Plaintiffs v Defendant

PRACTICE AND PROCEDURE - Application to reopen evidence - Application rejected - Evidence Act 2008 (Vic) ss 67, 69 - Inspector-General in Bankruptcy v Bradshaw [2006] FCA 22 considered.

EQUITY - Estoppel - Defendant alleged plaintiff estopped from enforcing covenant - Not established - Unreasonable for defendant to adopt assumption.

MISLEADING OR DECEPTIVE CONDUCT - Defendant alleged misleading representations by plaintiff - Alleged representations did not occur - Defendant alleged misrepresentation by silence - Defendant's expectation that plaintiffs inform it of certain facts not was reasonable - Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd [1988] FCA 40; (1988) 39 FCR 546 - Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31 - Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 - Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1 considered.

1 This case concerns the construction of an aircraft hangar and, specifically, whether that construction is in breach of a restrictive covenant.

2 The plaintiffs say that the defendant's erection of an aircraft hangar on the subject land is in breach of a restrictive covenant because it is above the covenanted height limit and therefore should be demolished or, alternatively, rectified.

3 The defendant (and plaintiff by counterclaim) says that the plaintiffs ought be estopped from seeking the relief they do. In addition, the defendant contends the plaintiffs have engaged in misleading or deceptive conduct in relation to the construction of the hangar, and therefore the relief they seek ought be denied.

4 The defendant (by its counterclaim) also seeks an order that the contract of sale of the land on which the aircraft hangar was constructed is void ab initio.

5 The plaintiffs, Mr Garry Maxwell Baum and Mrs Patricia Anne Baum ('the Baums'), purchased a property in the early 1990s which they subsequently developed into an airport. The airport received further upgrades between 2013 and 2014 so it could be used by light aircraft. During this upgrade project, a number of lots were created in a plan of subdivision (being Plan of Subdivision 725105T), with Lot 1 being the runways at the airport and Lots 2 to 18 intended as hangar lots, which the Baums could sell to members of the public (after subdivision). Lot 1 is now incorporated in a new plan of subdivision as Lot 1A (a small area of land having been added to it) and is owned by the G & P Baum Superannuation Fund. Mr Baum and Mrs Baum are trustees of that superannuation fund.

6 In April 2014, auctions were held by Ray White Highton on behalf of the Baums to sell Lots 2 to 18. Lot 2 was passed in at auction, and subsequently sold to Ferryman Properties Pty Ltd ('Ferryman'). The contract of sale was signed by Mr Warren Barry ('Mr Barry') and Mr Kelvin Barry on behalf of Ferryman ('the contract'). On 21 May 2014, Ferryman nominated the defendant, Barport Pty Ltd ('Barport') as the purchaser under the contract. Settlement occurred on 23 April 2015.

7 The Plan of Subdivision attached to the contract contained the following covenants. The second item ('the covenant') is the subject of this case:

Upon registration of this plan the following restrictions are to be created,

Land to benefit: All lots on this plan.

Land to be burdened: Lots 2 - 18 on this plan.

Description of restriction:

1. The registered proprietor/s for the time being of lots 2-18 on this plan shall not construct any building using external materials other than: neutral COLORBOND wall and roof cladding or natural concrete.
2. The registered proprietor/s for the time being of lots 2-18 (both inclusive) on this plan shall not construct any building or hangar that is not in accordance with the height limitations as per CASA Manual of Standards Part 139 - Aerodromes.
3. The registered proprietor/s for the time being of lots 2-18 on this plan shall not leave any portion of the of the [sic] direct frontages to the 9m common property access road without either a non-permeable fence or a building.

8 The CASA Manual of Standards Part 139 ('the MOS') 'sets out certain standards for certified aerodromes, registered aerodromes, and other aircraft landing areas where aircraft arrive, depart or move that are not certified or registered'.[1] The MOS is a federal legislative instrument. It is made under reg 139.015 of the Civil Aviation Regulations 1998 (Cth), and operates in conjunction with Part 139 of those regulations.[2]

9 The Baums claim that the MOS contains a height limit, and that the height limitations referred to in the covenant should be construed as being a reference to that limit.[3] They further claim that the hangar on Lot 2 infringes the height limitations under the MOS by 1.146 m in the south-west corner and by 1.386 m in the south-east corner.[4]

(a) a mandatory injunction requiring Barport to demolish the hangar;

(b) a mandatory injunction requiring Barport to make all necessary modifications to the hangar to ensure that it complies with the covenant;

(c) costs; or

(d) such further or other costs as the Court considers appropriate.[5]

11 Barport argues that the covenant does not currently have force.[6] This is because, Barport says, the MOS expressly provides that it does not apply to Airport Landing Areas (ALA), a category into which Lethbridge Airport falls.[7] Barport also argues that what the Baums claim are 'height limitations' in the MOS do not, in fact, impose a restriction on height at all.[8]

12 By counterclaim, Barport alleges firstly that the Baums should be estopped from enforcing the covenant if it is found to apply,[9] and secondly and alternatively, that the Baums engaged in misleading or deceptive conduct prior to the hangar's completion.[10]

13 Finally, Barport alleges that, in any event, the contract is void ab initio by reason of the Baums' non-disclosure as to the content or effect of the restrictive covenant.

14 The essence of Barport's estoppel claim is that the Baums induced Barport to assume that Lot 2 was the best lot in the subdivision and that a hangar with walls 6 metres high could be built on it.[11] Having induced this assumption, and by remaining silent in relation to the height of the hangar on Lot 2 until construction was almost complete,[12] Barport argues that it would suffer detriment if the Baums are not estopped from enforcing the covenant.[13]

15 Barport's misleading or deceptive conduct case is based primarily on emails sent by Mr Baum to Mr Barry on 2 and 3 June 2014, in which Barport alleges that Mr Baum, knowing that Barport intended to build a hangar 6 metres high, told Mr Barry that he could build a hangar with height of 'some 5.5 to 6 metre'. Although Mr Baum did qualify this by saying that the actual height would depend on the final level of Lot 2, it is alleged that he failed to inform Mr Barry that it would never be possible to build a hangar to 6 metres without contravening the covenant, because the final level of Lot 2 would never allow this.[14] Barport further alleges that, after making the statements in his emails of 2 and 3 June 2014, Mr Baum remained silent until construction of the hangar was almost complete in late 2015.[15]

16 Barport argues that it relied on Mr Baum's statements in his email and his subsequent silence. As such, Barport says, the Court should make orders refusing to enforce the covenant.[16]

17 At the conclusion of evidence, the Baums sought to re-open their case for the limited purpose of tendering the following two documents as business records:

(a) Grant Agreement between the State of Victoria and Golden Plains Shire Council dated 6 December 2013 ('the Grant Agreement'); and

(b) Letter from Crowe Horwath to Department of State Development, Business and Innovation ('the Crowe Horwath Letter').

18 The Baums submitted that the Court's discretion to grant leave to re-open should be exercised because this case falls within the one of the four recognised classes in Inspector-General in Bankruptcy v Bradshaw.[17]

19 At trial, I made orders refusing the application to re-open. I indicated at the time that I would expand on my reasons for refusing this application in my final judgment.

20 The legal principles for a re-opening application are well settled. As summarised by Kenny J in Bradshaw, it is generally recognised that there are four situations in which a court may grant leave to re-open a case, namely, where there is:

(d) a mistaken apprehension of the law.[18]

21 These categories are not closed.[19] However, as Kenny J noted, the overriding principle is that the Court should consider whether, taken as a whole, the justice of the case favours the grant of leave to re-open.[20]

22 The Baums submitted that their application fell into the second category, namely, that of inadvertent error. They suggested that it was an error, and not a deliberate decision, that led counsel for the Baums to omit to tender the two relevant documents.[21] They argued that because the relevant documents related to the upgrade project at Lethbridge Airport, which was covered in the examination in chief of Mr Baum, there can be no suggestion that the failure to tender these documents was intended to give the Baums a tactical advantage.[22]

23 The Baums relied on Urban Transport Authority of NSW v Nweiser, in which counsel mistakenly considered that certain evidence was not admissible and decided on that basis not to call a witness, but later realised that the evidence was actually admissible, and sought to re-open the case. In that proceeding, the decision was not a tactical one.[23] The Baums further argued that this application should be distinguished from Advanced Fuels Technology v Blythe, in which the decision not to call the witness was a tactical one.[24] They asserted that there would be no prejudice to Barport if the relevant documents were tendered.[25]

24 Barport, on the other hand, opposed the application.[26] In particular, Barport submitted that the Baums now seek to tender the Grant Agreement as a business record of the State Government of Victoria. It was asserted that there was no evidence before me concerning the provenance of this document, or indeed how the Baums came to be in possession of it. Indeed, it is noteworthy that this document was not produced by the State of Victoria in response to a subpoena served upon them.

25 I am not persuaded that the Baums have adequately explained how these two documents, namely the Crowe Howarth letter and the Grant Agreement, form part of their business records. Nor am I persuaded that they are relevant to any pleaded facts which are in issue in this proceeding. In particular, details about the Grant Agreement, its existence, relevance or force, were not the subject of any examination of any witness in the proceeding. Nor was Mr Baum cross-examined about the subject matter of these two documents.

26 In these circumstances I agree with Barport's submissions that it was, and I quote, 'entitled to assume that they did not form part of the plaintiffs' evidence when it took forensic decisions as to the cross-examination of Mr Baum: ASIC v Rich [2006] 826 at [18]'.[27]

27 In my opinion, it would be prejudicial to Barport had this letter been admitted in evidence at such a late stage in the proceeding. If it were, it would, in my view, be contrary to the dictates of the Civil Procedure Act requiring just, efficient, timely and cost-effective disposition of the proceeding.[28] I say this because the admission of such documents would necessarily require a further delay of the proceedings, the possible recalling of witnesses and the risk that parties would require additional evidence from witnesses not previously foreshadowed as giving evidence in the proceeding.

28 This leaves the email chain between Mr Kevin Gould of the Civil Aviation Safety Authority ('CASA') and Ms Sharon Richards, which was marked for identification ('the CASA email').

29 The Baums submitted that their evidence that Mr Baum spoke to Mr Gould by telephone, following which Mr Gould sent him the CASA email was sufficient in that the CASA email has been properly proven through Mr Baum. In addition, the Baums rely on the hearsay rule and s 69 of the Evidence Act 2008 (Vic) ('the Evidence Act') as being an email received in the ordinary course of the business of the Baums, and therefore, it is submitted, that it is a 'business record'.[29]

30 It was further submitted by the Baums that the CASA email was received by Mr Baum so that he could determine what effect, if any, the construction on Lot 2 may have on any future ability to register Lethbridge Airport in the future.

31 By contrast, Barport asserts that s 69(2) of the Evidence Act does not provide for the admissibility of the evidence. In particular, it is asserted that s 69(3) of the Evidence Act provides that s 69(2) is inapplicable if any representation 'was obtained or prepared for the purposes of conducting, or for or in contemplation of or in connection with, an Australian proceeding'. It is submitted that due to the fact that the CASA email is dated 14 January 2016, and proceedings were threatened to be brought on 12 and 13 January 2016, by the Baums against Barport, that I should draw the conclusion, on the balance of probabilities, that the CASA email was 'obtained or prepared for the purpose of conducting, or for or in contemplation of or in connection with, an Australian proceeding'.[30]

32 Barport argued that this document did not fall under the category of 'records of business' and also that this document was never put to a witness and therefore lacks the basis of being tendered.[31]

33 Barport further argued that the Grant Agreement also could not be classified as a business record of Lethbridge Airport, as it does not actually record the business activities of the Baums. It submitted that mere possession is insufficient to make a document a record of business.[32] Barport also challenged the relevance of the Grant Agreement.[33]

34 Last but not least, Barport submitted that Mr Baum was not cross-examined on the Grant Agreement, as it was not part of the Baums' evidence.

35 I agree with Barport's submission. There is a strong inference to be drawn, which I do draw, that the CASA email was prepared for the purpose of conducting, or at least in contemplation of, this proceeding.

36 It was impressed upon me by the Baums that the admission of the CASA email into evidence would not involve unfair prejudice to Barport. I disagree. Barport would have been deprived of the opportunity to cross-examine Mr Gould, or to conduct any further forensic examination into the circumstances that resulted in the production of the CASA email.

37 Although it was impressed upon me that the CASA email should be admitted into evidence and, if necessary, appropriate weight be given to it, I consider that, on balance, the admission of the CASA email does involve unfair prejudice to Barport under s 135 of the Evidence Act, and therefore, it is not admitted into evidence.

38 It is important also to note that this trial was originally scheduled for 6 days. However, at the time the Baums' counsel made this application, it was day 8 of the trial and two more days were required for closing submissions.

39 The critical issue in this proceeding is the construction of the covenant that appears in the Plan of Subdivision. If it is found that the covenant did not impose the 'height limitations' that the Baums argue that it imposes, then the Baums' claim would fail, and it would be unnecessary to address the counterclaim.

40 The key phrase in the covenant is 'height limitations'. In order to ascertain what the words 'height limitations' mean in the context of the covenant, it is important to examine the MOS in some detail. In particular, it must be asked whether there is a 'height limitation' in the MOS - and if so, what it means, how it is measured and how it should be applied to the facts of this case.

41 I note here that there are currently two runways at Lethbridge Airport: a grass runway having the bearings of 17/35 and a sealed bitumen runway having the bearings of 10/28. The relevant runway in this case is the 10/28 sealed runway ('the runway').

42 Before going into the substance, there was a dispute as to which version of the MOS is applicable. The Baums initially argued that the current version dated January 2017 (version 1.14) is applicable, while Barport argued that the version dated November 2014 (version 1.12) should be applied. This issue was resolved in closing, with both parties agreeing that the November 2014 version of the MOS applies. To avoid doubt, unless otherwise indicated, references below to the MOS are to the November 2014 version (version 1.12).[34]

Parties' submissions on construction of covenant

43 The Baums submit that the covenant 'means exactly what it says'.[35] That is, Barport must not construct any building or hangar that is not in accordance with the height limitations contained in the MOS.[36]

44 The Baums further contend that because the covenant directs the reader to the MOS, regard should be had to that document, and that evidence is admissible to aid understanding of any technical terms that are not comprehensible as a matter of general knowledge.[37]

45 Whilst the Baums accept that the MOS does not presently apply to Lethbridge Airport or Lot 2, they contend that this only means that they are not obliged to establish obstacle limitation surfaces ('OLS').[38] They argue that the covenant only imports the 'height limitations' and not the whole of the MOS.[39]

46 The Baums further argue that despite the fact that the MOS does not apply to Lethbridge Airport, the height limitations in the MOS nevertheless apply by reason of the covenant.[40] They contend that whether or not the MOS applies to Lethbridge Airport and Lot 2 is irrelevant.[41]

47 The Baums also submit that the Court can have regard to the purpose of the covenant, objectively construed.[42] They argue that the covenant has several purposes and objects, including:

(a) to set safety standards for safe operations and safe air navigation at Lethbridge Airport;

(b) to keep track with current safety standards as determined by CASA from time to time; and

(c) to ensure that Lethbridge Airport meets the applicable standards of a registered aerodrome, which would enable it to apply for and become a registered airport, if it so chooses.[43]

48 It is to be noted that in their pleadings, the Baums simply contend that the MOS applied to Lethbridge Airport, and not that the MOS applied as updated from time to time_._ While this issue was the subject of some argument, it is not necessary in the event to reach a conclusion on this point, as the construction of the covenant in the present case does not require it. I do note, by way of observation only, that the covenant purports to restrict the 'registered proprietor/s for the time being of lots 2-18', and refers only to the construction of any building or hangar. Without deciding the point, these words do suggest that the covenant has limited reach, burdening only the present proprietors of the affected lots during the construction phase.

49 Barport submits that Chapter 7 of the MOS is not intended to unconditionally prohibit obstacles, except those located in obstacle restriction areas.[44] Barport argues that a 'limit' is something which cannot be breached.[45] On the contrary, Barport says, OLS are only intended to provide guides for the assessment and treatment of obstacles around the airport, to mitigate hazards during visual flight operations.[46]

50 Barport further points out that under the MOS, an aerodrome operator is responsible for the establishment of OLS.[47] The Baums concede that this has not been done.

51 Barport submits that a reasonable person with knowledge of the location and characteristics of the runways and Lot 2, and the MOS, would construe the covenant as not currently prohibiting the building of a hangar on Lot 2 above a certain height for the following reasons:

(a) the runways and lot 2 are located within Lethbridge Airport;

(b) Lethbridge Airport is not a certified or registered aerodrome;

(c) Lethbridge Airport is an ALA to which the CASA MOS did not and still does not apply;

(d) Chapter 7 of the MOS does not impose any 'height limitations', but rather is concerned with obstacle restriction areas and OLS, and how objects infringing OLS are to be treated; and

(e) because the MOS does not apply to Lethbridge Airport, there is no 'aerodrome operator' and thus no OLS have been established which can be penetrated by a hangar built on lot 2.[48]

52 Barport submits that because the MOS applies to 'aerodrome operators' and not to owners of lots such as Barport, the objective purpose of the covenant is to impose the same obligations on Barport that the MOS imposes on the 'aerodrome operator' of Lethbridge Airport (if any) from time to time.[49] Barport says that the covenant imposes the obligation on Barport not to prevent the 'aerodrome operator' from complying with the MOS to the extent that it applies to the airport and nothing more.[50] As such, obligations such as the establishment of OLS, the monitoring and reporting in relation to OLS, are not imported by the covenant.[51] Barport argues that to impose 'height limitations' on Lot 2 without other concurrent obligations on the 'aerodrome operator' makes no sense.[52]

53 Furthermore, Barport submits that even if the objective purpose of the covenant is to apply the MOS to Lethbridge Airport notwithstanding that the airport is an ALA, a reasonable person would construe the covenant as not currently prohibiting the building of a hangar on Lot 2 above a certain height for the following reasons:

(a) Lot 2 is not in an obstacle restriction area;

(b) the Baums are not required to establish OLS for Lethbridge Airport until the MOS applies to the airport;

(c) because no OLS were established, there are no OLS for any structure on Lot 2 to penetrate; and

(d) even if OLS were established, an infringement of OLS is not necessarily prohibited, but may necessitate some modifications to the site such as markings or lighting.[53]

Legal principles on the construction of restrictive covenants

54 The legal principles on the construction of restrictive covenants were recently summarised by this Court in Clare v Bedelis:

A review of the authorities reveals the following principles of interpretation are applicable to restrictive covenants:

(a) subject to the qualifications mentioned below, the ordinary principles of interpretation of written documents apply. The object of interpretation is to discover the intention of the parties as revealed by the language of the document in question;

(b) the words of a restrictive covenant:

• (i) should generally be given their ordinary and everyday meaning and not be interpreted using a technical or legal approach. Evidence may be admitted, however, as to the meaning of technical engineering, building or surveying terms and abbreviations;
• (ii) must always be construed in their context, upon a reading of the whole of the instrument, and having regard to the purpose or object of the restriction;

(c) importantly, the words of a restrictive covenant should be given the meaning that a reasonable reader would attribute to them. The reasonable reader may have knowledge of such of the surrounding circumstances as are available. These circumstances may be limited to the most obvious circumstances having regard to the operation of the Torrens system and the fact that the covenant is recorded in the register kept by the Registrar of Titles. As the High Court held in Westfield:

The third party who inspects the Register cannot be expected, consistently with the scheme of the Torrens system, to look further for extrinsic material which might establish facts or circumstances existing at the time of the creation of the registered dealing and placing the third party (or any court later seized of a dispute) in the situation of the grantee ...

(d) the words of the covenant should be construed not in the abstract but by reference to the location and the physical characteristics of the properties which are affected by it, and having regard to the plan of subdivision and, depending on the evidence, possibly having regard to corresponding covenants affecting other lots in the estate;

(e) because the meaning of particular words depend upon their context (including the purpose or object of the restriction in a covenant) cases that consider similar words provide no more than persuasive authority as to the meaning of words in a different document. Further, the decisions upon an expression in one instrument are of very dubious utility in relation to another;

(f) the rules of evidence assisting the construction of contracts inter partes, of the nature explained by Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales, do not apply to the construction of easements and covenants;

(g) if the meaning remains in doubt after other rules of interpretation have been applied, as a last resort or 'very late resort,' the covenant should be construed contra proferentem, that is, against the covenantor;

(h) whether a covenant has been breached or not is a question of fact to be determined according to the facts of the case and in the light of the actual language in which the restrictive covenant is framed; and

(i) generally speaking, the proper construction of an instrument intended to have legal effect is a question of law, not fact. On the other hand, the meaning of a particular word or expression in such an instrument may be a question of fact, particularly where the Court has already determined as a matter of construction that the word or expression is used in its ordinary and natural meaning.[54]

55 The MOS expressly provides that it does not affect ALAs:

1.1.1.4 Except where otherwise stated, the standards set out in this MOS are for certified aerodromes.

1.1.1.7 To avoid doubt, except in relation to the effects of Subpart 139.D (reporting officers and safety inspections), this MOS does not affect ALAs.[55]

56 Experts for both parties agreed that Lethbridge Airport is an ALA that does not comply with Subpart 139.D and consequently, the MOS does not currently apply to Lethbridge Airport.

57 Chapter 7 of the MOS deals with obstacle restriction and limitation. Section 7.1.1.2 defines an 'obstacle' as follows:

(a) any object that stands on, or stands above, the specified surface of an obstacle restriction area which comprises the runway strips, runway end safety areas, clearways and taxiway strips; and

(b) any object that penetrates the obstacle limitation surfaces (OLS), a series of surfaces that set the height limits of objects, around an aerodrome.[56]

58 It is to be noted that despite the use of the conjunction 'and' between the two paragraphs of this section, it is clearly not intended to suggest that an object must meet the definitions in both paragraph (a) and (b) in order to be an 'obstacle'. Rather, the section sets out two categories of objects, and states that both those in paragraph (a), and those in paragraph (b), are 'obstacles'. In any event, there was no dispute as to the meaning of this section.

7.3.1.1 The Obstacle Limitation Surfaces (OLS) are conceptual (imaginary) surfaces associated with a runway, which identify the lower limits of the aerodrome airspace above which objects become obstacles to aircraft operations, and must be reported to CASA.[57]

60 Chapters 8 and 9 deal with visual aids provided by aerodrome markings, markers, signals, signs and lights. Specifically, s 8.10 deals with obstacle markings, and s 9.4 deals with obstacle lighting.

Fixed objects, temporary and permanent, which extend above the obstacle limitation surfaces but are permitted to remain; or objects which are present on the movement area, are regarded as obstacles, and must be marked. The aerodrome operator must submit details of such obstacles to CASA, for hazard assessment and particular requirements for marking and lighting. This information must be included in the Aerodrome Manual.[58]

Under the Civil Aviation Regulations, CASA may determine that an object or a proposed object which intrudes into navigable airspace requires, or will be required to be provided with, obstacle lighting. Responsibility for the provision and maintenance of obstacle lighting on a building or structure rests with the owner of the building or structure. Within the limits of the obstacle limitation surfaces of an aerodrome, responsibility for the provision and maintenance of obstacle lighting on natural terrain or vegetation, where determined necessary for aircraft operations at the aerodrome, rests with the aerodrome operator.[59]

63 In their individual reports, Mr Jordan (the expert retained by the Baums) and Mr Thompson (the expert retained by Barport) each concluded that the hangar did not comply with the MOS, if those standards were applicable, on the basis that it infringed the OLS that applied to the Airport. It is to be noted that Mr Thompson suggested that 'the MOS does not affect an ALA conducting the type of operations at Lethbridge Airport', while Mr Jordan appears to have proceeded on the assumption that the MOS applied. Both experts understood the term 'height limitations' as referring to the transitional surface of the OLS.

64 Mr Jordan did not discuss how the CASA might react to this infringement, if Lethbridge Airport were to apply for registered airport status.

65 Mr Thompson did not consider that any infringement would necessitate the demolition of the hangar, suggesting that '[i]n cases where infringements of obstacle limitation surfaces occur, augmenting the visibility of the structure for pilots is the preferred treatment'. He further suggested that: '[b]ased on the "day only" operations of Lethbridge Airport, the location of the structure and minor nature of the infringement it is difficult to establish a reasonable argument for demolition'.

66 In their joint report, Mr Jordan and Mr Thompson again agreed that the hangar on Lot 2 would not comply with the MOS if it applied to Lethbridge Airport, but that it did not apply. This is not a matter upon which the Court requires expert evidence. The question of whether the covenant, by its own force, and according to the authorities, incorporates height limitations as prescribed by the MOS, is a matter for the Court alone. The experts further agreed that it wasn't possible to predict what determination the Civil Aviation Safety Authority was likely to make in relation to the hangar:

1. It was agreed by DJ [David Jordan] and MT [Michael Thompson] that Lethbridge Airport is an Aircraft Landing Area (ALA) that does not comply with CASR part 139 subpart 139.D

2. Based on point 1, DJ and MT agreed that CASA Manual of Standards part 139 does not currently apply to Lethbridge Airport.

3. MT was unaware of an existing covenant in relation to Lethbridge Airport and MOS part 139. MT is unaware of any other circumstances where a covenant exists on aerodrome land, specifically in relation to CASR 139 provisions. DJ and MT could not conclude the affect [sic] a covenant will have on an ALA that does not currently comply with Subpart 139.D

4. DJ and MT discussed the possibility of Lethbridge becoming a registered airport under CASR part 139 compliance. Both DJ and MT agreed under the application for registration CASR would be required to evaluate the hangar infringement in relation to MOS part 139 Chapter 7 - Obstacle Limitation and Restriction and make a determination in relation to safety and standards compliance. DJ and MT both concurred that any CASA determination in relation to the hangar cannot be accurately forecast and will require significant hazard and risk assessment input in relation to those determinations. DJ and MT could not conclude what treatment of the hangar CASA would require to enable registration due to the internal processes and consultations conducted by CASA.

5. DJ and MT agreed any application for registration of Lethbridge Airport would require a complete inspection of the facility to ensure all aspects of 139 standards are met.

67 In this case, to determine whether 'height limitations' in the covenant apply, one needs to ask three questions: first, whether the words 'height limitations' can be understood as general knowledge without reference to extrinsic evidence; secondly, if yes, what meaning would a reasonable person attribute to these words; and thirdly, given the meaning the reasonable person attributes to these words, what are the 'height limitations' in relation to Lot 2 under the MOS.

68 In my view, the term 'height limitations' can be readily understood without reference to extrinsic evidence. Having regard to the location and the physical characteristics of the properties as being located inside an airport, a reasonable reader giving the term 'height limitations' in the covenant its ordinary and everyday meaning, would understand the term as the maximum allowable height. In other words, 'height limitations' would be understood as a height restriction which cannot be breached.

69 The question then becomes: what is the maximum allowable height under the MOS in relation to Lot 2? Although the term 'height limitations' in the covenant does not need extrinsic evidence to aid its understanding, reference must be had to the whole of the MOS in order to understand whether a maximum allowable height is imposed in the MOS and if yes, what it is as applied to Lethbridge Airport.

70 I note that at this stage, I am looking purely for a maximum allowable height imposed by the MOS.

71 Importantly, s 7 of the MOS establishes two distinct concepts: 'obstacle restriction' and 'obstacle limitation'.[60] 'Obstacle restriction' applies to objects that stand on or above obstacle restriction area, which comprises the runway strips, runway end safety areas, clearways and taxiway strips.[61] S 7.1.2.1 provides that, except for approved visual and navigational aids, objects must not be located within the obstacle restriction area without the specific approval of CASA.[62] Lot 2 is not located within the obstacle restriction area.

72 Although the language of 'height limits' was used in the definition of OLS under s 7.1.1.2(b), the OLS do not, on the terms of the MOS, purport to absolutely restrict the height of objects. This is to be contrasted with the concept of 'obstacle restriction' referred to in s 7.1.1.2(a). Whereas s 7.1.2.1 prevents any objects, besides approved visual and navigational aids, from being in the obstacle restriction area without the permission of CASA,[63] nothing in the MOS prevents an object from infringing the OLS.

73 So much is identified by Mr Thompson's expert report. Furthermore, the words 'height limits' should also be understood in the context of the MOS and in connection with other parts of the MOS. Particularly, ss 8.10 and 9.4 should be considered.[64] These two sections provide for ways to treat objects that do protrude the OLS and thereby further confirm that the OLS are not intended to impose a maximum allowable height.[65]

74 It should also be noted, however, that in his report, Mr Jordan is of the view that the MOS does detail limitations on obstructions on and surrounding aerodromes.[66] Mr Jordan also refers to s 7.3.2.9(e) which provides that:

The inner transitional surface should be used as the controlling surface for navigational aids, aircraft and vehicle holding positions which have to be located near the runway. The transitional surface should be used for building height control.[67]

75 However, s 7.3.2.9 is in relation to the 'inner transitional surface' which does not form part of the OLS for a non-instrument runway which the runway at Lethbridge Airport currently is.[68]

76 If the covenant makes reference to a specific building height limit, then that limit should be adhered to. If the covenant makes reference to a neutral standard which does not explicitly exclude application to the airport, the relevant limit in the standard, if any, should also be adhered to. In this case, the covenant refers to a standard which expressly provides that it does not apply to the type of airport Lethbridge Airport currently is. In such cases, the standard would only apply if the language of the document indicates intention to the contrary.

77 It is argued by the Baums that there are three purposes that can be read into the covenant as outlined in [47] above. I now deal with these alleged purposes. The question here is whether these purposes, if established from the text of the covenant, display sufficient intention between the parties for the MOS to apply notwithstanding the explicit exclusion by the MOS in relation to ALA.

78 The first such purpose contended by the Baums is to set safety standards for safe operations and safe air navigation at Lethbridge Airport. It may be said that this purpose could be inferred from the imposition of the covenant, attempting as it does, to restrict the height to which structures on the relevant lots can be erected. However, I do not think that this is a necessary conclusion. In my opinion, it would not be necessary for such a purpose to be understood in order to enforce the height limitations, if they otherwise applied (either independently or by virtue of the covenant).

79 The second alleged purpose is to keep track with current safety standards as determined by CASA from time to time. As I have previously mentioned, it is not necessary for me to determine whether, on the proper construction of the covenant, it has the effect of requiring a registered proprietor of an affected lot to keep pace with CASA standards as they may vary from time to time.[69]

80 The third alleged purpose is to ensure that Lethbridge Airport meets the applicable standards of a registered aerodrome, which would enable it to apply for and become a registered airport, if it so chooses. I do not consider that it is reasonable to infer that the parties intended that Lethbridge Airport may, at some future point, meet the standards required to gain registration as a certified aerodrome. I say this notwithstanding that this very result may indeed have been a strongly held subjective intention and desire of the Baums.

81 In summary, I consider that the words of the covenant are readily understood, and impose a height limitation on the construction of the hangar on Lot 2, for the following reasons:

(a) the covenant is readily understood without the necessity for complex analysis or assistance by experts to understand its meaning;

(b) the joint experts both readily agreed that if the MOS applied, the construction on Lot 2 would infringe the height limitations set out therein; and

(c) the evidence supports the conclusion that both parties expected that height limitations in the MOS would apply to the construction on Lot 2. So much was revealed in the documentary evidence before the Court and in oral testimony, particularly in the advice given by Mr Baum in his email of 21 April 2015, in which he said that the hangar on Lot 2 would comply with 'the CASA Manual of Standards height restriction'.

82 In its defence and counterclaim, respectively, Barport claims that the Baums:

(a) are estopped from enforcing the covenant;[70] and

(b) engaged in misleading or deceptive conduct, or conduct liable to mislead or deceive.[71]

I will deal with each of these claims in turn.

83 Barport alleges that the Baums induced Barport to adopt the assumption that:

(a) a hangar with walls 6 metres high could be constructed on Lot 2;

(b) they did not object to the construction of a hangar with walls 6 metres high on Lot 2; and

(c) if the walls of the hangar constructed on Lot 2 were 6 metres high and this did breach the covenant, the Baums would not enforce the covenant against Barport.[72]

84 Essentially, Barport claims that the Baums induced it to assume that it could construct a hangar with walls 6 metres tall on Lot 2 without fear of adverse legal consequences.

85 Barport claims that it held this assumption over three periods:

(a) before accepting the nomination to be the purchaser on 13 May 2014;

(b) before completing the purchase of Lot 2 on 23 April 2015; and

(c) before commencing construction of a hangar on Lot 2 in October 2015.[73]

86 It further claims that it relied upon this assumption, to its detriment,[74] in doing the following:

(a) accepting the nomination to become the purchaser under the contract;

(b) completing the purchase of Lot 2 on 23 April 2015; and

(c) constructing, from October 2015, a hangar on Lot 2 with walls 6 metres high.[75]

87 Notably, in its pleadings, Barport made no claim of detrimental reliance in respect of any period after construction commenced in October 2015. As such, no act or omission by the Baums after construction commenced forms part of Barport's claim in estoppel.

88 This is true notwithstanding the fact that in the particulars for this claim, Barport alleged that '[u]ntil 5 January 2016, the Baums remained silent in relation to the height of the walls of the hangar on Lot 2'.[76] As noted by Dixon J in Wheelahan v City of Casey (No 12):

[P]articulars are not intended to fill gaps in a deficient pleading. Rather, they are intended to meet a separate requirement - namely, to fill in the picture of the plaintiff's cause of action (or defendant's defence) with information sufficiently detailed to put the other party on guard as to the case that must be met.[77]

89 For the reasons that follow, I find that the Baums are not estopped from enforcing the covenant against Barport.

90 The alleged acts or omissions by the Baums or their agents said to have induced Barport into adopting the assumption are as follows:

(a) Prior to 5 April 2014: 'Ray White Highton, on behalf of the plaintiffs...advertised each of the 17 freehold lots as blocks upon which hangars could be constructed'.[78]

(b) 5 April 2014: '[t]he vendors' statement did not:

(i) disclose any intention to have Lethbridge Airport become a registered aerodrome or certified aerodrome;

(ii) say that height limitations applicable to certified aerodromes and registered aerodromes applied to Lethbridge Airport; or

(iii) say that height limitations applicable to certified aerodromes and registered aerodromes would apply to the 17 freehold lots that were being sold by the plaintiffs.'[79]

(c) 5 April 2014: 'the auctioneer did not say during the auction of lot 2, on behalf of the plaintiffs...that:

(i) any building or hangar constructed on lot 2 would be subject to a height limitation; or

(ii) that Lethbridge Airport would be applying to become a registered aerodrome or certified aerodrome'.[80]

(d) 2 June 2014: Mr Baum sent Mr Barry an email stating in substance that 'a hangar could be constructed on Lot 2 to a height of 5.5 to 6 metres depending on the level of the lot once it had been levelled'.[81]

(e) 3 June 2014: The statement contained in the email of 2 June 2014 was repeated, in a second email.[82]

(f) 9 August 2014: 'Mr Baum...said that he hoped that all purchasers of the lots sold at Lethbridge Airport would build hangars within 6 months of settlement'.[83]

(g) 23 February 2015: 'Whyte, Just & Moore told Moores, the solicitors acting for Barport, that the plaintiffs...wanted construction of the hangar on Lot 2 completed prior to 1 February 2016'.[84]

(h) Before October 2015: Despite having been notified on 14 September 2014,[85] and 3 November 2014,[86] that Barport intended to construct a hangar on Lot 2 with walls 6 metres tall, plaintiffs remained silent.[87]

91 It was never in dispute that, having purchased Lot 2, Barport was entitled to construct a hangar upon it. As such, representations (a), (f) and (g) did not convey any information that might have led Barport into error. This leaves representations (b), (c), (d), (e) and (h).

Representation (b): The vendors' statement of 5 April 2014

92 Barport alleges that the vendors' statement did not:

(i) disclose any intention to have Lethbridge Airport become a registered aerodrome or certified aerodrome;

(ii) say that height limitations applicable to certified aerodromes and registered aerodromes applied to Lethbridge Airport; or

(iii) say that height limitations applicable to certified aerodromes and registered aerodromes would apply to the 17 freehold lots that were being sold by the plaintiffs as trustees for the G and P Baum Superannuation Fund'.[88]

93 While it is true that the listed matters were not expressed in the vendors' statement, it is unclear why the Baums were under any obligation to include them. The terms of s 32 were clearly fulfilled: on the first page of the vendor's statement, under the heading 'Restrictions', it is noted that the restrictions applying to the property are '[a]s set out in the attached copies of title documents otherwise none known to the Vendor'. Turning to those title documents, on the sixth sheet, under the heading 'Creation of restrictions', the restrictive covenant is clearly expressed.

94 By this submission, Barport effectively suggests that, in addition to notifying it of the existence of the restrictive covenant, the Baums should have told it, firstly, why such a covenant applied, and, secondly, how it should be interpreted. There is nothing on the terms of s 32 of the Sale of Land Act 1962 (Vic) to suggest that such a disclosure is necessary. Moreover, under the law of contract, such a disclosure would be of little assistance to the purchaser. As the High Court has observed: 'the legal rights and obligations of the parties turn upon what their words and conduct would be reasonably understood to convey, not upon actual beliefs or intentions'.[89] As such, it would scarcely have assisted Barport if the Baums had informed it of their views on the purpose and correct construction of the covenant.

95 To the extent that further enquiries were necessary to determine the effect of the covenant, the rule of caveat emptor suggests that Barport should have acted 'diligently, prudently and carefully in [its] own interests'[90] before proceeding with the contract. A prudent purchaser, upon discovering that a restrictive covenant of unclear effect applied to land that it hoped to purchase, would surely seek independent legal advice, or otherwise try to ascertain the covenant's effect.

Representation (c): The auctioneer's silence on 5 April 2014

96 Representation (c) was an omission by the auctioneer, namely, that he or she did not say anything during the auction to the effect that:

(A) any building or hangar constructed on lot 2 would be subject to a height limitation; or

(B) that Lethbridge Airport would be applying to become a registered aerodrome or certified aerodrome.[91]

97 This argument is without merit. Barport's defence does not express, firstly, why the auctioneer should be presumed to have any greater knowledge of the restriction applying to the land than Barport, secondly, why he or she was under a duty to disclose any such knowledge to the purchaser, or thirdly, how any such disclosure would have assisted Barport, who had already been notified of the existence of the restrictive covenant by means of the vendors' statement.

Representations (d) & (e): The emails of 2 and 3 June 2014

98 Contrary to what Barport alleges, the emails of 2 and 3 June 2014 did not contain a representation that Barport was entitled to build a hangar with walls 6 metres tall on Lot 2. The same representation was alleged in the context of Barport's claim of misleading or deceptive conduct, and is dealt with in my discussion of that issue below.[92] For now, it suffices to say that the language of the emails was too equivocal for them to have carried the meaning alleged by Barport.

Representation (h): The Baums' silence prior to October 2015

99 Barport alleges that it informed the Baums on two occasions that it intended to build a hangar on Lot 2 that would have walls 6 metres tall, and that the Baums did not object to this prior to the commencement of construction in October 2015.

100 The first occasion was on 14 September 2014, when 'Mr Baum...was told the specifications of the hangar which Barport intended to construct on Lot 2, including that the walls were to be 6 metres high'.[93] This information was contained in an email discussing group pricing of hangars, in which the 'wall height' of Mr Barry's hangar is listed as 6.0 m. This email was sent by Michael Hooker, the owner of Lot 13 on the Plan of Subdivision, which includes Lot 2. In my opinion, this communication makes the evidence in this case equivocal. The communication was from a third party and was predictive of what may be constructed on Lot 2. The question that falls upon the Court is whether that, in the totality of circumstances, the evidence supports the conclusion that it was reasonable for Barport to expect that the Baums would, in effect, advise them of height limitations. In my opinion, this is not the case.

101 The second occasion was on 3 November 2014, when 'Mr Baum...was again told the specifications of the hangar which Barport intended to construct on Lot 2, including that the walls were to be 6 metres high'.[94] This was a second email, in which the information contained in the first email was set out in the form of a table. This email was sent by John Eastwood, the owner of Lot 14 on the Plan of Subdivision.

102 Mr Baum gave evidence that he had not read the emails in question.

103 In its closing submissions, Barport suggested that:

Mr Baum's evidence that he was not interested in these emails should be rejected given his obsession with the airport, curiosity about the hangars which were to be built and responsibility for levelling the land.[95]

104 With respect, I find this submission unconvincing. It seems distinctly unlikely that Mr Baum would have read an email suggesting that Barport might breach the covenant, at such an early juncture, and failed to raise his concerns. Indeed, the proposition put to Mr Baum in cross-examination, that he had previously raised his concerns about the height of the hangar Mr Barry intended to build, would seem to run contrary to Barport's own contention. I accept Mr Baum's evidence that, at the time he received the initial email, he was 'overloaded' with work, and that he didn't make a habit of reading emails.

105 I further accept that Mr Baum felt, quite correctly, that it was not incumbent on him to monitor Barport's compliance with the terms of the covenant, and assumed that it would do so itself:

No, I was - every time I spoke to Barport, and [Mr Barry] said he was building 6 metres high, I sent some information or spoke to him, or he's reinforced to me that he wasn't going the full height. So it's up to him to - to do the levels on his own block to work out how high he's building it to be level, as far as I was concerned.

106 Mr Baum's evidence is supported by his frank admission that, upon the commencement of construction on 1 December 2015, he was 'horrified' to realise that the height of the walls of the hangar on Lot 2 would be 6 metres, but nevertheless held off from contacting Barport.

107 Barport alleges that the Baums engaged in misleading or deceptive conduct, or conduct liable to mislead or deceive, as defined by ss 4 and 18 of the Australian Consumer Law,[96] as applied in Victoria by s 8 of the Australian Consumer Law and Fair Trading Act 2012 (Vic).[97]

108 First, Barport alleges that on 2 June 2014, Mr Baum sent an email to Mr Barry that contained the following representation:

(a) the CASA Manual of Standards limited hangar heights to a maximum rise of 20% or, put more simply, a rise of 1 metre for every 5 metres distance from the edge of the runway;

(b) the land purchased by Barport was 30 metres from the edge of the runway;

(c) the level of Lot 2 would be between 0 to 0.5 metres higher than the edge of the runway;

(d) therefore the wall on Lot 2 closest to the runway could be 5.5 to 6 metres high depending on the final level of Lot 2 relative to the edge of the runway.[98]

109 Second, Barport alleges that this representation as repeated in an email sent by Mr Baum to Mr Barry on 3 June 2014.[99]

110 Third, Barport alleges that Mr Baum held the following information ('the Information'):

(a) the final level of Lot 2 relative to the runway; and

(b) that the Baums objected to the construction of a hangar on Lot 2 with 6 metre high walls,[100]

and that he failed to disclose this information to Barport.[101]

111 Barport claims that in reliance upon the two representations, and induced by the representations and Mr Baum's failure to disclose any of the Information, it completed the contract and constructed a hangar on Lot 2 with walls that were 6 metres high relative to the runway, to its detriment.[102]

112 For the reasons that follow, I find that the Baums did not engage in misleading or deceptive conduct, or conduct liable to mislead or deceive.

113 There are a variety of circumstances in which silence may amount to misleading or deceptive conduct.[103] In Rafferty v Madgwicks, the Federal Court commented that the relevant authorities 'recognise that the circumstances in which silence may support a finding of misleading or deceptive conduct are not properly subject to any unifying principle'.[104]

114 Where an allegation of misleading or deceptive conduct is alleged, the onus is on the party making the allegation to establish how the failure to disclose had the potential to mislead or deceive. In Fraser v NRMA Holdings Ltd,[105] the Court stated that:

Where the contravention of s 52 alleged involves a failure to make a full and fair disclosure of information, the applicant carries the onus of establishing how or in what manner that which was said involved error or how that which was left unsaid had the potential to mislead or deceive. Errors and omissions to have that potential must be relevant to the topic about which it is said that the respondents' conduct is likely to mislead or deceive. The need for an applicant to establish materiality is of particular importance in a case like the present one where the proposal is complex, and involves difficult questions of commercial judgment and matters of degree and conjecture as to the future about which there is room for a range of honestly and reasonably held opinions.[106]

115 Where there is an alleged representation by silence, the Court in Rafferty stated that the correct starting point is Demagogue v Ramensky;[107] a decision that 'stands primarily for the proposition that the significance of silence depends on the circumstances of the case',[108] and in which Black CJ stated the following:

Silence is to be assessed as a circumstance like any other. To say this is certainly not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive. To speak of "mere silence" or of a duty of disclosure can divert attention from that primary question. Although "mere silence" is a convenient way of describing some fact situations, there is in truth no such thing as "mere silence" because the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed.[109]

116 In the event that such a reasonable expectation arises, the Court in Rafferty v Madgwicks observed:

[T]he authorities also acknowledge that, if the circumstances of a particular case would give rise to a reasonable expectation that, if a fact existed, it would be disclosed, then the failure to disclose that fact may give rise to an inference that the fact does not exist. In this situation (ie, where there is such a reasonable expectation), a failure to disclose the existence of that fact could constitute misleading and deceptive conduct.[110]

117 In this sense, the affected party may then suffer detriment as a consequence of relying upon such an inference. One this point, in Winterton Constructions Pty Ltd v Hambros Australia Ltd,[111] Hill J observed:

[I]f the circumstances are such that a person is entitled to believe that a relevant matter affecting him or her adversely would, if it existed, be communicated, then the failure to so communicate it may constitute conduct which is misleading or deceptive because the person who ultimately may act to his or her detriment is entitled to infer from the silence that no danger of detriment existed. Thus, where a duty to speak is imposed, silence may constitute misleading and deceptive conduct.[112]

118 In establishing the weight to attribute to silence, Lockhart J, in Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd,[113] observed that:

It is difficult to conceive how mere silence by an alleged contravener could be sufficient to attract the operation of s 52, but when all the relevant circumstances of a case are analysed, silence of the alleged contravener may be the critical matter upon which reliance is placed to establish misleading or deceptive conduct.[114]

119 Based upon the authorities referred to above, the common determinant when considering whether silence constitutes misleading or deceptive conduct is the extent to which the circumstances of a case have given rise to a 'reasonable expectation' of disclosure. As such, a more detailed treatment of this expression is warranted.

120 In Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd,[115] French CJ and Kiefel J stated that the 'language of reasonable expectation is not statutory' and 'indicates an approach which can be taken to the characterisation ... of conduct consisting of, or including, non-disclosure of information'.[116]

For conduct to be misleading or deceptive it is not necessary that it convey express or implied representations. It suffices that it leads or is likely to lead into error.[117]

122 Their Honours provided some insight into where the parameters might lie in determining when such an expectation has arisen. As a general proposition, they noted that section 18[118] 'does not require a party to commercial negotiations to volunteer information which will be of assistance to the decision-making of the other party. A fortiori it does not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence'.[119]

123 Their Honours outlined considerations that might be relevant to determining whether a reasonable expectation has arisen in relation to a commercial relationship, stating:

In commercial dealings between individuals or individual entities, characterisation of conduct will be undertaken by reference to its circumstances and context. Silence may be a circumstance to be considered. The knowledge of the person to whom the conduct is directed may be relevant. Also relevant, as in the present case, may be the existence of common assumptions and practices established between the parties or prevailing in the particular profession, trade or industry in which they carry on business. The judgment which looks to a reasonable expectation of disclosure as an aid to characterising non-disclosure as misleading or deceptive is objective. It is a practical approach to the application of the prohibition in [s 18].[120]

124 This point was reiterated in Traderight (NSW) Pty Ltd v Bank of Queensland Ltd,[121] where Barrett JA (with whom Bathurst CJ and Beazley P agreed) noted that:

In assessing the quality and implications of silence and the conduct of a person that consists of remaining silent, all aspects of the objectively ascertained context will arise for consideration. Shared knowledge and assumptions - engendered, for example, by a course of dealing or a particular commercial setting or practice - of the person who remains silent and the person by whom the silence is experienced will be relevant, as will the separate knowledge of the latter.[122]

125 As to whether there is a duty to disclose, in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd,[123] Lockhart J (with whom Burchett J agreed) stated that:

The duty to disclose is not confined to cases where there are particular relationships, such as trustee and beneficiary or solicitor and client, principal and agent and guardian and ward. There is no useful purpose in seeking to analyse the circumstances in which the duty to disclose will arise as this must depend on the facts of each case.[124]

126 In Rhone-Poulenc,[125] Bowen CJ referred to situations in which the allegation regarding such conduct has been established, stating:

Dealing with the question of misrepresentation constituted by silence, there are cases which show, for example, that an omission to mention a qualification, in the absence of which some absolute statement made is rendered misleading, is conduct which should be regarded as misleading. So too is the omission to mention a subsequent change which has occurred after some statement which is correct at the time has been made where the result of the change is to render the statement incorrect so that thereafter it becomes misleading.[126]

127 In Winterton Constructions Pty Ltd v Hambros Australia Ltd,[127] Hill J stated that:

The most usual case where silence may constituted misleading conduct, is that which I have elsewhere referred to as the half-truth case. A vendor may make a series of representations about the property to be sold, but omit from them some matter which is absolutely vital, so that what is said constitutes but a half-truth.[128]

Significance of failure to make relevant enquiries

128 In Henjo Investments, the vendor failed to advise the purchaser of a business that it was subject to serious seating limitations. As to whether the purchase should have made relevant enquiries, Lockhart J said:

It is no answer to say that Collins Marrickville should have made its own inquiries and that, if it had done so, it would have found out the true position ... It is true that Mr Collins recognised the importance of verifying the material given to him by Mr Le May about the seating capacity of the restaurant and that, had his solicitor done what he should have done, the true position would have emerged and the sale probably would not have proceeded. But these circumstances did not negate the duty to disclose which the circumstances otherwise imposed.[129]

129 This point was reiterated in Traderight, where Barrett JA (with whom Bathurst CJ and Beazley P agreed) commented, with reference to Henjo Investments, that it was 'no answer' to suggest 'that the purchaser should have relied on its own inquiries'.[130] Further, with reference to CPI Group Ltd v Stora Enso Australia Pty Ltd, Barrett JA repeated this point, noting that

it is no answer to a claim of misleading or deceptive conduct by silence to say that the person misled should have made his or her own enquiries and that, had they done so, it would have revealed the true position.[131]

130 Before considering the main part of Barport's claim of misleading or deceptive conduct, it is necessary to deal briefly with one of the forms of relief sought in its counterclaim, namely a declaration that the contract was void ab initio, on the basis of misleading or deceptive conduct by the Baums. Barport is not entitled to such an order.

131 In their outline of closing submissions, the Baums argued that there was no pleaded claim in relation to any representation prior to 2 June 2014.[132] I find this conclusion inescapable. The order that the contract was void ab initio is sought in paragraph 26(a) of the counterclaim. Barport's entitlement to such relief is said to be 'by reason of the matters set out in paragraphs 2 to 23 above'.[133] In none of these paragraphs is any pre-contractual conduct by the Baums impugned. Indeed, the only possible reference to such conduct is in paragraph 5 of the counterclaim, which simply states: 'Barport refers to and repeats paragraphs 5A(a) to 5A(e) of its Defence'.[134] It is to be noted that paragraphs 5A(c) and (d)(ii) allege certain nondisclosures by the vendor and auctioneer,[135] but neither of these nondisclosures are said to have been misleading or deceptive (or liable to mislead or deceive).

132 In Wheelahan v City of Casey (No 12), Dixon J noted:

[T]he function of a pleading in civil proceedings is to alert the other party to the case they need to meet (and hence satisfy basic requirements of procedural fairness) and further, to define the precise issues for determination so that the court may conduct a fair trial.[136]

By this measure, the pleading is insufficient. A recital of facts does not constitute a pleading: it does not fall to the Court to fill in the blanks. The appropriate party to do this would be Barport (through the filing of an amended counterclaim), and the appropriate time to do so would have been before the close of pleadings.

133 In any event, even if this claim had been pleaded appropriately, it would not have succeeded, as the contract was concluded between the Baums and Ferryman Pty Ltd. Barport was not a party to the contract, but rather was the latter's nominee. As such, the appropriate party to bring such a claim would be Ferryman Pty Ltd, which is not a party to this proceeding.

134 Evidence given by Mr Barry at trial was to the effect that a meeting that he attended at Lethbridge Airport was also attended by Mr Baum. Mr Barry asserts that, at that meeting, he informed those present (including Mr Baum) that Barport intended to build a hangar on Lot 2 boundary to boundary with walls 6 metres high. Barport says that Mr Baum told Mr Barry at that point that there may be a height limit for his lot and that he would send something to Mr Barry. It is significant, according to Barport that, at that time, Mr Baum knew that the 'maximum height you could actually build to is six metres if everything's level and...it wasn't level'. I have had regard to this evidence in arriving at my decision.

135 The pleaded case of misleading or deceptive conduct did not allege any representation prior to 2 June 2014, so the Court is left with considering the following:

(a) 2 June 2014: Mr Baum sent Mr Barry an email stating in substance that 'the wall on lot 2 closest to the runway could be 5.5 to 6 metres high depending on the final level of lot 2 relative to the level of the edge of the runway'.[137]

(b) 3 June 2014: The statement contained in the email of 2 June 2014 was repeated, in a second email.[138]

(c) Between 3 June 2014 and 5 January 2016: 'Mr Baum...did not disclose any of the Information to Barport'.[139] The 'Information' is defined in the counterclaim as being information which Mr Baum was alleged have possessed during this period, namely (a) the final level of Lot 2 relative to the runway, and (b) that he and Mrs Baum objected to the construction of a hangar on Lot 2 with walls 6 metres high.[140] Barport argues that it had a reasonable expectation that Mr Baum would disclose this information before settlement,[141] based on a number of factors that most relevantly include:

(i) 'on or about 31 May 2014 Mr Barry told Mr Baum that Barport intended to construct a hangar on Lot 2';[142]

(ii) 'on 14 September 2014 Mr Baum...was told the specifications of the hangar which Barport intended to construct on Lot 2, including that the walls were to be 6 metres high';[143] and

(iii) 'on 3 November 2014 Mr Baum...was again told the specifications of the hangar which Barport intended to construct on Lot 2, including that the walls were to be 6 metres high'.[144]

136 I find that the emails of 2 and 3 June 2014 were not misleading or deceptive, or likely to mislead or deceive. The email of 2 June 2014 reads:

Warren

Maximum heights are devined [sic] by the CASA Maunual [sic] of Standards 139 Chapter 139 (attached)

Table 13.1-1: Standards for physical dimensions and obstacle limitation surfaces

Transitional surface Slope (to 45 m in height) 20%

This Standard limits hangar heights to a maximum rise 20% or put more simply a rise of 1 metre for every five metres distance from the runway strip edge

The first lots (no 2 and no 18) are 30 metres from the edge of the runway strip

This allows the closest wall to the runway of lot No 2 to be some 5.5 to 6 metre heigh [sic]. The actual height will need to take in [sic] account the final level of your lot once it has been levelled. The 5.5 m assumes the lot would be 0.5 metre higher than the runway edge.

The centre (ridge) of the Hangar can be higher because it is further away from he [sic] runway and similaly [sic] the wall furtherest [sic] from the runway could be higher still

I confirm the 3m width of land between your Hangar door and he [sic] sealed harstand [sic] will be sealed

Garry Baum

137 The email of 3 June 2014 is almost identical, the only difference being that it includes a link to the website of the Federal Register of Legislation, and specifically to the entry on the MOS.

138 The representation alleged to have been conveyed in the two emails consists of four subsidiary representations:

(a) the CASA Manual of Standards limits hangar heights to a maximum rise of 20% or put more simply a rise of 1 metre for every five metres distance from the runway strip;

(b) the land purchased by Barport was 30 metres from the edge of the runway strip;

(c) the level of Lot 2 will be between 0 to 0.5 metres higher than the edge of the runway;

(d) therefore the wall on Lot 2 closest to the runway could be 5.5 to 6 metres high depending on the final level of Lot 2 relative to the level of the edge of the runway.

Representations (a) and (b) are uncontroversial. Representations (c) and (d), however, require closer scrutiny.

139 I find that representation (c) was not made in the emails of 2 June 2014 and 3 June 2014. These emails do not conclusively state the expected height of Lot 2 relative to the runway, once levelling work was completed:

(1) The hangar wall closest to the runway is said to have an allowable height of 'some 5.5 to 6 metre heigh [sic],' indicating that the upper and lower bounds of this range were not fixed.

(2) It is further stated that '[t]he actual height will need to take in [sic] account the final level of your lot once it has been levelled', indicating that the final level of the lot, and consequently the permissible height of the hangar, was not fixed.

The language of these emails is too equivocal to carry the meaning suggested by Barport.

140 For much the same reasons, I find that representation (d) was not made. While it was true that the permissible height of the hangar 'depend[ed] on the final level of Lot 2 relative to the level of the edge of the runway', it was not stated that this height would definitely be between 5.5 and 6 metres. The use of the terms 'some' and 'actual height' indicated that this range was merely an estimate.

141 Even if the emails had contained the representations imputed to them by Barport, it was not reasonable for them to interpret them as meaning that a hangar with walls that were 6 metres high relative to the runway could be built on Lot 2. Statutory protections against misleading and deceptive conduct are not intended to be 'imposed for the benefit of persons who fail to take reasonable care of their own interests'.[145] It is not reasonable for a party, when given a range of heights to which it might be able to build, depending on the final level of the construction site, to assume that it is permitted to build a structure to the maximum height expressed in that range.[146] It is particularly unreasonable for a party to undertake such a course without checking the final level of the site, as Barport in fact did.[147]

142 Barport also alleges that Mr Baum was under a duty between 3 June 2014 and 5 January 2016 to disclose to it the following matters:

(a) 'the final level of Lot 2 relative to the runway'; and

(b) 'that he and Mrs Baum...object[ed] to the construction of a hangar on Lot 2 with walls 6 metres high'.[148]

143 I find that Mr Baum was not under a duty to disclose either matter.

Mr Baum was not under a duty to disclose the final level of Lot 2 relative to the runway

144 Barport alleged that at the time he sent the emails of 2 and 3 June 2014, Mr Baum 'knew that the level of lot 2 could not be reduced by 600 or 700 millimetres',[149] and his alleged representation in those emails that Lot 2 could be made level with the runway was, therefore, a 'half-truth' that he had a duty to correct.[150] They relied in particular on a statement made by Mr Baum in cross-examination:

I personally thought it had about 600/700 mil above the runway, if you want to know the truth, if I had to guess it. And now I find when you get the expert in they're talking 1.4. If you care to look at some of the numbers I - I've sent out telling Mr Barry; my numbers were out considerably. I thought it was much lower than that, so I'm not going to say that I was trying to deceive him or anything like that.

145 As has already been discussed, the emails contained no such representation, so there was no 'half-truth' for Mr Baum to correct. That issue is distinct, however, from question of whether Mr Baum was obliged to inform Barport of the height of Lot 2 relative to the runway, and especially that the height had not been reduced by 600-700mm.

146 The existence of such a duty turns on whether, in levelling Lot 2, Mr Baum should have determined the height of the lot, and conveyed that information to Barport. I find that he was under no obligation to do so.

147 It appears, on the evidence presented to the Court, that each party assumed that the other was responsible for checking the height of the lot. Mr Baum assumed that it was up to Mr Barry 'to do the levels on his own block to work out how high he's building [the hangar] to be legal', whereas Barport assumed that Mr Baum would check the height when he levelled the lot. Ultimately, Mr Baum's assumption was reasonable, while, in my opinion, Barport's was not.

148 First, at no point did Mr Baum promise that he would level Lot 2 to a specified height, and at no point did Barport request that he do so.

149 Second, Mr Baum did not hold any actual knowledge such as might enliven a duty to disclose. This is not a situation where the vendor was aware of the 'true facts' and withheld them from the purchaser.[151] Rather, Barport effectively suggests that Mr Baum was obliged to make ascertain the height of the lot, and then inform them of it. It would be onerous to find such a duty: in order to truly 'know' the height of the lot, Mr Baum would have had to undertake the kind of measurements that are usually done by a surveyor, at the expense of the purchaser of land (and not usually done by a vendor, free of charge).

150 Third, it was not reasonable for Barport to assume that Mr Baum would level Lot 2 to a height that would allow for the immediate construction of a hangar without further measurements being made. Mr Baum did not level the lot pursuant to any contract, and was not paid to for his work. The levelling works were ad hoc: Mr Baum did not initially intend to level lot 2, but decided he might as well do so after levelling other lots nearby. He assumed, as Barport should have assumed, that the nature of the arrangement meant that he didn't need to be 'too fussy about it'.

151 Fourth, in any event, it was reasonable for Mr Baum to assume that Barport, as the constructing party, would check the height of Lot 2, and make any necessary adjustments, before commencing construction. As the High Court has made clear, and as I have noted, statutory protections against misleading or deceptive conduct '[do] not impose on a party an obligation to volunteer information in order to avoid the consequences of the careless disregard, for its own interests, of another party of equal bargaining power and competence'.[152] Mr Baum was not obliged to save Barport from its own carelessness.

152 This submission essentially amounts to the suggestion that Mr Baum's actions in levelling Lot 2 absolved Barport of any responsibility whatsoever to measure the land's height before beginning construction. In my opinion, this is an unacceptable shift in the balance of risk and obligation that usually applies to the sale of property, and would run contrary to the expectation that purchasers act 'diligently, prudently and carefully in their own interests'.[153]

Mr Baum was not aware of the hangar's height prior to 1 December 2015

153 I find that, prior to 1 December 2015, Mr Baum was not aware that the hangar Barport intended to construct on Lot 2 would have 6 metre high walls, and it was reasonable for him to assume that it would not. In Mr Baum own words: 'up until [1 December 2015] I still thought Mr Barry had done calculations to know what he could do. I wasn't still fully aware of how to do these perfect calculations ... It's not my problem'.

154 This issue has already been canvassed in relation to Barport's claim in estoppel, which cited two emails sent to Mr Baum on 14 September 2014 and 3 November 2014.[154] However, one further alleged notification was relied upon by Barport in its claim in misleading and deceptive conduct.

155 Barport alleges that Mr Baum was informed by Mr Barry, first in a conversation of 19 April 2015, and again in an email dated 21 April 2015, that a cantilever track Barport intended to install on Lot 2 would be 5.5m high relative to the runway. In cross-examination, it was put to Mr Baum that if he had calculated the permissible height of the track relative to the runway, he would have found that the track which Barport intended to install would exceed the OLS.

156 I find that it would be unreasonable to expect that Mr Baum, who was not the party bound by the covenant, should perform such calculations, especially when Mr Barry had asserted in his email that the 'CASA Manual of Standards height restriction would be complied with'. Indeed, Mr Baum took the email to mean that Mr Barry 'had levels done to know how high he could build at lot 2'. It did not fall to Mr Baum to ensure Barport's compliance with the covenant, and it would be impermissible to so shift the burden of monitoring compliance.

Mr Baum became aware of the hangar's height on 1 December 2015

157 Mr Baum first became aware that the hangar that Barport was constructing on Lot 2 would be have walls that were 6 metres high on 1 December 2015. On this date, the steel which was to be used for the vertical pillars of the hangar walls was delivered. The following exchange took place between counsel for Barport and Mr Baum during cross-examination:

Now, you told her Honour that when the steel for lot 2 was being unloaded you spoke to Mr Carson, do you remember giving that evidence?---Yes.

And these pieces of steel were vertical beams that were to be used for the sides of the hangar, correct?---Yes, all - all different components of the hangar.

Including the vertical beams?---Yes, the - the actual posts or column, whatever you want to call them.

And Mr Carson told you that the hangar on lot 2 was going to be 6 metres high, didn't he---Yes.

HER HONOUR: What date was this?

MR MEREINE: And this, Mr Baum, was before the construction of the hangar on lot 2, wasn't it?---Yes.

And what date do you say that is, Mr Baum?---Ah, I - I - before Christmas sometime, before Christmas, when he was - when we were unloading the stuff.

And you told Her Honour as well that you told Mr Carson that the hangar was not supposed to be 6 metres high, correct?---Correct.

And you told Her Honour as well that you were absolutely horrified that day, correct? - Yes.

That's your evidence about that day?---Yes.

So just before the frame of the hangar was going to be build you knew that the hangar was going to be 6 metres high, didn't you?---Yes.

158 Mr Baum conceded that he did not immediately contact Mr Barry after making this realisation. The Baums first warned Barport that it might be in breach of the covenant on 5 January 2016.

Did Barport have a reasonable expectation that Mr Baum contact it on or shortly after 1 December 2015?

159 It has been established that Mr Baum knew, from 1 December 2015, that the hangar that Barport was building on Lot 2 would have walls that were 6 metres high, and that he did not inform Barport that he objected to this construction until 5 January 2016.

160 However, this omission does not necessarily constitute misleading or deceptive conduct. Per Black CJ in Demagogue v Ramensky, there is no 'general duty of disclosure' in the context of misleading and deceptive conduct.[155] He further noted that:

the significance of silence always falls to be considered in the context in which it occurs. That context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if particular matters exist they will be disclosed.[156]

161 The importance of the surrounding context in determining whether a given omission constitutes misleading and deceptive conduct was reinforced by the Federal Court in Rafferty, who noted that 'the significance of silence depends on the circumstances of the case'.[157]

162 The question, then, is whether Barport's expectation that Mr Baum would inform it 'that he and Mrs Baum...object[ed] to the construction of a hangar on Lot 2 with walls 6 metres high'[158] was reasonable in the circumstances in which that expectation was held.

163 While it is true that 'but for' Mr Baum's silence between 1 December 2015 and 5 January 2016, Barport may have halted construction more promptly, and thereby reduced their loss somewhat, this does not necessarily entitle Barport to relief. The whole of the circumstances need to be taken into account to determine whether the relief sought by Barport is justified.

164 The situation that Barport found itself in from 1 December 2015 onwards was primarily of its own making. Barport, through its disregard for its own interests, placed itself in a vulnerable position, where it was reliant on Mr Baum to inform it that it was in breach of the covenant. It was a party of at least equal bargaining power and competence, and as such should have taken steps to ensure its own compliance with the covenant.[159] It signally failed to do so:

(a) Mr Barry did not seek independent legal advice on the effect of the covenant, and relied, in effect, on the silence of the Baums' real estate agent and lawyer. He assumed that he could build a hangar 6 metres in height because 'no one had said that [he] couldn't'. He did not ask the Baums' lawyer for any advice about the effect of the covenant.

(b) Mr Barry conceded that he 'didn't really look too closely at the Manual of Standards' until Mr Baum raised it as an issue in January 2016.

(c) Mr Barry did not engage a surveyor to measure the height of Lot 2 relative to the runway, which he suggested was because he was relying on Mr Baum's surveyors. However, despite his purported reliance on Mr Baum's surveyors, Mr Barry was never informed of the final level of Lot 2 by Mr Baum, and there is no evidence to suggest that Mr Barry ever asked Mr Baum for this information.

(d) Mr Baum was given no instructions by Mr Barry about the levelling of Lot 2. The ad hoc nature of the earthworks would not suggest to a reasonable observer that Mr Baum intended to ensure that Lot 2 was level with the runway.[160]

(e) Mr Barry advised Mr Baum by email that the hangar that Barport was constructing would comply with the MOS.

165 In the circumstances, Barport's expectation that Mr Baum would inform it that he objected to their construction of a hangar on Lot 2 with 6 metre high walls was unreasonable. Barport had ample opportunity to make enquiries about the effect of the covenant, the height of the lot, and the consequent permissible height of the hangar, and did not do so.

166 I make this finding notwithstanding the conversation that allegedly occurred between Mr Baum and Mr Barry on 5 December 2015, at a Christmas party for the Geelong Aviators Club. Mr Barry alleged that during that party, Mr Baum said nothing to him about the height of the hangar walls. I find that it was not reasonable for Mr Barry to expect that Mr Baum would inform him of his objections in a conversation at a casual event. Circumstances on casual and social occasions do, at times, involve comments or observations which may, viewed in the cold light of day, have different or more important and significant consequences. However, in my opinion, I do not consider that the interaction, based on the evidence at trial, justifies the conclusion that a social interaction, notwithstanding that it may have had some business context and content, ought result in the conclusion that a representation was made as to the height of the hangar. In my opinion, there are too many countervailing factors which militate against this conclusion. Such a nondisclosure should not allow Mr Barry to avoid the full force and effect of the covenant.

167 This failure is determinative despite the statement of Lockhart J in Henjo Investments, to the effect that it is no answer to a claim of misleading or deceptive conduct by silence to say that the person misled should have made his or her own inquiries and that had they done so, it would have revealed the true position.[161] This statement must be read in light of the subsequent decision of the High Court in Miller v BMW, who held the failure of a person to make enquiries is a relevant consideration in assessing a claim of misleading and deceptive conduct, although it will not automatically defeat that person's claim.[162] In the present context, Barport's failure to make enquiries was so severe as to amount to a 'careless disregard' for its own interests.[163]

168 In short, if a purchaser fails to take reasonable measures to ensure that it is acting in accordance with a restrictive covenant, it is no answer for it to say that the vendor should have informed it that it was in breach. It would be unduly onerous, and contrary to the aforementioned authorities, to impose the burden of monitoring compliance on the vendor.

169 For the reasons above, I determine the following:

(a) Barport is in breach of the covenant in relation to the construction of the hangar on Lot 2;

(b) I find that the Baums did not engage in misleading or deceptive conduct; and

(c) There is no basis for any finding that the Baums should be estopped from enforcing the covenant or that the contract was void ab initio.

170 Having found that Barport breached the covenant, the appropriate order is for the demolition or structural modification of the hangar to comply with the standards defined in the MOS.

171 I will hear the parties on the form of the orders and on the question of costs.

[1] Civil Aviation Safety Authority, Manual of Standards Part 139 - Aerodromes (Version 1.12: January 2014) s 1.1.1.1.

[3] Plaintiffs' Closing Submissions [23]-[32], [38]-[40].

[8] Defendant's Closing Submissions [23].

[17] [2006] FCA 22 ('Bradshaw').

[18] Ibid [24]; see also Spotlight Pty Ltd v NCON Australia Ltd [2012] VSC 232 [25]-[26] ('Spotlight').

[19] Spotlight [2012] VSC 232 [26].

[20] Bradshaw [2006] FCA 22 [26].

[21] Plaintiffs' Re-opening Application Submissions [3].

[24] Advanced Fuels Technology v Blythe [2017] VSC 250 [2].

[25] Plaintiffs' Re-opening Application Submissions [5].

[26] Defendant's Re-opening Application Submissions [4].

[28] Civil Procedure Act 2010 (Vic) s 7.

[29] Aqua-Marine Marketing Pty Ltd v Pacific Reef Fisheries (Australia) Pty Ltd (No 4) (2011) FCR 479, 482.

[30] Evidence Act ss 141(1), 183.

[31] Defendant's Re-opening Application Submissions [2].

[34] Civil Aviation Safety Authority, Manual of Standards Part 139 - Aerodromes (Version 1.12: November 2014).

[35] Plaintiffs' Closing Submissions [15].

[44] Defendant's Closing Submissions [18]-[19].

[54] Russell Maynard Clare & Ors v Eva Bedelis [2016] VSC 381, [31] (citations omitted).

[55] Civil Aviation Safety Authority, Manual of Standards Part 139 - Aerodromes (Version 1.12: November 2014) ss 1.1.1.4, 1.1.1.7.

[59] Ibid s 9.4.

[60] Ibid ss 7.1.2, 7.1.3. See also s 7.1.1.2.

[64] Ibid s 8.10, 9.4.

[66] Note also that Mr Jordan's report is based on MOS version 1.13 (March 2016) and Mr Thompson's report is based on both versions 1.13 and 1.12 (November 2014). Mr Thompson has compared the two versions and stated in his report that there are no material differences in content relevant to this assessment.

[67] Civil Aviation Safety Authority, Manual of Standards Part 139 - Aerodromes (Version 1.12: November 2014) s 7.3.2.9(e) (emphasis added).

[69] See above para [48].

[77] Wheelahan & Anor v City of Casey & Ors (No 12) [2013] VSC 316 [25], citing Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279, 286 (Mason CJ and Gaudron J).

[89] Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471, 483 [34] (Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ), citing Gissing v Gissing [1970] UKHL 3; [1971] AC 886, 906 (Diplock LJ); Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441, 502 (Diplock LJ).

[90] Woolcock St Investments Pty Ltd v CDG Pty Ltd [2004] HCA 16; (2004) 216 CLR 515, 592 [227] (Callinan J) ('Woolcock').

[92] See below paras [136]-[141].

[95] Defendant's Closing Submissions [61].

[96] Competition and Consumer Act 2010 (Cth) sch 2 ('Australian Consumer Law') ss 4, 18.

[97] Australian Consumer Law and Fair Trading Act 2012 (Vic) s 8.

[103] Miller v BMW (2010) 241 CLR 357, 368 [16].

[104] Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1, 68 [278] (Kenny, Stone and Logan JJ) (emphasis added). See also Russell V Miller, Miller's Australian Competition and Consumer Law Annotated (Lawbook Co, 40th ed, 2018) 1244 [ACL. 18.380] ('Miller').

[105] (1995) 55 FCR 452.

[106] Ibid 467-8 (Black CJ, von Doussa and Cooper JJ) (emphasis added).

[107] Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31.

[108] Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1, 68 [277] (Kenny, Stone and Logan JJ) (emphasis added).

[109] Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31, 32 (emphasis added). See also Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1, 68 [277].

[110] Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1, 68 [278] (Kenny, Stone and Logan JJ) (emphasis added).

[111] Winterton Constructions Pty Ltd v Hambros Australia Ltd [1992] FCA 582; (1992) 39 FCR 97 ('Winterton').

[112] Winterton [1992] FCA 582; (1992) 39 FCR 97, 114 (emphasis added).

[113] [1986] FCA 218; (1986) 12 FCR 477 ('Rhone-Poulenc').

[115] (2010) 241 CLR 357 ('Miller v BMW').

[116] Ibid 369 [19] (emphasis added).

[117] Ibid 368 [15] (citations omitted) (emphasis added).

[118] Australian Consumer Law s 18 (dealt with in Miller v BMW as s 52 of the Trade Practices Act 1974 (Cth)).

[119] Ibid 371 [22] (emphasis added). See also Miller, 1244 [ACL. 18.380].

[120] Ibid 369-70, 371 [20] (citations omitted) (emphasis added). See also Lam v Austintel Investments Australia Pty Ltd (1989) 97 FLR 458, 475 (Gleeson CJ).

[121] [2015] NSWCA 94 ('Traderight').

[123] [1988] FCA 40; (1988) 39 FCR 546 ('Henjo Investments').

[124] Ibid 557 (emphasis added). In Commonwealth Bank of Australia v Mehta (1991) 23 NSWLR 84, Samuels JA (citing French J in Taco Company of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177, 202) stated that 'silence is not misleading only where there is a duty to disclose at common law or in equity. It may simply be the element in all the circumstances of a case ... which renders the conduct in question misleading or deceptive, whether or not it also constitutes breach of some other precept of law or equity': at 88 (emphasis added).

[125] Rhone-Poulenc [1986] FCA 218; (1986) 12 FCR 477, cited in Winterton [1992] FCA 582; (1992) 39 FCR 97, 112-123 (Hill J).

[127] Winterton [1992] FCA 582; (1992) 39 FCR 97.

[129] Henjo Investments [1988] FCA 40; (1988) 39 FCR 546, 557-8 (citation omitted; emphasis added).

[130] Traderight [2015] NSWCA 94 [187].

[132] Plaintiffs' Closing Submissions [46].

[135] See paras [92]-[97] above.

[136] Wheelahan v City of Casey [2013] VSC 316 [25] (Dixon J).

[145] Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, 199 (Gibbs CJ).

[146] As Mr Baum says that he assumed after reading the email of 2 June 2014. See Defendant's Closing Submissions [52].

[147] See below, para [164].

[149] Defendant's Closing Submissions [51].

[150] Winterton [1992] FCA 582; (1992) 39 FCR 97, 113-4 (Hill J).

[151] C.f. Henjo Investments [1988] FCA 40; (1988) 39 FCR 546, 556 (Lockhart J).

[152] Miller v BMW (2010) 241 CLR 357, 371 [22].

[153] Woolcock [2004] HCA 16; (2004) 216 CLR 515, 592 [227] (Callinan J).

[154] See above paras [100]-[106].

[155] Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31, 32.

[157] Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1, 68 [277], citing Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31.

[159] Miller v BMW (2010) 241 CLR 357, 371 [22].

[160] See above para [150].

[161] Henjo Investments [1988] FCA 40; (1988) 39 FCR 546, 557-8.

[162] Miller v BMW (2010) 241 CLR 357, 385 [91] (Heydon, Crennan and Bell JJ).