Re Stefan Platz and Helga Platz v Creative'S Landscape Design Centre Pty Ltd; Zinco Pty Ltd; William Kochergen; Al Kochergen and William Alex Kochergen [1989] FCA 7 (1 February 1989)

FEDERAL COURT OF AUSTRALIA

Re: STEFAN PLATZ and HELGA PLATZ
And: CREATIVE'S LANDSCAPE DESIGN CENTRE PTY LTD; ZINCO PTY LTD; WILLIAM
KOCHERGEN; AL KOCHERGEN and WILLIAM ALEX KOCHERGEN
No. G4 of 1987
Trade Practices

COURT

IN THE FEDERAL COURT OF AUSTRALIA
SOUTH AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Fisher J.(1)

CATCHWORDS

Trade Practices - Misleading or deceptive conduct - Lease of retail garden centre and purchase of stock and equipment - Representations as to volume of sales of garden centre - Reliance of purchasers thereon - liability of vendor - Question of relief deferred.

Trade Practices Act 1974 - s.52

HEARING

ADELAIDE
1:2:1989

Counsel for the Applicants: Mr M. Hoile

Solicitors for the Applicants: John Goldberg & Co.

Counsel for the Respondents: Mr J. Mansfield, QC and Mr B.M. Bowler

Solicitors for the Respondents: Hume Taylor & Co.

DECISION

These proceedings arise out of negotiations which led up to the acquisition by the applicants Stefan Platz and Helga Platz ("Mr and Mrs Platz") of the stock, plant and equipment of a retail garden centre conducted by the respondent Creative's Landscape Design Centre Pty Ltd ("Creative's") at 272 Gorge Road and the grant to them by the respondent companies of a lease of the garden centre premises. Mr and Mrs Platz contend that the conduct of these companies constituted a contravention of s.52 of the Trade Practices Act 1974 ("the Act") and that the respondents William Kochergen ("Mr Bill Kochergen"), Al Kochergen and William Alex Kochergen ("Mr Kochergen senior") were persons involved in the contravention. Mr and Mrs Platz claim relief pursuant to ss.82 and 87 of the Act. However the proceedings ultimately were conducted on the basis that I should determine in the first instance the various questions of liability under the Act, for fraudulent misrepresentation and under the Misrepresentation Act (S.A.) 1972 and only if necessary thereafter deal with the question of the appropriate relief. The three Kochergen respondents were directors of Creative's and Zinco Pty Ltd and as such participated to a greater or lesser extent in the negotiations.

2. Mr and Mrs Platz alleged a number of misrepresentations made both in documents and orally but the alleged misrepresentations which I see as crucial to these proceedings related to the volume of sales of the retail garden centre for the financial years 1982/83, 1983/84 and 1984/85. Mr and Mrs Platz contend that in reliance upon these representations they entered into an agreement for sale and purchase of the stock, plant and equipment ("the sale agreement") and a lease and under-lease of the garden centre premises. They plead that these representations were false and thus constituted misleading or deceptive conduct for the purposes of s.52 of the Act. Counsel for the respondents made a number of submissions based on the form of the pleadings and the reliance by the applicants on their allegation of fraudulent misrepresentation all of which matters I will deal with later in these reasons. It is first of all necessary to relate the background to the proceedings. I propose to do this in the first instance by reference to the documentary evidence, the existence of which cannot be a matter of dispute.

3. The Kochergens had for a number of years conducted a retail garden centre on the site at 272 Gorge Road Athelstone and a wholesale nursery and landscape business at 808 Gorge Road. Since early 1984 the landscape business was conducted at 272 Gorge Road. The Kochergens' background was as follows. Mr Bill Kochergen and Mr Al Kochergen were both raised on their father's farm in California. When his schooling had finished Mr Bill Kochergen left the farm, commenced training in landscape contracting and undertook a correspondence course with the university. He later worked in landscape contracting and garden maintenance while continuing his correspondence course. He had no formal training in landscaping nor did he graduate from university. In 1972 Mr Bill Kochergen came to Adelaide with his brother Jack and bought the site at 272 Gorge Road.

4. Mr Al Kochergen worked on his father's farm when he completed his schooling and then worked at the county hospital for two years. While at the hospital he also worked part-time as a mechanic and as a gardener. He then returned to the farm until he came to Australia in 1973 with his family and parents. He began work at 272 Gorge Road, the then place of business of "Creative's Gardening and Landscaping", and shortly thereafter, 808 Gorge Road was purchased.

5. Mr and Mrs Platz have each in their respective ways had quite considerable business experience. They had at the relevant time much more experience of commercial matters and a much greater involvement in the world of business than the Kochergens. Mr Platz had been manager for South Australia and the Northern Territory for Agfa Ltd, a company involved in the merchandising of photographic materials, since 1969. He had in particular engaged himself in setting the sales budgets for the company and in achieving these budgets. During his time as manager he had increased the annual turnover of his branch from approximately $300,000 to $5.5 million.

6. For approximately eight years from 1962 Mrs Platz had conducted a hairdressing salon. In 1970 she sold the business and with her then husband bought another. At a later stage they owned five hairdressing salons. However when her marriage ended those salons were sold and she went back to managing one salon. In 1982 Mr and Mrs Platz bought a number of shops in one of which she commenced another hairdressing business. In January 1985 they opened a plant shop adjacent to the hairdressing salon which Mrs Platz then operated in conjunction with her hairdressing salon.

7. In early June 1985 Mr and Mrs Platz were looking to buy a business in which they both could be involved. They had inspected a number of businesses including hardware stores and a gift shop and then became aware of the fact that the Kochergen's garden centre was for sale. Mr and Mrs Platz saw an advertisement in the Sunday Mail newspaper of 2 June, the terms of which were as follows:
"FOR LEASE OR SALE

CREATIVE'S RETAIL GARDEN CENTRE
272 Gorge Road, Athelstone
A decision by the Director's (sic) of Creative's
Landscape Design Centre Pty. Ltd. to concentrate their
activities in the areas of plant wholesaling and
landscaping has resulted in this outstanding retail
business opportunity becoming available.
10 + 5 YEAR LEASE or OUTRIGHT PURCHASE
Suit established nursery business seeking another high
quality outlet in a developing area, although will also
suit an experienced smaller owner/operator. All
enquiries to
JOHN P. YOUNG & Associates (S.A.) Pty. Ltd.
Management Consultants
38 Greenhill Road, Wayville, S.A. 5034
P.O. Box 80, Goodwood, S.A. 5034, Telephone [phone]."

8. Mr Platz contacted a Mr Peter Middleton of John P. Young & Associates Pty Ltd, who had the conduct of the sale, and was told that a purchaser would be required to pay for stock and plant and that the rental of the premises was not negotiable. Mr Middleton said that the figures of the business could be made available. It was arranged that these would be delivered to the hairdressing salon conducted by Mrs Platz which was relatively near the premises at 272 Gorge Road. These figures were in the form of two documents, which for purpose of identification only I call the "Touche Ross" documents, relating respectively to the financial years ending 30 June 1983 and 1984. It is necessary to set out in full each of these documents commencing with that for the year ending 30 June 1983.

"TOUCHE ROSS & CO.
CREATIVE'S LANDSCAPE DESIGN CENTRE PTY. LTD.
Bill Kochergen has provided this firm with figures
which provide an estimated annual profit of the
retail centre only. The figures are broken up
into two columns - 6 day trading and 7 day trading
per week.
The sales for the six day column have been
extracted from the annual figures for the year
ended 30th June, 1983. The sales figure for the
seven day column include an estimated turnover
figure of $3,800 per Sunday. We consider this
figure to be low.
Included in the expenses is interest of $60,000
which is based on the borrowing of $500,000 at 12%
per annum.
We comment as follows -
The estimated sales turnover based on seven day
trading of $644,000 is, in our opinion, not
unreasonable at all. It averages at $12,500 per
week which probably is an under-estimation.
The percentage of gross profit to sales is shown
at 60%. Bill Kochergen feels that this is not
unreasonable, however, as an independent garden
centre, the margin could be reduced to at least
50% due to independent purchasing costs. Using
the 50% gross profit margin, a net profit of
$60,500 would be achieved.
No rental figure has been included in the expense
figures, however, the rent is substituted in the
main by the interest charge of $60,000 plus the
inclusion of rates and taxes. Wages of $130,000
for the seven day trading period is not
under-estimated in our opinion, considering the
penalty rates which would apply during times of
outside normal trading hours.
Yours sincerely,
W.R. HENDERSON
Partner
Enc.
CREATIVE'S LANDSCAPE DESIGN CENTRE PTY. LTD
RETAIL SALES AND EXPENSES - 272 GORGE ROAD
YEAR ENDED 30TH JUNE, 1983
6 days 7 days
Sales $444,000 $644,000
Gross Profit (60%) $266,000 $387,000
Accountancy $ 1,500 $ 1,500
Advertising 22,000 32,000
Bank Charges 1,800 1,800
Subscriptions 500 500
Delivery 500 500
Insurance 4,000 4,000
Interest 60,000 60,000
Motor Vehicle (2 vehicles) 4,000 4,000
Postage and Stationery 4,000 4,000
Power 7,500 7,500
Rates 5,000 5,000
Repairs 5,500 5,500
Security 200 200
Staff Benefits 1,000 1,000
Telephone 2,500 2,500
Wages 90,000 130,000
Leasehold Rent 1,500 1,500
$211,500 $261,500
Net Profit before Depreciation$ 54,500 $125,500"

The second document was in the following terms:

" TOUCHE ROSS & CO.
CREATIVE'S LANDSCAPE DESIGN CENTRE PTY. LTD.
Attached is a schedule of the retail figures as
provided by Bill Kochergen in respect of the year
ended 30th June, 1984. You will note that the
gross profit margin is shown at 65%. This is an
increase of 5% over those figures prepared in
respect of the year ended 30th June, 1983. Bill
Kochergen has advised that the margin has
increased due to firstly, an increase in retail
prices and secondly, a culling of product lines
held for resale.
Please note that the figures provided are for a
six day trading week.
Yours sincerely,
W.R. HENDERSEN
Partner
cc: Mr. W. Kochergen
CREATIVE'S LANDSCAPE DESIGN CENTRE PTY. LTD.
RETAIL SALES AND EXPENSES - 272 GORGE ROAD
YEAR ENDED 30TH JUNE, 1984 (SEE NOTE)
6 days
$403,000
Gross Profit (65%) $261,950
Accountancy $ 1,500
Advertising 17,000
Bank Charges 1,900
Subscriptions 500
Delivery 500
Insurance 5,500
Interest 64,000
Motor Vehicle (2 vehicles) 4,500
Postage and Stationery 2, 500
Power 8,000
Rates 5,700
Repairs 4,000
Security 100
Staff Benefits 1,500
Telephone 2,900
Wages 81,000
Leasehold Rent 1,700
$202,800
Net Profit before Depreciation$ 59,150
Note
The June, 1984 sales have been estimated at
$38,000 for the month and the expenses based on
normal monthly expenditure incurred for the months
prior to June."

9. Mr and Mrs Platz considered these documents on Tuesday 4 June 1985 and a meeting was arranged for the morning of the following day. The various versions of the discussion at that meeting, which was inconclusive, will be later reviewed. A further meeting was arranged for the afternoon of the next day. At that further meeting a handwritten document was produced by Mr Bill Kochergen in which the following information appeared:

" 4-6-85
Sales - Retail Garden Centre 272 Gorge Rd. Athelstone
1983 Sales (big promotion year)
lower margins ? $637,774
1984 Sales increased prices
Bought little in ? 536,607
1985 Sales June estimated ? 583,600
Wages and Salaries
1984 - 82,537
1985 Approx 88,000
Advertising Budget 5% of estimated turnover.
Present Gross Profit Margin 65% - 66%"

The question marks were placed on this document by Mr Platz.

10. Mr Bill Kochergen stated that he produced a further document at one of these meetings being a letter to him from his accountants Touche Ross & Co. dated 31 January 1984 which purported to enclose copies of financial statements for the period of six months ending 31 December 1983. However the statements attached to the letter were in respect of the year ended 30 June 1984. The only significant figures which, according to Mr Bill Kochergen, were referred to at this meeting were those which stated the landscape sales of Creative's as $241,735.42 for the year ending 30 June 1983 and $198,931.10 for the year ended 30 June 1984. The other sales of Creative's were called "Retail Sales" and comprised $752,027.39 for the year ended 30 June 1983 and $655,585.03 for the year ended 30 June 1984.

11. On 6 June 1985 Mr and Mrs Platz signed a letter prepared by Mr Middleton indicating their intention to make an offer to purchase the garden centre which letter was in the following terms:

"S. & H. Platz,
19 Treefern Avenue,
ROSTREVOR, S.A. 5073
6th June, 1985
The General Manager,
John P. Young & Associates (S.A.) Pty. Ltd.,
38 Greenhill Road,
WAYVILLE, S.A. 5034
Dear Mr. Middleton,
This letter is to confirm the intention of my
wife, Helga, and myself to submit an offer of
purchase for the retail nursery business owned by
Creative's Landscape Design Centre Pty. Ltd., and
situated at 272 Gorge Road, Athelstone.
We have thoroughly considered all financial
aspects indicated to us by the Directors of the
above company, and understand that the purchase
involves;
1. Annual lease of $78,000 plus outgoings,
adjusted to the C.P.I. and subject to annual
reviews.
2. Purchase of fixtures and fittings listed and
valued at $44,773.
3. Purchase of stock at an agreed price.
4. Terms of the lease to be an initial 10 years
plus option of a further five years.
5. We understand the name Creative's and/or any
industrial property does not pass with the
property. We will trade under a new name.
Final acceptance will be subject to finance, which
will be through the ANZ Bank, Kent Town.
We look forward to your confirmation that
negotiations can proceed further, when we would
expect to pay a deposit into a Trust Fund while
final sale documentation and all legal matters are
concluded.
Yours faithfully,
STEFAN PLATZ
HELGA PLATZ"

On the following day Mr Middleton delivered to Mr and Mrs Platz a letter signed by him on behalf of his clients which was as follows:

"JOHN P. YOUNG & ASSOCIATES (S.A. PTY LTD)
CONFIDENTIAL
7th June 1985
Mr and Mrs S. Platz,
19 Treefern Avenue,
ROSTREVOR, S.A. 5073.
Dear Mr and Mrs Platz,
On behalf of Creative's Landscape Design Centre
Pty. Ltd., we are pleased to accept the intent of
your letter dated June 6th 1985 and to offer you
the opportunity to lease the property situated at
272 Gorge Road, Athelstone, and to purchase the
stock, fixtures and fittings as listed separately.
The Directors have asked me to list for you the
following conditions of lease and purchase:-
1. Annual lease of $78,000.00 plus outgoings of
freehold and leasehold, reviewed and adjusted
annually subject to the C.P.I.
2. Purchase of fittings and fixtures as listed,
total value of $44,773.00.
Zinco Pty. Ltd., the Directors' nominee
company, sells the fittings and fixtures.
3. Purchase of our stock at an agreed value,
total of which is due and payable on
settlement.
4. The term of the lease to be an initial 10
years plus an option of a further 5 years.
Also that the lease be registered over the
title.
5. The inclusion of first right of refusal and/or
first option of purchase of freehold and
leasehold to be offered to the Platz or Lessee
should the Directors decide to sell the real
estate.
6. The full and complete understanding that the
name Creative's and/or any industrial
properties, e.g. logos, slogans and insignia
do not pass with the sale of fixtures,
fittings and stock purchase and/or lease.
7. That a deposit of $15,000 being approximately
10% for fittings fixtures and stock be
submitted by June 14, 1985 to our client's
solicitors trust account in the name of
O'Loughlin Robertson & Co. Trust Account, this
money to be held on mutual behalf and
disbursed at the time of settlement, July
15th, 1985.
8. That your bank approval be submitted by June
14th, 1985.
9. That settlement be on or before July 15th,
1985.
10. That the lessee (Platz) have access to the
Lorenz leasehold for the term of the lease in
the form of written approval from the
Directors of Creative's or a sub lease
approval by the Lorenz family, whichever is
most advantageous to the lessee.
11. That should the Lorenz family demand that the
Directors of Creative's execute their option
to purchase land contained within the Lorenz
lease, a rental increase of an amount equal to
15% per annum or current market rates of the
purchase price be considered as an approved
rental increase.
12. That Creative's and the Directors of
Creative's agree not to operate a retail
nursery and/or garden centre within a 6? 10?
kilometer radius for the term of the lease.
13. The lessee (Platz) agree not to operate a
Wholesale Nursery from the site at 272 Gorge
Road, Athelstone, for the term of the lease.
14. That the lessee (Platz) agree not to operate a
landscape design and contracting business from
the site at 272 Gorge Road, Athelstone for the
term of the lease.
15. The lessee (Platz) agrees to continue the
retail nursery and garden centre as per
council approval and ongoing consent, usage
for the term of the lease.
16. That the lessee (Platz) allows Creative's an
advertising board (sign) of approximately 2 x
3 metres in a conspicuous position on site as
a landscape and information board for sales
brochures for Creative's Landscape Design
Centre Pty. Ltd. This will be mutually
beneficial for both lessee and lessor.
17. That the lessee and lessor sign appropriate
lease documents prepared by O'Loughlin
Robertson & Co. for our mutual behalf.
Your acceptance of this offer can be indicated by
submission to John P. Young and Associates (S.A.)
Pty. Ltd. the cheque indicated in point 7, which
we, in turn, will deposit with the solicitors
O'Loughlin Robertson & Co.
The Directors have asked me to express to you
their entire satisfaction with the course of
negotiations thus far, and their desire for a long
and happy association with you.
Yours faithfully,
JOHN P. YOUNG & ASSOCIATION (S.A.) PTY. LTD.
PETER R. MIDDLETON - General Manager"

12. Subsequently a draft of an agreement for sale and purchase in relatively standard form prepared by the Kochergen's solicitors was supplied to Mr and Mrs Platz for consideration by them and their solicitor. Clause 24 is, at least at this stage, the only portion of the agreement to which attention need be given. That clause is as follows:

"24. (a) The Purchaser shall carry on a retail
nursery business at and from the premises
at 272 Gorge Road, Athelstone aforesaid,
and shall not carry on any wholesale
nursery business or landscape design and
contracting business which the Purchaser
acknowledges the Vendor intends to
continue after the date of settlement.
The term 'retail nursery business' means
and includes a sale of the products of the
nursery business to the general public.
The term 'wholesale nursery business'
means and includes a sale of the products
of the nursery business to persons who
carry on a retail nursery business or a
sale other than to the general public.
(b) The Vendor shall not as a manager receiver
agent or partner of any person during the
term of the Memorandum of Lease and
Memorandum of Underlease referred to in
clause 15(a) and 15(b) hereof carry on or
be concerned or interested or engaged
directly or indirectly in a retail nursery
business within an area of a circle formed
by taking a radius of 10 kilometres from
the premises at 272 Gorge Road, Athelstone
aforesaid."

13. The contents of these documents, assessed objectively, would prima facie appear to direct attention to the retail nursery business conducted by Creative's at 272 Gorge Road and the volume of sales of that business during the years in question. They do not indicate any difficulty in isolating out the volume of these sales from the sales of the other businesses. Much was made from time to time of the fact that no payment was made for the goodwill of the business and that notwithstanding the terminology of many of the documents Mr and Mrs Platz were not acquiring the business which Creative's had previously conducted on that site. However there is no doubt that in taking a lease of the premises at the specified rental they were acquiring the local goodwill referable to these premises, which goodwill was preserved for them by the restrictive covenant in clause 24(b) above.

14. I turn now to the oral evidence of happenings prior to and at the two meetings held respectively on 5 and 6 June 1985 concerning which there was much dispute. It is apparent that at the conclusion of the latter meeting or shortly thereafter Mr and Mrs Platz decided to acquire the stock and plant and to take a lease of the premises. It follows that, in so far as they contend that in coming to that decision they relied upon conduct which contravened the Act, that conduct must have taken place between Monday 3 June and Thursday 6 June inclusive. It is my opinion that if they are to succeed Mr and Mrs Platz can only do so in respect of the representations concerning the volume of sales in each of various years. Accordingly I propose to concentrate on the oral evidence on this topic. There was much dispute between Mr Bill Kochergen and Mr and Mrs Platz in this evidence, and it is helpful to assess it against the background of the documents to which I have earlier drawn attention. I put to one side the representations allegedly made in respect of other matters such as the value of the fittings and fixtures and the stock because in my opinion Mr and Mrs Platz cannot establish these as mispresentations. Their case must in my view stand or fall on the oral and written representations made concerning the volume of sales.

15. Mr Platz gave evidence concerning the meeting with Mr Middleton on Monday 3 June 1985. This meeting took 25 minutes to a half-hour and Mr Middleton indicated that he had no financial figures, particularly on turnover, of the business available. He said he would arrange a meeting with the Kochergens. Mr Platz was told by Mr Middleton at the Monday meeting that the price of the fittings and fixtures was $45,000, that the name Creative's would not be available to the purchaser, and that the terms of the proposed lease was 10 years with a right of renewal for a further 5 years at a rental of $78,000 which was not negotiable. Arrangements were made for a meeting with the Kochergens on the following Wednesday and for financial figures to be provided which would prior thereto be delivered to Mrs Platz's salon. Mr Platz said that he told Mr Middleton that he wished to study the figures before they met with the Kochergens. Mr and Mrs Platz in this way received what I have earlier called the Touche Ross documents and a valuation of the premises by Jackman and Treloar Ltd. They studied these documents on the Tuesday evening. Neither Mr Middleton nor the author of the valuation was called by the respondents.

16. On Wednesday 5 June a meeting was held at 272 Gorge Road. Mr Middleton was present to introduce Mr and Mrs Platz to Mr Bill and Mr Al Kochergen. Mr Middleton left shortly thereafter. Mr Platz brought with him to the meeting the Touche Ross documents and said that the sales figures therein were very soon under discussion. He said that they were 12 months old and that on the basis of these figures the rent was far too high and that it was not a paying proposition. He drew attention to the fact that in the figures for the year ended 30 June 1984 the word "rent" was written alongside the word "interest". If the rent was to be $78,000 the profit figure was, he said, only about $45,000 and that "it was not worth it". In particular he said that it was not worth giving up two jobs. He said that he asked for later figures and Mr Bill Kochergen said he would write something out and list what the sales were for the current year. There was discussion concerning the estimated turnover figure of $3,800 for Sunday trading which appeared in the Touche Ross document in relation to the year ending 30 June 1983. The Kochergens did not trade on Sundays. Reference was also made to the gross profit margin which Mr and Mrs Platz accepted they could not hope to achieve. Mr Platz said that he and his wife enquired on a number of occasions whether the business was only the retail as advertised and whether the figures were only of retail sales and that Mr Bill Kochergen said that they were. The meeting was adjourned until the next day for the purpose, he said, of more up-to-date figures being produced.

17. The Thursday meeting was held at about lunchtime in the presence of Mr Bill and Mr Al Kochergen and Mr and Mrs Platz. Mr Kochergen senior was possibly present, Mr Platz said, but only for a short time. Mr Bill Kochergen produced the handwritten figures set out above saying "here are the figures you requested". Mr Platz said he also asked why they were so different from what he called "the official figures". He was told by Mr Bill Kochergen that the business had improved and that the handwritten figures were the actual figures, and had come from a computerised cash register printout. Mr Platz said he also asked for and obtained explanations in respect of the figures for 1983 and 1984. He was told that in the 1983 year there was a big promotion and that their brother Jack worked on lower profit margins. In the 1984 year they decided to increase their prices and work on a higher margin and possibly achieve a lower turnover. At a later time in the meeting Mr Bill Kochergen again said in answer to a question concerning the 1984 figures that the Touche Ross figures were the official figures and the handwritten ones were the true figures. Mr Platz said that his wife asked several times at this meeting whether Mr Bill Kochergen was sure that the figures pertained only to the retail garden centre. He said that she asked this question on so many occasions that it became embarrassing. It is pertinent to note that there was evidence that she again asked this question, this time of Mr Al Kochergen, at a subsequent visit on a Saturday to the garden centre.

18. At one of these meetings Mr Platz said that he was told of the three businesses conducted by Creative's and that the company recorded the operations of the three businesses in one set of accounts.

19. Mr Platz's evidence as to the happenings at these two meetings was not shaken although subject to some challenge during a searching cross-examination. He confirmed his evidence that he would not have "bought the business" on the basis of the figures in the Touche Ross documents but only after he was assured that the handwritten figures were the true and correct figures. He also agreed that in relation to the Touche Ross figures he had asked where were the primary records, the retail sales, the journals and that Mr Bill Kochergen had said that they were not available in the books because no separate books were kept for each of the Creative's businesses. It was put to him on a number of occasions that he bought the business in reliance upon the Touche Ross documents and on the assumption that the figures therein in respect of turnover were correct. He was however emphatic that he would not have purchased in reliance upon these figures because they disclosed insufficient profit to make the purchase worthwhile. He was also adamant that he relied on the figures which had been handwritten and given to him by Mr Bill Kochergen at the second meeting.

20. The evidence of Mrs Platz was also subject to a searching cross-examination which extended over a number of days. Her recollection of the meetings on many of the above topics was if anything better than that of her husband and her evidence was seldom in conflict with his version thereof. She confirmed that he had wanted up-to-date figures and that she repeatedly sought confirmation that the figures they were being given were only retail figures. The first meeting she said closed with her and her husband wanting more figures on turnover, and in particular for the 84/85 financial year. She said that the handwritten figures presented at the second meeting "appeared to be what I was after". She had previously said that she wanted "figures for retail only because that is the only thing we were buying". As to the Touche Ross figures she said that they were not enough because the expenses of her and her husband were higher.

21. Mr Bill Kochergen's evidence in chief indicated clearly that he had only a very limited and indeed somewhat confused recollection of happenings at the first meeting. He said that the Touche Ross documents were not discussed at that meeting and in fact that he had no recollection of any discussion about financial records at that meeting. He agreed that Mr and Mrs Platz then stated, when referring to rent, that the purchase was "just too dear" and he agreed that they "always" said that the rent was too high. In reference to the handwritten figures presented at the second meeting he said that he had "prepared some sales figures which he thought represented the goodwill of the site, the power of the site". He said that he was uncertain whether these handwritten figures were discussed at the first or second meeting. At the first meeting he said that the "power of the name Creative's" was discussed and more so at the second meeting. He said that at the second meeting Mr and Mrs Platz were very concerned with the accuracy of the Touche Ross sales figures and as to how "we could prove them". Again he said that they were concerned about the rental and that it was undisputed that they said the rent was too high. He proffered that Mrs Platz had "boldly" asked about the figures and how they could prove them. In this context he was asked to relate the discussion on financial matters in relation to the Touche Ross documents. He replied "the primary discussion or topic was that Mr and Mrs Platz, Mrs Platz more so than Mr Platz repeatedly asked me to prove: 'how could you prove that you are not lying to us on these sales figures?' She boldly asked that and I respect her for her boldness". In reply to her questioning he said that they could not be proved absolutely accurate because they were "extractions from our account - from our Kalamazoo book". He said that he did not believe he used the word "Kalamazoo" but that he did say that they were extractions from consolidated earnings and that he produced to Mr and Mrs Platz an annual return. The document called by him "an annual return" comprised either the letter dated 31 January 1984 with its attachments previously referred to or the financial statements for the year ended 30 June 1984 the first page of which stated under the heading "Sales" - "Landscape $198,931 and "Retail $655,585". He said that he explained that the latter figure was "not just retail" - the true retail figures were as stated in the Touche Ross documents.

22. Mr Bill Kochergen also gave evidence to explain how he arrived at the sales figures in the Touche Ross and the handwritten documents. I propose to deal with this after I have discussed the evidence of all participants in the two meetings.

23. Much of significance was obtained from Mr Bill Kochergen during his cross-examination particularly in that the conflict between his evidence and that of Mr and Mrs Platz became even more apparent. His answers to questions were frequently inconsistent with his evidence in chief and with other aspects of his cross-examination. But a number of matters which were established by his cross-examination do enable an understanding of his attitude to the negotiations and how he arrived at this attitude. He said in respect of the first meeting that he did not recollect Mr and Mrs Platz having any document with them. He agreed that Mr Platz said that the acquisition was just too dear and that he was thereby referring to a purchase of the property for $750,000 and the rental of $78,000. He said that at this meeting Mr Platz made it clear that they only wished to lease. He said that he mentioned that the name "Creative's" and its goodwill, which included the landscape business, would cost them $100,000. He did not recall the Touche Ross figures being discussed at the first meeting. Nor was there any discussion of financial records or the production of further financial records. He said that he may have on this occasion produced some sale figures "which I thought represented the goodwill of the site, the power of the site". These figures were prepared on the Tuesday and were the handwritten figures. He said that he produced this document to demonstrate what he believed to be the "power of advertising of our firm" and "what sorts of sales figures we believed we guaranteed for the company by the name Creative's and its logo, including landscape and retail".

24. In respect of the Thursday meeting he said that Mr Platz still only wanted to lease the premises and that the handwritten figures were discussed for about 15 minutes. He agreed that Mrs Platz said repeatedly that she was very concerned about the sales figures in the Touche Ross documents and their accuracy. Mr Platz showed an interest he said in the figure of $655,685 appearing in the financial accounts as retail sales for the year ended 30 June 1984 and was curious, he said, about the discrepancy. He acknowledged that he told Mr Platz that the explanation was that there was an error on the part of Touche Ross. He also explained the Touche Ross figures as an attempt on his part to extract retail figures and that these and not the abovementioned price of $655,685 were the true retail figures. He agreed that Mr Platz said that the asking figure for the fittings and fixtures was "outrageous" and said that he probably replied that he agreed. He reiterated that he did not recall any discussion on figures at the first meeting and on one occasion stated that he did not remember that meeting.

25. He did not agree that Mr Platz asked for more recent figures but said that he did tell them "our figures would probably not be of interest to you because you are not buying the goodwill and taking over the business as such". This he said was his reply to any "response" of Mrs Platz at the two meetings and thereafter. Subsequently Mr Bill Kochergen appeared to say that both the Touche Ross figures as well as the handwritten figures were discussed at the first meeting and that Mr Platz did at one meeting ask for more recent figures. He said that his response to this request was "you are not buying goodwill, you are renting bricks and mortar". He also stated that he said "I have no obligation to show you any sales figures because the rental is based on valuation". Subsequently he appeared uncertain whether Mr Platz had asked for more recent figures but said that he was reluctant to give them figures. He said that he made it clear to Mr Platz that "we probably should not be supplying any sales figures to him as no business was really changing hands". He also said that the handwritten figures were "a discussion paper for myself, not for presentation". He denied emphatically that Mr and Mrs Platz told him at the first meeting that the Touche Ross figures did not satisfy them, that they were not up-to-date and there was "not enough money in it". He said that Mr Platz said he had very little interest in sales figures. During cross-examination he denied that the handwritten figures were produced at the request of Mr and Mrs Platz or that Mr Platz asked for later figures. He agreed however that in his answer to interrogatories he had said that the handwritten figures were produced in response to a question asked by Mr Platz.

26. Mr Bill Kochergen's evidence received little, if any, support from that given by his brother Mr Al Kochergen and on a number of important matters Mr Al Kochergen disagreed with his brother's version. In many instances he confirmed the evidence of Mr and Mrs Platz.

27. Mr Al Kochergen's responsibility at the relevant times was for the wholesale production nursery. He said he took no part in the contractual or administration side of Creative's businesses, all of which was left to his brother Bill. He was present at the two meetings but that he had not seen either the Touche Ross documents or the handwritten documents prior to any meeting with Mr and Mrs Platz. There was an arrangement between himself and his brother Bill that the latter would procure financial information relating to 272 Gorge Road. He said that he could not accurately recall conversations which took place at either of the meetings. Turnover he agreed was discussed but he could not recollect at which meeting. He remembered that Mr and Mrs Platz were told that there was no way of "actually dissecting the trading companies one from the other". However he had no specific recollection of the three documents or any of them being produced or discussed at either meeting nor did he make any vomment concerning the figures therein and in particular the figures in the handwritten document.

28. During his cross-examination Mr Al Kochergen said he recalled the Touche Ross documents being discussed at the first meeting but could not identify the specific documents. He also heard many times Mr Platz saying to his brother that the figures with which he had been presented were 12 months old and that on those figures the rent was too high, and further that it was not worth him giving up his job with Agfa and his wife giving up her business on those figures. He recalled Mr Platz asking if the figures were correct and if they were retail. He also remembered Mrs Platz asking again and again if the Touche Ross figures were accurate. He also remembered Mrs Platz querying the accuracy of the figures on a day subsequent to the two meetings. When specific questions were put to him based on Mr and Mrs Platz' version of what occurred at the two meetings his invariable answer was that he could not admit or deny their version. He agreed that Mr Platz could have said that the turnover figures given to them "better be right and they better be retail only", otherwise they could not afford to pay the rent. He agreed because as he said "There was so much - both Mr and Mrs Platz were saying 'This better be right, this better be right' so I would have to say, yes, this does ring a bit of a bell". There was, significantly, no confirmation from him that Mr Bill Kochergen's statements concerning "the power of the retail" and "the power of the site" were made at either of the meetings.

29. Mr Al Kochergen agreed that the first meeting ended on the basis that further information was required by the Platz. He acknowledged that further information must have been given by his brother at the second meeting but was unable to recollect how it was given or what was given. He had no recollection of a document being handed over by his brother at that meeting.

30. Mr and Mrs Platz contend that all the sales figures supplied to them by the respondents were inaccurate and grossly overstated the volume of retail sales which had been achieved in past years at 272 Gorge Road. They are greatly assisted in establishing this contention by a very careful assessment of the records of the Creative's company by their accountant Mr Broadbent. This contrasts with Mr Bill Kochergen's unsatisfactory evidence as to how he calculated the volume of these sales as appearing in the Touche Ross and handwritten documents. In his answers to interrogatories he said that the "retail sales and expenses" in the Touche Ross document for the year ended 30 June 1984 were an estimate of the sales and expenses which were attributable only to the retail nursery business. Some of the figures were derived, he said by apportioning figures which applied to all of the business carried on by Creative's.

31. Mr Bill Kochergen explained the procedures used by him in November 1983 and June 1984 to arrive at the various figures. In respect of the Touche Ross figures and their preparation Mr Kochergen did all of the work himself. Those figures for the year ended 30 June 1984 are described as "retail sales" in the heading to the document and were said to total $403,000. He arrived at this figure by totalling with the aid of a calculator the proceeds of sales which he said he identified as retail sales in Creative's cash receipts journal. That journal set out in respect of each sale the name of the drawer of a cheque, and the particular amount thereof and the bank upon an individual cheque was drawn. It also recorded the amounts received on bankcard and by way of cash. Each of these three classes of payments were then dissected under one of a number of headings, identified namely as Landscape Supplies, Debtors, Landscape, Wholesale, Retail and Sundry. Mr Kochergen said that he "nominated" all of the retail sales appearing in this journal. He looked he said at each entry concerning himself first with the figures in the debtors' column, saw what column the entry was in and whether he could recognise it as a retail sale. He ignored all sales which he identified as capital sales. He said that he was attempting to identify from these records what "the sales from 272 Gorge Road were in spite of what column they were in". If he considered a sale was a retail sale he added it into the calculator. He ended up with a summary of the amounts which he had extracted as retail sales on a month by month basis and totalled these amounts which in that year came to $403,000.

32. The Touche Ross documents disclosed the retail sales for the year ending 30 June 1983 as $444,000. Mr Kochergen said he arrived at this figure by exactly the same process, namely identifying the sales which he assessed as retail sales without regard to the particular columns into which they had been placed in the cash receipts journal and totalling the monthly amounts of these sales. The process by which he said he isolated out the sales which he identified as retail sales were by reference to the name of the drawer of the particular cheque. In respect of amounts received by way of cash or bankcard it must follow that in these two instances he accepted the dissection in the journal and only included an amount if it was classified as retail. Mr Kochergen was unable to produce any documentation by reference to which he could inform the Court which sales he identified at that time as retail and which he rejected.

33. The fact that he was unable to give evidence in any greater detail of what he did in November 1983 and June 1984 prompted Mr Kochergen during the trial to attempt to repeat the processes which he had undertaken on those earlier occasions. During his evidence he produced a document which set out the date, the name of each transaction or client which he identified as emanating from the 272 Gorge Road premises and the amount thereof. Furthermore he classified each of these transactions by columns identified as retail, debtors, landscape plants, landscape supplies and trade. The procedure which he adopted to arrive at this process of identification and classification was to photocopy the relevant pages of the cash receipts journal, highlight the entries which he thought were retail and have these entries entered into a computer which produced the document tendered to the Court. It is obvious that again the accuracy of this procedure in identifying retail sales depended essentially upon Mr Bill Kochergen's capacity fairly and critically to classify as retail sales sales which in the records of the company are not so classified, and in particular to assess as retail sales those sales classified only by the name of the purchaser. Furthermore he was preparing this exercise in respect of a period of time during the greater portion of which he had little if any involvement with the retail garden centre.

34. In respect of the handwritten figures Mr Kochergen said that this document represented all sales recorded in the cash receipts journal less what he extracted as "the pure wholesale, which means the wholesale sales to re-sellers and some trade". He said in chief that it indicated the "power of advertising and what sorts of sales figures we believed we generated for the company by the name "Creative's" and its logo which included landscaping, landscape sales, landscape design sales and the trade sales". He said he "used these sales figures to try to convince Mr and Mrs Platz" but he did not complete the sentence to explain what was the matter of which he tried to convince them.

35. His explanation as to the procedure he adopted was that from the figures in the Kalamazoo system he "extracted pure wholesale". He said that this could be done "by percentage or by knowledge of the approximate percentage of the wholesale sales or by extraction. I cannot remember exactly how I did this document. It was prepared for myself as a discussion note". He said the only document he had used was the Kalamazoo sheets and he had used a calculator. He did not make any notes of what he was doing other than on the document bearing the handwritten figures.

36. This explanation is completely at variance with his answers to interrogatories when he said that the three figures were all derived from the financial reports of Touche Ross & Co. He arrived, he said, at the figures for each year by adding approximately two-thirds of the item "retail sales" to approximately one-half of the item "landscape sales" for each of the particular years. He made in these answers no reference to using figures in the cash receipts journal.

37. I need not say much concerning Mr Bill Kochergen's attempt during the trial to recapitulate in documentary form the calculations which he had performed in preparing the Touche Ross documents in November 1983 and June 1984. He admitted that he only had his memory to rely upon and it was very apparent from cross-examination that a substantial number of the sales or receipts that he included could not by any measure be classified as retail sales made at or generated by 272 Gorge Road. In many instances he included a certain portion of the various items, i.e. 50% of the proceeds of landscaping, which percentage was assessed on a completely arbitrary basis and 50% of the sales to specified customers, particularly Mercorella. Amounts received as reimbursement of wages from the Department of Finance were included as retail sales as well as a number of sales which were obviously wholesale sales. A comparison of the results of this exercise with the information set out in the Kalamazoo cash receipts book appeared to disclose that in the exercise Mr Bill Kochergen included not only 100% of the retail sales but also 90% of the proceeds of bulk supplies, 60% of landscape supplies and 15% of debtors. His reproduction of the earlier exercise highlights and confirms one's impression gained from Mr Bill Kochergen's oral evidence, namely that little or no reliance can be placed on the calculations by which he arrived at any of the sales figures in the Touche Ross documents, or in fact in any of his figures.

38. Mr Broadbent's assessment of the amount of retail sales during the years 30 June 1984 and 1985 was very much more acceptable and was carefully and competently performed. He relied on the financial accounts and in particular the Kalamazoo records, particularly the cash receipts journal and the sales journal. He accepted in general that these records correctly disclosed the manner of trading of Creative's and the recording of the results thereof. I am of opinion that he was perfectly justified in adopting this approach. He was challenged only to a limited extent in cross-examination and the respondents did not through their accountants or otherwise produce any contrary evidence other than the figures of Mr Bill Kochergen previously related. Certainly Mr Broadbent was not proved to be wrong in the approach he adopted particularly in his reliance upon the dissection of sales in the cash receipts journal. Nor was any evidence given by the persons who wrote up the journal to establish that Mr Broadbent was not justified in relying upon the information therein.

39. Mr Broadbent accepted as a starting point the figures shown as retail sales in the cash receipts journal for the years ending 30 June 1984 and 30 June 1985. He was aware that in addition certain of the sales to account customers should properly be regarded as retail sales but, with the exception of a period of seven months, these sales on credit had not been dissected in the sales journal. However for that period of seven months, namely July 1983 to 31 January 1984 there had been a dissection of the credit sales (a total of $206,981) between wholesale, retail and landscape. $1,182 of that amount, namely .6% thereof represented credit retail sales. Using this information he added to the retail sales disclosed in the Kalamazoo cash receipts journal .6% of the credit sales for each of the years. This in my opinion was an acceptable approach in the circumstances and the respondents did not attempt to any significant extent to show that his end result was wrong. I am very satisfied to accept Mr Broadbent's assessment of retail sales from 272 Gorge Road as being in the vicinity of $290,000 for the year ended 30 June 1984 and $278,000 for the year ended 30 June 1985. It may be a coincidence but it is at least interesting, and maybe significant, to note that the sales made by Mr and Mrs Platz during the year ended 30 June 1986, excluding therefrom the proceeds of sales made on Sundays and the proceeds of a cut flowers business (neither of which activities having been conducted by Creative's) totalled approximately $280,000.

40. On the crucial matters in this action, namely the happenings at the meetings and the turnover figures, I am unable to place any reliance on the evidence of Mr Bill Kochergen. His recollection of the happenings at the two meetings was extremely vague and frequently in conflict with that of Mr and Mrs Platz whose evidence I prefer. Furthermore his evidence was not supported by that of his brother Mr Al Kochergen who on many important aspects confirmed the version of the meetings of Mr and Mrs Platz. Likewise I cannot place any reliance on the figures produced by Mr Bill Kochergen for the turnover at 272 Gorge Road. I infinitely prefer the exercise performed by Mr Broadbent.

41. As I said very early in these reasons the documentary evidence available to Mr and Mrs Platz prior to and at the two meetings without exception identified the figures therein as purporting to be the figures relevant to that portion of Creative's business which was being relinquished in favour of Mr and Mrs Platz, i.e. the retail nursery business. If I am to find that they should have understood to the contrary, it must be the consequence of an acceptable explanation given to them at the meetings. Mr Bill Kochergen did not give a logical explanation capable of dispelling their preconceived understanding. In making these findings I do not mean to say that Mr Bill Kochergen deliberately set out to mislead Mr and Mrs Platz or deliberately exaggerated the turnover. He conducted negotiations with two persons with business experience without the assistance of Creative's agent, solicitors or accountants. On the basis of the explanation he gave it is apparent he did not understand the attitude of Mr and Mrs Platz seeking to ascertain the volume of sales previously achieved. He thought it "bold" of Mrs Platz to query continuously the reliability of his figures, which would only, in his view, be of relevance to a purchaser who was buying the business with its name and logo and paying a figure for goodwill. In my opinion he misled Mr and Mrs Platz by producing figures virtually out of the air which gave a false impression of turnover. His inability to supply reliable figures and to appreciate the unreliability of what he was producing was the consequence not only of the complexity of Creative's accounting for its various businesses but of the fact that he had not at any time operated only the retail business. Insofar as he operated that business he did so in conjunction with the landscape business, for a period of less than two years during which the sale of the retail garden centre was always in contemplation. Furthermore the figures in the Touche Ross documents related to a period of two years during the first eighteen months of which he was not involved in retail sales from the garden centre. His efforts to produce figures for retail sales in excess of those classified as such in the cash receipts journal depended solely upon his personal assessment which was established in many instances to be quite unreliable.

42. I have said already that if the documentary evidence available to Mr and Mrs Platz at the Wednesday and Thursday meetings is not to be assessed at face value it must be the consequence of adequate explanations by Mr Bill Kochergen at those meetings. These explanations must establish that Mr and Mrs Platz should have been aware that they could not rely upon these documents as stating reasonably accurately the retail sales of the garden centre during the specified years. However counsel for the respondents vigorously and persuasivly presented a contrary submission. He said that the Touche Ross figures should not be assessed in isolation but in the light of the explanations given at the meetings. However the fact is that not only were these documents supplied to the Platz before the meeting but they had been prepared and were supplied to a Mr Ludlow of Baillieu Bullock Wilkinson Pty Ltd at a time when that company had the property and business at 272 Gorge Road for sale. There was no evidence that that company was told that no reliance could be placed on the figures in the absence of explanation.

43. In any event there was little if any evidence that Mr Bill Kochergen did inform or explain to Mr and Mrs Platz that the figures included sales which went well beyond retail customers, notwithstanding repeated assurances being sought on this score. Certainly they were told of the difficulty of extracting accurate figures but no indication was given to them that these figures included sales to trade customers and landscape customers. It is to be remembered that Mr Bill Kochergen's initial evidence was that the Touche Ross documents were not discussed at the first meeting and that he had no recollection of any discussion about financial records at the meeting. Furthermore it was not put to Mr and Mrs Platz that they were aware, in consequence of what they were told by Mr Bill Kochergen, that the figures included trade and landscape customers. Counsel for the respondents also submitted that whether or not there was an explanation did not matter if the persons receiving the information had an understanding about it. He said that Mrs Platz at least must have had an understanding of the categories of customers at 272 Gorge Road "because they had been going there for years". Again nothing along these lines was put to Mr and Mrs Platz and in any event their visits for the purpose of making purchases could hardly have given them any adequate understanding of the nature or extent for example of landscape customers. Furthermore it was not put to them that the figures included customers other than retail customers which they might "inherit".

44. From time to time Mr Bill Kochergen and his counsel used the expression "sales generated from 272" when speaking of the Touche Ross documents. However when the difficulties of this approach became apparent counsel substituted the expression "sales made from 272". In this respect it was said that the word "retail" in the Touche Ross documents was used to indicate that the sales were "from the retail centre" and were not necessarily "the retail sales from that centre". However both of the latter documents state that the figures are of "retail sales and expenses". Furthermore it was not clearly put to Mr or Mrs Platz that the Touche Ross figures represented the sales or customers they might inherit or the sales made from 272 Gorge Road. Rather it was put to Mr Platz in cross-examination that the documents conveyed to him, with the apparent authority of accountants, the retail sales at 272.

45. Counsel's contention concerning the handwritten figures was that partly in consequence of a comment by Mr Middleton (which was not established by the evidence but a mere supposition) and partly "as a perception" on their part, the Kochergens contemplated selling the goodwill that went with the Creative's name and logo and confining themselves to the wholesale nursery at 808 Gorge Road. The handwritten figures were then prepared to show what revenue a transaction such as that might generate. In my opinion such an approach cannot be sustained. It cannot stand alongside the form of the handwritten document already discussed, the fact that Mr Bill Kochergen produced it in response to a question of Mr Platz, the insistence by Mr and Mrs Platz from the outset that they were only interested in the retail business and would not pay $100,000 for Creative's name and the logo, and the fact that it was not until the production of this document that the Platz went ahead with the purchase. This explanation of the handwritten figures given by Mr Bill Kochergen was most unconvincing and cannot be accepted. His counsel however contended that unless I find that he was deliberately lying there was no scope for any other interpretation. In my opinion I do not need to make such a finding. Mr Bill Kochergen's explanations and conduct generally disclosed such a lack of business understanding and commercial acumen or "nous" that he was incapable of appreciating what it was that the Mr and Mrs Platz were seeking assurances upon and why, and the fact that it was impossible for him, in the light of Creative's financial records, to respond with any accuracy to their requests. The pity of it was that he did not acknowledge these deficiencies and refrain from making any representations on the matter of retail turnover at 272 Gorge Road. If he had done nothing more than direct the attention of Mr and Mrs Platz to the Kalamazoo system of recording transactions, they would have been alerted to the volume of retail sales as there stated and thereafter would have proceeded in reliance only upon their own investigations.

46. In the circumstances I am satisfied that Mr Bill Kochergen, although not deliberately lying, acted recklessly. If he had deliberately concocted a false picture of the retail figures, his evidence would surely, at least in chief, have appeared more convincing. It would not have comprised so many inconsistencies or illogicalities. His story did not bear the stamp of a deliberate attempt to mislead but rather of extremely confused and muddled thought processes. However he could not with any degree of honesty have believed that he was giving to Mr and Mrs Platz the information which they sought on so many occasions. Furthermore he could not have had an honest belief in the accuracy of the figures he supplied to them.

47. Counsel also drew attention to the fact that in the statement of claim as initially filed Mr and Mrs Platz pleaded the figures in the Touche Ross documents, that they were false and that they relied upon these figures in entering into the purchase agreement and lease. However, when amended, the statement of claim made no reference to the figures in the Touche Ross documents and only pleaded the handwritten figures and reliance thereon. Counsel drew attention to what he described as the abandonment of a case based upon the figures in the Touche Ross documents and a case thereafter based exclusively on the handwritten figures. He said that there had been no satisfactory explanation for this change of course. However it is apparent that the handwritten figures, although not the document containing the same, were in fact referred to the statement of claim prior to amendment. It was pleaded that Mr and Mrs Platz entered into the deal in reliance upon the figures in the two Touche Ross documents and the handwritten figures. Subsequently the statement of claim was amended because, as it appears to me from the evidence, Mr and Mrs Platz only went ahead when the handwritten figures were produced. If their advisors had wished to place reliance upon the inaccurate figures in the Touche Ross documents as an element of misleading conduct that indeed should have been pleaded and particularised. However no point was taken during the hearing that the evidence of allegedly misleading conduct was going beyond the pleadings and the particulars. In my opinion the totality of the conduct, including the Touche Ross documents, was misleading although, but for the handwritten figures, Mr and Mrs Platz, on their evidence which I accept, would not have proceeded. In this way it is corrrect to state their reliance as being on the handwritten figures rather the whole of the misleading conduct.

48. Mr and Mrs Platz pleaded that they entered into the agreement to purchase and the leases in reliance upon the sales figures in the handwritten document. In my opinion they have established this aspect of their case. They strongly denied the efforts of counsel for the respondents to have them agree that they relied on the Touche Ross figures. Their evidence which I accept was that they were not prepared to pay the rent sought if the turnover and the ensuing profit was as indicated in the Touche Ross figures. Their evidence that they wanted further information and up-to-date figures for the then current year received some support from Mr Al Kochergen. The form of the handwritten document produced at the second meeting, on the face of it, coincided with the form of the Touche Ross documents. Mr Bill Kochergen produced the handwritten document at the request of Mr Platz. There was absolutely nothing on the face of these figures to indicate that they had been prepared on a totally different basis to the Touche Ross figures and that they referred to sales from totally different segments of Creative's business. Mr Bill Kochergen attempted to satisfy me that he had told Mr and Mrs Platz that they were prepared for another purpose, namely what they would achieve if they bought everything except the wholesale business. However I do not accept that he conveyed an adequate or acceptable explanation of these figures if he sought to have them understood as something other than what they appeared to be on the fact of the documents. Mr and Mrs Platz had earlier rejected any suggestion that they should do more than lease the premises and buy stock and plant. As persons reasonably experienced in business affairs they were persuaded, contrary to their attitude at the end of the first meeting, to proceed with the purchase. There is no reasonably acceptable explanation for this other than that Mr Bill Kochergen gave them financial information which they had asked for and which on the face of it appeared to be what they sought. They were, as a matter of objective determination, entitled to rely upon the situation as they understood it and as justifying a decision to go ahead. At this stage I restrict my findings to misleading conduct on the part of the respondent Creative's upon which conduct Mr and Mrs Platz relied in entering into the agreement for sale and purchase and the two leases. It remains to determine the nature and extent of the relief which this Court must order, and against which of the respondents. I will hear counsel on a mutually convenient occasion on these matters.