Discussion
16 The reasons for judgment must be considered as a whole. As the respondent submitted, the order of the paragraphs constituting the Federal Magistrate's reasons in respect of reliance may be capable of causing confusion but, on a fair reading of the whole of the reasons, no error is disclosed. A number of matters make good this proposition.
17 At [3] of the reasons for judgment, the Federal Magistrate indicated that he would not "rehearse all of the evidence in detail" but would "deal with it on the basis of the issues to be resolved". He then stated that, having made his findings of fact in relation to these issues, he would turn to the law. Immediately following these statements at [3] there is a section entitled "History and Findings on the Evidence". While some parts of the paragraphs in this section record factual findings on their face (for example, the first half of [4]), others (for example, the second half of [4]) record disputed evidence. To determine what finding has been made in respect of the disputed evidence, reference must be made to other parts of the reasons for judgment.
18 Accordingly, while disputed evidence regarding the making of the representations is identified in the second half of [4], the finding that the first and second of the alleged representations (that is, that the business made a total weekly profit of $1,300-$1,500 and a profit of 7 cents per litre on fuel sales) were made is at [21]. At [23]-[24] the Federal Magistrate expanded on this finding in the context of the falsity of the representations as follows:
[23] […] I have accepted that Mr Varvarian told Mr and Mrs Messina that he was making between $1,300.00 and $1,500.00 per week even though he was paying wages. He did not tell them that the business was making a loss which could be alleviated by substituting wages to outside staff for wages to the new proprietors or, more accurately, not paying the new proprietors at all so that the business appeared to be making a profit. The representation was false.
[24] In regard to the representation by Mr Varvarian that the service station made around 7¢ a litre of fuel sold, this is contradicted by the evidence. …the only conclusion to be drawn is that the statement was misleading.
19 The Federal Magistrate returned again to the representations at [26] in the context of the question whether they concerned future matters as contemplated by s 51A of the Trade Practices Act. The Federal Magistrate made this finding at [26]:
I have found that the actual representation which Mr Varvarian made was that he was taking between $1,300.00 to $1,500.00 per week and paying staff wages. It seems to me that the references which he made to owner/occupiers must have been references to the future. I am equally satisfied that the representation as to 7¢ per litre was also intended as a representation of the future. It was clear that Mr Messina was asking Mr Varvarian those questions so that he could work out what profit his wife would be likely to make. Mr Varvarian knew that the representation was being used for that purpose.
20 At [5] the Federal Magistrate made factual findings about Mr Messina's calculations. The appellants contend that the reasons for judgment contain no finding that, at the time he handed over the figures which formed the basis of these calculations in February 2007, Mr Varvarian repeated any part of the representations. Rather, when [4] and [5] of the reasons are read together, the appellants say that Mr Messina's evidence is to be understood as identifying the making of the representations in November 2006 only. I do not consider this reading of the reasons to be open. It is true that the Federal Magistrate found that Mr Messina had wrongly identified the date on which he was handed the document setting out the base figures. Mr Messina thought he had been given this document in November 2006 but, given that the figures refer to sales until the end of January 2007, he could not have been given them before that time. However, the Federal Magistrate's reasons in relation to the remainder of Mr Messina's evidence on this point are clear. At [4] the Federal Magistrate identified the two representations made (as he found at [21]) at the lunch meeting in November 2006. At [5] the Federal Magistrate indicated that that Mr Varvarian must have given Mr and Mrs Messina the base figures after the November lunch meeting, at another meeting on the Ryde service station site sometime during or after February 2007. The Federal Magistrate recorded Mr Messina's evidence as being that, at that later meeting and as he handed over the document setting out the base figures, Mr Varvarian pointed to those figures and said:
You work on 7 cents per litre on fuel and 33% profit on the shop sales. And even though I don't work at the site, I make $1300 to $1500 net every week.
21 At [21] the Federal Magistrate said:
I am satisfied that Mr Varvarian produced the fuel and shop sale document on which Mr Messina worked prior to exchange of contracts. It has not been alleged that Mr Varvarian misrepresented the situation regarding the fuel sales by silence and it is quite clear that Mr Messina did his figures assuming that those were per litre sales rather than dollar sales. I think it unlikely that Mr Messina would have done figures on the basis of a 5¢ per litre profit if it had not been suggested to him that the true figure was 7¢ because it is clear from this document and his oral evidence that he was trying to do figures on the basis of a more conservative estimate. I believe that Mr Varvarian made the representation about the total profit per week because I prefer the evidence of the Messinas to his evidence and because Mr Messina's evidence is corroborated by the recorded conversation.
22 Read with [4] and [5], this makes it apparent that the Federal Magistrate accepted all of Mr Messina's evidence as recorded in those paragraphs except for the date on which the base figures were handed over.
23 Another critical finding appears at [5] of the reasons. It is the Federal Magistrate's statement that:
Perhaps the more important point for the purposes of this case is that Mr Messina thought that the figures indicated that the business was making a profit.
24 This statement must be read with the finding at [21] that it is "unlikely that Mr Messina would have done figures on the basis of a 5¢ per litre profit if it had not been suggested to him that the true figure was 7¢". In other words, insofar as Mr Messina's calculations were concerned, account had to be taken of the context in which they were prepared. They were prepared after the representations were made and in circumstances where, as the Federal Magistrate found, Mr Messina believed by reason of those representations both that the business was making a profit and that the profit on fuel sales was 7 cents a litre. This context, as his Honour recognised, affects the significance which can be attributed to Mr Messina's calculations in determining the question of reliance.
25 At [6] the Federal Magistrate recorded part of Mr Varvarian's version of events in relation to the making of the representations. It is obvious from [21] that the Federal Magistrate rejected this evidence. At [7] the Federal Magistrate made findings about matters that either were or became uncontentious.
26 At [8] the Federal Magistrate recorded another representation Mr and Mrs Messina alleged Mr Varvarian to have made. Read with [21] it is apparent that his Honour was not satisfied that this other representation was made. At [9] and [10] the Federal Magistrate recorded some disputed evidence regarding Mrs Messina's reservations about the profitability of the business and Mr Varvarian's responses to her concerns. According to the appellants, nothing can be made of this disputed evidence because the Federal Magistrate's reasons do not resolve the dispute by any finding. I disagree. As the respondent submitted, a fair reading of [21] of the reasons indicates that when the Federal Magistrate said "I believe that Mr Varvarian made the representation about the total profit per week because I prefer the evidence of the Messinas to his evidence and because Mr Messina's evidence is corroborated by the recorded conversation", the statement "I prefer the evidence of the Messinas to his evidence" must be understood as a conclusion that, in the event of any dispute between the Messinas and Mr Varvarian about the making of the representations, his Honour preferred the evidence of the former.
27 At [9] there is also reference to Mrs Messina's evidence as it relates to the repetition of the representations in February 2007. The evidence was that the Messinas and Mr Varvarian met at Mr Varvarian's Killara service station, where the following conversation occurred:
[Mrs Messina] "Avedis, what I would like are your profit and loss statements, your bank statements, your BAS statements and anything that can help me do my due diligence to work out the figures you have given me are correct. Can you give me proof that the figure you give us of 7 cents per litre profit on fuel sales is correct from the computer generated sheet you gave us previously?"
[Mr Messina] "You don't have to do that. Avedis is like family, I trust him and he wouldn't sell us a dud, if he says he is making between $1,300.00-$1,500.00 per week then he is making $1,300.00-$1,500.00 per week"
[Mr Varvarian] "Margaret, I wouldn't rip off a prostitute let alone a friend."
28 The Federal Magistrate's reasons return to this conversation at [15], where he quotes the evidence of Mrs Messina in relation to it. Read in the context of the reasons as whole (including the general acceptance of the Messinas' evidence in preference to that of Mr Varvarian at [21]), it is apparent that the Federal Magistrate is doing more than merely recording Mrs Messina's evidence at [15]. He is accepting that evidence as truth. According to this evidence, Mrs Messina realised she was not making any money before or at the beginning of the second trial period. Because of her concerns, Mr and Mrs Messina met Mr Varvarian at his Killara service station. Mrs Messina's oral evidence about the conversation as recorded at [15] is generally consistent with her affidavit evidence as set out in [9].
29 In the same evidence quoted at [9], Mrs Messina referred to another conversation with Mr Varvarian as follows:
[Mrs Messina] "Avedis, I can't see how the business is making any profit"
[Mr Varvarian] "Don't worry the business is making money but all the profit is under the ground and in the stock."
30 The evidence further records that, at about the same time, Mrs Messina had a discussion with her husband as follows:
[Mrs Messina] "John, I've been working in the business for the last week and I can't see where it is making any profit"
[Mr Messina] "Look Avedis is like family I trust him implicitly and if he says it is making $1,300.00-$1,500.00 net profit per week then I believe him. Anyway profit is averaged out over the whole year not just a week or two. Avedis wouldn't sell us a dud business."
31 These conversations, which refer in terms to the representation in respect of a profit per week of between $1,300 and $1,500, are inconsistent with Mr Varvarian's evidence. Given that the Federal Magistrate found that this representation was made having regard to, amongst other things, his acceptance of the evidence of the Messinas in preference to that of Mr Varvarian, there cannot be any real doubt that the Federal Magistrate's reasons when read as a whole include a finding that the conversations to which Mrs Messina deposed in [9] occurred.
32 This conclusion is reinforced by his Honour's recitation of the respondent's arguments about reliance at [29]. The Federal Magistrate recited these arguments on the apparent assumption (correct in my view) that he had already found that the facts underpinning the arguments existed. Moreover, at [30], when referring to the second of the conversations to which Mrs Messina deposed in [9], the Federal Magistrate said this:
In Mrs Messina's affidavit, she deposes to a conversation with Mr Varvarian in which, in response to her concern that she could not see how the business was making a profit, he said "don't worry, the business is making money but all the profit is under the ground and in the stock." Mr Varvarian's evidence confirms that a conversation of this type occurred.
33 At [34] the Federal Magistrate returned to the first conversation to which Mrs Messina deposed in [9] on the basis of a clear assumption that he had found that conversation to have occurred as described by Mrs Messina. So much is apparent from the statements in [34] in these terms:
In the instant case, the representations were clearly made to advance Mr Varvarian's commercial interests. The applicant was entitled to assume that those representations were carefully considered and intended to be relied upon. In this regard, it is relevant that Mr Varvarian was present when Mr Messina reassured his wife that an inspection of the financial documents would not be necessary during the February meeting at the Killara service station. As such, it would have been reasonably foreseeable that the Messinas might not carry out due diligence as a result of the representations. In these circumstances, I am satisfied that the applicant's failure to conduct due diligence did not break the chain of causation.
34 For these reasons, the appellants' submission that the Federal Magistrate left the disputed evidence at [9] and [10] unresolved is unsustainable. The Federal Magistrate generally accepted the evidence of Mr and Mrs Messina in relation to the matters in those paragraphs, and rejected that of Mr Varvarian. The Federal Magistrate also gave further explanation for his rejection of disputed aspects of Mr Varvarian's evidence at [16]. His Honour found that the evidence Mr Varvarian had given about the cash component of the sale of the business to the respondent was adverse to his credit. The Federal Magistrate said:
The excuse given to the tax office was patently untrue because on Mr Varvarian's own evidence the payment was made before the end of the tax year. Mr Varvarian's unsatisfactory evidence in relation to this aspect of the matter made me very cautious about his other evidence on matters that were in contention.
35 As the respondent submitted, while expressed in the context of a specific issue, the finding that Mr Varvarian's evidence was unsatisfactory had wider significance for the Federal Magistrate's reasoning process and his overall acceptance of the evidence of Mr and Mrs Messina in preference to that of Mr Varvarian where they were in dispute.
36 At [11] the Federal Magistrate recorded Mrs Messina's evidence that she obtained legal advice on the contract for sale and that "the solicitor explained the contract, that she read it and understood that she was buying a business. She understood that there were other terms in the contract, although she did not recall them and did not discuss them". In the context of the reasons as a whole - and the general acceptance of Mr and Mrs Messina as witnesses of truth - [11] must be understood as the Federal Magistrate not merely recording but also accepting this evidence.
37 The same conclusion applies to [12]. At [12] the Federal Magistrate dealt with the discussion Mr and Mrs Messina had with their accountant. His Honour described this as follows:
The Messinas agreed that they had discussed the purchase with their accountant before contracts were exchanged. The accountant asked them if they had done due diligence and they said that they had not. Mr Messina said that Mr Varvarian was a friend and that he had done the figures on the basis of 5¢ a litre on fuel and shop sales at 25% and it had come out alright. He thought the business was worthwhile on that basis. But Mrs Messina put the most weight on Mr Varvarian's representation that the business was making $1,500.00 a week. That was what she focussed upon. Mrs Messina discussed the purchase of the business with Mr Newcombe, her accountant.
"And did Mr Newcombe suggest to you that you should check the figures of the business before you purchased it?"
"Mr Newcombe asked me if I had done my due diligence. I said to him that I have been given no profit and loss statements, or statements to basically ascertain if this was, in fact, correct. We showed Mr Newcombe the piece of paper that had the shop sales and the amounts of fuel being sold, which was the piece of paper that John had, and Mike Newcombe - John turned around and said to Mike Newcombe, "it is not necessary for us to do due diligence. We are purchasing this from Avedis, which is a very good friend of mine, and we trust him implicitly." And that is exactly the conversation that I remember."
38 There are other relevant factual findings in [13]. In particular, the Federal Magistrate accepted Mrs Messina's evidence that, during the trial period (which must be understood, in context, as the two trial periods taken together), there were problems with the bowsers; specifically, two bowsers did not work. Importantly, as the Federal Magistrate found, Mrs Messina assumed that Mr Varvarian was making his weekly profit without those two bowsers.
39 At [16] the Federal Magistrate said (and must be understood as having found) that:
Notwithstanding her concerns, Mrs Messina persevered in the trial period and on 26 April 2007, after her redundancy monies had come through, exchanged contracts and settled the sale.
40 At [17] the Federal Magistrate said (and again must be understood as having found) that Mrs Messina became so concerned by the business's lack of profitability that she held another meeting with Mr Varvarian at his office in Killara on or about 20 May 2007. At this meeting Mr Varvarian again suggested that the profit was "in the ground" in fuel and stock. Mrs Messina again requested financial information but was not provided with it.
41 At [18] the Federal Magistrate said (and, for the same reasons set out above, found) that Mr Newcombe, the accountant, became involved in July 2007. Mr Newcombe concluded that the business was not profitable. The Messinas discussed the problem again with Mr Varvarian, and also raised the issue of the rent on the premises, which they considered to be too high. Mr Varvarian apparently concurred. As he was a friend of the landlord, he agreed to liaise with the landlord for a rent reduction. Mr Messina also gave Mr Varvarian a $5,000 gift at this time for selling the business to his wife.
42 The Federal Magistrate (at [19]) described the following period as an "hiatus" lasting until May 2008. In the same paragraph, the Federal Magistrate described a confrontation between Mr Messina and Mr Varvarian which Mr Messina recorded. The Federal Magistrate noted that the transcript of the recorded conversation did not appear to show Mr Varvarian denying Mr Messina's assertion that Mr Varvarian had represented that the business was making a profit of between $1,300 and $1,500 per week.
43 The part of the Federal Magistrate's reasons entitled "Reliance", commencing at [27], must be read in light of the connections which, as shown above, link various parts of the reasons together. Despite being placed in a separate section, the reasons in this part are not intended to be read in isolation from the context of the reasons as whole. Further, the paragraphs comprising this section disclose a similar tendency to that identified in other parts of the reasons: that is, to make an initial conclusion in one paragraph and then return to and build upon it in other paragraphs. This tendency founded the appellants' arguments of error. Properly analysed, however, the alleged errors are nothing more than a complaint about the style in which the reasons are expressed (which includes their structure), and not about their substance. As Gleeson CJ said in another context, "[d]ecision-makers commonly express their reasons sequentially; but that does not mean that they decide each factual issue in isolation from the others" (Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002; Appellant S106/2002 v Minister for Immigration and Multicultural Affairs (2003) 198 ALR 59; [2003] HCA 30 at [14]).
44 When the reasons are read fairly and in context it is apparent that the Federal Magistrate correctly described reliance as a question of fact (at [27]), and that he made the findings of fact required to reach a conclusion on this question. Further, his Honour expressly recognised that the respondent contended that it had actually (as a matter of fact) relied on the representations (at [31]).
45 The Federal Magistrate also correctly identified the arguments made by the appellants to support a finding that the respondent, when purchasing the business, had not relied on the representations (at [27]-[28]). In his summary of those arguments the Federal Magistrate referred to each of three key factors which the appellants identified as critical to this appeal, being Mr Messina's own calculations (including the mistake he made about the fuel sales), the advice Mr and Mrs Messina received from their accountant, and the two trial periods during which Mrs Messina and her son worked in the business. At [27]-[28], moreover, the Federal Magistrate identified all the other factors on which the appellants relied: the concerns Mrs Messina had about the profitability of the business during the trial periods and before entering into the contract for sale; the fact that Mrs Messina did not press Mr Varvarian for financial statements when given reassurances by Mr Messina that she could trust Mr Varvarian; Mrs Messina's former role as a bank manager who understood figures; and the advice Mr and Mrs Messina obtained from their solicitor about the contract for sale, which included the disclaimer provisions. In other words, in recording the appellants' submissions, the Federal Magistrate was plainly aware of all the relevant circumstances on which the appellants relied to negate the drawing of the inference of reliance.
46 The Federal Magistrate did state his conclusion - that he was "satisfied that the respondents have not produced any evidence capable of rebutting this inference" (that is, the inference of reliance) (at [31]) - before dealing with the appellants' arguments concerning the overall factual circumstances from which such an inference might be drawn. In so doing, however, his Honour did not misapply Gould v Vaggelas. It is true that the Federal Magistrate did not refer to the words "and nothing more appears" from the judgment of Wilson J in Gould v Vaggelas at 238 where this was said:
Where a plaintiff shows that a defendant has made false statements to him intending thereby to induce him to enter into a contract and those statements are of such a nature as would be likely to provide such inducement and the plaintiff did in fact enter into that contract and thereby suffered damage and nothing more appears, common sense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract. However, it is open to the defendant to obstruct the drawing of that natural inference of fact by showing that there were other relevant circumstances.
47 Given the reference in this part of the reasons to the capacity of a defendant to show other relevant circumstances, and the fact that (as outlined above) the Federal Magistrate did consider the circumstances the appellants relied upon in this regard, the appellants' submission that the Federal Magistrate was not entitled to draw the inference of reliance in this case because "other things" did appear cannot be accepted. Moreover, and as the respondent pointed out, the common-sense proposition about reliance with which Gould v Vaggelas is in part concerned can be put in other ways. Brennan J expressed it as follows at 250:
An inference of inducement may be drawn when a party enters into a contract after a material representation has been made to him, but it is no more than an inference of fact and it is settled law that such an inference may be rebutted by the facts of the case. [Citations omitted.]
48 In the present case, the Federal Magistrate found that the representations were made; that they were false; and that Mr Varvarian, the maker of the representations, knew that Mr Messina intended to use the information they contained in order to work out what profit his wife would be likely to make (at [26]). In other words, and as the Federal Magistrate's reasons place beyond doubt at [34], when his Honour drew the initial inference of reliance at [31] he did so against a background of findings to the effect that Mr Varvarian made the false representations intending them to induce entry into the contract for sale and that the respondent had in fact acted on that inducement. Suffice it to say that, given those findings, the initial inference of reliance was correctly drawn. Consistent with principle, the Federal Magistrate then turned to the question of other circumstances which might rebut that initial inference. In so doing, the Federal Magistrate was not departing from the obligation "[w]hen all the facts are in … [to] determine whether or not [he was] satisfied on the balance of probabilities that the misrepresentations in question contributed to the [respondent's] entry into the contract" (Gould v Vaggelas at 238-239). To the contrary, the Federal Magistrate was discharging that obligation.
49 This is the background, moreover, against which the Federal Magistrate came to consider the appellants' submissions about relevant circumstances, including the three key matters emphasised in this appeal. Before dealing with the Federal Magistrate's reasons, and in the context of the submission that the ultimate finding of reliance was "extraordinary" if the significance of those three key matters is accurately assessed, the following observations may be made.
50 First, in respect of Mr Messina's own calculations, the Federal Magistrate found (as noted above) that Mr Varvarian repeated the representations when handing over the document containing the base figures on which Mr Messina's calculations were founded (at [5]). The Federal Magistrate also found that Mr Messina made his calculations believing that the business was making a profit (at [5]). That belief was induced by the false representations.
51 Second, in respect of the Messinas obtaining advice from their accountant, Mr Newcombe, the Messinas told Mr Newcombe that they had not done due diligence on the business. Mr Messina explained that it was unnecessary, as Mr Varvarian was a friend whom they trusted. Further, Mrs Messina, whom the Federal Magistrate found decided to make the purchase (at [30]), "put the most weight on Mr Varvarian's representation that the business was making $1,500 a week. That was what she focussed upon" (at [12]). This is the context in which the Federal Magistrate, at [32], accepted that the negotiations for the purchase had to be understood in the context of the friendship between the Messinas and Mr Varvarian and their trust of him. It also explains why the fact that the Messinas did not carry out a due diligence process was found by the Federal Magistrate to be "a direct consequence of reliance on Mr Varvarian's representations" (at [32]). As the Federal Magistrate found at [34], the Messinas were entitled to treat those representations as "carefully considered and intended to be relied upon". Also at [34] is the Federal Magistrate's conclusion that Mr Varvarian's presence when Mr Messina reassured his wife that she did not need the financial information she had requested (because Mr Varvarian was like family, Mr Messina trusted him, and Mr Varvarian would not sell them a dud, so that if he said he was making between $1,300 and $1,500 per week he was doing so - see [9]) was itself relevant to the finding of reliance. Insofar as Mr Messina privately reassured his wife to the same effect, the Federal Magistrate was satisfied that these reassurances did "not significantly detract from the inducement inherent in the original representations" (at [35]).
52 Third, in respect of the trial periods, the Federal Magistrate found that Mrs Messina assumed Mr Varvarian was making the profit he represented himself to have been making even with two broken bowsers (at [13]). Because she was not making a profit during the trial periods the Messinas met with Mr Varvarian, who said "Don't worry the business is making money but all the profit is under the ground and in the stock" (at [9]). Further, when Mrs Messina discussed her concerns with her husband, he reassured her based on Mr Varvarian being a friend who was "like family" and who had said that the business was making $1,300 to $1,500 profit per week (at [9]). This is the context in which the Federal Magistrate, at [31], concluded that the trial periods did not establish that Mrs Messina knew the true financial position of the business, and that the fact that she had expressed distrust about the representations was insufficient to negate the inference of reliance his Honour had drawn based on all relevant circumstances.
53 When the above circumstances are taken into account, the appellants' submission that the finding of reliance was "extraordinary" in the face of Mr Messina's calculations, the advice from the accountant and the trial periods cannot be sustained. Similar considerations undermine the appellants' challenge to the Federal Magistrate's reasoning with respect to other circumstances relevant to the drawing of the ultimate inference of reliance.
54 It is true that the ultimate finding of reliance appears at the end of [35], in the context of the findings relating to the relevance of Mr Messina's private reassurances to his wife (cited by the appellants as a circumstance negating any inference of reliance). It is also true that this ultimate finding precedes that part of the reasons in which the Federal Magistrate dealt with another relevant circumstance, namely the disclaimer provisions in the contract for sale. As to the former point, and as the respondent submitted, it may be confusing for an ultimate finding to appear at the end of a paragraph dealing with a specific issue, but the finding itself is clear. The Federal Magistrate stated that:
In the circumstances of the instant case, the contravening conduct was a substantial reason for the purchase of the business. Had it not been for those representations, the contract for sale would have in all probability not have been executed.
55 The terms of this finding, including the reference to the "but for" test in the second sentence, do not support the argument that the Federal Magistrate misunderstood the issue of either reliance or causation (discussed separately below). In particular, when this finding is read in the context of the reasons overall, it cannot be said that the Federal Magistrate failed to consider (or to find) that, as a matter of subjective fact, Mrs Messina actually relied on the representations. That finding, in various forms, is repeatedly made (at [12], [31], [32], [35] and [36]).
56 As to the latter point, and again as the respondent submitted, the placement of the ultimate finding before the discussion of one of the factors relevant to that finding is a matter of style (or structure) rather than substance. It cannot be assumed that the Federal Magistrate somehow made the finding without considering everything that precedes and follows it in the reasons.
57 The Federal Magistrate's reasons in respect of the disclaimer provisions in the contract for sale (at [36]) were the subject of specific challenge by the appellants insofar as they were based on or supported by reference to decided cases. The relevant parts of [36] have been extracted above. In this regard it must be recalled that the Federal Magistrate accepted (at [11]) that Mrs Messina's solicitor had explained the contract, and that she had read it and "understood that she was buying a business". The Federal Magistrate also accepted that she "understood that there were other terms in the contract, although she did not recall them and did not discuss them". In other words, the state of the evidence as accepted by the Federal Magistrate was that Mrs Messina did not recall and had not discussed the disclaimer provisions on which the appellants relied to negative reliance. This is why, at [36], the Federal Magistrate said "[n]or was there any evidence that the exclusion clause had been specifically brought to the attention of Mrs Messina before the contract had been exchanged". This is the background to the Federal Magistrate's conclusion at [36] that, while the respondent obtained legal advice, he was not satisfied that "the disclaimers justify a finding that the representations did not induce it to purchase the service station". This is a finding of fact in the particular circumstances of this case. It is not an impermissible form of reasoning from principle without regard to the facts. Having made the relevant findings of fact, the Federal Magistrate continued by distinguishing the present case from certain others. Again, in so doing, the Federal Magistrate was not reasoning by reference to principle rather than fact. He was reinforcing the finding already made by distinguishing the facts of other cases. There is nothing impermissible in the Federal Magistrate having done so in these terms.
58 For these reasons the appellants' challenge to the Federal Magistrate's finding of reliance cannot be accepted. The finding was not only open on the facts as found; in my view, it was right.