Dukemaster Pty Ltd v Bluehive Pty Ltd [2002] FCAFC 377 (27 November 2002)

Last Updated: 27 November 2002

FEDERAL COURT OF AUSTRALIA

Dukemaster Pty Ltd v Bluehive Pty Ltd [2002] FCAFC 377

Trade Practices Act 1974 (Cth) s 51A

Wheeler Grace & Pierucci Pty Ltd v Wright (1989) ATPR 40-940 cited

Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 cited

Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494 referred to

Kenny & Good Pty Ltd v MGICA (1992) Limited [1999] HCA 25; (1999) 199 CLR 413 referred to

I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Limited [2002] HCA 41; (2002) 192 ALR 1 referred to

Gould v Vaggelas [1985] HCA 75; (1983-1985) 157 CLR 215 cited

Reynell v Sprye (1852) 42 ER 710 cited

Barton v Armstrong [1973] UKPC 2; (1973) 2 NSWLR 598 cited

Australian Steel & Mining Corporation Pty Ltd v Corben (1974) 2 NSWLR 202 cited

Nicholas v Thompson [1924] VLR 554 cited

DUKEMASTER PTY LTD v BLUEHIVE PTY LTD & ANOR

V 754 OF 2000

SUNDBERG, EMMETT and CONTI JJ

27 NOVEMBER 2002

MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 754 OF 2000

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	DUKEMASTER PTY LTD (ACN 050 275 226) APPELLANT
AND:	BLUEHIVE PTY LTD (ACN 073 073 300) FIRST RESPONDENT GAN HOLDINGS PTY LTD (ACN 080 258 635) SECOND RESPONDENT
JUDGES:	SUNDBERG, EMMETT and CONTI JJ
DATE OF ORDER:	27 NOVEMBER 2002
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The orders of the primary judge be set aside and in lieu thereof it be ordered that the application be dismissed.

3. On or before 11 December 2002 the parties file and exchange written submissions as to the costs of the appeal and of the proceedings before the primary judge.

4. There be liberty to apply.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 754 OF 2000

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

BETWEEN:	DUKEMASTER PTY LTD (ACN 050 275 226) APPELLANT
AND:	BLUEHIVE PTY LTD (ACN 073 073 300) FIRST RESPONDENT GAN HOLDINGS PTY LTD (ACN 080 258 635) SECOND RESPONDENT

JUDGES:	SUNDBERG, EMMETT and CONTI JJ
DATE:	27 NOVEMBER 2002
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

SUNDBERG and EMMETT JJ

BACKGROUND

1 On 15 September 2000, a judge of the Court ordered, inter alia, that there be judgment in sum of $315,095.94 in favour of the respondent, Bluehive Pty Ltd ("Bluehive"), against the appellant, Dukemaster Pty Ltd ("Dukemaster") - see [2000] FCA 1307 ("the First Findings"). On the same day, his Honour also dismissed a cross-claim by Dukemaster. Dukemaster appealed to the Full Court from the orders made on 15 September 2000. On 5 March 2001, for reasons given on that date ("our Earlier Reasons"), the Full Court, as presently constituted, made orders that included the following (see [2001] FCA 180):

"...........................

3. The matter the subject of the appeal against the judgment for [Bluehive] be remitted to the primary judge for the making of findings on the issues referred to in paragraph 21 of the Court's reasons.

4. Pending the making of the findings referred to in paragraph 3 hereof the appeal be stood over.

5. Costs be reserved."

2 On 16 November 2001, following a further hearing, the primary judge made additional findings - see [2001] FCA 1621 ("the Second Findings"). His Honour, in effect, confirmed the orders that had been made previously. Following publication of the Second Findings, Dukemaster filed an amended notice of appeal and the Full Court has now heard further argument on behalf of both Dukemaster and Bluehive.

3 The nature of the proceeding, the issues involved and the essential facts are set out in our Earlier Reasons, which should be taken to be incorporated into these reasons. In essence, Bluehive alleged that representations were made on behalf of Dukemaster, which were said to constitute misleading and deceptive conduct, that induced Bluehive to take up a tenancy of Shop 5 in the food court of the Paramount Shopping Centre, a retail apartment complex in Melbourne.

4 Before recording what was said by his Honour in the Second Findings, it is convenient to set out again the representations alleged by Bluehive. The representations, as pleaded, were as follows:

(a) that the shopping centre would offer a three level retail arcade;

(b) that the shopping centre would have a tenant mix including a supermarket and 55 speciality shops.

(c) that the 55 specialty shops were rapidly being leased and the shopping centre would be fully tenanted when it opened;

(d) that there would be a bistro/gaming venue located on the upper Bourke St level of the shopping centre which would trade to 1.00 a.m. every night of the week;

(e) that there would be a Food Court with 8 shops having access to Little Bourke Street, in which [Bluehives's] business would have exclusivity in the sale of Italian cuisine

(f) that [Bluehives's] shop would only be one of two tenants permitted to sell all types of coffee;

(g) that the grand opening date of the shopping centre would be in December 1996;

(h) Bluehive could easily meet its rental of $50,000 per annum;

(i) Bluehive would have a turnover of about $8,000 per week;

(j) there would be 450 seats for patrons in the food court and each seat would generate about $14,000 per annum, making a total annual income of about $6,300,000 for the eight shops in the food court; and

(k) the figure for turnover rent of $780,000 per shop was quite easily achievable.

5 In the First Findings, the primary judge found that representations (g), (h), (i), (j) and (k) were all made. His Honour made no findings concerning representations (a), (b), (e) and (f), treating them as having been admitted. His Honour did not mention representations (c) and (d), which were denied in the defence. In concluding that representations (g) to (k) were made, the primary judge attached great importance to Bluehive's letter of offer of 22 August 1996, the terms of which are set out in par [8] of our Earlier Reasons ("the Letter of Offer").

6 In our Earlier Reasons, we said (pars [20] and [21]):

"20. If the primary judge had preferred the evidence of Mr Gan and Mr Sayers over that of Mr Hii and Mr Cook because he disbelieved the latter, or because the accounts of the former accorded more with the probabilities, we would have no difficulty in concluding that he was entitled to do so. But his Honour's reason for accepting Mr Gan's account is that one aspect of it was supported by the letter of offer. This was representation (i), though not as pleaded, which was that Bluehive would have a turnover of about $8,000 per annum. The evidence that emerged at trial differed from the pleading in that Mr Cook was alleged to have specified a turnover range of between $8,000 and $15,000. It was the multiplicational link between $15,000 and $780,000 that founded the primary judge's use of the letter of offer to choose between the two accounts of what occurred at the meeting. In explaining why he regarded the letter as critical in this respect his Honour said, first, that Mr Cook could provide no explanation as to how the $780,000 figure came to be in the letter. We are not sure why the fact that someone in the Dukemaster camp could not explain it is a matter of significance. Then his Honour said there was no reason for Mr Gan to volunteer to pay a rental figure in excess of the required base rent. This overlooks the fact that in May 1996 Bluehive negotiated with Dukemaster and its real estate agent about Shop 1 in the Centre. In the course of these negotiations Mr Gan discovered that Dukemaster's standard offer to lease provided for a percentage rent when turnover exceeded a specified amount. Accordingly, if it wanted Shop 5, there was a good reason for Bluehive to offer a turnover rent. We are thus unable to agree with the primary judge's conclusion that Mr Gan's offer to pay a turnover rent `had to be in response to something said about that subject during the course of the meeting', and that it was therefore obvious that $15,000 turnover had been mentioned by Mr Hii or Mr Cook. Given Mr Gan's awareness that Dukemaster wanted a turnover rent for space in the Centre, it is just as likely that Mr Gan and Mr Sayers, in the course of their discussion after the meeting, fastened upon $15,000 of their own volition.

21. It is not clear whether, independently of the letter of offer, the primary judge would have accepted Mr Gan's account of what occurred at the meeting. His Honour noted aspects of Mr Cook's account that he found improbable, and that one part of his evidence was `difficult to accept'. But he also noted matters that `may cast doubt upon the credibility' of Mr Gan and Mr Sayers. He mentioned disparities between their accounts and the fact that Mr Gan did not mention any of the representations about projected turnover until the application was filed in December 1998. The turnover representations were not mentioned by Bluehive's solicitors in their letter to Dukemaster's solicitors of 28 August 1997 setting out in detail the misrepresentations allegedly made to Mr Gan to induce him to take a lease of Shop 5. The representations did not feature in proceedings instituted by Bluehive, Holdings and Mr Gan against Dukemaster in 1998 in the Victorian Civil and Administrative Tribunal. Bluehive's pleading in the Tribunal was almost word for word the same as that appearing in its statement of claim in the present case, save for the absence of representations (h) to (k). Mr Gan's explanation for this was that he assumed that Mr Hii and Mr Cook would deny having made the turnover representations, and that in order to avoid getting into a slanging match with them he had raised only those matters that could not be the subject of any dispute. Understandably, the primary judge found this explanation `not wholly convincing'. We entertain considerable doubt whether, but for the letter, his Honour would have accepted Mr Gan's account of the facts relevant to representations (h), (i) and (j)."

7 We then recorded that counsel were agreed that if, as was the case, the Court thought the Letter of Offer too fragile a basis for preferring Mr Gan's evidence of what was said at the meeting on 21 August 1996, the Court should not attempt to assess what the primary judge would have done had he not attached such importance to the Letter of Offer; nor should the Court form its own view. Rather, it was agreed that the Court should remit the matter to the primary judge for findings to be made, in light of our conclusion about the Letter of Offer, concerning representations (g) to (k) and about the other pleaded representations. That is the course the Court adopted. Pending the making of those findings, the appeal was stood over. Amongst the issues stood over was that part of the appeal concerned with the primary judge's assessment of damages and Dukemaster's cross claim, which was for rent under the tenancy of Shop 5.

THE ADDITIONAL FINDINGS

8 On the remitter Dukemaster apparently submitted that the primary judge was permitted to do no more than revisit such of the evidence as he had specifically dealt with in his earlier judgment and that he was not at liberty to refer to, or rely on, any other evidence adduced at the trial. On the other hand, Bluehive submitted that the Full Court intended that the primary judge should re-evaluate the evidence of Mr Gan and Mr Sayers against that of Mr Hii and Mr Cook in the light of the Full Court's view that too much weight had been attributed to the Letter of Offer. Bluehive said that his Honour should identify the extent, if any, to which the demeanour of the various witnesses may have impacted upon his reasons for preferring the evidence of Mr Gan and Mr Sayers.

9 His Honour rejected Dukemaster's submission and accepted Bluehive's analysis of the task expected of him, saying (at par [95]):

"I can see no reason why the Full Court would have remitted the matter to me to make the findings of fact referred to in par 21 of its reasons for judgment if, as Dukemaster contended, the only possible outcome of my further deliberations would be to accept the evidence of Mr Hii and Mr Cook in preference to Mr Gan and Mr Sayers. Had the Full Court considered that to be `the only possible outcome', it was perfectly capable of stating that conclusion for itself."

His Honour went on to say that, upon his reconsideration of the weight to be accorded the evidence given by Mr Gan and Mr Sayers, he was required to put aside the processes of reasoning that had led him to attribute the weight he did to the Letter of Offer. He said that he did not read the Full Court's reasons as precluding him from giving any weight to the Letter of Offer.

10 His Honour then observed that, at the very least, there was nothing in the Letter of Offer that was inconsistent with the evidence given by Mr Gan and Mr Sayers. His Honour noted the matters to which he had referred in this connection in the First Findings, referring again to the significant discrepancies in the evidence concerning what took place during the course of the meeting of 21 August 1996. His Honour considered that it was difficult to see how the witnesses who gave evidence regarding that event could all be telling the truth.

11 His Honour still had "serious reservations" regarding Mr Cook's reliability as a witness and did not accept his evidence that Mr Gan raised projected turnover figures in answer to a question from Mr Cook. Nor did his Honour accept Mr Cook's evidence that there had been no discussion of the rental for Shop 5 at any stage during the course of the meeting of 21 August 1996. His Honour also said he had reservations as to the credibility of Mr Hii, who seemed to have been largely preoccupied with other matters during much of the conversation that took place at the meeting and whose recollection of events was vague and unreliable.

12 Notwithstanding the reservations that his Honour expressed about certain aspects of Mr Gan's evidence, his Honour was of the opinion that Mr Gan was a witness of truth. His Honour also applied that conclusion to Mr Sayers. His Honour considered that it was far more likely that Mr Hii and/or Mr Cook proffered the projected turnover figures of $8,000 to $15,000 per week as an inducement to Bluehive to take up the lease of Shop 5, as alleged by both Mr Gan and Mr Sayers.

13 His Honour remained of the view that Mr Cook's suggestion that Mr Gan had mentioned profit turnover figures of "$8,000 per week, rising to $10,000 per week in a reasonably short period of time" in answer to a question from Mr Cook was utterly implausible. His Honour had regard to the fact that, while Mr Gan had some background in a take away food venture and that his father had been involved in operating a number of Asian food outlets, Mr Gan would have had very little idea of what an Italian food outlet in this particular food court would be likely to generate in weekly turnover.

14 His Honour also considered that Dukemaster must have given at least some attention to the likely turnover figures for the food court, since the written material handed to Bluehive's representatives contains projected turnover figures. Thus, under the heading "The Proposed Food Court" in a brochure relating to the proposed Centre entitled "Where Retail Opportunity is Paramount" ("the Brochure"), the following appears:

"There are currently nine existing food courts in the CBD, achieving a total turnover level of around $35M per year, based on a total eating out market of $300M in 1995. This indicates that food courts are currently accounting for approximately 12 per cent of the available market. Starting from a very low base only a few years ago, this is a significant share, which leaves scope for increases in food court turnover without leading to market saturation.

...........................

The average size of CBD food courts is large, with more than 11 individual outlets and an average seating capacity of 470. The average turnover was $6.6 million in 1994. The average turnover per seat being in the range of $12,000 - $16,000."

15 It was upon the basis of that assessment of the witnesses that the primary judge reached the following conclusions in the Second Findings:

* representation (a) was made, it was untrue in that there were not three retail levels and Bluehive acted in reliance on it in entering into the lease

* representation (b) was made, it was misleading and deceptive and Bluehive relied on it in entering into the lease

* representation (c) was made, but Bluehive had not relied on it, and in any event it had not caused Bluehive loss or damage

* representation (d) was made, it was misleading and "together with others" it had been relied on by Bluehive

* representation (e) was made, it was misleading, but Bluehive had not relied on it, and in any event it had not caused Bluehive loss or damage

* representation (f) was made, it was misleading, but Bluehive had not relied on it, and in any event it had not caused Bluehive loss or damage

* representation (i) was made, it was misleading, Bluehive relied on it and it was causally connected with the loss sustained by Bluehive

* representation (j) was made, it was misleading, Bluehive relied on it and it was causally connected with the loss sustained by Bluehive.

16 His Honour made no findings about representation (h), which was not supported by any evidence. We were told that the case had proceeded on the basis that representation (h) was made out on the evidence. Counsel for Dukemaster sought to withdraw that concession, but was not permitted to do so. In the Second Findings his Honour made the following comments concerning representation (h) (pars [113]-[116]):

"Having given this matter further consideration, I think Dukemaster is correct in its contention that there was in fact no evidence to support representation (h), as pleaded. I should emphasise, however, that the case was conducted throughout by both parties upon the basis that no distinction should be drawn between whether any of representations (h), (i) or (j) were made. Rather, the case was conducted upon the basis that if I preferred the evidence of Mr Gan and Mr Sayers to that of Mr Hii and Mr Cook I would find that representations (h), (i) and (j) were all made. In other words, these three representations were treated as being inextricably linked.

It was certainly never suggested during the trial before me that a disconformity between representation (h), as pleaded, and the evidence actually adduced, should lead to a rejection of Bluehive's claim in respect of that representation.

Whatever the formal state of the pleadings, I am in no doubt that the case before me was conducted upon the footing that if Mr Gan and Mr Sayers were believed, and Mr Hii and Mr Cook not believed, Dukemaster would be found to have made at least representations (h), (i) and (j).

Now that the issue of the sufficiency of the evidence to support representation (h) has been raised, my inclination is to limit my findings to representations (i) and (j)."

There was no notice of contention filed in relation to his Honour's treatment of representation (h).

17 In the First Findings, the primary judge found representation (g) had been made, but had not been relied on. No additional findings were made by the primary judge about representation (g) in the Second Findings. Representation (k) was also found to have been made, but on appeal Bluehive did not seek to support the finding. There was no remitter in relation to representation (k). The result of his Honour's findings and the conduct of the proceeding to date is that alleged representations (c), (e), (f), (g), (h) and (k) should be treated as not supporting the judgment in favour of Bluehive.

18 Unless the findings of the primary judge in relation to alleged representations (a), (b), (d), (i) and (j) are disturbed, the appeal so far as it relates to contravention of s 52, must be dismissed. Dukemaster does seek to disturb those findings. Thus, having regard to the conclusions of the primary judge and the issues presented on appeal, the Full Court need give consideration only to representations (a), (b) and (d) and to representations (i) and (j). It is not necessary to consider any of the other representations pleaded.

ISSUES ON APPEAL

19 In its amended notice of appeal, Dukemaster asserts that the primary judge ought to have found that neither representation (i) or (j) was made since, in finding that Mr Gan and Mr Sayers were witnesses of truth, his Honour failed to have any or sufficient regard to certain matters. In particular, Dukemaster asserts that his Honour did not take into account the fact that no complaint was made by Mr Gan that representations (i) or (j) were made until the institution of this proceeding in December 1998 despite other earlier opportunities for making such a complaint.

20 In addition, Dukemaster asserted that:

* the primary judge erroneously weighed the evidence of and reassessed the credibility of Mr Gan, Mr Sayers, Mr Cook and Mr Hii by reference to the Letter of Offer;

* the primary judge did not weigh or assess the credibility of Mr Gan and Mr Sayers against the totality of the evidence;

* the primary judge failed to ascribe any reasons as to why the evidence of Mr Gan and Mr Sayers was preferred to that of Mr Cook and Mr Hii.

21 Dukemaster contended that the primary judge made three principal errors in reaching the conclusions of the Second Findings. The first was the apparent conflict between two paragraphs of his Honour's reasons. On the one hand, his Honour concluded that it must have been obvious to Mr Gan that there was not the slightest prospect of the shops of the shopping Centre being rapidly leased and that it was also plain that the Centre would not be fully tenanted when it eventually opened some months after December 1996. On the other hand, his Honour also concluded (par [143]) that by the time it had become clear in December 1996 that there would not be a three level retail arcade, Bluehive had "passed the point of no return". Acceptance of the first conclusion is inconsistent, so it is said, with Bluehive having relied on any of representations (a), (b), (i) or (j).

22 The second so-called error was his Honour's reliance on corroboration by Mr Sayers of evidence given by Mr Gan concerning statements upon which representations (i) and (j) were based, without having regard to submissions made on behalf of Dukemaster that that evidence was a recent invention on the part of Mr Sayers.

23 Finally, notwithstanding that his Honour referred to particulars furnished by Bluehive, which "made it clear that representations (h), (i) and (j) were, in part, to be implied from the conduct of Mr Hii and Mr Cook", his Honour made no findings concerning the conduct on which such representations were based and there was no evidence of conduct from which any such representations could be inferred.

WEIGHT OF THE LETTER OF OFFER

24 Dukemaster contended that the primary judge reassessed the credibility of the relevant witnesses by reference to the Letter of Offer and that to do so was erroneous, in the light of the terms on which the matter had been remitted by the Full Court. This submission misstates the course his Honour adopted.

25 His Honour accepted that, on his reconsideration of the weight to be accorded to the evidence of Mr Gan and Mr Sayers, he had to "put aside the processes of reasoning that had led me to attribute the weight which I did to the letter of offer". He then noted that in the First Findings he had made several findings adverse to Mr Cook, that some of his evidence was inherently implausible and that it was more likely that he would have made the statements about projected turnover than that Mr Gan would have made them.

26 He continued (pars [99] to [103]):

"It is difficult to see how the witnesses who gave evidence regarding [what took place at the Meeting] can all be telling the truth. One or more of those witnesses is either lying, or has significantly reconstructed what occurred, perhaps without being fully conscious of having done so.

Notwithstanding the reservations which I expressed about certain aspects of Mr Gan's evidence, he was, in my opinion a witness of truth. That conclusion applies also to Mr Sayers.

Mr Cook was, at the very least, a witness whose memory of events was uncertain. Even Mr Hii agreed with Mr Gan and Mr Sayers that Mr Cook went off with Mr Gan after their initial conversation. I have no doubt that that occurred, and that Mr Cook accompanied Mr Gan and Mr Sayers upon a tour of the Centre, as they claimed.

I had, at the time of the trial, and still have, serious reservations regarding Mr Cook's reliability as a witness. I do not accept his evidence regarding Mr Gan having raised the projected turnover figures in answer to a question from Mr Cook. I do not accept his evidence regarding there having been no discussion of rental for Shop 5 at any stage during the course of the Meeting.

I also have reservations regarding the credibility of Mr Hii. He seems to me to have been largely preoccupied with other matters during much of the conversation which took place. His recollection of events seems to me to be vague and unreliable."

27 His Honour then repeated that, in reaching his conclusion that he preferred the evidence of Mr Gan and Mr Sayers to that of Mr Hii and Mr Cook, he had done his best to put the Letter of Offer entirely to one side. It was only then that he added that there was nothing in the Letter of Offer that was inconsistent with the evidence given by Mr Gan and Mr Sayers. Thus, his Honour first announced his conclusion on the credibility issue, ignoring the Letter of Offer, and only then referred to the Letter of Offer.

28 It is plain from our reasons that the primary judge was to review the evidence, including the demeanour of the witnesses, and state his conclusion about the accounts of Mr Gan and Mr Sayers, without attributing the weight he did to the Letter of Offer. We were of the view that his Honour had found the Letter of Offer so strongly supportive of Mr Gan's account, that he may not have considered, or may not have set out in his reasons, other matters that bore on the conclusion he reached.

29 The course his Honour adopted was the course we had in mind when we remitted the matter to him. We endorse his observation that, if the only possible outcome of his further consideration was the acceptance of the evidence of Mr Hii and Mr Cook in preference to that of Mr Gan and Mr Sayers, we would have said that ourselves. There would have been no occasion for the remitter. Our intention was that the primary judge revisit the evidence led at trial and identify the extent to which the demeanour of the various witnesses may have impacted on his reasons for preferring the evidence of Mr Gan and Mr Sayers to that of Mr Hii and Mr Cook.

30 Thus, we said that, if his Honour's preference derived from a disbelief of Mr Hii and Mr Cook, or was arrived at because the accounts of Mr Gan and Mr Sayers accorded more with the probabilities, we would have had no difficulty in concluding that he was entitled to have that preference. We also said it was not clear whether, independently of the Letter of Offer, the primary judge would have accepted Mr Gan's account of what occurred at the meeting, in view of his Honour's reservations about aspects of his and Mr Sayers' evidence. We said we had considerable doubt whether, but for the Letter of Offer, his Honour would have accepted Mr Gan's account of the facts relevant to representations (h), (i) and (j).

31 We agree with his Honour that nothing in our Earlier Reasons precluded him from giving any weight to the Letter of Offer. Our concern was that he had given too much weight to it. He did not err in the manner alleged by Dukemaster. This ground of appeal has no substance.

REPRESENTATIONS (a), (b) AND (d)

32 The amended statement of claim particularised all of the representations as having been "oral, in writing and to be implied". In so far as they were said to be oral, they were said to consist of conversations between Messrs Gan and Sayers, on the one hand, and Messrs Cook and Hii, on the other hand. However, no evidence was given, and the primary judge made no findings, concerning any conversations that could have given rise to representations (a), (b) and (d). In so far as the representations were said to be implied, they were said to be implied from the conduct of Messrs Cook and Hii. However, no evidence was referred to by the primary judge and the Full Court was not taken to any evidence as to conduct that could be said to have given rise to representations (a), (b) and (d), other than their conduct in handing to Mr Gan and Mr Sayers the following:

* the Brochure;

* a document ("the Guidelines") entitled "The Paramount Centre Fitout Guidelines";

* plans of the shopping centre ("the Plans") showing the location of Shop 5, a copy of which was annexed to the form of lease submitted to Bluehive.

In so far as the representations were said to be in writing, they were said to be found in those documents. Thus, Bluehive's case was that representations (a), (b) and (d) were made by the handing to Mr Gan or Mr Sayers of those three documents.

33 His Honour observed that representation (d) was not sufficient, standing alone, to warrant granting Bluehive the relief it sought. On the other hand, his Honour also observed that representation (d) strengthened Bluehive's case when read in conjunction with representations (a) and (b). Those observations concerning representation (d) are not entirely clear. It appears, however, that his Honour accepted that any reliance on representation (d) alone was insufficient to warrant damages in favour of Bluehive.

34 His Honour found, and there was no challenge to the finding, that from December 1996, Bluehive had passed the point of no return, having financially committed to operating Shop 5 as an Italian food outlet. That was the loss said to have been suffered by Bluehive by the conduct on the part of Dukemaster that was complained of in the proceeding. Since the Plans were not given to Bluehive until well after December 1996, they can have no bearing on whether there was any reliance by Bluehive on representations (a), (b) and (d). Accordingly, the only material that could be relied on by Dukemaster as giving rise to representations (a), (b) and (d) is contained in the Brochure and the Guidelines.

35 The relevant part of the Brochure is as follows:

"Situated on the corner of Bourke and Exhibition Streets. The Paramount Centre is a retail development incorporating 5,747 sq.m of leasable area over three main levels, suitably positioned to attract the huge shopping audience that visit the area every day.

The retail mall has frontages to both Bourke Street and Little Bourke Street, serviced by underground parking with 421 car spaces available for customer parking, 55 shops are proposed in the project (including a Supermarket and Food Court on the Little Bourke Street Level)."

36 The relevant part of the Guidelines relied on by Dukemaster is as follows:

"The Paramount is Melbourne's latest shopping centre, that offers multi-level retail arcades which provide access between Bourke Street and Little Bourke Street.

The Paramount offers some 55 speciality shops, a food court, a supermarket, a bistro/gaming area and serviced offices beneath 230 apartments.

Dramatic skylights over the atrium space provide ample natural light throughout the retail centre. The light, the finishes and the details, all add up to providing a Centre, the likes of which have not been seen elsewhere on Bourke Street.

This new, sophisticated Centre provides you with an ideal opportunity to retail from Melbourne's premier shopping street.

The Paramount needs you the tenants to give your best in your fitout design, lighting, merchandising and graphics to make this great centre complete."

37 The Guidelines also contain plans of three levels of the proposed shopping centre showing the location of at least 55 shops, being:

* Little Bourke Street level - 9 shops;

* Bourke Street level - 24 shops;

* top level - 22 shops.

38 Representations (a), (b) and (d) are expressed to relate to a future time. However, the pleading is silent as to that future time. In the course of argument, senior counsel for Dukemaster suggested that the representations should be understood as referring either to the time when the shopping centre would be open or to "the foreseeable future". No more specific time was suggested as the time to which representations (a), (b) and (d) should be taken to refer.

39 In the course of the Second Findings, his Honour referred at several points to the prospects of whether there would be shops operating in the shopping centre "in the foreseeable future". Thus, his Honour said:

"[In August 1996 the shopping centre] did not have retail shops or retail services provided on all three levels, and there was no prospect whatever that it would provide such shops or services at any stage in the foreseeable future." - paragraph [123].

...........................

"I am satisfied that at the time the brochure was provided to Mr Gan there was not in existence, and not likely to be in the foreseeable future, a fully let, or successful retail arcade." - paragraph [126].

...........................

"The fact that the centre was conceived, designed and built to house 55 shops does not justify the representation that, as at August 1996, it was believed, on reasonable grounds, that it would, at some stage in the foreseeable future have 55 speciality shops." - paragraph [140].

The representations pleaded, however, make no mention of "the foreseeable future" or any other point in time.

40 Nor does the language of the Brochure and the Guidelines give rise to representations (a), (b) or (d) as pleaded. The Brochure says that the Centre "is a retail development". The Brochure also says "55 shops are proposed in the project" and the Guidelines say that the centre "offers some 55 speciality shops".

41 The Paramount Centre was a retail development incorporating 5,747 square metres of leasable area on three main levels. The Guidelines show plans of 55 shops on three levels. There is no suggestion that the "leasable area" of those 55 shops was other than 5,747 square metres. In addition, it is clear that 55 shops were proposed in the project. Those 55 shops were being offered for lease.

42 By August 1996, when the Brochure and the Guidelines were handed to Mr Sayers and Mr Gan, the building had only recently been handed over by the builders. No fitout had begun and considerable work was necessary before the Shopping Centre would be operating. That was apparent on inspection and Messrs Sayers and Gan were conducted on an inspection in August 1996. At that stage, there were no shops as such and no arcade.

43 It is clear from the documents that they are describing the accommodation that was to be offered in the Centre. The documents are clearly intended to invite prospective tenants to take up tenancies in the shopping centre that was being established. The documents do not constitute a representation that the shopping centre would offer a three level retail arcade and would have a tenant mix including a supermarket and 55 speciality shops "when it opens" or "in the foreseeable future". The language of the Brochure is that of an offer in the sense described above. The Guidelines made it clear that tenants were then being sought.

44 The documents, fairly considered, are a statement of what was being offered by Dukemaster to prospective tenants. They are not fairly to be construed as a statement as to what would happen at some unspecified time in the future. The material relied on in the Brochure and the Guidelines did not give rise to representations (a) and (b) and was neither misleading nor deceptive. Bluehive is not entitled to damages on the basis of representations (a), (b) and (d).

REPRESENTATIONS (i) AND (j)

45 The primary judge concluded that representations (i) and (j) were made, that they were representations as to "future matters" within s 51A of the Trade Practices Act and that Dukemaster had no reasonable grounds for making the representations. His Honour also accepted the evidence of Mr Gan that he relied upon those representations and that Bluehive would not have taken up the lease of Shop 5 had they not been made. His Honour considered, therefore, that representations (i) and (j) were causally connected with the loss sustained by Bluehive.

46 Notwithstanding the observation made by the primary judge in the First Findings (par [86]) that it had not been suggested on behalf of Dukemaster that, if his Honour found that representations (i) and (j) had been made, there was no reliance on them by Bluehive, the appeal proceeded on the basis that the question of reliance was in issue, quite apart from the question of whether or not the statements attributed to Messrs Hii and Cook had been made. The Full Court heard submissions on that question on behalf of Bluehive as well as Dukemaster without any suggestion that it was an issue that was not open for Dukemaster on the appeal.

47 In his evidence in chief, Mr Gan said that, after the meeting on 21 August 1996, he had a discussion with Mr Sayers to run through what had been discussed at the meeting. He said that he and Mr Sayers were impressed by what they had been told by the owners "would be envisaged there so far as the retail tenancies". He said that he and Mr Sayers decided to put together a formal offer to reflect the sort of general terms that they had discussed during the meeting. They then prepared the Letter of Offer.

48 When asked what factors were operating on his mind in relation to the proposed tenancy at the time the Letter of Offer was prepared Mr Gan said:

"(AB 98) We considered what Mr Cook had said to us as far as turnover. We decided that if we were to offer rental we would have to base it on the lower of Mr Cook's estimate of our turnover, so we offered rental to be in line with the lower amount of $8,000 a week."

49 He said that the rent of $55,000 in the Letter of Offer was calculated as a percentage of turnover and that a comfortable level was usually about 12 or 13 per cent of turnover. He said that the figure of $55,000 was a figure that they felt was reasonable on an $8,000 turnover "that we were told we would do at the minimum". He said that the percentage rent was arrived at as a result of a meeting when Mr Hii told them that if they were to achieve $15,000 a week or more, he would want to have a percentage of 10 per cent. If they could achieve "those level of sales he would want a slice of that, a greater slice".

50 Mr Gan's evidence was that after a tour of the site they went back to the offices of either Mr Cook or Mr Hii. He said that Mr Hii told him "there would be 450 seats in this food court and by his calculations that he expected $14,000 per annum per seat would be generated". He said that Mr Cook "said I should do between $8,000 and $15,000 per week in turnover". He also said that Mr Hii "suggested that on that sort of turnover he would want about $75,000 rental for that premises, shop number 5". He said that Mr Hii also said "that that was justifiable based on what turnover we would do, between $8,000 and $15,000, and that if we were in the event to turnover $15,000 or more he would want a percentage of turnover for rental".

INCONSISTENT FINDINGS

51 The question of reliance by Bluehive is very much tied up with other representations alleged by Bluehive. The primary judge was satisfied that representations (d), (e) and (f) were made and that they must be taken to be misleading. His Honour also accepted Mr Gan's evidence that Mr Cook had made a statement to him in terms of representation (c). However, his Honour was not satisfied that Bluehive relied on representations (c), (e) or (f). As indicated above, it also appears that his Honour considered that representation (d) alone was insufficient to warrant damages in favour of Bluehive.

52 In that context, his Honour then made two findings that give rise to some difficulty. The findings are as follows:

"[143]. Long before the Centre opened on 28 July 1997, it was perfectly apparent that there would not be a three level retail arcade. There was also no prospect of "55 speciality shops" being occupied. However, by the time that this had become clear, Bluehive was financially committed to operating Shop 5 as an Italian food outlet. It had carried out an expensive fitout. From at least December 1996, it had passed the point of no return.

...........................

[150]. Mr Gan said in evidence that Mr Cook told him just before they went on the tour that there would be 55 retail shops fully operating and tenanted when the Centre was to have its grand opening towards the end of the year. However, by the time Bluehive committed itself irrevocably to taking up the lease of Shop 5, which appears to be around December 1996, it must have been obvious to Mr Gan that there was not the slightest prospect of the shops being rapidly leased. It was also plain that the Centre would not be fully tenanted when it eventually opened, some months hence."

53 The reference, in paragraph [143], to the fact becoming clear that there was no prospect of 55 specialty shops being occupied, must be a reference to that fact becoming clear to Bluehive. In so far as paragraph [143] refers to the prospect of 55 specialty shops being occupied, there is once again an omission to state the time when those shops would become occupied. In the context it should probably be taken to refer to the date of opening. That is to say, long before the Centre opened, it had become clear to Bluehive that there was no prospect of 55 specialty shops being occupied at the time of opening. However, that only became clear after Bluehive had passed the point of no return in December 1996.

54 It is therefore curious that his Honour, in paragraph [150], concluded that by the time Bluehive committed itself irrevocably, in around December 1996, it must have been obvious to Mr Gan that there was not the slightest prospect of the shops being rapidly leased. The reference in paragraph [150] to it being "also plain that the Centre would not be fully tenanted when it eventually opened some months hence" must be a statement about Mr Gan's understanding. That is to say, it must be a finding that it was also plain to Mr Gan, by the time Bluehive committed itself irrevocably in December 1996, that the Centre would not be fully tenanted when it eventually opened. It is impossible to read paragraph [150] in any other way without doing considerable violence to its clear language.

55 His Honour made the finding in paragraph [150] in the context of dealing with the question of whether Bluehive relied, in any sense, upon representation (c). However, while it is a finding made in that context, it is nevertheless a finding of fact. In the light of that finding, it would be difficult to justify a finding that Mr Gan and Bluehive had relied on representations (i) and (j).

56 Assuming Mr Gan's evidence as to the statements concerning turnover is accepted, it is also subject to the deficiency of a lack of time. Mr Gan did not give any evidence that he was told when there would be 450 seats in the food court with $14,000 per annum per seat. Nor did he say that Mr Cook or Mr Hii told him when Bluehive could expect to have a turnover between $8,000 and $15,000 per week. It is clearly implicit in the statements attributed to Messrs Hii and Cook, if they were made, that they were speaking of a time when the shopping centre would be fully tenanted. It is clear that they were not speaking of a time when the shopping centre was not fully tenanted.

57 Thus, the finding at par [150] is critical to the question of whether there was reliance on the statements attributed to Messrs Hii and Cook. If it was plain to Mr Gan in December 1996 that the Centre would not be fully tenanted when it eventually opened, some months thence, there could be no finding that Mr Gan relied on a representation that Bluehive would have a turnover of about $8,000 per week when the shopping centre opened and that there would be 450 seats for the patrons in the food court when the shopping centre opened and that each seat would generate about $14,000 per annum.

LACK OF COMPLAINT

58 However, most significant in relation to the question of reliance on the statements attributed to Messrs Hii and Cook is the complete absence of complaint in relation to those matters prior to the commencement of the proceeding. By August 1997, Bluehive was discontented with its proposed tenancy of Shop 5. It made complaints about the conduct of Dukemaster. However, it was not until 23 December 1998, when the proceeding was commenced, that the allegations of representations (i) and (j) were first made.

59 While the bargain for the lease of Shop 5 was struck in September 1996, the delays in the fitout of the shopping centre meant that the formal documentation of the arrangements was still not complete in July 1997. There was continued negotiation concerning the terms of the lease until that time. Amendments were still being made to the draft lease in June 1997 dealing, for example, with exclusivity. On 17 July 1997, Dukemaster's solicitors sent to Bluehive's solicitors three copies of the proposed lease and guarantee documents for execution by Bluehive and its guarantor. Even then, Bluehive's solicitors responded on 22 July 1997, requesting further amendments to the documentation. Thus, it is clear that Bluehive and its legal advisors were giving careful attention to the documentation of the proposed tenancy.

60 On 4 August 1997 Bluehive made a written complaint to Dukemaster by a letter from Mr Gan to Mr Hii. In the letter, Mr Gan relevantly said as follows:

"Prior to entering heads of agreement to lease shop number 5 at the Paramount Centre back in September 1996 I was advised that the Paramount Centre was entering into several leases on the Bourke Street and first floor level and that I should gear up to be ready to open for trade in early December 1996... At no stage was I told that the Centre would be opening up in stages, and that the food court tenancies would be the first to commence trade.

Communication from management of the Paramount Centre since September 1996 through to early June 1997 was inadequate, and I relied heavily on information passed on to me by my architect... I believe that many things have been said to encourage and influence me to take up a lease in the Centre, and as a result I have been given misleading information. If I had known that the Centre would not be completely leased by the time I was to commence trading, I probably would not have decided to take up a lease. In May 1997, it became obvious that the Bourke Street and first floor level was not going to be ready by the time I was to start trading. However, I had already committed to finance, paid a deposit to the shop fitter, engaged the work of my architect and purchased many equipment for the shop. It was too late to turn back."

The letter also included a complaint about alleged breach of the terms and conditions of the proposed lease by reason of another tenant selling coffee. While it says "many things have been said to encourage and influence me", no mention is made of statements about turnover.

61 On 28 August 1997, Bluehive's solicitors wrote to Dukemaster's solicitors saying that Bluehive was not prepared to enter into a lease of the premises on the terms offered by Dukemaster and was no longer prepared to continue to occupy Shop 5 "pending negotiations". After requesting that Dukemaster's directors contact Mr Gan to discuss the handover of Shop 5, the letter went on as follows:

"Our client and its director were induced to offer to lease the shop by representations from the directors of your, and from its agents, that:

(i) the food court would be opening for trade in December 1996 to catch the Christmas business;

(ii) the whole Centre, including the retail shops, would all be opening at about the same time;

(iii) shop 5 would have exclusivity in the sale of coffee beverages on the food court level.

All of these representations were proven incorrect.

...........................

In all the circumstances, our client is not prepared to enter into a lease of the premises.

..........................."

Again, no mention was made of statements about turnover, despite allegations of other representations.

62 On 18 September 1997, Bluehive's solicitors wrote again to Dukemaster's solicitors referring to their letter of 28 August 1997 and to discussions that had taken place that morning between Messrs Gan and Cook. The solicitors said that they had been instructed that Bluehive would cease trading from Shop 5 as from the close of business on Friday, 19 September 1997. Once again, there was no suggestion of a representation having been made concerning turnover.

63 Thereafter, there was continued negotiation between the parties, which, ultimately, was inconclusive. For example, on 6 February 1998, Bluehive's solicitors wrote to Dukemaster's solicitors saying, inter alia:

"Our client initially agreed to a gross rental of $50,000 in respect of shop 5 in September 1996 based on information then provided by the landlord as to the nature of the Centre and the number of speciality shops in it. With the passage of time, those predictions have proved to be incorrect. The shop simply will not support the types of rent being sought by the landlord, on present performance. Our client will agree to the gross rental of $40,000 being increased to $50,000 if annual sales from shop 5 exceed $416,000 but not otherwise."

It is significant that, notwithstanding the reference in that letter to turnover ("sales"), no mention is made of representations concerning turnover.

64 On 23 February 1998, Bluehive's solicitors wrote again to Dukemaster's solicitors relevantly saying:

"Our client reiterates that it cannot accommodate a gross annual rent of $50,000. It will only agree to a gross rental of $40,000 being increased to $50,000 if the annual sales from shop 5 exceed $416,000."

Again, no mention was made of alleged representations concerning turnover, despite reference to "annual sales".

65 Finally, on 1 April 1998, Mr Gan, on behalf of Bluehive, wrote to the manager of the Centre, relevantly saying:

"I write to advise that I am unable to make any payment for rental as requested by the landlord.

As you know, I have provided several weekly sales records to you which clearly indicates that the business is unable to support any rental charges. Your request for the full rental to commence from 1 April 1998 is unreasonable and without regard.

I have attached a profit and loss report for your consideration which clearly indicates that the business is operating at a loss. Further, I have had to inject personal funds into the business to keep it afloat.

...........................

Should the landlord insist that I contribute towards the rental, I advise that I will have no choice but to close my business in the Centre.

Finally, as you are aware, I am still willing to talk about the various issues in relation to both shop 5 and shop 11, however, having said that I point out that time is slowly running out and matters must be finalised without any further delays.

I would appreciate your response to the above issues at your earliest convenience."

It is significant that at a time when Dukemaster was apparently demanding payment of arrears of rent when Bluehive's sales were inadequate to support the payment of the rent, no complaint was made about alleged representations relating to turnover.

66 On 28 August 1998, Bluehive commenced proceedings against Dukemaster in the Retail Tenancies List of the Victorian Civil and Administrative Tribunal ("the Tribunal"). Bluehive claimed orders that its lease be set aside ab initio and damages under s 82 of the Trade Practices Act, on the basis of contravention of s 52 of that Act. Attached to the application to the Tribunal was a description of the grounds of the application. The grounds included allegation of representations (a) to (e). Significantly, no mention was made of alleged representations (i) and (j). On 19 October 1998, points of claim were filed by Dukemaster in the Tribunal. The points of claim repeated the allegations relating to representations (a) to (e). No allegation was made in terms of representations (i) and (j).

67 His Honour referred to the fact that Mr Gan did not allege any representation concerning projected turnover until the commencement of the proceeding in this Court. Mr Gan asserted that he had not mentioned the matter of turnover at an earlier stage because he had assumed that both Mr Hii and Mr Cook would deny having made the representations. He said that, in order to avoid getting into a "pointless slanging match" he had confined his complaints to those representations that could not be the subject of any dispute, including, in particular those that had been made in writing. His Honour did not find Mr Gan's explanation "wholly convincing". Nevertheless, his Honour considered that, when balanced against "the considerable weight which must be given to" the Letter of Offer, the only conclusion that was available was that Mr Gan's account of what occurred during the course of the meeting on 21 August 1996 was substantially accurate.

RECENT INVENTION BY MR SAYERS

68 Pursuant to directions given by the Court, an outline of the evidence to be given by Mr Sayers was prepared on 27 January 2000 and served on Dukemaster's solicitors before the trial. No mention was made in that outline of evidence of any statement alleged to have been made by Mr Cook concerning turnover. However, the oral evidence of Mr Sayers in chief included the following questions and answers:

"What else did he say about the food court?" - "He told me that they had done a calculation on the turnover that the food court would generate."

"Did he tell you what that was?" - "He said that our tenancy would have a minimum turnover of $8,000 per week and that we would expect to do $15,000 a week"

"Did you question him about that?" - "No."

69 Mr Sayers was subsequently shown the Letter of Offer in the course of his evidence in chief. His attention was drawn to the figure of $50,000 described as "gross rent per annum" and was asked how that sum was arrived at. His response was:

"We based that calculation on the figures that Peter Cook had given us."

The following exchange then took place:

His Honour:	"Which particular figures? - On the $8,000."
Senior Counsel for Bluehive:	"The percentage went on the following page? - That was based on the upper end of what Peter Cook had said. He told us that we would expect to do $15,000 a week so we calculated that figure based on that information.
	At the time this letter was prepared and sent in August 1996, what was the state of your mind about the matters that you had been told by Mr Cook? - I was confident in what he had told me."

That question was a reference to the percentage rent of "10 per cent of annual turnover in excess of $780,000" set out in the letter of 22 August 1996.

70 Mr Sayers was cross examined about the omission from his outline of evidence of any reference to that conversation with Mr Cook. He agreed that the information about turnover was probably one of the most important things he heard Mr Cook say to him on that afternoon and one of the most important things that would remain in his mind in making a decision to put an offer. However, he accepted, in the course of cross-examination, that his statement did not say anything about Mr Cook telling him that there would be an $8,000 a week turnover made at Shop 5.

71 His only explanation for the matter being omitted from his outline of evidence was that he forgot to tell Bluehive's solicitors on the day when he was interviewed by them for the purposes of making a statement concerning his evidence. That is not especially convincing. The omission of any mention of the matter weighs heavily against a conclusion that the matter was relied on to any extent in the decision to incur expenditure in relation to the proposed lease.

RELIANCE ON TURNOVER REPRESENTATIONS

72 Against that background, it is necessary to assess the primary judge's conclusion that Bluehive, through Mr Gan, relied on the statements concerning turnover attributed to Messrs Hii and Cook, and that Bluehive would not have taken up the lease of Shop 5 had those statements not been made.

73 As we have said, his Honour concluded in the Second Findings that, notwithstanding the reservations that he had earlier expressed about certain aspects of Mr Gan's evidence, Mr Gan was in his Honour's opinion a witness of truth. His Honour observed that that conclusion applied also to Mr Sayers. On the other hand, his Honour observed that Mr Cook was a witness whose memory of events was uncertain and that his Honour had serious reservations regarding Mr Cook's reliability as a witness. His Honour also observed that he had reservations regarding the credibility of Mr Hii, observing that his recollection of the events seemed to be vague and unreliable. His Honour did not say expressly that he had regard to the undoubted advantage that a trial judge, who sees the witnesses in person, has over an appellate court in assessing credibility.

74 Indeed, our attention was drawn to exchanges between his Honour and counsel in the course of argument after remitter. The following was said:

His Honour:	"The High Court and other courts have commented on the limits, quite properly the limits that can really be accorded to concepts like demeanour. Demeanour has dangers associated with it and it has always been my view that although it is a matter to be taken into account one is wary of demeanour as a critical matter, particularly when one is talking about conversations that might have occurred years and years ago.
...........................
	The judgment could have been made appeal proof, if I had been minded to do that, simply by inserting a line or sentence, so the Full Court says, along the lines of `I was not impressed by the demeanour of (A), (B) or (C) and I much preferred the demeanour of (X), (Y) or (Z).'
...........................
	I am not in the business of writing judgments in that way unless and until it becomes a significant part of the reasoning process to focus on matters of demeanour.
	You may take it I do not propose to say anything whatever in this second attempt to get the facts right on the question of demeanour per se. Demeanour will not enter into this judgment except as a negation of something that I take into account.
...........................
	There may be cases where the demeanour of a witness really does cast light upon whose account of what occurred several years ago took place. In my view this is not such a case in terms of demeanour strictly understood. There is nothing in the demeanour of any of the witnesses - that is body language, matters of that kind - which assist me in the slightest in terms of preferring one version of what occurred to another.
...........................
	What you're saying to me - and I just wanted to be clearly understood - is that you have no difficulty with my considering the objective probabilities of the evidence given by the witnesses and incorporating in my judgment that I write or any findings of fact that I make, such observations as I have already made about the witnesses, but beyond that your submission is that I should not reconstruct an impression of demeanour.
Senior Counsel for Dukemaster:	"No, or embark on a fuller examination of credit and character."
His Honour:	"Credit is a difficult word; character is a different word. Character doesn't enter into it as far as I am concerned. Credit may mean truthfulness or it may mean credibility in terms of accuracy of recollection. If one is talking about the latter then inherent probabilities may lead me to prefer the evidence of one witness to the evidence of another. That's not strictly an analysis of credit, it's an analysis of the credibility of the account given by the witness. Is there anything wrong with that analysis?"
Senior Counsel for Dukemaster:	"No, there is not your Honour. Indeed, one might say there would be no point for the Full Court to have remitted the matter to your Honour."
His Honour:	"I was going to say that."

75 The extent to which exchange between bench and counsel in the course of argument can be informative as to the reasons for a decision is very limited. Propositions may be advanced by the bench in the course of dialogue between bench and counsel in order to expose issues and elucidate arguments. When the Court reserves its decision for consideration, observations made in the course of argument concerning the possible outcome should be given no weight at all.

76 On the other hand, where a trial judge makes observations as to his or her understanding as to the task upon which he or she is about to embark, there may be some justification for having regard to those observations, if the ultimate reasons are silent as to those questions. That appears to be the case here where, consistently with the observations made in the course of argument, his Honour appears to have based his conclusions concerning the credibility of the contending witnesses on inherent probabilities and on the vagueness of the evidence given by Mr Hii and Mr Cook.

77 In any event, the question of reliance does not depend upon resolution of conflict between the competing versions of Messrs Cook and Hii on the one hand and Messrs Gan and Sayers on the other. Rather, it depends upon an assessment of the likelihood that the statements attributed to Messrs Cook and Hii, assuming they were made, would have induced Mr Gan and Mr Sayers to commit themselves to substantial expenditure some months after they were made without any confirmation of the statements or any indication to Dukemaster that Bluehive was intending to incur substantial expense in reliance upon such statements.

78 In circumstances where his Honour omitted to advert to the submission concerning recent invention in relation to Mr Sayers and concluded that Mr Gan's explanation for not having previously mentioned the representations as to turnover was not "wholly convincing", there is a strong case for concluding that the Full Court should consider afresh the evidence to which it has been taken in order to make its own assessment as to whether it is more likely than not that the statements attributed to Mr Hii and Mr Cook were actually made by them. That assessment must be made in circumstances where statements that were said to be critical in the making of a decision to incur expenditure, were not mentioned at a time when complaints were being made about other so-called representations.

CONCLUSION

79 It is inherently unlikely that Bluehive would, in December 1996, have incurred expenditure in reliance upon the statements concerning turnover attributed to Messrs Cook and Hii where:

* certain of the representations alleged by Bluehive were found by his Honour not to have been relied upon;

* at the time of commitment in December 1996, Bluehive knew that there was no three-level retail arcade and that there were not 55 specialty shops.

That conclusion is reinforced by the circumstances that:

* there was no complaint about the alleged misleading and deceptive conduct till December 1998, many months after it must have been apparent that the predictions were unreliable; and

* Mr Sayers failed to mention the statements attributed to Messrs Cook and Hii when first asked to give a statement as to important matters relative to the proceeding.

80 Whether or not the statements attributed to Messrs Cook and Hii were made by them as asserted by Messrs Sayers and Gan, it is more likely than not that the statements played no part in the decision by Bluehive to pass the point of no return and commit itself irrevocably in December 1996 and incur expenditure in relation to the proposed tenancy. In those circumstances, we are not satisfied, on the balance of probabilities, assuming that the statements attributed to Messrs Hii and Cook were made by them, that Bluehive suffered any loss or damage by the conduct of Dukemaster, through Messrs Cook and Hii, in making those statements. Therefore, any cause of action under s 82 of the Trade Practices Act must fail.

81 We are mindful of the difficulties that an appellate court has in reaching a different conclusion from that reached by a trial judge who has all of the advantages of seeing witnesses and assessing the reliability of their evidence on the basis of their demeanour in the witness box. In that regard, we have had the advantage of reading the reasons of Conti J in draft form. However, for the reasons that we have articulated, we, with considerable diffidence have reached a conclusion different from that reached by the trial judge.

ORDERS

82 It is common ground that, even if Dukemaster's appeal against the judgment were to be dismissed, the judgment should be reduced to $212,978.44. We have concluded, in the light of the above, however, that the claim by Bluehive based on contravention of s 52 of the Trade Practices Act should fail. It follows that the judgment in favour of Bluehive should be set aside in its entirety. In lieu of the orders previously made in relation to Bluehive's application, the appropriate order is that the application be dismissed.

83 The Court has been asked not to consider the question of costs until the parties have had the opportunity of making further submissions in the light of the outcome of the appeal. Accordingly, we propose to give directions for the making of written submissions on the question of costs.

84 We have also adverted earlier to the cross-claim by Dukemaster for recovery of rent. On 15 September 2000, the primary judge ordered that Dukemaster's cross-claim for rent be dismissed. His Honour concluded that any amount payable for rent would be added to Bluehive's losses, and could be claimed by it. In the light of the conclusion that we have reached, that finding does not hold. No defence to the claim for rent has been advanced other than reliance upon the cause of action for contravention of s 52 of the Trade Practices Act. It would follow that there should be judgment for Dukemaster against Bluehive on its cross-claim.

85 However, we consider that it is appropriate to make no orders on the cross-claim at this stage. Rather, the parties should be directed to bring in short minutes after the question of costs has been resolved. The parties should also have the opportunity of considering our reasons in order to confirm that all of the issues raised on the appeal have been addressed. We consider that that is appropriate, having regard to the somewhat unusual course that this appeal has taken.

I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg and the Honourable Justice Emmett.

Associate:

Dated: 27 November 2002

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	V 754 OF 2000

ON APPEAL FROM THE HONOURABLE JUSTICE WEINBERG

BETWEEN:	DUKEMASTER PTY LTD (ACN 050 275 226) APPLICANT
AND:	BLUEHIVE PTY LTD (ACN 073 073 300) FIRST RESPONDENT GAN HOLDINGS PTY LTD (ACN 080 258 635) SECOND RESPONDENT

JUDGE:	SUNDBERG, EMMETT and CONTI JJ
DATE:	27 NOVEMBER 2002
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

CONTI J

86 I am grateful to Sundberg and Emmett JJ for their comprehensive review of the course taken by the proceedings at first instance and on appeal. I have reached the view however that the conclusions of the primary judge in relation to the critical representations, denoted (a), (b), (d), (i) and (j) in the proceedings, should be upheld on appeal. The circumstances of the present litigation serve to exemplify the extent to which the operation of s 51A of the Trade Practices Act 1974 (Cth) ("the Act") has overtaken the common law doctrine of collateral warranty, particularly by reason of the reversal of the onus of proof in relation to representations as to future matters. The conclusions of the primary judge were critical of the commercial behaviour of the appellant property developer/owner, which had found itself placed in circumstances of difficulty in attracting prospective occupiers to its substantial commercial property development, which at the time the parties first came into contact was close to completion. The first respondent became one such occupier of certain shop premises within the complex, but withheld from signing any lease or other occupancy agreement in favour of the appellant prior to the first respondent's abandonment of those shop premises. That respondent did however commit itself to the fitting out of those shop premises, and thereafter to what quickly became the unprofitable conduct of an Italian food outlet therefrom for a limited period of time.

87 My starting point for these reasons for judgment is that Mr Gan, the principal decision-maker of the respondents Bluehive Pty Ltd and Gan Holdings Pty Ltd (together "Bluehive"), was found by the primary judge to be a witness of truth, but no such affirmative finding was made in relation to Mr Hii or Mr Cook, the principals associated with the appellant ("Dukemaster"). Moreover the appellant did not seek to disturb on appeal the findings of the primary judge that those representations (a), (b), (d), (i) and (j) were made by Dukemaster to Bluehive substantially to the effect reproduced below:

"(a) that the shopping centre would offer a three level retail arcade;

(b) that the shopping centre would have a tenant mix including a supermarket and 55 specialty shops;

...

(d) that there would be a bistro/gaming venue located on the upper Bourke Street level of the shopping centre which would trade to 1:00am every night of the week;

...

(i) that Bluehive would have a turnover of about $8000 per week;

(j) that there would be 450 seats for patrons in the food court and each seat would generate about $14,000 per annum, making a total annual income of about $6,300,000 for the 8 shops in the food court;

..."

88 As to representation (a), the primary judge found that by August 1996, when the representation was made by virtue of the contents of the "Brochure" and the "Guidelines" handed by Dukemaster's representations to Bluehive's representatives:

"... the Centre was still little more than a shell with a history of failed attempts to lease the shops on the Bourke Street and Upper Bourke Street levels."

The primary judge further found in that context that "[i]ndeed, even when the Centre commenced trading almost a year later, it was still barely tenanted" (see [21] of the primary judge's reasons for judgment of 16 November 2001, being the second of his Honour's judgments in the proceedings, to which I shall hereafter refer to as "the second judgment below"). The material parts of the Brochure and Guidelines have been reproduced in the contemporaneous reasons for judgment of Sundberg and Emmett JJ.

89 The primary judge found in the course of [121-138] of the second judgment below, in relation to representation (a), that the same was misleading within s 51A of the Act, since at the time it was made, the shopping centre "... did not have retail shops or retail services provided on all three levels, and there was no prospect whatever that it would provide such shops or services at any stage in the foreseeable future". His Honour also found that "[i]t was plainly implicit in what was said in the Brochure that there would be retailers offering goods and services to members of the public on all three levels..., [being] an important selling point...," and further that "[a] three level retail development would be likely to attract substantial numbers to the Centre, thereby generating business for shops in the food court... [whereas] [o]ffice space, whether let or unlet, would hardly achieve the same result." His Honour found further again that "[w]hen the Centre finally opened on 28 July 1997, almost a year after the Meeting took place, there were still only two retail shops open on the Bourke Street level, and none at all on the Upper Bourke Street level". It was largely in the context of those findings that the primary judge reached the following further conclusions adversely to Dukemaster, namely that "... at the time the Brochure was provided to Mr Gan there was not in existence, and not likely to be in the foreseeable future, a fully let, or successful retail trade", and "[f]or whatever reason, the premises were (and were known by Dukemaster to be) largely unlettable for retail purposes". In the meantime, it appears that in or about December 1996, Bluehive made financial commitments in relation to what I might describe broadly as the commencement of the fitting out of the premises as an Italian food outlet.

90 As to representation (b), the primary judge dismissed what I would describe as Dukemaster's disingenuous submission that in publishing the Brochure and the Guidelines, it thereby said nothing more than that there would be a space in the Centre for 55 potential tenants. His Honour concluded at [139] of the second judgment below that he was satisfied that representation (b) was made in the terms pleaded, and further at [141] that "[t]here is a significant difference between telling a prospective tenant that it was originally conceived that `55 specialty shops' would be built as part of a project, and representing that the Centre currently `offers some 55 specialty shops' ".

91 As to the critical issue of Bluehive's reliance upon representations (a) and (b), the primary judge concluded as follows:

"142 In my view, the evidence sufficiently establishes that Mr Gan, on behalf of Bluehive, relied upon both representations (a) and (b) when he decided to enter into the lease of Shop 5, and committed Bluehive financially and irrevocably to that course. Not only was the general tenor of Mr Gan's evidence to that effect, but it would be impossible not to draw that inference from the evidence taken as a whole.

143 Long before the Centre opened on 28 July 1997, it was perfectly apparent that there would not be a three level retail arcade. There was also no prospect of `55 specialty shops' being occupied. However, by the time that this had become clear, Bluehive was financially committed to operating Shop 5 as an Italian food outlet. It had carried out an expensive fit-out. From at least December 1996, it had passed the point of no return."

I should again emphasise, in the context of the above findings, that such financial commitment on Bluehive's part did not involve the signing of a lease or an occupancy agreement in favour of Dukemaster. Nevertheless, the fitting out of the shop premises as an Italian food outlet, and the subsequent operation thereof, did involve a financial commitment of significance, such as to satisfy in principle the notion of reliance according to law. It is illustrative of the difficulties then facing Dukemaster that it did not require the signing of a lease or occupancy agreement as a condition for allowing Bluehive into possession.

92 Representation (d) was asserted by Bluehive to be partly oral and partly in writing. Dukemaster's submission in relation thereto was essentially to the effect that although the Guidelines had referred to the Centre offering a "bistro/gaming area", nothing had been said about there being a "bistro/gaming venue", hardly a distinction of substance, as the primary judge pointed out at [145] of the second judgment below. Bluehive's principal decision-maker Mr Gan testified that he had relied upon that representation, despite his then imperfect understanding of the nature of a bistro and gaming area, and further that he regarded the existence of a bistro/gaming "zone" as being good for Bluehive's take-away food business, because its presence, and late closure times, meant that there would be people coming through the Centre, not just throughout the morning and early afternoon, but the entire day, thus creating a continual flow of pedestrian traffic (see [33-34] of the second judgment below). The primary judge was satisfied that representation (d) was in fact made, and must be taken to be misleading, albeit that in his view, representation (d) was not sufficient, standing alone, to warrant granting Bluehive the relief it sought in the proceedings (see [147] of the second judgment below), representation (i) having significance only by way of supplement to representations (a) and (b).

93 I am unable to accept that to the extent that the findings of the primary judge at [123] of the second judgment below, in relation to representation (a), contained the concluding temporal expression "in the foreseeable future", notwithstanding that representation (a) as pleaded did not literally include those words, derogated from the force and efficacy of those findings. I further think that the same observation is true of the primary judge's subsequent findings in [126] and [140] in the second judgment below, which also contained the expression "in the foreseeable future". Sub-sections 51A(1) and (2) of the Act do not require that a representation with respect to "any future matter" should necessarily assign any specific future time or occasion to when that representation was supposedly to take effect. Those statutory provisions may equally operate in context upon a representation as to the occurrence of a matter or circumstance unspecifically in "the foreseeable future", particularly in situations where, to borrow the dictum from Lee J as a member of a Full Court in Wheeler Grace & Pierucci Pty Ltd v Wright (1989) ATPR 40-940 at 50,251, there has been, as here, a "failure to qualify the statement or disclose the risk of non-fulfilment" on the part of the representor.

94 Nor does it seem to me that representations (a) and (b) are to be denied efficacy or significance according to their respective terms, because of the presence in the Brochure of the expression "55 shops are proposed in the project", and in the Guidelines of the expression "offers some 55 specialty shops" (my emphasis). Those phrases were not used in a contextual vacuum, but appeared in the documents handed to Bluehive's representatives at the time of their inspection of what was physically obvious by then a retail development approaching completion of construction. I should add that the Brochure also used the description "... is a retail development". It was open to Dukemaster to have disabused Bluehive's expectations generated by those descriptions presented by the Brochure and Guidelines, before Bluehive "had passed the point of no return" in December 1996, being critical finding of the primary judge appearing in [143] of the second judgment below.

95 I do not think therefore, in the light of the content relevantly of the Brochure and Guidelines, and of the events which happened up to and including December 1996, that the primary judge erred in his conclusion in [142] of the second judgment below that "... the evidence sufficiently establishes that Mr Gan, on behalf of Bluehive, relied upon both representations (a) and (b) when he decided to enter into the lease of Shop 5, and committed Bluehive financially and irrevocably to that course". That conclusion is assisted moreover by his Honour's finding in relation to representation (d). The primary judge was of course more advantageously placed than a Full Court in discerning the nuances of the circumstantial context which prevailed in December 1996, when Bluehive reached "the point of no return" (the evidentiary description referred to in [94] above). It follows that irrespective of Bluehive's success or otherwise upon the remaining representations, including representations (i) and (j), Dukemaster must fail on its appeal.

96 Moving then to representations (i) and (j), being the only other representations of ultimate significance, the same were said by Bluehive to have been orally made by Mr Hii and Mr Cook on behalf of Dukemaster to at least Mr Gan of Bluehive (and Gan Holdings Pty Limited). The primary judge found at [115-116] of the second judgment below as follows:

"Whatever the formal state of the pleadings, I am in no doubt that the case before me was conducted upon the footing that if Mr Gan and Mr Sayers were believed, and Mr Hii and Mr Cook not believed, Dukemaster would be found to have made at least representations (h), (i) and (j).

Now that the issue of the sufficiency of the evidence to support representation (h) has been raised, my inclination is to limit my findings to representations (i) and (j). I conclude that those representations were made. I also conclude that they were representations as to `future matters' within s 51A and are accordingly to be taken to be misleading unless Dukemaster had reasonable grounds for making them. It has never been suggested by Dukemaster that there were any such grounds. I find there were none."

97 As to the matter of reliance upon the representations (i) and (j), I accept that some debateable difficulties emerge. The primary judge found in relation thereto at [117] of the second judgment below as follows:

"I accept the evidence of Mr Gan that he relied upon those representations, and that Bluehive would not have taken up the lease of Shop 5 had they not been made. Much of Mr Gan's evidence concerned the oral representations. He was cross-examined at great length about them. He stressed how impressed he and Mr Sayers had been with what they had been told. It is clear that financial considerations were of the utmost importance so far as Mr Gan was concerned. He explained how he arrived at a rental offer of $55,000 per annum as a percentage of turnover being 12-13% on a projected weekly figure of $8,000. I accept that evidence, just as I did in my primary judgment. Mr Gan had to consider carefully whether to go into Southbank or go (sic) take up the tenancy at Shop 5 at the Centre. As he was going to invest a great deal of his own money, and that of his wife, in fitting out and stocking up Shop 5, the representations made by Mr Hii and Mr Cook that tended to suggest that it would be a sound business venture were all likely to have played some role in persuading him to take up the lease."

98 His Honour proceeded thereafter in [118] of the second judgment below to find that representations (i) and (j) were causally connected with the loss which he found to have been sustained by Bluehive, and he cited in that context Henville v Walker [2001] HCA 52; (2001) 206 CLR 459 at 469, where Gleeson CJ said as follows:

"For there to be the necessary causal relationship between a contravention of s 52, and loss or damage, so as to satisfy the requirements of s 82(1), it is not essential that the contravention be the sole cause of the loss or damage... In the present case there were two concurrent causes of the imprudent decision to buy the land and undertake the development project. The conduct of the respondents was one of those causes. That is enough."

I would add that earlier at 468, the Chief Justice also said as follows:

"It will commonly be the case that a person who is induced by a misleading or deceptive representation to undertake a course of action will have acted carelessly, or will have been otherwise at fault, in responding to the inducement. The purpose of the legislation is not restricted to the protection of the careful or the astute..."

Moreover at 494, McHugh J observed as follows:

"Similarly, in respect of claims under s 82, courts have accepted that loss or damage is causally connected to a contravention of the Act if a misrepresentation was one of the causes of the loss or damage sustained by the claimant."

99 The notion that there may be two or more causes of the same loss or damage, in contrast to the existence of only one cause and perhaps a further remote cause thereof, had been recognised by the High Court, in relation to proceedings under s 82 of the Act prior to Henville v Walker, particularly in the context of contravening conduct within s 52 thereof : see Marks v GIO Australia Holdings Ltd [1998] HCA 69; (1998) 196 CLR 494 at 512 (McHugh, Hayne and Callinan JJ), Kenny & Good Pty Ltd v MGICA (1992) Limited [1999] HCA 25; (1999) 199 CLR 413 at 460 (Kirby and Callinan JJ), and most recently I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Limited [2002] HCA 41; (2002) 192 ALR 1 at 8-9 (Gleeson CJ), 11-14 (Gaudron, Gummow and Hayne JJ), 23-25 (McHugh J), 39-42 (Kirby J) and 53-54 (Callinan J). Section 82 of the Act, as construed and applied in those authorities, reflects in my opinion the approach taken by the common law, in relation to the tort of deceit, to the effect that once a representation has been shown to have altered the position of an applicant for relief in reliance on the misrepresentation, a measure of leeway should be given to that applicant, in the sense that he or she would not lightly be found to have ceased to be subjected to the impact or influence of that misrepresentation.

100 By way of one illustration, in Gould v Vaggelas [1985] HCA 75; (1983-1985) 157 CLR 215, which related solely to the common law tort of deceit, Gibbs CJ said at 228 as follows:

"However, a suspicion that they had been defrauded is very different from a full knowledge of the extent of the fraud, and the fact that they had an opportunity to take action that might have averted further losses does not necessarily mean that it was unreasonable to fail to do so. The critical question is whether it was unreasonable for the Goulds to continue to allow the company to trade..."

And further at 251-252, Brennan J said as follows:

"If the representor leads the representee to believe any part of the representation which is, and is known by the representor, to be untrue and the representee acts on that belief and suffers damage, the representor does not escape liability because the representee did not believe the representation in full. If the representee's desire to own what was for sale leads to the giving of some credence to the representation which would not otherwise have been given, the representee's self-induced gullibility is no defence to the representor."

101 The origin of the "leeway" notion to which I have just referred may be traced to the following dictum of Lord Cranworth LJ in Reynell v Sprye (1852) 42 ER 710 at 728:

"Once make out that there has been anything like deception and no contract resting in any degree on that foundation can stand."

The notion may be recognised in the majority judgment of the Privy Council (Lord Cross of Chelsea, Lord Kilbrandon and Sir Garfield Barwick) in Barton v Armstrong [1973] UKPC 2; (1973) 2 NSWLR 598 commencing at 622. At 631, the following appears:

"If it were established that Barton did not allow the representation to affect his judgment then he could not make it a ground for relief, even though the representation was designed and known by Barton to be designed to affect his judgment. If on the other hand Barton relied on the misrepresentation, Armstrong could not have defeated his claim to relief by showing that there were other more weighty causes which contributed to his decision to execute the deed, for in this field the court does not allow an examination into the relative importance of contributory causes."

102 Subsequently in Australian Steel & Mining Corporation Pty Ltd v Corben (1974) 2 NSWLR 202 at 207, the New South Wales Court of Appeal (per Hutley JA with whom Moffitt P and Samuels JA agreed) postulated the extent of the leeway expansively as follows:

"...The party relying upon misrepresentation to avoid a contract has to prove that the false statement did influence him..., but it is not correct to say that the representation must be the very ground upon which the transaction has taken place. Once there is acceptable evidence that the representation was one among the factors which induced the contract, that is sufficient.

I am also of opinion that the proposition that the misrepresentation must be material is incorrect."

In support of that approach, Hutley JA cited with approval the following passage from the judgment of Cussen ACJ in Nicholas v Thompson [1924] VLR 554 at 565:

"In connection with this question of `materiality' the test of the ordinary reasonable man has been suggested, and no doubt in many cases the test can, as a matter of evidence and for the purposes of the tribunal which has to find the facts, be properly resorted to. It must be remembered that there may be cases, though they do not often occur, in which what would be `material' to the ordinary man would not be `material' to the parties or one of them."

103 What has been cited from Australian Steel & Mining Corporation, concerning "one among the factors which induced the contract", renders it strictly unnecessary for Bluehive to succeed in relation to representations (i) and (j), in addition to representations (a), (b) and (d), assuming that the primary judge did not err in relation to the latter representations, which I would find to be the case. In any event, I think that the "leeway" notion to which I have referred, if capable of analogous application to the doctrine of reliance upon misrepresentations, which I consider to be feasible, should assist to lead to the rejection of the appeal in relation to representations (i) and (j) as well.

104 Dukemaster has contended that reliance could not have been reasonably placed by Bluehive upon representations (i) and (j), for reasons provided by Sundberg and Emmett JJ. One of those reasons was that Bluehive did not formally plead that the making of representations on the part of Dukemaster, concerning the turnover and income Bluehive would derive from operating an Italian food outlet in the subject premises, other than very belatedly, namely at the time of commencement of the proceedings below. Another reason was that no reliance testimony was raised by Bluehive in any written outline of Mr Sayer's testimony on behalf of Bluehive prior to the time of commencement of the proceedings. The primary judge recognised those shortcomings, in the presentation of Bluehive's case below, but his Honour nevertheless allowed a measure of leeway in favour of Bluehive upon the issue of reliance, in the context of his conclusions upon the nature and extent of the conduct of Dukemaster involved in the making of misrepresentations (i) and (j), and in the non-fulfilment thereof. Particularly given the volume and complexity of the testimony and documentation placed before the primary judge, and of the complex evidentiary tasks which he was required to resolve, inter alia in relation to representations (i) and (j), I think that it would be unsafe and incorrect for me to form my own view upon issues of reliance, in preference to the conclusion of the primary judge, which arise in relation to those representations.

105 I would therefore have dismissed the appeal of Dukemaster, and would have maintained the award of damages made by the primary judge, at least to the extent of the cost of the abortive fitting-out of the premises, and of the trading losses thereafter sustained until possession was abandoned.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti.

Associate:

Dated: 27 November 2002

Counsel for the Appellant:	A G Southall QC and R Phillips
Solicitors for the Appellant:	Kliger Partners
Counsel for the Respondents:	J Larkins QC and R Miller
Solicitors for the Respondents:	Taylor Splatt & Partners
Date of Hearing:	12, 13 August 2002
Date of Judgment:	27 November 2002