It will be observed that the document was signed by the appellant Withnall. In cross examination, Kavanagh made it plain that he also associated his name with the document and its pretensions.
9 The Referee found, and his Honour adopted, the conclusion that this document (and similar other assurances) was made with a view to inducing the Owners to enter into this building agreement with the Builder, and that the contents of the document did in fact induce the Owners so to act.
10 As a matter of construction, the document is both representational and promissory; it is not merely expression of an opinion; it is meant to apply to the future as well as the present, and in some places actually does so explicitly - for example; "We will always individually assess the relevant site conditions including solar access, land usage and market demands whether or not we are building a home for you and your family or designing, building and managing your residential investment property"; in effect, it is saying: "Marwick Developments is a first-rate reliable building company, and if you contract with it you will be very content with its services". In these respects it is false and misleading within the meaning of the Trade Practices Act. Moreover, it is not only the Builder which is responsible for the document; it is actually signed by the appellant Withnall, and in cross examination the appellant Kavanagh associated himself with it. In these circumstances, by virtue of s 75B of the Trade Practices Act, the appellants are as liable as the Builder.
11 What is more, granted the findings of the intentions of the representers and the effect of the representation on the respondent Owner, in my view a classical case of collateral warranty is made out. In other words, the bargain was "We the directors will guarantee the excellence of the Builder in consideration of you, the Owner, entering into a contract with the Builder".
12 I agree with his Honour that in this respect the case is on all fours with Shanklin Pier (1951) Limited v Dettol Products Limited [1917] 2 KB 854.
13 Mr Dubler made great play of an argument that a finding of personal liability in the appellants contradicts the fundamental principles of agency. I am not attracted to this argument. In the first place, it is irrelevant to the Trade Practices point, as s 75B obviously applies to agents as much as to principals; and in the second place, as far as the collateral contact is concerned, it misses the point, because the parties to the collateral contract are the appellants (in their personal and not in any representative capacity) and the Owners - the Builder is not a party to the collateral contract.
14 For these reasons I would dismiss the appeal with costs.
15 BROWNIE AJA: The basic facts are summarised in the judgment of Meagher JA, which I have had the advantage of reading. I respectfully agree with his Honour's conclusion about the liability of the appellants under the Trade Practices Act ("the Act"), but disagree with his conclusion about their liability under a collateral contract.
16 The documentary record before us is deficient, omitting amongst other things the pleadings, but as is clear from the reasons for judgment of the learned primary judge, one strand of the respondents' case, before the referee and before the primary judge, was that the appellants, in breach of the provisions of s.75B(1)(c) of the Act, had been knowingly concerned in the breach by the Builder ("Kayuu") of the provisions of s.52 of the Act. In summary, the respondents said that Kayuu, and therefore the appellants, had represented that Kayuu would carry out the relevant building work in a workmanlike manner, and in a timely manner, and that Kayuu had in place a management process that would produce these results.
17 The representations in question, constituting the presently significant part of the conduct said to have infringed the provisions of s.52, consisted in part of representations about future matters, so as to attract the operation of s.51A of the Act, and in part of representations about present matters, that is, "present" at the time the representations were made, prior to the date of the contract, 20 October 1996.
18 These representations include the document quoted by Meagher JA at [8]. In my view, these documents, read as a whole, cannot properly be described as relating only to a present, as distinct from a future state of affairs. Whilst it is true that some fragments of the documents are expressed in the present tense, a fair view of the documents, read as a whole, points to the conclusion that they should be taken to be representations about the future conduct of Kayuu. Perhaps the point is more clearly illustrated by a letter from Kayuu to the first respondent dated 26 June 1995 (relating to a project which did not proceed, and not to the project the subject of the litigation). In that letter, Kayuu said, over the signature of the first appellant, Mr Kavanagh, on behalf of Kayuu (which traded as Marwick Homes):-
Marwick Homes, in accordance with the strict quality regulation of the Housing Industry, is required to following (sic) the building standards as stipulated by the Building Code of Australia (BCA). Such standards must also meet the numerous inspection/approval requirements from a range of statutory and lending authorities, forming an industry-wide model for ensuring quality building practices.
The in-house management process for quality control starts with the subcontractors executing an agreement (attached) which binds them to tight time periods and ensures the highest quality of workmanship.
19 In my judgment, this is representational as to the future conduct of Kayuu. The respondents also relied upon other, oral, representations. I do not think they are significantly different, on this point. That is, the statements were representations about future matters.
20 The appellants submitted that there was no evidence that they or Kayuu did not have reasonable grounds for making the representations in question. I do not accept this: there was evidence capable of supporting the view that Kayuu did not have in place the management process mentioned in its letter of 26 June 1995, but in any event, the appellants and Kayuu bore the relevant onus of proof: s.51A of the Act; and they did not discharge that onus.
21 The appellants also submitted that the method by which damages had been assessed, under s.82 of the Act, was flawed. Before the referee, respondents presented a case, primarily against Kayuu, and primarily for damages for breach of contract, and the referee assessed damages under this rubric in a conventional way: he made findings as to the cost of completing the work and of rectifying the faulty workmanship, and he assessed a sum representing the loss to the respondents resulting from the failure of Kayuu to complete the building work within the time stipulated for in the contract.
22 Then, without comment, the referee treated the damages payable under the Act as being the same sum of money, and the learned primary Judge adopted the report, without significant discussion of this point.
23 The appellants say, however, that as a matter of general principle, it is necessary to approach the task of assessing damages under s.82 in a different way. One should compare the actual position of the respondents with what their position would have been but for the breach of the provisions of s.52, and not by comparing their actual position with what their position would have been but for the breach by Kayuu of its contractual obligations.
24 There is no doubt that, generally speaking, this is the correct approach: Marks v GIO Australia Holdings Limited (1998) 196 CLR 494. However, this generality is not to be elevated into some absolute rule of law, not justified by the words of the statute and where, as is the case here, the conduct found to have constituted a breach of the provisions of s.52 led the respondents into entering into a contract, it may be that the contract would have produced the very benefit that was the subject of the representation, so that it might be appropriate to assess damages by reference to the contract: Marks at 504.
25 A result of the conduct of Kayuu and of the appellants, in breach of the provisions of s.52, was that the respondents entered into a contract with Kayuu, for the construction of residential premises. I think that we are entitled to know that, in Sydney at the relevant time, there were many people engaged in work of that nature, in competition with each other. The evidence makes it plain that if the respondents had not contracted with Kayuu, they would have contracted with someone else to do the same general work. It is no doubt possible that the contract which the respondents would have entered into with some other builder might have been for a different contract sum, might have been made pursuant to a different form of contract, and might have stipulated a different date for completion of the work, but it seems legitimate to infer that the contract between the respondents and Kayuu represented what was generally available in the market place at the time.
26 The conduct of the appellants which infringed s.52 consisted of representations that Kayuu would do the work in question in a workmanlike manner, and in a timely manner. The loss or damage suffered by the respondents "by" that breach consisted of the cost of completing the work, and of rectifying the faulty work, $189,676, together with the further sum of $10,640 in respect of the delayed completion of the work. The latter sum represented rent of $190 per week, for 56 weeks: a rent expense incurred by the respondents as the result of the failure of Kayuu to complete the work in a timely manner. That is, in the circumstances of this case, the damages awarded against Kayuu for breach of contract coincided with the damages payable by the appellants, assessed under s.82.
27 As to the collateral contract question, it does not seem to me that the evidence shows that either of the appellants ever said (or wrote) words on his own personal behalf, as distinct from speaking in his capacity as a director of Kayuu. Thus, the two documents mentioned above were signed by the appellants, as directors; and as I read the affidavits, and the transcript of the oral evidence, neither of the appellants ever said anything, purportedly on his own behalf, as distinct from speaking in his capacity as a director.
28 There might be one apparent exception to this: in paragraph 7 of the affidavit of Mr Blisset of 24 December 1996, he spoke of a conversation he had with Mr Whitnall, in which the two men spoke of the then contemplated contract between the respondents and Kayuu. In that conversation Mr Blisset referred to Kayuu as "you", and Mr Whitnall referred to it as "we". At the end of the conversation, Mr Blisset said:
I am relying on you to do this job properly. If this job falls over it will jeopardise my position for [another then proposed project].