MWH Australia Pty Ltd v Wynton Stone Australia Pty Ltd

MWH Australia Pty Ltd v Wynton Stone Australia Pty Ltd - [2010] VSCA 245 - VSCA 2010 case summary — Zoe

[60]

Counsel for the appellants cited Gould v Vaggelas also for the proposition that the trial judge was bound to infer, in the absence of contrary evidence, that the appellants had been induced by the representations to enter into the lease. Reference was also made to the judgment of Jenkinson J (Ryan J agreeing) in National Australia Bank Ltd v Cunningham (1990) ATPR 41-047 for the uncontroversial proposition that liability under s 82 of the Act for a contravention of s 52 can be established where the misrepresentation was but one of a number of factors which induced a loss-making decision. That case was also invoked, however, in support of a submission that liability can be established when it is shown that a person may have abstained from the

course of action or inaction allegedly induced if the misrepresentation had been made.

Gould v Vaggelas lays down no exhaustive rule for the approach to evidence of inducement in misrepresentation cases. In particular, it lays down no rule in claims for damages under s 82 of the Act for contravention of s 52, where the gist of the conduct complained of is the making of misrepresentations. On the question of proof of inducement, the judgment of Wilson J in Gould v Vaggelas makes the point that a combination of factors may, if unanswered, lead to the conclusion that a person was induced by the representation of another to make the relevant decision. Where, for example, it is shown that a false representation has been made which the representor intended should induce the representee to enter into a contract, and where it is shown that the representation is of a kind likely to provide such an inducement and that the representee entered into the contract, then, as Wilson J said (157 CLR at 238; 56 ALR at 48):

... common sense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract.

The statement provides a practical guide to the way in which inferences can and should be drawn in such cases. It remains for the tribunal of fact, as his Honour pointed out, to determine, when all the evidence has concluded, whether the misrepresentation in question contributed to the decision to enter the contract. The unremarkable logic of these propositions is more likely to be obscured than illuminated by reference to notions of presumptions of fact or the incidence of the evidentiary onus.[22]

[159]

Counsel for the appellants cited Gould v Vaggelas also for the proposition that the trial judge was bound to infer, in the absence of contrary evidence, that the appellants had been induced by the representations to enter into the lease. Reference was also made to the judgment of Jenkinson J (Ryan J agreeing) in National Australia Bank Ltd v Cunningham[61] for the uncontroversial proposition that liability under s 82 of the Act for a contravention of s 52 can be established where the misrepresentation was but one of a number of factors which induced a loss-making decision. That case was also invoked, however, in support of a submission that liability can be established when it is shown that a person may have abstained from the course of action or inaction allegedly induced if the misrepresentation had been made.

Gould v Vaggelas lays down no exhaustive rule for the approach to evidence of inducement in misrepresentation cases. In particular, it lays down no rule in claims for damages under s 82 of the Act for contravention of s 52, where the gist of the conduct complained of is the making of misrepresentations. On the question of proof of inducement, the judgment of Wilson J in Gould v Vaggelas makes the point that a combination of factors may, if unanswered, lead to the conclusion that a person was induced by the representation of another to make the relevant decision. Where, for example, it is shown that a false representation has been made which the representor intended should induce the representee to enter into a contract, and where it is shown that the representation is of a kind likely to provide such an inducement and that the representee entered into the contract, then, as Wilson J said:[62]

... common sense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract.

The statement provides a practical guide to the way in which inferences can and should be drawn in such cases. It remains for the tribunal of fact, as his Honour pointed out, to determine, when all the evidence has concluded, whether the misrepresentation in question contributed to the decision to enter the contract. The unremarkable logic of these propositions is more likely to be obscured than illuminated by reference to notions of presumptions of fact or the incidence of the evidentiary onus.

[161]

The question of causation can sometimes be resolved not by direct evidence as to what part a misrepresentation played in the process of entry into contract, but by a Court determining what effect must be taken to have resulted. Indeed this course may sometimes be preferable to one which rested solely on evidence later given on the point. In Gould v Vaggelas[64] Wilson J held that if a material representation is calculated (which is to say, objectively likely: Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd;[65] Henderson v Amadio Pty Ltd (No 1)[66]) to induce the representee to enter into a contract and the person in fact enters into a contract, a fair inference arises that the representation operated as an inducement, adding that it need not be the only cause. The latter point is now uncontroversial. It suffices for liability if a misrepresentation played some part in inducing entry into contract for the price agreed. That part of Wilson J's judgment was not stated to be an exhaustive rule, but is to be seen as a guide to a question of fact which may arise. A conclusion of inducement may then be reached where a combination of factors, including the quality of the representation itself, goes unanswered. In relation to the representation itself it would need to be of a kind likely to provide that inducement and such that

...commonsense would demand the conclusion that the false representations played at least some part in inducing the plaintiff to enter into the contract[67]

a statement regarded by the Full Court in Ricochet as providing a practical guide to the drawing of inferences in such cases.

In Gould v Vaggelas the representations were of that kind and the inference, that the purchasers were thereby influenced, arose. Evidence to the contrary was considered not to negative the inference of reliance.[68] In Sibley v Grosvenor[69] a conclusion that a representation had materially affected purchasers in the price they considered paying for land was reached because it was such as to 'naturally operate' on their minds.[70] The Full Court in Ricochet pointed out that the fact the relevant misrepresentation might have had some such effect will not suffice. There would not be the level of certainty necessary to enable an inference to be drawn.

In the present case, his Honour was invited to draw the inference that the contravening conduct of Jagar caused Hanave loss and damage' but considered that the '...direct evidence Burke gave makes the drawing of any such inference inappropriate' and that there was no relevant connexion between the damage Hanave may have suffered and the conduct in question.

A statement to the effect that a principal and long-term tenant has been very satisfactory in meeting its lease obligations, which include the payment of rental, cannot in my view be regarded as uninfluential on the mind of a purchaser considering making an offer, even if a purchaser already has an understanding or opinion about their reputation as well established retailers. The statement of fact made not only supports a positive opinion otherwise reached, it adds to it something on a topic known to the landlord. Indeed, it seems likely that his Honour thought that to be the case, since it was only the direct evidence of Mr Burke, referred to above, which was pointed to as rendering a conclusion of inducement impossible. That is to say, it was seen as negativing that inference.[71]

[163]

Using tools of analysis drawn from the common law of deceit (misrepresentation and reliance) within the statutory framework provided by ss 42 and 68 of the Fair Trading Act may sometimes be helpful in identifying contravening conduct and deciding whether loss or damage was suffered by the contravention. But as McHugh J pointed out v Lachlan Elder Realty Pty Ltd,[73] the 'conduct' with which s 52 of the Trade Practices Act 1974 (Cth) deals is not confined to '"representations", whether they be representations as to matters of present or future fact or law'.[74] This proposition applies with equal force to s 42 of the Fair Trading Act. References to misrepresentation or reliance must not be permitted to obscure the need to identify contravening conduct (here, misleading or deceptive conduct) and a causal connection (denoted by the word 'by') between that conduct and the loss and damage allegedly suffered. As McHugh J also pointed out in Butcher,[75] with particular reference to s 52 of the Trade Practices Act, but with equal application to s 42 of the Fair Trading Act:

The question whether conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. In determining whether a contravention of s 52 has occurred, the task of the court is to examine the relevant course of conduct as a whole. It is determined by reference to the alleged conduct in the light of the relevant surrounding facts and circumstances. It is an objective question that the court must determine for itself.[76] It invites error to look at isolated parts of the corporation's conduct. The effect of any relevant statements or actions or any silence or inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct.[77] Thus, where the alleged contravention of s 52 relates primarily to a document, the effect of the

document must be examined in the context of the evidence as a whole.[78] The court is not confined to examining the document in isolation. It must have regard to all the conduct of the corporation in relation to the document including the preparation and distribution of the document and any statement, action, silence or inaction in connection with the document.[79] [Emphasis as in the original.]

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Cases Cited (33)