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[2009] QSC 187
plaintiff. The lease evidenced by the letters of 19 and 25 October 2005 was varied so that its initial term expired on the earlier of 31 March 2010 or one month after issue of a certificate of practical...
Swires' representative conveyed that JAT would be offered other premises after its three-year lease, but Swires did not intend to honour that commitment. JAT relied on the representation and did not bring forward plans for its own replacement facility. The Court found misleading or deceptive conduct and extended the lease only long enough to help avoid the likely disruption while JAT's new facility was completed. The Court did not decide that JAT had an enforceable contractual option for a further three years.
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1 cited instrument linked from this judgment.
2,473 words · generated 01/10/2026
Lyschrome Pty Ltd, trading as JAT Refrigerated Road Services, operated a refrigerated transport business and occupied cold-storage premises at Murarrie owned by Swire Cold Storage Pty Ltd. The Murarrie facility suited JAT because it combined substantial pallet capacity with a relatively large number of usable loading docks, a configuration the Court found particularly valuable to the business ([1]–[3], [12]–[13]).
When JAT's earlier sublease was not to be renewed, its representative negotiated directly with Swires. JAT wanted a six-year arrangement, allowing time to develop and build its own facility. Swires was unwilling to commit to six years because it might redevelop or sell the Murarrie site. The arrangement discussed was a three-year lease, with alternative premises to be provided if Swires required JAT to leave the Murarrie site ([14]–[16]).
The key documents were two letters. Swires' letter of 19 October 2005 referred to a “three-year agreement with a further option of three years at another Swire Cold Storage Site”. JAT's 25 October response accepted a three-year agreement with a further three-year option ([17], [19]). There was no signed formal lease that ultimately replaced those letters. Draft leases were exchanged, but the final position remained that the letters were the contractual documents ([29]–[34]).
The parties disagreed about what the discussions and letters meant. Swires argued that it had only offered to reconsider whether space might be available near the end of the first term. Dutney J rejected that construction. The Court preferred the evidence of JAT's representative and found that Swires had conveyed that JAT would be offered premises at another suitable Swires site for a second three-year period ([21]–[27]).
The crucial distinction was between an enforceable contractual option and a representation about future conduct. The Court considered that no enforceable option existed because essential matters, including the premises' location and the rent, had not been agreed ([6]). JAT's pleaded option claim was not pursued in submissions, so the Court did not decide it further ([7]). The case instead turned on the Trade Practices Act claim and the relief available if misleading or deceptive conduct was established ([8]).
Swires later told JAT to vacate by 19 October 2008. JAT did not then have alternative premises ready. It had begun developing a new facility at Freight Street, Lytton, but the evidence indicated that completion was expected around January 2010 ([39], [45]–[48]). The Court found that a gap in access to cold-storage premises could seriously harm the business and that JAT had relied on the representation when it did not bring forward the development process ([48]–[49], [55]–[56]).
The final order extended the lease term to the earlier of 31 March 2010 or one month after issue of a certificate of practical completion for the new facility. The Court also ordered Swires to pay JAT's costs on the standard basis ([71]).
The statutory analysis began with s 52 of the Trade Practices Act 1974 (Cth), which the judgment quoted as prohibiting a corporation from engaging in misleading or deceptive conduct, or conduct likely to mislead or deceive, in trade or commerce ([50]). Because the representation concerned what Swires would do in the future, the Court also considered s 51A, which it described as deeming a representation about a future matter misleading unless the corporation had reasonable grounds for making it ([52]).
Dutney J found that the representation was not simply an offer to discuss possible premises later. The wording in the letters, read with the negotiations, indicated a commitment to an additional three-year period at another suitable Swires location ([22]–[27]). The Court also relied on the first draft lease prepared by Swires' representative, which referred to a further three years at another Swires location within Hemmant, subject to agreement by both parties. A later draft instead said “Options - Nil”, but that did not displace the earlier exchange of letters as the contractual record ([27]–[34]).
The Court found that Swires, through its representative Mr Towell, did not intend to be bound by the representation when it was made. It also found that Mr Towell lacked actual authority to commit Swires to anything beyond a three-year lease at Murarrie. Nevertheless, Swires had put him forward as the person authorised to negotiate JAT's occupation, including at alternative premises. The Court therefore held Swires bound by his representation ([53]–[54]).
The findings about reliance were central to the remedy. The Court accepted that JAT would have organised its own premises earlier if it had known it could not rely on Swires to provide an alternative location. The evidence indicated that the land and planning process could have allowed JAT to have its own cold store ready by the end of the original term if it had started in time ([48], [55]). The Court also found that moving a cold-storage business required substantial advance organisation and that JAT had not acted as if it expected to be without premises at the end of the first term ([56]).
Section 87 was important because it allowed relief beyond a simple damages award. The judgment quoted the provision as authorising orders considered appropriate to compensate for, prevent or reduce loss or damage. It also observed that the statutory power to direct supply of specified services could encompass rental accommodation ([60]–[61]). The Court referred to Murphy v Overton Investments Pty Ltd for the proposition that a damages award is not necessarily the appropriate or ordinary remedy for misleading conduct inducing a continuing future obligation; the form of relief depends on the loss and on other available orders ([62]).
Here, the loss had not yet been suffered because JAT remained in occupation under an interlocutory injunction. The Court considered that a limited extension could prevent the likely disruption, whereas calculating future loss in damages would be imprecise ([58], [63]). It framed the order to bridge the time until JAT's own facility became available, while placing an outside limit on the extension ([66], [68]–[70]).
The judgment records that no enforceable three-year option had been established on the facts. The location of the alternative premises and the rent for the further period remained unsettled, and the Court described those matters as essential terms that had not been agreed ([6]). JAT's option claim was not formally abandoned, but no submissions were made in support of it; accordingly, the Court did not decide that claim ([7]).
That contractual uncertainty did not end the statutory inquiry. Dutney J treated the promise to provide alternative premises as a representation about future conduct, even though it was not enforceable as a contractual option ([51]–[54]). The decision therefore illustrates, on its own facts, that the absence of an enforceable option did not prevent a separate finding of misleading or deceptive conduct or remedial relief under the TPA.
The judgment did not purport to reformulate the general law of options or set out a comprehensive test for when an uncertain promise becomes actionable under the TPA. Its reasoning depended on the particular words used, the negotiations, the evidence about the representative's intention, JAT's reliance, and the likely consequences of being left without suitable premises ([22]–[27], [53]–[56]). The remedial order was likewise tied to the specific evidence about construction timing and the availability of other premises ([41], [45]–[49], [66]).
The judgment also distinguished the function of preventive relief from damages. It relied on s 87 as a means to prevent or reduce likely loss, and it considered a lease extension appropriate because the adverse consequences could be avoided by maintaining JAT's access to the premises until its new facility was ready ([60]–[66]). It did not determine an amount of damages or find that JAT had already suffered loss from being forced to vacate, because the interlocutory injunction had enabled JAT to remain in occupation ([42], [58]).
This is a 2009 decision applying the Trade Practices Act provisions quoted in the judgment. The supplied judgment does not address later statutory amendments or the present operation of equivalent consumer-law provisions. Any application to a current dispute would therefore require checking the current legislation and later authorities.
At [25], Dutney J wrote: “An option in a lease is a well understood term, even by most lay people. It refers to a firm commitment to provide an extension of the period of the lease.” In plain English, the Court rejected the idea that “option” meant only that Swires would consider negotiating later. The meaning of the word, in context, was a commitment to provide a further lease period.
At [27], the Court compared that ordinary meaning with Mr Towell's asserted personal understanding that an option meant no more than inviting future negotiations. It found that such a private understanding had not been conveyed to JAT. In practical terms, the Court assessed the communication received by the other party, not merely the speaker's unexpressed intention.
At [54], the Court found that Mr Towell did not intend to bind Swires, but also found that Swires had presented him as the person authorised to negotiate JAT's occupation. The Court concluded that Swires was bound by the representation. This passage is important because the finding about the speaker's intention did not, in the Court's analysis, prevent the representation from having statutory consequences.
At [63], Dutney J said that where loss had not yet occurred and could be avoided, avoiding it was preferable to an imprecise calculation of what might happen in the future. Put simply, the Court considered whether practical preventive relief could address the risk more accurately than estimating hypothetical damages.
At [66], the Court linked the remedy to the counterfactual position: without the representation, JAT would have organised its own cold store to be available when the original lease ended. Because the facility would not be ready by then, the extension was designed to provide time to reach that position.
At [70], the Court described its proposed order as “the least required” to prevent the likely damage. The extension was therefore not an award of the full three-year option claimed in the original negotiations. It was a time-limited response to the loss the Court found likely on the evidence.
The judgment is potentially relevant to fact patterns involving a commercial representation about future conduct, where the recipient relies on it in arranging its affairs and the representation is not honoured. Its reasoning is most closely tied to circumstances where the representation was made during negotiations, was communicated as a commitment rather than a mere possibility, and concerned an important ongoing business arrangement ([22]–[27], [51]–[56]).
It may also be relevant where a contractual promise is too uncertain to be enforced as an option or other contractual right, but the facts may support a separate statutory claim about misleading or deceptive conduct. In this case, the future premises and rent were not agreed, yet the Court separately examined the promise's meaning, the promisor's intention, reasonable grounds, reliance and likely detriment ([6], [51]–[57]).
The remedy reasoning may be relevant where loss is prospective, can be prevented or reduced, and a tailored order may address it more effectively than a speculative damages assessment. The decision's specific remedy depended on evidence that the business could not readily move elsewhere, that relocation took time, and that JAT's replacement premises would be ready within a reasonably identifiable period ([41], [48]–[49], [56], [63]–[70]).
The judgment does not establish that every informal promise about future premises is misleading, that every such promise supports an order changing a lease, or that an uncertain option will always produce statutory relief. The Court's conclusions were grounded in the particular documents, credibility findings, evidence of reliance and construction timetable.
The supplied judgment does not identify any later cases that followed, distinguished, applied or criticised Lyschrome Pty Ltd t/a JAT Refrigerated Road Services v Swire Cold Storage Pty Ltd. It was delivered on 15 July 2009, and the text provided here contains no later judicial treatment. It is therefore not possible, on the supplied source alone, to describe how subsequent courts have treated this decision.
The authorities that Dutney J cited are earlier decisions, not later treatment of Lyschrome. Futuretronics International Pty Ltd v Gadzhis was cited in the discussion of promises concerning future matters ([51]). Murphy v Overton Investments Pty Ltd was cited in considering the range of possible remedies under s 87 ([62]). Marks v GIO Australia Holdings was cited in discussing the conventional approach to damages under s 82 ([65]). Verwayen v The Commonwealth was referred to in the discussion of the estoppel claim ([67]).
For research use, the distinction matters: the judgment itself explains how those earlier authorities informed the Court's reasoning, but the supplied text cannot establish whether later courts adopted or limited the Lyschrome reasoning. That question requires research beyond this judgment.
The judgment leaves several issues unresolved. First, it did not determine whether a contractual option existed. Although the Court said no enforceable option existed because essential terms had not been agreed, it did not finally adjudicate the pleaded option claim after submissions were not advanced on it ([6]–[7]). The case should not therefore be described as a final ruling on every possible contractual argument concerning the letters.
Second, the Court did not separately decide the estoppel claim. It considered that the relief available under s 87 could not be exceeded by the estoppel claim in the circumstances, and that the estoppel claim added nothing unless the statutory claim succeeded ([67]). The judgment therefore does not provide a separate determination of the elements or independent remedy for estoppel on these facts.
Third, the order was closely calibrated to evidence of likely completion of JAT's replacement facility and the absence of readily available alternative premises. The Court allowed a margin for unexpected delay and set 31 March 2010 as the outside date ([41], [45], [68]). The judgment does not specify how a court should frame relief where completion timing is less certain or where the affected business has other practical alternatives.
Fourth, the Court found that Swires' representative lacked actual authority to make a binding commitment beyond the initial lease, but held Swires bound by the representation because it had put him forward as its negotiating representative ([54]). The decision does not comprehensively address the limits of that reasoning in other agency circumstances.
Finally, the judgment concerned provisions of the Trade Practices Act as quoted and applied in 2009. The supplied text does not address subsequent legislative changes, current statutory wording, or later decisions interpreting related provisions. Those matters remain outside what can be concluded from this source alone.
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Porter Davies as town agents for Dennis & Co for the plaintiff
[1] JAT Lyschrome Pty Ltd trading as JAT Refrigerated Services ("JAT") occupies cold storage premises owned by Swires Swire Cold Storage Pty Ltd "(Swires") at Murarrie near the Port of Brisbane ("the Murarrie premises").
[2] JAT conducts a refrigerated road transport business to various destinations between Cairns and Sydney.
[3] Between 2005 and 2008 the Murarrie premises were occupied pursuant to an agreement for lease negotiated between Mr Whitbread on behalf of JAT and Mr Towell on behalf of Swires.
[4] It was common ground that that lease ended on 19 October 2008.
[5] As pleaded, the first issue concerned the existence or otherwise of an option to renew the lease for a further three years until October 2011.
[6] It quickly became apparent that no enforceable option existed. As will appear when the facts are set out, there was no note or memorandum setting out the essential terms. Neither the location of the premises nor the rent to be paid during the option period had been agreed as between the parties.
[7] While the claim for exercise of the option was not formally abandoned, no submissions were advanced in support of that claim and I do not propose to deal with it further.
[8] The more substantial issues in the case concerned the operation of the Trade Practices Act 1974 (Cth) ("the TPA") and the relief available to JAT in the event that it was able to make out a case of misleading or deceptive conduct and estoppel.
[9] Prior to October 2005 JAT operated its business from the Murarrie premises pursuant to a sublease from a company referred to in the evidence as Polar. Polar did not wish to renew its lease and JAT then entered into direct negotiations with Swires.
[10] JAT is a company owned by Mr Azzopardi. Mr Azzopardi was formerly a truck driver. He was undoubtedly successful in that occupation such that he now controls a substantial fleet of refrigerated vehicles.
[11] Mr Azzopardi lives in Townsville. The Brisbane cold storage facility was managed until recently by Mr Whitbread.
[12] The Murarrie premises were ideal for JAT's business. It contained space for approximately 874 pallets together with office accommodation, but still provided six usable loading docks. One dock was always unserviceable.
[13] The Murarrie premises are old. More modern premises stack pallets higher with the consequence that fewer loading docks are available for the same number of pallets. It was the unusually large number of usable loading docks for the total pallets storage which particularly suited JAT's business.
[14] Mr Azzopardi instructed Mr Whitbread to negotiate a lease of the premises to correspond with the ending of the Polar lease. Mr Whitbread gave evidence that what he was required to obtain was a six year lease.
[15] Since about 2004 JAT had long-term plans to develop its own facility. Six years was a term which provided plenty of time to develop those ideas and construct premises.
[16] Mr Towell was not prepared to agree to a six year lease. He told Mr Whitbread that Swires wanted to redevelop or sell the Murarrie premises. That was to take place approximately 18 months to two years into the term of the proposed lease. Mr Whitbread agreed that if the Murarrie premises were required, either for demolition or sale within that timeframe, JAT would move out. That agreement, however, was predicated upon Mr Towell's assurance that Swires would provide alternative premises, even though at the time of the negotiations the location of those premises and the rent that would be payable for those premises could not be settled. All that was known was that the rent payable for alternative premises would be higher than that payable for the Murarrie premises. This did not appear to trouble JAT.
[17] On 19 October 2005 following the negotiations, Mr Towell wrote an undated letter to Mr Whitbread in the following terms:
Further to your expression of interest today 19th October 2005, Swire Cold Storage is pleased to submit the following rate for rental at our Murarrie site. This quote is based on receiving commitment for a three-year agreement with a further option of three years at another Swire Cold Storage Site.
Area = Freezer room consisting of 740 pallet spaces at 1200mm. Chiller area consisting of 134 pallet spaces at 1200mm Seven docks
Offices consisting of 93 square meters excluding amenities.
Availability of the quoted area will need to be discussed further if quotation is accepted. Lease Agreement for 3 years with a 3-year option.
Please note that these rates should be read in conjunction with our conditions of storage and conditions of carriage, copies of which are attached. The rates quoted will attract a GST of 10 per cent; our payment terms are 14 days. If you have any queries feel free to contact me.
[18] It was common ground that the attached conditions of storage and conditions of carriage had no relevance to JAT's tenancy.
[19] Mr Whitbread passed Mr Towell's letter on to Mr Azzopardi who responded on 25 October 2005 in these terms:
I refer to your quotation for rental of your Murarrie site received by us on 20 October 2005. We agree to a three year agreement with a further option of three years at the rates quoted by you.
Please discuss availability of quoted area with our Brisbane Manager, Mr David Whitbread.
Please do not hesitate to contact us if you require further information.
[20] In his affidavit which constituted his evidence-in-chief, Mr Towell's version of the negotiations with Mr Whitbread was as follows:
"5(b) I admit that Whitbread said to me words to the effect that JAT wanted to lease premises the same as they were currently operating out of, that is leasing an area with cold stores, seven docks and with the same area and office space as JAT currently occupied.
(c) I said words to the effect that -
- (i) SCS could offer to JAT a three year lease of the space it currently occupied at the property;
- (ii) SCS could offer JAT a second three year lease but that the second lease would need to be in respect of another site owned by SCS because the property was earmarked for demolition in the future and SCS could not commit to leasing rooms at the property beyond three years;
- (iii) I could not say what alternative premises might be available for JAT in three years time but that someone from JAT should contact me closer to the expiry of the initial three year term and we would look at other SCS sites for availability of suitable premises at that time."
[21] I prefer Mr Whitbread's evidence concerning the discussions between him and Mr Towell as far as any differences are material. Mr Towell tried to resile from his affidavit under cross-examination but ultimately conceded that the affidavit was more likely to be correct.
[22] Particularly when Mr Towell's affidavit evidence is compared to the letter he sent following the conversation, I accept Mr Whitbread's evidence that representations were made to JAT the effect of which was that it would be given a three year lease with a three year option. Even though the exact premises to which the option would relate could not be identified at that time, it would be offered premises for a further three years at another appropriate site owned by Swires.
[23] For Swires it was submitted that any representation contained in the letter of offer could only be interpreted as an indication that Swires would reconsider the position having regard to the availability of space at the end of the three year lease. This is submitted to be made clear by the paragraph of the letter under the heading "Conditions". I cannot accept this submission.
[24] The "quoted area" in the passage relied on from the letter is the area of the Murarrie premises identified in the preceding paragraph as "area". It is the only area quoted. The need to discuss availability of the quoted area arises because of JAT's agreement to move to other premises to be provided by Swires if Swires wanted to reclaim the Murarrie premises.
[25] Swires' submission overlooks both the last sentence of the first paragraph and the last sentence of the paragraph relied on. An option in a lease is a well understood term, even by most lay people. It refers to a firm commitment to provide an extension of the period of the lease.
[26] The letter, if construed as Swires submits, is inconsistent with the oral negotiations which it purports to reflect.
[27] Under cross-examination Mr Towell asserted that when he offered an option for a further three years to Mr Whitbread he understood that term to mean no more than that he would invite negotiations in the event that a site was available. Even if this was what Mr Towell intended to convey by use of the expression "option", this meaning was not conveyed to Mr Whitbread. If there was any doubt about the representation which Mr Towell recognised having made, it is dispelled by reference to the first draft lease he prepared. In item 6 concerning the term of the lease, there is a note "Options - as per item 13, Schedule 1". Item 13 is in these terms:
"Further three years at other SCS location within Hemmant, Qld as agreed to by both parties."
[28] Mr Towell referred the draft lease he had prepared to Mr Herbert who was the General Manager, Commercial for the respondent.
[29] Correctly, Mr Herbert was of the view that an option in the form drafted by Mr Towell was not an option at all. The draft lease was amended and item 6 on the front page of the draft lease then read: "Options - Nil". That draft was eventually forwarded to Mr Azzopardi in about late February 2007, almost half way through the initial three year term of the lease agreed in the correspondence.
[30] Mr Azzopardi did not engage solicitors for the purpose of negotiating or settling the draft of the lease. Mr Azzopardi gave evidence that when the lease was received in Townsville he was in Cairns. When he got back to Townsville he signed the lease without reading it, although in his affidavit he accepted that he looked cursorily at the first three pages. I do not think the difference is material. In retrospect, Mr Azzopardi admitted that had he read the draft lease and noticed that there was no option, he would have understood that notwithstanding the exchange of correspondence the lease was limited to three years.
[31] As first blush, Mr Azzopardi's evidence that he did not notice the absence of the option on the front page of the lease seems unlikely. It is obvious to a lawyer. On the other hand, it was apparent from his demeanour under cross-examination and the significance he attached to things said at subsequent meetings to which I will refer that Mr Azzopardi was unsophisticated when it came to the detail of legal transactions and documents. He appeared to be what he was, a truck driver who, through his hard work and abilities in that sphere, had developed a substantial business.
[32] In any event, signing a lease for premises which were critical to the success or otherwise of the business without reading it and without obtaining any advice in relation to it is no less credible that Mr Towell's evidence that offering an option as far as he was concerned was no more than agreeing to negotiate at some time in the future. Mr Towell was a former storeman who had risen through Swires to a managerial position. Having regard to their respective backgrounds I do not think standards of diligence and understanding expected of more sophisticated businessmen apply either to Mr Azzopardi or Mr Towell.
[33] Consequently, I accept that Mr Azzopardi did not read the lease that was sent to him for execution sufficiently to register the absence of the option. As a result, he continued to labour under the misapprehension induced by Mr Towell's representations and the exchange of correspondence that he would be offered premises by Swires for a second three year term.
[34] Swires did not sign the lease which was returned by Mr Azzopardi. Mr Herbert was dissatisfied with some of its terms which were redrafted and an amended form of lease was sent to JAT in about mid-2007. The asserted justification for the further lease was that the initial draft had been lost and no reference was made to the fact that the form of lease had been altered. In any event, nothing turns on that because the second draft lease was not signed by either party. The only contractual documents between the parties remained the exchange of letters in October 2005.
[35] The next direct communication between Mr Azzopardi and Swires appears to have been in February 2008 when Mr Azzopardi met Mr Towell for lunch to discuss the future of the Murarrie premises.
[36] During the course of the lunch there was a discussion concerning alternative premises. Both Mr Azzopardi and Mr Towell agree that the prospect of moving into Swires' Cannon Hill cold store was raised but that Mr Azzopardi was told that there was no space available.
[37] In paragraph 18 of his affidavit Mr Towell said that he told Mr Azzopardi that he was having difficulty finding available space because all of Swires' cold storage rooms were in excess of 2,000 pallets and it would be difficult to find alternative accommodation for a smaller number of pallets with a large number of docks. According to Mr Towell, Mr Azzopardi responded that he would take a room of 2,000 pallets to get the required number of docks if he had to. Mr Azzopardi and Mr Towell then visited Swires' Hemmant cold storage facility.
[38] Mr Azzopardi's affidavit puts the position rather more positively for JAT. I accept that his reference to premises at 1430 Lytton Road, Morningside is an error and that the premises that were discussed were on Lytton Road at Hemmant. Nonetheless, and even accepting Mr Towell's version of the conversation as set out in his affidavit, there is nothing to indicate that Swires did not intend to give effect to the representation made back in October 2005. Merely to indicate a difficulty in finding other premises is not, to my mind, the same as a statement that premises would not be offered unless suitable space was available which was not required for some other purpose. In any case there was no apparent need to vacate the Murarrie premises in the immediate future.
[39] In early August 2008, Mr Azzopardi had a conversation with Mr Curyer who had replaced Mr Towell. Mr Azzopardi was concerned because some other tenants at Murarrie were vacating. Without making any promise as to the future, Mr Curyer allayed Mr Azzopardi's concern that his lease would be terminated. Not long after that, by letter dated 22 August 2008, Swires informed JAT that the lease would expire on 19 October 2008 and that the premises must be vacated by that date.
[40] In any event, I do not accept that any representation was made in either February 2008 or October 2008 on behalf of Swires which could support a claim to relief either under the TPA or in estoppel.
[41] About the time of the letter of 19 October 2008, Mr Azzopardi had engaged Wright Property and King & Co Property Consultants in an endeavour to obtain alternative premises. The evidence of the relevant agents was to the effect that cold storage premises in the Brisbane region are in heavy demand and rarely available. In any event, no premises were available into which JAT could move.
[42] Prior to the expiration of the lease JAT sought and obtained an interlocutory injunction to enable it to remain in the Murarrie premises until this action was determined. It is still in occupation of those premises.
[43] Having regard to the uncertainty concerning the date of appointment of the agents and the acquisition of land on which to construct a new cold store, it might well be that Mr Azzopardi became concerned about his position earlier than 19 August 2008. He may have started thinking of alternative solutions about the time other tenants at Murarrie started receiving notices to vacate. There is nothing in Mr Azzopardi's conduct earlier than mid 2008 which suggests any concerns about the security of premises into the foreseeable future.
[44] Swires' actual plans for Murarrie are unclear. Despite being asked directly what Swires' intentions for the premises are, no clear answer was given. The best I can ascertain is that it is intended to either sell the premises, redevelop the site for a more modern cold storage facility or make use of the premises for Swires' own purposes for some indefinite period. In any event no timetable appears to be in place to achieve any of those ends. At present, Swires is using that part of the Murarrie premises vacated by other tenants to meet its own storage needs.
[45] JAT has commenced construction on its own premises in Freight Street, Lytton near the Port of Brisbane and those premises are expected to be completed in about January 2010.
[46] JAT signed a contract to purchase the land on which the cold storage facility is being constructed on 1 July 2008. The land had been available from the Queensland Government for some time prior to that.
[47] The contract was conditional on the production by JAT to the vendor of council approved building plans satisfactory to the Department of Infrastructure within five months after the contract date. Completion was to be 14 days after production of those plans. A formal design and construct contract was entered into on 15 January 2009 between JAT and Space Frame Buildings Pty Ltd. Space Frame Buildings Pty Ltd had been involved with designing appropriate cold storage facilities for JAT to replace the Murarrie premises since at least the beginning of 2008. The lead time to design the premises, acquire the land and construct the premises to completion thus appears to be about two years.
[48] Mr Azzopardi gave evidence that if the representations concerning the offer of a second three-year term had not been made, he would have accelerated the proposal to construct new premises for JAT so as to have those premises available for occupation by the end of the lease. I am satisfied on the evidence that that could have been achieved within the term of the lease. I am also satisfied on the evidence that since Space Frame Buildings Pty Ltd produced a project outline dated 28 February 2008 JAT has proceeded with reasonable diligence and it is unlikely that the project could be completed in any significantly shorter time frame. The consequence of this finding is that in order to have premises of its own available to move into at the end of the lease, JAT needed to commence the design and construction of those premises and the purchase of the land by the end of 2006.
[49] I also accept that the unavailability of premises for even a relatively short period would have catastrophic consequences to JAT's business. Mr Azzopardi deposed to the business having approximately 900 customers who had been with the business for up to 12 years. Closure of the business's Brisbane premises for even a relatively short period would result in the loss of some or even many of those customers, possibly irretrievably. Whether JAT's business would survive such closure was something that was not explored by the evidence. Mr Azzopardi deposed that the business would fail if it had no premises from which to operate in Brisbane or south-east Queensland but that matter was neither the subject of further evidence nor cross-examination.
The Trade Practices Act claim.
[50] The starting point for discussion is s 52 of the TPA which provides that:
"(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."
[51] The representation that JAT would be offered alternative premises in the event that the Murarrie premises were not to be available was a representation as to future conduct. It was in the nature of a contractual promise given in the course of the negotiations. Whether for reasons of uncertainty it was not enforceable in contract is not to the point. In Futuretronics International Pty Ltd v Gadzhis,[1] the court said:
"I am not persuaded that one should treat every contractual promise as giving rise to an implied representation of the kind referred to in ... section 51A ... However, I am persuaded that if there be an unconditional promise which forms part of the contractual obligations, then it is proper to treat the giving of that promise, at least in the ordinary case, as the making of a representation as to a future matter, being either the doing of an act or the refusing to do an act, being in each case the subject of the promise. Perhaps conditional promises may also be treated as the making of a representation as to future conduct, but in each case the qualifying terms of the promise would usually lead to the conclusion that the maker had reasonable grounds therefore unless it could be shown that under no circumstances would the promisor have fulfilled his promise."
[52] In this particular case, I am satisfied that the requirements of s 51A of the TPA in relation to representations regarding future matters are applicable. That section deems misleading a representation with respect to any future matter unless the corporation has reasonable grounds for making the representation.
[53] At the time the oral representations were made, Mr Towell had no intention of committing Swires to offering anything to JAT at the expiration of the lease. In his evidence,[2] Mr Towell made this clear:
"You wrote in your letter that you wanted J.A.T. to commit to a three-plus-three lease arrangement, didn't you?-- I had in the letter it was three years and I had a conditional on the option which we would have to discuss going forward. There's a different terminology of perception that may be on my part because I don't have a legal mind, but the three years was the commitment I was looking for to commit to a lease out of J.A.T. and the three year option was what we were talking about, getting closer to the expiry and bringing that option up and say, "Okay, what's available?" I never - I had no idea. I mean, I knew some details from Coles, what was happening, had some ideas in my mind, but obviously couldn't commit.
You say that at the time you had the conversations in October 2005, you had no idea whether or not Swire would in fact be able to make space available to J.A.T. in 2008; is that the idea?-- That's - yeah, that's basically the idea. Although, I did make it quite clear through all the conversations that we would have to go into communications about it, as I said in the letter obviously."
[54] I do not accept the proposition that Mr Towell made plain to Mr Whitbread in the course of that conversation that he was not intending to commit Swires. That part of the evidence is inconsistent with his affidavit, with the correspondence offering the lease and with the original draft which he prepared following acceptance of his written offer. Nonetheless, I do accept that at the time the representation was made Swires, through Mr Towell, did not intend to be bound by it. I am not satisfied in fact that Mr Towell had any actual authority to commit Swires to anything other than a three year lease at the Murarrie premises. Despite this, however, he was put forward by Swires as the person with authority on its behalf to negotiate JAT's occupation, either of the Murarrie premises or of alternative premises. Swires is, therefore, bound by his representation.
[55] I am satisfied that Mr Azzopardi relied on the representation transmitted to him via Mr Whitbread and the correspondence. There is no evidence of any impediment that would have prevented JAT from proceeding to develop its own premises within the three year lease term if it had believed that to be necessary to ensure alternative premises at the lease's expiration. The land on which JAT is currently building alternative premises had been available for a number of years.[3]
[56] Moving JAT's place of business from one cold storage facility to another is a major operation requiring more than six months from the commencement of organisation to actually moving.[4] The fact that JAT had taken no steps to organise such a move prior to receiving the letter indicating vacant possession was required on 19 October 2008 suggests that reliance was in fact being placed upon the representation until at least well into 2008. Had there been any doubt in Mr Azzopardi's mind as to whether or not an offer of alternative space would be forthcoming, it would be astonishing if he had not followed up the breakfast meeting with Mr Towell with a greater sense of urgency. I am satisfied that in fact Mr Azzopardi felt no sense of urgency believing that he would remain at Murarrie until it was necessary for his company to move out to enable Swires to implement its plans in relation to Murarrie. He thus anticipated a reasonable period of notice as to the location of the alternative premises.
[57] Having regard to these findings, I am satisfied that there has been a breach of s 52 of the TPA by Swires and the question then arises as to the available relief.
[58] No attempt was made on behalf of JAT to quantify the damage it would be likely to suffer were it suddenly to vacate the Murarrie premises with no alternative location to go to. At present, no damage has been suffered as a result of JAT's obtaining the interlocutory injunction prior to the expiration of the lease.
[59] JAT's case is that relief should be formulated pursuant to s 87 of the TPA enabling it to remain in its present location for the duration of the represented second three year term.
[60] Section 87 of the TPA, insofar as it is relevant, provides:
"(1) Subject to subsection (1AA) but without limiting the generality of section 80, where, in a proceeding instituted under this Part, or for an offence against Part VC, the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in ... in contravention of a provision of Part ... V ..., the Court may, whether or not it grants an injunction under section 80 or makes an order under section 82, 86C or 86D, make such order or orders as it thinks appropriate against the person who engaged in the conduct or a person who was involved in the contravention (including all or any of the orders mentioned in subsection (2) of this section) if the Court considers that the order or orders concerned will compensate the first-mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage."
[61] The orders referred to in subs (2) include an order directing a defendant to supply specified services to the person who suffered, or is likely to suffer, the loss or damage. The supply of services is sufficiently wide to include the provision of the rental accommodation.
"It would be wrong, therefore, to assume that, where a person is induced by misleading or deceptive conduct to undertake a continuing future obligation, the remedy to be awarded for a contravention of Pt V of the Act must be, or even ordinarily will be, a lump sum award of damages. There will be cases in which that will be the appropriate remedy. But that is a conclusion to be reached only after identifying the loss or damage which has been or will likely be suffered. That loss or damage may take several forms. It may be incurred at different times. Whether damages are to be awarded in compensation may depend upon what other forms of relief are to be awarded. In particular it will be much affected by what orders to prevent or reduce the loss or damage are made under s 87."
[63] In this case an award of damages is not an appropriate remedy where other remedies are available. Where damage has not yet been suffered and can be avoided, it seems to me avoiding that damage is preferable to some imprecise calculation of what the future might hold.
[64] In my view, this case is an appropriate one for the framing of an order of the type claimed by JAT albeit, perhaps, not quite as extensive.
[65] In making submissions in relation to the claim based on estoppel, Senior Counsel for Swires argued that all that was required by way of relief was that which would permit the reversal of the detriment occasioned by acting on the representation. Whether in estoppel or in relation to a claim under the TPA, I accept that that is the proper approach to adopt. In Marks v GIO Australia Holdings,[6] in the context of a damages claim made pursuant to s 82 of the TPA, the court confirmed the conventional approach to damages which in general terms may be summarised as the amount required to place a plaintiff in the position that plaintiff would have been in had the misleading or deceptive conduct not taken place. In Marks no damage was suffered because even though what the plaintiff acquired was worth less than that which had been represented, it was still worth more than had been paid.
[66] In this case, had the representations not been made, JAT could, and I am satisfied would, have organised its affairs so that it had a constructed cold store available for it to move into at the expiration of the lease. By reason of the misleading or deceptive conduct, such a facility will not now be available before January 2010. Consequently, applying s 87 to prevent the suffering of loss otherwise likely to be incurred, a proper remedy, in my view, is to require Swires to make the premises available until JAT is in the position it would have been in had the representation not been made. That effectively involves extending the term of the lease until completion of the premises currently under construction. I am satisfied on the evidence that alternative rental premises are not readily available in the Brisbane area and having regard to the period of time required to re-establish JAT's business in such premises could not be utilised any earlier than the cold store currently being constructed.
[67] Having reached this conclusion, it is not necessary to consider the estoppel claim. Any claim for estoppel in this case depends upon a favourable finding in relation to the representation made by Mr Towell, JAT's reliance on it and the suffering of detriment. In the circumstances of this case, the relief granted could not be more extensive than the relief available under s 87 of the TPA. Hence a claim in estoppel could not succeed unless the TPA claim also succeeded and the claim adds nothing to the relief obtainable.[7] Thus, there is no utility in separately determining whether any relief might have been obtained in estoppel.
[68] I propose to extend the term of the original lease until one month after the completion of the new cold store; but not longer than the end of March 2010. On the evidence, the March date is well after the building should be completed. It allows a generous margin for unexpected delays.
[69] Under the proposed order, Swires retains the rights it had as lessor under the general law in the event of default by JAT in the performance of any of its obligations under the lease. The impact of this order on Swires is likely to be minimal. Despite being given the opportunity during the trial, Swires' witnesses were unable to identify any immediate specific plans for the Murarrie premises should JAT vacate and will continue to earn revenue from them. Swires can now work towards a specific date by which time the premises should be vacant. For its part, JAT has at least 6 months from now to organise its business to commence trading from the new facility.
[70] In all the circumstances, the proposed order seems to me to be the least required to prevent the damage JAT is otherwise likely to suffer as a consequence of Swires' misleading or deceptive conduct.
1. The lease agreement made between the plaintiff and the defendant evidenced by the defendant's letter to the plaintiff of 19 October 2005 and the plaintiff's letter to the defendant dated 25 October 2005 be varied to make the initial term of the lease expire on the earlier of 31 March 2010 or one month following the issue of a certificate of practical completion for the plaintiff's premises at Freight Street, Lytton.
2. The defendant is to pay the plaintiff's costs of the action to be assessed on the standard basis.
[1] [1992] VicRp 63; [1992] 2 VR 217 at 240-241.
[5] [2004] HCA 3; (2004) 216 CLR 388 at 409.
[7] See Verwayen v The Commonwealth (1990) 170 CLR 394.
Lyschrome P/L t/a JAT Refrigerated Road Services
Swire Cold Storage P/L
(1998) 196 CLR 494
(2004) 216 CLR 388
(1990) 170 CLR 394
The lease evidenced by the letters of 19 and 25 October 2005 was varied so that its initial term expired on the earlier of 31 March 2010 or one month after issue of a certificate of practical completion for JAT's Freight Street premises. Swires was ordered to pay JAT's costs, assessed on the standard basis.