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

Federal Court of Australia|1985-04-11|Before: Neaves J

TRADE PRACTICES - Consumer protection - Lease of shop shopping centre ~ Misleading or deceptive conduct - Damages

WESTERN AUSTRALIA DISTRICT REGISTRY GENERAL DIVISION

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

JUDGE MAKING ORDER: Neaves J. DATE ORDER MADE: 11 April 1985 PLACE: Canberra

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

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (347 paragraphs)

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