Federal Court of Australia
JUDGMENT No. Zloly 87]
CATCHWORDS
TRADE PRACTICES ACT - Misleading or deceptive conduct - False or
misleading representations as to conditions of contract. CONTRACT - Breach of contract - Unilateral mistake - Failure ta show
mistaken belief.
EQUITY - Breach of fiduciary duty - failure to establish fiduciary
duty.
Trade Practices Act: ss. 52 and 53(g).
SAPPHIRE INVESTMENTS PTY. LIMITED, ALFRED SAUER, LINDA ELIZABETH SAUER
v. BURNS PHILP TRUSTEE COMPANY LIMITED, ESTATE MORTGAGE FINANCIAL
SERVICES LIMITED ESTATE MORTGAGE MANAGERS LIMITED iCHARD LEW,
REUBEN LEW
G212 of 1987
Lockhart J.
16 December 1987
Sydney
IN THE FEDERAL COURT OF AUSTRALIA )
)
NEW SOUTH WALES DISTRICT REGISTRY )
GENERAL DIVISION
16 December 1987
LOCKHART J.
BETWEEN
) )
No. G212 of 1987
SAPPHIRE INVESTMENTS PTY.
LIMITED, ALFRED SAUER, LINDA ELIZABETH SAUER
Applicants BURNS PHILP TRUSTEE COMPANY LIMITED
First Respondent ESTATE MORTGAGE FINANCIAL
SERVICES LIMITED
Second Respondent
ESTATE MORTGAGE MANAGERS
LIMITED
Third Respondent
RICHARD LEW
Fourth Respondent
REUBEN LEW
Fifth Respondent
REASONS FOR JUDGMENT
This case concerns the financing of the construction of a
retirement village at Merimbula, New South Wales, known as the "Valley
High Resort Village"
Investments Pty.
Limited
("Sapphire")
("Valley High").
In 1981 and 1982 Sapphire
purchased land at Merimbula.
Towards the end of 1984 Sapphire decided to use the land for the
2.
purpose of constructing Valley High. The shareholders and directors of Sapphire are Alfred Sauer and his wife, Linda Elizabeth Sauer. Mrs. Sauer had little to do with Valley High. The controlling force
behind it was Mr. Sauer.
Valley High was an ambitious project and required extensive borrowings. Sapphire was funded initially by Esanda Limited; but in late March 1985 Sapphire approached other financiers for a substantial loan to pay out Esanda and fund the development of the project. The Estate Mortgage Group was approached on behalf of Sapphire. It is an organisation based in Melbourne carrying on business as mortgage managers, brokers and finance consultants. Richard Jacob Lew of Camberwell, Victoria, the fourth respondent, is a director of Estate Mortgage Finance Services Limited and Estate Mortgage Managers Limited (the second and third respondents) and the officer of those companies primarily involved in the discussions with Sapphire relating to the financing of Valley High. I shall, for convenience, refer to the Estate Mortgage companies, including the second and third respondents, both collectively and singly as "Estate Mortgage" especially as no distinction was drawn by the parties between any of the companies in
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