FEDERAL COURT OF AUSTRALIA Sotiropoulos v Bico Designs Pty Ltd [2013] FCA 25 Citation: Sotiropoulos v Bico Designs Pty Ltd [2013] FCA 25 Parties: JODIE-ANN SOTIROPOULOS v BICO DESIGNS PTY LTD ACN 083 107 573 (DEREGISTERED), JOSEPH BITON, MICHAEL COHEN, PETER ANTHONY GROSSMAN and BICO AUSTRALIA PTY LTD ACN 119 993 636 File number(s): NSD 2066 of 2011 Judge: JAGOT J Date of judgment: 29 January 2013 Catchwords: TRADE PRACTICES – whether any reliance on representations by applicant – whether representations made out Legislation: Fair Trading Act 1987 (NSW) Trade Practices Act 1974 (Cth) Cases cited: Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 Gould v Vaggelas (1985) 157 CLR 215 Henderson v Amadio Pty Ltd (No 1) (1995) 62 FCR 1 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 546 Macquarie Generation v Peabody Resources Ltd (2001) Aust Contract R 90-121; [2000] NSWCA 361 March v Stramare (E & MH) Pty Ltd [1991] HCA 12; (1991) 171 CLR 506 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2001) 241 CLR 357; [2001] FCA 31 Pritchard v Racecage Pty Ltd (1997) 72 FCR 203 Ricochet Pty Ltd v Equity Trustees Executors and Agency Company Ltd (1993) 21 FCR 229 Wardley Austalia Ltd v Western Australia (1992) 175 CLR 514 Watson v Foxman (1995) 49 NSWLR 315 Date of hearing: 17 December 2012 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 32 Counsel for the Applicant: Mr M Klooster Solicitor for the Applicant: TW Legal Counsel for the Respondents: Mr R White Solicitor for the Respondents: DC Legal IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 2066 of 2011 BETWEEN: JODIE-ANN SOTIROPOULOS Applicant AND: BICO DESIGNS PTY LTD ACN 083 107 573 (DEREGISTERED) First Respondent JOSEPH BITON Second Respondent MICHAEL COHEN Third Respondent PETER ANTHONY GROSSMAN Fourth Respondent BICO AUSTRALIA PTY LTD ACN 119 993 636 Fifth Respondent JUDGE: JAGOT J DATE OF ORDER: 29 JANUARY 2013 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The proceeding be dismissed. 2. The applicant pay the respondents' costs, as agreed or taxed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION NSD 2066 of 2011 BETWEEN: JODIE-ANN SOTIROPOULOS Applicant AND: BICO DESIGNS PTY LTD ACN 083 107 573 (DEREGISTERED) First Respondent JOSEPH BITON Second Respondent MICHAEL COHEN Third Respondent PETER ANTHONY GROSSMAN Fourth Respondent BICO AUSTRALIA PTY LTD ACN 119 993 636 Fifth Respondent JUDGE: JAGOT J DATE: 29 january 2013 PLACE: SYDNEY REASONS FOR JUDGMENT 1 These reasons for judgment concern the determination of a question in this proceeding which I ordered be heard separately from any other question in the proceeding on 28 June 2012. The question is whether a deed of settlement dated 23 May 2008 (the Deed) should be set aside pursuant to s 87 of the Trade Practices Act 1974 (Cth) (the Trade Practices Act). It was agreed between the parties that the separate question is potentially determinative of the proceeding; if the Deed is not set aside the proceeding must be dismissed because the Deed contains a release precluding the applicant from bringing any claims against the respondents in relation to or arising out of the District Court proceedings or relating to the affairs of Bico USA Inc (Bico USA) and Bico Designs Pty Ltd (Bico Designs). This proceeding falls within the scope of the release and thus is precluded by the Deed if it is not set aside. BACKGROUND 2 The applicant, Ms Jodie-Ann Sotiropoulos, commenced proceedings in the District Court of New South Wales on 16 November 2005 seeking recovery of unpaid wages and employee benefits against four defendants: Bico Designs, Mr Joseph Biton, Mr Michael Cohen and Mr Peter Grossman. Messrs Biton, Cohen and Grossman were directors of Bico Designs. Bico Designs was placed into liquidation on 18 July 2006 and deregistered on 19 September 2006. The applicant continued the proceeding against Messrs Biton, Cohen and Grossman. 3 The parties attended a court-ordered mediation on 23 May 2008, shortly before a five day hearing was to commence on 2 June 2008. All parties were legally represented at the mediation. The defendants offered the applicant a sum of $65,000 to settle the proceeding and the applicant accepted this offer. The Deed was drawn up and executed by the parties on the same day, 23 May 2008. It includes the following operative provisions: OPERATIVE PROVISIONS 1 Interpretation 1.1 In this Deed, unless the context otherwise requires: (d) "Defendants" means each of Grossman, Biton and Cohen jointly or severally. … (g) "Proceedings" means the Proceedings commenced by [the applicant] against the Bico Designs Pty Limited, Grossman, Biton and Cohen in the District Court of New South Wales, being proceedings number 4968 of 2005. … (h) "Resolution Documents" means the documents recording the resolution of shareholders of Bico Designs USA Inc… (i) "Settlement Amount" means $65,000 as cleared funds. … 2 Settlement 2.1 In consideration for this Deed: (a) The parties consent to the dismissal of the Proceedings with each party to pay their own costs of the Proceedings. (b) The Defendants will pay [the applicant] the Settlement Amount within 6 days of the date of this Deed. (c) The parties will cause their respective legal representatives to sign the Consent Orders to dismiss the Proceeding sin accordance with this paragraph. (d) Biton and Grossman will sign the Resolution Documents on exchange of this Deed. Cohen will sign the Resolution Documents within 6 days of the date of this Deed. 2.2 Subject to receipt of the Settlement Amount and the signed Resolution Documents in accordance with this paragraph the parties shall cause Consent Orders to be filed in the Proceedings within 2 business days of receipt of the Settlement Amount and Resolution Documents. 3 Release 3.1 In consideration of the mutual promises made in this Deed: (a) Upon the Defendants complying with their obligations set out in paragraph 2 above, [the applicant] will release and forever discharge the Defendants and Bico Designs Pty Limited from any claims, actions, and suits, whether known or unknown which [the applicant] may have, now or in the future, against them in relation to or arising out of the Proceedings or relating to the affairs of Bico USA Inc and Bico Designs Pty Limited. (b) Upon exchange of this Deed the Defendants release and forever discharge [the applicant] from any claims actions and suits which they may have now or in the future against [the applicant], whether known or unknown, in relation to or arising out of the Proceedings or the affairs of Bico USA Inc and Bico Design Pty Limited. … 4 The resolution of shareholders of Bico Designs USA Inc (Bico USA) referred to in cl 1.1(h) was a resolution removing the applicant from her position as President of Bico USA and accepting her resignation as Director, Secretary and Treasurer of Bico USA. 5 Following the execution of the Deed, orders were made by consent dismissing the proceeding on 2 June 2008 in the District Court in the following terms: 1. The proceedings be dismissed and each party pay their own costs. 2. Any order for costs made in these proceedings be vacated. The current proceeding 6 This proceeding was commenced on 21 November 2011. The applicant seeks relief under the Trade Practices Act and the Fair Trading Act 1987 (NSW) (the FT Act) for unpaid salaries and entitlements arising out of her employment with Bico Designs and Bico USA, as set out in the second further amended statement of claim. It is common ground that the applicant cannot pursue this relief unless she can obtain a declaration setting aside the Deed pursuant to s 87 of the Trade Practices Act as the release in cl 3 of the Deed provides a complete defence to the claims the applicant brings. 7 The applicant sought to have the Deed set aside on the ground of misleading or deceptive conduct by the respondents during the District Court proceeding and mediation or alternatively on the ground of economic duress. However, the economic duress argument was expressly abandoned during the course of the hearing, leaving the grounds of alleged misleading or deceptive conduct for resolution. 8 The misleading or deceptive conduct is said to arise as follows: (1) The respondents did not produce two Austrade Grant Applications for the financial years 2003/04 and 2004/05 which fell within the categories of discovery ordered by the District Court on 22 March 2007 (the Austrade applications). By doing so the respondents represented to the applicant that each of the Austrade applications either did not exist or were not in the respondents' possession or control (the discovery representation). (2) During the conduct of the District Court proceeding and at the mediation the respondents represented to the applicant that she was not an employee of Bico Designs while she was working for Bico USA in the United States, while making representations in the Austrade applications that the applicant was in fact employed by Bico Designs and Bico USA. (3) Mr Grossman, the fourth respondent in this proceeding and a director of both Bico Designs and Bico USA, did not inform the applicant that he was under investigation by the Australian Securities and Investments Commission (ASIC) regarding his involvement with Bico Designs (the ASIC representation). 9 The applicant pleaded that the respondents knew or ought to have known that the representations were false at the time of making them and that the making of each of the representations constituted conduct that was misleading or deceptive or likely to mislead or deceive in breach of s 52 of the Trade Practices Act and/or s 42 of the FT Act. The applicant relied on those representations and was induced by them to enter into the Deed. The Deed should therefore be set aside pursuant to s 87 of the Trade Practices Act. It is common ground between the parties that the provisions of the Trade Practices Act continue to apply as the relevant conduct occurred prior to 1 January 2011. Reliance 10 In order to have the Deed set aside under s 87 the applicant must prove that the loss or damage suffered was "by conduct" in breach of the Trade Practices Act. In Wardley Austalia Ltd v Western Australia (1992) 175 CLR 514 (Wardley) Mason CJ, Dawson, Gaudron and McHugh JJ stated that the word "by" "clearly expresses the notion of causation" and that s 82(1) "should be understood as taking up the common law practical or common-sense concept of causation recently discussed by this Court in March v Stramare (E & MH) Pty Ltd [1991] HCA 12; (1991) 171 CLR 506, except in so far as that concept is modified or supplemented expressly or impliedly by the provisions of the Act" (at 525). Section 87 is not relevantly different from s 82 in this regard and the same considerations apply (Pritchard v Racecage Pty Ltd (1997) 72 FCR 203 at 220E). 11 Their Honours noted in Wardley at 525 that where the Court is "concerned with contraventions of s 52(1) in the form of misleading conduct constituted by misrepresentations…acts done by the representee in reliance upon the misrepresentation constitute a sufficient connexion to satisfy the concept of causation". In Gould v Vaggelas (1985) 157 CLR 215 Wilson J said at 236 that if "a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation" and that "[t]he representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract". A material representation is calculated in the sense of being "objectively likely" to act as an inducement (Henderson v Amadio Pty Ltd (No 1) (1995) 62 FCR 1 at 166). Further, as Lockhart, Gummow and French JJ observed in Ricochet Pty Ltd v Equity Trustees Executors and Agency Company Ltd (1993) 21 FCR 229 at 235: Ultimately, the "causative threshold" beyond which liability attaches to a misrepresentation which is one of a number of factors inducing a decision that produces loss, will be a question of judgment...But the mere possibility that a misrepresentation might have induced a course of action by the representee can never of itself attach liability under s 82 to the making of it. 12 The insuperable difficulty for the applicant in this case, even assuming in her favour that the representations were made as pleaded, is that I am not satisfied on the balance of probabilities that the representations were material in the sense of playing some part in her decision to enter into the Deed. 13 The applicant gave evidence in her affidavit to the effect that she would have perceived her prospects of success to be greater in the District Court proceeding had she known about the Austrade applications and the ASIC investigation of Mr Grossman at the time of the mediation. This was said to support the submission that she would not have entered into the Deed given her perception of increased prospects of success in the District Court. However, courts have often commented on the dangers of subjective evidence of reliance given by the representee some time after the event and with the benefit of hindsight (see Watson v Foxman (1995) 49 NSWLR 315 at 318-319). Evidence of this kind should be evaluated objectively in light of the circumstances at the time (Rosenberg v Percival (2001) 205 CLR 434; [2001] HCA 18 at [16]). As Mason P noted in Macquarie Generation v Peabody Resources Ltd (2001) Aust Contract R 90-121; [2000] NSWCA 361 at [2] "[r]escission for misrepresentation in relation to a carefully negotiated written contract requires close examination of the alleged misrepresentation and its impact upon the representee at the time of contract". 14 The applicant's other evidence provides a better guide to the circumstances at the time of entering into the Deed. She gave evidence that the "most important matter in [her] life" at the time of the mediation was that she be removed as president of Bico USA because until that happened she was liable for the failure of Bico USA to pay tax in the United States. The applicant accepted in cross-examination that there was no certainty the respondents would have signed the forms permitting her to be removed as president even if she had been ultimately successful in the District Court proceeding. She also accepted that something that was "very important" to her at the time was not having to pay any more legal costs. By the time of the mediation the applicant had spent a substantial amount in legal fees. She had been forced to sell a number of assets to pay for the litigation and she was almost broke. The applicant also gave evidence that her solicitor who had been acting for her for approximately two years attended the mediation and she discussed the offer with her solicitor before accepting it. 15 Prosecution in the United States for tax liabilities is a serious matter and the applicant was rightly concerned about it. It is thus inherently plausible and unsurprising that the applicant's major concern at the time was her removal from the presidency of Bico USA. There was no guarantee that she would have obtained the shareholders' resolution from the directors of Bico USA releasing her from the presidency had she continued with the court proceeding. In deciding whether to enter into the Deed the applicant had to weigh up the benefits of not incurring further legal costs and obtaining the certainty of her removal as president of Bico USA against the possibility of prosecution in the United States and incurring substantial further legal costs during a five day hearing. In doing so she had the benefit of advice from a solicitor who had been acting for her for two years. In light of the circumstances at the time I simply do not accept the balance between these matters could not have been or was materially affected by the representations the applicant alleges were made. 16 Assume in the applicant's favour that the representations were made as she claims. On this premise, the Austrade applications should have been discovered. The applicant contended that the Austrade applications are evidence of representations being made to the Federal Government that she was employed by Bico Designs, which went to the issue in the District Court proceeding as to who employed the applicant. This representation is said to arise out of the fact that the applicant is named in a schedule to the applications. In the schedule there are entries for payroll and superannuation payments under the heading "Details of activity paid for". The "supporting evidence" listed next to these entries is listed as contracts and reports. The applicant submitted that as Bico Designs was applying for the grant the supporting contract must be the applicant's employment agreement with Bico Designs, and that this constitutes a representation to the Federal Government that the applicant was employed by Bico Designs and not Bico USA. However, this conclusion relies on a weak chain of inferences drawn from the terms of the applications. There is no clear statement to the effect that the applicant is employed by Bico Designs. Further, the applicant had stronger evidence on this point in the form of the employment agreement itself which on its face accorded with the applicant's view that she was employed by Bico Designs. The Austrade applications are ambiguous at best. It is difficult to accept that they could have provided the applicant with any rational basis for perceived greater chances of success in the District Court proceeding compared to the evidence otherwise available. 17 The applicant accepted in cross-examination that she "had always believed prior to the mediation that the representation made by the respondents that she was employed by Bico USA was a false one" and that "notwithstanding that belief she still decided to enter into the Deed". The applicant always thought she was not employed by Bico USA and that she was only employed by Bico Designs. Again, it is difficult to accept that the applicant relied on a representation that she believed to be false in deciding to enter into the Deed. 18 Had the applicant known of the ASIC investigation of Mr Grossman it could only have adversely affected Mr Grossman's credit in the proceeding. It was not germane otherwise to any issue in the District Court proceeding. The applicant stated in cross-examination that had she known of the ASIC investigation "there would have been a stronger chance that [she] would have gone to court", not that she would not have entered into the Deed. This reflects the balancing process confronting the applicant when deciding whether to settle the proceeding. Even if it is assumed that knowledge of all the information the subject of the representations may have marginally increased the applicant's perception of her prospects of success in the District Court proceeding, she still had to make a decision balancing her risk and reward with the benefit of the legal advice she had. The Deed gave the applicant the certainty of being removed as president of Bico USA and of receiving $65,000 from the respondents as well as the balance of some of her legal fees. Against this background it is objectively unlikely that the representations (on the continuing premise that they were made as alleged) could have been material to the applicant's decision. On the objective evidence, the applicant would have entered into the Deed regardless of the representations in order to secure her removal as president of Bico USA, the most important thing to her at that time, and her evidence now that she would not have done so is a product of hindsight that does not accord with objective circumstances at the time of mediation, nor her own oral evidence. 19 The other insuperable problem for the applicant is that I do not accept that any of the alleged representations were made. This is discussed below. THE REPRESENTATIONS The discovery representation 20 The applicant submitted that by filing an affidavit of discovery to the effect that Bico Designs had complied with its discovery obligations a representation was made by the respondents that the Austrade applications either did not exist or were not in the possession or control of the respondents. The respondents admitted that the Austrade applications were discoverable but submitted that the applications were not within their possession or control at the time of discovery and they did not refuse or neglect to provide them. 21 Orders were made for discovery in the District Court on 22 March 2007. In an affidavit of discovery sworn 23 August 2007 Mr Grossman stated that he has "made reasonable enquiries as to the existence and location of the documents referred to in the order" for discovery and he believes there are "no documents (other than excluded documents) falling within any of the classes specified in the order that are, or that within the last 6 months before the commencement of the proceedings have been, in the possession of the defendants other than the documents referred to in part 1 or 2 of the list of documents." The Austrade applications do not appear in the list of documents. 22 The affidavit does not give rise to a representation that the Austrade applications do not exist. The terms of the affidavit acknowledge only that there are no other documents that are currently in the possession of the respondents or that have been in their possession within the six months prior to the commencement of the District Court proceeding. It cannot be inferred from this that documents not referred to in the list of documents do not exist. Any such inference, if made, would be unreasonable. 23 The relevant inference, however, was not drawn by the applicant at the time in any event. The applicant accepted in cross-examination that she was aware of the existence of the Austrade documents before the mediation and that she had been searching for them since about 2006. As such, she could not have inferred that the documents did not exist. The only inference she could have drawn is that the documents had not been discovered when they arguably should have been. Despite this, when the applicant was unable to find the Austrade applications in the discovered documents she did not instruct her solicitors to write to the respondents' solicitors asking why the applications were not on the list of documents or to issue a notice to produce. On or around 26 March 2008 the applicant contacted Austrade to enquire whether she could obtain a copy of the Austrade applications. She was advised to make an application under the Freedom of Information Act 1982 (Cth) and she did so on 1 April 2008. The applicant ultimately obtained the Austrade applications on 29 May 2008. The applicant had previously dealt with Austrade in 2006 in relation to the Austrade applications but had not made further attempts to obtain them at that time. 24 In light of this evidence, the applicant could not have believed that the documents did not exist when she entered into the Deed. Moreover, the fact that the applicant was aware of the existence of the Austrade applications but did not attempt to obtain them until 2008 (a year after discovery) indicates that she cannot have perceived the documents as being as critical to her case in the District Court as she now claims. If the Austrade applications did form material objective evidence that the applicant could have utilised in the District Court then further steps could and would have been taken in 2007 to obtain them by contacting the respondents' solicitors and investigating any inadequate compliance with discovery, given that the applicant was aware of the existence of the applications. As noted, these steps were not taken. In these circumstances I do not accept that the Austrade applications were seen at the time as material to a fact in issue in the proceeding, nor that any alleged representation that they did not exist or were not in the possession of the respondents was a material inducement to the applicant to enter into the Deed. The applicant's evidence in this regard is a further example of the dangers of hindsight referred to above. 25 I also do not accept that the Austrade applications were in the possession or control of the respondents at the time discovery was ordered or six months prior to the commencement of proceedings. Mr Grossman gave oral evidence that the Austrade application for 2004/05 was prepared by a third party specialist, Mr Yabsley, in 2005. Mr Grossman accepted that he would have met with the specialist to go through the document, signed it and returned it to the specialist to lodge in or around November 2005. He said he would have kept the supporting documents but not the application itself or a copy of it. In relation to the application for 2003/04, Mr Grossman did not prepare it himself but assisted others in its preparation. He kept the documentation supporting the application but not a copy of the application itself. It emerged in Mr Grossman's cross-examination that he did not know what happened to the Austrade applications after signing them and returning them to the specialist to be lodged. 26 Mr Grossman also gave evidence that all the books and documents belonging to Bico Designs were delivered to the offices of the administrator on the day the company was placed into voluntary administration, 14 June 2006. On 27 June 2006 the liquidator sent a letter to Messrs Grossman, Biton and Cohen. The letter noted in part that the liquidator had not been supplied with "[i]nformation relating specifically to the Grant of $80,000 (if any)". Mr Grossman gave evidence that this was a reference to the Austrade grant. On receiving this letter he looked for any further documents and could not find anything in the company office or in the directors' possession that related to the grant applications. In the report to creditors dated 3 July 2006 the liquidator noted that the company register and various bank statements had not yet been provided but no other items were outstanding. It is not clear precisely what occurred following the letter of 27 June 2006 but the liquidator did not report any further issues relating to the company's books and records. While the proceeding was commenced in the District Court on 16 November 2005 the orders for discovery were not made until 22 March 2007. Within this timeframe Mr Grossman and the other directors of Bico Designs had already handed over the company's records to the liquidator. They could not have known in 2007 what documents were in their possession or control six months prior to the start of the proceeding in 2005. Further, it is not implausible that Mr Grossman did not keep copies of the applications and that any copies and supporting documentation were provided to the liquidator when Bico Designs went into administration. The challenge to Mr Grossman's credit was not persuasive. Hence, I am satisfied that as a matter of fact the Austrade applications were not within the custody or power of the respondents at the time of discovery. The only representation which could have been conveyed by the discovery affidavit, that the documents were not in the possession or custody of Bico Designs, was therefore true in any event. The ASIC representation 27 On 2 May 2008 Mr Grossman received a letter from ASIC asking him to demonstrate why he should not be disqualified from managing corporations. The applicant submitted that the failure of Mr Grossman to inform her that he was under investigation amounted to misleading or deceptive conduct by silence. 28 In Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 39 FCR 546 Lockhart J, with whom Burchett and Foster JJ agreed, said at 557 that "silence can give rise to an actionable misrepresentation where there is a duty upon the representor to reveal a matter if it exists, and where the other party is therefore entitled to infer that matter does not exist from the silence of the representor." However, as Black CJ observed in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 (Demagogue) at 32 "[s]ilence is to be assessed as a circumstance like any other. To say this is certainly not to impose any general duty of disclosure; the question is simply whether, having regard to all the relevant circumstances, there has been conduct that is misleading or deceptive or that is likely to mislead or deceive." Gummow J, then a Judge of this Court and with whom Black CJ and Cooper J agreed, said at 41 of Demagogue that "unless the circumstances are such as to give rise to the reasonable expectation that if some relevant fact exists it would be disclosed, it is difficult to see how mere silence could support the inference that the fact does not exist." These statements were approved by French CJ and Kiefel J in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2001) 241 CLR 357; [2001] FCA 31 at [17]-[18]. 29 There was undoubtedly silence on the part of Mr Grossman. However, as the cases identify, mere silence is not enough. The significance of silence is to be considered in the context in which it occurs (Demagogue at 41). The applicant has not identified any circumstances or material facts which could give rise to a reasonable expectation on her part that the fact of Mr Grossman's investigation would be disclosed. The relevant context is that Mr Grossman was being investigated by ASIC in relation to his management of three companies, one of which was Bico Designs. This was not relevant to any of the facts in issue in the District Court proceeding. Taken at its highest it could have affected his credit as a witness, but that did not give rise to any duty or expectation of disclosure. Mr Grossman was also the director of the two companies with which the applicant was involved. There is nothing in this relationship which suggests he was under an obligation to disclose the letter to her. The fact that Mr Grossman remained silent as to the fact that he was being investigated by ASIC did not constitute any form of misleading or deceptive conduct. 30 Further, Mr Grossman received the letter on 2 May 2008. The ASIC decision to disqualify Mr Grossman from being a director was not announced until 18 February 2009 and a decision in the Administrative Appeals Tribunal affirming the decision of ASIC was not published until 12 January 2011. The District Court proceeding had settled some time before either of these dates. Even if the applicant had known of the letter to Mr Grossman all she would have known at the date of the mediation was that he was under investigation. It is highly improbable that any rational person could have perceived the fact of an investigation as material to the decision whether or not to enter into the Deed and there is no basis to infer that the applicant acted other than rationally when she in fact entered into the Deed. CONCLUSION 31 I am not satisfied that any of the representations as pleaded by the applicant are made out. Even if the representations were made none of them were capable of materially affecting the applicant's perceptions of what she had to gain and lose from entering into the Deed at the time of mediation and I am not satisfied she was thereby induced by the alleged representations to enter into the Deed. The applicant took the benefit of the Deed at the time and remains bound by it. 32 The answer to the separate question, accordingly, is "no" – the Deed should not be set aside pursuant to s 87 of the Trade Practices Act. The applicant is bound by the release in the Deed and is precluded from pursuing the other relief set out in the second further amended statement of claim. Accordingly, the appropriate order is that the proceeding be dismissed and the applicant pay the respondents' costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate: Dated: 29 January 2013