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Federal Court of Australia |
Trade Practices Act 1974 (Cth): ss 52, 82
Winterton Constructions Pty Ltd v Hambros Australia Ltd [1992] FCA 582; (1992) 39 FCR 97: cited
Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31: cited
James v ANZ Banking Group Ltd (1986) 64 ALR 347: cited
Oraka Pty Limited v Leda Holdings (1997) ATPR 41-558: cited
Kenny & Good Pty Limited v MGICA (1992) Limited (1997) ATPR 41-576: cited
JOHN PRAVIT TANTIPECH and P O & SONS PTY LIMITED v IOOF AUSTRALIA TRUSTEES (NSW) LIMITED
NG 642 of 1996
LOCKHART J
SYDNEY
16 JANUARY 1998
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | NG 642 of 1996 |
|
BETWEEN: | JOHN PRAVIT TANTIPECH
First Applicant
P O & SONS PTY LIMITED Second Applicant |
|
AND: | IOOF AUSTRALIA TRUSTEES (NSW) LIMITED
Respondent |
|
JUDGE: | LOCKHART J |
| DATE OF ORDER: | 16 january 1998 |
| WHERE MADE: | SYDNEY |
THE COURT ORDERS THAT:
1. The applicant bring in short minutes of order on a date to be fixed to give effect to the Court's reasons for judgment.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
|
IN THE FEDERAL COURT OF AUSTRALIA | |
| NEW SOUTH WALES DISTRICT REGISTRY | ng 642 of 1996 |
|
BETWEEN: | JOHN PRAVIT TANTIPECH
First Applicant
P O & SONS PTY LIMITED Second Applicant |
|
AND: | IOOF AUSTRALIA TRUSTEES (NSW) LIMITED
Respondent |
JUDGE:
LOCKHART J DATE: 16 JANUARY 1998 PLACE: SYDNEY
This is a claim for damages under s 82 of the Trade Practices Act 1974 (Cth) ("the Act"). The first applicant (John Pravit Tantipech) alleges that he was induced to enter into a lease of a shop in a shopping centre known as the Mandarin Centre ("the Centre") in Chatswood, controlled and operated by the respondent, following the making of false representations to him by the respondent's agent.
The second applicant, P O & Sons Pty Limited ("P O & Sons"), is a company controlled by Tantipech through which various expenses in carrying on Tantipech's business were incurred; it was joined as a party towards the conclusion of the final hearing of the case for the purpose of ensuring that there was no absent vehicle for the recovery of damages.
There is a cross-claim filed by the respondent. It relies on the lease of the shop to Tantipech for three years commencing on 25 January 1996 and terminating on 24 January 1999. The respondent claims the unpaid rental together with unpaid contributions to a promotion fund, a sinking fund, and to the rates and taxes and operating expenses of the Centre. Interest on unpaid moneys due under the lease is also claimed pursuant to clause 13 of the lease.
The respondent asserts that in all the circumstances it was entitled to bring the lease to an end and to re-enter the premises and that it did terminate the lease and seeks damages from Tantipech together with interest.
The case turns on its facts, many of which are in dispute. There are some serious questions of fact concerning the making of the relevant representations and the reliance placed upon them by Tantipech which turn on the credibility of some witnesses. The evidence was given by affidavit and most of the witnesses were cross-examined. The principal witness for Tantipech was Tantipech himself. At times he was assisted by an interpreter. His solicitor swore an affidavit relating to a matter which did not prove to be contentious. The solicitor was not cross-examined.
An important witness for the respondent was Kisaku Uchida, a Principal of Showa Realty Australia Pty Limited ("Showa") which at the relevant time was a leasing agent for the respondent. Like Tantipech, Uchida was at times assisted by an interpreter. Tantipech asserts that Uchida made the relevant representations to him which induced him to become a lessee of the shop. Andrew Berkeley was another important witness for the respondent. He was employed by Byvan Management (NSW) Pty Limited ("Byvan") to the position of the Manager of the Mandarin Centre ("Centre Manager") which he held until he became an asset manager in late 1996 or early 1997. Patrick Gocher was the Managing Director of Caverstock Pty Limited ("Caverstock"), a company involved in the administration of leases. Caverstock was the project co-ordinator of the Mandarin Centre. Gocher's evidence went principally to the calculation of percentages of the areas of the Mandarin Centre used for various purposes. His evidence was directed to establishing the accuracy of the important representation that was in fact made to Tantipech before he entered into the lease about the percentage of the relevant parts of the Mandarin Centre that had already been leased or "committed" for lease. Gocher's evidence also dealt generally with matters involving him as Caverstock's Managing Director concerning the involvement with the Centre.
Robert John Versey gave evidence for the respondent. He is a director of Paragon Services Pty Limited ("Paragon") and was appointed Centre Manager in September 1996 replacing Byvan. His evidence went mainly to a cross-claim of the respondent involving the calculation of moneys said to be owing by Tantipech.
David Shakes was a witness of the respondent. Shakes was employed by Byvan as a marketing manager at the relevant time.
I shall state my findings of fact which reflect my assessment of the credibility of the relevant witnesses. In particular Tantipech, Uchida and, to a lesser extent, Berkeley. I accept Tantipech as a truthful and reliable witness. Although there is agreement on some of the facts between Tantipech and Uchida, where the evidence conflicts, as it does, I prefer the evidence of Tantipech. Similarly with Tantipech and Berkeley, although Berkeley's evidence on contentious questions of fact was in a fairly limited area. Similarly in the case of the minor conflicts of evidence that arise between Tantipech and other witnesses for the respondent. My assessment of the credibility and reliability of the witnesses is based upon the impression they gave me when giving their evidence in the witness box when measured in the light of the probabilities and relevant documents.
Showa was a leasing agent for the respondent and acted at relevant times through it's Principal, Uchida. Byvan was the Centre Manager for the respondent until about September 1996 when Paragon took its place.
Caverstock was the project manager for construction of the Centre and acted as the respondent's agent in dealing with Tantipech with respect to the fit-out of the leased premises.
Tantipech is an experienced jeweller having operated a jewellery business in Thailand for some years. In about mid February 1995 he noticed an advertisement on the construction site of the Centre seeking retail tenants for the Centre. Tantipech and his wife went to the offices of Showa in Crows Nest, a suburb that is close to Chatswood, and was introduced to Uchida, a Principal of Showa. Tantipech told Uchida that he had seen the sign advertising the Centre and was interested in leasing a shop for the conduct of his jewellery business. Uchida drew Tantipech's attention to some plans of the proposed Centre which were floor plans dividing various floors into shop spaces. Tantipech said to Uchida that for his type of business he would be interested in the ground floor.
Uchida gave to Tantipech a copy of a promotional brochure. The Centre was to consist of a ground floor and five upper floors, the first floor being intended for the letting of retail shops, the second floor for the letting of retail food outlets, the third floor was to be a cinema complex, the fourth floor to house the Mandarin Club and the fifth floor as a sports facility. Below ground level there were three basement areas for car parking. The cinema complex was to consist of eight cinemas. It was intended that there would be easy access from the cinema complex to the food hall and retail levels to encourage cinema goers to patronize the Centre's other tenants. The food hall on the second floor was intended to direct customer traffic flow up to the cinema complex and down to the retail floors leading to the street and was to be connected by walkways to the Chatswood Rail and Bus Interchange. The emphasis in the food outlets and restaurants on the second floor was to be Asian but with nevertheless a large range of international cuisine as well.
The first inside page of the promotional brochure made a number of statements, including the following:
"The Sydney Mandarin Club was founded in its own building at the corner of Goulburn and Pitt Streets near Sydney's Chinatown some 28 years ago, and has become one of Australia's most successful clubs. It is proposed that the Chatswood Mandarin Club, which gives the Mandarin Center its name and which will be housed on the upper floors of the Centre, will be considerably bigger than the City Club."
"The Centre will be the first major development in Chatswood for three years, and will add an exciting Asian flavour to shopping in Chatswood. Already, even before the ground has been broken for the project, it is about 80% pre-leased or committed. Demand for the remaining retail space is very strong."
. . .
"With the anchor support of the new Mandarin Club; one of Hoyts largest cinema complexes. . . plus the Centre's key positioning in Sydney's most dynamic shopping centre, we anticipate that the Chatswood Mandarin Centre will be the greatest success story in Sydney retail and entertainment development for many years."
During the discussions between Uchida and Tantipech, Uchida said that the Centre would be the largest Asian shopping centre on the North Shore of Sydney and would be planned to attract the Asian community in the surrounding suburbs. He said that the Mandarin Club and the Hoyts Cinema complex would be the major tenants of the Centre.
Uchida said:
"The ground floor will be mainly fashion related. The first floor will mainly be music and entertainment related and the second floor will be an international food court. On the third floor will be the Hoyts Cinema complex and the remaining floors will house the Mandarin Club and the Fitness centre."
He also said to Tantipech:
"I think you should know that around 80 per cent of the Centre has already been leased and there is a lot of interest. You should act quickly if you want to lease the shop."
As at 6 March 1995 according to a rental schedule prepared by Caverstock, leases were signed for 34 per cent of the lettable space on the retail floors (the ground floor and the first and second floors), and for 22 per cent of the lettable space on the ground floor only. By including draft and executed leases issued (but draft leases issued in particular), the figures are 76 per cent and 86 per cent respectively.
About a week later Tantipech and Uchida had a second meeting. Uchida suggested that Tantipech should consider shop S17 (later known as shop G17). About the end of April 1995, when Uchida and Tantipech met again, they discussed shop S17 and Uchida said that shop S8/9 was leased and would be a book and magazine store; shop S13 would be a wholesale jewellery manufacturer and was already leased; shop S16 would be a bridal store and was already leased; shop S18 would be a flower store and the lease arrangements were being finalized and shop S19 was planned to be a bank and the lease arrangements were being finalized.
The real position was somewhat different. A proposal had been issued to a book shop for shops S7/8 and the negotiations had been on foot for some months. A lease for shop S16 was executed on 23 March 1995 although the lessee later withdrew. A proposal had been issued to a florist earlier in the year for shop S18 and negotiations on that lease were ensuing. There was a suggestion that shop S19 would be a bank but there were no negotiations.
Tantipech said that if Uchida wanted him as a tenant it would need to be a condition that retail jewellery stores in the Centre were limited to two including his business. He also said that security was a major concern in his business and he would need to be satisfied that the security was satisfactory. Uchida said that he would speak to the lessor about these matters and get back to him.
A few days later the two men had a discussion in Uchida's office when Uchida said that the lessor had agreed to limit the number of retail jewellery stores to two, including Tantipech's business and that the Centre would be guarded and there would be around the clock security. Later Uchida told Tantipech that the lessor had agreed to lease shop G17 to Tantipech. Tantipech went overseas and returned in late April 1995. When he returned he was told by Uchida that it was anticipated that construction of the Centre would be completed about August 1995 and that the Centre was scheduled to be open to the public in October 1995.
As at 11 May 1995 according to a rental status schedule prepared by Sid Helprin, leases were signed for 46 per cent of the lettable space on the retail floors (the ground floor and the first and second floors), and for 40 per cent of the lettable space on the ground floor only. Including draft and executed leases issued the figures are 55 per cent and 56 per cent respectively.
Tantipech signed the lease of shop G17 in early June 1995. After he signed the lease, in late August 1995 Tantipech received a letter from Byvan that mentioned "the special attractions of late night operations proposed by the Management of the well established and respected Gordon Rugby Club and Hoyts 8 Cinemas." There was no mention that the Gordon Rugby Club was replacing the Mandarin Club. Enclosed with the letter were copies of newspaper reports which discussed the Mandarin Centre. Those reports also mentioned the Gordon Rugby Club and Hoyts 8 Cinemas as major tenants of the Centre but did not refer to the Mandarin Club.
Tantipech became aware that the opening date of the Centre had been put back and that the premises would not be available for fit out until the end of September for an opening scheduled to be held on 21 November. Tantipech then took steps to have his shop fitted out before the proposed November opening. He later learnt that the planned opening had been delayed again until 12 December 1995. Difficulties were experienced by Tantipech's architect in obtaining details about the proposed fit-out of his shop. More and more delays occurred and the shops on the ground level and Tantipech became increasingly frustrated about the delay and complained about it.
Letters passed between the interested parties and conversations occurred relating to the delay in the construction of the Centre and in particular the fit-out of shop G17. The opening date of the Centre was delayed again until 25 January 1996. Tantipech became increasingly frustrated and his original fit-out contractor cancelled the fit-out contract with him shortly before Christmas 1995 due to delays and uncertainty.
A meeting of the tenants of the Centre was called by Byvan on 13 December 1995. After the conclusion of the formal part of the meeting Tantipech spoke to Berkeley and expressed his concerns about the delays and said that while there seemed to be some fit-out activity in the food court area there was very little such activity on the ground floor. Berkeley assured him that over 60 per cent of the Centre had been leased and there were currently discussions going on for many of the remaining shops.
Berkeley confirmed during the formal part of the meeting that the opening date for the Centre would still be 25 January 1996 and said that the Centre's grand opening would be on Chinese New Year, 19 February 1996. The grand opening was delayed, however, and was rescheduled to be held in March, but it in fact had not occurred by July 1996 when Tantipech swore his affidavit in this proceeding.
Tantipech was informed in early January 1996 that shop G17 was now ready for fit-out work but due to the previous delays he had not re-engaged a contractor to commence the fit-out and did not engage a contractor until the end of January 1996 with the intention of opening for business in the first week of March 1996.
On 17 January 1996 a meeting was held where many tenants expressed their dissatisfaction with the ongoing delay and the Centre's occupancy level and an offer was made at that meeting to the tenants to compensate them for delay in the opening of the Centre. Tantipech did not regard the offer as satisfactory and did not respond to it.
As at 5 February 1996 according to a rental status schedule prepared by Byvan, leases were signed for 65 per cent of the lettable space on the retail floors (the ground floor and the first and second floors), and for 47 per cent of the lettable space on the ground floor only.
Tantipech finally opened his shop for business on 9 March 1996. He was aware at that time that all of the shops immediately surrounding his shop were vacant and there was still no fit-out activity in any of them. He said that as late as the date of swearing his affidavit of July 1996 the majority of the Centre's retail area was still unoccupied and his shop was "totally isolated and exposed". The interior of the Centre had security cameras stationed but the main entrance area to the Centre where his shop was located was not covered by any camera. There was a very low level of pedestrian traffic into and out of the Centre through the main entrance due to the low occupancy rate of the Centre and continuing construction work nearby which made pedestrian access difficult.
Steps had been taken by the owner to make provision for pedestrian access to the Centre from the Chatswood Interchange which again reduced the level of pedestrian flow through the main entrance.
Tantipech had commented about the security situation several times to the security guards and he expressed his concern. He expressed his concern about the paucity of the occupancy of the surrounding shops, absence of security and other related matters, but his concerns were not satisfied.
By the end of March 1996 a further offer was made on behalf of the owner to waive the rental in full for March and to reduce the rental for the months of April, May and June. About that time Tantipech said to Berkeley that he was not prepared to pay the rent at that stage as the situation was unsatisfactory. Berkeley said that he understood that the tenants had been having problems and he asked Tantipech to simply pay the outgoings and pay the rent later when the problems had been sorted out. Again Tantipech expressed his concerns in a formal way by letter regarding the Centre and he included a cheque in payment of the outgoings for the month of March 1996 with the letter.
Tantipech's shop was robbed on 19 April 1996 and he has not traded since then. He has suffered substantial loss. He has not paid any rent but has paid outgoings as assessed up to and including March 1996. He is claiming damages for the loss that he suffered as a result of leaving the premises. He is not claiming damages for the loss of jewellery from the robbery.
1. the Mandarin Centre was 80 per cent leased;
2. the Mandarin Centre would be the site of the Mandarin Club, an enterprise established by Mr Denis Wong, which by its nature would attract a large Chinese clientele to the Mandarin Centre;
3. the shops surrounding shop G17 (which is the shop leased to Tantipech for the conduct of a jewellery business) had already been leased or were about to be leased;
4. the number of shops which could sell jewellery in the Mandarin Centre would be limited to two;
5. in response to Tantipech's statement that security was a major concern to him in running his jewellery business, the Centre would have around the clock security;
6. it was anticipated that the construction of the Mandarin Centre would be completed about August 1995; and
7. the Mandarin Centre was scheduled to be open to the public in October 1995 and that the opening would be by way of a "grand" opening.
I will consider, in turn, whether these representations were in fact made and whether they constitute misleading or deceptive conduct within the meaning of s 52 of the Act.
The promotional brochure also conveyed certain representations. The critical part of the brochure stated:
"Already, even before the ground has been broken for the project, it is about 80% pre-leased or committed. Demand for the remaining retail space is very strong."
In my opinion the reasonable construction of the brochure, in particular the words just extracted from the first inside page, would convey to a potential lessee of a retail shop on the ground floor (being the relevant class of person) that, even before construction work had commenced for the Centre, about 80 per cent of the space available for retail shops and food outlets were already the subject of binding leases or prospective tenants had committed themselves to enter into leases such that they were no longer available for other prospective tenants. The brochure also conveyed the impression that demand for the remaining 20 per cent of the retail space was very strong; in effect meaning that if people wanted to become prospective tenants of ground floor shops or retail food outlets on the second floor they had better get in quickly or they would miss out.
I reject the case made by the respondent that the reference to 80 percent was with respect to 80 percent of the total available floor space in the Centre including the Hoyts cinema complex, the Mandarin Club, the sports facility on level 5.
As mentioned previously, on 6 March 1995, leases had been signed for only 34 per cent of the lettable space on the retail floors. Arguably it is necessary to include the space that is subject to draft and executed leases. If that is done the total percentage of retail space unavailable rises to 76 per cent, a figure that is close to the 80 per cent. However that figure fell dramatically by 11 May 1995, at which time the total retail space subject to signed, executed or drafted leases fell to 55 per cent. Tantipech was not informed of this before he signed the lease in June 1995.
In the result, even if I were to consider that the correct approach is to include the space that is subject to signed, executed or drafted leases, I would find that the respondent's failure to inform Tantipech of the fall in "pre-leased or committed" retail space constituted misleading or deceptive conduct. In the circumstances, Tantipech was entitled to believe that any significant change in the pre-leased or committed space would be communicated to him: Winterton Constructions Pty Ltd v Hambros Australia Ltd [1992] FCA 582; (1992) 39 FCR 97; Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31, per Black CJ at 32.
In my opinion, the representation conveyed in the brochure that the demand for the remaining retail space was very strong also constituted misleading or deceptive conduct. As the above evidence suggests, demand for the remaining retail space was far from strong and, in fact, weakened as the date of execution of the lease approached.
As it turned out, the Mandarin Club did not become a tenant of the Centre; a fact which Tantipech only learnt after he signed the lease. While the evidence is not clear, it seems that at the time that the representation was made the Mandarin Club had entered a lease. I therefore find that the respondent had reasonable grounds for stating that the Club would be housed in the Centre and that the statements were not misleading or deceptive.
While the evidence is not comprehensive, it seems that, at least in the week of the robbery, there was one guard present on the premises at all times, and on some occasions there were two or three. Therefore the statement that the Centre would have 24-hour security cannot be misleading or deceptive.
Both of these representations can be characterized as predictions or opinions as to future events. The mere fact that representations as to future conduct or events do not come to pass, does not make those representations misleading or deceptive: James v ANZ Banking Group Ltd (1986) 64 ALR 347, per Toohey J at 372.
These statements do nothing more than convey the meaning that Uchida anticipated that the Centre would open in October 1995 and perhaps that he had a basis for making that statement. In my opinion, these statements do not constitute misleading or deceptive conduct.
First the lease itself. The lease contains clause 25.07 in a not unfamiliar form which states so far as relevant that the lease embodies the whole transaction of the leasing and that all representations pertaining to the leasing "are hereby cancelled." The clause then contains an acknowledgment by Tantipech "that it has entered into this Lease without relying upon any representation or warranty by the Lessor and after satisfying itself as to the suitability of the Premises for the purpose for which the Premises are leased hereunder." The lease is dated 2 June 1995.
The lease was explained to Tantipech by his solicitors, Hunt & Hunt, by letter dated 3 May 1995. That letter was six pages long and contained 32 numbered paragraphs which referred to various clauses of the lease. Paragraph 25 reads:
"Clause 25 General Provisions. The terms are usual for a lease of this sort. We draw your attention particularly to clause 25.07 which states that this lease is the whole of the transaction between the parties. Should the letting agent or any other person who has made any representations to you with regard to the premises which are not specifically referred to in this document then you should advise us. If any representations have been made but are not included in this document then there is no way that you can enforce them against the lessor"
Another document of some four pages titled "Deed of Acknowledgment" is also dated 2 June 1995 and is signed by Tantipech and his son, John Tantipech. This document should be set out in full it reads as follows:
"1. The Lessee represents and confirms that, save for those statements listed in clause 2 below, the Lessor has made no statement or statements whatsoever which have in any way induced or influenced the Lessee to enter into a Lease or to agree to any or all of the terms of the Lease.
2. This clause is to be completed by either:
(i) the Lessee filling in the )
blank to the right or, if )
there is insufficient room, ) PLEASE REFER TO
by attaching a separate ) THE ATTACHED
sheet, stating the substance ) SUPPLEMENT
of any such statements and )
indemnifying the person who )
made them; or )
(ii) the Lessee writing `No such )
statements have been taken )
into account in any manner )
whatsoever by me' IF AND )
ONLY IF that is the true )
position. )
3. In particular the Lessee indicates below whether it has taken into account or relied upon any statement by the Lessor as to:
(a) the suitability of the Premises
for the Business Yes ... No ....
(b) the fittings finishes facilities
of amenities of the Premises or
the Mandarin Centre (`the
Centre') Yes .... No ....
(c) whether or not the Business may
lawfully be carried on from
the Premises Yes .... No ....
(d) the economic viability or
potential or prospects or [sic]
Centre or of the Premises Yes ... No ....
(e) the potential or capacity
of the Centre or the area
in which the Centre is
located to support the
Business Yes .... No ....
(f) the number or types or kinds
of businesses of the
Business that will be permitted
to operate in the Centre or their
proximity to the Premises Yes .... No ....
(g) the number or types or kinds
of any other businesses that
will be permitted to operate
in the Centre Yes .... No ....
(h) the identity or quality or
profitability of other
businesses carried on or
proposed to be carried on in
the Centre Yes .... No ....
(i) the facilities or services
available either to or for
the benefit of the Lessee or
other tenants or the public
at the Centre Yes .... No ....
(j) the number or proportion of
leases or proposed leases which
have been actually entered into,
are presently proposed to be
entered into or are presently
being negotiated or may in the
future come into existence in
relation to other premises in
the Centre Yes .... No ....
[If any `yes' indication has been given, the Assignee must include the relevant statement or statements in clause 2 above]
4. The Lessee acknowledges that the Lessor has the right to alter the tenancy mix in the Centre at any time, in its absolute discretion.
5. In consideration of the Lessor granting a Lease, the Lessee agrees to indemnify the Lessor against any claim (whether at law or in equity or under any statute, regulation or by-law) which the Lessee may make against the Lessor in respect of any statement or statements not set forth in clause 2. In the event that any such claim is made, then the Lessee agrees that the Lessor's production and proof of the due execution of this Acknowledgment by the Lessee/Assignee will be a complete bar to any claim and will give the Lessor the right to have any claim summarily dismissed.
6. In this clause:
(a) `statements' mean any statements whether described as statements or as promises, undertakings, representations, conditions, warranties or by any other name or description whatsoever in connection or associated with the Lessor's consent to assignment of any lease.
(b) `Lessor' includes any person acting or alleged to be acting on the Lessor's behalf.
(c) `Business' means the business currently being carried on on [sic] the Premises by the Assignor, or
in the case of a new lease `Business' to be carried on on [sic] the proposed premises.
The Lessee warrantes [sic] that the statements contained herein are true and correct and acknowledges that the Lessor is relying on such warrants in agreeing to enter into the Lease.
* In reference to Clause 3(f) of the Deed of Acknowledgment, I was informed by Mr Ushida [sic] that there will only be two jewellery stores (including mine) within the Mandarin Centre.
* In reference to Clause 3(i) of the Deed of Acknowledgment, I was informed by Mr Ushida [sic] that the Mandarin Centre will have 24-hour, 7-day security guards once it is in operation."
Tantipech's signature then appears.
In my opinion neither the Lease nor the Deed of Acknowledgment bar Tantipech from pursuing his claim and succeeding in it. It is well established that where an agreement is itself obtained by misrepresentation a disclaimer or exclusion clause in the document itself cannot bar the claim. It is sufficient to refer to the recent judgment to Burchett J in Oraka Pty Limited v Leda Holdings (1997) ATPR 41-558. In my opinion the principles referred to by his Honour apply here to both the Lease and the Deed of Acknowledgment.
The Deed of Acknowledgment is perhaps in a slightly different position to the Lease because the Deed itself is directed specifically to the very question of representations by the lessor. It is plain from reading it that Tantipech has ticked the relevant boxes in clause 3 relating to representations of various kinds, so one would assume that his attention must have been directed to the very question of whether other leases or proposed leases in relation to other premises in the Centre had been entered into or proposed to be entered into or then being negotiated or might in the future come into existence (see clause 3(j)). The evidence establishes that Tantipech's son read the document to him before Tantipech signed it. Tantipech's son did not give evidence so I do not know what command of English he has but I must assume that he understood English to a reasonable degree.
My impression from the evidence is that Tantipech did not understand that the documents which he signed related directly to the specific representations made to him on behalf of the respondent concerning the occupancy of other shops including surrounding shops in the Centre. Indeed, in early June when he signed the documents the full impact of the failure of the respondent to secure leases over the other shops on the ground floor in particular would not have been present in Tantipech's mind. It was only later when his shop was so isolated and the risk of security to his business substantially increased that the impact of the statements made on behalf of the respondent about occupancy of other shops came home to him.
As a matter of fact I am satisfied that Tantipech did not understand the full impact of the Deed of Acknowledgment or the exclusion clause in the Lease. Hence these documents have no bearing on whether certain representations concerning the proportion of retail space leased induced Tantipech to enter into the lease.
It is well recognized, and was conceded by Berkeley and Shakes, that the success of a shop in a shopping centre is largely influenced by the amount of business being conducted in the surrounding precincts. In addition, for a jewellery shop in particular surrounding shops are important for security. A jewellery shop sitting alone in an isolated section of a shopping centre is far more attractive to criminals. Tantipech made it quite clear on a number of occasions that security was an important concern to him. Most notably, in his tenancy application he printed the words "Good Secure Position" beside the phrase "Special Conditions".
One week before the robbery Tantipech wrote a letter to Berkeley complaining, inter alia, that: a) he had not made a sale to anyone other than friends; b) the pedestrian traffic passing his shops was almost non-existent; c) all but one shop surrounding his was unoccupied which had unfortunate security consequences. I conclude from this letter that it is likely that business was so poor that Tantipech would probably have been forced to leave even if the robbery had not occurred.
Thus in my opinion Tantipech suffered loss and damage as a result of the making of the false representations. There is a causal nexus between the making of the false representations and the suffering of loss or damage by Tantipech. See Kenny & Good Pty Limited v MGICA (1992) Limited (1997) ATPR 41-576.
My conclusion that Tantipech suffered loss and damage directly as a result of the making of the representations would remain even if I held that the robbery was the only reason that Tantipech left the premises. I accept that the robbery of Tantipech's shop was carried out in violent circumstances by a number of armed robbers and it would have been difficult for unarmed security guards on the premises to prevent. Nonetheless, Tantipech's shop stood almost alone on the ground floor where the pedestrian traffic was very limited and the security arrangements that were in place at the Centre were quite inadequate for a shop known by the respondent to be used for the conduct of a jewellery business. In my opinion there was a causal nexus between the damage suffered by Tantipech as a result of the robbery and the making of the relevant representation.
The parties have agreed on the amount of damages that should be awarded to Tantipech if he succeeds in the case.
Tantipech is also entitled to interest under s 51A of the Federal Court of Australia Act 1976 (Cth).
Tantipech's costs of the proceeding including any reserved costs must be paid by the respondent.
I shall make no substantive orders to-day. The matter is adjourned to a date to be fixed. The applicants are directed to bring in short minutes of order on the adjourned date to give effect to the Court's reasons for judgment.
|
I certify that this and the preceding eighteen (18) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice
Lockhart |
Associate:
Dated: 16 January 1998
|
Counsel for the Applicant: | Mr L Aitken |
| Solicitor for the Applicant: | Furlong & Associates |
| Counsel for the Respondent: | Mr I E Davidson |
| Solicitor for the Respondent: | Harris & Co |
| Date of Hearing: | 1, 2, 3, 4 December 1997 |
| Date of Judgment: | 16 January 1998 |
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/1998/7.html