Robinson v 470 St Kilda Road Pty Ltd

Federal Court of Australia (Full Court)|2018-06-01|Before: Markovic JJ

BACKGROUND 63 The following summary of the uncontroversial facts is taken largely from the reasons of the primary judge. 64 In October 2010, Reed Constructions Australia Pty Ltd (Reed) as contractor, entered into a design and construct contract with St Kilda Road, as principal, for the redevelopment of a building at 470 St Kilda Road, Melbourne. The contract works involved converting an office building into a 14 story residential apartment building. 65 Clause 37.1 of the contract provided for Reed to make payment claims on the 28th day of each month for "work under contract" (WUC) undertaken in that month. The parties adopted a standard practice for dealing with the monthly payment claims, which involved Reed providing the payment claim to St Kilda Road's representative, together with a statutory declaration as to the payment of Reed's subcontractors and suppliers. The statutory declaration was provided pursuant to cl 38.1 of the contract, which provided, relevantly: 38.1 WORKERS AND SUBCONTRACTORS If requested by the Principal or the Principal's Representative, the Contractor shall give in respect of a payment claim, documentary evidence of the payment of moneys due and payable to: (a) workers of the Contractor and of the subcontractors; and (b) subcontractors, in respect of WUC the subject of that payment claim. If the Contractor is unable to give such documentary evidence, the Contractor shall give other documentary evidence of the moneys so due and payable to workers and subcontractors. Documentary evidence, except where the Contract otherwise provides, shall be to the Principal's Representative's satisfaction. … 66 In November 2011, Reed proposed that it be permitted to make early payment claims over the Christmas period and up to February 2012, covering payment claims no. 14 (November 2011), no. 15 (December 2011), no. 16 (January 2012), and no. 17 (February 2012). The proposal was accepted by St Kilda Road. 67 In respect of payment claim no. 15, the new arrangement was that Reed would submit its claim on 12 December 2011 for works completed up to 22 December 2011. On 12 December 2011, Reed sent payment claim no. 15 to St Kilda Road's representative, accompanied by a statutory declaration made by Robinson. Robinson was the chief operating officer of Reed. He declared, relevantly: That to the best of my knowledge and belief having made all reasonable enquiries, at this date - ... all sub-contractors or suppliers of material who are or at any time have been engaged on the work under the Contract have been paid in full all monies which have become payable to the sub-contractor under the terms of the sub-contract or to the supplier of materials under the terms of the agreement for supply. 68 Reed issued a tax invoice dated 22 December 2011 in the sum of $1,426,641.70, and the applicant paid it on 11 January 2011. 69 On 31 January 2012, Reed served payment claim no. 16, supported by another statutory declaration of Robinson which was dated 31 January 2012, but was otherwise in the same terms. 70 By early February 2012, all of Reed's subcontractors had abandoned the site. Reed provided a "creditors' list" to St Kilda Road's representative showing that payments of $175,242.61 were overdue to subcontractors and suppliers in respect of the St Kilda Road project from October 2011, and payments of $2,585,512.60 were overdue from November 2011. 71 On 6 February 2012, St Kilda Road issued a show cause notice under cl 39.2 of the contract, relying on Robinson's statutory declaration of 31 January 2012 as grounds for terminating the contract. The notice stated that Reed had committed a substantial breach of the contract because it "knowingly provided a Statutory Declaration containing an untrue statement, namely that all subcontractors or suppliers of materials who are or at any time have been engaged on the work under the contract have been paid in full all monies which have become payable". On 1 March 2012, the applicant terminated the contract pursuant to cl 30.4 on the ground contained in the show cause notice. Reed did not contest the termination. 72 On 29 February 2012, Reed issued payment claim no. 17 in the amount of $929,388.76. Unsurprisingly, the payment claim was not accompanied by any statutory declaration. The claim was not accepted by St Kilda Road. 73 By February 2012, the contract works were a little over 90% complete. St Kilda Road was required to make "restart" payments totalling about $2.8 million to subcontractors to get them back to finish the works. The primary judge noted that no claim was made by St Kilda Road in the proceeding in respect of those payments. 74 On 20 March 2012, Reed sought adjudication of payment claim no. 16 pursuant to the Building and Construction Industry Security of Payment Act 2002 (Vic) (Security of Payment Act). The adjudicator delivered a determination favourable to Reed, namely that St Kilda Road pay the full amount of the claim of $760,698.84. 75 On 16 April 2012, St Kilda Road issued proceedings in the Supreme Court of Victoria against Reed claiming damages of approximately $5.63 million arising out of the termination of the contract. 76 On 17 April 2012, St Kilda Road sought judicial review in the Supreme Court of Victoria of the determination in respect of payment claim no. 16. St Kilda Road provided security by way of bank guarantee for the amount of $760,698.84. The proceeding was dismissed by Vickery J on 7 June 2012: 470 St Kilda Road Pty Ltd v Reed Constructions Australia Pty Ltd [2012] VSC 235. 77 Reed sought adjudication of payment claim no. 17. On 18 May 2012, the adjudicator delivered a determination that St Kilda Road pay to Reed an amount of $661,127.50. On 22 June 2012, St Kilda Road filed an application for judicial review in respect of that determination. St Kilda Road provided security by way of bank guarantee for the adjudicated amount 78 On 9 July 2012, a liquidator was appointed to Reed. Upon that happening, Reed's rights under the Security of Payment Act were at an end: see Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd (2016) 116 ACSR 493 (at [76]-[90]). 79 On 12 October 2012, the applicant was granted leave to appeal to the Court of Appeal from the judgment of Vickery J, but no steps were taken to progress the appeal. 80 Eventually, the liquidator reported that Reed had unsecured creditors totalling $132 million, none (including the applicant) of whom received any dividend. 81 In March 2013, St Kilda Road settled all claims by and against the liquidator on terms requiring St Kilda Road to pay $100,000, while recovering in full its bank guarantees.

THE PRIMARY JUDGE'S FINDINGS ON CONTROVERSIAL ISSUES 82 Section 18 of the ACL provides: A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead to deceive. 83 In support of payment claim no. 15, Robinson had declared that to the best of his knowledge and belief, having made all reasonable enquiries, all relevant subcontractors and suppliers had been paid in full. The primary judge held at [70] that the limited enquiries Robinson had made could on no view be said to be reasonable for the purposes of his statutory declaration. His Honour held (at [75] and [77]) that, accordingly, the declaration was materially untrue and misleading or deceptive. 84 The primary judge indicated (at [78]) that the next issue was whether St Kilda Road had suffered loss and damage "by" Robinson's misleading or deceptive conduct. Two witnesses for St Kilda Road gave evidence to the effect that if Robinson had not signed the statutory declaration, or had disclosed the true position, payment claim no. 15 would not have been approved or paid to Reed on 11 January 2012 or at all. They gave evidence that St Kilda Road would have issued a show cause notice and terminated the contract, as it had following the receipt of payment claim no. 16. 85 The primary judge found: [85] ...I have no hesitation in accepting their evidence that had [the appellant] disclosed the true position, either at 12 or 22 December 2011, the [respondent] would have triggered the show cause process in mid-January [2012], not in February [2012]. It follows as a matter of common sense that the consequence of doing so would have been that it would not have paid the sum of $1,426,641.70, or any sum, in respect of payment claim no. 15. 86 His Honour then (at [87]) considered a submission by Robinson that St Kilda Road did not have any contractual right to withhold payment of payment claim no. 15, or at least the part of the payment claim that represented amounts that had in fact been paid to subcontractors. Robinson relied on cl 38.2 of the contract, which provided: 38.2 WITHHOLDING PAYMENT Subject to the next paragraph and to law, the Principal's Representative may reject in a payment schedule so much of Payment Claim that equates to the potential claims of workers of the Contractor and of the subcontractors and their respective workers the subject of clause 38.1 until the Contractor complies with clause 38. 1. The Principal shall not reject in a payment schedule such moneys in excess of the moneys evidenced pursuant to clause 38.l as due and payable to workers and subcontractors. 87 His Honour noted (at [88]) that Robinson submitted, and St Kilda Road accepted, that by cl 38.2, St Kilda Road was only entitled to reject in a payment schedule "so much of a Payment Claim that equates to the potential claims of the...subcontractors...until the Contractor complies with cl 38.1". 88 His Honour went on to say: 88 …But that is not the point. 89 As the applicant submitted, this is an "all or nothing" case. The applicant's case does not depend upon needing to prove that, as at 12 or 22 December 2011, the applicant could have proved a case that nil amount, or any particular or precise amount, was owing. 90 The applicant's pleaded case is that the statutory declaration, a critical part of the "documentary evidence" referred to in cl 38.1, was materially false. As the applicant submitted, it had no obligation to pay any moneys to Reed until Reed first properly complied with its obligations under cl 38.1 and provided the required proof of payment. On the evidence, not only did Reed not properly comply with cl 38.1 in respect of WUC up to 12 or 22 December 2011, as senior counsel for the applicant put it "by December 2011 it could never properly comply with cl 38.1 and it never again did." 91 For the foregoing reasons, the applicant has made good its case under the ACL. 89 His Honour (at [92]-[97]) then considered Robinson's submission that the misleading or deceptive conduct claim was apportionable under Pt IVA of the ACL. Robinson had submitted that 50% of the responsibility lay with Reed, on whose behalf Robinson made the statutory declaration. The primary judge rejected that submission, firstly, because there was no evidence that suggested that Reed misled Robinson or caused him to make the statutory declaration and, secondly, because the declaration on its face made it clear that it was Robinson who made the enquiries and that it was his own knowledge and belief in respect of which he made the declaration. Further, his Honour held that Robinson's status as an employee of Reed could not by itself justify apportioning liability. 90 The primary judge then considered St Kilda Road's claim of negligent misrepresentation (at [98]-[100]), noting that little was said about it during the trial. His Honour held that Robinson owed St Kilda Road a duty to exercise reasonable care in making each of the statements contained in the statutory declaration, and that Robinson had breached that duty. His Honour held that St Kilda Road had suffered damage represented by the sum it paid in respect of payment claim no. 15 for the same reasons given with respect to the misleading or deceptive conduct claim. 91 His Honour concluded (at [101]) that there would be judgment for the applicant in the sum of $1,426,641.70, plus interest.

THE NOTICE OF APPEAL AND THE NOTICE OF CONTENTION 92 Robinson abandoned the first two grounds of his notice of appeal. The remaining grounds are: Causation 3. The Court erred in holding that the consequence of the Appellant's failure to disclose the true position about the overdue accounts to subcontractors and suppliers was that the Respondent "would not have paid the sum of $1,426,641.70, or any sum, in respect of payment claim 15" (Reasons at [85]). 4. The Court should have held that the Respondent had not established: a. that it could and would have withheld payment to Reed Constructions Australia Pty Ltd (Reed) of the whole of the sum paid for payment claim 15; and b. that it could and would have retained the whole of the sum paid for payment claim 15, including that it would not have paid any sum to subcontractors and suppliers (where such sum had not previously been paid by Reed), and/or to the liquidators of Reed, in respect of the works the subject of payment claim 15. Loss or damage 5. The Court erred in holding, on the basis of the counterfactual identified in ground 3 above, that the loss or damage suffered by the Respondent was the full amount of the amount paid for payment claim 15. 6. The Court should have held, for the reasons identified in ground 4 above, that the Respondent would have had to pay some amounts to subcontractors and/or suppliers and/or to the liquidators of Reed, in respect of the works the subject of payment claim 15, and that because the Respondent presented its damages claim as an "all or nothing" case (Reasons at [89]), the Respondent had failed to establish that the loss or damage suffered by the Respondent was the full amount of the amount paid pursuant to payment claim 15. Proportionate liability 7. The Court erred in holding that no part of the Respondent's claim should be apportioned (Reasons at [96]). 8. The Court should have held that Reed Constructions Australia Pty Ltd was directly and jointly liable for the damage the subject of the claim and that the Respondent's liability was limited to 50% of the damages claimed. 93 St Kilda Road complains, with some justification, about the generality of the grounds of appeal. The grounds do no more than assert that the primary judge erred in holding as he did and failing to hold differently. The grounds do not identify with particularity the errors asserted to have been made by the primary judge. 94 In Robinson's written submissions concerning the first four grounds, it became apparent that his principal allegation is that the primary judge erred by failing to consider several submissions advanced by him concerning whether loss and damage had been sustained and the quantum of damages. Robinson's argument is, in substance, that if the primary judge had considered those submissions, his Honour would not have made the findings described in Grounds 3 and 5 and would instead have made the findings described in Grounds 4 and 6. 95 St Kilda Road complains, again with some justification, that Robinson should have specified in the notice of appeal the ground that the primary judge failed to deal with all of its submissions, and not merely raised it in their written and oral submissions. However, the ground can be considered to be encompassed within the broad pleaded grounds. The submissions can be regarded as providing particulars of the grounds. St Kilda Road has had an adequate opportunity to deal with Robinson's submissions. The ground should be considered by the Court. 96 Robinson has filed a notice of contention containing the following grounds: 1. In reaching the conclusion at [85] of its Reasons that the Respondent "would not have paid the sum of $1,426,641.70, or any sum, in respect of payment claim no. 15", the Court should also have found that any entitlement that arose to Reed Constructions Australia Pty Ltd ("Reed") in respect of Payment Claim 15 pursuant to the Building and Construction Industry Security of Payment Act 2002 (Vic) ("the Act") would not have affected the Respondent's loss and damage in circumstances where: (a) the evidence adduced at trial established that, by December 2011, Reed was not able to pay its debts as and when they fell due and the Respondent could have and would have obtained a stay on execution of any judgment that Reed may have obtained pursuant to the Act in respect of Payment Claim 15; (b) pursuant to s 47 of the Act, any entitlement by Reed in respect of Payment Claim 15 was, at best, interim only, and the evidence adduced at trial established that the Respondent had a significant potential offsetting claim that greatly exceeded the amount of Reed's interim entitlement in respect of Payment Claim 15; and (c) the Liquidator of Reed settled Reed's unpaid Payment Claims 16 and 17 for a sum of $100,000, and the evidence adduced at trial established that the Liquidator of Reed did not have the resources to pursue, and would not on balance have in fact pursued, any claim against the Respondent for Payment Claim 15 had that claim not been paid. 2. The Court ought to have found that the conclusion at [97] of its Reasons that "no part of the claim should be apportioned" was supported by further matters, namely that: (a) the Appellant had not pleaded or established at all the existence of any apportionable claim by the Respondent against Reed that gave rise to an apportionment; (b) if (which is denied) such an apportionable claim against Reed was made out by the Appellant, then the relative causal potency of the conduct of the Appellant and the conduct of Reed in causing the Respondent's loss and damage militated against any apportionment of the loss to Reed; and/or (c) if (which is denied) such an apportionable claim against Reed was made out by the Appellant, then the relative causal potency was such that 100% of any apportionment ought to fall to the Appellant for the Respondent's loss, as it was he, and not Reed, who bore the causative responsibility as the true cause of the said loss. 97 From Ground 1 of the notice of contention, it can be inferred that St Kilda Road anticipated the complaint ultimately made by Robinson about the primary judge's failure to deal with all of its submissions.

Causation and damages 98 As has been noted, the principal allegation of error concerning causation and damages made by Robinson is that the primary judge failed to consider several of Robinson's submissions. That makes it necessary to identify the competing submissions in respect of causation and damages and then to consider his Honour's reasons. In order to put those submissions into context, it is also necessary to examine the relevant provisions of the ACL and some of the principles concerning causation and damages. 99 The appropriate starting point is s 236 of the ACL, which provides: 236 Actions for damages (1) If: (a) a person (the claimant) suffers loss or damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention. ... 100 Section 237 of the ACL provides: 237 Compensation orders etc. on application by an injured person or the regulator (1) A court may: (a) on application of a person (the injured person) who has suffered, or is likely to suffer, loss or damage because of the conduct of another person that: (i) was engaged in a contravention of a provision of Chapter 2, 3 or 4; or ... ... make such order or orders as the court thinks appropriate against the person who engaged in the conduct, or a person involved in that conduct. … (2) The order must be an order that the court considers will: (a) compensate the injured person, or any such injured persons, in whole or in part for the loss or damage; or ... 101 Section 243 of the ACL provides: 243 Kinds of orders that may be made Without limiting section 237(1), 238(1) or 239(1), the orders that a court may make under any of those sections against a person (the respondent) include all or any of the following: ... (e) ... an order directing the respondent to pay the injured person the amount of the loss or damage; ... 102 Having found that Robinson had engaged in misleading and deceptive conduct, the primary judge stated (at [78]) that the next issue was whether St Kilda Road had suffered loss and damage "by" that conduct, referring to Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 (at [34], [38] and [95]). In Marks, the High Court was concerned with ss 82 and 87 of the Trade Practices Act 1974 (Cth) (TPA), which provided, in effect, that the loss or damage that may be recovered is the amount of the loss or damage suffered "by" the conduct of another person that was done in contravention of Pt IV or Pt V. In contrast, ss 236, 237 and 243 of the ACL are concerned with loss or damage that may be recovered "because of" the conduct of another person that was done in contravention Ch 2. The difference in expression does not affect this case. 103 The jurisprudence concerning ss 82 and 87 of the TPA remains relevant to the construction and application of s 236, 237 and 243 of the ACL. In Marks, the plurality considered the issues of causation and damages, saying (at [38]): [The] inquiry is one that seeks to identify a causal connection between the loss or damage that it is alleged has been or is likely to be suffered and the contravening conduct. But once that causal connection is established, there is nothing in s 82 or s 87 (or elsewhere in the Act) which suggests either that the amount that may be recovered under s 82(1), or that the orders that may be made under s 87, should be limited by drawing some analogy with the law of contract, tort or equitable remedies. 104 However, the principles of assessment in contract or tort, particularly concerning assessment of damages for deceit, may be of great assistance: Marks (at [17], [38], [103], [152]); Henville v Walker (2001) 206 CLR 459 (at [18]-[19], [130]); Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 (at 14-15). 105 In Marks, the plurality went on to consider how it is to be determined whether there is a causal connection between the loss and damage and the contravening conduct (at [42]): It follows, then, that a comparison must be made between the position in which the party that allegedly has suffered loss or damage is and the position in which that party would have been but for the contravening conduct. And even this inquiry may not conclude the question. Analysing the question of causation only by reference to what is, in essence, a "but for" test has been found wanting in other contexts and it may well be that it is not an exclusive test of causation in this area either. (Citations omitted.) 106 Their Honours continued (at [48]): A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted. 107 In Henville, Gleeson CJ considered how damages are to be measured (at [18]): Section 82 of the Act is the statutory source of the appellants' entitlement to damages. The only express guidance given as to the measure of those damages is to be found in the concept of causation in the word "by". The task is to select a measure of damages which conforms to the remedial purpose of the statute and to the justice and equity of the case. The purpose of the statute, so far as presently relevant, is to establish a standard of behaviour in business by proscribing misleading and deceptive conduct, whether or not the misleading or deception is deliberate, and by providing a remedy in damages. 108 McHugh J added (at [131]): Indeed, general principles for assessing damages may have to give way altogether in particular cases to solutions best adapted to give the injured claimant an amount which will most fairly compensate for the wrong suffered. (Citation omitted.) 109 An applicant is required to prove on the balance of probabilities that he or she has relied on a misleading or deceptive representation and has sustained some loss or damage: Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 (at 351); Gates (at 7, 14). It is also necessary for the applicant to prove the quantum of his or her loss or damage: Cummins Generator Technologies Germany GMBH v Johnson Controls Australia Pty Ltd (2015) 326 ALR 556 (at [133]). 110 While the applicant carries the onus of proving some loss or damage, there remains some uncertainty as to whether it is then for the contravener to establish that particular aspects or items of the loss claimed are not attributable to the contravening conduct: see Henville (at [148], [166], cf [70]). In Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338, the Victorian Court of Appeal, referring to the onus of proof, said (at [733]) that "much will depend upon the circumstances of the case". Where the contravenor's conduct has made the quantification of damages difficult, a court is entitled to draw inferences in favour of the applicant: Murphy v Overton Investments Pty Limited (2004) 216 CLR 388 (at [74]). 111 In this case, once Robinson's contravention of s 18 of the ACL was established, St Kilda Road's contention that Robinson should be ordered to pay damages required proof of three matters. Firstly, St Kilda Road was required to prove that it had relied upon the misrepresentation. Secondly, St Kilda Road had to prove that it had suffered at least some loss or damage as a consequence of that reliance. Thirdly, St Kilda Road had to lead evidence as to the extent of the loss or damage it suffered; although there was an issue as to whether the onus was then on Robinson to show that the loss and damage was not of that extent. The first of these matters was found by the primary judge to be proven and is not in issue in the appeal. The second and third matters remain controversial. 112 Before the primary judge, St Kilda Road submitted that it had suffered loss and damage of $1,426,641.70. It described the case it was running as an "all or nothing" case. This seems to have been a concession that if its loss or damage was not that full amount, it was entitled to nothing. Even though St Kilda Road asserted that it had been "deprived of the opportunity to end the Contract a month earlier", it did not attempt to make out a case that it had suffered a loss of an opportunity to avoid payment of payment claim no. 15, the value of which would be measured on the possibilities or probabilities of the case: cf Sellars at [355]; Barnes v Forty Two International Pty Ltd (2014) 316 ALR 408 (at [190]). 113 Before the primary judge, St Kilda Road was required to demonstrate, at least as a starting point, the position it would have been in but for Robinson's misleading or deceptive conduct. It was also required to demonstrate the position it had been left in as a result of its reliance upon the conduct. In this way, a comparison of the positions could be made, and the loss or damage quantified. St Kilda Road developed its submissions upon these issues in the following manner. 114 St Kilda Road submitted that in reliance upon the misleading or deceptive declaration of Robinson, it paid $1,426,641.70 to Reed for payment claim no. 15. If a truthful declaration, or no declaration, had been provided, it would not have paid any amount for payment claim no. 15. It was entitled to withhold payment under cl 38.2 of the contract until Reed complied with cl 38.1. The submission continued that "not only did Reed not properly comply with cl 38.1 in respect of WUC up to 22 December 2011, by December 2011 it could never properly comply with cl 38.1, and it never did again." St Kilda Road did not explain or develop that part of its submission. 115 St Kilda Road submitted that if a truthful declaration or no declaration had been provided, it would have triggered the show cause process in mid-January 2012 and would have terminated the contract, as it had in March 2012. The argument continued that St Kilda Road would then have commenced proceedings for damages arising from the termination of the contract, as it had in April 2012. The claim of $5.56 million would have been reduced to take into account the non-payment of payment claim no. 15, but would still have been for over $4 million. Reed was hopelessly insolvent by 31 January 2012. Reed's liquidator never had the funds to pursue payment claims no. 16 or no. 17, and there was no sensible reason to suspect that this would have changed if he also had to pursue payment claim no. 15. The liquidator settled payment claim nos. 16 and 17 and Robinson's counter-balancing claim by accepting payment of $100,000. There was no evidentiary foundation for a submission that the addition of payment claim no. 15 into that mix would have led to a different outcome. 116 St Kilda Road submitted that it would have obtained a stay of execution of any adjudication in respect of payment claim no. 15. Once Reed went into liquidation, consistently with Façade (at [76]-[90]), all Reed's rights under the Security of Payments Act ceased. 117 St Kilda Road argued that, thus, it would never have paid $1,426,641.70 or any sum for payment claim no. 15 if St Kilda Road had provided a truthful declaration or no declaration. However, as Reed had paid payment claim no. 15 in full and recovered nothing in the liquidation, it was $1,426,641.70 worse off as a result of Robinson's misleading or deceptive conduct. 118 St Kilda Road's position that this was an "all or nothing claim" resulted in Robinson seeking to demonstrate that St Kilda Road's loss was something less than $1,426,641.70, which would mean that the proceeding should be dismissed. Robinson's submissions upon causation and damages, so far as are relevant to the appeal, were developed as follows before the primary judge. 119 Robinson argued that under the contract, St Kilda Road had no right to withhold payment of payment claim no. 15. The only right to withhold was conferred by cl 38.2 of the contract, but that right was only in respect of "monies due and payable to…subcontractors…in respect of WUC the subject of that payment claim". That phrase applied to only the work for which progress claim no. 15 was rendered, namely work done in December 2011. But St Kilda Road had not alleged that any invoices from subcontractors or suppliers for work done in December 2011 were unpaid and due and payable. Therefore, there was no right to withhold payment. Even if the clause contained a broader right to withhold, it did not extend beyond the unpaid amounts that would have been revealed by an accurate statutory declaration, which Robinson claimed totalled $161,401 at 12 December 2011 and $609,342.72 at 22 December 2011. If St Kilda Road had purported to withhold payment, Reed would have proceeded to adjudication and would have succeeded, as it did in respect of progress claim no. 16. At that point, Robinson would either have had to pay the amount of progress claim no. 15 to Reed, or pay it into court (as was the adjudicated amount for progress claim no. 16). St Kilda Road's claim that it would have obtained a stay of execution of the adjudicated determination was speculative and unproved. 120 Robinson argued that St Kilda Road's claim that it would ultimately have been able to retain the benefit of the whole of the $1,426,641.70 in any hypothetical, alternative negotiations with the liquidator was unproven. There was no evidence before the Court about what would or might have been the result of the hypothetical, alternative negotiations. The circumstances of the negotiations would have been different because the additional amount for progress claim no. 15 would have had to be paid into Court and would have been sought by the liquidator. Robinson submitted that in order for St Kilda Road, which it claimed bore the onus of proving its loss, to demonstrate this aspect of its case, it was necessary for the Court to hear evidence from the liquidator, but St Kilda Road had not called the liquidator. 121 Robinson argued further that St Kilda Road's claim that it would have been $1,426,641.70 better off if the representation had not been made, depended upon the proposition that it would never have had to pay anyone anything for the work that was the subject of progress claim no. 15. That work had in fact been performed in December 2011 by Reed and its subcontractors. St Kilda Road was always going to have to pay someone for the work; it could not sensibly be said that St Kilda Road could have taken the value of the work and not paid for it. St Kilda Road had to make the "restart" payments to subcontractors and suppliers including for work and materials invoiced in December 2011. St Kilda Road's case as run required it to prove that it would never have had to pay anyone anything for the work done - whether Reed, its liquidator, or the subcontractors and suppliers. As St Kilda Road would have had to pay something for the work done, its "all or nothing case" must fail. 122 In response, St Kilda Road submitted that while it later made the "restart" payments to the unpaid subcontractors and suppliers, it did so voluntarily and was under no legal obligation to do so. St Kilda Road submitted that Robinson had the onus of adducing evidence to demonstrate that St Kilda Road would have paid some part of the $1,426,641.70 in any event, but had failed to do so. Further, St Kilda Road had failed to put that issue to St Kilda Road's witnesses. St Kilda Road argued that Robinson's construction of cl 38.1 was misconceived. It submitted that unless and until Reed properly provided evidence of moneys due and payable to subcontractors to St Kilda Road's satisfaction, St Kilda Road was entitled to withhold a sum equating to all potential claims by subcontractors. 123 This is not, by any means, a comprehensive recitation of the parties' submissions, which were more nuanced, elaborate and detailed, but it serves to show that there were a number of substantial factual and legal issues which might have fallen to be considered by the primary judge. The primary judge's reasons demonstrate that his Honour did not decide upon many of these issues, although that approach does not necessarily reveal error. Whether there was error depends upon whether determination of these issues was necessary in order for his Honour to resolve the case. 124 The primary judge's reasoning upon whether St Kilda Road had suffered loss and damage and the quantification of damages is contained in only a few short paragraphs. Those paragraphs reveal what may be a single stream, or possibly two streams, of reasoning. 125 First, (at [85]) his Honour found that if not for the misleading or deceptive conduct, St Kilda Road would have terminated the contract and that it followed, as a matter of common sense, that the consequence would have been that St Kilda Road would not have paid the sum of $1,426,641.70, or any sum, in respect of payment claim no. 15. 126 Second, his Honour (at [90]) accepted the applicant's submission that it had no obligation to pay any moneys to Reed under the contract until Reed first properly complied with its obligations under cl 38.1 and provided the required proof of payment; but Reed had not and could never properly comply with cl 38.1. 127 In the appeal, St Kilda Road submits that (at [85]) the primary judge inferentially accepted its argument that if it had terminated the contract earlier and had not paid $1,426,641.70 for payment claim no. 15, the liquidator would still have settled on the same terms, so that St Kilda Road would never have paid, or had to pay, any part of that amount. However, that is not reflected in what his Honour said. His Honour should be understood (at [85]) merely to have accepted the evidence of St Kilda Road's witnesses that if Robinson had disclosed the true position, it would not have paid payment claim no. 15. In my opinion, his Honour did not consider (at [85]) Robinson's argument that St Kilda Road's damages were less than $1,426,641.70 and that, because St Kilda Road had presented its case as an "all or nothing case", the proceeding should be dismissed. Accordingly, his Honour did not consider the issues involved in that argument, including whether the liquidator would have settled for only $100,000 if payment claim no. 15 had not been paid and whether St Kilda Road would have had to pay restart payments to subcontractors in any event. 128 The primary judge did not consider these issues because his Honour decided the case on a different, overarching point. In its written submissions, St Kilda Road had correctly submitted that Reed had not complied with cl 38.1 of the contract. It also asserted that by December 2011, Reed "could never properly comply with cl 38.1", but did not explain the basis of that assertion in its written or oral submissions. At [90], his Honour held, as a matter of construction, that St Kilda Road had no obligation to pay any amount until Reed properly complied with its obligation under cl 38.1 of the contract. His Honour also held that Reed had not, and could never, properly comply and, therefore, no obligation to pay payment claim no. 15 could ever have arisen. The primary judge did not explain why St Kilda Road's submission was accepted. 129 It may be surmised that the primary judge concluded that Reed could never comply with cl 38.1 of the contract because that clause required that "Documentary evidence, except where the Contract otherwise provides, shall be to the Principal's Representative's satisfaction". His Honour may have concluded that Robinson could never provide documentary evidence to St Kilda Road's representative's satisfaction in circumstances where the subcontractors had not been paid. Against this, it might be argued that the representative's satisfaction was only required as to the form of the documentary evidence, and not its content; and that Reed could have complied with cl 38.1 by providing a statutory declaration setting out the amounts in fact due and payable to the subcontractors. 130 However, Robinson did not advance any such argument in the appeal. In fact, Robinson made no challenge at all to the primary judge's findings (at [90]) in his notice of appeal or in his written and oral submissions. Therefore, his Honour's conclusion that under the terms of the contract St Kilda Road would never have been obliged to pay the $1,426,641.70, or any sum, in respect of payment claim no. 15 must stand. 131 The primary judge's conclusion (at [90]) disposed of Robinson's argument that under cl 38.2, St Kilda Road was not entitled to withhold payment of payment claim no. 15, or was only entitled to withhold part of the amount. That conclusion also disposed of Robinson's submission that St Kilda Road's "all or nothing case" should be dismissed because damages should be assessed at less than $1,426,641.70. It was unnecessary for his Honour to determine Robinson's arguments concerning whether the liquidator would have settled for only $100,000 and whether St Kilda Road would have had to pay Reed the restart payments in any event. That is because no obligation had arisen, or could ever arise, requiring St Kilda Road to pay anything under the contract in respect of payment claim no. 15. As St Kilda Road had been induced by the misleading statutory declaration to pay Reed the $1,426,641.70, and it had not recovered anything, that amount represented the extent of its loss. 132 As I have said, Robinson did not challenge the primary judge's conclusion (at [90]). The primary judge did not consider and decide upon all of Robinson's submissions because, on his Honour's reasoning, doing so would have made no difference to the outcome of the case. Robinson has not demonstrated the error he asserts. That makes it unnecessary to deal with Ground 1 of St Kilda Road's notice of contention.

APPORTIONMENT 133 I respectfully agree with the views expressed by McKerracher and Markovic JJ for rejecting Ground 2 of the notice of appeal, dealing with apportionment. 134 The appeal should be dismissed. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.

Pt VIA Competition and Consumer Act 2010(Cth)

Trade Practices Act 1974(Cth)ss 82, 87

Competition and Consumer Act 2018(Cth)

Corporations Act 2001(Cth)s 439A(4)(a)

Conclusion on appeal Grounds 3 to 6 24 It may be accepted that the reasoning on this point was not expansive, but in our view that is more to do with the manner in which the case was conducted - that is on which issues the parties chose to argue. The primary judge was, of course, required to resolve many other issues over and above the point now ventilated on the appeal. He was not required on the pleaded case, or the case as conducted at trial, to set out a detailed analysis of what might have happened hypothetically had payment claim no. 15 been withheld. 25 For all those reasons, on the pleaded (and further re-pleaded) case, we consider the primary judge's reasons and conclusions were correct. 26 In passing, we note that St Kilda Road refers to the decision of the Victorian Court of Appeal in Façade Treatment Engineering Pty Ltd (In Liq) v Brookfield Multiplex Constructions Pty Ltd (2016) 116 ACSR 493 in support of its first ground of the notice of contention on appeal. That decision has been recently questioned in a decision of the NSW Supreme Court: Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2018] NSWSC 412 (at [30] and [127]). While we note this divergence taken in Seymour Whyte in relation to the Building and Construction Industry Security of Payment Act 1999 (NSW), it is unnecessary to refer to any difference in approach as the primary judge was able, correctly, to reach a decision which did not require exploration of the matters raised in the notice of contention. 27 In our view, appeal Grounds 3 to 6 cannot succeed.

Mr Robinson's contentions 33 Mr Robinson relies on Williams v Pisano (2015) 90 NSWLR 342 (at [55]-[93]) for the contention that where two persons are jointly and directly liable for a single representation, the claim is an apportionable claim. Mr Robinson acknowledges that this is an unsettled area of the law, noting the observations of Bathurst CJ (at [4]) and McColl JA (at [6]) in Williams, but contends that the obiter reasoning and analysis of Emmett JA should be followed. It was unnecessary for the other members of the Court in Williams to express a view on this point. 34 Mr Robinson also relies on the fact that in the particular circumstances of this case, Mr Robinson was the directing mind and will of the company, thus, for the purposes of the statement that was made, he and Reed bear joint and direct liability for the statement. The factors that establish that he was the directing mind and will of Reed were referred to in the primary judge's reasons (at [95] and detailed above) and are not disputed. Mr Robinson says it is also relevant that the primary judge held (at [55]) that "the sole function and commercial purpose of the statutory declaration was to provide evidence of the due payment for the work". Mr Robinson states that his was a function and purpose serving only the needs and the objectives of Reed. Mr Robinson refers particularly to Tesco Supermarkets Ltd v Nattrass [1972] AC 153; Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500; Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (2003) 129 FCR 339 and Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471. 35 "Tesco liability" stems from the widely recognised and followed statement of Lord Reid who said (at 170): A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. (Emphasis added.) 36 Mr Robinson contends, correctly, that the liability of Reed under Tesco is not vicarious liability, but liability of Reed itself. That doctrine is aimed at direct liability for a top level officer who is effectively acting for the company and is acting independently and within his or her own discretion: see, for example, Hamilton v Whitehead (1988) 155 CLR 121 per Mason CJ, Wilson and Toohey JJ (at 127). Vicarious liability on the other hand (usually, but certainly not always) relates to negligence, and imposes liability for the conduct of directors, servants or agents acting within the scope of their authority. 37 Mr Robinson says it is not clear from the reasoning of the primary judge as to whether his Honour accepted Reed was jointly liable for the statement, but declined to apportion any liability to it, or whether he did not accept that Reed was jointly liable for the statement. The former, Mr Robinson argues, would be quite an extreme position, failing to recognise the commercial circumstances in which the declaration was made. The latter position, it is contended, would be wrong at law where Mr Robinson is the directing mind and will of Reed. For Mr Robinson, it is said that once it is accepted that Reed was a concurrent wrongdoer, then both Reed and Mr Robinson were equally responsible for the declaration and are both equally responsible for the loss and damage suffered in the sense discussed by Emmett JA in Williams (at [92]-[93]). There was no question of vicarious liability. Reed is directly and fully liable as Mr Robinson was its acting mind and will.

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