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Embo Holdings Pty Ltd v Gary Stirling Camm & Ors [1998] FCA 648 (11 June 1998)

Last Updated: 16 June 1998

FEDERAL COURT OF AUSTRALIA

AGENCY - Retainer to act as agent to find and negotiate the purchase of an aircraft - whether on the facts there was a relationship of principal and agent - Duty to exercise reasonable care and skill - Standard of care - whether there was a breach of any duty of care by the agent in not conducting searches as to the ownership of the aircraft and not advising the principal to conduct appropriate searches

TRADE PRACTICES - Misleading and deceptive conduct - whether representation made by the agent as to ownership of aircraft misleading and deceptive - whether thirdnamed respondent a person involved in a contravention pursuant to s 75B - whether representations merely statements of opinion

FAIR TRADING - Misleading and deceptive conduct of a person in trade or commerce

DAMAGES - Causation - whether consequential losses claimed caused by misrepresentations made by agent - whether causal nexus between misrepresentations and consequential losses claimed severed by applicant's conduct - Measure of damages - whether consequential losses are recoverable - Mitigation of damages - whether the respondents' discharged their onus of proof

Trade Practices Act 1974 (Cth), ss 52(1)(2), 75B(1)(c), 82(1), 87

Fair Trading Act 1989 (Qld), ss 5F, 38, 99, 100

Fair Trading Act 1985 (Vic), ss 11, 31

Fair Trading Act 1987 (WA), ss 68, 77, 79

Petersen v Maloney [1951] HCA 57; (1951) 84 CLR 91, applied.

MacCormick v Nowland (1988) 49 ATPR 180, referred to.

Henjo Investments Pty Limited v Collins Marrickville Pty Limited [1988] FCA 40; (1988) 79 ALR 83, applied.

Stanton & Anor v Australian and New Zealand Banking Group Ltd & Anor (1987) 40 ATPR 755, distinguished.

Franich v Swannell (1993) 10 WAR 459, distinguished.

Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661, applied.

Hornsby Building Information Centre Limited v Sydney Building Information Centre Pty Limited [1978] HCA 11; (1978) 140 CLR 216, applied.

Enzed Holdings Ltd v Wynthea Pty Ltd [1984] FCA 373; (1984) 4 FCR 450, applied.

March v Stramare (E & M H ) Pty Ltd & Anor [1991] HCA 12; (1990-1991) 171 CLR 506, applied.

Wardley Australia Limited & Anor v The State Of Western Australia [1992] HCA 55; (1992) 175 CLR 514, discussed.

Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd, 75 ALR 271 referred to.

Asea Brown Boveri Pty Ltd v Burns Philp Trustee Co Ltd (Unreported, NSW Supreme Court, Giles J, 23 April 1990, 50361 Of 1989, discussed.

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191, discussed.

Argy v Blunts & Lane Cove Real Estate (1990) 26 FCR 112, applied.

Neilsen v Hempston Holdings Pty Ltd (1986) 65 ALR 302, referred to.

Kizbeau Pty Ltd And Ors v W G & B Pty Ltd & Anor [1995] HCA 4; (1995) 184 CLR 281, discussed.

Gates v City Mutual Life [1988] HCA 55; (1985-1986) 166 CLR 1, applied.

Hennessy Glass Aluminium Systems Pty Ltd v Eagle Star Trustees Ltd & Ors (Fitzgerald P, Pincus JA, and Derrington J, 15 August 1996, 20 December 1996 unreported) discussed.

Hubbards Pty Ltd v Simpson Ltd (1982) 41 ALR 509, applied.

Banco De Portugal v Waterlow [1932] UKHL 1; (1932) AC 452, 506, applied.

EMBO HOLDINGS PTY LTD -v- GARY STIRLING CAMM, WESTERN GROUP PTY LTD (ACN 010 104 631), ALEC MERCER, URS FELIX, FELIX HOLDINGS PTY LTD, gary stirling camm, embo holdings pty ltd, urs felix and FELIX HOLDINGS PTY LTD, EMBO HOLDINGS PTY LTD

VG 38 of 1994

MILLANE JR

MELBOURNE

11 JUNE 1998

IN THE FEDERAL COURT OF AUSTRALIA


VICTORIA DISTRICT REGISTRY
VG 38 of 1994
BETWEEN:
EMBO HOLDINGS PTY LTD

Applicant

AND:

and between

and

AND BETWEEN

AND

GARY STIRLING CAMM

First Respondent

WESTERN GROUP PTY LTD (ACN 010 104 631)

Second Respondent

ALEC MERCER

Third Respondent

URS FELIX

Fourth Respondent

FELIX HOLDINGS PTY LTD

Fifth Respondent

gary stirling camm

cross-applicant

embo holdings pty ltd

cross-respondent

urs felix and FELIX HOLDINGS PTY LTD

CROSS-APPLICANTS

EMBO HOLDINGS PTY LTD

CROSS-RESPONDENT

JUDICIAL REGISTRAR:

MILLANE JR
DATE OF ORDER:
11 JUNE 1998
WHERE MADE:
MELBOURNE

THE COURT DECLARES THAT:

1. (a) The second and thirdnamed respondents engaged in conduct in trade or commerce which contravened s 52 of the Trade Practices Act 1974 (Cth); s 38 of the Fair Trading Act 1989 (Qld) and s 11 of the Fair Trading Act 1985 (Vic);

(b) the thirdnamed respondent was not a person involved in the contravention of s 52 of the Trade Practices Act 1974 (Cth) within the meaning of s 75B of that Act.

AND THE COURT ORDERS THAT:

2. The respondents pay damages to the applicant in the sum of $97,133.06.

3. On or before 4.00pm on Tuesday 16 June 1998 the parties file and serve any written submissions on both the question of interest and costs.

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
VG 38 of 1994

BETWEEN:

EMBO HOLDINGS PTY LTD

Applicant

AND:

and between

and

AND BETWEEN

AND

GARY STIRLING CAMM

First Respondent

WESTERN GROUP PTY LTD (ACN 010 104 631)

Second Respondent

ALEC MERCER

Third Respondent

URS FELIX

Fourth Respondent

FELIX HOLDINGS PTY LTD

Fifth Respondent

gary stirling camm

cross-applicant

embo holdings pty ltd

cross-respondent

urs felix and FELIX HOLDINGS PTY LTD

CROSS-APPLICANTS

EMBO HOLDINGS PTY LTD

CROSS-RESPONDENT

JUDICIAL REGISTRAR

MILLANE
DATE:
11 JUNE 1998
PLACE:
MELBOURNE

REASONS FOR JUDGMENT

This proceeding has a long history dating back to February 1994 when the first, second and thirdnamed respondents were all sued by the applicant arising out of the purchase by the applicant of a piper cub aircraft ("the aircraft") from the firstnamed respondent ("Camm") in late 1993. By August 1994 the fourth and fifthnamed respondents were added and various cross-claims were filed.

With the passage of time it appears that Camm was declared bankrupt on 30 November 1995; thereby staying the applicant's action against him and, on 18 December 1996, the applicant and the fourth and fifthnamed respondents executed a deed of settlement pursuant to the terms of which the applicant paid the fourth and fifthnamed respondents $20,000.00. This left the action between the applicant and the secondnamed respondent ("Western") and the thirdnamed respondent ("Mercer") to be decided.

The claims

On 4 July 1997 the applicant filed a Further Amended Statement of Claim and subsequently on 5 December 1997 filed Further Particulars of its loss and damage, items (a) to (h) inclusive, totalling $97,839.52. At hearing Mr Northrop of Counsel amended item (g) of the loss and damage claimed; that is to say the applicant's legal costs incurred in relation to the claims against and by the fourth and fifthnamed respondents, from $14,508.52 to $15,802.06; giving a total claim of $99,133.06.

As against Western and Mercer it is alleged that through its employee, Mercer, Western was retained for valuable consideration as the applicant's agent in connection with the purchase of the aircraft and at all relevant times owed the applicant a duty of care in the performance of the retainer and further owed a duty to provide the applicant with proper information concerning the subject of the retainer. The applicant alleges that on or about 1 December 1993 it was informed by Western through Mercer that Camm was the owner of the aircraft and, on or about 7 December 1993, Mercer prepared a written contract of sale and arranged for both Camm and the applicant to execute it.

It is alleged that in breach of the retainer and their duty of care Western and Mercer failed to ascertain or make any enquiries as to the ownership of the aircraft and further failed to advise the applicant that it should do so to establish the identity of the registered owner before paying Camm a total of $50,000.00 by 10 January 1994 when it took possession of the aircraft. In addition to these allegations the applicant alleges that certain representations were made to it by the respondents in respect to the ownership of the aircraft. These representations were made in trade or commerce and were relied on by the applicant when it executed the contract of sale and paid both the purchase price to Camm and a commission fee of $2,000.00 to Western. It is alleged that the representations as to ownership were false and untrue and that Western and Mercer engaged in conduct that was misleading or deceptive or likely to mislead or deceive in contravention of s 52 of the Trade Practices Act 1974 (Cth) or further or alternatively engaged in conduct in contravention of the misleading or deceptive conduct provisions of the State Acts; namely, s 38 of the Fair Trading Act 1989 (Qld) or s 11 of the Fair Trading Act 1985 (Vic). As against Mercer it is further alleged that he "... was directly or indirectly, knowingly concerned in or a party to the contravention by Western of s 52 of the Trade Practices Act 1974 (Cth) (sic)".

The Facts

By agreement affidavit evidence was relied on and a number of the deponents were cross-examined at hearing. With regard to Mercer's affidavit sworn on 15 August 1997 I upheld the applicant's objection to the admission in evidence of its contents but nevertheless acceded to the respondents' application that Mercer, who was present in Court, be permitted to give oral evidence. The parties relied on the following affidavit evidence:

(a) On the applicant's part -

(i) two affidavits of Anthony Phillip Ralph ("Ralph") sworn on 3 July 1997 and 23 March 1998 respectively. At the relevant time Ralph was a director of the applicant company but ceased to hold this office in the latter part of 1994;

(ii) an affidavit of Anthony Elder ("Elder") a solicitor and partner in the firm acting for the applicant, Dunhill Madden Butler; and

(iii) two affidavits of William Malcolm Radford ("Radford") sworn on 3 July 1997 and 24 March 1998 respectively. At the relevant time Radford was a manager employed by the applicant at its Wanna Station in Western Australia near Carnarvon.

(b) On Western and Mercer's part -

(i) with the exception of paragraphs 3(b) and 5 thereof an affidavit of William C. Cooper ("Cooper") sworn in August 1997. At the date of swearing his affidavit Cooper was a director of Western. Cooper was the only deponent not required for cross-examination.

Generally speaking it was the legal consequences of the parties acting as they did rather than the facts which were in dispute in the proceeding. In October 1993 Radford crashed a piper aircraft owned by the applicant and used in the day to day management of its Wanna Station property. In their joint Amended Defence filed on 25 September 1997 Western and Mercer generally denied the allegation that Western is and was at all material times carrying on business as an aircraft sales agent under the name "Western Aircraft Sales" at Breakfast Creek and Archerfield, Queensland. However, by a Notice to Admit Facts dated 24 April 1998 and served pursuant to Order 18 Rule 2 of the Federal Court Rules the applicant sought admissions from Western and Mercer concerning a number of material facts, including the facts contained in the assertion that at all material times Western:

"... carried on business, among other things, as an aircraft sales agent under the name `Western Aircraft Sales' at Breakfast Creek and Archerfield, Queensland".

No notice was filed by either respondent disputing these facts or any other facts referred to in the Notice and, despite the respondents' objection to this course, the hearing proceeded on the basis that the facts referred to in the Notice were admitted for the purpose of this proceeding.

Relying on an advertisement seen in a magazine called "Aviation Trader" Ralph telephoned Western on 3 November 1993 and spoke to Mercer. That initial conversation was one in which Ralph informed Mercer that the applicant wished to purchase a piper super cub aircraft to replace the one that crashed in the previous week. Western could not offer the applicant a replacement aircraft of the type sought, however, their discussion went beyond this with Ralph alleging that he accepted an offer from Western to act as the applicant's agent to make enquiries both to see whether any aircraft of the type sought by the applicant was available and to negotiate the purchase of an aircraft on its behalf. In contrast, in their defence Western and Mercer denied any agreement to act as the applicant's agent in the purchase of the aircraft. Notwithstanding the generality of this denial, subsequently in his affidavit sworn in August 1997 Cooper stated that he "... did not disagree with anything contained in ..." paragraphs 4, 5, 6, 8, 9, 10, 13, 14, 15 and 17 of Ralph's affidavit sworn on 3 July 1997. Significantly these paragraphs include the assertion that in response to his telephone inquiry Mercer not only told him that Western did not have an aircraft of the type sought but said Western "...would be happy to act as Embo's agent in making enquiries to see whether any aircraft of that type were available in the market and to negotiate the purchase of an aircraft on Embo's behalf ..."; to which proposal Ralph says he agreed.

When Mercer gave his oral evidence it was clear that his recollection of the conversations with Ralph and the sequence of events leading up to the purchase of the aircraft was very fragmented. In fact, all he said in relation to their discussion was that when he told Ralph he did not have any aircraft available of the kind sought by the applicant he offered to "... look through the system and see if (he) could find him any information on that ..." and he then returned to Ralph within a week telling him that he "... had a possible aeroplane that would suit him and gave him the details".

When asked by his Counsel what, if anything, Ralph specifically asked him to do, contrary to Ralph's evidence and Cooper's sworn acceptance of this evidence, Mercer said "... Provide him with details of a suitable aircraft that he could purchase".

On 15 November 1993 Mercer sent the following facsimile message to Ralph (Exhibit "APR1")

"Tony,

I have found a Super Cub where the owner is willing to sell.

The A/c is currently in process of a total re build and will be as new. The Engine has done 160 HRS ... (word illegible)

Asking $55,000 and will be ready in 10 weeks.

Please let me know if you are interested.

Regards

Alec Mercer." (sic)

Notwithstanding the claim by Mercer that the arrangement between the applicant and Western was confined to providing Ralph with details of a suitable aircraft for purchase the abovementioned facsimile message and Western's subsequent conduct outlined below indicate that Western acted in a manner which was consistent with the proposal Ralph alleges he accepted. Because of these matters and the contents of Cooper's affidavit I am satisfied that it is more likely than not that the initial arrangement involved an agreement by Western to act as the applicant's agent to both locate a suitable aircraft and negotiate the purchase of a suitable aircraft.

There was a delay between the completion of the work on the aircraft and further communication between Ralph and Mercer on 1 December 1993 when Mercer contacted Ralph and, according to Ralph, told him that Camm was the owner of the aircraft, which was then ready for inspection. I am satisfied, both because of the contents of the facsimile message and because of his conduct in transmitting information between the applicant and the potential seller, as well as making arrangements for Camm to fly the aircraft to Maryborough on 4 December 1993 to allow Radford to inspect it, that on more than one occasion Mercer did identify and refer to Camm as the owner of the aircraft. I am also satisfied on the evidence that when he indicated that Camm was the owner he did so, not only because Camm told him that this was so and was in possession of the aircraft but, also because Mercer at some stage sighted the flight manual which at that time still showed Camm to be the holder of the certificate of registration for the aircraft.

Part III of the Civil Aviation Regulations deal with, amongst other things, the registration of aircraft by the Civil Aviation Authority. It is apparent from these Regulations that a register of Australian aircraft is kept by the Authority (Regulation 8) and that register contains registration information concerning aircraft, including the name and address of the holder of the certificate of registration (Regulation 13). However, the Regulations also reveal that the holder of the certificate of registration is not necessarily the owner (Regulation 10) or the holder of a property interest in the aircraft. This comes about because an application for registration may be made by "an entitled person" (Regulation 10) and by definition (Regulation 2) such a person includes one who:

"(a) operates, manages or maintains the aircraft; or

(b) is, or will be, responsible for its operation, management or maintenance."

Accordingly, scrutiny of the aircraft register alone would reveal the name and address of the holder of the certificate of registration who may not be the person or persons holding any property interest (as defined by Regulation 2) in the aircraft. What happened in this case is that at the relevant time the Authority's register named a person other than Camm as the holder of the certificate of registration from May 1993 but that fact alone did not necessarily mean that Camm had no property interest in the aircraft or that he could not transfer good title to a purchaser.

Regulation 13D requires the holder of a certificate of registration to formerly notify the Authority of any acquisition or disposal of a property interest in an aircraft within fourteen (14) days after the date of the transaction. Relying on the contents of the Regulations if a person seeks to establish what property interests are held in an aircraft and recorded with the Authority then one must inspect a number of documents, including the aircraft register, the application made for registration and the latest if any written notification given to the Authority in relation to the acquisition or disposal of any property interest (see Regulations 8, 10, 13 and 13D).

The Regulations do not require that an aircraft's flight manual contain the name and address of either the holder of the certificate of registration or each person who holds a property interest in the aircraft (Regulation 138). When, therefore, at the relevant time the flight manual named Camm, as the holder of the certificate of registration it could not be treated as a reliable source of information from which Mercer or anyone else could conclude either that Camm held any or all of the property interests held in the aircraft or that Camm was in fact authorised to sell the aircraft and execute the contract of sale document. When he was cross-examined Mercer said that he formed his belief that Camm was the owner of the aircraft not only because Camm had possession of the aircraft but because he "... had professed to (Mercer) authority to sell the aeroplane". According to Mercer, because of past experience with the Authority, it was not possible to obtain documentation from the Authority to establish ownership. In saying this I understood him to be referring to the register and his knowledge that an inspection of this alone would not suffice to identify all or any of the holders of a property interest. The upshot of his evidence is that he made no enquiries on the question of ownership because in his experience it was difficult to get information directly from the Authority and, in any event, he believed, and this is borne out by the Regulations, that the information on the register was not proof of what property interests were held in the aircraft. Therefore, when he informed the applicant that Camm was the owner he did so because Camm had possession of the aircraft, was named as the holder of the certificate of registration in the flight manual and had at some stage informed Mercer that he had authority to sell the aircraft.

Notwithstanding that his own experience showed that it was difficult to obtain from the Authority details of any property interests and, further, notwithstanding his knowledge that the registration information did not provide proper evidence of ownership, Mercer made no enquiries beyond the matters he says he relied on when he referred to "the owner" as Camm, when he completed the contract of sale document naming Camm as the vendor and when he inserted the word "nil" in the section of the contract next to the word "Encumbrances". Mercer also conceded that he did not recommend to the applicant that it make any enquiries or take any steps to confirm the identity of the person or persons holding any property interests or having authorisation to sell the aircraft. It was clear from his evidence that even if in law there was a relationship of agency he took the view that the applicant should make its own enquiries because on past practice he believed he was not obliged to do this.

On 3 December 1993 Mercer sent Ralph a further facsimile message (Exhibit "ARP2"), which contained a detailed aircraft specification for the aircraft. On this date there was also confirmation of the inspection arrangements made through Mercer for 12.00pm on 4 December 1993.

Radford's evidence was that on 4 December 1993, in accordance with the inspection arrangement, he and his son met with Camm and inspected the aircraft. There was on that occasion discussion about, amongst other things, the fittings to remain with the aircraft and the price Camm sought. At hearing some evidence was given about the various amounts sought and discussed and how after a test flight Radford offered Camm a cheque for $50,000.00 on the basis that Camm would retain some of the fittings the applicant did not require. Radford did point out to the Court that the offer was made subject to him obtaining authorisation from the applicant to pay this amount. Radford's uncontested evidence is that Camm wanted time to consider the offer made and they parted on that basis. In other words, there was then no agreement for the applicant to purchase the aircraft from Camm for $50,000.00.

Exhibit R1 is a copy of a two page facsimile transmission from Camm addressed to W. Radford, dated 6 December 1993 the contents of which purport to confirm an agreement made between them on 4 December 1993 at Maryborough in respect to the sale of the aircraft on the terms set out in the facsimile. The transmission information on that document suggests that it was sent on 7 December 1993; although there is no direct evidence to whom it was sent apart from the name of the addressee, Radford, who denied receiving the document.

Ralph also denied receiving or ever seeing the lastmentioned facsimile message , even though the document shows that on 7 February 1994 a company he was then associated with, Onga Pty Limited, sent the same document by facsimile. What Ralph deposes to in paragraph 11 of his affidavit sworn on 3 July 1997 is that on the morning of 6 December 1993 he was telephoned by Mercer who inquired about the outcome of the inspection. Before that call Ralph had already spoken to Radford and, when he subsequently spoke to Mercer, he told him that the applicant wished to buy the aircraft and was prepared to offer $50,000.00 for it. During this conversation Ralph claims, and I accept as true his evidence on these matters, that Mercer informed him that he thought the offer was sufficient to "... clinch the deal and he would ring Camm and make the offer."

On the same date, on 6 December 1993, Ralph says that he received a facsimile message from Camm as follows: ("APR3")

"Dear Sir,

Please see to follow the basis of an agreement which Bill and I formulated on Saturday 04 December, 1993 at Maryborough. I tried to send it to W.A. but no-one was there.

Bill is willing to give me a cheque on Saturday but I said I wanted to think it over and also I would prefer a transfer of funds as it would clear faster.

Today we were contacted by Alec Mercer, who claims that everything must go through his Company. Whereas Bill said not to worry about Mercer.

A Contract has arrived from Mercer under the name of: WESTERN AIRCRAFT SALES. This remains unsigned. Please clarify these matters and/or put me in touch with Bill, if appropriate as some of the points raised in my Fax to him of todays date are important with respect to the final sale price.

Best Regards,

Gary Camm" (sic)

Whether or not Ralph or Radford received the other facsimile message addressed to Radford and first sent on 7 December 1993, Ralph's conduct, in instructing Mercer to negotiate the purchase at $50,000.00 and his subsequent conduct in telephoning Mercer after he received the abovementioned facsimile message on 6 December 1993 to confirm that Mercer would negotiate the contract on the applicant's behalf, is consistent with the applicant's claim that it intended to and did deal with Camm through Mercer to complete the agreement to purchase the aircraft without directly negotiating a concluded agreement with Camm.

According to paragraph 13 of Ralph's affidavit sworn on 3 July 1997 during the abovementioned telephone conversation Mercer told him that "... He would require Embo to pay (Western) a commission for acting as its agent in the purchase of the Cub. He initially asked for $4,000.00, however, we finally agreed on $2,000.00 ...". This paragraph of Ralph's affidavit is one Cooper swore he did not disagree with; although Mercer at hearing attempted to offer a different explanation for the arrangement whereby the applicant; not Camm, paid the $2,000.00 commission. Interestingly enough, the copy contract document drawn by Mercer names the vendor's agent as: "Western Livestock Pty Ltd trading as Western Aircraft Sales of Suite 7, 30 Argyle Street, Breakfast Creek" and this was done even though on his evidence by the time he transmitted a copy of this document to Ralph for execution he and Ralph had agreed that the applicant would pay Western a $2,000.00 commission.

At hearing Mercer claimed for the first time that Western was actually acting as Camm's agent in the sale of the aircraft but, because the applicant through Radford and Camm had negotiated their own agreement to sell and purchase the aircraft and Camm had not achieved his required purchase price of $55,000.00, Mercer left it up to the contracting parties to work out who would pay Western's commission. Mercer alleges that it was the applicant who eventually agreed to do this. I note that neither the pleadings nor Cooper's affidavit make any reference to this alternative agency scenario; relying solely on a so called "spotting" arrangement. On hearing this evidence that Western was in fact Camm's agent I formed the view that Mercer in giving this evidence was attempting to avoid a finding that at the relevant time Western was the applicant's agent. However, whether or not Western was, and there was no objective evidence called to establish that this was a relationship of agency, or believed itself to have been Camm's agent, does not immediately preclude the existence of a relationship of agency between the applicant and Western in respect to the same transaction, if objective evidence is available pointing to this conclusion. The error made by Mercer and, indeed, the applicant's witnesses was that they used the word "agent" to loosely describe the commercial arrangements between the various parties to this transaction without drawing any distinction between the colloquial use of the word and its use to describe what the law recognises as a relationship of agency. Therefore, their respective views on whether there was an agency were of no assistance in helping me determine the true legal position.

Following the 6 December 1993 telephone conversations Ralph forwarded to Mercer a facsimile copy of Camm's earlier facsimile to him and, according to paragraph 14 of his affidavit, later on the same day Mercer telephoned Ralph, told him that Camm had accepted the $50,000.00 offer and that he, Mercer, would draw up a Western standard contract, have it signed by Camm and then forward it to Ralph for execution.

On 7 December 1993 Mercer sent a facsimile message together with a copy of the contract to Ralph with a message which read: (Exhibit "APR4")

"Tony,

Details from Gary Camm

Copy of Contract.

If all in order sign last page and return to me for inclusion in contract.

Any further queries please let me know.

Regards

Alec Mercer

A/c transfer papers will be signed as soon as deposit is agreed upon."

The copy contract document (Exhibit "APR5") which accompanied that facsimile message was not simply a blank proforma document used by Western in its sales, but was a document into which relevant sales and purchase information had been inserted by Western and Mercer. Apart from the information concerning the identity of the parties, the particulars of the aircraft, the equipment not included in the sale, the extent of any encumbrances ("nil"), the purchase price, the deposit and the date for completion ("on or before 15 January 1994"), the document drafted by Mercer included five "Special Conditions of Sale" as follows:

"1. Aircraft to be delivered to Carnarvon WA by vendor on or before January 15 1994.

2. Purchaser agrees to pay fuel costs for the direct ferry Brisbane - Carnarvon. Any off direct truck costs to be paid by the vendor.

3. The deposit of $10,000.00 will be released to the vendor by the purchaser on sighting the insurance policy noting the interest of Embo Holding P/L of PO Box 78 Toorak Vic.

4. Radio equipment not required by the purchaser to be removed by the vendor at Carnarvon airport and the aircraft to be left in a clean and serviceable condition.

5. Balance of purchase monies to be paid direct to the vendor upon acceptance of the aircraft in Carnarvon to his designated account."

The inclusion of the abovementioned information by Mercer is consistent with Ralph's evidence that he discussed the contents of the document with Mercer before he received a copy for signing. After receipt of the copy contract Ralph executed the document on behalf of the applicant and returned it to Mercer. He then received from Mercer a signed copy of the contract and the insurance details the applicant required, after which he paid to Camm the agreed deposit of $10,000.00. That deposit was paid by the applicant on 8 December 1993 into an account nominated by Camm. On the same date Western sent to the applicant, by facsimile transmission, an invoice (Exhibit "APR7") for $2,000.00 and that amount was also paid by the applicant.

It was agreed that after the contract was executed and the deposit and commission were paid the only other steps taken by Mercer were to arrange for the final delivery of the aircraft to the applicant by Camm. This conduct accords with the terms of the written contract, which provided for the direct payment of the deposit and the balance of the purchase price to Camm. The arrangement made by Mercer for delivery of the aircraft was made for 10 January 1994 at Carnarvon airport with Camm handing over possession of the aircraft to Radford.

When possession of the aircraft was handed over and the final payment was made, according to the applicant, the three hour summer time difference between Carnarvon in Western Australia and Melbourne has some bearing on how its actions should be construed. As arranged, on 10 January 1994 Radford flew to Carnarvon to inspect the aircraft at approximately 8.00am and met with Camm. Radford was accompanied by his son, who was seeking an endorsement to fly the aircraft. During the morning the endorsement process was undertaken by his son with Dick Scott from Tropic Air Services Pty Limited. The significance of this evidence is that it provides an explanation for why, during the course of the morning, the Civil Aviation Authority had cause to forward a facsimile transmission to Scott at the airport raising a query about the identity of the owner of the aircraft. What appears to have happened is that Scott noted a discrepancy in the weight loading information in the flight manual and contacted the Authority to clarify it. In turn the Authority after being notified by Scott that Camm was the owner queried this information in a facsimile message sent to Scott at 12.15pm (Exhibit "WRM2" to Radford's affidavit sworn on 3 July 1997).

Both Radford and Ralph gave evidence that they attempted to contact one another while Radford was at the airport. He left the airport at approximately 9.45am without speaking to Ralph. When he returned at approximately 11.30am to 11.45am he says he was told by Camm that Ralph had telephoned to speak to him and, in his absence, Ralph had been put onto Camm. This evidence accords with Ralph's claim that he telephoned the airport to speak to Radford at about 3.00pm (Melbourne time) but was put through to Camm because Radford was not there. During his conversation with Camm, Ralph was informed that Radford had "Okayed delivery" and, because of this, when Camm told Ralph that he was going on holidays to Rottnest Island for two weeks and he was taking a flight out of the airport that day, Ralph agreed to remit the balance of the purchase price, $40,000.00, to Camm's account "straight away". The time at which he agreed to do this and acted upon this in Melbourne was, therefore, between 2.30pm and 3.00pm.

By the time Radford returned to the airport and was informed by Camm that he had spoken to Ralph, who had agreed to transfer the balance of the funds to him, Ralph had, it was claimed, already initiated steps to transfer the funds to Camm when neither Ralph nor Radford had any cause for concern about his authority to sell the aircraft.

At 12.00pm Western Australian time Radford, Camm and some others left the airport for lunch. Shortly after 1.00pm it was Radford's uncontested evidence that his son handed to him the facsimile message sent to Scott by the inspector from the Civil Aviation Authority indicating that, despite the fact that the aircraft's flight manual apparently named Camm as the holder of the aircraft's certificate of registration, Felix, the fourthnamed respondent, was named in the Authority's facsimile transmission as "the owner" from 14 May 1993 (Exhibit "WRM2"). However, I note with some interest that Exhibit "AE5" attached to Elder's affidavit contains a copy of notices both of disposal and acquisition of a property interest in the aircraft. The person disposing of the property interest on 7 May 1993 was named as "Gary Stirling Camm" and the person acquiring the property interest on 7 May 1993 was named as the corporate entity, "Felix Holdings Pty Ltd". The copy Certificate of Registration issued on 14 May 1993 describes "Mr Urs Felix" as the holder of the certificate of registration. Accordingly, the advice given by the Authority on 10 January 1994 could hardly be relied on as proof that Felix had a property interest in the aircraft and was the owner.

Armed with the Authority's facsimile, when Camm returned to the airport, Radford asked Camm to sign the transfer documents, before asking him for an explanation. In response to being shown the facsimile Radford says that Camm told him that he and Felix had been in business together and Camm was to pay some of the proceeds of the sale to Felix. At that time he was also asked by Camm to desist for two weeks from lodging with the Authority the transfer documents (Exhibit "WRM1") Radford had Camm complete; notwithstanding the Authority's query about Camm's ownership of the aircraft.

It is the applicant's case that by the time Radford became aware of the query concerning Camm's authority, if any, to sell the aircraft it was approximately 4.15pm in Melbourne ("knock-off time" according to Radford) and Radford believed that the funds transfer arranged by Ralph had already taken place. Therefore, on Radford's evidence his action in requiring Camm to complete the transfer documents was only an attempt by him to complete the transaction and to in some way make Camm legally responsible if the information in the documents was incorrect, as well as, in Radford's words, "to prove that he had ownership". When Radford was cross-examined about why he agreed with Camm to hold the transfer documents for a period of two weeks he denied that he did agree to do this but then said:

"...he asked me to hold them for a fortnight, and up until that period of time I was led to believe that Mr Camm was a well educated man from Melbourne, has chivalry and decency, and I thought at the time that when he said he would sort things out, "Give me a fortnight to sought things out", that everything would be fair enough".

Radford's affidavit sworn on 3 July 1997 includes Exhibit "WRM1" which consists of copies of the transfer documents one of which appears to be signed by Radford and bears a handwritten date: 24 January 1994. This document and Radford's evidence generally are consistent with a continuing belief on his part that Camm had authority to sell the aircraft and needed time to sort out what Radford referred to as a "financial arrangement" Camm said he had with his former business partner.

There is no evidence to show at what time the transfer of funds to Camm's account actually occurred. Exhibit "APR9" is a written request from Ralph to the applicant's bankers to transfer $40,000.00 to Camm's account. However, that document, apart from containing the date 10 January 1994, sheds no light on what time that request was made and at what time the bank responded to the request and transferred the funds to Camm's account. Without evidence to show when this happened it remains possible that the transfer occurred at any time from when the request was sent by Ralph in the middle of the afternoon on 10 January 1994. On the morning of 11 January 1994 when Ralph telephoned the bank he was told that the transfer of funds had occurred. If I accept Ralph's evidence that he took immediate steps to transfer the funds following his telephone conversation with Camm between 2.30pm and 3.00pm Melbourne time on 10 January 1994 it is possible that by 4.15pm (Melbourne time) the monies had been transferred and it was reasonable for Radford to have assumed this to be so and not to have rung Ralph to try and stop the funds transaction from proceeding. Of course, whatever opportunity may have been available to recall the instruction to transfer the balance of the purchase monies, the $10,000.00 deposit and the $2,000.00 commission were long since paid to Camm and Western respectively. However, on the evidence I am not satisfied that it can be said that the balance of the purchase monies were transferred to Camm's account by 4.15pm Melbourne time, even though the instructions for this to take place may have been given before that time. This notwithstanding neither am I satisfied that, by the time Radford received a copy of the Authority's facsimile message and raised the query with Camm, it can be confidently asserted that Radford knew that Camm had no property interest in the aircraft and had no authority to sell the aircraft. In fact, even then it was not clear from the message given that Camm was not the registered certificate holder because the handwritten message accompanying the facsimile message from the Authority made no reference to the holder of the certificate of registration and was equivocal about whether any subsequent change in property interests had taken place in favour of Camm:

"DICK

THIS AIRCRAFT HAS A DIFFERENT OWNER FROM THE

GUY WE TALKED ABOUT THIS MORNING.

I'LL HAVE TO CONFIRM THAT A CHANGE OF INTEREST

HAS NOT REVERTED TO THE PREVIOUS OWNER, MR GARY

STERLING.

CALL ME IF YOU WANT CLARIFICATION HOWEVER THIS IS THE LATEST INFO WE HAVE

REGARDS

BEVAN.".

On the question of ownership of the aircraft the following admissions were made by the respondents in accordance with the Notice to Admit Facts filed by the applicant at hearing on 12 May 1998:

"1. ...

4. In December 1993 and January 1994 the first respondent was not registered as owner of the aircraft registered VH-HCM ("the Aircraft").

5. In December 1993 and January 1994 the first respondent was not the owner of the Aircraft.

6. In December 1993 and January 1994 the first respondent was not able to transfer title to the aircraft to the applicant.

7. In December 1993 and January 1994 the first respondent was not able to transfer or procure the transfer of the registration of the Aircraft to the applicant". (sic)

During the morning of 11 January 1994 Ralph was informed by Radford that the Authority's records showed Felix, not Camm, to be "the owner" of the aircraft and, after making further enquiries, Ralph telephoned Felix who asserted, amongst other things, that Camm did not have authority to sell the aircraft and that he, Felix, had not been aware of the sale. Ralph also made contact with Camm by telephone and was told that Felix did not own the aircraft however he, Camm, did owe Felix $75,000.00 and intended to give Felix a second mortgage over his home to allow the transfer of ownership of the aircraft to proceed.

On 18 January 1994 the applicant's solicitors were instructed and the parties thereafter sought to resolve their dispute through the litigation process.

Contract and Agency

On the evidence I am satisfied that when Ralph accepted Western's offer in November 1993 to locate a suitable aircraft and to negotiate the purchase of same on behalf of the applicant, Western was then retained by the applicant and, if Western had done no more than it agreed with Ralph to do and, had the parties not subsequently agreed to a commission fee of $2,000.00, its contractual entitlement to remuneration for acting in accordance with the terms agreed upon may have been implied.

It would, however, be inappropriate to conclude because Western was at the relevant time in the business of acting as an agent in the sale of aircraft and had contracted with the applicant to perform certain tasks directed towards it purchasing a suitable aircraft that, this alone, created a relationship of principal and agent in November 1993. In her submissions to the Court the respondents' counsel quite correctly drew my attention to the High Court authority of Petersen v Maloney [1951] HCA 57; (1951) 84 CLR 91, where the Court, at pages 94 and 95 of its joint judgment, confirmed the general principle that the colloquial usage of the term "agent" does not denote an authority or capacity to create legal relations between the principal and third party. In Petersen's case the Court said that the mere appointment of a person such as a real estate agent:

"... Under the designation of agent does not, apart from the general rule that the employer will be responsible for misrepresentations made by him, necessarily create any authority to do anything which will affect the legal position of his employer. He may, of course, be given any expressed authority which the employer thinks fit to give him, and estoppels may arise, but the law does not imply from the mere fact of employment to find the purchaser a general authority to do on behalf of the employer anything which may be incidental to the effecting of a sale."

For a relationship of agency to have arisen in November 1993 Western had to be authorised to act for the applicant so as to create or affect legal relations between the applicant and the vendor of a suitable aircraft. On the evidence this could not have been so in November 1993; although there was a contractual retainer, the express terms of which I have already referred to above. I am satisfied that the relationship changed in December 1993 once Ralph authorised Western to make an offer and in effect legally bind the applicant to the purchase of the aircraft.

Because of the legal consequences it is not surprising that a great deal of Court time and argument was devoted to whether or not in law there was a relationship of agency even though, on the facts, there could be little dispute that there was a commercial arrangement the express terms of which included agreement by the respondents to locate a suitable aircraft, to negotiate the purchase of a suitable aircraft, to make an offer on behalf of the applicant to the vendor on what the applicant considered was a suitable aircraft, for Western to be paid a commission and, once the applicant's offer was accepted, to draw up and arrange for the exchange of an executed contract of sale.

One of the legal consequences attaching to the relationship of principal and agent is that the law recognises that an agent employed for remuneration has a duty to exercise reasonable care and skill in the performance of the task undertaken as agent.

In this case Western conceded that it carried on business as an aircraft sales agent. Ordinarily, to discharge its duty of care, Western would be expected to act with the skill and care appropriate to an agent engaged in the business of aircraft sales. The appropriate standard of care is a question of fact and in this case there was no evidence called from any other aircraft sales witnesses on whether it was reasonable in all the circumstances to expect Mercer to take steps, such as a search of the Authority's register and records, to confirm Camm's authority to sell the aircraft or to at least tell the applicant that it should make enquiries to confirm his authority to sell, before paying the deposit and the balance of the purchase price and taking possession of the aircraft.

Mercer's own evidence was to the effect that Western did not usually make enquiries from the Authority about the ownership of aircraft for sale because of the difficulty it experienced in obtaining accurate information from the Authority and, because the information contained in the Authority's aircraft register does not necessarily indicate the identity of all or any of the property interests held in a registered aircraft. The evidence in this case and the Regulations do suggest that simply ascertaining the identity of the holder of the aircraft's certificate of registration would not be enough to establish the ownership of the aircraft.

In the absence of evidence of what the appropriate standard of care was I am not satisfied that in order to discharge the duty of care owed to the applicant as its agent Western or Mercer was required to make specific enquiries as to ownership; including a search of the Authority's records, or to at least advise the applicant to search those records.

There is authority for a further proposition that; for instance, a vendor's agent may owe a non contractual duty of care to a purchaser to take care in relation to any representation the agent makes about the subject property (see MacCormick v Nowland (1988) 40 ATPR 852). However, the applicant's case in respect to any duty of care owed has been pleaded on the basis of the alleged retainer of the respondent, Western, as its agent and, therefore, I have not gone beyond that pleading to deal with any alternative proposition raised at hearing by reason of Mercer's evidence that Western was at all times acting as the agent of the vendor, not the purchaser.

The Representations

Apart from the agency arguments the applicant also relied on representations as to ownership of the aircraft it said Western and Mercer made prior to the execution of the contract of sale. Indeed, at hearing it was acknowledged by the applicant's counsel that its principle claim was that made by it pursuant to the Trade Practices Act 1974 and, presumably, the comparable State provisions. According to paragraph 34 of the Amended Statement of Claim those representations consisted of the following statements:

"Further or alternatively, prior to execution of the contract of sale, each of Western Aircraft and Mercer represented to Embo that:-

(a) Camm was the owner of the aircraft;

(b) Camm had the right to sell the aircraft to Embo;

(c) upon completion of the contact of sale Embo would have title to

and quiet possession of the aircraft;

(d) there were no encumbrances affecting the aircraft;

(e) Camm was able to transfer registration of the aircraft to Embo.

("the second representations")"(sic)

The evidence bears out the allegation that there were express oral and written representations made by Mercer to Ralph identifying and referring to Camm as the owner of the aircraft. However, the applicant also asserts that the alleged representations are to be implied from the conduct of the two respondents in procuring the aircraft on behalf of the applicant and submitting to the applicant the contract of sale. Relying on the facts I have already referred to, I accept that the alleged representations could also be implied from the respondents' conduct in procuring the aircraft for purchase and submitting the contract of sale to the applicant.

As I have noted above it was admitted in the formal admissions made by Western and Mercer that Camm was not the owner of the aircraft at the relevant time and could not transfer title to the applicant. These admissions and the evidence generally confirm that the representations were made; albeit innocently. In other words, it is more probable than not that Mercer was duped by Camm's words and conduct and believed throughout the transaction that Camm was the owner and had authority to sell.

The case pursued against Western and Mercer in respect to the representations made by Mercer relies on misleading and deceptive conduct and, in particular s 52 of the Trade Practices Act 1974 (Cth) and the comparable State provisions; that is to say, s 38 of the Fair Trading Act 1989 (Qld) and s 11 of the Fair Trading Act 1985 (Vic).

Subsections 52(1) and (2) of the Trade Practices Act provides:

"(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

(2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub-section (1)."

In determining whether or not the conduct alleged has a quality of being misleading or deceptive I have borne in mind His Honour Justice Lockhart's observations in Henjo Investments Pty Limited v Collins Marrickville Pty Limited [1988] FCA 40; (1988) 79 ALR 83 at page 93 where he says:

"... There is no need or warrant to search for other words to replace those used in the section itself. Dictionaries, one's own knowledge of the developing English language and ordinary experience are useful touchstones, but ultimately in each case it is necessary to examine the conduct, whether representational in character or not, and ask the question whether the impugned conduct of its nature constitutes misleading or deceptive conduct. ...".

On the evidence I am satisfied that:

(a) The representations as alleged were false and those representations were conveyed to the applicant in circumstances where Western and Mercer knew no more than what they had been told by Camm and what Mercer had observed from the information recorded in aircraft's flight manual;

(b) the respondents' conduct in so far as it conveyed a misrepresentation; namely that for the purpose of the transaction Camm was the owner/vendor of the aircraft and was authorised to sell it, was misleading; and

(c) the applicant was actively induced by the misrepresentations as to the ownership of the aircraft to enter into the contract of sale on or about 7 December 1993 and on 8 December 1993 pay both the deposit money and the commission fee and, this was so, notwithstanding the fact that, had the applicant made its own enquiries before agreeing to purchase the aircraft it may have both discovered and confirmed the falsity of the representations made as to ownership. The payment of the balance of the purchase price and taking possession of the aircraft on 10 January 1994 needs to be considered more carefully in the light of the events which occurred on that date.

One issue pressed by the respondents was the fact that there was no evidence that they had any knowledge of the falsity of the representations as to the ownership of the aircraft and that they did no more than convey the information given to them about the ownership of the aircraft to the applicant. On the question of whether what was conveyed was misleading the respondents' counsel relied on this Court's decision in Stanton & Anor v Australian and New Zealand Banking Group Ltd & Anor (1987) 40 ATPR 755 to support their submission that the representations were merely statements of opinion and did not amount to misleading or deceptive conduct. In Stanton's case it is true that the Court found that the bank manager not only believed what he said about a third person with whom he had limited dealings but had no reason to doubt that this person was reputable. This decision, however, is not authority for the proposition that statements of opinion, where the maker of the statement believes and has no reason to doubt the accuracy of what is said, do not attract liability under s 52 of the Trade Practices Act. The decision is best explained by referring to the Court's finding that there was no evidence called to establish that the person about whom the bank manager expressed his opinion was not reputable and that what he said was not objectively true or without foundation. In the case before me there was evidence given and admissions made that establish that the representations were of fact and the representations when made were false.

Following the hearing the respondents' counsel provided the Court and the applicant's counsel with a copy of the decision of the Full Court of the Supreme Court of Western Australia in Franich v Swannell (1993) 10 WAR 459. One of the findings of the Full Court in that decision was that the real estate agency and its representative knew no more than what was contained in a document, described as a sanitised engineer's report, concerning the structure of the house being purchased. This report was available for inspection by prospective purchasers when the property was auctioned. The purchasers inspected the property and saw signs of subsidence from of the obvious cracking of bricks. The Judge at first instance found that the real estate agency never mentioned the engineer's report to the purchasers, however, he was not persuaded that they would have withheld their offer had they known of it. An allegation of misleading and deceptive conduct was persisted with notwithstanding the finding that these respondents had no knowledge of the continuing subsidence. Bearing in mind the findings made at first instance, the Full Court rejected a submission that the real estate agency and its representative had engaged in misleading and deceptive conduct because they did not inform the purchaser that there was continuing subsidence of the property and, in the circumstances described, the Full Court found that there could be no reasonable expectation that they would not maintain silence about this matter.

Clearly the abovementioned case is distinguishable from the case before me because in the present case the applicant relies on express representations as to ownership; not mere silence or the existence of any duty to disclose matters that were not within the respondents' knowledge. Here the respondents passed on information without expressly or impliedly disclaiming any belief in its truth or falsity and, thereby, engaged in conduct that was misleading (see Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at page 666). To conclude otherwise, would be against the weight of longstanding authority that confirms that unintentional misrepresentations can and do amount to misleading and deceptive conduct (see Hornsby Building Information Centre Limited v Sydney Building Information Centre Pty Limited [1978] HCA 11; (1978) 140 CLR 216).

Damages

In relation to the contraventions alleged in its Amended Application the applicant seeks against the second and thirdnamed respondents:

"1. ...

2. Alternatively, damages pursuant to -

(a) sections 82 and 87 of the Trade Practices Act (Cth);

(b) sections 99 and 100 of the Fair Trading Act 1989 (Qld);

(c) sections 79 and 77 of the Fair Trading Act 1987 (WA).

3. Interest pursuant to statute.

4. Costs."

It is not clear to me from the pleadings contained in the Amended Statement of Claim, which only refers to the Queensland legislation and the Victorian Act, the Fair Trading Act 1985, whether it was intended that the applicant rely on both the Victorian legislation and the Western Australian legislation referred to in the Amended Application. In so far as the legislation in each State generally mirrors the provisions contained in the Trade Practices Act not a great deal turns on this obvious error in the pleadings and the prayer for relief. Indeed, the respondents did not seek to make an issue of this inconsistency and I have proceeded on the basis that the submissions made to me were primarily directed to the statutory relief offered by the Commonwealth Act at least as against the corporate respondent, Western, and, as against Mercer, the applicant relied on the State provisions which refer to the conduct of a person in trade or commerce..

Section 75B of the Trade Practices Act (see also s 68 of the Fair Trading Act (WA), s 31 of the Fair Trading Act (Vic) and s 5F of the Fair Trading Act (Qld)) provides a statutory basis for determining whether Mercer was also a person involved in a contravention of, in this case, Part V of the Act. For the purpose of the Act subsection 75B(1) includes a person who:

"(a) ...

(b) ...

(c) has been in any way, directly or indirectly, knowingly concerned

in, or party to, the contravention; or

(d) ..."

Subsection 82(1) of the Trade Practices Act provides:

"A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention."

The use of the word, "knowingly" in paragraph 75B(1)(c) of the Trade Practices Act indicates to me that, while s 75B together with s 82 of the Trade Practices Act empowers me to award damages against Mercer as a person involved in a contravention of s 52, it is necessary that there be proof that he was knowingly concerned in the contravention of the legislation (see Enzed Holdings Ltd v Wynthea Pty Ltd [1984] FCA 373; (1984) 4 FCR 450 and the decision of the High Court in Yorke v Lucas). I am not satisfied that there is any evidence to support a finding that he was an intentional participant in the sense that he had knowledge of the essential elements of the contravention alleged and , accordingly, any award of damages made pursuant to the Trade Practices Act is confined to an award against the company. However, this finding does not preclude an award of damages being made against Mercer in respect to any contravention by him of; for instance, s 11 of the Fair Trading Act 1985 (Vic) or s 38 of the Fair Trading Act 1989 (Qld).

The further and better particulars filed by the applicant on 5 December 1997 set out the following items of loss and damage claimed, bearing in mind that at hearing item (g) was amended upwards to $15,802.06:

"(a) Net cost of purchase and sale of replacement aircraft $ 7,000.00

(b) Cost of borrowing funds to purchase replacement aircraft $ 18,983.00

(c) Hanger costs for HCM for 26 months to at $120 a month $ 3,120.00

(d) Cost of insuring HCM aircraft whilst hangered $ 4,160.00

(e) Commission paid to sale agent $ 2,000.00

(f) Payment to Felix and Felix Holdings $ 20,000.00

(g) Legal costs incurred in respect of claim by Felix and

Felix Holdings $ 14,508.52

(h) Cost of putting HCM airaft back into service $ 28,068.00"

(sic)

In addition to the admissions I have already referred to the respondents made the following further admissions in relation to the quantum of the amounts; namely that:

" .........

8. The applicant incurred legal costs in respect of third and fourth respondents' claim to be entitled to the aircraft in the sum of $14,508.52.

9. The applicant incurred costs in respect of storing the aircraft of $120 a month.

10. The aircraft was stored by the applicant for 26 months.

11. The applicant incurred costs of $18,983 to borrow funds to purchase an aircraft to replace the aircraft.

12. The applicant incurred costs of $4,160 to insure the aircraft while it was being stored.

13. The applicant incurred net costs of $7,000 to purchase and sell an aircraft to replace the aircraft." (sic)

The respondents have admitted that the applicant incurred the legal costs claimed but that admission is limited to the original amount claimed. However, Elder's evidence was such that I am satisfied that, if there is the necessary causative link between the damage claimed and the conduct alleged, the true amount for the purpose of calculating the applicant's loss is $15,802.06.

(i) Causation

On the question of causation I am satisfied that the representations as to ownership and the authority to sell were designed to induce the applicant to enter into the contract of sale with Camm and contributed to the making of the contract of sale between Camm and the applicant. In that sense the misrepresentation was one of the causes and continued to be an element in the applicant paying the deposit monies, the commission, payment of the balance of the purchase price and taking possession of the aircraft on 10 January 1994. This is because on the lastmentioned date, notwithstanding the matters that had come to Radford's attention, the applicant still relied on the misrepresentation made to complete the purchase and to accept possession of the aircraft from Camm. Therefore, according to the applicant, any damage suffered was causally connected to the misrepresentation.

In reaching my decision on the question of causation and what is often conveniently referred to as "reliance" I have considered a number of authorities, including those I was directed to by the parties.

As was noted by the majority of the Court in March v Stramare (E & M H ) Pty Ltd & Anor [1991] HCA 12; (1990-1991) 171 CLR 506 causation is essentially a question of a fact and to determine whether there is the requisite nexus I must rely on commonsense and experience.

At pages 525 and 526 of the majority judgment in Wardley Australia Limited & Anor v The State of Western Australia [1992] HCA 55; (1992) 175 CLR 514 the High Court offered the following interpretation of the statutory provision:

"... The statutory cause of action arises when the plaintiff suffers loss or damage "by" contravening conduct of another person. "By" is a curious word to use. One might have expected "by means of", "by reason of", "in consequence of" or "as a result of". But the word clearly expresses the notion of causation without defining or elucidating it. In this situation, s.82(1) should be understood as taking up the common law practical or common-sense concept of causation recently discussed by this Court in March v. Stramare (E. & M. H.) Pty. Ltd. (50), except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act. Had Parliament intended to say something else, it would have been natural and easy to have said so.

In the context of the Act, the concept of loss or damage, like the concept of causation, must be applied in a wide variety of situations because the contraventions of Pts VI and V which give rise to causes of action under s.82(1) are diverse. Here we are concerned with contraventions of s.52(1) in the form of misleading conduct constituted by misrepresentations. In this situation, as at common law, acts done by the representee in reliance upon the misrepresentation constitute a sufficient connexion to satisfy the concept of causation. And, if those acts result in economic loss, that is, loss other than physical injury to person or property, that economic loss will ordinarily be recoverable under s.82(1). In the context of the area of commercial conduct in which the Act operates, the reference to "loss or damage" in s.82(1) plainly includes economic or financial loss."

One argument advanced by the respondents was that if there was misleading and deceptive conduct within the meaning attached to that phrase by s 52 of the Trade Practices Act the chain of causation was broken by a number of actions on the applicant's part and, in particular, Radford's action once he knew that there was a query about Camm's ownership of the aircraft and, therefore, his authority to sell the aircraft. What is apparent from the facts I have set out earlier in this judgment is that Radford was aware that there was a discrepancy between the Authority's records which it said showed Felix to be the owner and the flight manual information which named Camm as the holder of the certificate of registration of the aircraft. Radford knew this before he required Camm to sign the transfer papers and before he actually sought an explanation from Camm about the contents of the Authority's facsimile transmission. On his own evidence when he asked Camm to sign the transfer papers he did so because he wanted to make Camm legally liable. I understood his evidence to mean that he had his suspicions about Camm but wanted to make sure that Camm signed the transfer papers before he raised any query with Camm.

Another matter relevant to determining whether the actions of Radford severed any link between the misrepresentations and the damage suffered is his failure to take action to stop the transfer of the balance of the purchase monies, which if transferred in accordance with Ralph's written instructions could have been transferred at any time on 10 January 1994. The applicant failed to call evidence on when the transfer of funds took place, therefore, I am not in a position to conclude that this transaction could not have been stopped had Radford acted as soon as he became aware of these matters on 10 January 1994 and contacted Ralph.

In my view the respondents' concern about causation must, on the facts of this case be confined to the applicant's actions on 10 January 1994. Prior to that date the applicant had entered into the contract of sale on 7 December 1993 with a person whom the respondents' admitted did not have the capacity to transfer good title of the aircraft to the applicant during the relevant period of the transaction. By 8 December 1993 the applicant had paid some $12,000.00 in deposit and commission monies, relying in part on the misrepresentations made. The question I must decide is whether in view of the matters brought to Radford's attention the misrepresentations remained an effective and real cause of any further loss suffered following the transfer of the balance of the purchase price; namely the $40,000.00 and the losses associated with taking possession of the aircraft (see Elna Australia Pty Ltd v International Computers (Australia) Pty Ltd, 75 ALR 271).

In relation to causation the applicant has the burden of proof and as I have already noted it called no evidence to establish the time at which the monies were transferred. However, when Ralph responded to Camm's request to transfer the money on 10 January 1994 and initiated the instruction to do so between 2.30pm and 2.45pm Melbourne time the misrepresentation as to ownership was still an operative element in the applicant acting as it did.

There are many decisions in which the facts of the particular case under consideration have led the Court to decide that the loss and damage alleged did not flow from the misleading or deceptive conduct alleged. One such case relied on by the respondents is that of Asea Brown Boveri Pty Ltd v Burns Philp Trustee Co Ltd (unreported, NSW Sup Ct, Giles J, 23 April 1990, 50361 of 1989), where in contrast to the case before me His Honour Justice Giles found that there was no misleading and deceptive conduct and, in any event, on the facts before him the plaintiff's loss was suffered as a result of its failure to adequately check the contract document it executed.

The respondents also relied on the observations of Chief Justice Gibbs (as he then was) in the High Court decision, Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 199, where His Honour said:

"...The heavy burdens which the section creates cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests. What is reasonable will or (sic) course depend on all the circumstances."

The decision I found of most assistance in deciding this matter was that of His Honour Justice Hill in Argy v Blunts & Lane Cove Real Estate (1990) 26 SCR 112 where the Court considered in some detail the issue of causation and numerous authorities; including the decisions in Neilsen v Hempston Holdings Pty Ltd (1986) 65 ALR 302 and the Henjo's case I have already referred to.

Argy's case was one where the applicant was a solicitor, yet it was acknowledged that despite his legal background he did not appreciate the real meaning of the zoning certificate and the documents he relied on to enter into a contract to purchase a property. In considering the authorities on this matter His Honour Justice Hill confirmed that the chain of causation is not broken just by showing that an applicant failed to take reasonable care of his own interests by; for instance, failing to check the accuracy of the representations made or by failing to conduct any or any adequate investigation to prove or disprove the representations made. However, His Honour also said at page 138 of this decision that:

"... A case may perhaps be imagined where an applicant is so negligent in protecting his own interests that there will be a finding of fact that the representation complained of was not in the circumstances a real inducement to his entering into a contract. In such a case the element of causation between the misrepresentation and damage will have been severed by the intervention of the negligence of the applicant. However, in my view, the present cannot be said to be that case."

In Argy's case the court accepted that the solicitor applicant may have acted with more prudence if he had closely perused the contract and had employed one of his partners, who presumably had expertise in conveyancing, to act for him. Nevertheless, the solicitor was led by the misrepresentations made to believe certain matters and the effect of these misrepresentations was not lost by the solicitor's cursory perusal of the contract. His Honour also found that in respect to the representation conveyed by the incomplete zoning certificate Argy was induced to enter the contract and this was so notwithstanding the fact that had he diligently attended to his own interests the falsity of the representation would have been discovered by him.

In my respectful view the observations of the High Court in the Parkdale case should be interpreted with His Honour Justice Hill's observations in mind and not in a way which suggests that before having the benefit of s 52 of the Trade Practices Act a consumer must show that he or she took reasonable care of their own interests. Obviously there may be extreme cases where, as Justice Hill noted, a consumer is so negligent that the causative link between the misrepresentation and the damage suffered cannot be proved on the balance of probabilities. In the end all this really means is that, in those extreme cases, the negligence was the cause of the loss and damage and the misleading conduct had little or no part to play in the loss suffered.

When Ralph acted to transfer the funds on Camm's say so it may have been prudent to have confirmed with Radford that this was in accordance with Radford's wishes but he nevertheless took this step when he still believed that Camm the was owner and had authority to sell. Therefore, a final step on the applicant's part in the purchase process occurred when there was no hint that Camm was not the owner.

It may have also been prudent for Radford to make further checks with the Authority before accepting the signed transfer documents; although as it turns out the advice given by the Authority on 10 January 1994 does not appear to have accurately named the legal entity acquiring a property interest in the aircraft in May 1993.

Further it may have been prudent for Radford to have contacted Ralph immediately when Radford was advised that Camm may not be the owner of the aircraft so that Ralph could have tried to stop the transfer of the funds if these funds had not already transferred. However, I accept Radford's evidence that at the time he believed the funds had transferred and he acted as he did in obtaining Camm's signature on the transfer papers and taking possession of the aircraft so as to protect the applicant's interests.

Even if I accept that a lack of care on Radford's part, his lack of understanding of the legal effect of his actions in obtaining Camm's signature on the transfer documents and taking possession of the aircraft when Camm did not have the capacity or authority to transfer ownership of the aircraft, were causes of the consequential loss and damage claimed, this does not mean that a real and effective cause of the loss and damage suffered in relation to taking possession of the aircraft did not include the applicant's belief, in part engendered by the respondents' misrepresentation, that Camm was an owner and had authority to sell. In my view Radford's actions were in part a product of the confusion caused by the original misrepresentations which induced the applicant to act as it did. He obviously failed to appreciate the full significance of the information received by him on 10 January 1994 and his belief that the money had already been transferred may have been incorrect but I am not satisfied that by reason of those actions the misrepresentations did not cause the further consequential loss and damage claimed.

(ii) Measure of Damages

The admissions made by the respondents meant that the quantum of the loss and damage claimed was admitted in respect to the various items claimed, but the claim for damages pursuant to s 82 of the Trade Practices Act, the connection between the losses claimed and the misleading conduct of the respondents and the reasonableness of the amounts claimed remained in dispute. It was submitted on behalf of the respondents that the applicant's claim for damages pursuant to s 82 of the Trade Practices Act (and presumably the State provisions relied on) was misconceived because this case involves an acquisition of an asset and, in order for the Court to assess any loss, the applicant must prove the value of the aircraft at the date of purchase. In making this submission they relied on the High Court decision in Kizbeau Pty Ltd and Ors v W G & B Pty Ltd & Anor [1995] HCA 4; (1995) 184 CLR 281, where, when considering the assessment of damages after a business was purchased as a result of a misleading statement, the majority of the Court said (at page 290) that:

"Actions based on s 52 are analogous to actions for torts. It follows that, in assessing damages under s 82 of the Act, the rules for assessing damages in tort, and not the rules for assessing damages in contract, are the appropriate guide in most, if not all, cases (11).

In an action for damages for deceit for inducing a person to enter a contract of purchase, which is an action that is closely analogous to an action for damages for breach of s 52, the courts have consistently held that the proper measure of damages is the difference between the real value of the thing acquired as at the date of acquisition and the price paid for it (12). Nevertheless, although the value is assessed as at the date of the acquisition, subsequent events may be looked at in so far as they illuminate the value of the thing as at that date (13). A distinction is drawn, however, between subsequent events that arise from the nature or use of the thing itself and subsequent events that affect the value of the thing but arise from sources supervening upon or extraneous to the fraudulent inducement (14). Events falling into the former category are admissible to prove the value of the thing, those falling into the latter category are inadmissible for that purpose."

However, the majority of the Court also went on to say at page 291 that:

"In some cases of deceit, it may also be proper to compensate the defrauded party not only for the difference between the value of the thing acquired and the price paid for it but also for losses induced by the fraud and directly incurred in conducting the business (19)."

The difficulty I have with the lastmentioned submission by the respondents is that, amongst other things, the submission is based on the incorrect premise that the applicant acquired good title to the aircraft when it purported to purchase it from Camm in 1994.

What occurred following the discovery that Felix was the holder of the registration certificate for the aircraft and that Felix and Felix Holdings Pty Ltd asserted title to the aircraft was that, eventually, negotiations were entered into which resulted in title to the aircraft being transferred to the applicant in approximately December 1996.

As at 10 January 1994 the applicant had paid a total of $52,000.00 towards the purchase of an aircraft for use in its business at Wanna Station in Western Australia. It had possession of the aircraft but faced a dispute about whether it acquired good title to the aircraft from Camm, who still asserted that he was authorised to sell the aircraft. The applicant never argued or sought to prove that the aircraft was not worth the amount paid by it in 1994.

I have already noted that the searches of the Authority's records by the applicant's solicitors produced information which suggests that the company, Felix Holdings Pty Ltd, was the entity with a property interest in the aircraft and Felix was the registered holder of the registration certificate for the aircraft from May 1993. The correspondence passing between the parties' legal representatives, some copies of which form part of the documents exhibited to Elder's affidavit, show that unsuccessful attempts were made by the parties to resolve the dispute as to ownership and to arrange for the transfer of the aircraft to the applicant.

According to Radford's affidavit sworn on 3 July 1997, on 5 August 1994 the applicant bought a replacement aircraft "... in case we could no longer use the HCM aircraft ...". Radford said that the replacement aircraft was purchased for $67,000.00. However, when he was cross-examined on this matter it became clear that that sum included $15,000.00 paid by the applicant for a replacement engine it installed after it purchased the replacement aircraft.

On 26 September 1994 Felix formally demanded possession of the aircraft (Exhibit "AE6") and in the same month these proceedings were commenced.

The Court proceedings were originally fixed for hearing on 1 July 1996, however, negotiations were entered into between at least the applicant and the fourth and fifthnamed respondents (who were also cross-applicants) and these negotiation were concluded when they executed a deed of settlement on 18 December 1996 (Exhibit "AE7"). Pursuant to the terms of the deed, and in order to obtain a transfer of the aircraft to the applicant, the applicant paid to Felix a further sum of $20,000.00 in settlement of all claims and cross-claims between the applicant and the fourth and fifthnamed respondents. It now seeks this further sum as a consequential loss.

By a letter dated 27 October 1994 the Authority informed Radford that it had suspended the aircraft certificate of registration and the certificate of airworthiness until such time as it received an application for registration from an "entitled person" as defined by its Regulations. Therefore, from the date of that notice Radford hangared the aircraft at Wanna Station and did not take any steps to service or operate the aircraft until 28 January 1997 when he was notified that the dispute between Felix and the applicant had been settled. Once he received this notification he says that he arranged for the aircraft to be serviced and this involved some upgrading to the aircraft to accord with the Regulations and performed repairs to its engine damaged by lack of use. The aircraft was back in use on 24 March 1997 and, according to the evidence given at hearing, the replacement aircraft was sold by the applicant in May 1997 for $60,000.00.

Looking at the background to the claims made and the context in which the loss and damage is said to have occurred it is clear that this is not simply a case about the acquisition of an asset where the applicant claims that it was misled and as a result paid too much for an asset. The loss and damage claimed in this case is that allegedly caused by the applicant being induced to pay $50,000.00 to a person who could not transfer title of the asset to the applicant, and on the respondents own admissions never could have transferred title in the relevant period, leading to the applicant taking possession of an aircraft that it did not have title to and could not acquire good title to without the payment of an additional sum.

It does seem that for some months the applicant was able to use the aircraft but as the dispute dragged on it not only incurred costs in relation to the storage of the aircraft but it says that it incurred consequential losses in being required to purchase a replacement. What it seeks is the net cost to it in respect to the purchase and sale of this replacement. It also seeks the cost of borrowing money to purchase this replacement. At hearing it was apparent that what the applicant meant by "borrowing" was in fact the interest it paid on the use of its overdraft facility to purchase the replacement aircraft and to install the new engine in this replacement aircraft.

As submitted by the applicant's counsel, essentially, this is a case about the recovery of consequential losses flowing from the applicant reliance on a misrepresentation as to the ownership of the aircraft. Expectation losses may not be recovered (see Wardley's case) but it is not the case that consequential losses are precluded from recovery and this proposition is evident from the majority decision of the High Court in Gates v City Mutual Life [1986] HCA 3; (1985-1986) 160 CLR 1 where it was said at pages 11 and 12 of that decision that:

"The Act does not prescribe the measure of damages recoverable by a plaintiff for contravention of the provisions of Pts IV and V. Accordingly, it is for the courts to determine what is the appropriate measure of damages recoverable by a plaintiff who suffers loss or damage by conduct done in contravention of the relevant provisions. Two established measures of damages, those applicable in contract and tort respectively, compete for acceptance. In contract, damages are awarded with the object of placing the plaintiff in the position in which he would have been had the contract been performed - he is entitled to damages for loss of bargain (expectation loss) and damage suffered, including expenditure incurred, in reliance on the contract (reliance loss). In tort, on the other hand, damages are awarded with the object of placing the plaintiff in the position in which he would have been had the tort not been committed (similar to reliance loss).

The differences and the similarities between the two approaches are best illustrated by contrasting the damages recoverable for breach of contractual warranty on a purchase of goods with those recoverable for a fraudulent misrepresentation inducing entry into a contract for the purchase of goods on the assumption that the contracts are identical except that in one case the representation amounts to a warranty and in the other it is merely a non-contractual representation. For breach of warranty the plaintiff is prima facie entitled to recover the difference between the real value of the good and the value of the goods as warranted. In deceit the measure of damages is the difference at the time of purchase between the real value of the goods, and the price paid: Potts v. Miller (21); Toteff v. Antonas (22); Gould v. Vaggelas (23). But this has been treated as a prima facie measure only, the true measure being reflected in the proposition stated by Dixon J. In Toteff v Antonas (24) in these terms:

"In an action of deceit a plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage he has suffered in consequence of his altering his position under the inducement of the fraudulent misrepresentations made by the defendant."

As His Honour then pointed out, it is a question of determining how much worse off the plaintiff is as a result of entering into the transaction which the representation induced him to enter than he would have been had the transaction not taken place. This entitles the plaintiff to all the consequential loss directly flowing from his reliance on the representation (Potts v. Miller (25); Doyle v. Olby (Ironmongers) Ltd (26), at least if the loss is foreseeable: see Gould v. Vaggelas (27)".

On the evidence I am satisfied that items (a), (b), (c) and (d) are consequential losses and that they were foreseeable losses. The amount of these losses is not in dispute and they are recoverable in the sum of $33,263.00.

Item (e), which relates to the commission fee negotiated and paid to the respondents, is not a loss suffered but an expense incurred in the purchase of the aircraft through the payment of a fee to the agent. Accordingly, I have acceded to the respondents' submission that this not be allowed.

Item (g), which relates to the legal costs incurred, was disputed by the respondents on the basis that it was "vague" and the respondents felt that they could not, on the documents given to them, properly determine whether or not the amounts were overstated. In my view the quantum of the legal costs incurred was admitted at least up to $14,508.52 and that sum was corrected by Elder's evidence to $15,802.06. Therefore, I cannot see any proper basis for challenging the amount of the legal costs incurred in trying to prove title to the aircraft and defend the claims made against the applicant because it did not acquire good title on 10 January 1994. In the event that an order is made against the respondents for payment of these legal costs claimed by the applicant as consequential damages, the respondents ask me to order that only costs taxed in accordance with Order 62 of the Federal Court Rules be paid. However, this is not a case where I am being asked to award this amount as legal costs in the proceedings. Because of the admissions made they are the costs incurred, whether or not in reaching the amount claimed the costs were assessed on a party/party basis or on any other basis. Accordingly, I propose to make the further order for payment of these legal costs as consequential damages in the sum of $15,802.06.

Items (f) and (h) involve the additional sums of $20,000.00 paid to acquire title to the aircraft and $28,068.00 paid for the cost of putting the aircraft back into service. These two items were not the subject of any admissions made before or during the hearing.

In relation to the $20,000.00 paid to the fourth and fifthnamed respondents on settlement of the proceedings between the applicant and these parties the respondents' submitted that it was necessary for me to determine the reasonableness of these payments. One authority was relied on and that was a decision involving a building dispute in Hennessy Glass Aluminium Systems Pty Ltd v Eagle Star Trustees Ltd & Ors (Fitzgerald P, Pincus JA, and Derrington J, 15 August 1996, 20 December 1996 unreported) where His Honour Pincus J A said (at page 6 of the unreported copy of that decision):

"... A settlement which is reasonable, in the sense of being entered into in good faith after careful consideration and on proper advice, may later be proved to have been quite unnecessary, for example because some evidence comes to light which shows that the claim settled was in truth unsustainable. But such evidence would not displace the presumption that the settlement was reasonable, which was held to apply in Wong v Hutchinson (1961) 68 WN (NSW) 55 at 58, nor show that the party agreeing to pay under the settlement acted unreasonably in doing so."

I accept as reasonable Elder's evidence that he considered the legal position of the applicant in respect to the ownership of the aircraft and advised the applicant to settle and pay the additional sum to the fourth and fifthnamed respondents, thereby acquiring good title to the aircraft and, in effect, bringing to an end the uncertainty about title and the need to store the aircraft and operate a replacement aircraft in the applicant's business.

Further I accept the applicant's counsel's submission that in reality the argument advanced by the respondents, both as to the additional payment made and the cost of putting the aircraft back into service, amounted to a submission that the applicant failed to take steps to mitigate the damage suffered.

In this case the respondents carry the burden of proving that the applicant failed to mitigate its loss (see Hubbards Pty Ltd v Simpson Ltd (1982) 41 ALR 509). Both in contract and in tort claims it has been long accepted that the following remarks of Lord MacMillan in Banco de Portugal v Waterlow [1932] UKHL 1; (1932) AC 452, 506 set out the correct approach to this question:

"Where the sufferer from a breach of contract finds himself in consequence of that breach placed in a position of embarrassment the measures which he may be driven to adopt in order to extricate himself ought not be weighed in nice scales at the instance of the party whose breach of contract has occasioned the difficulty. It is often easy after an emergency has passed to criticise the steps which have been taken to meet it, but such criticism does not come well from those who have themselves created the emergency. The law is satisfied if the party placed in a difficult situation by reason of the breach of a duty owed to him has acted reasonably in the adoption of remedial measures and he will not be disentitled to recover the cost of such measures merely because the party in breach can suggest that other measures less burdensome to him might have been taken."

It was not argued that the further amounts claimed had not been paid and, on the evidence, I am satisfied that the amounts were expended in the manner and for the reasons alleged by the witnesses. Otherwise, the respondents called no evidence which properly challenged the reasonableness of this expenditure in the circumstances described and, accordingly, the respondents have not met their onus of proof on these matters. This being so I propose to make orders which include the payment of these additional amounts to the applicant.

The application for relief made to the Court includes an application for costs. Costs usually follow the event and, in this case, I propose to make an order for costs in favour of the successful applicant. However, before doing so I propose to give the parties the opportunity to file written submissions on the exercise of my discretion pursuant to Order 62 Rule 36A of the Federal Court Rules.

THE COURT DECLARES THAT:

1. (a) The second and thirdnamed respondents engaged in conduct in trade or commerce which contravened s 52 of the Trade Practices Act 1974 (Cth); s 38 of the Fair Trading Act 1989 (Qld) and s 11 of the Fair Trading Act 1985 (Vic);

(b) the thirdnamed respondent was not a person involved in the contravention of s 52 of the Trade Practices Act 1974 (Cth) within the meaning of s 75B of that Act.

AND THE COURT ORDERS THAT:

2. The respondents pay damages to the applicant in the sum of $97,133.06.

3. On or before 4.00pm on Tuesday 16 June 1998 the parties file and serve any written submissions on both the question of interest and costs.

I certify that this and the preceding

eighteen (18) pages are a true copy

of the Reasons for Judgment herein

of Judicial Registrar Millane

Associate:

Dated: 11 June 1998

Counsel for the Applicant: MR C NORTHROP

Solicitor for the Applicant: DUNHILL MADDEN BUTLER

Counsel for the Second Respondent: MS D SKENNAR

Counsel for the Third Respondent: JAMES WALKER, SOLICITOR

Date of Hearing: 11 & 12 May 1998

Date of Judgment: 11 June 1998


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