TEXTRALIAN ENTERPRISES PTY LTD & ORS v
PERPETUAL TRUSTEES (VICTORIA) LTD & ORS
JUDGMENT
1 PRIESTLEY JA: In broad terms this case concerns two commercial leases, the first of which was surrendered during its term and replaced by the second. The appellants (lessees) claimed that they were induced by the lessor's misrepresentations to enter into each lease. As the second lease was entered into in order to settle disputes that had arisen concerning the first one, the appellants can only succeed in obtaining any relief concerning the first one if they make good their appeal concerning the second one. I do not think they have done this, so, in my opinion the appeal should be dismissed.
2 The full circumstances of the case are set out in the reasons of Heydon JA. Fitzgerald JA, basing himself on the materials in Heydon JA's reasons, has stated succinctly, and in a way with which I concur, why he agrees with Heydon JA's conclusion.
3 I therefore agree that the appeal should be dismissed with costs.
4 FITZGERALD JA: The detailed description and analysis of the circumstances giving rise to this appeal which have been undertaken by Heydon JA enable me to deal with the matter briefly. Since the parties made no attempt to distinguish between the different appellants on the one hand or the different respondents on the other, the issues can be considered between the appellants as a group and the respondents as a group.
5 I agree with Heydon JA that the appellants are not entitled to relief in relation to the earlier 1993 transaction if they are not entitled to relief in relation to the 1996 transaction, which was entered into to replace the 1993 transaction and to compromise the appellants' then claims in relation to that transaction. Broadly stated, the appellants allege that they were induced to enter the 1996 transaction by one or more of the misrepresentations alleged in sub-paragraphs (a) to (h) of paragraph 16 of the Amended Defence and Cross Claim, which are set out in Heydon JA's reasons for judgment.
6 As his Honour has demonstrated, each element of the appellants' claim confronts major obstacles. Even if it be assumed that they could establish other aspects of their case, they cannot establish reliance upon a material misrepresentation by the respondents without the evidence of Mr and Mrs Slattery, which was not accepted by the trial judge. His Honour was especially critical of Mr Slattery's evidence, which he described as "completely unreliable". His Honour also stated that Mr Slattery's "credibility was completely shattered in cross-examination".
7 For the reasons given by Heydon JA, the trial judge's decision not to accept the evidence of Mr and Mrs Slattery was amply justified without his Honour's conclusion that Mr Slattery had fabricated and artificially aged some handwritten notes, allegedly made some years earlier, which the appellants produced very late in the trial. The evidence at trial, and in particular the expert opinion of a document examiner, Mr Anderson, supported the trial judge's conclusion that Mr Slattery had fabricated and artificially aged the handwritten notes, which was one of the matters which his Honour took into account in rejecting Mr Slattery's evidence.
8 Under the heading "Fresh evidence", Heydon JA has discussed additional evidence which the appellants sought to adduce in this Court but the Court declined to admit. I agree with what his Honour has stated in relation to what is described as the "Juan Uribe material". If admitted, the other additional evidence of Paul Denison Westwood and Mark Nugent would have cast doubt on the trial judge's conclusion that Mr Slattery fabricated and artificially aged the handwritten notes, and, if accepted, would have demonstrated that his Honour's conclusion was wrong.
9 In his reasons for judgment, Heydon JA has described the circumstances at trial in which the appellants produced the handwritten notes, the respondents produced a report from Mr Anderson which they had obtained overnight, and the appellants made a forensic decision not to pursue an application for a two week adjournment to challenge Mr Anderson's opinion, seemingly because of the terms which the trial judge suggested might be imposed if an adjournment for that purpose was granted. I agree with Heydon JA that the attitude adopted by the trial judge was not unfair, and no basis has been shown upon which his Honour's discretion could legitimately be disturbed by this Court.
10 While this Court cannot determine that the trial judge would certainly have rejected Mr Slattery's evidence even if his Honour had not concluded that Mr Slattery had fabricated and artificially aged the handwritten notes, his Honour's statements in his reasons for judgment, conflicts between Mr Slattery's testimony and documentary evidence and other features of Mr Slattery's evidence referred to by Heydon JA make it highly unlikely that Mr Slattery's evidence would have been accepted even in the absence of Mr Anderson's opinion.
11 More importantly, it must have been obvious to the appellants at trial that Mr Slattery's credibility was critical to their success and might be very adversely affected by Mr Anderson's opinion concerning the handwritten notes. Nonetheless, they elected not to contest Mr Andersons's opinion. The evidence of Mr Westwood and Mr Nugent, which they sought to introduce in this Court, had no purpose other than to relitigate an issue which was deliberately abandoned at trial. Further, the difficulties which the appellants faced at trial in contesting Mr Anderson's opinion were wholly attributable to their own late production of the handwritten notes, necessitating an overnight report from Mr Anderson which they could not meet without an adjournment. As earlier noted, they declined to seek an adjournment when it seemed that terms might be imposed.
12 In the circumstances, it is unnecessary to consider other problems which confronted the appellants' case, particularly on the issue of reliance, including their response when they were offered the 1996 lease and requested to specify any representations which had been made to them which they were relying upon.
13 I am satisfied that the Court's decision not to admit the additional evidence which the appellants sought to adduce was in the interests of justice despite the potential significance of the evidence of Mr Westwood and Mr Nugent.
14 Without that additional evidence, the appellants' attack on the trial judge's refusal to accept the evidence of Mr and Mrs Slattery cannot succeed and the appeal must fail.
15 I agree with what Heydon JA has written with respect to the "specific grounds of appeal relating to the 1996 lease", and with the orders proposed by his Honour.
16 HEYDON JA:
Background
This appeal is brought against orders made by Young J after a hearing of two proceedings together, the evidence in one being evidence in the other. The two proceedings arose out of the grant of a lease of Shop TE12 in the Erina Fair Shopping Centre, east of Gosford. Though the lease was executed on 31 January 1994, its commencing date was 12 October 1993 and its term was five years. The lessee was B & M Activities Pty Ltd. That lease was surrendered and replaced with effect from 1 November 1996 by a fresh lease, the tenant being Textralian Enterprises Pty Ltd. Its term was seven years.
17 The appellants are the two tenants and a Mr and Mrs Slattery, whose interests are coincident with those of the tenants. The respondents are the lessors which granted each lease. In following the reasoning of the trial judge it is necessary to bear in mind that for convenience he referred to the appellants (who were plaintiffs in proceedings No 5027 of 1997 and defendants in proceedings No 4497 of 1997) as "plaintiffs" and the other parties as "defendants". In this judgment they will be called respectively "appellants" and "respondents".
18 The essential complaint which the appellants have against the respondents is that entry into both leases was induced by misrepresentations made by officers of Lend Lease Property Management (Australia) Pty Ltd ("LLPM"), which was agent for the respondents.
19 The background is that disputes between the lessee and the lessors arose in relation to the first lease during 1996. They were resolved on 23 July 1996, and as part of the settlement the new lease was granted. On 1 April 1997 the lessee stopped paying rent. On 3 June 1997 the solicitors for the appellants wrote to LLPM contending that entry into both leases had been induced by misrepresentation. On 9 October 1997 the lessors took possession of TE12. The lessee then re-entered the premises. Proceedings No 4497 of 1997 commenced on 22 October 1997 to restrain the trespass and recover arrears of rent. By cross-claim, the appellants alleged that the second lease was induced by misrepresentations, that it ought to be varied under s 87 of the Trade Practices Act 1974 (Cth), and that they were to be given monetary relief.
20 On or about 5 December 1997 proceedings No 5027 of 1997 commenced. The appellants sought damages for misrepresentations made in relation to the first lease and a s 87 order varying the terms of the first lease.
21 The appellants in written and oral argument placed most stress on proceedings No 5027 of 1997 - i.e. those relating to the first lease. But those proceedings were doomed to fail unless the settlement of disputes effected in 1996 could be set aside on the ground of the misrepresentations alleged to vitiate the second lease. The trial judge held that the respondents' conduct did not justify that outcome. He also held that the first lease was not induced by actionable misrepresentations either. In my judgment, for reasons given below, the trial judge was correct in not setting aside the 1996 settlement and in not granting any relief in relation to the 1996 lease. But assessing the correctness of his conclusion, which rested on credibility-based conclusions of primary fact, necessitates examining the parties' dealings in the period 1993-1996. Significant parts of the trial judge's reasoning in relation to credibility rest on those dealings.