lo 7 } f 4 ¢ & t & io Trade practices - consumer protection - misleading and deceptive conduct - jurisdiction of court to hear and determine all claims made by applicant - admissibility of similar fact evidence. CATCHWORDS Trade Practices Act 1974, s.52. MISTER FIGGINS PTY. LTD. v. CENTREPOINT FREEHOLDS PTY. LTD. Federal Court of Australia V.G. No. 116 of 1980 Coram: Northrop J. Melbourne 25 February 1981. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY ) V.G. No. 116 of 1980 ) ) GENERAL DIVISION BETWEEN: MISTER FIGGINS PTY. LTD. Applicant and CENTREPOINT FREEHOLDS PTY. LTD. Respondent NORTHROP J. REASONS FOR JUDGMENT 25 FEBRUARY 1981. By application filed on 29 September 1980 the applicant claims relief against the respondent under a number of headings. Included among the claims made are the following: 1. Declarations that specified conduct of the respondent constituted conduct of the respondent in trade or commerce which was misleading or deceptive or likely to mislead or deceive in contravention of s.52(1) frade Practices Act 1974 as amended ("the Act"), that specified representations made on behalf of the respondent contravened s.53(aa) of the Act and that specified statements made on behalf of the respondent were made in contravention of s.53A of the Act. 2. Damages under s.82 of the Act for loss and damage suffered by or in consequence of the said conduct, representations and statements with incidental orders of set-off between any damages so awarded and any rent payable by the applicant to the respondent under the terms of deeds being leases of shops at the Centrepoint Mall at Melbourne. 3. Orders under s.87 of the Act in relation to the leases of the said shops. 4, A declaration that the applicant is entitled to avoid the leases and for consequential orders under s.87 of the Act and to rescind the leases pursuant to its common law entitlement and for consequential orders. 5. Damages for breaches of common law. The application proceeded by way of pleadings and came on for hearing on 16 February 1981. The Statement of Claim as amended pursuant to leave granted on that day, alleged the incorporation of each of the parties and that the respondent was a trading corporation. Paragraph 2 is set out: of service. I have given no full consideration to the significance of those words. All I say is that they have no relevance to the circumstances of this case and thus do not here operate to cut down the effect of the general part of the definition, For the reasons I have given the point of law which has been argued is decided adversely to the respondents. I order that they bear the costs of the argument. wcI37 pages rye at wu 3p oncurabic By tnt Associate jucginent horsin Gh + Mir gus tise Sheppara. pated {tr Regal 14 8 - 10. ESLER RES Re eT a word of wide import. A benefit could be conferred by a person performing work or upon such a person, Is there then anything in the provisions of para~ graph (a) of the definition which sheds light on the matter? Sub-paragraph (i) specifically includes benefits that are provided, granted or conferred under a contract for or in relation to the performance of work whether with or without the supply of goods. This provision, which is not to limit the generality of the principal part of the definition, does seem to envisage aq benefit provided as a result of work being done under a contract for another pursuant to which goods as well as work may be provided. But the critical words are, "a contract for or in relation to the performance of work". Those words do not suggest to me that there could not be, within the meaning of the section, a benefit conferred pursuant to such a contract by the party for whom the work 1s done as well as by the party who carries out the work. Be that as it may, the later provisions of the definition are clearly made sub- sidiary to the earlier more general provisions and cannot control the meaning which those provisions have. I have also had regard to the closing words of the definition which exclude rights or benefits being the supply of goods or the performance of work under a contract oi — ee once the benefit was said to be the opportunity to earn income from the first respondent in return for work to be performed by the cartage contractors, no more was involved than the opportunity to receive payments of money. This was said to be outside the section; see my judgment in the S.W.B. Family Credit Union case 32 A.L.R. at pp.383-384, . - I am of opinion that that submission should be rejected because there is more involved in the provision of work or the opportunity to earn income from work than a mere payment of money. The benefit is not the payment or payments of money which will be made but the opportunity to carry out the work which 1s to be provided. The payment of money which is to come as the result of the exercise of that opportunity is but a consequence of the availability of the work and the undertaking of it by the cartage contractors. It remains to consider whether, notwithstanding the width of the definition of "services", there is to be perceived a legislative intention to limit its meaning, where parties are in a relationship pursuant to which one provides work for the other, to those benefits which are conferred on the party for whom the work is done, in this case the first respondent. In my opinion there is nothing in the general part of the definition to warrant the con- clusion that there is any such limitation. "Benefit" is Ee Tee fie Sa ER ect ei RN ERTS PORES AIRE ETRE ST NLS TOOT NETTIE EST en TSR IS SEH SEeES ES a naece tad = xs "benefits" and to the circumstance that these will comprise "services" if they are provided, granted or conferred in trade or commerce the Commission's approach to the problem can be understood. It submits that the first respondent offered to provide (from the definition of "supply") a benefit that was to be provided in trade or commerce on condition that Mr. Ahlquist to whom the first respondent offered to provide the benefit would acquire a truck from Denmac Ford Pty. Limited. The benefit which the first respondent was said to be providing - and this is the essence of the matter - was work for Mr. Ahlquist when he acquired the truck. In terms of the particulars earlier set out that allegation was further refined in the Commission's allegation that each offer was of the opportunity to earn income from the first respondent in return for work to be performed by the cartage contractors including Mr. Ahlquist. The word "work" is defined in the Concise Exford Dictionary to mean, inter alia, employment, especially the opportunity of earning money by labour, It is in that sense that the Commission has used the word "work" an the particulars furnished as part of the statement of claim. One of the attacks made by counsel for the first respondent upon that approach to the problem was to say that SSR IE TS Ta ELSE However, I have proceeded as I have because both parties asked me to do so, saying that the point might or might not arise depending on how the evidence in the case falis out. I should add that I have not given any attention either to the significance of the word "will" in s.47(6). That word was the subject of discussion and decision by the majority in S.W.B. Family Credit Union Limited v. Parramatta Tourist Services Pty. Limited (1980) 32 A.L.R.365. That was not the subject of any submission by counsel and its significance is not relevant to the outcome of the point here in question. in ordinary language a person who performs work for another is performing a service for him, in that sense Mr. Ahlquist, if he were given work by the first respondent, would be performing a service for it. In return for that service he would be paid money. The first respondent would not be performing a service for Mr. Ahlquist. But the matter must be approached with the definition of "services" in mind. The fact that the first respondent would not in the circumstances of this case be providing a service in the ordinary sense of that term will not avail it if it is providing, for example, a benefit which is to be regarded as a service for the purposes of the definition. If one turns to the terms of the definition which I have earlier set out and has regard only to the word "(b) a contract of insurance; (c) a contract between a banker and a customer of the banker entered into in the course of the carrying on by the banker of the business of banking; or (a) any contract for or in relation to the lend- ing of moneys, but does not include rights or benefits being the supply of goods or the performance of work under a contract of service" It is to be observed that although the definition is not an exhaustive one that circumstance is of no relevance ir the present case. "Supply" is defined in s.4 to include, when used in relation to services, "provide, grant or confer", The transaction which the Commission alleges in the present case is a simple one. It may be summarised as one in which the first respondent offered work as a cartage contractor to Mr. Ahlquist on condition that he acquire a Ford truck from Denmac Ford Pty. Limited. The Commission alleges that the offer to supply Mr. Ahiquist with work is an offer to supply him with services within the meaning of the Act. It submits that the offer need not be one intended, if eventually accepted, to create a contractual relationship although it may have been of this kind. That as not a submission with which I have dealt in determining the point at issue. I have assumed that the offer may be one the acceptance of which would not result in a binding contract. That assumption may not prove to be correct. Be? LT ASRS ee ag nt to roses 4 a Mets DASE Sth a Re Mes SET ee Seti. Seth ies beets SIT sc eee ne 2 defence, the detail of which need not be referred to. The essence of the respondents! submissions is that the conduct which the Commission alleges is not within the section because this is not a case where the first respondent offered to supply services; rather it is a case where, to take the example provided by paragraph 4 of the amended statement of claim, Mr. Ahlquist offered ~ to supply services to the first respondent. The competing submissions of the parties cannot be understood without reference to the definitions of "services" and "supply" in s.4 of the Act or without reference to sub- section (13) of s.47. Paragraph (a) of that sub-section provides that a reference to a condition shall be read as a reference to any condition, "whether direct or indirect and whether having legal or equitable force or not", "Services" is defined in s.4 of the Act as follows: " tservices! includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges or facilities that are, or are to be, provided, granted or conferred in trade or commerce, and without limiting the generality of the foregoing, includes the rights, benefits, privileges or facilities that are, or are to be, provided, granted or conferred under - (a) a contract for or in relation to - (i) the performance of work (including work of a professional nature), whether with or without the supply of goods; (ii) the provision of, or of the use or enjoy- ment of facilities for, amusement, entertainment recreation or instruction; or (iii) the conferring of rights, benefits or privileges for which remuneration is pay- able in the form of a royalty, tribute, levy or similar exaction; "a, In or about May, 1979 the first respondent offered to supply work as a cartage contractor to Gordon Ashburn Ahlquist on condition that he acquire a Ford Louisville truck from Denmac Ford Pty Ltd. PARTICULARS The said offer was made at Brisbane in the State of Queensland to the said Gordon Ashburn Ahlquist orally by the second respondent as the servant or agent on behalf of the first respondent." Additional. . particulars have been filed. it is relevant only to refer to paragraph 1(a) of those particulars which is as follows: "]1, As to paragraphs 4 to 14 inclusive of the Amended Statement of Claim, particulars of the full terms of each offer therein referred to are as follows:- (a) Each offer was of the opportunity to earn income from First Respondent in return for work to be performed by the offeree or offerees as cartage contractor for the First Respondent, on condition that the offeree or offerees acquired a Ford Louisville truck from Denmac Ford Pty Ltd (or in the case of one Lachlan Matthew Hogan or alternatively he and Jane Joanna Hogan a Ford truck from Denmac Ford Pty Ltd)." Paragraph 2(d) of the first respondent's defence says that the first respondent obgects in point of law to para- graphs of the amended statement of clain, including para- graph 4, on the ground that the conduct alleged in paragraphs 4 to 14 inclusive thereof would not fall within any of the descriptions in s.47(6) of the Act, "since offering to engage and pay a supplier of services does not fulfil any of such descriptions", The second respondent has raised a similar point in his Be LSE PS tS es AE provide for what is to constitute that conduct. The sub-section in question is sub-section (6) which provides: " A corporation also engages in the practice of exclusive dealing if the corporation - (a) supplies, or offers to supply, goods or services; (b) supplies, or offers to supply, goods or services at a particular price; or (c) gives or allows, or offers to give or _ allow, a discount, allowance, rebate or credit in relation to the supply or pre- posed supply of goods or services by the corporation, on the condition that the person to whom the corporation supplies or offers or proposes to supply the goods or services or, if that person is a body corporate, a body corporate related to that body corporate will acquire goods or services of a particular kind or description directly or indirectly from another person." The amended statement of claim in paragraphs 4 to 14 inclusive alleges the making by the first respondent of a number of offers each of which is said to constitute exclusive dealing and thus a contravention of s.47, Each paragraph is in a form similar to the others, the only difference being that the offers were made at different times to different persons. In order that the point in question may be understood it is sufficient, therefore, to refer only to one paragraph. For this purpose I have selected paragraph 4 and the particulars appended to it. It is as follows: 2. "2. At all material times one Craig Robertson acted as a servant and/or agent of the respondent in relation to leasing and proposed leasing of shops by the respondent to tenants at the Centrepoint Mall, Bourke Street, Melbourne." The Defence, as amended pursuant to leave granted on 16 February 1981, contained the following: "2. Save to admit that one Craig Robertson acted in connection with the leasing and proposed leasing of shops by the Respondent to tenants and prospective tenants at the Centrepoint Mall, Bourke Street, Melbourne, it denies the allegations contained in paragraph 2 thereof." It is common ground between the parties that the said Craig Robertson died in March 1979. The applicant pleads the existence of two deeds constituting the leases of the said shops, and by paragraph 4 of the Statement of Claim alleges that in order to induce ut to make and enter into the said deeds the respondent represented and warranted to the applicant some seventeen separate facts, hereinafter referred to as "representations". Particulars allege that the representations were partly in writing, partly oral and partly to be implied and were given and made by Mr. Robertson acting as agent for the respondent. The respondent admits the deeds but denies each and every allegation contained in paragraph 4 of the Statemenc of Claim. The applicant alleges that each of the representations was faise and that the warranties were broken, all of which is denied by the respondent. The applicant alleges that the representations were made in connection with the grant or possible grant of an interest in land under s.53A of the Act, all of which is denied by the respondent. Paragraph 7 of the Statement of Claim alleges that the representations constituted contraventions of s.52, s.53(aa) and s.53A of the Act. The respondent denies each of those allegations. The applicant alleges that the representations were made fraudulently and further constituted a breach of a duty of care owed to the applicant. The respondent denies each of those allegations. Paragraph 11 of the Statement of Claim is set out: "ll. By reason of the matters aforesaid and in particular — (a) By reason of the contravention of the provisions of Sections 52, 53(aa) and 53A of the Trade Practices Act 1974; (b) By reason of the breaches of warranty and the false representations made and negligence as aforesaid - the applicant has suffered and will continue to suffer loss and damage in respect of the said shops." Particulars are then set out. The respondent denies each of the allegations. The respondent's defence, as it stood after being amended on 16 February 1981, pleaded a number of facts designed to establish defences of waiver and estoppel, a defence based upon s.45 of the Act and defences based upon express terms contained in the said deeds. At the time leave was given to the respondent to amend its defence to include, inter alia, those defences, the applicant was given leave to file and serve within four days a reply to the amended defence. In his opening, counsel for the applicant stated that the respondent, in the year 1977, was developing a shopping complex fronting Bourke Street, Melbourne, to be known as the "Centrepoint Mall" and that during a series of meetings in 1977 and 1978 Mr. Robertson made the representations to Mr. Figgins on behalf of the applicant. Evidence called would establish that the representations were false and that a number of them were known to be false by Mr. Robertson and the respondent, and that the representations were made with the intent of inducing the applicant to enter into the deeds. Counsel stated that among the witnesses he proposed to call were eight persons, other than Mr. Figgins, who were closely associated with tenants of other shops in Centrepoint Mall and to whom Mr. Robertson had made representations identical with or similar in substance to those made to Mr. Figgins. Of those eight witnesses, five were closely associated with tenants which, as applicants in proceedings pending in the Federal Court, were making claims similar to those made by the applicant. Before the first witness was called counsel for the respondent sought a ruling that the evidence proposed to be given by those eight witnesses was irrelevant and not admissible and that the ruling should be given before any evidence was called. In support of his submissions counsel established that by letter dated 9 February 1981, the applicant's solicitors informed the respondent's solicitors that it was proposed to call evidence from witnesses to show that statements were made by agents of the respondent which were Similar in substance to those made to Mr. Figgins. By letter dated 12 February 1981, hand delivered, they identified the proposed witnesses as being other tenants at the Mall to whom Mr. Robertson had made similar or identical representations as those made to Mr. Figgins. The names of the proposed witnesses were supplied by letter dated 13 February 1981. By letter dated 12 February 1981 the respondent's solicitors had given notice that they contended that the evidence was inadmissible and that inadequate notice had been given if the evidence was otherwise admissible. [In substance, counsel submitted: 1. That the evidence was inadmissible to prove that the representations alleged by the applicant were in fact made to the applicant by Mr. Robertson on the basis thac it was not probative of the issue as to whether statements were made by A to B to prove that A made those or similar statements to other persons (similar facts). 2. If the applicant intended to rely upon the principle that the evidence was directed to prove that the respondent had engaged in a course of systematic fraud, it had to establish more than that the representations had been made to the witnesses, but had to establish the instances of fraud and that that had not been pleaded. 3. That if the evidence was tendered to prove a systematic fraud, the evidence should not be admitted because it would be oppressive or unfair to the respondent and that the respondent had not been given fair notice of the evidence, particularly in the circumstances where Mr. Robertson was deceased, five of the proposed witnesses were closely associated with proceedings of a similar nature which were presently pending in the Court and that in order to be in a position to cross examine each of the eight witnesses t°he respondent should have been given adequate time for preparation of what was said to be eight separate actions. 4, That if the applicant relied upon the proposed evidence to establish intent or fraud on the part of the respondent that would be relevant only with respect to the common law claims based on fraud, or possibly breach of duty and that the Federal Court did not have jurisdiction to hear and determine the claims based on fraud, negligence or breach of warranty and that the evidence of intent of fraud was not admissible. In answer, counsel for the applicant indicated that it was proposed to file and deliver a reply to the effect that the applicant was induced to enter into the deeds which gave rise to the alleged waiver and estoppel and the defence based upon the express terms contained in the deeds by reason of the representations which constituted misleading or deceptive conduct as well as fraud, and that it was entitled to rescind the deeds. In the light of the proposed reply, the substance of the submissions made by counsel for the applicant were: 1. That the witnesses would give evidence that in the course of negotiation leading to the execution of deeds being leases of other shops at Centrepoint Mall, Mr. Robertson had made a number of representations which were, in fact, similar to the representations made to Mr. Figgins, and that the only issue was whether that evidence was relevant to prove an issue of fact between the applicant and the respondent, namely that Mr. Robertson had made the representations to Mr. Figgins. 2. That the repetition of the representations tended to establish that the respondent intended to make Misleading or deceptive statements and that established intent which supported the view that the representations did constitute conduct which contravened s.52 of the Act. 3. (Ct Insofar as fraud is concerned, the evidence tended to establish that the representations made to Mr. Figgins were not made by mistake or by accident but pursuant to a system or course of conduct. 4, The evidence would tend to establish the agency of Mr. Robertson which was an issue raised by the pleadings. 5. No principles of law required a party to give prior notice to an opposing party of the names of proposed witnesses. 6. The court had jurisdiction to hear and determine the common law claims and in that event, if otherwise necessary, the evidence was directed to prove a course of conduct or system of fraud by the respondent. In reply made on 18 February 1981 counsel for the respondent sought and was granted leave to further amend - 10- the defence by deleting the paragraphs raising the defences based upon express terms contained in the deeds, c.f. Kok Hoong v. Leong Cheong Kweng Mines Ltd. [1947] A.C. 993, especially at pp.1016-1017. The defence, as further amended, was filed on 19 February 1981 and retained the paragrapahs raising the defences of waiver and estoppel. By its reply filed on 18 February 1981 the appellant alleges that in doing the acts alleged tc constitute waiver or giving rise to the estoppel it was induced to do so by the representations, warranties, misleading and deceptive conduct, false and fraudulent representations and false and misleading statements of the respondent. The substantive question to be determined is whether the evidence proposed to be given by the eight witnesses has any probative force in relation to a fact in issue. The general principle is that proof of "similar facts" done by a party to litigation does not tend to prove that the party did a particular act in issue alleged in litigation. The general principle is stated in Cross on Evidence, Second Australian Edition, paragraph 14.2 at p.342, as follows: "Evidence cf the misconduct of a party on other occasions (including his possession of uncriminating material) must not be given if the only reason why it is substantially -~ ll - relevant is that it shows a disposition towards wrongdoing in general, or the commission of the particular crime or civil wrong with which such party is charged, unless such a disposition is of particular relevance to a matter in issue in the proceedings." This is a general principle and there are many instances where evidence of "similar facts" is admissible. Thus evidence of "similar facts" is admissible where the facts include "circumstances whose relation to the fact in issue consists in the probability or increased probability, judged rationally upon common experience, that they would not be found unless the fact to be proved also existed". This principle was discussed by Dixon J., as he then was, in Martin v. Osborne (1936) 55 C.L.R. 367 at pp.375-6 as follows: "If an issue is to be proved by circumstantial evidence, facts subsidiary to or connected with the main fact must be established from which the conclusion follows as a rational inference. In the inculpation of an accused person the evidentiary circumstances must bear no other reasonable explanation. This means that, according to the common course of human affairs, the degree of probability that the occurrence of the facts proved would be accompanied by the occurrence of the fact to be proved is so high that the contary cannot reasonably be supposed. The circumstances which may be taken into account in this process of reasoning include all facts and matters which form constituent parts or ingredients of the transaction itself or explain or make intelligible the course of conduct pursued. The moral tendencies of persons, their proneness to acts or omissions of a particular description, their reputations and their associations are in general not matters which it is lawful to take into - 12 - account, and evidence disclosing them, if not otherwise relevant, is rigidly excluded. But the class of acts and occurrences that may be considered includes circumstances whose relation to the fact in 1ssue consists in the probability or increased probebility, judged rationally upon common experience, that they would not be found unless the fact to be proved also existed. The application of this, as of any other general statement about relevancy is subject to the well-known specific rules of exclusion. For instance, the rule against hearsay and the warning implied in the descriptive phrase res inter alios acta lead to the exclusion of evidence not only of what a strangec to the cause has said but also of what he has done, if it is offered to prove his knowledge of some fact and thus the existence of that fact, notwithstanding that the fact itself be relevant and its proof by another medium be receivable. But it is at least true, I think, that the acts of a party are admissible against him whenever they form a component in a combination of circumstances which is unlikely to occur without the fact in issue also occurring. The repetition of acts or occurrences is often the very thing which makes it probable that they are accompanied by some further fact. The frequency with which a set of circumstances recurs or the regularity with which a course of conduct is pursued may exclude, as unreasonable, any other explanation or hypothesis than the truth of the fact to be proved." His Honour then referred to a number of cases illustrating the application of those principles. Section 52({1) of the Act provides that a corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Under s.80 of the Act, the court 15S empowered, on the application. of specified persons, to grant - 13- an injunction restraining a person from engaging in conduct that constitutes a contravention of s.52({1). In the present case, the applicant alleges that the representations by Mr. Robertson constitute conduct which contravenes s.52(1) of the Act. That conduct has now ceased, but on the assumption that it was continuing and the applicant was seeking an injunction under s.80 of the Act, evidence of representations made by Mr. Robertson would be admissible to prove that conduct. The applicant is seeking damages under s.82(1) of the Act which provides that a person who suffers loss or damage by conduct of another person that was done in contravention of s.52(1) may recover the amount of the loss or damage against that other person. In order to succeed in its claim the applicant must establish that it suffered loss or damage by the conduct of the respondent. On the facts of the present case an essential feature in establishing the claim appears to be that the applicant knew of that conduct. In these circumstances counsel for the respondent contended that since the knowledge of the applicant was an essential feature of the applicant's case, evidence of similar representations made to other persons was irrelevant to tend to prove that the representations were made to the applicant and he contrasted the provisions of s.80 of the Act. Put another way, his submission was that the fact that the representations, even if constituting conduct under s.52, were made to other persons, does not tend to prove that the representations, even if constituting conduct under s.52, -~ 14 were made to the applicant. He contended that the evidence of the eight witnesses was not logically probative of the fact in issue. I do not accept that contention. It must be remembered that at present the only issue for determination is the admissibility of evidence. The question of the weight to be given to the evidence, if admitted, does not arise at this stage. Likewise, the ruling sought relates to evidentiary facts, not to material facts, c.f. Harris v. Gas and Fuel Corporation of Victoria [1975] V.R. 619. In that case the Full Court of the Supreme Court had to consider whether evidence of "similar facts" constituted "material facts" under s.23A of the Limitation of Actions Act 1958. In a joint judgment, the Court said at p.625: "But even if all this were established and it was admissible as an evidentiary fact, this would still not make it a material fact relating to the applicant's cause of action. However much similar facts could be relied upon as evidence to support a conclusion of negligence or breach of duty of the Gas and Fuel Corporation in causing personal injury to the applicant (compare Martin v. Osborne (1936), 55 C.L.R. 367), the similar facts so established would not be material facts which must be pleaded and upon which any cause of action by the applicant would be based." In the present case, the respondent at all material times was developing a shopping complex and in so doing was seeking tenants to whom it could lease shops situated within ~15 - that complex. By its pleadings, the respondent admits that Mr. Robertson acted in connection with the leasing and proposed leasing of shops by the respondent to tenants and prospective tenants in that complex. The fact in issue is whether Mr. Robertson made representations to Mr. Figgins which representations constituted engaging in conduct under s.52 of the Act. If it is established by evidence that Mr. Robertson made representations which constituted conduct under s.52 of the Act to other prospective tenants of shops in the same complex, there is a probability or increased probability judged rationally upon common experience, that similar representations were made to Mr. Figgins. The representations, if constituing conduct of the requisite kind, established a pattern which would lead to support the proof of the fact in issue. The evidence of the eight witnesses would, in my opinion, have probative value and is logically probative of a fact in issue. The line of authorities relied upon by counsel for the respondent dealt with 1ssues of fraud, and in view of the opinion I have formed, based as it is on conduct proscribed by s.52(1) of the Act and related to one venture, I do not need to refer to those authorities further. It is sufficient to say that they are not uniform and arise mainly in jurisdictions outside Australia. Likewise, at this stage, I do not express any opinion on the relevance of intent in establishing a case under the Act. - 16 - In support of his submissions based on oppression and unfairness, counsel for the respondent relied upon an expression of opinion in Mood Music Publishing Co. Ltd. v. De Wolfe Ltd. [1976] 1 Ch. 119. That was an action based on breach of copyright where a defence was that any resemblance was coincidental. The defendant objected to evidence being tendered to establish "similar facts" in relation to other recordings. The evidence included a "trap order". Lord Denning at p.127 said: "The admissibility of evidence as to 'similar facts' has been much considered in the criminal law. Some of them have reached the highest tribunal, the latest of them being Reg. v. Boardman [1975] A.C. 421. The criminal courts have been very careful not to admit such evidence unless its probative value is so strong that it should be received in the interests of justice: and its admission will not operate unfairly to the accused. In civil cases the courts have followed a similar line but have not been so chary of admitting it. In civil cases the courts will admit evidence of similar facts if it is logically probative, that is, if it is logically relevant in determining the matter which is in issue: provided that 1t is not oppressive or unfair to the other side: and also that the other side has fair notice of it and is able to deal with it. Instances are Brown v. Eastern & Midlands Railway Co. (1889) 22 Q.B.D. 391; Moore v. Ransome's Dock Committee (1898) 14 T.L.R. 539 and Hales v. Kerr [1908] 2 K.B. 601." The cases therein referred to do not seem to support the general principles stated. Counsel could not refer to any other authority to support his contention. In my opinion, -~17- witnesses, otherwise logically probative of a fact in issue, is not rendered inadmissible by reason of oppression and unfairness. Nothing that I have said is to be taken as pre-judging any further application made by counsel for the respondent. In my opinion, the evidence outlined is admissible and I so rule. In these circumstances it is unnecessary to consider the other matters raised in argument. The issue of jurisdiction, however, was argued at length, and it would be ef assistance to the parties if I express my opinion on that issue. Counsel for the respondent contended that the court had no jurisdiction to hear and determine any of the claims except those arising under the Act. He relied upon the opinions expressed in the recent decisions of the High Court in Philip Morris Incorporated v. Adam P. Brown Male Fashions Pty. Ltd. and United States Surgical Corporation v. Hospital Products International Pty. Ltd., unreported, 10 February 1981. There is no doubt that the Federal Court has jurisdiction to hear and determine "matters" arising under the Act, but the issue is, which of the other claims made by the applicant come within those "matters". It is immaterial what phrase is used to describe those claims, whether it be ~ 18 - "accrued jurisdiction", "attached jurisdiction" or "incidental jurisdiction". What is important is to determine the principles to be applied and the application of those principles to the facts of the present case. Stephen J. agreed with the conclusions and reasons expressed by Mason J. in the two recent judgments. In his reasons in the Philip Morris case, after considering a long line of previous decisions of the High Court culminating in Moorgate Tobacco Co. Ltd. v. Philip Morris Ltd. 54, A.L.J.R. 479, Mason J. said: "So much, then, for the claim that the - defendant's narrow view of 'matter' has the support of authority. Once it is accepted, as it must be, that there is no special magic in the scope of those matters which involve the interpretation of the Constitution, the lesson to be learned from the authorities is that the Court having jurisdiction to determine a Matter falling within ss. 75 and 76 giving rise to the exercise of federal jurisdiction has jurisdiction to decide an attached non-severable claim. The classification of a claim as 'non-severable' does not necessarily mean that it is, or must be, united to the federal claim by a single claim for relief, though this is a common illustration of a non-severable claim. The non-severable character of the attached claim may emerge from other aspects of the relationship between the federal and the attached claim. For example, it may appear that the resolution of the attached claim is essential to a determination of the federal question. Likewise, it may appear that the attached claim and the federal claim so depend on common transactions and facts that they arise out of a common substratum of facts. In instances of this kind a court which exercises federal jurisdiction will have jurisdiction to determine the attached claim as an element in the exercise of its federal jurisdiction." -~ 19 - I propose to apply those principles to the facts of this case. Counsel for the applicant formulated the matter before the court as follows: "The matter before the court is the controversy between the applicant and the respondent arising out of the fact, if it be true, that the applicant was induced to become a tenant of the respondent by reason of the false statements made by the respondent in the circumstances referred to in the statement of claim." Counsel for the respondent does not dispute that formulation. In my opinion all the claims made by the applicant come within the jurisdiction of the Federal Court. The resolution of those claims, insofar as they are based upon the common law, is essential to the determmination of the federal question. The claims depend upon common transactions and facts and arise out of a common sub stratum of facts. Accordingly, in my opinion, the Federal Court has jurisdiction to hear and determine all claims made by the applicant. My opinion is supported by the views expressed by Smithers J. in Firona Pry. Ltd. v. Hersfield Holdings Pty. Ltd. unreported, 13 February 1981. -~ 20 - Accordingly, I propose to allow the applicant call the eight witnesses, or such of them as he may decide. DOTS E . - F ceri" raat this ané the NWETEEN ()9) prece _ , Duss 229 @ druecopy of the Reasons For Jud,ment havin of fe Honourcbl: Lic. Fustice NoatHroP- - Wo, Maenk Acsociate Dated: 25 Ac8euney (9%) ES ndud -sdehahedee ars to FODERAL COURT OF AUSTRALIA WICTORIA ee ertaan eeceee DISTRICT REGISTRY GENERAL ee ec eee ec cree ee «DIVISION No of Action M.G. No.ll@®ft 1980..... MISTER FIGGINS PTY. LTD. v. CENTREPOINT FREEHOLDS PTY. LTD. TITLE OF ACTION ...c een ese eeece Pe eee es oree ns eurcecseenee a a re 231 26,27 FPEBRUARY'2,3,4,5,10,11,12, 13, 16,23,24,25,26,27 MARCH;AND 720 'SoLy 1981. A f Date (s) of "hearing we cet we oe cee sceeeeees Date Judgment delivered §, SULY, 1981 Date of orders: 20 JULY 1981 MR B.C. BERKELEY Q.C. Counsel and ( meme eee ree coe ee Oe eh ee tee eee eee eee tote ree teeee ( 4 ( MRR, MERKEL ||. , : . Solicitors for ( ; TBR RE ccc cc cee cee ccc cece cece tee ccetesees , ( APPLICANT INSTRUCTED BY: ALECK SACKS & SON Counsel and ( DR C,L, PANNAM OC. lec e cc ce cee cece ec cecceaee MR T.A. NEESHAM Solicitors for ( MB R.A, FINKELSTEIN cee ne cen cee ceeetecces { RESPONDENT INSTRUCTED BY: MADDEN BUTLER ELDER & GRAHAM Mark Diserio SIGNEd cove ce cccc cc cr es cer essere nesssces (Associate) Date: 2 AUGUST 198k. (NOTE: To be despatched to Principal Registry, Sydney for on-forwarding to law publishers) CATCHWORDS Trade practices - consumer protection ~ misleading and deceptive conduct - lease of shops - knowledge of and reliance upon that conduct. Damages ~- measure of damages - power of court to make orders compensating person suffering loss or damage ~ discretion of court ~- powers to vary contract or arrangement ~- principles to be applied - variation of lease. Trade Practices Act 1974 ss.52, 82, 86, 87. " MISTER FIGGINS PTY. LTD. v. CENTREPOINT FREEHOLDS PTY. LYD. Federal Court of Australia V.G. No. 116 of 1980 Coram: Northrop J. Melbourne 6 July 1981. Lerner te Ea, ae a ene a eg aE ae ee aa a Rit RIERA Sil ERIE acre met Stare ATS AERTS Emcee eeSabee 8 antes ae ne Bee IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY ) V.G. No. 116 of 1980 ) GENERAL DIVISION ) BETWEEN: MISTER FIGGINS PTY. LTD. Applicant and CENTREPOINT FREEHOLDS PTY. LTD. Respondent NORTHROP J. ORDER 20 JULY 1981. THE COURT ORDERS AND DECLARES: 1. That the lease dated 22 September 1978 and entered into between Centrepoint Freeholds Pty. Ltd. as lessor and Mister Figgins Pty. Ltd. as lessee, being the lease of shops G15, 116 and part 112 at Centrepoint Mall, Bourke Street, Melbourne, be varied as hereinafter set out and that the lease as so varied had effect on and after the commencement of the lease on 10 October 1979: (a) Delete PART IV (Initial rent) of the SCHEDULE to the lease and in lieu thereof insert the following: " PART IV (Initial rent) $53,430 per annum - $4,452,500 per* calendar month ~- $1,027.50 per week." (b) Delete the following clauses of the lease: "Clause 6.02, Clause 6.03, Clause 24.01(c), Clause 26.00 and Clause 27.00." (c) Vary APPENDIX 1 (Rent Review) to the lease by deleting from paragraph 3 thereof the following words: "PROVIDED FURTHER and it is hereby agreed and declared by the Lessor and the Lessee that notwithstanding the foregoing the rental payable hereunder shall not in any event be less than the rental payable at the relevant rent adjustment date." That the lease dated 22 September 1978 and entered into between Centrepoint Freeholds Pty. Ltd. as lessor and Mister Figgins Pty. Ltd. as lessee, being the lease of shop 112 at Centrepoint Mall, Bourke Street, Melbourne, be varied as hereinafter set out and that the lease as so varied had effect on and after the commencement of the lease cn 10 October 1979: (a) Delete PART IV (Initial rent) of the SCHEDULE to the lease and in lieu thereof insert the following: " PART IV (Initial rent) $7,050 per annum ~- $587.50 per calendar month - $135.58 per week," (b) Delete the following clauses of the lease: "Clause 6.02, Clause 6.03 and Clause 25,00." tne Eten rem rt an ne RENAE N cree hr AS REN A OE Ph att I a AN eel in Ad RO aE hea a Ser ADOT Pa Aaa a len ACE lta Nene a Ae a th el ee ea (c) Vary APPENDIX 1 (Rent Review) to the lease by deleting from paragraph 3 thereof the following words: "PROVIDED THAT and it is hereby agreed and declared by the Lessor and the Lessee that notwithstanding the foregoing the rental payable hereunder shall not in any event be less than the rental payable at the relevant rent adjustment date," That the respondent at its own expense annex to each copy of the said leases executed by the parties or either of them an office copy of this order and endorse upon the schedule of each such document the words "The lease has been varied by the order of the Federal Court of Australia a copy of which is annexed hereto", That the respondent pay four-fifths (4/5ths) of the applicant's costs, to be taxed. Liberty to apply. iN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY vV.G. No. 116 of 1980 GENERAL DIVISION BETWEEN: MISTER FIGGINS PTY. LTD. Applicant , and CENTREPOINT FREEHOLDS PTY. LTD. Respondent NORTHROP J. REASONS FOR JUDGMENT 6 JULY 1981. In September 1980, Mister Figgins Pty. Ltd, (hereinafter called "the applicant") commenced proceedings in the Federal Court against Centrepoint Freeholds Pty. Ltd. (hereinafter called "the respondent"), Bach of the parties to the proceedings is a corporation under the Trade Practices Act 1974 as amended ("the Act"). During the year 1975, the respondent, by related companies, was considering developing a large area of land situated between Swanston and Elizabeth Streets, Melbourne and extending from Bourke Street to Little Collins Street as a new shopping complex. The development became known as the Centrepoint Mall, Bourke Street. The Mall was opened for trading in October 1979, To give effect to the development, it was necessary for the respondent to obtain tenants cf shops to be constructed in the Mall and to have those tenants enter into leases of their shops prior to the opening of the Mall so that the Mall could be used for trading when it opened. The respondent engaged one Craig Robertson to act as its agent for the purpose of finding tenants for shops in the Mall, In addition, from time to time publicity drives were undertaken by the respondent in an attempt to attract potential tenants. A number of leases were entered into well in advance of the day the Mall opened for trading in October 1979. In September 1978, the applicant as lessee, entered into two leases of shops in the Mall, one lease being for shops G15, 116 and part 112, and the other lease for shop 112. By its claim, the applicant alleges that in entering into the leases it relied upon a number of representations made to it by or on behalf of the respondent. The representations alleged were - (a) There would be many big name, strong and high quality traders trading around the said shops and "Rarity" would have a shop directly opposite the said shops. (b) The £irst floor was to be a high class boutique area. (c) (d) (e) (£) (g) (h) (i) The upstairs shop being part Shop 112 was situated in a high class fashion boutique area. (ii) The ground floor at the Mall was fully leased apart from the applicant's shops and that 90% of the shops on the First Floor boutique area had been taken. The Mall would be open for trading by mid-March 1979, s The Trade Exhibition and theatrette proposed to be conducted at the Mall would attract a large number of people in addition to normal passing traffic. There were to be two entrances to the Mall from Bourke Street which would permit and allow greater passing traffic through the Mall between Little Collins: and Bourke Street. The commencing rent for the shops was to be $109,750 per annum. The applicant's share of maintenance charges and eurgoings which were to be payable by the (3) (k) {1) (m) applicant would be around 12% of the rental payable and would not exceed 15% of that rent. The applicant's shops would be the only shops at the Mall permitted by the respondent to retail shoes, The Centrepoint Mall would be equal to the quality and standard of-the Centrepoint complex in Sydney. The Centrepoint Mall would attract a volume and quality of customer similar to that attracted by Centrepoint Sydney. The Centrepoint Mall was to have closed circuit television which would assist public movement in and around the Centre and help the public to become aware of the facilities available to the public at the Centre. rhe Centrepoint Mall would possess the characteristics and have the appearance of the Mall as set out in the brochure handed to the applicant. The applicant's proposed occupation and use of the shops was lawful and would remain lawful for the duration of its lease and any renewal thereof, (o) The respondent had complied with all relevant municipal and statutory requirements so as to enable the applicant to use its said shops for the purpose of selling ladies' and men's fashion footwear, accessories and fashion clothing for the duration of the lease and any renewal thereof. a (p) A substantial sum of money would be spent on advertising the Centrepoint Mall both for its opening and on a continuing basis. {q) There would be at least two restaurants in the Centre, By its claim the applicant alleges that each of those representations - Constituted conduct by the respondent that was misleading or deceptive in contravention of s.52 of the Act. Constituted false representations under s.53(aa) of the Act. 3. °* Constituted false or misleading statements under s.53A of the Act. In addition to the claims based on the Act, the applicant alleges that the representations constituted — l. Terms of an agreement between the applicant and the respondent. 2. Fraudulent misrepresentation by the respondent. 3. Negligence on the part of the respondent. By its application, as amended, the applicant is claiming damages and in addition orders under s.87 of the Act. In his final submissions, counsel for the applicant abandoned the claims insofar as they were based on the representations set out in paragraphs (g), (i), (n), (0), (p) and {q) as set out above, Likewise, counsel stated that he did not pursue the claims insofar as they were based upon the grounds that the representations constituted - ct '. (7) i. Terms of an agreement between the applicant and respondent. 2. Fraudulent misrepresentation by the respondent. 3. Negligence on the part of the respondent. 4. False representations under s.53(aa) of the Act. 5. False or misleading statements under s.53(A) of the Act. In the result, the applicant is claiming damages under s.82 of the Act and orders under s.87 of the Act. Section 82 provides ~ "82.(1) A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention." Section 52 is within Part V of the Act and provides - "52.(1) A corporation shail not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive, (2) Nothing in the succeeding provisions of this Division shall be taken as limiting by implication the generality of sub-section (1)." The relevant provisions of s.87 are - " "87.(1) Where, in a proceeding instituted under... this Part, the Court finds that a person who is a party to the proceeding has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in ... in contravention of a provision of Part ... V, the Court may, whether or not it... makes an order under s.80A or 82, make such order or orders as it thinks appropriate against the person who engaged in the conduct +.» (including all or any of the orders mentioned in sub-section (2) of this section) if the Court considers that the order or orders concerned will compensate the first-mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage. (1A) The Court may, on the application of a person who has suffered, or is likely to suffer, loss or damage by conduct of another person that was engaged in eee in contravention of a provision of Part V, make such order or orders as it thinks appropriate against the person who engaged in the conduct eee (Ancluding all or any of the orders mentioned in sub~section (2)) if the Court considers that the order or orders concerned will compensate the first-mentioned person in whole or in part for the loss or damage or will prevent or reduce the loss or damage." Sub-section (2) contains provisions relating to the type of orders that may be made by the Court. Both s.82 and s.87 are within Part VI of the Act. By its defence, the respondent raised the Constitutional validity of s.87 of the Act. Requisite notices were given under s.78B Judiciary Act 1903 but no Attorney-General appeared in these proceedings. In final submissions, counsel for the respondent abandoned any defence based on the invalidity of s.87. In opening the applicant's case, counsel stated that he proposed calling eight witnesses, other than Mr. Figgins, who were closely associated with tenants of other shops in the Mall and to whom Mr. Robertson had made representations identical with or similar in substance to those made to Mr. Figgins. Of those eight witnesses, five were closely associated with tenants which, as applicants in proceedings pending in the Federal Court, were making claims similar to those made by the applicant. At the close of the opening, counsel for the respondent submitted that the evidence proposed to be given by the eight witnesses should not be admitted and sought a ruling on that question of admissibility. It was an admitted fact that Mr. Robertson had died in March 1979. On 25 February 1981 the Court ruled - 10 - that the evidence was admissible and published its reasons. The substance of the reasons was that as an essential step in establishing its case the applicant had to establish that the representations constituted conduct of the respondent in contravention of s.52 of the Act. If the evidence by the eight witnesses tended to prove that conduct, there was a probability or increased probability that similar representations constituting conduct of Mr. Robertson were made to Mr. Figgins, but in order to establish its case, the applicant had to show that it had suffered loss or damage by that conduct. This involved the fact that the applicant at least knew of that conduct. During the course of the hearing, thirteen witnesses were called by counsel for the applicant and twelve witnesses were called by counsel for the respondent. A large number of exhibits, some of which were very voluminous, were tendered. In addition, at the request of the parties, the Court held a view of the Mall. The view was held cn the basis that the Court could treat as evidence what it saw and the view was not to be limited to the basis of assisting the Court to understand the evidence to be given. As it was, the view was of great assistance to the Court in understanding the evidence, and in addition, in some respects assisted the Court in making findings of fact, - Ti - In the course of submissions, counsel for the respondent raised the question of the degree of satisfaction that should be required by the Court before the applicant eStablished its case. In this regard, the death of Mr. Robertson makes the task of the Court that much more difficult. To a large degree, the applicant's case is based upon conversations between Mr. Figgins and Mr. Robertson. Mr, Figgins only can give evidence of those conversations. He has given that evidence and much relies upon his credibility as a witness. The respondent cannot call Mr. Robertson to give evidence. The respondent is unable to seek information from Mr. Robertson from which to cross-examine Mr. Figgins. The applicant's case may have been affected adversely by evidence given by Mr. Robertson, In this respect, counsel contended that the Court should scrutinize with great care the evidence of Mr. Figgins relating to statements made by Mr. Robertson as well as the other witnesses' evidence of alleged statements made by Mr. Robertson. He referred to what Isaacs J. said in Plunkett v. Buli (1915) 19 C.L.R. 544 at pp.548-9 - "Then we come to the question how far the onus of proof which lay upon the plaintiff was satisfied. She had the burden of establishing the original creation of the indebtedness of the deceased to her; and undoubtedly it is established that in cases of this sort the Court scrutinizes very carefully a claim against the estate of a deceased person. Tt is not that the Court looks on the plaintiff's case with suspicion and as prima facie -12- fraudulent, but it scrutinizes the evidence very carefully to see whether it is true or untrue." This is accepted, but at the same time, the applicant should not be penalized by the death of Mr. Robertson, In the present case, the applicant's claim is based on grounds including a contravention of s.52 of the Act, and until final submissions, an allegation of fraudulent misrepresentation. The ivil standard of proof applies, and with necessary adaptions, I adopt what I said in Trade Practices Commission Vv. Ansett Transport Industries (Operations) Pty. Ltd. (1978) 32 F.L.R. 305 at p.329 - ",,.. referred to Briginshaw v. Briginshaw ((1938) 60 C.L.R. 336) per Latham C.J. at pp.343-4 and Dixon J. at pp.360, et seq., the well-known passages relating to the 'degree of persuasion of the mind according to the balance of probabilities and the gravity or otherwise of the fact of whose existence the mind is to be persuaded', See Rejfek v. McBlroy ((1965) 112 C.L.R. 517, at p.52i). This latter case does not detract from the opinions expressed in Briginshaw Vv, Briginshaw. In the present case the civil standard of proof is to be applied, but I keep in mind the gravity of the consequences resulting from a finding that the acquisition of the shares constitutes a contravention of s.50 of the Act." Before considering the evidence in detail, I desire to make some general comments concerning my impressions of Mr. Figgins, Mr. Alter and some of the other witnesses. Mr. Figgins is the managing director of the applicant and the ~13- major shareholder in that company. He is an astute businessman, and through a number of companies conducts and controls a large number of retail shoe shops in Melbourne and Sydney. To a remarkably large extent he exercises a detailed control over those shops. He was expanding his business at a great speed and often at the utmost limits, or even beyond those limits, of his financial resources. He was far-sighted and planned far ahead, but at the same time retained a large degree of personal contrel of the activities of individual shops. He did not like delegating authority, although he left the detail of his financial arrangements to others. Nevertheless he had a remarkable knowledge of the whole of his business activities. He was subjected to a long, careful and competent cross-examination,. After seeing and hearing him during the four days that he gave evidence I find that his recollection of facts was good, he was not evasive, and that essentially he was a witness of truth. At the same time he was not the innocent victim he at times appeared to be. He was a tough, experienced businessman not averse to acting in a deceptive manner. When he first heard of the possible development, he attempted to ensure that he would be the oniy retailer of shoes operating in the Mall. He obtained a letter of undertaking dated 28 November 1975 from Hanover Freeholds Pty. Ltd., which, for present purposes, can be treated as a related company of the respondent, in favour of the applicant under which the applicant in substance was to have the first offer of shops in the proposed development, - 14 - and that named competitors of the applicant were not to be granted leases in the Mali. Mr. Figgins forwarded a copy of that letter of undertaking to Mr. Robertson at about the time negotiations began between them concerning the proposed leases in the Mall. Mr. Figgins could be very devious. After he knew that his venture into the Mall was not the financial success he had anticipated he made no formal complaint concerning the alleged misrepresentations, Although a formal letter of complaint was written on his behalf by the solicitor for the applicant in April 1980, he raised no formal complaint to Mr. Alter, a director and joint controller of the respondent. One of his reasons for not making complaint was that he was trying to induce Mr. Alter to take over the development of a site he, Mr. Figgins, had purchased in Sydney to develop into a shopping mall. It was only after he failed in doing this that he commenced action in the Federal Court in September 1980, some nine months after he knew that many of the representations he alleged had been made were in fact untrue. Mr. Figgins had no hesitation in manipulating events for the financial advantage of his companies. He regularly did not pay rent when it became due, not only with respect to his shops in the Mall, but also with respect of other shops leased from companies related to the respondent. Many writs were issued against his companies for arrears of rent. Mr. Figgins was astute in persuading the respondent -~ 15 - and its related companies to accept belated payments. Likewise, he was able to induce the respondent and its related companies to accept reduced rent based upon various factors including a depressed market and noise being caused by construction work, At all relevant times the finances of his companies were dangerously extended and he had serious cash flow problems which he was trying to resolve by what can be described as dubious commercial practices. , Mr. Figgins is an ingenious thinker. He was able to put into effect plans for the construction of an intermediate level linking his three shops in the Mall, thereby making use of space which otherwise would have been wasted. The construction work was carried out at the expense of the applicant, but by doing this it was able to obtain storage space for its shops rent free. This illustrates the fact that he was able to see possibilities and had the ability to turn them to his own advantage even though, as in this respect, at the urging of Mr. Robertson. Before 'entering into the leases of the shops, Mr. Figgins obtained legal advice concerning their terms and as a result a number of standard terms of the leases were varied in favour of the applicant. He was not a man easily mislead and always attempted to turn all matters to the benefit of his companies. -16- Despite all these views of Mr. Figgins I find him a witness to be relied upon. Aithough documents which tended to establish all these matters, as well as other matters going to credit, were put to him in cross-examination, he made no effort to evade the issues or to dispute the conclusions to be drawn from them. On the facts of this case he did not comply perhaps with the traditional morality applicable to commerce, but this does not affect adversely my impression of him as a witness of truth. Mr. Alter gave evidence also. He, togecher with a Mr. Fayman, controlled the respondent. Earlier three persons, Mr. Alter, Mr. Fayman and a Mr. Herscu controlled Hanover Developments Pty. Ltd. which, in substance, was a joint venture of those three. Some years ago that joint venture was divided and thereafter Mr. Alter and Mr. Fayman controlled a number of related companies, including the respondent and Pacific Shopping Centres Pty. Ltd., the Managing company for the Centrepoint Mall. The building construction works for the Mall were carried out by another related company, 'Centrepoint Custodians Pty. Ltd. Mr. Alter did not have many meetings with Mr. Figgins, and his evidence is not crucial in the challenge to the credibility of Mr. Figgins on most issues. Nevertheless, his presence in the witness box was of importance. I found him an unsatisfactory witness. He waS evasive and had an unfortunate habit of either not knowing or forgetting any fact which I would have -17- expected him to know or remember, but which he thought would be adverse to the respondent. Obviously he is a man of great ability and able to make a financial success of his various activities, He appeared to be an astute businessman, and from observation I formed the view that he knew a lot more of the details concerning the development of the Centrepoint Mall, including the leasing arrangements, than he was prepared to admit. A committee comprising Mr. Alter, Mr. Fayman, Mr. Robertson and a Mr. Axup, who was the project manager for the building of the Mall, met regularly during the crucial period of construction and letting. The decisions were made by Mr. Alter and Mr. Fayman, but during this period Mr. Fayman was overseas for much of the time thus letting Mr. Alter make the decisions on his own. Reports were prepared by Mr. Axup from information supplied to him, including information from Mr. Robertson. Mr. Axup kept the minutes of the meetings of the committee. These documents have been a useful source of contemporaneous information, Despite the fact that Mr. Alter must have known of the reports and minutes at the time they were prepared and of the facts recorded, his recollection of those facts was extremely bad. A document produced from Mr. Robertson's papers in the custody of the respondent showed the rents that Mr. Robertson claimed he would be able to get for the shops in the Mall and the next highest range of rents suggested by another estate agent who, apparently, had been asked to report. The respondent chose Mr. Robertson to act as its agent and the - 18 - terms of his appointment are set out in a document dated 16 December 1977 and signed by Mr. Alter and on behalf of Mr. Fayman. There can be no doubt that the rents for the shops at the Mall were extremely high when compared with rents for shops of a similar kind in arcades in areas near the Mall. Mr. Robertson then had the task of inducing tenants to enter into leases for shops in the Mall at those high rentals. The scene was set for hard selling by Mr. Robertson. Mr. Alter must have expected this. .In this regard, the evidence of Mr. Alter and my impressions of him achieved an importance greater than the direct effect of his evidence. The impression' gained is that Mr. Robertson had placed himself in a position where he had to go to extreme lengths in an attempt to achieve the results which he had promised Mr. Alter. Mr. Alter was prepared to do all things to help Mr. Robertson to achieve those results. The scene was set for the conduct to be engaged in by Mr. Robertson which gives rise to the present claim by the applicant. In this respect the evidence of the witnesses connected with the other tenants in the Mall is important. Generally speaking, I found those witnesses honest and attempting to tell the truth to the best of their recollection. They were not persons with the business experience and devious turn of mind of Mr. Figgins. The effect of their evidence was to establish conduct by Hr. Robertson remarkably consistent with what could be expected -~19- of a person in the position of Mr. Robertson and as appearing from the brief summary concerning Mr, Alter and Mr. Robertson relating to the leasing arrangements for the Mall. The evidence of the conduct of Mr. Robertson given by those witnesses bears a striking similarity to the evidence of the conduct of Mr. Robertson given by Mr. Figgins. In those circumstances, the Court more easily finds the conduct proved. In addition, it must be established that Mr. Figgins knew of that conduct and acted upon it. In this last respect, it must be said that Mr. Figgins acted upon that conduct because he believed that the whole concept would be a financial success leading to the financial success of his own business. His expectations were not to be fulfilled. The substance of the assignment given by the respondent to Mr. Robertson as set out in the document dated 16 December 1977 was to seek out and obtain a suitable tenant mix for the Centrepoint Mall development at rents which equalled or exceeded a specified budget of net returns, i.e. the expected net cash receivable on a fully paid-up basis for the first year of'operation and in accordance with leases for the basement, ground floor, first floor and second lower floor for a total of $2,508,000 p.a. with certain areas excepted. The fee for the assignment was 5.18% of the total budget net rents. The general obligations of Mr. Robertson were ~ "a) Seeking out and obtaining a suitable tenant mix and selection at net rents which equal or exceed budgets. b) Conducting lease negotiations with tenants and in conjunction with Hanover Sstaf£ bringing same to a satisfactory conclusion, c) Provide an epitome of the lease together with a statement of lessee requirements. This is to be in the form of an application form properly completed (with deposit monies) and signed by the prospective tenant. d) Co-ordinate with Architect, Consultants, Builder and Project Staff at planning and project meeting and at other times decided necessary in relation to tenant mix and leasing only. e) Co-ordinate in any other activities relevant to the tenant mix and leasing. £) Your firm is accountable to the directors of Hanover (or their nominees in writing) for the satisfactory performance of your responsibilities, g) Your Mr. Robertson is to personally attend to our account and be responsible for its progress and completion." The concept of tenant mix is of importance. The financial success of shopping ventures similar to Centrepoint depends largely upon compatible and competing traders attracting potential customers. The absence of a proper tenant mix is one of the major complaints by the applicant. The budgetted net rents were in accordance with the rents Mr, Robertson had assessed could be obtained. His assessment was - 21 - $2,592,673. The assessment of the other agent, who acted as agent for the respondent or related companies with respect to other developments, was $1,399,638. An important document for the purposes of this case is a brochure prepared on behalf of the respondent and approved by Mr. Alter depicting the lay-out of the Mall, the position of the shops, the existence of the walkways and a sketch of the Bourke Street entrance to Centrepoint. The sketch was explained on the brochure as, "You are in Bourke Street Mall, looking into Centrepoint Mall... Melbourne's new Mall-to-Mall retail environment". A certain degree of artistic licence can be expected, and for the purposes of this case the drawings of the persons appearing in the sketch can be ignored. The overall effect of the sketch depicts an attractive entrance, open and easily seen from Bourke Street. From the ground floor wide escalators ascend to and from the first floor and descend and ascend to and from the basement. The scene is spacious. There is nothing cramped or mean about it. It looks inviting and attractive and commands attention, It depicts a strong invitation to enter, browse and buy. People in Bourke Street are able to see clearly along the walkways on the ground floor as well as the basement and the first floor level. Shops at lower leveis can be seen clearly from Bourke Street. The overall effect is most inviting and attractive. The brochure was designed ~ 22 - to attract potential lessees and for this purpose was very effective. It had the following statements endorsed on it - "Now leasing: CENTREPOINT MALL The new way through to Melbourne's Bourke Street Mall Centrepoint Mall ushers in an exciting new era for City retailing. It creates an" opportunity for retailers where before there was none. The concept of a mall shopping environment that will blend with the City Council's new Pedestrian Mall is refreshing and original. Five city buildings have been ingeniously linked together to form a spacious thorough- fare between Bourke and Little Collins Streets. Floors have been carefully designed to provide retail opportunities for just about ali goods and services, All floors flow from Bourke, right through to Little Collins Street. Ground and first floors become a Mall of shops. Upper floors have been opened up into a huge sequence of spaces, to accommodate restaurants, enter- taLnment, promotion, professional areas, and community facilities. The vast basement has been devoted to a mouth-watering world of take-away foods, Closed circuit TV will provide a visual link between floors, while wide escalators, fast elevators and spacious walkways will facilitate the pedestrian flow throughout the centre. Melbourne's Bourke Street Mall will create a new pace for pedestrians - relaxed, more leisurely. It will become a centre for Melbournians to meet and mingle. Centrepoint Mall is designed to become part of this environment. It meanders from Bourke through to Little Collins, to Swanston and on to the City Square. Centrepoint Mall is ready for leasing. It's planned to open in November '78, and it's a retail oppor- tunity too good to miss! Applications, preferably in writing, stating nature of proposed business, size of tenancy, etc. to: Centrepoint Mall P.O. Box 387, South Melbourne, 3205. Or contact Mr. C. Robertson, 62 1108 or 62 1226." - 23 - Advertisements containing the sketch and similar wordings were inserted in the press. The first meeting between Mr. Figgins and Mr. Robertson took place as early as the beginning of 1977, i.e. before Mr. Robertson had received his signed assignment and before the brochure was provided. At that time Mr. Robertson did not know of the existence of the letter of undertaking dated 28 November 1975." Mr. Figgins was keen to become a lessee in the Mall and he intended to keep his preferred position against competitors. Under cover of a letter dated 10 February 1977, he forwarded to Mr. Robertson a copy of the letter of undertaking. The letter referred to recent discussions between Mr. Figgins and Mr. Robertson. Apparently at that early meeting Mr. Figgins told Mr. Robertson that he wanted shops in the Mall preferably opening on to Bourke Street. Before considering the particular allegations made it is important to note the crucial dates of July 1978 and September 1978. The detailed discussions between Mr. Figgins and Mr. Robertson concerning the proposed leases in Centrepoint commenced early in the year 1978. The application for the tenancy of shops G15, 116 and part 112 is dated 3 July 1978, while the application for the tenancy of shop 112 is dated 20 July 1978. The two leases for those shops are each dated 22 September 1978. The Mall opened for trading on 10 October 1979. Some tenants made complaints to the respondent almost immediately and groups of tenants combined to present their complaints to the respondent. Early in the year 1980 solicitors' letters were being written demanding relief against the respondent. Although aware of those actions, the applicant did not take any overt action until a letter of demand in April 1980. Legal proceedings were not commenced by the applicant until September 1980. " The applicant caused the intermediate level to be constructed connecting shop 112 with an intermediate shop level between shop G15 and shop 116. That intermediate level was to be and is used as a store for all three shops and was constructed at the cost of the applicant. For this purpose the applicant made use of the architect engaged by the respondent or its related companies for the construction of the Mall, namely Mr. Barnard-Brown. Shop 112 is situated on the first floor level. Shop 116 is situated on the lower second floor level. Shop G15 is situated on the ground floor level directly below shop 116. 'internal stairways link G15 and 116 to an intermediate shop level which can be entered by the public only from G15 or 116. Retail sales to the public take place on that intermediate shop level between the two shops as wel] as from G15 and 116. A door gives entry from that intermediate shop level to the store-room and another door gives entry from shep 112 to the same store-room. The store-room is in the nature of a secret hidden room, the ~ 25 - presence of which is not suspected by the passing public. The "up" escalators from the Bourke Street entrance go direct to the lower second floor level, even though the sketch on the brochure depicts them as going to the first floor level. Shop 116 is on the level at the top end of that escalator, but after reaching that point in order to reach the entrance to shop 112 a customer has to go down ancther escalator or a flight of stairs or walk around the side, front and third side of shop 116 and down a sloping walkway towards Little Collins Street and then turn to the right and to right again. In fact, one of the striking effects of the Mall is the confusion caused by the walkways, both level and sloping, the escalators, stairs and corners. It is easy to become disoriented and confused and it is easy to become lost as in a maze. It is convenient to consider the allegations made in the order discussed by counsel for the applicant in his final address, namely paragraph (h), paragraph (c)(ii), a group of paragraphs (m), (e), (f£) and (1), paragraph (d) and finally the grotip being paragraphs (k), (a), (3), (b), (¢)(i). It will be recalled that the allegations contained in paragraphs (g), (i), (n); (0); (p) and (q) were abandoned. At a meeting held early in the year 1978; probably in February, Mr. Robertson met Mr. Figgins at the Richmond office of the applicant. At that time Mr. Figgins wanted a - 26 - shop with a frontage to Bourke Street and another shop with a frontage to Little Collins Street. At that February meeting, Mr. Robertson informed Mr. Figgins of the rent required for those two shops. The rents were very high and Mr. Figgins claimed he could not pay them. The substance of the conversation and all following conversations is taken from the evidence in chief of Mr. Figgins - "I said to Mr. Robertson these rents are ridiculous, they are much too high and 1f cannot possibly afford that kind of rental. Then he said to me, well you must remember the opening of the centre will be in March 1979, and you must consider the inflation between now and then, that is taken into account in these rentals. I replied to him, well I still think the rentals are ridiculous and much too high even taking that into consideration. Then he said to me, well let me explain a little more about the centre, I de not think you fully realise the potential of this. He said, this centre is very much, will be very much like Centrepoint in Sydney. He said with added attractions, and then he went on to explain to me what the attractions were. He said there would be closed circuit television on the various levels where the public could see the various facilities throughout the centre, It would help in traffic flow throughout the centre, Another * point he said that there would be a trade exhibition in the development which would attract extra people. He said also there would be a theatrette. They were going to retain part of the picture theatre and create a theatrette which also would give added traffic flow to the centre. He said there would be a child minding centre within the development, He had a plan on my desk in front of us and he pointed to the front of Bourke Street and he said this very wide frontage and these two malls will create a funnel effect and create huge traffic flow into the centre, I said to him, well, yes, it looks very good; it is all very weil, but I -~ 27 = consider the most important parts of the centre are the tenants themselves and the tenancy mix. Do you have many applications for tenants at this stage? I said a very important part of the centre would be the tenancy mix and the type of tenants, and he said to me he had hundreds of applications already, far more in each type of retail area than he needed to fill the centre. He would be very careful in his selection and select only the best retailers for the centre." At the second,meeting in about March 1978 Mr. Robertson had a plan of Centrepoint with him and a copy of the brochure. A discussion took place concerning rentais of various «"shops. Mr. Figgins asked a Mrs. Thompson, the Executive Director, to come to the meeting to take notes of the rentals. Mrs. Thompson gave evidence of what was said at that meeting and at a subsequent meeting at which she was present when the names of other proposed tenants were mentioned by Mr. Robertson. Her recollection is not good, but her evidence supports the substance of some of the evidence given by Mr. Figgins. At the second meeting in 1978 Mr. Figgins asked Mr. Robertson about outgoings ~ . "I said what is the total cost of the outgoings that I am going to have to pay, and he said, the total of outgoings will be between 10 and 15 per cent of the rental. He said for the purpose of calculating your costs you should work on 12 per cent of the rental." - 28 - A discussion then ensued about the need for storage space for a shoe retail shop. The conversation continued — "Mr. Robertson then said to me, why do you not consider a shop inside the centre, and I said I did not want a shop inside the centre, and he said, but I do not believe that you really appreciate how good this centre is going to be. Then he went on to explain more about the centre and to sell me on the whole concept, I think, because he said to me, there is going to be a complete gourmet food centre in the basement which will pull traffic like the food centre in Sydney, in the complex in Sydney. He said there will be over 20 countries represented in different types of food stores. He also said there will be a delicatessen area very similar to the delicatessen area in the Myer food section. Then we talked about the ground floor and he said he had far more tenants than he needed from all over Australia to fill the ground floor and he would only select from Australia's top retailers for that area as it is the most important area." Reference was then made to the fact that Mr. Figgins conducted a shop at Centrepoint Sydney and the conversation continued — "Well, he asked whether it was successful and I said, yes, it was very successful, and he said, is not that inside the complex, and I said, yes, and he said, then you should know what to expect from this centre because it is going to be very similar in the tenancy mix and quality of tenants and concept as that particular centre, He said an area that would specifically be of interest to me would be the first floor area and, you know, naturally I questioned why and to Mr. ~ 29 - he said this is going to be very much like the gallery level of Centrepoint in Sydney in its concept, quality of tenants and tenancy mix. He said the whole area would be fully carpeted and he would only have high class, high fashion and accessory boutiques on that level." At this meeting Mr. Robertson handed the brochure Figgins. In addition, Mr. Figgins had seen the advertisement in similar form in the "Herald" on Saturday, 18 March 1978, , In relation to the brochure the evidence is - "Pirstly, he opened this up and he said this is how the centre will look. Then he turned it over and he marked a shop. The number is G.O.4, but it is not just that shop. lt is a section in behind that as well and he suggested that I might be interested in that shop because of the large area at the back and he could do a cheaper rental which would enable me to have storage behind. However, he said this shop is on offer to Rarity Menswear and that if they did not sign the lease within the next couple of weeks then I could have the shop. He also said there is an area on here in orange and he offered those shops as well and said that they would also be very sSuitcable. They are G.14 and G.15, and also on the first floor 114. He said we could have a shop on the upper level, also on the ground, and there was enough height between for a mezzanine floor which would be very suitable for storage and he suggested that I should consider that as well." Mr. Robertson ieft the brochure with Mr. Figgins and that brochure was tendered as an exhibit in the hearing. ~ 30 - A further meeting occurred either late in March or early in April - "At this meeting Mr. Robertson told me I could not have that Rarity shop any more and I asked why and he said, 'Well, Rarity have taken it'. I asked again, 'Well, has it actually been leased, has Rarity actually signed the lease?' and he said, 'Yes'. So then discussions centred around the other shop on that pamphlet and he produced a new plan, a large plan with a transparency that laid over the top. He proceeded to explain how the other shop could , be linked to the first floor and how I could have a storage area, and whatever." A further meeting occurred in April at which Mr. Robertson produced a plan prepared by Mr. Barnard-Brown. A number of conversations took place concerning that plan and alterations to it. A series of meetings took place including meetings with Mr. Barnard-Brown. A rental for the area was discussed and negotiations took place between Mr. Figgins and Mr. Alter and an amount was agreed upon. The terms of the agreement were contained in a letter from the applicant +0 Mr. Robertson dated 9 May 1978. Difficulties arose relating to the obtaining of municipal approval for the proposal. Eventually the application for tenancy of shops G15, 116 and part 112 was made by the applicant on 3 July 1978. The application sets cut the name of the lessee, the shops to be leased, the area of the shops and that the uses of the shops were to be for retailing of ladies' and men's fashion footwear, accessories and fashion clothing. The lease was to be for a term of six years with two options for a further six -~ 31- years each, and the commencing date was to be March 1979. The rent was $84,000 per annum and a deposit of $7,000 was paid, being one month's rental in advance. There was provision for rental review every two years and, failing agreement, rental to be determined by an arbitrator. The application for tenancy was a pro~forma document provided for all persons seeking to become tenants of the centre. Included in it is the following - a "Rates & Taxes, Common Area Outgoings, Merchants Association contribution payable by lessee." Special conditions were inserted as follows - "Store area between ground and first levels to be provided over shops G12, 13, 14 & 15. By the Lessor at the cost of the Lessee in accordance with detailed pians to be provided by Lessors architect to approval of Lessor and Lessee, such area to be occupied rent free and not to be taken into account in any rental review under the leasc or any extension thereof." A further special' condition was typed in as follows - "The Lessor agrees that no other Lessee in the Centrepoint Mall will be permitted to sell footwear." There is also typed in a notation, "This application is subject to the Applicant's Solicitors! approval of the formal lease". *squzUusy3 ayy pue xtu AdueUdsRZ ayR Fe YooT eB seaey OF Tay pajuer I asneoseq 'uosduoyl °*Siw UT peaeTTeo — pue ysep Au uo suetTd sy3 dn psuedo aH ,z2squeUsy Buy {Te ere oum, 'ATTeoTytoeds payse [ os ,a7e squeus3z ey} oyM pue st xtw AdueUSy ay 7eYyA HuTAouyY ut peysezejutT szow yonu w,r 'ATasatTy 4TTeM, 'pres T '*dous 3ey MOU ASprsuoo pTnoys 1 yey pue '4TFouNcS syQ YITA sweatTqoid osy3 euoozeao aaey AvyQ 'OTqeTrTeae Mou sea ZTT dous aya 2eyU su OF psuoTjUSU Sy pur aT}UeD ayy Fo suetTd sy3 buotTe AYyHnorzq /(uoSszAeqoy *AW) OH, - JNO 28S ST UOCTIeSISAUOD BUTAMOTTOF sy} pue UOSRAeqoy "AN puUe suT6S6tq 'aq useajeq soetd yoo? butrqJesw azeyqzanzy wv °SstTYyQ Op Of P2eTTeJ uosazsqoy 'AW *paateaoasz useq pey suotTIedT{Tdde Hursesy pauSts woym woriy sjueuey aaTROAadsoId FO YSTT e aueotr{tdde ay3 09 SpTAord pTNOM uoSsz79Q0N "AW FeUQ pawATyuco gzET ATne ~L pazep 3ueortdde soy3 03 dnxw °Aw wozz 319998T W ,JusUdOTeAep syR UT. seessey sat ZoOsdsoid sy JO STTeASD UATA SU YSTUaAnZ noA ey. yYsenber Tr *sqoedsoid s,j300foid ay 2 ssasse zayQZINZ oF aw etTqeue og 4ATHburpazoooy "*[NnFssaoons st 3oaload pue jusudoTaasp [TB@AsA0 syR 3eYUA TeITA ST AT 'atqeta aq o3 Aoueusy s,Aueduoo Aw I0F Aspz0 uy pue 'ySty st atqeAed [Tequer syR 3ey Suton *ZedsAROOF [TEs 03 pezqtTured oq [[TM yUSeudoTaAep sy UT SEBSsseT x9y30 OU 4eYyR epTAorId TTTA eseatT ay} 7eYyR pue 'aseayt [TewzOF eyy jo Teaoidde ,szoATOT{ToOS s,Aueduop Au of 3oafqns pajzetTduos ussaq sey uotqzeottdde sayz 3eY43 Sa3ou [TTTM nok *°° a -— squeeze ys BUTAOTTOF da43 papntTour AuedrTdde ay jyuspuodsszr s3y2 03 uot }eo{{Tdde Aoueusez |yz HurpAzeaxroF 3S9q3ET SYR UT - 33~ I noticed that there were not any names on these plans, there were just the types of shops that they were going to be written on them; in other words, there was 'ladies fashion' written on the plan and I pointed to that and I asked Mr. Robertson, you know, 'Who is that shop?' He would give me the name of the retailer. He said, 'I can't tell you all the retailers in the centre' and I wanted to know why and he said, 'Because I have to keep it confidential, I promised them that I would keep this information completely confidential, the same as I promised you'. I had previously * asked him to do the same, I said I had to know who the tenants were because I must = I had to be able to judge the viability of the centre, I would have to know who waS going in there. He said: I can teil you a few but I cannot tell you many of them. So then he proceeded to tell me some of the names. Among the names he mentioned to me there was Rarity, there was Portmans, Just Jeans, there were Dunklings, Edments, Gucci, Cue. I do not remember others that he mentioned to me. He @id not mention many more names than that, actually, and I was not happy with that, and I said - I asked him the question: 'Well, how much of the centre is actually leased at this point of time' He said, 'Well, the whole of the ground floor is leased, apart from yourselves, and 90 per cent of the first floor is taken,' He said 'If you don't hurry up and make up your mind on that shop 112, I can't hoid it forever'. 'It is in a key position, in the heart of the gallery' level and, you know, it will go'. TI had to make up my mind from that." The applicant agreed to take a lease of shop 112. Mr. Figgins then said in evidence - "Some of those names are very large businesses and quite important traders in the city, especially Portmans. This was of interest to - 34 - us because it was women's fashion, it is a good women's fashion shop, and they are a very large company, they pull a lot of traffic; so that one in particular was of special interest to us. It is very important to us. I would say the potential of any centre rests on the tenants that are in there, because that is the drawcard of any retail business, the retailers there, and the difference between a one-shop operator that does not have the contacts and - cannot get the right merchandise and one that has a lot of pull and a large retailer that can buy well - the difference in pull is the difference of night and day. We only look for centres where we have top retailers in and around us," In relation to shops 112 and 116 Mr. Figgins said he expected that the area would be exactly like the gallery level of Centrepecint in Sydney and that Mr. Robertson said that the area would be very much like the Centrepoint Gallery Level in Sydney. The application for tenancy for shop 112 is dated 20 July 1°78 and is in a similar form to the earlier application, The use of premises is to be the same. The term is to be the same. 'The annual rental was $25,750. 'The special conditioh is stated to be "Nil. (Refer signed leasing application form for shops G15, 116 and part 112 dated 3 July and our letter of July 7th 1978)", and the application was made subject to the applicant's solicitors' approval to the formal lease. The letter from the respondent of 7 July confirmed the terms of the special arrangement in relation to the intermediate floor and that in the initial - 35 - letting it was not proposed to lease premises to any other ladies' footwear retailer. I find that the conversations between Mr, Figgins and Mr. Robertson as set out did occur and were substantially as given in evidence by Mr. Figgins, The allegation contained in paragraph (h) is - "(h) The applicant's share of maintenance charges and outgoings which were to he payable by the applicant would be around 12% of the rental payable and would not exceed 15% of that rent." On the evidence, I am satisfied that Mr. Robertson, in the course of conversations, did mention to Mr. Figgins that the outgoings would be between 10 - 15% of the rent, but that he should act on a percentage of about 12%. In fact, the outgoings were in excess of 15%. A more realistic estimation would have been 20 - 25%, but even that would have been speculation in 1978. In fact, 20 - 25% was the estimate reached by officers of the respondent and advised to Mr. Alter and expressed in a letter dated 17 May 1979 from Mr. Axup to the respondent's solicitor. Even at that date a warning was given as to the uncertainty and unreliability of that estimate, Apart from one, all the relevant witnesses gave evidence of conduct by Mr. Robertson in relation to his estimate of outgoings or overheads compared to rent, and -~ 36 ~- these ranged from about 10% to about 15%. The odd man out said Mr. Robertson told him about 20%. A @ifficulty arises in relation to what is meant by 'the word "outgoings" and what Mr. Figgins understood that word to mean, or rather in the context of the facts of this case what was the meaning to be given tc the word "outgoings", Initially at least, municipal rates, both local govetnment and Board of Werks, and State land tax were not to be levied on individual shops. One set of rates was tc be levied on the whole building and apportioned to the tenants. In addition to those statutory rates commonly referred to as outgoings there vere other expenses to be incurred by the respondent in relation to the common areas. These additional expenses were to be apportioned between the tenants. The community outgoings were difficult to assess prior to the completion of the Mall. There is no common method by which these various groups of outgoings and expenses are dealt with in other developments. In some cases one course is adopted, while in others a different course. An examination of the position with respect of other shops leased by the applicant shows there was no common pattern. Normally, one would expect "outgoings" to include statutory rates only. In another sense outgoings include charges for services and utilities such as electricity. At the same time prospective lessees are concerned to know the total amount of payments required to be made in addition to rent to enable them to -37 - occupy the leased premises. A total figure is desired to enable the proposed tenant to make an assessment of the viability of the business to be undertaken in the leased site. The applications for tenancy draw a clear distinction between three classes of payment apart from rent - namely, (1), rates and taxes; (2), common area outgoings; and (3), Merchants' Association contributions. The leases, all in a Standard form, draw a distinction between "outgoings" and "apportionable outgoings". Outgoings are treated as municipal rates and other statutory charges imposed in respect of shops leased under the lease. These outgoings related to what are described as "rates and taxes" in the application for tenancy forms. The leases make other provisions for what are described as ""apportionable outgoings" which are defined to cover a large number of expenses, including depreciation, and costs incurred by the respondent with respect to common areas including rates and taxes imposed with respect to those common areas. Apportionable outgoings can be equated to "common area outgoings" referred to in the application for tenancy forms. Under the leases, the lessees are required to become members of the Merchants' Association and can be charged contributions up to a maximum of 5% of the annual rent. This charge corresponds with the third type of charge referred to in the application for tenancy forms. The maximum amount of those contributions can be ascertained. The amounts of the other charges were incapable of accurate estimation, but the - 38 - amounts of the rates and taxes were more susceptible to accurate estimation than apportionable outgoings. As I have said, I am satisfied that Mr. Robertson stated that his estimation of the outgoings would be between 10 ~ 15% of the rent. That statement was made without any attempt to remove confusion as to what was included in the word "outgoings". The statements were made in a form which indicated that apportiongble outgoings were to be included. In fact, counsel for the respondent made submissions to the effect that the apportionable outgoings approximated 15% of rent. In any event, because of the fact that the storage area leased by the applicant was leased rent-free but was to be included for the purposes of outgoings and apportionable outgoings, distorted percentages arise when compared with rent. To the extent that the statements were confusing, they could constitute conduct which was misleading or deceptive under s.52 of the Act. Mr. Robertson either knew or should have known that the estimation of 15% for all outgoings and apportionable outgoings was misleading, but he made no attempt to corredt that misleading conduct. In the present case, however, I am concerned only with the effect of that conduct on Mr. Figgins. I am not satisfied that Mr. Figgins acted or relied upon that conduct, or more particularly I am not satisfied that he caused the applications for tenancies and the leases to be signed and executed by the applicant in reliance in any respect on that conduct. -~ 39 — From his experience with the other shops being conducted by the applicant, Mr. Figgins knew or should have known that charges in the nature of the apportionable outgoings when added to normal outgoings exceeded by far 15% of the rent paid for those shops. In addition, Mr. Figgins sought legal advice concerning the terms of the leases, and aS a result hard bargaining took place between the applicant, the respondent and their respective solicitors resulting in special concessions being granted to the applicant. In particular, the definition of apportionable outgoings contained in the leases was varied to make the relevant clauses that much less onerous for the lessee than in the standard form of lease. If the applicant had been relying or acting upon the conduct of Mr. Robertson in this respect the simple solution would have been to insert a proviso that the total amount of outgoings and apportionable outgoings would not exceed 15% of the rent payable. This was not done, The applicant does not make out a case based on paragrapk (h). The allegation contained in paragraph (c)({ii) is - "(c) (ii) The ground floor at the Mall was fully leased apart from the applicant's shops and that 90% of the shops on the First Floor boutique area had been taken." -~ 40 - Mr. Robertson was carrying out the terms of his assignment to seek lessees for the Mall. The words he used to Mr. Figgins have been set out. He was receiving many enquiries but few applications for tenancies. Even fewer ieases were being executed. Some confusion exists as to whether Mr. Robertson considered applications for tenancies as being equivalent to leases, but the result does not depend upon a distinction of that kind. Mr. Robertson was the perpetual optimist and considered as an existing,fact what he hoped might eventuate. The evidence shows that he used this technique in an attempt to induce potential lessees to make applications for tenancies 'even though there were variations in words used. The tenancy reports being prepared by officers of the respondent and made available to Mr. Alter and to Hr. Robertson showed a very different picture to that painted by Mr, Robertson to Mr. Figgins. The respondent was having very real difficulty in obtaining lessees. The rents were very high and potential lessees were wary of entering into leases. The leasing reports, particularly those of July 1978 and October 1978, show a small number only of leases and not many more applications for tenancies. Mr. Robertson received copies of those reports, and although it is not necessary for the purposes of s.52 of the Act to establish that a person engaging in the conduct therein referred to knew that the conduct was misleading or deceptive, nevertheless on the facts found I am satisfied that Mr. Robertson knew that his statements concerning the number of shops already leased were - 41 - false, In fact, the difficulty in obtaining lessees continued right up to the opening of the Mall, but in order to be successful it was important that the Mall have a full house of tenants when it opened. I am satisfied that Mr. Figgins relied and acted upon this conduct of Mr. Robertson. The applicant makes out a case based upon paragraph ({c)(ii). - The allegations contained in paragraphs (m), (e); (£) and (1) are - "(m) The Centrepoint Mall would possess the characteristics and have the appearance of the Mall as set out in the brochure handed to the applicant. (e) The Trade Exhibition and theatrette proposed to be conducted at the Mall would attract a large number of people in addition to normal passing traffic. (f) There were to be two entrances to the Mall from Bourke Street which would permit and allow greater passing traffic through the Mall between Little Collins and Bourke Street. (1) the Centrepoint Mall was to have closed circuit television which would assist public movement in and around the Centre and help the public to become aware of the facilities available to the public at the Centre." I am satisfied that the applicant has made out a case based upon paragraphs (m) and (1). I am not satisfied that the applicant has made out a case based upon paragraphs (e) and (f£). The nature of the brochure has been Gescribed. Its purpose was to attract potential lessees. Copies were given to the other witnesses who gave evidence concerning enquiries for leases. The brochure was relied upon by the respondent as an important selling feature for prospective lessees. Even allowing for artistic licence, the sketch on the brochure is deceptive and misleading under s.52 of the Act. The Mall was in the course of construction when the applicant made its applications for tenancies and entered into the leases. Mr. Figgins had to rely to a large degree upon the brochure to visualize the completed Mall. He was given the brochure early in 1978. I find he relied upon it and acted upon it. In reality, the appearance of the Mall from Bourke Street bears no resemblance to the sketch depicted on the brochure. In facet there is a large diamond-shaped support column directly in front of the escalators thus blocking the open aspect depicted in the brochure. A plan in the brochure shows a round column placed there, but that is completely ignored in the sketch. The escalators are much narrower and steeper than those depicted in the sketch. The entrance in fact is tather narrow and congested and has a rather mean - 43 - appearance, The existence of the shops in the Mall is hard te define. The centre escalators give access to the first Fioor which, at the top point, in reality constitutes the lower second floor level. It will be recalled that shop 116 is at that level, but shop 112 is at a lower level and can be reached from Bourke Street oniy in the manner described earlier. The effect of this added height and narrower escalators is that the shops in the Mall at the top of the escalators, 'as well as in the basement, are difficult to see from the street, and the shops on the first floor level do not have the wrap-around effect depicted in the sketch. The Mall does not have the inviting and attractive entrance Gepicted in the sketch. It does not possess' the characteristics nor does it have the appearance as depicted in the sketch. The evidence given by Mr. Alter relating to the brochure, the escalators and the closed circuit television was most unsatisfactory. He had approved the sketch before it was printed, In evidence he attempted co justify the Mall as being consistent with the sketch. He prevaricated and attempted to avoid answering questions in cross-examination. This can be illustrated in particular by his evidence concerning the width of the escalators and the closed circuit television. The brochure states - - 44 - e "Closed circuit TV will provide a visual link between floors, while wide escalators ... and Spacious walkways will facilitate the pedestrian flow throughcut the Centre." o In the context of the Mall, the escalators are not wide. No closed circuit television was provided. There is no visual link between floors. There may have been technical difficulties with television screening but the substitution of a moving sign outside the Mall does not constitute a " replacement for the television. The plans on the brochure depict an area labelled "Exhibition Trade" on the second floor and a "Theatrette" in the basement, as well as two entrances to the Mall from Bourke Street. To that extent representations were made to Mr. Figgins and for that matter to the other witnesses who had been given copies of the brochure, of those facts. None of those features eventuated. The brochure continued to be relied upon by the respondent even after decisions had been made not to provide those facilities. Nevertheless, on the evidence I am not satisfied that Mr. Figgins, in causing the applicant to make the applications for tenancies or to execute the leases, relied or acted upon any of those representations. The applicant conducted a shoe shop in the basement of the Leviathan building contiguous with the proposed theatrette. Before making the applications for tenancies -he - 45 = had negotiated with Mr. Robertson concerning the possibility of linking the Leviathan shop to the basement of the Mall. This could have been done only on the basis that the theatrette was not being proceeded with. Technical aifficulties prevented the linking of that shop with the Mall. Apart altogether from the evidence of Mr. Barnard-Brown, I find that Mr. Piggins either knew or must have known that there was to be no theatrette at the time the applications for tenancies were made. Likewise, the plans annexed to the lease of shops G15, 116 and part 112 to identify the shops, the subject of the leases, depicted that the second mall did not open on to Bourke Street, I do not believe Mr. Figgins when he says he did not notice chat from the plans. They are clearly defined in red, Further, the whole concept of the special development of shops G15, 116 and 112 was based on a walkway around three sides of GL5. The walkway along the Bourke Street side of that shop is not shown on the plan in the brochure, but is shown on the plan annexed to the lease of shops G15, 116 and part 112. The numbers given to the shops as appearing on the brochure had been altered at the time the applications for tenancies were signed. From all these re-arrangements, Mr. Figgins either knew or should have known that the second entrance to Bourke Street had been closed and that the walkway had been re-directed to go past the Bourke - 46 ~ o Street side of shop G15 to meet with the other walkway near the escalators where that walkway entered into Bourke Street. There is confusion as to what is meant by the trade exhibition, or rather the area marked "Exhibition Trade". No clear ideas had been formulated as to what was being planned, but an impression was given that it would attract persons to the Mall and thus increase the number of potential customers walking through the Mali. I am not satisfied that Mr. Figgins relied or acted upon that representation. His concern was with the appearance of the Mall, the number of shops that had been let, the types of businesses to be conducted and the names of the persons carrying on those businesses, particularly in the areas of the Mall near the shops to be leased by hin. The allegation contained in paragraoh {d) is - "(d) The Mall would be open for trading by mid-March 1979." In the brochure it is stated that the Mall is planned to open in November 1978. The applications for tenancies stated that the commencing date of the leases is March 1979. The Mall did not open for trading until October 1979, Rent and outgoings did not become payable by the applicant until October 1979, The Mall was in the course of construction, The shops being leased by the applicant were in the course of - 47 being constructed. There were delays in construction and delays in obtaining the requisite approvals from statutory authorities for the construction of the particular shops. The proposed opening date was being postponed from time to time. Mr. Figgins knew all of these facts. I am not Satisfied that on these special facts this paragraph specifies conduct that was misleading or deceptive under s.52 of the Act. , The allegations contained in paragraphs (k), (a), (3); (b) and (c)(i) are set out - "(k) The Centrepoint Mall would attract a volume and quality of customer similar to tnat attracted by Centrepoint Sydney. (a) There would be many big name, strong and high quality traders trading around the said shops and 'Rarity' would have a shop directly opposite the said shops. o (3) The Centrepoint Mall would be equal to the quality and standard of the Centrepoint complex in Sydney. (b) The first floor was to be a high class boutique area. (c) (i) The upstairs shop being part Shop 112 was situated in a high class fashion boutique area." I am satisfied that the applicant has made out a case based on paragraphs (a), (b) and (c)(i). I am not satisfied that the applicant has made out a case based on paragraphs (k) and (j). - 48 = It is accepted that to be successful a shopping complex of a type similar to Centrepoint needs a proper tenant mix, high quality traders who compete and complement each other, and that well-known business names help to - attract customers to the complex thereby increasing the number of potential customers for all tenants. The concept of a tenancy mix was stated by Mr. Cummins, a well-qualified witness whose qualifications are referred to later. He said - " "The tenancy mix is really the quality of tenants in a premises. A good tenancy mix is one where one tenant leads a possible purchaser into the next tenant and vice versa, so if you get a good quality tenant in the beginning, if the person wanting to purchase does not purchase there he might go to a next door shop or the one after, and get a reasonable opportunity to get a similar quality cf goods." The first shop situated within the Mall that Mr. Figgins desired to lease had a large area suitable fir storage purposes. Mr. Robertson told him that "Rarity" had a lease of that shop. "Rarity" is a well-known business name attracting customers and the shop being situated «oposite shop G15 would tend to attract persons as potential customers of the applicant. Likewise, Mr. Figgins insisted on being told the names of other retailers who had leases of shops in the Mall. He was given names by Mr. Robertson, albeit reluctantly, despite a direction from the respondent. In fact Mr. Axup had advised against the giving of the names-in - 49 - view of the danger of misrepresentation claims, but Mr. Alter had overruled the advice of Mr. Axup. Mr. Robertson gave the names to Mr. Figgins and they included names of well-known, reputable and attractive retailers whose businesses complemented the business proposed by Mr. Figgins. I find that Mr. Figgins relied upon the conduct constituted by those statements and made the applications for tenancies. The applicant has established grounds (a); (b) and (c)(i). There is a Centrepoint shopping complex in Sydney. Plans and photographs of that complex were tendered in evidence, In addition, Mr. Cummins gave evidence concerning Sydney Centrepoint - "There is no comparison whatever. Here in Sydney you have probably the best arcade of its type in Australia with quality tenants on the one floor sitting, or rather close to one another on one flocr, and on the other floors you have a different gradation of shop type, a slightly lower level as you come down, whereas in Melbourne you have a mixture of one or two quite good, with one or two quite poor. That, coupled with the fact that in Melbourne you have a most extraordinary layout of walkways due to the design of the building, whereas in Sydney you have a direct walk through from one point to another, from one focal point, which is Myers, to another focal point at the other end, which is of course David Jones, two of the leading stores of Sydney." ~ 50 ~ Sydney Centrepoint was discussed in conversations between Mr. Figgins and Mr. Robertson, In the absence of counsel, but with their consent, I had a view of Centrepoint Sydney as an aid to understanding the evidence. There are marked aifferences between the two complexes, but difficulty arises from an attempt to give any realistic meaning to the words used in conversations. I am not satisfied that the evidence discloses sufficient to constitute conduct under s.52 of the Act. , In the result, I am satisfied that the applicant has made out a case under s.52 of the Act based upon six of the eighteen paragraphs set out in the statement of claim, : namely paragraphs (a), (b), (c)(i), (c)(ii), (1) and (m). In his submissions counsel for the applicant contended that the applicant had suffered loss or damage by the conduct of the respondent done in contravention of s.52 of the Act and scught an order under s.82 for the recovery of the amount of that loss or damage. In addition, he sought orders under s.87 of the Act. He contended that the applicant had suffered and was likely to suffer loss or Gamage by that conduct and sought orders mentioned in s.87(2). - 5] - Before considering what orders should be made, a preliminary issue calls for determination, Counsel for the applicant submitted that in the absence of any cross claim by the respondent, the Court was limited to the making of an order in the form sought by the applicant. His submission can be summarized as follows - "What the applicant is asking for and what the act gives is a right to damages, and if that is the relief which the applicant chooses and the factual foundation for it exists, the applicant has an election, and if the relief that he chooses is damages, and he is Gtherwise entitled to it, damages is what the applicant ought to have. In our submission it would not be open to the court to say to the applicant: We would rather give you some other form of relief which we have got jurisdiction to give if you ask for it. It certainly does not lie in the mouth of the respondent to say we want the court to exercise the powers under section 87. The respondent is not a party, who, on the facts proved, has any standing to ask for relief under section 87." This preliminary issue is of importance. The statement of claim alleges that the applicant suffered loss and damage in respect of the shops, and the particulars thereof in their amended form are - "1. (a) Trading loss in the Miss F Shop Gi5 and 116 - (i) for the 38 weeks to 30th June 1980 $116,967; (ii) for the 6 months to 3list December 1980 $60,848; (b) (c) (a) - 52 - (iii) The losses have continued since the 3lst December 1980 and are continuing. Trading loss in the Snob Shop 112 - (i) for the 38 weeks to the 30th June 1980 $40,371; (ii) for the 6 months to the 31st December 1980 $24,979; (iii) The losses have continued since the 3lst December 1980 and are continuing. The~ cost of providing working capital for the said shops at the tate of 15 per centum per annum on the following figures : (i) average stock $78,668; (ii) equipment $7,678; Cost of fixtures and fittings for the purpose of opening up the said shops being the total payable under the two leases of the fixtures and fittings $344,015. Pay-out figure as at the 9th day of February 1980 was $216,288.12. Value of the fixtures and fittings on the basis of being dismantled and removed from the demised premises as at the 12th February 1981, $11,600. Further and in the alternative to the trading loss the applicant claims the difference between the rent due under the said leases and the market rent of the demised premises as follows: {a) (b) Shop 15 on che ground floor market rent $41,100 per annum plus rates and land tax. Shop 112 on the first fleoer market rent $7,050 plus rates and land tax. ~ 53 - (c) Shop 116 on the first floor market rent $12,330 plus rates and land tax. The difference in rent as set out above is continuing. 3. Maintenance charges and outgoings are being charged to the applicant which are far in excess of 15 per centum of the rental payable by it." The primary claim made in submissions was for the recovery of the loss and "damage suffered by the applicant up to the date of judgment and rescission of the leases from that date. The primary submission made by counsel for the respondent was that, assuming that the applicant established a case under s.52 of the Act, the Court should make orders under s.87 varying the amount of rent specified in the leases. The submissicns of counsel] for the applicant on this preliminary issue are rejected. The relevant parts of s.82 are - "AR person who suffers loss or damage by conduct of another person that was done in contravention of ... (s.52) ... May recover the amount of the loss or damage by action Jurisdiction to hear and determine that action is conferred by s.86 — -~ 54 - "86. Jurisdiction is conferred on the Court to hear and determine actions, prosecutions and other proceedings under this Part and that jurisdiction is exclusive of the jurisdiction of any other court, other than the jurisdiction of the High Court under section 75 of the Constitution." The court referred to in that section is defined to mean the Federal Court of Australia. Section 87 gonfers powers on the Court. Sub-sections (1) and (1A) are complementary. In the present case the condition precedent to the exercise of powers under s.87({1) is the existence of the proceedings aileging contravention of s.52 and in which the Court has found that the applicant has suffered loss or damage by the conduct of the respondent in contravention of s.52. Alternatively, the condition precedent to the exercise of power under s.87(1A) has been satisfied. In these circumstances, the Court has power, namely it - "... May, whether or not ... it makes an order under gee s.82, make such order ... as it thinks appropriate against eee (the respondent) ... (including all or any of the rders mentioned in sub-section (2) of this section) if the Court considers that the order or orders concerned will compensate ... (the applicant) ... in whole or in part for the loss or damage or will prevent or reduce the loss or damage." Sub-section (2) then lists a large number of wide-ranging types of orders that may be made as indicating the wide nature of the discretion conferred upon the court - "(2) The orders referred to in sub~sections (1) and (1A) are - (a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Court thinks fit, to have been void ab initio or at all times on and after such date before the date on which the order is made as is specified in the order; (b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after such date before the date on which the order is made as is so specified; {c} an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage; (4) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage; ~ 55 - tion (2) then lists a large number of wide~ranging sgub-/ , of orders that may be made as indicating the cy jare of the discretion conferred upon the court ~— f i f "(2) The orders referred to in sub-sections (1) and (1A) are ~ ' (a) (b) {c) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Court thinks fit, to have been void ab initio or at all times on and after such date before the date on which the order is made as is specified in the order; an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract Or arrangement to have had effect as so varied on and after such date before the date on which the order is made as is so specified; an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage; an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage; wide Sub-section (2) then lists a large number of wide-ranging of typés of orders that may be made as indicating the wide ? mature o£ the discretion conferred upon the court - "(2) The orders referred to in sub-sections (1) and (1A) are - (a) an order declaring the whole or any part of a contract made between the person who suffered, or is likely to suffer, the loss or damage and the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, or of a collateral arrangement relating to such a contract, to be void and, if the Court thinks fit, to have been void ab initio or at all times on and after such date before the date on which the order is made as is specified in the order; (b) an order varying such a contract or arrangement in such manner as is specified in the order and, if the Court thinks fit, declaring the contract or arrangement to have had effect as so varied on and after such date before the date on which the order is made as is. so specified; {c) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct to refund money or return property to the person who suffered the loss or damage; (d} an order directing the person who engaged in the conduct or a4 person who was involved in the contravention constituted by the conduct to pay to the person who suffered the loss or damage the amount of the loss or damage; - 56 - (e) an order directing the person who engaged in the conduct or a person who was involved in the contravention constituted by the conduct, at his own expense, to repair, or provide parts for, goods that had been supplied by the person who engaged in the conduct to the person who suffered, or is likely to suffer, the loss or damage; and (£) an order directing the person who engaged in the conduct or a person who was involved in the 4y contravention constituted by the conduct, at his own expense, to supply specified services to the person who suffered, or is likely to suffer, the loss or damage." 4%, There is no doubt that in a clear case under s,82Z, the Court is under a duty to assess, on the evidence before it, the loss or damage suffered, no matter how difficult or complex that assessment may be. Assessment of the damages involves, in such a case, the question of causation. The section confers a right upon applicants to recover the amount of that loss or damage. Section 87 confers a discretion upon the Court, a discretion to make orders which it considers will compensate the applicant in whole or in part for the loss or damage. That discretion must be exercised according to law and in this regard reference may be made to the well known passages appearing in House v. The King (1936) 55 C.L.R. 499 per Starke J, at p.503 and per Dixon, Evatt and McTiernan Jd. at pp.504-5. - 57 - I reject any suggestion that the form of order to be made in this case is limited to the form of relief claimed by the applicant. Section 87 confers upon the Court a wide discretion to do justice between the parties. The Court should not restrict the exercise of that discretion by imposing upon itself technicalities which might defeat the policy of the section. No claim is made that the submissions of counsel for the respondent have caught the applicant by surprise. No applicatign was made for an adjournment to enable counsel to consider and prepare a reply to the submissions of counsel for the respondent concerning the form of relief to be awarded. The Court is required to consider all matters properly before it and to make such orders under s.82 and s.87 as it considers appropriate. It must apply the law, but in doing that it must do 'justice between the parties. It must do what is fair between the parties. Mr. Cummins was called by the applicant to give evidence. He is a highly qualified and very experienced valuer. He has wide experience in the managing and letting of shops in various arcades in the City of Melbourne. He gave evidence of what he considered to be the current market value of the rents of the shops G15, 116 and 112. fhe reasonable values of those rents were similar in October 1978. His valuations were based on the assumption that in addition to the rent, the lessee would be required to pay the Statutory rates and taxes, such as the municipal rates, the ~ 58 ~ Board of Works rates and State land tax, but that the lessor would pay common area oputgoings, namely the apportionable cutgoings as referred to and defined in the leases. In addition, the lessee would be required to pay for the services and utilities provided to the shops. Mr. Cummins' valuations were - Shop G15 - $41,100 per annum Shop 116 - , $12,330 per annum Shop 112 - $ 7,050 per annum webs, ary On this basis, in Mr. Cummins' opinion the reasonable rent for the shops G15 and 116 and part 112 was $53,430 per annum. Under the leases, in addition to the rent and the cost of services and utilities provided to the shops, the applicant was required to pay statutory rates and taxes and apportionable outgoings. The amounts of rent under the lease from the commencement date, 10 October 1979, and for the ensuing two years were - Shops G15, 116 and part 112 ~ $84,000 per annum Shop 112 - $25,750 per annum Mr. Cummins' opinion was that no rent should be charged for the storage area since it was constructed by the tenant at its own cost, but that the tenant should pay any - 59 - statutory rates and taxes applicable thereto as well as the cost of services and utilities. The tenant should not pay or reimburse the lessor any sums being apportionable outgoings within the meaning of the leases. No evidence on this aspect was called by the respohdent, and I accept the evidence of Mr. Cummins. on this evidence, the direct damages suffered by the applicant can be determined. , o In addition, much evidence was led by the applicant concerning the consequential loss or damage suffered by the applicant. Because of the order proposed to be made, it is not necessary to consider the whole of that evidence in detail, but I should comment that I found the evidence most unsatisfactory and unreliable. It raised difficult questions of causation, namely whether the loss of profits was caused by the general depressed nature of the retail market generally in 1979 and 1980 and by the strained financial resources of the applicant. It is sufficient to say that cn the submissions 'of counsel for the applicant, the total amount of the consequential loss or damage claimed was very high. There is no doubt that the applicant'has suffered loss or damage under s.82 of the Act. The conduct of the respondent did influence the applicant in its decision to - 60 - make the application for tenancies and to execute the leases. At the same time, that conduct was not the sole influence affecting the applicant. The conduct was a factor affecting the applicant in making those decisions. That is sufficient for the purposes of s.82. Nevertheless, Mr. Figgins was an experienced and resourceful businessman, eager to extend his retail budinesses into the Centrepoint Mall and to prevent his competitors from doing likewise. He wanted his companies to be part of the exciting new venture. The primary submission of counsel for the applicant was that the damages should be calculated by adding together the direct damages, being the difference between the reasonable value of the shops and the amount that the applicants had agreed to pay for them, and the consequential loss, being the loss of profits for conducting the business and the loss related to the expenditure in fitting out those shops. If the lease was not to be rescinded as from the date of judgment, further damages should be awarded, but the primary submission was that the Teases should be rescinded as from that date. As an alternative to that last submission it was contended that the terms of the lease be varied by reducing the amount of rent for the shops, by relieving the applicant from its obligation to pay apportionable outgoings and to relieve the applicant from its obligation to carry on business in the shops of the retailing of ladies' and men's fashion footwear, accessories and fashion clothing. If the -61- last-mentioned obligation was varied, any type of business could thereafter be conducted in those shops thus making it possible that an assignment of lease could be obtained more easily, the lease having some four years and three months to run aS a minimum term. .. In an action for damages for fraudulent misrepresentation, the amount of damages to which a plaintiff is entitled is, prima fa¢ie, "the amount by which the price which he has paid exceeds the true value of the thing bought at the time when he bought it": McAllister v. Richmond Brewing Co. (N.S.W.) Pty. Ltd. (1942) 42 S.R.N.S.W. 187 per Jordan C.J. at 192, This passage is taken from a longer and very helpful passage at pp.191-3 where the Chief Justice considers the general questions of rescission and damages for deceit. At p.1$2 the Chief Justice said - "The rule is well settled, and exceptional circumstances are necessary to justify an award of anything more by reference to the general principle, but such circumstances may occur." At p.193 the Chief Justice said - "Different considerations would arise when, as a result of deceit, the purchaser has been led to have dealings with a third party which made rescission impossible. In such a case, the circumstances might be such as to entitle the buyer to recover by way cf damages any unavoidable loss which was fairly referable to the deceit." Dixon der The general principles to be applied are stated by as he then was, in Toteff v. Antonas (1952) C.L.R. 647 at pp.650-1 - "In an action of deceit a plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage he has suffered in consequence of his altering his position under the inducement of the fraudulent misrepresentations made by the defendant. When what he has been induced to do is to make a purchase from the defendant and part with his money to him in payment of the price, then, if the transaction stands and is not @isaffirmed or rescinded, what is recoverable is 'the difference between the real value of the property, and the sum which the plaintiff was induced to give for it' per Abbott L.C.d. Pearson v. Wheeler ((1825) Ry. & Mood. 303, at p.304 [171 E.R. 1028, at p.1029]). As Sir James Hannen P. in Peek v. Derry ((1887) 37 Ch. D, 541, at p.594; cf. (1889) 14 App. Cas. 337) pointed out, the question is how much worse off is the plaintiff than if he had not entered into the transaction. If he had not done so he would have had the purchase money in his pocket. To ascertain his loss you must deduct from the amount he paid the reali value of the thing he got. It may be objected that the point of the application of this doctrine lies in identifying 'the transaction' and that what Mayo J. has done is to identify it as the purchase of the goodwill and that only. But what is meant is the transaction into which the representation induced the plaintiff to enter. The measure of damages in an action of deceit consists in the loss or expenditure incurred by the plaintiff in consequence of the inducement on which he relied diminished by the corresponding advantage in money or moneys worth obtained by him on the other side : Potts v. Miller ((1940) 64 C.L.R. 282, at p.297). You look to what he has been induced to part with as the initial step. He is entitled to say that but for the fraud he would never have parted with his money : per Coleridge L.C.J., Twycross v. Grant ((1877) 2 - 63 - C.P.D. 469, at p.491). But he cannot recover the entire price he has paid unless the thing prove wholly worthless. If the thing has any appreciable value the damages must be reduced pro tanto : per Cockburn L.C.J., Twycross v. Grant (at p.543). It must not be forgotten that after all deceit is an action on the case for special damage incurred in consequence of the defendant's fraudulent inducement." A useful reference to some of the many cases dealing with these matters appears in Ivanof v. Phillip M. Levy Pty. Ltd. [1971] V.R. 167 per McInerney J. at pp.170-1. Under s.82 of the Act, the applicant is entitled to recover the loss or damage suffered "by conduct of another person", There must be a causal connection between the conduct and the loss or damage. The words of Dixon J. just cited may be adapted to read that a claim under s.82, when based on s.52, is in the nature of an action for special damages incurred in consequence of the respondent's misleading or deceptive conduct. The damages to be recovered are, in my opinion, to be determined in a manner similar to deceit cases. The principles to be applied are similar to those applied in 'determining the measure of damages in tort, not for breach of contract. With respect, I agree with the views expressed by Fox J. in Brown v. Jam Factory Pty. Ltd., Federal Court of Australia, 26 March 1981, unreported. There may be cases where the measure of damages to be recovered exceeds the difference in value between the - 64 - amount by which the price paid exceeds the true value. Esso Petroleum Co. Ltd. v. Mardon [1976] 1 Q.B. 801 is such a case, see Lord Denning M.R. at pp.820-1 and Ormrod L.J. at pp.828-830. See also the Jam Factory case, supra. In the present case counsel for the applicant contended that there were circumstances justifying the recovery of the greater amount of damages. He referred to the expenditure incurred by the applicant in constructing the storage area, the benefit of which remains with the respondent. He relied upon the provisions of Clause 8 of the leases which restricts the permitted use of the' shops to that of the retailing of ladies' and men's fashion footwear, accessories and fashion clothing. He referred to the long period between the execution of the leases and the commencement of the tenancies. He contended that thereafter the respondent was entitled to commence and continue trading to determine if the businesses could be conducted at a profit. All those factors, it was contended, should be taken into accuunt as circumstances justifying an increase in the amount of damages' to be recovered. In my opinion, in the present case the amount of damages to be recovered by the applicant is to be determined by reference to the difference between what were the reasonable rents for the shops in October 1979 on the one hand, and the rents and the liability to pay apportionaple - 65 - outgoings as provided for in the lease on the other. Counsel for the respondent submitted that some allowance should be made in favour of the respondent because of the benefit conferred on the applicant by reason of the absence of competitors in the Mall. He contended that the evidence of Mr. Cummins was based on the shops as shops and did not take into account the effect of the special benefit resulting to the applicant. That contention is rejected since the leases did not confer that benefit on the applicant. The undertaking: by the respondent concerning competition as contained in the letter of 7 July 1978 is limited to the initial lettings only. Reference has been made already to the special nature of the wide discretion conferred upon the Court by s.87 of the Act. That is a discretion not always available to a court in assessing damages for tort or, for that matter, for breach of contract. Mr. Figgins was an active supporter of the concept of the Centrepoint Mall. He desired to participate in the development to the exclusion of his competitors, When the Mall opened for trading in October 1979 he knew or should have known that each of the representations established, and being those contained in paragraphs (a), (b), (c)(i), (c)(ii), (1) and (m) set ouc above, were false, yet he resolved that his companies commence trading. Thereafter, even though he knew that his businesses were a financial failure, or rather were not - 66 - making the profits he had anticipated they would make, he made no complaint to Mr. Alter. He engaged in that course deliberately in an attempt to induce Mr. Alter to make special arrangements to ease the applicant's difficulties and in an attempt to induce Mr. Alter to enter into the new development proposed in Sydney. Mr. Figgins knew that other tenants at the Mall were making formal complaints to the respondent concerning misleading and deceptive conduct by the respondent relating to the Mall. He knew letters of demand had been written and negotiations for possible settlements were taking place. The first formal claim was not made by the applicant until a solicitor's letter in April 1980, and even after that date no attempt was made to press the claim until the application was issued in September 1980. Although the difficulties inherent in the traditional problems of deciding whether to rescind a contract or to affirm the contract and sue for damages in the event of deceit are to be avoided as far as possible in proceedings under s.82 and s.87 cf the Act, nevertheless some consideration and weight must be given to the actions of the parties after knowledge of the existence of misleading or deceptive conduct. Section 87 enables the Court to overcome many of those types of difficulties, but at the same time the conduct of the parties, and in the present case particularly the conduct of the applicant, is relevant to be considered in the exercise of the discretion conferred by s.87 of the Act, and more particularly for present purposes in determining the amount - 67 - of damages to be recovered under s.82. In my opinion, the applicant by its conduct has affirmed the leases. The consequential losses are not caused by the conduct of the respondent but by the actions of the applicant, The applicant is not entitled to recover damages over and above the difference in value of what it got and what it bargained to get. There are no special circumstances justifying additional damages. " For similar reasons, in the exercise of the discretion conferred by s.87 it is proposed that the leases should not be rescinded either ab initio or as from the date of judgment in this matter. In further support of that decision I rely upon the fact that Mr. Figgins is an experienced and capable businessman. He obtained legal advice concerning the terms of the leases. He was able to obtain special terms relating to rent far more favourable to him than to lessees generally under the standard form of lease. The initial rent was to remain the same and was not subject to increases by the application of a formula based upon increases in the consumer price index. Likewise, the rent review under the applicant's leases was to be at two-yearly rests and in the failure of agreement the amount of the rent was to be determined by an arbitrator. There was a proviso to the effect that the rent so determined was not to be less than the rent payable at the relevant time of the review. Under the standard form of lease the rent was to be - 68 - reviewed vearly and increased by the application of a formula based upon increases in the consumer price index. The applicant should be bound by the terms of its leases in the form as varied by the orders to be made by the Court. However, in the course of his submissions, counsel for the respondent conceded that the proviso just mentioned preventing any reduction of rent on review should be deleted. I propose to vary the terms of the leases accordingly. " One of the essential requirements of a successful shopping complex "such as Centrepoint Mall is the existence of a proper tenant mix. The nature of the business being conducted in shops G15, 116 and 112 forms part of that tenant mix at Centrepoint. In the absence of agreement by the respondent, YI can see no reason why other terms of the applicant's leases should be varied to relieve the applicant of its obligation to continue the permitted use of tiose shops. At the same time it is important that the respondent continue to attempt to obtain a proper tenant mix for Centrepoint. The applicant is entitled to that course of action by the respondent. It remains to consider what form of orders should be made. Having regard to what has been said, the discretion conferred by s.87 of the Act, the damages to be recovered by the applicant and the continuation of the leases into the future, the simplest, neatest and most effective method of ~ 69 ~- giving effect to the judgment of the Court is to make orders under s.87 of the Act, and in particular under s.87(2){(b) thereof. It is proposed that the Court vary the two leases and to declare that the two leases as so varied have effect from the commencement of the leases, namely 10 October 1979. The variations of the leases are as follows - 1. Lease of shops G15, 116 and part 112 , (a) The SCHEDULE to the lease be varied by deleting PART IV thereof and substituting the following - " PART IV (Initial rent) $53,430 per annum —- $4,452.50 per calendar month ~ $1,027.50 per week." (b) The following clauses of the lease be deleted - "Clause 6.02, Clause 6.03, Clause 24.01({c), Clause 26.00 and Clause 27.00." (c) APPENDIX 1 (Rent Review) to the lease be varied by deleting from Clause 3 thereof the following words - - 70 - "PROVIDED FURTHER and it is hereby agreeaq and declared by the Lessor and the Lessee that notwithstanding the foregoing the rental payable hereunder shall not in any event be less than the rental payable at the relevant rent adjustment date." 2. Lease of shop No, 112 - {a) The SCHEDULE to the lease be varied by deleting PART IV thereof,and substituting the following - " PART IV (Initial rent) $7,050 per annum ~- $587.50 per calendar month - $135.58 per week." (b) The following clauses of the lease be deleted - "Clause 6.01, Clause 6.03 and Clause 25.00." (c) APPENDIX 1 (Rent Review) to the lease be varied by deleting from Clause 3 thereof the following words ~ "PROVIDED THAT and it is hereby agreed and declared by the Lessor and the Lessee that notwithstanding the foregoing the rental payable hereunder shall not in any event be less than the rental payable at the relevant rent adjustment date." -71- The applicant has made some payments but not all of the amounts of rent and other outgoings provided for in the leases before variation. Computations will need to be made to determine either the amounts owing or which have been overpaid by the applicant as a result of its obligation under the leases after being varied. During final submissions counsel suggested that the Court should publish its reasons and minutes of proposed orders. The parties would then be in a position to make any hecessary computations and to make submissions to the Court as to the form of final orders to be made. I propose to follow that course. In addition, the parties may wish to make submissions concerning the costs of the proceedings, In the result, I publish minutes of the orders proposed to be made and my reasons for the making of those orders. The further hearing of the matter will be adjourned. I certify that this and the Seventy (10) . } preceding pages are a true copy of the Reasons for Judgment herein of the Honourable Mr. Justice NoRTHEOP, — Mb U xhaonk Associate Dated: 6 Jury 198} . a reece IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY V.G. No. 116 of 1980 GENERAL DIVISION ee et et ee BETWEEN: MISTER FIGGINS PTY, LTD. Applicant Pa and t CENTREPOINT FREEHOLDS PTY. LTD. Respondent NORTHROP J. MINUTES OF PROPOSED ORDERS 6 JULY 1981. THE COURT ORDERS AND DECLARES: That the lease dated 22 September 1978 and entered into between Centrepoint Freeholds Pty. Ltd. as lessor and Mister Figgins Pty. Ltd. as lessee, being the lease of shops G15, 116 and part 112 at Centrepoint Mall, Bourke Street, Melbourne, be varied as hereinafter set out and that the lease as so varied had effect on and after the commencement of the lease on 10 October 1979: (a) Delete PART IV (Initial rent} of the SCHEDULE to the lease and in lieu thereof insert the following: 2. " PART IV (Initial rent) $53,430 per annum - $4,452.50 per calendar month - $1,027.50 per week," (b) Delete the following clauses of the lease: "Clause 6.02, Clause 6.03, Clause 24.01(c), Clause 26.00 and Clause 27.00." (c} Varying APPENDIX 1 (Rent Review) to the lease by deleting from paragraph 3 thereof the following words: "PROVIDED FURTHER and it is hereby agreed and declared by the Lessor and the Lessee that notwithstanding the foregoing the rental payable hereunder shall not in any event be less than the rental payable at the relevant rent adjustment date." That the lease dated 22 September 1978 and entered into between Centrepoint Freeholds Pty. Ltd. as lessor and Mister Figgins Pty. Ltd. as lessee, being the lease of shop 112 at Centrepoint Mall, Bourke Street, Melbourne, be varied as hereinafter set out and that the lease as so varied had effect on and after the commencement of the lease on 10 October 1979: (c) {b) Vary APPENDIX 1 (Rent Review) to the lease by deleting Delete PART IV (Initial rent) of the SCHEDULE to the jJease and in lieu thereof insert the following: " PART IV (Initial rent) $7,050 per annum - $587.50 per calendar month - $135.58 per week." Delete the following clauses of the lease: "Clause 6.01, Clause 6.03 and Clause 25.00." from paragraph 3 thereof the following words: "PROVIDED THAT and it is hereby agreed and deciared by the Lessor and the Lessee that notwithstanding the foregoing the rental payable hereunder shall not in any event be less than the rental payable at the relevant rent adjustment date."