Derring Lane Pty Ltd v Fitzgibbon [2007] VSCA 79

"The purchaser shall elect whether the margin scheme is to apply to the sale of the property made under this contract, provided that the purchaser shall be responsible for the payment of the vendor's valuation costs. The purchaser shall be required to make its election at least 14 days prior to the settlement day."

7 The scheme was designed to ensure that GST was paid only on any increase in the value of property between 1 July 2000 (when GST was introduced) and 23 May 2002 (the date of the contract).

8 In late December 2002, the appellant made the election referred to in clause 17.2.4. A valuation of the property as at 1 July 2000 was thus required. The vendor engaged the respondent to undertake the necessary valuation. He provided a retrospective valuation as at 1 July 2000, in an amount of $1.1 million. As clause 17.2.4 provided, the appellant paid the respondent's fee in respect of the valuation.

9 The valuation report was addressed to the vendor. It contained a lengthy disclaimer clause, to part of which I shall later refer.

10 Prior to preparing his valuation report the respondent was aware that the appellant had lodged an application to subdivide the property. He also conceded in cross examination that he was then aware of the existence of the contract, and of knowing that both parties to the contract would depend upon his valuation for the purposes of calculating GST.[2]

11 The respondent's valuation led to GST being calculated on the difference between $1.1 million and $2.25 million. GST of $115,000 was paid by Derring Lane to the vendor at settlement. The vendor remitted such amount to the Australian Taxation Office.

12 In its proceeding, Derring Lane claimed that the "true" value of the property as at 1 July 2000 was $1.8 million. Were that so, GST, based upon the difference between $1.8 million and $2.25 million, would have been $45,000. Hence the appellant's claim for $70,000.

The issues, and their resolution by the Tribunal

13 In the context of the appellant's common law claim, both the tribunal and the learned judge in the Trial Division treated the case as one which was governed by authorities pertaining to liability for negligent misstatement.

14 The tribunal's conclusions were relevantly these:

(1) The respondent owed the appellant a duty of reasonable care in respect of the preparation of the valuation not to cause the appellant pure economic loss.

(2) The valuation had been negligently prepared, and so understated by a large amount the value of the subject property as at 1 July 2000.

(3) The appellant had not been induced by the negligent misrepresentation to make the payment of GST that it did.

(4) Had the appellant made out causation, the tribunal would have awarded it damages of $35,000.

15 There were two aspects to the third-mentioned conclusion. Each of them raises a question of law. First, that it is a necessity, in every case in which damages for pure economic loss are sought in consequence of a negligent misstatement, that the action which results in the loss be induced on the faith of the reliability of the misstatement; or, put another way, that the action which the representee takes to his detriment is in reliance upon the representation. Second, that by inducement is meant what the tribunal characterized as "active" - by contrast with "passive" - reliance.

16 There were two elements to the fourth-mentioned conclusion. First, that the negligence identified by the tribunal was causative of the appellant's loss. Second, that the quantum of loss was established by assessing the GST which would have been payable had the subject land been valued at $1.45m on 1 July 2000, and contrasting that amount with the amount of GST which in fact was paid.

17 I turn to the claim raised by the appellant under the Fair Trading Act. The tribunal found that the respondent had made representations in breach of s 9 of that Act. But it found that the appellant had not established, in the language of s 159 of the Act, that it had suffered loss "because of" such breach.

Resolution of the appeal to the Trial Division

18 The learned judge in the Trial Division concluded, in essence, that the common law and statutory claims had rightly failed for want of proof of causation. The reasons assigned by the tribunal in that connection revealed no error of law, and the unchallenged findings of fact justified the conclusions reached. That made it unnecessary for his Honour to consider issues raised by the respondent by its notice of contention. I add that, had his Honour determined the question of causation in the appellant's favour - whether in one or both of the common law and statutory contexts - the question what was the proper amount of damages would not, or at least may not, have arisen. That emerges from a comparison of the Notice of Appeal pertinent to the appeal to the Trial Division and the Notice of Appeal pertinent to the present appeal.

The disclaimer

19 In the logical development of the appellant's claim, the first issue was whether the appellant had established that the respondent owed it a pertinent duty of care. The tribunal's finding, favourable to the appellant in that connection, is put in issue by the respondent's notice of contention. I should deal with that matter immediately.

20 Before considering the respondent's submission, this should be said: In finding for the appellant on the duty of care issue, the tribunal applied the criteria of foreseeable reliance and intended reliance which were described by Brennan CJ and McHugh J in Esanda Finance Corporation Ltd v Peat Marwick Hungerfords.[3] I think it is doubtful, in light of Interchase Corporation Ltd (in Liq) v Grosvenor Hill (Queensland) Pty Limited (No 3)[4] that such an analysis was appropriate. But an Interchase approach - see later - would have produced no different outcome.

21 That said, I go to paragraph 1 of the notice of contention, which is in the following terms:

"In light of

(a) the primary findings of fact made by the Tribunal;

(b) the disclaimer clause appearing in the valuation, properly construed

The Tribunal should have determined that, in preparing his written valuation, the respondent did not owe to the appellant a duty to exercise the due care and skill of a reasonably competent professional valuer in carrying out a valuation and assessing the value of the property."

22 As developed by respondent's counsel, there were two aspects to the contention. First, the tribunal had wrongly used the disclaimer clause to establish the existence of a duty of care. Second, the tribunal should have construed the clause to negate the existence of such a duty.

23 Each aspect of the contention pertains to the appellant's common law claim. It was not submitted that the disclaimer could overcome a statutory duty owed and breached.

24 Neither party submitted that it was necessary to refer to the entirety of the disclaimer clause in order to resolve the contention now under consideration. It was enough to refer to so much of the clause as the tribunal set out in its reasons:

"This valuation is for the use only of the party to whom it is addressed. No responsibility is accepted to any third party who may use or rely on the whole or any part of the content of this valuation."

25 The relevant part of the clause needs to be set in context. The following matters are pertinent:

• The valuation was sought by the vendor at the appellant's request.

"conceded in cross-examination that at the time he prepared his valuation he knew of the contract of sale and knew that both parties to the contract ... would depend upon his valuation for the purposes of calculating GST."[5]

• The respondent certified the market value of the land at $1.1m "for GST purposes"; and in his report he referred to Goods and Services Ruling GSTR 2000/21 issued by the Australian Taxation Office.

• The respondent stated in his report that it was issued "for the sole purpose of use in connection with its consideration of the potential GST payable under the margin scheme."

26 In the event, there could be no doubt that, in preparing the report and in certifying the value of the land at 1 July 2000, the respondent knew that it was to be, as he conceded, relied upon by the vendor and purchaser for the purposes of calculating GST chargeable by the vendor and payable by the purchaser - the vendor having a statutory obligation to add GST to the sale price and to remit the same, when paid, to the Australian Taxation Office; and the purchaser being obliged by contract to pay the same.

27 The Tribunal dealt with the existence and content of the disclaimer as follows. First, it held that in order to establish a claim for pure economic loss for negligent misstatement a plaintiff must prove that -

"a. the maker of the statement knew, or ought to have realized, that the person bringing the action, or a class including that person, might reasonably rely upon the statement having been made with reasonable care;

b. (unless the person bringing the action actually requested the maker to provide information or advice) the maker of the statement intended that the person bringing the action, or a class including that person, should rely upon the statement (McHugh J in the Esanda Finance case, above, at 274-275)."

28 Second, applying that approach the tribunal said -

"In the present case there is no difficulty about elements a) and b) above. As I have already said, Mr Fitzgibbon conceded in cross-examination that at the time he prepared his valuation he knew of the contract of sale of the land to Derring Lane and knew that both Glen Eira City Council and Derring Lane would depend upon his valuation for the purpose of calculating GST. The very words of the disclaimer found in his valuation confirm that he intended that his valuation should be acted upon by Derring Lane and knew that Derring Lane might reasonably rely upon it."

29 Third, later in its reasons the tribunal said this:

"The Points of Defence alleged that because of the disclaimer contained in Mr Fitzgibbon's report there was no duty of care to Derring Lane owed or assumed. In his final address [counsel for the respondent], quite properly in my opinion, mentioned this matter only briefly. For in my view the proper construction of the disclaimer in the valuation report is that it does not apply to Derring Lane. The whole tenor of the document was that it was designed for the purpose of calculation of GST for a known transaction between a known vendor and a known purchaser, Derring Lane. Although the valuation was addressed to Glen Eira City Council, which had retained Mr Fitzgibbon, the valuation report was manifestly not for the sole use of the party to which the report was addressed, even though the wording of the disclaimer section suggested otherwise. Derring Lane was not a 'third party' within the meaning of that expression in the disclaimer section. So far as the second cause of action (contravention of the Fair Trading Act) is concerned, it was not disputed that the authorities establish that a disclaimer clause affords no defence to such a statutory cause of action."

30 The first aspect of the respondent's contention focussed upon the reasons assigned by the Tribunal for its conclusion, noted above, that "there is no difficulty about elements (a) and (b)." According to counsel's submission, the Tribunal found, in substance, that proof of element (a) was to be found in the respondent's evidentiary concession, whilst proof of element (b) was to be found in the words of the disclaimer itself. But, counsel submitted, proof of a matter necessary to establish duty of care logically could not be found in a clause that was intended to negate liability.

31 I do not agree with the reading which counsel sought to give to the passage in the tribunal's reasons which explained why there was "no difficulty" with the two elements of proof. To my mind, the sentence which shortly outlined the respondent's concession bore upon both of elements (a) and (b), whilst the sentence referring to the disclaimer represented an intended check as to the validity of the conclusion that both elements had been made out. So much is evident from the tribunal's reference to the words of the disclaimer confirming that the respondent intended that the valuation should be acted upon, and showing that he knew that the appellant might reasonably rely upon it. It is not necessary to decide whether the disclaimer could have been used as a check in that way. The tribunal's conclusion that elements (a) and (b) had been proved did not depend upon the validity or otherwise of such a check; and I do not doubt that the evidence apart from the disclaimer entitled such a conclusion.

32 I turn to the submission that the tribunal should have construed the disclaimer to negate the existence of a duty of care.

33 The submission falls away in the event that the matter is analysed as one in which the valuation operated, in substance, to finally ascertain the amount payable under the contract. As was the situation in Interchase,[6] the case is not then one in which the appellant relied upon the content of the valuation. Neither should it be said that the appellant used the valuation.

34 But suppose that the matter should be analysed as one in which the appellant was required to prove that it relied upon the valuation. Assume also that it established sufficient reliance. The tribunal, approaching the matter from that standpoint, concluded that on a proper construction of the disclaimer it did not apply to the appellant. That was because -

"The whole tenor of [the valuation] was designed for the purpose of calculation of GST for a known transaction between a known vendor and a known purchaser ... Although the valuation was addressed to [the vendor], which had retained [the respondent], the valuation report was manifestly not for the sole use of the party to which the report was addressed, even though the wording of the disclaimer section suggested otherwise. [The appellant] was not a 'third party' within the meaning of that expression in the disclaimer section."

35 To the above may be added the following circumstances:

• The statement in the valuation report that it was issued "for the sole purpose of use in connection with its consideration of the potential GST payable under the margin scheme" - a statement not notable for its use of the English language, but clear enough in its import.

• The respondent's concession, noted by the Tribunal, that he knew that both parties to the contract would depend upon his valuation for the purposes of calculating GST.

36 A disclaimer may operate to negate a duty of care which would otherwise arise on consideration of pertinent facts. Hedley Byrne & Co Ltd v Heller and Partners Ltd[7] was such a case. There the disclaimer was addressed to the only party to whom the statement was made. That is not this case. On the other hand, a copy of the valuation was provided to the appellant, so the situation is not one in which the disclaimer could not operate against the appellant on the footing that the valuation was unknown to it.[8]

37 In Mutual Life and Citizens Assurance Co Ltd and Anor v Evatt,[9] Barwick CJ said that a disclaimer -

" ... particularly if acknowledged by the recipient, will in many instances be one of the circumstances to be taken into consideration in deciding whether or not a duty of care has arisen, and it may be sufficiently potent in some cases to prevent the creation of the necessary [special] relationship. Whether it is so or not must, in my opinion, depend upon all the circumstances of and surrounding the giving of the information or advice."

38 The decision of the High Court (by majority) was reversed by the Privy Council (by majority).[10] But the accuracy of the observation of Barwick CJ cited above, strictly obiter dictum, was not thereby undermined.[11]

39 In my opinion, an investigation of "all the circumstances of and surrounding of the giving of" the valuation well justified the conclusion reached by the tribunal concerning the operation of the disclaimer. The matters to which the tribunal referred, and the several additional matters which I have mentioned, pointed in that direction.

40 I should add this: The tribunal concluded, in part, that the appellant was not a "third party" within the meaning of that expression in the disclaimer. That showed a tendency, I think, to treat the disclaimer as if it was a term of a contract made between the respondent and the appellant. But there was no such contract. The duty of care owed by the respondent to the appellant, if duty there was, was a tortious duty arising from consideration of all pertinent circumstances.

41 The appellant submitted that the Tribunal's conclusion was consistent with the decisions of Wootten J in BT Australia Ltd v Raine & Horne Pty Ltd[12] and of the Queensland Court of Appeal in Interchase. According to the respondent's submissions, however, those decisions were distinguishable because there the maker of the statement knew that the recipient thereof was required to act in a way that must affect particular third parties; and that was not this case.

42 Assuming that the present matter was not one in which, by operation of the contract of sale, the valuation bound both the vendor and the appellant, then Interchase would be distinguishable on the facts. McPherson JA, it appears, would have applied Raine & Horne reasoning if, in Interchase, there had not been a contractual imprint. But that was obiter dictum.

43 The analysis in Raine & Horne, on the other hand, did not depend upon the valuation having operation, by force of contract, between the recipient of the report and the parties suffering loss. Wootten J analysed the relationship between the statement maker, the statement recipient and the party suffering loss using the language of reliance. Raine & Horne, his Honour said, indisputably owed a Hedley Byrne duty to BT - the trustee of a unit trust and the investment manager for the assets for superannuation funds. But BT, although it had acted on the negligent statement, was not the person who had suffered damage. Nor were the third plaintiffs, the trustees of a number of superannuation funds with investments in the trust - which funds had suffered losses by reason of a negligent valuation of property that had resulted in a wrong valuation of units in the unit trust - persons who, like the plaintiff in Hedley Byrne, were and were known to be, the real recipients and users of the advice. The third plaintiffs did not receive or use the advice. The third plaintiffs were simply passive suffers from BT's reliance on and use of Raine & Horne valuation.[13]

44 Nonetheless, his Honour said, it appealed to notions of common sense and justice that -

" ... if, as was assumed by most of their Lordships in Hedley Byrne itself, it is sufficient (in the absence of a disclaimer) that the defendant was aware that the inquirer was seeking the information to pass on to the plaintiff who would act on it in a way which might cause financial loss if the information was incorrect, it should be sufficient also that the defendant was aware that the inquirer would himself act on the information in the execution of a duty which he owed to the plaintiff in a way which would cause similar loss."[14]

45 Having then concluded that, the disclaimer aside, the defendant should be taken to have assumed responsibility to the third plaintiffs to take reasonable care in valuing a particular property, his Honour turned to the disclaimer, the language of which was as follows:

"This report is for the use only of the party to whom it is addressed and for no other purpose, and no responsibility is accepted to any third party for the whole or part of the contents of this report."

46 His Honour observed at the outset, so far as it concerned the third plaintiffs, that what was important was "the presence of the disclaimer, not its legitimacy as a term of the contract" made between Raine & Horne and the trustee of the unit trust. So also, by analogy, in this case.

47 Then the judge accepted the submission for BT that -

" ... the second part of the clause must be understood as disclaiming responsibility to any third party using the valuation, but not as disclaiming responsibility for damage resulting to a third party by the very use of the valuation by BT for which Raine & Horne in the first part of the clause impliedly accepted responsibility."[15]

" ... if [the disclaimer] was intended to disclaim responsibility for the consequences of its use for the very purpose for which it was obtained, it was reasonable to expect Raine & Horne to say so in clear words."[16]

"While in the present case the contractual liability would not extend to third parties, the obligation to provide the valuation was being undertaken in a contractual context where responsibility to take care was being assumed to BT, and where in my view, it would be reasonable to infer that the responsibility so assumed would extend in tort beyond the other party to the contract to the third plaintiffs, in the discharge of duties towards which BT proposed to use the valuation."[17]

" ... although the duties of Raine & Horne under the contract did not extend to the third plaintiffs, the situation was such that in the absence of a disclaimer of liability to the third plaintiffs, Raine & Horne would be taken to be accepting such responsibility. Hence it was not merely a question of whether it said or did something more to assume responsibility. It was a question of whether it disclaimed a responsibility which it would be taken to have assumed in the absence of a clear disclaimer. In those circumstances if Raine & Horne wished to avoid a responsibility which would otherwise naturally fall on it, it was in my view up to it as the framer and profferor of the disclaimer to say so clearly."[18]

48 Even if, in the present case, the contract of sale had not obliged the use of the valuation for calculation of GST, the pertinent circumstances of the matter - in which I include the statement within the valuation report stating the purpose for which the same was made, and the respondent's concession that he knew the parties would depend upon the valuation - made the case in substance indistinguishable from Raine & Horne. By analogy, the second part of the disclaimer should not be understood to exclude responsibility for damage resulting to the appellant by the very use of the valuation by the vendor for which the respondent had impliedly accepted responsibility in the first part of the clause.

Were the findings of breach of duty and of misleading or deceptive conduct incapable of being causative of the loss alleged by the appellant?

49 Once the appellant established that the respondent owed it a duty of care, the next matter for proof was breach of duty. The tribunal found breach. By his notice of contention, developed in argument, the respondent contended that the breach identified by the tribunal was necessarily irrelevant to the appellant's claimed loss and damage. Following a logical progression, I turn to consider that contention. In my opinion it should be rejected. I consider that it involved a misunderstanding of what the tribunal decided.

50 Before explaining what I have just said, I should note the detail of the respondent's argument. It ran this way: The tribunal had found that the respondent's negligence, in turn pertinent to representations which were in breach of statute, consisted of not having paid proper regard to comparable sales data, and not having applied the comparable sales method of valuation. But the tribunal had also held that the respondent's adoption of the hypothetical subdivision method of valuation had not been negligent, that the respondent had only used that methodology, and that he had taken reasonable care in formulating his calculations when applying that methodology. It followed, absent passing reference by the respondent in his report to the comparable sales method, that a finding of negligence (or statutory breach) causing loss could not have been made. Further, to have made out loss attributable to the identified breach of duty, there must have been evidence that the appellant had relied upon the respondent's application of the valuation method which he selected, not simply the valuation itself.

51 I turn to the reasons why the contention should be rejected. It is necessary to consider the tribunal's reasons in some detail.

52 First, the tribunal noted that according to his report the respondent had -

• Valued the land using "the hypothetical subdivisional method".[19]

• Made extensive investigations of comparable land sales.

• Undertaken his valuation in accordance with the Australian Taxation Office's Goods and Services Tax Ruling GST R 2000/21, applying clause 24 thereof.

• Determined market value of the completed subdivision "with regard to comparable sales ... and by the use of hypothetical development and discounted cash flow methods."

53 Second, the Tribunal noted that clause 24 of the pertinent ruling exhorted valuation using the comparable sales method unless the valuer formed the opinion that such method was for some reason inappropriate.

54 Third, the tribunal observed that the respondent's valuation spreadsheet in fact set out no calculations for valuations by either the comparable sales or discounted cash flow methods.

55 Fourth, the tribunal noted that the appellant's case was put two ways: The respondent had adopted negligently wrong methodology; and the respondent's valuation was so much too low that it must have been prepared negligently.

56 Fifth, having described the evidence of expert witnesses called at trial, the tribunal concluded that the sales of three particular properties "were all sales which ought to have been taken into account as comparable sales" for the purpose of retrospective valuation of the subject land as at 1 July 2000.

57 Sixth, the tribunal appears to have accepted that the hypothetical subdivisional method of valuation is one that is "more prone to error because of the number of variables that have to be considered".

58 Seventh, "tend(ing) towards generosity when allowing a range of latitude", the tribunal adopted, as falling within an acceptable variation, valuations which were within 20% of each other. In applying this approach, it should be noted, the tribunal treated the 20% as being 20% either way, this importing a latitude of 40% from other, accepted, valuations.

59 Eighth, the tribunal noted that the respondent's evidence about what methodology he had adopted had been inconsistent. It did not accept his evidence, given at times, that he had valued the land both by the hypothetical subdivision and comparable sales methods.

60 Ninth, the tribunal found that the respondent had employed the hypothetical subdivisional method in making his valuation, and had paid "little more than lip service" to the comparable sales method, his regard to that method having been "too cursory". He had only "gone through the motions" of considering adjustments to the comparable sales which he had identified.

61 Tenth, the tribunal found that the respondent's application of the hypothetical subdivisional method, "whether right or wrong, was not negligent". By that the tribunal meant, as it explained, that particular criticisms of the way in which the respondent used that method had not been made out. It said that

"(t)he incongruity of [the respondent] taking reasonable care in the use of the ... method yet arriving at an incorrect, and negligently incorrect, overall result seems to me to demonstrate ... that the method is more error prone than other methods including the comparable sales method."

62 Eleventh, the Tribunal concluded that the respondent -

" ... was negligent in not having paid proper regard to comparable sales data and the application of the comparable sales method, and ... the degree of variation in the result he arrived at from the boundaries of the range of reasonable latitude from a proper result also spoke of negligence.

"the representations which the valuation report made, that the opinions expressed in the valuation report were the product of due care and skill, were made on reasonable grounds, were safe to be relied upon and were not outside the reasonable range of latitude, amounted to misleading or deceptive conduct in contravention of section 9 of the Fair Trading Act."

63 It can now be seen that the Tribunal did not find, contrary to the submission made for the respondent, that the respondent's use of the hypothetical subdivisional method was not negligent. It rather found that the mechanical steps taken in application of the method were not negligent, but that application of the method had nonetheless yielded a valuation which was so wrong as to bespeak negligence. The negligence discerned by the Tribunal in explanation of the aberrant valuation may be described in either one of two ways. Either the respondent had been negligent to adopt and apply the hypothetical subdivisional method notwithstanding that he eschewed reference to comparable sales as a check; or otherwise the respondent had been negligent because he had not subjected the valuation arrived at by the error-prone hypothetical subdivisional method to the corrective check of the comparable sales method.

64 In the event, the contention fails at a factual level. The case is not one, by distant analogy, where the negligence pleaded and proved, two cars having collided head-on, is that the defendant's car had a faulty tail light.

65 There is possibly a second reason why the contention should fail. The second aspect of the respondent's submissions involved the assumption that in every case of negligent misstatement proof of causation depends upon proof of the representee's reliance on the statement. Such an assumption, see later in these reasons, seems not to be sound.

Proof of causation

66 Being of opinion that the tribunal did not err in law in concluding that the respondent owed the appellant a duty of care, in preparing the valuation, not to cause the appellant pure economic loss, that the valuation was negligently prepared, and that the identified negligence was not irrelevant to the plaintiff's loss and damage, the central issue raised by the appeal resolves itself into this: Did the tribunal commit an error of law - as the appellant submits - in finding that the appellant could not make out a claim for pure economic loss founded in negligent misstatement, or a statutory claim founded in misleading or deceptive conduct, unless it could establish that the misstatement or conduct induced the action resulting in the loss; inducement requiring "active" rather than "passive" reliance?

67 In considering causation, the tribunal began by focussing upon aspects of the appellant's points of claim. There, in respect of the common law claim, the appellant alleged that -

• "As a consequence of the valuation, and in reliance thereupon, the [appellant] paid $115,000 by way of GST ..."; and

• "At all material time the respondent knew that the valuation would be relied upon and used by the vendor and the appellant to calculate the amount of GST payable ... "

68 These allegations were, it was said, pertinent to the question whether the respondent had owed the appellant a duty of care in carrying out the valuation.

69 The Tribunal then embarked upon discussion of "(t)he elements of the cause of action for economic loss resulting from reliance on a negligent misstatement (the Hedley Byrne claim)".[20] In so characterising the ambit of its enquiry, the Tribunal effectively foreclosed enquiry as to what is required, other than reasonable foreseeability of loss, in order that a defendant be made responsible for economic loss in consequence of a statement negligently made or advice negligently given.

70 Consistently with what it had already said, the tribunal then opined, as I have previously noted, that a plaintiff must prove that -

"a. the maker of the statement knew, or ought to have realized, that the person bringing the action, or a class including that person, might reasonably rely upon the statement having been made with reasonable care;

b. (unless the person bringing the action actually requested the maker to provide information or advice) the maker of the statement intended that the person bringing the action, or a class including that person, should rely upon the statement (McHugh J in the Esanda Finance case, above, at 274-275);

...

d. the person bringing the action relied upon the statement, by acting upon and being induced by the statement to enter into a transaction or make a payment (Gummow J in the Esanda Finance case, above, at 301)."

71 Matters (a) and (b) go to the question whether a duty of care arises in the particular case. Matter (d) goes to the issue of causation. Again as I have already noted, the tribunal found that the appellant had proved matters (a) and (b); but not matter (d).

72 The Tribunal said this about matter (d), which it had earlier described in terms of the person having "actually ... been induced, by the statement, to act upon it":

"Clause 17.2.4 required Derring Lane to make an election, at least 14 days before the settlement date of 10 January 2004, whether the margin scheme was to apply. It also provided that Derring Lane should "be responsible for payment of the Vendor's valuation costs". From that provision there was to be implied, in my opinion, a term that if Derring Lane requested the vendor to obtain a valuation the vendor would so so. It did not otherwise, in my opinion, impose any obligation upon the vendor to obtain a valuation. It was silent on the question of whether Derring Lane could commission its own valuation and use that valuation as the basis for calculation of GST under the margin scheme. It was also largely silent on the question of what the options of the parties were if each of them obtained a valuation and the valuations differed, and on the question of whether Derring Lane could insist upon use of the valuation figure arrived at by its own valuer; all one can say is that if there were valuations obtained by each party then clause 17.2.4 required that Derring Lane should pay nevertheless for the cost of the valuation obtained by the vendor. The purpose of this discussion of clause 17.2.4 is to demonstrate that when Derring Lane purchased the land at auction it locked itself in to a rather vague and unclear provision about the way in which it might utilise the margin scheme."

• The vendor had then obtained the impugned valuation from the respondent.

• The appellant's solicitor and a representative of the appellant had thought the valuation seemed low, but that they were bound by the contract to proceed to settlement and appeared to have no choice other than to accept the figures provided.

• The appellant's representatives had relied upon the valuation in the sense that it provided the means for calculating GST.

74 The tribunal, against that background, rejected the respondent's submission that the appellant, though its representatives, had actually believed the valuation to be wrong, but had proceeded to settlement nevertheless.

75 Then the tribunal said this:

"Nevertheless, I accept [the] principal submission [of counsel for the respondent], that Derring Lane has not proved that it relied, in the relevant sense, upon the valuation at the time of settlement. My findings are as follows. By having entered into the contract, Derring Lane was locked into an arrangement that meant that clause 17.2.4 would operate if it made the election referred to in that clause. By having made the election to use the margin scheme, but by not having commissioned any valuation of its own up to the date (three days before the date due for settlement) on which it became aware of Mr Fitzgibbon's valuation, Derring Lane was locked into a further position of having to use the valuation as a basis for settlement or to pursue one of two unattractive alternatives: either to ignore the valuation and its own election and pay GST on the full contract price, or to delay settlement - which would have meant, at least temporarily, a default under the contract - and try to obtain a higher valuation. It decided to use the valuation and pay GST calculated accordingly, not because it believed that the calculations based upon the valuation would be correct but because, in Mr Davidson's words, it 'appeared to have no choice', in practical terms.

I do not question the commercial wisdom of the decision. On the contrary, I think that Mr Davidson was wise not to have got into dispute with the vendor over the application of a vague and unclear clause. The decision was not one, however, that came from reliance upon the valuation. There was no active reliance, as I have termed it, in the way that successful claimants in other negligent mis-statement cases have been able to show. Derring Lane did not put faith in the correctness of the valuation. It did not, on the faith of the valuation, do something that it would not otherwise have done; it would have settled by paying GST in accordance with the margin scheme, rather than pursue an unpalatable alternative. Having become aware of the valuation, it used it in circumstances where there was no practical alternative to doing so. That might be termed passive reliance, but in my understanding of the law it is not enough to establish the kind of reliance which is an element in the cause of action for negligent mis-statement."

76 The terms "active reliance" and "passive reliance", counsel informed us, were coined by the tribunal.

77 The tribunal touched on clause 17.2.4. in one other connection. Is also had to do with the issue of causation:

" ... it was said that any loss or damage suffered by Derring Lane was caused not by any statement of Mr Fitzgibbon but by Derring Lane's own failure to object to the valuation and to obtain its own valuation opinion. I reject that argument because it appears to assume, incorrectly in my opinion, that Derring Lane had clear legal rights, as against Glen Eira City Council, to object to the valuation obtained by Glen Eira City Council and to obtain its own valuation. It is by no means clear that under clause 17.2.4 of the contract of sale Derring Lane had any such rights. I think it highly likely that, if Derring Lane had made its election earlier, had obtained its own valuation and had submitted that valuation to Glen Eira City Council so that the GST could be calculated, then Glen Eira City Council would have accepted that quotation and would not have retained Mr Fitzgibbon to produce another valuation; the witness statement of Mr Graffen[21] seems to indicate that. But that is a different thing from saying that Derring Lane had a right to insist upon the use of a valuation other than one commissioned by Glen Eira City Council. In my opinion that right did not clearly exist. In the event, Glen Eira City Council's attitude to an attempted assertion of such a right was never put to the test. One cannot say that Derring Lane's obtaining its own valuation would have avoided the use of Mr Fitzgibbon's quotation and would have avoided any loss that flowed from its use."

78 Out of all this, I consider that several matters are clear. First, at no point did the tribunal decide upon the proper construction of clause 17.2.4. Yet its consideration of the issue of inducement began and ended[22] with a discussion about the meaning and operation of that clause. Second, because the tribunal recognized that the valuation had played an operative role in the appellant paying the amount of GST that it did, but because, as it found, that role did not involve the appellant paying such amount only on the faith of the reliability of the matter negligently misstated, it discerned a reconciliation of principle in the notions of "active" and "passive" reliance - the former describing the situation in which a representee acts to its detriment on the faith of the representation negligently made, this constituting the only causal reliance upon a misstatement sufficient to establish entitlement to relief.

79 The learned judge in the Trial Division, in his reasons for judgment, noted that counsel for the appellant had "rightly conceded that, in order to establish the negligence claim, it was necessary for the appellant to demonstrate that it relied upon the valuation and that this was the cause of the loss." Against that background, his Honour rejected the submission that -

" ... reliance can be inferred from the fact that the payment of GST by the appellant was calculated by reference to the valuation and, as a matter of commonsense, the negligent valuation was the cause of the appellant's loss constituted by overpayment of GST."

"In my view, this submission ought not be accepted. It obscures the importance of establishing, as an essential ingredient of the cause of action for negligent misstatement, that the misstatement was in fact relied upon by the person claiming to have been induced to act in a particular way in reliance upon it."

He cited, in support of that conclusion, passages from San Sebastian Pty Ltd v The Minister Administering the Enviromental Planning and Assessment Act 1979 and anor,[23] and Esanda Finance.[24]

81 Reference to those authorities led to the learned judge summarising the position this way:

"In order to succeed in an action for loss caused by a negligent misstatement, it is necessary to prove actual inducement in the sense described in the Tribunal's reasons for decision. Of course, such inducement may be inferred from the circumstances of the case."

82 Concluding that the Tribunal had correctly applied the law to the facts of the case, his Honour said this:

"On the factual findings made by the Tribunal, the appellant did not pay GST calculated by reference to the valuation because it believed the valuation to be probably true. It paid this amount of GST because its believed, notwithstanding its doubts about the truth of the valuation, that it 'had no choice' but to settle."

83 Pausing for a moment, this may be said: First, the appellant seems to have argued that it was sufficient if it could demonstrate, as a matter of common sense, a direct link between the negligent valuation and the loss suffered. If there was such a link, "reliance [could] be inferred from the fact that the amount of GST paid by the appellant to the vendor was calculated by reference to the valuation." This argument sought to meld the commonsense concept of causation with an acceptance that reliance - in the sense of inducement - must be proved.

84 Second, presumably because the appellant approached the matter from the standpoint that, by some mechanism, reliance must be proved to make out causation, and in any event because the learned judge regarded proof of actual inducement as essential in that connection, clause 17.2.4 remained unconstrued.

85 Third, his Honour reasoned, as I understand it, that a representee could not prove relevant inducement if, although the representee could not have suffered the loss which it did had it not made a payment the amount of which was dictated by the negligent misstatement, it was led to make that payment because it believed, in the particular circumstances, that it had no choice but to do so.

86 In my opinion, the way in which the appellant put its claim, at the tribunal, before the learned judge below, and at times in argument in this Court, tended to obscure proper analysis of the matter. Once a pertinent duty of care was discerned, the plaintiff had to prove that it had been caused economic loss by the negligent misstatement. The question was then whether, in the circumstances of the case, the appellant had to prove, if it was to recover damages, that it had been induced to act to its financial detriment on the faith of the reliability of the negligent valuation; or whether causation might be proved in some other, and what, way. The further question was whether, if inducement must be proved, there was error in the analysis below of what is necessary to satisfy that test.

87 There is a long line of authorities, in this country and in other common law jurisdictions, in which the necessary causal link between a misstatement actionable in tort and recovery of damages has been expressed in the language of inducement.[25] Many of the authorities have been principally concerned with the question whether a duty of care should be discerned in the particular circumstances, whilst sometimes the question has been one of the proper measure of damages. But none of that denies what has been said in the context of proof of causation. Indeed, making a point that could not be in doubt, counsel for the respondent cited two cases in which the inducement analysis had been employed in determining the presence or absence of a causal link between negligent misstatement and economic loss: AGC (Advances) Ltd v Baillieu Knight Frank (SA) Pty Ltd[26] and Richard Ellis (WA) Pty Ltd v Mullins Investments Pty Ltd (In Liquidation).[27]

88 On the other hand, the common characteristic of the very many cases to which I have been referring is that the plaintiff's conduct, engaged in to its detriment, was voluntary. Whatever may have been the force of the auditor's report, or the property valuation, or the publicly exhibited redevelopment scheme, or the council's certificate, the plaintiff was not constrained to act in the way it did simply because the statement had been made. It was therefore entirely understandable that, when a particular plaintiff acted in a certain manner, it should be put to proving that its conduct was not simply coincidental, but had been actuated by the negligently erroneous statement. There would be such proof if the plaintiff established that it had acted on the faith of the reliability of the misstatement.

89 An analysis such as I have just mentioned could be used - indeed, would almost certainly be the easier of proof - in cases where the circumstances were "akin [or "equivalent"] to contract".[28] But that does not mean that the analysis has application where, by a contract to which the statement-maker is not a party, but of which the statement maker has relevant knowledge, the plaintiff is constrained to act in accordance with the statement made.

90 What I have thus far said leads on to this proposition: There are cases, I consider, in which a negligent misstatement can be held to have caused recoverable damage simply because, as the representor knows will happen, the representee is obliged to, and does, act consonantly with the misstatement, and so suffers loss. Indeed, counsel for the respondent accepted that there is such a class of case, citing Interchase in that connection.

91 I do not say that such cases might not be fitted into reliance/inducement framework, though it may be regarded as artificial to do so. Of this, more later.

92 Counsel for the respondent emphasised that no argument had been raised for the appellant that clause 17.2.4 of the contract of sale was relevant to the question whether the case was of the Interchase kind. He submitted also that the attitude of the parties to the clause had been addressed in evidence. He further submitted that Interchase was a different case, because there evaluation had always been required, whereas here no question of a valuation arose until the appellant made an election under clause 17.2.4.

93 In my opinion, the true meaning of clause 17.2.4 is of great importance to the resolution of this appeal. Its meaning involves a question of construction. Even if some evidence was given at trial about the attitude of the contracting parties to the clause, nothing said by the tribunal suggests that what was said could bear upon the issue of construction. This Court, in the circumstances, is able to undertake the task of construction, and in my opinion it should do so.

94 It cannot be said that the clause is satisfactorily drafted. Nonetheless, it should be read so as to make it workable. Four features should be noted. First, recourse to the margin scheme was to be at the election of the purchaser. Understandably so. Although the vendor was obliged to charge GST, and to remit same when received to the Australian Taxation Office, it was the purchaser which had to pay GST[29] and the amount payable was likely to be less if the margin scheme applied. Second, an election was required to be made at least 14 days before settlement. Third, the clause did not squarely say that the vendor must have a valuation made in the event of the purchaser making an election. But it conveyed that this was the parties' intent by referring to "the vendor's valuation costs" in an unqualified way - that is, it did not refer to "the vendor's valuation costs, if any". Fourth, the clause contained no mechanism for dealing with conflicting valuations.

95 In my opinion, having regard to the features just noted, the clause should be construed to mean, in the event that the purchaser elected that the margin scheme should apply, that the vendor was to obtain a valuation, at cost to the purchaser, which was to provide the basis for calculation of GST. The clause did not contemplate that valuations operative in respect of the application of the margin scheme would be obtained by each of the vendor and purchaser.

96 In the event, and contrary to the tribunal's observation, the situation was not one in which the appellant "locked itself into a rather vague, unclear provision about the way in which it might utilize the margin scheme." So far as the tribunal contemplated that, within the clause, the appellant might have "commissioned a valuation of its own", it misunderstood the import of the clause. This in turn led it to err when it said that the appellant -

" ... was locked into an arrangement that meant that clause 17.2.4 would operate if it made the election referred to in that clause. By having made the election to use the margin scheme, but by not having commissioned any valuation of its own up to the date (three days before the date due for settlement) on which it became aware of Mr Fitzgibbon's valuation, Derring Lane was locked into a further position of having to use the valuation as a basis for settlement or to pursue one of two unattractive alternatives: either to ignore the valuation and its own election and pay GST on the full contract price, or to delay settlement - which would have meant, at least temporarily, a default under the contract - and try to obtain a higher valuation."

97 The true position was rather that the valuation operated to quantify the GST payable - that is, by a comparison of the value of the property as at 1 July 2000 with the purchase price. The purchase price plus the GST so quantified was the total amount payable under the contract, the amount which the appellant was contractually bound to pay.

98 The tribunal noted in its reasons, as I have said earlier, the respondent's concession that at the time he prepared the valuation he knew of the contract of sale, and that he knew both parties would depend upon it for the purposes of calculating GST. It noted also in its reasons that he had certified the value of the land "for GST purposes", and that he had referred in his report to a pertinent GST ruling by the Australian Taxation Office.

99 In the entirety of the circumstances which I have described, I consider that this matter was of the kind considered in Interchase. So viewed, in my opinion the better view is that the case did not turn, in proof of causation, upon the appellant having been induced to act upon the negligent valuation, to its loss, because it believed in the reliability of the valuation. Rather, as the respondent understood - in substance if not in precise detail - when he provided the valuation, the appellant was contractually bound to pay the amount of GST which flowed from application of the negligent misstatement.

100 I have referred to Interchase a number of times. I should say why I consider that it assists resolution of the present matter.

101 In that case the respondent, Interchase, agreed with P that the latter would complete the construction and fitting out of a shopping centre on the respondent's land. When the job was complete, each of P and the respondent was to obtain a valuation of the shopping centre. The average of the valuations was to provide the basis for determining the amount ultimately payable by the respondent to P. Two valuations were made, and each was negligently inaccurate. The respondent had to pay too much. It sued both valuers. One valuer settled, one contested the claim brought against it. The principal question was whether it owed a common law duty of care to the respondent, it having being retained by P, not the respondent. The Queensland Court of Appeal, relevantly confirming the decision at trial, held that a duty of care had been owed.

102 The leading judgement was delivered by McPherson JA. His Honour said this:

"The duty of care alleged by the plaintiff in these proceedings is of a much more direct character than is commonly encountered in cases involving negligent opinions or advice on which someone has chosen to act. That is so because it was the very act of the defendants in delivering their valuations that directly affected and altered the legal rights and duties of the parties to the Development Agreement. It did so by bringing them into binding contractual relations with each other."[30]

And

"Judged by the criterion of 'contractual equivalence', the transaction came about as close as can be to a contract without being one in fact or in law."[31]

103 His Honour considered that support for the existence of a duty of care was to be found in Holt v Cox,[32] in a statement by McHugh JA (as his Honour then was) in Legal & General Life of Australia Ltd v A Hudson Pty Ltd,[33] in the decision of Wootten J in Raine & Horne Pty Ltd, and in Kenny & Good.

104 Emphasizing the particular nature of the plaintiff's claim, McPherson JA said that -

" ... it is to be recalled that the plaintiff's case is presented not as one of 'reliance' on a valuation, but on the footing that the valuations, having on delivery the effect ascribed to them by the Development Agreement of obliging Interchase to pay the additional amount on completion, took immediate effect to the detriment and loss of Interchase by binding it to do so."[34]

105 It is the case, as I earlier noted, that Interchase was primarily decided upon the question whether the particular valuer owed Interchase a duty of care with respect to the preparation and publication of the valuation. It is also the case that the necessary anticipation of reliance, in the context of duty of care, described by Brennan CJ in Esanda Finance[35] is not the same as the actual reliance, or inducement, which has been described in the context of causation. But if a duty of care may arise absent anticipated reliance on the faith of the reliability of a statement, it would seem to follow - as respondent's counsel implicitly accepted by citing Interchase in the context of a submission about causation - that reliance, in the sense of inducement, will not always be necessary in the context of proof of causation. In circumstances where a valuer knows the significance to contracting parties of the valuation which he prepares for one of them, I do not think that the law denies recovery to a contracting party - though not the party who retained the valuer[36] - who is obliged to act consonantly with a negligently prepared valuation or else break the contract.[37]

106 In Legal & General,[38] McHugh JA observed that -

"It is now settled that an action for damages for negligence will lie against a valuer to whom the parties have referred the question of valuation if one of them suffers loss as a result of his negligent valuation."[39]

In support of that proposition, his Honour cited Sutcliffe v Thackrah[40] and Arenson v Arenson.[41]

107 I should briefly refer to Arenson, which followed Thackrah. It involved an attempt to strike out a statement of claim as disclosing no cause of action. The application succeeded at first instance, and in the Court of Appeal. Not so in the House of Lords. The claim, so far as relevant, turned on an agreement between A and B that if B was to leave his employment by a private company, he would sell his shares in it to A, who was the controlling shareholder and chairman, for "fair value" - that being the price determined by the company auditors, whose valuation was to be binding upon A & B. B left the company. The shares were valued by the auditors, and B transferred them to A at that amount. Later circumstances showed, B claimed, that the shares had been grossly undervalued.

108 Consideration of the matter was complicated by a question whether the auditors had acted as arbitrators, and were immune from liability for negligence. But clear it is that their Lordships considered that the case as pleaded disclosed a cause of action in negligent misstatement against the auditors. Since the valuation was to be binding on the parties, the concept of inducement to act on the faith of the reliability of the valuation, as the obligatory causal link, would not seem to have had scope for operation. B's obligation to sell the shares for the amount of the valuation did not depend upon whether he agreed with or distrusted the valuation, or upon whether he had, or did not have, misgivings as to its reliability.

109 In the event, Arenson seems to me to sit comfortably with Interchase, and to bear upon both duty and causation.

Another way of looking at causation?

110 Although, in my opinion, the language of inducement is not apt to describe a situation where a representee acts consonantly with a misstatement because of a contractual obligation owed to someone other than the representor to do so, it does not follow that inducement cannot be made to fit that situation. The tribunal concluded that the appellant had not actively relied upon the valuation. It had not put faith in the correctness of the valuation and done something which it would not otherwise have done. But, when regard is had to the proper construction of clause 17.2.4, it might equally be said that, by making the election there referred to, the appellant committed itself to acting in conformity with the valuation; and that by so committing itself, and then paying GST calculated by reference to the valuation, it ought be taken to have acted in reliance on the reliability of the valuation.

111 The sense of the tribunal's reasoning was that a party obliged to act in a particular way when presented with a negligent misstatement must fail to prove causation regardless whether or not it positively endorsed the reliability of the misstatement before it acted - for its endorsement could add nothing to its obligation otherwise existing. That, with respect, seems to me to be wrong at two points. First, it assumes that an obligation to act consonantly with a statement is necessarily incompatible with inducement to act in reliance on the reliability of the statement. Second, it does not take account of the prospect that there may be more than one cause of loss, of which inducement need only be one.[42]

112 The tribunal did not consider, because it did not construe clause 17.2.4, the potential significance of the appellant committing itself, by making the election, to acting consonantly with the valuation. Again, the tribunal's finding that the appellant "decided to use the valuation and pay GST accordingly, not because it believed that the calculation based upon the valuation would be correct, but because ... it appeared to have no choice, in practical terms" seems to me to sit ill with its rejection of the respondent's submission that the appellant actually believed the valuation was wrong but proceeded to settlement nonetheless; and to have failed to grapple with the conception of multiple causes. The likely explanation of the last-mentioned failure, I think, was the tribunal's categorization of reliance as "active" and "passive", the categories apparently being mutually exclusive.

113 In the event, I would hold, were it necessary, that the tribunal misdirected itself upon the issue of inducement.

The statutory claim

114 Because, in my opinion, the appellant has made good its appeal in reliance on its common law claim, I need not address the nature of the causal relationship required to make good the claim founded on breach of the Fair Trading Act. The respondent submitted, in the context of the statutory claim, that the appellant must have shown that it was misled or deceived by the impugned conduct. Hence, there must be proof of reliance. Counsel cited Ford Motor Company of Australia v Arrowcrest Group Pty Ltd,[43] where Lander J plainly approached the matter in that way. But, as I say, the issue need not be determined.

115 Also because it was advanced in the context of the statutory claim, I will say nothing about the appellant's claim based upon third party reliance.[44] The learned judge below opined, I think correctly, that the tribunal had misunderstood the appellant's relevant submission at trial, but that the tribunal's findings of fact doomed the point in any event. But, as I say, the issue need not be investigated.

What amount of damages should have been awarded?

116 The Tribunal held that, if it had been awarding damages, it would have awarded $35,000. It arrived at that amount as follows: Although a "proper valuation" should have "approximated to" $1.8m as at 1 July 2000, a range of latitude must be allowed to a valuer within which a valuation might be made and yet not be accounted outside a permissible, non-negligent, extreme. The range of latitude was plus or minus 20%. The respondent's valuation, $1.1m, was outside the permissible extreme. It bespoke negligence. The permissible 20% extreme, on the "down side" of a proper valuation, was $1.45m. Damages should therefore be calculated by comparing the amount of GST actually paid on the difference between $1.1m and $2.25m - $115,000, with the amount of GST that would have been payable on the difference between $1.45m and $2.25m - $80,000. The difference, $35,000, was the measure of the plaintiff's damages.

117 Counsel for the appellant submitted, in my opinion correctly, that the question at what figure a valuation so far departed from a "proper valuation" as to bespeak negligence, whilst pertinent to the issue of breach of duty, did not provide the base point for assessment of damages. Rather, the starting point was the value of the land on 1 July 2000, according to the evidence of a "proper valuation" as found by the tribunal. The proper comparison was thus between $1.8 million and $2.25 million. If it was otherwise then, depending upon the valuation made the starting point for comparison could have been $1.8 million plus or minus 20%.

118 In my opinion, had the appellant succeeded in its claim before the tribunal, but been awarded $35,000 in damages, it could have contended, properly, that the tribunal had misdirected itself in its approach to assessment of damages - by treating evidence going to proof of negligence as evidence providing a necessary base point for quantification of damages. Whether the appellant could have raised such a question of law in circumstances that the tribunal found liability against it need not be decided. The fact is that the appellant did not seek to agitate such a question when it sought and obtained leave to appeal to the Trial Division.

119 Appeal is available, on a question of law, from an order of the Tribunal, if leave to appeal is granted.[45] The circumstances in which leave will be granted were discussed by Phillips JA in Secretary to the Department of Premier and Cabinet v Hulls.[46] Although there is some capacity to extend time, s 148 of the Victorian Civil and Administrative Tribunal Act plainly contemplates that the question of law will be speedily identified and pursued.[47]

120 A question might arise whether, one question of law having been identified and having been the foundation stone of grant of leave to appeal, it is open to an appellant to supplement the appeal by recourse to a further question of law - the time for identification of a question of law having long expired. It was noted in Housing Guarantee Fund Ltd v Moutidis[48] that an appellant, having been granted leave to appeal, had amended its grounds of appeal so as to challenge the Tribunal's very jurisdiction. But the efficacy or otherwise of the amendment, which presumably raised a new question of law, was not decided.

121 The issue which I have highlighted is akin to that which, in the context of s 109 of the Magistrates' Court Act 1989, gave rise to considerable debate in appeals to which Order 58 of Chapter 1 of the Rules in its previous form applied.[49] It is an issue which is also akin to, though not identical with, the legislative regimes considered in State of Victoria v Bacon,[50] where the presently relevant question was left unanswered and in He v Aloe[51] where the Court permitted the reformulation of questions of law by a self-represented litigant.[52]

122 The question which might have arisen was not agitated, however, before us. Rather, counsel for the appellant contended that the Court's power under s 148(7)(b) of the Act to make an order which the tribunal could have made enabled the Court to make an order in his client's favour for $70,000.

123 In my opinion, the Court does not have power to make an order which is dependent, in substance, upon the resolution, favourably to the appellant, of a question of law which is not raised by the notice of appeal. That is so regardless of the proper answer to the question whether a new question of law may be relied upon once leave to appeal on a particular question of law has been granted.

124 Having regard to the amount involved in this controversy, and to the fact that it has already been the subject of litigation in the tribunal, the Trial Division, and this Court, it would be much the best thing if an order could now be made bringing the matter to an end. But, unless the respondent consents to an order being made against it for $70,000 rather than $35,000, I think that the matter must go back to the tribunal for the pronouncing of orders in conformity with this Court's reasons.

[1] The land described in Certificate of Title, Vol 10638, Folio 634.

[2] See the tribunal's reasons at [9].

[3] [1997] HCA 8; (1997) 188 CLR 241, at 252 per Brennan CJ and at 274-275 per Mc Hugh J.

[4] [2003] 1 Qd R 26.

[5] Those concessions sat comfortably with the respondent's note of his instructions: "To ascertain the fair current market value of the said property, as at 1st July 2000, to facilitate the calculation of GST for sale settlement purposes using the Margin Scheme.."

[6] Ibid at 47-48, [48] per McPherson JA.

[7] [1963] UKHL 4; [1964] AC 465. See, for instance, per Lord Reid at 492-493 and Lord Morris at 504.

[8] Cf Hedley Byrne at 483 per Lord Reid.

[9] [1968] HCA 74; (1968) 122 CLR 556 at 570.

[10] [1970] UKPCHCA 2; (1970) 122 CLR 628.

[11] It was cited by McPherson JA in Interchase, supra, at [47], 47.

[12] [1983] 3 NSWLR 221.

[13] Paraphrasing his Honour's findings at 229.

[14] Ibid, at 232.

[15] Ibid, at 236.

[16] Ibid, at 236

[17] Ibid, at 237

[18] Ibid at 237.

[19] Otherwise called by witnesses "the Turner Method", in reference to Turner v Minister of Public Instruction [1956] HCA 7; (1956) 95 CLR 245.

[20] Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964].

[21] Apparently an employee of Glen Eira City Council.

[22] At paragraphs 31 and 32, and at paragraphs 40 and 41 of its reasons.

[23] (1986) 162 CLR 341, particularly at 357 per Gibbs CJ, Mason, Wilson and Dawson JJ, and at 366-367 per Brennan J.

[24] Supra at 257 per Dawson J.

[25] One could begin, in relatively modern times, with the dissenting judgment of Denning LJ in Candler v Crane, Christmas & Co [1951] 2 KB 164, approved by the House of Lords in the Hedley Byrne case. See also, in England, amongst many authorities, Smith v Eric S Bush and Harris v Wyre Forest District Council [1990] UKHL 1; [1990] 1 AC 831, Caparo Industries plc v Dickman and ors [1990] UKHL 2; [1990] 2 AC 605, and Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1996] UKHL 10; [1997] AC 191. In Australia, see for example San Sebastian at 357 per Gibbs CJ, Mason, Wilson and Dawson JJ, and at 366 per Brennan J; Esanda Finance at 256 per Dawson J, and at 287 impliedly by McHugh J; and Kenny & Good Pty Ltd and Anor v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413.

[26] Full Court, Supreme Court of South Australia, 12 October 1992, unreported.

[27] (1995) 124 FLR 157.

[28] The meaning of the term, often used, is not free of debate. Lords Templeman and Jauncey did not agree whether Smith and Harris were such cases. Its meaning, in a particular context, was described by Gummow J in Hill v Van Erp (1997) 188 CLR 159 at 233. In Kenny & Good, Mc Hugh J, citing Gummow J's observations, applied it to a "free rider on the contract"; supra at 434.

[29] Though it might ultimately recoup the same from the ATO, or set off the amount paid against GST charged by it.

[30] Supra, at 39, [27].

[31] Supra, at 40, [30].

[32] [1997] NSWSC 144; (1977) 23 ACSR 590 at 596.

[33] (1985) 1 NSWLR 314 at 335.

[34] Supra, at 41, [32].

[35] Supra at 252.

[36] Albeit the party who must pay the cost of the valuation.

[37] At least recovery should not be denied where the affected party does not know that the valuation is negligently - and detrimentally to that party - inaccurate.

[38] Citation at footnote 33.

[39] At 335F-G.

[40] [1974] AC 727.

[41] Reported as Arenson v Casson Beckman Rutley & Co [1977] AC 405.

[42] See, for instance Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 at 493, [106]- [107] per McHugh JA, Hanave Pty Ltd v Lfot Pty Ltd & Ors [1999] FCA 357; (1999) ATPR 41-687 at 42,791 [46] per Kiefel J, Smith v Noss [2006] NSWCA 37 at [26]- [27] per Gyles JA.

[43] (2003) 134 FLR 532 particular at s 35 [94], 536-539, [98]-[123].

[44] See Janssen Cilag Pty Ltd v Pfizer Pty Ltd (1992) 37 FLR 526, McCarthy v McIntyre [1999] FCA 805 and Hampic v Adams [1999] NSWCA 455 at [35]- [36].

[45] Victorian Civil and Administrative Tribunal Act 1998, s 148(1).

[46] [1999] VSCA 117; [1999] 3 VR 331 at 335-337.

[47] See s 148(2)(a), (3).

[48] [2004] VSCA 226, per Eames JA at [6].

[49] Williams, Civil Procedure in Victoria, paras 58.06.170-175. That matter was left open by Brooking JA in Ericsson Pty Ltd v Popovski (2000) 1VR 260 at 267-268, [22].

[50] [1998] 4 VR 269.

[51] [2006] VSCA 150.

[52] Ibid at [3]-[6]. The reasons suggest, however, that it was not argued that re-framed questions could not be relied upon, as being out of time. See also He v Aloe & Co Pty Ltd [2006] VSCA 235 at [3]- [5]