REASONS FOR JUDGMENT
CONTI J
86 I am grateful to Sundberg and Emmett JJ for their comprehensive review of the course taken by the proceedings at first instance and on appeal. I have reached the view however that the conclusions of the primary judge in relation to the critical representations, denoted (a), (b), (d), (i) and (j) in the proceedings, should be upheld on appeal. The circumstances of the present litigation serve to exemplify the extent to which the operation of s 51A of the Trade Practices Act 1974 (Cth) ("the Act") has overtaken the common law doctrine of collateral warranty, particularly by reason of the reversal of the onus of proof in relation to representations as to future matters. The conclusions of the primary judge were critical of the commercial behaviour of the appellant property developer/owner, which had found itself placed in circumstances of difficulty in attracting prospective occupiers to its substantial commercial property development, which at the time the parties first came into contact was close to completion. The first respondent became one such occupier of certain shop premises within the complex, but withheld from signing any lease or other occupancy agreement in favour of the appellant prior to the first respondent's abandonment of those shop premises. That respondent did however commit itself to the fitting out of those shop premises, and thereafter to what quickly became the unprofitable conduct of an Italian food outlet therefrom for a limited period of time.
87 My starting point for these reasons for judgment is that Mr Gan, the principal decision-maker of the respondents Bluehive Pty Ltd and Gan Holdings Pty Ltd (together "Bluehive"), was found by the primary judge to be a witness of truth, but no such affirmative finding was made in relation to Mr Hii or Mr Cook, the principals associated with the appellant ("Dukemaster"). Moreover the appellant did not seek to disturb on appeal the findings of the primary judge that those representations (a), (b), (d), (i) and (j) were made by Dukemaster to Bluehive substantially to the effect reproduced below:
"(a) that the shopping centre would offer a three level retail arcade;
(b) that the shopping centre would have a tenant mix including a supermarket and 55 specialty shops;
…
(d) that there would be a bistro/gaming venue located on the upper Bourke Street level of the shopping centre which would trade to 1:00am every night of the week;
…
(i) that Bluehive would have a turnover of about $8000 per week;
(j) that there would be 450 seats for patrons in the food court and each seat would generate about $14,000 per annum, making a total annual income of about $6,300,000 for the 8 shops in the food court;
…"
88 As to representation (a), the primary judge found that by August 1996, when the representation was made by virtue of the contents of the "Brochure" and the "Guidelines" handed by Dukemaster's representations to Bluehive's representatives:
"… the Centre was still little more than a shell with a history of failed attempts to lease the shops on the Bourke Street and Upper Bourke Street levels."
The primary judge further found in that context that "[i]ndeed, even when the Centre commenced trading almost a year later, it was still barely tenanted" (see [21] of the primary judge's reasons for judgment of 16 November 2001, being the second of his Honour's judgments in the proceedings, to which I shall hereafter refer to as "the second judgment below"). The material parts of the Brochure and Guidelines have been reproduced in the contemporaneous reasons for judgment of Sundberg and Emmett JJ.
89 The primary judge found in the course of [121-138] of the second judgment below, in relation to representation (a), that the same was misleading within s 51A of the Act, since at the time it was made, the shopping centre "… did not have retail shops or retail services provided on all three levels, and there was no prospect whatever that it would provide such shops or services at any stage in the foreseeable future". His Honour also found that "[i]t was plainly implicit in what was said in the Brochure that there would be retailers offering goods and services to members of the public on all three levels…, [being] an important selling point…," and further that "[a] three level retail development would be likely to attract substantial numbers to the Centre, thereby generating business for shops in the food court… [whereas] [o]ffice space, whether let or unlet, would hardly achieve the same result." His Honour found further again that "[w]hen the Centre finally opened on 28 July 1997, almost a year after the Meeting took place, there were still only two retail shops open on the Bourke Street level, and none at all on the Upper Bourke Street level". It was largely in the context of those findings that the primary judge reached the following further conclusions adversely to Dukemaster, namely that "… at the time the Brochure was provided to Mr Gan there was not in existence, and not likely to be in the foreseeable future, a fully let, or successful retail trade", and "[f]or whatever reason, the premises were (and were known by Dukemaster to be) largely unlettable for retail purposes". In the meantime, it appears that in or about December 1996, Bluehive made financial commitments in relation to what I might describe broadly as the commencement of the fitting out of the premises as an Italian food outlet.
90 As to representation (b), the primary judge dismissed what I would describe as Dukemaster's disingenuous submission that in publishing the Brochure and the Guidelines, it thereby said nothing more than that there would be a space in the Centre for 55 potential tenants. His Honour concluded at [139] of the second judgment below that he was satisfied that representation (b) was made in the terms pleaded, and further at [141] that "[t]here is a significant difference between telling a prospective tenant that it was originally conceived that '55 specialty shops' would be built as part of a project, and representing that the Centre currently 'offers some 55 specialty shops' ".
91 As to the critical issue of Bluehive's reliance upon representations (a) and (b), the primary judge concluded as follows:
"142 In my view, the evidence sufficiently establishes that Mr Gan, on behalf of Bluehive, relied upon both representations (a) and (b) when he decided to enter into the lease of Shop 5, and committed Bluehive financially and irrevocably to that course. Not only was the general tenor of Mr Gan's evidence to that effect, but it would be impossible not to draw that inference from the evidence taken as a whole.
143 Long before the Centre opened on 28 July 1997, it was perfectly apparent that there would not be a three level retail arcade. There was also no prospect of '55 specialty shops' being occupied. However, by the time that this had become clear, Bluehive was financially committed to operating Shop 5 as an Italian food outlet. It had carried out an expensive fit-out. From at least December 1996, it had passed the point of no return."
I should again emphasise, in the context of the above findings, that such financial commitment on Bluehive's part did not involve the signing of a lease or an occupancy agreement in favour of Dukemaster. Nevertheless, the fitting out of the shop premises as an Italian food outlet, and the subsequent operation thereof, did involve a financial commitment of significance, such as to satisfy in principle the notion of reliance according to law. It is illustrative of the difficulties then facing Dukemaster that it did not require the signing of a lease or occupancy agreement as a condition for allowing Bluehive into possession.
92 Representation (d) was asserted by Bluehive to be partly oral and partly in writing. Dukemaster's submission in relation thereto was essentially to the effect that although the Guidelines had referred to the Centre offering a "bistro/gaming area", nothing had been said about there being a "bistro/gaming venue", hardly a distinction of substance, as the primary judge pointed out at [145] of the second judgment below. Bluehive's principal decision-maker Mr Gan testified that he had relied upon that representation, despite his then imperfect understanding of the nature of a bistro and gaming area, and further that he regarded the existence of a bistro/gaming "zone" as being good for Bluehive's take-away food business, because its presence, and late closure times, meant that there would be people coming through the Centre, not just throughout the morning and early afternoon, but the entire day, thus creating a continual flow of pedestrian traffic (see [33-34] of the second judgment below). The primary judge was satisfied that representation (d) was in fact made, and must be taken to be misleading, albeit that in his view, representation (d) was not sufficient, standing alone, to warrant granting Bluehive the relief it sought in the proceedings (see [147] of the second judgment below), representation (i) having significance only by way of supplement to representations (a) and (b).
93 I am unable to accept that to the extent that the findings of the primary judge at [123] of the second judgment below, in relation to representation (a), contained the concluding temporal expression "in the foreseeable future", notwithstanding that representation (a) as pleaded did not literally include those words, derogated from the force and efficacy of those findings. I further think that the same observation is true of the primary judge's subsequent findings in [126] and [140] in the second judgment below, which also contained the expression "in the foreseeable future". Sub-sections 51A(1) and (2) of the Act do not require that a representation with respect to "any future matter" should necessarily assign any specific future time or occasion to when that representation was supposedly to take effect. Those statutory provisions may equally operate in context upon a representation as to the occurrence of a matter or circumstance unspecifically in "the foreseeable future", particularly in situations where, to borrow the dictum from Lee J as a member of a Full Court in Wheeler Grace & Pierucci Pty Ltd v Wright (1989) ATPR 40-940 at 50,251, there has been, as here, a "failure to qualify the statement or disclose the risk of non-fulfilment" on the part of the representor.
94 Nor does it seem to me that representations (a) and (b) are to be denied efficacy or significance according to their respective terms, because of the presence in the Brochure of the expression "55 shops are proposed in the project", and in the Guidelines of the expression "offers some 55 specialty shops" (my emphasis). Those phrases were not used in a contextual vacuum, but appeared in the documents handed to Bluehive's representatives at the time of their inspection of what was physically obvious by then a retail development approaching completion of construction. I should add that the Brochure also used the description "… is a retail development". It was open to Dukemaster to have disabused Bluehive's expectations generated by those descriptions presented by the Brochure and Guidelines, before Bluehive "had passed the point of no return" in December 1996, being critical finding of the primary judge appearing in [143] of the second judgment below.
95 I do not think therefore, in the light of the content relevantly of the Brochure and Guidelines, and of the events which happened up to and including December 1996, that the primary judge erred in his conclusion in [142] of the second judgment below that "… the evidence sufficiently establishes that Mr Gan, on behalf of Bluehive, relied upon both representations (a) and (b) when he decided to enter into the lease of Shop 5, and committed Bluehive financially and irrevocably to that course". That conclusion is assisted moreover by his Honour's finding in relation to representation (d). The primary judge was of course more advantageously placed than a Full Court in discerning the nuances of the circumstantial context which prevailed in December 1996, when Bluehive reached "the point of no return" (the evidentiary description referred to in [94] above). It follows that irrespective of Bluehive's success or otherwise upon the remaining representations, including representations (i) and (j), Dukemaster must fail on its appeal.
96 Moving then to representations (i) and (j), being the only other representations of ultimate significance, the same were said by Bluehive to have been orally made by Mr Hii and Mr Cook on behalf of Dukemaster to at least Mr Gan of Bluehive (and Gan Holdings Pty Limited). The primary judge found at [115-116] of the second judgment below as follows:
"Whatever the formal state of the pleadings, I am in no doubt that the case before me was conducted upon the footing that if Mr Gan and Mr Sayers were believed, and Mr Hii and Mr Cook not believed, Dukemaster would be found to have made at least representations (h), (i) and (j).
Now that the issue of the sufficiency of the evidence to support representation (h) has been raised, my inclination is to limit my findings to representations (i) and (j). I conclude that those representations were made. I also conclude that they were representations as to 'future matters' within s 51A and are accordingly to be taken to be misleading unless Dukemaster had reasonable grounds for making them. It has never been suggested by Dukemaster that there were any such grounds. I find there were none."
97 As to the matter of reliance upon the representations (i) and (j), I accept that some debateable difficulties emerge. The primary judge found in relation thereto at [117] of the second judgment below as follows:
"I accept the evidence of Mr Gan that he relied upon those representations, and that Bluehive would not have taken up the lease of Shop 5 had they not been made. Much of Mr Gan's evidence concerned the oral representations. He was cross-examined at great length about them. He stressed how impressed he and Mr Sayers had been with what they had been told. It is clear that financial considerations were of the utmost importance so far as Mr Gan was concerned. He explained how he arrived at a rental offer of $55,000 per annum as a percentage of turnover being 12-13% on a projected weekly figure of $8,000. I accept that evidence, just as I did in my primary judgment. Mr Gan had to consider carefully whether to go into Southbank or go (sic) take up the tenancy at Shop 5 at the Centre. As he was going to invest a great deal of his own money, and that of his wife, in fitting out and stocking up Shop 5, the representations made by Mr Hii and Mr Cook that tended to suggest that it would be a sound business venture were all likely to have played some role in persuading him to take up the lease."
98 His Honour proceeded thereafter in [118] of the second judgment below to find that representations (i) and (j) were causally connected with the loss which he found to have been sustained by Bluehive, and he cited in that context Henville v Walker (2001) 206 CLR 459 at 469, where Gleeson CJ said as follows:
"For there to be the necessary causal relationship between a contravention of s 52, and loss or damage, so as to satisfy the requirements of s 82(1), it is not essential that the contravention be the sole cause of the loss or damage… In the present case there were two concurrent causes of the imprudent decision to buy the land and undertake the development project. The conduct of the respondents was one of those causes. That is enough."
I would add that earlier at 468, the Chief Justice also said as follows:
"It will commonly be the case that a person who is induced by a misleading or deceptive representation to undertake a course of action will have acted carelessly, or will have been otherwise at fault, in responding to the inducement. The purpose of the legislation is not restricted to the protection of the careful or the astute…"
Moreover at 494, McHugh J observed as follows:
"Similarly, in respect of claims under s 82, courts have accepted that loss or damage is causally connected to a contravention of the Act if a misrepresentation was one of the causes of the loss or damage sustained by the claimant."
99 The notion that there may be two or more causes of the same loss or damage, in contrast to the existence of only one cause and perhaps a further remote cause thereof, had been recognised by the High Court, in relation to proceedings under s 82 of the Act prior to Henville v Walker, particularly in the context of contravening conduct within s 52 thereof : see Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 at 512 (McHugh, Hayne and Callinan JJ), Kenny & Good Pty Ltd v MGICA (1992) Limited (1999) 199 CLR 413 at 460 (Kirby and Callinan JJ), and most recently I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Limited (2002) 192 ALR 1 at 8-9 (Gleeson CJ), 11-14 (Gaudron, Gummow and Hayne JJ), 23-25 (McHugh J), 39-42 (Kirby J) and 53-54 (Callinan J). Section 82 of the Act, as construed and applied in those authorities, reflects in my opinion the approach taken by the common law, in relation to the tort of deceit, to the effect that once a representation has been shown to have altered the position of an applicant for relief in reliance on the misrepresentation, a measure of leeway should be given to that applicant, in the sense that he or she would not lightly be found to have ceased to be subjected to the impact or influence of that misrepresentation.
100 By way of one illustration, in Gould v Vaggelas (1983-1985) 157 CLR 215, which related solely to the common law tort of deceit, Gibbs CJ said at 228 as follows:
"However, a suspicion that they had been defrauded is very different from a full knowledge of the extent of the fraud, and the fact that they had an opportunity to take action that might have averted further losses does not necessarily mean that it was unreasonable to fail to do so. The critical question is whether it was unreasonable for the Goulds to continue to allow the company to trade…"
And further at 251-252, Brennan J said as follows:
"If the representor leads the representee to believe any part of the representation which is, and is known by the representor, to be untrue and the representee acts on that belief and suffers damage, the representor does not escape liability because the representee did not believe the representation in full. If the representee's desire to own what was for sale leads to the giving of some credence to the representation which would not otherwise have been given, the representee's self-induced gullibility is no defence to the representor."
101 The origin of the "leeway" notion to which I have just referred may be traced to the following dictum of Lord Cranworth LJ in Reynell v Sprye (1852) 42 ER 710 at 728:
"Once make out that there has been anything like deception and no contract resting in any degree on that foundation can stand."
The notion may be recognised in the majority judgment of the Privy Council (Lord Cross of Chelsea, Lord Kilbrandon and Sir Garfield Barwick) in Barton v Armstrong (1973) 2 NSWLR 598 commencing at 622. At 631, the following appears:
"If it were established that Barton did not allow the representation to affect his judgment then he could not make it a ground for relief, even though the representation was designed and known by Barton to be designed to affect his judgment. If on the other hand Barton relied on the misrepresentation, Armstrong could not have defeated his claim to relief by showing that there were other more weighty causes which contributed to his decision to execute the deed, for in this field the court does not allow an examination into the relative importance of contributory causes."
102 Subsequently in Australian Steel & Mining Corporation Pty Ltd v Corben (1974) 2 NSWLR 202 at 207, the New South Wales Court of Appeal (per Hutley JA with whom Moffitt P and Samuels JA agreed) postulated the extent of the leeway expansively as follows:
"…The party relying upon misrepresentation to avoid a contract has to prove that the false statement did influence him…, but it is not correct to say that the representation must be the very ground upon which the transaction has taken place. Once there is acceptable evidence that the representation was one among the factors which induced the contract, that is sufficient.
I am also of opinion that the proposition that the misrepresentation must be material is incorrect."
In support of that approach, Hutley JA cited with approval the following passage from the judgment of Cussen ACJ in Nicholas v Thompson [1924] VLR 554 at 565:
"In connection with this question of 'materiality' the test of the ordinary reasonable man has been suggested, and no doubt in many cases the test can, as a matter of evidence and for the purposes of the tribunal which has to find the facts, be properly resorted to. It must be remembered that there may be cases, though they do not often occur, in which what would be 'material' to the ordinary man would not be 'material' to the parties or one of them."
103 What has been cited from Australian Steel & Mining Corporation, concerning "one among the factors which induced the contract", renders it strictly unnecessary for Bluehive to succeed in relation to representations (i) and (j), in addition to representations (a), (b) and (d), assuming that the primary judge did not err in relation to the latter representations, which I would find to be the case. In any event, I think that the "leeway" notion to which I have referred, if capable of analogous application to the doctrine of reliance upon misrepresentations, which I consider to be feasible, should assist to lead to the rejection of the appeal in relation to representations (i) and (j) as well.
104 Dukemaster has contended that reliance could not have been reasonably placed by Bluehive upon representations (i) and (j), for reasons provided by Sundberg and Emmett JJ. One of those reasons was that Bluehive did not formally plead that the making of representations on the part of Dukemaster, concerning the turnover and income Bluehive would derive from operating an Italian food outlet in the subject premises, other than very belatedly, namely at the time of commencement of the proceedings below. Another reason was that no reliance testimony was raised by Bluehive in any written outline of Mr Sayer's testimony on behalf of Bluehive prior to the time of commencement of the proceedings. The primary judge recognised those shortcomings, in the presentation of Bluehive's case below, but his Honour nevertheless allowed a measure of leeway in favour of Bluehive upon the issue of reliance, in the context of his conclusions upon the nature and extent of the conduct of Dukemaster involved in the making of misrepresentations (i) and (j), and in the non-fulfilment thereof. Particularly given the volume and complexity of the testimony and documentation placed before the primary judge, and of the complex evidentiary tasks which he was required to resolve, inter alia in relation to representations (i) and (j), I think that it would be unsafe and incorrect for me to form my own view upon issues of reliance, in preference to the conclusion of the primary judge, which arise in relation to those representations.