Jelin Pty Ltd v. Murdoch Pty Ltd [1985] FCA 140

There be judgment for Jelin Pty. Limited ("the applicant") against Murdoch Pty. Limited ("the respondent") in the sum of $98,842.

The respondent by itself its servants and agents be restrained from instituting or continuing any action to recover from the applicant or from any guarantor of the applicant any amount under the lease of shop 6 in the premises known as the Mount Hawthorn Plaza

Shopping Centre or any amount for the use and occupation of the said shop by the applicant.

The respondent pay the applicant's costs of the proceeding including all reserved costs.

Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

WESTERN AUSTRALIA DISTRICT REGISTRY No. WAG 26 of 1983

BETWEEN : JELIN PTY. LIMITED Applicant AND: MURDOCH PTY. LIMITED Respondent

Jelin Pty. Limited ("the applicant") claims damages pursuant to sub-section 82(1) of the Trade Practices Act 1974 ("the Act") for an alleged breach of section 52 of the Act consisting of conduct on the part of Murdoch Pty. Limited ("the respondent") that was misleading or deceptive or was likely to mislead or deceive. In the alternative the applicant claims damages for fraudulent misrepresentation, negligent

misrepresentation and breach of collateral warranty.

On 12 August 1981 the applicant executed a document entitled "Offer to Lease" in respect of certain premises, being shop 6, forming part of a shopping centre to be known as the

Mount Hawthorn Plaza Shopping Centre then under construction

for the respondent by Murdoch Constructions Pty. Limited, an associated company. Subsequently, on or about 3 December 1981, the applicant executed a lease in respect of those premises for a term of 5 years commencing on 10 November 1981 at an annual rent of $15,527.52 payable by monthly instalments of $1,293.96 in advance and subject to review upwards at intervals of 18 months. The applicant alleges that it was induced to execute the offer to lease and the lease by reason of representations, which were false, made to it by one Michael Wright, an employee

of Excel Leasing Pty. Limited, as agent for the respondent.

The shopping centre was being constructed on land bounded by Scarborough Beach Road and Flinders and Fairfield Streets in the Perth suburb of Mount Hawthorn. The building to house the various shops was being constructed on that part of the site adjacent to Scarborough Beach Road, a busy arterial road. The building occupied a little more than half the site, the balance of the site being a ground level uncovered parking area for some 212 vehicles with access from Flinders and Fairfield Streets. The site was a sloping one falling towards Scarborough Beach Road. That part of the building adjacent to Scarborough Beach Road had two levels but that part of it adjacent to the rear car park was of one storey only. According to a brochure prepared in relation to the shopping centre, the premises on the lower level fronting Scarborough Beach Road were to be occupied by a bank, a real estate office,

a home building society and a restaurant with an area

immediately to the rear set aside for under-cover parking (for some 55 vehicles) with access from Flinders Street. Again according to the brochure, the upper level was to consist of a "Target Discount Supermarket" and 22 specialty shops. The design of the shopping centre was such that some nine of those shops were at the same level as, and were accessible directly from, the rear uncovered car park with the consequence that they could continue to trade even though the main part of the shopping complex was closed. One of the shops with access directly from the rear car park was shop 6 the subject of the present proceedings. The major tenant was to be Target

Supermarkets Pty. Limited, a wholly owned subsidiary of The

Excel Leasing Pty. Limited was one of a group of companies, known as the Murdoch group, which included the respondent. It was appointed as agent for the respondent with responsibility for negotiating and arranging leases of the various shops in the centre, other than the area to be occupied by Target. It did not have authority to conclude leases, its

function being limited to submitting proposals to the

trust of the Lowe family, its sole shareholders and directors being James Lowe and his wife, Valerie Elaine Lowe. James Lowe

came to Perth in 1978. He was an engineer by profession but

had an accident which interfered with his working life. His daughter was an apprentice hairdresser. The applicant bought a small hairdressing shop, put a manageress in charge and employed Mr Lowe's daughter as an apprentice. The business had been losing money but it was turned into a profitable enterprise and sold. Thereafter the main activity engaged in by the applicant was the buying of run-down retail businesses, building them up and selling them at a profit. assisting in the financing of the sale by allowing part of the purchase price to

remain outstanding secured by bills of sale. Prior to the

happening of the events to which it will be necessary to refer in some detail the applicant had carried out such activities in respect of four or five hairdressing salons, a delicatessen, a fish and chip shop and two newsagencies. In August 1981, it remained the owner of one hairdressing salon which was being

The central issue is whether Mr Wright in the course of discussing the Mount Hawthorn Plaza Shopping Centre with Mr and Mrs Lowe on 12 August 1981 made the oral representations to them on which the applicant relies. The representations which the applicant alleges Mr Wright made are set out in the amended statement of claim (paragraph 9) in the following terms -

"(a) Target Supermarkets Pty. Ltd. and/or the Respondent had then conducted a survey

which showed that at least 10,000 people would pass through the Shopping Centre each week after it opened for business;

the Respondent then held the belief that 10,000 people would pass through the Shopping Centre each week after it opened;

there were reasonable grounds for the belief pleaded in sub-paragraph (b)

Target Supermarkets Pty. Ltd. then intended to operate a store at the Shopping Centre which would he a variety store;

the Respondent then held the belief that Target Supermarkets Pty. Ltd. intended to operate a store at the Shopping Centre which would be a variety store;

there were reasonable grounds for the belief pleaded in sub-paragraph (e) above;

Target Supermarkets Pty. Ltd. then intended to apply only about one third of the capacity of the store to be operated by it for the sale of foodstuffs;

the Respondent then held the belief that Target Supermarkets Pty. Ltd. then

intended to apply only about one third of the capacity of the store it would

there were reasonable grounds for the belief pleaded in sub-paragraph (h) above;

the Respondent had not permitted and would not permit any other lessee of a shop in the Shopping Centre to trade in competition with the Applicant;

the Respondent then intended to permit the Applicant to sell takeaway foods from the shop to be leased by it;

the Respondent then intended to erect neon signs on the Shopping Centre to indicate that there were shops and, in particular, a delicatessen at the rear

(m) the Respondent then held the belief that the amount payable by the Applicant under the proposed Lease for outgoings would not exceed $40.00 per week;

(n) there were reasonable grounds for the belief pleaded in sub-paragraph (m) above;

(o) the Respondent had leased all other shops in the Shopping Centre as, inter alia, a restaurant, a pizza bar, a fish and chip shop, a gardening centre, a newsagency, a liquor store and a

laundromat and these businesses would be open seven (7) days a week, forming a shopping centre of their own;

(p) the Respondent had leased all the other shops in the Shopping Centre to tenants who were experienced shop owners;

{q) the appearance of the Shopping Centre when completed would be as depicted in an artist's impression thereof shown to

The representations other than those set out in paragraphs (c), (e), (£), (h), (21) and (n) were said to have been express. Those set out in the paragraphs mentioned were said to have arisen by implication from the express oral statements made by

The responsibility of the respondent for what Mr Wright said to Mr and Mrs Lowe on 12 August 1981 in relation to the shopping centre is not disputed. It is, however, denied

Mr Lowe gave evidence that in August 1981 he received a telephone call from a person who had been interested in taking a lease of a newsagency but who did not wish to proceed with the venture. He telephoned Mr Lowe to ask whether he was interested in taking over the lease and suggested that he telephone Mr Wright of Excel Leasing Pty. Limited. The newsagency in question was not the newsagency in the Mount

Mr Lowe said that, on the morning of 12 August 1981, he telephoned Mr Wright and enquired of Mr Wright whether the newsagency of which he had been informed was available for lease. He was told that it was not. Either during the course of that conversation or during a subsequent telephone conversation on that morning initiated by Mr Wright, Mr Lowe was informed that there was a delicatessen available in the Mount Hawthorn Plaza Shopping Centre which was then under construction and which was expected to open in September 1981. Mr Wright informed Mr Lowe of the location of the shopping centre and suggested that he inspect it and again talk to Mr Wright. According to Mr Lowe, Mr Wright said during the course

of that conversation that the shopping centre included a Target

store which Mr Wright described as "a variety store".

I find that Mr and Mrs Lowe and Mr Wright understood a "variety" store to be one selling a wide range of household

goods but not foodstuffs. I also find that each of them

understood the word "supermarket" to refer toa store selling

Mr Wright also, according to Mr Lowe, referred to other types of shops that would be in the shopping centre and said that some of them would be open for trading seven days a week. Mr Wright is also said to have expressed the view that Mr Lowe "could be in and out in six months" by which Mr Lowe understood Mr Wright to be saying that the business could he built up in six months and then sold at a profit. Mr Lowe said that Mr Wright had made this remark because he knew of Mr Lowe as a person who was interested in buying retail businesses that were run down. rehabilitating them and selling them at a

The conversation was said by Mr Lowe to have lasted

Mr and Mrs Lowe then went to the shopping centre. Construction work was in progress and they had difficulty in

identifying the shop that Mr Wright had suggested to them as

From the shopping centre gite Mr and Mrs Lowe proceeded directly to call on Mr Wright at his office to discuss the matter. Mr Lowe's evidence was that the interval

between the second telephone conversation he said he had with

Mr Wright and the meeting in Mr Wright's office was a little more than three-quarters of an hour. Mr Wright said that the

Mr Lowe raised with Mr Wright the availability of a newsagency business, saying that he was not interested in taking a delicatessen because it involved trading seven days a week. A newsagency business was attractive because it had more limited trading hours - five and a half days a week. Mr Wright informed him that there was no newsagency available and again

Mr Lowe said that Mr Wright showed his wife and himself what he, Mr Lowe, described as a photograph or a picture in colour of the proposed shopping centre and explained that it depicted what the shopping centre would look like when completed. He said that there were about half a dozen copies lying loose on Mr Wright's desk. The document to which Mr Lowe was referring is an artist's impression of a shopping centre complex described on its face as the Mount Hawthorn Plaza. I am satisfied that it does not depict the shopping centre as then under construction and that a person with Mr Lowe's engineering background could not have thought otherwise once he was shown the floor plans of the shopping centre under construction. Mrs Lowe also identified the document as one she saw in Mr Wright's office. Mr Wright denied ever having seen

the document or having copies of it in his office. Both Mr and

Mrs Lowe agreed that they had seen the document only briefly and had not studied it.

In his evidence in chief Mr Lowe did not, as one might have expected in relation to a matter that has been of constant concern to him over a period of some three years, give a clear and comprehensive statement of what took place at the meeting with Mr Wright on 12 August 1981. However, piecing together the whole of his evidence, the substance of what took place at

the meeting according to him may be summarised as follows -

. My Wright produced a plan of the upper floor of the shopping centre and pointed out the part of the premises to be occupied by Target, the location of

» In response to an objection by Mrs Lowe that the proposed delicatessen was at the rear of the shopping complex away from Scarborough Beach Road with its passing traffic, particularly after normal trading hours, Mr Wright said the shopping centre would have neon signs which could be seen for miles around. He also said that there would be further neon signs depicting the parking and shopping areas and that the car parking area would be well

that Mr Wright had said the neon signs would show that the shops facing the car park were open seven

Mr Lowe asked how he could operate a delicatessen in close proximity to the Target store and was told that the Target store would be "two-thirds variety and one-third food" with the consequence that there would be minimal competition with the proposed delicatessen as the food lines available at Target would be restricted because of the limited space available and the need for Target to purchase in bulk. Reference was made to the Target store in the Pine Glades Shopping Centre in the suburb of Balga not far distant from Mount Hawthorn. Mr Lowe said that the Target store at the Pine Glades Shopping Centre, which was at that time a supermarket retailing food only, was "a dead loss ».. and we didnot want to go into the same situation". Mr Wright replied "No, this is going

There was a discussion as to the rent payable which

that they ask the respondent for a three months' rent free period and said that it would most

there would be 10,000 customers coming through the shopping centre per week and that on the basis that

week, the delicatessen would have a gross income of $4,000 per week. Later, in cross-examination, Mr Lowe said that Mr Wright's statement that 10,000 customers would be coming through the shopping

centre was related to the opening of the centre and that he had said that, with the promotion of the centre that was planned, that figure would be built

Mr Wright said that the respondent was going to open a clothing store in the complex and that "they

Mr Wright said that all the shops other than the delicatessen had been leased, that the delicatessen had been leased but the proposed lessee had backed

wanting it, a quick decision would need to be made.

• Me Wright said there would be no other trader competing with the delicatessen and that all the

• Mr Lowe said that he proposed to sell take-away food and fruit and vegetables to which Mr Wright replied that "there was no problem with that": he suggested that Mr Lowe could even put in tables and chairs and sell tea and coffee. Mr Lowe subsequently qualified his assertion that Mr Wright had said there was no objection to selling take-away food from the delicatessen by saying that he was told that, before selling take-away food that required the installation of special equipment, he would need to submit plans for the

• Mr Wright produced a document entitled "Offer to Lease" and went through it page by page filling in details of the premises, the term of the proposed lease, the annual rent, the deposit payable and, on

• Mr Lowe told Mr Wright of his experience in buying retail businesses, building them up and selling

intention was, if he took a lease of the delicatessen, to get out of the business probably after 6 months with a view to making a quick profit or to allow his son, who was then 18 years of age, to take it over. Consequently he asked for the deletion from the "Offer to Lease" of a clause which would have required the lessee to make a

being disposed of within the first two years of the

Mr Wright told Mr Lowe to take no notice of the amount of $15,527.52 inserted into the document as the annual rent for the shop as that figure had been determined only to enable the respondent to put a higher value on the building for the purpose of raising finance and that the rent was negotiable after the first three months' rent free period, a concession which he considered the respondent would

There was discussion about the amount payable, in addition to rent, by way of a share of "aggregate variable outgoings" (as defined in the document), being the moneys expended by the respondent in the maintenance and operation of the shopping centre. Mr Wright said the amount payable on that account

• Mr Wright said that the shops facing the rear car park would be open seven days a week and that those shops would constitute a small shopping centre of

• Me Wright suggested that they should not purchase the necessary fittings and equipment for the shop but take them on lease, thus obviating the need to lay out further capital particularly as Mr Lowe's

Both Mr and Mrs Lowe denied that they saw at Mr Wright's office the brochure to which I have already referred and which had been prepared to promote the Mount Hawthorn Plaza. They also denied that they were given a copy of it. Mr Wright gave evidence that, although he could not be certain he had done so, he believed he had given them a copy. The brochure refers to the Target store as being a "supermarket" and a "discount supermarket". Target was referred to as "Australia's fastest growing supermarket chain". The brochure

"Target Food is an enormous asset to Mt Hawthorn Plaza".

Mr Lowe in his evidence in chief said that the meeting

cross-examination he said it lasted 15 to 20 minutes.

After the meeting Mr and Mrs Lowe returned to the shopping centre site and identified the location of shop 6. They determined that some alteration to the layout of the shop was necessary for their purposes. They then went to see their

According to Mr Lowe certain amendments were made at

the solicitor's office to the offer to lease. The company seal

was then affixed and he and his wife signed the document. Presumably the signatures were not then witnessed as the

executed document bears Mr Wright's signature as the witness.

Mr and Mrs Lowe then returned to Mr Wright's office. According to Mr Wright, Mr and Mrs Lowe signed the offer in his presence after he had written into the offer certain provisions that they required to be included. He thought the applicant's

seal had already been affixed. Nothing, however, turns on these matters as it is common ground that the document was executed on 12 August 1981 and delivered to Mr Wright. A deposit of $1,793.96 was paid, being one month's rent in

advance ($1,293.96) and $500 on account of costs to be incurred

The amendments made to the offer to lease, whether made at the solicitor's office or when Mr and Mrs Lowe returned to Mr Wright's office, were the deletion of clause 19 which would have obliged the lessee to make certain payments to the lessor in the event that the lessee sold or agreed to sell or otherwise dispose of the business within two years from the commencing date of the lease, the addition of certain requirements as to the lay-out of the shop and a condition in the following terms: "Lessor to grant 3 months rent free to

On the following day Mr Wright informed Mr Lowe that

Before referring to the evidence of Mrs Lowe and Mr Wright as to what took place on 12 August 1981 it will be

Mr Lowe arranged for the fitting out of the shop and the purchase of stock. There was some delay in the completion of the shopping centre and it opened on 10 November 1981. When the shopping centre opened the Target store was devoted exclusively to the sale of foodstuffs. It included a large delicatessen section and a take-away food counter. It was not

By letter dated 2 September 1981 Excel Leasing Pty. Limited sent to Mr Lowe for execution by the applicant an agreement for a lease of shop 6. That document is not in evidence but it would appear from another document that is in evidence that it contained, in a schedule to the agreement, the terms of the proposed lease. The document was not executed by the applicant and on 30 October 1981 Messrs McManus, Cullen and Clements, solicitors for the applicant, wrote to the solicitors for the respondent returning the document and requesting amendments both to the agreement for lease and the proposed

Subsequently, an amended form of lease was submitted by the respondent to the applicant. The applicant was still not prepared to sign the lease because, it was said, the lease differed in material respects from the "Offer to Lease" previously executed. However, at a meeting on or about 3 December 1981 between Mr Lowe and Mr Hare, the Director (Finance and Administration) of the respondent, the lease was executed. It may be noted that the lease shows the name of the lessor as MUR Nominees Pty. Limited though the document is executed by Murdoch Pty. Limited. I was informed that MUR Nominees Pty. Limited was the name by which the respondent was formerly known. No objection was made to executing the lease on the ground that the respondent had been guilty of fraudulent

or negligent misrepresentation or had been guilty of a breach

By letter dated 8 October 1981 the respondent had confirmed to the applicant that it had granted a three months' rent free period from 10 November 1981 but that no provision to

that effect would be contained in the lease document.

Mr Lowe's evidence was that after the shopping centre opened for business there were very few customers and that the position did not improve. He said that from time to time Target sold goods at cut prices and that this temporarily attracted customers to the shopping centre but not to the applicant's shop. He further said that the delicatessen business never operated ata profit. There was continuous disputation between Mr Lowe and representatives of the respondent. The applicant paid no rent and less than the amount claimed by the respondent on account of variable outgoings. This led to the respondent commencing legal proceedings against the applicant in April and May 1982. The applicant commenced legal proceedings against the respondent in the Supreme Court of Western Australia on 8 July 1982 claiming damages for fraudulent misrepresentation and negligent

misstatement. Between May and August 1982 negotiations took

place between the parties and in September 1982 agreement was

reached that the pending legal proceedings would be withdrawn and that the respondent would waive the arrears of rent and grant the applicant a further rent free period of six months,

the rent payable thereafter to be fixed having regard to the

"trading pattern of the Centre and also taking into account all

of the known factors". The respondent did not, however, review the rent at the end of the period of six months. Findings on

these matters were made by Toohey J. in a judgment (unreported)

The present proceedings were commenced on 6 July 1983.

The applicant remained in occupation, paying no rent, until settlement took place on 20 February 1984 under a contract for the sale of the business between the applicant and one Dominic Circosta. The applicant's lease of shop 6 was then

I return now to Mrs Lowe's evidence of what took place

at the first meeting with Mr Wright on 12 August 1981.

Asked by the applicant's counsel what Mr Wright had said about the shopping centre that was being built at Mount

"He told us that Target was the major tenant, that they were brilliant and they were the fastest growing store in the west. He said that all the shops had been let and that only experienced tenants were going into these shops. He said there was only the delicatessen left and we had to be quick to get that because there were two or three other people interested."

Asked whether Mr Wright indicated what the nature of Target's activities in the shopping centre would be, she replied:

"Yes, he said it would be a mixture; there would be two-thirds variety and one-third food."

When shown the location of shop 6 on the floor plan she

commented that a delicatessen was no good around the back: it

"And he said all the shops along the back would be like a 7-day trading centre all of their own; they would all be trading seven days. He said that there would be signs to illuminate the fact that there were all the shops around the back and car-parks would be indicated."

Mrs Lowe said that, having indicated to Mr Wright the type of goods they would sell from the delicatessen, including take-away food, Mr Wright suggested that, as the shop was so big, they could put tables and chairs in and serve tea and

coffee. She said Mr Wright gave no indication that they would

Mr Wright then discussed with them the document entitled "Offer to Lease". Mr Wright was informed that, as they would not remain in the delicatessen for a lengthy period but would want to sell it, they would need to have deleted the clause requiring a payment to be made to the lessor if the business were disposed of within the first two years of

Mrs Lowe expressed the view that the rent was too high. Mr Wright, she said, explained that the shopping centre, and consequently the delicatessen, would be doing so well that they would be able to afford the rent. He said, according to Mes Lowe, that surveys had been conducted: that "Target needed a minimum of 10,000 people a week going through the centre to make it viable for them". Later in her evidence she said that Mr Wright had said that "there would be a minimum of 10,000 a

According to Mrs Lowe, Mr Wright made a calculation of the gross income that the delicatessen might expect to receive based upon 10,000 people a week coming into the centre. In her

"I am not strictly a figures person. I might not have paid full attention to it but I think he basically worked so many people, you would geta good quarter of them, that would be 2500 people, they would spend $3 or $4 a head, to give how much we could expect to come through the deli, and that was only for the normal Target trading hours. We still expected to make a lot more from after hours trading."

In cross-examination she put the figure for gross' turnover

Mrs Lowe also said that there was reference during the

discussion to a survey of the traffic using Scarborough Beach

Road in the vicinity of the shopping centre. The survey was said to have arrived at a figure of 20,000 cars though during

The provision contained in the "Offer to Lease" document relating to the payment of variable outgoings was also

"Look, it won't cost you any more; it will bea maximum of $40 per week."

There was no discussion as to how that figure was calculated.

Mrs Lowe also said that Mr Wright suggested that they seek from the lessor a rent free period of three months. He

said that the lessor was giving everyone a one month rent free

period but that they should try for a period of three months.

According to Mrs Lowe the meeting lasted for from one

Mr Wright, in his evidence, agreed that Mr Lowe telephoned him on the morning of 12 August 1981 requesting information as to the shops that his company was leasing. Mr Lowe was looking for a newsagency. There being no newsagency available, the conversation turned to shops in the Mount

Hawthorn Plaza. Mr Lowe said that he had traded in a

delicatessen previously. There was, according to Mr Wright, a

very brief discussion about the shopping centre and he suggested that Mr Lowe come to his office to discuss the matter. Mr Lowe made an appointment and came to Mr Wright's

According to Mr Wright the conversation at the office centred around the delicatessen. Mr and Mrs Lowe were shown

its location on an architect's drawing of the shopping centre. With the use of the plan of the shopping centre Mr and Mrs Lowe were told what shops were being allocated for what businesses, the location within the shopping centre of some of those businesses being dictated by their special plumbing or other requirements. Mr Wright said he also identified the shops, limited in number, in respect of which offers to lease had

Mr Wright said he then introduced the "Offer to Lease" document and that he filled it inas they discussed various

There was a discussion concerning the costs associated with operating a shop in the shopping centre. In particular there was reference to the rent, noting that there was to be a review every 18 months, and the aggregate variable outgoings. As to the former, Mr and Mrs Lowe said it was too high. According to Mr Wright, the rent was fixed and not negotiable

except as to a rent free period at the beginning of the tern.

There was, he said, no suggestion by him to Mr and Mrs Lowe that the rent was further negotiable. As to the latter, Mr Wright said it was not possible to quote a figure for a lessee's share of the aggregate variable outgoings but that the yardstick he used, if asked, was about 25 - 30 per cent. of the annual rent. He could not remember whether Mr and Mrs Lowe had asked him to estimate what the applicant would be obliged to pay on that account. He said that Mr Lowe understood about variable outgoings because he had had a newsagency in another shopping centre where variable outgoings were charged. Mrs Lowe, however, said that in the case of that newsagency the variable outgoings were not charged separately but were

whether the delicatessen could be located on Scarborough Beach Road. Mr Wright said he explained that there was no parking in Scarborough Beach Road, that the car park was at the rear and that the owners wished the delicatessen to be near the car park which would be lit up at night: the delicatessen was one of the main attractions for after hours trading. It was, he said,

the respondent's idea that certain shops be located with direct

access from the rear car park so that they could trade after hours and that the shopping centre had been so designed. Another attractive feature, he said, was that the delicatessen was opposite the newsagency : the two businesses would

Mr Wright also agreed that Mr Lowe had sought the removal of the clause in the "Offer to Lease" requiring the lessee to make a payment to the lessor in the event of the business being disposed of within the first two years of the

lease. His understanding was that Mr Lowe intended that his gon run the business as a long term venture but he wanted the

clause removed in case the business was sold after a short

His main sales point, according to Mr Wright, was that it was a very densely populated area and that Scarborough Beach Road was a very busy thoroughfare. The shopping centre, therefore, had an available source of customers. He said he also explained to Mr and Mrs Lowe that the availability within the shopping centre of a large car park would attract customers. Mr Wright also said that the discussion involved what Target were expecting to attract to their supermarket. He denied, however, that any figures had been mentioned because no figures were available to him except figures as to the volume of traffic on Scarborough Beach Road. He said he may have Mentioned the traffic survey but he did not quote any figures as to the traffic flow. He said he knew that Myers or Target would have "done their homework" to determine whether the area was an appropriate one for another supermarket. He knew that a survey had been done and that the project was viable from

Target's point of view. He was not, he said, aware of the

supermarket similar in design, layout and in the type of stock

sold to other Target supermarkets in Perth. He assumed that Mr Lowe had seen the Target supermarket in the Pine Glades Shopping Centre which had a delicatessen section and a snack

bar and the Mount Hawthorn store was to be similar to it.

Mr Wright said he showed Mr and Mrs Lowe the brochure prepared to promote the shopping centre but denied that he had an artist's impression of the shopping centre other than the

• that there was any discussion concerning competition between shops in the shopping centre though he said that Mr and Mrs Lowe asked whether there would be another shop trading as a

. that he indicated that signs were to be erected on

. that he informed Mr and Mrs Lowe that 10,000 people

• that he made any calculations involving the number of people who might be customers of the delicatessen and the average amount they might

. that there was a discussion about take-away foods;

. that he informed Mr and Mrs Lowe that the variable

As to the number of customers that would pass through the shopping centre each week he said that 10,000 people was not "a viable figure". He said he had been associated with another shopping centre which was four times the size of the Mount Hawthorn Plaza and that centre only attracted 8,000 to 10,000 people per week when it opened. He said that it could not be expected that the Mount Hawthorn Plaza would attract 10,000 people per week and that he would not have used that figure. He agreed, however, that the other shopping centre was not ina densely populated area as was the Mount Hawthorn

Mr Wright said that Mr and Mrs Lowe took away with them the "Offer to Lease" document (which had been partly completed) to consult their solicitor. They returned later in the day and Mr Wright said that he wrote into the "Offer to

Lease" document additional conditions that they requested. The

document, which already bore the imprint of the applicant's seal, was signed by Mr and Mrs Lowe and he witnessed their

signatures. The deposit of $1,793.96 was then paid.

I admitted, over objection, evidence from three witnesses who had been lessees of shops in the Mount Hawthorn Plaza of conversations they had had with Mr Wright concerning the negotiations which resulted in the leasing of those shops. Those conversations all took place prior to the conversation

between Mr Wright and Mr and Mrs Lowe on 12 August 1981. The witnesses were Raymond Joseph Reynolds, George Conto and Sonya Tanya Ann Rivett. I shall refer to their evidence later in

Mr Reynolds, Mr Conto and Mrs Rivett cannot, of course, be regarded as entirely independent witnesses. Each was the lessee of a shop in the centre when it opened, each was

dissatisfied and each made complaints to the respondent alleging that misrepresentations had been made to them to induce them to become lessees. However, observing their demeanour in the witness box, I was unable to discern any

respect in which their evidence was coloured by their dealings

In the light of the conflicting evidence as to what was said at the crucial meeting on12 August 1981 in Mr

Wright's office, I have not found it an easy task to determine

where the truth lies. I did not find Mr Lowe an entirely

satisfactory witness. He was prone to exaqgerate when it

appeared to suit the applicant's case to do so. He also sought in later answers to reinforce the statements that he had already firmly asserted Mr Wright had made at the meeting by expanding and embellishing those statements. On a number of occasions he asserted facts without attributing his knowledge of them to statements made to him by Mr Wright but subsequently attributed that knowledge to what Mr Wright toid him at the

There is no doubt that Mr Lowe is convinced that Mr Wright did make all the statements he attributed to him but I am left with the impression that, at least in part, his recollection has been coloured by the disputation which has occurred between himself and the respondent since the shopping centre opened. According to Mr Lowe he became completely dissatisfied with the situation from the very first day on which the shopping centre operated and he conducted a running battle with the respondent not only on his own behalf but as a leading participant in a group of lessees dissatisfied with the centre and its operation. It would in such circumstances be a natural reaction to attribute to Mr Wright, in retrospect, statements by way of representations which accord with Mr

Lowe's expectations in relation to the shopping centre.

A similar comment can, I think, fairly be made in relation to Mrs Lowe's evidence though, on the whole, I found her to be a more satisfactory witness than Mr Lowe. Mrs Lowe's evidence generally coincided with that of Mr Lowe as to the subject matters discussed with Mr Wright at the meeting on 12 August 1981 but her version of what was said is not alwavs

There are particular features of Mr Lowe''s evidence which I find curious. The lease of shop 6 had not been executed when the shopping centre opened on 10 November 1981 and was not in fact siqned until about 3 December 1981. In that period of some three weeks Mr Lowe says he had become aware that the Target store was completely devoted to the sale of foodstuffs, there were few customers coming to the complex and, in particular, to his shop and he was dissatisfied with a number of other matters. Yet his conviction that the applicant had been induced to enter into the contractual arrangements with the respondent by misrepresentations made by Mr Wright was not made the subject of any objection to the signing of the lease. Mr Lowe attributed this to advice from his solicitor that, as the applicant's offer to lease had been accepted by the respondent, the applicant was bound to sign a lease which reflected the terms of that accepted offer. The solicitor was

shopping centre were being handied by another firm of solicitors acting on behalf of a number of lessees and that

those complaints were the subject of correspondence between that firm of solicitors and the respondent. There is in evidence a letter dated 12 January 1982 addressed to the respondent's solicitors by Messrs Terence McDonnell & Co., Solicitors, acting om behalf of the "proposed lessees" of 10 shops in the Mount Hawthorn Plaza. One of those "proposed

lessees" was the applicant. The letter contained the following

"When our client negotiated it was on the basis of a Newsagency, but he was advised that there was a Delicatessen available and that with a Target variety store drawing 10,000 people aday, "he

would be laughing". He was advised that a survey had shown that this would be the expected movement of people.

Our client was also advised that there would be (in addition to 'the Deli') a Fish and Chip shop, a Restaurant, a Pizza Bar, a Gardening Centre and a Newsagency open 7 days a week - in other words a small shopping complex within the Plaza.

Qur client was also advised that there would be no conflict of trades.

On the basis of those representations, our client passed up another Delicatessen which he had planned to purchase. This was a matter brought to the notice of your client's representative during negotiations. The Offer was checked and changes made. When the lease was received it did not agree with the Offer.

Our client had been advised that in the Delicatessen he could sell fruit and vegetables, and provide hot foods. In the lease agreement, our client was prohibited from selling fruit and vegetables, and later he was instructed not to sell

hot food. Then the Target store opened in competition, and our client's business virtually ceased.

In addition to the above, our client has advised that the outside lights are not turned on, accordingly there is no draw card.

Our client considers that the representations made were not true."

The misrepresentations complained of in that letter are not as extensive as those now alleged, In particular, there is no reference to the amount represented as being the maximum amount

payable on account of variable outgoings. This, however, would be explicable if, as was suggested in evidence, no account for payment of variable outgoings had been received by the

Mr Lowe sought to give the impression that at the time he called at Mr Wright's office he was not at all interested in operating a delicatessen, or indeed any shop other than a newsagency, in the Mount Hawthorn Shopping Centre and that it was only because of the rosy picture that Mr Wright painted and the statements he made that he became convinced that the delicatessen was a good deal. Observing Mr Lowe in the witness box I am far from satisfied that he is the type of person who could be so swayed by mere assertions unsupported by any objective material as to change his whole attitude to the project within what was, according to him, a meeting of some 30 minutes duration. I think that when the meeting of 12 August 1981 began Mr Lowe had a greater interest in taking a shop in

the new shopping centre than he was prepared to admit.

Another curious feature of the case is that Mr and Mrs Lowe consulted their solicitor upon the "Offer to Lease" document and, as a result of that consultation, various amendments to the document were sought, including an amendment providing for a rent free period of three months. According to

Mr Lowe the other matters which he says were represented to him by Me Wright were discussed with the solicitor but it was not thought prudent or appropriate to seek to include any of them in the offer to lease or even to record them in a letter to the

Serious as are these criticisms of the evidence of Mr and Mrs Lowe, they do not, I think, require the rejection of the whole of their evidence as unreliable. Rather they require that it be very critically examined. Having done so, I have concluded, as will appear, that their evidence should be accepted as establishing that some of the representations relied upon were in fact made by Mr Wright. However, I am unable to accept that he made other statements attributed to

Mr Wright's evidence was even more unsatisfactory though some allowance must be made for the fact that he had

conversations with a large number of people concerning the

leasing of shops in the Mount Hawthorn Plaza and it is

understandable that this, apart from the lapse of time, would

make it more difficult to remember what was said at any particular discussion. Another factor is that he was not approached to give evidence in the matter until the evening prior to the commencement of the hearing. Even making due allowance for these considerations, I did not find his evidence on a number of matters convincing. He could not recall having discussed with Mr and Mrs Lowe a number of topics in relation to the shopping centre which they said had been the subject of discussion. He was not, however, prepared to deny that some of those matters had been discussed or that he had made comments upon them. He tended to discount the likelihood of his having made some of the statements attributed to him by Mr and Mrs Lowe by reference to what he said was his usual practice in negotiating the leasing of specialty shops in a shopping centre and to the limited role he had as agent for the respondent. His recollection of the details of the conversation was vague and the comment must, I think, be made that his answers in

relation to particular topics were not always consistent.

Mr Wright sought to convey the impression that he had not taken a particularly active role in endeavouring to interest Mr and Mrs Lowe in taking a lease of the delicatessen. According to him his real interest lay in ascertaining whether they had the necessary background and financial resources to make them desirable lessees from the respondent's viewpoint. On other matters he was but a passive conveyor of information

derived from the material which he had in his possession

relating to the Mount Hawthorn Plaza and his previous involvement with shopping centre development projects, including those developed by the respondent, in most of which

His evidence must, however, be viewed against the background that it was of great importance that as many as possible of the specialty shops should be occupied and ready to commence trading on the opening day of the shopping centre which, at the time of the conversation with Mr and Mrs Lowe, was only weeks away. At that time an offer to lease had been

accepted only in respect of ten of the shops and whether the

desirable goal of having the shopping centre fully operational on opening day was to be reached depended largely on the efforts of himself and of the manager of the company by which he was employed, Mr Ray Rishani. During his cross-examination Mr Wright somewhat grudgingly accepted that at the time the offer to lease was signed, Mr and Mrs Lowe had become excited about the delicatessen and that their excitement was, at least

in part, due to his efforts in "selling" the venture to then.

With those preliminary observations I turn to a consideration of the representations alleged. I shall deal first with the representations concerning the number of people who would pass through the shopping centre. The amended statement of claim (paragraph 9) alleges that Mr Wright

"(a) Target Supermarkets Pty. Ltd. and/or the Respondent had then conducted a survey which showed that at least 10,000 people

would pass through the Shopping Centre each week after it opened for business. (b) the Respondent then held the belief that 10,000 people would pass through the Shopping Centre each week after it opened; (c) there were reasonable grounds for the

Mr Lowe's evidence, if believed, establishes that Mr Wright said that, based on a survey that had been conducted, 10,000 people would pass through the shopping centre when it opened for business. Mr Lowe does not say that Mr Wright identified who had carried out the survey. Mrs Lowe's evidence is somewhat different. According to her Mr Wright said that "surveys had been conducted" and that "Target needed a minimum of 10,000 people a week coming through their store for it to be viable". Later in her evidence she added that Mr Wright had said that "there would be a minimum of 10,000 a week". Later again she attributed to Mr White the words "Target would not go

in there without a minimum of 10,000 people per week".

The applicant introduced into evidence a document dated April 1980 entitled "Mt. Hawthorn, W.A. - Investigation for a Target Supermarket" on the site now occupied by the Mount Hawthorn Plaza. The document, which appears to have been

prepared by Myer Shopping Centres Pty. Limited, relates toa

shopping centre considerably different in design from that

which was ultimately constructed. It contains material relating to the location, the site, competition in the area, the population in the area, sales forecasts and the layout of the proposed shopping centre. It includes a market research report and material provided by Murdoch Constructions Pty. Limited. It refers toa traffic count on Scarborough Beach Road in June 1977 but there is no material relating to the number of customers that might be expected to pass through the shopping centre or as to the minimum number that Target would require before regarding the project as one they should embrace. There is evidence that that document was available to the respondent prior to August 1981. Mr Wright denied that he

had ever seen the document and I accept that evidence.

Mr Wright agreed that there was a discussion with Mr and Mrs Lowe concerning the people who might be expected to use the shopping centre. His evidence in chief was that he thought the discussion centred on the density of the population in the area andon the fact that the centre fronted a main road, namely Scarborough Beach Road. Somewhat significantly, however, he added that they discussed "what Target were expecting to get ... into their supermarket". He said, however, that there were no figures available except a Metropolitan Region Planning Authority traffic survey in

relation to Scarborough Beach Road and that he may have

mentioned that study to Mr and Mrs Lowe. He denied that he

stated any figure as the number of people that Target could expect. He agreed that he was aware that a survey had been done prior to Target agreeing to take space in the shopping

centre but he said he had never seen it and was not aware of its contents. In cross-examination he agreed that he recollected talking to Mr and Mrs Lowe "about a survey done by Myer" but he did not remember talking about the number of people. He said that, if he had mentioned a figure, it would not have been as high as 10,000 because that figure represented the number of people that passed through another shopping centre with which he had been associated and he regarded that centre as much larger than the Mount Hawthorn Plaza though he agreed it was not in an area as densely populated as was Mount

Mr Reynolds, Mr Conto and Mrs Rivett all gave evidence that Mr Wright said to them that a survey had been conducted. Mr Reynolds' evidence was that he was told that the survey had shown that "the centre would be supported by the required number of people to make it a viable proposition". He said that the number of people had been mentioned by Mr Wright but he could not recollect what that mumber was. Mr Conto said he had been told that Mr Wright "gave an estimate of approximately 10,000 people per week that would be the sort of minimum draw of such a shopping centre". This, he understood, to be the result of the survey. The evidence of Mr Reynolds and Mr Conto

on this aspect was not challenged in cross examination.

",.. that they had spoken to a lot of people in the area, they had gone round and done a house to house survey, and on the figures that they had got, they had estimated - I cannot think, but I know it was in the thousands, ten or 20,000 people would be shopping in the centre, going through it in a week and he said even if we got one per cent. of those people buying just one bunch of flowers which would be an average of $2, you know, it was a viable proposition."

This evidence of Mrs Rivett tends to support the evidence of Mr and Mrs Lowe that Mr Wright made a calculation as to the gross income that the delicatessen might expect based on the figure of 10,000 people per week passing through the centre. Mr Wright's evidence was that, not only did he not make any such

calculation for Mr and Mrs Lowe, he never did that kind of

Taking all these matters into consideration I have reached the conclusion, on the probabilities, that Mrs Lowe's evidence correctly reflects what Mr Wright said concerning the number of people who would pass through the shopping centre when it opened. The effect of that evidence is that Mr Wright represented that a survey had been done which projected that 10,000 people would pass through the shopping centre per week when it opened and that that figure was accepted by Target as

being sufficient to make the project a viable one. I so find.

The applicant has, however, not established that the

representations alleged in sub-paragraphs (b) and (c) of

paragraph 9 of the amended statement of claim were made.

I turn now to the representations alleged in relation to the type of store to be operated by Target. Those representations are set out in sub-paragraphs (d) to (i) inclusive of paragraph 9 of the amended statement of claim the text of which is set out earlier in these reasons. The substance of the allegations 1s that Target intended to operate the store as a variety store or, alternatively, to apply about one-third of its capacity to the sale of foodstuffs and the

Mr Lowe's evidence was that during the telephone conversation or conversations he had with Mr Wright on the morning of 12 August 1981 Mr Wright described the Target store as being "a variety store". According to Mr Lowe, Mr Wright at the first meeting in his office on that day said that the Target store would be "two-thirds variety and one-third food" and, in response to a comment by Mr Lowe that the Pine Glades Shopping Centre in which there was a Target supermarket was "a dead loss", Mr Wright said "No, this is going to be variety".

Mrs Lowe's evidence as to what was said at the meeting was to

"He told us it was going to be variety very early on in the conversation because we wondered how a deli could survive with a big food store."

Mr Reynolds said that Mr Wright told him that Target "would be a variety-type store, not just a food store - carrying variety lines". Mr Conto said he had a fairly lengthy conversation with Mr Wright "drawing a parallel" between the Innaloo Shopping Centre and the Mount Hawthorn Plaza. According to Mr Conto, Mr Wright said the Mount Hawthorn Plaza store would not be the same but would be a similar store but not on the same scale as the Innaloo Shopping Centre. Mr Conto's evidence was that that store was "a variety store", "a combination of everything". Mr Wright's evidence supports the conclusion that the major tenants in the Innaioo Shopping Centre retailed goods other than foodstuffs. On the other hand, Mrs Rivett said she was told by Mr Wright that the Target

Mr Wright denied that he had said that the Target store was to be anything other than a supermarket, that isa store selling only foodstuffs. He said, however, that in August 1981, he was aware that Target proposed that the store in the Mount Hawthorn Plaza would differ in some respects from their other supermarkets but he was not aware what those differences might be. He said that Target was very secretive about it and the differences did not become apparent until the shopping centre opened. He also said that in August 1981 Target did not operate any store that was partly variety and

The main thrust of Mr Wright's evidence was that Mr and Mrs Lowe knew that the Target store was to be a supermarket selling only food. There was no suggestion in his evidence in chief that he had said to Mr and Mrs Lowe that the Target store was to contain a snack bar anda delicatessen or that he had pointed out to them on the architect's drawing of the shopping centre the proposed location of those facilities. No suggestion was put to Mr or Mrs Lowe in cross-examination that that had occurred yet well into his cross-examination Mr Wright, in answer to a question concerning competition in the shopping centre, asserted that Mr Lowe knew that the Target store was to have a snack bar and a delicatessen. He amplified

that answer by saying that he had told Mr and Mrs Lowe of them

and had pointed out their location by reference to the drawing.

Having given due consideration to the whole of the evidence on this part of the case I accept as more probable the evidence of Mr and Mrs Lowe that Mr Wright represented to them that the Target store in the Mount Hawthorn Plaza would be "two-thirds variety and one-third food". I do not accept Mr Wright's evidence that he informed Mr and Mrs Lowe that the Target store would contain a snack bar and delicatessen nor his evidence that he pointed out to them their location by

reference to the plan of the shopping centre complex.

Except as I have stated, I have concluded that the applicant has not established that the representations alleged in sub-paragraphs (d) to (i) inclusive of the amended statement

Sub-paragraph 9(j) of the amended statement of claim alleges a representation by Mr Wright that the respondent had

not permitted and would not permit any other lessee of a shop in the shopping centre to trade in competition with the

Mr Lowe's evidence was that Mr Wright had said there would be no competition in the shopping centre. Mrs Lowe said they were told "there would be no competing trades in the centre at all". They did not suggest that Mr Wright had made

any more detailed or particular statement concerning

competition in the shopping centre. However, when the shopping centre opened, they appear to have regarded not only the Target delicatessen as being in competition with them but also such shops as a bakery, a coffee shop anda take-away food shop. Somewhat paradoxically, Mr and Mrs Lowe said that Mr Wright suggested to them that shop 6 was so large that they could install tables and chairs and serve tea and coffee, an enterprise which would have been in direct competition with the coffee shop that Mr and Mrs Lowe knew was to operate in one of the specialty shops. Such a suggestion would not be consistent with a general principle of no competition within the centre.

Mr Wright agreed that he had told Mr and Mrs Lowe that "there would be no competing trades" in the shopping centre. It is clear that by this statement Mr Wright meant to convey to Mr and Mrs Lowe that there would be no other specialty shop in the centre leased as a delicatessen. That is, I think, the

I find that Mr Wright did represent to Mr and Mrs Lowe that there would be no other specialty shop in the centre leased as a delicatessen. I find, however, that Mr Wright did not represent that there would be no competition in the sense that the applicant would have a monopoly in selling whatever

kinds of goods it chose to retail in its delicatessen.

Sub-paragraph 9(k) of the amended statement of claim alleges that Mr Wright represented that the respondent then intended to permit the applicant to sell take-away foods from

Mr Lowe said that he informed Mr Wright that he wanted to be able to sell take-away foods and fruit and vegetables "because that is what is part of a" delicatessen. To that Mr

Wright is said to have replied "No problem at all". Mrs Lowe, asked what they indicated to Mr Wright as being the type of

"... we said normal delicatessen lines - lunches, take-away."

She said that Mr Wright gave no indication that they would not

Mr Lowe subsequently qualified his assertion that Mr Wright had said there was no objection to selling take-away food by saying that he was informed that plans would have to be submitted for the approval of the respondent in respect of the installation of any special equipment that was required. I accept that such plans were submitted by the applicant and approved but that subsequently, and before the equipment was installed, whatever approval had been given was revoked. That

change of heart, however, cannot be laid at Mr Wright's door.

In my judgment there was some confusion as to what each party meant in referring to take-away food that was ordinarily the subject of trade in a delicatessen. Mr and Mrs Lowe obviously included in it food lines that required special equipment to be installed such as a chicken rotisserie, hot plates, deep frying equipment, bain-maries and an extractor fan. I am satisfied that Mr Wright took a less expansive view and, while I am satisfied that some reference was made during the discussion to take-away food, I am not satisfied that Mr Wright made a representation in the terms pleaded and certainly not in the terms which extended to the classes of take-away

Sub-paragraph 9(1) of the amended statement of claim alleges a representation in relation to the erection of signs. There is, again, a conflict of evidence between Mr and Mrs Lowe on the one hand and Mr Wright on the other. Mr Lowe's evidence was that Mr Wright said that there would be "neon signs ali the way round depicting parking areas and shopping". In cross-examination he added that he was told there would be

According to Mrs Lowe, Mr Wright said that "there would be signs to illuminate the fact that there were alli the shops around the back and car-parks would be indicated". Later she said that, according to Mr Wright, there would be "illuminations, signs - ail the things that were needed for

Mr Wright referred to a variety of matters that would affect the provision of signs, particularly neon signs, ona shopping centre and said that he would not have been ina position to make any statement as to what signs the respondent might erect on the site. He agreed, however, that it is usual for a shopping centre to have neon signs and that there was no reason to suppose the Mount Hawthorn Plaza would be different. Although he said that he did not think the question of signs came up during the discussion on 12 August 1981, he agreed that it was possible that it did and that he said something along the lines of that alleged by Mr and Mrs Lowe.

On the probabilities I find that Mr Wright did represent to Mr and Mrs Lowe that there would be neon signs on the shopping centre to indicate that at the rear there were

"(m) the Respondent then held the belief that the amount payable by the Applicant under the proposed Lease for outgoings would not exceed $40.00 per week;

Although Mr and Mrs Lowe gave evidence that Mr Wight made statements to them as to the amount per week which would be payable by way of variable outgoings, their evidence does not establish that Mr Wright made any representation as to the respondent's belief as to what those amounts would be. I, therefore, find that the applicant has failed to establish the

representations alleged in sub-paragraphs (m) and (n) of

Iam satisfied, however, that Mr and Mrs Lowe raised with Mr Wright the amount per week that would be payable by way of variable outgoings. It was clearly a matter that would be

of considerable concern to them in deciding whether to take up

the lease of the delicatessen. They had had no previous experience of being charged for variable outgoings in addition to rent. In their prior venture in a shopping centre the variables had been absorbed into the calculation of the rent. Mr Wright acknowledged that they had commented that the rent was high and they they were concerned to have an indication of the additional amount that might be payable for variable outgoings. Mr Wright's evidence was to the effect that, if asked for an estimate of variable outgoings, his practice was to refer to a percentage of the annual rent and not to a sum of money. Notwithstanding Mr Wright's assertion [I accept Mr and Mrs Lowe's evidence that they were informed by Mr Wright that the amount payable on that account would not exceed $40 per

As to the representation alleged in sub-paragraph 9(0) of the amended statement of claim, I accept the evidence of Mr and Mrs Lowe that they were told by Mr Wright that all the shops inthe centre, other than the delicatessen, had been leased. I am also satisfied on the probabilities that Mr Wright used words indicating that the shops facing the car park were such that they could trade seven days a week and that it was expected they would do so. I am satisfied that he did not say that the tenants of those shops would trade seven days a week or that they had given any assurance to that effect or

Iam relieved from further consideration of the representation alleged in sub-paragraph 9(p) of the amended statement of claim as the applicant did not, in the light of the evidence, press that such representation, if made, was

As to the remaining allegation (sub-paragraph 9(q)), I am satisfied that the artist's impression to which that allegation refers was not seen by Mr and Mrs Lowe in Mr Wright's office on 12 August 1981. The applicant has not

established that the representation alleged was made.

Mr Lowe's evidence was that the applicant entered into the arrangement to take a lease of shop 6 solely because of the representations made to himself and Mrs Lowe at the meeting on 12 August 1981. He said that, had he relied on his own judgment, he would never have gone in there but he went in because "Mr Wright had painted such a good picture that we just could not fail". His evidence was that, aithough he immediately consulted the applicant's solicitor and also saw

the applicant's accountant, he made no independent enquiries

about any of the matters that he said Mr Wright told him.

I have already made reference to the impression I formed from observing Mr Lowe in the witness box that he was not the type of person who could be so swayed by Mr Wright's assertions and that, before the discussion with Mr Wright, he

had a greater interest in taking a shop in the Mount Hawthorn Plaza than he was prepared to admit. However, I am relieved of the necessity to form a view upon the question whether what Mr

Wright said was the sole motivating force in inducing the

applicant to enter into the transaction. It is sufficient to

find, as I do, that the representations which I have found that Mr Wright made were relied upon by Mr and Mrs Lowe as a factor materially inducing them to reach a decision that the applicant should take a lease of shop 6. I find that the applicant would not have entered into the contractual arrangements it did but for the representations made by Mr Wright on the respondent's

IT am also satisfied that Mr Wright had no basis in fact to support the following representations which I have

. that the survey which had been done projected that 10,000 people would pass through the Mount Hawthorn

. that the Target store in the Mount Hawthorn Plaza

• that there would be neon signs on the shopping centre to indicate that at the rear there were

Those representations were untrue and it follows that the respondent, by reason of the false representations made by Mr Wright, engaged in misleading or deceptive conduct within the meaning of section 52 of the Trade Practices Act 1974. It is not disputed that such conduct occurred in trade or commerce so that, subject to the question of damage, the applicant has established the necessary ingredients to succeed in the cause of action pleaded under that Act. In the light of that conclusion it is unnecessary to consider the other causes of

The applicant approached the question of damages by comparing the position in which it might have been expected to be if it had not executed the "Offer to Lease" document and subsequently the lease of shop 6 with its position when it

disposed of the business in February 1984: see Brown v. Jam

Factory Pty. Ltd. (1981) 35 A.L.R. 79; Mister Figgins Pty. Ltd.

v. Centrepoint Freeholds Pty. Ltd. (1981) 36 A.L.R. 23; and Yorke v. Ross Lucas Pty. Ltd. (1982) 45 A.L.R. 299. By this

Moneys of the applicant introduced into the business between 4 November 1981 and

Loans made to the applicant for the purposes of the business 61,400 $163,935

Value of goods taken from the business for the personal

Counsel for the respondent submitted that I should find that the applicant, with full knowledge of the true position, affirmed the transaction with the respondent for the lease of the shop and that the damages attributable to the misleading or deceptive conduct on the part of the respondent should be reduced accordingly. I have already commented upon the somewhat curious feature that the lease was signed by the applicant on 3 December 1981, some three weeks after the shopping centre opened when the applicant became aware that the

Target store was devoted exclusively to the sale of foodstuffs with a large delicatessen section and a take-away food counter,

without any protest about that matter and I have referred to Mr

Lowe's explanation for this. There was, however, disputation between the applicant and the respondent on various matters from the opening day and this continued until the agreement was reached in September 1982 under which the respondent waived the arrears of rent and granted the applicant a further rent free period of six months. Reference has already been made to the default of the respondent in carrying out the terms of that agreement. Had it not defaulted there may have been some force in the suggestion that the applicant should be taken to have affirmed the lease. However, I am unable to find, on the evidence, that the applicant by its conduct affirmed the

Counsel for the respondent also submitted that, to some extent at least. the damage claimed was attributable to the fact that the business was not prudently managed. He criticised the applicant for not having a cash flow budget and for not having maintained appropriate records to establish that

every effort had been made to run the business on a profitable basis. There was, he said, no evidence to show what steps had

been taken to increase the turnover of the business and he was critical of the evidence given by Mr Lowe as to the percentage

mark up on goods sold. However, there is little positive

evidence in relation to these matters and, on the evidence

before me, I am not prepared to make a finding that the

It was also said that the applicant had failed to mitigate its damages. Emphasis was placed on the circumstance that the applicant had continued to trade in the premises, rent free, for a period of some 27 months despite the fact that trading was not profitable. Having regard to the negotiations that took place between the parties culminating in the agreement of September 1982 to which I have referred, I think the conduct of the applicant in continuing to trade from the premises was reasonable. After the expiration of the rent free period of 6 months then negotiated and some reasonable period thereafter within which the applicant might have expected the respondent to comply with its obligation to fix the rent having regard to the "trading pattern of the Centre and also taking into account all of the known factors", it may be that the applicant should have taken more active steps than it did to endeavour to find a purchaser for the business. In fact it terminated its association with the business on 20 February 1984, that is some eleven months after the expiration of the six months' rent free period negotiated in September 1982. The applicant was, however, faced with some difficulties in disposing of the business and there is no firm foundation for a finding that by a specified date it should have done so. The amount by which the damages should be reduced in consequence of

In the result I am not prepared to hold that' the applicant's conduct has been such as to warrant a finding that

it failed to mitigate the damage which it suffered by reason of

the misleading or deceptive conduct of the respondent.

In addition to the amount of $88,842 already referred to, the applicant claimed $40,000 by way of loss of potential earnings on the sum of $102,535, being moneys of the applicant introduced into the business. I was informed by counsel for the applicant that the amount of $40,000 was a rounded figure representing interest on $102,535 at 17.5 per centum per annum for a period of 27 months (from November 1981 to February 1984). Mr Lowe's evidence was that, had the applicant not put

the money into the delicatessen business. it would have invested it with an expected return of 17.5 per centum per

annum. This rate of interest was said to be related to other investments which the applicant had at the time but it must be said that the evidence was no more than an assertion by Mr Lowe

with no documentary or other evidence to support it.

I am prepared to allow as an element in the calculation of the damages an amount representing the interest that it might be assumed the applicant's money would have earned if not used for the purpose of the business although it

is probable that, if it had not taken a lease of shop 6 in the

Mount Hawthorn Plaza its available funds would have been

utilised in acquiring some other business but with what results

is, of course, a matter of speculation. I am not, however, prepared to allow the amount claimed. The moneys contributed by the applicant were paid in comparatively small amounts over the whole of the period of operation of the business. For example, only $15,000 was contributed between November 1981 and June 1982 and a substantial part of the total of $102,535 (viz. $58,700) was not contributed until after the expiration of the

propose to allow the sum of $10,000 on this account.

In the result, I am of opinion that the applicant is entitled to recover from the respondent the sum of $98,842.

The respondent must pay the applicant's costs including ali

It remains to mention the possibility that the respondent may seek to recover from the applicant, or from any surety for the applicant, moneys for rent and a share of variable outgoings under the lease up to 20 February 1984 or an amount in respect of the applicant's use and occupation of the premises up to that date. No undertaking was given by the respondent that it would not seek to recover such moneys and it

would, I think, be appropriate in all the circumstances that

the respondent be enjoined from taking any such proceedings. The rationale for taking this course is that, had the applicant already paid such sums, the loss and damage suffered by reason

of the respondent's conduct would have been correspondingly

I certify that this and the preceding 57 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves.