Paing Pty Ltd & Ors v Golden Harvest

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30113/02 - Paing Pty Limited & Ors v Golden Harvest (Aust) Pty Limited

JUDGMENT 1 His Honour: This is an appeal brought pursuant to the Administrative Decisions Tribunal Act 1997 (the Act). Section 119 (1) of the Act creates a right of appeal to this court. That section relevantly states:- Parties in proceedings before the Appeal Panel of the tribunal…may appeal to the Supreme Court on a question of law against any decision of the Appeal Panel in those proceedings. 2 The decision, which is the subject of this appeal, is one made by the Appeal Panel of the Administrative Decisions Tribunal made on the 28 November 2002. In turn the Appeal Panel decision was the result of an appeal from a decision of a judicial member of the Administrative Decisions Tribunal, namely, Mr R Fox, which he had made on 21 June 2002. 3 The dispute which came before the Tribunal arose from leases which had been taken out by the four plaintiffs over shops in a complex known as the Carlingford Village, which is owned by the defendant. The principal issue, which arose before the judicial member, Mr Fox, was whether or not the four plaintiffs were entitled to obtain relief by way of compensation because of alleged breaches by the defendant of section 10 of the Retail Leases Act (1994). Section 10 (2) of that Act states:- (1) A party to a retail shop is liable to pay another party to the lease ('the injured party') reasonable compensation for damage suffered by the injured party that is attributable to the injured party's entering into the lease as a result of a false or misleading statement or representation made by the party, or any person acting under the party's authority, with knowledge that it was false or misleading. (2) The giving of a lessor's disclosure statement to a prospective lessee under a retail shop lease is considered to be the making of a representation by the lessor to the lessee as to the information in the disclosure statement. 4 The alleged false or misleading statement or representation relied upon by the plaintiffs involves statements made concerning the construction of two residential towers in the complex known as the Carlingford Village. The issue before the judicial member was whether or not the defendant had, through its servants or agents, represented that those towers would be built or whether or not it had been represented that there had been a proposal that these towers would be built. 5 The grounds of appeal as certified by counsel and as argued by counsel for the plaintiffs were as follows:- 1. The Judicial Member of the Administrative Decisions Tribunal made findings of fact in his decision dated 21 June 2002, including the following findings of fact: i) That the defendant's representatives made oral representations to the Plaintiffs, "that a residential development of some sort would be built" upon the Carlingford Village Shopping Centre. ii) That the giving of the Defendant's Disclosure Statement to the Plaintiffs under their respective Retail Shop Leases, including pictorial details of artist's impressions and architectural plans of the residential tower development, was a representation by the Defendant to the Plaintiffs "that there would be a major residential development on the Centre". [36], [33] iii) Whilst there was no evidence before the Judicial Member to establish the date on which the Development Application in respect of the Residential Tower was refused by Council, there was no dispute that the Development Application had never been approved; accordingly, the Judicial Member found as a fact, that the representations set out above, that the Residential Tower would be built , were untrue. 2. It was not open to the Appeal Panel of the Administrative Decisions Tribunal to overturn these findings of fact which were properly made by the Judicial Member, and which were not "glaringly improbable": Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479. 3. The Appeal Panel of the Administrative Decisions Tribunal erred in law in holding (contrary to the findings of fact made by the Judicial Member): a) That the oral representations made by the Defendant's representatives were that the Residential Tower "was (no more than) a proposal to the local council" . b) That the Judicial Member found that the Residential Tower was (no more than) a proposal to the local council" (para [34]). - Whilst the words "a proposal" do appear in the findings of the Judicial Member [32], it is erroneous to find that this was the Judicial Member's finding of fact as to the nature and effect of the oral representations made by the Defendant's representatives. Having reviewed the words which the Defendant's representatives said he used in conversation with the Plaintiffs [26], the Judicial Member found that: "I am satisfied that these or similar words would mean to any prospective lessee that a residential development of some sort would be built upon the Centre." [27] (emphasis added) c) That in the absence of direct evidence that the Development Application had been refused before the representations were made, the representations were not "false or misleading" to the knowledge of the Defendant. 4. The Defendant knew at all material times, that no Development Application had been approved in respect of the Residential Tower. If, as the Judicial Member found, the representations made by the Defendant's representatives were to the effect that a Residential Tower would be built , then the Appeal Panel erred in law in failing to find that those representations were false or misleading to the knowledge of the Defendant. 5. The Appeal Panel erred in law in finding that the Plaintiffs were required to prove to a standard higher than the balance of probabilities , that the Defendant or its representatives made representations to the Plaintiffs "with knowledge that (the representations) were false or misleading." [26]. The Appeal Panel erred in law in holding that "Any evidence in this regard would have to be clear and unambiguous" [41]. 6. The Appeal Panel erred in law, in implicitly finding that the Judicial Member was not entitled to make relevant findings of fact by inference from the evidence before him: Luxton v Vines (1952) 85 CLR 352. The Judicial Member inferred, and was entitled to infer, that the Defendant and its representatives knew that the building of the residential Tower was never more than a proposal, yet it was represented to the Plaintiffs as a fait accompli .

6 Appeals from a judicial member to the Appeal Panel are governed by sections 112 - 118 of the Act. There is no issue before this court that Mr Fox's decision constituted an appealable decision pursuant to section 112 of the Act. Section 113 is in the following terms:- (1) A party to proceedings in which an appealable decision of the Tribunal is made may appeal to the Tribunal constituted by an Appeal Panel. (2) An appeal: (a) may be made on any question of law, and (b) with the leave of the Appeal Panel, may extend to a review of the merits of the appealable decision. (3) An Appeal must be made: (a) within 28 days after the Tribunal furnishes the party with written reasons for the appealable decision under section 89, or (b) within such further time as the Appeal Panel may allow. (4) An appeal is to be made in the manner prescribed by the rules of the Tribunal. 7 Sections 114 and 115 deal with the mechanics of the Appeals Panel dealing with both questions of law and appeals on the merits. Here the Appeal Panel declined an application made on behalf of the defendant, the appellant before them, to have the matter dealt with on its merits and determined to hear the appeal limited to questions of law. 8 The nub of the appellants' argument before this court is that the appeal panel erred in overruling questions of finding of fact made by the judicial member when they had no power to do so. 9 The ambit of an appellate tribunal's jurisdiction when confined to dealing with questions of law in dealing with findings of fact made by the tribunal below has been the subject of many judicial determinations in the past. Here both counsel referred to a number of decisions relating to the distinction between questions of fact and the question of law in appellate matters. These cases included Ballesty v The Director of Liquor and Gaming Sup Ct, Kirby J, unreported 11 December 2002 SC13437/01; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; James & Ors v ANZ Banking Group Ltd & Ors (1986) 64 ALR 347 at 372; Australian Gas Light Company v Valuer-General (1940) 40 SR (NSW) 126 particularly at 137 and 138; and Devries v The Australian National Railways Commission (1992) 177 CLR 472 at 479. 10 The law as stated in those authorities is clear. There is nothing which has fallen from the High Court in the authorities cited which diminishes in any way the statement of law made by Jordan CJ in AGL v Valuer-General at 137-138. There Jordan CJ said (and I have omitted the authorities from which he relied to establish the following rules of law which he adumbrated):- Before proceeding to the questions which have been submitted it is necessary to keep in mind that this court has jurisdiction to determine only questions of law and only such questions of law as are submitted to it. In cases in which the appellate jurisdiction has determined jurisdiction to determine only questions of law, the following rules appear to be established by the authorities: (1) The question 'What is the meaning of an ordinary English word or phrase used in the statute?' is one of fact and not of law. This question is to be resolved at the relevant tribunal itself by considering the word in its context with the assistance of dictionaries and other books, and not by expert evidence; although evidence is receivable as the meaning of technical terms; and the meaning of technical legal term is a question of law. (2) The question of whether a particular set of facts comes within the description of such a word or phrase is one of fact. (3) A finding of fact by a tribunal of fact cannot be disturbed if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its finding, and there is evidence capable of supporting its inferences. (4) Such a finding can be disturbed only (a) if there is no evidence to support its inferences or (b) if the facts inferred by it and supported by evidence are incapable of justifying the finding of fact based upon those inferences. Thus, if the facts inferred by the tribunal from the evidence before it are necessarily within the description of a word or phrase in a statute or necessarily outside that description the contrary decision is wrong in law. If, however the facts so inferred are capable of being regarded as either within or without the description according to the relative significance attached to them a decision either way by a tribunal of fact cannot be disturbed by a superior court which can determine only questions of law. 11 Here postulates three and four as set out by Jordan CJ's judgment are relevant to the issues which emerged in this matter. In Devries, Brennan, Gaudron, and McHugh JJ at 479 observed as follows:- More than once in recent years, this court has pointed out that a finding of fact by a trial judge based on the credibility of a witness, is not to be set aside because an appellate court thinks that the probabilities of the case are against - even strongly against - that finding of fact. If the trial judges finding depends to any substantial degree on the credibility of the witness, the finding must stand unless it can be shown that the trial judge "has failed to use or has palpably misused his advantage" or has acted on evidence which was "inconsistent with the facts incontrovertibly established by the evidence" or which was "glaringly improbable". 12 One of the matters, which was the subject of the appellant's challenge in this court to the decision of the Appeal Panel, is to be found in paragraph 34 of the Appeal Panels findings. There the Panel said:- The representation, and the subject of the appeal to this Appeal Panel, relied upon by the respondents as giving rise to a compensable claim under section 10 was that a residential tower would be built within the shopping complex. Various witnesses on the respondents' side deposed to a representation of this kind being made by either or all David Whittaker, Joseph Antonios and Aaron Barnes of Retail Estate Pty Ltd. The respondents also rely upon the representation made in the lessor's disclosure statement. During the hearing, there was an acute contest as to whether the oral statements were to the effect that there was a proposal that a residential tower would be built on the one hand or whether the statement or representation was unqualified and amounted to a representation of the former kind while some of the witnesses for the respondents deposed to the making of an unqualified statement or representation. In the light of this conflict of evidence and after hearing and seeing the witnesses at the hearing, the Tribunal's finding in relation to the oral statements or representations is important. The Tribunal found that: 'I am satisfied that in their own way each of the applicants [ the respondents] asked about those proposals, and I am also satisfied that the representatives of the Lessor had a standard response which indicated that the residential tower was a proposal to the local council .' The critical words in this finding, in our view, are the words in italics. The oral statements or representations, as found by the learned judicial member, were that there was a proposal by the appellant to build a residential tower which would be put to the local council. There was ample evidence presented at the hearing for the judicial member's finding in this regard. The important point for this appeal is whether such a finding supports a conclusion that the making of the oral statements or representations constituted a breach of section 10 giving rise to a compensable claim. It is not clear from his judgment that the Tribunal made such a finding but, in any case, we think not. Having regard to the content of the oral representation as found, a finding of a breach would need to be predicated upon a conclusion that the representation was false or misleading to the knowledge of the appellant. In our view, the evidence to sustain such a finding would need, for example, to point to the application to council to build the residential tower being withdrawn or defeated with no prosecution of an appeal at the time of or before the representation was made. A failure to disclose that council had rejected the application before the leases were entered into or that council insisted upon significant amendments to the application and proposed development might well amount to misleading conduct: Warner v Elders Rural Finance Ltd (1993) ATPR 41-238; Demagogue Pty Ltd v Ramensky (1992) 110 ALR 608; Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83. However, no such evidence was presented to the Tribunal. There was no evidence before the Tribunal as to whether and if so, when, the local council rejected the appellant's proposal to build the tower. The mere fact that the tower had not been built or work started is not enough to warrant the inference that the representation that there was a proposal to build the tower was false or misleading: Bill Acceptance Corporation Ltd v GWA Ltd (1983) 50 ALR 242. 13 In fact what the judicial member found is contained in paragraphs 26, 27, 33 and 36 of his reasons. At paragraph 26 he said:- We emphasise the significance of the words, ' with knowledge that it was false or misleading.' Courts have frequently stated that inferences of fraud are not lightly drawn and likewise, we are of the view that in approaching the liability of a representor under section 10, the Tribunal should be satisfied that clear evidence has been led allowing the tribunal to conclude that the representor knew that the utterance was false or misleading. 14 At paragraph 27 he said:- In his written submissions, counsel for the appellant has submitted that the law developed in the interpretation and application of section 52 Trade Practices Act 1974 is relevant to a correct understanding of the reach of section 10 Retail Leases Act 1994. Certainly there is some similarity between the wording of the respective provisions and the protection afforded by the two statutory regimes. In particular, the distinction, vital to the common law of misrepresentation, between representations of existing fact and representations of future extent, by the Trade Practices Act 1974: Cohen v Centrepoint Freeholds Pty Ltd (1982) 66 FLR 57; Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 55 ALR 25. There is no reason to suppose that the common law distinction has been preserved in the wording of section 10 which simply enjoins the making of a false or misleading statement or representation . 15 At paragraph 33 he said: Counsel for the appellant has submitted that the onus is on the respondents to demonstrate that their cause of action for compensation is within the terms of section 10. We agree with this submission. It is the respondents who are bringing the action under section 10 and it is the respondents who must show that the statement or representation relied upon was made by the appellant with knowledge that it was false or misleading. There is no equivalent provision in the Retail Leases Act 1994 to section 51 A(2) Trade Practices Act 1974. 16 At paragraph 36 he said: The attached plan and drawings consisted of 11 pages and described what was shown on the plan as a proposed residential development. 17 Counsel for the defendants has submitted that it matters not whether it was represented to the leaseholders that the towers were to be built or that the representation was merely that there was a proposal that a tower might be built. Whatever representation had been made to the leaseholders it was the nature of a forecast as to future events and as such, as a matter of law, could not be misleading or deceptive unless it is proved that at its time of making that it is not a genuine proposal or that the person making the representation knew that it could not be carried out. There was in the defendant's submission no evidence before the judicial member which enabled him to make findings adverse to the defendant on the latter two matters. Accordingly the appeal panel rightly found that the judicial member had erred in law in finding as he did. Reliance was placed in this submission on the authorities I have noted earlier in these reasons. 18 I disagree. I have read the transcript of the relevant evidence upon which the learned judicial member made his findings. It cannot be said that the learned judicial member acted on evidence which "was inconsistent with facts incontrovertibly established by the evidence" or which was "glaringly improbable". It follows in my view that the appellate panel erred in law in finding as they did because effectively what they did was to transpose the question of law into a question of fact which was beyond their power. 19 This finding is enough to dispose of the appeal. However, I should say that I also accept the argument submitted on behalf of the appellants that the learned judicial member was in fact entitled to draw the inferences which are contained in paragraphs 39 - 43 inclusive of his reasons. But as I have said the finding I have made is sufficient to dispose of the appeal and it is thus not necessary to amplify my reasons for upholding the second argument advanced by the appellants. 20 The orders I make pursuant to section 120 of the Act are as follows: 1) Appeal upheld. 2) The decision of the Appeal Panel is set aside. 3) The case is to be remitted to the Appeal Panel to be heard and decided in accordance with the findings of this court. 4) The defendants are to pay the plaintiffs' costs of this appeal.

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