FEDERAL COURT OF AUSTRALIA Kestrel Holdings Pty Ltd v APF Properties Pty Ltd [2009] FCAFC 144 NEGLIGENCE – proposed purchase of three rural properties by joint venture – joint venture included vendors and purchasers – valuer engaged by accountants acting for purchasers – whether valuer owed a duty of care to purchaser in preparation of valuations – whether valuer was negligent in preparation and presentation of valuations TRADE PRACTICES – misleading and deceptive conduct – whether representations by vendor company through one of its directors to valuer were misleading and deceptive – whether the valuer relied on those representations – whether representations made by vendor company and relied upon and set out by valuer in valuations were representations by valuer – whether vendor company liable to purchaser for misrepresentations as well as valuer being liable for misrepresentations DAMAGES – contribution – concurrent liability of valuer and vendor company – contribution claimed between valuer and vendor company – assessment of relative culpability DAMAGES – damages for misleading and deceptive conduct and negligent misstatement – consideration of the assessment of damages by primary judge – appropriate measure of damages when the purchaser is not induced to enter into a transaction, but is induced to pay a higher price than it would otherwise have paid – interest calculated under O 35A r 7A(1) of the Federal Court Rules as measure of or substitute for damages for losses consequential upon payment of higher price COSTS – appeal of valuer and of vendor each successful in part – appropriate order as to costs Civil Liability Act 2002 (Tas) Part 9A Fair Trading Act 1990 (Tas) s 14(1) Federal Court of Australia Act 1976 (Cth) Trade Practices Act 1974 (Cth) Part IVA Wrongs Act 1954 (Tas) s 3 Aghajanian v Stanley Thompson Valuers Pty Ltd [1999] NSWSC 1154 APF Properties Pty Ltd v Kestrel Holdings Pty Ltd [2006] FCA 1080 considered APF Properties Pty Ltd v Kestrel Holdings Pty Ltd (No 2) [2007] FCA 1561 considered Australia & New Zealand Banking Group Ltd v Karam [2005] NSWCA 344; (2005) 64 NSWLR 149 considered BT Australia Ltd v Raine & Horne Pty Ltd [1983] 3 NSWLR 221 considered Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282 considered Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106;(2001) 123 FCR 62 considered Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 applied City of Botany Bay Council v Jazabas Pty Ltd [2001] NSWCA 94 considered D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1 applied Derring Lane Pty Ltd v Fitzgibbon [2007] VSCA 79; (2007) 16 VR 563 considered Interchase Corp Ltd (in liq) v ACN 010 087 573 Pty Ltd [2001] QCA 191; [2003] 1 Qd R 26 considered Jones v Dunkel (1959) 101 CLR 298 referred to Karam v Australia & New Zealand Banking Group Ltd [2001] NSWSC 709 referred to Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413 applied Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 considered Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556 applied Plum v Commonwealth Bank of Australia [2005] FCA 790 considered Sanders v Glev Franchises Pty Ltd [2002] FCA 1332 considered Smith v State Bank of New South Wales Ltd [2001] FCA 946;(2001) 188 ALR 729 referred to Ta Ho Ma Pty Ltd v Allen (1999) NSWCA 202; (1999) 47 NSWLR 1 considered Tame v New South Wales [2002] HCA 35; (2002) 211 CLR 317 considered Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1 considered Tipperary Developments Pty Ltd v Western Australia [2006] WASC 137 considered Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 considered Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514 KESTREL HOLDINGS PTY LTD (ACN 009 590 265) and NICOLAS GRAEME ROBINSON v APF PROPERTIES PTY LTD (ACN 095 297 019) and HALISBWYN PTY LTD (ACN 064 825 341) TRADING AS "MANTACH WHITMORE VALUATIONS" TAD 4 of 2008 HALISBWYN PTY LTD (ACN 064 825 341) TRADING AS "MANTACH WHITMORE VALUATIONS" v APF PROPERTIES PTY LTD (ACN 095 297 019) TAD 5 of 2008 GRAY, MANSFIELD & TRACEY JJ 15 OCTOBER 2009 ADELAIDE (HEARD IN HOBART) IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY GENERAL DIVISION TAD 4 of 2008 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: KESTREL HOLDINGS PTY LTD (ACN 009 590 265) First Appellant NICOLAS GRAEME ROBINSON Second Appellant AND: APF PROPERTIES PTY LTD (ACN 095 297 019) First Respondent HALISBWYN PTY LTD (ACN 17 064 825 341) TRADING AS "MANTACH WHITMORE VALUATIONS" Second Respondent TAD 5 of 2008 between: HALISBWYN PTY LTD (ACN 17 064 825 341) TRADING AS "MANTACH WHITMORE VALUATIONS" Appellant AND APF PROPERTIES PTY LTD (ACN 095 297 019) Respondent JUDGES: GRAY, MANSFIELD & TRACEY JJ DATE OF ORDER: 15 OCTOBER 2009 WHERE MADE: ADELAIDE (HEARD IN HOBART) THE COURT ORDERS THAT: 1. The appeals be allowed in part. 2. The order made in paragraph 1 of the orders made in proceeding no TAD 27 of 2005 on 19 December 2007 (the orders at first instance) be varied by substituting for the figure "$894,568" the figure "$709,661.26" consisting of $398,000 in damages and $311,661.26 by way of interest on that sum, pursuant to O 35A r 7A(1) of the Federal Court Rules, for the period from 11 May 2001 to 15 October 2009. 3. The orders made in paragraphs 2, 6 and 7 of the orders at first instance be set aside and there be substituted therefor orders that: (1) the appellant in proceeding no TAD 5 of 2008 be entitled to contribution from the appellants in proceeding no TAD 4 of 2008 to the extent of one half of the total sum referred to in paragraph 2 above, and to one half of the costs referred to in paragraph 4 of the orders at first instance; (2) the appellants in proceeding no TAD 4 of 2008 be entitled to contribution from the appellant in proceeding no TAD 5 of 2008, to the extent of one half of the total sum referred to in paragraph 2 above and to one half of the costs referred to in paragraph 4 of the orders at first instance; (3) the appellants in proceeding no TAD 4 of 2008 together with the appellant in proceeding no TAD 5 of 2008 each bear their own costs of proceeding no TAD 27 of 2005. 4. There be no order as to the costs of the appeals. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY GENERAL DIVISION TAD 4 of 2008 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: KESTREL HOLDINGS PTY LTD (ACN 009 590 265) First Appellant NICOLAS GRAEME ROBINSON Second Appellant AND: APF PROPERTIES PTY LTD (ACN 095 297 019) First Respondent HALISBWYN PTY LTD (ACN 17 064 825 341) TRADING AS "MANTACH WHITMORE VALUATIONS" Second Respondent TAD 5 of 2008 between: HALISBWYN PTY LTD (ACN 064 825 341) TRADING AS "MANTACH WHITMORE VALUATIONS" Appellant AND APF PROPERTIES PTY LTD (ACN 095 297 019) Respondent JUDGES: GRAY, MANSFIELD & TRACEY JJ DATE: 15 OCTOBER 2009 PLACE: ADELAIDE (HEARD IN HOBART) REASONS FOR JUDGMENT THE COURT 1 These two appeals arise out of the same set of transactions. 2 In essence, they concern the valuation and sale of two farming properties on the north-west coast of Tasmania, and the question as to who should be held liable in circumstances where those properties were sold at overvalue, as between: · Kestrel Holdings Pty Ltd (Kestrel) as vendor of the two properties to APF Properties Pty Ltd (APF) by reason of what it told the valuer of those properties about the quality of those properties, through one of the directors of Kestrel, Nicolas Robinson (Mr Robinson) who was the relevant person who conveyed that information to the valuer; · the valuer of those two properties, Halisbwyn Pty Ltd (trading as Mantach Whitmore Valuations) (Mantach), whose valuations were used to determine the purchase price of the two properties between APF and Kestrel; and · APF as the purchaser of the two properties from Kestrel, and who subsequently resold them at a loss. 3 The primary judge gave judgment in favour of APF against Kestrel, Mr Robinson and Mantach for damages of $894,568, together with costs, and then ordered that Mantach recover that sum of $894,568 and the costs for which it is liable, and its own costs, from Kestrel and from Mr Robinson. His Honour ordered that APF's costs be taxed on a party and party basis to 21 March 2007 and thereafter on an indemnity basis. The reasons for judgment are published: APF Properties Pty Ltd v Kestrel Holdings Pty Ltd [2006] FCA 1080; APF Properties Pty Ltd v Kestrel Holdings Pty Ltd (No 2) [2007] FCA 1561. 4 Each of Kestrel and Mr Robinson, and Mantach, have appealed from those orders. 5 At first instance, APF also claimed relief against another company, Robinson Investment Capital Pty Ltd (Robinson Investment), and against another valuer Harrison Humphreys Pty Ltd (Harrison). The claim against the first of those entities was dismissed with costs. The claim against Harrison ultimately was not pursued and no orders were made against it. 6 The facts are complex. It is necessary to set them out in some detail. The following is based upon the uncontested findings of the primary judge. THE FACTS 7 Kestrel is a company owned by the Robinson family, including Mr Robinson. The Robinson family through Kestrel owned three farming properties on the north-west region of Tasmania. The three properties were known as Broadmoor, Lower Wilmot and Mannings Jetty Road (the three Robinson properties). For some time, the Robinson family had grown crops of pyrethrum on the three Robinson properties. They grew those crops under contracts to supply a company Botanical Resources Australia Pty Ltd (BRA), then engaged in the production of pyrethrum in Tasmania. 8 In August 1992, Richardson & Wrench (Tas) Pty Ltd valued Broadmoor for the Westpac Bank at $560,000. Its valuation identified approximately 52 hectares of cropping land, approximately 30 hectares of grazing slopes and flats, and the balance of the land comprised bush, dams and waste areas. Kestrel and the Robinsons had a copy of that valuation at material times. 9 In 1997, a finance broker instructed Mantach to value the three Robinson properties. The instruction was given on behalf of a legal firm which was a prospective mortgagee. Mantach duly provided valuations of Broadmoor and Lower Wilmot dated March 1997, following an inspection of the property by Brian Mantach (Mr Mantach), a principal of Mantach, on 14 March 1997 (the 1997 Mantach valuations). Mantach then valued Broadmoor at $1,022,000. Its report noted the instructions to establish the current fair market value of the property for mortgage security purposes, and that the instructions were on behalf of the Robinson family, and the proposed lender. 10 The 1997 Mantach valuation of Broadmoor (which was on two titles) included a description of title P0992 as having approximately 42 hectares of near level upper banks and gently sloping hillside, and the balance of the land in that title as steeper undulating land that remained as bush, and it described title P0993 as containing approximately 40 hectares of mostly near level banks and gently sloping land used for cropping purposes, with the remainder of that property being undulating in nature and containing bush. The 1997 Mantach valuation of Broadmoor noted that Broadmoor was then exclusively used for cropping purposes, and that: [b]y scaling off a map and by discussions with the owners, there is [sic] approximately 82 ha of gently undulating banks and slopes that have been cleared and are used for cropping purposes. The remaining 40 ha of the property is bush. The 1997 Mantach valuation at Broadmoor was based on 82 hectares of red cropping land at $10,000 per hectare, and 40 hectares of bush at $1,500 per hectare (making a total of $880,000), plus buildings and chattels valued at $142,000, to take the total valuation to $1,022,000. 11 The 1997 Mantach valuation of Lower Wilmot was also based on Mr Mantach's inspection of that property, on the same date he inspected Broadmoor. The 1997 Mantach valuation of Lower Wilmot was $753,000. It included a figure for 70 hectares of "cropping land" at $8,000 per hectare. 12 In July 1999, Mantach provided further valuations of Broadmoor and Lower Wilmot for mortgage lending purposes. In each of those valuations, the descriptions of cropping land and the values ascribed to it and to the overall value were the same as in the 1997 Mantach valuations. In November 1999, at the request of the Robinsons, Mantach "assigned" those valuations to the Commonwealth Bank of Australia. That is, Mantach made the valuations available to the bank for its use, apparently for security purposes. 13 It was also in 1999 that what became the Australian Pyrethrum Farms Joint Venture (the APF JV) was conceived. 14 The Robinson family began to consider developing a pyrethrum farming and manufacturing operation in opposition to BRA. They engaged a merchant banker, Mr Haydn Wright to advise on that proposal, and to explore the acquiring of investors. 15 Mr Wright in turn engaged Boyd Partners Ltd (Boyds), a Melbourne firm of corporate financial advisers and chartered accountants, to provide advice on the proposal. In about mid 2000, through Boyds, two potential external investors were identified, Andrew Cottrell and Gary Andriske. They were clients of Boyds. 16 Messrs Cottrell and Andriske subsequently made several visits to Tasmania and had discussions with Mr Robinson. They came to the view that "red soil" was preferable to acquire because it had better drainage properties, even though apparently alternative soil was cheaper and could be operated quite profitably. At that time, it was not specifically contemplated that Broadmoor, Lower Wilmot or Mannings Jetty Road would become land of the proposed joint venture. In the course of one of their trips to Tasmania, Messrs Cottrell and Andriske inspected a number of farming properties in the north-west region of Tasmania, including Broadmoor and Lower Wilmot. They were told by Mr Robinson that the price of red cropping land was about $7,000 per hectare, but that Broadmoor and Lower Wilmot were worth more. 17 By about November 2000, the various parties were committed in principle to the proposed joint venture. At about that time, it was also agreed that the three Robinson properties would be purchased by the joint venture. 18 A corporate and trust structure collectively called the APF JV was proposed. The APF JV informally comprised Mr Robinson and his brother Christopher Robinson, Mr Wright, Messrs Cottrell and Andriske, and Mr Andrew Youl, another farmer (or their respective trust and corporate vehicles). The proposed vehicle for the acquisition of the three Robinson properties was APF. 19 Broadly speaking, the scheme of the joint venture was that the Robinsons would run operations under the overall direction of Mr Youl, and that Messrs Cottrell and Andriske would provide the equity capital. In the longer term, further property acquisitions were contemplated. Arrangements were made to import a particular pyrethrum seed from the USA. 20 Following the agreement in principle, on 5 December 2000, APF and APF Investments Pty Ltd (APF Investments) were incorporated. Mr Wright became the sole director of APF and Mr McLeod, an officer of Boyds, the sole director of APF Investments. It is not necessary to refer to the detailed trust arrangements. The simplified structure of the joint venture involved an operating company called Australian Pyrethrum Farms Pty Ltd (APF Farms), with A Class shares held by APF Investments (the Cottrell and Andriske interests) on a 50/50 basis and B Class shares held by Australian Bio-Pharmaceuticals Pty Ltd (ABP), incorporated on 24 November 1999 (shares divided between the Robinsons and Messrs Wright, Youl and a Mr Blair). Holders of the B Class shares were not entitled to a share of profits until the return on investments to APF Investments reached 25%. ABP had a deferred interest contingent on APF Investments obtaining a 25% return. APF Farms was to lease the properties from APF, again via various trust structures holding beneficial interests, shared between APF Investments and ABP, with ABP again having a deferred interest contingent on APF Investments obtaining a 25% return. 21 At a meeting in November 2000, at the office of Boyds in Melbourne, the individuals concerned in the APF JV realised that the purchased seed was shortly to arrive and that it was desirable to plant it as soon as possible. The participants at that meeting included Mr Robinson and his brother and Messrs Cottrell and Andriske. Those present recognised that the three Robinson properties were the only ones which could be ready in time to put the seed in. The discussion turned to how to acquire access to those properties. It was agreed that the APF JV (through APF) would buy the three Robinson properties, subject to the homestead on Broadmoor being somehow retained by Mr Robinson for his use. As noted, it was anticipated that those three properties would be just the beginning of a number of properties to be acquired over the following year or so. Those present could not agree on a price for the three Robinson properties. It was agreed to get two valuations of the three Robinson properties and to take the median figure between the two valuations of each property to fix the price to be paid by APF for the three Robinson properties. 22 On 29 November 2000, Boyds wrote to Mantach requesting a valuation of the three properties. That request was in the following terms (formal parts omitted): REQUEST FOR VALUATION IN RELATION TO THE FOLLOWING PROPERTIES: q P.2600 Mannings Jetty Road, North Motton, q P 0992 & P 0993 Broadmoor RA 403 Preston Main Road, q UPI Nos. 1155-1159 Wilmot Road, Lower Wilmot. We hereby instruct Mantach Whitmore Valuations to prepare a formal valuation of the freehold interest in the above properties. We require the following issues to be considered in performing this assignment: q The valuations is [sic] to be carried out in accordance with the definition of Market Value as defined by the International Assets Standards Committee; q The valuation should be based on an arms length market valuation; q The valuation reports must be signed by the undertaking Valuer and any other person duly required in relation to the Firm's Professional Indemnity Insurance; q We require full disclosure of the Valuation Methodology including calculations, rationale and any assumptions; and q The valuation is urgent and must be completed without delay. Prior to undertaking the assignment, would you please provide an indication of your fee for our approval together with the proposed completion date. Should you have any queries or require any further information, please do not hesitate to contact us. On 29 November 2000, Boyds also gave instructions to Harrison in similar terms. 23 On 9 January 2001, Harrison wrote to Boyds advising of valuations of $820,000 for Broadmoor, and $575,000 for Lower Wilmot, stating that full valuations would follow. 24 On 15 January 2001, Mantach wrote to Boyds stating that Mr Mantach had inspected the three Robinson properties and that the three valuations requested were being prepared. Valuation figures were then given as follows: Broadmoor $1,040,000 Lower Wilmot $753,000 Mannings Jetty Road $400,000 The letter stated that there were on Broadmoor: [a]bout 82 hectares of …land [which] comprises good red basalt type soils that are very suitable for intensive cropping purposes. The balance comprises land that was until recently bush but which has now been pushed and partly cleared. That letter also said that Lower Wilmot had "about 70 hectares of good cropping land". 25 The timing of the next step is said to be significant. On 16 January 2001, Mr Robinson faxed a copy of a document called the "Agtech Report" to Mantach. The covering letter said: Dear Brian, Please find attached a report by Agtech on our properties. Yours faithfully, Nic 26 The Agtech Report was dated 15 January 2001. It purported to have come from a firm called Agtech Rural & Horticultural Consultants and to have been prepared for "potential joint venture partners of Australian pyrethrum farms (APF Ltd)". It was in fact prepared by Mr Robinson. 27 The Agtech Report included statements that Broadmoor had 80 hectares of cropping land and 40 hectares of bush, and that Lower Wilmot had 80 hectares of cropping land and 66 hectares of bush and pasture. It also made comments about matters such as soils, weed control, irrigation systems and yield projections. It asserted that Agtech specialised in giving advice to agricultural businesses in the north-west region of Tasmania and had "extensive experience in the agricultural and horticultural industry". 28 On 18 January 2001, Mr Wright emailed Boyds, saying that discussions with the shareholders of ABP had the view that the three Robinson properties would be sold to APF for $2,300,000 "unless reasonable argument can be shown to the contrary". That was a little in excess of $100,000 more than the total of the three anticipated Mantach valuations. 29 Later in January, Mantach sent its formal valuations of the three Robinsons properties to Boyds (the 2001 Mantach valuations). They were accompanied with a compliments slip in the following terms: With Compliments To: J J McLeod Enclosed please find the Valuation Report as requested for your client, Robinson Thank you for your instructions in this matter. Regards Brian Mantach The words underlined were handwritten. 30 The 2001 Mantach valuations, dated January 2001, represented that the value of Broadmoor was $1,040,000 and that Broadmoor had 82 hectares of cropping land available. They also represented that the value of Lower Wilmot was $753,000 and that Lower Wilmot had 70 hectares of cropping land available. 31 It is apparent that the Broadmoor valuation prepared by Mantach in January 2001 was largely based on its earlier 1997 Mantach valuation. Under the heading "Client and Instructions" the report stated: My instructions are to prepare a formal valuation of the freehold interest in the property. Instructions have been issued by Boyd Partners Limited. 32 The 1997 Mantach valuation of Broadmoor described the Broadmoor land in the following terms: Description P 0992 comprises approximately 42 ha of near level upper banks and gently sloping hillside ranging from the 150 metre contour down to the 100 metre contour. Kerrison Creek runs through this land forming a permanent water supply. The balance land in this title is steeper undulating land that remains as bush. P 0993 contains approximately 40 ha of mostly near level banks and gentle slopes that is [sic] used for cropping purposes with the remainder of the property being undulating in nature and containing bush. The soils on the cleared land are red basalt in nature, mostly stone free and very suitable for cropping purposes. The area has an average rainfall of around 37 inches and predominant land use in the area, apart from cropping in its various forms is for dairying, fat lambs and beef cattle. Under the heading "Site Improvements" there appeared the following: The property is now exclusively used for cropping purposes. By scaling off a map and by discussions with the owners, there is [sic] approximately 82 ha of gently undulating banks and slopes that have been cleared and are used for cropping purposes. The remaining 40 ha of the property is bush. The boundary is fenced with standard post and wire fencing plus there is some internal fencing of a similar nature. A gravel roadway provides access through the property. [Emphasis added.] 33 That description was repeated in the 2001 Mantach valuation of Broadmoor except that the italicised sentence was replaced with the following: The remaining 40 ha of the property was bush much of which has recently been cleared. 34 Also by way of contrast with the 2001 Mantach valuation of Broadmoor, the 1997 Mantach valuation of Broadmoor recorded the instructions to "establish the current fair market value of the property for mortgage security purposes" and it identified the source of the instructions as a finance broker on behalf of the Robinson family, and the name of the proposed lender. 35 The 2001 Mantach valuation of Broadmoor then discussed seven comparable sales, showing brief details of improvements, cropping areas and price and another nine sales noted in more summary form. Under the heading "Summation Valuation", figures were attributed to various improvements including 82 hectares of "Red cropping land at $9,500 per hectare". 36 That valuation also had a heading "Qualifications and Assumptions". Relevantly for present purposes, it said that, while the valuer had "taken every reasonable care both during our inspection of the property and in making relevant enquiries, we have not undertaken or requested" a number of enquiries and searches including soil surveys. It also added: We state that this report is for the use only of the party to whom it is addressed and for no other purpose, and no responsibility is accepted to any third party for the whole or part of its contents. 37 The 2001 Mantach valuation of Lower Wilmot was for the same figure as the 1997 Mantach valuation of Lower Wilmot. The qualifications and assumptions set out in the Broadmoor valuation, referred to above, were also included in the Lower Wilmot valuation. 38 Clearly, the average of the two valuations of Mantach and Harrison was not acceptable to Kestrel and Mr Robinson, despite the apparent agreement. On 25 January 2001, Mr Wright on behalf of Kestrel and Mr Robinson wrote to Boyds criticising the valuations and suggesting a total consideration for the three Robinson properties of $2,300,000, and inviting agreement at such a price. The letter also enclosed a document described as a "separate analysis" provided by Christopher Robinson which asserted that the appropriate value was some $2,838,420, to put in context the claim for $2,300,000 which (it was said a few days later by email) was needed by Mr Robinson to pay out family with reimbursement to investors at subdivision. No agreement on that total price was reached. 39 Shortly after that, the seed previously ordered arrived in Australia, although it was detained in quarantine for a time. There was then a little delay whilst BRA (the entity on whose behalf the Robinsons had previously been growing pyrethrum) agreed to the eradication of their plants from the Robinsons' properties. 40 On 27 March 2001 a Shareholders Agreement was executed. The parties included ABP (the Robinson, Wright and Youl interests), APF Investments (the Cottrell and Andriske interests) and APF Farms. The recitals included statements to the effect that the first stage of the project comprised an initial planting of 400 hectares of pyrethrum in 2001, that the parties intended to expand the project "on a prudent basis" to at least 1000 hectares, and that APF Investments agreed to fund a minimum level of 1000 hectares. 41 On 27 April 2001, a meeting of the Board of APF was held. At that time, the seeds previously held in quarantine were about to be released. It was resolved by APF to sign the purchase contracts. Contracts of sale were exchanged shortly thereafter on 11 May 2001 with Messrs Cottrell and Andriske named as purchasers. Subsequently, they nominated APF as the purchaser. The purchase price for each property was the amount of the valuation by Mantach for each property in the 2001 Mantach valuations. 42 The Broadmoor contract contained a clause for the sale back of the homestead on Broadmoor upon terms which do not need to be further discussed. It was that matter which led to the joinder at first instance of Robinson Investment. It may be noted that between 28 November 2001 and 29 August 2003 negotiations on that matter took place and eventually led to the lease of an area called the homestead block, of approximately 1.67 hectares, from the Broadmoor property for a term of 99 years to the Robinson interests. 43 There was then a further delay due to a problem with potential contamination to a seed bank from the seeds provided. 44 Ultimately the contracts were settled on 30 August 2001. Finance through the Bank of Melbourne (subsequently taken over by the Westpac Bank) had been confirmed. On 2 July 2001, that bank had emailed Mantach stating that it wished to rely upon the 2001 Mantach valuations addressed to Boyds "for mortgage purposes relating to proposed Pyrethrum farming". As it had previously done, Mantach agreed that the valuation reports it had provided to Boyds in January 2001 were to be "assigned" to the bank to be used and relied on for mortgage lending purposes. Mantach said the valuations were still confirmed as current. Because, it said, the reports were then assigned to the bank "for the same client", no fee would be charged. 45 APF purchased the three Robinson properties for the total sum of $2,193,000 made up as follows: Broadmoor $1,040,000 Lower Wilmot $753,000 Mannings Jetty Road $400,000 The purchase was partly financed by a commercial bill facility of $1.5 m from the Bank of Melbourne. 46 By the end of 2003, the project was in trouble. The anticipated expansion of the joint venture had not occurred. A major factor in the collapse of the APF JV was the collapse of the market for pyrethrum. It is not necessary to go into the reasons for that. There were also management disputes. In early June 2004, APF resolved to put the three Robinson properties on the market. 47 An experienced real estate agent in Ulverstone, Mr Medwin, was retained as agent for the sale. He was an agent who, the primary judge accepted, had accumulated very specific knowledge about the north-west region of Tasmania. He had been familiar with the three Robinson properties for many years. He inspected the properties. 48 Mr Medwin, in the course of an inspection of Broadmoor in July 2004, had cause to query the claim from Christopher Robinson that it was a 300 acre property with 160 acres presently planted to crops. He could not see that there were 160 acres (64.7 hectares) being cropped. He procured a copy of the paddock plan and crop rotation plans, together with aerial maps of the property and the Tasmap 1:25,000 map (the Tasmap). He also made inquiries of the water licence detail, as he had a rule of thumb that one hectare of cropping land would require a licence for 1 ML (1 million litres) of water. The Broadmoor water licence was for 43 ML. He concluded that it had 40 hectares of land capable of being used for cropping purposes. 49 Mr Medwin also inspected the Lower Wilmot property on the same occasion. After similar inquiries, he estimated the total area for cropping land was 52 hectares. 50 He then submitted a marketing plan suggesting that Broadmoor had 40 hectares of prime cropping land in a sought after area and that Lower Wilmot held 52 hectares of prime cropping land. Upon his recommendation, the two properties were offered by sale by auction. After that time, he received a copy of the 2001 Mantach valuations. He firmly disagreed with them in terms of the land area available for cropping and in terms of the value. During the course of his sales campaign, he said there was a lot of interest in Broadmoor, but that Lower Wilmot did not attract the same amount of interest because it was not in a prime cropping area, was further inland and was relatively isolated. 51 The auctions of the three Robinson properties were conducted on 10 August 2004. Mannings Jetty Road sold at auction at or about the reserve price ($400,000). Lower Wilmot was passed in; it sold shortly after the auction for $450,000, after negotiations with the only bidder. That again was about its reserve price. There was no bidding for Broadmoor and it was not sold at that time. 52 There were certain contested facts at hearing upon which the primary judge made findings and upon which now it is appropriate to proceed. They relate to dealings between the Robinsons and Mantach, and the process by which Mantach came to make the 2001 Mantach valuations of Broadmoor and Lower Wilmot. 53 On 14 March 1997, for the purposes of the 1997 Mantach valuations, Mr Mantach inspected both Broadmoor and Lower Wilmot. He made a file note that he was told by Mr Robinson that Broadmoor had about "200 ac cleared". That is, that Mr Robinson told him that 200 acres of the property had been cleared. That is approximately 81 hectares. He was also told by Mr Robinson that all the cleared land was used for cropping purposes. On the same occasion, Mr Robinson told him that there were about 70 hectares of cropping land at Lower Wilmot. 54 Mr Mantach then used a scale rule to calculate the amount of cleared land shown on the Tasmap for Broadmoor and Lower Wilmot. This process produced, in the case of Lower Wilmot, a cleared area of 70 hectares (consistent with what Mr Robinson had told him) but a cleared area of 68 hectares only in relation to Broadmoor. He telephoned Mr Robinson to discuss the discrepancy. He was told by Mr Robinson that they had done some clearing at the edge of the bush since the time the Tasmap had been prepared in about 1992, and that accounted for the difference. Mr Robinson had told him that all cleared land was used for cropping purposes. That information is recorded in the 1997 Mantach valuation of Broadmoor. 55 The primary judge accepted Mr Mantach's evidence about those discussions with Mr Robinson. 56 The primary judge observed that the ordinary meaning conveyed by the description of Broadmoor and Lower Wilmot in the 1997 Mantach valuations (and in the 2001 Mantach valuations) was that the two sources of information: scaling off a map and discussions with the owner, produced the one consistent result. 57 The primary judge also found, again accepting Mr Mantach's evidence, that Mr Mantach had relied on what he had been told by Mr Robinson in 1997, and that his reliance on that information continued through until he had completed the 2001 Mantach valuations, and further that he had relied upon the Agtech Report in reaching the 2001 Mantach valuations. His Honour described the Agtech Report as playing "a comparatively minor confirmatory role", but was not information ignored by Mr Mantach. 58 The primary judge concluded that Mr Mantach was entitled to rely on what Mr Robinson had told him, but not to the exclusion of making his own inquiries because the circumstances warranted the making of independent inquiries. The amount of croppable land was far and away the most important factor in deciding the value of the two properties. It is an objectively discernable fact. His Honour noted that owners seeking valuations are not "objective, disinterested bystanders" so that it should not take much to put a reasonably competent valuer on an inquiry as to what an owner tells that valuer about croppable areas. In this instance, the discrepancy between what Mr Mantach was told and what appeared on the Tasmap should have sounded a warning. So too should the gratuitous provision of the Agtech Report, which his Honour said was "highly suspicious". It had no address. It was not signed. It had a significant misspelling in various parts of it of the name Agtech. Moreover, as the primary judge found, Mr Mantach had no basis for arriving at the croppable area of 82 hectares for Broadmoor being neither the figure of 81 hectares conveyed by Mr Robinson, nor the figure of 80 hectares mentioned in the Agtech Report. Mr Mantach was unable to explain how he came to apportion that 82 hectares as between the two property titles constituting Broadmoor as to 40 and 42 hectares respectively. His Honour also found that Mr Mantach should not have equated all cleared land with croppable land just on Mr Robinson's say so. He considered that the discrepancy which Mr Mantach had discovered in relation to Broadmoor should have put him on inquiry either to obtain a consultant's report or to recommend that his client obtain one to precisely identify the area of croppable land on the two properties. 59 The primary judge specifically found that Mantach did rely on the Agtech Report, even though it reached Mr Mantach after he had sent his letter of 15 January 2001 indicating his valuation estimates of the three Robinson properties, and even though the Agtech Report identified 80 hectares of croppable land on Lower Wilmot, and even though Mr Mantach had previously made an estimate of 70 hectares to which he adhered. He thought the figure in the Agtech Report (80 hectares) was "broadly consistent" with his own figure of 82 hectares for Broadmoor. We note also that subsequently, in the middle of 2004, Mr Mantach was asked to indicate the foundation for his assessment of croppable land on Broadmoor and Lower Wilmot. His letter of 19 July 2004 in response, inter alia, identified the Agtech Report. That particular evidence was of course only admissible against Mantach, and not against Kestrel or Mr Robinson. 60 Clearly, as his Honour found, the Agtech Report was false and misleading. His Honour ultimately found that the croppable land on Broadmoor was 45 hectares only and the croppable area on Lower Wilmot was 60.2 hectares. He also found that the Agtech Report was false and misleading because it was put forward by Mr Robinson as coming from an independent consultant, although Mr Robinson acknowledged through his counsel that he was the author of that document. THE PROCEEDINGS AT FIRST INSTANCE 61 In the proceedings at first instance, there was complaint about the quality of the 2001 Mantach valuations in respect of Broadmoor and Lower Wilmot, but not in respect of Mannings Jetty Road. It was alleged that Mantach had been negligent in respect of the valuations of Broadmoor and Lower Wilmot. APF also alleged various misrepresentations by Kestrel and by Mr Robinson as to the value, price and available cropping areas of Broadmoor and Lower Wilmot. It also alleged breaches of fiduciary duties and duties of care owned by Mr Robinson to his joint venture partners. At first instance, an issue also arose as to the grant by APF to Robinson Investment of a 99 year lease over the homestead block on Broadmoor. As noted, that claim was unsuccessful. It is not in issue on the appeal. 62 APF alleged, and the primary judge found, that Kestrel and Mr Robinson had made two relevant misrepresentations about Broadmoor and Lower Wilmot. Those representations were made to Mantach, and not directly to APF. They were: (a) misrepresenting the croppable areas of Broadmoor and Lower Wilmot in 1997, during the course of an inspection by Mr Mantach of those two properties; and (b) misrepresenting the croppable areas of Broadmoor and Lower Wilmot in the Agtech Report, provided to Mantach by Mr Robinson on 16 January 2001. 63 The finding that those representations were made was based upon his Honour's acceptance of the evidence of Mr Mantach over that adduced on behalf of Kestrel and Mr Robinson, as discussed above. 64 APF claimed that Mantach was in breach of a duty of care to APF to make proper and diligent inquiries to determine the area of land available for cropping, to exercise the care, competence and diligence of a competent valuer, and to give fair and accurate advice in relation to the value of Broadmoor and Lower Wilmot, and the area available for cropping. It said that Mantach negligently relied upon the advice of the Robinsons and the Agtech Report to determine the area of land available for cropping; failed to make any or adequate inquiries about the information in the Agtech Report; failed either to commission an agricultural report to accurately determine the land available for cropping or to advise Boyds or APF to commission such a report; relied upon information in the Tasmap to determine the area of land available for cropping; failed to identify accurately the land available for cropping; and failed to utilise accurately the comparable sales evidence. 65 Mantach disputed that it knew or ought to have known that Boyds would communicate the 2001 Mantach valuations to a client or clients of Boyds, who would rely on those valuations and the statements in them in deciding whether to invest in or purchase the three Robinson properties. Hence, it contended that it owed no duty of care to APF in respect of the 2001 Mantach valuations. It also said that it had provided the earlier 1997 Mantach valuations based upon a representation from Mr Robinson that there were 80 or 82 hectares of land on Broadmoor and 70 hectares on Lower Wilmot suitable for cropping purposes, and those representations had been repeated by Mr Robinson at the time of the 2001 Mantach valuations. Mantach claimed on the appeal and at first instance that Mr Robinson, as the agent of APF, knew the areas of land at Broadmoor and Lower Wilmot used for cropping purposes, and so APF was not misled as to anything to this effect in the 2001 Mantach valuations. It also said it owed no duty of care to APF because it was providing a valuation of Broadmoor and Lower Wilmot for the Robinsons and not for a potential purchaser of the properties, and that it did not need to obtain an independent agricultural consultant's report because it was appropriate for Mantach to rely upon Robinson's statements as to the area available, and used for, cropping purposes. 66 It is not necessary to set out in detail all of the alleged misrepresentations. Ultimately, the primary judge found some not to have been proved. They are no longer raised as an issue in the appeals. It is sufficient to note those particular allegations which the primary judge found to have been proved. They related to the croppable areas on Broadmoor and Lower Wilmot. 67 The primary judge concluded that Mantach did owe a duty of care to APF and that it had been negligent in the 2001 Mantach valuations of Broadmoor and Lower Wilmot in: (a) overstating the croppable areas of each of those properties; and (b) applying too high a rate per croppable area, because its analysis and use of comparable sales was flawed. Consequently, his Honour concluded that the values of each of Broadmoor and Lower Wilmot was significantly overstated. The primary judge also held that the overstatement of the croppable areas on Broadmoor and Lower Wilmot also constituted misleading and deceptive representations by Mantach. 68 It is helpful to note how the primary judge addressed the matters raised by Mantach in opposition to the APF claim. 69 As to whether Mantach knew or ought to have known that the 2001 Mantach valuations were required for a purchaser, rather than a mortgage financier, his Honour noted that Mr Mantach claimed that he had no cause to believe that the Boyds' request was for anyone other than the Robinsons, or for any reason other than lending purposes. Mr Mantach pointed out that he had sent the 2001 Mantach valuations to Boyds with a with compliments slip identifying "for your client Robinson". The Robinsons were his point of contact when he inspected the properties on 21 December 2000. On that occasion, he was made aware of a discussion about a joint venture which involved growing pyrethrum "through mortgage borrowing or something similar". He did not get further information at that time. 70 The primary judge said at [189]: If the difference between valuing for a purchaser and valuing for a lender is as important as Mantach says it is, then I think a reasonable valuer in his position would have raised the matter with Boyds. It must have seemed highly likely that this Melbourne firm of Corporate Financial Advisors and Chartered Accountants seeking urgent valuations of Tasmanian rural properties was acting on behalf of a client or clients rather than as principals. In his evidence Mr Mantach said that he in fact assumed this. 71 His Honour also noted that the Agtech Report referred to "potential joint venture partners" of the Robinsons, which would obviously include some parties other than the Robinsons in some capacity or other, including at least the possibility of becoming owners or part owners of the three Robinson properties. Moreover, his Honour observed, by July 2001 and before the mortgagee's funds were advanced and the purchases completed, Mr Mantach knew that his valuations were required by a purchaser. That had been conveyed to him by Westpac (the Bank of Melbourne) on 2 July 2001, as it was to provide financing for purchase of the properties and wished to rely on the 2001 Mantach valuations for mortgage purposes. By then Mr Mantach knew that somebody other than the Robinsons was purchasing the three Robinson properties and that the Robinsons were not Boyds' clients. He did not raise that with the bank. Mr Mantach also accepted in evidence that the 2001 Mantach valuations were designed to go to a firm of accountants and whoever they were acting for, whether a bank, a vendor or a purchaser. He made no further inquiry. 72 Consequently, his Honour concluded that Mantach did know, or ought to have known, that the 2001 Mantach valuations were, or may have been, required for a purchaser of the three Robinson properties. In any event, his Honour said, there was no argument developed that the test of market value would have been applied differently if Mr Mantach had known his valuation was for a purchaser rather than for a mortgagee. 73 The primary judge had little trouble in rejecting the proposition advanced on behalf of Mantach that Mr Robinson was acting as agent for Boyds or APF when he made the representations to Mr Mantach about the croppable area of Broadmoor and Lower Wilmot in 2001. His Honour described the "underlying reality" as being that APF was the purchaser, as the vehicle for the Cottrell and Andriske interests, and that Boyd was acting for the purchaser. All concerned were aware of that reality. An inspection of the property was obviously necessary, including dealing with the property owner. As his Honour said, "all this falls far short of a purchaser authorising a vendor to make binding representations to the purchaser's valuer". 74 His Honour concluded that Mr Mantach could take into account what Mr Robinson (and Christopher Robinson) had told him about the croppable areas of Broadmoor and Lower Wilmot, but was not entitled as a valuer simply to use that information without applying his professional judgment to it. Mr Mantach, his Honour found, made a "fundamental error in treating all cleared land as croppable land". 75 The primary judge concluded that Mantach owed APF a duty of care in preparing and presenting the 2001 Mantach valuations. The letter of instructions from Boyds, set out at [22] above, described them as "Corporate Financial Advisors and Chartered Accountants", and it sought a formal valuation including reference to an "arms length market valuation". The circumstances indicated that it was not Boyds who were seeking the valuations for themselves, but were doing so for a client. His Honour concluded at [344] and [345]: In the present case there was an identifiable class constituted by clients of Boyds on whose behalf that firm was seeking the valuations in connection with some commercial dealing involving the specified properties. I do not see the reference to Robinson on the compliments slip as displacing this inference. Counsel for Mantach argued that it was not unreasonable for his client to take the view that the valuations were prepared for a mortgagee. But Mantach's knowledge does not have to go to the precise use to which the valuation was to be put. In any event, the evidence shows that Mantach knew that its valuation would or might be used for some purpose other than mortgage, or at the very least was indifferent to the use. Mr Mantach cut and pasted from the 1997 valuation and in the course of doing so removed all reference to mortgage purposes. When he found that there was a purchaser he made no attempt to correct the record. 76 The primary judge found that Mantach was required to take reasonable care to establish the important features of the properties to be valued. It is clear in this instance that one of those features was the croppable area. His Honour found that the croppable area of Broadmoor was 45 hectares, rather than 82 hectares as Mantach had assessed, and of Lower Wilmot was 59 hectares rather than 70 hectares as Mantach had assessed. Those differences were well beyond any acceptable margin for error. 77 On the appeals, there was no challenge to the findings about the croppable areas of Broadmoor. It is not necessary, therefore, to explain how the primary judge reached those figures, save to the extent that it flows into his Honour's findings in relation to the croppable areas of Lower Wilmot and the valuation of Lower Wilmot. 78 The rate per hectare for croppable land used in the 2001 Mantach valuations was $9,500. That rate was based on seven sales which were described as "particularly relevant", and it referred to nine other sales. Of the seven "particularly relevant" sales, two had prices per croppable area akin to that selected by Mantach ($9,370 and $10,000) but were for much smaller croppable areas (11.7 and 18 hectares respectively). The balance of the "particularly relevant" sales were for larger croppable areas, between 43 and 146 hectares, and had sale rates per hectare between $7,000 and $8,333. The primary judge accepted other expert evidence, confirmed by analysis, that smaller properties sell at a higher rate per hectare because they are more widely affordable. His Honour found that, based on sales which were by area more comparable, the rate per hectare should have been much lower than that selected by Mantach for croppable areas. 79 The primary judge also found that the use of a "catch-all" approach, that is taking an overall rate per hectare for all croppable land irrespective of its quality – a sort of averaging approach – carried the problem of identifying sales where the mix of quality croppable land bore the same proportions as the property to be valued. It was not an approach which other valuers supported. 80 His Honour concluded that the combination of the use of sales that were not comparable and the "catch-all" approach meant that the rate per hectare used by Mantach was not reasonable and was not within an acceptable range. 81 His Honour assessed the resulting damages to APF as the difference between the price paid (the 2001 Mantach valuation figures) and the value of Broadmoor and Lower Wilmot at the time of the sale of the two properties. In doing so, his Honour did not accept the claim that there had been no loss, because the value of the two properties had increased in value over the period between their sale and the time of the judgment. 82 Hence, the primary judge entered judgment against Kestrel, Mr Robinson and Mantach for damages of $894,568 in favour of APF. The claim for rescission of the Broadmoor lease over the homestead block was dismissed. His Honour ordered that Mr Robinson and Mantach pay the costs of APF on a party and party basis until 21 March 2007 and thereafter on an indemnity basis. 83 At first instance, Mantach also cross-claimed against APF on the basis that Boyds and Mr Robinson impliedly represented that the 2001 Mantach valuations were required by the Robinsons, and not for a potential purchaser of the Robinson properties, and that it did not need to obtain an independent agricultural consultant's report before preparing its valuations and could rely on what Kestrel and Mr Robinson said about the croppable areas of Broadmoor and Lower Wilmot. Had it not received those representations, it claimed, it would not have undertaken the 2001 Mantach valuations or would have somehow qualified them. The primary judge rejected the cross-claim because it was statute-barred when made, being made outside six years from the claim arising (the date of exchange of contracts for the sale and purchase of Broadmoor and Lower Wilmot); his Honour applied s 82(2) of the Trade Practices Act 1974 (Cth) (the TP Act). His Honour also dismissed that claim because, as he said at [365]: In any event, as already mentioned, there is no basis for my attribution to the applicant of liability for any representation made by the Robinsons to Mantach. 84 Earlier in his reasons, the primary judge had rejected the proposition that APF, as purchaser through Boyds, had authorised Mr Robinson or Kestrel as vendor of the three Robinson properties, to make binding representations as to matters going to the value of those properties. His Honour also rejected the claims that the alleged implied representations were made, when making his findings of fact more generally on the nature and circumstance of the transactions. 85 Mantach cross-claimed against Kestrel and Mr Robinson on the basis that it was the misrepresentations made by Mr Robinson on behalf of Kestrel as to the croppable areas upon Broadmoor and Lower Wilmot on which it had acted. 86 The primary judge gave judgment for Mantach on its cross-claim against Kestrel and Mr Robinson for the full amount of the damages of $894,568, and ordered that Kestrel and Mr Robinson pay to Mantach the costs awarded against it in favour of APF. His Honour also ordered Kestrel and Mr Robinson pay to Mantach its costs of the proceeding to be taxed on a party and party basis. 87 In essence, APF succeeded in its claims against Kestrel and Mr Robinson, and against Mantach, and Mantach in turn succeeded in its claim for indemnity against Kestrel and Mr Robinson. THE ISSUES ON THE APPEALS 88 On its appeal, Mantach asserted that the claim by APF should have been dismissed because, in the particular circumstances, Mantach did not owe it a duty of care in relation to the preparation of the 2001 Mantach valuations of Broadmoor and Lower Wilmot, so that its negligence (as found by the primary judge) did not result in any liability to APF. Secondly, it asserted that, in respect of its valuation of the Lower Wilmot property, the primary judge erred in finding that it had been negligent at all. Thirdly, it asserted that the assessment of damages of the primary judge was too high because his Honour assessed damages on a "no transaction" basis rather than a completed transaction basis. 89 Mantach also contended that its cross-claim against APF was wrongly dismissed. 90 The appeal of Kestrel and Mr Robinson raised extensive issues. They argued that, in making the two misrepresentations as to the croppable areas of Broadmoor and Lower Wilmot, they were agents of APF so that APF could not recover from them in respect of those misrepresentations, even if they were relied upon by Mantach. They maintained that the 2001 Mantach valuations of Broadmoor and Lower Wilmot were negligent, but that any liability to APF which arose from that negligence should lie with Mantach only. They challenged the findings of the primary judge that Mantach had relied on either of the two representations made by them, and the findings that the representations about the amount of croppable land on Broadmoor and Lower Wilmot were misleading and deceptive (other than perhaps as to 13 hectares of alleged croppable land on Broadmoor), because there was a common understanding as to the meaning of "croppable land" between Mr Mantach and Kestrel and Mr Robinson. That meaning was that "croppable land" meant cleared land only, not necessarily land capable of being used for cropping purposes, and secondly that croppable land included land on which there was existing infrastructure (sheds, roads, tracks, dams and the like). Consequently, they contended that their communications to Mr Mantach were not misleading or deceptive, and that the 2001 Mantach valuations, if they misrepresented the area of croppable land (because APF did not have the same understanding of that term) were a result of Mr Mantach's own negligence, not brought about by Kestrel and Mr Robinson. They also asserted that the finding of the primary judge that Mantach had relied on the Agtech Report was erroneous. They further asserted that the representations found to have been made by Mr Robinson in 1997 had not been pleaded by APF against them, and that the primary judge erred in permitting them to be relied upon. 91 Kestrel and Mr Robinson further contended that the primary judge erred in his approach to the issue of contribution as between Mantach on the one hand and Kestrel and Mr Robinson on the other. 92 Finally, they too asserted error in the assessment of damages, partly on the same basis as Mantach, but also on two other bases: that to allow interest for the period of the loss was erroneous because the primary judge thus "double-dipped" by allowing bank interest which had already brought into it CPI increments and secondly, on the factual ground that the value of the Broadmoor and Lower Wilmot at the date of assessing the damages was greater than the price paid at the time of the misleading conduct, so that there had been no loss. Those matters raised by Kestrel and Mr Robinson are addressed when considering the issue of damages generally. 93 Kestrel and Mr Robinson also argued that Mantach's cross-claim against them was out of time (a matter not dealt with by the primary judge). CONSIDERATION Whether Mantach owed a Duty of Care to APF in relation to the preparation of the 2001 Mantach valuations of Broadmoor and Lower Wilmot 94 It now seems clear that a valuer may in certain circumstances owe a duty of care to the recipient of a valuation containing negligent misstatements causing economic loss, even in the absence of a contractual relationship between the valuer and the recipient of the valuation. A duty of care is recognised to exist where the valuer actually knows or ought to have known that the person in question would rely upon the valuation so prepared. In respect of the objective limb of that formulation, it is noted that subjective knowledge of the particular recipient or purpose to which the valuation would be put is not relevant. In addition, there is the further requirement that a finding of a duty of care be reasonable in all the circumstances. Accordingly, the subjective knowledge, actual or potential, of the valuer is a relevant consideration in determining reasonableness. 95 In D'Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1, in the context of the advocate's immunity from actions in negligence, McHugh J at [99]-[100] and [103] summarised the present state of the law in the following way: Absent a contractual or fiduciary relationship, any person who makes a negligent statement causing damage owes no actionable duty of care to other persons unless the statement was made in circumstances meeting the conditions formulated by this court in San Sebastian Pty Ltd v Minister Administering the Environmental Planning and Assessment Act 1979 and other cases. … In all these cases, the policy of the law is that no action should lie for the negligent or careless conduct of the defendant even though the defendant knew or ought to have known that his or her conduct might cause damage to the plaintiff. … Where the harm suffered by a person is economic loss …, the common law is always reluctant to impose a duty of care on the harm-causing person even where it was reasonably foreseeable that harm of that kind might ensue. … Reasonable foresight of harm is never decisive in determining whether a person owes a duty to take care to avoid economic loss. … Before the law will impose a duty of care in respect of these kinds of harm, it considers other factors and will not impose a duty of care unless public policy requires it. Those factors include the nature of the defendant's activities and the object that the defendant is seeking to achieve. The common law evaluates all the competing interests in the case before determining, as a matter of policy, that the defendant should be restrained in carrying out its activities by the obligation to take reasonable care for the plaintiff's economic … interests. [Footnotes omitted.] 96 The issue is to identify when such factors will give rise to a duty of care, or put another way, what factors need to exist before such a duty of care arises. 97 Tepko Pty Ltd v Water Board [2001] HCA 19; (2001) 206 CLR 1 (Tepko) approved of the elements giving rise to a duty of care in negligent misstatement cases as expressed by Barwick CJ in Mutual Life & Citizens' Assurance Co Ltd v Evatt (1968) 122 CLR 556. The "Evatt principles" espoused by Barwick CJ at 571 were as follows: (a) the speaker must realise, or the circumstances be such that he ought to have realised, that the recipient intends to act upon the information or advice in respect of his property or of himself in connection with some matter of business or serious consequence; and (b) the circumstances must be such that it is reasonable in all the circumstances for the recipient to seek, or to accept, and to rely upon the utterance of the speaker. The nature of the subject matter, the occasion of the interchange, and the identity and relative position of the parties as regards knowledge actual or potential and relevant capacity to form or exercise judgment will all be included in the factors which will determine the reasonableness of the acceptance of, and of the reliance by the recipient on, the words of the speaker. 98 Those principles have been applied in a number of recent cases: see Tipperary Developments Pty Ltd v Western Australia [2006] WASC 137 at [330] per Murray ACJ; Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 at [63] per Gummow J; Plum v Commonwealth Bank of Australia [2005] FCA 790 at [136] per Wilcox J; Tame v New South Wales [2002] HCA 35; (2002) 211 CLR 317 at [238] per Gummow and Kirby JJ; Sanders v Glev Franchises Pty Ltd [2002] FCA 1332 at [347] per Kenny J; Smith v State Bank of New South Wales Ltd [2001] FCA 946;(2001) 188 ALR 729 at [65] per Gray J; Chapman v Luminis Pty Ltd (No 4) [2001] FCA 1106;(2001) 123 FCR 62 at [280] per von Doussa J; City of Botany Bay Council v Jazabas Pty Ltd [2001] NSWCA 94 at [41] per Mason P; Karam v Australia & New Zealand Banking Group Ltd [2001] NSWSC 709 at [469] per Santow J (reversed on appeal on other grounds: Australia & New Zealand Banking Group Ltd v Karam [2005] NSWCA 344; (2005) 64 NSWLR 149). 99 It must be emphasised, however, that notwithstanding the guidance offered by the Evatt principles, the court must nevertheless undertake a "case-by-case identification of whether a duty situation arises consistently with the rather broad principles mentioned in Perre v Apand and other cases that deal with liability for pure economic loss": see Interchase Corp Ltd (in liq) v ACN 010 087 573 Pty Ltd [2001] QCA 191; [2003] 1 Qd R 26 at [90] per Thomas JA. 100 McPherson JA at [21] provided a useful summary of the position of valuers in respect of negligent misstatement in the following terms in Interchase: Valuers, appraisers, surveyors and the like belong to a class whose business it is to give professional opinions or advice. Opinions about a matter as intangible and (dare one say) evanescent as market value are always likely to be contentious, especially during periods of fluctuating economic conditions. As a result, in cases where their valuations serve to fix the price or consideration to be paid by one contracting party to another, they are, as has been said, liable to be "shot at by both sides": Arenson v Arenson [1977] AC 405, 418. Partly for that reason, a somewhat wider margin of error is permitted them before they are found to have been negligent in valuing the subject matter: see Holt v Cox (1997) 23 ACSR 590, 596 (Mason P, with whom Priestley JA agreed). For some time, indeed, they were regarded by the courts as legally immune from claims by either party for negligence in performing what was said to be the quasi-arbitral or quasi-judicial function of solving by their valuation a dispute or difference between the parties. See Finnegan v Allen [1943] KB 425. Whether any such immunity prevails when a valuer is appointed to arbitrate a genuine dispute about value does not fall to be considered here. Between Interchase and PEL in mid-1988 there was no pre-existing "dispute" about the value of the Myer Centre that was capable of being submitted to arbitration. See Re Carus-Wilson and Greene (1886) 18 QBD 7; and (1986) 60 ALJ 8, at 9–10, to which an immodest reference may be not impermissible. The decision in Finnegan v Allen was followed by Kemp v John Fairfax & Sons Pty Ltd (1952) 69 WN (NSW) 328 in circumstances resembling those here; but where as in this instance valuers are retained to determine the market value of a subject matter for the purpose of fixing the price, those decisions can no longer be considered good law in the light of the more recent decision of the House of Lords in Arenson v Arenson [1977] AC 405. The reasoning of their Lordships in that case is, to my mind, persuasive, and, so far as Queensland is concerned, Finnegan v Allen [1943] KB 425 and other decisions in that tradition should not be followed here. Indeed, that view of the law now seems to have been accepted in New South Wales: see Legal & General Life of Australia Ltd v A Hudson Pty Ltd (1985) 1 NSWLR 314, 335 (McHugh JA). His Honour continued at [31]: Turning to specific authority, there are judicial statements and decisions in Australia that support the existence of a duty. In Holt v Cox (1997) 23 ACSR 590, 596, Mason P and Priestley JA accepted that the expert who negligently determines a valuation will be held liable in damages to the party suffering loss in consequence of the expert's valuation. In Legal & General Life of Australia Ltd v A. Hudson Pty Ltd (1985) 1 NSWLR 314, 335, McHugh JA considered it "now settled" by Sutcliffe v Thackrah [1974] AC 727 and Arenson v Arenson [1977] AC 405 that "an action for damages for negligence will lie against a valuer to whom the parties have referred the question of valuation if one of them suffers loss as the result of his negligent valuation". The decision of Wootten J. in BT Australia Ltd v Raine & Horne Pty Ltd [1983] 3 NSWLR 221 is to that effect. There the successful plaintiffs were, as trustees for others, unit holders in a trust who suffered losses in consequence of the defendant's negligent valuation of the units. Although having no contract with the defendant, they recovered damages for breach of the common duty of care. The decision in Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 (affirming 77 FCR 307 (Full Court), and Lindgren J. in 140 ALR 313) was given in favour of a financier who, in reliance on the defendant's negligent over-valuation, had lent too much on the security of residential land at Hunters Hill. In the High Court, liability was conceded; but, in analysing the measure of damages, Gaudron J (at 425–426), McHugh J (at 434), and Gummow J (at 446), all regarded the valuer as being liable in negligence for the resulting loss. The case was one of reliance, in which the plaintiff's task of establishing a duty of care was simplified by an express invitation from the valuer to rely on the valuation; but the decision stands as authority that, apart from any binding contractual relationship between the parties, there may be liability on the part of a valuer for loss caused by a negligent valuation. [Emphasis added.] More recently, Ashley JA in Derring Lane Pty Ltd v Fitzgibbon [2007] VSCA 79; (2007) 16 VR 563 also referred to the decision of Wootten J in BT Australia Ltd v Raine & Horne Pty Ltd [1983] 3 NSWLR 221 and, along the same lines as McPherson JA in Interchase, his Honour said at [43]-[44]: The analysis in Raine & Horne, on the other hand, did not depend upon the valuation having operation, by force of contract, between the recipient of the report and the parties suffering loss. Wootten J analysed the relationship between the statement maker, the statement recipient and the party suffering loss using the language of reliance. Raine & Horne, his Honour said, indisputably owed a Hedley Byrne duty to BT — the trustee of a unit trust and the investment manager for the assets for superannuation funds. But BT, although it had acted on the negligent statement, was not the person who had suffered damage. Nor were the third plaintiffs, the trustees of a number of superannuation funds with investments in the trust — which funds had suffered losses by reason of a negligent valuation of property that had resulted in a wrong valuation of units in the unit trust — persons who, like the plaintiff in Hedley Byrne, were and were known to be, the real recipients and users of the advice. The third plaintiffs did not receive or use the advice. The third plaintiffs were simply passive suffers [sic] from BT's reliance on and use of the Raine & Horne valuation. None the less, his Honour said, it appealed to notions of common sense and justice that: … if, as was assumed by most of their Lordships in Hedley Byrne itself, it is sufficient (in the absence of a disclaimer) that the defendant was aware that the inquirer was seeking the information to pass on to the plaintiff who would act on it in a way which might cause financial loss if the information was incorrect, it should be sufficient also that the defendant was aware that the inquirer would himself act on the information in the execution of a duty which he owed to the plaintiff in a way which would cause similar loss. [Footnotes omitted.] 101 That approach was reinforced by the High Court in Kenny & Good Pty Ltd v MGICA (1992) Ltd [1999] HCA 25; (1999) 199 CLR 413 (Kenny & Good). In that case Kirby and Callinan JJ at [116] stated: "The instructions, and the terms in which they were complied with, and the valuation provided, all give content to the duty of care in this case, as they will in most, if not all, such cases." 102 To determine whether a duty of care is owed by a valuer to a person that is not the valuer's direct client, there may be conflicting tests propounded. According to The Laws of Australia, "[a] valuer may owe a duty of care to persons who are not clients if reasonable foreseeability of loss and a relationship of proximity is established between the parties": at [27.8.6]. In light of the approach of the High Court in Tepko, however, the statement of the law in Halsbury's Laws of Australia [340-1025] is probably more accurate: A valuer may be liable in negligence to third parties who have suffered financial loss where the valuer knew or ought to have known [that those third parties] would rely on his or her valuation. Where a valuer knows or ought reasonably to have known that a third party would rely on his or her valuation, the valuer assumes responsibility for the valuation, sufficient to give rise to a duty of care in tort. Whether a valuer owes a duty of care to a third party will depend on whether it was reasonable in all the circumstances for the third party to rely on the valuation. And as Gummow J stated in Kenny & Good at [83]: In this case, MGICA relied upon the valuers to exercise reasonable care and skill in providing the valuation. The relationship of reliance was particularly close in that but for the valuation MGICA would not have acted to its detriment in entering into the mortgage insurance transaction. Further, given the text of their Report, the valuers knew, or ought to have known, that their representations would be relied upon by MGICA. See also at [17], [21]-[22], [28] per Gaudron J. McHugh J, by contrast, found a duty of care existed based on the assumption of responsibility by the valuer, while Kirby and Callinan JJ preferred to find a duty of care based on the various tests promulgated in Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232. 103 Even where such reliance can be proved there is the further requirement that it be reasonable in all the circumstances for the claimant to so rely upon the valuation. For instance, as noted by Sheppard AJA in Ta Ho Ma Pty Ltd v Allen (1999) NSWCA 202; (1999) 47 NSWLR 1 at 25-6, it would be unreasonable to hold a valuer liable for reliance upon a stale valuation. 104 In Plenty v Pattinson [2001] SASC 42, Duggan J determined proceedings commenced by financiers who advanced moneys to a third party based, inter alia, upon the allegedly negligent valuation of the first respondent Pattinson. The learned Judge observed at [8]: In April 1979, the first defendant, Mr Pattinson, was asked to value the property. There is a question as to whether the request emanated from AGC or Mr Besson. For reasons which are discussed later in this judgment the issue of liability does not turn on this question. It is not in dispute that Mr Pattinson was aware at the time that the valuation was required for a loan application and that it might well be used in applications made to various lenders. His Honour found in that case that the valuation was for the purpose of the claimant, Mr Besson. However, his Honour added at [77]: In any event, it is beyond doubt that Mr Pattinson was aware of the purpose of the report, namely, that it would be used to assist in obtaining finance for the car yard. I find that he was also aware that the valuation could be used in applications for a loan to a variety of lenders and not just AGC. The evidence establishes that Mr Pattinson held himself out as an expert valuer of land and that he provided advice knowing that it would be communicated to potential lenders such as the plaintiffs and that it was very likely that they would rely on his opinions for the purpose of deciding whether to advance funds and, if so, the amount which they were prepared to advance. In these circumstances he was placed under a duty of care to the plaintiffs (Esanda Finance Corporation Ltd v Peat Marwick Hungerfords (1997) 188 CLR 241 at 249-252). [Emphasis added.] In our judgment, the Evatt principles, as recently approved in Tepko, provide the guidance to determine the present issue. Recently, Gummow J in Vairy v Wyong Shire Council [2005] HCA 62; (2005) 223 CLR 422 at [63] said: In many well-settled areas of the law of negligence, the existence of a duty of care presents no challenge. … [A]s indicated by Tepko Pty Ltd v Water Board, the special circumstances that call into existence a duty of care in utterance by way of information or advice can be articulated. 105 On that basis, the primary judge correctly concluded that Mantach owed a duty of care to APF when providing the 2001 Mantach valuations, for the reasons his Honour gave. 106 Mantach provided the 2001 Mantach valuations to Boyds. It intended that the recipient of those valuations would act on them. It realised that Boyds was not the principal in the transaction, but was acting for a client or clients. Hence it intended, and clearly realised or ought to have realised, that the clients of Boyds for whom the valuations were sought might act upon the 2001 Mantach valuations in connection with some matter of business or serious consequence. So much was acknowledged by Mr Mantach in his evidence. It is not a case where the relationship between Mantach and Boyds defined, by contract, the extent of use of the 2001 Mantach valuations in a way relevant to the duty of care of Mantach to the recipient of those valuations. It is not a case where Boyds passed the valuations to some entity other than their direct clients, or for some other reason Mantach should not have realised that the direct clients of Boyds may act on the valuations. The introduction of a corporate adviser such as Boyds, self-identified as corporate financial advisers and chartered accountants, was sufficient to signal to Mantach that the purpose of the valuations may have extended beyond the Robinsons merely refinancing their borrowings. Indeed, as the primary judge pointed out, the Agtech Report referred to "potential joint venture partners", and subsequently in July 2001 when Mantach agreed for Westpac to also rely on the 2001 Mantach valuations to advance funds in respect of the three Robinson properties, it was aware that the proposed advance was to an entity purchasing those properties and did not then express any concern that the purchaser should also have relied on its valuations. Mr Mantach, during his evidence, acknowledged that position when he accepted the retainer that he understood the 2001 Mantach valuations were to go to the client or clients of Boyds, whether they be a bank, a vendor or a purchaser of the three Robinson properties, that is "whoever they were acting for". 107 Mantach argued that it was not specifically aware that APF was the intended recipient and user of its valuations, but that it believed the valuations were for the Robinsons, for whom it had previously provided the 1997 Mantach valuations. Senior counsel referred to the decision of Hamilton J in Aghajanian v Stanley Thompson Valuers Pty Ltd [1999] NSWSC 1154 at [92], where his Honour said: [T]here is simply no evidence that the defendant had any knowledge that the purchaser was relying upon its judgment. The only possible exception to this is in the very limited sense that it was no doubt aware of the proposed purchase price and that, if its valuation fell substantially short of that price, that would or might create difficulties in obtaining the finance necessary for the purchase to proceed. 108 Each case must be decided on its own facts. The lack of specific knowledge of the identity of APF does not of itself mean that no duty of care was owed to APF. The proposition to that effect inverts the appropriate inquiry. A duty of care arises where the valuer knew or ought to have known that the valuation would be acted upon in connection with some matter of business or serious consequence by a client of Boyds. Even if Mantach believed the 2001 Mantach valuations were prepared for the Robinsons only, and not APF (although the findings of the primary judge do not appear to accept that such a subjective belief existed), it was aware that the Robinsons' involvement extended to some form of joint venture both directly through the Agtech Report and by its awareness of Boyds involvement and its realisation that the potential transaction might extend beyond refinancing by the Robinsons. 109 On this aspect, it is useful to recall a further point made by the primary judge. Boyds requested the valuations of the three Robinson properties as arms length market valuations, and using the definition of "market value" as defined by the International Assets Standards Committee. The evidence did not (at least so far as was exposed to the Full Court on the appeals) address that definition. There was no submission, and indeed no suggestion, that the market values should or might vary, depending on the purposes of the valuations. That does not indicate that any duty of care was owed to APF. But it does indicate that, in the present circumstances, there is no reason of policy or justice why any duty of care (which on Mantach's case it owed to the Robinsons or to Kestrel) should not be owed to APF because the nature of the task it had undertaken was inherently different. 110 Mantach's submission that APF was unable to recover for breach of any duty of care owed to it by Mantach, because it was a duty of care owed to APF and the Robinsons as "the client" (and, in that circumstance, was not breached because of Mr Robinson's conduct) recognises that it was within the purview of Mantach that the 2001 Mantach valuations were to be acted upon by the entity or entities on whose behalf Boyds sought those valuations in connection with some matter of business or serious consequence. 111 The further requirement of the Evatt principles is readily satisfied. 112 Clearly, it was reasonable in all the circumstances for APF to rely upon the 2001 Mantach valuations. The nature of the valuations, the circumstances in which they were procured, the expertise of Mantach and the fact that it held itself out as an expert valuer and was engaged on that basis all point to it being reasonable for APF to rely upon those valuations. It was not contended to the contrary by Mantach. 113 In this context, the fact that Mantach made no enquiry as to the particular purpose of the valuations is also relevant. It did not suggest that, in making the valuations, their particular purpose would influence its assessment, or honest opinion, of the true market value of the three Robinson properties. Boyds did not disclose the identity of their clients or the purpose of the valuations. Mantach did not suggest, either to Boyds or in submissions, that either of those pieces of information would have affected its undertaking the valuations or the way it went about making them. 114 For those reasons, we consider that the primary judge correctly concluded that Mantach owed to APF a duty to take reasonable care in the preparation and presentation of the 2001 Mantach valuations, including those of Broadmoor and Lower Wilmot. Whether Mantach was negligent in the preparation and presentation of the 2001 Mantach valuation of Lower Wilmot 115 Mantach valued Lower Wilmot at $753,000. That valuation was one of the 2001 Mantach valuations provided to Boyds. As noted, that valuation was based, in part, on there being 70 hectares of croppable land available on the property. That land was valued at $8,000 per hectare. 116 APF claimed that the true value of Lower Wilmot was in the order of $450,000 and that it contained only 50.5 hectares of croppable land. It alleged that the representations by Mantach referred to in the preceding paragraph involved misleading and/or deceptive conduct contrary to ss 52 and 53A(1)(b) of the TP Act. It also claimed that Mantach had been negligent in failing to identify accurately the land available for cropping, and in dealing with the few examples of comparable sales in the area. 117 The primary judge concluded (at [355]) that the representations made by Mantach constituted misleading and deceptive conduct. He also found that Mantach was negligent in making the representations. A critical element of the reasoning which led to these conclusions, insofar as they related to Lower Wilmot, was the absence of a proper foundation for the opinions expressed by Mantach as to the value of the property and as to the area of "croppable land" on it. His Honour's consideration of these questions was undertaken in conjunction with his consideration of like questions in respect of Broadmoor. This was, no doubt, because of the manner in which the template questions for the purposes of the primary judgment had been framed. 118 Template question 18 asked: "Did Mantach have a reasonable basis for its statement as to the cropping area on Broadmoor and Lower Wilmot?" 119 The primary judge found that Lower Wilmot had a total area of approximately 151.3 hectares. He found that only 60.2 hectares were croppable. He made this finding on the basis of the evidence of Mr David Armstrong, APF's expert agricultural consultant witness, who had found that 50.5 hectares had been cropped recently and regularly. The paddocks incorporated in the area had good soils, low to moderate slope and were regular in shape and convenient to irrigate. There was a further 9.7 hectares which were croppable albeit less conveniently because of the irregular shapes of the blocks, steeper slopes and difficulty in irrigation. The remainder of the property was unsuitable for any cropping. 120 Other experts had placed differing estimates on the area of croppable land on the property. The estimates, to the nearest hectares, were: · Austin (APF's expert valuer witness): 55 · Medwin (selling agent for property in 2004): 54 · Cripps (Mantach's expert valuer witness): 54 or 67 (depending on the outcome of expert soil quality analysis) · Lehman (Mantach's expert agricultural consultant witness): 68 121 One of the reasons for these variations was a difference of view as to what was meant by "croppable land". That difference was explained by the primary judge at [253] as follows: As already mentioned there was evidence that in the discourse of valuers of North West Coast rural properties (and perhaps of similar properties elsewhere in Tasmania) the term "croppable land", or synonyms such as "land available for cropping", extends to infrastructure such as dams and roadways and a homestead and curtilage. The rationale is said to be that such infrastructure is essential for the running of a cropping property and/or that the land occupied by the infrastructure would be suitable for cropping if not so occupied. His Honour adopted a different definition. He found at [254] that "croppable land" was an ordinary, non-technical English term which meant "land on which crops can be grown" or, as Mr Armstrong had said in his evidence, "land that you can drive a tractor over and crop". In applying this definition to Lower Wilmot his Honour accepted Mr Armstrong's evidence, in part because he took the view that if land outside the paddocks on the property was, in a practical sense, capable of producing crops "logic suggests it would have been cropped by now" (at [272]). 122 His Honour answered template question 18: "No". 123 Template question 19 asked: "Did Mantach have a reasonable basis for its expression of value for Broadmoor and Lower Wilmot?". His Honour answered: "No". This answer was informed, in part, by the answer which he later gave to template question 21. 124 Template question 21 read: "Was the rate per hectare used by Mantach for Broadmoor and Lower Wilmot reasonable and/or within an acceptable range?" In answering the question his Honour dealt separately with Broadmoor and Lower Wilmot. 125 In respect of Broadmoor, his Honour noted that Mantach had found that there were 82 hectares of croppable land on Broadmoor and that comparable sales supported a value of $9,500 per hectare. His Honour then summarised at [202] and [203] the basis on which Mr Mantach had sought to justify his valuation of $9,500 per hectare: His [Mr Mantach's] comparable sales "particularly relevant to this subject property" were as follows: Property Date Cropping (ha) Price (ha) 1. Prestons 11/00 80 $7125 2. Geales 10/00 146 $7712 3. Allison 08/00 57 $8333 4. Walkers 02/00 11.7 $9370 5. Kindred 07/99 43 $7930 6. Kings 05/99 55 $7000 7. Preston 03/99 18 $10000 He referred in more summary form to nine other sales. Of these, five were relatively small properties: 17.98 ha ($9450), 27.54 ha ($10,167), 30.68 ha ($9,680), 13.17 ha ($11,390) and 34 ha ($10,500). 126 His Honour drew attention to the differences in valuations having regard to the size of the croppable areas on the various properties. He said at [204]: Mr Austin was of the view that numbers 4 and 7 of the "particularly relevant" sales were too small, as were the five sales mentioned in the last paragraph. Mr Cripps pointed out that usually smaller properties will sell at a higher rate per hectare because they are more affordable to a larger group of people. It will be seen that numbers 4 and 7 are the two highest figures per hectare and the only ones that get anywhere near the figure Mr Mantach adopted for Broadmoor. 127 The primary judge next turned to Mantach's reliance on what was called the "catch-all" approach to the valuation of land. As described by his Honour, the approach involves "taking an overall per hectare figure for all cropping land on the property, that figure being adjusted according to the proportions of varying qualities of land." As his Honour observed, this approach produced the same outcome as would be arrived at by dealing separately with the various classes of croppable land on a property and applying different valuations to them. Problems did arise, however, when the "catch-all" approach had been applied to value a particular property and that valuation was also influenced by the prices paid for "comparable" properties. Unless the comparator properties had equivalent proportions of land in the various classes, like was not being compared with like. This led his Honour to conclude at [207], in respect of Broadmoor, that "[a] combination of the use of sales that were not truly comparable and the "catch-all" approach means the rate per hectare used by Mantach was not reasonable or within an acceptable range." 128 His Honour then dealt with template question 21 insofar as it applied to Lower Wilmot. He said simply at [208] that: Mr Mantach used the same comparable sales and the same "catch-all" approach for Lower Wilmot. The same result follows. 129 In saying that the "same result follows" we understand his Honour to be expressing the view that Mr Mantach's opinion, that the proper rate per hectare to be applied to Lower Wilmot was $8,000, "was not reasonable or within an acceptable range." It was "not reasonable" because it was not based on reasonable grounds. 130 Mantach raised three grounds of appeal in relation to the trial judge's findings concerning Lower Wilmot. It alleged error in the findings that the Lower Wilmot valuation had been prepared negligently and that Mr Mantach had engaged in misleading and deceptive conduct by placing a value on the property without having a proper basis to do so. Complaint was made that his Honour erred by failing to give reasons for these findings. A third ground alleged a mathematical error because his Honour found that Mantach's estimate of the cropping area was 18.6% greater than the true croppable area of the property. 131 The third ground is uncontentious and can be put to one side. It was conceded by APF that the correct figure is 16.3% (60.2 hectares compared with 70 hectares). APF, nonetheless, contended that the 16.3% variation was still outside the acceptable margin for error which his Honour found to be 15%. 132 It is to be noted that the major ground presently under consideration, namely, that which alleged error by the primary judge in finding that the valuation of Lower Wilmot had been prepared negligently and amounted to misleading and deceptive conduct, was directed to his Honour's ultimate findings that two of the causes of action relied on by APF had been made out. The findings in relation to faulty comparisons with other properties and the use of the "catch-all" approach only concern certain intermediate steps in the reasoning that led to Mr Mantach determining the impugned rate per hectare. Senior counsel for Mantach argued that it was his Honour's findings in relation to these intermediate steps that occasioned the alleged errors in the ultimate findings. 133 Although the primary judge, in answering template question 21 insofar as it applied to Lower Wilmot, relied on the same grounds which had led him to conclude that the 2001 Mantach valuation of Broadmoor was unreasonable, it is to be observed that there was a number of significant differences between the two properties and the manner in which Mantach valued them. These differences included: · the total land area of Lower Wilmot was registered on five separate titles. Broadmoor was on two titles; · in valuing the Lower Wilmot property Mantach distinguished between areas of croppable land, pasture and bush on each of the titles; · the total area of Lower Wilmot was larger than Broadmoor (151.3 hectares compared with 122 hectares). Despite this, on Mantach's estimates, a much lower proportion of Lower Wilmot was comprised of croppable land (70 hectares) than was the case with Broadmoor. On Mr Armstrong's estimates (60 hectares) the percentage of croppable land on the two properties was about the same; · Broadmoor enjoyed superior soils and better climatic conditions than did Lower Wilmot; · Lower Wilmot was located about 16km south of, and inland from, Broadmoor. It was further away from major towns on the coastline than was Broadmoor; and · Mantach applied a "catch-all" valuation of the croppable land on Lower Wilmot of $8,000 per hectare. His equivalent valuation for Broadmoor was $9,500 per hectare. 134 In determining the value to be placed on Lower Wilmot, Mr Mantach had to make a judgment as to the extent of the croppable area on the property. He fixed on a figure of 70 hectares. The primary judge accepted Mr Armstrong's estimate of 60.2 hectares. As a result, he found that the valuation, which was, in significant part, based on Mr Mantach's 70 hectare figure, was outside the acceptable range. In accepting Mr Armstrong's evidence his Honour said at [272]: Clearly the real dispute is as to the croppability of the areas outside the paddocks. Mathematical precision is not possible. However, one circumstance suggests a conservative approach. This property [Lower Wilmot], like Broadmoor, has been cropped for many years, including some 10 years by the Robinsons. If land outside the paddocks was really, in a practical sense, capable of producing crops logic suggests it would have been cropped by now. This finding overlooked the fact that Mr Armstrong agreed, in the course of cross-examination by counsel for Kestrel and Mr Robinson, that there was, on the property, a potential for a further 6.2 hectares of the land outside the paddocks to be rendered croppable. This could be achieved by measures such as the adjustment of fence lines and the levelling out of some slopes. 135 More importantly, however, Mr Armstrong agreed that he had not included 5.2 hectares of infrastructure consisting of dams and roads on the property. Mr Mantach had included this area in reaching his estimate of 70 hectares of croppable land. Mr Armstrong (who was not a valuer) acknowledged that it was the practice of Tasmanian valuers to include infrastructure within an assessment of croppable land. He explained the difference in approach between valuers and agricultural experts in the following exchange: And it is a difference between the two disciplines? --- Well, I guess it's a difference. I mean, essentially if I'm looking at the area of croppable land, I want to know the area that you can drive a tractor over and crop. And in fact, the second reason that valuers, at least, often include the area occupied by infrastructure is because it often occupies actual cropping land that could be cropped, were it not occupied by the infrastructure? --- Yes, correct. And the third reason that – if it didn't exist, often – if this infrastructure didn't exist, often you would have to use otherwise croppable land for the purposes of setting this infrastructure up? --- That's certainly possible. Mr Austin, a valuer, also agreed that some valuers will include infrastructure in assessments of croppable areas and others will not. 136 Mr Armstrong was not prepared to venture an opinion as to whether the inclusion of infrastructure in the area of croppable land was a sound valuation practice or not. He did, however, accept that, if the potentially croppable land and the area devoted to infrastructure were added to his estimate of the area of croppable land, the area of croppable land on Lower Wilmot was of the order estimated by Mantach. 137 Another significant element of the 2001 Mantach valuation was the determination of the value to be attributed to the area of croppable land. As already noted, Mr Mantach applied a "catch-all" approach to the valuation by applying a value of $8,000 per hectare to all of the croppable land. In valuing Lower Wilmot, Mr Mantach had regard to the same sales in the area as he had considered when valuing Broadmoor (see above at [125]). In valuing Lower Wilmot, Mr Mantach was influenced, in his choice of comparable properties, by his view that the land was "much further from the coast than other cropping lands in the district meaning that it ha[d] only limited influence from the calming effects of Bass Strait on the weather." The valuation would have been lower had it not been for extensive works which had been undertaken in order to provide water to all of the cropping area thereby increasing the potential productivity of the land. These irrigation works were supplemented by higher than average rainfall in the area. Mr Mantach also took into account the possibility that one or more of the five titles could be sold separately as rural residential type blocks. 138 Mr Austin, the expert valuer called by APF, placed a lower value per hectare ($6,000) on the croppable area of Lower Wilmot. The principal reason for the lower figure adopted by Mr Austin was that he considered that some of the sales which Mr Mantach had taken into account were of properties which were not comparable with Lower Wilmot. He preferred other comparators which supported his estimate. As already, noted, he considered that there were only 55 hectares of cropping land on the property. Like Mr Mantach, he included infrastructure in the area of cropping land. The major element of his valuation of $450,000 was $330,000 ($6,000 x 55) for the croppable land. Mr Austin was asked to express an opinion about the efficacy of the "catch-all" approach to valuation. He said that, while this was not his preferred approach, it was a "legitimate" method of valuation. 139 There was no substantial issue in the proceeding over the valuation of the areas of the property which the two valuers regarded as being not croppable. Mr Mantach placed a valuation of $188,738 on the area beyond the 70 hectares. Mr Austin valued the area additional to his 55 hectares estimate at $116,000. Despite this disparity there was no specific attack on this aspect of the 2001 Mantach valuation. 140 The primary judge found that the 2001 Mantach valuation of $753,000 was a "gross over-valuation" when compared with Mr Austin's valuation of $450,000 which he accepted. The 2001 Mantach valuation of Lower Wilmot was, therefore, in the order of 60% higher than Mr Austin's. The main reasons for this difference were that Mr Mantach considered that there were 15 more hectares of croppable land on the property than Mr Austin was prepared to allow, and that Mr Mantach applied a rate of $8,000 per hectare to that land whereas Mr Austin considered that the appropriate rate was $6,000. The differences between the two valuers was not related to any disagreement about the meaning of the term "croppable land". They both considered that infrastructure located on what would otherwise be croppable land should be included, notwithstanding his Honour's preference for the contrary approach advocated by Mr Armstrong. 141 Mantach did not challenge the primary judge's finding that the $9,500 per hectare valuation of the croppable land on Broadmoor contributed to a negligent over-valuation of that property and to a false and misleading representation as to its value. It does not, necessarily, follow that, simply because Mantach used the same comparable sales and the same "catch-all" approach when valuing Lower Wilmot, that it thereby acted negligently in respect of that valuation or that it was misleading and deceptive. The rate per hectare which Mantach adopted for Lower Wilmot was $1,500 less than that which it applied to Broadmoor. This disparity may be explicable by reference to one or more of the factors identified in paragraph [133] above. The primary judge's reasons do not explain why it was that he considered that the properties which Mantach had taken into account when fixing a rate for Broadmoor were necessarily inappropriate comparators in relation to Lower Wilmot. One reason for him rejecting the comparisons relied on in relation to Broadmoor was that many of the other properties were much smaller than Broadmoor. Given the fact that Lower Wilmot was on five titles and that individual parts of the property could have been sold separately it is not self evident that the smaller properties were not proper comparators in respect of Lower Wilmot. 142 In fixing the lower rate of $6,000 per hectare for Lower Wilmot, Mr Austin also employed the "catch-all" approach to valuation. It is, therefore, not immediately obvious why that approach could be found to have led Mantach into error in relation to Lower Wilmot, simply because it may have done so in relation to Broadmoor. Moreover, his Honour does not give reasons for preferring the $6,000 rate to Mantach's $8,000. 143 His Honour's reasons provide no guidance as to why he concluded that, despite the material differences between the two properties, Mantach's reliance on the same comparators in fixing a rate for Broadmoor and Lower Wilmot and his application, in both valuations, of the "catch-all" approach, necessarily produced a rate per hectare for Lower Wilmot which was not reasonable or within an acceptable range. 144 The primary judge did not hold, in terms, that Mantach was negligent in applying the "catch-all" approach or in the way in which Mr Mantach went about comparing Lower Wilmot with other properties which had been sold in previous years. His Honour's criticism was that these errors had led Mantach to fix on a rate for Lower Wilmot which was outside the reasonable range. In the absence of more elaborate findings it is impossible to quantify the effect of these errors on the ultimate valuation. The errors (if they be errors) might or might not have given rise to what his Honour found was a gross over-valuation of the property. It was this latter finding which led his Honour to hold that Mantach had been negligent and made misleading and deceptive representations. 145 There were, however, other elements of the valuation process which contributed to the determination of the $753,000 valuation. One or more of those elements might have mitigated any adverse effects of the errors and brought the valuation within an acceptable range. One of these additional variables was the determination of the area of croppable land on the property. 146 His Honour's conclusion that the 2001 Mantach valuation was a gross over-valuation was based, in part, on his application of a narrower definition of "croppable land" than that applied by Mantach and Mr Austin. Applying Mr Armstrong's "can I drive a tractor over it and crop it?" approach, his Honour found that there were approximately 10 fewer croppable hectares than Mantach had determined were present on the property. On Mantach's rate per hectare this gave rise to an $80,000 difference in the overall valuation. On Mr Austin's rate it would have accounted for a differential of $60,000. Had Mr Austin's rate been applied to 70 hectares, his valuation of the property would have been increased to at least $480,000. 147 There was plainly a difference of opinion between agricultural experts such as Mr Armstrong and between valuers as to whether or not areas of croppable land on which infrastructure such as dams, sheds and homesteads were located should be included in the area of croppable land on a property when valuation was being undertaken. His Honour preferred one view and this led him to find that there was a smaller area of croppable land on Lower Wilmot than that determined by Mantach. It is not necessary for us to express a view as to whether one of these approaches is to be preferred to the other. If a valuer uses a particular term in a way that it is used by other competent valuers in good standing, this tells strongly against any suggestion that the valuer has been negligent by utilising one meaning in preference to another. Similarly, the expression of the opinion that there is a certain croppable area on a property will not constitute a misleading and deceptive representation if it is based on such an accepted usage. 148 His Honour made the uncontentious finding that a valuation of plus or minus 15% of the true valuation of land would not be unreasonable or suggestive of negligence. His finding of a gross over-valuation was dependent on $450,000 being the true value of Lower Wilmot at the relevant time. This was the value determined by Mr Austin. His Honour, as he was entitled to do, accepted Mr Austin's opinion in preference to the opinions of other expert witnesses. He explained his reasons for doing so. The accuracy of the valuation was supported by the fact that $450,000 was the price obtained when the property was sold in 2004. 149 Even when allowance is made for there being an additional 10 hectares of croppable land on the property, Mantach's overall valuation remains well outside the acceptable range. The principal reason for this is the rate per hectare of croppable land on which Mr Mantach settled. This suggests that Mr Austin's $6,000 was more realistic and that Mr Mantach's $8,000 was excessive. It also suggests that his Honour was correct to hold that Mr Mantach's figure was not reasonable, notwithstanding his Honour's failure to explain his reasons for so concluding in any detail. It may be inferred that the error lay in inappropriate comparisons being made with the prices achieved by the vendors of some other properties in the area. 150 The first and second grounds of appeal on this aspect, as identified in [130], fail. The third of those grounds should be upheld for the reasons there given. The error does not, however, have any consequences for the disposition of the appeal. Whether the representations made in 1997 by Kestrel through Mr Robinson were misleading and deceptive, whether Mantach relied upon those representations, and whether Mantach relied upon the Agtech Report 151 The primary judge found that Mr Robinson made representations to Mantach about the croppable area of Broadmoor in 1997, when Mr Mantach visited Broadmoor for the purpose of making a valuation of it. The visit was on 14 March 1997. Mr Mantach and Mr Robinson drove around the property. Mr Mantach made a file note indicating that there were plus or minus 200 acres of cleared land. This file note recorded a statement of Mr Robinson to that effect. Mr Robinson also said that all the cleared land was used for cropping purposes. 200 acres is roughly 81 hectares. Subsequently, Mr Mantach calculated the area of cleared land shown on the relevant Tasmap. This exercise indicated a clear area of 68 hectares. Mr Mantach rang Mr Robinson to discuss the discrepancy. Mr Robinson said that he and his brother had done some clearing at the edge of the bush since the Tasmap had been created, and that accounted for the difference. 152 The finding that Mr Robinson made this representation to Mr Mantach was arrived at by his Honour by accepting the evidence of Mr Mantach to this effect. His Honour was bolstered by the fact that Mr Robinson and his brother were both present in Court for most of the hearing, but did not give evidence. His Honour felt that the rule in Jones v Dunkel (1959) 101 CLR 298 entitled him to infer that any evidence they could give on the issue would not have assisted them. His Honour also felt that, because Broadmoor was a cropping property, it was inherently likely that an owner wanting the best figure from a valuer would give the valuer some estimate of the croppable area. The circumstance of Mr Mantach investigating the discrepancy between the Tasmap and what Mr Robinson had said was, as his Honour saw it, a little out of the ordinary and therefore likely to stick in the mind of someone in Mr Mantach's position. 153 Counsel for Kestrel and Mr Robinson challenged this finding. He maintained that Mr Mantach was "manifestly embarrassed by his lack of professionalism and his lack of contemporaneous notes" in cross-examination, and that his evidence was internally inconsistent. Further, the events were more than 10 years earlier and there were no supporting notes or contemporaneous records. Mr Mantach had no idea of how he managed to split his figure of 82 hectares on Broadmoor into 40 and 42 hectares respectively on the two titles that made up the property. Counsel argued that it was Mr Mantach who equated "cleared land" with "croppable land". 154 There is no reason to disturb his Honour's findings. His Honour was aware of the time that had elapsed since the events in question, and dealt with it expressly in his reasons for judgment. There was a significant contemporaneous record, being the field note made by Mr Mantach in the course of his inspection. As his Honour said, the subsequent need to clear up the discrepancy between what Mr Mantach calculated from the map and what Mr Robinson had told him about cleared land was likely to make the events memorable to Mr Mantach. His Honour was entitled to accept the uncontradicted evidence of Mr Mantach, despite the fact that he also found that Mr Mantach had not acted in a professional manner himself in the way in which he dealt with the information. This finding did not require his Honour to disbelieve the evidence Mr Mantach gave about matters of fact. It does not entitle this Court to disbelieve him. 155 In part, the primary judge's finding that Mr Robinson misled Mantach was based on the false statement in the Agtech Report that Broadmoor contained 80 hectares of cropping land. Mr Mantach said that he did not suspect that the Agtech Report was not genuine. With respect to the cropping area of Broadmoor, it was broadly consistent with what he stated in his report. He read it before finalising his report. In cross-examination, Mr Mantach was asked whether he relied on the Agtech Report. He replied, "No". He said that he did not even assume that the Agtech Report was a serious document, one that he could rely on. It was information that Mr Robinson gave him for the purpose of demonstrating the nature and characteristics of the properties he was valuing, and that was how Mr Mantach received it. He was asked whether he had checked the information and he said: I had previously valued these two - these properties on two occasions. So the information that I already had on these properties was already in reports I had already prepared. So this was just additional information that had been provided to me. Mr Mantach then agreed that the Agtech Report "confirmed the 80 hectares of cropping land on Broadmoor." It was this last answer that led the primary judge to say at [163]: I find that Mr Mantach relied on what Nicolas Robinson told him about cropping areas, both verbally and via the Agtech Report. The Agtech Report in fact played a comparatively minor confirmatory role, but was nevertheless part of the information available to Mr Mantach on this issue. It was not ignored by him. At [164] his Honour said: There is no reason to doubt Mr Mantach's evidence on this question. Indeed, the Robinsons were his main source as to this critical factual basis for his valuation, especially of Broadmoor. When faced with an inconsistency between what Nicolas had told him and his calculation from the Tasmap, Mr Mantach accepted Nicolas's explanation. He placed some reliance on it. The primary judge repeated the findings about reliance on the Agtech Report at [182] of his reasons for judgment. In that passage, his Honour also referred to a subsequent statement of Mr Mantach, in correspondence with the solicitors for APF, who inquired as to the basis of Mr Mantach's assessment of croppable land on Broadmoor. The actual statement of Mr Mantach is quoted in [238] of his Honour's reasons for judgment. Again, it is equivocal as to reliance on the Agtech Report. The relevant paragraph is as follows: Page 7 of the report, under the heading "Site Improvements" it is stated "By scaling off a map and by discussions with the owners…" that would seem to answer your request. My file also includes extracts from a report prepared by Atech [sic] Rural and Horticultural Consultants which was faxed to me on 16 January 2001 by Nick Robinson. That report clearly refers to the property having 80 hectares cropping land and 40 hectares bush. 156 The primary judge's findings that Mr Mantach in fact relied on the Agtech Report are not supported by the evidence. They are inconsistent with Mr Mantach's express denial of having relied on the Agtech Report. His description of the Agtech Report as additional information provided by Mr Robinson that confirmed the 80 hectares of cropping land on Broadmoor did not involve a retraction of that denial. The primary judge did not expressly disbelieve the denial and did not expressly disbelieve Mr Mantach's evidence generally. Indeed, his Honour accepted much of that evidence. The manner in which Mr Mantach dealt with the Agtech Report in his subsequent letter, by referring to it after he had explained the basis of his assessment, also provides no support for the proposition that he relied on the Agtech Report in making his assessment. In the circumstances, the findings that Mr Mantach relied on the Agtech Report cannot be sustained. This does not mean that the finding that Mr Mantach relied on Mr Robinson's estimate of the croppable land on Broadmoor, when he prepared the 2001 Mantach valuation, can be set aside. The finding was supported amply by the evidence, and the reasoning of the primary judge, concerning the representations made on 1997. Mr Mantach relied on those representations to prepare his valuation of Broadmoor. It was not necessary for him to have relied on the Agtech Report, whether or not that report was false. 157 In contending that the representations made in 1997 were not misleading and did not mislead Mr Mantach, counsel for Kestrel and Mr Robinson raised several contentions. He argued that, as to 68 hectares on Broadmoor, there was no misleading conduct. There were in fact 68 hectares of croppable land on that property. He contended that the primary judge should have drawn the distinction between being misled about 81 hectares and being misled about 13 hectares, the difference between 81 and 68. Why this distinction would be considered relevant is not clear. The representation was as to the total, not as to any particular part, of the croppable land on Broadmoor. The fact that Mr Mantach used a "catch-all" method of valuation, not distinguishing between steeper and flatter land, or between prime and less than prime croppable land, and including land on which there were items of infrastructure and dams, did not warrant the conclusion that his Honour should have confined his attention to 13 hectares. His Honour held that there was no inconsistency between Mr Mantach being misled by Mr Robinson as to the amount of croppable land and Mr Mantach failing to make his own proper inquiries as to the amount of croppable land. As a matter of logic, this must be correct. In relying on Mr Robinson's figure, Mr Mantach was misled. In failing to make his own inquiries as to the amount of croppable land, Mr Mantach was also negligent. In other words, his choice to rely on what Mr Robinson had told him in 1997 led to Mr Mantach being misled and constituted the evidence of his negligence. Nor could it be said that there was a common understanding that cleared land was to be equated with croppable land. Mr Mantach did not put forward this proposition in his valuation. He used the term "croppable land" in the sense in which it would have been understood by a reader of the 2001 Mantach valuation, not in any special, local sense, equating it with "cleared land". If there had been uncertainty as to what Mr Robinson meant by "croppable land", Mr Mantach could have inquired as to how he used the term. The fact that he did not make such an inquiry, but represented that there were 82 hectares of croppable land on Broadmoor, in the ordinary sense of that term, indicates that he was misled. The primary judge accepted that Mr Robinson told Mr Mantach in 1997 that all cleared land was croppable land. That finding must stand. The representation was misleading. 158 Counsel for Kestrel and Mr Robinson attempted to establish that Mr Robinson had a reasonable basis for his estimate of croppable land. To do so, he characterised the representation as a matter of opinion, rather than as a matter of fact. This argument cannot be accepted. Although the primary judge said that assessing what land is croppable was not a matter of precision, his Honour did characterise the amount of croppable land as an objectively discernable fact. There is no inconsistency between these two statements and both are correct. Mr Robinson's representation was as to a total of 81 hectares of croppable land, not merely as to 13. It was a statement of fact. Even if land on which there were items of infrastructure and dams was included, there was still a difference between the estimate and the reality that was great enough to make the representations misleading. 159 The primary judge at [162] of his reasons for judgment postponed the question whether Mr Robinson had a reasonable basis for his estimate until after his Honour made a finding as to what was in fact the croppable area of the properties. He never returned in terms to the question of a reasonable basis for the estimate by Mr Robinson. It is implicit in his Honour's conclusion that Mr Mantach did not have a reasonable basis for putting forward his estimate of 82 hectares of croppable land on Broadmoor that his Honour took the view that Mr Robinson did not have a reasonable basis for his estimate of 81 hectares. It would be wrong to allow an appeal on this issue and send the proceeding back for a retrial. 160 Senior counsel for Mantach argued that the representations made in 1997 were never part of Kestrel and Mr Robinson's case against Mantach, and the primary judge ought not to have allowed Kestrel and Mr Robinson to rely on those representations against Mantach. APF pleaded its claim against Kestrel and Mr Robinson on the basis of representations made in 2000 and 2001, about the amount of land suitable for cropping at both Broadmoor and Lower Wilmot. By their cross-claim against Mantach, Kestrel and Mr Robinson referred to the APF's allegations, without being specific as to the dates of representations. In its fourth amended cross-claim against Kestrel and Mr Robinson, Mantach itself pleaded the representations made in 1997 with respect to both Lower Wilmot and Broadmoor. This cross-claim was pleaded as based on both negligence and misleading and deceptive conduct. Mantach can hardly complain that Kestrel and Mr Robinson, as well as APF, relied on the representations made in 1997, when it had pleaded them itself. In the 21st century, courts are substantially less constrained by the precise form of pleadings, and are more ready than in times past to make findings as far as possible in accordance with the truth. If any deficiency in the pleadings by APF and Kestrel and Mr Robinson had been brought to light in the course of the trial, it could, and undoubtedly would, have been cured by a simple amendment. If it did not take objection at the trial, Mantach cannot be permitted to rely on any such deficiency as a ground of appeal. The cross-claim against APF 161 It is not necessary to address Mantach's claim that the primary judge erred in finding that its cross-claim against APF, based upon the matters referred to at [83] above, was statute-barred. That is because we are satisfied that his Honour's findings of fact, and conclusions, as to whether the alleged implied representations were made were open to his Honour to make and have not been shown to have been made in error. 162 The letter of instructions from Boyds to Mantach of 29 November 2000 did not, either expressly or impliedly, represent that the 2001 Mantach valuations were for the Robinsons. By its terms, it made clear that a formal and proper valuation was to be provided. There is nothing in that letter of instruction which supports the implication of the asserted representations. No subsequent communication from Boyds is said to do so. The fact that the valuer inspected the property with Mr Robinson does not do so. No evidence was identified in the course of submissions that Mr Robinson then asserted that the valuation was for the Robinson interests only. Mantach did not seek to clarify the basis or source of its instructions. The fact that Mr Mantach may have speculated that the Robinson interests were, through Boyds, seeking the valuations was not of sufficient moment to him to clarify the matter. The letter of Mantach to Boyds of 15 January 2001, giving the valuation figures, did not do so; nor did it indicate that Mantach assumed that Boyds was acting only for the Robinson interests. The only piece of relatively contemporary evidence to suggest that was the "With Compliments" slip provided with the valuations later in January 2001. That does not provide a basis for inferring the asserted representations or any of them. 163 It is worth noting, in this regard, that Mantach did not put the contention that APF should be attributed with the representations made by Kestrel and Mr Robinson to it. It expressly confined the foundation of its cross-claim to the allegedly implied representations. In our judgment, the primary judge did not err in concluding that those representations were not made by APF through Boyds. There was ample evidence to support that conclusion. The assessment of damages 164 The primary judge awarded to APF damages totalling $894,568. The major element of this sum was the difference between the total purchase price paid by APF for the three Robinson properties and the actual value of the three Robinson properties at the date of purchase. The total purchase price was $2,193,000, comprising $1,040,000 for Broadmoor, $753,000 for Lower Wilmot and $400,000 for Mannings Jetty Road. These figures matched precisely the figures in the 2001 Mantach valuations. His Honour found that the 2001 Mantach valuations of Broadmoor and Lower Wilmot were overstated, and that the true values of those properties at the date of purchase were $720,000 and $450,000 respectively. The valuation of Mannings Jetty Road was considered to be accurate. On this basis, the total actual value of the three Robinson properties was $1,570,000. The difference between the price paid and the actual value was $623,000. 165 Mantach, and Kestrel and Mr Robinson, challenged the primary judge's finding as to the true value of Lower Wilmot at the time of purchase. We have rejected the attack on that finding. In making the finding, his Honour accepted valuations of Mr Austin, who gave evidence, in preference to valuations of Mr Cripps, who also gave evidence. His Honour preferred Mr Austin, because he was a local valuer, whereas Mr Cripps was not. In addition, his Honour relied on the actual sale figure for Lower Wilmot in August 2004. For the purposes of assessing damages, therefore, we proceed on the basis that the total value of Broadmoor and Lower Wilmot at the time of purchase was $1,170,000. 166 In choosing to rely on the difference between the amounts actually paid and the value of the properties at the time of purchase, the primary judge regarded himself as applying the usual rule as to damages for a misleading and deceptive representation, and negligent misstatement, that the basic measure should be the difference between the price paid and the true value at the time of purchase. As the High Court in Kizbeau Pty Ltd v W G & B Pty Ltd [1995] HCA 4; (1995) 184 CLR 281 (Kizbeau) said at 291 (per Brennan, Deane, Dawson, Gaudron and McHugh JJ): 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. 167 In Kizbeau, the misleading and deceptive conduct was by a vendor, in making representations as to the use to which business premises could be put. It was found that the representations induced the purchaser to enter into the contract to purchase the business. Damages being the difference between the real value of the business and the price paid for it were clearly appropriate. The true value of the business was its value without the attributes that the premises were represented to have, because the premises did not have those attributes. 168 The present case is not one in which a purchaser was induced to enter into a purchase transaction by representations that were misleading and deceptive, or constituted negligent misstatements. APF had already made a decision that it would purchase the three Robinson properties. Its purpose in doing so was to enter into the proposed joint venture to grow pyrethrum crops on the three properties. The purpose of obtaining the valuation from Mantach, as well as the valuation from Mr Cubbins of Harrison, was not to enable APF to make a decision whether to purchase, but merely to assist in fixing the price at which they would purchase. In these circumstances, the loss suffered by APF as a result of the misrepresentations in the 2001 Mantach valuation, may not be measured appropriately by the application of the usual rule that the damage suffered is the difference between the real value at the date of purchase and the price paid. Where reliance on misleading representations does not make the difference between a decision to purchase and no purchase at all, the usual rule may not be applicable. 169 The original mechanism agreed between the Robinsons and APF for determining the price for the three Robinson properties was to engage two valuers and to split the difference between their valuations. This agreement was carried into effect by the engagement of Mantach and Harrison. Mr Cubbins communicated the figures for the Harrison valuations on 9 January 2001. They were $820,000 for Broadmoor and $575,000 for Lower Wilmot. Mantach communicated its figures on 15 January 2001. They were $1,040,000 for Broadmoor and $753,000 for Lower Wilmot. Mantach's figures were based on the incorrect calculation of the amount of croppable land on Broadmoor and on the over-valuation per hectare of the Lower Wilmot property and to a degree upon the overstatement of its croppable land. Upon receipt of the valuations, the parties did not carry into effect their original agreement to split the difference between the estimates of the two valuers. The Robinsons demanded a greater sum than that (initially $2,300,000) and APF agreed to pay a greater sum. The greater sum agreed was the amount of the 2001 Mantach valuations. 170 If the 2001 Mantach valuations had not misrepresented the values of Broadmoor and Lower Wilmot, it is probable that APF would have paid less to purchase the three Robinson properties. It is most likely, however, that APF would have purchased the three Robinson properties in any event, in order to pursue the proposed joint venture. It is most likely that APF and the Robinsons would have agreed on a price for the three Robinson properties that APF would have been prepared to pay and the Robinsons would have been prepared to accept. The difficulty is in determining that price on the evidence. In circumstances such as this, the parties' own evidence as to what they would have been prepared to pay if circumstances had been different is not necessarily a reliable guide. It is very unlikely that they would have thought about that question at the relevant time, because either they did not know of the flaws in the 2001 Mantach valuations, or one of them knew and was seeking to use the known falsity of the valuation to its own advantage, and the other did not know. The Court must do the best it can on the evidence to determine the price that would have been paid if circumstances had been different. 171 The starting point is to assume that Mantach had stated accurate figures for Broadmoor and Lower Wilmot. That is to say, the assumption should be made that the 2001 Mantach valuations would have represented the true values of those two properties as the primary judge found them to be, $720,000 for Broadmoor and $450,000 for Lower Wilmot. In those circumstances, the Harrison valuation would have been higher in each case, but no complaint was made that Harrison had been negligent in arriving at the figures given, or that those figures were themselves misleading or deceptive. They must be taken to have represented the legitimate opinion of Mr Cubbins as to the values of the two properties, and to lie within an acceptable range of variation for differences of opinion. 172 In those circumstances, it is most unlikely that APF and the Robinsons would have adhered to their original agreement to split the difference between the two valuations. They did not adhere to that agreement when the Harrison valuation was for a lower figure than Mantach, so it is even more likely that the Robinsons would have held out for a figure higher than the agreed median. What this figure would have been is hard to determine objectively. The Robinsons had a need to clear debts of their own. APF was at one stage prepared to pay even more than the 2001 Mantach valuations to secure the properties. If the 2001 Mantach valuations had represented the true values of Broadmoor and Lower Wilmot, however, the figures it gave would have had a significant effect on APF's determination of the amount it was prepared to pay and on the Robinsons' expectations of what they could sell for, and their ability to extract a higher price. In the circumstances, the most likely event is that the parties would have done what they did, and agreed on a price equivalent to the higher of the two valuations. In the supposed circumstances, the higher of the two valuations would have been the Harrison valuation. The components of the price representing Broadmoor and Lower Wilmot respectively would have been $820,000 and $575,000. With the addition of $400,000 for Mannings Jetty Road, the total price would have been $1,795,000. This was $398,000 less than the price actually paid. 173 The amount of $398,000 should have been the basic figure for damages on which the primary judge relied. His Honour was in error in applying the usual rule, that the basic figure should have been the difference between the price paid and the true value of the land, because APF was not being induced to buy the land. It was being induced to pay a higher price than it would have paid for land that it would have bought in any event, by being told by Mantach that the higher price was an appropriate one. If Mantach had told it the true value of the properties, APF would have paid in accordance with the valuation of Harrison. 174 It is then necessary to deal with the other elements that the primary judge added to the basic figure in his calculation of damages. His Honour accepted the evidence of an accountant, given on behalf of APF, of losses consequential upon APF having paid more for the three properties than it otherwise would have paid. These losses included additional interest and fees resulting from borrowing a larger sum of money to fund the purchase than would have been borrowed but for the Mantach valuation, other additional borrowing costs, and additional stamp duty paid. These amounts were calculated on the basis that the basic amount lost by APF was the difference between the price paid and the true value of the properties at the time of purchase. In accordance with the accountant's evidence, his Honour allowed adjustments on these amounts, and on the overpayment for the properties, in accordance with changes in the consumer price index, in order to compensate for the difference in the value of each dollar between the time of purchase and the time of judgment. It is impossible now for this Court to adjust these calculations in accordance with the different base figure we have arrived at as the correct figure. In addition, the question arises whether it is appropriate to award damages by reference to consumer price index changes on such items. The usual practice is to exercise the power given to the Court by s 51A(1) of the Federal Court of Australia Act 1976 (Cth), to award interest from the date on which the cause of action arose until the date of judgment. Such interest is awarded to cover any necessary compensation to a successful party for the cost of borrowing money that it may have had to borrow to enter into the transaction, or for the opportunity cost of not being able to use money expended in the transaction to produce a return in other ways. It also compensates for other minor costs, such as borrowing costs and stamp duty, and for any diminution in value of each dollar involved due to inflation. The exercise of the power to award interest in this way is both convenient and cost-saving. If we were not to exercise the power, it would be necessary for us to return this part of the proceeding for retrial, before a judge other than the primary judge (who has since retired). This would entail substantial expense to the parties. 175 In our view the power to award interest should be exercised, in lieu of the calculation of additional items of damages on the basis of the accountant's evidence, as undertaken by the primary judge. Order 35 r 7A of the Federal Court Rules now provides, as an option, that interest may be calculated according to the cash rate of interest set by the Reserve Bank of Australia from time to time plus 4%. This represents an appropriate way of compensating APF for the kinds of losses that the primary judge attempted to cover by specific calculations. 176 Accordingly, we would allow the appeals in part, and vary the order of the primary judge in paragraphs 1 and 2 of the Orders made on 19 December 2007, by substituting for the figure $894,568 the figure $398,000 plus interest at the rate specified in O 35 r 7A(1) of the Federal Court Rules for the period from 11 May 2001 (when contracts for the sale and purchase of the three Robinson properties were exchanged and the loss was thereby suffered) to the date of judgment in this Court, totalling $311,661.26. The calculation of the interest is set out in the following table. That calculation involves taking the cash rate published by the Reserve Bank of Australia for each of the periods specified, adding 4% to that rate, and determining the resulting percentage of the sum of $398,000 applicable to each of those periods. Start date End date Days Cash rate (%) Cash rate (%) + 4% Total ($) 11-May-01 4-Sep-01 118 5 9 $11,580.16 5-Sep-01 2-Oct-01 28 4.75 8.75 $2,671.51 3-Oct-01 4-Dec-01 63 4.5 8.5 $5,839.15 5-Dec-01 7-May-02 154 4.25 8.25 $13,853.67 8-May-02 4-Jun-02 28 4.5 8.5 $2,595.18 5-Jun-02 4-Nov-03 518 4.75 8.75 $49,422.88 5-Nov-03 2-Dec-03 28 5 9 $2,747.84 3-Dec-03 1-Mar-05 455 5.25 9.25 $45,892.67 2-Mar-05 2-May-06 427 5.5 9.5 $44,232.52 3-May-06 1-Aug-06 91 5.75 9.75 $9,674.67 2-Aug-06 7-Nov-06 98 6 10 $10,686.03 8-Nov-06 7-Aug-07 273 6.25 10.25 $30,512.42 8-Aug-07 6-Nov-07 91 6.5 10.5 $10,418.88 7-Nov-07 5-Feb-08 91 6.75 10.75 $10,666.95 6-Feb-08 4-Mar-08 28 7 11 $3,358.47 5-Mar-08 2-Sep-08 182 7.25 11.25 $22,326.16 3-Sep-08 7-Oct-08 34 7 11 $4,078.14 8-Oct-08 4-Nov-08 28 6 10 $3,053.15 5-Nov-08 2-Dec-08 28 5.25 9.25 $2,824.16 3-Dec-08 3-Feb-09 63 4.25 8.25 $5,667.41 4-Feb-09 7-Apr-09 63 3.25 7.25 $4,980.45 8-Apr-09 15-Oct-09 191 3 7 $14,578.80 TOTAL $ 311,661.26 Mantach's cross-claim against Kestrel and Mr Robinson 177 Kestrel and Mr Robinson also appealed on the basis that Mantach's cross-claim against them should not have been allowed, because it was made outside the statutory limitation period. This was not a point decided specifically by the primary judge. Probably this was because Kestrel and Mr Robinson did not plead the point in response to Mantach's fourth amended cross-claim. By O 11 r 10 of the Federal Court Rules, a statute of limitation is a point of law that a party is required to plead specifically. In contrast, APF did plead statutes of limitations specifically in answer to the cross-claim against it by Mantach. The making of that claim outside the relevant limitation period was one reason why the primary judge dismissed the cross-claim of Mantach against APF. The other reason was the substantial one that there was no ground for any liability by APF to Mantach in respect of the conduct of Kestrel and Mr Robinson. In dealing with the question of limitation periods on Mantach's cross-claim against APF, the primary judge took the view that any loss or damage incurred by Mantach was sustained on the date when contracts of sale were exchanged between APF and Kestrel in respect of the sale of the three Robinson properties. In his Honour's view, the exchange of contracts produced rights and obligations which, if they were disadvantageous, brought about loss and damage. 178 In Wardley Australia Ltd v State of Western Australia [1992] HCA 55; (1992) 175 CLR 514, the High Court made it clear that loss or damage as a result of misleading and deceptive conduct is not necessarily suffered on the assumption of contractual obligations consequent upon the conduct. It may be suffered at a later time, if the suffering of loss and damage depends upon the occurrence of other events. See especially the judgment of Mason CJ, Dawson, Gaudron and McHugh JJ at 527-33. If the defence of limitation had been pleaded at first instance, Mantach would have been able to consider whether it needed to plead and prove any facts which might assist it in overcoming the defence. There would have been an opportunity to argue the issues, and for the primary judge to reach a conclusion on them. As it turns out, none of this occurred. In the circumstances, it would be unjust to Mantach to allow Kestrel and Mr Robinson in effect to plead the statutory limitation defence for the first time on appeal. Contribution as between Mantach and Kestrel and Mr Robinson 179 The primary judge considered the question of contribution between Kestrel and Mr Robinson on one hand and Mantach on the other. His Honour appears to have taken the view that the appropriate principles were the ones referred to in Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282 (Burke). His Honour took the view that the present case, like Burke, was a case of a misleading and deceptive vendor and a negligent professional adviser of a purchaser. His Honour followed Burke in holding that Kestrel and Mr Robinson, whose conduct misled and deceived Mantach as well as APF, were not entitled to contribution from Mantach. Mantach was entitled to indemnity from Kestrel and Mr Robinson. The relevant passages appear at [373]-[378] of his Honour's reasons for judgment. 180 There are four possible sources of power to order contribution between the respective parties who are liable to APF: · the principles referred to in Burke, especially at [14]-[18] per Gaudron ACJ and Hayne J; · Section 3(1) and (2) of the Wrongs Act 1954 (Tas); · Part VIA of the TP Act; and · Part 9A of the Civil Liability Act 2002 (Tas). 181 The relevance of some of these sources may depend upon the dates at which APF's causes of action against the other parties came into existence, by the suffering by them of loss and damage, and whether that event occurred after the enactment of the relevant provisions. It is unlikely that the provisions would be held to apply retrospectively to causes of action already in existence. These questions were not argued in detail, and it is unnecessary to determine them in any event. Whatever the source of the power to award contribution, the conditions upon which the power is to be exercised are in substance the same. In the first place, it must be determined whether the liability of Mantach is concurrent with that of Kestrel and Mr Robinson. If so, the Court must then consider what is just and equitable in terms of the respective contributions that should be made by those parties, having regard to the degree to which the culpability of each contributed to bringing about the loss and damage suffered by APF. 182 As to the first of these issues, the primary judge erred in regarding the case as similar to Burke. In that case, the vendor of a property was liable for misleading and deceptive conduct, by making untrue representations to the purchaser about the financial standing of the tenants of the property. The purchaser's solicitor was liable for breach of retainer as solicitor, and negligence, in failing to advise the purchaser to make adequate inquiries about the financial standing of the tenants. Not surprisingly, the majority of the High Court found that there was not sufficient relationship between the bases of the liability of the two parties to permit the misleading and deceptive vendor to recover contribution from the solicitor, who had omitted to perform a professional duty. 183 In the present case, the causes of action against Kestrel and Mr Robinson and against Mantach were substantially similar. Mr Robinson was under a duty not to mislead and deceive APF, if not pursuant to s 52 of the TP Act, then pursuant to s 14(1) of the Fair Trading Act 1990 (Tas). Mr Robinson was also under a duty not to act with want of due care in making representations that bore upon the valuation of the properties to be sold to APF. In each case, those duties carried with them an obligation to correct misinformation if it became known that Mr Robinson had misinformed Mantach earlier, the circumstances being such that it was likely that Mantach would rely on that earlier misinformation if it were not corrected. Similarly, Mantach was under a duty not to mislead or deceive APF as to the value of the two properties, by virtue of s 52 of the TP Act and, if necessary, s 14(1) of the Fair Trading Act 1990 (Tas), and under a duty to APF to act with reasonable care in the preparation of the valuations of Broadmoor and Lower Wilmot. 184 The primary judge found that there was misleading and deceptive conduct on the part of Kestrel and Mr Robinson, in misinforming Mantach as to the amount of croppable land on both Broadmoor and Lower Wilmot and in failing to correct that misinformation before the 2001 Mantach valuations. His Honour also found that Kestrel and Mr Robinson were negligent in misstating the extent of the croppable land on each of the properties, and that Mantach relied on the negligent misstatements to its detriment in preparing the valuations. It is important to note that his Honour did not make a finding of fraud against Kestrel or Mr Robinson in respect of the representations made in 1997 about croppable land, or the failure to correct them subsequently. A finding of fraud, if made, would have differentiated the liability of Kestrel and Mr Robinson from that of Mantach, and would have justified his Honour's conclusion that Kestrel and Mr Robinson should not be entitled to claim contribution from Mantach, and Mantach was entitled to indemnity from them. Insofar as his Honour's findings about Mantach's reliance on the admittedly false Agtech Report might have suggested that there was fraud, we have held that those findings were not justified (see [156] above). The primary judge also held that Mantach misled and deceived APF by its valuations of Broadmoor and Lower Wilmot. Mantach was also negligent. It should have taken further steps to ascertain accurately the extent of the croppable land on Broadmoor and Lower Wilmot, and it acted with want of due care in choosing the rate at which it valued each hectare of land on Lower Wilmot. 185 The present case is therefore one in which the misleading and deceptive conduct and negligence of Kestrel and Mr Robinson and the misleading and deceptive conduct and negligence of Mantach both contributed to the loss and damage suffered by APF. The conduct of each was not distinguishable in substance, in the way that the conduct of the vendor in Burke was distinguishable from that of the purchaser's solicitor. The similarity of the causes of action APF had against Kestrel and Mr Robinson and against Mantach, coupled with the manner in which the conduct of each combined to bring about the loss and damage of APF, dictates the conclusion that the case is a proper one for contribution, rather than one for indemnity by Kestrel and Mr Robinson to Mantach. 186 The assessment of the relative culpability of Mr Robinson and Mr Mantach is complicated by a number of factors. The major one is that there were two separate properties involved, Broadmoor and Lower Wilmot. In relation to Broadmoor, the uncorrected representations as to the extent of the croppable land had a much greater effect on the eventual valuation of Mantach than did the similar representations in relation to Lower Wilmot. In the case of Broadmoor, it was the overestimate of the amount of croppable land that was the principal cause of the excessive valuation. In the case of Lower Wilmot, the overestimate of croppable land played a relatively minor part, the substantial factor being Mr Mantach's selection of an unreasonably high figure per hectare as the appropriate value which, coupled with the "catch-all" approach, resulted in a substantial over-valuation. In the case of Broadmoor, we have held that the loss and damage suffered by APF was the difference between the amount paid for the properties concerned, and the amount that would have been paid if the 2001 Mantach valuations had been accurate, being the amount of the Harrison valuations. Of the total sum of $398,000 loss and damage suffered by APF, $220,000 was attributable to the overvaluation of Broadmoor and $178,000 was attributable to Lower Wilmot. Kestrel and Mr Robinson ought to bear somewhat more than half of the liability for the former, but substantially less than half of the liability for the latter. Precise calculation is impossible, but on this analysis, it is just and equitable to say that Kestrel and Mr Robinson should bear half of the overall liability and Mantach should bear the other half. 187 For these reasons, the Orders made by the primary judge should be varied, so as to delete pargraph 2 thereof, in which his Honour ordered judgment for Mantach against Kestrel and Mr Robinson, for the full amount of the damages, and substituting for that paragraph an order to the effect that Kestrel and Mr Robinson on the one hand and Mantach on the other hand each be liable for 50% of the amount of the damages. This variation of the Order has consequences in relation to paragraphs 6 and 7 of those Orders. In paragraph 6, his Honour ordered that Kestrel and Mr Robinson indemnify Mantach in respect of costs awarded against Mantach in favour of APF. In paragraph 7, his Honour ordered that Kestrel and Mr Robinson pay Mantach's costs of the proceeding at first instance. Both of those Orders should be set aside, consequent upon the removal of the indemnity and the substitution of equal contribution. Instead, it should be ordered that, as between them, each of Kestrel and Mr Robinson on the one hand and Mantach on the other hand should be liable to pay 50% of the costs awarded in favour of APF. In respect of the costs of the proceeding at first instance, each of Kestrel and Mr Robinson, and of Mantach, should bear their own costs. COSTS OF THE APPEAL 188 In these two appeals, each of the parties has had some success and some failure. Kestrel and Mr Robinson have succeeded in reducing the amount of damages that they are required to pay to APF and in having substituted for their liability to indemnify Mantach the obligation to pay 50% of the damages and costs payable to APF. In all other respects, they have failed in their appeal. Significantly, they have failed altogether to avoid liability to APF. Similarly, Mantach has succeeded in reducing the amount of damages payable by it to APF. It has also failed to overturn the findings on which its liability to pay damages to APF was based. It has likewise failed to sustain its indemnity against Kestrel and Mr Robinson in respect of damages and costs, and has suffered a reduction of that indemnity to its liability to satisfy 50% of the judgment for damages and costs in favour of APF. Given the complexities of the issues in the appeals, any attempt to order that the various parties pay various portions of other parties' costs would be fraught with difficulty. The interests of justice will be best served if there is no order as to the costs of any party to either of the appeals. I certify that the preceding one hundred and eighty-eight (188) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Gray, Mansfield & Tracey. Associate: Dated: 15 October 2009 Counsel for Kestrel Holdings Pty Ltd and Nicolas Graeme Robinson: W Ayliffe and D Geason Solicitor for Kestrel Holdings Pty Ltd and Nicolas Graeme Robinson: Butler McIntyre & Butler Counsel for Halisbwyn Pty Ltd: P Riordan SC and C Madder Solicitor for Halisbwyn Pty Ltd: DLA Phillips Fox Counsel for the APF Properties Pty Ltd: D Gunson SC and A Valentine Solicitor for the APF Properties Pty Ltd: Ware & Partners Date of Hearing: 25 and 26 August 2008 Date of Judgment: 15 October 2009