Ting v Blanche

REASONABLE GROUNDS UNDER S 51A In par 4 of its amended defence the Bank pleaded in the alternative that, if it made any of the alleged representations, then they were representations as to a future matter within s 51A and it had reasonable grounds for making each such representation. The following particulars were provided: "Particulars (a) Between 22 May 1990 and 24 April 1991 the Bank's intentions in relation to the progressive issue of denominations of new series polymer notes were as set forth in the Bank's press release 90-13 and 90-31. (b) On 24 April 1991 the Bank decided to defer the issue date of the new series polymer note from 20 May 1991 pending determination of a new and feasible timeframe for production. (c) On 24 April 1991 the Bank also decided that knowledge of the decision referred to in (b) was to be restricted until after the Bank Board met on 7 May 1991. (d) On 16 May 1991 the Bank issued press release 91-09 announcing the deferral of the issue of the new series polymer notes (and provided a copy of this press release to Mr Sykes)." These particulars on their face conspicuously fail to allege matters which would constitute reasonable grounds within the meaning of s 51A. For this purpose it is not to the point what the Bank's intentions were, or what it decided, or what announcements it made. If there was a representation as to a future matter, s 51A requires the representor to show · some facts or circumstances · existing at the time of the representation · on which the representor in fact relied · which are objectively reasonable and · which support the representation made Moreover, there is no necessary connection between the reasonable grounds and the subsequent circumstances which resulted in the predicted state of affairs not occurring. The Bank's case was directed to showing that the long delay in the release of the $5 notes was due to problems which it could not have reasonably anticipated. It may be doubted that this was in fact the case, given the failure of the Bank to carry out test production runs prior to the time the representations were made. But the question posed by s 51A is whether the representor had reasonable grounds for making the representation. If it did not, the representation "shall be taken to be misleading". The ordinary s 52 misrepresentation is treated as misleading or deceptive even if the representor be innocent of fraud or negligence. Section 51A, a subset of s 52, applies that strict liability to representations as to future matters. The only difference is a concession in favour of representors. Liability is avoided - in contrast to the ordinary s 52 case - if the representor had reasonable grounds for making the representation. Subject only to that, a representor as to a future matter cannot be heard to say that the occurrence or non-occurrence of the future event was unpredictable, any more than the s 52 representor can say that the untruth of his or her representation was not reasonably to be expected. In any case, the evidence discussed by Emmett J convincingly shows that there was not merely lack of positive grounds for the Bank making the representations, but evidence pointing the other way. Also, the appellants were correct in arguing that matters which occurred after the representations could not be relied on to establish reasonable grounds. The learned trial judge in my respectful opinion should have held that the Bank had failed to establish reasonable grounds. It is now necessary to turn to the other issues raised in the appeal.

A FUTURE MATTER In Tinge v Blanche (1993) 118 ALR 543, Hill J said (at 552-553): "It will be readily apparent that a representation as to future conduct or a future event will generally imply (and sometimes explicitly state) that the maker of the representation was of a particular state of mind as to the future conduct or event as at the time the representation was made. A representation that a particular occupancy rate for a hotel might in the future be achieved, or, as alleged here, that a particular rent for nominated premises could be achieved in a future letting, impliedly involves a representation that the maker of the representation believed that the occupancy rate or rental could be achieved. It would be no less a representation as to the future by virtue of this implication. If the actual term of the representation is that the maker of the representation is of the view at the time that the occupancy rate or rental nominated could be achieved in the future, does that express statement turn a representation as to the future into a representation as to existing fact? … Whatever may be the case where there is an express representation as to the maker's state of mind concerning a future matter, it is not, in my opinion, correct to treat a representation as to an event or conduct in the future, be that in the form of a prediction or otherwise, as not being a representation with respect to a future matter merely because it implies a representation as to the maker's present state of mind. The language of s 51A is very wide and the words 'with respect to' are, like the words 'in respect of' discussed by Dickson J, delivering the judgment of the Supreme Court of Canada in Nowegijick v R (1983) 144 DLR (3d) 193 at 200, (a discussion cited with approval by Toohey J in Smith v FCT (1987) 164 CLR 513 at 533; 74 ALR 411 at 424): '… words of the widest possible scope. They import such meanings as 'in relation to, with reference to' or 'in connection with'. The phrase 'in respect of' is probably the widest of any expression intended to convey some connection between to related subject-matters.' A representation as to future rental, for example, will be a representation with respect to a future matter, even if also, impliedly, a representation as to the existing state of mind of the maker." In the later case of Miba Pty Ltd v Nescor Industries Group Pty Ltd (1996) 141 ALR 525 at 536 Merkel J agreed with those observations of Hill J. Merkel J went on to point out that it was still necessary to characterise the representation made. After discussing the representation in the case before him, his Honour commented (at 536): "I should add that the operation of s 51A cannot be rendered nugatory by merely stating a belief or understanding with respect to a future matter. For the reasons pointed out by Hill J in my view such a statement, without more, is and remains one with respect to a future matter." See also Bowler v Hilda Pty Ltd (1988) 153 ALR 95 at 106-109. On this issue, I would agree with the learned trial judge that the relevant representations were made with respect to a future matter. The future matter was the release by the Bank of the new $5 notes. The release of the notes was a "matter", and it was something which was going to happen, or not happen, in the future. In the present context we are not concerned with a prediction by a representor of a future event over which the representor has no control, such as the prediction by a developer of future takings of a shop in a shopping centre. Still less is this a case, like Miba, where the grounds for a projection are expressly stipulated and an assessment of their reasonableness is left for evaluation by the representee (141 ALR at 536). Rather, the Bank was speaking of a highly technical production process which was entirely within its own control. Outsiders such as appellants had no access to information against which the reasonableness of the Bank's predictions might be assessed; nor was any such information - however incomplete - proffered by the Bank. In such circumstances representees in the position of the appellants would not be concerned with the Bank's state of mind. A representor in some circumstances might for example say "It is our present intention to carry out project X, although this may change". But the Bank do not suggest any qualification was made to its repeated statements that it intended to manufacture, and release at some time in the future, a new $5 note. With respect to Emmett J, I do not share his Honour's view as to the significance of Mr Carlin's revision of Mr Syke's draft "Club Life" editorial. The precision of the predicted release date was softened; to use the vernacular, the Bank was leaving itself some room to swerve. But it remained a prediction nonetheless. "Sometime after Easter 1991" in this commercial context would not convey the literal meaning of any time at all - be it one year, five years, ten years. It would simply mean some reasonable time. It is not necessary to specify what was a reasonable time. No doubt one week or one month after Easter would be reasonable; but eighteen months clearly would not. Counsel for the Bank emphasised the use of the expression "best guess" by Mr Taylor. But the word "guess" often means an estimate or an approximate judgment, without actual measurement or calculation. I think it would have conveyed such a meaning in the present context. Mr Taylor was giving a judgment as to when a future event would occur. Admittedly, this was not a matter which could be predicted with precision to the day. But equally it would not be taken as a random choice of a number, like a lottery. In my opinion, the representation here was of the kind discussed in Tinge and Milba. There was necessarily an element of the Bank's present belief involved. The statement as to this was only saying explicitly what was necessarily implicit. The appellants were concerned with the date of the issue, not the Bank's present state of mind.

TRADE OR COMMERCE Counsel for the Bank did not seek to argue that in manufacturing and issuing Australian currency (as distinct from currency manufactured for and sold to foreign countries) the Bank was not engaged in trade or commerce. Rather he argued that the statements of the Bank did not bear a trading or commercial character. He said this was so because there was no "relationship" between the Bank and the appellants arising out of the issue of the notes. This argument is without substance. Dealing in trade or commerce is not limited to that between parties in contractual relations. The evidence disclosed that the Bank was interested in the possible use of Mr Sykes' device and indeed advanced funds for its development and appointed him as a consultant. The Bank had a clear commercial interest in the announcement of the release date to Mr Sykes so that he could assist in the marketing process of the new notes: see Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604, Fasold v Roberts (1997) 70 FCR 489 at 531. UNREASONABLE RELIANCE Counsel for the Bank argued that it was unreasonable for the appellants to rely on any of the Bank's representations, if made. In responding to this argument counsel for the appellants argued that the representation satisfied the test of whether there was a "real or not remote chance or possibility regardless of whether it was less than 50 per cent" that the appellants would have relied on the representations as meaning that the Bank predicted a release date for the notes of about April 1991. That phrase comes from Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees Union (1979) 42 FLR 331 at 346-7 per Deane J and was adopted by the Full Court in Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87. However, in the context of the present case the issue is a false one. Both Tillmanns and Global Sportsman were cases involving a prediction as to the likely consequences of conduct which contravened the Act. In Tillmanns a union had placed a black ban on meat held in an abattoir for delivery to a chain of butcher shops with which the union was in dispute. A critical issue was whether the respondents' conduct "would have or be likely to have the effect of causing substantial loss or damage to the business of" the butcher within the meaning of s 45D(1) of the Act. In Global Sportsman the cricketer Jeff Thompson and an associated company complained of a contravention of s 52 and defamation arising from a cartoon and article in a newspaper. The issue was whether the publication was "likely to mislead or deceive" readers of the newspaper. In that context the Full Court applied the passage from Tillmanns already referred to. The Full Court was concerned not with the first limb of s 52(1) (conduct "which is misleading or deceptive") but with the second limb (conduct "which is likely to mislead or deceive"). The present case is one alleging direct reliance by representees on statements by the representor. The Act does not in such circumstances erect any precondition that such reliance be "reasonable". Any argument to the contrary would be inconsistent with the well established principle that contributory negligence is not available as a defence to a claim for damages based on a contravention of s 52. In Henjo Investments Pty Ltd v Collins Marrackville Pty Ltd (1988) 39 FCR 546 Lockhart J, with whom Burchett and Foster JJ relevantly agreed, said (at 558) after referring to a number of decisions: "These decisions support the view that recovery under s 52 is founded by the applicant's factual reliance upon the misleading or deceptive conduct of the respondent, although that conduct was not the only factor in the applicant's decision to enter a particular agreement, and also the applicant did not seek to verify the representations or did so inadequately and so failed to discover their falsity." Also in Sutton v A J Thompson Pty Ltd (in liq) (1987) 73 ALR 233 at 240 another Full Court said: "But there is nothing in the principle cited, or in any other authority which has been brought to our attention, to suggest that a person who has been misled into entering a contract, by false representations of a type which were likely to produce that result, and in fact did so, can be deprived of his remedy because of his failure to check the accuracy of those representations." The possibility remains that the representee's own carelessness may be so dominant as to break the chain of causation: see Munchies Management Pty Ltd v Belperio (1988) 84 ALR 700 at 712. However the present case is far removed from any such situation. The Bank was the manufacturer of a new product, to be released some time in the future. The appellants had no involvement in or knowledge of the manufacturing process. They were outsiders for whom the issue date was relevant for the own business purposes. The Bank was uniquely placed to make predictions about the prospective issue date and it is inherently likely, and certainly not unreasonable, that the appellants would rely on what the Bank said.

ORDERS The appeal should be allowed and the matter remitted to the primary judge for the determination of the matters which on the view he took did not need to be decided. The Bank should pay the appellants' costs of the appeal, including reserved costs. The costs of the trial should be reserved for the consideration of the primary judge upon the conclusion of the further hearing.

I certify that this and the preceding seven (7) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey

SUNDBERG J I gratefully adopt the exposition of the evidence contained in the judgment of Emmett J and his Honour's statement of the issues to which the appeal gives rise.

THE CRITICAL FACTS In the Bank's Press Release of 22 May 1990 it was announced that a new series of currency notes, commencing with the $5 note, "is to be launched later this year". Other notes would be issued progressively over the ensuing two to three years. In late October 1990 Mr Taylor told Mr Sykes that the Bank's "best guess" was that the new $5 note would be released after Easter 1991, possibly some time in April, but that in order to achieve that date everything would need to go well. There could be hiccups or problems. If there were, the release could be delayed a little. In its Press Release of 6 November the Bank announced that because of design work and production delays the new series "will not now begin to issue until after Easter next year". On 7 December Mr Sykes sent Mr Carlin by facsimile a draft editorial for a publication of the Registered Clubs Association known as "Club Life". He did this at Mr Carlin's request because Mr Carlin wanted to make sure the editorial was accurate and that the Bank approved it. On the same day Mr Carlin made some amendments to the draft. He altered Mr Sykes' sentence: "The plastic bank notes will be introduced from next April with the new $5 note", so that it read: "The plastic bank notes are expected to be introduced starting with the new $5 note from sometime after Easter 1991". The sequence thus began with an unqualified statement in May 1990 that the new series would be launched by the $5 note later in the year. This was replaced in October by the expression of the Bank's "best guess" that the release would occur after Easter 1991, possibly some time in April. Mr Taylor's statement was qualified in three respects. It was a "best guess". The reference to "after Easter 1991" meant "possibly some time in April". The prediction was dependent on everything going well; if there were any hiccups or problems the release date would be a little delayed. These qualifications were not repeated in the November press release. The reference in the November release to the May release shows that the statement that the notes would not begin to issue until after Easter 1991 should be taken as an announcement that the notes would start to issue after Easter 1991. Then in December "after Easter 1991" became "sometime after Easter 1991", and the positive statement that the notes would start to issue at that time became an expectation on the Bank's part that they would then be introduced. I see no real difference between "after Easter" and "sometime after Easter". In context, the Bank was saying that the launch would be soon after Easter.

A FUTURE MATTER? Is the statement that the notes are expected to be introduced from sometime (ie soon) after Easter 1991 a representation with respect to a future matter for the purposes of s 51A of the Trade Practices Act 1974? A representation can of course be withdrawn or qualified by the representor before it has been acted on by the representee. But that does not mean that where there has been a series of representations about a topic, one must take the last of them and characterise it in isolation. There is no doubt that the May Press Release was directed to a future matter, namely the time at which the new series of notes would be launched. Mr Taylor's statement of October 1990 was still about the release date of the $5 note, though it was hedged with qualifications. The November 1990 Press Release was an unqualified statement on the same topic. That is the background against which the amended editorial is to be viewed. Was the relevant part of the editorial with respect to the date of the launch of the notes or, as the Bank contends, with respect to its state of mind about that date? The editorial was about the need for clubs to learn new ways of handling the plastic notes. The plastic notes had to be handled and stored flat rather than folded. Mr Sykes had developed a plastic banknote handling system to contain and store the notes in a flat format. The system would be marketed to banks, building societies, financial institutions and clubs from February 1991. The editorial quoted Mr Sykes as stressing the need for clubs and other institutions to be fully prepared for the introduction of the new notes, because confusion would result if the matter were left until the new currency arrived. The remarks attributed to Mr Sykes described him as a consultant to the Bank. Given that the editorial was about the changeover from paper to plastic notes, the availability from February 1991 of a new system to handle them, and the need for commercial users of notes to be ready for the changeover, the statement that the notes are expected to be introduced from sometime (soon) after Easter 1991 is, in my view, one with respect to the release date. The context provided by the editorial as a whole thus complements that provided by the sequence of statements from May to December 1990. There is a substantial and direct connection between the statement and the release date and not a merely incidental one. Cf Herald & Weekly Times Ltd v The Commonwealth (1966) 115 CLR 418 at 436 and O'Grady v Northern Queensland Co Ltd (1990) 169 CLR 356 at 374.

THE EARLIER CASES The earlier decisions on "future matter" in s 51A do not stand in the way of this approach to the characterisation of the representation. In Jacques v Cut Price Deli Pty Ltd (1993) ATPR (Digest) 46‑102 the statement of claim alleged two representations about the turnover of a shop in a shopping centre. The first was that the shop would trade with a turnover of at least $10,000 per week. The second was that the representors believed that the shop when managed by the applicants would trade with a turnover of at least $10,000 per week. Spender J said at 53,436 that the first was a representation as to a future matter, namely the future turnover, and the second a representation of present fact, namely the representors' present belief as to the trading potential of the shop. Comparable allegations were made about the profitability of the shop ‑ the shop could trade with gross profits between 38 per cent and 42 per cent of the weekly trading figures, and the representors believed that the premises would so trade. His Honour said that the former was within s 51A and the latter, as a representation about the representors' present state of mind, was not. The contrast drawn by the pleadings compelled that conclusion. The first turnover and the first profitability pleas were plainly directed to future turnover and future profits, and the second turnover and profitability pleas were, as a matter of construction, directed to the representors' belief about those matters. Jacques provides no assistance to the present case for want of any comparable contrast. In Ting v Blanche (1993) 118 ALR 543 Hill J found that the respondent had represented that if the applicants purchased a warehouse they could rent it out for between $70,000 and $80,000 a year, and that this was misleading and deceptive. But his Honour dismissed the application on the ground that the representation had not been pleaded. However, for the purpose of considering s 51A, his Honour assumed that the representation had been pleaded. His Honour said (at 552‑553): It will be readily apparent that a representation as to future conduct or a future event will generally imply (and sometimes explicitly state) that the maker of the representation was of a particular state of mind as to the future conduct or event as at the time the representation was made. A representation that a particular occupancy rate for a hotel might in the future be achieved, or, as alleged here, that a particular rent for nominated premises could be achieved in a future letting, impliedly involves a representation that the maker of the representation believed that the occupancy rate or rental could be achieved. It would be no less a representation as to the future by virtue of this implication. If the actual term of the representation is that the maker of the representation is of the view at the time that the occupancy rate or rental nominated could be achieved in the future, does that express statement turn a representation as to the future into a representation as to existing fact? His Honour then examined Jacques, and continued: Whatever may be the case where there is an express representation as to the maker's state of mind concerning a future matter, it is not, in my opinion, correct to treat a representation as to an event or conduct in the future, be that in the form of a prediction or otherwise, as not being a representation with respect to a future matter merely because it implies a representation as to the maker's present state of mind. … A representation as to future rental, for example, will be a representation with respect to a future matter, even if also, impliedly, a representation as to the existing state of mind of the maker. I would respectfully agree that a representation as to a future matter does not lose that character because it implies a representation that the maker of the statement believes that the representation is true. However that does not assist in the present case where the question is not the loss of the characteristic of futurity but whether the statement has that character in the first place. The question raised by the present case is that posed but not answered by Hill J, namely whether a representation about the representor's state of mind concerning a future matter lacks the character of a representation as to the future because it states his present belief. As I have indicated, the answer to his Honour's question will depend on the facts of the particular case. In Miba Pty Ltd v Nescor Industries Group Pty Ltd (1996) 141 ALR 525 the applicants alleged that in order to induce them to enter into a franchise agreement at Northland Shopping Centre the respondents made representations about the takings that the business would make. They relied on a letter from one of the respondents in which it was said that the weekly sales achieved at the Chadstone franchise ranged between $14,780 to $18,396 over a six week period, and that the sales were expected to settle down to between $14,000 and $16,000 per week and then gradually increase. The letter then stated the writer's "understanding" that the average food court operator at Northland achieved sales in the order of $10,000 per week. The Chadstone and Northland food courts were then compared, and the letter concluded by saying that Northland had 60 per cent fewer food court tenants to compete with, and similar centre traffic, and "this would lead us to believe that a well managed operation at Northland could achieve sales of between $8,000 and $12,000 per week after adjusting for competition and demographics". The information in the letter was said to be to assist the applicants to evaluate a cash flow projection; that the information was confidential and was to be used only to evaluate the success of a store at Northland. Merkel J held that the $8,000 to $12,000 statement was not within s 51A. His Honour said (at 536): … it is my view that [the representation] is properly characterised as a statement as to a present belief based on the grounds set out. In that context it relates to the capacity of the proposed outlet to achieve the sales projection. Although the sales projection necessarily has a future element in it that element does not transform the characterisation of the representation into one which is with respect to a future matter. In my view the applicability of s 51A is to be ascertained by a proper characterisation of the representation made in each case. It is difficult to see how s 51A can operate in a case such as the present where the grounds for the sales projection are expressly stipulated and an assessment of their reasonableness is left for evaluation by the representee. In these circumstances a representation that the grounds are reasonable, rather than that the representor believes that they are reasonable, is inconsistent with the representation made. His Honour then added: the operation of s 51A cannot be rendered nugatory by merely stating a belief or understanding with respect to a future matter. For the reasons pointed out by Hill J [in Ting] in my view such a statement, without more, is and remains one with respect to a future matter. By the first of these two sentences I understand his Honour to be saying that that which is in truth a statement with respect to a future matter does not lose that character because it is expressed as a belief or an understanding. The second sentence I think attributes to Hill J a decision on the very matter that his Honour left open: see (1993) 118 ALR at 553 lines 20 and 21. As I read Ting, Hill J expressed the view, obiter, that a representation as to a future event does not lose that character merely because it implies a representation as to maker's present state of mind. The significance of Miba for present purposes is its insistence that whether a statement is with respect to a future matter depends on its proper characterisation in the context in which it is made. It is, I think, unwise to lay down a general rule that a statement of belief or understanding about a future matter is a statement with respect to that matter for the purposes of s 51A. I do not regard Hill J as having so decided. For example, the statement - "I expect it to rain on Friday" - may, as the Bank contended, be a statement as to the maker's belief rather than about the subject‑matter of the belief. But, if that be so, it cannot dictate a like characterisation of the Bank's statement, for that would ignore its context and background. It would also ignore the fact that whether the Bank's expectation was fulfilled was entirely within its control, while the forecaster had no control over the weather.

OTHER ISSUES I agree with Heerey J, for the reasons his Honour gives, that the primary judge should have held that the Bank had failed to show that it had reasonable grounds for making the representations about the release date. I also agree with what his Honour has said about the Bank's submissions that its statements were not made in trade or commerce and that it was unreasonable for the appellants to rely on the representations.

CONCLUSION The appeal should be allowed and the matter remitted to the primary judge for the determination of the matters which, on the view he took, did not need to be decided.

I certify that this and the preceding six (6) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg

REASONS FOR JUDGMENT EMMETT J: These proceedings arise out of statements alleged to have been made on behalf of the Reserve Bank of Australia ("the Bank") in connection with proposals for the introduction of polymer bank notes. The appellants contended that the statements constituted conduct by the Bank in trade or commerce which was misleading and deceptive in contravention of section 52 of the Trade Practices Act 1974 (Cth). They contended, in the alternative, that the statements were made by the Bank in breach of a duty owed to the appellants to take care in making such statements. A judge of the Court concluded that the Bank did not engage in misleading or deceptive conduct. The trial judge also concluded that there was no breach by the Bank of any duty owed to the appellants. Accordingly, his Honour dismissed the application with costs. The appellants have appealed from that decision.

THE PARTIES In 1990 the first appellant, Mr Peter Sykes ("Mr Sykes"), was engaged in the commercial development, promotion, production and manufacture of a product ("the Product") designed to handle plastic or polymer bank notes when folded and subsequently of a device ("the Device") designed to handle plastic or polymer bank notes when flat, together with paper bands to hold such notes in groups of 10 or 100 and dispensers to hold and dispense the paper bands. The second appellant, Beverley May Sykes ("Mrs Sykes"), is Mr Syke's wife. The third appellant, Polybank Pty Limited ("Polybank"), was incorporated and commenced trading on or about 1 July 1991 and was thereafter involved in the manufacture, promotion and sale of the Device, the paper bands and the dispensers. The Bank is constituted under the Reserve Bank Act 1959 (Cth) ("the Bank Act") under the name the "Reserve Bank of Australia". The Board of the Bank is required under section 10(2) of the Bank Act to ensure that the monetary and banking policy of the Bank is dedicated to the greatest advantage of the people of Australia. Under section 26, the Bank is constituted as the central bank of Australia. It is prohibited from carrying on business otherwise than as a central bank. Under section 31 of the Bank Act, the Bank is empowered to issue, reissue or cancel Australian notes. Australian notes may only be printed by or under the authority of the Bank. By section 36 of the Bank Act, the notes are to be legal tender throughout Australia. The Bank has a division known as Note Printing Australia ("NPA") which manufactures notes for Australia and other countries. In particular, NPA now designs, manufactures and produces polymer bank notes.

THE ISSUES NPA commenced research and development of polymer note technology in 1968. The first release of a polymer bank note was a $10 commemorative bicentennial note issued in 1988. That was a world first for polymer note technology. On 22 May 1990 the Bank announced that a new series of currency notes, commencing with the $5 note, was to be launched later that year. These proceedings concern the circumstances leading up to the timing of the issue of polymer bank notes in the denomination of $5 and the subsequent issue of notes in other denominations. In their amended statement of claim the appellants made the following allegations: 7. On or about 10 August 1990, at a meeting at [the Bank's] head office in Martin Place in Sydney, Mr John Taylor on behalf of [the Bank]

(a) that the $5 polymer bank note would be released shortly after made the following oral representations to [Mr Sykes]: Easter 1991; and

(b) that after the release of the new $5 polymer bank note, new polymer bank notes for the other bank notes in the series would be released sequentially at approximately six monthly intervals.

8. Further, on several occasions between late November 1990 and March 1991, Mr Peter Carlin on the [Bank's] behalf orally represented to [Mr Sykes] that once the new polymer $5 bank note was released shortly after Easter 1991, new polymer bank notes for the other bank notes would be released sequentially at approximately six monthly intervals.

9. Further, in or about November 1990 Mr Peter Carlin on the [Bank's] behalf represented to [Mr Sykes] that the new polymer $5 bank note would be released shortly after Easter in 1991.

Mr Carlin handed to [Mr Sykes] a copy of the [Bank's] press release dated 6 November 1990.

10. Further, in or about late November 1990 in Sydney and early December 1990 in Melbourne, Peter Carlin, on the [Bank's] behalf made oral representations at several meetings and in the presence of [Mr Sykes] that the new $5 polymer bank note was to be released shortly after Easter 1991 and that thereafter new polymer banknotes for the remaining bank notes in the series would be released sequentially at approximately six monthly intervals.

11. Further, on or about 7 December 1990 Mr Peter Carlin on the [Bank's] behalf represented to [Mr Sykes] that:

(a) the new polymer $5 bank note would be released sometime after Easter 1971; and

(b) the release of the new $5 polymer bank note would be followed by the sequential release, at approximately 6 monthly intervals, of the new plastic polymer bank notes for the remaining bank notes in the series. The appellants contended that, in contravention of section 52 of the Trade Practices Act, the representations alleged were misleading or deceptive in that: (a) the polymer $5 bank note was not released shortly after Easter 1991, eventually having been released in November 1992; (b) the new polymer bank notes for the remaining bank notes in the series were not released at approximately six monthly intervals after Easter 1991; (c) new polymer bank notes for the other bank notes in the series were not released at six monthly intervals following the eventual release of the new polymer $5 bank note in November 1992, the polymer $10 note having been released in November 1992 and the polymer $20 note in November 1993; (d) the Bank failed to qualify the representations by informing Mr Sykes of the risk that the representations may not be fulfilled. The appellants relied on section 51A of the Trade Practices Act to support their contentions that the statements were misleading. Section 51A relevantly provides as follows: 51A Interpretation

(1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for the making the representation, the representation shall be taken to be misleading.

(2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.

(3) Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead. The appellants contended that the representations fell within section 51A(1) and that the Bank did not have reasonable grounds for making the representation. The Bank disputed both contentions and said that, even if it made a representation with respect to future matter and did not have reasonable grounds for making the representations, the nature of the representations was such that it was not reasonable for the appellants to act in reliance on the statements. Much of the debate concerned the question of whether or not the statements found by the trial judge could be properly characterised as representations with respect to any future matter within the meaning of section 51A of the Trade Practices Act and whether the Bank had reasonable grounds for making those representations. His Honour found that certain representations were made, that the representations were made with respect to future matter and that they were made in trade or commerce. However, his Honour found that the Bank had reasonable grounds for making the representations and concluded, therefore, that the representations were not misleading or deceptive or likely to mislead or deceive. In view of the conclusions which the trial judge reached as to the representations and negligence, it was not necessary for him to consider the issues of reliance or damages and he refrained from doing so. The appellants also alleged, in the alternative, that the Bank owed to Mr and Mrs Sykes a duty of care in making the representations alleged and that the Bank breached that duty of care. The duty was alleged to arise, in all the circumstances because: (a) the Bank knew or ought to have known: (i) that it was being trusted by Mr and Mrs Sykes to give information which Mr Sykes and Mrs Sykes believed the Bank to possess; (ii) that the subject matter of the representations was of a serious or business nature; (iii) that Mr Sykes and Mrs Sykes intended to rely and intended to act upon the representations. (b) it was reasonable for Mr Sykes and Mrs Sykes to seek to rely upon the representations. The appellants alleged that the Bank was in breach of that duty of care because it failed: · to take reasonable steps to ensure that the representations were accurate in all material respects; · within a reasonable time, to advise Mr Sykes and Mrs Sykes of when and if those representations ceased to be accurate in all material respects. The appellants alleged that they suffered damage by the conduct complained of and that they suffered damage as a result of the alleged breach of duty in that, in reliance on the representations set out above: (a) Mr and Mrs Sykes expended funds in planning, developing and promoting the Device, the paper bands and the dispensers and Mr Sykes refrained from seeking employment so as to devote himself to planning, developing, promoting and manufacturing the device, the paper bands and the dispensers. (b) Mr Sykes discontinued the promotion of, and his plans for the production and manufacture of, the Product. (c) Polybank obtained and subsequently increased an overdraft facility. (d) Polybank expended funds promoting, developing and selling the Device, the paper bands and the dispensers and arranging for their production, storage and distribution. (e) Mr and Mrs Sykes executed personal guarantees as security for the overdraft facility and agreed to the increase in the overdraft facility. The thrust of the appellants case on appeal was that the failure by the Bank to conduct an appropriate test production run prior to the press release of November 1990 should have led the trial judge to the conclusion that: (a) the Bank did not act on reasonable grounds in making its "predictions" to Mr Sykes;

(b) the Bank was in breach of the duty of care which it owed to Mr Sykes in making the representations in question. On appeal, the Bank re-agitated the question of whether the representations were within section 51A and supported the conclusions of the trial judge on the reasonableness question. The Bank also contended that, if the Full Court were of the view that representations were made with respect to any future matter and that the Bank had no reasonable grounds for making the representations, the Court should decide the question of whether, in all the circumstances, it was reasonable for the appellants to have acted in reliance on the representations as found. The Bank also contended on appeal that the conduct complained of was not engaged in in trade or commerce within the meaning of section 52 of the Trade Practices Act.

THE REPRESENTATIONS The appellants relied principally on oral representations alleged to have been made to Mr Sykes. They also relied on the terms of a press release made by the Bank. There were some respects in which conversations between Mr Sykes and representatives of the Banks were disputed. His Honour concluded, however, that there was substantial agreement between the parties as to the terms of the representations made by the Bank. His Honour made specific findings as to oral statements made to Mr Sykes and the findings were not challenged on appeal. His Honour found that statements were made as follows: · In about August 1990 Mr John Taylor, senior manager, Note Issue, Currency Division of Currency and Banking Department of the Bank told Mr Sykes that, after the $5 note, notes would be issued progressively over a two to three year period, and that there would be in the order of six months between the release of successive notes. · In about late October 1990, prior to the 6 November press release, Mr Taylor informed Mr Sykes that the Bank's "best guess" was that the new $5 would be released after Easter 1991, possibly some time in April, and that in order to achieve that date everything would need to go well. Mr Taylor also said that if any problems were encountered the release could be delayed a little. Mr Taylor expressed the opinion that there could be "hiccups" or problems. · During the period Mr Sykes was "encouraged" by the Bank to develop the Device further. Further, on 6 November 1990 Mr Peter Carlin, manager, Cash Processing and Distribution in the Currency and Banking Department of the Bank, handed to Mr Sykes a press release by the Bank in the following terms: NEW CURRENCY NOTE SERIES In May 1990 the Bank announced that a new series of currency notes, commencing with the $5 note, would start to issue around this time. Final design work and production delays, however, mean that the new series will not now begin to issue until after Easter next year. The new $5 note will be… printed on plastic similar to that used for the $10 Bicentennial note issued in 1988.

Notes of the $10, $20, $50 and $100 denominations in the new series will carry portraits of further prominent Australian men and women… Further details will be announced when final decisions are made on the names of the Australians to be recognised in this way. [Emphasis added] The announcement in May referred to in that press release was in the following terms: NEW SERIES OF CURRENCY NOTES A new series of currency notes, commencing with the $5 note, is to be launched later this year. It is nearly 25 years since the first denominations in the present series of notes were introduced. Two of these notes - the $1 and $2 - have been replaced by coins in recent years. The new series also provides the opportunity to incorporate recent technological advances and state-of-the-art security features. These will assist in minimising the risk of serious counterfeiting in Australia.

A panel of expert consultants has been considering possible new note designs, which are intended to be uniquely Australian in character.

The new $5 note will be printed on polymer (plastic) similar to that used for the Bicentennial $10 note which was issued in 1988.

Other notes in the new series will be issued progressively over the ensuing two to three years. Details of individual notes will be provided closer to their release dates.

Reserve Bank of Australia Sydney An important additional finding in relation to the representations concerned an exchange which occurred in early December 1990. Mr Sykes prepared a draft editorial for a publication of the Registered Clubs Association known as "Club Life". Mr Carlin had accompanied Mr Sykes to meetings with cash handlers during the period from August 1990 and requested a copy of the draft editorial so that he could make sure that it was accurate and that the Bank approved of it. On 7 December 1990, Mr Carlin sent to Mr Sykes particulars of amendments which he considered should be made to the draft. One significant alteration made by Mr Carlin was as follows: Sykes Draft Carlin Revision The plastic notes will be introduced from next April with the new $5 note. The plastic notes are expected to be introduced starting with the new $5 note from sometime after Easter 1991.

The significance of the incident concerning that editorial will be considered below.

THE FINDINGS OF THE TRIAL JUDGE The trial judge made a number of findings from which he concluded that the Bank acted on reasonable grounds in making "predictions" and in issuing the press releases in question. The findings made by his Honour were as follows: 1. That as at November-December 1990 when the estimate of a release period for the $5 polymer note and subsequent release of the other denominations was given the Bank had no intention that its statements would mislead or deceive, nor were such statements made recklessly. 2. Before publication of the press release of 6 November 1990 the Bank had given comprehensive and proper consideration to the timing and feasibility of the issue of the bank notes in the period late April-early May 1991. The post-Easter date was not selected in an arbitrary or random way. The proposed release date was deferred several times before the post-Easter date was published. The evidence indicates that the date was eventually fixed as 20 May after the Currency and Banking Department had taken into account the considerations advanced by NPA as to production and quality. 3. One of the main circumstances which caused postponement of the late 1990 date, predicted in the May 1990 press release, arose from alterations to the design and not as a result of production problems of the type or magnitude which necessitated the subsequent deferral in May 1991. 4. The main problems which led to the deferral in May 1991 were far more numerous, extensive and serious than the production difficulties which had been encountered up to December 1990. They could not have reasonably been anticipated by the Bank. 5. One major problem which led to the deferral of the May 1991 date was the ink adhesion problem. This was a new problem which had not have been predicted prior to mid-April 1991 and was of an order of magnitude and difficulty far greater than earlier problems encountered in 1990. 6. Reasonable efforts were made by the Bank both in the Currency Section and NPA to meet the production problems which accrued from November through April 1991. 7. With the benefit of hindsight some of the problems which were encountered in January-April 1991, but not including the ink adhesion problem, might possibly have been foreseen and dealt with differently. 8. Having regard to the experience and expertise of NPA and its officers which were available to the Bank, as at November-December 1990, there were reasonable grounds on which it could publish its expectation that the release of the $5 note would take place after Eater 1991 and that other denominations would be released at intervals of six monthly periods. 9. As at April-May 1991 the Bank did not have grounds to anticipate that the $5 notes would not be released until late 1992. The May 1991 press release indicated that the Bank would not be in a position to make an announcement of a release date until late in 1991. This was known to Sykes. There was no misleading or deceptive silence by the Bank either during 1991 or at any time. The appellants' challenged those findings on the ground that his Honour applied an incorrect test. They contended that his Honour erred in reaching his findings because he relied on documentary and oral evidence which postdated the relevant representations. It was said that such evidence could not support a conclusion that the Bank had reasonable grounds upon which to base its "predictions". The evidence in question was particularly relevant to findings numbered 4, 5 and 6 relating to the causes of the postponement. I shall return to that question below. The appellants also referred to evidence before the trial judge which was said to be the only material on which the Bank could have based its "prediction". They contended that that evidence would not support a conclusion that the experience and expertise available to the Bank as at November-December 1990 constituted reasonable grounds upon which the "prediction" concerning Easter 1991 could have been based. That evidence was not referred to by his Honour. It is necessary, therefore, to consider it in some detail. On 6 February 1990 an aide memoire was prepared in connection with a meeting with the Federal Treasurer which was to take place on 8 February 1990. The aide memoire indicated that the only production experience which the Bank had with polymer notes was the issue of a commemorative $10 note. The aide memoire relevantly provided as follows: New Note Series The Bank plans to commence the issue of a new series of currency notes later this year so that we can enhance security and reap productivity gains. The Bank is pleased with the field trial (provided by the commemorative $10 note) of a new style of currency note and considers the more general application of the technology is appropriate. Thus, the Bank plans to release at least the first of the new note series, the $5, on plastic.

The Bank plans to issue the new series notes at roughly six monthly intervals with the first being released in the second half of this year… The Bank intends to issue a press release shortly confirming plans to issue a new note series commencing with the $5. The appellants contended that as early as July 1990 difficulties were being encountered. They relied on notes of a meeting held on 27 July 1990 concerning the proposed new $5 note. The notes included the following: 2. Intaglio

Generally concern is being expressed by all regarding the overall quality of these plates. ……………………………… 3. Propafilm

Initial material supplied to production was found to be sub standard having poor gauge variation…

Present production speed limited to 43% of Schedule until the gear is fitted. ……………………………… 8. Overcoating The results of the 4 GSM trial gave conflicting information, therefore, a second trial has been arranged for Tuesday 30 July. ……………………………… On 14 September 1990, Mr Robert L. Larkin, the general manager of NPA wrote to Mr M.G. Bush the head of Central Bank Services of the Bank. The letter relevantly said as follows: NEW $5 NOTE DESIGN In reply to your paper this morning in relation to the options for the design, we make the following points: · Given that the design of the new $5 note was done at NPA we support continuing with the design, but if there is going to be a delay in the launch then we should take the opportunity to further refine the design in order to improve production efficiency and note appearance. · We agree that any delay in launch will adversely impact our ability to market the new technology. · The current design will stretch our capability to new limits particularly in relation to having 60 notes per sheet. In hindsight, this note is too technically complicated for such a low denomination. Therefore, we would like the opportunity to make new intaglio plates and discuss with you some design changes to improve production and appearance such as getting rid of the tie points. ……………………………… Whatever happens we need to have enough time to plan for an orderly production programme encompassing an adequate learning curve given the new technology and processes involved. You may argue that the technology and processes should be old hat by now, having produced two plastic notes, but we are still very much developing and fine-tuning the technology. The appellants drew attention to the warning note sounded by the reference to "fine tuning the technology". On 3 October 1990, Mr Larkin wrote to Mr J.K. Colditz, senior manager of the Currency and Banking Department of the Bank. The letter relevantly provided as follows: NEW NOTE SERIES $5 ……………………………… ...it looks as though the new note will remain unresolved for a further period… I have spoken and written to Mike Bush regarding our desire to re-consider the design of the new $5 note, with a view to improving its production efficiency and ensuring a smooth initial start up. However, this can only take place assuming the note is not issued before Christmas. I believe the issues raised in your letter, and those matters of production efficiency can appropriately be resolved in mutual discussions as soon as the date of issue of the $5 note is clarified. On 4 October 1990, Mr Taylor prepared a memorandum which said relevantly as follows: It is recommended that the Bank provide a grant, to a maximum of $30,000, to Mr Peter Sykes to research and develop a cash drawer for plastic notes. The grant would be subject to some conditions outlined below. Background Mr Sykes perceived that there was a problem for cash handlers handling plastic notes and as a result developed and patented a device for the storage of plastic notes in folds. ……………………………… Mr Sykes approached us initially to find out about likely overseas use of plastic notes. During the course of that initial discussion we pointed out to Mr Sykes the direction we saw cash handling techniques evolving to handle plastic notes. ……………………………… Following those discussions, Mr Sykes showed us a crude prototype of an individual cash drawer module that utilised his basic ideas but which also kept notes flat. Associated with the cash drawer would be a device for banding each ten notes semi-automatically. Work on developing this bander had not started. Mr Sykes recognised that in the long term this system would be better for the banks that his initial device. However, Mr Sykes had invested all his funds in his first device. Mr Sykes was informed that the Bank would not try to dissuade him from promoting his initial device - it met an immediate demand and it appeared that the payback period for purchasers would be quite short. However, Mr Sykes was encouraged to develop his cash drawer system and if he needed financial support to do so he should put a proposal to the Bank. Mr Sykes has now put such a proposal to the Bank. ……………………………… On 5 October 1990, Mr Larkin sent a note to various officers within NPA as follows: $5 NEW NOTE SERIES John Colditz has advised that a decision has been made with regard the $5 new note, and RBA wishes to issue the note at the end of January if possible… I re-enforced our previous request to John that we discuss the possibility of making some design changes to the note to improve its initial and long term productivity… We need to quickly resolve the detail of our redesign request, and prepare a production plan. We then need to meet with RBA with our proposed changes (preferably with proofs) and advise them of our capability in terms of launch date. Mr Gration is to co-ordinate this activity, particularly in relation to the question of note redesign for improved productivity. On 11 October 1990, a memorandum was brought into existence by the currency section of the Currency and Banking Department of the Bank. The memorandum was headed "NEW NOTE SERIES, NNS $5 DENOMINATION" and relevantly provided as follows: ……………………………… It is our view that to bring the reworked design through redesign, platemaking and proofing, the earliest reasonable date the new note can be put on the Supersimultan will be mid January to early February 1991, which suggests a theoretical early issue date of around March/April 1991. Our preferred timing is mid April. In coming to this view, we have considered the following issues: · other production requirements; · issue strategy ; · other factors. Other Production Requirements

……………………………… Other Factors When looking at the possibilities of when the NNS$5 might issue, a number of other factors are relevant and need to be considered. Broadly, these are: (i) changes in notice specifications (ii) distribution of finished notes by the Bank's branches; (iii) pre-release testing; (iv) public education; (v) risk factors.

……………………………… (iii) Pre-Release Testing The closeness in the timing means pre-release testing particularly with a trickle approach may be impractical.

Alternatively, we could ignore testing altogether. A January release date pretty much rules out pre-release testing.

……………………………… (v) Risk Factors An early release date (even mid march) requires things to go well. Past experience suggests that this optimism cannot be justified. Main risk factors relate to: · pre-production problems - new design or plates prove to be unsatisfactory; · production problems - NPA warn that these have not all been resolved; · loss of impact of public eduction; · further loss of credibility if things are delayed again. Overall, the advantages and disadvantages of going early by end January rather than late are summarised below:

……………………………… Conclusion The issue of the new note series $5 in late January 1990 has advantages but also significant disadvantages. The probability of things going wrong is too high, in our view, to further risk the Bank's credibility. On balance, an issue date of around mid April is recommended. The appellants drew attention to the matters dealing with risk factors as indicating reservation about the Bank's ability to achieve target dates. On 12 October 1990, Mr Larkin wrote to the Deputy Governor of the Bank relevantly saying as follows: We recognise that the Bank is keen to issue the new plastic note in early 1991; however, we strongly believe that this opportunity should be taken to ensure that the $5 note, when issued, will be a product which is not only aesthetically pleasing and fully compatible with our production processes but which draws favourable comment as the first circulating Australian bank note on a plastic substrate. Our desire for highest possible quality is also prompted by the perceived life of the $5 design.

There are a number of scenarios which would impact upon the issue date of the NNS $5 note:

Our preference is for Scenario III and the quality of Intaglio printing of the portrait which will be achieved through a combination of photopolymer and engraving techniques.

While we fully appreciate RBA's desire to issue the new note as soon as possible following the Christmas break, we believe the risk of further embarrassment is significant if we do not provide for an orderly processing and management of the project. The world will be especially critical if this note does not live up to expectations. The appellants drew attention to the note of warning in the last paragraph. On 16 October 1990, Mr Colditz prepared a note recognising possible difficulties as follows: NEW $5 NOTE

1. The news from NPA is disappointing to say the least. However, let it be clear that no-one, least of all the issuer, wants to release an inferior product. To a considerable extent we are in NPA's hands. The implication seems to be that had we gone ahead and issued the previously agreed design, we would indeed have had an inferior product; now that a design change is necessary, the opportunity should be taken to fix up some other problems that were becoming evidence to NPA. There is the possibility that quality defects perceived by NPA are more apparent to them than they would be to us.

3. With so many changes being contemplated, there is also the possibility that we won't like what we see at proof stage, thus injecting further delays.

4. The NPA thrust now is that we change the emphasis from time deadline to quality. While we understand and sympathise with the sentiment, we've been "caught" by that philosophy before.

5. The earliest issue possibility put to us by NPA is now early March, with their preference being end April. If we are forced out as far as March, and it seems we are, is the embarrassment any worse by going to end April? Probably not.

7. Should we put our new target issue date in the public forum? Given all the changes and uncertainties, we believe it is too risky to do so. Our recommendation is not to be too precise. There is a handwritten note on that document as follows:

It looks like the 12th floor have accepted end - April; confirmation to come. On 31 October 1990, Mr Bush, the head of Central Bank Services of the Bank, wrote to Mr Larkin saying relevantly as follows: NEW $5 NOTE Referring to recent discussions and your letter of 12 October to the Deputy Governor, your Scenario III is accepted, with issue of the new note at end April 1991.

As you know, we had hoped to bring something out well before then but we are prepared to wait in the interests of project manageability and product quality.

We would, of course, not wish to slip again and we are looking for your firm assurance that we can confidently re-plan our public education programme etc on the basis of a 30 April 1991 release date.

Specifically, we would like 30 million pieces of top quality notes in the branches by that date…

We would like your confirmation that this will be achieved, together with a critical path showing each phase of the process, including details of all sign-off dates, to achieve the aforementioned schedule. The response came in the form of a letter from Mr Larkin to an Assistant Governor of the Bank of 16 November 1990. After referring to the letter of 31 October 1990, Mr Larkin's letter said:

I write to advise with regard our efforts to ensure that the production and delivery schedule for the new $5 note will be met.

The schedule and key dates detailed in [memorandum dated 2 November 1990] are based on minimum requirements to allow a redesign of the note for improved production efficiency and product quality. We believe that the programme proposed while tight, is realistic and achievable, but contingent on the meeting of the key dates. There is no slack time built into the programme and it includes working over through the Christmas shutdown period.

I would like to assure you that NPA is taking every opportunity to minimise the risks in the production schedule and provide alternate action in case of major problems… In addition, we believe that our experience with and lessons learnt from the Singapore Project and more recently the Western Samoa Project provide an opportunity to ensure that unforeseen problems with the new $5 note are minimised.

We must recognise however the high risks involved in closely linking a public announced release date to a tight schedule, particularly in view of the new technology involved. The $5NNS will be our first "non commemorative" banknote and will certainly test both our resources and our technology. The appellants contended that, in the light of that evidence, there was no basis on which the trial judge could have found that the Bank had reasonable grounds for making the "predictions" which his Honour found had been made. The Bank contended, on the other hand, that there was evidence to justify such a finding in the form of: (a) research since 1968; (b) issue of the $10 commemorative note; (c) problems with pre $5 polymer note production were different from the ink adhesion problem which first appeared in April 1991; (d) process testing was undertaken and disclosed production results adequate to allow "after Easter 1991" issues of $5 polymer note. The difficulty with the Bank's contention, however, is the lack of any specificity in the evidence relied on to support the reasonableness of the "prediction" that NPA could produce the desired quantity of new notes of the desired quality by the end of April 1991. The Court was not taken to any evidence as to the research alleged to have been undertaken since 1968. The experience concerning the issue of the $10 commemorative note was equivocal. That issue was a limited one and the Bank experienced difficulties with the issue. Further, it is not to the point to say that the problems which caused the postponement were not problems which were apparent at the time of the "prediction". The material relied on by the trial judge for his findings demonstrated fairly clearly that the problems encountered in 1991 which led to the postponement were not foreseeable and had not been experienced as at the time of the representations. However, the question is whether the Bank had reasonable grounds for making the relevant "predictions". The complaint is that, by November 1990, the Bank had undertaken no production testing to determine whether the target dates were achievable, in circumstances where the technology was new and difficulties had already been experienced. If it be accepted that the statements found by his Honour were representations with respect to a future matter, section 51A of the Trade Practices Act cast the onus onto the Bank to establish that it had reasonable grounds for making them. In the light of the material extracted above, I have serious reservations as to whether that onus was discharged. However, for the reasons which follow, I do not consider that the statements in question were representations with respect to a future matter. Accordingly, it is not necessary to decide this question. REPRESENTATIONS WITH RESPECT TO ANY FUTURE MATTER The trial judge found that the statements made to Mr Sykes were representations with respect to a future matter. It is necessary, therefore, to consider the character of the statements which his Honour found had been made. The Bank contended that the statements by the Bank's representatives, as found by his Honour, were no more than statements as to the then expectation of the Bank. The trial judge thought that that contention was "somewhat over subtle in the circumstances of the present case". His Honour considered that the Bank was in a unique position to know the circumstances and factors which bear upon release of the notes since it is the governmental authority charged with the manufacture, promotion and marketing of the notes. His Honour considered that, in substance, there was no real distinction to be drawn between the statement of an "expectation" that an event would take place and a statement that an event would take place, especially where the act in question was one which is to be implemented the representor. In reaching that conclusion the trial judge cited comments made by Hill J in Ting v Blanche (1993) 118 ALR 543. In that case, Hill J observed (at 552-553) that a representation as to future conduct or a future event will generally imply (and sometimes explicitly state) that the maker of the representation was of a particular state of mind as to that future conduct or event as at the time the representation was made. On the other hand, it is not correct to treat a representation as to future conduct or a future event as not being a representation with respect to a future matter merely because it implies a representation as to the maker's present state of mind. The present question, however, is whether the statements found by the trial judge to have been made by the Bank can properly be said to be representations as to a future matter. If the statements can properly be so treated, the fact that they implicitly represent the Bank's present state of mind would not detract from their being representations within the meaning of section 51A. If they cannot, the observations made by Hill J simply have no bearing on the question. They do not assist in determining whether or not particular statements should be treated as representations with respect to any future matter. Different considerations may apply according to whether a statement about a future event is being made by a person who will be responsible for the occurrence or non-occurrence of the relevant event. If the make of the statement is not responsible, the statement could not be construed as carrying with it a statement about the present intention of the maker of the statement. However, it might carry with it a statement about the belief of the maker. On the other hand, if the maker is responsible, a question arises as to whether the statement is in truth a statement with respect to a future matter or whether it is, fairly construed, nothing more than a statement by the maker of present intention or belief. By making amendments to Mr Sykes' draft editorial in December 1990, it is clear that Mr Carlin was intending that the editorial in "Club Life" would convey a message different from that which Mr Sykes intended to convey in his original version. The statements which the trial judge found had been made to Mr Sykes on behalf of the Bank must be considered in the light of the comment implicitly made by Mr Carlin by making the amendments. Whereas Mr Sykes' draft might properly be characterised as an unqualified prophecy, the language of Mr Carlin's revision is much more akin to a statement of the Bank's then expectation. Mr Sykes must be taken to have understood and appreciated that Mr Carlin was denying that Mr Sykes' original words accurately reflected the position. Thus, Mr Sykes must have understood Mr Carlin as rejecting the unqualified prophecy which Mr Sykes had expressed. Mr Sykes knew that the proposal for release "after Easter 1991" was no more than the Bank's expectation and that the Bank was not prepared to be a party to a statement that the notes "will be introduced from next April". Accordingly, from 7 December 1990, Mr Sykes knew that the Bank was not prepared to make a prediction. Mr Carlin was only prepared to say something about the present expectation of the Bank. Everything which had been said to Mr Sykes beforehand must be understood in the light of that clear intimation on behalf of the Bank. When the press releases and the statements found by his Honour are considered in the light of Mr Carlin's subsequent correction to the editorial in "Club Life", it is clear that they amount to no more than a statement by the Bank in December 1990 that it had an expectation that plastic bank notes would be introduced, starting with the new $5 note from sometime after Easter 1991. It was not a prediction and was not a representation with respect to a future event. Accordingly, section 51A had no application. It may be, of course, that the statement as to the Bank's expectation carried with it an implied representation that that expectation was reasonably held. Further, such an implied representation may have been misleading or deceptive if it were not reasonably held. In the absence of assistance from section 51A, the onus of establishing such allegations would rest on the appellants. It would not be a matter for the Bank to establish positively that such representation was true. The evidence summarised above would not support a conclusion that the Bank did not have the expectation in question. On the contrary, it is clear that the Bank had the expectation, in December 1990, that the new $5 note would be introduced sometime after Easter 1991. In any event, no such representation was alleged. It is not necessary, therefore, to determine whether that expectation was reasonably held. CONCLUSIONS It follows, in my opinion, that the appellants have failed to establish that any conduct on the part of the Bank was misleading or deceptive. The trial judge found that the conduct of the Bank complained of by the appellants was conduct in trade or commerce. The Bank sought to challenge that conclusion on appeal. In the light of the conclusion which I have reached concerning the nature of the representation, it is unnecessary to decide whether any relevant conduct of the Bank was conduct in trade or commerce within the meaning of section 52. The Bank also contended that if there was some prediction as to the expected release date of the new notes, it was not reasonable for the appellants to have relied on that prediction in acting in the way alleged in the statement of claim. As indicated above, the primary judge did not find it necessary to deal with the question of reliance. In the light of the conclusion reached above, it is still not necessary to deal with that question. The alternative case propounded on behalf of the appellants was that the Bank was in breach of a duty of care because it failed to take reasonable steps to ensure that its representations were accurate in all material respects. In the light of the conclusion reached above that the statements, properly construed, were accurate statements of the Bank's present expectations, it follows that there was no breach of duty and the claim in negligence must also fail. The appeal should be dismissed with costs. I certify that this and the preceding twenty-two (22) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.

Associate: Dated: 6 November 1998 Counsel for the Applicant: M.A. Ashhurst

Solicitor for the Respondent: Reserve Bank of Australia