BLUEHIVE'S APPEAL
Representations (g) to (k)
17 It was submitted that the primary judge should have inferred from all the circumstances that none of the above representations was made. It will be recalled that his Honour accepted Mr Gan's account of the meeting because it was supported by the letter of offer. Mr Gan's and Mr Sayers' evidence was that Mr Cook told them during a tour of the Centre that the grand opening was expected to be in December 1996. Mr Cook denied taking Mr Gan on a tour of the Centre, but did not deny having said the Centre was expected to open in December. In the circumstances it is not surprising that the primary judge found that representation (g) was made. No attempt was made to persuade us that he should not have so found. However nothing turns on this finding because Bluehive conceded that it had not relied on the representation when entering into the lease. Representation (h) does not appear to us to be supported by any evidence. Neither Mr Gan nor Mr Sayers claimed that he had been told by Mr Hii or Mr Cook that Dukemaster could easily meet its rental of $50,000 per annum. We were told that at first instance the case proceeded on the basis that this representation was made out on the evidence. On appeal, senior counsel for Dukemaster sought to withdraw this concession so as to be able to contend that there was no evidence to support the representation. A party who has conceded an issue at trial will be allowed to contest that issue on appeal only in the clearest case and on the most cogent grounds: Port Jackson Stevedoring Pty Ltd v Salmond & Spraggon (Aust) Pty Ltd (1978) 139 CLR 231 at 241. No grounds, let alone cogent grounds, were put before us, and we decline to allow the matter to be agitated. Representation (i) is supported by Mr Gan's evidence that Mr Cook told him he should manage a weekly turnover of between $8,000 and $15,000. Mr Sayers' evidence was to much the same effect ‑ a minimum of $8,000 per week and that "we would expect to do $15,000 per week".
18 Representation (j) is supported by Mr Gan's evidence that Mr Hii told him there would be 450 seats in the food hall and that he expected each seat would generate $14,000 per annum, though there is no clear evidence that Mr Hii went on to say that this would make a total annual income of about $6,300,000 for the eight shops in the food court. In the course of cross‑examination Mr Gan was asked whether there was anything in writing saying there would be 450 seats for patrons in the food court, each seat generating about $14,000 per annum "making a total annual income of about $6.3 million for the eight shops in the food court". He replied that there was not, but that it had been said to him at the meeting. We think it likely that Mr Gan would have understood the reference to total annual income to be counsel's interpolation rather than something that had been said at the meeting. Mr Sayer's evidence partially supports the representation in that he said Mr Cook told him there would be 450 seats in the hall and that Dukemaster had done a calculation on the turnover the food hall would generate. He did not say what the calculation was. Mr Hii and Mr Cook both denied having said anything about the number of seats that would be available or how much they would generate. We need not dwell on the fact that the second part of the representation may not have been sustained by the evidence. The case below was conducted on the basis this representation (j) was made out.
19 Neither Mr Gan nor Mr Sayers provided any support for representation (k). It is true that Mr Sayers said Mr Cook told him they could expect a turnover of $15,000 a week, and that Mr Gan said Mr Cook told him he would expect a turnover of between $8,000 and $15,000 a week. Even though $15,000 multiplied by 52 weeks equals $780,000, that does not sustain a representation that turnover rent of $780,000 per shop was quite easily achievable. Although the letter of offer refers to $780,000, it does not sustain the representation pleaded. On the appeal counsel for Bluehive informed the Court that they did not seek to support the finding that representation (k) had been made.
20 If the primary judge had preferred the evidence of Mr Gan and Mr Sayers over that of Mr Hii and Mr Cook because he disbelieved the latter, or because the accounts of the former accorded more with the probabilities, we would have no difficulty in concluding that he was entitled to do so. But his Honour's reason for accepting Mr Gan's account is that one aspect of it was supported by the letter of offer. This was representation (i), though not as pleaded, which was that Bluehive would have a turnover of about $8,000 per annum. The evidence that emerged at trial differed from the pleading in that Mr Cook was alleged to have specified a turnover range of between $8,000 and $15,000. It was the multiplicational link between $15,000 and $780,000 that founded the primary judge's use of the letter of offer to choose between the two accounts of what occurred at the meeting. In explaining why he regarded the letter as critical in this respect his Honour said, first, that Mr Cook could provide no explanation as to how the $780,000 figure came to be in the letter. We are not sure why the fact that someone in the Dukemaster camp could not explain it is a matter of significance. Then his Honour said there was no reason for Mr Gan to volunteer to pay a rental figure in excess of the required base rent. This overlooks the fact that in May 1996 Bluehive negotiated with Dukemaster and its real estate agent about Shop 1 in the Centre. In the course of these negotiations Mr Gan discovered that Dukemaster's standard offer to lease provided for a percentage rent when turnover exceeded a specified amount. Accordingly, if it wanted Shop 5, there was a good reason for Bluehive to offer a turnover rent. We are thus unable to agree with the primary judge's conclusion that Mr Gan's offer to pay a turnover rent "had to be in response to something said about that subject during the course of the meeting", and that it was therefore obvious that $15,000 turnover had been mentioned by Mr Hii or Mr Cook. Given Mr Gan's awareness that Dukemaster wanted a turnover rent for space in the Centre, it is just as likely that Mr Gan and Mr Sayers, in the course of their discussion after the meeting, fastened upon $15,000 of their own volition.
21 It is not clear whether, independently of the letter of offer, the primary judge would have accepted Mr Gan's account of what occurred at the meeting. His Honour noted aspects of Mr Cook's account that he found improbable, and that one part of his evidence was "difficult to accept". But he also noted matters that "may cast doubt upon the credibility" of Mr Gan and Mr Sayers. He mentioned disparities between their accounts and the fact that Mr Gan did not mention any of the representations about projected turnover until the application was filed in December 1998. The turnover representations were not mentioned by Bluehive's solicitors in their letter to Dukemaster's solicitors of 28 August 1997 setting out in detail the misrepresentations allegedly made to Mr Gan to induce him to take a lease of Shop 5. The representations did not feature in proceedings instituted by Bluehive, Holdings and Mr Gan against Dukemaster in 1998 in the Victorian Civil and Administrative Tribunal. Bluehive's pleading in the Tribunal was almost word for word the same as that appearing in its statement of claim in the present case, save for the absence of representations (h) to (k). Mr Gan's explanation for this was that he assumed that Mr Hii and Mr Cook would deny having made the turnover representations, and that in order to avoid getting into a slanging match with them he had raised only those matters that could not be the subject of any dispute. Understandably, the primary judge found this explanation "not wholly convincing". We entertain considerable doubt whether, but for the letter, his Honour would have accepted Mr Gan's account of the facts relevant to representations (h), (i) and (j). Counsel were in agreement that if we thought the letter of offer too fragile a basis for preferring Mr Gan's account of what was said at the meeting, as we do, we should not attempt to assess what the primary judge would have done had he not attached the importance he did to the letter, or to form our own view, but should remit the matter to his Honour in order for findings to be made about those representations in light of our conclusions about the letter of offer, and about the other pleaded representations. In view of this, it would be inappropriate for us to deal with that part of the appeal concerned with the primary judge's assessment of damages, or with Dukemaster's cross‑claim for rent which the primary judge dismissed.