Reliance by Sangain on the Oral Representations
38 I turn then to consider the question of reliance on the misleading or deceptive conduct.
39 Mr Foini submitted on the appeal that a finding of reliance was not "available on the evidence" and that the finding of reliance that was made "involved perversity or manifest unreasonableness in fact-finding".
40 He correctly conceded that the issue of reliance was not to be determined objectively but, rather, involved determining the subjective question of whether as a matter of fact Mr Sanna, on behalf of Sangain, relied upon the oral representations in causing Sangain to enter into the supply contract with Italform.
41 As pointed out by French CJ in Campbell, there may be "practical overlaps" in the resolution of the "logically distinct questions" of whether there has been misleading or deceptive conduct and whether a person has suffered loss or damage thereby for the purposes of legislation such as s 52 of the Trade Practices Act (at [24]). As his Honour further pointed out, a contractual disclaimer of reliance will in many cases not "be taken to evidence a break in the causal link between misleading or deceptive conduct and loss" (at [31]). Despite such a provision the representee may "nevertheless be found to have been actuated by the misrepresentations into entering the contract. The question is not one of law, but of fact" (at [31]). Thus, in the present case, the subsequent written statement as to delivery time did not necessarily preclude a finding of reliance by Mr Sanna on the earlier oral representations.
42 To recover damages for contravention of s 52 it is necessary to show that loss was caused "by" the contravention. In many cases, this will be shown by proving that the conduct was relied upon in the taking of some action, often, as here, by the entry into a contract. In other cases, particularly when the misleading or deceptive conduct is constituted by a failure to speak or advise, the notion of "reliance" is less useful as one of the "tools of analysis" to be utilised for the purpose of determining whether there is "a causal connection (denoted by the word 'by') between [misleading or deceptive] conduct and the loss and damage allegedly suffered" (Campbell at [102] and [143]).
43 Contrary to the submission of Mr Foini, the finding of reliance by Sangain (and therefore, in this case, of causation of loss) was available on the evidence. Determination of the factual question of reliance was a matter for the Referee (and in a limited sense also for the primary judge: see [18] - [19] above). Mr Foini's submission must be rejected if it is concluded, as I do conclude, that there was evidence capable of supporting the Referee's conclusion that Sangain was induced by the oral representations to enter into the supply contract with Italform. Examples of evidence of this character given by Mr Sanna are as follows:
- "Q. Eight weeks, if it had been discussed between you and the people at Meriton [a reference to Karimbla], was not considered anything more than an estimate as to when the cranes would arrive; correct?
A. No, it's very important. Eight weeks is the important time.
Q. Why, then, is eight weeks not mentioned in your quote to Meriton?
A. I don't need. Been talking verbally. This what he's verbally - with everybody there. I not see the reason to write that. I still never believe can happen what's happened - never believed that. I believe the cranes will arrive in Australia in eight weeks. Always I believed that".
- "Q. I want to suggest to you that whatever you might have thought about eight weeks back in February, you didn't believe it any more come 22 March?
A. No, I believe always".
- "Q. Well, you had been told either just before or just after 21 February that the cranes would be in Australia, erected in eight weeks?
A. I believe always, yes".
- "Q. So come 22 March, which is the date of this quote, you had not signed a contract with Mr Foini, but you had signed a contract with Meriton, so you say?
A. I signed - I not take this contract with Meriton. Mr Foini assured Meriton, assured Meriton and me, in eight weeks the crane is here. From the time I taking Mr Foini there, in the Meriton office, I've been counting that.
Q. So that's from way back around 21 February?
A. Yes.
Q. So come 22 March, four weeks of the eight weeks has ticked by?
A. Yes.
Q. And Mr Foini provides you with a further quote?
A. Yes.
Q. And it still says that he's expecting delivery between 90 and 150 days --
A. Yes.
Q. -- from the time of order?
A. Yes.
Q. Now, that is completely out of step with what you thought?
A. I know that. The situation, I accepted the situation. I believed in Mr Foini, the cranes are late".
44 In seeking to prove that there was no reliance, Mr Foini pointed to the presence in the last answer of the phrase "the cranes are late", but the meaning of that was, at its most favourable from his point of view, ambiguous. In the context in which it appeared, the phrase was quite capable of being understood, not as a reference to Mr Sanna's understanding on 22 March 2006, but as a reference to what had in fact transpired, namely, that the cranes were late in delivery. This is a point which he had made in the passage first quoted in [43] above. In any event, it remained the case that there was evidence capable of founding the Referee's finding of reliance. Moreover, that evidence was such, particularly when taken with the Referee's finding as to the nature of the pre-existing relationship between the companies and the managing directors (see [33] above), that the Referee's finding of reliance was neither perverse nor unreasonable as asserted by Mr Foini.
45 The succinct fashion in which the Referee dealt with this issue was fully justified by the manner in which Italform and Mr Foini conducted their cases during the Reference. In this respect I have referred earlier to the limited written submissions made in relation to the misleading or deceptive claim (see [34] above) and the fact that it was not suggested on the appeal that the oral submissions to the Referee were relevantly any different to the written submissions.
46 In addition to the passages to which I have referred in [34] above, the written submissions listed, amongst the issues to which the case was said to "boil down", the issue that "if the representations were made, were they relied upon by [Italform]?" The same issue was identified in the Commercial List Statement annexed to the Summons filed by Sangain commencing the present proceedings. Further, in that Statement, Sangain alleged that it relied upon the relevant oral representations in entering into the purchase contract with Italform. In his affidavit which was in evidence before the Referee, Mr Sanna said that he relied upon Mr Foini's representations as to delivery. That proposition was challenged in the cross-examination of Mr Sanna (see for example the passages quoted in [43] above).
47 In addition, Sangain's Statement of Facts and Issues, put before the Referee, alleged that the oral representations induced Sangain to enter into the purchase contract with Italform. The Statement of Facts and Issues of Italform and Mr Foini, in response, said that there were some pre-contractual discussions concerning timing of delivery "but such discussions were superseded by the express terms of the contract".
48 In these circumstances my view is that, although hardly at the forefront of the issues at the Reference, the question of reliance was in issue before the Referee and that Italform and Mr Foini were entitled to put to the primary judge the arguments that they did put concerning reliance. I thus respectfully disagree with the contrary view expressed by the primary judge (see [22] above).
49 Sangain derived some support on this point from the decision of the High Court in Tyson v Brisbane Market Freight Brokers Pty Ltd (1994) HCA 67; (1994) 120 ALR 1, where it was contended that the Court of Appeal had erred in considering whether there had been reliance upon a representation because that matter had not been at issue at the trial. The majority did not regard the absence of submissions upon the point as determinative. McHugh J observed that, absent any admission as to the relevant matter, the moving party bore the onus of proving the elements of its case, which included the element of reliance. His Honour went on to say:
"As often happens in litigious contests, the opposing party (in this case the plaintiff) concentrated its forensic fire on a particular issue in the pleadings. That issue was whether the representation was made at all. If the plaintiff could succeed on that issue, the defence failed. But that forensic tactic did not constitute an admission by the plaintiff that the representation, if made, was made before, or became part of, the contract. Nor did it constitute a concession that the time of making the representation was not an issue in the case. …
A party does not make an admission about one of the issues in the other party's pleadings simply because he or she calls no evidence on, or makes no submission about, that issue" (at 10; see also the other members of the majority at 5).
50 I would add that the circumstances of particular litigation may be such that the absence of a submission on a point may give rise to an implied admission. In light of the High Court's emphasis in Aon Risk Services Ltd v ANU [2009] HCA 27; (2009) 83 ALJR 951 on the efficient and timely disposal of litigation it may be that courts will be more ready in the future to make such an implication than they might have been in the past. In the present case however the point was kept open, although barely so, in the written submissions which were lodged. These were to be read in the context of the documents which defined the issues in the proceedings and in the Reference and of the cross-examination of Mr Sanna. Italform and Mr Foini's lack of focus upon the point in their submissions provided ample reason for it to be dealt with in the brief fashion in which the Referee dealt with it.
51 My conclusion in relation to Mr Foini's submissions concerning the misleading or deceptive conduct claim is that whilst it was open to him to put the submissions that he, and Italform, put before the primary judge, the submissions did not demonstrate that the findings of the Referee were not open to him or were unreasonable, or that the Referee made some error of law. In these circumstances, no question arises of interference by this Court in the exercise by the primary judge of his discretion to adopt the Report.