JUDGMENT Noo 28.31.22... CATCHWORDS TRADE PRACTICES - misleading or deceptive conduct - false or misleading representations as to conditions of contract - alleged breaches of contract and of fiduciary duty - not established at trial - appeal - findings of trial judge open on evidence - appeal dismissed SAPPHIRE INVESTMENTS PTY. LIMITED, ALFRED SAUER and LINDA ELIZABETH SAUER v. BURNS PHILP TRUSTEE COMPANY LIMITED AND OTHERS No. ° Davies, Morling and Foster JJ. 8 June 1988 Sydney IN THE FEDERAL COURT OF AUSTRALIA ) ) NEW SOUTH WALES DISTRICT REGISTRY ) No. G 753 of 1987 ) ) GENERAL DIVISION BETWEEN: SAPPHIRE INVESTMENTS PTY. LIMITED, ALFRED SAUER, LINDA ELIZABETH SAUER Appellants 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 MINUTE OF ORDER JUDGES MAKING ORDER DATE OF ORDER WHERE MADE Sydney THE COURT ORDERS AS FOLLOWS: 8 June 1988 Davies, Morling and Foster JJ. 1. The appeal is dismissed. 2. The appellants are to pay the respondents' costs. NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION No. G 753 of 1987 BETWEEN: SAPPHIRE INVESTMENTS PTY. LIMITED, ALFRED SAUER, LINDA ELIZABETH SAUER Appellants AND: 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 CORAM DATE: 8 June 1988 PLACE: SYDNEY REASONS FOR JUDGMENT DAVIES, MORLING and FOSTER JJ. Fifth Respondent THE COURT: This is an appeal from a decision of a judge of the Court dismissing an application in which the appellants sought damages against the respondents for alleged breaches of the Trade Practices Act 1974 (Cth) and for other alleged causes of action. There was no dispute before the learned trial judge, nor on appeal, that the Court had jurisdiction to entertain all the claims made. All the claims arose out of the one matter and the Court's accrued jurisdiction extends to authorize it to determine all of them: Philip Morris Inc. v Adam P. Brown Male Fashions Pty. Ltd. (1981) 148 C.L.R. 457 and Fencott v Muller (1983) 152 C.L.R. 570. The appellants' claims arose out of the construction of a retirement village at Merimbula on the South Coast of New South Wales. Substantial moneys were borrowed by the first appellant from the first respondent to enable the construction of the retirement village to be undertaken. It is unnecessary, for the purposes of disposing of the appeal, to refer to the somewhat complicated facts surrounding the loans made by the first respondent and to the way in which the other parties to this appeal became involved in the transactions. They are set out in considerable detail in the judgment under appeal and no good purpose would be served by their repetition. One of the principal matters debated in the appeal was whether the extent of the respondents' liability to provide finance for the construction of Stage 1 of the retirement village was that set out in the executed agreements or whether, on the other hand, the respondents or one or more of them orally agreed to provide or made promissory representations that they would provide all the finance necessary to complete that construction. At the time the loan transactions were entered into, all the parties had competent legal advice. From time to time contractual documents were brought into existence on the advice of solicitors. The causes of action which the appellants sought to make out before his Honour depended almost exclusively for their proof upon the context of conversations between representatives of the parties. As the trial judge said:-— "The case turns almost entirely on questions of fact and to a considerable degree on _ the credibility or the reliability of witnesses." The trial judge preferred to accept the respondents' witnesses to those called by the appellants. Many, if not most, of his findings were based upon his views as to the credibility of witnesses. This is not a case in which an appellate court is in as good a position as a trial judge to determine the questions of fact that arose at the trial: cf Warren v Coombes (1979) 142 C.L.R. 531. His Honour's findings were not reached by drawing inferences from documents and undisputed facts. In these circumstances the task of showing error in the trial judge's findings is very difficult indeed. In Uranerz (Aust) Pty Ltd v Hale (1980) 30 A.L.R. 193, Gibbs, Stephen, Mason, Murphy and Wilson JJ. explained the function of an appellate court when considering findings of fact made by the court below or a tribunal. At p. 197, their Honours said: - "It is of course well established that an appellate court which hears an appeal on documents and not on oral evidence will generally defer to the conclusion which the trial judge has formed upon the question which of the witnesses, whom he has seen and heard, are credible." 4. At p.199, their Honours held:- "(the Judge) was not entitled to reverse the finding of the Tribunal which was based on its view of the credibility of the witnesses unless it was seen clearly to be wrong on grounds which did not depend merely on credibility - for example, on the ground that the evidence which was accepted was inconsistent with established facts, or was so improbable that no reasonable person could accept it, or that the judgment of the Tribunal disclosed that its conclusion was affected by some error of law or fact." We have carefully considered his Honour's reasons and the full submissions which have been put to us by Mr Sauer, whom we permitted to appear for the appellants. Notwithstanding all that has been put to us, we do not think that any error has been demonstrated in his Honour's judgment. There was ample evidence before him to justify the findings he made. Indeed, we would go further and say that the case for the respondents at the trial was strong and it would have been surprising if his Honour had found that any of the appellants' claims had been established. There was compelling evidence at the trial that it was known to the appellants that the first respondent's lending powers did not extend to advancing more than two-thirds of the value of the security given for a loan. His Honour was well entitled to accept this evidence. It was destructive of the claims which were themselves inconsistent with the documents executed by the parties. 5. We mention these particular matters only by way of illustration. The reasons advanced by his Honour in his judgment for rejecting the various claims put forward at the trial are persuasive, and it is sufficient that we say that we agree with then. The appellants have suffered great financial loss arising out of the building of the retirement centre. Sadly, Mr and Mrs Sauer have lost their home in the financial debacle which occurred. Their predicament excites our sympathy, but we are quite unable to say that it is due to any conduct for which the respondents are responsible. Mr Sauer put to the Court an eloquent submission to the effect that he would not have proceeded with the venture or committed his home thereto unless he had believed and relied upon the oral representations and agreements which he claimed had been made. Notwithstanding the force of Mr Sauer's argument, which we well appreciate, this is just one of the matters which the trial judge had to weigh in the balance and does not provide a sufficient ground for rejecting his conclusions reached as they were on the whole of the evidence. Mr Sauer also submitted that he and his counsel had come to the trial ill prepared and that, had the facts been adequately marshalled and the full story been put to the trial judge in a proper manner, the trial judge would have come to a different conclusion. However, his Honour's judgment is lengthy and detailed. He gave to the matter very close and careful consideration. There is no ground for setting aside his Honour's conclusions. It is unnecessary for us to deal separately with all the many matters which were the subject of submissions in the course of the appeal. With respect to all of them, the crucial issue was one of fact. In respect of all issues there was evidence going both ways and his Honour''s findings of fact, which depended in part upon his view as to the credibility of the witnesses, must be accepted by this Court, there being no ground to disturb them. Because the appellants were without legal represent- ation on the hearing of the appeal we have taken especial care to examine the judgment under appeal to see whether there is any ground for setting aside his Honour's findings, whether in whole or in part. However, we can find no error in it. Accordingly, the appeal must be dismissed with costs. I certify that this and the five (5) preceding pages are a true copy of the Reasons for, Judgment_of the Court. 'ACS, Associate: Date: 8 19 Appearance ellants: Mr Sauer appeared in person and, by leave, for the other appellants. Counsel for ist respondent: Mr R.P. Meagher Q.C. with Mr. J.C. Campbell instructed by: Bell Cadogan Couston & Gengos Counsel for 2nd, 3rd, 4th and respondents: Mr J.C. Kelly with Mr G. Charney instructed by: Abadee Dresdner & Freeman Date of Hearing: 1 June 1988