained available until the last Unit was sold in November 2020, although it was amended to remove the oral representations complained of on 22 August 2019 according to the Commissioner.

107. Seven Promotional Emails were admitted having been sent. They were sent to consumers on 31 January, 8, 15 and 28 February, 1 March, 12 April and 24 May 2018.

108. The Real Estate Website Advertising was live from about July 2017 up until (at least) the last Unit was sold in about November 2020.

109. On 5 April 2018, Mr Duncan Edghill, then Deputy Director-General - Transport Canberra, emailed Mr Nick Merriman, then employed by Geocon as a Development Manager. The email expressed concern about some of the advertising for the Development and said: Many thanks for your time on the phone a few moments ago. As discussed, it was a courtesy call following feedback we’d received around Geocon advertising and public discussion of Light Rail Stage 2 to Woden. We hope what we discussed (which I’ve outlined below again for your convenience) will enable Geocon to ensure its advertising and discussion of light rail is accurate. Light Rail Stage 2 from the city to Woden was announced by the ACT Government as its preferred corridor for the next stage of light rail in late 2016. Since early 2017 Transport Canberra has been working on the development of conceptual designs, business case activities and progressing discussions with the Commonwealth. As with Light Rail Stage 1, there are still a number of important processes we need to go through for Stage 2, including: * Planning approvals. As the project travels through Commonwealth areas, there are a number of important Commonwealth Government and Parliamentary approvals that are necessary to obtain. These are outside the control of the ACT Government; * Further community consultation processes; * Consideration by (and approval of) the ACT Government of a business case for the project; and * Procurement and detailed design of the system. Each of the above processes can materially shape the timing, final design, alignment, stop locations and other features of the process. We also received some feedback that light rail travel time was discussed at a Geocon event, but note that the ACT Government has not yet released any travel times for the system (which will be subject to the final alignment, extent of wire-free running, stop numbers and other factors). As a courtesy, we wanted to draw this to your attention so that you may consider what may be appropriate and accurate in your advertising and public discussion of Light Rail Stage 2. Please do not hesitate to contact me should you or Nathan wish to further discuss.

110. Most relevantly, the email noted that there were a number of approvals yet to be obtained for Stage 2, stop locations were subject to change, the ACT Government had not released any travel times for Stage 2, and travel times would be subject to a number of factors.

111. Mr Merriman forwarded Mr Edghill’s email to Mr Nathan Ross, a Geocon Development Manager, on the same day. Mr Ross forwarded the same email to Ms Hindson and Mr Micalos about 15 minutes later with the comment “General comments from Transport Canberra below. No issues.” Ms Hindson then forwarded the email to Mr Stephens about an hour later. Mr Stephens replied: Must be kind of serious if we are getting calls from the deputy director general of transport Canberra

112. On the evidence, neither Mr Stephens, a director of GRE, nor Mr Micalos, the head of the Marketing Team, discussed the matters raised by Mr Edghill, nor sought any changes to the then existing Promotional Material.

113. In June 2018, several months after the commencement of the publication of the Promotional Material, Transport Canberra published a Light Rail Update. That document said, amongst other things, that the extension of the Light Rail to Woden remained subject to the granting of several statutory approvals, those being approvals required under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act), development approval under the Planning and Development Act 2007 (ACT) (Planning and Development Act), works approval by the National Capital Authority under the Australian Capital Territory (Planning and Land Management) Act 1988 (ACT) (the ACT Planning and Land Management Act) and approval by both Houses of the Commonwealth Parliament as required under the Parliament Act 1974 (Cth) (the Parliament Act).

114. The document said that travel time for the light rail from Woden to the City was anticipated to be between 25-30 minutes, with frequency being every 6 min in peak periods, at least every 10 min between 7am and 6pm on weekdays and at least every 15 min outside of these hours on weekdays, Saturdays, Sundays and public holidays.

115. On 31 August 2018, an investigator appointed by the Commissioner wrote letters to Geocon Group and Zapari in identical terms asking a series of questions. Answers were provided (as discussed below) and the investigator subsequently issued a series of s 52 Notices (discussed later). Section 52 is found within Part 5, Division 5.2 of the FTACT, which deals with investigations by the Commissioner in relation to compliance with the FTACT. Section 52 says, inter alia, that an investigator may by written notice require a person or corporation to give the investigator information in writing and any documents as identified in the notice. A person who, without reasonable excuse, fails to comply with a requirement under s 52 commits an offence punishable by the payment of 50 penalty units, imprisonment for 6 months, or both.

116. In the letters of 31 August 2018, the investigator said that he was concerned about certain representations that had been made in advertising material relating to the Development and the basis for making those representations. In particular, the investigator expressed concern about representations made regarding the location of the future light rail interchange and about rental yield.

117. The investigator drew attention to the Billboards, a “development brochure” and a website, and, in relation to the location of the stop at Woden and whether Stage 2 was a certainty, said: The large banners, website, Investment Report and the development brochure state that the Grand Central Towers development site or adjacent area will be the location of a future light rail interchange. The statements and their advertising style create the impression that the future light rail route to Woden and the light rail interchange are certain and will be situated under or adjacent to the development site. The ACT Government has not settled the route and location of future light rail interchanges for the planned City to Woden corridor and are still in the planning and negotiation phase, as outlined in the ACT Government, Transport Canberra, Light Rail Update, June 2018.

118. In relation to rental yield, the investigator said: The advertisement banners on the sides of the building at the 15 Bowes Street development site also state "7% RENTAL YIELD" (attachment marked 'A'). In comparison, the Investor Report, page 5 states that the rental yield for Woden is 5.4% per annum in 2018 (attachment marked 'C'). Page 33 of the Investor Report provides that: "Influences that may affect the future value, capital growth and rental yields in property investments mean that past performance is no guarantee that targeted returns will be met." The statement "7% RENTAL YIELD" on the 15 Bowes Street banners infers that 7% is the expected achievable rental yield upon purchasing a property at Grand Central Towers development. There is no reference to the 7% rental yield in the Investor Report or additional information in the advertisement banners which caveats or explains the apparent inconsistency between the figures to consumer[s].

119. The investigator sought answers to a number of questions including what the basis was for making the representation of 7 percent rental yield.

120. Mr Stephens said that Ms Alex Glover, Assistant Development Manager of Geocon, asked him to check the Stephens Yield Report before it was sent to Mr Micalos for his review and before it was sent to Meyer Vandenberg Lawyers to respond to the investigator’s letters of 31 August 2018.

121. Mr Stephens said that he did as he was asked and recalled being copied into the email to Meyer Vandenberg Lawyers attaching the Stephens Yield Report.

122. On 11 September 2018, Mr Micalos emailed a solicitor at Meyer Vandenberg which was copied to, amongst others, Mr Skepev, Mr Stephens and Ms Hindson. The email said that Mr Micalos was “happy with this response” (the response was not in evidence). The email continued: One point – Alex G can we please issue a rental appraisal report for each unit as at completion (ie 2020) These figures adjusted for inflation will show a 7% Yield on purchase price…. We need to use an independent agency brand.

123. Mr Micalos then sought and received four rental appraisals from LJ Hooker dated 12 September 2018 (the 2018 LJ Hooker appraisals), them being for: a one bedroom unit; a one bedroom plus study unit; a two bedroom unit; and a three bedroom unit.

124. Mr Stephens said these 2018 appraisals were obtained for two reasons. First, they were desired to assist with a response to the investigator’s letters dated 31 August 2018. Second, they were desired because the 2017 appraisals were some 12 months old, and the market had moved on.

125. By letter dated 12 September 2018, Meyer Vandenberg Lawyers responded to the investigator’s letter of 31 August 2018 directed to Zapari. In that letter it was confirmed that the 7 percent rental yield representation related to gross (not net) rental yield. The answer to the investigator’s question about the basis for the representation as to 7 percent rental yield was: Upon negotiations of the purchase of a unit in Grand Central Towers, potential purchasers are offered entry into a property management agreement with licenced real estate agent GRE Sales Pty Limited (“GRE Sales”) to exclusively manage the unit on the purchaser’s behalf (“Property Management Agreement”). Clause 10 of the Property Management Agreement provides a rental guarantee whereby GRE Sales will reimburse the purchaser for the difference between the rent achieved at market and a minimum rent equivalent to 7% gross yield for the subject unit (being 7% of the purchase price divided by 52) for a period of 104 weeks from the date the contract for sale is completed. Further, in the event that the subject unit cannot be leased for a period of four months after completion of the contract for sale, GRE Sales agrees to pay the purchaser a minimum rent equivalent to 7% gross yield for the subject unit (being 7% of the purchase price divided by 52) monthly in arrears until the expiry of 104 weeks from the date the contract for sale is completed. A copy of the Property Management Agreement is enclosed. Our clients also relied upon the following documents in assessing a 7% gross rental yield: (a) rental appraisals for Grand Central Tower[s] as at 25 October 2017 from Ms Susie Weaver, Executive Property Manager at LJ Hooker Canberra City; and (b) a price list for units in Grand Central Towers with calculations for expected rental yields for each unit once completed. A copy of the above documents is enclosed. For your further reference, our clients have obtained additional rental appraisals for Grand Central Tower[s] from Ms Susie Weaver, Executive Property Manager at LJ Hooker Canberra City for rent as at the date of this letter. A copy of these appraisals is also enclosed.

126. That answer was incorrect in two respects and notable for a third.

127. First, the document attached, and said to be “a price list for units in Grand Central Towers with calculations for expected rental yields for each unit once completed”, was not the same document emailed to Meyer Vandenberg which Mr Stephens had exhibited to his affidavit and which he said he recalled being attached to that email. Notably, it used different rental estimates, being the highest rent in the range provided in the 2018 LJ Hooker appraisals for each unit type (whilst Mr Stephens had used rents below those in the 2017 LJ Hooker appraisals).

128. Second, at the time of that letter, (but not before) the Property Management Agreements mentioned in that response (guaranteeing 7 percent gross yield) had not been offered to any purchasers. They were not offered until November 2018. More will be said about those agreements later in these reasons.

129. The notable third respect is that the document attached and purporting to be the document relied on as a basis for making the 7 percent rental yield representation calculated yields rounded up to the nearest percent and used rents higher than those set out in the 2017 LJ Hooker rental appraisals, namely the highest rent in the range provided in the 2018 LJ Hooker appraisals for each unit type.

130. In a subsequent letter dated 25 March 2019, Meyer Vandenberg, on behalf of Zapari, Geocon Bowes, GZ and GRE, said that that attachment just mentioned had been incorrect. They said that the attachment was a calculation prepared on or about 12 September 2018 (the 12 September 2018 spreadsheet) and was based upon an updated rental appraisal from LJ Hooker on that same day (the 2018 LJ Hooker appraisals) and, to the extent known at that date, the contracted price for the units in the Development.

131. Meyer Vandenberg then said:

132. The recipients of the Notices - GZ, GBSJV, GRE Sales and ZPBS - say by way of clarification: … (b) a calculation of expected yields was undertaken at or about the time of release of the Development to market in February 2018 using the LJ Hooker appraisals dated 25 October 2017 and the asking price for each unit in the Development; and (c) the calculation referred to immediately above, in paragraph 9(b), was not undertaken on a spreadsheet or, if it was, it cannot now be located.

133. I shall return to that statement when discussing Mr Micalos’ evidence in which he purported to attach the missing calculation referred to in that letter, but with no explanation as to how it had come to be found.

134. The letter also withdrew the assertion made in Meyer Vandenberg’s 12 September 2018 letter that one basis relied on for the 7 percent rental yield representation was the Property Management Agreements. Meyer Vandenberg said on behalf of GZ, Geocon Bowes and Zapari that: … (b) by way of clarification, the property management agreement underpins the representation on the Updated Website only; (c) the property management initiative was developed independently of the Grand Central Towers development; (d) the Updated Website was launched to coincide with the property management service; and (e) the 12 September 2018 spreadsheet was relied upon in formulating the viability of the 7% guarantee, not the Billboard, Brochure or Investor Report.

135. The “Updated Website” was a reference to the website for Grand Central Towers, updated after 11 December 2018.

136. I shall return to that statement when discussing Mr Micalos’ evidence in which he insisted, contrary to Meyer Vandenberg’s letter, that the property management agreements were one basis he relied on for the 7 percent rental yield representation in February 2018.

137. Having noted that inconsistency, even in the 12 September 2018 spreadsheet there were a number of Units calculated to have gross rental yields of 5 percent or 6 percent, although the majority were calculated to have yields of 7 percent or better.

138. In about October 2018, the ACT Government split the works required for Stage 2 of the light rail into two parts: Stage 2A and Stage 2B.

139. From about November 2018, (but not before) Property Management Agreements were offered to some, but not all, potential purchasers of Units by GRE.

140. There were two Property Management Agreements which differed only in their term. One was for two years, and the other was for five years. The parties to these Property Management Agreements were to be the purchaser of a Unit and GRE. It was a term of the Property Management Agreements that GRE would be retained as the property manager for the relevant Unit, and cl 10 provided that GRE would guarantee a minimum rent equivalent to 7 percent gross yield (being 7 percent of the contract sales price, less any incentive, divided by 52) for two or five years.

141. Importantly, as GRE properly and fairly admitted in opening submissions, and as Mr Stephens said, the Property Management Agreements were offered to some but not all prospective purchasers, and, of course, could only be taken advantage of by those willing to contract with GRE on the terms offered in the Agreements. Such terms included an obligation to pay a letting fee of two weeks’ rent, a management fee of 8.7 percent of achieved rent, a lease negotiation/renewal fee, a customer care, IT support and administrative fee, fees for ACAT mediations and hearings “at cost”, and fees for overseeing maintenance and repairs at cost. Needless to say, some purchasers may not have considered those terms financially advantageous.

142. In about April 2019, construction of Stage 1 of the light rail (Gungahlin to the City) was completed and operations commenced.

143. By an invoice dated 30 June 2019, Geocon Group invoiced GRE $10.6m (incl GST) for labour hire. Both Mr Georgalis and Mr Stephens accepted this invoice related to Geocon Group’s labour hire to GRE, and the only labour hire mentioned in the evidence was that of the Geocon Group Marketing Team. No defendant led any evidence of any other service that Geocon Group provided to GRE and for which GRE was charged any amount of money.

144. These proceedings were commenced on 22 August 2019.

145. On 23 August 2019, an article appeared in the ABC News headed “Geocon accused of breaching consumer laws over Canberra apartment advertising”. The article contained a photo of a Billboard and referred to the commencement of the present case by the Commissioner.

146. The sale of the last Unit occurred in about November 2020, and the construction of the Development was completed in about December 2020.

The Commissioner’s case on agency and who engaged in the relevant conduct

Who made the representations (or engaged in the relevant conduct)

146. Up until the first day of the hearing, the Commissioner was relying upon her Third Further Amended Statement of Claim. In that document the Commissioner expressly pleaded that GRE published, or caused to be published, the Billboards, Brochure, Flyer and Promotional Video. There was no express pleading as to who published the Promotional Emails or the Real Estate Website Advertising.

147. On the first day of hearing the Commissioner applied to amend her pleading to file a Fourth Further Amended Statement of Claim.

148. The Commissioner submitted that several defendants had, in written opening submissions, adopted positions not consistent with answers given in several responses to investigators’ letters and s 52 Notices. There was some substance to that submission, with several defendants submitting in closing submissions, for example, that some answers provided in responses to s 52 Notices could not be relied on for their accuracy.

149. The relevant amendments were to allege, in relation to the publication of the Brochure, Flyer and Promotional Video, that GRE published those materials, or, in the alternative, that Geocon Group published them.

150. In relation to the Promotional Emails and the Real Estate Website Advertising, the amendments were to expressly plead that GRE published those materials, or, in the alternative, that Geocon Group published them.

151. The amendments were allowed on terms that the defendants would be permitted to adduce such additional oral evidence as they may be advised in relation to the amendments, and costs of the application were reserved. In the event, no additional oral evidence was adduced.

152. The Fourth Further Amended Statement of Claim was filed, as were defences to that pleading.

The Commissioner’s original pleaded agency case

153. The Commissioner’s case against GRE was that it published the Representations, or, more properly, engaged in the relevant conduct. The alternative allegation was that Geocon Group engaged in the relevant conduct.

154. The Commissioner’s case against the other four defendants was based on agency. As described by the Commissioner, there was a first and a second tier agency case.

155. The first tier agency case was that GRE (or Geocon Group) engaged in the relevant conduct as agent of GZ or Zapari or both, and thus those two corporations were liable for GRE’s (or Geocon Group’s) conduct.

156. The second tier agency case pleaded in the Third and Fourth Further Amended Statements of Claim asserted that GZ was the agent of BSD, Zapari and Geocon Bowes, and thus if GZ was liable (for either GRE’s or Geocon Group’s conduct), then BSD, Zapari and Geocon Bowes were liable for GZ’s misconduct (which GZ had accrued by reason of being the principal for GRE or Geocon Group).

157. The only material facts arguably set out in the second tier agency pleadings were certain clauses in the Joint Venture Agreement and the Development Agreement.

158. I shall return to these pleadings shortly below.

The application to amend the second tier agency case The second tier agency case at the commencement of the hearing

159. At the commencement of the hearing, the Commissioner’s second tier agency case was as described above.

160. If that finding was made, the Commissioner’s case was that GZ was the agent of Zapari, BSD and Geocon Bowes for the specific purpose of marketing (T 380.36-.39; 381.9-.12), and thus Zapari, BSD and Geocon Bowes were liable as principals for the conduct of GZ. In closing written submissions (at [9]), Zapari was no longer alleged to be the principal of GZ; the second tier agency case being limited to GZ being the agent of Geocon Bowes and BSD. Accordingly, I shall not mention Zapari hereafter in relation to the second tier agency case.

161. The Commissioner said she was not asserting that BSD and Geocon Bowes were liable merely because they were the shareholders of GZ and, in that sense, controlled GZ. That position was soundly based: see Salomon v A Salomon & Co Ltd [1897] AC 22; Briggs v James Hardie & Co Pty Ltd (1989) 16 NSWLR 549 (Briggs) per Rogers AJA at 567F- 577E.

162. Rather, the Commissioner’s second tier agency case as opened, orally and in writing, was to the effect that an agency arose between BSD and Geocon Bowes as principals, and GZ as agent, pursuant to the terms of two of the agreements executed on 22 December 2017, namely the Joint Venture Agreement and the Development Agreement.

163. This was reflected in par 64 of the Third (and Fourth) Further Amended Statement of Claim. That paragraph said: At all material times, GZ Developments acted on behalf of BSD, Geocon Bowes JV and Zapari and as their agent, within the scope [of] its actual or apparent authority as agent. Particulars a. GZ Developments was the nominee of BSD and Geocon Bowes JV pursuant to the Bowes Street JV Agreement and entered into the Development Agreement in its capacity as nominee. b. Pursuant to cl 3.12 of the Bowes Street JV Agreement, Geocon and Zapari Group branding was incorporated into all marketing materials for the Development. c. Pursuant to cl 13 of the Development Agreement between BSD, Geocon Bowes JV and Zapari, GZ Development was responsible for marketing activities for the Development.

164. That pleading leaves much to be desired. The averment is simply a broad assertion of agency without any pleading of material facts. Nevertheless, the particulars provided would convey to the reasonable reader, cognisant that the rules of pleading require a pleading to notify a responding party of the case it has to meet and to define the issues for determination, that the relevant material facts of the agency alleged were found in the contractual rights and obligations contained in the agreements particularised and the particular clauses of those agreements identified.

165. In the Commissioner’s written opening submissions, which were consistent with the pleading, she submitted at [65]: In turn, GZ Developments acted on behalf of Bowes Street Developments, Geocon Bowes Street and Zapari Property as their agent, within the scope of its actual or apparent authority as agent.

166. A footnote was provided in relation to that sentence, and the footnote said: Bowes Street JV Agreement (CB 37 at Tab 7 p.831); Bowes Street Development Agreement (CB 37 at Tab 11 p.921).

167. What those matters conveyed was that the material facts relied upon to establish the second tier agency were the various contractual rights and obligations relating to marketing set out in the Joint Venture Agreement and the Development Agreement.

168. The following will make more sense shortly, but there was no mention of the PCG in the Commissioner’s written opening submissions in Section D, headed “THE ROLES OF THE DEFENDANTS” in which the second tier agency case was described. The PCG was mentioned three times in Section E of the submissions, headed “THE PROMOTIONAL MATERIALS AND THE REPRESENTATIONS TO WHICH THEY GAVE RISE” in relation to three meetings concerning the Flyer and particular emails only. Nor was there any mention of the PCG directing GZ to do various things relating to marketing and then GZ, in turn, directing GRE (or Geocon Group) in relation to that marketing.

169. Nor was the PCG itself, or any allegation of the PCG directing GZ, mentioned in the Third Further Amended Statement of Claim and most particularly not in par 64. In particular, there was no mention in par 64 or its particulars of cls 20 or 26 of the Joint Venture Agreement nor the occurrence of any of the events mentioned in those clauses.

170. There was occasional mention of the PCG in the Commissioner’s oral opening, although only as a background or collateral fact as distinct from identification as a material fact relevant to agency.

A new second tier agency case emerges

171. During the oral opening of Geocon Bowes’s case, I told the Commissioner’s senior counsel that there were two questions I would ask her after all other parties had given their oral opening submissions so that I could get a better general overview of the case. The second of those two questions was directed to the second tier agency case.

172. On that subject the following was said commencing at T 327.32 directed to some indicia of agency (consent, direction and control which were identified in South Sydney District Rugby League Football Club Ltd v News Ltd [2000] FCA 1541; 177 ALR 611 (South Sydney)) in relation to the second tier agency case: HIS HONOUR: Just before you move off - Ms Sharpe [sic], I will ask you to give a brief reply on a couple of things. … … HIS HONOUR: Yes. Thank you. And then the second thing is, I just have a - a big picture level would be assisted by you pointing out what your case is on direction and control agency. MS SHARP: Yes. HIS HONOUR: You took me to the detail of the agreements but if, for example, which clause in any particular agreement says that one party has control over another. MS SHARP: Yes. HIS HONOUR: Just that big picture, I would appreciate.

173. After the oral openings of the other parties were completed, I sought the answers to the two questions from the Commissioner’s senior counsel. Answers were given, and of relevance was the answer to the second question set out in the quoted transcript above, namely the particular clauses in the agreements relating to the control and direction of GZ by Geocon Bowes and BSD. After that answer was given (which traversed factual material beyond the bounds of the question) Geocon Bowes and BSD objected on the basis that the case so described had not been pleaded or otherwise notified to those defendants.

174. I determined that the case outlined in the answer to my question had not been pleaded. This led to a further application by the plaintiff to amend the pleadings and to file a Fifth Further Amended Statement of Claim to plead an expanded second tier agency case. I subsequently refused that application and said I would provide reasons for doing so in this judgment. These are those reasons.

175. Up to the point in time when I received the answer to the question set out at [172] above, the material facts identified in the pleading in par 64 (albeit in particulars) were, as I have said, limited to certain contractual rights and obligations between those parties set out in the Joint Venture Agreement and the Development Agreement.

176. The case described in answer to the question I asked the Commissioner was as follows. The Commissioner’s position remained that she was not alleging that BSD and Geocon Bowes were the principals of GZ merely by the fact that they were, together, 100 percent shareholders of GZ.

177. Rather, the Commissioner submitted that there were authorities to the effect that there could be additional matters (described in some of those authorities as “something more” than mere controlling shareholdings alone) which could give rise to shareholders being held to be principals of their subsidiary. A number of cases of that type are found in the judgment of Rogers AJA in Briggs at 567F-577E, although as his Honour pointed out, there is no unifying principle disclosed by those authorities as to what circumstances might give rise to that conclusion.

178. The Commissioner submitted that the “something more” in this case was that other terms of the Joint Venture Agreement had “subverted the ordinary course of decision-making within” GZ (T 381.16-.19). It was said that, rather than the directors of GZ making decisions, the decision-making power had been reposed in the PCG (T 381.24-.25).

179. The Commissioner’s senior counsel then took me to cl 26 of the Joint Venture Agreement which governed the PCG. Of particular relevance was cl 26.4 which provided that the PCG would provide the development manager (Geocon Bowes) with “guidance and direction in respect of Project Control Matters”. Cl 26.4 said: The PCG will have the responsibility of providing the Development Manager with guidance and direction in respect of Project Control Matters. The Participants may from time to time delegate additional responsibilities or expand the role of the PCG.

180. “Project Control Matters” was defined in the Joint Venture Agreement to be the matters set out in Schedule 1 to that Agreement. There were 13 such matters which I have described earlier, but marketing was not one of them.

181. Of significance is that cl 26.4 said that the “Participants” (defined to mean BSD and Geocon Bowes) could “delegate additional responsibilities or expand the role of the PCG”.

182. The submission (at T 382.3-.6) was that: The point we make is the usual decision-making process of the company has been displaced by this provision (cl 26) in the agreement and has given control of GZ Developments in relation to marketing to the first defendant and the second defendant.

183. It was then submitted (at T 382.28-.29) that: Yes, ‘and additional responsibilities to expand the role of the PCG’ and we say marketing was one of those additional responsibilities.

184. The Commissioner’s senior counsel summarised this new case by submitting (at T 385.32-.35) that: We say that the first and second defendants tell GRE what to do via the fourth defendant. They instruct the fourth defendant and in turn the fourth defendant instructs GRE.

185. What those submissions conveyed was that, as material factual matters, the Participants had, at some point in time, delegated marketing to the PCG as an additional responsibility, that the PCG had exercised that responsibility by directing GZ what to do vis-à-vis marketing, and in turn GZ had so directed GRE.

186. The Commissioner’s senior counsel submitted that this agency case (as just described) was referred to in the Commissioner’s written opening at pars 52 to 66 and par 64 of the Statement of Claim (quoted above at [176]).

187. I disagreed.

188. Nowhere in those paragraphs in those documents is there any mention of the Participants delegating marketing to the PCG, that the PCG had exercised that responsibility by directing GZ what to do vis-à-vis marketing and in turn GZ had so directed GRE.

189. The nub of the problem was that the Commissioner took the view that it was sufficient to simply plead that “[a]t all material times, GZ Developments acted on behalf of BSD, Geocon Bowes and Zapari and as their agent, within the scope [of] its actual or apparent authority as agent” without saying more.

190. Again, I disagreed.

191. That statement was an assertion, or perhaps two assertions, and does not contain any material facts relating to the factual matters described at [185] above. It is trite to say that material facts are required to be pleaded to inform the responding parties of the essential elements of the case they have to meet.

192. Put more simply, par 64 of the pleading did not plead relevant material facts to the cause of action now described such as the Participants delegating marketing (as an additional responsibility) to the PCG, the PCG exercising that responsibility by directing GZ what to do vis-à-vis marketing, and in turn, GZ so directing GRE.

193. Subsequently, on the next hearing day, the Commissioner’s senior counsel appeared to contradict what I have outlined above and seemed to indicate that the material facts relied on were limited to the express terms of the Joint Venture Agreement (T 412.42- 413.20), and what may be implied from those express terms (T 413.22-.24).

194. At the time of those submissions, I was of a similar mind as that of Geocon Bowes’s senior counsel who said (at T 416.4-.5): I agree with your Honour that that's what Ms Sharp has said this morning. I don't agree that that's what she said on Friday (the previous hearing day).

195. Argument continued until the Commissioner’s senior counsel then said that the Commissioner would be relying upon additional material facts to those pleaded, that is, additional to the terms of the two agreements. Commencing at T 424.29 the following exchange took place: MS SHARP: Could I take your Honour to clause 26.4 and again I went to this clause on Friday afternoon. The clause states: The PCG will have responsibility of providing the development manager with guidance and direction in respect of the project control matters. And it continues, 'The participants may from time to time delegate additional responsibilities to expand the role of the PCG.' Now, I rely on that term, your Honour, but there is the question of the role being expanded and we say the role was expanded by the marketing and I wish to make that very clear in case - - HIS HONOUR: So you do rely on events which occurred after the signing of this agreement, that is, some events which expanded the role? MS SHARP: Yes, your Honour, but it comes back to the terms of this contract. It is this contract which - - - … HIS HONOUR: That's the first part, and then to make good your argument you would then seek to prove the expansion of the role? MS SHARP: Well, yes, your Honour. The role - there was a - that, 'The participants may from time to time delegate additional responsibilities to expand the role of the PCG,' and as I said on Friday, that occurred with respect to marketing. This is not a revelation this morning. I said that on Friday and that is why I apprehend that my learned friend is now trying to compress what we're able to say by saying we're not allowed to rely on decisions that were made at the project control group meetings which - - - HIS HONOUR: In terms of agency, do you say that after 22 December that participants delegated additional responsibilities pursuant to this clause? MS SHARP: I say what happened within the four corners of this clause. HIS HONOUR: Would you please answer my question. Do you say that after 22 December the participants delegated additional responsibilities - - - MS SHARP: Yes. HIS HONOUR: All right. MS SHARP: We say on the proper construction of this agreement - and again I alluded to this on Friday afternoon - the project control matters does not include the marketing and that was a matter that it expanded the role of the PCG and that's what I said - - - HIS HONOUR: Subsequent to 22 December. … MS SHARP: Yes, but your Honour, the source of authority is still the four corners of this agreement. … … HIS HONOUR: What I keep saying to you is the source is only the beginning of the argument. You then must come to subsequent events, which is Ms Steele's and Mr Percy's objection, that the subsequent events, for example, which delegated additional responsibilities or expanded the role of the PCG should have been and have not been pleaded. MS SHARP: Well, again I come back to the submission, your Honour, that it has been pleaded from day one that this agency arrangement existed and it's been particularised from day one that it was based on this joint venture agreement. HIS HONOUR: Where's the pleading of delegation of additional responsibilities or expansion of the role of the PCG after 22 December? Where's that in the pleading? MS SHARP: Your Honour, there is no pleading of that because that is a matter of evidence, your Honour. …

196. In addition to those remarks, it became clear that the second tier agency case the Commissioner said she wanted to prosecute included the material facts that the PCG directed GZ in relation to marketing, and in turn GZ directed GRE per cls 20 and 26 of the Joint Venture Agreement.

197. The last sentence of the quote above reveals the nub of the problem. The Commissioner took the view that facts such as the Participants delegating marketing (as an additional responsibility) to the PCG, the PCG exercising that responsibility by directing GZ what to do vis-à-vis marketing, and GZ, in turn, directing GRE in relation to that marketing, were matters of evidence and were not material facts required to be pleaded.

198. In my view that view was mistaken.

The new second tier agency case was not pleaded

199. Rule 406 of the Court Procedures Rules 2006 (ACT) (the Rules) requires pleadings to contain a statement in a summary form of the material facts on which the party relies and to state specifically any matter that if not stated specifically may take another party by surprise. Material facts are those facts which are required to be proved to make good the cause of action.

200. Refshauge J succinctly described what are material facts, and how they differ from particulars, in Canberra Data Centres Pty Ltd v Vibe Constructions (Act) Pty Ltd [2010] ACTSC 20; 4 ACTLR 114. His Honour said: [34] There have been many other statements in the cases which have refined or nuanced this. The threads have been helpfully drawn together in Multigroup Distribution Services Pty Ltd v TNT Australia Pty Ltd [1996] ATPR 41-522. Burchett J said (at 42,679): The primary function (of a statement of claim) is to tell the defending party what the claim is that he has to meet. That is a matter of elementary and natural justice; the claim cannot be answered until it is known. When a sufficient defence has been filed to a sufficient statement of claim, a further function will generally have been performed — that of defining the question or questions for decision. This definition is required, of course, from an early stage, or else discovery and other interlocutory procedures are likely to prove misdirected, wasteful and unproductive. In order to achieve these fundamentals, a statement of claim must set out clearly, not just the bare claim that is made, but also “the material facts on which it is based”, including facts that, if not specifically pleaded might take the other party by surprise. [35] Given the extensive reference in this case to particulars, it is also worth repeating what is trite law but necessary to be emphasised, namely the difference between pleadings and particulars and, especially, the role of each. I refer to the often cited observation of Scott J in Bruce v Odhams Press Ltd where his Honour said (at 711–3): … but it is beyond question that there is a radical distinction [between a statement of material facts and particulars] and none the less so that in cases near the dividing line there is a penumbra where the two may and often do overlap, just as between night and day there is a zone of doubt which we call dusk … The cardinal provision in r 4 is that the statement of claim must state the material facts. The word “material” means necessary for the purpose of formulating a complete cause of action; and if any one “material” fact is omitted, the statement of claim is bad; it is “demurrable” in the old phraseology, and in the new is liable to be “struck out” … The function of “particulars” under r 6 is quite different. They are not to be used in order to fill materials gaps in a demurrable statement of claim — gaps which ought to have been filled by appropriate statements of the various material facts which together constitute the plaintiff’s cause of action. The use of particulars is intended to meet a further and quite separate requirement of pleading, imposed in fairness and justice to the defendant. Their function is to fill in the picture of the plaintiff’s cause of action with information sufficiently detailed to put the defendant on his guard as to the case he has to meet and to enable him to prepare for trial. Consequently in strictness particulars cannot cure a bad statement of claim. But in practice it is often difficult to distinguish between a “material fact” and a “particular” piece of information which it is reasonable to give the defendant in order to tell him the case he has to meet; hence in the nature of things there is often overlapping.

201. In my view, facts such as the Participants delegating marketing (as an additional responsibility) under cl 26.4 of the Joint Venture Agreement to the PCG, the PCG exercising that responsibility by directing GZ what to do vis-à-vis marketing, and GZ, in turn, so directing GRE in relation to that marketing, were all material facts that were required to be pleaded. They were required in order to inform the responding parties what the (full) agency case was that they were required to meet. Those three facts were needed to formulate, or were elements of, the cause of action alleged.

202. Simply pleading that at “all material times, GZ Developments acted on behalf of BSD, Geocon Bowes and Zapari and as their agent, within the scope [of] its actual or apparent authority as agent” did not tell the responding parties how that case would be made out i.e. the material facts relied on.

203. I also observe that this expanded case was reliant upon cl 26.4 of the Joint Venture Agreement, a clause not referred to in par 64 of the pleading nor in any of its particulars.

204. For those reasons I held that this expanded agency case had not been pleaded.

The application to amend the second tier agency case

205. The ruling I made during the hearing that the expanded second tier agency case had not been pleaded led to an application to amend the statement of claim. I made clear that any new allegations should be pleaded rather than being added as particulars (T 475.18) but what appeared the next day was a draft Fifth Further Amended Statement of Claim which, in relation to the paragraphs of substance, being pars 63 and 64, simply added further particulars.

206. Those new particulars imperfectly described the expanded agency case that had been outlined orally and which I have described above. However, at that time the hearing was into its seventh day (having been set down for 10 days) with only one witness having given evidence and there was little point insisting on proper pleadings.

207. In the draft Fifth Further Amended Statement of Claim there were some amendments to pars 62I and 65 which I allowed but which need not be mentioned here.

208. The substantive amendments were those proposed to pars 63 and 64. I allowed some of the amendments to those paragraphs and disallowed others.

209. The proposed amendments are quoted below. Underlined words were those sought to be added but for which leave was refused. Italicised words were words sought to be added and which I allowed. Struck-through words were deleted by the Commissioner as part of her desired amendments. Words in brackets were allowed because there was no objection: 63. In publishing or causing to be published the Promotional Material, GRE Sales, or further or alternatively, Geocon Group, engaged in conduct at the direction of, or with the consent or agreement of, GZ Developments and Zapari. Particulars A. As to the primary case that GRE Sales engaged in the conduct as agent of GZ Developments and Zapari: a. Response to s 52 notice issued to GGPL dated 25 March 2019, para 5(b) b. Response to s 52 notices issued to GZ Developments, Geocon Bowes, GRE Sales and Zapari dated 25 March 2019, para 23 B. As to the alternative case that Geocon Group engaged in the conduct as agent of GZ Developments and Zapari: a. There was no written agency agreement and an agency agreement is to be implied from conduct and the acquiescence by GZ Developments in the publication of the Promotional Materials following approval of those materials at PCG meetings: affidavit of Thomas Stephens affirmed 12 May 2023 at [12]-[15] and [28]-[34], affidavit of Nikolaos Georgalis affirmed 9 May 2023 at [42]-[55]; and affidavit of Peter Micalos sworn 10 May 2023 at [4] and [15]-[22]. C. As to the position of Zapari on either the primary or alternative case, it was the landowner and seller and by its conduct consented to (expressly and by acquiescence) the Promotional Materials which were issued on its behalf. 64. At all material times, GZ Developments acted on behalf of BSD, Geocon Bowes and Zapari and as their agent, within the scope its actual or apparent authority as agent. Particulars a. (On 22 December 2017) GZ Developments was appointed the nominee of BSD and Geocon Bowes pursuant to the Bowes Street JV Agreement entered into the Development Agreement in its capacity as nominee (cl.3.3) and pursuant to that agreement: (i) BSD and Geocon Bowes were the Participants and in cl.2.1 agreed to associate themselves as an unincorporated joint venture to carry out the Project; (ii) by cls.3.4 to 3.8, GZ Developments agreed to make various appointments including, by cl.3.5, the appointment of GRE Sales to provide the Agency Services; (iii) by cl.3.11, GZ Developments as nominee of BSD and Geocon Bowes bore the risk of delivering the Project; (iv) by cl.3.12, the parties agreed that Geocon and Zapari Group branding would be incorporated into all marketing materials for the Project in a manner acceptable to BSD and Geocon Bowes acting reasonably; (v) by cl.20(c), the directors of GZ Developments agreed they would comply with the directions of the PCG in so far as those directions relate to GZ Developments’s role as the nominee; (vi) by cl.24.1, the PCG could approve the Development Manager to do things in its own name and in the name of GZ Developments; (vii) by cl.24.2, BSD and Geocon Bowes agreed that decisions in respect of Project Control Matters are reserved to the PCG and GZ Developments must obtain approval of the PCG prior to undertaking any action in respect of a Project Control Matter; (viii) by cl.26.1, the PCG consisted of one representative of BSD and one representative of Geocon Bowes; (ix) by cl.26.4, the PCG was responsible for directing the Development Manager in relation to Project Control Matters and BSD and Geocon Bowes could from time to time delegate additional responsibilities to the PCG and expand its role; and in the premises, BSD and Geocon Bowes could direct, authorise and control GZ Developments in relation to such matters falling within cl.26.4, and this was consented to by each of these parties through their entry into the Bowes Street JV Agreement. b. BSD and Geocon Bowes did by their conduct delegate to the PCG within cl.26.4 responsibility for marketing since: (i) marketing was usually a standing item in PCG meetings; (ii) marketing reports and marketing dashboards were tabled at PCG Reports; (iii) authorisation was given at PCG meetings to marketing including Promotional Materials b. Pursuant to cl 3.12 of the Bowes Street JV Agreement, Geocon and Zapari Group branding was incorporated into all marketing materials for the Development. c. Pursuant to cl 13 of the Development Agreement between BSD, Geocon Bowes and Zapari, GZ Development was responsible for marketing activities for the Development. d. By reason of (a) to (changed to “and” after leave to add b. was refused) (c) above, GZ Developments’ responsibility for marketing activities was controlled by BSD and Geocon Bowes.

210. After hearing objections, I allowed all proposed amendments with the exception of par 63, particulars B. and C., and par 64, particular b. (beginning “BSD and Geocon Bowes did by their conduct delegate …”).

211. I allowed the amendments I did because in my view they tolerably were within the case that the relevant defendants were ready to meet (agency arising from contractual rights and obligations), there was no resulting impediment to the efficient dispatch of the case and there was no prejudice to the relevant defendants. That is, the allowed amendments simply added a number of additional clauses in the Joint Venture Agreement in circumstances where the original agency case as originally opened was based on the contractual rights and obligations in the Joint Venture Agreement and the Development Agreement and tidied up some obvious omissions.

Reasons for refusing the application to amend the second tier agency case

212. I disallowed particular B. to par 63 because there had been no earlier pleading of an agency agreement existing between GZ and Geocon Group, and I was persuaded that there was prejudice in particular B. because it alleged “conduct and the acquiescence by GZ Developments” which had not been pleaded or particularised. In my view there were reasonable enquiries that could have been undertaken on that matter, and evidence possibly obtained had earlier notice been given. The opportunity to obtain that evidence no longer existed. As for the allegation against Zapari in particular B., the particular was entirely silent as to what the case was.

213. I disallowed particular C. to par 63 because there were no material facts identified as to the “conduct” alleged, and this would hinder Zapari in knowing what case it had to meet. Zapari frankly said that there was unlikely to be any prejudice because Mr Skepev was already a witness and was available to take instructions, but in my view Zapari was entitled to know the case it had to meet before Mr Skepev gave evidence.

214. I disallowed particular b. to par 64 for three reasons.

215. First, I was persuaded that a number of the defendants were prejudiced in being denied a fair opportunity to prepare for and to meet that case. The Commissioner submitted that all PCG minutes were in the Court Book but that was not correct, and the factual allegation that BSD and Geocon Bowes delegated responsibility for marketing to the PCG “by their conduct” would necessarily involve a wider enquiry than simply looking at minutes of PCG meetings. Whilst the Commissioner may have been content to rely upon a selection of PCG minutes to establish her case, the relevant defendants may have, if given the opportunity, cast a wider evidential net to meet that case. For example, the defendants may have tendered other documents or sought to lead further testimonial evidence from witnesses as to conversations between their officers.

216. The Commissioner again said that the agency case had always been pleaded, but I disagreed (as I have said earlier in these reasons). The relevant material facts relied on by the Commissioner in the new second tier agency case had not been pleaded and there would be prejudice should they be allowed.

217. Second, enough was enough. Put another way, there comes a point at which a plaintiff has been afforded ample and reasonable opportunity to amend his, her or its pleadings and once that line has been crossed, then in the proper exercise of discretion, having regard to the circumstances of the case, that leave may be refused: Dennis v Australian Broadcasting Corporation [2008] NSWCA 37 per Spigelman CJ at [26] (Basten and Campbell JJA agreeing); McMahon v John Fairfax Publications Pty Ltd [2010] NSWCA 308 per Allsop P at [33] (Young JA agreeing).

218. The present case was commenced in 2019. There were five parties, each with more than one counsel except for GRE. There had been multiple directions hearings. Considerable time and expense had been incurred in preparing for the present hearing, evidenced by a Court Book of 9,609 pages, a Supplementary Court Book of 3,725 pages, opening written submissions totalling 144 pages with a total of 540 footnotes and a Joint List of Authorities of 10,368 pages.

219. The case commenced with the Commissioner seeking leave to file a Fourth Further Amended Statement of Claim, albeit the need for which was prompted by an arguable change in position by some defendants. Be that as it may, the application for leave to file the Fifth Further Amended Statement of Claim did not arise out of any conduct of the defendants, and only became apparent on the fifth day of the hearing after oral opening submissions by all of the parties.

220. Third, the case had been set down for ten days (it ended up taking 17 days), and if particular b. had been allowed there would have had to have been an adjournment. There would have been further and not inconsiderable delay in finding another hearing date. In my view the Commissioner had had ample time and opportunity to fully plead the second tier agency case based on the material facts I have described above.

221. Fourth, in refusing leave, I took into account s 5A of the Court Procedures Act 2004 (ACT) which says that the main purpose of the civil procedure provisions is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible, and I took into account the objectives set out in s 5(2). I took into account the terms of r 502 of the Rules (r 501 does not apply because the amendments raised issues which did not appear, even unclearly, in the pleadings at the time of the application for leave to amend: see Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; 239 CLR 175 (Aon) at 205, [71]).

222. As was said by the plurality in Aon at 217, [111]-[112]: An application for leave to amend a pleading should not be approached on the basis that a party is entitled to raise an arguable claim, subject to payment of costs by way of compensation. There is no such entitlement. All matters relevant to the exercise of the power to permit amendment should be weighed. The fact of substantial delay and wasted costs, the concerns of case management, will assume importance on an application for leave to amend. Statements in JL Holdings which suggest only a limited application for case management do not rest upon a principle which has been carefully worked out in a significant succession of cases. On the contrary, the statements are not consonant with this Court’s earlier recognition of the effects of delay, not only upon the parties to the proceedings in question, but upon the court and other litigants. Such statements should not be applied in the future. A party has the right to bring proceedings. Parties have choices as to what claims are to be made and how they are to be framed. But limits will be placed upon their ability to effect changes to their pleadings, particularly if litigation is advanced. That is why, in seeking the just resolution of the dispute, reference is made to parties having a sufficient opportunity to identify the issues they seek to agitate. (Citations omitted.)

223. Accordingly, I refused leave to amend the second tier agency case.

224. I shall now describe the central statutory provisions which apply in this case, and some principles which apply to them.

Australian Consumer Law

Applicable legal principles

225. The Commissioner relied upon ss 4, 18 and 29(1)(b) and (g) of the ACL. Those provisions are incorporated by reference into the law of the Australian Capital Territory under the provisions of the FTACT, a proposition not disputed by any party. For ease of reference, I shall simply refer to the relevant provisions as being provisions of the ACL.

226. The relevant principles concerning ss 4 and 18 of the ACL are well understood and are not substantially in dispute between the parties. I shall set them out briefly below.

227. The applicability of s 29(1)(b) and (g) of the ACL to the facts of this case was very much in dispute. Accordingly, in addition to setting out the relevant provisions below, I shall determine the legal issues raised in relation to those provisions after I have set them out.

Section 4 of the ACL

228. Section 4 of the ACL is concerned with future matters and says:

4 Misleading representations with respect to future matters (1) If: (a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and (b) the person does not have reasonable grounds for making the representation; the representation is taken, for the purposes of this Schedule, to be misleading. (2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by: (a) a party to the proceeding; or (b) any other person; the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary. (3) To avoid doubt, subsection (2) does not: (a) have the effect that, merely because such evidence to the contrary is adduced, the person who made the representation is taken to have had reasonable grounds for making the representation; or (b) have the effect of placing on any person an onus of proving that the person who made the representation had reasonable grounds for making the representation. (4) Subsection (1) does not limit by implication the meaning of a reference in this Schedule to: (a) a misleading representation; or (b) a representation that is misleading in a material particular; or (c) conduct that is misleading or is likely or liable to mislead; and, in particular, does not imply that a representation that a person makes with respect to any future matter is not misleading merely because the person has reasonable grounds for making the representation.

229. A representation made with respect to a future matter is in the nature of a promise, forecast, prediction or other like statement about something that will only transpire in the future, and which is not capable of being proven to be true or false when made: see Australian Competition and Consumer Commission v Woolworths Group Ltd [2020] FCAFC 162; 281 FCR 108 at 145, [132].

230. During the hearing of this case I was required to rule on an objection to the tender of extracts of Hansard recording statements made by various persons in the ACT Legislative Assembly, Budget Papers tabled in the ACT Legislative Assembly, a report of the Commonwealth Joint Standing Committee on the National Capital and External Territories dated October 2018 entitled “Commonwealth approvals for ACT light rail” and various submissions made to the Joint Standing Committee for the purposes of preparing the Report (collectively called the Parliamentary Materials).

231. I admitted the Parliamentary Materials: Commissioner for Fair Trading v Bowes Street Developments Pty Ltd (No 2) [2023] ACTSC 168; 378 FLR 390 (Bowes St (No 2)).

232. In Bowes St (No 2) I said the following about s 4 which I also apply in this judgment, and in particular the irrelevance of a person’s belief in the accuracy of a representation as to a future matter: [21] The following general principles apply to s 4 in its application to the facts of any particular case. Those general principles are: (a) For there to be “reasonable grounds” at the time of making the representations the representator had to have had facts sufficient to induce in the mind of a reasonable person a basis for making the representation. This cannot involve hindsight reasoning. (b) The question whether the representor had “reasonable grounds” is an objective rather than subjective one. A genuine or honest belief on the part of the representor in a representation is not sufficient to show reasonable grounds. However, the courts generally consider the position of the representor, including the representor’s knowledge, experience and expertise, in considering whether the representor had reasonable grounds for making a particular representation. (c) The representor must have in fact relied upon the identified facts and circumstances that existed at the time of the representation to support the reasonable grounds contention regarding the representation. [22] In Sykes v Reserve Bank of Australia [1998] FCA 1405; 88 FCR 511, Heerey J said at 513: If there was a representation as to a future matter, s 51A [the forebearer of s 4] requires a representor to show: • some facts or circumstances • existing at the time of the representations • on which the representor in fact relied • which are objectively reasonable and • which support the representation made. [23] The word “belief” does not appear in his Honour's judgment, nor does it appear in s 4. The question of belief is mentioned in some of the authorities but in two different ways which are not relevant to this case. The first is in terms of a belief a consumer may form after receipt of a misleading representation. The second sense in which belief is used in the authorities is the belief that a representor may have when that representor has represented that he or she holds a particular opinion, and in such cases, whether or not the representor believed in that opinion is a relevant issue. [24] In submissions it was put that one issue in the case is whether the relevant actors in this case did or did not hold particular beliefs but, in my view, that issue is irrelevant. [25] In Cummings v Lewis (1993) 41 FCR 599, Sheppard and Neaves JJ said at 565: …For the moment, it is important to note that s 41 is of significance for two reasons. Subsection (1) provides that a representation with respect to any future matter shall be taken to be misleading if the person making it does not have reasonable grounds for doing so. The second matter to note is that the onus of establishing that a person had reasonable grounds for making a representation with respect to a future matter is on the person making it. [26] Their Honours then said at 565: …Genuine or honest belief is not what s 41 of the Act refers to. It refers to the person making a representation not having reasonable grounds for making it. The distinction is perhaps a fine one, but the fact that a person may honestly believe in a particular state of affairs does not necessarily mean that he has reasonable grounds for his belief that the statement he makes is correct. [27] The s 41 referred to by their Honours was s 41 of the Fair Trading Act 1987 (NSW). It was in the following terms: (1) For the purposes of this Part [Part 5 in which s 42 also appears], where a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the person does not have reasonable grounds for making the representation, the representation shall be taken to be misleading. (2) The onus of establishing that a person had reasonable grounds for making a representation referred to in subsection (1) is on the person. (3) Subsection (1) shall not be taken to limit by implication the meaning of a reference in this Part to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead. [28] In Miller's Australian Competition and Consumer Law Annotated 2023, 45th edition, the learned authors say at paragraph [ACL.4.80], “The fact that a person may believe in a particular state of affairs does not necessarily mean that there are reasonable grounds for that belief,” and cite Cummings v Lewis. [29] Cummings v Lewis was also cited with approval in Traderight (NSW) Pty Ltd v Bank of Queensland (No 10) [2012] NSWSC 1181, wherein Ball J said at [48]: …The question whether there are reasonable grounds for making a particular representation is an objective not a subjective question. A genuine or honest belief on the part of the representor in a representation is not sufficient to show reasonable grounds: Cummings v Lewis (1993) 41 FCR 559 at 565. [30] Returning to Sykes, the five matters to be considered in a case such are this, are: (1) to identify the particular facts or circumstances relied on, (2) which existed at the time of the representations, (3) on which the representor in fact relied, (4) which are objectively reasonable and (5) which support the representations made.

233. The time for assessment whether there were reasonable grounds for a representation with respect to any future matter is at the time the representation was made, although subsequent events may be relevant in determining whether the person’s grounds for making the representation were reasonable, but without engaging in hindsight reasoning: City of Botany Bay Council v Jazabas Pty Limited (ACN 060 105 053) [2001] NSWCA 94 at [83] (Mason P, Beazley JA agreeing); Australian Competition & Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114 at [100]-[102].

234. The test is objective. Many of the Commissioner’s, and some defendants’ submissions, raised the question whether the various witnesses’ subjective view of the reasonableness of the grounds they said they relied on could or should be believed. But that is not the issue. I agree with Geocon Bowes’ submission which said: First, because the question of whether representations are misleading or deceptive or false or misleading is objective, as is the question of whether the grounds for making those representations were reasonable, the testimonial evidence of the Defendants’ witnesses has a narrow relevance. Its only relevance in answering those objective questions is in establishing the grounds that the Defendants in fact had for making the Representations. Witnesses’ opinions about whether those grounds were reasonable have no direct relevance; they cannot supplant, or even bear on, the Court’s task of assessing the reasonableness of those grounds objectively. So, for example, the Commissioner’s submissions about whether the Defendants’ witnesses accepted or otherwise that the Light Rail Stage 2 was not guaranteed to extend to Woden Town Centre or stop near the Land (PCS [263]-[266]) have no bearing on the objective assessments that the Court is required to make.

235. I would only impose one caveat to that submission, and that is that the evidence of the witnesses’ beliefs may be relevant to their credit.

236. In considering whether a representor had reasonable grounds for making a particular representation it may also be appropriate to take into account the position of the representor, including the representor’s knowledge, experience and expertise. In Traderight (NSW) Pty Ltd v Bank of Queensland Limited (No 10) [2012] NSWSC 1181 Ball J said: [48] … The question whether there are reasonable grounds for making a particular representation is an objective not a subjective question. A genuine or honest belief on the part of the representor in a representation is not sufficient to show reasonable grounds: Cummings v Lewis (1993) 41 FCR 559 at 565. However, courts generally consider the position of the representor, including the representor's knowledge, experience and expertise, in considering whether the representor had reasonable grounds for making a particular representation. For example, in Australian Competition and Consumer Commission v Danoz Direct Pty Ltd [2003] FCA 881; (2003) 60 IPR 296, Danoz Direct had made representations about the fitness benefits of a product known as the "AbTronic". To prove that it had "reasonable grounds" for making the representations, Danoz Direct argued that it relied upon information given to it by the manufacturer of the product. Dowsett J addressed that submission at [174] in these terms: In many cases a retailer will rely upon representations made by a manufacturer or wholesaler as to the quality and capacity of a particular product and will make representations based upon them. It cannot be seriously suggested that a pharmacist who recommends a product to a customer, acting upon information provided by a reputable manufacturer, lacks reasonable grounds. Similarly, it cannot be asserted that s 51A requires a retailer of electrical goods to carry out testing on a television set supplied by a reputable manufacturer in order to ensure that it has the qualities asserted in relevant promotional material, before he or she represents that it has such qualities. In my view, such representations may well be made on reasonable grounds if they are based upon information provided by a supplier. In each case, the question will depend upon the reputation of the supplier and past dealings between it and the retailer. If goods of a particular kind have been consistently provided over a lengthy period of time, have always been of good quality and lived up to representations made by the supplier, then it may well be reasonable for the retailer to act upon representations concerning a new product. Each case will depend upon its own facts. His Honour then went on to find that Danoz Direct did not have reasonable grounds for most of the representations it made because it had access to scientific material about the product and had not assessed the reliability of the manufacturer's claims in light of that material: at [175]ff. [49] Similarly, a person who relies on expert advice for making a representation may have reasonable grounds for making it if the person made reasonable enquiries concerning the qualifications and experience of the expert and had no reason to doubt the conclusions the expert reached, even if those conclusions were arrived at as a result of negligence: Lake Koala Pty Ltd v Walker [1991] 2 Qd R 49 at 58. (Emphasis added.)

237. I also wish to emphasise, contrary to a submission made by GZ, that the relevant facts and circumstances to be considered are those in the possession of and relied on by the representor, and not otherwise. That is, other publications or other facts and circumstances tending to show there were reasonable grounds for a representation, but which were not in the representor’s possession and were not relied on by it, are not relevant to s 4.

238. That position is commonly traced back to Heerey J’s judgment in Sykes v Reserve Bank of Australia (1998) 88 FCR 511 (Sykes) and has continued. In Australian Competition and Consumer Commission v Woolworths Limited [2019] FCA 1039 (Woolworths), Mortimer J (as her Honour then was) undertook an extensive analysis of that issue and the authorities at [114]-[131] which I gratefully adopt. An appeal from that judgment was dismissed: ACCC v Woolworths Group Limited [2020] FCAFC 162; 281 FCR 108 (ACCC v Woolworths Group Limited). No point was taken on appeal that Mortimer J’s holdings quoted below involved any error.

239. In that analysis which began at [114], her Honour said: As I explain below, I consider the authorities suggest that for a representor to “have” reasonable grounds, the representor must rely on the information, facts or circumstances said to constitute the reasonable grounds. (Emphasis added.)

240. Later, at [135], her Honour noted, with reference to Cummings v Lewis (1993) 41 FCR 599 (Cummings), that the representor’s reliance may be direct, or it may be inferred from other evidence. Her Honour said: This passage makes it clear the grounds must nevertheless be those of the representor, although they might be established through evidence from sources other than the representor. That is the case here. There is no direct evidence from any employee of Woolworths who purports to be the representor. Nonetheless, there is evidence of the circumstances in which the representations on the labels came to be made, and indeed (on Woolworths’ submission) what information was in its possession at the time the representations were made, and what it can be inferred to have “relied” upon. All this passage in Cummings is doing, in my opinion, is cautioning against reliance on subjective evidence from the representor as being necessarily likely to give an accurate picture of what information the representor “had” as a basis for any prediction or forecast made.

241. Her Honour noted at [127] the many cases that had followed Sykes. After referring to a number of cases which had applied Sykes, her Honour said: I accept there are also dicta in other cases which indicate acceptance of the position in Sykes, including the need for evidence of what the representor relied on: see Pramoko v Grande Enterprises Ltd [2015] WASCA 157; 108 ACSR 469 at [57] (Martin CJ, with whom Newnes JA and Beech J agreed); Gate Gourmet Australia Pty Limited (in liq) v Gate Gourmet Holding AG [2004] NSWSC 149 at [300] (Einstein J); Australian Competition and Consumer Commission v Emerald Ocean Distributors Pty Ltd [2005] FCA 1703; ATPR 42-096 at [30] (Nicholson J); Australian Competition and Consumer Commission v Henry Kaye and National Investment Institute Pty Ltd [2004] FCA 1363 at [140] (Kenny J); Seven Network Limited v News Limited (No 7) [2005] FCA 1092 at [16] (Sackville J); Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 7) [2008] FCA 1364 at [418] (Collier J); Australian Competition and Consumer Commission v Jones (No 5) [2011] FCA 49 at [23] (Logan J) and Whelan v Cigarette & Gift Warehouse Pty Ltd [2017] FCA 1534; 275 IR 285 at [178] (Collier J).

242. If one paragraph summed up her Honour’s analysis, it was [129] which said: Most importantly in my opinion, the text of s 4(1), read with s 4(2), clearly supports the position for which the ACCC contends. Subsection (1) is concerned with whether the person making the representation “does not have” reasonable grounds. The only sensible way to understand that phrase is that at the time of making the representation, the representor herself or himself, or through its corporate actors, “had” – as in fact possessed – a basis which can be objectively described as reasonable, for what was represented. The text directs attention to the information which in fact provided the basis for the statements or conduct. It does not direct attention to whether there were reasonable grounds for the making of the representation. Rather, the text focuses on whether the representor “had” such grounds. (Emphasis added.)

243. I should also observe that it does not assist a representor if the representation in relation to a future matter turns out to be correct. Mortimer J said at [136]: The situation posed by Woolworths at [142] of its closing submissions – of a prediction which turns out to be “entirely true and accurate” but where the information actually relied on at the time of the representation did not objectively establish reasonable grounds – might be somewhat fanciful. However, it is also nothing more than the working out of the intended effect of a provision such as s 4, which is to require those making predictions to have a reasonable basis for them at the time they make them. A representor is not entitled to rely on luck going her or his way and the prediction turning out to be true when there was no objectively reasonable basis for it when it was made. The whole purpose of s 4 (and earlier of s 51A) was to avoid this kind of recklessness. The Full Court in Dateline at [101]-[102] rejected a similar submission.

Section 18 of the ACL

244. The familiar s 18(1) of the ACL says: 18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

245. In this case the Commissioner relied on the Promotional Material as the conduct which conveyed representations which were said to be misleading or deceptive, or likely to mislead or deceive.

246. In a case such as this when the representations were made to the public at large, the Commissioner is not required to prove that any particular person was in fact misled, but whether the conduct was misleading or deceptive is determined at a level of abstraction involving those who are judged to be ordinary or reasonable members of the class of prospective purchasers: see Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12; 202 CLR 45 (Campomar).

247. As to the ordinary or reasonable members of the class of prospective purchasers, the Court said in Campomar (referring to s 18’s predecessor) at 85: [102] It is in these cases of representations to the public, of which the first appeal is one, that there enter the “ordinary” or “reasonable” members of the class of prospective purchasers. Although a class of consumers may be expected to include a wide range of persons, in isolating the “ordinary” or “reasonable” members of that class, there is an objective attribution of certain characteristics. Thus, in Puxu, Gibbs CJ determined that the legislation did not impose burdens which operated for the benefit of persons “who fail[ed] to take reasonable care of their own interests”. In the same case, Mason J concluded that, while it was unlikely that an ordinary purchaser would notice the very slight differences in the appearance of the two items of furniture in question, nevertheless such a prospective purchaser reasonably could be expected to attempt to ascertain the brand name of the particular type of furniture on offer. [103] Where the persons in question are not identified individuals to whom a particular misrepresentation has been made or from whom a relevant fact, circumstance or proposal was withheld, but are members of a class to which the conduct in question was directed in a general sense, it is necessary to isolate by some criterion a representative member of that class. The inquiry thus is to be made with respect to this hypothetical individual why the misconception complained has arisen or is likely to arise if no injunctive relief be granted. In formulating this inquiry, the courts have had regard to what appears to be the outer limits of the purpose and scope of the statutory norm of conduct fixed by s 52. Thus, in Puxu, Gibbs CJ observed that conduct not intended to mislead or deceive and which was engaged in “honestly and reasonably” might nevertheless contravene s 52. Having regard to these “heavy burdens” which the statute created, his Honour concluded that, where the effect of conduct on a class of persons, such as consumers, was in issue, the section must be “regarded as contemplating the effect of the conduct on reasonable members of the class”. (Footnotes omitted.)

248. In relation to the “ordinary” or “reasonable” members of the class of prospective purchasers, the question is whether a not insignificant number of that class would be misled or deceived: Hansen Beverage Co v Bickfords (Australia) Pty Ltd [2008] FCAFC 181; 171 FCR 579, Tamberlin J at [46] (Siopis J agreeing).

249. Evidence that someone was actually misled or deceived is admissible, and may be given weight, but the absence of such evidence may not be significant: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 634; 317 ALR 73 (ACCC v Coles); Henley Arch Pty Ltd v Henley Constructions [2021] FCA 1369; 163 IPR 1 at [545].

250. In ACCC v Coles, Allsop CJ said at [45]: … The objective assessment of advertising using ordinary English words in an attempt to persuade can be undertaken without the lengthening of a trial by the bringing of witnesses of indeterminate numbers. Language, especially advertising, seeking to raise intuitive senses and associations, can have its ambiguities and subtleties. The task of evaluating the objective character and meaning of the language in the minds of reasonable members of the public is not necessarily one that will be assisted in any cost-effective manner by calling members of the public. The question is one for the court: Taco Company of Australia v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202.

251. The general principles applicable to s 18 were not in dispute in this case and were summarised in ACCC v Coles. In that case Allsop CJ said at 81: [38] For the enquiry under s 18, it is necessary to identify the impugned conduct and then to consider whether that conduct, considered as a whole and in context, is misleading or deceptive or likely to mislead or deceive: Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; 294 ALR 404; 99 IPR 197; [2013] HCA 1 at [89], [102] and [118]; and Campomar Sociedad Limitada v Nike International (2000) 202 CLR 45; 169 ALR 677; 46 IPR 481; [2000] HCA 12 at [100]–[101] (Campomar). The same applies to the enquiry as to representations and conduct under ss 29(1)(a) and 33, respectively. [39] Conduct is misleading or deceptive or likely to mislead or deceive if it has the tendency to lead into error, if there is a sufficient causal link between the conduct and the error on the part of the person exposed to the conduct: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; 304 ALR 186; 96 ACSR 475; [2013] HCA 54 at [39] (TPG). The causing of confusion or questioning is insufficient; it is necessary to establish that the ordinary or reasonable consumer is likely to be led into error. [40] There is no meaningful difference between the words and phrases “misleading or deceptive” and “mislead or deceive” (s 18), “false or misleading” (s 29(1)(a)) and “mislead” (s 33): Australian Competition and Consumer Commission v Dukemaster Pty Ltd [2009] FCA 682 at [14]. [41] It is necessary to view the conduct as a whole and in its proper context. This will or may include consideration of the type of market, the manner in which such goods are sold, and the habits and characteristics of purchasers in such a market: see generally TPG at [52]; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 199; 42 ALR 1 at 6–7; 1A IPR 684 at 688–9; [1982] HCA 44 (Parkdale); and Reckitt & Coleman Products Ltd v Borden Inc [1990] 1 WLR 491; (1990) 17 IPR 1 at 16–17 (a passing off case). The context will also include relevant disclaimers or explanations: Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; 212 ALR 357; [2004] HCA 60 at [49] (where the disclaimer, in small print, but in a short document, was “there to be read”). [42] In assessing advertising material, the “dominant message” of the material will be of crucial importance: TPG at [45]. [43] Where conduct or representations is or are directed to members of the public at large, the conduct or representations must be judged by their effect on “ordinary” or “reasonable” members of the class of prospective purchasers: Campomar at [105]. In a context such as the present, the purchasing of a staple such as bread in a supermarket, the ordinary or reasonable person may be intelligent or not, may be well educated or not, will not likely spend any time undertaking an intellectualised process of analysis, will often be shopping for many other items, and will be likely affected by an intuitive sense of attraction rather than by any process of analytical or logical choice. The dominant message of advertising for bread is likely to be simple, though intuitively diffuse. What is reasonable care by members of the public (compare Parkdale at CLR 199; ALR 6–7; IPR 688–9) must be judged in the above context. The purchase of bread from a baker or bread shop should not normally call for astute attention to disclaimers about the wares on sale at the counter. … [46] Half-truths may be misleading by the insufficiency of information that permits a reasonably open but erroneous conclusion to be drawn: Fraser v NRMA Holdings Ltd (1994) 52 FCR 1; 124 ALR 548 at 563; 14 ACSR 656 at 678; Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1992) 38 FCR 1 at 50; 111 ALR 61 at 108; 24 IPR 529 at 576–7 (Tobacco Institute). In Tobacco Institute, Hill J referred to the valuable observations of Sheldon J and Sheppard J (when the latter was a member of the Industrial Court) in CRW Pty Ltd v Sneddon [1972] AR (NSW) 17 at 28, as well as making pertinent and valuable observations of his own. Hill J said the following at FCR 50; ALR 108; IPR 576: However, as was observed by Sheldon and Sheppard JJ in CRW Pty Ltd v Sneddon (1972) AR (NSW) 17 at 28 (the context was the Consumer Protection Act 1969 (NSW): “An advertisement published in a newspaper is not selective as to its readers. The bread is cast on very wide waters. The advertiser must be assumed to know that the readers will include the shrewd and the ingenuous, the educated and the uneducated and the experienced and inexperienced in commercial transactions. He is not entitled to assume that the reader will be able to supply for himself or (often) herself omitted facts or to resolve ambiguities. An advertisement may be misleading even though it fails to deceive more wary readers.” Where, as in the present case, the advertisement is capable of more than one meaning, the question of whether the conduct of placing the advertisement in a newspaper is misleading or deceptive conduct must be tested against each meaning which is reasonably open. This is perhaps but another way of saying that the advertisement will be misleading or likely to mislead or deceive if any reasonable interpretation of it would lead a member of the class, who can be expected to read it, into error: Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77 at 81 per Northrop J and cf the approach taken by Mason J in Parkdale.

252. The Commissioner submitted that the representations are to be assessed on their own account and not by reference to later qualifying statements because the representations enticed consumers into a marketing web. There is force in that submission in this case.

253. In relation to marketing webs, French CJ, Crennan, Bell and Keane JJ said in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; 250 CLR 640 (TPG HCA) at 655 [50]: It has long been recognised that a contravention of s 52 of the TPA may occur, not only when a contract has been concluded under the influence of a misleading advertisement, but also at the point where members of the target audience have been enticed into “the marketing web” by an erroneous belief engendered by an advertiser, even if the consumer may come to appreciate the true position before a transaction is concluded [Trade Practices Commission v Optus Communications Pty Ltd (1996) 64 FCR 326 at 338 –339; SAP Australia Pty Ltd v Sapient Australia Pty Ltd (1999) 169 ALR 1 at 14 [51]; Australian Competition and Consumer Commission v Commonwealth Bank of Australia (2003) 133 FCR 149 at 171 –172 [47]. See also Bridge Stockbrokers Ltd v Bridges (1984) 4 FCR 460 at 475)]. That those consumers who signed up for TPG’s package of services could be expected to understand fully the nature of their obligations to TPG by the time they actually became its customers is no answer to the question whether the advertisements were misleading. (Emphasis added.)

254. Thus, in Xiamen Huadian Switchgear Co Ltd v Powins Pty [2022] FCA 1159; 169 IPR 77 Halley J, citing TPG HCA, said at [81]: … provisions proscribing misleading or deceptive conduct may be contravened at the point where members of the target audience have been seduced into the seller’s “web of negotiation” or “marketing web” by the impugned conduct, even if the consumer may come to appreciate the true position before a transaction is concluded: TPG HCA at [50] (French CJ, Crennan, Bell and Keane JJ).

255. As Perram J pointed out in Australian Competition and Consumer Commission v Singtel Optus Pty Ltd [2010] FCA 1177 (Singtel Optus 2010) at [19], whilst the context in which representations are made is relevant to the question of whether they are misleading, the critical question in each case is where context ends, and irrelevant post-conduct correction begins. Nevertheless, his Honour said at [22], it is incorrect to examine whether representations were misleading only at the (later) point of sale (in this case, presumably that would be when contracts for sale were exchanged). At [26] his Honour said: Nor, contrary to Optus’ submissions, is the misleading nature of the advertisement reduced by the statements Optus makes, or seeks to have made on its behalf, at the point of sale. As I have explained above, when dealing with the objections to the evidence, it is an error to ask whether consumers who purchased the product were misled. This is for practical reasons set out above — the capacity of the advertisement to induce people to begin dealing with Optus (rather than others) without necessarily closing the transaction — and also for the textual reason that s 52 simply does not contain any limitation about what it is that consumers must be misled into doing to contravene the prohibition. Accepting in Optus’ favour that some kinds of statements were made to consumers through the sales process and website this does not undo, in this case, the plainly misleading and deceptive nature of the advertisement. In that regard, I have found the evidence about the traffic across the website of little utility. For completeness, I reject also Optus’ contention, based on its survey evidence, that the time taken by consumers to make broadband purchasing decisions and their reliance upon on-line and other forms of research means that the advertisement should not be seen as being misleading. This is largely for the reasons already given — it gives no weight to the initial inducement the advertisement provides to head down the path with Optus and puts at nil the negative consequences for consumers and competitors alike of that form of enticement. Of course it is true that the purchase of a broadband plan is a substantial purchase rather than an impulse purchase although even that fact was kept in fairly small print at the bottom of the page. But even so, this is not sufficient to overcome the very misleading nature of the principal message.

256. Silence is to be assessed as a circumstance like any other.

257. BSD/Zapari submitted that the Representations were made in circumstances where ordinary or reasonable consumers looking to purchase property would not have expected the information conveyed by the Promotional Material to cover the field before deciding whether to proceed with such a significant, if not the most significant, transaction of their lives. The submission continued and said that given the fact that consumers are generally accustomed to puffery in advertising, it can hardly be expected or, indeed, reasonable, for consumers to solely rely on the matters conveyed by the advertising in making a decision as to whether to purchase a property. GZ made a similar submission in regard to puffery.

258. Puffery is something that is not meant to be taken seriously or acted on: Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 (Downey) at [92]; Ackers v Austcorp International [2009] FCA 432 (Ackers) at [166]. None of the Representations fall into that category. All were considered and reasonably precise statements made for the purpose of enticing potential purchasers by identifying and highlighting what the developers represented were virtues of the Development. They were meant to be taken seriously and were meant to be acted upon.

259. BSD/Zapari also submitted that appropriate weight ought be given to the presence of disclaimers on the websites of Allhomes and Domain and to the presence of the disclaimer in the standard form contract for the purchase of the units in the Development.

260. The disclaimers on the websites were said to have specifically stated that “purchasers should rely on their own inquiries and information in their contract for sale before making any commitments” and that “the material contained on this website does not form part of any offer, inducement, representation, warranty or contract”.

261. Unfortunately, no Court Book reference was provided for the website disclaimers. No disclaimer appears in the video screen capture of the Allhomes website the Commissioner took me to [Prescott affidavit schedule of file notes, item 22 (CB Tab 26 at p.299), Exhibit AP1-14 at CB Tab 35, Tab AP1-14 at p 567 and Exhibit AP2-8, which appears in the Digital Court Book].

262. There were three video captures of the Allhomes website, taken on 30 May 2019 (exhibit AP2-3 to Mr Prescott’s affidavit), 5 July 2019 (exhibit AP2-8 to Mr Prescott’s affidavit) and 13 December 2020 (exhibit SO2-28 to Mr O’Rourke’s affidavit). The first two contain no disclaimer that I can see from that video, but the third does contain the disclaimer.

263. There was one video capture of the Domain website dated 13 December 2020 (exhibit SO2-27 to Mr O’Rourke’s affidavit), but no disclaimer is apparent in that video.

264. No standard form contract, or its terms, was specifically proved, although the Commissioner, in reply, tendered a copy of the Law Society of the ACT’s Contract for Sale, CS07-2017. Many pages of that document have “Meyer Vandenberg Lawyers” and “Special Conditions – Grand Central Block 5 Section 35 Phillip” printed at the bottom. The relevant clause seems to be cl 75.2 which said: 75.2 No reliance Each party has entered into this Contract without reliance upon any representation, statement or warranty (including sales and marketing material and preliminary art work), except as set out in this Contract.

265. As best I understood these submissions from BSD/Zapari, they concerned reliance by consumers on the representations. That is, did consumers rely on the Representations when purchasing their Units. But I am not concerned with reliance by consumers in this case and BSD/Zapari did not explain what issue those submissions went to in the case before me.

266. At the end of the day, the question before me is simply whether, having regard to all the relevant circumstances, there had been conduct that was misleading, deceptive or false, or that was likely to mislead or deceive. Causation in relation to any particular purchaser is not an issue in the case before me.

267. If the submission was to the effect that the Representations were not misleading or deceptive, or likely to mislead or deceive, because of the disclaimers (and a faint, small font disclaimer appears on the last page of the Brochure) I do not accept it. The disclaimers were in anodyne terms, in the least prominent parts of the website and Brochure and would have been most unlikely to have had any operative effect on a consumer’s thinking, let alone depriving the representations of their misleading character. Section 29(1) of the ACL

The statutory provisions and some general matters

268. The Commissioner’s case was that GRE (or, in the alternative, Geocon Group) breached s 29(1)(b) or (g) in making the Representations.

269. Section 29(1(b) and (g) of the ACL say: 29 False or misleading representations about goods or services (1) A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services: … (b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or … (g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits; …

270. In relation to s 29(1)(b), the Commissioner’s case was based on “value”. In relation to s 29(1)(g), the Commissioner’s case was based on “benefits” and “performance characteristics”.

271. The Commissioner submitted that the supply of services in this case was the supply of rights and interests in real property, being the sale of the Units. The defendants contended that the sale of land in the ACT was not a “service”.

272. Note should be taken of the words “in connection with” in the section. In Monroe Topple & Associates Pty Ltd v The Institute of Chartered Accountants in Australia [2001] FCA 1056; ATPR (Digest) 46-212, Lindgren J was concerned with s 51AC of the Trade Practices Act 1974 (Cth) (TPA), the predecessor to the ACL. Section 51AC said that a corporation must not, in trade or commerce, “in connection with” the supply or possible supply of services engage in unconscionable conduct. Of the words “in connection with” his Honour said at [260]: Both the context internal to s 51AC and the legislative history to which I have referred, teach that the expression ‘in connection with’ in s 51AC requires that the conduct impugned "accompany", "go with" or "be involved in" the supply of the goods or services, and that it is not sufficient that, as alleged in the present case, such a supply be the occasion of unconscionable conduct of the supplier directed to an unrelated third party with which the supplier has no dealings at all. …

273. His Honour’s explanation of those words was applied to the same words in s 29(1) of the ACL by Thawley J in Australian Competition and Consumer Commission v Google LLC (No 2) [2021] FCA 367 at [360].

274. Thus, one question is whether the representations, in Lindgren J’s wording, accompanied, went with or were involved with the sale of the Units.

275. I shall first set out other relevant provisions before then turning to the defendants’ submissions and my decision on each issue raised by the parties in relation to s 29.

276. The word “services” is defined in s 2 of the ACL relevantly as follows:

services includes: (a) any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce; and (b) without limiting paragraph (a), the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under: (i) a contract for or in relation to the performance of work (including work of a professional nature), whether with or without the supply of goods; or (ii) a contract for or in relation to the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or (iii) a contract for or in relation to the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; or (iv) a contract of insurance; or (v) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or (vi) any contract for or in relation to the lending of money; but does not include rights or benefits being the supply of goods or the performance of work under a contract of service.

277. Section 11 of the ACL is relevant. It says:

11 References to acquisition, supply and re-supply In this Schedule: … (b) a reference to the supply or acquisition of … services includes a reference to agreeing to supply or acquire … services; and … (a) a reference to the supply or acquisition of services includes a reference to the supply or acquisition of services together with property or other services, or both; and …

278. Section 4 of the Competition and Consumer Act 2010 (Cth) (the CCA), to which the ACL is Schedule 2, defines “services” more narrowly as follows:

services includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under: (a) a contract for or in relation to: (i) the performance of work (including work of a professional nature), whether with or without the supply of goods; (ii) the provision of, or the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or (iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; (b) a contract of insurance; (c) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or (d) any contract for or in relation to the lending of moneys; but does not include rights or benefits being the supply of goods or the performance of work under a contract of service.

279. The predecessor to that section, being s 4 of the TPA, was in very similar terms and has been described as being of “extravagant width”: see Roberts v Murlar Pty Ltd (1986) 68 ALR 62 at 72; National Australia Bank Ltd v Sproule (1989) 98 ALR 570 at 575– 576 (Rogers CJ); South Sydney District Rugby League Football Club Ltd v News Ltd (2000) 177 ALR 611 at 655 [182] (Finn J). I do not see why that description should not apply to the definition of “services” in the ACL.

280. The principles set out in Campomar quoted earlier in this judgment in relation to s 18 apply equally to s 29(1). There is no material difference between the phrase “misleading or deceptive” in s 18 and the phrase “false or misleading” in s 29: ACCC v Coles at [40]; Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2020] FCAFC 130; 278 FCR 450 at [21] (Wigney, O’Bryan and Jackson JJ); Energy Beverages LLC v Cantarella Bros Pty Ltd [2022] FCA 113; 403 ALR 299 at [375].

281. Having said that, s 29, in contrast to s 18, is limited to whether a representation was false or misleading and does not include whether a representation was likely to mislead.

282. When assessing whether representations contravene s 29(1), the gravity of the findings must be kept in mind because s 29(1) is a civil penalty provision. In Australian Building and Construction Commissioner v Parker [2017] FCA 564; 266 IR 340 Flick J said at [58]: First, when making the findings of fact, due regard must be had to the gravity of the matters alleged: Evidence Act, s 140(2). …The contraventions alleged by the Commissioner have to take into account the fact that they are contraventions of civil remedy provisions of the Fair Work Act. They are, accordingly, properly to be regarded as “quasi criminal”: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 3) [2002] FCA 1294 at [53]; (2002) ATPR 41901 at 45,414 per Goldberg J; BHP Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 1291 at [68] to [69], (2013) 239 IR 363 at 388 to 389 per Collier J. The standard of proof referred to in s 140(2) is a re-statement of the standard of proof referred to by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336: Liquor Hospitality and Miscellaneous Union v Arnott’s Biscuits Ltd [2010] FCA 770 at [15]; (2010) 188 FCR 221 at 225 per Logan J.

283. The Commissioner agreed that the Briginshaw principles should apply in this case (T 1491.2-.20) and I am content to proceed on that basis and have made my factual findings in relation to s 29(1) according to that standard.

Principles of statutory construction

284. Essentially, the issues determined in this part of the judgment regarding s 29(1) of the ACL are ones of statutory construction. The principles applicable to statutory construction are well known and uncontroversial. I set them out in greater detail in my judgment in McIver v Australian Capital Territory; Williams v Australian Capital Territory [2024] ACTSC 112 at [229]-[242].

285. In short, the Legislation Act 2001 (ACT) says that interpretation of part of a statute requires consideration of that part in the context of the whole of the statute. It also says that in working out the meaning of an Act, the interpretation that would best achieve the purpose of the Act is to be preferred to any other interpretation.

286. In terms of the common law, Hayne, Heydon, Crennan and Kiefel JJ said in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27 at 46- 47, [47]: This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy. (Citations omitted.)

287. That statement did not require literalism. In R v A2 [2019] HCA 35; 269 CLR 507 Kiefel CJ and Keane J, with whom Nettle and Gordon JJ agreed, said the following at 520-522: [32] The method to be applied in construing a statute to ascertain the intended meaning of the words used is well settled. It commences with a consideration of the words of the provision itself, but it does not end there. A literal approach to construction, which requires the courts to obey the ordinary meaning or usage of the words of a provision, even if the result is improbable, has long been eschewed by this Court. It is now accepted that even words having an apparently clear ordinary or grammatical meaning may be ascribed a different legal meaning after the process of construction is complete. This is because consideration of the context for the provision may point to factors that tend against the ordinary usage of the words of the provision. [33] Consideration of the context for the provision is undertaken at the first stage of the process of construction. Context is to be understood in its widest sense. It includes surrounding statutory provisions, what may be drawn from other aspects of the statute and the statute as a whole. It extends to the mischief which it may be seen that the statute is intended to remedy. “Mischief” is an old expression. It may be understood to refer to a state of affairs which to date the law has not addressed. It is in that sense a defect in the law which is now sought to be remedied. The mischief may point most clearly to what it is that the statute seeks to achieve. [34] This is not to suggest that a very general purpose of a statute will necessarily provide much context for a particular provision or that the words of the provision should be lost sight of in the process of construction. These considerations were emphasised in the decisions of this Court upon which the Court of Criminal Appeal placed some weight. [35] The joint judgment in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue rejected an approach which paid no regard to the words of the provision and sought to apply the general purpose of the statute, to raise revenue, to derive a very different meaning from that which could be drawn from the terms of the provision. The general purpose said nothing meaningful about the provision, the text of which clearly enough conveyed its intended operation. Similarly, in Saeed v Minister for Immigration and Citizenship the court below was held to have failed to consider the actual terms of the section. A general purpose of the statute, to address shortcomings identified in an earlier decision of this Court, was not as useful as the intention revealed by the terms of the statute itself. In Baini v The Queen, it was necessary to reiterate that the question of whether there had been a “substantial miscarriage of justice” within the meaning of the relevant provision required consideration of the text of the provision, not resort to paraphrases of the statutory language in extrinsic materials, other cases and different legislation. [36] These cases serve to remind that the text of a statute is important, for it contains the words being construed, and that a very general purpose may not detract from the meaning of those words. As always with statutory construction, much depends upon the terms of the particular statute and what may be drawn from the context for and purpose of the provision. [37] None of these cases suggest a return to a literal approach to construction. They do not suggest that the text should not be read in context and by reference to the mischief to which the provision is directed. They do not deny the possibility, adverted to in CIC Insurance Ltd v Bankstown Football Club Ltd, that in a particular case, “if the apparently plain words of a provision are read in the light of the mischief which the statute was designed to overcome and of the objects of the legislation, they may wear a very different appearance”. When a literal meaning of words in a statute does not conform to the evident purpose or policy of the particular provision, it is entirely appropriate for the courts to depart from the literal meaning. A construction which promotes the purpose of a statute is to be preferred. (Citations omitted.)

The sale of the Units was a supply of services under the ACL

288. The first question raised in relation to s 29(1) is whether the Representations were in connection with the supply of services, or in connection with the promotion by any means of the supply or use of services. The Commissioner’s case was that the relevant service was the supply of land being the sale of the Units to purchasers.

289. GRE adopted the submissions of Geocon Bowes and GZ.

290. GZ submitted that because GRE, the only entity which made the representations, did not itself deliver the “services”, and did not itself sell land to the purchasers, s 29(1) could not apply. I do not agree. Section 29(1) includes representations made “in connection with” the supply of services in that they accompanied, went with or were involved with the supply of the services, namely the sale of the Units. The Representations in this case were made for the very purpose of enticing consumers to buy the Units at prices suitable to the developers and therefore accompanied, went with or were involved with the sale of the units to consumers.

291. The word “supply” is defined in the ACL as follows: supply, when used as a verb, includes: (a) in relation to goods—supply (including re-supply) by way of sale, exchange, lease, hire or hire-purchase; and (b) in relation to services—provide, grant or confer; and, when used as a noun, has a corresponding meaning, and supplied and supplier have corresponding meanings.

292. The Commissioner submitted that the definition of “services” expressly included rights and interests in real property, and the sale of residential land amounted to the provision, grant or conferral of rights or interests in real property.

293. The Commissioner cited authorities to the effect that a lease, and a licence, over real property were services, as was a call option to acquire premises under a contract for sale. The Commissioner also cited obiter statements to the effect that a sale of residential land was the supply of a service.

294. In relation to the latter, the Commissioner cited Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd [2004] VSCA 242; 22 VAR 279 (Sigma) at [22] per Batt JA (Vincent and Nettle JJA agreeing) and Mercier Rouse Street Pty Ltd v Burness [2015] VSCA 8 (Mercier) at [1] and [3] per Warren CJ and at [4]-[7] per Neave JA.

295. In relation to a lease, the Commissioner cited Zeus and Ra Pty Ltd v Nicolaou [2003] VSCA 11; 6 VR 606 (Zeus) at [76] per Charles and Eames JJA with Winneke P (at [1]) agreeing.

296. It is useful to consider those authorities in chronological order.

297. Zeus concerned a dispute between a landlord and tenant of commercial premises. Section 107 of the Fair Trading Act 1999 (Vic) (FTAV) provided that a fair trading dispute was a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier or possible supplier of goods or services in relation to the supply or possible supply of goods or services. Section 108 conferred jurisdiction on the tribunal to hear and determine a fair trading dispute.

298. Section 3 of the FTAV defined “services” to mean: Any rights (including rights in relation to, and interests in real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce… .

299. It appears that there was no dispute between the parties that a lease fell within the definition of services. In relation to that issue all that Charles and Eames JJA said about it was: [75] If the words “purchaser” and “supplier” are to be construed as referring to the past, as well as the present and future, supply of services, the definition of the word “services” contained in s 3 then provides no support for the appellant’s argument. For when the definition of “services” is read into s 107, the disputes covered by the Fair Trading Act include a dispute arising between a purchaser and a supplier of services (including rights and interests in relation to real property) that are provided, granted or conferred in trade or commerce. In our view there is nothing in the definition of a “fair trading dispute” properly construed, which would exclude from VCAT’s jurisdiction under the Fair Trading Act a dispute arising between a purchaser and supplier under an executed contract. [76] In Humphries & Cooke Ltd v Essendon Airport Ltd ([2001] VCAT 2439, decided on 30 November 2001, at [12]) Deputy President Macnamara said that: It appears that sections 107 and 108 of the Fair Trading Act 1999 bestow a general landlord and tenant jurisdiction on this Tribunal. They give the Tribunal power to determine fair trading disputes which are defined as disputes between the suppliers and purchasers of goods and services. Services are defined in s 3 of the Act to include interests in real or personal property, and supply is defined to include grant. It follows in my view that whether or not the Retail Tenancies Reform Act applies to these premises the Tribunal has jurisdiction in a general sense to deal with a dispute between the landlord and tenant in the present circumstances. We agree with the Deputy President’s interpretation of ss 107 and 108, which was applied by Judge Bowman in rejecting the appellant’s application to strike out paragraphs [3] and [4] of Zeus & Ra’s claim.

300. That holding in Humphries was followed in Liuzag Custodian Pty Ltd v Brown Gouge Pty Ltd (Building and Property) [2021] VCAT 1212, Bretair Pty Ltd v Cave (Retail Tenancies) [2012] VCAT 1039 and Bloomcorp Pty Ltd v Meninya Investments Pty Ltd (Retail Tenancies) [2013] VCAT 1311. In the latter two cases the Senior Members said that the issue whether FTAV applied to leasehold agreements had been considered by the Victorian Supreme Court of Appeal in Zeus which had affirmed the determination of Judge Bowman at first instance, that the FTAV bestowed a general landlord and tenant jurisdiction on the Tribunal.

301. The holding in Zeus was followed in two Victorian Civil and Administrative Tribunal (VCAT) decisions, being Dang v T.M. Smith Street Pty Ltd (Retail Tenancies) [2005] VCAT 2926 and Tomasevic v Simms Corp Hotels and Leisure Pty Ltd (Residential Tenancies) [2011] VCAT 2170, and once in the Victorian Supreme Court in Tucci v Victorian Civil and Administrative Tribunal & Anor [2010] VSC 425; 33 VAR 206 but has not otherwise been cited.

302. I shall return to Tucci after considering Sigma.

303. In Sigma, Sigma was a builder and Maryvell conducted a restaurant business on land it owned. Sigma required access to a building site adjacent to the property owned by Maryvell that could only be undertaken by passing over part of the Maryvell’s land. Maryvell granted Sigma a licence to pass over the property and, as part of this, Maryvell charged its interest in the land to enable Sigma to lodge a caveat recording the licence. A dispute arose. Maryvell terminated the licence and sought an injunction from the VCAT to evict Sigma from the land.

304. One question in the case was whether the VCAT had jurisdiction. That question depended on whether there was a “fair trading dispute” under the FTAV and that question involved the further question whether the grant of the licence constituted a supply of services within the meaning of s 3 of the FTAV.

305. Blatt JA said at [19]: The Fair Trading Act by s 108(1) provided that VCAT “may hear and determine a fair trading dispute”. By s 107(1) as in force at the material time, a “fair trading dispute” was defined as “a dispute or claim arising between a purchaser or possible purchaser of goods or services and a supplier of or possible supplier of goods or services in relation to a supply or possible supply of goods or services”. The applicability of that definition depends on the definition of “services” in s 3, there being no suggestion that “goods” were involved. So far as material, “services” are there defined as including: … any rights (including rights in relation to, and interests in real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce … By parity of reasoning with the court’s decision in Zeus and Ra the licence agreement here provided, granted or conferred rights in relation to real property.

306. In the case before me the Commissioner cited [22] from Sigma (quoted below), but as I read that passage it is directed to the question whether the services were supplied in trade or commerce rather than being directly concerned with the issue before me, although it does seem to say (or assume) that the sale of a purely domestic dwelling by a developer to a purchaser would involve the provision of rights in relation to real property. The full paragraph said: It seems to me that the definition of "services" requires one to consider the question, at least principally, from the point of view of the supplier. Thus, the sale of a purely domestic dwelling by its owner to a developer or trader in real estate might not involve the provision in trade and commerce of rights in relation to real property, whereas if the parties were reversed, it almost certainly would. Although some allowance must be made for the different context in which the expression "in trade or commerce" there appeared the statement by four justices of the High Court in Concrete Constructions (N.S.W.) Pty Ltd v. Nelson may be taken as a safe guide to what must be found if the expression is to be satisfied here. The provision, etc., of rights, etc., must be "in the course of ... activities or transactions which, of their nature, bear a trading or commercial character". In my opinion, notwithstanding that the licence was an isolated transaction and, unlike the first sale of goods by a new business, unlikely to be repeated, the granting of it was an activity or transaction which of its nature bore a trading or commercial character. For Maryvell was temporarily turning to account part of the premises on which it conducted, or used to conduct, a business. The fact that the transaction was divorced from the mainstream of Maryvell's business is, whilst relevant, not decisive. Although the question which arose in Federal Commissioner of Taxation v Montgomery, to which Nettle, J.A. referred in the course of argument, was not the same as arises here, the case furnishes a helpful analogy. There the inducement payments granted to a lessee were held by the majority of the High Court to be properly characterised as revenue receipts because they arose from an adventure in the nature of trade undertaken in the course of a wider business activity, notwithstanding the singularity of the transaction and its extraordinary nature when judged by reference to transactions in which the lessee usually engaged. In my opinion, the Federal Court decisions relied on for Sigma are distinguishable. In O'Brien the land was not used for any business activity and the vendors were not, in selling, acting in the course of carrying on business. In Argy v. Blunts the relevant part of the decision was that the owner of a house by selling it, whether with or without agents and whether privately or by auction, does not do so in the course of a trade or business or in a business context and therefore does not do so in trade or commerce. But the licensor here was a company that was or had been engaged in business and the licence was granted over part of the land on which the business was or had been conducted. (Citations omitted, Emphasis added.)

307. In Tucci, the landlord leased certain premises in Victoria to a corporate tenant for a five-year period for commercial use as an indoor tennis and beach volleyball complex. Attached to the lease was a guarantee and indemnity given to the landlord by the plaintiff, Michael Tucci, who was the sole director of the tenant. One question in the case was whether the guarantee and indemnity fell within the definition of “services” in the FTAV. The VCAT held it had jurisdiction because Mr Tucci had supplied a “service” to the landlord by giving the guarantee and indemnity. Mr Tucci appealed.

308. Mr Tucci conceded, as Cavanough J said he was constrained to do so by virtue of “binding Court of Appeal authority”, that ss 107 and 108 of the FTAV bestowed a general landlord and tenant jurisdiction on VCAT as between landlord (as supplier-trader) and tenant (as purchaser-consumer), citing Zeus. However, Mr Tucci submitted that Zeus was distinguishable for various reasons I need not repeat. At [40] his Honour said this about a trade and commerce point which had been raised: … So far as relevant, “supplier” means simply the person who has supplied or is to supply the services and “purchaser” means simply the person to whom the services have been or are to be supplied. As the plaintiff conceded at the hearing, a “purchaser” need not have given any consideration for the supply of the services. On the other hand, it is necessary that the services have been, or are to be, supplied “in trade or commerce”. In Sigma Constructions (Vic) Pty Ltd v Maryvell Investments Pty Ltd it was held by the Court of Appeal that the question whether “services” are provided “in trade or commerce” for the purposes of the provisions in question should be considered, at least principally, from the point of view of the supplier. Thus, the court said, the sale of a purely domestic dwelling by its owner to a developer or trader in real estate might not involve the provision in trade or commerce of rights in relation to real property, whereas if the parties were reversed it almost certainly would. In the present case, the context was entirely commercial on all sides and the plaintiff was the sole director of the tenant. In those circumstances the plaintiff properly conceded at the hearing that if in this case any “services” were supplied by or to him they were supplied “in trade or commerce”. (Emphasis added.)

309. At [59]-[60] his Honour said: In advancing his submissions on this point, the plaintiff was constrained to identify a class of “services” that included the granting of occupancy rights over land because s 3 of the Act defines the word “services” so as to include “any rights (including rights in relation to, and interests in real or personal property) …”. But the abovementioned observations of the Court of Appeal in Sigma indicate that VCAT’s jurisdiction under ss 107 and 108 extends not only to disputes concerning occupancy rights over land (such as disputes about leases or licences) but also to disputes about the sale of land or interests in land. That would be consistent with longstanding Federal Court authority to the effect that the relevantly similar definition of “services” in the Trade Practices Act 1974 (Cth) (“TPA”) covers the sale of rights and interests in real property. In Cash Resources Australia Pty Ltd v Bentley it was held by Gillard J that, as s 107 of the (Fair Trading) Act stood in 2002, the execution of a mortgage of land constituted the supply of services within the meaning of the section. The proposition that s 107 is restricted to disputes about “contracts for services”, ie contracts under which the supplier is required to “perform by the provision of some service”, cannot easily be reconciled with the proposition (apparently endorsed by the Court of Appeal in its abovementioned observations in Sigma) that the mere sale of a piece of land, in itself, constitutes the provision by the vendor of “services”. By merely entering into a contract of sale, the vendor ipso facto confers rights on the purchaser, usually comprising an equitable interest in the land. According to the Court of Appeal, that in itself represents the supply of a “service” within the meaning of the definition in s 3. Similarly, in Cash Resources Gillard J viewed the mere granting of a mortgage as the supply of a “service”. It is difficult to see any correspondence between those views and the plaintiff’s contention that the case before VCAT must involve a “contract for services”. (Citations omitted. Emphasis added.)

310. The “abovementioned observations of the Court of Appeal in Sigma” referred to in the first paragraph of the quote above were those in Sigma at [22] which I have quoted earlier.

311. In the passage in Tucci that I have quoted above, Cavanough J said, and I think correctly, that by entering into a contract of sale, the vendor ipso facto conferred rights on the purchaser, usually comprising an equitable interest in the land. On completion, that equitable interest would be converted into a legal interest.

312. It is pertinent to note that the legislation in those Victorian cases was different to the present, although the concepts involved are very similar in relation to services. Thus, whilst the holdings of the Court of Appeal are not binding on me they may be persuasive. I also note that the point raised by the defendants was not raised in any of those authorities.

313. More relevant to the issue before me is Henderson v Pioneer Homes Pty Ltd (No 2) (1980) 43 FLR 276; (1980) 29 ALR 597 which was not cited by any party before me.

314. That case concerned advertisements in newspapers in Adelaide which promoted the sale of blocks of land, together with, in some cases, a house and specified extras such as a carport, fencing, paving, vinyl and carpets. The houses were said to be available at certain locations on finance plans specified in the advertisements. The transactions being promoted involved the purchaser entering into a contract for the sale of house and land (and specified extras if any) of two contracts, one for the sale of land and the other for the building of a house (and specified extras if any).

315. The informant commenced proceedings against two defendants alleging a breach of s 53(g) of the TPA. That section said: 53. A corporation shall not, in trade or commerce, in connexion with the supply or possible supply of goods or services or in connexion with the promotion by any means of the supply or use of goods or services- … (g) make a false or misleading statement concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy."

316. At the time, the definition of “services” in the TPA was (relevantly): services includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under … (Second and third emphasis added.)

317. The defendants pleaded not guilty. The proceedings came before a single judge of the Federal Court who stated a case for the consideration of the Full Court. The Full Court struck out the stated case on the basis it had no jurisdiction to answer the questions posed, but the High Court held that that view was in error and remitted the matter to the Full Court to determine the stated case.

318. The first question stated for determination on the remittal was: Were the contents of the advertisements which referred to $100 deposit and payments of weekly amounts statements made in connexion (sic) with the promotion by any means of the supply of services?

319. Smithers J held at 278 that: The first question stated to this Full Court was: "Were the contents of the advertisements which referred to $100 deposit and payments of weekly amounts statements made in connexion with the promotion by any means of the supply of services?" The answer to this question is in the affirmative. Indeed it was not seriously contested to the contrary. The contents of the advertisements were obviously "made" in connexion with the promotion of the sale of rights and interests in real property and thus of services as defined in s. 4 of the Act and accordingly of services within the meaning of s. 53 of the Act. (Emphasis added.)

320. At 279, his Honour said: Certainly the rights in the land which were the subject of the proposed transaction were a service within the definition of "services" in s. 4 of the Act.

321. Franki J (Northrop J agreeing) held similarly. His Honour said at 289: The respondents did not seriously argue that the transactions to which the advertisements were directed were not statements made in connexion with the promotion by any means of the supply of services. It may be thought rather strange that those transactions would fall within the supply of services. However, the definition of "services" in s. 4 includes interests in real or personal property and " any contract for or in relation to the lending of moneys" and s. 4C(d) provides that a reference to the supply of services, unless the contrary intention appears, includes a reference to the supply of services together with property or other services or both. I am satisfied that question (a) should be answered " Yes" in respect of each advertisement.

322. Henderson was followed by Blue J in Highfield Property Investments Pty Ltd v Commercial and Residential Developments (SA) Pty Ltd [2012] SASC 165, his Honour saying at [348]: … However, the decision of the Court in Pioneer Homes is directly on point and, as a decision of an intermediate court of appeal, effectively binding on me. I therefore hold that the conduct of Commercial was capable of being in connection with the acquisition of services notwithstanding the Contract was for the acquisition of land.

323. Henderson also appears to have been accepted without disagreement by Sundberg J in Australian Competition and Consumer Commission v Gary Peer and Associates Pty Ltd [2005] FCA 404; 142 FCR 506. That case was brought against a real estate agent retained to sell a residential home. The agent accepted the representations made by it were in trade or commerce, but the issue was whether the “service”, namely the sale of land by the vendor, was supplied “in trade or commerce”. That was because the definition of “services” then, and in the case before me, includes the requirement that the supply be in trade or commerce.

324. After referring to Henderson at [56], Sundberg J held that the vendors were not selling their home in trade and commerce, and for that reason the sale of land was not a service. Thus, the point before me was not squarely before his Honour. Be that as it may, Sundberg J appeared to accept the authority of Henderson. The following passage was directed to “services” and the sale of land: [96] The inclusive nature of the Act’s definition of “services” is not fatal to the respondent’s contention. The work done by the word “includes” in the definition of “services” is to enlarge the ordinary meaning of “services” to include “rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce”. The enlargement of the meaning of the word “services” to include certain things that might not ordinarily be thought of as services (such as interests in real property) is circumscribed by the words “in trade or commerce”.

325. A somewhat similar point was made in Obeid v Australian Competition and Consumer Commission [2014] FCAFC 155; 226 FCR 471 (Obeid) in which the Full Federal Court (Allsop CJ, Mansfield and Middleton JJ) considered the definition of “services” in the CCA (which I have quoted above at [278] and which is relevantly similar to the definition of “services” in s 4 of the ACL). Their Honours said: [52] Looking at the text of the definition “services” there is no reason to conclude the term “includes” is exhaustive. Whilst it includes services that would come within the ordinary meaning of that word, it also includes services not within the ordinary meaning (eg rights or interests in relation to real or personal property). The historical context described by the primary judge confirms that the term “includes” is not meant to be exhaustive. [53] Therefore, in interpreting the term “services”, unless a contrary intention appears in the substantive provisions being applied, the ordinary meaning of the term “services” is to be adopted along with the specified services in the definition itself.

326. Mercier, the other authority cited by the Commissioner in support of the proposition that a sale of residential land was the supply of a service, was another Victorian case concerning provisions of the FTAV and whether the VCAT had jurisdiction to hear a matter and was decided after Henderson, the cases I have mentioned which have applied it and Obeid. The difference in Mercier was that it was concerned with provisions of the ACL which had by that time been incorporated by reference into the FTAV.

327. Neave JA was of the opinion that services did include the sale of land. After referring to Sigma, and noting that the point had not been fully argued in that case, her Honour said at [7]: The plain words of the definition of services include ‘rights in relation to, and interests in real and personal property.’ There is a strong argument that these words should not be read down because ‘services’ is normally an inapt expression to describe the one-off transfer of an interest in property. The drafting style is an enlarging one, which adds a meaning which would otherwise not be included in the defined term.

328. Santamaria JA thought otherwise. After referring to Tucci, his Honour said at [184] that the definition of “services”, although drawn in wide terms, should not be given an expansive construction, citing Queensland Aggregates Pty Ltd v Trade Practices Commission (1981) 57 FLR 314 (Queensland Aggregates).

329. His Honour said at [185] that the ordinary and natural meaning of the word “services” should be taken into account and referred to various dictionary definitions.

330. His Honour referred to Sigma and Cash Resources Australia Pty Ltd v Bentley [2002] VSC 271; 19 VAR 119 (referred to in Tucci and in which Gillard J held that the granting of a mortgage was a “service”) and then said: [188] In my opinion, the O’Bryans are correct to observe that, to the extent that in these cases courts have held that there had been a supply of ‘services’, the transaction in issue bestowed an ongoing benefit (such as a continuing right of occupation) in relation to real property. The present transaction did not involve an ongoing relationship between the parties such as exists where there is a mortgage, or a lease or a licence. The transaction was in relation to land; it was not in relation to ‘services’. [189]. The contextual meaning must not be disregarded. The fundamental term ‘services’ necessarily controls all that it is defined to include. The ‘rights’ that are referred to in (a) must still be ‘rights’ that are in the nature of ‘services’. … Since neither the plain nor the contextual meaning of the term ‘services’ can be taken to incorporate the obligations of a vendor to deliver a transfer to the purchaser under a simple contract for the sale of land, this transaction falls outside the definition of ‘services’ in s 3 of the ACL. It follows that a dispute with respect to such a transaction is not a ‘consumer and trader dispute’.

331. It is important to note that Henderson, the cases that followed it and Obeid were not cited to their Honours in Mercier.

332. The third member of the Court of Appeal in Mercier, Warren CJ, expressed no view on the issue because his Honour thought the issue was not straightforward, had not been fully argued and the appeal could be determined on another basis.

333. In relation to a licence falling within the definition of “services”, the Commissioner cited Sigma at [19]-[22] per Batt JA with Vincent JA (at [37]) and Nettle JA (at [38]) agreeing. I need not refer to that case again.

334. In relation to a call option to acquire premises under a contract for sale, the Commissioner cited Tameeka Group Pty Ltd v Landan Pty Ltd (No 3) [2016] FCA 733 (Tameeka) at [160]-[164] per Markovic J. I need not refer to that case as it does not seem to shed any light on the issue.

335. Geocon Bowes submitted that it was not natural to describe the sale and transfer of full title or ownership of real property as being the provision, grant or conferral of a right in relation to or interest in real property. Rather, it was submitted, it was the transfer of the real property itself (that is, the entire bundle of rights and interests that constitute the real property).

336. Geocon Bowes submitted that this was in contrast to the cases relied upon by the Commissioner (referred to above with the exception of Henderson, the cases that followed it, and Obeid) relating to leases, licenses and call options, which could: … naturally be described as involving the provision, granting or conferral of rights or interests in real property (as opposed to the whole of the real property).

337. No logical reason occurs to me, and none was suggested, why the section should apply to some, but not all, interests or bundles of rights in land. That is, if “services” includes the granting of lesser interests in land such as leases, licenses and mortgages, no logical reason occurs to me or was suggested in argument which would justify or explain why “services” would exclude the granting of the whole interest in land. I think more likely the mischief the statute sought to address was certain conduct in relation to the supply or possible supply of any and all types of rights or interests in land. That is what Henderson stands for as I read that decision in relation to the similar provisions of the TPA.

338. Geocon Bowes also relied on the view expressed by the Full Federal Court in Queensland Aggregates at 318-319 that, given the juxtaposition of ‘goods’ and ‘services’ in the TPA, the supply of goods should not be regarded as a supply of services even if, technically, it could be described as a supply of ‘rights in relation to … personal property’ within the meaning of the definition of ‘services’. Geocon Bowes submitted that analogous reasoning applied in relation to the sale of land.

339. The passage Geocon Bowes drew attention to in that last submission, at 221, says something a little different. It said: In the view we take, the sweepingly general provisions of the definition of services contained in s 4 of the Act should not be given an expansive construction. Thus, for example, we would, in the context of the repeated use in the Act of the words “goods or services”, exclude from references to the supply of “services” in the defined sense, the supply of goods, even though the supply of goods would ordinarily involve the granting of “rights in relation to, and interests in, … personal property”. Again, as at present advised, we would exclude from the scope of the words “supply of services”, a simple payment of money even though, in one sense, money might be regarded as coming within the word “benefits”.

340. As I read that passage their Honours were saying that the words “goods or services” had the effect that the supply of “services” (not “goods” as Geocon Bowes submitted) in the defined sense would not include the supply of goods (not “services” as Geocon Bowes submitted), even though the supply of goods would ordinarily involve the granting of “rights in relation to, and interests in, … personal property”.

341. The facts in that case were that the appellants made a number of offers to supply work to different persons on condition that those persons purchased a particular type of truck from a particular truck dealer, something called third line forcing. If proved, that conduct would have been a breach of s 47(6) of the TPA.

342. The submission made, which their Honours were addressing in the quote above, was (at 220): It is said that if such offers constitute supply then it would follow, logically, that in every contract for supply of services or sale of goods the customer supplies a service. He contracts to pay and he pays. It would make “supply” and “acquire” interchangeable. It is contended that this could not have been the legislative intention and that the definitions should in some way be read down. No particular formulation is put forward indicating how this might be done.

343. That is, because the definition of “services” included rights in relation to, and interests in, personal property i.e. goods, then every contract for the supply of goods would also be a contract for the supply of services. Their Honours did not consider whether the definition of “services” should be read in an analogous way, but in any event, it could not.

344. The definition of “goods” in the TPA simply said that goods included ships, aircraft and other vehicles, animals including fish, minerals, trees and crops, and gas and electricity. No-one suggested that what Zapari supplied was a good. That is, whilst the definition of “services” included, in terms, rights and interests in relation to real property, the definition of “goods” did not include rights or interests in relation to services. Therefore, I do not think that the reasoning in Queensland Aggregates should be applied analogously to the issue before me.

345. In my view, the definitions of “services” in the ACL does include the supply of rights or interests in land such as the sale of the Units in the Development. I have come to that view for five reasons.

346. First, the views expressed in Henderson are as applicable to the provisions of the ACL presently under consideration as they were to the TPA provisions in issue in that case, and the views of Neave JA in Mercier are more persuasive to me than the views of Santamaria JA. Although Henderson concerned the TPA, the provisions are of such similarity that I consider that I should apply the holding of an intermediate Court of Appeal on those TPA provisions to the similar provisions of the ACL.

347. Second, even if that approach were incorrect, I am of the view that the plain words of the definition of “services”, together with context in the widest sense (which includes the existing state of the law and the mischief which the statute was intended to remedy) compel that conclusion.

348. The definition is an inclusive definition. It says that it includes (without any limiting words) any rights in relation to, and interests in, real property. To adopt the view of Santamaria JA, or to accept Geocon Bowes’ submission, as persuasively as it was put, would be, with respect, to introduce words of limitation that are not found in the statute.

349. Third, I do not agree with Geocon Bowes that an estate in fee simple, the largest estate known to the law, is not an interest in land. In my view it is an “interest”, being a whole or 100 percent interest.

350. An estate in fee simple is commonly referred to as an “interest” in land. That is, it is not the case that an “interest in land” is confined to meaning something less than the whole. There are many cases which refer to a fee simple as an interest in land. One example is Northern Territory v Mr A. Griffiths (decd) and Lorraine Jones on behalf of the Ngaliwurru and Nungali Peoples [2019] HCA 7; 269 CLR 1. In that case, which involved native title issues, Kiefel CJ, Bell, Keane, Nettle and Gordon JJ said at [67]: The Full Court were right to begin their ascertainment of the economic value of the native title rights and interests with the identification of those rights and interests. At common law, freehold ownership or, more precisely, an estate in fee simple is the most ample estate which can exist in land. As such, it confers the greatest rights in relation to land and the greatest degree of power that can be exercised over the land; and, for that reason, it ordinarily has the greatest economic value of any estate in land. Lesser estates in land confer lesser rights in relation to land and, therefore, a lesser degree of power exercisable over the land; and, for that reason, they ordinarily have a lesser economic value than a fee simple interest in land.

351. I also note their Honours’ reference, at [68] to the common law’s “conception of property as comprised of a ‘bundle of rights’”.

352. Fourth, the Torrens system of title by registration provides for the transfer of interests in land by the execution and registration of particular forms. Section 77 of the Land Titles Act 1925 (ACT) provides that on the registration of a transfer, the interest in land described in the transfer, shall pass to the transferee. The form for transfers approved pursuant to s 140 asks the question “PERCENTAGE OF INTEREST OWNED (whole or state share)”. Thus, this form is used to transfer a 100 percent interest in the land.

353. Fifth, in the ACT the sale of residential property such as the Units in the Development does not involve the transfer of estates in fee simple, but is the transfer of leasehold interests.

354. In the ACT, at least in relation to Territory Land (as defined in the Australian Capital Territory (Planning and Land Management) Act 1988 (Cth) (the Land Management Act)), which I infer applies to the Development, one does not purchase a fee simple as occurs, for example, in New South Wales. The fee simple for Territory Land is owned and held by the Commonwealth.

355. In relation to Territory Land, the Commonwealth granted authority to manage that land to the Australian Capital Territory Executive established by s 36 of the Australian Capital Territory (Self-Government) Act 1988 (Cth): see s 29 of the Land Management Act. Under s 29(1)(b) of the Land Management Act, and subject to s 9 of the Seat of Government (Administration) Act 1910 (Cth), the Executive may grant, dispose of, acquire, hold and administer estates in Territory Land.

356. Section 29(3) of the Land Management Act says that the term of an estate in Territory Land granted on or after Self-Government Day shall not exceed 99 years or such longer period as is prescribed, but the estate may be renewed.

357. Pursuant to that and associated legislation, 99 year leases were and are issued for residential Territory Land and are commonly referred to as Crown Leases.

358. Thus, when buying residential Territory Land in the ACT, a purchaser does not purchase the fee simple, but rather takes a transfer of the Crown Lease from the vendor (lessee) for that parcel of land.

359. The subdivision of land for the purpose of unit developments in the ACT is governed by the Unit Titles Act 2001 (ACT) (the Unit Titles Act). A unit title is a type of property ownership where a person owns a defined part of a Units Plan. Section 33 of the Unit Titles Act provides that, on the registration of a units plan, the lease of the (developed) parcel ends, the former lessee (in this case being Zapari) is granted a lease for each unit in the Units Plan and the owners corporation is granted a lease for the common property. Zapari may then sell (or more accurately transfer) the Crown lease for each Unit to a purchaser. Hence, for example, on the first page of Mr Dalton’s Contract for Sale, the “Land” is defined to be the “unexpired term of the Lease” in relation to that Unit.

360. Geocon Bowes accepted (see at [336] above), that leasehold interests were interests in land caught by the definition of “services”. That concession was correctly and properly made in my view. Thus, the sales of the Units, being the transfers of leases, were “services” within the meaning of that term even assuming Geocon Bowes was correct in submitting that the sale of the fee simple in land was not a “service”.

361. I should note a number of other submissions which I have not accepted.

362. Geocon Bowes submitted that the words “in connection with the supply or possible supply of ... services or in connection with the promotion by any means of the supply or use of ... services” in s 29(1) should not be construed as extending to representations relating to the mere sale or transfer of title to land because that was the precise subject matter of s 30 of the ACL. It was submitted that s 30 concerns a narrower but overlapping range of representations relating to the sale or grant of interests in land. It was submitted that the types of representations listed in s 30(1) overlap with, but were narrower than, those listed in s 29(1), and this was an indication that s 29(1) was not intended to capture representations relating to the sale or grant of interests in land. If that were not the case, the submission continued, the overlapping subsections in s 30(1) would be redundant or otiose and statutory provisions generally will not be interpreted in such a way.

363. Section 30 says:

29 False or misleading representations about sale etc. of land (1) A person must not, in trade or commerce, in connection with the sale or grant, or the possible sale or grant, of an interest in land or in connection with the promotion by any means of the sale or grant of an interest in land: (a) make a false or misleading representation that the person making the representation has a sponsorship, approval or affiliation; or (b) make a false or misleading representation concerning the nature of the interest in the land; or (c) make a false or misleading representation concerning the price payable for the land; or (d) make a false or misleading representation concerning the location of the land; or (e) make a false or misleading representation concerning the characteristics of the land; or (f) make a false or misleading representation concerning the use to which the land is capable of being put or may lawfully be put; or (g) make a false or misleading representation concerning the existence or availability of facilities associated with the land. Note: A pecuniary penalty may be imposed for a contravention of this subsection. (2) This section does not affect the application of any other provision of Part 2-1 or this Part in relation to the supply or acquisition, or the possible supply or acquisition, of interests in land.

364. I do not accept the submission. First, s 30(2) says expressly that s 30 does not affect the application of s 29 (as well as other sections) in relation to the supply or acquisition, or the possible supply or acquisition, of interests in land. If my interpretation of “services” is correct, then s 29 applies to the supply of interests in land and s 30(2) expressly says that s 30 does not affect s 29.

365. Second, whilst I accept there could be some overlap between the two provisions, I do not read them as being mutually exclusive and nor do I think s 30 would be rendered otiose if s 29 applied to the supply of land.

366. Geocon Bowes also points to the fact that in various sections of the ACL there is an express inclusion of a sale or grant of an interest in land in addition to a supply of services. For example, s 23(3) says: A consumer contract is a contract for: (a) a supply of goods or services; or (b) a sale or grant of an interest in land; to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption.

367. Geocon Bowes submitted that the inclusion in those sections (ss 23(3), 25(g), 32(1)(c) and (2)(c), 50(1)(c) and 219(1)(b)) of “a sale or grant of an interest in land” in addition to the supply of services was a strong indication that “services” did not include a sale or grant of an interest in land because if that were not the case the expression “a sale or grant of an interest in land” was otiose. That submission has force, but the definition of “services” does include the supply of “rights (including rights in relation to, and interests in, real or personal property)” and I think the better view is to prefer there being some otiose subsections rather than to read words of limitation which do not exist into the definition of “services”.

368. Geocon Bowes next submitted that its construction, that is, the exclusion of land (at least when the fee simple was transferred) from the definition of “services” was supported by the Explanatory Memorandum of the Trade Practices Amendment (Australian Consumer Law) Bill 2009 (Cth), which stated in relation to s 30 of the Bill (which became s 30 of the ACL) that: Dealings in relation to land are neither a good nor a service and, accordingly, this specific prohibition on false or misleading representations about the sale of land and other forms of land transaction was added to the TP Act in 1987. Similar prohibitions exist in the FT Acts of most States and Territories.

369. I do not find that Explanatory Memorandum persuasive. The purpose of that Bill was to, inter alia, convert the former TPA into the CCA. As the quote above said, that provision had existed in earlier versions of the TPA, and the Explanatory Memorandum on the Bill that introduced the earlier section was inconsistent with the Memorandum cited.

370. Section 29’s predecessor, being s 53 of the TPA, was first inserted in 1977 by the Trade Practices Amendment Bill 1977 (Cth). That Bill also introduced the definition of “services”. The Explanatory Memorandum to that Bill said in cl 27: The Bill deals specifically with false representations and other misleading or offensive conduct in relation to land (new section 53A, clause 29). Leases and licences of an interest in land are defined as services for the purpose of the Act (see definition of "services", new section 4(1), clause 5(m)). (Emphasis added.)

371. The definition of “services” introduced by the Trade Practices Amendment Act 1977 (Cth) was relevantly identical to the present definition. It said: ‘services’ includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under— (a) a contract for or in relation to— (i) the performance of work (including work of a professional nature), whether with or without the supply of goods; (ii) the provision of, or of the use or enjoyment of facilities for, amusement, entertainment, recreation or instruction; or (iii) the conferring of rights, benefits or privileges for which remuneration is payable in the form of a royalty, tribute, levy or similar exaction; (b) a contract of insurance; (c) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or (d) any contract for or in relation to the lending of moneys, but does not include rights or benefits being the supply of goods or the performance of work under a contract of service. (Emphasis added.)

372. That definition was amended in 1978, but not in any relevant way, and Henderson was decided on that definition of “services”.

373. I appreciate that the text of the Explanatory Memorandum I have quoted at [370] only refers to leases and licenses. But Explanatory Memoranda are aids to interpretation, they do not determine the ultimate holding. But I note that that explanation is consistent with the view that the transfers of leases, which is what occurred with the sale of the Units, was a “service”.

374. The text of the provision, seen in context and applying Henderson, persuade me that the sale of Units in the Development was the supply of services for the purposes of s 29(1) of the ACL.

The Rental Yield Representation was a representation within s 29(1)(b) of the ACL

375. The second issue raised was whether the Rental Yield Representation, assuming all other matters in favour of the Commissioner, could constitute a breach of s 29(1)(b).

376. The Commissioner submitted that the Rental Yield Representation amounted to a false or misleading representation concerning the value of the service (being the sale of each particular Unit) within the meaning of s 29(1)(b). She submitted that the value of a unit to an investor consumer would logically be affected by the rental yield a Unit could achieve. Therefore, an overstatement of future rental yield would, by implication, misrepresent the value of the Units at the time of the Rental Yield Representation. The Commissioner cited Australian Competition and Consumer Commission v Hillside (Australia New Media) Pty Ltd trading as Bet365 [2015] FCA 1007 at [105] per Beach J in support.

377. In that case Beach J found that two of the respondents had breached s 29(1)(b) in relation to representations of “$200 FREE BETS FOR NEW CUSTOMERS”. His Honour held that that representation conveyed the dominant message that new customers were entitled to $200 of free bets, without limitation or restriction.

378. At [105] his Honour said:

… Third, in relation to s 29(1)(b), the concept of “value” would be affected by something being for “free” with or without associated terms and conditions. By the dominant message of “free” and the downplaying, to say the least, of the terms and conditions, the cumulative effect amounted to a false or misleading representation concerning “value”.

379. In my view the Rental Yield Representation did represent that the services had a certain value by reason of the fact that Units would achieve a 7 percent gross rental yield. A 7 percent gross rental yield was viewed as a positive by the defendants and would obviously be reflective of higher purchase prices from interested investor consumers than if, for example, they were advertised as achieving a 5 percent rental yield.

380. In my opinion the Rental Yield Representation, assuming all other matters in favour of the Commissioner, could constitute a breach of s 29(1)(b) in relation to “value”.

The Rental Yield, Light Rail Location and Travel Times Representations, but not the Approval Representation, were representations within s 29(1)(g) of the ACL

381. The last issue to be considered here is whether those various representations, assuming all other matters in favour of the Commissioner, could constitute a breach of s 29(1)(g).

382. The Commissioner submitted that the Rental Yield Representation breached s 29(1)(g) because that Representation misrepresented the rental yield which was a “benefit” or “performance characteristic” of the service.

383. The Commissioner cited Dillon v Chin (1988) 84 ALR 457 at 466 as authority for the proposition that a profit projection on a service (an offer to manage an investment in commodity futures) may fall within the description "characteristics … uses or benefits they do not have".

384. The Commissioner submitted that each of the Approval, Light Rail Location and Travel Times Representations were representations that the services had benefits within the meaning of that word in s 29(1)(g), namely the proximity to light rail, and that the light rail would convey passengers to Canberra City in 10 minutes at a frequency of every five minutes.

385. The Commissioner submitted that the concept of benefit under s 29(1)(g) was broad enough to encompass benefits which are ancillary and associated with the services and cited Australian Competition and Consumer Commission v SmileDirectClub LLC [2022] FCA 1343 at [52]; Australian Competition and Consumer Commission v iSelect Limited [2020] FCA 1523; Australian Competition and Consumer Commission v Clinica Internationale Pty Ltd (No 2) [2016] FCA 62; Given v Optional Extras Pty Ltd (1976) 10 ALR 627 and De Jong v Prudential Assurance Co Ltd (1977) 14 ALR 694.

386. Geocon Bowes submitted that s 29(1)(g) could not apply to those Representations for three main reasons.

387. First, Geocon Bowes submitted that none of the Representations was as to the benefits of the service which was supplied. That is, they were not benefits forming part of or inherent in the rights or interests in the services supplied, but were extraneous to it. The submissions continued that the location or features of the light rail were not benefits that the service had in the sense that they were inherent to the land. Geocon Bowes cited in support Hollis v ABE Copiers Pty Limited (1979) 41 FLR 141 at 151 (Lockhart J) (Hollis); Brown v Jam Factory Pty Ltd (1981) 53 FLR 340 at 349 (Fox J) (Brown); Australian Competition and Consumer Commission v Billbusters Pty Ltd [2003] FCA 423 at [69] (Kenny J) (Billbusters); Australian Competition and Consumer Commission v Pest Free Australia Pty Ltd [2004] FCA 527 at [15] (Emmett J) (Pest Free); Australian Competition and Consumer Commission v We Buy Houses Pty Ltd [2017] FCA 915 at [40] (Gleeson J) (We Buy Houses). All but We Buy Houses concerned s 53(c) of the TPA, the predecessor to s 29(1)(g) of the ACL. We Buy Houses concerned s 29(1)(g).

388. Hollis concerned the sale of a photocopier. Five informations were laid. The third was an allegation that, in breach of s 53(c) of the TPA, the defendant falsely represented that the photocopier had a benefit it did not have, namely that a 40 percent taxation investment allowance would be available to the purchaser when that allowance was not available because the machine was second hand and not new.

389. Lockhart J held at 151:

In my opinion a representation that a purchaser or lessee of goods will qualify for an investment allowance in respect of goods to be supplied to him by the person making the representation is not within the purview of s 53 (c). It is a statement that a particular fiscal advantage will accrue to a taxpayer if he acquires certain goods. It is not a representation that the goods have a benefit.

390. Brown is of little assistance in this case because Fox J did not explore the issue before me.

391. Billbusters was an application for summary judgment. In that case the respondent said that the service he could provide could detect overcharging by Telstra, he would negotiate with Telstra for a reduction in a bill or a refund and would charge 30 percent of the reduction or refund to his customer as his fee. Inter alia, the ACCC alleged that representations to that effect were in breach of s 53(c) of the TPA in that the services did not have the benefits represented. In relation to “benefit” Kenny J said at [69]: The ACCC has also alleged that, in making the pleaded representations, the first respondent represented that its services had "performance characteristics, uses or benefits” they did not have in contravention of s 53(c) of the TPA. Plainly, this is not a case of performance characteristics ... The words "uses or benefits" are, however, of more general application. Whether there is a representation of a relevant "use" or "benefit" in connection with services to be provided by a representor will depend on the nature of the services in question, although the benefit, for these purposes, must inhere in the services in question: cf Given Optional Extras Pty Ltd (1976) 10 ALR 627; De Jong v Prudential Assurance Co Ltd (1977) 14 ALR 694; Trade Practices Commission v Optus Communications Pty Ltd (1996) 64 FCR 326; Dillon v Chin (1988) 84 ALR 457; and Health Insurance Commission v Hospitals Contribution Fund of Australia (1981) 36 ALR 204, at 211 per Bowen CJ; but see Hollis v ABE Copiers Pty Ltd (1979) 41 FLR 141, 151 per Lockhart J. (Emphasis added.)

392. In Pest Free the respondent manufactured and supplied electronic plug-in pest control devices for controlling and repelling rats, mice and cockroaches. It supplied devices to consumers and wholesale purchasers in Australia. It was alleged that Pest Free represented that the devices affected the sensitive metabolism of the insects and vermin with the result that they could not eat, sleep or breed, and the devices would cause the death, by dehydration and/or starvation, of the insects and vermin if they were unable to escape the effects of the devices. Inter alia, the ACCC alleged that by making such representations, Pest Free also represented that the devices had certain performance characteristics, uses or benefits in breach of s 53(c) of the TPA. In relation to that allegation, Emmett J said at [15]: … A performance characteristic, use or benefit in relation to goods such as the Devices, signifies something that the goods can do or something that can be done with the goods. Alternatively, it might signify some consequence of having or owning the goods. (Emphasis added.)

393. In We Buy Houses it was alleged that the respondents ran seminars, “boot camps” and operated a website at and in which they represented that the respondents could teach consumers how to buy a house for $1, and/or without a deposit or a bank loan, and/or with little or none of the consumer’s money, and/or generate income and profit by dealing with property in various ways. Inter alia, the ACCC alleged that the supply of “materials and information, seminars, boot camps and mentoring programs” were the “services”. The representations made in connection with the supply of those services were alleged to have been false or misleading in representing that those services had certain performance characteristics, uses or benefits.

394. In relation to s 29(1)(g) of the ACL, Gleeson J, citing the passage from Pest Free quoted above, said at [40]: For s 29(1)(g), a performance characteristic, use or benefit in relation to services signifies something that the services can do or something that can be done with the services, or perhaps some consequence of having received the services: cf Australian Competition and Consumer Commission v Pest Free Australia [2004] FCA 527 at [15]. (Emphasis added.)

395. Gleeson J found that the respondents had breached s 29(1)(g). Her Honour reasoned as follows, at [511]: The System and Strategies Representations were false or misleading for the reasons set out above. As representations about what could be achieved by following or implementing the techniques promoted by the respondents, the System and Strategies Representations were directed to the techniques promoted at the boot camps and the Go Direct programs. In the various contexts in which they were made, the System and Strategies Representations entailed the further representation that WBH and Mr Otton services were useful and beneficial because they taught consumers the techniques. The uses or benefits of the services were that they equipped consumers with skills and information to apply the techniques to achieve the outcomes identified in the representations.

396. In my view the Rental Yield Representation represented that the services (the rights or interests in the Units) had the benefit of no less than 7 percent gross rental yield. Rental yield was an inherent characteristic of the Units viewed from the perspective of both professional and non-professional investors. Indeed, I infer the main purpose behind the making of the Rental Yield Representation was to attract professional and non-professional investors and have them purchase the Units at the prices desired by the developers.

397. Whether the words “performance characteristic” add anything to “benefit” in these circumstances is doubtful, but I would be inclined to the view that the Rental Yield Representation did convey that the Units had a performance characteristic in the sense that “performance” means something like the action or process of performing a task or function. The task or function of a unit rented out for profit includes making a certain return on investment. I do not think the words “performance characteristic” should be confined to physical characteristics such as being watertight for example.

398. I am also of the view that Light Rail Location and Travel Times Representations were representations that the services had benefits within the meaning of that word in s 29(1)(g), namely the proximity to light rail, and that the light rail would convey passengers to Canberra City in 10 minutes at a frequency of every five minutes.

399. As Kenny J said in Billbusters, whether something is a “benefit" will depend on the nature of the services in question. In Pest Free, Emmett J made the point that a benefit is not only something that the goods (or services) can do, but it may signify some consequence of having or owning the goods or receiving the services, a point with which Gleeson J agreed in We Buy Houses.

400. Location of real property is an inherent characteristic of real property. In the residential real property market, location is an important factor considered by purchasers. Depending on the particular purchaser, proximity to various amenities such as schools, shops, restaurants, medical services and public transport are often important considerations and are frequently expressly advertised when those amenities are proximate to the property being sold. That is so whether the purchasers are investor lessors or owner-occupiers.

401. Geocon Bowes submitted that the Commissioner had not led any evidence to establish that proximity to light rail would be likely to increase the value of the land. It submitted that for some potential purchasers of residential property, having a light rail station close to their dwelling would be a negative as opposed to a positive coincidence, and a quality which could be viewed as either positive or negative could not be described as a benefit.

402. I do not think evidence is necessary to prove that proximity to public transport (in this case light rail) would likely increase the value of the Units. It is a commonly advertised virtue of residential property, accepting that not all consumers would be attracted to that feature. Of course, the question is not whether it would increase value, but whether it could be viewed as a benefit.

403. If evidence were needed, the defendants provided it. As the Promotional Email dated 1 March 2018 said: LOCATION. LOCATION. LOCATION.

404. The Promotional Materials advertised that proximity because it was viewed as a positive. As Mr Georgalis said in his affidavit: Geocon has typically selected sites and built multi-storey residential apartment and hotels in or around town centres (for example, Woden, Gungahlin, Belconnen, Tuggeranong and Canberra City and its surrounds) due to the amenities that town centres provide residents such as access to retail shops, restaurants and public transport hubs. (Emphasis added.)

405. He said that at a development inception meeting (development inception meetings occur at the very start of a proposed development) it was decided to focus on: … 'time' as a theme and leverage off the ACT Government's election commitments and other ACT Government publications … which stated that light rail was coming to Woden and that it would stop near the location of the Development.

406. He also said that: Mr Micalos and I discussed in general terms the proposed marketing strategy, including that marketing would focus on residents' ability to access the amenity provided by the future Stage 2 of the Canberra Metro Light Rail.

407. Indeed, in the Promotional Video, Mr Georgalis expressly extolled the benefit of being proximate to the light rail. He said: Living in Grand Central Towers and being able to walk out the front door and jump on the light rail and be in the City ... every 5 minutes, is an extraordinary opportunity for Canberrans, we've never had this type of amenity or public transport available to people that live in apartment complexes.

408. It is true that some consumers may see that proximity as a negative. Those consumers may prefer quieter neighbourhoods and may prefer neighbourhoods which do not have public transport. But something does not need to be viewed positively by every consumer to be a benefit. Section 29(1)(g) asks whether there was a false or misleading representation that services had performance characteristics, uses or benefits. In that context, benefit means something which some, but not necessarily all, consumers would view positively.

409. The Commissioner also submitted that the Approval Representation represented that the services had particular benefits. I do not agree.

410. The Approval Representation was that the light rail to Woden Town Centre had received planning approval, or such approval as was required by law. I do not think the mere fact that Stage 2 had received approval was an inherent benefit or performance characteristic of the Units. Identification of the representative member of the class to whom the representations were made

411. My first task is to identify the representative member of the class of persons to whom the representations were made per Campomar. I shall call this person the “reasonable consumer” for ease of expression.

412. I am not required to isolate only one hypothetical reasonable consumer. In ACCC v Google (No 2) [2021] FCA 367; 391 ALR 346 Thawley J observed at [91]: I do not accept that in all misleading or deceptive conduct cases where the conduct is directed to the public at large, or a segment of the public, it is necessary to isolate one hypothetical person within the class to determine whether there has been a contravention. It may be necessary to isolate a number of hypothetical persons within the class, assuming the variable characteristics of the reasonable members of the class suggest that such an approach is appropriate. As was made clear in Campomar at [99], cases should not be considered in the abstract; regard must be had to the circumstances of the particular case and the remedy sought in respect of the contravention alleged to have occurred. I do not read Campomar at [103] as requiring the identification of only one hypothetical person in all cases. The final sentence of [103] recognises that “where the effect of conduct on a class of persons, such as consumers, was in issue, the section must be ‘regarded as contemplating the effect of the conduct on reasonable members of the class’”, citing Puxu at 199. It may be that reasonable members of the class cannot be distilled into a single hypothetical reasonable person.

413. In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd [2023] HCA 8; 277 CLR 186 Kiefel CJ, Gageler, Gordon, Edelman and Gleeson JJ spoke of the four steps involved in deciding whether a person had breached s 18 of the ACL. They were: first, identifying the conduct said to contravene s 18; second, considering whether the identified conduct was conduct in trade or commerce; third, considering what meaning that conduct conveyed; and fourth, determining whether that conduct in light of that meaning was misleading or deceptive or likely to mislead or deceive.

414. Turning to the reasonable consumer, their Honours said at [83]: Where the conduct was directed to the public or part of the public, the third and fourth steps must be undertaken by reference to the effect or likely effect of the conduct on the ordinary and reasonable members of the relevant class of persons. The relevant class of persons may be defined according to the nature of the conduct, by geographical distribution, age or some other common attribute, habit or interest. It is necessary to isolate an ordinary and reasonable "representative member" (or members) of that class, to objectively attribute characteristics and knowledge to that hypothetical person (or persons), and to consider the effect or likely effect of the conduct on their state of mind. This hypothetical construct "avoids using the very ignorant or the very knowledgeable to assess effect or likely effect; it also avoids using those credited with habitual caution or exceptional carelessness; it also avoids considering the assumptions of persons which are extreme or fanciful". The construct allows for a range of reasonable reactions to the conduct by the ordinary and reasonable member (or members) of the class. (Emphasis added.)

415. Both Mr Georgalis and Mr Stephens accepted that the marketing campaign was conducted both nationally and, to an extent, internationally (China and Hong Kong). Mr Georgalis said it was probably conducted in Vietnam as well. Some marketing materials were translated into Mandarin, although there is no evidence that any of the Promotional Materials were translated. Be that as it may, it is reasonable to infer there were some English speakers/readers in those countries, and perhaps those with some English abilities would be more likely to look at the Real Estate Website Marketing or watch the Promotional Video or seek and receive a Promotional Email.

416. The target audience, domestically and internationally, included owner-occupiers and investors (both first time and sophisticated investors). Some of the target audience resided in Canberra, some in other parts of Australia and a few overseas. A schedule prepared by one of the defendants in 2023 (according to Mr Stephens) summarised the Unit sales which showed that many purchasers resided in the ACT, many resided in New South Wales or Victoria, one resided in China and another in Vietnam.

417. I do not agree with the Geocon Bowes submission that the reasonable consumer should only be regarded as being inquisitive, attentive, attuned to the possibility of further detail being available and attuned to the likelihood of some exaggeration or puffery. In my view that overstates matters and incorrectly confines the reasonable consumer to an intelligent, somewhat cynical and wary person who would rarely accept any statement at face value. Putting aside the different adjectives, I think Geocon Bowes’s submission is not consistent with the descriptions of the reasonable consumer in analogous or nearly analogous circumstances as revealed in the authorities (to which I will shortly come).

418. GZ and GRE submitted that the scope of the audience was not the same for each type of Promotional Material as the Commissioner had conceded, and it was therefore necessary to consider the characteristics of the audience for each medium. For example, it was submitted that because the Billboards would be viewed by someone walking past them, the reasonable consumer should be attributed with a higher degree of knowledge about the light rail infrastructure project in the ACT, the ACT Government and the property market in the ACT.

419. The Commissioner did not make the concession alleged. The Commissioner, in the passage identified by GZ and GRE, submitted that what was conveyed by each medium had to be judged in the context that each medium was different in terms of the geographic distribution of each medium. The Commissioner said: However, it is accepted that the geographic dimension of the target audience varies in this case according to the particular advertising medium. For example, the Billboard would be perceived by people who were in its vicinity. On the other hand, Promotional Emails or electronic copies of the Brochure could have been sent to all parts of the world.

420. No authority was cited in support of GZ’s proposition, but there is some common sense to it. Of course, someone walking past and viewing the Billboards may have been from interstate and had come to see in person the site of the proposed Development having received a Promotional Email or having seen the Website Marketing, but I do not think the delineation between audiences suggested by GZ is necessarily correct.

421. I think the basal point of GZ’s submission was that the ordinary member of the class of people to whom the Representations were made included local Canberrans who could be assumed to have more background knowledge of the light rail than interstate consumers. That difference, and the others alluded to, may be accommodated in the range of characteristics which the “ordinary” or “reasonable” members (plural) of the class to whom the Promotional Materials was directed would have. This will include consideration of the type of market, the manner in which the Units were advertised and sold, and the habits and characteristics of purchasers in such a market. As mentioned earlier, a representation may be misleading if a not insignificant number of that class would be misled or deceived.

422. So, for example, in ACCC v Coles, Allsop CJ at [43] said that in the case before his Honour, which concerned the purchasing of a staple such as bread in a supermarket, the ordinary or reasonable consumer: … may be intelligent or not, may be well educated or not, will not likely spend any time undertaking an intellectualised process of analysis, will often be shopping for many other items, and will be likely affected by an intuitive sense of attraction rather than by any process of analytical or logical choice. The dominant message of advertising for bread is likely to be simple, though intuitively diffuse. What is reasonable care by members of the public (compare Parkdale at CLR 199; ALR 6–7; IPR 688–9) must be judged in the above context. The purchase of bread from a baker or bread shop should not normally call for astute attention to disclaimers about the wares on sale at the counter.

423. In Australian Competition and Consumer Commission v TPG Internet [2011] FCA 1254 (TPG FCA) Murphy J said the following about advertisements published to the world at large at [24]: The Court must take into account that an advertisement published to the world at large is designed and calculated to be seen and read by a wide range of persons, including the shrewd and the ingenuous, the educated and the uneducated, the experienced and inexperienced in commercial transactions. It will include the astute, the informed, those who are sceptical and read the small print, those who are intelligent and those who are well informed. It will also cover many who do not possess those characteristics, those who are less informed and those with average intelligence: Telstra Corp Ltd v Cable and Wireless Optus Ltd [2001] FCA 1478 at [21]–[25] (Cable and Wireless).

424. The mediums used by the Promotional Materials cast the net for purchasers very wide. The evidence is that the Promotional Material was directed to the general public at large, the knowledgeable and those who were not, the superficial readers or viewers or listeners as well as the profound, the gullible as well as the cautious and the careless, those who had experience in the buying of residential land and those who had little or no such experience, young people and older people. It included the shrewd and the ingenuous, the educated and the uneducated, and the experienced and inexperienced in commercial transactions.

425. The target audience also included owner-occupiers and investors (both first time and sophisticated investors). Some of the target audience resided in Canberra, some in other parts of Australia and a few overseas.

426. Some, such as the reasonably well informed Canberra resident, may have known more about the light rail than someone ordinarily resident interstate, but even the ordinary Canberra resident would not have independently known sufficient information about light rail locations, travel times and rental yields to have been in a position to falsify what was said about those matters in the Promotional Material.

427. Of course, for those audience members ordinarily resident outside of the ACT, it was more probable than not that they knew nothing more about Stage 2B and Woden rental yields than what was conveyed by the Promotional Materials.

428. Adopting the phraseology of Smithers J in Henderson, the Promotional Material invited readers to have confidence in the messages conveyed, to rely on the representations as candid and bona fide, meaning what they said, speaking simply and speaking in the language of the readers and to be read without suspicion.

429. These readers could be expected to have placed trust in the Representations because they would reasonably consider that professional developers would have more knowledge than themselves about the light rail’s location, travel times and future rental yields. Whilst such readers could reasonably be expected to ultimately seek legal advice if they were to enter into a conveyance of a Unit, I do not think they would have made further enquiries about locations, travel times and rental yields. Even if that were expected of them, the marketing web authorities are against that submission.

430. I agree with GZ and GRE that each medium had different considerations to take into account in terms of, for example, how long a consumer might read them, but I do not think I should attempt to define different reasonable consumers for each medium. No authority that I am aware of suggested such was appropriate, and I was not taken to any such authority.

431. GRE’s submission was that I should even define different reasonable consumers depending on whether they received the Brochure electronically or in hard copy. GRE submitted that those that received the Brochure electronically included those that downloaded the Brochure but did not open it, opened and then deleted it, those that opened it and skimmed it, or read it closely.

432. I think that is taking the hypothetical consumer and his or her characteristics too far. Given the infinite number of possibilities as to how a consumer perceives a representation, there is no utility in pursuing that approach and I do not see it as being required by Campomar.

433. GZ submitted that the ordinary reasonable member of the audience for the Brochure would properly be attributed with knowledge of the ACT Government’s light rail development and be taken to be capable of accessing further information about the status of that infrastructure project. How interstate purchasers could be attributed to have had that knowledge was not explained, but I also do not think many Canberrans would have had significant knowledge of what contingencies needed to be satisfied before Stage 2B could be built, what plans there were and what factors would influence travel times, and what facts and formulas should be used to reasonably predict future rental yields.

434. GRE submitted that for consumers who received the Brochure in hard copy I should assume that such consumers had a great deal of information about the Development. GRE submitted I should assume that these consumers had: (a) location, project and market overviews; (b) features, inclusions, prices, outgoings (strata fees, water charges, rates, land tax); (c) rental estimates prepared by a third-party (in February and March 2018, this was the LJ Hooker Rental Appraisal dated 25 October 2017); (d) stamp duty information; (e) a tax depreciation estimate report; (f) a market overview investment report prepared by a third-party, namely MacroPlanDimasi, which contained information on macroeconomic indicators, the residential market, the health precinct, property analysis and financial analysis.

435. That submission was based on what Mr Stephens described as the “typical buyer journey process” and his experience of how a face-to-face meeting between sales agent and potential purchaser was supposed to proceed. I place no weight on that evidence of Mr Stephens given his generally poor credit (see further below), the lack of substantive corroboration for his assertions and the fact that none of those matters were put to Mr Dalton in cross-examination.

436. GRE then submitted that in that context, any impression created by the Brochure would likely have had minimal impact given the significant amount of other information which the recipient of the Brochure already had. GRE submitted that a recipient of the Brochure may have read the Brochure closely or only skimmed it, but the impact of the information in the Brochure would have been, at most, ancillary to the information which they had already received as part of the sales process.

437. I do not accept that submission. If I was wrong to place no weight on Mr Stephens’ evidence of the typical buyer journey process, none of the information supposedly communicated to these consumers would have so overwhelmed the consumers such that the dominant messages conveyed by the Brochure and about which the Commissioner complains would not have been received. If anything, the Brochure, a high quality marketing document filled with enticing photographs and clear and bold statements would have attracted greater attention than the comparatively dry information contained in the other documents referred to.

438. GZ also submitted that even interstate or international purchasers would more often than not either inspect the property before purchase or have an agent do so for them. They would then be aware (in the event that they had not been before) that there was no light rail at the site and again they would realise that the light rail was an expectation. That submission is misplaced. The Commissioner’s case was not that there was a light rail then in existence, it was that the future construction of Stage 2B was certain.

439. GZ submitted that the reasonable consumer would have, after seeing the representations, undertaken research and discovered for themselves the true position.

440. No authority was cited to support the submission, although the following passage from TPG FCA at [30] was quoted in a submission concerning what knowledge should be ascribed to the reasonable consumer: An ordinary or reasonable consumer can be expected to do some research before purchasing a broadband internet plan as it is a substantial rather than an impulse purchase. He or she will have a higher degree of knowledge as a result. Consumers must be taken to have a certain degree of background knowledge about basic internet usage: ACCC v Singtel at [28].

441. However, that passage dealt with past or existing knowledge, rather than knowledge to be gained from future research, as the citation from Singtel Optus 2010 bears out. Further, it concerned internet plans, a widespread service which has been present in the community for many years. That is different to a Development in a unique location with unique characteristics.

442. It is possible the submission was based on the principle that s 52 of the TPA and s 18 of the ACL were not enacted for the benefit of people who fail to take care of their own interests. But that does not apply in this case. What is meant by that principle was explained by the plurality in TPG HCA at [38]-[39]. The plurality said that conduct is misleading or deceptive, or likely to mislead or deceive: … if it has a tendency to lead into error. That is to say there must be a sufficient causal link between the conduct and error on the part of persons exposed to it. It is in that sense that it can be said that the prohibitions in ss 52 and 18 were not enacted for the benefit of people who failed to take reasonable care of their own interests.

443. In any event, I do not accept GZ’s submission. First, no authority was cited to support it. Second, it conflicts with the marketing web authorities. In TPG HCA the plurality held that a contravention of s 52 of the TPA may occur at the point where members of the target audience have been enticed into a marketing web by an erroneous belief engendered by an advertiser, even if the consumer may come to appreciate the true position before a transaction is concluded. Third, it is not consistent with what was said in TPG HCA at [38]-[39].

444. I have described what I have called the reasonable consumer at [424]-[428] above. I shall now consider what was conveyed by each medium, and whether what was conveyed was false, misleading or deceptive or likely to mislead or deceive.

The Promotional Material and what representations were made

Some general matters

445. I shall shortly describe each type of the Promotional Material and their contents. After describing each medium, I shall make findings as to what representations were conveyed by each.

446. As the Approval Representation related to a past fact, I shall also make a finding in this part of the judgment whether that representation was misleading.

447. The other Representations related to future matters. I shall decide whether there were reasonable grounds for those Representations later in the judgment.

448. A question arises whether the different Promotional Materials should be considered singularly or collectively when considering whether the pleaded Representations were made.

449. The Commissioner’s case was pleaded in a way that suggested that although the content of each of the Promotional Materials differed somewhat in terms of the precise representations made and the subject matters addressed, each individual medium was not to be assessed on its own but as a conglomeration. In effect, the Commissioner’s pleaded case seemed to adopt the approach of Perram J in Singtel Optus 2010. In that case different forms of advertisements were the subject of complaint, namely on-line advertisements, a series of television commercials, certain print advertisements, flyers and a billboard promotion. His Honour said at [5] that each form of medium presented its own subtleties in terms of gauging whether that medium’s advertisement was misleading but, at [6], did not think that the kind of subtleties raised by those issues needed to be dwelled on. That was because his Honour said that the core of the Commission’s complaints across all of the advertisements in all of the relevant mediums was the same.

450. In submissions, the parties adopted a somewhat hybrid approach. By that I mean they made submissions about a particular medium (e.g. the Billboards) and what they represented, and at other times would make submissions about whether a number of mediums (treated as a conglomeration) conveyed a particular representation. This latter approach was appropriate when, as in Singtel Optus 2010, the core representations were the same or very similar.

451. Having said that, it is best to consider each medium on its own merits and separately from the others. That is for three reasons.

452. First, because s 18 of the ACL is concerned with conduct, and each medium was conduct in and of itself.

453. Second, Geocon Bowes submitted that all of the Promotional Material formed part of one sales campaign, and it was most likely that reasonable consumers each received a range of Promotional Material, including material containing these qualifications. It was submitted that the evidence of Mr Dalton bore this out. BSD/Zapari submitted that I should assume every reasonable consumer read the Brochure and saw the Promotional Video, because the two seconds in the Video in which a newspaper extract appeared with the text “March 2017, Government proposes light rail stage 2 to Woden” made it abundantly clear that the Canberra Metro Light Rail had not been “approved” as represented in the Brochure.

454. I do not agree with these submissions. I do not agree that I should assume the reasonable consumer received all or a range of Promotional Materials. That I think is unrealistic in that it is highly unlikely every purchaser of a Unit saw and read all the Promotional Materials. If only a range of Promotional Materials was read and seen, there is no evidence available for me to decide which combination of Promotional Materials was most likely to have been seen by the reasonable consumer. Only the Promotional Video and one email was cited in support of the submission by Geocon Bowes, and only the Video and the Brochure was cited by BSD/Zapari, but there is no evidence to support those combinations over others.

455. In my view, each of the Promotional Materials must be judged on its own merits.

456. Against the event that I am incorrect in that conclusion, I would not have accepted that had a reasonable consumer seen both the Video and email suggested by Geocon Bowes, or the Video and the Brochure as submitted by BSD/Zapari, they would have had any different perception as to what was being conveyed than I have otherwise found.

457. Third, because there are some differences between the representations made about a particular subject matter in some of the mediums. For example, in relation to the Rental Yield Representation, the Billboard said, “DA APPROVED | 7% RENTAL YIELD”, whilst the Brochure said, “7% gross rental yield achievable based on rental projections” (emphasis added).

458. I shall now turn to the Promotional Material and the representations.

459. In relation to the Approval Representation, the nub of the Commissioner’s case was that it represented that all necessary approvals had been obtained, whereas that was not the fact.

460. In relation to the Light Rail Location Representations, the nub of the Commissioner’s case was that they conveyed, as matters of certainty, that the light rail would be extended to Woden Town Centre and that it would stop at, adjacent to or proximate to the Development. The Commissioner said that the representor had no reasonable grounds for making those representations.

461. In relation to the Travel Times Representations, the nub of the Commissioner’s case was that the suggested travel time and suggested frequency of services were, in effect, fanciful, and there were no reasonable grounds for making those representations.

462. In relation to the Rental Yield Representation, the nub of the Commissioner’s case was that the representation conveyed that all Units would achieve that rental return if rented out. The Commissioner said there were no reasonable grounds for that representation because, amongst other things, all of the calculations undertaken by the developers as to future rental yield that were tendered in evidence showed that many Units, and often most, were projected to return less than a 7 percent gross rental yield.

The Billboards

463. There was no dispute that the Billboards were located adjacent to each other, above the second floor of the building which was on the Land prior to being demolished to make way for the Development. They were located on the East and North sides of that building. There was also a billboard on the southern side of the building, but that billboard was not part of the Commissioner’s case.

464. The Billboards had the following appearance:

465. There is no dispute that the Billboard on the North side was approximately 20 metres long and 10 metres high. The Billboard on the East side was approximately 35 metres long and 10 metres high.

466. There is no dispute that both Billboards included the following statements and symbols on their respective right hand sides: (a) adjacent to a photograph of the proposed Development, the words “YOUR CANBERRA METRO TERMINAL STOPS HERE” against a black backdrop; (b) on either side of the words referred to above were two vertical lines of chevron-style arrows pointing downwards; and (c) immediately below the two lines of arrows, a colour image of a red Canberra Metro Light Rail tram.

467. In the middle and left-hand sides of the Billboards there was a colour image of the proposed Development, together with the words “GRAND CENTRAL TOWERS” in brown font underneath a logo containing two towers surrounded on either side by images, being the Grand Central Towers logo, that, on the Commissioner’s case, included a resemblance to a light rail tram.

468. All defendants denied the logo included a resemblance to a light rail tram. A better copy of the logo seen on the picture of the Billboards above is:

469. At the top of each Billboard was the name “ADAM MORGAN” followed by a mobile telephone number. Mr Morgan’s name and telephone number also appeared underneath the logo, followed by the words “GEOCON” and “ZAPARI”.

470. There is no dispute that on the upper portions of the Billboards the following statements appeared: (a) the words “DA APPROVED | 7% RENTAL YIELD”; and (b) “GRANDCENTRALTOWERS.GEOCON.COM. AU”.

471. There was no dispute between the parties, on the pleadings, that the Billboards made no reference to the fact that: (a) the Stage 2 Proposal (announced in October 2016 by the ACT Government) was subject to approval by the ACT Government and Commonwealth entities; (b) the route and location of the stops for the Stage 2 Proposal were indicative only and had not been finalised or approved; and (c) the Stage 2 Proposal had not been approved by either the ACT Government or the relevant Commonwealth entities.

472. There is no issue that the Billboards were erected sometime between 19-23 March 2018 (the precise date doesn’t matter) and remained onsite until about September 2018.

473. The Billboards were a medium which would be looked at relatively quickly and in passing, and in that regard the consumer’s first impression would be key. There was no disclaimer.

474. They would not have considered each of the phrases or words on the Billboards individually or carefully. In the absence of obvious disclaimers on the face of the Billboards, a reasonable consumer of the relevant class would assume that the claims on the Billboards could be taken at face-value.

475. The messages conveyed were simple, direct and unequivocal.

476. GRE submitted that the impression created by the Billboards would have been passing and insubstantial, that many people would have seen the words on the Billboard without processing any information conveyed by them. I am unsure what this submission was really directed to. It seemed to be suggesting that the Billboards amounted to no representation at all. If so, I do not accept that submission. Developers are not in the habit of spending money on forms of advertising which are not noticed by consumers, and it defies common sense to suggest that no-one who looked at the Billboards did not take some interest in them if only to know what was happening on that site.

477. GRE also submitted that any person looking at the Billboards would only understand and process the statement “7% RENTAL YIELD” if they had some interest in the Development already. I do not agree. That submission defies common sense. Anybody who looked at the Billboards for any reason was capable of “processing” the representation “7% RENTAL YIELD”, and many consumers might have been interested in that representation without being at that time interested in the Development. Of course, that representation may have enticed them to become interested because of the yield representation. After all, that was the Billboards’ purpose, to attract interest. The Approval Representation

478. In my view the Billboards did not convey the Approval Representation. There is nothing on the Billboards which would have conveyed to the reasonable consumer that planning or other required approvals for Stage 2B had been received.

479. The Commissioner submitted that the Approval Representation was made by implication. Although that may perhaps be a logical conclusion in that the light rail could only eventuate if approvals were obtained, I do not agree that that is what a reasonable consumer would have taken from observing the Billboards.

480. Further, it was equally open to a hypothetical reader to imply from the Billboards not that those approvals had already been obtained, but that the necessary approvals would be obtained in the future. Such a representation in relation to that future matter was not part of the Commissioner’s case.

The Light Rail Location Representations

481. The Billboards did, however, convey to the reasonable consumer the Light Rail Location Representations. That is, that the light rail would be extended to Woden Town Centre, and would stop at, adjacent to or proximate to the Land.

482. The combination of the words “YOUR CANBERRA METRO TERMINAL STOPS HERE” with two vertical lines of chevron-style arrows pointing downwards on either side of them and with a colour image of a red Canberra Metro Light Rail tram were unequivocal. To a reasonable consumer passing by and seeing the Billboards, even with passing attention, the simple and unequivocal message conveyed was that there would be a metro terminal “here”. The “here” and the unequivocal message that there would be a terminal “here” (meaning at, adjacent to or proximate to the Land) were emphasised by the logo which showed, in my view, two vertical towers, with two light trams at their base.

483. During the hearing there were various words used to describe what was meant by the word “would” in the Commissioner’s pleading of the Light Rail Location Representations. i.e. the Canberra Metro would be extended to Woden Town Centre and the Canberra Metro would stop at, adjacent to or proximate to the Land.

484. The Commissioner’s case was that the Representation conveyed that there was a “guarantee” of those events happening, or those events would “definitely” or “certainly” occur. That is, the Representations were conveying that Stage 2B to Woden (and the light rail stop at, adjacent or proximate to the Development) would definitely or certainly eventuate, or that Stage 2B to Woden was guaranteed to eventuate.

485. GRE adopted the submissions of Geocon Bowes and GZ in relation to this Representation.

486. GZ submitted that the Commissioner never pleaded that the alleged representations conveyed a “guarantee” that the light rail would go to Woden, but the case was fought on that basis, and it was clear from the time of the opening statements that this was the Commissioner’s case.

487. Geocon Bowes disputed that the Light Rail Location Representations would have been conveyed to the reasonable consumer. It submitted that the reasonable consumer would understand that there were many reasons why an infrastructure project such as Stage 2B might not be completed or might be completed in a different way from what was planned, and which would be outside the control of a private developer. That understanding, the submission continued, would have been reinforced by statements made in the Promotional Video such as “Future Light Rail” (emphasis added), that Stage 2B to Woden was “propose[d]”, and by a statement made in the Promotional Email dated 1 March 2018 which, on a map of the four proposed route options, said that the light rail stop at Woden was “indicative only”.

488. BSD/Zapari submitted that the Billboards simply conveyed that this was a future possibility, although BSD/Zapari did not identify any feature of the Billboards that conveyed “possibility” rather than the certainty conveyed by the unequivocal and unqualified matters I have identified. I do not agree with those parties’ submissions.

489. In my view what was being conveyed to the reasonable consumer by the Billboards was that light rail to Woden, and a light rail terminal at, adjacent or proximate to the Development, was definitely or certainly going to occur. The Billboards were unequivocal and Geocon Bowes’ submissions imputes too much background knowledge to the reasonable consumer.

490. Further, a representation will be misleading if any reasonable interpretation of it would lead a reasonable consumer into error. One reasonable interpretation of the Billboards is the one I have ascribed to it. I do not place much weight on Mr Dalton’s subjective evidence. He was but one of many consumers and the issue must be judged objectively.

491. The representation that Stage 2B was guaranteed, or would definitely or certainly eventuate, was not conveying that there was no possibility of some hypothetical catastrophic event which might prevent Stage 2B from eventuating (earthquakes for example), but rather that there was no impediment, or contingency which would not be satisfied, which would prevent Stage 2B from being built. Put another way, there was no possible change of government policy, or technical, financial or approval impediment or contingency which could possibly prevent the completion of Stage 2B.

492. The unequivocal nature of those messages may be contrasted with, for example, a statement in the Promotional Video that said (at 0:25 to 0:27) “Government proposes light rail stage 2 to Woden”. That statement was accurate. But the message conveyed by the Billboards went further than a “proposal”. There were no qualifying words or images on the Billboards which conveyed that the light rail, and the position of the light rail stop, was “proposed” rather than certain.

493. Another way of looking at the message conveyed by the Billboards is that what was on the Billboards was a half-truth. That is, the Billboards left out the “proposed” part of a representation equivalent to what was said in the Video.

494. Accordingly, the Billboards made the Light Rail Location Representations.

The Rental Yield Representation

495. In my opinion the Billboards conveyed the Rental Yield Representation, namely that a purchaser of a Unit in the Development (meaning every purchaser) would obtain a 7 percent gross rental yield from a lessee if the Unit was rented out on the private market for a reasonable period after the Development was completed.

496. GZ submitted that the Commissioner’s pleading was to the effect that the representation should be understood as conveying that “at least one unit” in Grand Central Towers would achieve a gross rental yield of 7 percent if rented out, although this was not a guarantee of such a return. That is not a correct reading of the pleading, and it was clear from the time of opening submissions that what the Commissioner was contending was that the Billboards conveyed that every Unit would return a gross yield of 7 percent if rented out, and the case was fought on that basis.

497. The words “7% RENTAL YIELD” were unequivocal. All parties except GRE accepted that what was being conveyed was gross rental yield rather than net rental yield. GRE submitted that it may have conveyed gross or net rental yield, and this would have confused consumers. I do not accept GRE’s submission. In this context the reasonable consumer, as all other parties accepted, would have understood the representation as meaning gross rental yield. There would have been too many cost variables affecting net rental yield which only purchasers would have known about (such as the amount of tax deductible interest they might be paying) for developers to have made such a statement, and consumers would have understood that the statement was directed to gross rental yield.

498. The dominant message was, without any qualification or equivocation, that the Units would return a 7 percent gross rental yield to those purchasers who would desire to rent out their purchase. There was no representation that that rental yield was “possible” for example, nor that it referred to an average of rental yields of all Units, nor that it only applied to an unidentified portion of the Units, nor that it was the upper limit as suggested by GZ (which, in any event, was not the highest rental yield of all Units as calculated by Mr Micalos). There were simply no words or other visual indicator on the Billboards conveying any of those qualifications.

499. It is no answer, as GRE submitted, that some consumers would have made further enquiries or would have come to know otherwise because of later statements made by GRE (no such later statements were proved). The authorities I have quoted earlier are against that submission. At the very least, that statement was an enticement for the consumer to deal with GRE, to be enticed into the marketing web by the unequivocal statement that any and every unit purchased would achieve a 7 percent rental yield.

500. It is also no answer, as Geocon Bowes submitted, that the representation must be seen in the context of the limited physical space available on a Billboard. Geocon Bowes submitted that the reasonable consumer would have understood that, in light of the limited physical space on the Billboard, the statements on it could not be taken in a completely literal way. I disagree. Rather, the limited space and the making of that bold representation conveyed the dominant and firm, unqualified representation that consumers were entitled to take at face value. Reasonable consumers would have thought that if the representation was not true, or the true position could not be accurately described on the Billboards due to space limitations, then it would not have been made. To accept Geocon Bowes’ submission would effectively licence representors to mislead if they could prove space limitations.

501. In Ackers the representation was “[f]rom day one your return will be a guaranteed 7% p.a”. In relation to that representation Rares J said at [367]: That was a key selling point. It worked on Mr Owers and Ms Tan-Bounkeua. They understood that from day one for 10 years they would receive that return. The promise of a guaranteed return was a prime consideration for them, as Austcorp understood it used this as its marketing strategy based on the expert assessment of each of Mr Walker (in his letter of 3 June 1999), Mr Chappell and Mr Hung. In Coluzzi [2002] NSWCA 74 at [57] Mason P observed of a similar representation, that it may be reasonable to make a qualified estimate or prediction but quite unreasonable to make “… an unqualified and firm prediction such as is conveyed by the word ‘guaranteed’ in the present context”. That context was a guaranteed net 7% p.a. return on capital invested in a serviced apartment bought off the plan.

502. The word “guaranteed” was not used in the Rental Yield Representation, nor were the words “from day one”, but the unqualified unequivocal statement “7% RENTAL YIELD” conveyed the idea that all purchasers would be able to rent their Units out and receive a gross rental yield of 7 percent.

503. The Billboards did not say “7% rental yield possible”, or “7% rental yield possible on some units”, or “7% average rental yield” or some qualified representation to similar effect.

504. The Billboards were not selective as to their readers. GRE must be assumed to know that readers of the Billboards would include everyone who walked past them, and that would include the shrewd and the ingenuous, the educated and the uneducated and the experienced and inexperienced in commercial transactions. GRE was not entitled to assume that the readers would be able to discover for themselves omitted qualifications to the message conveyed. An advertisement may be misleading even though it fails to deceive more wary readers who perhaps would have made further enquiries. There was no disclaimer to the representation, no explanation and no qualification of any kind.

505. The authorities establish that the Commissioner may rely on any meaning reasonably open to a significant number of readers, and if the representation is capable of more than one meaning, it will be misleading or deceptive if any reasonable interpretation of it would lead into error an ordinary and reasonable member of the class who can be expected to read it: see, for example, Australian Competition and Consumer Commission v Emerald Ocean Distributors Pty Ltd [2005] FCA 1703 (Emerald Ocean) at [25]. In my view, the meaning reasonably open to a significant number of readers was that every Unit would achieve a gross rental yield of 7 percent for a reasonable period after the Development was completed.

506. The Billboards were a medium which would be looked at quickly and in passing, and in that regard the consumer’s first impression would be key. That first impression was that every Unit would be capable of returning a 7 percent gross rental yield.

507. Accordingly, the Billboard made the Rental Yield Representation.

The Brochure

508. A copy of the Brochure is annexed to this judgment and marked “A”.

509. All defendants admitted on their pleadings that the Brochure was a 36-page colour brochure which, from around 22 March 2018: (a) was available to download on Geocon’s website upon provision of an email address; (b) was distributed in hard copy to interested buyers at a Geocon sales suite located at the corner of Akuna and Bunda Streets, Canberra City; (c) was made available electronically to sales agents; and (d) was emailed to interested buyers who registered their interest in the Development via the website.

510. The Brochure contained the following relevant statements and symbols:

(a) on the front and back cover pages, the words “GRAND CENTRAL TOWERS” and the Grand Central Logo; (b) on pp 2-3, the words “LIVE CENTRAL LIVE GRAND”. The words “CENTRAL” and “GRAND” are in larger print; (c) on p 4, the words “Inspired by the restless energy and timeless sophistication of New York’s Grand Central Station”; (d) on p 7, the words “1 minute to Woden bus terminal & Future Light Rail Terminal”; (e) on pp 8-9: (i) a photograph of the region in which the Land is located identifying several landmarks and containing a simulated image of the Development; (ii) on the right hand side of the image, a simulated marker of the Development close to a marker labelled “Future Light Rail” is overlaid on the image of Woden; (g) on pp 10-11: (i) the words “Stage 2 of the $900 million Light Rail Network will also link residents directly to Capital Hill, the Canberra CBD and beyond”; (ii) an image of a light rail line depicting “Woden Town Centre” as the penultimate stop; (iii) a map of the transport network showing Woden Valley connected to South Canberra by a light rail line; (h) on pp 12-13, a map of Woden Town Centre depicting the location of the Development adjacent to a transport line and marking the “Future Light Rail Interchange” on Callam St, which is located a few blocks from the Development; (i) on p 34, the words “7% gross rental yield achievable based on rental projections”; and (j) on p 35, the words “[t]he transit theme also makes sense as rail travel is set to play an increasingly significant part in Woden’s future with the approval of Stage 2 of the light rail, so there are many synergies”.

511. The Brochure also contained the following statements which the defendants contended should be considered when determining whether any of the pleaded representations were made, namely: (a) on pp 12-13: (i) the words “[e]very lifestyle amenity is close at hand, including world-class parks, entertainment venues and sporting facilities, together with health, education and a burgeoning local shopping scene – and the promise of more to come as public and private investment reaches unprecedented levels”; (ii) an image of a light rail line depicting Woden Town Centre as the penultimate stop in a different colour to the images of other local amenities and services in Woden Town; (b) on p 34: (i) the words “Canberra, Australia’s most thriving city” at the top of the page; (ii) the words “The numbers speak for themselves. Canberra is growing up fast, as it continues to evolve into a vibrant and modern city. It today boasts one of the most dynamic property markets anywhere in Australia”; (iii) the words “$2.8 Billion” and “ACT Government capital investment announced over the next four years in the 2015-16 Infrastructure Investment Program” next to an image of a light rail tram and above a URL address; (iv) references to other statistics pertaining to the Canberra market and locality, including the words “7% gross rental yields achievable based on rental projections”; (c) on the inside of the back cover, the words “Grand Central Towers unashamedly draws its inspiration from the buzz and vitality of New York City’s, Grand Central Station in Midtown Manhattan. It’s one of the most amazing urban spaces on the planet, an exciting mass of people and noise and energy, 24/7”.

512. On the last page of the Brochure was a disclaimer. The disclaimer was in faint, grey, small type against a black background. It was difficult to read or even notice it was present. It said: Disclaimer GRAND CENTRAL TOWERS (‘the Development’) The information, images and plans representing the Development in this brochure are for illustration only and are subject to change. Please contact 1300 97 97 57 for the most up to date plans before entering into any contract for sale. Illustrations and plans are the designer’s impressions only and may not be an accurate representation of the development, or be to scale. Purchasers should rely on their own enquiries and information in their contract for sale before making any commitments. This brochure does not constitute an offer or contract.

513. The disclaimer was utterly ineffective in countering the representations conveyed by the Brochure. Its font was so small, the print so faint, its position was in the least noticeable part of the document, and the wording was feeble. Unsurprisingly, it’s place, position and design served to de-emphasise it and its message. I do not think many consumers would have even noticed the disclaimer was there, and the grey colour of the font against a black background visually discouraged it being read.

514. The Brochure was alleged to have conveyed the Approval, Light Rail Location and Rental Yield Representations.

515. A number of defendants submitted that the Brochure would have been read with great care by consumers, but I think that submission overstates the position. It is true that the Brochure was some 36 pages long, and contained much more information than, for example, the Billboard. I accept that the Brochure would have been read more closely than the Billboard, not least because it was something likely to be taken home and read at some leisure.

516. Having said that, the Brochure was a marketing document which had been artfully designed and contained many prominent (in size) high quality pictures which emphasised the qualities of the Development and the Units, but with largely small type. The Brochure was designed to impress and to make a strong visual impact. The bulk of most pages were taken up with photographs or diagrams.

517. Mr Dalton said that he skimmed over most of the brochure but then read more closely some portions of it that were of particular interest to him. I think that fairly describes what the reasonable consumer would have done.

The Approval Representation

518. In my view the Brochure conveyed the Approval Representation.

519. GRE adopted the submissions of Geocon Bowes and GZ in relation to this Representation.

520. The express words “with the approval of Stage 2 of the light rail” in the context of the words “[i]nspired by the restless energy and timeless sophistication of New York’s Grand Central Station” and the words “1 minute to Woden bus terminal & Future Light Rail Terminal” together with the photographs, images and maps on pp 8-9 and 12-13 conveyed to the reasonable consumer that, as far as the necessary approval process was concerned, every necessary approval had been granted.

521. Geocon Bowes submitted that the word “approval” in the phrase “with the approval of Stage 2 of the light rail” meant sanctioned, meaning it had the support of the government, or that the government had approved Stage 2B as a matter of policy as distinct from planning and other such approvals required by the planning regime and planning bodies. It submitted that dictionary definitions of the word “approval” should be applied, namely that the word meant (relevantly) officially or authoritatively confirmed or sanctioned.

522. BSD/Zapari submitted that what was conveyed was that Stage 2B to Woden was proposed, indicative only and, essentially, a future and upcoming proposition, and further submitted that the word “approved” was not further defined in the Brochure and many readers of the Brochure would not analyse it closely or in much detail.

523. I do not agree with these submissions.

524. The word “approval” is commonly used in the community in relation to, for example, development approval or building approval when residential homeowners are seeking to build or renovate residential buildings. It is common in the advertising for sale of residential property for potential possible improvements to be mentioned (e.g. a new dwelling, a second story etc) and it is common to see those representations qualified by the words “subject to approval”. Of course, the message conveyed is that approval for any such improvement is required from the relevant planning body.

525. I think the reasonable consumer would regard the word “approval” in the sentence “[t]he transit theme also makes sense as rail travel is set to play an increasingly significant part in Woden’s future with the approval of Stage 2 of the light rail …” similarly. That is, that all necessary planning and other approvals required by law had been received from all necessary bodies. In that way the dictionary definition is apt, that is, that Stage 2B had been officially or authoritatively confirmed or sanctioned by all necessary planning or regulatory bodies. The representation did not convey approval by the ACT Government in the sense of approval as a policy of the Government.

526. Geocon Bowes’ submission would have had a sound foundation if the Representation had been in some way limited to the Government as distinct from other necessary planning bodies by saying, for example, “with the approval by the Government of Stage 2 of the light rail” or some more accurate wording. But that was not the wording used, nor the message that was conveyed.

527. Geocon Bowes also submitted that the Brochure conveyed that, because of the words “set to” and “in Woden’s future”, the ordinary, reasonable reader would have read these statements as being directed to the future: that is, upon the approval, construction and operation of the Light Rail Stage 2, rail travel would play an increasingly significant part in Woden's future. The full sentence in the Brochure was: The transit theme also makes sense as rail travel is set to play an increasingly significant part in Woden’s future with the approval of Stage 2 of the light rail, so there are many synergies.

528. GZ made a similar submission. GZ correctly said that regard must be had to the full context of the Brochure including all the words in the document or other communication and the way those words are conveyed, not just a word or phrase in isolation and the broader context of the relevant surrounding facts and circumstances. GZ submitted that while the word “approval” was used once in relation to light rail, the references to light rail throughout the document were couched in the language of the future (“Future Light Rail”, “set to play”, “Future Light Rail Interchange”, “the promise of more to come as public and private investment reaches unprecedented levels”). GZ submitted that the single use of the word “approval” in the context of those statements about future infrastructure would not convey to the reasonable consumer the very specific representation that planning or legal approvals for light rail had already been obtained. GZ submitted that at its highest, the word “approval”, in its context, might have alluded to the fact that the ACT Government had settled on or “approved” the preferred route for Stage 2 or conveyed cabinet or budgetary approval.

529. I do not agree.

530. The words “with the approval of Stage 2 of the light rail” are past tense. True it is the sentence contemplates that construction of Stage 2 would be a future matter, but not its approval. The “approval” of the light rail was advanced as a selling point, namely that having been approved, Stage 2B to Woden was simply a matter of time. Further, there were no qualifying words which may have conveyed the meanings GZ contended for, something easily done by adding those words if that was what the representor intended. For example, the sentence could have been written “with the approval of the Stage 2 route”, or “with Cabinet approval of Stage 2”. No qualifying words were used, and so what was conveyed was that all necessary approvals had in fact been received.

531. GZ also submitted that the Brochure was a lengthy document which demanded a higher level of attention than a Billboard which might be seen only fleetingly. I agree with that submission.

532. GZ submitted that there was no discussion in the document of the specific progress of the light rail project or the technical requirements to be completed for its realisation. GZ submitted that to convey specifically that planning approval or other legal approvals had been obtained would require some devotion in the Brochure to the technical requirements for light rail. I do not accept that submission. There was no need in an advertising Brochure representing that Stage 2 had been approved, to set out the technical requirements necessary for those approvals.

533. The representation was misleading or was likely to mislead because it had a tendency to lead reasonable consumers into error.

534. It is common ground that not all necessary approvals had been obtained at the time the Representation was made and thereafter up until the last Unit was sold. Amongst others, Stage 2 had not received approvals that it required under the EPBC Act, it had not received development approval under the Planning and Development Act, it had not received works approval by the National Capital Authority under the ACT Planning and Land Management Act and it had not received approval by both Houses of the Commonwealth Parliament as required under the Parliament Act.

535. Accordingly, the Approval Representation was misleading or deceptive, or likely to mislead or deceive for the purposes of s 18 of the ACL.

536. The Commissioner submitted there were many other approvals which were required, but there is no need to traverse them. It was not disputed on the evidence that the approvals set out above had not been obtained when the representations were made and had not been obtained before the last Unit was sold, at least in relation to Stage 2B which was the light rail to Woden.

The Light Rail Location Representations

537. In my opinion the Brochure conveyed the Light Rail Location Representations.

538. In favour of the Commissioner’s case was the fact that the Brochure contained the same logo as was on the Billboards and which is reproduced at [468] above.

539. It also contained the words on p 7, “1 minute to Woden bus terminal & Future Light Rail Terminal”, the annotated photograph on p 8 showing “Future Light Rail” proximate to the Development and the diagram on p 10 showing the light rail route passing through Woden (and ending at Canberra Hospital). A one minute travel time between the Development and the light rail terminal necessarily implied that the light rail terminal was at, adjacent to or proximate to the Development.

540. On the other hand, the diagram on p 13 (headed “WODEN REAWAKENS”) did not show any light rail terminal at, adjacent or proximate to the Development. Rather, it showed two light rail terminals which were not at or adjacent to the Development. In that diagram the terminal to the north of the Development was on the opposite side of Launceston St, and the terminal to the south was past Bradley and Neptune Sts. There was no evidence of those distances, but in my view those terminals could not be described as at, adjacent or proximate to the Development.

541. Having said that, the diagram was not prominent, the location of the light rail stops on that diagram and their geographic relationship to the Development would only have been noticed by the discerning consumer taking care to examine every part of the Brochure. Most reasonable consumers would only have noticed the route to Woden but would not have noticed that the light rail stops were not at, adjacent to or proximate to the Development.

542. What the reasonable consumer would have taken note of were the express words on p 7, “1 minute to Woden bus terminal & Future Light Rail Terminal” and the annotated photograph on p 8 showing “Future Light Rail” proximate to the Development.

543. In my view the Brochure conveyed the Light Rail Location Representations.

The Rental Yield Representation

544. In my opinion the Brochure conveyed the Rental Yield Representation.

545. The representation in the Brochure was different to the Billboards in that the words used in the Brochure on p 34 were “7% gross rental yield achievable based on rental projections” whereas the Billboards said “7% RENTAL YIELD”.

546. Geocon Bowes and GRE submitted that the word “achievable” conveyed something less than a certainty, but would have conveyed that word’s ordinary English meaning, which was “capable of being achieved”, not certain or guaranteed to actually be achieved. BSD/Zapari submitted that it meant that 7 percent was a possibility given rental projections.

547. Another dictionary meaning of “achievable” is able to be brought about or reached successfully.

548. However, I do not think it correct to decide the meaning of that word out of context, and the question is what was conveyed to the reasonable consumer, something not determined by dictionary definitions.

549. The word “achievable” was followed by the words “based on rental projections”. Thus, what the representor was conveying was that it had undertaken rental projections and a gross rental yield of seven percent per annum was capable of being obtained by purchasers who acted as reasonable lessors (those who acted as reasonable lessors in, for example, undertaking reasonable advertising, reasonable preparation of the property for inspection and the like). That is, what was being conveyed was that a seven percent gross rental yield was all but certain to be obtained by a reasonable lessor. The Representation was more of a promise, or a firm and soundly based prediction, than a mere possibility. That was because these experienced property developers expressly said that they had done some rental calculations upon which the seven percent return represented was based.

550. All defendants submitted that the reasonable consumer would not have understood the representation as applying to all Units, but I reject those submissions for the obvious reason that the representation was entirely unequivocal and unqualified. I repeat what I said about those matters in relation to the Billboards.

551. In my view those words did convey the Rental Yield Representation because the Brochure invited consumers to have confidence in the message conveyed, to rely on the Representation as bona fide, meaning what it said and to be read without suspicion. This is keeping in mind that the members of the class of consumers to which the Brochure was directed consisted of a broad range of people, including the astute and the gullible, the intelligent and the not so intelligent, the well-educated and the poorly educated.

552. Accordingly, the Brochure made the Rental Yield Representation.

553. I should record at this point, lest it be thought to have been overlooked, that no defendant contended that “7%” conveyed to the reasonable consumer, for example, any gross rental return of 6.5 – 7.4 percent (but rounded up or down to 7 percent). I mention that point because some calculations done by Mr Stephens were rounded to the nearest one per percent, which had the effect of suggesting rental yield on some units was 7 percent whereas, if done to the nearest tenth of a percent, the yields were between 6.5 – 6.9 percent. No defendant submitted, and I think correctly, that a representation of a gross rental yield of 7 percent was not misleading because such a representation included yields of between 6.5 – 6.9 percent (which was in fact the yield for a number of units). I think that was an appropriate position to adopt. The representation did not convey to the reasonable consumer something less than 7 percent (but rounded up to the nearest one percent).

The Flyer

554. A copy of the Flyer is annexed to this judgment and marked “B”.

555. There is no dispute that the Flyer was a two page double-sided colour document which was made available electronically to sales agents to distribute. There was an allegation that it was also placed “in media including newspapers”, but this allegation was disputed and not proved.

556. The Flyer contained the following statements relied on by the Commissioner: (a) on the front page were the words “GRAND CENTRAL TOWERS” and contained the Grand Central Logo; (b) on the front page were the words “[a]t the junction of Canberra’s Light Rail Stage 2”; (c) on the front page was a circle which contained larger printed words stating “7% GROSS RENTAL YIELD”; and (d) on the second page were the words “[t]he numbers speak for themselves” and under that, near an icon of a house, were the words “7.0% Gross rental yields achievable.”

557. The Flyer also contained the following statements (each of which was followed by a different website address, presumably being a document or webpage supporting the statements made) which the defendants contended should be considered when determining whether any of the pleaded representations were made, namely: (a) “$234 MILLION: ACT Government Urban Renewal Program currently underway”; (b) “1.3%: House prices in Canberra jumped 0.6% in September, while across the last quarter prices rose by 1.3%”; (c) “EDUCATED WORKFORCE: ACT population produces $90 of value added per hour vs National average of $75 per hour”; (d) “$2.8 BILLION: ACT Government capital investment announced over the next four years in the 2015-16 Infrastructure Investment Program”; (e) “9.3 MILLION: Projected passengers per annum at Canberra Airport by 2033/34 (vs 2.9 million in 2013/14)”; (f) “AUSTRALIA’S #1 UNIVERSITY CITY: Canberra has a higher percentage of its population studying at university than any other city in Australia. It also ranks in the Top 21 university cities in the world according to the QS student city rankings”; (g) “1.3%: Canberra Overall Rental Vacancy Rate, March 2017 (second lowest in Australia)”; (h) “1 MILLION: ACT population forecast to 2050 with an average annual growth for Canberra of 0.95% vs Australian average of 0.66% p.a.”; (i) “3RD BEST CITY: Canberra named Lonely Planet’s third best city in the world to visit in 2018”.

558. The Flyer was alleged to have conveyed the Approval, Light Rail Location and Rental Yield Representations.

559. The Flyer was of similar design to the Brochure, but obviously shorter. It would have been read by the reasonable consumer more closely than the Billboards but perhaps not as closely as the Brochure.

The Approval Representation

560. In my view the Flyer did not convey the Approval Representation for the same reasons I have given in relation to the Billboards.

The Light Rail Location Representations

561. I do think the Flyer conveyed the Light Rail Location Representations.

562. The combination of the logo, the statement “[a]t the junction of Canberra’s Light Rail Stage 2” (emphasis added) together with the icon of an LVR followed by the words “$2.8 BILLION: ACT Government capital investment announced over the next four years in the 2015-16 Infrastructure Investment Program” would have conveyed to the reasonable consumer that the light rail was definitely or certainly going to go to Woden, and a light rail terminal would be at, adjacent or proximate to the Development.

563. Dictionary definitions of the word “junction” include a point where two things are joined, a place where two or more roads or rail lines meet. The reasonable consumer would have understood the word junction in that sense, that the Development and the light rail terminal geographically met at Woden i.e. were immediately adjacent to each other.

564. I otherwise repeat the considerations I mentioned in relation to the Light Rail Location Representations and the Brochure.

565. Accordingly, the Flyer made the Light Rail Location Representations.

The Rental Yield Representation

566. In my view the Flyer conveyed the Rental Yield Representation for the same reasons I gave (with necessary adjustments) in relation to the Brochure.

567. It contained the words “7% GROSS RENTAL YIELD” printed in large gold font inside a circle icon on the first page. The second page contained the words “7.0% Gross rental yields achievable” followed by, in a smaller and fainter font, the words “[b]ased on indicative rental figures”.

568. The contents of the Flyer are no different in substance to those used in the Brochure.

569. If anything, the Flyer was even more misleading because it said based “on indicative figures” in circumstances where every calculation (or indicative figures) undertaken by Mr Micalos showed that many, if not most units would not achieve seven percent. However, the statement that the seven percent was based on indicative figures, was a representation as to a past fact and was not part of the Commissioner’s case. In those circumstances, I do not rely on that fact.

570. Nevertheless, the Flyer made the Rental Yield Representation as alleged by the Commissioner.

The Promotional Video

571. It was not disputed that the Promotional Video was: (a) 3 minutes 28 seconds in length; (b) available on the Geocon Website; and (c) available on other publicly accessible websites including YouTube, Vimeo, allhomes.com.au and realestate.com.au.

572. The Commissioner’s case (which the defendants did not dispute other than for three inconsequential matters) was that from approximately 22 March 2018 until 22 August 2019, the Promotional Video included: (a) for 3 seconds from 0:25 to 0:27, in a format that appears to be a newspaper extract, the text: March 2017 RIGHT ON TRACK Government proposes light rail stage 2 to Woden (b) immediately following, a sequence of images from 0:27 to 0:50 depict a woman standing on a light rail tram, who then exits the tram, walks, looks up and appears to be looking at the Development, which appears to be immediately proximate to where the woman exited the light rail (some of the defendants deny that the Development appears to be immediately proximate to where the woman exited the light rail). The start of this sequence includes a time stamp “17:53”; (c) within the sequence described at par 61(b), at 0:30, there is an announcement as to the next stop on the electronic signage that says “Central”; (d) at 0:58, the woman is then shown in an apartment within the Development drinking a glass of wine with a time stamp on the screen “18:03” (GRE denies this allegation, but did not explain why); (e) at 2:18 to 2:34: (i) the video shows a sequence of images including the Development, the light rail and Nikolaos Georgalis, the director of GZ Developments and Geocon Bowes; (ii) while these images are shown, Mr Georgalis states “[l]iving in Grand Central Towers and being able to walk out the front door and jump on the light rail and be in the City in under 10 minutes every 5 minutes is an extraordinary opportunity for Canberrans, we’ve never had this type of amenity or public transport available to people that live in apartment complexes”; (f) at 2:55 to 2:58, a simulated marker of the Development close to a marker labelled “Future Light Rail” is overlaid on an image of Woden; and (g) at the end of the video, at 3:14 to 3:16 (some of the defendants assert a different time stamp), the Grand Central Logo is depicted on the screen.

573. The full transcript of what was said in the Promotional Video is: (Video begins with video montage of news stories regarding Woden, then a video montage of what appears to be the Grand Central Towers. Dialogue begins at 2 minutes 7 seconds.) Nick Georgalis: Time is the ultimate luxury. And it is precious your time. Nick Skepev: Grand Central Towers brings a new level of convenience to the modern lifestyle. Nick Georgalis: Living in Grand Central Towers and being able to walk out the front door, and jump on the light rail, and be in the city in under 10 minutes, every five minutes, is an extraordinary opportunity for Canberrans. We’ve never had this type of amenity or public transport available for people that live in apartment complexes. Nick Skepev: Residents will enjoy an abundance of amenity. Nick Georgalis: On top of the swimming pools or other amenity you would normally see in all these developments, we’re gonna have a concierge service for the residents. Nick Skepev: Residents can enjoy the views from the sky park on level 16, with views across Canberra. Nick Georgalis: These types of developments, these skyscrapers, these towers in Woden, are going to reinvigorate the precinct and create liveliness that hasn’t been seen there for many years. Nick Skepev: Grand Central Towers will be a development that will revitalise and transform the Woden town centre. Nick Georgalis: Grand Central Towers is bold and striking, it is the beginning of Woden’s revival.

574. The Promotional Video was alleged to have conveyed the Approval, Light Rail Location and Travel Times Representations.

The Approval Representation

575. In my view the Promotional Video did not convey the Approval Representation for the same reasons I gave in relation to the Billboards.

The Light Rail Location Representations

576. In my view the Promotional Video conveyed one, but not both of the Light Rail Location Representations. It conveyed that the light rail would be extended to Woden Town Centre but did not convey that the light rail would stop at, adjacent to or proximate to the Land.

577. Although there was a two second image of text (at 0:25 to 0:27) which included “Government proposes light rail stage 2 to Woden”, those words appeared relatively fleetingly, and the dominant message conveyed by the subsequent video clips and images would have conveyed to the reasonable consumer that the light rail was definitely or certainly going to go to Woden.

578. In the video Mr Georgalis said that purchasers could “walk out the front door and jump on the light rail” and emphasised that that amenity had never previously been available to Canberrans living in apartment complexes. Those statements together with the images and videos clips described above conveyed the certainty of light rail to Woden.

579. However, the video does not convey that the Development was at, adjacent or proximate to where the woman exited the light rail. The image of the Development follows immediately after the image of the woman looking up, but there is no geographical feature which places her proximate to the Development. Otherwise, there is nothing in the Video conveying that representation.

580. Accordingly, the Promotional Video conveyed that the light rail would be extended to Woden Town Centre as alleged by the Commissioner, but did not convey that the light rail would stop at, adjacent to or proximate to the Land.

The Travel Times Representations

581. There were two representations: that the travel time from the Land to Canberra City on the light rail would be under 10 minutes and, that the light rail service would provide light rail every 5 minutes between Woden Town Centre and Canberra City.

582. Geocon Bowes and GZ accepted that there were no reasonable grounds for the representation that the travel time from the Land to Canberra City on the light rail would be under 10 minutes. GRE adopted the submissions of Geocon Bowes and GZ in relation to this Representation.

583. BSD/Zapari took a different position. They submitted that that statement, viewed in its context, conveyed that a 10 minute journey was anticipated if the Canberra Metro Light Rail proposal proceeded. No submission was made identifying what particular context or aspect of the statement conveyed that meaning.

584. All defendants disputed that the second Travel Times Representation was conveyed, namely that the light rail between Woden and Canberra City would operate at a frequency of every five minutes.

585. In my view the Promotional Video conveyed both Travel Times Representations.

586. In relation to the 10 minute representation, I do not accept BSD/Zapari’s submission. The clear statement was that if consumers lived in the Development, they would be able to walk out their front door, jump on the light rail, and would be in Canberra City in under 10 minutes. There was no wording to the effect that that promise, forecast or prediction was other than a certainty.

587. Geocon Bowes submitted that the reasonable consumer would have taken into account the statement at the beginning of the video that the Government “proposes light rail stage 2 to Woden”, the statement describing the light rail as “Future Light Rail”, and that Mr Georgalis’ statement was readily discernible as advertising rhetoric.

588. The relevant part of Mr Georgalis’ statement was that: Living in Grand Central Towers and being able to walk out the front door, and jump on the light rail, and be in the city in under 10 minutes, every five minutes, is an extraordinary opportunity for Canberrans. (Emphasis added.)

589. Geocon Bowes submitted that the reasonable consumer would not have understood that statement as conveying, literally, that the light rail was guaranteed to travel every five minutes or at all times it operated. At most, the submission continued, the reasonable consumer would have understood Mr Georgalis to be conveying that every five minutes was a maximum frequency (e.g. at peak times), or that the light rail could be expected to travel approximately every five minutes.

590. I do not agree. If Mr Georgalis wished to convey to consumers that the Stage 2 light rail would travel at a five minute frequency at peak times (and not other times), then he only needed to add the words “at peak times” after “every five minutes”. He did not do so. There was no such qualification in the statement made.

591. Mr Georgalis used the word “every” in the expression “every five minutes”. To suggest that that would be understood by reasonable consumers as meaning only at some times during the day deprives the word “every” of its meaning, a meaning which was reinforced by the statement that a 10 minute light rail journey available every five minutes was an “extraordinary opportunity”. The reasonable consumer would have understood that a 10 minute light rail service every five minutes was extraordinary.

592. The word “future” would be understood to have meant that the construction of the light rail would be in the future, and the reasonable consumer would consider an experienced developer would know more than themselves about the plans for the light rail and would take Mr Georgalis’ statement at face value.

593. Whilst I accept there is room in advertising for some advertising rhetoric and a degree of puffery, the precision of the representation counts against the representation as falling within that description.

594. Accordingly, the Promotional Video conveyed the Travel Times Representations.

The Promotional Emails Overview

595. Five emails were admitted on the pleadings having been sent. They were emails dated 31 January, 8 February, 1 March, 12 April and 24 May 2018. They are annexed to this judgment and marked C1-C5 respectively. Certain email addresses and other irrelevant information in these and other annexures to this judgment have been redacted.

596. Two additional emails were admitted having been sent by Messrs Georgalis and Micalos, namely emails dated 15 and 28 February 2018. They are annexed to this judgment and marked C6 and C7 respectively.

597. The defendants contended that there is no evidence that the balance of the emails relied upon by the Commissioner were ever sent.

598. The Commissioner’s case that the balance of the pleaded emails were sent relies on the drawing of inferences from other circumstantial evidence.

599. According to the Fifth Further Amended Statement of Claim, no email made the Travel Times Representations. Only one email is alleged to have made the Approval Representation, and that email dated 12 April 2018 was admitted having been sent. Three emails allegedly made the Rental Yield Representations, but their sending is disputed, and about 38 allegedly made the Light Rail Location Representations. Of those, seven are admitted having been sent, with the sending of the balance of them disputed.

600. I shall first consider whether the 31 disputed emails allegedly making the Light Rail Location Representations were sent, followed by whether the three disputed emails allegedly making the Rental Yield Representation were sent. Which disputed Light Rail Location Representations emails were sent

601. The Commissioner first pointed to what she submitted were inconsistencies between the various defences filed by the defendants. I do not consider that those inconsistences, assuming they were such, could rationally affect (directly or indirectly) the assessment of the probability of the fact in issue, namely whether certain emails were sent or not.

602. The Commissioner next submitted that the defendants (when jointly represented) produced each Promotional Email (which was pleaded to have been sent to consumers) in answer to discovery Category 10. Category 10 sought: All informational emails sent to buyers including but not limited [to] emails sent on 1 March 2018, 15 February 2018, 22 February 2018, 8 March 2018, 21 March 2018, 14 December 2018, 30 April 2019. (Emphasis added.)

603. That submission may have had some force but for the fact it overlooked an important fact. The List of Documents described the documents produced pursuant to Category 10 as either “[d]rafts, previews and communications regarding the informational emails”, “[s]creenshots of informational emails”, or “[s]creenshots of 'OLD' informational emails (believed to be drafts)”. The effect of those statements was to undermine any inference that by producing the emails the defendants were admitting that they had been sent.

604. It may be, of course, that that response to Category 10 was not a proper response. In general terms, if party A seeks discovery of emails sent, the obligation on party B is to discover the emails sent, and not others not sent, or drafts etc. It is not appropriate, in my view, to discover documents not asked for mixed with those that were, and by so doing frustrate one of the forensic purposes of discovery, namely to prove certain facts. In other words, parties are required to discover the documents asked for, not documents which are not responsive to the request.

605. Be that as it may, the Commissioner’s remedy was to have sought an order pre-hearing under r 606 of the Rules which provides that if the Court considers that a party has not, or may not have, adequately disclosed discoverable documents, it may order a party to make further disclosure, or to have sought an order for a proper response to Category 10. That step was not taken and what is left is an answer to the Category 10 request which deprived the emails produced of the evidential force the Commissioner desired.

606. The Commissioner next complained that an important source of evidence confirming that certain promotional emails were sent were monthly marketing reports which, despite being captured in Category 3 in July 2020, were not discovered until 10 May 2023. The Commissioner submitted that that delayed production caused prejudice to the Commissioner because she would have been able to rely on a far greater number of emails and not encounter the Defendants’ non-admissions as to whether the emails were sent. This complaint, even if justified, has no evidential force. That is, it does not prove any relevant fact. I also note that 10 May was about eight weeks before the hearing commenced, there was no evidence of what attempt the Commissioner made in those eight weeks to overcome the alleged prejudice, and there was no application for an adjournment to overcome the prejudice alleged.

607. The Commissioner next submitted that what was clear from the marketing reports tendered was that a large number of different promotional emails, referred to as EDMs (electronic direct mail) were sent to potential purchasers over the duration of the marketing campaign. That may be so, but those reports do not prove what particular EDMs were sent and, most particularly, the contents of those EDMs.

608. The Commissioner next submitted that I should draw a Jones v Dunkel (1959) 101 CLR 298 (Jones v Dunkel) inference against the defendants for failing to call any evidence in relation to which, if any, of the pleaded emails were sent (in addition to the seven admitted having been sent). This was based on evidence given of various electronic databases which one or more of the defendants had access to and which stored all promotional emails. This submission has some force, and has troubled me, but I have come to the conclusion that I should not draw the inference and, even if I did, the inference would not assist the plaintiff.

609. First, a Jones v Dunkel inference may be drawn in particular circumstances. It is not the law that an inference must be drawn.

610. Second, such an inference only arises where there is a case to answer. That is, the inference is not drawn simply because there is an allegation made by a plaintiff. That allegation has to be supported by some evidence tending to prove the fact alleged. In JD Heydon, Cross on Evidence, (online, LexisNexis, 2023), the learned authors say at [1215]: Thirdly, the rule only applies where a party is “required to explain or contradict” something. What a party is required to explain or contradict depends on the issues in the case as thrown up in the pleadings and by the course of evidence in the case. No inference can be drawn unless evidence is given of facts “requiring an answer”. (Citations omitted. Emphasis added.)

611. Putting aside the admitted emails, and subject to what I say in the next paragraph, there is otherwise no evidence that the balance of the pleaded emails were sent, and so there is no (factual) case to answer and therefore no Jones v Dunkel inference should be drawn.

612. Even were I to draw the inference, the inference is only that the uncalled evidence or missing material would not have assisted the defendants’ case, not that it would have supported the Commissioner’s case. This would not have assisted the Commissioner on this issue.

613. Up to this point I did not find the Commissioner’s evidence of sending at all persuasive in relation to the disputed emails.

614. The Commissioner helpfully provided an aide memoire (being Annexure B to the Commissioner’s closing submissions) which set out in table form the emails (not in chronological or any other order) and the evidence said to support a finding that each email was sent.

615. I do not consider it necessary to decide whether each of the disputed 31 Light Rail Location Representations emails were sent in circumstances where seven such emails were admitted having been sent. This hearing was limited to liability and the precise number of emails sent making the same representations seems to me to be more of an issue for penalty rather than liability. I should add that the submissions in support of the contention that these disputed emails had been sent was, up to this point, unpersuasive. The balance of the material I was asked to consider was nothing more than Court Book references with no accompanying submissions.

616. The disputed emails were alleged to have conveyed the Light Rail Location Representations albeit expressed in different terms. Those differing terms were: (a) “Located at the Woden junction for the Light Rail Stage 2, Grand Central Towers is for those who appreciate the fast life and living every moment to the full.” (b) “Stage 2 of the $900 million Light Rail Network will also link residents directly to Capital Hill, the Canberra CBD and beyond.” (c) “However, who needs to travel when Westfield, a revitalised Woden Town Centre and Bus / Light Rail Stage 2 terminal are all right at your doorstep.” (d) “Central Towers … located at the Woden junction for the Light Rail Stage 2.” (e) “Location. Location. Location. Light Rail Stage 2 will link the City to Woden through the heart of Canberra's city centre.” (f) “Located at the Woden junction for the Light Rail Stage 2, Grand Central Towers is the defining feature of a revitalised Woden Town Centre.” (g) “As Canberra grows, Grand Central Towers puts you in the perfect position at the Woden junction of the Light Rail Stage 2 - keeping you connected to the heart of the Capital.”

617. In my view the case on liability in relation to the Promotional Emails and the Light Rail Location Representation can be adequately decided on the basis of the seven admitted emails. Should any of the disputed emails be relevant to penalty, then the sending of those emails may be considered at that time.

No evidence that the three Rental Yield Representation Promotional Emails were sent

618. Only three emails were alleged to have made the Rental Yield Representation, those being the emails dated 13 and 14 March 2018, and 27 June 2018. None of those emails were admitted having been sent. I will make findings as to the sending of those three emails.

619. In relation to those three emails, the only evidence identified by the Commissioner in her aide memoire for the sending of the emails dated 13 and 14 March 2018 was the Monthly Marketing Report dated March 2018 (Exhibit I). Nowhere in that document does it mention either of those two emails.

620. The evidence identified by the Commissioner for the sending of the email dated 27 June 2018 was an email from Ms Dickens to Ms Cain dated the next day, 28 June 2018. Ms Dickens was part of the Marketing Team. Ms Cain had an “@realestate.com.au” email address, but otherwise her role in events was not identified.

621. The email from Ms Dickens to Ms Cain was one of three in an email chain all of which were dated 28 June 2018. It appears an unidentified person with an “@edm.realestate.com.au” email address sent a draft of an email to Ms Dickens, who then replied to a Ms Arrowsmith (who had an “@realestate.com.au” email address) that there was an “extra 0 on the end of the 3 bedroom price …” in the draft email (which was correct). That email then appears to have been forwarded to Ms Cain.

622. Those emails are insufficient to persuade me that the email dated 27 June 2018 was sent. Simply because a draft was discussed the day after the alleged email was sent does not persuade me that the alleged email was sent. If anything, it is evidence against the proposition because a draft is being discussed after the offending email was allegedly sent.

623. The Monthly Marketing Report with “May 2018” on its cover, but which referred to June 2018 dates within its contents, contained the following page:

624. As one can see, it contains the words “EDM” and “[s]ent – 28 June 2018”. It does not refer to any email having been sent the day before, on 27 June 2018. Although it may not be discernible from the above reproduction, the document contains the words: Up to 7% gross rental yield available

625. The allegation was that the email sent on 27 June contained the same words less the words “[u]p to”. Therefore, this Monthly Marketing Report suggests that the pleaded email dated 27 June 2018 was not sent, but a different email (being the one reproduced above) was.

626. On the basis of those matters, I am not persuaded that the email dated 27 June 2018 was sent.

627. The Promotional Emails were pleaded to have conveyed the Approval, Light Rail Location and Rental Yield Representations. I have not been persuaded that any of the three emails alleged to have conveyed the Rental Yield Representations were sent. Accordingly, I need not discuss that Representation in relation to the Promotional Emails.

The seven admitted emails

628. The alleged offending words in each of the seven admitted emails, together with some other contextual text, were as follows: (a) 31 January: Brilliantly located. Breathtakingly designed. Introducing Grand Central Towers, a joint venture between GEOCON and Zapari located at the Woden junction for the Light Rail Stage 2. (b) 8 February: Located at the Woden junction for the Light Rail Stage 2, Grand Central Towers is for those who appreciate the fast life and living every moment to the full. (c) 15 February: Location. Location. Location. Located at the Woden junction for the Light Rail Stage 2, Grand Central Towers is the defining feature of a revitalised Woden Town Centre. (d) 28 February Grand Central Towers puts you in the perfect position at the Woden junction of the Light Rail Stage 2 - keeping you connected to the rest of the Capital. … Location. Location. Location. … Light Rail Stage 2 will link the City to Woden through the heart of Canberra's city centre. (e) 1 March: As Canberra grows, Grand Central Towers puts you in the perfect position at the Woden junction of the Light Rail Stage 2 - keeping you connected to the heart of the Capital. … Opposite Westfield Woden, public transport hub and just minutes away from multiple government & public service offices and Canberra CBD, Grand Central Towers is at the centre of it all. [NB. This email also included a diagram showing four route options for Stage 2 light rail route from Stage 1 (at the top) through Woden to Canberra Hospital (at the bottom). All route options either stop at or pass through Woden]. (f) 12 April: The transit theme also makes sense as rail travel is set to play an increasingly significant part in Woden’s future with the approval of Stage 2 of the light rail, so there are many synergies. [NB. This email also included a link to a video, the first image of which was of an LVR approaching a light rail stop (which image can be seen in the email)]. (g) 24 May: Stage 2 of the $900 million Ligh[t] Rail Network will also link residents directly to Capital Hill, the Canberra CBD and beyond. … With the promise of more to come as public and private investment reaches unprecedented levels, now is the time to buy at Woden town centre. [NB. This email also included a photo of a woman exiting an LVR onto a light rail stop, and a diagram showing the Stage 2 light rail route from ANU (at the top) through Woden to Canberra Hospital (at the bottom)].

629. Of the seven Promotional Emails sent, it was alleged that they had conveyed the Approval and Light Rail Location Representations. The Approval Representation

630. In my view the email dated 12 April 2018 conveyed the Approval Representation because it included the words “with the approval of Stage 2 of the light rail” together with the video link showing an LVR approaching a light rail stop. I repeat what I have said above about the word “approval”.

631. I do not consider the other emails to have made the Approval Representation by implication, as the Commissioner submitted, because I do not think a reasonable consumer would infer from those emails that all necessary approvals had been given. If a consumer had inferred something about approvals from the emails, it was just as likely the inference would have related to future approvals rather than past approvals.

632. The Approval Representation was misleading for the reasons I’ve given in relation to the Brochure.

The Light Rail Location Representations

633. In my view all seven emails conveyed the representation that light rail was (certainly) coming to Woden. There was no qualification or equivocation in the messaging to that effect in the words used in those emails.

634. The five emails dated 31 January, 8, 15 and 28 February, and 1 March 2018, conveyed the representation that the light rail stop at Woden would be at, adjacent or proximate to the Development because they said that the Development was “at the Woden junction of the Light Rail Stage 2” (emphasis added). I have set out above what the word “junction” would have conveyed to the reasonable consumer.

The Real Estate Websites Marketing

635. The Real Estate Websites were websites advertising the sale of real estate, including Allhomes.com.au, Domain.com.au and Realestate.com.au.

636. Each of the defendants admitted that the Development was advertised on Allhomes.com.au from 31 January 2018, Domain.com.au from February 2018, and Realestate.com.au from July 2018, and that advertising was maintained on these mediums until at least July 2022.

637. The Real Estate Websites Marketing was alleged to have conveyed the Approval and Light Rail Location Representations.

638. They are alleged to have done so by the inclusion of the Promotional Video and some wording. The Promotional Video was the first major item on the webpages and was in a large window spanning the useable content width of the page.

639. The Commissioner’s submissions were that a screen capture dated 5 July 2019 depicting an Allhomes website entry, in addition to the Promotional Video, included the statement: Introducing Grand Central Towers, A joint venture between GEOCON and ZAPARI located at the Woden junction for the Light Rail Stage 2.

The Approval Representation

640. In my view the Real Estate Websites did not convey the Approval Representation for the same reasons I gave in relation to the Promotional Video.

The Light Rail Location Representations

641. In my view two of the websites, Domain and Realestate, conveyed one, but not both of the Light Rail Location Representations for the same reasons I gave in relation to the Promotional Video. That is, by the inclusion of the Promotional Video on the websites, those websites conveyed that the light rail was certainly or definitely going to go to Woden.

642. The Allhomes website conveyed both Light Rail Location Representations. The inclusion of the Promotional Video conveyed the representation that light rail was certainly or definitely going to go to Woden. The use of the words quoted at [639] above conveyed the message that the light rail terminal would be at, adjacent or proximate to the Development.

The witnesses

What remains to be decided

643. In relation to the three representations as to future matters, and in respect of which a number of witnesses gave reasonable grounds evidence, there are five matters I must consider, namely: (a) to identify the particular facts or circumstances relied on; (b) which existed at the time of the representations; (c) on which the representor in fact relied; (d) which are objectively reasonable; (e) and which support the representations made.

644. The witnesses all identified the facts or circumstances that they asserted they relied on. I am satisfied that those facts and circumstances existed at the dates alleged (unless I indicate otherwise). I also accept that all of the facts and circumstances identified were objectively reasonable except for: (a) Mr Skepev’s evidence that it took approximately 10 minutes to travel by car from Woden to the City and the existing express bus service from Woden to the City took approximately 10 minutes (led in relation to one of the Travel Times Representations); (b) Mr Georgalis’ evidence that his experience was that units in previous Geocon developments in most cases exceeded predicted rental yields (led in relation to the Rental Yield Representation); (c) Mr Stephens’ evidence that he believed, based on his experience and understanding of the marketplace, that a 7 percent gross yield was achievable (led in relation to the Rental Yield Representation); and (d) Mr Skepev’s evidence that he believed that the 7 percent rental yield figure was reasonable because he considered that the units in Grand Central Towers, when completed, would command higher rent than that estimated in the LJ Hooker Rental Appraisals. This was stated because of the unique location and “high end” nature of the development in the Woden area, median weekly rent for units in Canberra were increasing, there was a low vacancy rate in Canberra, rates and costs (including inflation) were increasing, and his general property market knowledge.

645. None of those facts and circumstances were, in my view, objectively reasonable. I set out my reasons for those findings in the part of the judgment below dealing with whether there were reasonable grounds which supported the representations made.

646. As I understood the Commissioner’s submissions, there was no dispute about any of those three matters (identification, existence and objective reasonableness) other than the objective reasonableness matters I have identified at [644] above.

647. That leaves two of the five matters I have identified to be decided: whether the witnesses possessed and relied on the facts and circumstances asserted, and whether those facts and circumstances supported the representations made.

648. In short, I have found against the defendants in relation to both matters.

649. Strictly speaking, a finding that the witnesses did not possess and rely on the facts and circumstances asserted would be sufficient to dispose of this aspect of the case. However, against the event that it is not sufficient, that I am in error in not accepting the witnesses’ evidence, and because the issue was fully argued, I have also decided the fifth matter, namely whether the facts and circumstances asserted to have been relied on objectively supported the Representations made.

650. It is apt that I set out each witness’s evidence in the order in which the witnesses appeared and make findings of fact and credit in relation to each witness whilst discussing their evidence.

Credit and fact finding principles

651. In making my findings of fact and assessing credit, I bear in mind the dangers of too readily drawing conclusions about truthfulness and reliability solely or mainly from the appearance of the witnesses when giving their oral evidence. I will, as far as possible, reason to my conclusions on the basis of contemporary materials, objective facts, and the inherent probability of events: see Fox v Percy [2003] HCA 22; 214 CLR 118 at 128- 129 (Fox v Percy), [30]-[31] per Gleeson CJ, Gummow and Kirby JJ.

652. I also bear in mind McLelland CJ in Eq’s oft-quoted passage about the fallibility of human memory set out in Watson v Foxman (1995) 49 NSWLR 315 (Watson v Foxman), wherein his Honour said at 319: Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

653. The fallibility of human memory, and other difficulties with fact finding, were further examined by Justice David Ipp, writing extra-judicially, in ‘Problems with fact finding’ (2006) 80 Australian Law Journal 667 (‘Problems with fact finding’) at 667, and by Justice Peter McClellan, also writing extra-judicially, in ‘Who is telling the truth? Psychology, common sense and the law’ (2006) 80 Australian Law Journal 655 (‘Who is telling the truth?’) at 663-665.

654. Further comment on the fallibility of human memory is found in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) at [15]–[23], in which Leggatt J observed that there are a number of difficulties with oral evidence based on recollection of events. Leggatt J said that considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. As Lee J summarised his Lordship’s judgment in Webb v GetSwift Limited (No 5) [2019] FCA 1533 at [18]: As his Lordship noted, a witness is asked to make a statement, often when considerable time has already elapsed since the relevant events. The statement is usually drafted by a solicitor who is inevitably conscious of the significance for the case of what the witness does or does not say. The statement is often made after the memory of the witness has been “refreshed” by reading documents. The documents considered can often include argumentative material as well as documents that the witness did not see at the time and which came into existence after the events which the witness is being asked to recall. It may go through several iterations before it is finished. As Lord Buckmaster famously said, the truth “may sometimes leak out from an affidavit, like water from the bottom of a well”. This may be overly cynical, but the surest guide for deciding the case will be as identified by Leggatt J at [22]: … the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on the witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.

655. Leggatt J’s statement may be a helpful working hypothesis, but it is not a rule to be slavishly applied. At its base, it reflects what was said in Fox v Percy together with the recognition of the fallibility of human memory, and how, no matter the honesty of the witness, memory may be affected by the passage of time, self-interest, motivation, suggestion and other factors.

656. The other matter I note is what I must be satisfied of in relation to any finding of fact. McDougall J (McColl and Bell JJA agreeing) said in Nguyen v Cosmopolitan Homes (NSW) Pty Ltd [2008] NSWCA 246 (Nguyen) at [44]: A number of cases, of high authority, insist that for a tribunal of fact to be satisfied, on the balance of probabilities, of the existence of a fact, it must feel an actual persuasion of the existence of that fact.

657. What follows is directed by way of general comment on the evidence of the reasonable grounds witnesses, being Messrs Stephens, Skepev, Micalos and Georgalis, but not to Mr Dalton, if only because Mr Dalton’s evidence was not significant to the outcome of the case.

658. There was much cross-examination and many submissions on credit. One issue raised was the creditworthiness of the reasonable grounds witnesses when asked to recall the contents of documents they said they had relied on. Geocon Bowes submitted that it was unsurprising that the witnesses could not recall details of the documents they said in their affidavits that they had reviewed prior to the representations being made. Geocon Bowes submitted that it was unsurprising that the witnesses could not recall the precise contents of documents that they said they had read some five or more years before they sat in the witness box. So much may be accepted.

659. However, the submission continued to say that that lack of recollection did not imply that their evidence of having read the relevant documents at the time was untruthful or could not be relied upon. It was said that it accords with common sense and experience that one can recognise features of a document which triggers in the mind a memory of having read a document in the past (for example, images or particular statements made), without recollecting every word in it, and it was not surprising that the features of a document that stuck in witnesses’ minds were those that did support their belief as to the reasonableness of the Representations.

660. As I understood the submission, it was to the effect that it is unsurprising that a witness might first look at a document, and that document then “triggers” a recollection. If that was the submission, then the difficulty I have with it is the problem of recollection by suggestion, especially in a litigation context, as mentioned by Leggatt J.

661. Perhaps I have misunderstood the submission. Perhaps what was being submitted was that, although the witnesses were cross-examined about other contents of the documents they said they had relied on, and sometimes gave answers that they could not recall what else was said in the documents, this should not be held against them because it is commonsensical that human beings will remember parts of a document important to them, and not recall other parts. There is some common sense in that submission, and I do not regard the witnesses’ problems in failing to recall other material in various documents to be all that persuasive one way or the other. Rather, the witnesses’ credit suffered from other matters I regard as more significant.

662. Whist on that topic, it is a striking feature of the evidence given by the reasonable grounds witnesses that, despite that evidence being given by the two principal men behind the development (Messrs Skepev and Georgalis), the Development Manager (Mr Micalos) and the other director of the sales agent, GRE (Mr Stephens), and despite all of those witnesses exhibiting many documents that they said they could identify many years later and recalled reading many years earlier, not a single contemporaneous document or witness was produced which corroborated any of their versions of events. That is, there was not a single contemporaneous file note, diary entry or business record tendered which corroborated their assertions that they had read and relied on the facts and circumstances they asserted.

663. It was striking to me that, despite the obvious significance of Stage 2B to the success of the development, there was not a single contemporaneous document tendered by them referring to Stage 2B, the representations made and the facts and circumstances they asserted that they had available to them which (at least in their own minds) provided reasonable grounds for the Representations.

664. For example, there was not a single email between any of them, or between them and someone else, to the effect that they had read a particular document. There was not a single email between any of them discussing Stage 2B, the Representations and any of the publications they said they had read. There was no metadata tendered which would indicate when a pdf of a particular document or other electronic copy of a particular document was saved to a computer. There was no print imprint on any document produced indicating that the document was printed before the representations were made. There were no witnesses produced who gave any evidence that any of the reasonable grounds witnesses discussed a particular fact or circumstance with them at the relevant time.

665. Some of the documents bear a print date of 28 February 2019, about one year after the Representations started being publicly made and which was shortly after the Commissioner had corresponded with one or more of the defendants raising perceived issues with some of the Promotional Material.

666. Geocon Bowes submitted that this date imprint was a benign fact because both Mr Micalos and Mr Georgalis gave evidence that they kept an electronic file of documents relevant to the Light Rail Stage 2, and the fact that a document was printed on a later date did not establish that those witnesses did not access the document for the first time until the date of printing; it established simply that the document was not printed until that date. I accept what was said about the date of printing, that is, that that date did not mean the document was not saved electronically at an earlier point in time, but four matters stood out to me.

667. First, what was glaring was that neither of those two witnesses produced any metadata corroborating their evidence that they had created an electronic file or created an electronic copy of the subject document, and the absence of that evidence was not explained.

668. Second, none of the witnesses gave any evidence in chief that they had kept an electronic or paper file containing copies of the documents they said they had read prior to the making of the representations. Their evidence of having kept a file only emerged in cross-examination. That fact was significant to me for the reasons given by Campbell J in White v Shortall [2006] NSWSC 1379; 68 NSWLR 650 at [71]: Frequently, it is very damaging to the credibility of a plaintiff’s case if important evidence relating to it emerges only late in the course of evidence. The reason for this is that the Court is usually justified in assuming that the legal representatives of a plaintiff embarking on something as significant and potentially expensive as Supreme Court litigation will properly proof their client, obtain from their client all relevant details of the story relevant to the case, and include that material in affidavits in chief.

669. Third, GZ submitted that it was “plausible” that when the Commissioner made enquiries, the witnesses went back to find the material that they knew they had read, or examples of material of the kind they knew they had read. None of the witnesses said that that is what occurred.

670. Fourth, there were marked inconsistencies between what some of the witnesses said they relied on in their affidavits and what Meyer Vandenberg said was relied on in answer to the Commissioner’s letter and s 52 Notices. It is to be remembered that a person who, without reasonable excuse, fails to comply with a requirement under s 52 of the FTACT commits an offence punishable by the payment of 50 penalty units, imprisonment for 6 months or both. The Notices all said: Refusal or failure to comply with this Notice by the due date may constitute a criminal offence under the Fair Trading (Australian Consumer Law) Act 1992 and attract fines of up to $7,500 for an individual or $37,500 for a corporation, and/or up to six months imprisonment. Penalties apply if you knowingly provide false or misleading information or documents in purported compliance with a requirement under this Notice.

671. The natural inference is that the answers given in response to those Notices were considered answers provided after proper instructions were taken given those penalties, and even the answers given in response to the Commissioner’s letter dated 31 August 2018, although not a s 52 Notice, would, I infer, have been provided similarly.

672. The end result is that the question whether those witnesses read the material they asserted they did depended very largely, if not completely, upon their own, uncorroborated assertions that they did so.

673. In approaching their evidence and making findings as to their assertions, I bear in mind the need for very careful scrutiny to which such uncorroborated evidence should be subjected.

674. In the result, I have taken an adverse view of the credit of the reasonable grounds witnesses. Their evidence was lacking in detail at many significant points. They made striking claims of memory (and lack of memory), and their assertions lacked corroborative evidence which could well have been available although its absence was not explained. There was significant evidence given by them which emerged for the first time in cross-examination. There were inconsistencies between their evidence and the contents of letters from Meyer Vandenberg. There were internal inconsistences in some of the witnesses’ evidence and acceptance by some that parts of their affidavits were incorrect. I shall deal with those matters in more detail below.

Mr Dalton

675. Mr Dalton was born in Canberra and lived in Canberra continuously until he moved to Brisbane in February 2023. He was employed as a Cloud Engineer with a government department.

676. He said that in early 2018, he was actively looking to buy an investment property in Canberra, and to be eligible for a first homebuyer’s grant he had to purchase a new dwelling. To be eligible for that grant, he had to reside in any new property for 12 months, but he said that it was his intention, in the long-term, to treat the new property as an investment which he would ultimately rent out. He therefore decided to purchase a new apartment off-the-plan that was located close to Canberra city, had medium to long-term growth potential and which would be easy to rent out.

677. Mr Dalton became aware of the Development through a friend, and subsequently telephoned one of the real estate agents selling the Units.

678. A few days later, Mr Dalton went to what he called the Geocon Showroom and met the agent. They had a general chat about the Development, after which Mr Dalton’s state of mind was that the development of the light rail line, with a stop right next to the Development, would be very good for the growth of the value of the property. He was also attracted to the light rail going to Woden as he worked in Canberra city at the time and the option of taking the light rail to work appealed to him. He examined some floor plans, picked a particular Unit and paid a holding deposit of $1,000.

679. The holding deposit was subject to a cooling off period which is why Mr Dalton felt comfortable paying the holding deposit that day. However, he intended to undertake further research into the property including learning more about the light rail. He asked the agent to send him any further materials or information he had on the property and the light rail.

680. A few days later, on 1 March 2018, he received an email a copy of which is annexed to this judgment and marked “C8”. It is in the same form as Annexure C3 to this judgment referred to above at [595] except that C8 is directed specifically to Mr Dalton.

681. Mr Dalton recalled reading the email and said: I recall reading it and seeing the following statements: "Location, Location, Location", "Light rail Stage 2 will link the City to Woden" and "as Canberra grows, Grand Central Towers puts you in the perfect position at the Woden junction of the Light Rail Stage 2 - keeping you connected to the heart of the Capital". I also recall reading the statement “7% rental yield", which stood out to me as I ultimately viewed this purchase as an investment that I intended to rent out. (Emphasis original.)

682. After reading the email, Mr Dalton said he remembered feeling reassured that the light rail was going to happen and the map of the light rail track in the email led him to believe that the light rail was guaranteed and was “100%” going to go to Woden. He said that as an investor, he relied on the statements in the email in deciding to follow through with the purchase of the property.

683. Mr Dalton met with his solicitor on 5 March 2018 and signed a contract for sale. Exchange of the contract for sale took place that same day.

684. Mr Dalton later received an email from Mr Morgan on 13 March 2018, and another email on 19 March 2018, which attached a copy of the Brochure. He said he read the Brochure very closely because, although he had already paid the holding deposit, he wanted to do further due diligence on the property before he was required to pay the balance of the 5 percent deposit due on 30 March 2019.

685. In reading the Brochure, Mr Dalton said that the inclusion of the map of the light rail route on page 6 of the Brochure, and the statement that “Stage 2 of the $900 million Light Rail Network will also link residents directly to Capital Hill, the Canberra CBD and beyond” gave him confidence that the light rail was going to go to Woden and would be located right next to the Development.

686. About 18 months later, Mr Dalton decided to rescind the contract primarily because the light rail development to Woden had not been built and there was still no sign of it being built. As a result, he did not consider the property to be as good an investment as he had originally thought.

687. Zapari would not agree to a mutual rescission of the contract for sale. Mr Dalton decided to proceed with his purchase and settlement occurred on 10 February 2021. Shortly after settlement he moved into the property and continued to live there for approximately 18 months after which he rented the Unit out.

688. In cross-examination, Mr Dalton said he also relied on what appeared on the Billboards, which he looked at on a daily basis, and which he said was a big part of his decision to purchase the Unit.

689. Mr Dalton said in cross-examination that he chose this particular Unit because it was higher off the ground, and he thought the north facing view was “a little bit more lucrative”. This was not reflected in his affidavit wherein he said that he chose his Unit because he wanted to be on the opposite side to where the light rail station was to be located to limit any noise that may result from that station.

690. Mr Dalton accepted that when he rented his out his Unit, commencing in January 2023, he received a yearly rental which equated to a gross rental yield of 7.14 percent.

691. Mr Dalton agreed that his conveyancing solicitor had sought rescission at least partly on the basis that he had relied on the rental yield advertised. In cross-examination, Mr Dalton seemed to disavow that statement. He said he never really cared about the percentage of the rental yield advertised.

692. Mr Dalton said that he did not pay any attention to the material published by the ACT Government in relation to light rail in the lead up to the 2016 election.

693. Mr Dalton accepted that the map in the email to him contained four different route options (although all four intersected with the icon representing the Development) and the light rail stop on the map adjacent to the Development was said to be “indicative only”. It was put to him that those factors conveyed to him that the route and location of the light rail stop at Woden hadn’t been settled yet. He disagreed with that proposition, saying that the impression he got was that whilst the route and stop location hadn’t been settled, it was more of a question of which option would be taken as distinct from the light rail to Woden not happening at all.

694. He later said that the impression he gained from the Brochure was that there was still a lot of detail to be worked out in relation to Stage 2, there were some contingencies.

695. Mr Dalton was taken to many other parts of the Brochure which he did not recall reading or taking any interest in, or could only vaguely recall reading or having a vague interest in.

696. He said that prior to asking his solicitor to seek a rescission of the contract for sale, he undertook some internet research, which conveyed to him that the Woden light rail was not guaranteed. He could not recall whether one of the searches he undertook produced the 23 August 2019 ABC News article headed “Geocon accused of breaching consumer laws over Canberra apartment advertising”, but he did agree that he only explored rescission of his contract for sale after seeing that or similar articles.

697. It was put to Mr Dalton that the email he had “already read” (which I take to be a reference to the email of 1 March 2018) conveyed to him that the light rail to Woden had not been approved. In answer to that question Mr Dalton said: Yes. I mean, again, I thought it had been approved to a certain level. I’m not privy to how the process worked, but I was under an understanding that they would not sell – make this a selling point if it wasn’t already signed, essentially, done and dusted. I would be shocked if it was actually pulled. So I assumed up until a certain point that it was approved, but not to the point of the timelines or the routes.

698. When it was later put to him that he never understood that the Woden light rail was guaranteed he gave the following answer: No, that’s not true. I was completely content at the time and was told by sales agents that the light rail was going there, and my belief was 100 per cent that the light rail was going there. It was a – it’s an expensive project that would take an extremely long time, and so I understood there were a lot of hurdles to go forth. But my belief was there was no way a developer would advertise this and then scrap it, and say, sorry, we didn’t get approved it’s not happening anymore. I’m new to the property game, I wouldn’t – I thought by a basic understanding of the law selling a big selling piece like a rail to the apartment is a very big promise. And so I believed in the promise and I saw things that affirmed that, and I was not expecting that - that there was an enormous potential that it wouldn’t happen. I was – that’s what put me off, and I’m like, okay, well that completely ruins my investment now.

699. He was then asked about who he thought the “promise” was from: To the extent that you understood it as a promise, Mr Dalton, you understood it as a promise from the ACT Government, didn’t you?---A promise – I’m talking about the promise from Geocon. The promise of the light rail, Mr Dalton, you understood that was a promise from Geocon – not from Geocon, from the ACT Government, didn’t you, Mr Dalton?---No, absolutely not. I thought that Geocon would have been again, at the point of already done those part of the proceedings and that they had the ability to advertise this. I would never – I thought that was – it would be illegal for them to advertise all of this without having everything already done and dusted on a legal front. So I would’ve – I was – I was unaware that the ACT were making promises, and I was unaware that Geocon were going off the back of that.

700. In relation to the Brochure, Mr Dalton was cross-examined about the statement in the Brochure “12 minutes to Canberra CBD”. Mr Dalton said that the impression he gained from that statement was that it may have applied to a car journey, bus or the light rail, that it was a “rough timeframe”, but the light rail was included.

701. Mr Dalton was cross-examined in relation to various facts elicited by the cross examiner which were not in Mr Dalton’s affidavit and which it was suggested Mr Dalton had chosen to leave out, but I did not gain the impression that Mr Dalton was being evasive in any way or had tailored his affidavit. He was, after all, a witness with no financial or other interest or motivation in the litigation.

702. I observed that Mr Dalton carefully listened to and answered questions without evasion to the best of his ability in an unfamiliar environment. He was forthright and made concessions where they were called for. He suffered from some uncertainty in relation to some factual matters but was frank in saying so. Where he felt certain, he said so.

703. Mr Dalton’s evidence was not directed to any contested factual issue but was elicited as evidence of what a reasonable consumer understood two of the subject media (the Brochure and one of the Promotional Emails) conveyed to him.

704. I accept his evidence generally and accept his evidence of what the Brochure and one of the Promotional Emails conveyed to him. Mr Dalton’s evidence on those matters is relevant to the question of what the Brochure and one of the Promotional Emails represented but is not determinative. I have taken his evidence into account on those matters, although only to a minor degree. More important to me was an objective assessment of what was being conveyed.

705. For completeness I should note I made a non-publication order in relation to certain personal details of Mr Dalton which were contained in the Court Book: see T 1420.42- 1421.11.

Mr Stephens

706. Mr Stephens is and was a director of GRE. His day-to-day role for GRE was that of Sales Director and he supervised the sales agents. He was an employee of Geocon Group, and GRE had no employees. GRE had a corporate real estate license, and Mr Stephens had his own, personal agent’s licence.

707. Mr Stephens had been a Sales Director of GRE/Geocon Group since about October 2017. Prior to this, he was a Development Manager of Geocon Group for approximately 3 years.

708. From about May 2005 to September 2014, he had been employed at Independent Property Group, where he had been involved in various aspects of project marketing, services and administration of approximately 60 different residential projects within the ACT. His activities ranged from assistance in initial feasibility study of sites, advice around plans and pricing, developing marketing strategies, implementing the marketing and sales strategies, sales negotiation and management, administration, management of variations, design and delivery of display suites, reporting, training of the sales teams and post settlement support for completed projects.

709. Shortly after 22 December 2017 he was provided with development and marketing material in relation to the Development. This material included the three 2017 LJ Hooker appraisals.

710. Those appraisals assessed rental for the various types of units as follows: (a) for a one bedroom unit $380 – 410 per week; (b) for a one bedroom/study unit $420 - 440 per week; and (c) for a two bedroom unit $560 - 590 per week.

711. Mr Stephens was aware of the Marketing Team but had little to do with them or the development of the marketing strategy or content of the Promotional Material. He said that the Marketing Team would, on occasion, consult him in relation to the proposed marketing activities and the budget for the sales and marketing campaign. In the course of these communications, he would provide occasional input on the wording used for the marketing but did not sign off on, or approve, the final product. He said he did not direct or control the Marketing Team. I accept that evidence.

712. Mr Stephens said in cross-examination that some of the marketing materials were translated into Mandarin (which marketing materials were translated was not identified) and were distributed in China and Hong Kong, as well as nationally. He accepted the marketing campaign extended well beyond Canberra.

713. In or around February 2018, Mr Stephens met with Messrs Micalos and Morgan to set the prices for the Units on release of the Development to the market in about early February for the ROI (return on inquiry) campaign, and the end of March 2018 for the public release.

714. An undated Release Pricing Schedule which contained the release prices for the Units was exhibited to his affidavit. Mr Stephens’ affidavit gave the impression that the document he exhibited was the original document (that is, how the document appeared in early 2018), but in cross-examination it became apparent that the document he exhibited was a “live” document in that when Units were sold the sale price would be updated from the release price. Thus, the prices in the document exhibited may not have been the release prices in the document in early 2018.

715. I found Mr Stephens’ evidence to be unsatisfactory in this respect. For example, he gave conflicting consecutive answers in the following exchange: So, is this the actual version of the pricing schedule that you say was discussed at that particular meeting you refer to at paragraph 21?---This Excel spreadsheet with those prices in there, yes, I would say they were - that was in the meeting, and to the best of my recollection, yes. All right. So, we agree it was this particular version?---I can't agree that it's this particular version, but I can say with confidence it was a version similar in all - yes, in all columns and details, yes.

716. On many occasions Mr Stephens would answer questions in a way which suggested he was speculating as to what happened, rather than recollecting. The above exchange is but one example of where he would answer “I would say they were …”. Another example is “Nick would have said to me – or I believe he said to me …”.

717. I asked him whether his use of expressions such as “I would have” and “I think” and “I believed” indicated he was guessing or whether he actually had a recollection. He answered: A: I’d say I’d have a recollection. Q: I’m sorry? A: A recollection.

718. Despite that answer, which I do not accept, and over the course of his evidence as I observed him answering questions, I came to the view that he often did not remember events but was attempting to reconstruct what he thought may have happened. I shall return to issues concerning his credit later.

719. Mr Stephens said that the release price would ordinarily make its way into advertising material, typically in the form of "2 bedroom unit from $X'' but it did not necessarily represent the sale price or the actual advertised price for an individual unit.

720. Mr Stephens said that in the meeting he had with Messrs Micalos and Morgan, there was discussion of the rental yield of the Units, although Mr Stephens could not recall the details of the discussion. He said that he did recall undertaking calculations of the rental yield.

721. Mr Stephens exhibited an internal report, the Stephens Yield Report, which he said calculated yields by reference to actual sale prices and the 2017 LJ Hooker appraisals. He said that Ms Alexandra Glover, Assistant Development Manager of Geocon, had asked him to check the Stephens Yield Report before it was sent to Mr Micalos for his review and before it was sent to Meyer Vandenberg Lawyers. Mr Stephens said he did as he was requested and recalled being copied into the email to Meyer Vandenberg attaching the Stephens Yield Report. He said he was informed by Ms Glover that the Stephens Yield Report had been sent to Meyer Vandenberg.

722. That document, the Stephens Yield Report, which included “purchase price” and “anticipated” weekly rental, showed only 24 of a total of 425 Units in the Development met a minimum gross rental yield of 7.0 percent or better. A small number had rental yields of between 4 and 5 percent, there were many with yields of between 5 and 6 percent and many with yields between 6 and 7 percent. It is of some note that the rental yield figures in this document were calculated to one decimal place.

723. According to Mr Stephens, at the time he performed those calculations there were no three bedroom Units and no penthouses in the Development Application (they were added later when the development application was amended). He said there were differences between two-bedroom Units in that some had car spaces, and some did not. He acknowledged that the presence or absence of a car space could significantly affect any rental yield, but there was no appraisal from LJ Hooker which distinguished between the two types of two-bedroom units.

724. Much later, I infer at or near the time he affirmed his first affidavit in May 2023, Mr Stephens undertook two rental yield calculations based on figures provided by two real estate agents which managed properties in the Development, being Waratah Estate Agents Canberra (Waratah) and The Property Collective (TPC). This evidence is not relevant, of course, to any issue in the case, but they were illuminating as to Mr Stephens’ credit.

725. Mr Stephens said his Waratah Analysis Spreadsheet (of 22 Units) showed that: (a) 10 of the 22 units under management achieved a 7 percent or higher rental yield at completion in 2021; (b) 12 of the 22 units under management achieved over 7 percent rental yield in 2023; and (c) the majority of purchasers of units achieved higher rents than estimated in 2017, 2018 and 2020.

726. The statement that 10 of the 22 units under management achieved a 7 percent or higher rental yield at completion was only true because the result had been rounded up to the nearest whole percent. If calculations were done to one decimal point (the nearest tenth of a percent), the statement would have had to have been that only five of 22 Units achieved a 7 percent rental yield. I rather gained the impression that this calculation was done as a clumsy attempt to cast a more favourable light on the rental yield issue so far as concerned GRE.

727. The TPC Analysis was similarly clumsy. Mr Stephens said that he compared the Original Rental Appraisal (the 2017 LJ Hooker appraisals), the September 2018 Rental Appraisal (the 2018 LJ Hooker appraisals), and Geocon Property Management Rental Estimates from July 2020. The latter Geocon estimates never appeared in evidence and may be ignored.

728. In this TPC Analysis, rental yields were again taken to the nearest whole percent, with the result that the number of Units achieving 7 percent was overstated. In addition, the 2017 LJ Hooker appraisals gave a range of rents for each unit type, and the calculations used the highest figure in the range. Again, the result was to increase the number of properties said to be able to achieve a 7 percent gross rental yield than if a median or lowest rental figure was used.

729. Those clumsy attempts to bolster the defence to the claim in relation to the Rental Yield Representation are adverse to Mr Stephens’ credit.

730. Mr Stephens said that the Brochure became available in hardcopy to the sales agents towards the end of March or early April 2018. He was aware that the Brochure contained the statement "7% gross rental yields achievable based on rental projections", yet he must have known that that statement was not correct if applied to all Units according to his own calculations performed when he had his meeting with Messrs Micalos and Morgan in February 2018. He gave no evidence of seeing any rental projections that supported a representation to the effect that every Unit would be capable of a 7% rental yield.

731. After four further appraisals were obtained from LJ Hooker in September 2018, Mr Stephens did not undertake any further rental yield calculations.

732. In relation to the Promotional Emails, Mr Stephens said that bulk emails were sent by the Marketing Team and not by individual sales agents. There were about 20 sales agents and Mr Stephens did not check their individual emails, but he accepted that agents would, from time to time, send EDMs to people on their databases.

733. Mr Stephens said he had little to do with the contents of the Billboard, the Brochure, the Flyer, the Promotional Emails or the Real Estates Website Advertising. But he did purport to give some reasonable grounds evidence in relation to the Light Rail Location Representations. He said: 33. Prior to hardcopies of the Brochure and Flyers being made available to sales agents, I recall obtaining a range of documents that were published by the ACT Government and in the media in relation to the proposed light rail route to the Woden town centre. I recall viewing indicative drawings and maps of the prospective location of where stations for the light rail may be situated. Based on this material, I formed a view that incorporating the construction of the light rail was suitable to be used in the marketing campaign for the Grand Central Towers. 34. Most, if not all, of the documents I refer to [in] the above paragraph are exhibited to the affidavit of Mr Micalos dated 10 May 2023 (Mr Micalos' Affidavit). I do not have copies of these documents saved to my drive or computer, except to the extent they are exhibited to Mr Micalos' Affidavit. 35. To the best of my recollection, the documents I refer to in paragraphs 33 and 34 above are as follows: a. Notice of Decision granting approval of the development site (23 January 2018), which I recall contained entity advice that the proposal to extend to Woden would include a terminus on Callum [sic] Street; b. Capital Metro Russell Extension Project (18 September 2015); c. Capital Metro Contract Summary (June 2016); d. Canberra Light Rail Summary (May 2017); e. Transport Canberra Light Rail Summary (1 August 2017); f. Canberra Metro Full Business Case (2017); g. Woden Town Centre Master Plan (1 November 2015); h. National Capital Plan; i. Canberra Times report titled; route for light rail would terminate at Woden (1 September 2016); j. Map of preferred route issued by the ABC (2 September 2016); k. Canberra Times report - Civic to Woden is a certainty (25 November 2016); l. Canberra Times news article titled Canberra Hospital Extension officially dropped for stage 2 of Light Rail (18 December 2017); m. Canberra Light Rail network; taking you from the City to Woden published by Transport Canberra (August 2017); n. Light Rail stage 2 newsletter (May 2017); and o. Transport Canberra Light Rail Update (June 2018). (Cross-references to where those documents appeared in Mr Micalos’ affidavit removed.)

734. I found that evidence unpersuasive.

735. First, as I have mentioned earlier, there were no contemporaneous materials or objective facts to support his version of events, and, other than the documents I have expressly identified, it does not seem to me to be inherently probable that he had read and relied upon the documents he asserted.

736. Second, Mr Stephens appeared to me to be not always forthright in his evidence, and he gave the distinct impression he was reconstructing much of his version of events.

737. Third, he simply asserted that he could recall those fifteen individual documents that were dated between about five to eight years before he affirmed his affidavit, a striking feat of recollection in the absence of any objective or contemporaneous evidence to support his recollection or that assertion. It is inherently improbable that his recollection was that good, and my observations of him in the witness box demonstrated his recollection was not that good.

738. Fourth, he said he recalled “obtaining” the documents listed above and viewed “indicative drawings and maps of the prospective location of where stations for the light rail may be situated” (the drawings and maps were not identified). He gave no evidence of what he meant by “obtained”, that is, whether he read the newspaper articles and copied them, whether he saw these documents somewhere online and downloaded a copy, or how he otherwise obtained them.

739. It is probable that he had read and had available the 23 January 2018 development approval, the National Capital Plan and the Woden Town Centre Master Plan, as it is inherently probable that they were core documents which he would had to have been cognisant of in order to exercise his employment duties. I also think it probable that he had read or been told something, somewhere and at some point in time, to the effect that the then Government had proposed the building of Stage 2 light rail to Woden, and that all proposed routes were to, or through, Woden. After that point however, I am not persuaded that he read and relied on the particular documents he asserted he did before the Representations were made.

740. Fifth, when asked whether he read those 15 documents he did not say that he had read them, or recalled reading them, but rather he said: Yes, I would have read them. (Emphasis added.)

741. “Would have” in the context of his cross-examination conveyed to me that Mr Stephens really had no recollection of what he read, and any recollection he did have had been overlaid by perceptions of self-interest and conscious consideration of what should have been read or could have been read.

742. Sixth, there was no witness which corroborated his account. That is, there was no witness who gave evidence to the effect that, reasonably contemporaneously with Mr Stephens having read the documents, Mr Stephens said something to the witness about light rail and what the documents had communicated to him about that subject.

743. Seventh, further doubt as to the reliability of his evidence is that he said that most “if not all of the documents I refer to [in] the above paragraph are exhibited to the affidavit of Mr Micalos”. That casts doubt in my mind whether his list of the documents he supposedly read before the Representations were made were from his own, independent recollection or were a result of suggestion in that he had been shown Mr Micalos’ affidavit before he affirmed his own affidavit.

744. Eighth, his clumsy attempts to convey a more favourable impression of rental yields by the inclusion of his Waratah Analysis Spreadsheet and TPC Analysis did not speak well to his forthrightness as a witness.

745. Ninth, the last document he mentioned, the Transport Canberra Light Rail Update, was published in June 2018. Yet Mr Stephens said in his affidavit that he viewed that document prior to hardcopies of the Brochure and Flyers being made available to sales agents in March and April 2018. Obviously, that could not have happened, but the fact he said in his affidavit that he relied on a document not then in existence demonstrated a somewhat cavalier attitude towards accuracy in his affidavit.

746. Tenth, his credit was also affected adversely in cross-examination. For example, he was cross-examined about how he could recall the fifteen documents listed at [733] above. The following evidence was given: And at paragraph 35, you set out all the documents in subparagraphs (a) through zero?--- Yes. (a) through (o). Now, did you read each of those documents for the purpose of preparing this affidavit?---No. So how can you possibly know, Mr Stephens, if these were the documents you read back before representations were made in the brochures and the flyers?---Because some of these documents existed before.

747. That answer conveyed to me that he could not recall reading them, but he reasoned that because the documents were dated before the representations were made (with one exception), he must have read them. His evidence continued: How can you possibly know whether you read these ones?---I worked as a development manager for Geocon for a number of years and as part of that, you are required to read legislation like the National Capital Plan and the Territory Plan and so there are - there is information in those documents which set out avenues, transport routes - - - … THE WITNESS: And so that’s how I form a view in having seen and read those documents prior to the project even existing that I formed the view that light rail could in the future go to Woden. MS SHARP: Isn't it the case that you have no idea at all whether those documents you've itemised at paragraph 35 that you didn't read when you prepared this affidavit were the documents you read back in - before these brochures and flyers were published?---I remember reading the Capital Metro updates, absolutely.

748. The last answer conveyed his assertion that he could recall the Capital Metro Updates, but he said nothing about the other documents.

749. Overall, I do not accept Mr Stephens’ evidence (unless otherwise indicated) unless it was corroborated by other, independent, objective or contemporaneous evidence. There was no such evidence in relation to the documents, facts and circumstances he said he relied on, although I accept he had read the 23 January 2018 development approval, the National Capital Plan and the Woden Town Centre Master Plan.

Mr Skepev

750. Mr Skepev is the sole director and company secretary of BSD and Zapari. He is one of two directors of GZ.

751. Mr Skepev said that prior to lodging the development application for the Land on 24 May 2017, he was keen to participate in community consultations and lodge submissions in relation to the future of the Woden Valley area, particularly in relation to issues concerning transport, connectivity, high density, residential development and urban renewal.

752. He said he was familiar with the Woden Town Centre Master Plan dated November 2015 and had specific regard to what that document indicated in terms of light rail. Figure 17 in that Master Plan showed a “rapid transit” route and stops along Callam St (which was adjacent to the Development on its eastern side). The Master Plan said in cl 3.5.1: Light rail The Light Rail Master Plan is investigating the potential for the expansion of a light rail network across Canberra. The outcomes of the plan will inform future decisions about extensions to Capital Metro Stage 1 (between the city centre and Gungahlin). The master plan builds on work already undertaken on light rail and integrated land use and transport planning, and delivers on government policies, including Transport for Canberra and the ACT Planning Strategy. Provision is being made for an alignment along Callam Street for light rail (Figure 17).

753. Mr Skepev attended meetings with various officials and consultants regarding his proposed development, and issues including possible light rail were discussed. He obtained a Transport Impact Assessment from GTA Consultants dated 18 April 2017 which said, amongst other things: The ACT Government recently identified a preferred route for the Stage 2 Light Rail project between Civic and Woden. The preferred route travels along Commonwealth Avenue, Adelaide Avenue, Yarra Glen and Callam Street, however, it is noted that this route is still to be finalised following detailed analysis. It has not yet been determined whether the future light rail will travel on the verge or along the median of Callam Street. Once the light rail is delivered it is expected that bus services along the corridor will be modified to provide feeder services between adjacent communities and the route, rather than running parallel to the light rail.

754. In May 2017, Mr Skepev attended a Woden Roundtable discussion in relation to how the ACT Government was delivering on the Woden Town Centre Masterplan. After that date, Mr Skepev had a number of interactions with government representatives in which light rail to Woden Town Centre was raised.

755. On 10 June 2017, Zapari lodged a submission with the ACT Government in relation to Stage 2. The submission said: ZAPARI currently has 2 properties located on the proposed Light Rail Stage 2 – City to Woden. … (Emphasis added.)

756. The submission went on to discuss various route options for Stage 2 and expressed reasons why certain routes were better than others.

757. The submission turned to the light rail stops and: … strongly recommended that the rail stop in Woden Town Centre be located immediately adjacent to the bus interchange …

758. There then followed an aerial photograph showing proposed light rail stops in Callam St, and between Bowes and Matilda Sts, but being closer to Bowes St.

759. I accept Mr Skepev’s evidence that he knew the matters I have just outlined. It is inherently probable that a property developer would be cognisant of a relevant area’s master plan in which his company had purchased a significant site for development and would take an interest in the future of that area in relation to transport, connectivity, high density residential development and urban renewal. It is inherently probable that a property developer would attend meetings with various officials and consultants regarding his proposed development and that he would read consultants’ reports which Zapari had commissioned. Mr Skepev’s interest in those matters, and particularly light rail, are corroborated by the 10 June 2017 submission made to the ACT Government.

760. On or about 25 October 2017, Mr Skepev received the 2017 LJ Hooker appraisals.

761. I accept that Mr Skepev sought and obtained the 2017 LJ Hooker appraisals and read them. It is also inherently probable that he formed and held the opinion that the likely weekly market rent for those Units would increase over the next 3 to 5 years given that it is rare for weekly market rents to decline.

762. Mr Skepev said that prior to and following the approval of the development application in January 2018, the ACT Government had made various public pronouncements concerning the light rail to Woden, although those particular pronouncements were not identified. He said he was specifically interested in those pronouncements because he wished to know what impact the light rail to Woden may have had on the Development. The pronouncements were not identified, nor their contents.

763. He said that for those reasons, although he did not now recall reviewing them, he was generally aware of the “following matters” contained within “those publications”. The affidavit is unclear whether what was intended to be conveyed was that “those publications” were the public pronouncements referred to in the immediately preceding paragraph, or something else. In any event his affidavit said: For these reasons, although I do not now recall reviewing the following publications, I was generally aware of the following matters contained within those publications: (a) Light Rail Stage 2, May 2017: the Stage 2 Route Map: City to Woden; (b) Light Rail Update, August 2017: the light rail network map (Figure 1); the statement that "[t]he ACT government is committed to deliver the next phase of a city shaping transport network with the commencement of design development for Light Rail Stage 2 from the City to Woden” (Section 3); the feedback concerning route options (Figure [unreadable]); the theme of integrated transport, with light rail integrating with the current bus networks and other transport modes including bicycle networks (Section 4); and (c) Canberra's light rail network: taking you from City to Woden, August 2017: the statement that "[t]he ACT government is committed to delivering Light Rail Stage 2 which will link City to Woden, continuing the north-south transport spine commenced in Light Rail Stage 1".

764. Insofar as those publications conveyed that the Government was proceeding with its policy to, if possible, extend light rail to Woden, I accept Mr Skepev’s evidence that he was aware of a number of Government pronouncements to the general effect that the Government had a policy to extend light rail to Woden, and was proceeding with implementing that policy by attending to some of the necessary preliminary steps required to effect that outcome. But as he accepted in cross-examination, none of those publications said that Stage 2 had obtained all the approvals required by law nor did they support any of the Representations made.

765. Mr Skepev said that he had regard to the Territory Plan Variation 344 which included the statement that, amongst other issues raised by submitters, were issues with the provision of transport orientated development and light rail alignment. I accept that the Territory Plan Variation 344 was in existence as at 8 August 2018, which is the date it bears, but the representations were all made before that date and therefore I do not accept that Mr Skepev relied on it at the time the representations were made.

766. Mr Skepev gave evidence that it was his practice to read the Canberra Times, the Sydney Morning Herald, and the ABC News every day, to review the Allhomes, Domain and Riotact websites regularly, and to read the Financial Review from time to time. That evidence is inherently probable, and I accept it. He said he was particularly interested in articles appearing in those publications that concerned Stage 2. I think that that evidence is also inherently probable because of the likely effect that light rail to Woden would have on the value of the Land if the light rail eventuated, and the effect light rail would have on the range of development options for the site.

767. His evidence of events after this point I found problematic.

768. His affidavit then said that he: … had regard to the following articles and information contained therein: (a) Christopher Knaus, 'Labour announces light rail to go to Woden', The Canberra Times (online at 1 September 2016): "Labor has announced the next stage of its light rail network will go to Woden .. . The planned 11-kilometre route will see trams cross the lake over the Commonwealth Avenue bridge, travel through the Parliamentary Triangle, and down Adelaide Avenue to the Woden town centre ... It is being dubbed the 'north-south spine', a long light rail network stretching from Gungahlin to Woden, which will integrate with rapid and local buses, later tram stages, and other transport options to service the rest of the city ... Chief Minister Andrew Barr said in a statement ... 'Extending light rail to Woden will create a north-south spine for our public transport network and critically, it will get light rail across the lake ... Buses, bikes, and walking routes and later stages of light rail will feed into this spine, making it even easier for Canberrans to get where they need to go'"; (b) 'Canberra light rail's second stage to link Woden and Civic, ACT Government says', ABC News (online at 2 September 2016): "The Government today announced the second stage of the tram line would join Civic and the Woden town centre .. .ACT Chief Minister Andrew Barr said the new plan would create a north-south public transport spine for Canberra from the first stage from Gungahlin to the second stage to Woden"; (c) Kirsten Lawson, 'Serious work to begin on Woden light rail line as ACT Government calls tenders on design and cost', The Canberra Times (online at 25 November 2016): "Transport Minister Meegan Fitzharris said the only firm decision made about the route from Woden was that the light rail would cross the lake on Commonwealth Avenue bridge and end in the Woden town centre ... ‘Civic to Woden is a certainty ... ', she said ... The government plans to sign contracts for the building of the Woden line before the 2020 election, and Ms Fitzharris said it was doing everything it could to ensure continuity of work for the private sector, so there was no gap between construction of the Gungahlin line and work beginning on Woden"; (d) Kirsten Lawson and Katie Burgess, 'Canberra light rail: Options for stage two route to Woden revealed', The Canberra Times (online at 2 May 2017): "The main question for debate in the routes released on Monday is whether to go straight around Capital Circle from Commonwealth Avenue, or take a detour through Barton ... The government is considering two endpoints - the Woden town centre or heading on to Canberra Hospital... "; and (e) Katie Burgess, 'Canberra Hospital extension officially dropped for stage two of light rail', The Canberra Times (online at 18 December 2017): "After months of community consultation and technical analysis, the ACT government has narrowed down the possible routes the light rail will take south from the city from four to two .. . they both terminate in the Woden Town Centre".

769. The five news articles identified above were dated 1 and 2 September, 25 November 2016, 2 May and 18 December 2017, being between approximately six to seven years before Mr Skepev affirmed his affidavit. He gave no evidence of having made any contemporaneous note of having read any of those articles, nor did he make any contemporaneous note of their relevant contents. He did not exhibit any contemporaneous communication that referred to him reading any of those articles. He gave no evidence that he contemporaneously saved any of those articles, either in paper or electronic form. There is no other witness who corroborated his evidence that he read them, nor that Mr Skepev had said at the time that he had read them. At the end of the day, he simply asserted that he could recall reading those particular articles six to seven years after reading them.

770. Mr Skepev exhibited all five articles to his affidavit, and four of the five had a date imprint in the top left hand corner which read “2/28/2019”. No party disputed that that was not a date indicating when the document was printed and was in Month/Day/Year format.

771. I find it probable that those articles were printed on 28 February 2019. It follows that those articles were not printed before the representations were made (in March 2018). No explanation was provided by Mr Skepev why those articles he claimed to have read before March 2018 were printed in February 2019.

772. 28 February 2019 was nine days after the Commissioner’s investigator’s s 52 Notice to Mr Skepev dated 19 February 2019, a letter Mr Skepev agreed he had read. In that s 52 Notice the investigator had asked Mr Skepev to state his basis “for the claims on the Billboard” that “YOUR CANBERRA METRO TERMINAL STOPS HERE" and the statement in the Brochure “with approval of Stage 2 of the light rail”. That question was directed squarely to asking what was Mr Skepev’s basis for the representations, not any other person’s basis.

773. On 25 March 2019, Meyer Vandenberg provided a response to the investigator on behalf of Mr Skepev. Mr Skepev accepted in cross-examination that he understood he was required to provide accurate and truthful answers to the investigator’s questions, he gave instructions for that reply to be sent and believed that he read the reply before it was sent (because it could not have been sent without his instructions).

774. In relation to the question summarised above, the answer identified eight sources of information relied upon.

775. In relation to the two representations identified at [772] above, there are significant differences between the sources of information Mr Skepev said in his affidavit he relied on, and the sources of information identified in the response to the investigator.

776. I have identified the five articles the affidavit asserted were relied on. In Meyer Vandenberg’s response only two of the five articles were listed, being those in (c) and (e) in [766] above (referred to in footnotes 1 and 2 on p 10 of the letter).

777. The balance of the eight sources of information were three statements made in the Legislative Assembly, one was the submission from the ACT Government to the Joint Standing Committee on the National Capital and External Territories’ inquiry into Commonwealth and Parliamentary approvals for the proposed Stage 2 of the Australian Capital Territory light rail project, one was a Transport Canberra Light Rail Update dated August 2017, and the other was a Transport Canberra Light Rail Update dated June 2018. In relation to this last document, Mr Skepev said in cross-examination that he couldn’t recall reading that document specifically, but none of those six documents were referred to in his affidavit.

778. The three statements made in the Legislative Assembly were not mentioned in his affidavit, nor was the submission from the ACT Government to the Joint Standing Committee on the National Capital and External Territories’ inquiry into Commonwealth and Parliamentary approvals for the proposed Stage 2 of the Australian Capital Territory light rail project and nor was the Transport Canberra Light Rail Update dated June 2018 (accepting this document post-dated the publishing of the Promotional Material).

779. Three of the five news articles exhibited to his affidavit are dated late 2016, and the other two are dated May and December 2017. Mr Skepev’s affidavit was affirmed in May 2023, six to seven years after he supposedly read those articles (and, according to his practice, having read many more articles since).

780. Mr Skepev also exhibited an additional eight news articles to his affidavit which he said he had read and relied on in relation to the Rental Yield Representation. Again, there was no contemporaneous or other corroborative evidence which supported those assertions.

781. When one looks at the copies of those additional eight articles exhibited to his affidavit, six of the eight contain a date in the top left hand corner. They were, respectively: (a) 09/05/2023, 14:04; (b) 09/05/2023, 14:08; (c) 5/9/23, 2:11 PM; (d) no imprint; (e) no imprint; (f) 5/9/23, 2:08 PM; (g) 5/9/23, 2:07 PM; and (h) 4/12/2019.

782. I find it probable that those date and time imprints were the dates and times the articles were printed. Put simply, six of the eight articles identified were printed well after the Rental Yield Representation was made. I am not persuaded that Mr Skepev read and relied on those eight articles prior to the Representations having been made.

783. Those printed dates, and the inconsistencies between Meyer Vandenberg’s response dated 25 March 2019 with Mr Skepev’s affidavit, emphasised to me the fallibility of human recollection, and particularly Mr Skepev’s, and underlined the lack of contemporaneous or objective corroboration for his assertions that he read and relied on the material identified in his affidavit prior to the representations having been made.

784. Mr Skepev’s evidence continued. He said in his affidavit that on 20 January 2018 he was emailed a copy of the Brochure by Mr Micalos which he read.

785. He said that on 23 January 2018, the development application submitted by Zapari was approved, subject to conditions. In the approval letter, under the heading Entity Advice, the approving authority said: Light Rail On 5 January 2018, advice was received from Transport Canberra Light Rail, regarding the amended proposal lodged under s 144 C. The advice is that that there is currently a proposal to extend light rail to Woden which would include a terminus on Callam Street. This may impact on the road configuration in Woden and accessibility to the development site during construction.

786. In relation to the Billboards, Mr Skepev said he had some minor input in relation to its content in that he suggested making the sales agents’ details larger.

787. At a PCG meeting on 27 February 2018, Mr Skepev considered the contents of the Billboard. He said he considered the statement "YOUR CANBERRA METRO TERMINAL STOPS HERE" and the symbols of the arrows pointing downwards appearing on the billboards were reasonable (in his opinion) in circumstances where, on the basis of the matters detailed above, the ACT Government had announced its commitment to Stage 2 of the light rail, the Development was adjacent to the existing bus interchange and the ACT Government had indicated that the future light rail would be integrated with the existing bus interchange along Callam St. As to the arrows pointing downwards, he thought they conveyed that the light rail would be stopping in the vicinity of the Development along Callam St and that it was not proposed to stop exactly at the bottom of the arrows. Of course, what he thought was conveyed or what was reasonable to convey is irrelevant to my determination.

788. He said that he considered that the statement "7% rental yield" appearing on the Billboards was reasonable (in his opinion) on the basis of fourteen things: his subjective knowledge and experience (five separate matters dealt with below); the eight articles in various publications which I have mentioned above (and which I am not persuaded he read and relied on before the Representations were made); and the rental guarantee offered to purchasers.

789. In terms of his subjective knowledge, he said that even though the 2017 LJ Hooker appraisals were based on the original development (that was subsequently amended), he considered that the Development, once completed, would command higher unit rents than those estimated in the 2017 LJ Hooker appraisals given the Development's unique location and high-end nature in the Woden Valley area, median weekly rent for units in Canberra were increasing, the low vacancy rate in Canberra, rates, costs and inflation were increasing, and his general property market knowledge.

790. I do not consider this evidence to be persuasive or credible. No explanation or details were given why this was a unique location, nor why this property was “high-end”. No explanation or details were given as to the alleged increase in median weekly rentals, the low vacancy rate in Canberra, rates, costs and inflation other than what may appear in the eight publications listed in his affidavit. No details or facts were provided as to his “general property market knowledge”.

791. That evidence was also not consistent with his answer in Meyer Vandenberg’s letter dated 25 March 2019 as to the basis for the claims on the Billboards of a “7% rental yield”. The question asked was “[s]tate Skepev’s basis” for the claims on the Billboard of a “7% RENTAL YIELD”.

792. The answer was: 24. There is a reasonable basis of fact for the opinion, namely: (a) evidence of independent analysts of a prevailing rental yield for apartments of between 5.4% (for Canberra generally) and 5.8% for the Woden Valley; and (b) adjusted for the increased rental the proposed properties will be able to command having regard to: (i) inferior and aging apartment stock in the Woden Valley; (ii) greater amenity not available to other developments in the Woden Valley; and (iii) the fact that the rental stream will become available when the development is completed in 2 years, the rent that can be commanded is likely to increase by approximately 1.5% per annum (based on historical figures). 25. The opinion was verified by assessing the likely rental yield having regard to selling price and anticipated rental return: (a) GGPL and GRE Sales assessed the selling price at the time of going to market of each unit in the Development; (b) market rent was assessed by obtaining an LJ Hooker opinion of the likely monthly rentals for 1 bedroom, 1 bedroom plus study, and 2 bedroom units in the Woden Valley as at October 2017; and (c) annual market rent derived from the figures provided by LJ Hooker divided by the selling price for the corresponding type of unit at initial offering to market and multiplied by 100, provided a rental yield figure averaging 7%.

793. The calculation mentioned in para 24(b)(iii) of that letter, the critical linchpin of the response, did not appear in Mr Skepev’s affidavit, there was no evidence in his affidavit (nor provided by any other witness) of any calculation supporting the statement in par 25(c), and other evidence suggests that that particular answer was incorrect.

794. The eight publications he said he relied on in relation to the Rental Yield Representation (the print dates for six of which post-dated the making of the Representations) were the following articles: (a) Emma Kelly and Rachel Packham, 'Rents rise faster in Canberra than in any other Australian capital city: report', Allhomes (online at 24 January 2017): " Gross yields have increased by 7.5 per cent for both houses and units over the past year, to 4.48 per cent and 5.7 per cent respectively"; (b) Andrew Wilson, 'Canberra house and unit rents on the rise', Alhomes (online at 20 October 2017): " Canberra is the top performer for gross rental yields for units recording 5.77 per cent over the quarter"; (c) Nicola Powell, 'Canberra unit rental yields higher than other cities', Allhomes (online at 5 December 2017): "Those in search of a unit could opt for Canberra, given that the bush capital provided the highest yielding unit market compared to other Australian capital cities at 5.77 per cent, according to data from the September 2017 quarter”; (d) Lucy Bladen and Josephine Huynh, ‘Canberra records highest rental yield growth in nation: Domain report’, Allhomes (online at 18 January 2018): "The latest Domain State of the Market Rental Report, released on Thursday, showed Canberra's gross rental yields for units grew by 2.2 per cent in the last quarter of 2017. This is the highest in the country, representing a 4.7 per cent annual growth and investors gaining a 5.8 per cent return on income year on year"; (e) 'What's happening in your area?', Domain (online at March 2018): "Gross Rental Yields (%) ... Units… Canberra - March 2018 - 5.84%"; (f) Lucy Bladen and Josephine Huynh, 'Canberra unit rents surge to record high: Domain report', Allhomes (online at 12 April 2018): "For investors, Canberra's unit market is proving to be a gold mine, with gross rental yield growing 3.2 per cent in the last quarter to 5.84 per cent. This is the second-highest in Australia ... " (g) Lucy Bladen, 'Canberra weekly house rents have topped the nation: Domain report', Allhomes (online at 12 July 2018): "Gross rental yields remained steady over the quarter at 4.28 per cent for houses and 5.78 per cent for units"; and (h) 'Domain Rental Report March 2019', Domain (online at March 2019): "Median unit rental yields ... Canberra - March 2019 - 6.14%".

795. Despite listing those articles, Mr Skepev never identified what each article said that drew his attention in terms of rental yield and which led him to the view that it was reasonable to represent that every Unit in the Development would achieve a 7 percent gross rental yield (which is the finding I make later in this judgment). Put another way, he did not identify what facts he relied on in those articles, and what his reasoning process was, to arrive at the view that the Units would achieve 7 percent gross rental yield on completion. For example, some of the articles provided figures for past median rental increases in Canberra in percentage terms. Yet, Mr Skepev gave no evidence of undertaking a calculation of future Development rentals (using the 2017 LJ Hooker appraisals as base figures, and then calculating to the expected date of completion of the Development) assuming such percentage increases continued annually.

796. He accepted in cross-examination that none of those articles said that a 7 percent rental yield could be expected, and some of the articles were speaking of rental yields substantially lower than 7 percent. The articles also spoke in generalities. For example, various things were said about unit rentals in Canberra, but the Canberra market was not broken down into more specific areas (such as Phillip where the Development was located), high-end versus low-end units and there was no breakdown of different sized units (one bedroom, two bedroom, three bedroom etc) nor any breakdown taking into account different amenities (such as the inclusion or exclusion of a car space).

797. None of those eight articles were mentioned in Meyer Vandenberg’s response on behalf of Mr Skepev to the Commissioner dated 25 March 2019 in relation to this representation.

798. In relation to the rental guarantee, Mr Skepev also relied on the fact that, to his understanding, GRE offered a rental guarantee of 7 percent to purchasers of Units who entered into a property management agreement with GRE Sales on certain terms and conditions.

799. Mr Skepev said that the rental guarantee was discussed at a PCG Meeting on 6 February 2018, and the minute of that meeting confirms that fact, but Mr Skepev did not say what was discussed and the minute only said, “[i]nvestor incentive for review (guaranteed yields)”. As noted earlier, that offer did not start until November 2018, was only available to purchasers who were willing to enter into a property management contract with GRE and was not offered to all prospective purchasers.

800. In short, I do not accept Mr Skepev’s evidence that he relied on the fourteen facts and circumstances he asserted in his affidavit in relation to the Rental Yield Representation.

801. Mr Skepev’s evidence continued. He said he later saw a spreadsheet, which he believed was prepared by Mr Stephens and the sales and marketing team using the LJ Hooker Rental Appraisals. He could not recall what information was contained in this spreadsheet nor could he identify the precise spreadsheet.

802. Mr Skepev said that he was aware of the Commissioner’s letter dated 31 August 2018 to Zapari raising concerns about the contents of some of the marketing material, was aware that LJ Hooker were asked to and did provide appraisals dated 12 September 2018, was aware of Meyer Vandenberg’s response to the Commissioner dated 12 September 2018 written on behalf of Zapari, GZ, Geocon Bowes and GRE (but in response to the aforementioned letter to Zapari) and said he recalled seeing a spreadsheet reflecting a new rental analysis prepared by Stephens and the sales and marketing team, but could not recall what was in the spreadsheet.

803. Answers 6 and 7 in Meyer Vandenberg’s response dated 12 September 2018 are noteworthy. Although Mr Skepev could not recall reading the response, he said he would have reviewed the letter before it went out because that was normally what happened.

804. Question 6 asked: What is the basis for making the representation of 7% rental yield?

805. The answer referred to the GRE rental guarantee (which was not offered until November 2018) and said: Our clients also relied upon the following documents in assessing a 7% gross rental yield: (a) rental appraisals for Grand Central Tower[s] as at 25 October 2017 from Ms Susie Weaver, Executive Property Manager at LJ Hooker Canberra City; and (b) a price list for units in Grand Central Towers with calculations for expected rental yields for each unit once completed. A copy of the above documents is enclosed. For your further reference, our clients have obtained additional rental appraisals for Grand Central Tower[s] from Ms Susie Weaver, Executive Property Manager at LJ Hooker Canberra City for rent as at the date of this letter. A copy of these appraisals is also enclosed.

806. The second document referred to the price list for units in Grand Central Towers with calculations for expected rental yields for each unit once completed, showed rental yields calculated to the nearest whole percentage point, and included rentals greater than those set out in the 2017 LJ Hooker appraisals. Contrary to that letter, the rental figures used in that document appear to be the highest figure in the range of rentals provided by the 2018 LJ Hooker appraisals and were higher than Mr Micalos’ calculation of expected rentals on completion of the development (about which more will be said later).

807. In any event, the 2018 LJ Hooker appraisals were not in existence at the time the Representations were first made.

808. Question 7 was: Why is there an inconsistency in rental yield reported in the Investment Report and on the building advertisement banners?

809. The answer included the following statement: In contrast, the statement on the banners of the Grant [sic] Central Towers building advertisement banners “7% rental yield” refers to the guarantee rental yield offered to potential purchasers (as per Clause 10 of the Property Management Agreement referred to at 6 above) and expected rental yield for units in Grand Central Towers once completed. (Emphasis added.)

810. Once again, I note that the rental guarantee offer did not start until November 2018 (even though marketing advertising the 7 percent rental yield had commenced eight to nine months earlier), was only available to purchasers who were willing to enter into a property management contract with GRE and was not offered to all prospective purchasers. I also note that nothing on the Billboards or any of the other Promotional Material which referred to the 7 percent rental yield said anything about it applying only to those Units whose new owners were willing to enter into a property management agreement with GRE.

811. I do not accept Mr Skepev’s evidence that he read and relied on the documents, facts and circumstances he asserted. His assertions are not corroborated by any objective or contemporaneous evidence, they are inconsistent with the answers in responses to the investigator, they are inconsistent with the print dates on documents, and they lack critical detail which may have bolstered the striking claim of being able to recall all of these documents many years after having read them.

812. Turning specifically to the Brochure, no evidence was given by Mr Skepev in relation to the “rental projections” mentioned in the statement in the Brochure that “7% gross rental yield achievable based on rental projections”. That is, he gave no evidence of being involved in, seeing or being told of any actual, calculated rental projections.

813. Mr Skepev said that he received an email from Ms Hindson (sent to him and Mr Georgalis) on 8 March 2018 attaching a copy of their Q&A section of the Brochure. Mr Skepev was asked to confirm the draft or notify any desired changes. The draft relevantly said: Where did the design inspiration come from? The clue is in the name. Grand Central Towers unashamedly draws its inspiration from the buzz and vitality of New York City’s, Grand Central Station in Midtown Manhattan. It’s one of the most amazing urban spaces on the planet, an exciting mass of people and noise and energy, 24/7. The transit theme also makes sense as rail travel is set to play an increasingly significant part in Woden’s future with approval of Stage 2 of the light rail, so there are many synergies. Once this vision was agreed, we worked closely with award-winning architects, COX, to make it a reality. We couldn’t be happier with the result.

(Emphasis added.)

814. That statement was approved by Mr Skepev and was ultimately included on p 35 of the Brochure. Mr Skepev said that, in his opinion, the statement was reasonable given the matters I have summarised at [751]-[781] above.

815. In relation to the Flyer, Mr Skepev knew of its existence but was not involved in its production, nor, as I understood his evidence, did he have any detailed knowledge of its contents.

816. In relation to the Promotional Video, I have set out the circumstances of its making earlier above. Mr Skepev had no knowledge of Mr Georgalis’ statements in the video until he reviewed a draft version of the video on or about 20 March 2018.

817. Mr Skepev considered Mr Georgalis’ statement in the Video that a purchaser could use the light rail and be in the City in 10 minutes with services at a frequency of every five minutes as reasonable because of three publications he had seen, his own experience that it took approximately 10 minutes to travel by car from Woden to the City, the existing express bus service from Woden to the City took approximately 10 minutes, and the National Capital Plan. The three publications he mentioned were the Capital Metro Contract Summary June 2016, the Capital Metro Full Business Case 2017 and the ACTEW AGL - Canberra Metro Light Rail PowerPoint 10 February 2017.

818. Those three documents related solely to Stage 1. In addition, the Capital Metro Contract Summary June 2016 said intervals were 6 mins at their shortest, and 15 minutes at their longest. The Capital Metro Full Business Case 2017 said intervals would be 10 minutes at core times, and 15 minutes at other times. Five minute intervals would operate at peak times “if deemed necessary”. The third document, the ACTEW AGL - Canberra Metro Light Rail PowerPoint 10 February 2017, said “[s]ervices every 10 mins (5 min peak)”.

819. Mr Skepev said that he made some suggestions regarding adding more of Zapari’s logo to the video to Ms Hindson (who had sent the draft video to him), but otherwise provided no other feedback. In substance, Mr Skepev communicated his implied agreement with the contents of the Video.

820. In relation to the Real Estate Website Marketing, Mr Skepev said that he believed he may have reviewed website links sent to him by Ms Hindson, but otherwise did not have any involvement in their contents nor did he formally approve them.

821. As for the Promotional Emails, Mr Skepev was sent a copy of an EDM sent on 31 January 2018 (which the defendants admit was sent).

822. Mr Skepev regarded the statement: Introducing Grand Central Towers, a joint venture between GEOCON and ZAPARI located at the Woden junction for the Light Rail Stage 2 was reasonable based on the material I have summarised at [751]-[781] above.

823. Mr Skepev said that he did not receive copies of any other promotional email.

824. Mr Skepev was extensively cross-examined.

825. Mr Skepev was a generally cooperative witness who attempted to answer the questions put to him, but this was not always so. At times he was evasive when answering direct questions, particularly when faced with a potentially discomforting fact. One example will suffice. In the Promotional Video, Mr Georgalis had said that the light rail from Woden to the City would run at five minute intervals. Mr Skepev knew of that statement before the Video was published and impliedly approved it. When cross-examined on the reasonable grounds for that statement, the following exchange took place (at T 951.5-.18), with Mr Skepev evading giving a direct answer to the question until required to do so: And you saw that before the promotional video went live?---I did. And you do agree with me that as at March 2018, the frequency of the light rail services under proposed stage 2 had not been finalised or approved?--Stage 2 had not been finalised. All right, and the frequency of the light rail services under that proposal had not been finalised or approved?---Stage - yes. Stage 2 had not been finalised. And do you agree that in March of 2018, the travel time between Canberra City and Woden Town Centre on the proposed light rail had not been determined?---Stage 2 had not been finalised. HIS HONOUR: What is the answer to the question, Mr Skepev?---No. No.

826. But in important respects his evidence suffered in much the same way as the evidence of the other reasonable grounds witnesses. It lacked detail in important respects and lacked any corroboration by way of contemporaneous documents, objective facts or a credible witness.

827. Mr Skepev identified the particular facts or circumstances he said he relied on, and I accept his evidence that those facts and circumstances existed. What I do not accept, as I shall explain below, was his evidence that he in fact relied on a number of those particular facts or circumstances.

828. In cross-examination, Mr Skepev said that he was aware that the ACT Liberal Party had not supported the light rail to Woden in the past two or three election cycles (being elections held in October 2012, October 2016 and October 2020). He accepted that there was no guarantee that the Labour Party would continue to succeed (in forming government) in future elections and was aware that a new government may not proceed with commitments made by a former government.

829. He could not recall reading the Transport Canberra Light Rail Update dated June 2018 (despite Meyer Vandenberg telling the Commissioner in their letter dated 25 March 2019 that this was one of the documents Mr Skepev had relied upon). When cross-examined on that document’s contents, he acknowledged that in the first three months of 2018 he was aware that Stage 2 had not received development approval under the Planning and Development Act 2007 (ACT) and was unaware whether approval required under the the EPBC Act had been given.

830. Mr Skepev agreed that, as at March 2018, there was no guarantee that Stage 2 would be built, at least because of a possible change in government.

831. In March of 2018 he knew that the route of Stage 2 had not been determined, nor how many stops there would be. He said that he had previously lived at O’Malley, driven past Bowes St to Civic where his old office used to be, and was “aware” that buses from Woden to the City ran at 15 minute intervals and took about 10 minutes. How he was “aware” was not identified, and he accepted he had never caught the bus from Woden to the City. He therefore assumed that the light rail would take the same amount of time to travel from Woden to the City.

832. Mr Skepev accepted that the three publications he relied upon as reasonable grounds for the representation that light rail services would run at a frequency of five minutes (see [817] above) all related to Stage 1 and said nothing about Stage 2. He said (at T 952.27): Well, I'd assumed if - if the light rail was stopping every five minutes for the stage 1 they'd do the same thing for stage 2.

833. The problem with that answer, in relation to credit as well as reliance, is that only one of the three documents referred to a frequency of five minutes, and that was only at peak times. The representation made was not confined to peak times.

834. As I said earlier, I accept Mr Skepev’s evidence summarised up to [767] above. Thereafter, I do not accept his evidence of reading and relying upon the various newspapers and other publications at the time of their publication or before the representations were made and upon which he placed particular reliance as providing a reasonable basis for the representations made.

835. Clearly enough, he was aware of the proposal to build light rail in Canberra and was aware of the proposals to build Stages 1 and 2. What I am not persuaded of, however, is his version of events that he read the particular publications he asserted and did so before the Representations were made. That is, per Nguyen, I do not feel an actual persuasion that he read and relied on the documents, facts and circumstances he identified in his affidavit other than the ones I have identified.

836. As I have mentioned before, there was no corroboration by way of any contemporaneous document, objective fact or independent testimony that he had done so. I gained the impression from observing him answer questions in cross-examination that, whilst he had read some things such as the occasional newspaper article, he really had no independent recollection of what newspaper articles or other publications he had read.

837. I have noted the printed dates on many of the publications he exhibited to his affidavit, and which were a year or more after the representations were first made.

838. I have already remarked on the inconsistencies between his affidavit and answers he gave via Meyer Vandenberg to the investigator.

839. He could not recall reading various documents when they were put to him, even when those documents were listed as having been relied upon by him in Meyer Vandenberg’s letter to the investigator dated 25 March 2019. For example, he could not recall reading the Transport Canberra Light Rail Update – June 2018, nor Hansard in relation to the three statements to the Legislative Assembly mentioned in that letter. Indeed, he said that he did not know what Hansard was.

840. His credibility also suffered in asserting he thought it reasonable for Mr Georgalis to say the light rail from Woden to Canberra City would take ten minutes because of the documents he said he’d read. Since none of them said anything of the sort, it struck me that Mr Skepev was someone who would grasp at the smallest evidential straw to avoid drowning in adverse findings, and therefore was someone whose uncorroborated assertions of fact should be treated with caution.

841. I have noted that he was occasionally evasive in answering questions, although I have been careful in my evaluation of his oral evidence because, as BSD/Zapari’s submissions rightly point out, some of the cross-examination left a little to be desired in terms of precision and clarity.

Mr Micalos

842. Mr Micalos said that he was employed by Geocon Group as General Manager, Development, between April 2012 and December 2019 reporting directly to Mr Georgalis. He was no longer an employee of Geocon Group after 2019.

843. Mr Micalos said that he had overall responsibility for the marketing of developments within Geocon. As part of this, he, with the assistance and support of his direct reports (being Ms Hindson and possibly some others), would develop a marketing strategy for a development, which would then be approved by Mr Georgalis or, in the case of a joint venture, Mr Georgalis and the principal from the other joint venture party.

844. He said that in developing a marketing strategy, the usual process was that his direct reports would provide him with several marketing options which would be discussed with Mr Georgalis at development inception meetings. He said that development inception meetings occurred at the very start of a proposed development and included discussions on a number of topics including sales and marketing.

845. Mr Micalos said that the marketing functions for the Development were performed by the Marketing Team, all of whom were Geocon Group employees.

846. He said that in addition to the Marketing Team, external agencies were engaged and used for specialist expertise. These included 3Deep, There PL, and TMA. He said invoices for the services provided by those external agencies were paid by GZ (although some of the invoices he exhibited were directed to Geocon Development Holdings Pty Ltd).

847. Mr Micalos said that the content, such as "look and feel" and general layout of a publication, was largely at the discretion of the external agency, and the agencies were responsible for that content, but subject to internal approvals (which I took to mean the Marketing Team and Geocon), including by the joint venture party.

848. His evidence about content was not wholly consistent with answers given by Geocon Group in its response dated 25 March 2019 to a s 52 Notice. In Table 1 in that response, Geocon Group set out the conduct of Geocon Group employees and other entities involved in the development of the Promotional Material.

849. Table 1 said, for example, that it was Mr Micalos and Ms Hindson who instructed There PL to add the words “7% rental yield” to the Billboard design.

850. In any event, whomever drafted the content now complained of by the Commissioner, it was approved by the Marketing Team and Mr Micalos.

851. Mr Micalos said that his role as General Manager, Development, required him to be aware of matters that had the potential to affect a current or future development. Accordingly, he had regard to the planning instruments that govern the permissible development potential of land, variations (or proposed variations) to the Territory Plan, which might signal likely changes that could affect the development potential of land, Master Plans for areas under development or potentially under development, publications by planning authorities, debate in the Legislative Assembly relating to planning matters, and ACT Government press releases and reports which record pronouncements by the government relevant to planning in the ACT as well as the ACT Government budget, and related announcements.

852. In his affidavit he said that prior to the publication of the Promotional Material, he had read the following: (a) Capital Metro Authority Canberra's Light Rail - Preliminary Environmental Assessment dated 18 July 2014; (b) Capital Metro Authority Canberra's Light Rail - Preliminary Heritage Assessment July 2014; (c) Capital Metro Russell Extension Project dated 18 September 2015; (d) Capital Metro - Contract Summary; (e) ACTEW AGL - Canberra Metro Light Rail PowerPoint 10 dated 10 February 2017; (f) Canberra light rail summary dated 1 May 2017; (g) Light Rail Update dated 1 August 2017; (h) Canberra Metro - Full Business Case 2017; (i) 2018 Notice of Decision; (j) the Woden Town Centre Master Plan dated 1 November 2015; (k) parts of the National Capital Plan; (I) media articles and releases, including: (i) a 2012 Katy Gallagher Publication titled 'Capital Metro Light Rail Project'; (ii) a news article in the Canberra Times on 1 September 2016 titled 'Labor announces light rail to go to Woden'; (iii) a news article published on the Australian Broadcasting Corporation website on 2 September 2016 titled 'Canberra light rail's second stage to link Woden and Civic, ACT Government says'; (iv) a news article published in the Canberra Times on 25 November 2016 including a photograph of the Minister for Transport, Ms Meegan Fitzharris, and a statement by her that 'Civic to Woden is a certainty'; and (v) a news article published in the Canberra Times on 18 December 2017 titled 'Canberra Hospital extension officially dropped for stage 2 of light rail'. (m) comments of ACT Government ministers in the ACT Legislative Assembly, including: (i) on 9 May 2017, the Minister of Transport, Ms Fitzharris stated: There is... within the two options an option to also extend from the Woden town centre to Canberra Hospital. There is an ongoing and long period of time with a number of pieces of work that involve community consultation, technical advice and technical expertise. That is well underway also through Transport Canberra and City Services. … In relation to the package of works that was announced in the context of the midyear review ... there are nine packages of work underway. (ii) on 11 May 2017, the Chief Minister, Mr Barr stated in the Legislative Assembly: As we move around further to the Woden town centre there are undoubtedly opportunities for urban renewal to occur within the town centre and the immediate surrounds. That is something that I think the Woden community are very strongly behind and transport-oriented development is clearly an approach that the government strongly supports I have no doubt that the Woden town centre and the significant opportunities that present themselves there for both the government and private sector owned urban renewal projects that will take place associated with stage 2 present an exciting opportunity for Urban renewal in the Woden town centre. (iii) on 11 May 2017, the Minister for Transport, Ms Fitzharris stated in the Legislative Assembly: The design of the second stage of light rail will be integrated with the ongoing modernisation of the Woden Bus interchange. The design of the new public transport node will progress as part of the current light rail master plan. The master plan will inform the funding and timing of future improvements. (iv) on 24 August 2017, the Minister for Planning and Land Management, Mr Gentlemen in question time stated (in response to a question about possible zoning changes 'other than Woden)' that: The Light Rail Stage 2 project team have been investigating future land use scenarios and urban renewal opportunities along the corridor to inform the development of the Stage 2 business case. (v) on 29 November 2017, the Minister for Transport and City Services, Mr Steel stated: Zapari Group's proposed public transport oriented development next to the Woden bus interchange, which of course will be transformed as a future terminus for light rail stage 2. (vi) on 9 May 2018, the Minister for Transport, Ms Fitzharris stated: As promised, this government is building light rail stage 1 and is continuing to develop plans for a city-wide light rail network, starting with light rail stage 2 to Woden. (n) ACT Government publications, including: (i) in August 2017 Transport Canberra issued a document headed 'Light Rail Update'; (ii) 'Canberra's light rail network: taking you from the City to Woden (summary)' published by Transport Canberra on about August 2017; (iii) 'Light Rail Stage 2 Newsletter' published by Transport Canberra on about May 2017; and (iv) the 'yoursay.act.gov.au' website, which included a diagram of the 'preferred route' between Civic and Woden. (Cross-references to affidavit exhibits and some descriptions omitted.)

853. He then said that based on the material set out above, at the time the Promotional Material was prepared and published he believed that the Canberra Metro Light Rail would be extended to Woden Town Centre and would stop at, adjacent to, or proximate to, the Development.

854. His belief is, of course, irrelevant. The questions are whether there were facts or circumstances existing at the time of the representations on which the representor in fact relied, and which supported the representations made.

855. As with the other reasonable grounds witnesses, Mr Micalos gave no evidence of having made any contemporaneous note of having read any of the lengthy list of material set out at [852] above (or [859] below). He gave no evidence of having made any contemporaneous note of their relevant contents. He did not exhibit any contemporaneous communication that referred to him reading any of that material. He gave no evidence that he contemporaneously saved any of that material, either in paper or electronic form. There is no witness who corroborated his evidence that he read them (such as any member of the Marketing Team that Mr Micalos said shared this material), nor that Mr Micalos had contemporaneously said to them that he had read them.

856. All four of the media articles he exhibited (being those listed at (l) in [852] above) had print dates (in the top left-hand corner of each document) of “2/28/2019”, meaning 28 February 2019. Two of the six Hansard extracts bear the same date in the same place. Others of the same format bear no date, but that may be because of the position of the page on a photocopier when copied to be exhibited to his affidavit.

857. It struck me as rather odd that there was no evidence of discussion by Mr Micalos with the Marketing Team, Messrs Georgalis and Skepev, or any other person of the documents he said he read and relied on for the Representations. Of course, no doubt the Development was a large enterprise, and many matters would have occupied his attention. But nevertheless, at least according to the tenor of his affidavit, the Representations were important matters, as were the grounds for making them. Yet, at least on the evidence, Mr Micalos never discussed the Representations and what grounds existed for making them with anybody, nor at least, did he send any emails about them.

858. Highlighting that observation was the fact that Mr Micalos exhibited an email dated 18 January 2018 from Mr Stephens to the Geocon Sales Group, and cc’d to the Marketing and Development Teams, containing hyperlinks to articles in the Canberra Times and on the Allhomes website speaking of an upcoming rental boom and setting out various statistics for rental growth, interest rates, vacancy rates and a number of other metrics relevant to rental yield. This was not one of the documents upon which he said he relied, but it is a contemporaneous record of the Marketing Team sharing information relevant to rental yield. Yet, no email from any member of the Marketing Team attaching a copy of any of the materials Mr Micalos said he relied upon was tendered.

859. Mr Micalos then said in his affidavit that following the publication of the Promotional Material: I read or otherwise became aware of the following: (a) on 9 May 2018, the Minister for Transport, Ms Fitzharris stated in the Legislative Assembly: [TCCS] is currently undertaking detailed planning for the design, development and approvals for the Woden light rail route for our preferred route through Parkes and Barton ... It is clear that Canberrans support light rail stage 2 to Woden ... I look forward to continuing to develop our plans for light rail to Woden. (b) on 10 May 2018 the Commonwealth announced that it would inquire and report on the Commonwealth and Parliamentary approvals for the proposed stage 2 of the light rail project; (c) between May 2018 and August 2018 the Commonwealth government held an inquiry into the Stage 2 project (Inquiry); (d) a number of submissions made to the Inquiry, including: (i) the ACT Government and Transport Canberra submission dated 15 June 2018 titled 'Gungahlin to Woden (via Barton) Light Rail: Submission to the Joint Standing Committee on the National Capital and External Territories’; (ii) the ACT Government Responses to Questions on Notice dated 31 July 2018; (iii) the ACT Government Responses to questions on notice from public hearing dated 7 September 2018; (iv) the National Capital Authority (NCA) submission titled 'NCA Submission Light Rail Stage 2'; (v) the NCA Response to questions on notice following the public hearing dated 21 June 2018; (vi) the NCA’s supplementary submission dated 25 September 2018; (e) a report titled 'Commonwealth approvals for ACT Light Rail' by Joint Standing Committee dated 1 October 2018 and tabled in the Australian Parliament on 22 October 2018; (f) a report available on the Transport Canberra website in 2018 which stated that: (i) Transport Canberra had 'welcomed the report from the Commonwealth Inquiry ... into the City to Woden light rail project, having participated fully in the inquiry from May to August 2018'; (ii) 'The Commonwealth Committee clearly outlined a pathway to obtaining approvals for the City to Woden light rail route. The ACT government is now confidently continuing the projects development'; and (iii) Transport Canberra was 'building a Virtual Light Rail Tour from the City to Woden'; (g) a document titled 'Light Rail Update' published by Transport Canberra in June 2018, which stated: The ACT Government's preferred alignment for the City to Woden extension, via Barton will ... [c]ontinue to Woden Town Centre via Adelaide Avenue, terminating at Callam Street' (at page 8); and 'Light rail results in the realisation of potential opportunities for development in Woden, subject to future decisions of government. Approximately 601,300m2 of residential land (4,070 dwellings), 679,000m2 of commercial land, 49,200m2 of retail land and 7,500m2 of community land could be developed as a result of light rail (at page 39); and (h) Canberra Light Rail Delivered in Time for Easter Launch dated 23 April 2019. (Cross-references to affidavit exhibits omitted.)

860. Again, there was no corroboration of any sort for the assertions that he had read and relied on any of that material.

861. At the end of the day, in common with the other reasonable grounds witnesses, Mr Micalos made striking claims of memory by asserting that he was able to recall, purely by memory, the approximate 26 different sources of information listed at [852] above, and the 13 listed at [859] above, all of which had been published between five and eleven years before he swore his affidavit.

862. I should also pause at this juncture to note that in his affidavit, and in relation to the documents listed at [859] above, he said that he had “read or otherwise become aware of the following”. He was cross-examined about what he meant by “otherwise became aware of” and his answers were: You say, ‘I read or otherwise became aware of the following.’ What do you mean when you say, ‘You otherwise became aware’?---A colleague may have advised me of a particular article or the contents. Well, does that mean a colleague may not have advised you of the document you’re referring to here?---No. I believe that all of these documents I either read or someone made me aware of them. And you’re not suggesting that somebody read out these documents to you, word for word, are you?---No.

863. If the documents were not read to him word for word, then they could only have been summarised. Yet he gave no evidence (from his recollection) of what the summary was, nor which documents he read himself and which documents were summarised.

864. In addition, in his affidavit he quoted passages from several of the materials. Self-evidently he must have looked at the document to be able to do so, and thus his affidavit is not purely a representation of his recollection but is the product of at least a degree of reconstruction.

865. Returning to the narrative, in his affidavit, Mr Micalos then briefly described the marketing campaign (which has been described elsewhere in this judgment) and then turned to his reasonable grounds evidence in relation to each representation.

866. In relation to the Light Rail Location Representations, he said that in preparing the Promotional Material in so far as it contained representations about the location of the Canberra Metro Light Rail or one of its stops, he “relied on or had regard to” the material referred to at [852] above, as well as: (a) my knowledge and experience with the Woden Town Centre having undertaken a number of previous developments when employed as a developer for Hindmarsh, including Avoca and Woden Green which were some of the biggest developments in Woden at that time; and (b) my knowledge that the only open land available to the ACT Government to support a Canberra Metro Light Rail terminal in Woden is as part of an integrated traffic node at the location of the bus interchange or the ACT owned ground car park immediately adjacent, both of which either adjoin or are adjacent to the Land.

867. The “knowledge and experience with the Woden Town Centre” was not explained, nor detailed. No relevant facts were elicited to identify what particular experience or knowledge he had of Woden Town Centre, and what reasoning process he employed in order to rely upon those two things in relation to the Light Rail Location Representations.

868. As for his statement that “the only open land available to the ACT Government …”, this assertion was not evidence of the fact. The fact itself was not proved. If anything, it was merely an expression of opinion based on unknown facts.

869. Given the poor view I have taken of Mr Micalos’ credit, I do not accept these generalised and uncorroborated assertions which lacked important detail.

870. He said that in continuing the publication of the Promotional Material so far as it contained statements about the location of the Light Rail or one of its stops, he considered the material identified at [852] and [859] above.

871. In relation to the Travel Times Representations, he gave no evidence of any facts and circumstances relied on by himself other than reciting what Mr Georgalis had said about those matters in the Promotional Video. A paragraph in his affidavit in which he purported to say he thought Mr Georgalis had a reasonable basis for making those representations was objected to and rejected. Leave to adduce admissible oral evidence on the topic was granted, but was not exercised.

872. In relation to the Rental Yield Representation, he said that the mathematical formula he used (which I find was objectively reasonable) to determine the gross rental yield of a property was: [Anticipated Annual Rent] + [Purchase Price] X 100 = [Rental Yield]

873. He said that he obtained or was provided with the following information relevant to determining rental yields: (a) the 2017 and 2018 LJ Hooker appraisals; (b) a GCT Pricing Schedule dated 7 February 2018; (c) an email from Ms Galloway to Ms Dickens with a subject line 'RE: ***Potential SPAM***Canberra's property market a goldmine for investors' dated 9 February 2018 and its attachments; and (d) an email from Nick Skepev to Tom Stephens and Melanie Hindson with a subject line 'FW_Rental Appraisals' dated 12 February 2018.

874. In relation to the GCT Pricing Schedule, despite saying in his affidavit that it was dated 7 February 2018, the document exhibited bore no date. It contained other information in addition to “Release Price”, most particularly being “Anticipated Weekly Rent LJ Hooker”. The figures used in that column were from the (higher) 2018 LJ Hooker appraisals, which suggested that the document did not exist as at February 2018, at least in the form exhibited to his affidavit. This is one of many examples of the lack of accuracy in his affidavit which damaged his credit.

875. Mr Micalos faintly suggested there may have been a date on his digital file copy of the document (although that is not stated in his affidavit), although he said he saw “literally hundreds of these types of documents” in his role. If there was a digital file, it was not tendered.

876. He then said that using the formula set out in his affidavit, and by using the 2017 and 2018 LJ Hooker appraisal figures as the basis for the Anticipated Annual Rent, and the figures set out in the GCT Pricing schedule as the Purchase Price, he prepared five rental yield calculations using the formula he described, being: (a) Rental Yield calculations (all units using LJ Hooker 25 October 2017 figures) dated 7 February 2018; (b) Rental Yield calculations (using LJ Hooker 25 October 2017 figures) dated 7 February 2018; (c) Rental Yield calculations (using LJ Hooker 25 October 2017 and uplifted for rental increases) dated 7 February 2018 (the Third Calculation); (d) Rental Yield calculations (using LJ Hooker September 2018 figures); and (e) Rental Yield calculations (using LJ Hooker September 2018 figures).

877. Mr Micalos said that with the exception of the Third Calculation, the calculations were based on the anticipated rent as at 2017 and 2018 and did not take into account or make any allowance for increases in rent between those years and the expected completion of the Development (being 2020/2021).

878. He also said that he prepared those calculations “at the time that the promotional material was published”, and said he prepared the first calculation on 7 February 2018.

879. The first four calculations used the same sales price for each unit (according to my random sampling), but the fifth calculation used different prices. Why different prices were used was not explained, and where the sales prices came from for the fifth calculation was not identified.

880. The first calculation (which included three-bedroom Units and penthouses) only used the highest figure in the range of rents provided for each unit type by LJ Hooker and showed the majority of units with a gross rental yield below 7 percent. Where the rental figures came from for the 23 three-bedroom units and one penthouse mentioned in that document was not identified as there were no 2017 LJ Hooker appraisals for those unit types. This was another example of Mr Micalos’ lack of accuracy in his affidavit, and which damaged his credit. He said in his affidavit that those calculations (meaning all of them) were based on the 2017 LJ Hooker appraisals despite there being no appraisals for the three-bedroom and penthouse unit types.

881. The second calculation was the same as the first, but with the three-bedroom Units and penthouses removed. It showed an average gross yield of 6.4336 percent.

882. The Third Calculation used the upper figure of the range given by the 2017 LJ Hooker appraisals and “uplifted” that figure without any disclosure in his affidavit of the facts and reasoning process by which the amount of uplift was calculated. In cross-examination he said he: … took into account other data that I had available to me regarding the market data in terms of rents in the ACT. I considered company data, other information from sales agents and industry professionals and then I applied the calculations that I've referred to in my affidavit.

883. The other data and information referred to in that answer was never identified nor proven. Accordingly, I can give the evidence supposedly based on that data and information no weight.

884. In addition, I do not regard this late-appearing evidence as credible for the reasons given in White v Shortall to which I have referred earlier.

885. One of the Representations at the core of this case was the 7 percent gross rental yield representation. Mr Micalos was put forward as a reasonable grounds witness i.e. a witness able to give evidence of the facts and circumstances in the possession of the representor and existing at the time of the representation which supported the representation made. Thus, it was critical for Mr Micalos, amongst other things, to explain in his affidavit how he calculated the uplifted rental figures, that is, the facts or assumptions he relied on, and his reasoning process used to calculate the rental uplift. The answer he gave which I have quoted above was not in his affidavit, appeared for the first time in cross-examination, and even then he gave no evidence of what the data and information was and how he reasoned from that data to his conclusions.

886. Having said that, even assuming the uplifted figures were calculated on some logical and reasonable basis, many Units’ gross rental yield in the Third Calculation was less than 7.0 percent. On skim reading the document, it appears that well over 50 percent of the Units did not reach 7.0 percent. The document also stated that the “Overall Average Gross Yield” using the 2017 LJ Hooker appraisals was 6.4336 percent, and using the uplifted rental figures the “Overall Average Gross Yield” was 6.83 percent.

887. This Third Calculation was the only calculation produced by any reasonable grounds witness which used uplifted rental figures supposedly reflecting anticipated rents at a time when the Development was finished and purchasers would be able to rent their units to tenants. Whatever its other problems, this calculation showed that the majority of Units were not projected to achieve a gross rental return of 7 percent.

888. The fourth calculation was only to the nearest one percent and (on my random sampling) used only the highest number in the range of rents provided in 2018 by LJ Hooker for each unit type (although there was no appraisal for the one penthouse referred to in that document). My overall impression is that even when taken to the nearest one percent, about half of the Units had been calculated as having a rental return of 6 percent. A random sampling of units showing 7 percent (such as Unit 2 for example) showed that when taken to one decimal point the rental return was less than 7 percent.

889. The fifth calculation, and contrary to how it was described in the affidavit, appears to have used the 2017 rather than the 2018 LJ Hooker appraisals, and used different sales prices to the fourth calculation. Why the different prices were used and where those sales prices came from was not explained and I have given this document no weight.

890. Mr Micalos was insistent that he had prepared the first four calculations in February 2018. Assuming he did, about which I have some doubt, the plain result of those calculations is that no matter which different rental figures were used, Mr Micalos knew (based on those calculations) that no less than about 50 percent of the Units were anticipated to have a gross rental return of less than 7.0 percent.

891. Two further credit problems with Mr Micalos’ evidence arose out of those five calculations.

892. First, the exhibiting of the first two calculations, which are in spreadsheet form, seems inconsistent with Meyer Vandenberg’s letter to the Commissioner dated 25 March 2019 which said that GZ, Geocon Bowes, GRE and Zapari all said that a calculation of expected yields was undertaken at or about the time of release of the Development to market in February 2018 using the 2017 LJ Hooker appraisals and the asking price for each unit in the Development, but that that calculation was not undertaken on a spreadsheet or, if it was, it could not then be located. At the time of that letter, Mr Micalos was still employed by Geocon Group, but he had left that employment by the time he swore his affidavit on 10 May 2023 and exhibited those spreadsheet calculations. How the documents could not be located when Mr Micalos was employed, but could be located later when he was not, and the circumstances of them being found (if the documents were genuine) was not explained.

893. Second, his evidence about who prepared the spreadsheets varied. In his affidavit he said he “prepared the following rental yield calculations” (which I took to mean the spreadsheets exhibited). After being taken to the paragraph in his affidavit in which he said he had “prepared” the five calculations, the following exchange took place: So did you prepare any spreadsheets that contained rental yields?---I wouldn't have, no. I didn't prepare the spreadsheet but I may have made some calculations on the spreadsheet. Well, I don't understand. Can you explain?---Well, someone might have given me a unit schedule - a spreadsheet - and I might have reviewed it and made amendments, or I may have analysed the spreadsheet.

894. Yet later he gave the following evidence about those spreadsheets: So you did prepare those documents?---Yes. But you did not prepare them in February or March 2018, did you?---I believe I did prepare them at that day. … You told us a few moments ago that you did not prepare Excel spreadsheets that contained rental yields for every unit in Grand Central Towers?---I didn’t prepare the spreadsheets. But as I just mentioned I would often prepare analysis that was put into the spreadsheets. You didn’t prepare any of these spreadsheets in February or March 2018, did you?---I had input into the spreadsheets. But I didn’t necessarily prepare the spreadsheets. … And I suggest to you that you did not prepare those rental yield calculations in February or March of 2018?---That’s incorrect.

895. His affidavit then said that he had obtained reports prepared by MacroPlanDimasi titled “Woden Valley Market Assessment” dated April 2018 and “Canberra Market Assessment Investor Report” dated 6 April 2018.

896. He then said that he “arrived at the 7% figure” (meaning, he said, wherever 7 percent appeared in any rental yield analysis performed by him) having regard to the formula he had identified, the two reports identified in the paragraph above, the five rental yield calculations he had done, and: … (b) considering, based on my experience, the likely increase in the anticipated rent when the Development was to be completed and Units available to be rented (ie 2020 or 2021); (c) based on the following material that was publicly available at the time: (i) the Allhomes Report entitled 'Canberra Records highest rental yield growth in nation'; (ii) SQM Research, 'property Gross Rental Yield - Woden Valley ACT' (iii) Woden Valley Market Assessment dated 1 April 2018; (iv) MacroPlanDimasi Canberra Market Assessment Investor Report PowerPoint Presentation dated 6 April 2018; (v) RateCity report titled 'Rent surge in Hobart as yields slump in Sydney' dated 12 April 2018. (Cross-references to affidavit exhibits omitted.)

897. There are numerous problems with this evidence.

898. There was no evidence from Mr Micalos of the facts he relied on nor his reasoning process as to how he estimated the likely increase in the anticipated rent when the Development was to be completed. In cross-examination he said his calculations of future rentals: … would have been calculated in spreadsheets as per my formula in the affidavit after considering a range of research reports and the demand and supply, position in the market and the growth in rents.

899. That late appearing evidence further damages Mr Micalos’ credibility for not being in his affidavit, in addition to the fact that the alleged spreadsheets (of future rent) were not exhibited to his affidavit.

900. As to the non-appearance of those spreadsheets, all evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted: Blatch v Archer (1774) 1 Cowp 63 at 65. Thus, the weight to be given to his mere assertions of calculating likely future rents in the absence of contemporaneous corroborative material wholly in the power of the second defendant (whose sole director was also the sole director of Geocon Group, Mr Micalos’ then employer) to produce, and difficult for the Commissioner to have contradicted, is, in the context of the matters presently under consideration, significantly reduced.

901. Other than identifying and referring to the materials Mr Micalos said he relied on as reasonable grounds (which I have listed above), he made no attempt to identify what was actually said in any of those documents that he particularly relied on (the facts he relied on), nor how he reasoned from those facts to a 7 percent figure.

902. Further, his Third Calculation had already calculated (on some unknown basis) a rental uplift and over 50 percent (or a very large percentage) did not reach a 7 percent return.

903. At par 47 of his affidavit he said: At the time the Promotional Material was published, I believed, based on my experience and the matters outlined in paragraph 46 above, that 7% rental yield on the purchase price was achievable on average when the Units would be available to rent (ie, 2020 or 2021). (Emphasis added.)

904. Of course, the Rental Yield Representation did not represent that gross yield on the Units would average 7 percent. In the view I have taken, the Representation was to gross rental yield for every Unit, not an average over all Units. The expression “on average” necessarily implies that some Units would achieve less than 7 percent rental yield, a fact which Mr Micalos knew to be true given his own calculations.

905. Even then, the statement in his affidavit is not accurate because in the Third Calculation the average gross yield was calculated at 6.4336 percent using the 2017 LJ Hooker appraisals and 6.83 percent using the uplifted rental figures.

906. I note that in cross-examination, when those averages were put to him, he said he didn’t need to get to 7 percent because “(w)e were guaranteeing seven per cent”. That answer, at least for the period February-November 2018 was contrary to two things. First, all the defendants’ admitted in their defences that the rental guarantee provided by the GRE Property Management Agreements was not offered until November 2018. Second, in Meyer Vandenberg’s letter dated 25 March 2019 it was said, on behalf of GZ, Geocon Bowes and Zapari, that the “the property management agreement underpins the representation on the Updated Website only”.

907. Of course, none of the representations involving the 7 percent rental yield ever said anything to the effect that the Units would “on average” achieve 7 percent gross rental yield.

908. As for the five sources of information identified at [896] above, the first (Allhomes) was published in January 2018, the second (SQM) showed implied gross yields rarely exceeding 6 percent, and exceeding 7 percent once (although the copy exhibited was not the best), and the last three documents were published after the Promotional Material commenced in February 2018. Mr Micalos accepted, contrary to his affidavit, that he could not have taken those documents into account in February 2018, contrary to his assertion in his affidavit.

909. Later in cross-examination, when it was put to him that he could not have taken the three April 2018 documents into consideration because of their date, he said, for the first time: It was quite common to have these reports earlier. They were made – the date that these reports – we would have access, we would have been working on these reports many months earlier with the relevant research house as we were preparing for the launch.

910. That late-appearing evidence further damages Mr Micalos’ credibility.

911. Further still, his affidavit said that the three reports he identified were not drafts but were “publicly available at the time”. His answer about seeing draft reports (as well as the other credit problems I have mentioned) indicated to me that Mr Micalos didn’t really recall what he had seen and done in relation to gross rental returns, but when faced with problems with the version of events set out in his affidavit, he would make new assertions of fact in an endeavour to extricate himself from the forensic problem with which he was faced.

912. In my view, Mr Micalos’ credit was such that I could not accept his evidence unless it was corroborated by other contemporaneous or credible evidence. Using McLelland CJ in Eq’s words in Watson v Foxman (see [652] above,) it is more likely that his memory had been overlaid by perceptions of self-interest and conscious consideration of what should have been said or could have been said rather than having any real recollection of what took place.

913. That was so in another respect. Having said in his affidavit that these three documents were “publicly available at the time”, he later said in cross-examination that he wasn’t sure that the Woden Valley Market Assessment “dated 1 April 2018” was publicly available at the time. The document exhibited to his affidavit was dated “April 2018” on the first page. On the second page it was signed by Mr McKnight on 26 April 2018, and in the box above Mr McKnight’s signature it said that this was a draft document dated 26 April 2018 and not 1 April as Mr Micalos said in his affidavit. The document had no date entered for the Final Report.

914. It is reasonable to assume that this Report was a draft, but the date of that draft (26 April 2018) is after the Rental Yield Representation commenced to be made and contradicts his evidence that he had regard to this Report “at the time the Promotional Material was published” (which was a month or two earlier).

915. Turning to evidence on other matters, in cross-examination Mr Micalos accepted that, at least in his experience, a government of the day does not always deliver on its promises because there may be technical limitations, a change of priorities, budgetary constraints or because a change of government occurs. He knew that large, government-announced public infrastructure projects are sometimes not realised for any number of reasons.

916. He said he could not recall that the once-proposed light rail extension to Canberra Hospital (from Woden) was scrapped in December 2017, nor could he recall that the Liberal opposition did not support the light rail to Woden.

917. He was “unsure” whether the GCT Pricing Schedule dated 7 February 2018 used anticipated rental yields based on the subsequent September 2018 LJ Hooker rental appraisals (which appears to be the case) and was “unsure” whether he had any involvement in the creation of that document, although he said that he typically did not create such schedules himself.

918. He agreed that factors such as the number of bedrooms and bathrooms, whether there is a reserved car space, how high up in a tower a unit is situated, a unit’s aspect and views and whether a unit was well connected with public transport all affected potential rental rates. He agreed that to obtain an accurate rental appraisal it was important that the person providing the appraisal had sufficient details of the unit. He thought that only a small number of Units had changed in configuration from the original to the amended development, and that dimensions for some Units had changed as well.

919. Mr Micalos agreed there ended up being about 30 three-bedroom Units in the Development and four penthouses when completed (there were none in Zapari’s original approved development and therefore no three-bedroom or penthouse appraisals were obtained from LJ Hooker in 2017).

920. Despite exhibiting the 2017 LJ Hooker appraisals to his affidavit, he could not recall, when asked, whether there were any three-bedroom appraisals. Indeed, he said that he: … typically didn't look at three-bedroom units and penthouses because they weren't an investor product and where rental yields weren't that relevant to [sic].

921. Of course, none of the Rental Yield Representations said anything about the 7 percent gross rental yield not applying to the three-bedroom or penthouse Units.

922. Mr Micalos said that he could not recall whether the 2017 LJ Hooker appraisals were based on different plans (the original development) despite being the General Manager, Development, for Geocon Group and overseeing the amended development.

923. Mr Micalos said he was aware of the Commissioner’s s 52 Notices sent in August 2018, and he recalled providing some information to Geocon Group’s general counsel in relation to the questions asked in the Notices.

924. One of the questions asked in the Commissioner’s s 52 Notice dated 31 August 2018 to Zapari was the basis for making the representation of a 7 percent rental yield. The answer is quoted at [125] above. As I noted at [127] above, the document attached to Meyer Vandenberg’s response and said to be “a price list for units in Grand Central Towers with calculations for expected rental yields for each unit once completed” was not the same document Mr Stephens said was emailed to Meyer Vandenberg. Nor was Mr Micalos’ GCT Pricing Schedule (allegedly) dated 7 February 2018 the same as the attachment to Meyer Vandenberg’s response.

925. In general credit terms, in addition to the matters I have previously mentioned, Mr Micalos had a tendency to answer questions about what he did with answers which used “we” rather than “I”. That is, instead of saying “I did …” he would say “[w]e did …”. In the context of Mr Micalos saying in cross-examination that some documents exhibited to his affidavit were created by others, and the fact that he was a senior manager with various staff reporting to him, his frequent use of the term “we” when asked what he did gave me the distinct impression that he had no real recollection of relevant past events.

926. He also exhibited a tendency to attempt to avoid discomforting facts as well as exhibiting a poor recollection. It was never in dispute that LJ Hooker did not provide any rental appraisals in 2017 for three bedroom units or penthouses. Mr Micalos even exhibited the three appraisals that LJ Hooker did provide in 2017 (for a one bedroom, one bedroom plus study and a two-bedroom unit). Yet, when the simple proposition was put to him that LJ Hooker did not provide appraisals for three-bedroom or penthouse units in 2017 and thus facing the discomforting fact that calculations for gross rental yield made for those unit types in February 2018 had no underlying appraisal for support, he answered as follows: Now it is right, isn't it, that LJ Hooker did not give you any rental appraisals in October 2017 for three-bedroom units, did it?---I'm not a hundred per cent sure. The – we did only – I'm familiar with my – with what was in my affidavit but it – we typically didn't look at three-bedroom units and penthouses because they weren't an investor product and where rental yields weren't that relevant to. All I am asking you, and I will ask it again, is that LJ Hooker did not give you rental appraisals for three-bedroom units in October 2017?---I'm unsure. And LJ Hooker did not give you rental appraisals for penthouses in October 2017?---I'm – I don't recall.

927. Returning to the narrative, in an email dated 23 August 2019, Mr Micalos told Mr Georgalis that the “7% yield” and the “Light Rail Stops here” were his ideas and “direction”, and that the Marketing Team acted on his instructions.

928. In his affidavit Mr Micalos said that the sales campaign included four Promotional Emails sent on or about 15 February 2018, 28 February 2018, 1 March 2018, and 24 May 2018.

929. The email of 15 February 2018 represented “7.5% RENTAL YIELD”. That representation was not pleaded as part of the Commissioner’s case, but I think it is relevant to Mr Micalos’ credit in that he knew, on his own figures, that not every Unit was expected to reach 7 percent gross rental yield. Indeed, the majority were not. Yet here he was (since he said the 7 percent was his idea and given his position as head of the Marketing Team and having overall responsibility for marketing the Development) authorising an email representing 7.5 percent gross rental yield (and a full percentage point above the average gross rental yield figure he calculated using the 2017 LJ Hooker appraisals).

930. In relation to the Property Management Agreements, and contrary to GRE’s admission, Mr Micalos said they were offered to every purchaser. I do not accept his evidence. First, because he could not give that evidence unless he was present with every purchaser or had available a relevant business record. Second, I find Mr Micalos to be a witness of so little credit that I would not accept any of his evidence unless corroborated by other credible evidence.

931. Mr Micalos was cross-examined about his affidavit evidence that he had read, prior to the publication of the Promotional Material, six statements made by various ministers to the Legislative Assembly between 9 May 2017 and 9 May 2018. He exhibited to his affidavit extracts from Hansard which contained the statements he quoted in his affidavit. He said that he searched Hansard from time to time using terms like “light rail” or “Stage 2” or other key words he thought would be associated with the Stage 2 light rail in order to find anything relevant to those matters and the Development.

932. The sixth statement, made on 9 May 2018, was made after the Promotional Material had been published and so his recollection in relation to that statement was self-evidently incorrect.

933. He said in cross-examination (but not in his affidavit) that he downloaded the majority of the extracts and kept a file. His evidence was: Is it your evidence in respect of each of these extracts from Hansard that you refer to in paragraph 27 that you searched on the website and downloaded those Hansard extracts prior to the publication of the promotional materials?--Generally speaking, yes. I can’t recall if I downloaded every single one but the majority I would have. I kept a file.

934. Three matters arise from that evidence. First, if they were downloaded, there would have been metadata showing the date the computer file was first created, but no metadata was produced and exhibited to his affidavit. Second, if he couldn’t recall downloading every document, how did he remember he’d read the balance. This was not explained.

935. Third, in that answer and in re-examination, he said that he had maintained a file with respect to the Development in which he saved all important or relevant pieces of information or articles or any material that he had come across. He said he used to save them in a central file for his future reference to assist him to do his job.

936. No file was mentioned in his affidavit, nor was it exhibited to his affidavit. This was important evidence, and it only emerged in cross-examination. Thus, its late appearance damaged his credit.

937. There are further problems with his evidence. He was shown one of the Hansard extracts which he had exhibited to his affidavit and asked about what appears to be an image of two hole punches. The document shown to him was:

938. He said that the image of the hole punches along the left edge was because the Hansard extract was printed and “filed in a folder”, being a folder where he kept “key files” to allow him to keep up to date with things that he had read at the time. That was why, he said, he could recollect that he had relied on Hansard. He then said that the other documents in his affidavit came from that file (meaning, I took it, that the other documents he said he relied on in addition to the Hansard extracts).

939. I do not regard that evidence as credible.

940. As can be seen in the image above, in the top left-hand corner is a date (partly obscured) being “2/28/2019” (meaning, I infer, 28 February 2019). It was put to Mr Micalos that that was the date that he printed the documents bearing that imprint. He said that he could not recall the date he printed it.

941. The file was never mentioned in his affidavit. The images of hole punches appear on some of the documents he said he relied on but not others. If they all came from the same file, which must have been a two-hole ring binder folder given the image of the hole punches on the document shown to him, logic would suggest the same image of hole punches would appear on the copies of the other documents. Of a total of about 450 pages of these documents, images of holes appear on about 55 pages. One document in the bundle was the National Capital Plan, and from its pristine appearance it does not look like it was copied from a hole-punched copy. It was of 360 pages. If that document was ignored, it meant that of the remaining documents (about 90 pages), 55 pages had images of hole punches and the balance did not. No explanation was provided for why these 35-odd pages which supposedly came from the same file showed no image of hole punches.

942. The presence of hole punches is consistent with the documents having been put into a ring binder but is not evidence of when that was done.

943. Amongst the documents Mr Micalos said he relied on were four news articles. They are the same four news articles Messrs Skepev, Stephens and Georgalis said they also relied on, although Mr Skepev said he also relied on a fifth article (being the one listed at (d) in his affidavit at par 99).

944. The copies of those four news articles as exhibited to Mr Skepev’s and Mr Micalos’ affidavits are strikingly similar. One example will suffice. What appears immediately below is the first page of the article appearing in the Canberra Times on 18 December 2017 as exhibited to Mr Skepev’s affidavit (Court Book 3504):

945. What next follows is the same article as exhibited to Mr Micalos’ affidavit (Court Book 7557):

946. The only difference between the two copies that I can see is that on Mr Micalos’ copy appear the words “Page 571” in the very bottom right-hand corner. Otherwise, both appear identical including the imprint “2/28/2019” and images of hole punches.

947. At the time Messrs Skepev’s and Micalos’ affidavits were sworn, both on 10 May 2023, different solicitors acted for the parties that called each of those witnesses. That is, the solicitors who acted for BSD and Zapari (who called Mr Skepev) were different to the solicitors for Geocon Bowes (who called Mr Micalos). Originally the defendants had been represented by the same firm of solicitors, but BSD, Zapari and Geocon Bowes changed their solicitors on 19 and 29 April 2022.

948. The point of that observation is that it would seem unlikely that the identical appearance of those news articles occurred because one firm of solicitors was preparing the two affidavits sworn in May 2023 and whomever did the photocopying thought it convenient to use the same documents for both affidavits.

949. 28 February 2019 was ten days after the Commissioner’s essentially identical s 52 Notices sent to Geocon Bowes, GRE, GZ, Zapari and Geocon Group (Mr Micalos’ employer) dated 18 and 19 February 2019. In those Notices the Commissioner sought further information in relation to aspects of Meyer Vandenberg’s letter dated 12 September 2018 (written on behalf of Zapari, GZ, Geocon Bowes and GRE). The Commissioner asked, inter alia, which entity or entities were said to have relied on the publications mentioned in Meyer Vandenberg’s letter dated 12 September 2018, and which individuals within those entities were involved. The answers to those questions included Mr Micalos’ name.

950. Neither Mr Skepev nor Mr Micalos was cross-examined about how it was that their affidavits contained what appear to be identical copies of the four news articles I have referred to, and so I should make no findings about that issue, but it does serve to highlight the lack of contemporaneous or objective corroboration for their evidence of having read the various materials they say they read when corroboration was sorely needed.

951. Of the four news articles exhibited by Mr Micalos, all four bear the imprint “2/28/2019”. He was cross-examined about that date, and it was put to him that he printed those articles, and the Hansard extracts, on 28 February 2019. His answer was: I don't recall the date I printed (them) out.

952. In my view it is more probable than not that the four news articles were first printed on 28 February 2019. I do not accept Mr Micalos’ evidence that he kept a file to keep up to date with things he read at the time.

953. In relation to the planning regime governing the route Stage 2 would need to take, Mr Micalos accepted that the ACT Planning and Land Authority had planning authority over land falling within Territory Land, and the National Capital Authority had planning authority over land falling within the National Capital Plan. He said that relevant ACT and Federal Ministers had the power to approve developments in lieu of the relevant planning authority.

954. Mr Micalos said that after the publication of the Promotional Material, he “read or otherwise became aware of: (a) on 9 May 2018, the Minister for Transport, Ms Fitzharris stated in the Legislative Assembly: '[TCCS] is currently undertaking detailed planning for the design, development and approvals for the Woden light rail route for our preferred route through Parkes and Barton ... It is clear that Canberrans support light rail stage 2 to Woden ... I look forward to continuing to develop our plans for light rail to Woden' …; (b) on 10 May 2018 the Commonwealth announced that it would inquire and report on the Commonwealth and Parliamentary approvals for the proposed stage 2 of the light rail project; (c) between May 2018 and August 2018 the Commonwealth government held an inquiry into the Stage 2 project (Inquiry); (d) a number of submissions made to the Inquiry, including: (i) the ACT Government and Transport Canberra submission dated 15 June 2018 titled 'Gungahlin to Woden (via Barton) Light Rail: Submission to the Joint Standing Committee on the National Capital and External Territories' … ; (ii) the ACT Government Responses to Questions on Notice dated 31 July 2018 … ; (iii) the ACT Government Responses to questions on notice from public hearing dated 7 September 2018 … ; (iv) the National Capital Authority (NCA) submission titled 'NCA Submission Light Rail Stage 2' … ; (v) the NCA Response to questions on notice following the public hearing dated 21 June 2018 … ; (vi) the NCA's supplementary submission dated 25 September 2018 which stated that the NCP 'permits further consideration and exploration of a route for an inter-town public transport system along Commonwealth Avenue, Kings Avenue and either Capital Circle or State Circle. This approach is consistent with the principle provided for in the Griffins' original plan for Canberra' … ; (e) a report titled 'Commonwealth approvals for ACT Light Rail' by Joint Standing Committee dated 1 October 2018 and tabled in the Australian Parliament on 22 October 2018 … ; (f) a report available on the Transport Canberra website in 2018 (and still available) … stated that: (i) Transport Canberra had 'welcomed the report from the Commonwealth Inquiry ... into the City to Woden light rail project, having participated fully in the inquiry from May to August 2018'; (ii) 'The Commonwealth Committee clearly outlined a pathway to obtaining approvals for the City to Woden light rail route. The ACT government is now confidently continuing the project[’]s development'; and...; (iii) Transport Canberra was 'building a Virtual Light Rail Tour from the City to Woden'; (g) a document titled 'Light Rail Update' published by Transport Canberra in June 2018, which stated: 'the ACT Government's preferred alignment for the City to Woden extension, via Barton will ... [c]ontinue to Woden Town Centre via Adelaide Avenue, terminating at Callam Street' (at page 8); and 'Light rail results in the realisation of potential opportunities for development in Woden, subject to future decisions of government. Approximately 601,300m2 of residential land (4,070 dwellings), 679,000m2 of commercial land, 49,200m2 of retail land and 7,500m2 of community land could be developed as a result of light rail' (at page 39) … ; and (h) Canberra Light Rail Delivered in Time for Easter Launch dated 23 April 2019 …

955. He said that based on that material, he continued through 2018 and onwards to believe that the light rail would be extended to Woden and stop close to, or next to, the Development. His belief was irrelevant.

956. Be that as it may, and to the extent the documents are relevant because of their date, I do not accept Mr Micalos’ evidence that he read or relied on these documents. As with other documents he said he had read, he gave no evidence of having made any contemporaneous note of having read any of those documents. He gave no evidence of having made any contemporaneous note of their relevant contents. He did not exhibit any contemporaneous communication that referred to him reading any of that material. He gave no evidence that he contemporaneously saved any of that material, either in paper or electronic form other than the supposed file, which evidence I do not accept. There is no witness who corroborated his evidence that he read them nor that Mr Micalos had contemporaneously said to them that he had read them. I also take into account his generally poor creditworthiness that I have identified elsewhere above.

957. In addition, despite the striking claim of being able to remember all the documents when he swore his affidavit in May 2023, some five years after their publication, and having said that he had read them, he was cross-examined about the contents of some of those documents including submissions to the Inquiry. The following exchange took place: Now are these submissions that you actually read or that somebody otherwise made you aware of?---It would've been a combination. But you can't remember in respect of which set of submissions?---No. No, I can't. You do not really know what information you relied in submissions?---I relied on a lot of the – all the items listed in totality. Well you might not have read some of these submissions?---I did read them all. Well a minute ago you said you can't recall whether you read them or somebody else otherwise made you aware of them?---Yes. There were some that I thought might have been more relevant than others so I may have paid attention to certain documents more than others because I formed a view they had more weight. For example, the document that I [gave] the most weight was the notice of decision which was the approval by the government to approve Grand Central Towers and in that notice of decision on page 15 it explicitly spoke about light rail going to Callam Street, the current bus interchange was a significant terminus and that the re-design of this new light rail terminus may have impacts to traffic flow and whatnot and we needed to consider those in our development. So there were certain documents that I paid a lot of attention to and others not so much.

958. In that passage he gave inconsistent answers as to whether he’d read all of the submissions, and when pressed on the inconsistency in the last question, he avoided answering the question, which was directed to the submissions to the Inquiry, and not to other documents.

959. He was cross-examined about a number of statements made in the Transport Canberra Light Rail Update dated June 2018 and whether he knew of those things in early 2018 and up to March 2018. He accepted in cross-examination that he knew in early 2018 and up to March 2018 that: (a) Stage 2 was subject to approval from both the ACT and Federal authorities, and that those approvals had not been given at that time; (b) approvals required under the EPBC Act, development approval under the Planning and Development Act, works approval by the National Capital Authority under the ACT Planning and Land Management Act and approval by both Houses of the Commonwealth Parliament as required under the Parliament Act had not been given; (c) Transport Canberra were saying that Stage 2 was in the “early stages of project development, design and planning”; (d) Transport Canberra was of the view that the Territory was unlikely to enter into a delivery contract for the project until Works and Parliamentary Approval had been granted given the potential for changes out of that process to affect the economic, financial or operational viability of the project; (e) no final decision had been made by the ACT Government about the economic financial or operational viability of Stage 2 of the light rail; (f) the ACT Government expected to make its final investment decision in respect of Stage 2 once greater clarity was achieved as to the Federal Government's support for the project and any associated planning requirements; (g) economic analysis for the project could not be finalised until certainty was achieved regarding basic project features and final costings were undertaken.

960. He said that despite knowing those things, he was “very confident” that Stage 2 would eventuate. He said that there were a number of things underway, investment “getting spent”, studies being done, announcements being made and consultations. In his view there was an “absolute commitment” on behalf of the ACT Government to realising Stage 2. By “commitment” he meant that the government had a clear policy objective to deliver Stage 2, there would be some hurdles, but they would all be overcome in due course. As I have mentioned earlier in this judgment, his belief is irrelevant in relation to reasonable grounds.

961. In conclusion, I accept Mr Micalos’ evidence that he had read the 23 January 2018 development approval, the National Capital Plan and the Woden Town Centre Master Plan because it is inherently probable that he would have done so given his position at the time.

962. However, I do not accept Mr Micalos’ evidence (unless otherwise indicated) that he read any other document, or relied on any other document, fact or circumstances in relation to the Representations. His evidence in that regard lacked any corroboration and his written and oral evidence exhibited many credit problems.

Mr Georgalis

963. Mr Georgalis said that he was introduced to Mr Skepev by Mr Micalos in about October 2017. Mr Georgalis was aware that Zapari had submitted a development application for a mixed use development on the Land. They discussed a possible joint venture in developing the Land after which he was given a copy of the development application and the 2017 LJ Hooker rental appraisals to enable Geocon to undertake due diligence assessments on the viability of the project.

964. He said that he personally undertook due diligence assessments on each potential Geocon project, and Geocon employees also undertook more detailed due diligence assessments which Mr Georgalis would review.

965. Both his and Geocon’s employees’ assessments would consider the potential viability of a project by considering things like the construction costs, potential sale price and cost of delivery and other things that may affect sale prices and saleability including access to present and future amenities in close proximity to the proposed development, access to current and future employment and employment growth in locations in Canberra.

966. He said that those assessments primarily relied on publicly available material and the knowledge and experience of himself, the Geocon General Managers and their teams, in the Canberra property and building market.

967. In terms of “marketing functions within the joint venture”, as he called it, Mr Georgalis said that in 2017 and 2018, he was heavily involved at the inception stage of the Development, as was his practice with any Geocon development. During this inception phase he conducted meetings with Geocon employees to discuss, among other things, the theme of the development. The theme was the overarching concept as to how the Development would be presented to the market.

968. Attendees at the inception meetings included relevant general managers, marketing and other personnel. Attendees would present a number of options for the theme of the Development and the attendees would then pick the theme that best fit the market research that Mr Georgalis and Geocon had conducted.

969. Mr Georgalis said that, in relation to the Development, it was decided that time would be the theme, and the developers could leverage off the ACT Government's election commitments and other ACT Government publications “which stated that light rail was coming to Woden and that it would stop near the location of the Development”.

970. That evidence was corroborated by an email dated 20 January 2018 sent by Mr Micalos to Messrs Georgalis, Skepev, Stephens and Ms Hindson. In that email Mr Micalos said: Hi All Please see attached and below where we are at with the branding and positioning of Bowes Street. STRATEGY Play off the back of Act Government’s stage 2 light rail infrastructure announcement THEMATICS Old world charm / NYC / TIME / Railways / Light Rail (Emphasis added.)

971. I accept that evidence.

972. Mr Georgalis said that after the inception phase was finalised, the general managers and their teams were responsible (in line with the direction set at the inception meetings) to successfully deliver the Development and would seek his input and guidance as required.

973. Mr Georgalis said that Mr Micalos was responsible for managing the Development and was responsible for the marketing functions for the Development. Other members of the Marketing Team reported to Mr Micalos. As I have mentioned earlier, all members of the Marketing Team were employed by Geocon Group. GRE had no employees, and there was a contract between Geocon Group and GRE for Geocon Group to provide GRE with appropriately qualified and trained staff including marketing staff.

974. In cross-examination Mr Georgalis was taken to a record of various invoices issued by Geocon Group. Relevantly, there was an invoice dated 30 June 2019 issued by Geocon Group to GRE for $10,648,680.36 for “labour hire”. In his answers in cross-examination Mr Georgalis said he assumed that that invoice was for services provided under the Service Agreement (between Geocon Group and GRE) and that Geocon was providing a service or labour hire to GRE for reward.

975. In relation to the Service Agreement, Mr Georgalis gave the following evidence:

And what this agreement provided for was for Geocon to hire out its staff for the business of GRE Sales?---That's correct. And that labour hire was so that GRE Sales could perform the obligations it needed to perform?---That's correct. And in return for hiring out Geocon staff to GRE Sales, GRE Sales paid fees to Geocon Group. That's correct, isn't it?---I believe it might be classified as fees in here. …

976. Mr Georgalis said that in early 2018, Mr Micalos and he discussed in general terms the proposed marketing strategy, including that marketing would focus on residents' ability to access the amenity provided by the future Stage 2.

977. Mr Georgalis said that, in addition to the Marketing Team, external agencies were engaged and used for specialist expertise. Those included 3Deep, There PL and TMA. Invoices for the services provided were paid by GZ.

978. Mr Georgalis said that the Marketing Team (through the external agencies) created the Promotional Material, namely the Billboard, Brochure, Flyer, Promotional Video, four Promotional Emails and the Real Estate Website Advertising.

979. In relation to the Light Rail Location Representations, Mr Georgalis said that as part of his due diligence assessment for the Development, he said he recalled re-reviewing the Woden Town Centre Master Plan dated 1 November 2015 and was aware that the Woden Town Centre Master Plan made references to the “possibility” of light rail, indicated an alignment along Callam Street in the Woden Town Centre, and referred to a reserve on Callam Street to allow for rapid public transport which could include light rail. I accept that evidence as it is inherently probable.

980. Mr Georgalis did not identify which particular parts of the Master Plan he relied on, but when one looks at the extracts of the Master Plan exhibited to his affidavit, it is apparent that he relied on one statement and one diagram. The first was the statement: The Light Rail Master Plan is investigating the potential for the expansion of a light rail network across Canberra. The outcomes of the plan will inform future decisions about extensions to Capital Metro Stage 1 (between the city centre and Gungahlin). The master plan builds on work already undertaken on light rail and integrated land use and transport planning, and delivers on government policies, including Transport for Canberra and the ACT Planning Strategy. Provision is being made for an alignment along Callam Street for light rail (Figure 17). (Emphasis added.)

981. The diagram was Figure 17 which was as follows:

982. Mr Georgalis said that on 22 December 2017 he executed the Joint Venture Agreement, the Development Management Agreement, the Development Agreement, the Agency Agreement and a building contract between GZ and Geocon Constructors (ACT) Pty Ltd.

983. Mr Georgalis said that as a property developer based in the ACT, he was particularly interested in capital works and infrastructure projects that had the potential to impact property values in and around Canberra, the demand for units in certain locations, and the overall viability of a current or future development and future locations which may be suitable for property development.

984. He said that the Canberra Metro Light Rail had been one such project of interest to him as indicated by the fact that a consortium of major local development firms (including Geocon) had made an unsolicited proposal to the ACT Government in 2014 that related to the redevelopment of land along the then proposed Stage 1.

985. He said that he was responsible for the strategic direction of developments by Geocon and was responsible for ensuring that each project was feasible, considered and ultimately viable.

986. He said that to keep himself informed of capital works, infrastructure projects and other matters that may have affected Geocon's current and future developments, he paid close attention to ACT and Commonwealth Government announcements, government budgets and election commitments and media articles on various property and infrastructure matters, as well as other matters including reports on ACT population growth and employment data.

987. He said that he paid particular attention to those matters that related to or may have impacted a project he was considering or was involved in developing. Accordingly, he said he had for many years subscribed to the Canberra Times, the Australian, the Daily Telegraph and the Australian Financial Review to keep abreast of relevant events and a portion of his day was spent reviewing those publications.

988. He said he also regularly networked with other members of the construction and property development industry and visited various parts of Canberra to obtain a firsthand understanding of the various town centres. He paid particular attention to things like vacancy rates of shop fronts, the number of people in the town centres, and the surrounding environment including new developments and new construction.

989. He said he used all of those information sources to better understand the Canberra and Australian property market and to inform his decisions as to current and future investments and developments.

990. I accept Mr Georgalis’ evidence of his general awareness, his knowledge of the Woden Town Centre Master Plan, the steps he took to become aware of issues relating to development and his motivations for doing so, although I do not accept his evidence that he paid close or particular attention for reasons which appear later. It is inherently probable that a person behind a group of companies undertaking substantial residential developments would, at least in general terms, keep abreast of matters which impacted his business.

991. Mr Georgalis said that by the time he executed the various agreements on 22 December 2017, and in relation to Stage 2 of the Canberra Metro Light Rail, he had read the following on or about the date each publication was made and relied on their contents in relation to the Light Rail Location Representations and the Travel Times Representations: (a) the Capital Metro Authority Canberra's Light Rail - Preliminary Heritage Assessment July 2014; (b) the Capital Metro Russell Extension Project dated 18 September 2015; (c) the ACTEW AGL- Canberra Metro Light Rail PowerPoint 10 dated 10 February 2017; (d) the Canberra light rail summary dated 1 May 2017; (e) the Light Rail Update dated 1 August 2017; (f) the Canberra Metro - Full Business Case 2017; (g) the 2017/18 ACT Government budget media release 'Better Transport and Infrastructure for Canberra'; (h) media articles and releases including: (i) a 2012 Katy Gallagher Publication titled 'Capital Metro Light Rail Project'; (ii) a news article in the Canberra Times on 1 September 2016 titled 'Labor announces light rail to go to Woden'; (iii) a news article published on the Australian Broadcasting Corporation website on 2 September 2016 titled 'Canberra light rail's second stage to link Woden and Civic, ACT Government says'; (iv) a news article published in the Canberra Times on 25 November 2016 in which the Minister for Transport, Ms Fitzharris is quoted as saying 'Civic to Woden is a certainty'; (v) a news article published in the Canberra Times on 18 December 2017 titled 'Canberra Hospital extension officially dropped for stage 2 of light rail'; (i) ACT Government publications, including: (i) the Light Rail Update issued by Transport Canberra in August 2017; (ii) 'Canberra's light rail network: taking you from the City to Woden (summary)' published by Transport Canberra on about August 2017; and (iii) 'Light Rail Stage 2 Newsletter' published by Transport Canberra on about May 2017.

992. Mr Georgalis accepted in cross-examination that the first of those documents, dated July 2014, said nothing about Stage 2 and was published before Stage 2 had been announced in September or October 2016. He agreed he could not have relied on that document. That is the first, but not the last, example of a lack of accuracy in his affidavit and which damaged his credit.

993. In relation to the second document, the Capital Metro Russell Extension Project dated 18 September 2015, again, this was published before Stage 2 had been announced. In relation to travel times, it spoke only of anticipated (and not actual) travel times and frequency of services for Stage 1 (being six minutes at peak times on weekdays, 10 minutes between 9am and 4pm weekdays, and 15 minutes at other times and weekends). Mr Georgalis agreed he did not rely on that document in relation to the Light Rail Location Representations. Nor could he have relied on it in relation to any other representation given its date.

994. In relation to the third document, the ACTEW AGL - Canberra Metro Light Rail PowerPoint 10 dated 10 February 2017, he agreed that it did not mention Stage 2 and he did not rely on it in relation to the Light Rail Location Representations. Nor could he have relied on it in relation to any other representation given it did not concern Stage 2.

995. Nor did he rely on the sixth document, the Canberra Metro - Full Business Case 2017, because, as he accepted in cross-examination, that document concerned Stage 1 and did not mention Stage 2 and he did not rely on it.

996. The sworn affidavit evidence of Mr Georgalis that he had relied on the first, second, third, and sixth documents from the list above, when he readily accepted in cross-examination that he did not, is damaging to his credibility. The concessions in cross-examination were obtained by simply taking Mr Georgalis to the documents concerned and pointing out their date and that they did not concern Stage 2, matters which would have been obvious to Mr Georgalis had he read the documents and if he had placed value on giving accurate evidence in his affidavit. It also provides a basis for not being able to rely on other evidence of Mr Georgalis.

997. Regarding credibility, Mr Georgalis presented as an intelligent witness and was generally cooperative with the cross-examiner and often answered direct questions with direct answers, but this was not always so and there were several topics of cross-examination where he often avoided answering discomforting questions directly. On those topics, he provided answers which, whilst partially responsive to the question, provided a slant or a colour to the facts which he thought might suit his position. An example was: So you understood that there had been no business case developed for light rail stage 2 by the time of this document?---I felt that some work had already been done on it, but - - HIS HONOUR: What’s the answer to the question, Mr Georgialis [sic]?---Sorry. Could you repeat the question, please? MS SHARP: So you understood from reading this document that the business case for stage 2 had not been developed yet?---That’s correct.

998. Returning to the narrative, in relation to the fourth document, the Canberra light rail summary dated 1 May 2017, Mr Georgalis did not identify in his affidavit which sentences or paragraphs in that document he read and relied on before the representations were made. It is not persuasive in a case like the present for a witness to say, on oath, that he relied on a document without identifying what part he relied on and why.

999. Mr Georgalis said that he was aware of the ACT Government’s past performance in delivering infrastructure projects, including, for example, delivering the Gungahlin drive extension after public protests and significant delays due to legal challenges.

1000. He said that based on the material I have identified above, and his experience, he believed in December 2017 that the Canberra Metro Light Rail would be extended to Woden Town Centre and would stop at, adjacent to, or proximate to, the Development. His belief, as I’ve said many times before, is irrelevant.

1001. Mr Georgalis said he had read the fifth document, Light Rail Update dated 1 August 2017. He said in cross-examination that he understood from that document that the design stage for Stage 2 had not commenced at that point, that community consultations had only recently been completed, the route for Stage 2 had not been decided and there remained a number of steps that need to be taken for Stage 2 to eventuate (such as the completion of the business case).

1002. Mr Georgalis then said in his affidavit that he had read the four media articles, and the 2012 publication identified at [991] above before he had executed the December 2017 agreements. He was cross-examined about how he was able to recall reading those articles (given his affidavit was affirmed some five and half years later). He responded as follows: And may I ask you how you now remember how you had read each of the documents by that time?---I remember particular elements about the documents and went back off my desktop or in the folders that I keep in my office, and also online where I would find the articles as I had remembered reading them and where.

1003. He was later cross-examined about the imprint 2/28/2019 which appeared on the Canberra Times article of 1 September 2016 he said he relied on (and the three media articles which followed it in his list). He gave the following evidence: See there is a date there that says '28/02/2019'?---Yes. That was the date you printed out this article, wasn't it?---Potentially. Yes, and that was a date after the - - HIS HONOUR: What do you mean potentially?---I don't know if that is the date I printed it out or not. Thank you, Ms Sharp. MS SHARP: This was after the Commissioner for Fair Trading had made inquiries of the Geocon related entities, wasn't it?---That's correct. [So] this was not a document that was held on the file you talked about yesterday at the time, was it?---As I – yesterday I stated that there [were] articles I had read, the files on my folder and files on a desktop, files online that I was aware of and had read that referred back to it. But there are little hole punch marks on this document, aren't there?---Yes. Well, I suggest that this date, that is 28 February 2019, was the first time you read and accessed this article?---That's not correct. Is that true?---That's true. Are you sure about that?---I am. Yes.

1004. I find this evidence unpersuasive for a number of reasons. That is, I am not persuaded that Mr Georgalis read, printed or relied on the article (nor the others bearing the same date), nor kept a hard copy or any electronic copy.

1005. First, there is no mention of the hard copy and computer folders in his affidavit, and this late appearing evidence damages Mr Georgalis’ credibility for reasons I’ve given earlier with reference to White v Shortall.

1006. Second, he could not recall when he printed those articles, yet it contains an imprint of a date “2/28/2019”. In my view it is more probable than not that the document was printed on 28 February 2019.

1007. Third, the four news articles were dated 1 and 2 September, and 25 November 2016 and 18 December 2017, being between approximately six to seven years before Mr Georgalis affirmed his affidavit. As with Messrs Skepev, Micalos and Stephens, he gave no evidence of having made any contemporaneous note of having read those articles, nor did he make any contemporaneous note of their contents. Mr Georgalis did not exhibit any contemporaneous communication that referred to him reading those articles. He gave no evidence in his affidavit that he contemporaneously saved them in either paper or electronic form. There was no metadata tendered to prove the date any relevant electronic file was created. No other witness corroborated his evidence that he read those articles, nor that Mr Georgalis had said at the time that he had read them.

1008. Fourth, 28 February 2019 was nine and ten days after the Commissioner’s s 52 Notices dated 18 and 19 February 2019 directed to Geocon Bowes, Zapari, GZ and GRE (asking identical questions in each), and directed to Mr Skepev, Geocon Group and Mr Georgalis personally (asking identical questions in each). Each of those parties provided a response, alone or jointly with others, dated 25 March 2019.

1009. In the letter to Mr Georgalis, the investigator asked:

State Nikolaos Georgalis’ basis for the claims on the Billboard that: (a) “YOUR CANBERRA METRO TERMINAL STOPS HERE”

1010. The answer provided dated 25 March 2019 by Meyer Vandenberg on behalf of Mr Georgalis was that that statement was an opinion (which was not any defendant’s case at the hearing before me) and that there was a reasonable basis for the opinion being: Light Rail Stage 2: (a) is supported by the Woden Master Plan, which indicates the route of Light Rail Stage 2 to be aligned along Callam Street; (b) has been the subject of public pronouncements by the ACT Government as to likelihood, location and route. For example: (i) on or about 25 November 2016, the Minister for Transport stated that light rail from Civic to Woden was ‘a certainty’’; (ii) on 11 May 2017, the Minister for Transport stated to the Legislative Assembly that ‘the design of the second stage of light rail will be integrated with the ongoing modernisation of the Woden Bus Interchange'; (iii) on 11 May 2017, the Chief Minister stated to the Legislative Assembly that ‘the Woden town centre and the significant opportunities that present themselves there for both the government and private sector owned urban renewal projects that will take place associated with stage 2 present an exciting opportunity for Urban renewal in the Woden town centre’'; (iv) in August 2017, a document entitled “Light Rail Update” published by the ACT Government stated the Government is committed to delivery of Stage 2 with a plan depicting a stop at Woden; (v) on 18 December 2017, an article commenting on the ACT Government’s findings from community consultation and technical analysis stated that the second stage of the light rail route would ‘terminate in Woden’; (vi) on 9 May 2018, the Minister for Transport stated to the Legislative Assembly that 'Transport Canberra and City Services is currently undertaking detailed planning for the design, development and approvals for the Woden light rail route for our preferred route through Parkes and Barton ...It is clear that Canberrans support light rail stage 2 to Woden ...I look forward to continuing to develop our plans for light rail to Woden’; (vii) between May 2018 and August 2018, in submissions from the ACT Government to the Joint Standing Committee on the National Capital and External Territories inquiry into Commonwealth and Parliamentary approvals for the proposed Stage 2 of the Australian Capital Territory light rail project, the ACT Government stated the route for Stage 2 would terminate at Woden Town Centre on Callam Street; and (viii) a document entitled “Light Rail Update” published by Transport Canberra and dated June 2018 states, at paragraph 3.1, that the second stage of the light rail route will terminate at Callam Street. Paragraph 4.1.14 of that document states that the second stage of the light rail project provides significant development potential for residential commercial and retail land in Woden and notes, at page 39, that developers are working on grand plans that promise hope to breathe new life into the area.

1011. The statements referred to in that letter in pars (b)(i) and (v) were footnoted in the letter, the source documents being the third and fourth media articles dated 25 November 2016 and 18 December 2017 Mr Georgalis had identified and which are listed at (h) in [991] above.

1012. Of the fifteen documents listed by Mr Georgalis (at [991] above) that he said he had relied on before the Promotional Materials were first published in relation to the Light Rail Location Representations (which includes the statement on the Billboards that “YOUR CANBERRA METRO TERMINAL STOPS HERE”), only three were mentioned in Meyer Vandenberg’s letter dated 25 March 2019 (the two media articles and the Light Rail Update dated 1 August 2017).

1013. Conversely, of the five public pronouncements that Meyer Vandenberg said Mr Georgalis had relied on for the statement “YOUR CANBERRA METRO TERMINAL STOPS HERE”, only two were mentioned in his affidavit (being statements from the media articles dated 25 November 2016 and 18 December 2017).

1014. Although the investigator’s letter to Mr Georgalis, and his solicitor’s response (as well as the investigator’s letters to the defendants and Mr Skepev and their solicitor’s responses), was part of the Commissioner’s documentary case tendered against the defendants, Mr Georgalis, being a director of three of the five defendants and being put forward as a reasonable grounds witness, gave no explanation for the differences between his affidavit and his solicitor’s responses to the investigator.

1015. What I am left with is an affidavit affirmed in 2023, more than five years after the Promotional Materials were first published, with uncorroborated assertions as to what was read and when, and which is not consistent with Mr Georgalis’ solicitor’s response to the investigator in important respects (which I note was much closer chronologically to the critical events and therefore likely to be more accurate if reliant on recollections).

1016. In cross-examination Mr Georgalis said he was aware of the investigator’s s 52 Notice dated 19 February 2019 addressed to himself personally. He agreed he had read it. He agreed that he was aware that there were penalties if he provided false and misleading information. He then gave evidence that he gave the letter to Geocon’s general counsel to respond on his behalf, with no instruction other than to “respond to this please” and without reading his solicitor’s response dated 25 March 2019.

1017. Whether that evidence was true or not, it displayed an indifferent attitude towards accuracy in responding to the investigator’s questions which were backed by statutory penalties for knowingly providing false or misleading information or documents in answer to those questions. That indifferent attitude to accuracy was displayed in parts of his affidavit that I have already commented on. That attitude is relevant to Mr Georgalis’ credit.

1018. In any event, I do not accept this evidence. The letter was directed to him personally, and the only person able to give instructions on factual answers to those questions was himself. For the general counsel (who would have held a practising certificate) or the solicitor from Meyer Vandenberg to have sent a letter providing factual answers on behalf of Mr Georgalis without any instructions from Mr Georgalis whether or not those answers were accurate, would be, one would think (without so finding) tantamount to professional misconduct. I find it far more likely that Mr Georgalis did give instructions on the content of the response, and I do not accept his evidence on this issue.

1019. Although this response on behalf of Mr Georgalis was part of the Commissioner’s documentary case, no evidence was called by any of the three corporate defendants of which Mr Georgalis was a director to the effect that this letter was not written on Mr Georgalis’ instructions or was in any way inaccurate.

1020. Fifth, Messrs Skepev, Micalos and Georgalis all exhibited copies of those articles which appear to be identical. Before turning to that evidence, I should note that the witnesses were not cross-examined on this apparent fact, and so I make no findings about it. However, what this evidence does do is to highlight the lack of independent or contemporaneous corroboration supporting the assertions of having read a long list of documents purportedly recalled after many years.

1021. The documents all contain the very same date imprint “2/28/2019” and appear to have been copied from the same master copy despite Messrs Micalos and Georgalis saying they obtained their own copies, and kept their copies in their own hard or soft copy files (Mr Skepev gave no evidence on that topic). The only discernible difference is perhaps in the imprints, or lack thereof, of hole punches, but the copies are insufficiently clear to determine whether that feature is identical.

1022. The identicalness of the copies is shown by, for example, parts of the documents which were not copied correctly. Take, for example, the ABC Online article of 2 September 2016 and the obscuring of the top part of the ABC logo and the word “NEWS”. What is apparent from the full sized versions in the Court Book, but which may not be from the reproductions below, is that the features of the cut-off logo circled by me in the below enlargement of the logo is the same for each of the documents exhibited to the three witnesses’ affidavits:

1023. The copy exhibited to Mr Micalos’ affidavit was:

1024. The copy exhibited to Mr Georgalis’ affidavit was:

1025. The copy exhibited to Mr Skepev’s affidavit was:

1026. As I have said, the witnesses were not cross-examined on this issue, and so I cannot make any findings of dishonesty or collusion or otherwise and do not do so, but it is striking that all three witnesses exhibited overwhelmingly identical copies of the very same four media articles they said they independently came across, independently read and independently relied on.

1027. Sixth, as I have mentioned earlier, Mr Georgalis accepted in cross-examination that, contrary to his affidavit, he had not relied on the first, second, third and sixth documents in his list set out at [991] above.

1028. It was put to Mr Georgalis that what really happened was that after the investigator’s s 52 Notices that I have recently referred to above, he looked for newspaper articles and government announcements which he thought might help establish reasonable grounds for the representation that the light rail would go to Woden. He disagreed with that proposition, but when asked how he remembered reading each of those documents before the representations were made, he said that he had recalled particular elements about the documents and went “back off my desktop or in the folders that I keep in my office, and also online where I would find the articles as I had remembered reading them and where”.

1029. I do not accept his evidence of having records on his desktop or in folders in his office. None of that evidence appeared in his affidavit, it was not corroborated, the folders and desktop were not tendered and Mr Georgalis’ evidence has the other credit problems I have mentioned. Given the date imprints on the documents, and their proximity to the investigator’s letters, I find that the documents were printed on the dates they bear and were downloaded from online resources (and not taken from any hard or electronic file) as the result of searching.

1030. In relation to the balance of the question, it is sufficient for me say that I am not persuaded by Mr Georgalis’ evidence that he read or relied on any of those articles.

1031. Obviously enough, it is inherently probable that Mr Georgalis knew, as most Canberrans would have known, that the Government had announced Stage 2 and had made various statements in relation to it from time to time. However, I can have no confidence in Mr Georgalis’ evidence that he did read, and did rely on, the particular documents, facts and circumstances he said he did in his evidence.

1032. Mr Georgalis was cross-examined about his alleged reading of the balance of the documents set out at [991] and various questions were put to him as to his subjective state of mind (or beliefs), whether those beliefs were irrational or unreasonable and whether he thought there was or was not a reasonable basis for the representations. Whatever the answers, none of that evidence is relevant. The relevant issues were whether the facts and circumstances were relied on and whether they supported the representations made.

1033. Returning to the narrative of Mr Georgalis’ evidence, about a month after signing the various agreements on 22 December 2017, the development application submitted by Zapari had been approved, subject to conditions. Mr Georgalis said he read the entire document, evidence which I find to be inherently probable and which I accept. He said that, in particular, he read the following: TRANSPORT CANBERRA AND CITY SERVICES DIRECTORATE (TCCS) … Light Rail On 5 January 2018, advice was received from Transport Canberra Light Rail, regarding the amended proposal lodged under s 144 C. The advice is that that there is currently a proposal to extend light rail to Woden which would include a terminus on Callam Street. This may impact on the road configuration in Woden and accessibility to the development site during construction. The development should also note the significance of the area as a transport interchange. Occupation of the existing bus interchange may drive additional changes to the road network to accommodate a revised interchange facility. Changes may need to be undertaken prior to removal of the current facility. Response - It is noted that a light rail terminus is proposed for Callam Street, and that changes may occur to the existing bus interchange. Other than for an area of land at the south west corner of Block 5, the proposal is for development of existing leased land, maintaining the presence of existing roads. Proposed retail / community use of the ground floor adjacent to the northern and southern frontages will re-enforce east - west pedestrian flow routes between the Woden commercial core and the transport facilities.

1034. Mr Georgalis said that having read that document, he believed that the Canberra Metro Light Rail route to Woden would include a terminus on Callam Street. He said that that document reinforced his understanding of other ACT Government publications that he had read at that time (and which I have identified above).

1035. Mr Georgalis said that he subsequently read Transport Canberra’s Light Rail Update June 2018. In his affidavit he specifically drew attention to two aspects of that document. The first was the cover page which included an artist’s impression of a light rail stop adjacent to the Land (because the Billboards can be seen adjacent to the light rail stop). Second, the document said: … the ACT Government's preferred alignment for the City to Woden extension, via Barton will ... [c]ontinue to Woden Town Centre via Adelaide Avenue, terminating at Callam Street (p 8) and Light rail results in the realisation of potential opportunities for development in Woden, subject to future decisions of government. Approximately 601,300m2 of residential land (4,070 dwellings), 679,000m2 of commercial land, 49,200m2 of retail land and 7,500m2 of community land could be developed as a result of light rail. (p 39)

1036. In cross-examination, Mr Georgalis said he read this document with care around the time it was published, including the page which said that key statutory approvals required but not yet obtained included those required under the EPBC Act, development approval under the Planning and Development Act, works approval by the National Capital Authority under the ACT Planning and Land Management Act and approval by both Houses of the Commonwealth Parliament as required under the Parliament Act.

1037. He accepted that he read:

The ACT Government expects to make its final investment decision in respect of the City to Woden light rail project once greater clarity is achieved as to the Australian Government’s support for the project and any associated planning requirements. Commonwealth planning constraints, particularly if they are of a fundamental nature to the project, may affect the economic, financial and operational viability of the project … (p 58)

1038. He accepted that having read that passage, he knew that there were some significant contingencies in terms of the light rail to Woden proceeding.

1039. Mr Georgalis said that he subsequently read eight ACT Government media releases dated between 14 August 2020 and 10 October 2022. Those documents are irrelevant to the reasonable grounds issue at least up until 14 August 2020 (when the first of those eight was published). It is only facts and circumstances in existence at the time a representation is made that is relevant to s 4 of the ACL and reasonable grounds.

1040. He also identified three other documents. An ACT Government Update dated March 2023, an ACT Government website and several photographs shown to him at the time he affirmed his affidavit (9 May 2023). None of those documents are relevant for the reasons given above.

1041. In relation to the Travel Times Representations, it was Mr Georgalis who said in the Promotional Video that the travel time from the Land to Canberra City on the light rail would be under 10 minutes and/or that the light rail service would provide light rail every 5 minutes between Woden Town Centre and Canberra City.

1042. As mentioned earlier, Geocon Bowes, GZ and GRE accepted there were no reasonable grounds for the representation that the travel time from the Land to Canberra City on the light rail would be under 10 minutes, and Mr Georgalis had no reasonable grounds evidence in relation to that representation.

1043. As for the five minute frequency representation, in his affidavit he said that he relied on the ACT Government publications (identified at [991] above) which he said estimated the frequency of services during peak travel periods, and which included estimates of five and six minutes, and which said that when completed the light rail would be fast and frequent.

1044. What he did not say in his affidavit, is that all of the documents he relied on prior to the publication of the Promotional Material related to Stage 1 and not Stage 2. In cross examination, but not in his affidavit, he said that he relied on the frequency of Stage 1 services (which had not been completed until well after the Promotional Materials were first published) as a “generalised position” of the frequency of light rail in Canberra.

1045. His evidence that he genuinely relied on all 15 of the documents listed above at [991] before the Representations were made is patently inaccurate and damages his credit for the simple reason that only four of the 15 mentioned frequency of services, and then only in relation to Stage 1.

1046. The Capital Metro Authority Canberra's Light Rail - Preliminary Heritage Assessment July 2014 said: The project is anticipated to operate … at a frequency of at least ten minutes between 7 am and 6pm on weekdays, 15 minutes at other times and on Saturdays and 20 minutes on Sundays. Additional frequency may be accommodated at busy times if patronage requires it. The fleet of 14 low floor LRVs is sized to allow 5-minute frequency.

1047. The Capital Metro Contract Summary June 2016 said intervals (or frequency) for Stage 1 services were six minutes at their shortest, and 15 minutes at their longest. The Capital Metro Full Business Case 2017 said intervals would be 10 minutes at core times, and 15 minutes at other times. Five minute intervals would operate at peak times “if deemed necessary”. The third document, the ACTEW AGL - Canberra Metro Light Rail PowerPoint 10 February 2017, said “Services every 10 mins (5 min peak)”.

1048. Only one document related to Stage 2, and that was the Light Rail Update of June 2018 published three months after the Promotional Video was published. That document did not say services would have a frequency of every five minutes. Rather, it said: Services operating at least every 6 minutes in peak periods and every 10 minutes between 7.00 am and 6.00 pm on weekdays and outside of those periods running at least every 15 minutes.

1049. Mr Georgalis agreed that the best indication that the Government was giving in June 2018 as to the frequency of Stage 2 services was not five minutes, yet he said that there was a (rational) basis for his representation as to five minutes. That answer is not relevant to reasonable grounds but is relevant to credit.

1050. Mr Georgalis was obviously an intelligent man, his businesses would not have been as successful as they have been otherwise, and his demeanour whilst giving evidence was that of an intelligent person. Yet, the proposition that it was rational for him to represent a frequency of five minutes based only on reports concerning an uncompleted Stage 1 and predictions which, at their highest, suggested the possibility of five minute frequency at peak times alone, was, in my view absurd.

1051. The absurdity of some of his answers on this topic was further demonstrated by his purported recollection and reliance on the Capital Metro Authority Canberra's Light Rail - Preliminary Heritage Assessment July 2014. I have quoted the relevant extract from that document above.

1052. When cross-examined about that statement Mr Georgalis said: I can't interpret that completely [meaning the copy he was shown was not a clear copy] but it does refer to a 5 minute frequency.

1053. To suggest, as he did, that he truly relied on the statement that the LRVs (which I infer meant light rail vehicles proposed for Stage 1 and, by extension, Stage 2) “allowed” for five minute frequency (not that there would be a five minute frequency), whilst the statement clearly said elsewhere that what was proposed was a 10 minute frequency, was also absurd.

1054. I observed Mr Georgalis to often be evasive in cross-examination, sometimes subtly so, and would often avoid providing direct answers to direct questions. An example was when he was cross-examined on the Marketing Team producing marketing material for GRE. There was a (legitimate) objection, and some discussion in front of the witness about that objection, which was followed by: I am just going to ask my question again. The marketing team and Mr Micalos prepared marketing material for GRE Sales to use while it marketed the development, correct?---Well it was marketing the units of the development.

1055. At the time of that question and answer Mr Georgalis was clearly aware of the Commissioner’s allegation that the Geocon Group Marketing Team had been hired to GRE, and thus whatever the Marketing Team did was done on behalf of GRE. At the time I had the real sense that he was seeking to evade answering the question directly.

1056. In cross-examination by senior counsel for GZ (of which Mr Georgalis was a director), a party which led no affidavit evidence from Mr Georgalis, he was asked a series of questions and gave answers to the effect that Geocon had undertaken developments in many areas of Canberra in which the government of the day had made infrastructure commitments, and it was “unheard of” for the government to change its mind in relation to those commitments.

1057. The evidence was potentially relevant in the sense that although the question whether a representor had “reasonable grounds” is an objective rather than subjective one, the courts generally consider the position of the representor, including the representor’s knowledge, experience and expertise, in considering whether the representor had reasonable grounds for making a particular representation: see Bowes St (No 2) at [21]. This evidence may have fallen within the expressions “knowledge, experience and expertise”.

1058. However, none of that evidence was included in his affidavit, and it was elicited in cross-examination by a party of which he was a director and after the Commissioner had concluded her cross-examination. In my view that evidence was important evidence which only emerged late in the course of evidence. Perhaps more importantly, it lacked any detail as to the particular infrastructure projects Mr Georgalis was referring to and without any opportunity being given to the Commissioner to prepare her answer to that evidence.

1059. The fact that GZ was not the party which called Mr Georgalis elevates form over substance. Mr Georgalis was a director of GZ and GZ was perfectly at liberty to put on an affidavit by Mr Georgalis setting out that evidence if it had chosen to do so. In addition, that evidence would have assisted all other defendants, and most particularly the party that called him, Geocon Bowes, were it to be given any weight.

1060. I allowed the evidence, but the fact that it appeared when it did further damaged Mr Georgalis’ credibility. In this case I think I am justified in assuming that Geocon Bowes’s solicitors properly proofed Mr Georgalis, obtained from him all relevant details of the story relevant to the case, and included that material in his affidavit in chief. I do not find the evidence to be credible and I give it no weight.

1061. In relation to the Rental Yield Representations, Mr Georgalis said he was not involved with the assessments that generated the 7 percent rental yield figure, although he was aware of the representations being made to that effect.

1062. He said that he saw the 2017 LJ Hooker appraisals, and “believed” that 7 percent rental yield “was achievable” based on: (a) his understanding that rental yield was calculated by dividing the annual rent by the purchase price; (b) the anticipated rents were assessed by LJ Hooker as at 2017 and 2018 and did not make an assessment of the anticipated rent when the Development was anticipated to be completed and Units available to be rented in 2020 or 2021; and (c) his experience with previous developments including the fact (or, more accurately, bald assertion) that units in previous developments “in most cases exceeded the predicted rental yields”.

1063. This evidence was entirely unpersuasive.

1064. Taking the three matters in turn, first, the formula proves nothing.

1065. Second, accepting the 2017 LJ Hooker appraisals were given for rents in 2017, and the Development would not be completed until 2020/2021, he gave no evidence of facts and circumstances existing at the time the Rental Yield Representation was made that, when the Development was completed (which is obviously when rental yield would become relevant to purchasers) rents would be such that yields would be 7 percent.

1066. Third, there was no evidence provided as to the previous developments (which were in areas other than Woden) and their expected and actual yields, which might provide some indication that those facts, if true and accurate, might provide a reasonable, objective basis for the Rental Yield Representation.

1067. In conclusion, I have identified the evidence of Mr Georgalis which I accept, but otherwise I do not accept his evidence unless it is uncontroversial or is corroborated by other, independent, objective or contemporaneous evidence. In the event, in relation to the documents facts and circumstances he said he read and relied on before the Representations were made, it was not uncontroversial, there is no corroboration for it and I do not accept it.

Who made the representations

1068. The Commissioner’s primary case was that GRE published the Promotional Materials. Her alternative case was that Geocon Group published them.

1069. Geocon Group was not a party to the proceedings.

1070. GRE denied publishing the Billboards, the Flyer, the Promotional Emails, the Promotional Video or the Real Estate Website Advertising. It accepted publishing the Brochure by handing copies of it to consumers.

1071. GRE accepted that the Flyer was provided in hard copy by agents at the sales suite, and by email by the sales agents. GRE submitted that those actions fell outside the pleaded case which was that the Flyer was made available in media including newspapers and electronically to sales agents to distribute. I have found below that GRE published all of the Promotional Materials for reasons which have the consequence that I need not resolve the pleading issue raised.

1072. There are three categories of evidence relevant to the question of who published the Promotional Materials (and made the Representations to consumers): the suite of agreements executed on 22 December 2017 and, particularly, the proper construction of the Agency Agreement; certain answers provided to the Commissioner’s investigator before the commencement of proceedings; and the evidence of Messrs Georgalis and Micalos.

1073. I should note that Mr Stephens gave some slight evidence relevant to the question, but its weight was far outweighed by the evidence I shall refer to hereunder. That is because Mr Stephens was primarily involved with sales (being a licensed real estate agent) rather than marketing. He gave some evidence as to what sales agents were trained and directed to do with the various Promotional Materials made available to them, but I need not explore that evidence. The 22 December 2017 Agreements

1074. I have mentioned earlier the suite of agreements that were entered into on 22 December 2017. Four of those agreements are relevant to the question of who made (or published) the representations, namely the Joint Venture Agreement, the Development Agreement, the Development Management Agreement, and the Agency Agreement.

1075. The parties to the Joint Venture Agreement were Messrs Georgalis and Skepev, their private development vehicles being Geocon Bowes and BSD respectively, and the special purpose vehicle utilised by Messrs Georgalis and Skepev to undertake the Development, namely GZ. This agreement governed their joint venture and provided for how control would be exercised over the project and the division of profits. Geocon Bowes and BSD each owned one of two issued shares in GZ, with the directors being Messrs Georgalis and Skepev.

1076. Annexure A to the Joint Venture Agreement was the Development Management Agreement. Annexure B was the Development Agreement and Annexure C was the Agency Agreement.

1077. In the Joint Venture Agreement, the term “Agency Agreement” was defined to be the agreement between GZ and the Sales Agent to perform the Agency Services in the form of Annexure C. “Sales Agent” was defined to mean GRE. “Agency Services” was defined to mean the services of the sales agent as more accurately described in the Agency Agreement.

1078. Clause 3.3 said that BSD and Geocon Bowes appointed GZ as their nominee to carry out the project and GZ agreed to that appointment in accordance with the terms and conditions of that agreement.

1079. Clause 3.5 said that GZ agreed to appoint GRE to carry out the “Agency Services” under the Agency Agreement. Clause 3.11(d) said that the role and responsibility of GRE was to “sell the Units”.

1080. Clause 26 related to the Project Control Group (the PCG). This was the primary mechanism by which the joint venture partners (BSD and Geocon Bowes) would make decisions and exercise control over the project and the various corporations involved.

1081. Clause 26 said that the PCG would consist of two members, being one representative appointed by Geocon Bowes and one representative being appointed by BSD. Clause 26.1(b) said that Mr Georgalis had been appointed as Geocon Bowes’s representative, and Mr Skepev as BSD’s representative. Clause 26 and other clauses governed how the PCG would operate, but relevantly for this case, cl 26.4 provided that the PCG would provide the development manager (Geocon Bowes) with “guidance and direction in respect of” Project Control matters. Clause 20 said that the board of directors of GZ would comply with any directions of the PCG (so far as those directions related to the Development).

1082. More will need to be said about the PCG later.

1083. The parties to the Development Agreement were the owner of the land (Zapari), the developer (GZ), Pari Pari Pty Ltd (whose role may be ignored) and the two development vehicles (Geocon Bowes and BSD). Inter alia, this agreement governed the relationship between the developer, the owner of the land and Geocon Bowes and BSD.

1084. Clause 13.1 said that GZ would engage GRE to “market the Units for sale”. Clause 13.2 said that all commissions, advertising and marketing costs and expenses incurred in engaging the Sales Agent would be “Project Costs”. “Project Costs” were defined to mean the costs of the project incurred by or which were for the account of GZ.

1085. Clause 17.2 provided for a fee to be paid to GZ for undertaking the Development.

1086. As Zapari owned the Land, so it would own all the Units after the Land had been strata titled and thus, absent a different contractual arrangement, would be entitled to all proceeds on sale of the Units. Clause 18 governed the distribution of the proceeds of sale of the Units so that all proper costs were paid and the profits would find their way to Geocon Bowes and BSD. Inter alia, this clause provided that Zapari and GZ agreed that GRE would receive its fees and commissions from the sale proceeds.

1087. The parties to the Development Management Agreement were GZ and Geocon Bowes. Under this agreement Geocon Bowes agreed to be the development manager. As such, it would be, for a fee, managing and co-ordinating the development including dealing with funding, engineering the design, managing the builder, the necessary approvals and like matters. Included in the list of services to be provided by Geocon Bowes was “management of sales”.

1088. Clause 3.8 of the Development Management Agreement said that Geocon Bowes would coordinate the sales management process by, in accordance with directions from the PCG, developing a pricing strategy, managing GRE, liaising with GRE on offers, exchanges and market feedback, and facilitating the preparation and exchange of contracts for sale.

1089. The parties to the Agency Agreement were Zapari (the Landowner), GZ (the Principal) and GRE (the Agent). Signatures were appended in the two-page Schedule to the Agency Agreement. In that Schedule, Mr Skepev signed on behalf of the Landowner, Mr Georgalis on behalf of the Principal, and then Mr Georgalis signed again underneath the printed words “Geocon Group Pty Ltd”. Those printed words were accepted to be an error by all relevant parties who accepted that the words should have been GRE Sales Pty Ltd.

1090. The Introduction to the Agency Agreement said: A. The Agent carries on the business of a real estate agency. B. The Landowner is the registered proprietor of the Property. C. The Landowner has appointed the Principal to undertake the Development. D. The Principal has agreed to retain the Agent on the terms of this Agreement to market and negotiate the sale of the Property.

1091. Clause 4.1 said that the Agent must act as the Principal’s agent in relation to all matters involved with the sale of the Property including marketing the Property. Clause 4.2(a) said that the Agent must promote and market the Property at its sole discretion and cost unless otherwise specified in the Agency Agreement.

1092. Clause 4.2 went on to say that GZ authorised GRE to communicate information that it provided to GRE regarding the Units to prospective buyers, and that that information would be accurate.

1093. Other clauses in the Agency Agreement authorised the Agent to offer the Units for sale, accept holding deposits and to exchange contracts for sale in certain circumstances. Clause 5 provided that the Agent’s selling fee was to be calculated in accordance with the Schedule.

1094. Clause 6 was headed “MARKETING”. Clause 6.1 said that the Agent “[w]ill market the Property in accordance with the Schedule”. Clause 6.2 said that the Agent’s marketing fee was to be calculated and paid in accordance with the Schedule.

1095. In addition to the signatures and some other information, the Schedule contained a box headed “Services (clause 4)” after which appeared the words “[s]ervices set out in clause 4” (cl 4 included marketing).

1096. Also in the Schedule was a box “Marketing (clause 6)” after which appeared the words: Marketing will be performed by the Principal and no marketing fee to be paid [sic] by the Principal in addition to the Commission Percentage.

1097. Geocon Bowes and GRE placed much emphasis on the “Marketing (clause 6)” entry quoted above in support of their submission that GRE was not contracted to market the Units.

The proper construction of the Agency Agreement

1098. The general principles to apply when interpreting commercial contracts are well known. In The J & P Marlow (No 2) Pty Ltd v Hayes and McCabe [2023] NSWCA 117; 112 NSWLR 29, Meagher and Kirk JJA summarised the principles as follows: [89] Four members of the High Court summarised the core principles of construction of commercial contracts as follows in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35] : (1) The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. (2) That requires consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. That, in turn, is facilitated by an understanding of the genesis of the transaction, the background, the context and the market in which the parties are operating. (3) Unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption that the parties intended to produce a commercial result. The contract is to be construed so as to avoid it making commercial nonsense or working commercial inconvenience. [90] Put simply, as Gageler, Nettle and Gordon JJ stated in Simic v New South Wales Land and Housing Corp (2016) 260 CLR 85; [2016] HCA 47 at [78], the “proper construction of [a contract] is to be determined objectively by reference to its text, context and purpose” (citation omitted). Inherent in recognition of the importance of context and purpose is that the construction adopted may depart from the literal or ordinary meaning of the words employed. Gibbs J, for example, indicated as much in Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99; [1973] HCA 36 (ABC v APRA; at 109, citation omitted): if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, “even though the construction adopted is not the most obvious, or the most grammatically accurate”… Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument.

1099. The issue is one of construing the meaning of the word “Principal” where that word first appears in one particular place, namely next to the box “Marketing (clause 6)” in the Schedule (quoted above at [1096]).

1100. That issue is one of construction of the Agency Agreement rather than being an issue as to the identification of the parties to a contract, for two reasons.

1101. First, because there was no dispute that Zapari, GZ and GRE were all parties to the Agency Agreement. The dispute was whether the contractual obligation to market was contractually placed on GRE or GZ, and that came down to a construction of the terms of the contract which included the Schedule.

1102. Second, because the proper identity of parties identified in a contract may be a matter for construction (as distinct from rectification): Simic v New South Wales Land & Housing Corporation [2016] HCA 47; 260 CLR 85 per French CJ at [10] and per the reasoning process of Gageler, Nettle and Gordon JJ.

1103. The Commissioner, BSD and Zapari submitted that on the proper construction of the Agency Agreement, “Principal” (where it first appears next to the box “Marketing (clause 6) in the Schedule) was a mistake and should have been “Agent”. All other defendants submitted to the contrary.

1104. The issue invokes what is sometimes referred to as construction by rectification, although some senior jurists have described that label as confusing and suggesting it be eschewed because there is no “rectification”, as that term is used in equity, involved. Rather, it is the application of the usual canons of construction overlaid with a few additional considerations in circumstances where it is recognised that the drafting of a contract has miscarried.

1105. Geocon Bowes said that this issue had not been pleaded, although it was raised by two defendants and there were no pleadings between those defendants. I do not think it was a matter that needed to be pleaded. The proper construction of the Agency Agreement was always in issue, and “construction by rectification” is simply an aspect of construction at common law in particular circumstances.

1106. Its modern day source is often cited as the joint judgment of Dixon CJ and Fullagar J in Fitzgerald v Masters (1956) 95 CLR 420 in which their Honours said at 426-427: Words may generally be supplied, omitted or corrected, in an instrument, where it is clearly necessary in order to avoid absurdity or inconsistency.

1107. In Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liquidation) [2019] NSWCA 11; 99 NSWLR 317; (Seymour) Leeming JA (Payne and White JJA agreeing) described the position as follows: [6] At common law, if the error is clear, and it is also clear what a reasonable person would have understood the parties to have meant, then the mistake may be corrected as a matter of construction. This is old law. Lord St Leonards said in Wilson v Wilson (1854) 5 HL Cas 40 at 66-67; 10 ER 811 at 822: “Now it is a great mistake if it is supposed that even a Court of Law cannot correct a mistake, or error, on the face of an instrument: there is no magic in words. If you find a clear mistake, and it admits of no other construction, a Court of Law, as well as a Court of Equity, without impugning any doctrine about correcting those things which can only be shown by parol evidence to be mistakes - without, I say, going into those cases at all, both Courts of Law and of Equity may correct an obvious mistake on the face of an instrument without the slightest difficulty.” [7] Examples may be found in linguistic errors, such as “inconsistent” being read as “consistent” in Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53, or conceptual errors, such as “lessor” being read as “lessee” in McHugh Holdings Pty Ltd v Newtown Colonial Hotel Pty Ltd (2008) 73 NSWLR 53; [2008] NSWSC 542. The language of a contract is not read like a computer program, such that any slip is fatal. [8] Two conditions are necessary in order to correct the contractual language in this manner: (a) that the literal meaning of the contractual words is an absurdity and (b) that it is self-evident what the objective intention is to be taken to have been: see Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 at [117]-[119], approving National Australia Bank Ltd v Clowes [2013] NSWCA 179; 8 BFRA 600, where it was stated at [34]: “Where both those elements are present ... ordinary processes of contractual construction displace an absurd literal meaning by a meaningful legal meaning.” [9] Likewise, in the United Kingdom, the court must be satisfied both as to the mistake and the nature of the correction: Pink Floyd Music Ltd v EMI Records Ltd [2010] EWCA Civ 1429; [2011] 1 WLR 770 at [21] (Lord Neuberger); Arnold v Britton [2015] AC 1619; [2015] UKSC 36 at [78] (Lord Hodge). [10] The court must be satisfied of those matters to a high level of conviction. To use the language of Dixon CJ and Fullagar J in Fitzgerald v Masters at 426-427, it must be “clearly necessary in order to avoid absurdity or inconsistency”. As this Court said in Miwa Pty Ltd v Siantan Properties Pty Ltd [2011] NSWCA 297 at [18], the test of absurdity is not easily satisfied. Any question of absurdity or inconsistency must be identified according to established principles, by reference to the text of the agreement as understood in its factual and legal context: Wyllie v Tarrison Pty Ltd [2007] NSWCA 184 at [46]; Newey v Westpac Banking Corporation [2014] NSWCA 319 at [85]. Courts which are asked to delete, insert or rewrite part of a contract because of what is said to be an obvious error should bear steadily in mind that imperfections and infelicities and ambiguities in contractual language commonly reflect the give and take of negotiations, or the parties’ appreciation that some obscurities are incapable of resolution. As Lord Hoffmann explained, the court does “not readily accept that people have made mistakes in formal documents”: Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101; [2009] UKHL 38 at [23].

1108. Those principles were expressly approved in Perpetual Ltd v Myer Pty Ltd [2019] VSCA 98 (Whelan, Niall and Hargrave JJA) at [123] and applied in SSABR Pty Ltd v AMA Group Limited [2024] NSWCA 175 per Stern JA (Ward P and Price AJA agreeing) at [129]- [131].

1109. Documents or agreements executed reasonably contemporaneously and forming part of the same overall transaction may be relied upon as an aid to construction: Seymour at [10]; Golden Mile Property Investments Pty Ltd (In liq) v Cudgegong Australia Pty Ltd [2016] NSWCA 224; 18 BPR 36,121 per Ward JA at [67] (Basten and Meagher JJA agreeing). This is so even if the agreements are between different parties: McVeigh v National Australia Bank Ltd [2000] FCA 187; 278 ALR 429 [30]–[34], [77].

1110. Geocon Bowes’ submission to the effect that these agreements were inadmissible extrinsic evidence cited Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 (Codelfa) at 347, 352, 358 (Mason J) and Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1; 275 CLR 165 (Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd) at 415-16, [43]-[44] (Kiefel CJ, Keane and Edelman JJ). In my view neither of those authorities support the submission.

1111. In Codelfa, Mason J expressly allowed for the admission of surrounding circumstances (which is how I treat the agreements executed contemporaneously and forming part of the same overall transaction). Mason J said at 347: The broad purpose of the parol evidence rule is to exclude extrinsic evidence (except as to surrounding circumstances), including direct statements of intention (except in cases of latent ambiguity) and antecedent negotiations, to subtract from, add to, vary or contradict the language of a written instrument … (Emphasis added.)

1112. At 352, Mason J said that evidence of surrounding circumstances was admissible in certain circumstances, as were facts existing when the contract was made when known to both parties. His Honour said: The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.

1113. The Court of Appeal in SSABR Pty Ltd v AMA Group Limited [2024] NSWCA 175 per Stern JA (Ward P and Price AJA agreeing) at [132] also considered that evidence of surrounding circumstances was admissible in such circumstances.

1114. The passages cited from Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd do not support the submission made.

1115. In my opinion, viewed in its context, the literal meaning of the word “Principal” where first appearing in the box next to Marketing (clause 6) in the Schedule is an absurdity and it is self-evident that what was intended was the word “Agent”.

1116. As the High Court said in Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; 251 CLR 640 at [35] (French CJ, Hayne, Crennan and Kiefel JJ): A commercial contract is to be construed so as to avoid it “making commercial nonsense or working commercial inconvenience”.

1117. The draft Agency Agreement annexed as Annexure C to the Joint Venture Agreement was in the same form as that signed. That is, in the Schedule next to “Marketing (clause 6)” appeared the words “[m]arketing will be performed by the Principal and no marketing fee to be paid [sic] by the Principal in addition to the Commission Percentage”. Of note is that neither Zapari nor GRE were parties to the Joint Venture Agreement.

1118. The parties to the Development Agreement included Zapari (whose land was being sold), GZ and its two shareholders, Geocon Bowes and BSD. Clause 13.1 of that agreement said that the parties agreed that GZ would engage GRE to “market the Units for sale” and cl 13.2 said that all commissions, advertising and marketing costs and expenses incurred in engaging the Sales Agent would be “Project Costs”.

1119. Geocon Bowes places some emphasis on the words in cl 13.1 that the engagement was to “market the Units for sale”, and that what those words meant was that GRE was to sell the Units, not to undertake general marketing in relation to the Development. I do not agree. That construction, in substance, seeks to ignore the word “market”, and it is a canon of construction that all words to a contract should be given some operation if possible. Such a construction would also render otiose the words “marketing costs” in cl 13.2, and the word “marketing” in cl 30.4 and cl 6 of Schedule 1.

1120. The more natural, ordinary meaning of the words “to market the Units for sale” is that “to market” was the activity contemplated, with the stated aim being the sale of the Units.

1121. Prima facie, there was an inconsistency in the Development Agreement between the “Marketing (clause 6)” entry in Annexure C to the Joint Venture Agreement (being the draft Agency Agreement), and the express agreement found in the terms of that Agreement between the landowner, developer and the developer’s two shareholders that GRE would be engaged by GZ to market the Units.

1122. The Development Management Agreement says nothing relevant to the question at hand.

1123. In the Agency Agreement itself, the word “Principal” in the place indicated also gives rise to inconsistencies with other provisions of that Agreement.

1124. The Agency Agreement provided in its Introduction that GZ had agreed to retain GRE to “market and negotiate the sale” of the Units. Clause 4.1 said that GRE must act as GZ’s agent in relation to all matters involved with the sale of the Units including marketing the Units. Thus, the Introduction and cl 4.1 were consistent with cl 13.1 of the Development Agreement.

1125. Clause 4.2(a) of the Agency Agreement said that GRE “must” promote and market the Units.

1126. GRE was directed as to what it was expressly authorised to do in cls 4.1-4.3, with several instructions as to how things were to be done, and several restrictions imposed on how things were not to be done.

1127. Clause 4.2(c) said that GZ authorised GRE to communicate information that GZ provided to GRE regarding the Development to prospective buyers and buyers of the Units, unless GZ expressly advised GRE to the contrary.

1128. GZ warranted in cl 4.2(d) that the information that it provided to GRE regarding the Units and the Development was accurate and, per cl 4.2(e), GRE would not be liable for any loss or damage suffered by GZ in connection with the disclosure of information by GRE pursuant to cl 4.2(c) and (d).

1129. Section 6, headed “MARKETING”, said that GRE would “market” the Units in accordance with the Schedule.

1130. There was no dispute that GRE was appointed as the sales agent under the Agency Agreement and was to be paid commissions on those sales.

1131. Viewed against those facts, the sentence in the box next to “Marketing (clause 6)” is entirely inconsistent with many clauses in the Agency Agreement and clauses in the Development Agreement.

1132. It also appears to be literally absurd. That is, it literally said that marketing would be performed by GZ, and no marketing fee was to be paid by GZ in addition to the Commission Percentage. If it was meant that GZ would undertake marketing for no fee, it is absurd for this wording to speak of a marketing fee paid by GZ, rather than to GZ.

1133. Further, the sentence said that “[m]arketing will be performed by the Principal and no marketing fee to be paid [sic] by the Principal in addition to the Commission Percentage.” The second half of that sentence commencing after “Principal” where first used makes complete sense if the first “Principal” should have been “Agent”, but makes little sense otherwise. That is, if marketing was to be performed by the Principal, why does the balance of the sentence concern itself with what is to be paid to the Agent.

1134. One surrounding circumstance known to all of the parties to the Agency Agreement at the time of its execution, and which I may take into account, was that GZ had no employees. How then, rhetorically speaking, was it to market the Units?

1135. Other surrounding circumstance known to the parties was that whilst GRE had no employees, Geocon Group had an agreement with GRE for Geocon Group to labour hire its employees (in this case the Marketing Team) to other Geocon entities (in this case GRE) so that, as Mr Georgalis said in his affidavit, the other entities could perform their functions. This was known to Mr Georgalis, who was a director of GRE and GZ, and was known to Mr Skepev, the director of Zapari and the other director of GZ.

1136. Mr Skepev said in his affidavit that he was: … interested in Georgalis' in-house sales and marketing team as he was looking to recruit two agents from Independent Property Group, Adam Morgan (Morgan) and Matthew Nicholls (Nicholls), who I know were two of the highest selling agents in the Woden and Canberra region. I considered that if Morgan and Nicholls were going to come on board then that would be a reason to use Georgalis' in-house sales team ... In or around mid-December 2017, these discussions between Georgalis and I ultimately led to an understanding between us that we would undertake a joint venture in respect of the development of the Land. Zapari would make available the Land and the entities owned or controlled by Georgalis would take on the roles of joint developer, builder, development manager and sales and marketing agent. (Emphasis added.)

1137. GZ was not an entity owned or controlled by Mr Georgalis, but GRE was. Hence, when Mr Skepev was speaking of sales and marketing being done by an entity owned or controlled by Mr Georgalis, he was not referring to GZ. This must also have been known by Mr Georgalis, and therefore to all of the parties to the Agency Agreement.

1138. The background and context of the Agency Agreement points strongly toward GRE being the party required to do the marketing. In addition, the market in which the parties were operating points toward the same result. GRE was a real estate agent, whilst GZ was not. In the real estate market, it was more logical for GRE to undertake the marketing to the consumers who would then negotiate with GRE in relation to sales, rather than for GZ to undertake the marketing. Mr Stephens, a director of GRE, was a licensed agent, and GRE hired the Marketing Team from Geocon Group.

1139. I am satisfied, to the necessary high level of conviction, that the literal meaning of the word “Principal” in the place indicated is an absurdity and it is clear what the parties’ intentions were.

1140. The proper construction of the Agency Agreement is that the word “the Principal” in the Schedule where it first appears in the sentence next to “Marketing (clause 6)” should be understood as meaning “Agent”. That sentence should read: Marketing will be performed by the Principal Agent and no marketing fee to be paid [sic] by the Principal in addition to the Commission Percentage.

1141. That construction is more consistent with the balance of the terms of the Agency Agreement and in particular cl 4.1. It is consistent with the Development Agreement and in particular cl 13.1, under which GZ had agreed with its shareholders and the landowner that it, GZ, would engage GRE to market the Units. The fact that cl 4.2(a) of the Agency Agreement said that GRE would market the Units at its own cost is consistent with the interpretation I have given to the Marketing (clause 6) entry.

1142. Determined objectively, by reference to its text, context and purpose, the proper construction of the Agency Agreement must depart from the literal meaning of the word “Principal” when first appearing in the Marketing (clause 6) entry to avoid inconsistency with the balance of the terms of that agreement and the terms of the Development Agreement. It appears to me that the word “Principal” was a typographical error, just as there was the other typographical error in the Schedule where Mr Georgalis signed underneath the printed words “Geocon Group Pty Ltd”, whereas the words “GRE Pty Ltd” should have appeared. I note that this typographical error also appeared in the draft Agency Agreement being Annexure C to the Joint Venture Agreement.

1143. GRE made a number of submissions to the effect that Mr Stephens gave evidence he had nothing to do with the Marketing Team, he did not direct or control them. There was also some evidence from Mr Stephens that GZ paid the bills of the external agencies engaged to assist with marketing. These facts are not relevant to the construction argument because the conduct of parties is not admissible when interpreting clauses in an agreement: C H Magill & 1 Or v National Australia Bank Ltd [2001] NSWCA 221 per Ipp AJA (Meagher and Heydon JJA agreeing) at [51]-[53].

1144. In addition, Mr Stephens was but one officer of GRE. The other was Mr Georgalis who did control and direct the Marketing Team (or had the ultimate authority to do so) as the sole director of the company that employed the Marketing Team and who arranged for them to be hired to GRE.

1145. My conclusion is that GRE was contracted under the Agency Agreement to market the Units for sale. That conclusion is relevant to two issues in the case: who published the Promotional Material, and, if that was GRE, was GRE doing so as agent for GZ.

1146. The proper construction of the Agency Agreement is relevant to the first issue because the finding that GRE was contracted to market the Units is a fact which could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding, namely, whether GRE in fact published the Promotional Material. I shall now turn to the other evidence bearing on that issue.

1147. The second of those issues, whether GRE was the agent of GZ, is addressed later in this judgment.

The answers to the s 52 Notices

1148. The evidence referred to in this section of the judgment is not evidence I have taken into account on the proper construction of the Agency Agreement as it is not admissible for that purpose. Rather, it is factual evidence relevant to determining what actually occurred.

1149. The proceedings were commenced on 22 August 2019.

1150. As I have mentioned previously, prior to the commencement of the proceedings, the Commissioner’s investigator issued various s 52 Notices to the parties and associated entities and persons.

1151. On 25 March 2019, Meyer Vandenberg, then acting for GZ, Geocon Bowes, GRE and Zapari, responded on behalf of each of those parties to a s 52 Notice issued to each of them in relevantly identical terms.

1152. In Table 3(a) in that response, GZ, Geocon Bowes, GRE and Zapari said that GZ had “Engaged GRE Sales to undertake marketing of the Development” and that GRE had “Engaged GGPL to provide creative personnel for marketing the Development”. Although the question to which Table 3(a) responded was limited to a website, the answer encompassed all marketing.

1153. This is consistent with part of the answer to question 5, which was directed to the Billboards, Brochure, website and an investment report (the latter not being the subject of complaint by the Commissioner). The response provided a Table 5. The response said that Table 5 did not include any specific reference to GZ on the basis that “GZ (had) engaged GRE Sales to undertake marketing” and because Table 5 included references to “GRE Sales on the basis that (GRE) procured marketing creative work from” Geocon Group and that one or other of GRE’s directors approved the content.

1154. Geocon Bowes submitted that these answers were not admissions against it because the answers involved a conclusion which depended upon the application of a legal standard and cited Dovuro Pty Ltd v Wilkins [2003] HCA 51; 215 CLR 317. But I do not read the word “engaged” in those answers in a legal sense, and rather read the responses as conveying, from those parties’ perspectives, what was done in a factual sense. That is, the word “engaged” was not meant as “contractually engaged” or “contractually retained” but meant something to the effect that GZ took steps, or acted in a way to have GRE become involved in and do the marketing.

1155. That sense of the word “engaged” is made out by the fact that the relevant questions asked: Which entity or entities was responsible for updating the Website on this occasion? Please explain the basis on which an entity or entities are nominated as responsible. Specifically, please identify the relevant acts said to have been performed and the individuals (natural persons) who carried out those acts. (Emphasis added.)

1156. Those answers are admissions of fact made by the entities involved. They were formal statements made in response to a s 52 Notice which carried with it penalties for failing to comply with the request. The statements were made by solicitors retained by the parties and, I infer, after proper instructions were taken. In those circumstances those statements should be given considerable weight. I also note that those answers were given much closer to the occurrence of important events and for that reason are more likely to be reliable than uncorroborated recollections set out in affidavits sworn or affirmed many years later.

1157. Alternatively, if the answers were a representation of mixed fact and law, they may, as Geocon Bowes properly accepted, amount to an admission if they are not vague or equivocal representations. Geocon Bowes correctly submitted that the Court must be satisfied that such an admission was actually made, and must be satisfied on the balance of probabilities that it was a previous representation (of fact) adverse to the relevant party’s interest in the outcome.

1158. In my view, the statements made were not vague, equivocal or ambiguous, and I am satisfied that they were representations of fact adverse to GRE’s and GZ’s interests in the proceedings.

1159. I note that in Lym International Pty Ltd v Marcolongo [2011] NSWCA 303; 15 BPR 29,465 Campbell JA (Basten JA and Sackar J agreeing) said at [132] that Dovuro was concerned with admissions of law, and: Their Honours appear to have left open the situation concerning an admission of mixed fact and law by a person who is shown to understand the relevant legal standard, but that is not the present case.

1160. Self-evidently, the statements were made with the assistance of legal practitioners who could be taken to have known the relevant legal principles.

1161. Geocon Bowes also submitted that no first tier agency case was pleaded beyond the terms of the Agency Agreement and referred to [62I]-[62J] of the Commissioner’s pleading. I do not agree with that submission.

1162. Paragraph 63 pleads that GRE engaged in conduct at the direction of, or with the consent or agreement of GZ. That pleading of direction and consent involved factual matters outside the mere terms of the Agency Agreement.

1163. It is significant that, despite several submissions being made to the effect that the answers in these Notices should not be taken at face value and may have been inaccurate for a number of reasons, no defendant led any evidence to the effect that any particular answer or answers given in these letters was incorrect or inaccurate. For example, GRE’s counsel said in opening submissions (T 357.29-.31): It could be that the people who provided the information were mistaken or the solicitor's understanding of the information was mistaken.

1164. Despite that and similar submissions, there was no evidence called by GZ, Geocon Bowes, GRE or Zapari that any answer provided by them via Meyer Vandenberg’s letters to the Commissioner were mistaken or other than correct. Most particularly, none of Messrs Georgalis, Skepev or Micalos gave any evidence that any answer given in those responses was not correct so far as the facts known to them were concerned. In other words, the submissions made were entirely speculative with no evidence offered to support them. In the absence of that evidence, I draw a Jones v Dunkel inference that if such evidence had been called it would not have assisted GRE’s case on that point (and any other defendant which made a similar submission).

1165. GRE also submitted that Mr Stephens was not aware of the content of the responses to the s 52 Notices and did not provide assistance in preparing the response to those notices beyond checking a particular spreadsheet prepared by Ms Glover. It was submitted that because Mr Stephens was the director of GRE who was responsible for the conduct of its day-to-day activities, the fact that the answer was provided without his input makes it of limited probative value. GRE submitted that Mr Georgalis, the other director of GRE Sales, also had limited input into the content of the actual responses provided to the s 52 Notices.

1166. I do not accept that submission. Self-evidently, GRE authorised or instructed someone to provide instructions to Meyer Vandenberg. In relation to answers Meyer Vandenberg provided to the Commissioner on behalf of Mr Georgalis, Mr Georgalis said he instructed Geocon Group’s general counsel to respond because: I believe he would have been best placed to respond to it appropriately and co-ordinate the resources he needs within the business and the group to pool the information and respond.

1167. Amongst other things, that letter said that Geocon Group entered into a services agreement with GRE Sales dated 30 June 2018 and procured personnel to provide marketing services (amongst other services) to GRE Sales.

1168. In the absence of direct evidence casting doubt on the accuracy of the statements made in the Meyer Vandenberg responses, such evidence being wholly in the control of the defendants (see Blatch v Archer (1774) 1 Cowp 63 at 65), I do not accept any submission to the effect that I should doubt the accuracy of the answers provided. The fact that no defendant called any evidence casting doubt on the accuracy of the answers was telling.

1169. GRE also submitted that the responses to the s 52 Notices were fashioned at a preliminary stage and without the benefit of full investigations. Again, no evidence was called establishing that there was no “full investigation” in answering the letters, especially when penalties existed for knowingly providing false or misleading information or documents in response to a s 52 Notice.

1170. Turning to another s 52 Notice, in evidence was a response by Geocon Group dated 25 March 2019 to a s 52 Notice directed to that company dated 19 February 2019. Although Geocon Group was not a party to the proceedings, the response was nevertheless a piece of evidence relevant to the factual question of Geocon Group’s involvement with the Promotional Materials. Not to be overlooked is that the sole director of Geocon Group, Mr Georgalis, was the sole director of Geocon Bowes, one of two directors of GZ, one of two directors of GRE, and who gave evidence in the proceedings. The response was given by the same solicitors and was signed by the same partner of that firm who had replied to the s 52 Notices directed to GZ, Geocon Bowes, GRE and Zapari.

1171. The s 52 Notice was directed to the Billboards, Brochure, website and Investment Report, but the answers, as I read them, extended beyond those materials. The Geocon Group response said that GZ had entered into a real estate agency agreement dated 22 December 2017 with GRE Sales under which GRE Sales was to provide real estate services for the Development, including marketing. It said that GRE had engaged Geocon Group to provide personnel to provide marketing services.

1172. The response went on to say that the conduct of the Geocon Group personnel was undertaken under the delegated authority of Mr Georgalis as director of Geocon Group for GRE (of which Mr Georgalis was a director) and Geocon Group (of which Mr Georgalis was also a director). It said that GZ caused the promotional material to be developed but did not develop the promotional material.

1173. A third response to a s 52 Notice was provided by solicitors acting for GZ, Geocon Bowes, GRE and Geocon Group dated 26 June 2019. The s 52 Notice sought information about the Promotional Video.

1174. The response said that Geocon Group employees caused the Promotional Video to be uploaded under delegated authority to YouTube, Allhomes.com.au, Realestate.com.au and Vimeo.com.

1175. The response said the “Marketing Team” consisted of the same people Mr Georgalis identified in his affidavit, namely Mr Micalos, Melanie Hindson, Karen Coe, Alex Dickens, Myfanwy Galloway and Adam Gill. All were Geocon Group employees.

1176. The response said that the conduct of the Marketing Team was undertaken under the delegated authority of Mr Georgalis as director of Geocon Group and pursuant to an agreement under which Geocon Group provided the services of the Marketing Team to GRE.

1177. It also went on to say that GRE and Geocon Group were “ultimately responsible for the publication of the Promotional Video”, but I do not place any weight on that statement as that statement seems to me to involve the application of a legal standard (Dovuro Pty Ltd v Wilkins [2003] HCA 31; 215 CLR 317 per Gummow J at [69]-[71]) or, if not, is irrelevant opinion evidence.

1178. In conclusion, the answers I have identified given in response to the various s 52 Notices mentioned all point in the direction of GRE having published the Promotional Materials in the sense that the Marketing Team did so on behalf of GRE.

The evidence of Mr Georgalis and Mr Stephens

1179. The undisputed evidence from Mr Georgalis, which I accept, was that there was a contract by conduct between Geocon Group and GRE, followed by the Service Agreement dated 30 June 2018, for Geocon Group to provide appropriately qualified and trained staff to GRE (which had no employees) for a fee. Those staff were to include “clerical, accounting, marketing and legal staff” (emphasis added).

1180. The first in time of those two agreements was, I find, an agreement by conduct between the same entities and on the same terms (except perhaps as to fees). As Mr Georgalis put it, up until 30 June 2018, there was no formal agreement in place for the assignment or sharing of Geocon Group employees between Geocon entities although this was the practice before the signing of the Service Agreement. I infer that the word “formal” meant “in writing”. In cross-examination Mr Georgalis said that whilst the Service Agreement was dated 30 June 2018, the arrangements it set out were in place prior to that date.

1181. In relation to the Service Agreement, Mr Georgalis gave the following evidence: And what this agreement provided for was for Geocon to hire out its staff for the business of GRE Sales?---That's correct. And that labour hire was so that GRE Sales could perform the obligations it needed to perform?---That's correct. And in return for hiring out Geocon staff to GRE Sales, GRE Sales paid fees to Geocon Group. That's correct, isn't it?---I believe it might be classified as fees in here. …

1182. GRE paid Geocon Group approximately $10.65m pursuant to an invoice dated 30 June 2019 for “labour hire”. In his answers in cross-examination, Mr Georgalis said he assumed that that invoice was for services provided under the Service Agreement (between Geocon Group and GRE) and that Geocon was providing a service or labour hire to GRE for reward.

1183. The only evidence of any labour being hired to GRE by Geocon Group was the Marketing Team. That evidence is consistent with the proper construction of the Agency Agreement and is consistent with the answers to the s 52 Notices.

1184. GRE submitted that the $10.65m may have been for sales commissions, with GRE invoicing GZ and with the commissions passed on to Geocon Group for payment. I do not accept that submission.

1185. First, that submission is inconsistent with the description “labour hire” given in the invoice.

1186. Second, commissions were a development expense and would not be passed on to Geocon Group.

1187. Third, a document headed GRE Sales – Statements appeared to show that the total commission payable to GRE on contracts exchanged between 9 February 2018 and 9 May 2019 was $943,120. This is not consistent with $10.65m being charged a little under two months later. That is, if only a little under $1m had become chargeable in the 15 months specified, it is unlikely that another approximate $9.5m would become chargeable in the following two months (so as to arrive at $10.65m by 30 June).

1188. There was some evidence from Mr Stephens to the effect that he did not exert any control over the Marketing Team, and a submission was made that therefore the Marketing Team was not acting on behalf of GRE. That submission overlooked the fact that Mr Georgalis was the other, and dominant director of GRE, and it was he, as director of Geocon Group and GZ, who set in place the labour hire agreements between Geocon Group and GRE.

1189. Mr Stephens also pointed out that There PL had invoiced GZ in January and February 2018 for what appeared to be work involving the Billboards and the Brochure. That may be so, but what was important was the entity for whom the Geocon Group Marketing Team was acting, and that was GRE.

1190. Fourth, GRE led no evidence to support its submission despite such evidence being within its control.

GRE made the representations

1191. My findings are as follows.

1192. The proper construction of the Agency Agreement was that GRE was contractually engaged to market and sell the Units under the Agency Agreement.

1193. It had no employees to do so itself. In order to meet that contractual obligation, it hired the Marketing Team from Geocon Group. In exchange, it paid Geocon Group about $10.65m.

1194. The Marketing Team, on behalf of GRE, engaged with external agencies, and with their assistance the Marketing Team produced and published the Promotional Materials.

1195. Thus, it was GRE that made the representations because it was GRE, via its labour-hired Marketing Team, that produced the various media and made arrangements for it to be communicated to consumers either as a display, or provided electronically or in hard copy, aided by GRE’s agents handing hard copy Brochures and Flyers, and soft copy Flyers, to consumers.

1196. I should note that in the course of argument, the Commissioner sought to rely on written submissions (marked MFI 4) made by previous senior counsel for the first to fourth defendants (when jointly represented) on the Commissioner’s application to join GRE to the proceedings, oral submissions (marked MFI 5) and an affidavit read on that application (marked MFI 6). There were several associated documents (listed at T 1403) also tendered which were marked MFIs 7-12.

1197. I rejected the tender of MFI 4.

1198. I ruled that MFI 6 would be admitted if MFI 5 was admitted. I deferred ruling on MFIs 5 and 6 and allowed a short cross-examination on those documents on the voir dire.

1199. Having found on the proper construction of the Agency Agreement and the evidence I have referred to above that GRE made the representations, I do not find it necessary to determine whether the statements made in MFIs 5 and 6 were admissions admissible on this factual question, and therefore need not rule on MFIs 7-12. I also need not rule on the short voir dire evidence. I have not taken any of those matters into account.

Conclusions on reasonable grounds Some general matters

1200. I have set out above the relevant principles, as I understand them, applicable to s 4 of the ACL.

1201. I have found that I do not accept the evidence of any of the defendants’ witnesses who gave reasonable grounds evidence that they had possession of, and had in fact relied on the documents, facts and circumstances they identified in their evidence other than the matters I specifically identified.

1202. I have already indicated that I have accepted that all of those documents, facts and circumstances existed on the dates the documents bear, and that they were objectively reasonable except for the matters I have expressly identified.

1203. The last matter to consider is whether the facts and circumstances identified by those witnesses, if their evidence should have been accepted, supported the representations made.

1204. Before doing so, and because it was the subject of some disagreement between the parties, I should first decide whose evidence may be relied on by GRE to establish reasonable grounds. Whose evidence is relevant to s 4 of the ACL and reasonable grounds

1205. I have held that GRE made the representations. Therefore, it is GRE that bears the evidential onus to lead evidence of reasonable grounds for the making of the representations.

1206. Reasonable grounds evidence was led from Mr Skepev, Mr Georgalis, Mr Micalos and Mr Stephens (to a limited extent).

1207. I think the evidence of Mr Georgalis and Mr Micalos is relevant because Mr Georgalis was a director of GRE and Mr Micalos was part of the Marketing Team that developed and published the Promotional Material on behalf of GRE.

1208. GRE was ultimately owned by Mr Georgalis. GRE had one issued share which was owned by Georgalis Investments. Mr Georgalis is the sole director and shareholder of Georgalis Investments. Mr Georgalis was the directing mind and will of GRE, with Mr Stephens essentially being a quiescent director. Therefore, Mr Georgalis’ knowledge is attributable to GRE.

1209. Both Mr Georgalis and Mr Micalos, albeit in different ways, were intimately involved in developing and approving the Promotional Material. Implicit in both men giving the reasonable grounds evidence contained in their affidavits is that they knew of and approved the contents of the Promotional Material before it was published. As the relevant officers of GRE (Mr Micalos because he was part of the Marketing team hired to GRE) they were the principal human actors by which the corporation (GRE) made the representations complained of.

1210. The knowledge of an employee or agent of a company may be attributed to a company if that person had management and control in relation to the act or omission in issue: RP th Austin & IM Ramsay, Ford, Austin and Ramsay’s Principles of Corporations Law, (17 ed., LexisNexis, 2023), at [16.180]; Tesco Supermarkets Ltd v Nattrass [1972] AC 153 at 170-171; Hamilton v Whitehead (1988) 166 CLR 121. Mr Micalos had the management and control of marketing for the development and was hired to GRE to fulfill that role. Therefore, his knowledge may be attributed to GRE.

1211. I at first thought that Mr Skepev’s reasonable grounds evidence could not be attributed to GRE because he was not an officer of GRE nor did he play any role in GRE making the representations to consumers, but on reflection I think that that initial view is not correct.

1212. Mr Skepev attended some PCG meetings and approved various marketing content, albeit at a higher level of generality, but he nevertheless did approve it. To the extent he gave evidence of facts and circumstances relevant to reasonable grounds for the various representations, his knowledge may be attributed to GRE.

1213. I do not consider Mr Stephens’ evidence is relevant because he was not involved with the making of the representations except in a very peripheral way. Mr Stephens said he had little to do with the Marketing Team or the development of the content of the Promotional Material. He said that the Marketing Team would on occasion consult him and he would then provide some minor input on the wording used for marketing but did not sign off on or approve the final product. He said he did not direct or control the Marketing Team. I accept that evidence. Mr Stephens gave the distinct impression that he treated his role as a director of GRE as being a director in name only, and he was there to take care of sales rather than marketing (other than for the odd suggestion to the Marketing Team). However, against the event that I am wrong in that regard, I shall also assess Mr Stephens’ reasonable grounds evidence.

1214. One issue in the case was whether persons other than the representor could give reasonable grounds evidence. Reference was made to Cummings.

1215. The facts in Cummings were that a number of accountants marketed certain tax avoidance schemes to clients and others which involved horse racing syndicates. The syndicates were to be partnerships in which numbers of people would together own racehorses which would be trained, raced and perhaps sold. For the syndicates to be marketed, bloodstock had to be acquired to provide the syndicates with the principal assets necessary for their operation. Mr Cummings assisted the accountants by acquiring several million dollars’ worth of bloodstock at sales at his cost, but all turned to disaster when the marketing of the shares in the syndicates failed with Mr Cummings left with a large indebtedness for the horses he acquired. He sued the accountants on a number of bases including for misleading or deceptive conduct.

1216. The primary judge found that a number of representations as to the likely success of the syndicates had been made to Mr Cummings by the accountants. Those representations were generally to the effect that there would be no trouble in selling down the syndicates. In short, they were predictions or, as Sheppard and Neaves JJ put it at 565, “opinions of what the likely outcome of the marketing of the syndicates would be.”

1217. The representors denied that any such representations were made and thus did not give any evidence that they had reasonable grounds for making the representations. Their Honours said that such a situation was not uncommon and gave rise to the following practical problem (at 565): That raises a practical difficulty about the application of subs (2) of s 41 to some cases. There are many cases, whether under s 52 of the Trade Practices Act or s 42 of the Fair Trading Act, where the principal protagonists are not dishonest or fraudulent. Each gives evidence to the best of his or her ability of conversations which took place before a transaction was entered into or other steps were taken. One party alleges inducement by misleading or deceptive conduct. The other party denies it because he or she says that nothing of that kind was said. That evidence is given honestly and to the best of the witness's recollection. Yet so often a judge will find that party's evidence unreliable, but it will be rejected, not because it is dishonest but because it is mistaken. The question arises how, from a practical point of view, can a witness in that situation face up to what is to him or her a false position. Evidence needs to be given to show reasonable grounds for the making of a statement that the witness claims never to have made. …

1218. Their Honours then said at 566 that this practical problem was solvable as follows: Evidence of reasonable grounds may be established by evidence other than that of the persons who are alleged to have made particular representations as to a future matter. Indeed, as in so many other areas, a court may find the overall probabilities to which the circumstances of a given case give rise, the background to it and the conduct of parties prior to conversations taking place as providing better guides to whether or not they had particular states of mind or whether particular factors existed which would establish evidence of something such as reasonable grounds. It was the overall circumstances of the case which enabled his Honour to say, in relation to both [accountants], that each genuinely believed the encouraging assertions which his Honour found them to have made. If one changes the exercise to an inquiry, not into genuine or honest belief, but into whether there were reasonable grounds, it is again the overall circumstances of the case which will provide more reliable guidance than would oral evidence on the part of interested parties.

1219. In my view that statement is inapplicable in this case, not least because in this case the Representations were all in writing, photographs, diagrams or videos and there were no contested conversations. That is, there is no dispute in this case as to the content of the Promotional Material, which is very different to the situation in Cummings where the very representations in issue were all oral and were contested.

1220. Suffice to say that s 4 of the ACL is ultimately concerned with the representor, not the individuals involved. That is, did GRE have reasonable grounds for the making of the Representations. That point was emphasised in Crowley v Worley Limited [2022] FCAFC 33; 293 FCR 438. In that case the primary judge had dismissed proceedings brought against the respondent. The case involved an allegation that the respondent, Worley, engaged in misleading or deceptive conduct by representing that it expected to achieve NPAT (net profit after tax) in excess of $322 million in the financial year ended 30 June 2014 (FY14) and that it had reasonable grounds to so expect (the FY14 guidance representation), in contravention of s 1041H of the Corporations Act 2001 (Cth) (the Corporations Act), s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) and/or s 18 of the ACL. Another issue was whether Worley contravened its continuous disclosure obligations under s 674 of the Corporations Act and listing rule 3.1 of the (then) Australian Stock Exchange (ASX) Listing Rules, but that issue is not of concern here.

1221. The appellant submitted that the primary judge made all necessary findings to support the conclusion that Worley lacked reasonable grounds for the August 2013 earnings guidance statement which conveyed the FY14 guidance representation other than the ultimate finding to that effect. The appellant submitted that that failure resulted from four fundamental errors in the primary judge’s approach. The appeal was upheld.

1222. Jagot and Murphy JJ (Perram J agreeing), said at [54] that the relevant issue: … was not what was actually known by WOR’s board, what views the board held, or the reasonableness of the conduct of the board (although that was also put in issue by the appellant below). WOR made the FY14 guidance representation … and that it had reasonable grounds to so expect. While the FY14 guidance representation was made as a result of a decision of the board to adopt the FY14 budget and give the August 2013 earnings guidance statement to the market, the representor was WOR, not the board of WOR. Accordingly, the issue is whether WOR had reasonable grounds for making the FY14 guidance representation. The issue is not whether the board acted reasonably or unreasonably given the information made available to it by WOR’s officers.

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