3 The trial Judge found that Nea was entitled to an amount of $28,040.06 in respect of unpaid hire charges and installation costs, but also found that Magenta was entitled to damages for misleading and deceptive conduct which he assessed in an amount of $287,610.43. He set off the two amounts and entered judgment for Magenta in the amount of $259,570.37, together with interest from 18 September 1995 at the rates specified under the applicable statutory provisions pertaining to interest accruing on judgments. Magenta's counterclaim based on damages for breach of contract was dismissed.

4 In a subsequent decision, the trial Judge ordered that Nea was to pay Magenta's costs of the consolidated action, but that in respect of the costs of trial, Magenta should be limited to recovering costs for only eight of the 13 days of trial, because of the issues upon which Magenta failed.

5 Nea has appealed from the decision of the trial Judge on a variety of grounds which have two dominant themes, namely:

(a) the alleged failure of the trial Judge to properly evaluate the evidence relating to the representations made by the representatives of the parties during the course of their negotiations, with the consequence that he made errors of fact; and

(b) the failure of the trial Judge to appreciate the significance of a clause in the hire contract which excludes Nea's contractual liability for deficiencies in the performance of the equipment hired.

6 For the reasons that follow, in my opinion, the trial Judge did not err in any of the ways asserted by Nea and its appeal should be dismissed.

7 The reasons for decision of the trial Judge occupy 135 pages. What follows is an abbreviated summary of his principal conclusions relevant to issues raised in the appeal.

8 The trial Judge found that during the first half of 1995, Mr Byron Halbert and Mr John Bandy, who were both directors of Magenta, caused Magenta to enter into an informal oral joint venture agreement with Mourillion Mining relating to the extraction of gold from an existing ore stockpile situated on a mining tenement at Hawkins Find. The process to be used for the extraction of the gold was to be by heap leach and gravity circuit. Under the joint venture, the parties had different obligations. It was Magenta's obligation to supply and commission the crushing plant. The joint venture was to continue only so long as successful gold extraction operations could be conducted or until terminated on reasonable notice. The tenement on which operations were to be conducted was held at all material times by Mourillion Mining and there was no provision in the joint venture agreement enabling Magenta to acquire any interest in the relevant mining lease.

9 The trial Judge made the following findings: that despite their previous involvement with gold mining projects, neither Mr Halbert nor Mr Bandy had been involved directly in any ore crushing or gold recovery operations prior to their involvement in the operation at Hawkins Find; and that neither had any significant knowledge or experience of crushing operations prior to their approach to Nea for the supply of a crushing plant to be used at Hawkins Find.

10 He also found that both men made their lack of experience known to Mr Groenenberg of Nea during their first meeting with him, in a context which made it clear that they were relying upon him for advice as to suitability of the equipment to be used.

11 By 1995, there was a stockpile of ore at Hawkins Find which had been partially crushed to a dimension of about 40 millimetres or less. There was a further stockpile in which the ore was significantly larger - having dimensions of up to approximately 150 millimetres to 200 millimetres. The proposed operation involved first crushing the latter stockpile to finer dimensions (8 millimetres or less) and then piling those fines in heap leach pads and treating them with a sodium cyanide solution into which most of the gold contained in the ore would dissolve. The smaller the particles of ore, the greater would be the recovery of gold through this process.

12 Following the leaching process, the gold in solution would be recovered by a further treatment process.

13 In order to implement this process, in addition to the crushing plant required to crush the ore into smaller particles, a screening plant was required to separate those particles which were an acceptable size from those which were still too large. Those which were too large would be recirculated for further crushing.

14 The trial Judge found that the capacity of any particular machinery to adequately crush ore would be affected by at least two characteristics of that ore; namely, its hardness and its abrasiveness. The Bond Work Index is a measure of the hardness of ore by reference to the amount of work required to crush a tonne of that ore. But the trial Judge accepted expert evidence which was adduced to the effect that the Bond Work Index while useful, was of limited value in assessing the requirements for crushing particular ore because those requirements could be significantly affected by the abrasiveness of the ore, which is not necessarily related to its hardness. Ore which is particularly abrasive may cause great wear and tear to crushing equipment even if it is not particularly hard. The trial Judge found that the ore stockpiled at Hawkins Find comprised of granite porphyry with large elements of quartz (silica) which was particularly abrasive due to its silica content.

15 The trial Judge found that neither the representatives for Nea nor Magenta had a good understanding of the significance of hardness or abrasiveness in the choice of crushing methods and equipment.

16 After reviewing the evidence adduced on the topic of the hardness and abrasiveness of the ore stockpiled at Hawkins Find, the trial Judge found that the ore was both hard and abrasive with a varying range of hardness, having a mean Bond Work Index of 12.5 with a standard deviation of 6.5. Those findings were consistent with a report which had been prepared in 1984 and which had been made available to Mr Halbert and Mr Bandy prior to their attendance upon Mr Groenenberg. In that report, the stockpiled ore was described as having a Bond Work Index of about 17. The findings were also consistent with the evidence of each of Mr Bandy and Mr Halbert that at their first meeting with Mr Groenenberg, they told him that the ore had a Bond Work Index of 17 or 18.

17 The trial Judge also found that while the rock was hard; an impression which he considered any person would readily gain from mere inspection of samples, the rock was not exceptionally hard. He further found that it would be reasonable to expect that an impact crusher properly configured and in good working order could crush the ore, but with high rates of wear.

18 In the course of reviewing the ore treatment process, the trial Judge found that it was the expectation of the parties that the Hazemag - AP4B Impactor ("the Impactor"), which was a vital component in the process, was to run 10 hours per day and to crush to acceptable size, 50 tonnes or more of ore per hour. After reviewing alternative processes, the trial Judge found that it would not have been economical to acquire or utilise some of the more expensive processes available and that the choice of an Impactor, or series of impactors, to perform the task required at Hawkins Find, was a matter for careful selection and judgment.

19 The particular Impactor hired by Nea to Magenta was about 25 to 30 years old at the date of hire. Prior to the hire agreement, it had been at Nea's yard in Welshpool for more than 2 years, during which time it was not used. It had in the past been used for the preparation of soft road bases, and there were some remnants of soft limestone ore within its working parts.

20 Subsequent to the hire agreement, Nea undertook refurbishing and rewiring work on the Impactor. As the trial Judge recorded, the evidence of Mr Muscat, who was engaged in the refurbishment work, was to the effect that the machine was very old and badly worn and that if it had been his decision, he would not have attempted to refurbish it because it was beyond repair. Mr Muscat confirmed that plates made of Bisalloy 360 were used in the refurbishment work which was, in the opinion of the expert witness Mr Kendall, a material which was only suitable for use in mildly abrasive applications.

21 The trial Judge made detailed findings in respect of the performance of the Impactor after installation at Hawkins Find. He summarised those findings in the following passage at [69]:

"It never worked continuously for 10 hours. In the first fortnight [of operation] it worked for a total of only about 17 hours. It broke down repeatedly. Its components ... showed very severe wear and deterioration after only relatively small amounts of ore were processed."

22 At one point in his reasons, the trial Judge records his finding, on the balance of probabilities, that several factors contributed to the problems with the machine; being, the hardness of the ore in the stockpile; the lack of proper configuration; the use of substitute wear plates and materials; other than those specified by the manufacturer; and the lack of capacity to deal with throughput in circumstances in which a larger than expected proportion of the treated ore was recycled through the Impactor more than once. More generally, he found that the cause of the failure of the Impactor was its inability to crush the hard and abrasive ore which had been stockpiled at Hawkins Find.

23 In another part of his reasons for decision, the trial Judge referred to an additional factor which he found contributed to the unsuitability of the Impactor; namely, the use of an unsuitable K-type rotor. Having regard to the combination of factors which led to the unsuitability of the Impactor, he concluded at [86]:

"The hardness, or more correctly the abrasiveness, of the ore at Hawkins Find was an aggravating factor but it was by no means the sole cause of the problem. A properly equipped, refurbished and maintained Hazemag Impactor, with a suitable K-rotor and abrasive and wear plates of toughened steel alloy should have been capable of performing the task."

24 The trial Judge recorded Mr Kendall's criticisms of the Impactor following his inspection of it on site on 9 October 1995. He accepted Mr Kendall's view that the plant had not been adequately prepared or commissioned and that it was incapable of performing the tasks required of it.

25 The trial Judge found that the failure of the Impactor led to the cessation of the joint venture at Hawkins Find.

26 At trial, Nea conceded that the Impactor could not crush the ore which Magenta sought to crush at Hawkins Find. Nea claimed that it never represented, either expressly or impliedly, that the Impactor or the crushing circuit generally would be fit for the purpose of crushing the ore stockpiled at Hawkins Find and that Mr Groenenberg of Nea told Mr Halbert and Mr Bandy of Magenta that the Impactor was not suitable for hard rock and could only crush soft rock. Nea also submitted that any express or implied condition or warranty relating to the suitability or fitness of the machinery for the purpose contemplated, was expressly excluded by cl 8 of the terms and conditions of hire.

27 The trial Judge found that the agreement for the hire of the equipment was partly oral and partly written. The oral components were those terms agreed in the course of discussions between Messrs Groenenberg, Halbert and Bandy at a meeting on 25 July 1995. The written components were a facsimile transmission from Nea to Magenta dated 26 July 1995 and an order form from Magenta to Nea dated 28 July 1995.

28 The facsimile from Nea to Magenta dated 26 July 1995 comprised six pages. The first two pages were handwritten by Mr Groenenberg and included under the heading "Conditions", the words "As per our standard hire terms & conditions and our Hire Agreement to apply". Those standard terms and hire agreement comprised the fifth and sixth pages of the facsimile and included a clause in the following terms:

"8. That no warranty or condition expressed or implied is given by the owner as to the condition of the plant or as to the suitability or fitness of the plant for any purpose."

29 In terms of formal contractual analysis, the trial Judge found that the facsimile of 26 July 1995 taken in conjunction with the discussions which had taken place on 25 July 1995, constituted an offer by Nea to hire the itemised equipment on those terms. The offer had been substantially accepted by Magenta by the despatch of its order signed by Mr Bandy on 28 July 1995. However, because that order was in slightly different terms to the offer, in strict contractual analysis, it constituted a variation or counter-offer which was accepted by Nea's acceptance of a cheque from Magenta for the deposit on the hire arrangement on 31 July 1995.

30 The trial Judge listed the oral terms which he found arose from the discussions on 25 July 1995. It is not necessary to repeat that list.

31 The trial Judge rejected Magenta's submission that a binding oral agreement had been concluded by the end of the meeting on 25 July 1995 (with the result that the documents subsequently exchanged would not have had contractual effect). He arrived at that conclusion by reason of a process of characterisation and inference, rather than the express rejection of any of the evidence given by any of the witnesses.

32 However, there was a major difference between the evidence given by Mr Groenenberg on the one hand and the evidence given by Mr Halbert and Mr Bandy on the other, in relation to the discussions that took place on 25 July 1995. The trial Judge recounted their different versions of the discussions on that day in his reasons for decision.

33 In essence, Mr Groenenberg's version of the discussions was to the effect that he was not told what the Bond Work Index was for the ore stockpiled at Hawkins Find. In response to his observation that the particular Impactor supplied was only suitable for crushing soft rock, Mr Bandy said that that was what Magenta wanted, because the ore at Hawkins Find was soft.

34 Nea also relied upon evidence given by Mr Brent Cooper of a conversation he had with Mr Groenenberg in which (according to Mr Groenenberg during a short break from discussions with Mr Halbert and Mr Bandy) Mr Groenenberg had told Mr Cooper that he was considering hiring the Impactor to people who wished to use it to treat soft rock. The trial Judge records his ruling that Mr Cooper's evidence was not admissible to establish what had occurred in the discussions between Mr Groenenberg and the two directors of Magenta. The grounds of appeal do not directly challenge that ruling.

35 Mr Groenenberg also denied that he had ever been shown or invited to inspect any rock samples. He denied ever giving any assurance that the Impactor or equipment was able to do the work at Hawkins Find and further denied offering any advice to Mr Halbert or Mr Bandy about the suitability of the equipment for the project.

36 Each of Mr Halbert and Mr Bandy gave evidence to the effect that two milk crate sized boxes containing samples of the ore from the stockpile had been taken to Mr Groenenberg's yard in their utility and that one of the rock samples was taken from the utility and placed on Mr Groenenberg's desk during their discussions. In their evidence they described the dimensions to which the ore was to be crushed and that Mr Groenenberg was told that the ore had a Bond Work Index of about 17 or 18. Their evidence was that in response, Mr Groenenberg advised that he had the ideal machine for them in the yard and that he then drew up a sketch of how the proposed crushing circuit would be configured.

37 Their evidence was to the effect that they had made it known to Mr Groenenberg that they had never done crushing before and that they were relying on his knowledge and experience. Mr Halbert's evidence was that Mr Groenenberg was told that the ore was porphyry granite and that Mr Groenenberg said the Impactor could definitely crush 50 tonnes of ore an hour and might go up to 70 tonnes per hour.

38 Mr Bandy agreed that he had said to Mr Groenenberg that, "You could hit [the ore] with a hammer and it would break into pieces". His evidence was that Mr Groenenberg had been shown the two milk crates full of rock in the back of the utility when the men went out into the yard.

39 Mr Halbert and Mr Bandy each denied that Mr Groenenberg had made any statement to the effect that the Impactor was only suitable for crushing soft rock.

40 The trial Judge expressly recorded that he did not rely upon the demeanour of the witnesses when giving their evidence in resolving these inconsistencies. He considered that each of the witnesses was trying to give evidence to the best of his recollection and sincerely in the belief that their evidence was accurate.

41 The trial Judge considered that the circumstances of the discussions held on 25 July 1995, in which plainly Messrs Halbert and Bandy were looking for equipment which could undertake the task proposed at Hawkins Find; namely, the identification of the Impactor; the selection of other equipment to be used in conjunction with the Impactor; the sketching by Mr Groenenberg of a diagram showing the circuit to be employed; and the discussion about the hire arrangements could only give rise to a representation by Mr Groenenberg that the plant under discussion and the particular Impactor, was suitable for the task which had been disclosed and would be reasonably fit to perform that task.

42 After reviewing the objective probabilities and likelihoods of the different versions of events given by the three witnesses, the trial Judge concluded that at the time of the conversation on 25 July 1995, Mr Groenenberg believed that the Impactor would be suitable for the task required and was not concerned that the ore to be processed may have been too hard. He considered that the most likely explanation for the differing versions of events was a failure by Mr Groenenberg to appreciate the significance of what he was being told in relation to the hardness of the ore. He was satisfied that Mr Groenenberg was told of the Bond Index of the ore being approximately 17 or 18 and that he was shown samples of the ore. Further, in relation to the conversation with Mr Cooper, the trial Judge concluded that such conversation must have taken place some time after the meeting of 25 July 1995; otherwise it would have led to a chain of communications which would have precluded entry into the hire agreement.

43 The trial Judge therefore concluded that Magenta's directors had made it clear that they were seeking advice and a recommendation from Nea through its director, Mr Groenenberg, and that by recommending the Impactor and associated equipment, Mr Groenenberg represented on behalf of Nea that after refurbishment, the Impactor would be in reasonably good condition and fit for the purpose proposed. He further found that no warning was given to either Mr Halbert and Mr Bandy to the effect that the Impactor might be unsuitable for the treatment of hard rock or was only suitable for the treatment of soft rock.

44 The trial Judge also found that there was no specific reference to cl 8 of the standard conditions in the contract of hire in any of the discussions held on 25 July 1995 and that, aside from the inclusion of that clause within the facsimile, nothing was done on behalf of Nea to dispel the effect of the representations made on 25 July 1995 that the Impactor would be suitable for the task which had been made known.

45 The trial Judge further found that Mr Halbert and Mr Bandy, acting on behalf of Magenta, relied upon the representations made by Mr Groenenberg as to the suitability of the Impactor in entering into the hire contract.

46 Having rejected Magenta's argument that there was a total failure of consideration, the trial Judge accepted that Nea was entitled to rental and other amounts due under the hire agreement and therefore accepted that Nea was entitled to an amount of $28,040.06 plus interest.

47 In assessing Magenta's counterclaim, and consistently with the rulings he had made as to the formation of the contract, the trial Judge held that Nea's general terms and conditions, which were included within the offer made by the facsimile of 26 July 1995, formed a part of the contract for hire. After considering the cases dealing with the efficacy of exclusion clauses, the trial Judge held that cl 8 of Nea's standard terms and conditions was effective to exclude any contractual condition, warranty or other term relating to fitness of purpose, merchantability or suitability. It followed that Magenta's claim based on breach of contract was dismissed. No issue is taken in relation to the correctness of that ruling in this appeal.

48 That left Magenta's statutory claim for damages for misleading and deceptive conduct. The trial Judge reviewed the cases dealing with the effect which an exclusion or exemption clause had upon such claims and, in very general terms, concluded that if an exclusion or exemption clause is to be effective to preclude such a claim, it must be because it enables the conduct as a whole to be seen as not misleading or deceptive. His Honour then applied that test to the findings of fact which he had made relating to the events which preceded entry into the contract for hire. In the course of his consideration of those issues, he reiterated his preference for the evidence of Mr Halbert and Mr Bandy, which led him to conclude that it was Mr Groenenberg who identified and suggested the Impactor as a machine which was suitable for the task under discussion. He also reiterated his acceptance of the evidence of Mr Halbert and Mr Bandy that Mr Groenenberg indicated to them that the Impactor would be suitable for the particular purpose which they had discussed, once it had been properly refurbished and re-equipped. He therefore concluded that the precontractual negotiations involved a representation by Mr Groenenberg, on behalf of Nea, that the crushing circuit proposed, including the Impactor would be suitable to crush the ore at Hawkins Find to the dimensions and at the rates desired by Magenta.

49 For reasons explained by the trial Judge, he concluded at [267] that:

"[I]t will be misleading and deceptive conduct to induce a party to enter into a contract for the hire of equipment on the faith of a representation about the suitability of the equipment for the purpose disclosed when the detailed terms of the contract, expressly exclude any responsibility for that representation, unless the exclusion is clearly made known to the hirer or the hirer himself or herself appreciates the qualification of the obligation and, for that or any other reason, is not induced to enter into or to complete the contract because of the earlier representation."

50 The trial Judge found as a fact that neither Mr Halbert nor Mr Bandy appreciated that despite the assurances which Mr Groenenberg had given both expressly and implicitly as to the suitability of the equipment to be supplied under the hire contract, Nea was not accepting any contractual obligation that the equipment would be suitable for that purpose and had proposed that any warranty or contractual term to that effect be specifically excluded.

51 The trial Judge went on to find that the misleading and deceptive conduct of Mr Groenenberg was unwitting with the result that Magenta's claim against him personally, as an accessary to Nea's contravention of the Trade Practices Act, had to be dismissed (see Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661).

52 Having upheld Magenta's counterclaim for damages for misleading and deceptive conduct, the trial Judge then quantified that claim. In the course of doing so, he expressly found that he was satisfied that cl 8 of the standard terms and conditions had no impact whatever on either Mr Halbert or Mr Bandy when they agreed to enter into the contract to hire. The trial Judge found that Mr Halbert did not see or read the standard terms and conditions until they were brought to his attention by Mr Groenenberg in October 1995; well after the contract was formed. He found that although Mr Bandy read the enclosures included with the facsimile of 26 July 1995, he did not pay any regard to cl 8; that is, if he noticed it at all. He therefore reiterated his earlier conclusion that he had no doubt that cl 8 had no effect in dispelling the express and implied representations which had arisen from the statements made by Mr Groenenberg during the meeting on 25 July 1995.

53 In the result, the trial Judge quantified Magenta's claim for misleading and deceptive conduct in the amount of $287,610.43. This was substantially less than the amount Magenta had sought. A cross-appeal was lodged against that portion of the decision of the trial Judge, but it was abandoned by Magenta shortly before the hearing of the appeal.

54 The trial Judge concluded that Nea's claim should be set off against Magenta's counterclaim, leaving a balance due to Magenta of $259,570.37 and awarded interest on that amount from 18 September 1995 at the statutory rates applicable from time to time thereafter in respect of judgments.

55 There are seven grounds of appeal. Grounds 1-4 and 6 can be grouped together because, although they differ in detail, each can be generally described as a challenge to the findings of fact made by the trial Judge in respect of the pre-contractual negotiations between the representatives of Nea and Magenta. They were not separately addressed in oral argument and can be conveniently addressed together in these reasons.

56 Ground 5 raises an issue relating to the effect of the exclusion clause being cl 8 of Nea's standard terms and conditions. Ground 7 complains of the award of interest on Magenta's damages.

Grounds 1-4 and 6: The Pre-contractual Negotiations

57 Doing the best I can to synthesize from the grounds of appeal and the appellant's written and oral submissions, the specific errors which it is submitted caused the trial Judge to arrive at erroneous findings of fact as to the pre-contractual representations made by Nea and Magenta's reliance upon them, it seems that reliance is placed upon the following matters:

(a) an alleged confusion between hardness and abrasiveness of the ore;

(b) a failure to appreciate the significance of the abrasiveness of the ore in the causes of the failure of the Impactor;

(c) a failure to appreciate the significance of the non-contentious evidence to the effect that Mr Bandy said to Mr Groenenberg, in respect of the ore at Hawkins Find, that, "You could hit it with a hammer and it would break into pieces";

(d) a failure to find that there was an express representation by Nea to the effect that the Impactor would be capable of crushing very abrasive ore, which finding was submitted to be essential to the cause of action alleged;

(e) a failure to conclude that unless Magenta had made known to Nea that the ore which was to be crushed was as abrasive as that found at Hawkins Find, Nea's conduct could not be characterised as misleading and deceptive and there was no evidence to sustain a finding that Magenta had made known to Nea the nature of the ore to be crushed;

(f) the reasons given by the trial Judge for preferring the evidence of Mr Halbert and Mr Bandy to that of Mr Groenenberg did not withstand scrutiny and in addition, could not be reconciled with the evidence of Mr Brent Cooper which the trial Judge accepted;

(g) a failure to appreciate the significance of the evidence given by each of Mr Halbert and Mr Bandy as to their general awareness of the terms of "dry hire" contracts;

(h) the trial Judge should have found that the failure of the Impactor was essentially due to Magenta's alteration of its configuration and Magenta's methods of operation.

58 Nea raises two issues in relation to the findings made by the trial Judge in respect of the hardness and abrasiveness of the ore. It is said that the trial Judge confused the qualities of hardness and abrasiveness and appeared to use the terms interchangeably when they are quite distinct concepts; and secondly, that he failed to appreciate the significance of the abrasiveness of the ore in relation to the failure of the Impactor.

59 On at least two occasions in the course of his reasons for decision, the trial Judge separated the words "hardness" and "abrasiveness" with the disjunctive "or". However, when those passages in the reasons for decision are read in their context, and especially when read with other passages in the reasons, it is clear that there was no confusion of these concepts. The trial Judge was well aware of the differences in the two concepts.

60 In his reasons, the trial Judge found at [43]:

"Ores vary in their hardness or abrasiveness and, consequently, require widely varying degrees of force to be crushed or fragmented."

61 That finding is entirely consistent with the expert evidence which referred to the variability of both hardness and abrasiveness. The appreciation of the trial Judge of the distinction between the two concepts is apparent from the next paragraphs at [44] - [45] in his reasons, where he referred to the expert evidence in these terms:

"The expert evidence in this case indicated that the Bond Work Index, while useful, was of limited value in providing necessary information about the requirements for crushing the particular ore because, in addition to the Bond Work Index, a measure of the abrasiveness of the particular ore would also be needed in order to reach conclusions about the suitability of any particular machinery to crush that ore. Some ores can have a Bond Work Index which is not at the highest levels but, because the ore is particularly abrasive will nevertheless result in great wear and tear on crushing apparatus. The stockpiled ore at Hawkins Find comprising of granite porphyry with large elements of quartz (silica) was particularly abrasive because of its silica content.

The significance of a Bond Work Index for any particular ore and the additional importance of the abrasive characteristics of the ore for decisions to be made about the method and layout of a crushing circuit were not well understood by the representatives of the plaintiff or of the defendant who were involved in this case."

62 Those paragraphs make it quite clear that the trial Judge had a clear appreciation of the distinction between the two concepts.

63 Further, at [51], the trial Judge referred to Mr Bilney's evidence in these terms:

"Mr Bilney described the results as indicating a wide range of hardness. He contrasted the hardness of rock with its abrasiveness and emphasised that the Bond Work Index test did not measure abrasiveness although, it could also be regarded as being indicative of that characteristic."

64 So, when in [54] of his reasons, after reviewing the scientific evidence, the trial Judge observed "[t]his was the extent of the scientific evidence about the hardness or abrasiveness of the ore at Hawkins Find", it cannot be suggested that he was using the terms interchangeably. Clearly, when read in context, in that paragraph he is referring to the expert evidence dealing with each of the two concepts.

65 Further, at [58], the trial Judge found that the stockpile of the ore to be processed at Hawkins Find "was both hard and abrasive but had a varying range of hardness". In [7], he recorded his general finding in respect of the failure of the Impactor in these terms:

"A major problem which, as is now clear, caused its failure at the Hawkins Find operation was its inability to crush hard and abrasive ore which had been stockpiled at that site."

"The hardness, or more correctly the abrasiveness, of the ore at Hawkins Find was an aggravating factor but it was by no means the sole cause of the problem."

It is clear that he was drawing attention to the distinction which he had earlier identified between those two concepts and was emphasising that although both characteristics of the ore were relevant to, and causative of, the failure of the Impactor, it was the abrasiveness of the ore which was more significant.

67 The passages to which I have referred reveal that the trial Judge was well aware of the distinction between the characteristics of hardness and abrasiveness and also had a full appreciation of the particular significance of the abrasiveness of this ore in relation to the failure of the Impactor.

68 It is also clear from these passages, when read as a whole, that the trial Judge found that both hardness and abrasiveness were significant characteristics of the ore which led to the failure of the Impactor. He found abrasiveness was the more significant of the two, but that neither was the sole cause of the failure of the Impactor which was attributable to a combination of the various factors he identified. Those findings were entirely consistent with the evidence and in particular, the expert evidence of Mr Kendall, who was the only expert called.

69 The trial Judge did not err in the findings that he made in relation to hardness and abrasiveness.

70 Mr Bandy confirmed Mr Groenenberg's evidence that during the course of their meeting on 25 July 1995 he said, in relation to the ore at Hawkins Find, words to the effect that:

"You could hit it with a hammer and it would break into pieces".

71 Nea submits that this evidence established a representation by Magenta to Nea to the effect that the ore to be crushed was soft and that they were entitled to rely upon this when expressing views as to the suitability of the Impactor which was proposed for use at Hawkins Find.

72 But the statement made by Mr Bandy was in terms which are far too general and lacking in specificity to sustain that submission. No reference was made in the conversation to the size of the hammer, to the force to be applied by the hammer or to the size of the pieces into which the ore could be broken by such a means.

73 In any event, a reference to the breaking of ore by a hammer is a description of the characteristic of brittleness when subjected to a single sharp blow, not a reference to the characteristic of hardness evaluated in the context of successive blows in a crushing machine.

74 The significance of this evidence is, in any event, diminished by the findings made by the trial Judge that a sample of the ore was presented to Mr Groenenberg in his office and that Mr Groenenberg was shown two milk crates containing samples of the ore in the back of the utility during the course of the meeting on 25 July 1995. The trial Judge found that the hardness of the ore was apparent to any observer on superficial inspection of a sample.

75 In any event, the evidence given by Mr Groenenberg as to the use to which he put Mr Bandy's statement is fatal to the submission. His evidence was in these terms:

"Do you think that the consideration of his description of the use of a hammer is a proper basis upon which to judge what kind of material would be suitable to put in the crusher?---No.

But that was all you relied upon?---I didn't rely upon that. I relied upon the fact that I had told them it was a soft rock crusher and it was only to be used on soft rock such as limestone and that was what they had to offer - was to say, 'This is soft. You can hit it with a hammer and it breaks into small pieces.'"

76 Accordingly, the thrust of that evidence was to the effect that Mr Groenenberg did not rely upon Mr Bandy's statement relating to the use of a hammer, but rather upon the proposition that he had advised them that the Impactor was only suitable for use with soft rock. The trial Judge rejected that evidence and preferred the evidence of Mr Bandy and Mr Halbert that they had advised Mr Groenenberg that the ore had a Bond Work Index of 17 or 18, and that they had shown him samples of the ore from which it was apparent that the ore was hard, not soft.

No Representation by Nea in Respect of Abrasiveness

77 Nea submitted that because of the significance of the abrasiveness of the ore, its conduct could not be characterised as misleading and deceptive unless it was found that it had made a representation to the effect that the Impactor was capable of crushing ore of that degree of abrasiveness.

78 There are two fundamental flaws in this submission. The first is that the trial Judge did not find, nor did the evidence compel a conclusion to the effect that, the characteristic of abrasiveness was the sole cause of the failure of the Impactor.

79 The second flaw is that it misconceives the nature of Magenta's case which was pleaded and put at trial. Effectively, that case was that Magenta made known the particular purpose for which the Impactor was required; namely, crushing the ore which had been stockpiled at Hawkins Find and showed samples of that ore to Nea and advised Nea that the ore had a Bond Work Index of 17 or 18. In that context, as the trial Judge found, the statements made by Mr Groenenberg on behalf of Nea comprised a clear representation that the Impactor which he was proposing would be suitable for that purpose. There was therefore no need for Magenta to allege or prove a specific representation by Nea in respect of the capacity of the Impactor to treat abrasive ore.

Magenta's Failure to Advise Nea of the Abrasiveness of the Ore

80 Nea also submits that unless the evidence established that Magenta had made known to Nea the particular characteristic of the abrasiveness of the ore, Nea's recommendation of the Impactor could not be characterised as misleading and deceptive conduct.

81 This submission suffers the same two fundamental flaws as the submission considered in the preceding paragraphs. Firstly, it elevates the significance of the characteristic of abrasiveness to a level which is not sustained by the evidence or the findings of the trial Judge; and secondly, it misconceives the nature of the case which Magenta put and established.

The Preference Given to the Evidence of Mr Halbert and Mr Bandy

82 In his reasons, the trial Judge carefully set out the evidence given by each of Mr Halbert, Mr Bandy and Mr Groenenberg as to their discussions on 25 July 1995 and accurately identified the material points of distinction between their respective versions. He expressly recorded his inability to resolve the differences in their versions by reference to his observation of the demeanour of the witnesses when giving their evidence (reasons, [188]). He considered that each of the witnesses was trying to give evidence to the best of his recollection and sincerely in the belief that the evidence was accurate, given that the evidence was, of course, given in relation to events that had occurred many years earlier.

83 He recorded a number of favourable impressions of Mr Groenenberg. He considered him to be conscientious, very practically oriented and willing to provide and service machinery for a particular task when required. Consistently with that view, the trial Judge concluded that if Mr Groenenberg had any doubt as to the capacity of the Impactor to perform the task which had been identified by Magenta's representatives, he would have said so.

84 The trial Judge also accepted the evidence given by each of Mr Halbert and Mr Bandy as to their complete lack of prior experience in crushing and their consequent dependence upon the provision of advice from an experienced person such as Mr Groenenberg. He also accepted their evidence that they presented samples of ore to Mr Groenenberg for his inspection which would have revealed, to even the most superficial inspection, that the ore was hard and that they had told Mr Groenenberg that the ore had a Bond Work Index of 17 or 18.

85 Applying these conclusions to the conflicting versions of the evidence given, the trial Judge reasoned that if Mr Groenenberg had been aware that the ore was hard and that the Impactor was incapable of crushing hard ore, he would have said so, after which Mr Halbert and Mr Bandy would have immediately turned to look for alternative solutions. He therefore reasoned that the reconciliation of the conflicting accounts given lay in the conclusion that Mr Groenenberg was not aware that the Impactor was incapable of crushing hard ore and therefore did not express that view to Mr Halbert and Mr Bandy.

86 This process of reasoning was plainly open to the trial Judge. It is rational and logical. Nea's only real challenge to the process concerns an alleged failure to take proper account of the evidence given by Mr Cooper of his discussions with Mr Groenenberg.

87 The first point to note about that evidence is that the trial Judge ruled that Mr Cooper's evidence was not admissible as evidence of what was said at the meeting with Mr Halbert and Mr Bandy, at which he was not present. No challenge is made to that ruling which was obviously correct.

88 The trial Judge also noted that Mr Cooper was unable to say when his discussion with Mr Groenenberg took place.

89 Although Mr Halbert accepted in the course of his evidence that Mr Groenenberg did indicate to him that he would go and speak to a third party regarding the suitability of the Impactor for the proposed application, he was initially emphatic in his evidence that Mr Groenenberg did not leave his presence during the course of their discussion and therefore could not have spoken to Mr Cooper while they were there. Although he maintained that position, he did accept that it was possible that Mr Groenenberg may have left him and Mr Bandy briefly during the course of their conversation. However, he denied any recollection of that occurring.

90 The trial Judge also recorded in his reasons Mr Bandy's evidence that he had no recollection of Mr Groenenberg saying that he needed to go and speak to Mr Cooper, although he did not deny the possibility that it might have occurred.

91 Consistently with the process of reasoning set out above, the trial Judge reasoned that if the conversation between Mr Cooper and Mr Groenenberg had occurred as depicted by them on 25 July 1995, Mr Groenenberg would have expressed the view to each of Mr Halbert and Mr Bandy that the Impactor was not suitable for hard rock applications, with the consequence that negotiations would then have terminated. He therefore reasoned that the conversation between Mr Groenenberg and Mr Cooper must have taken place at some later time. Given Mr Cooper's inability to be specific as to the time at which the conversation took place, this process of reasoning appears to have been entirely open to the trial Judge. It was logical, rational and did not conflict with any of the evidence which he had accepted.

92 Accordingly, Nea's challenge to the preference given by the trial Judge to the evidence of Mr Halbert and Mr Bandy fails.

93 Nea pressed a submission that the trial Judge's findings as to the ignorance of each of Mr Halbert and Mr Bandy of the terms of cl 8 of Nea's standard terms and conditions should be set aside because of his failure to appreciate the significance of the evidence which they gave in relation to their general awareness of the provisions of "dry hire" contracts.

94 For reasons which I will endeavour to develop when dealing with the ground of appeal which specifically relates to cl 8, it does not seem to me that a great deal turns upon the factual question of whether or not one or other of Mr Halbert or Mr Bandy was aware of the existence of cl 8 prior to entering into the hire contract. In any case, Nea's challenge to the findings of fact made by the trial Judge on this topic appear to me to be without substance.

95 Mr Groenenberg did not suggest in his evidence that there was any discussion concerning cl 8 in the course of the meeting held on 25 July 1995. Accordingly, Nea's submission relies entirely upon the evidence given by each of Mr Halbert and Mr Bandy.

96 Dealing firstly with Mr Halbert, when asked when he first became aware of cl 8, he replied in these terms:

"Magenta Mining was in the same business as Hireplant and we hired out excavators and loaders on dry hire and wet hire and on dry hire you supplied a loader to a company and they paid you a minimum amount of money per hour for 50 hours a week. If the machine didn't work there was no hire paid and we always - that was sort of standard normal procedure, business procedure. If a machine wasn't working you didn't pay hire for it. We actually hired this machine off Hireplant. We actually paid $15,000 as a half-month hire in advance which you normally don't do for hire. If I hire something out, nobody pays me until they've had it for a month and then they pay me."

97 The question of when he first became aware of cl 8 was repeated, and he responded:

"I just think it's ridiculous because it's - I can't give that a guarantee on any machinery that I hire out. I can't say that."

98 When the question was repeated, he stated that he first became aware of cl 8 after the dispute had arisen with Mr Groenenberg in relation to the adequacy of the Impactor supplied; that is, well after the contract had been formed.

99 His evidence was to the effect that the facsimile of 26 July 1995 had been sent to Magenta's office at Kalgoorlie at a time when he was out on the mine site and he had no recollection of seeing the facsimile at that time.

100 Although one might infer from this evidence that Mr Halbert had a general awareness of the difference between dry hire and wet hire agreements, it is, I think, quite impossible to use the evidence to which I have referred to sustain a submission that he was aware of cl 8 at the time Magenta contracted to hire the equipment supplied by Nea.

101 Turning then to Mr Bandy, he accepted that he had received the facsimile of 26 July 1995. He was taken through its terms. When asked about the manuscript passage on the second page of the facsimile in which reference was made to Nea's standard hire terms and conditions, he responded that he took that to mean:

"Something like the small print you read on the other side of an Avis Rent a Car proposal."

102 Later in the cross-examination he was specifically asked if he read the two pages of Nea's standard terms and conditions when the facsimile arrived. He responded that he did not recall that he did. However, shortly thereafter, he accepted that he thought he had read the document in its entirety at or about the time it had arrived. Nevertheless, when specifically taken to cl 8, his evidence was that he did not recall reading it. He then referred to it as a "standard dry hire agreement". He said that he had seen "a few floating around"; he had not "read them extensively either but it's pretty well a rule of thumb".

103 In re-examination he was asked again about the extent to which he had read cl 8 prior to entering into the hire agreement. His answer was:

"I wouldn't say I read it and scrutinised it from cover to cover. However, having hired a lot of machinery in the past and having hired machinery to other people in the past, a dry hire agreement is a very understandable agreement."

104 He was then asked about dry hire agreements. He replied:

"Dry hire just says there's dry hire. It is an understood thing about dry hire. I mean, you can have a hundred pages of agreements but dry hire is dry hire, as simple as that. Dry hire is where the hirer replaces wearing parts - sorry; the hiree. The person hiring the machine is responsible for wearing parts, as in teeth on a bucket excavating, and the hirer of the machine is responsible for its mechanical wellbeing." (TS898)

105 There was no evidence given to the effect that cl 8 comprises any form of standard term in either a dry hire or any other form of agreement.

106 Accordingly, when regard is had to the particular terms in which Mr Bandy gave his evidence, it clearly falls short of acknowledgment that he recalled reading cl 8 prior to entering into the contract or that he had anything other than the most general awareness as to the effect of a dry hire agreement. It follows that the conclusion of the trial Judge that neither Mr Halbert nor Mr Bandy had any conscious appreciation of the terms of cl 8 prior to entering into the hire agreement was entirely justified by the evidence.

Magenta's Responsibility for the Failure of the Impactor

107 The grounds of appeal contain an allegation that the trial Judge should have found that the failure of the Impactor was essentially due to Magenta's alteration of its configuration and Magenta's methods of operation. However, that assertion was not supported by either the written or oral submissions advanced in support of the appeal and is not sustained by the evidence, including, in particular, the evidence given by Mr Kendall, which the trial Judge accepted. Accordingly, there is no substance in this proposition.

108 For these reasons, the various challenges which have been made to the findings of fact made by the trial Judge in relation to dealings between the representatives of Nea and Magenta must fail.

"The Learned Trial Judge erred in fact and law when he found that the Appellant, Nea, had not made it clear to Magenta prior to the parties entering into the hiring agreement that Nea gave no warranty as to suitability of that equipment for any purpose and as a consequence Nea was not entitled to rely on the exclusion clause in the contract."

110 My conclusion, earlier expressed, that the trial Judge did not err in fact when he concluded that neither Mr Halbert nor Mr Bandy had any conscious appreciation of cl 8 at the time the contract of hire was concluded, is sufficient to dispose of the ground expressed in the terms set out above. However, the written and oral submissions lodged in support of this aspect of the appeal go beyond the terms of the ground and assert, inter alia, that the failure of Magenta's representatives to read and appreciate the effect of cl 8 of the standard terms and conditions of hire precludes Nea's conduct being characterised as misleading and deceptive and/or precludes Magenta from establishing that such conduct was the cause of its loss.

111 There have been many cases dealing with claims for misleading and deceptive conduct in which a disclaimer given in the course of negotiations or a term has been included in a contract limiting a party's liability. For reasons which follow, it may be necessary to differentiate between a factual situation in which one party makes it clear to the other that he or she should not rely upon statements made or information provided, and the situation in which there is nothing more than a contractual provision which limits an obligation or liability which would otherwise have arisen under the contract (which is this case). It may also be necessary to differentiate between the circumstance in which the disclaimer or exclusion clause is said to preclude the conduct being characterised as misleading and deceptive and the circumstance in which it is said to preclude reasonable reliance and therefore, proof of causation of loss.

112 For present purposes, it is sufficient to summarise, at a very general level, the principles which emerge from the many cases on this topic in the following terms:

(1) It is not possible for a party to exclude the statutory liability that arises from a contravention of s 52 of the Trade Practices Act 1974 (Cth) ("the Act") by force of contractual provision alone.

(2) A disclaimer or exclusion clause can only affect the statutory liability for misleading and deceptive conduct if:

(a) it has the effect that the relevant conduct cannot be properly characterised as misleading and deceptive; or

(b) it has the effect that the claimant cannot successfully establish that it reasonably relied upon the misleading and deceptive conduct.

113 These principles were succinctly enunciated by Burchett J in Benlist Pty Ltd v Olivetti Australia Pty Ltd (1990) ATPR 41-043 where he observed at [51590]:

"It has been held on many occasions that the perpetrator of misleading conduct cannot, by resorting to such a clause, evade the operation of the Trade Practices Act. Of course, if the clause actually has the effect or [sic] erasing whatever is misleading in the conduct, the clause will be effective, not by any independent force of its own, but by actually modifying the conduct."

114 The trial Judge expressed the same general notion in the following terms at [256]:

"So it has been held that once a misrepresentation has been shown, the TPA prevails over a formal disclaimer. If such a clause is to be effective, it must be by enabling the conduct as a whole to be seen as not misleading ..."

115 The trial Judge's observation that the relevant conduct must be viewed as a whole (reasons at [256]) is consistent with established authority, including recent authority in the High Court in Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592. After referring to the issues that arise in the "conduit" line of cases (ie those cases in which a party asserts that it did nothing more than pass on information provided by another, for what it is worth, expressly or impliedly disclaiming any belief in its truth or falsity), the majority of the Court observed at [39]:

"In applying those principles, it is important that the agent's conduct be viewed as a whole. It is not right to characterise the problem as one of analysing the effect of its 'conduct' divorced from 'disclaimers' about that 'conduct' and divorced from other circumstances which might qualify its character. Everything relevant the agent did up to the time when the purchasers contracted to buy the Rednal land must be taken into account."

116 The questions which arise in this type of case are essentially factual; turning upon the effect of the disclaimer or exclusion clause in the characterisation of the conduct when viewed as a whole. So the particular terms of the relevant provision and the context in which it is either made available or known to the claimant will be of particular significance.

117 In the present case, it is of considerable significance that cl 8 did nothing more than preclude any term being incorporated in the contract relating to the condition of the plant to be supplied or as to its suitability or fitness. Thus, the only direct purpose or effect of the clause was to limit the extent of the contractual liability assumed by the hirer. Except to the extent that some warning might be implied from such a provision, it did not purport to warn the prospective hirer that the information supplied, prior to hiring, was unreliable; that the provider of the information lacked expertise or knowledge of the facts; or to provide information on any other factual matter that would be relevant to the likelihood of a prospective hirer placing reliance upon the representations made with respect to suitability or fitness. Rather, its only effect was to limit the extent of the contractual obligations being assumed by the hirer in the event that a contract is entered into. Such a limitation is not necessarily inconsistent with pre-contractual representations intended to induce and in fact inducing entry into the contract.

118 This is a very different factual situation to that in which a party to negotiations makes it clear that, for example, all it is doing is passing on information provided by another, without any knowledge or belief as to its accuracy; a circumstance in which a party to negotiations expressly denies any expertise in the subject matter; or, to take yet another of many possible factual examples, a situation in which a party advises the other that only very limited enquiries have been made and that, therefore, the information provided should be regarded as unreliable until verified.

119 The essential difference between those circumstances and a case such as the present, is that in a circumstance in which a party expressly advises the other that it should not rely, or should be cautious in relying, upon information provided, it can more plausibly be contended, either that the conduct as a whole is not properly characterised as misleading and deceptive or that the claimant has failed to establish that it reasonably relied upon that conduct.

120 But in the present case, where the only effect of the clause is to limit the extent of the contractual obligations assumed, as a matter of fact, any warning said to arise from such a clause is much less direct and significantly more obscure than the warning provided in the other hypothetical circumstances to which I have referred.

121 Both the trial Judge in his reasons, and Nea in its submissions to the Court, appear to have proceeded upon the assumption that there was no relevant distinction between a clause which does nothing more than limit the extent of contractual obligations assumed and a provision containing a clear and explicit warning as to the unreliability of the information being supplied (see for example, in the case of the trial Judge, the passage from [267] of his reasons which I have set out above). However, because of my views that the trial Judge was, in any event, correct in the conclusion at which he arrived on this topic, nothing turns upon that distinction in this appeal.

122 Further, neither the trial Judge, nor Nea in its submissions to the Court, distinguished between the impact of the clause upon the question of whether Nea's conduct was properly characterised as misleading and deceptive on the one hand, and its impact upon Magenta's proof of causation of loss on the other. At points in his reasons, there are indications to the effect that the trial Judge regarded cl 8 as irrelevant to the issue of causation. At [256], he observed:

"It is on the basis that the misleading and deceptive conduct remained a material cause of the damage suffered that observations to the effect that terms of a contract including disclaimers or exemption clauses are irrelevant must be understood: Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367 at 371 per Sheppard J ..."

123 However, the passage from [267] of the trial Judge's reasons shows that he was well aware of the potential relevance of an exclusion clause or disclaimer to the issues of reliance and causation.

124 There may well be cases in which, from a factual and practical perspective, there is little or no material distinction between addressing the effect of an exclusion clause or disclaimer from the perspective of characterisation of conduct on the one hand, or from the perspective of causation on the other, but there is nevertheless a distinction in principle which may be relevant in some cases.

125 That is because the question of whether conduct is properly characterised as misleading and deceptive is to be determined objectively, albeit having regard to the particular positions of the parties, their knowledge and experience and all the circumstances of their communications. In some classes of case, the misleading and deceptive conduct will be undertaken in relation to an entire range of persons of which the particular claimant was not an identifiable part at the time of the alleged conduct. However, in many cases, such as this case, the conduct will take place in relation to particular identified persons. It was held in Butcher v Lachlan (supra) that in such cases, the question of whether or not the conduct is properly characterised as misleading and deceptive is to be assessed having regard to the particular characteristics of the persons to whom the conduct was directed. However, the question remains an objective one, as is clear from the following passage in the judgment of the majority in the High Court at [37]:

"So here, it is necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchasers, bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known."

126 Although in dissent in the result, the same proposition was more fully enunciated by McHugh J in the following passage at [109]:

"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. 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. 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. 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." (footnotes omitted)

127 McHugh J emphasised the objective nature of the test when he observed at 626 [111], "Conduct that objectively leads one into error is misleading."

128 On the other hand, once the conduct has been characterised as misleading and deceptive and the question arises as to whether the claimant has established that the conduct caused loss, the question will be determined subjectively - so the relevant question will be, as a matter of fact, did this particular claimant rely upon the conduct by acting in such as way as to cause loss? See Henville v Walker [2001] HCA 52; (2001) 206 CLR 459; Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413, 425 - 426; Gould v Vaggelas [1984] HCA 68; (1984) 157 CLR 215. Questions of reasonableness will arise in that context, not because some notion of contributory negligence is available as a partial or complete defence, but only if and to the extent that the unreasonableness of the claimant's conduct precludes the conclusion that the misleading and deceptive conduct caused the loss in the sense required to establish an entitlement to compensation under s 82, or to an alternative remedy under s 87 of the Act: see March v E & MH Stramare Pty Ltd [1991] HCA 12; (1991) 171 CLR 506, 517; Henville v Walker (supra); I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; (2002) 210 CLR 109.

129 When the issue of causation arises for determination, in the context of the question of whether the claimant has established an entitlement to a remedy for loss suffered by reason of reliance upon misleading and deceptive conduct, the claimant will fail to establish that entitlement even if reliance would have been objectively reasonable if, as a matter of fact subjectively assessed, the claimant did not in fact rely upon the relevant conduct.

130 Ground 5 of the appeal and the submissions advanced in support of it, and, to an extent, the reasons for decision of the trial Judge, elide the distinction between a number of distinct issues. One issue is whether, assessed objectively, either or both of Mr Halbert and Mr Bandy could or should be taken to have known of the terms of cl 8, which is relevant to the question of whether Nea's conduct should be characterised as misleading and deceptive. Another issue is whether Magenta's claimed reliance was reasonable and a further issue is the subjective question of whether, in fact, Mr Halbert or Mr Bandy had a conscious appreciation of cl 8, both of which questions would be relevant to the question of causation.

131 Rather, each of ground 5 of the notice of appeal and the submissions advanced in support of it, and, to an extent, the reasons for decision of the trial Judge, proceed upon the assumption that a factual conclusion to the effect that either Mr Halbert or Mr Bandy was consciously aware of the terms of cl 8 would have been fatal to Magenta's claim. However, it seems to me that if it had been concluded either that, objectively assessed, Mr Halbert or Mr Bandy should be taken to have been aware of cl 8 or, subjectively assessed, either in fact were aware of that clause, because of the limited nature and effect of the clause, important questions would have remained for determination; namely, whether their knowledge objectively assessed would have precluded the conduct being characterised as misleading and deceptive or precluded the conclusion that the conduct caused Magenta's loss; and whether the subjective knowledge of either of them precluded Magenta from establishing causation of loss.

132 As it happens, it is not necessary to consider either of those questions because it seems to me to be clear from the findings of fact made by the trial Judge and the evidence to which I have referred, that the circumstances were not such that either Mr Halbert or Mr Bandy should be taken to have had actual knowledge of cl 8, nor, for reasons I have set out above, did the evidence establish that either in fact had knowledge of the clause.

133 It also follows from the principles I have set out above, and in particular the principle that the question of whether or not the alleged conduct was misleading and deceptive is a question to be determined, as a question of fact, from a consideration of the entire range of circumstances applicable to the particular case, that it is not possible to assert definitive propositions that will determine the outcome of cases in which misleading and deceptive conduct is alleged in the context of a disclaimer or exclusion clause. Accordingly, the portion of the reasons for decision of the trial Judge taken from [267] cannot be read as a definitive statement of principle that will apply to the factual circumstances of each and every case in which a representation as to suitability for purpose is made prior to entry into a contract which contains an exclusion clause. However, in its context, I do not read that portion of the trial Judge's reasons to be asserting that there is any such definitive principle and it is clear from his approach to the question revealed by his reasons for decision as a whole, that he properly viewed the matter as a question of fact to be determined by a consideration of all pertinent circumstances.

134 Turning then to the salient factual circumstances, even though Butcher (supra) was a "conduit" case and therefore somewhat different factually, some guidance as to the relevant considerations applicable to this case is to be drawn from Butcher. By reference to the reasons of the majority, it can be seen that they regarded the following factual matters to be of considerable importance.

135 In Butcher (supra), the majority analysed the knowledge and expertise of the respective parties. In the present case, the trial Judge found that Mr Halbert and Mr Bandy had little or no knowledge or experience of crushing, that Mr Groenenberg was aware of that and was also aware that they were relying upon his expertise. Those findings were amply sustained by the evidence, which included the following.

"Do you agree with the proposition that they told you, in effect, that they had little or no previous personal experience of crushing?---I gathered that, yes.

Yes. Secondly, they were asking you to advise them, to assist them?---To assist them, yes."

137 In re-examination, Mr Groenenberg was asked what he meant by the answer, "To assist them". He responded:

"To assist them in establishing the type of equipment that we had on offer that may be suitable for their application."

138 Further, Mr Groenenberg was asked of his knowledge of the experience of Mr Halbert and Mr Bandy in the following passage:

"Do you remember that they said to you that they had not to that stage personally been involved in ore-crushing?---Yes.

That they didn't personally know much about that activity?---Yes."

139 Mr Halbert was asked about the sketches Mr Groenenberg had drawn during the course of their meeting showing the circuit. In that context he gave this evidence:

"Mr Halbert, you mentioned sketches?---Yes. Not having much knowledge regarding crushers, he was drawing sketches as to how the circuit would work, and where the ore would go, and how it would come down to minus 8.

Who was it that didn't have much knowledge?---I didn't have much knowledge.

...

Did you tell Mr Groenenberg anything else about what had or hadn't been in your business activities in the past?---We told him we hadn't done any crushing before. I didn't know anything about crushing plants at all. We relied on his knowledge. He told me that he had 20 years of experience in the crushing business and knew all about it and would advise us on what machine to do and how to do it, how to put the circuit together, and that was it.

Did he say anything else to you about the particular crusher that he showed you? You say that he said things about its suitability to your requirements?---All he said to me was that it would be ideal for the job. It would do 50 tonne and [sic] hour and it was a very good machine."

140 Mr Bandy's evidence was generally to the effect that he had been referred to Mr Groenenberg by a number of other persons to whom he spoke because of Mr Groenenberg's experience and expertise in the supply of crushing equipment (see for example TS802).

141 Accordingly, when viewed objectively, the lack of expertise of Magenta's representatives combined with their reliance upon the expertise of the representative of Nea, being circumstances known to both parties, strongly reinforced the conclusions of the trial Judge in respect of the misleading and deceptive character of the conduct undertaken on behalf of Nea. Viewed subjectively, those circumstances reinforce the trial Judge's acceptance of the evidence of each of Mr Halbert and Mr Bandy to the effect that they relied upon the statements made by Mr Groenenberg when deciding to enter into the hire agreement.

142 The character of the transaction that gave rise to Magenta's claims is not contentious. It involved the hire of an expensive and complex set of equipment, the efficient operation of which was critical to the success of its gold extraction venture. These circumstances were known to Nea through its representative Mr Groenenberg and were of a character which accentuated the importance of the advice which he gave and the recommendations he made.

143 The trial Judge found as a fact that Mr Groenenberg's conduct gave rise to a clear and unequivocal representation to the effect that the equipment he was recommending would be suitable for the purpose of crushing the ore which had been stockpiled at Hawkins Find. He did not accept the evidence given by Mr Groenenberg that he had qualified the recommendations and advice he had given by the assertion that the Impactor would only be suitable to treat soft ore.

144 As I have observed, the exclusion clause does not purport to do anything more than limit the contractual liability of Nea. It does not purport to directly warn Magenta that no reliance should be placed upon the statements that had been made or the advice or recommendations provided by Mr Groenenberg. The clause is contained in relatively fine print within two pages of a set of standard terms and conditions. Although attention was drawn to those standard terms and conditions by the manuscript portion of Mr Groenenberg's facsimile, no particular reference was made to cl 8 in that facsimile. Nor was any reference made to cl 8 in the course of any of the oral communications between the representatives of the parties.

145 When these characteristics of the facts and circumstances are considered, it is clear that the conclusions of the trial Judge to the effect that the exclusion clause did not negate the misleading and deceptive character of Nea's conduct nor the conclusion that such conduct caused Magenta's loss were entirely justified and, indeed, inevitable. Appeal ground 5 fails.

146 In ground 7 of its appeal, Nea challenges the decision of the trial Judge to award interest on the whole of the damages awarded from 18 September 1995. No oral argument was advanced in support of this ground, and the written submissions were limited to the following paragraph:

"The Appellant relies upon the manner in which the case was conducted in the Court below and the recognition of the Respondent's responsibility in this regard by the Trial Judge in

the costs orders made in the Court below. In particular the Appellant relies on the inconsistency between the order as to interest on the judgment sum and the costs orders."

147 The reference to the costs orders made by the trial Judge is presumably a reference to his decision to only allow Magenta part of its costs of the trial, because of the issues upon which it failed. I am entirely unable to see any inconsistency between that decision and the decision to award Magenta interest on losses which the trial Judge found it had suffered in and from September 1995. The decision in respect of costs was based upon an assessment of the issues upon which the respective parties had succeeded. The decision in respect of the award of interest is concerned with an entirely different topic; namely, the adequacy of the compensation to Magenta for the losses which it suffered many years ago. There is no substance in ground 7.

149 WHEELER JA: I have had the advantage of reading in draft the reasons for decision of Martin CJ. I agree with those reasons, in relation to the grounds of appeal as they were drawn. To the extent that the submissions made by the appellant in relation to ground 5 travel beyond the terms of that ground, I agree with the observations of Buss JA in respect of those submissions.

150 BUSS JA: The material facts and the issues in the appeal are set out in the reasons of the Chief Justice.

151 I agree with the Chief Justice, for the reasons he gives, that grounds 1 - 4, 6 and 7 are without merit.

152 I also agree with the Chief Justice, for the reasons he gives, that ground 5, as drawn, should fail.

153 Further, I agree with the Chief Justice that Nea's written and oral submissions, to the effect that the failure of Magenta's representatives to read and appreciate the effect of cl 8 of the standard terms and conditions of hire precludes Nea's conduct from being characterised as misleading or deceptive, further or alternatively precludes Magenta from establishing that the conduct in question was a cause of its loss or damage, are without merit. My reasons are set out below.

"That no warranty or condition expressed or implied is given by the owner [that is, Nea] as to the condition of the plant or as to the suitability or fitness of the plant for any purpose."

155 By s 52(1) of the Trade Practices Act 1975 (Cth) ("TPA"), a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. Section 52 establishes a norm of conduct. See Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494 per Gummow J at 520 [76]. If a corporation engages in misleading or deceptive conduct, and that conduct is a cause of loss or damage suffered by another person, that person may recover the amount of the loss or damage from the corporation in proceedings under s 82(1) of the TPA.

156 A disclaimer or an exemption clause in a contract between a plaintiff and a defendant is not, of itself, a defence to the plaintiff's cause of action against the defendant under s 82(1) of the TPA.

157 As French J noted in Kewside Pty Ltd v Warman International Ltd (1990) ASC 55-964, at 58,823:

"To the extent that the provisions relied upon have contractual effect they cannot prevail against the provisions of sec 52 or the cause of action created by sec 82 of the Act. A disclaimer or exclusion clause will affect liability for misleading or deceptive conduct only if it deprives the conduct of that quality or breaks the causal connection between conduct and loss. Whether it has that effect in a given case is a question of evidence and not a question of law - Abundant Earth Pty Ltd & Ors v R & C Products Pty Ltd (1985) ATPR 40-532; (1985) 59 ALR 211; Hutchence & Ors v South Sea Bubble Co Pty Ltd & Ors (1986) ATPR 40-667 at p 47,377; (1986) 64 ALR 330 at p 338 (Wilcox J); Clark Equipment Australia Ltd v Covcat Pty Ltd & Ors (1987) ATPR 40-768; (1987) 71 ALR 367."

Also see Lezam Pty Ltd v Seabridge Australia Pty Ltd [1992] FCA 206; (1992) 35 FCR 535 at 557; Warwick Entertainment Centre Pty Ltd v Alpine Holdings Pty Ltd [2005] WASCA 174 at [59].

158 A disclaimer or an exemption clause may clarify a statement or representation which, if not clarified, could lead someone into error. This point was referred to and discussed by Keane JA in Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199. His Honour said, at [83]:

" ... Disclaimers had this effect in Butcher (Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592) where it was held that the effect of reading an entire brochure, including the disclaimers, was to make it clear that the survey report included in the brochure had not been prepared by the producer of the brochure but was simply being passed on without any representations being made as to its truth or falsity. It is apparent that if a disclaimer is to function in this way it must be worded unambiguously, feature prominently and it must be communicated to the reader that the disclaimer is relevant to the information it is seeking to qualify (Medical Benefits Fund of Australia Ltd v Cassidy [2003] FCAFC 289 at [35] - [38]; [2003] FCAFC 289; (2003) 135 FCR 1 at 17 - 18; Butcher at 609 [54] - [55]). As Jacobson and Bennett JJ noted in National Exchange (National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] FCAFC 90 at [55]; (2004) 49 ACSR 369 at 381):

'Where the disparity between the primary statement and the true position is great it is necessary for the maker of the statement to draw the attention of the reader to the true position in the clearest possible way.'"

159 In Keen Mar Corporation Pty Ltd v Labrador Park Shopping Centre Pty Ltd (1989) ATPR 46-048, tenants leased shops in a shopping centre. Representations were allegedly made to the tenants by a real estate agent on behalf of the landlord. Before the tenants signed the lease agreements they were required by the landlord to specify in a deed any representations that had been made to them concerning the premises which they proposed to lease. The tenants signed the deeds after consulting with solicitors. The tenants suffered losses during their period of occupancy of the premises and brought proceedings against the landlord and others which alleged that the representations constituted misleading or deceptive conduct in contravention of s 52 of the TPA. In the Full Court of the Federal Court, Morling and Wilcox JJ held, at 53,146, that an exemption clause in a lease cannot be relied upon by the lessor in answer to a cause of action under s 82(1) of the TPA in that the conduct upon which such a cause of action is based occurs before the execution of the lease and commonly will have induced the lessee to have entered the lease. Their Honours then added, however, that:

" ... the fact that a claimant states, in an agreement into which he claims to have been induced to enter by misleading conduct, that he was not so induced may bear upon the question whether he should be believed in asserting that the misleading conduct was an inducement."

Similarly, Spender J said, at 53,161, that if, in fact, a defendant's misleading or deceptive conduct has induced the plaintiff to enter a contract, that inducement is not negated because, in a document separate from the contract itself, the plaintiff says to the contrary. His Honour then noted that such a document may, in the circumstances, be of evidentiary significance:

"That a deed of acknowledgment has some value as evidence on the question of whether the representations did in fact induce the leases is accepted. Equally, however, it cannot be conclusive on the question of inducement. So to hold would in many cases be a convenient roundabout route of circumventing the policy of the statute."

Also see IOOF Australia Trustees (NSW) Ltd v Tantipech [1998] FCA 924; (1998) 156 ALR 470 at 480.

160 In the present case, the learned trial Judge articulated, at [259], what he described as the "essential question" concerning:

(a) Nea's alleged misleading or deceptive conduct before the parties entered the contract for the supply and hire of the Hazemag Impactor (and the other equipment);

(b) Magenta's alleged loss or damage; and

(c) whether cl 8 precluded Nea's alleged conduct from being characterised as misleading or deceptive or precluded Magenta from establishing that the alleged conduct in question was a cause of its alleged loss or damage.

"The essential question, therefore, must be whether or not the conduct complained of is misleading or deceptive in causing the party seeking relief from the court, to suffer damage. Is it misleading or deceptive to induce a party to enter a contract believing that it conferred upon him the benefit of a promise or assurance implied from the negotiations between the parties that equipment supplied would be of merchantable quality or fit for the purpose made known when, in reality, a disclaimer or exclusion clause in the contract documents prevented any such contractual obligation arising? No answer of general application can be given to this question because whether an individual contracting party was misled or deceived will depend on the facts of the particular case. There may have been misleading or deceptive conduct but the contracting party was aware of this or did not rely upon it because of making his or her own inquiries. Or there may be no misleading or deceptive conduct but the contracting party may have misled himself through misconstruing, entirely on his or her own account, the obligations which were being accepted. The decision in Butcher v Lachlan Elder Realty Pty Ltd (supra) is readily explained by the conclusion of the majority that it was not the selling agent (who had merely distributed a brochure containing erroneous survey information prepared from other disclosed sources) who was engaged in misleading or deceptive conduct. In different circumstances, a rejection of a purchaser's claim could equally be justified by concluding that, despite the existence of erroneous and potentially misleading and deceptive information, this had not caused the purchaser to enter the contract. Other possibilities consistent with that result can also be readily supposed."

(a) discussed in detail the evidence relating to the meeting on 25 July 1995;

(b) made a finding of fact that Mr G Groenenberg on behalf of Nea had expressly and impliedly represented to Messrs Halbert and Bandy on behalf of Magenta that the Hazemag Impactor would be suitable for the purpose which they had discussed, once it had been properly refurbished and re-equipped; and

(c) construed cl 8.

" ... it will be misleading and deceptive conduct to induce a party to enter into a contract for the hire of equipment on the faith of a representation about the suitability of the equipment for the purpose disclosed when the detailed terms of the contract, expressly exclude any responsibility for that representation, unless the exclusion is clearly made known to the hirer or the hirer himself or herself appreciates the qualification of the obligation and, for that or any other reason, is not induced to enter into or to complete the contract because of the earlier representation."

"When the contract for the supply and hire of the crushing circuit equipment was concluded, on 28 July 1995 [Magenta], by Messrs Halbert and Bandy, believed that they had received an assurance from Mr G Groenenberg on behalf of [Nea] that the equipment to be hired would be suitable for performing the crushing task at Hawkins Find as had been disclosed to Mr Groenenberg during the course of their meeting of 25 July 1995. I also find that they did not then appreciate that despite the assurances which had been given expressly and implicitly in this respect, that [Nea] was accepting no contractual obligation that the equipment would be suitable for that purpose and that any warranty or condition expressly or impliedly arising to that effect was specifically excluded."

163 The learned trial Judge returned to cl 8, and its interaction with the express and implied representation made by Mr G Groenenberg on behalf of Nea, in the context of Magenta's counterclaim. His Honour said, at [298] - [299]:

"In the present case, I am satisfied that cl 8 had no impact whatever either on Mr Halbert or Mr Bandy when, on behalf of Magenta, they agreed to enter into this contract to take the crushing circuit equipment on hire. The standard terms and conditions were not presented at the meeting of 25 July 1995, they were among the materials faxed to Mr Bandy, but not to Mr Halbert on 26 July. Mr Halbert did not see or read them until they were brought to his attention by Mr Groenenberg in October 1995. Mr Bandy read the enclosures with Exhibit 2, as he said but did not pay any regard to cl 8 if he noticed it at all. The existence of cl 8 was not specifically mentioned by Mr Groenenberg nor did the latter say or do anything to bring to the attention of Messrs Bandy or Halbert that no warranties or conditions of any kind were being given by Nea for this transaction.

I have no doubt that cl 8 did not have any effect in dispelling the express and implied representation which had arisen from Mr Groenenberg's discussions and conduct at the meeting of 25 July 1995 that this crushing circuit, and in particular the Hazemag Impactor, was fit for the purpose proposed at Hawkins Find and that it and the other equipment to be leased would be in reasonable condition at the time they were delivered for hire."

164 The learned trial Judge held, at [341], that Magenta had not established that it had lost profits from the operation at Hawkins Find or that it had been deprived of an opportunity which had any realistic prospect of returning an overall profit in the medium or long term. His Honour considered that Magenta's counterclaim for damages was confined to "wasted expenditure" damages, and found, at [343]:

"Had it not been for the misleading and deceptive conduct which led Magenta to enter into this agreement to take the crushing circuit on hire from Nea, Magenta would either have not proceeded with the venture or would have sought and obtained on hire other alternative equipment of such a nature and cost which would have provided a basis for believing that the gold extraction process would have been profitable. As I have already concluded that Magenta has failed to prove that the operation would have been profitable if this Hazemag Impactor had been reasonably fit for crushing the stockpiled ore, it seems unlikely that another crushing circuit, including a more powerful crusher or series of crushers, would have been profitable either, or that Magenta would have been prepared to proceed with significantly higher operating expenses. This conclusion provides another reason for selecting the approach of identifying wasted expenditure as the proper measure of damages."

165 It is apparent, from the passages in the learned trial Judge's reasons which I have set out at [160], [162] - [164] above, that His Honour was satisfied that:

(a) cl 8 did not, in fact, erase or qualify the express and implied representation made by Mr G Groenenberg on behalf of Nea to Messrs Halbert and Bandy on behalf of Magenta;

(b) in the circumstances, the making of that representation, the context in which it was made, and its falsity constituted misleading or deceptive conduct by Nea, in trade or commerce, within s 52 of the TPA;

(c) the misleading or deceptive conduct in question induced Magenta to enter the contract for the supply and hire of the Hazemag Impactor (and the other equipment), and was a cause of its loss or damage; and

(d) cl 8 did not sever the causal connection between Nea's misleading or deceptive conduct, on the one hand, and Magenta's loss or damage, on the other.

166 It was reasonably open to the learned trial Judge to find that cl 8 did not preclude Nea's conduct from being characterised as misleading or deceptive and did not preclude Magenta from establishing that the conduct in question was a cause of its loss or damage. The facts, circumstances and evidence which supported his Honour's finding are referred to in the reasons of the Chief Justice.