BHA INDUSTRIES PTY LTD t/as FORRESTER HOMES v GOROKAN DISPLAY VILLAGE PTY LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, HANDLEY and SHELLER JJA 27 October 1998, 10 November 1998 [1998] NSWCA 40 PRACTICE — AMENDMENT — DISCRETION OF TRIAL JUDGE TO REFUSE CONTRACT — IMPLIED TERMS The appellant, a builder of homes, unsuccessfully sued the respondent, the manager of a display village, for breach of contract. The appellant had purchased two lots in the respondent's village, upon one of which it had erected a display home. The display home was unsuccessful and no sales were forthcoming. The appellant alleged that this failure was due to the way in which the respondent managed traffic flow around the display village, leading to few customers inspecting its display home. The appellant argued that this conduct was in breach of implied terms in the Promotion Agreement between the parties. On the third day of the trial, the appellant sought leave to amend its statement of claim to include damages for breach of the Trade Practices Act 1974 (Cth), s51A and s52. The trial Judge refused leave on the basis that such leave would disrupt the trial and be unfairly prejudicial to the respondent. HELD, dismissing the appeal: (1) The appellant alleged four terms should have been implied into the contract. The trial Judge's finding that only the first of these existed was correct. BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, applied. (2) The finding that the other implied terms had not been breached was correct. (3) The trial Judge's decision to refuse leave to amend to raise the Trade Practices Act claims was a proper exercise of his discretion. The appellant still had the opportunity to commence separate proceedings based on the Trade Practices Act claims with a low probability of any estoppel-type defence succeeding. There had been no substantial injustice to the appellant. Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, and Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543 considered. (4) Leave had also been refused to allow the appellant to plead a defence to the respondent's cross-claim based on the Trade Practices claims. This decision was not affected by error, and was also affirmed. Priestley JA BHA Industries Pty Ltd (BHA) was unsuccessful in an action it brought in the District Court against Gorokan Display Village Pty Ltd (Gorokan) in which it claimed damages for breach of contract. On a cross-claim filed in the action Gorokan succeeded in obtaining a verdict and judgment for $65,330 and interest which, to the date of judgment, totalled $13,746.53. BHA appealed, asking that all the orders made by the trial Judge be set aside, a verdict entered for BHA and a new trial limited to the assessment of BHA's damages. The full background to the litigation involves a great deal of factual material, but for purposes of deciding the appeal, it is sufficient, in beginning to explain the case, to adopt, with adaptations, the concise introduction of the trial Judge. BHA sought damages against Gorokan for breaches of an agreement called "the Promotion Agreement" which they entered into on 20 June 1994. The Promotion Agreement was entered into in consequence of the purchase by BHA 2 UNREPORTED JUDGMENTS of two lots of land in a subdivision at Kanwal. BHA had exchanged contracts for the purchase of the land on 27 May 1994. The vendor was the developer Stannic Securities Pty Ltd. Its agent was Yeramba Estates Pty Ltd. The subdivision was of sixty-three lots which were, pursuant to the Promotion Agreement, to be exclusively dedicated to use as a builder's display village for an agreed period. Gorokan had no interest in the subdivision land. Its role was the management and promotion of the builder's display village. By special condition 10 of the contract for the purchase of its two lots BHA required the consent of Gorokan before it could sell either lot. C110 of the Promotion Agreement was to the same effect. The Promotion Agreement provided that for each lot purchased, the purchaser became entitled to one ordinary share in Gorokan. Pursuant to the Promotion Agreement BHA had to - pay a monthly levy to Gorokan. The Promotion Agreement also bound BHA to construct exhibition homes on not less than 51% of its two lots. BHA's two lots (lots 361 and 362) were at the south east corner of the subdivision. BHA built an exhibition home on lot 352, the corner lot. BHA's commercial purpose in entering into the arrangement was to attract potential customers to look at its exhibition home in the hope that some would become actual customers and engage BHA to build homes to the same plan as the exhibition home. From this point of view BHA's exhibition home was unsuccessful. As BHA saw the matter this lack of success was due to the way in which traffic was managed in and around the exhibition village, which led to few customers coming to inspect BHA's exhibition home. BHA blamed this on Gorokan, abandoned interest in the village, and refused to pay the amounts due to Gorokan under the Promotion Agreement. Gorokan began proceedings in the Local Court claiming the amounts unpaid in breach of the Promotion Agreement, amounting, at the time of the commencement of those proceedings on 21 August 1996, to $35,034. BHA filed a defence putting Gorokan's claim in issue and saying further that Gorokan did not carry out its obligations under the Promotion Agreement which had caused loss to BHA. In December 1996 BHA applied to the District Court to transfer the Local Court proceedings to the District Court. This was put on the basis that BHA had a cross-claim against Gorokan for a sum exceeding $50,000. The cross-claim alleged four terms implied in the Promotion Agreement, breach of those terms and loss following the breaches. The application to remove the case from the Local Court to the District Court was dismissed on 7 February 1997 and on 11 February 1997 BHA commenced an action in the District Court against Gorokan. The statement of claim claimed damages for breach of contract. In the Local Court BHA filed an amended defence in June 1997. In this defence allegations were again made of breaches of implied terms, although in a form somewhat different from those in the earlier defence. Alternatively, it was said that Gorokan had misrepresented the design layout of the exhibition village to BHA and that it was the misrepresentation which induced BHA to buy the lots and enter into the promotion agreement. In July 1997 BHA gave Gorokan notice of intention to seek to amend further its Local Court defence. The substance of the proposed new matter was a claim for relief under the Trade Practices Act based on allegations of misleading representations. UBRIA INDUSTRIES PTY LTD tas FORRESTER HOMES v GOROKAN DISPLAY VILLAGS PTY LTD (Priestley JA) The Local Court proceedings were settled by written terms of settlement on 31 July 1997. By consent and without admission of liability BHA consented to verdict and judgment against it for the amount claimed by Gorokan, $35,034, together with interest and costs. It was also agreed that the Local Court judgment be stayed until the conclusion of the action commenced by BHA against Gorokan in the District Court. It was also agreed that Gorokan could bring by way of cross-claim in the District Court action the accruing further claims by it against BRA for the amounts unpaid under the Promotion Agreement. The action was then transferred into the District Court's Commercial List. It was common ground between the parties in this court that the Local Court had no jurisdiction to grant the relief BHA was seeking under the Trade Practices Act. After interlocutory procedures had been gone through, the action was listed for hearing on Tuesday, 3 March 1998. When it commenced on that day, BHA's statement of claim was still the one filed in February 1997, which contained fourteen, paragraphs making the breach of contract claim and no reference to the Trade Practices Act. The contract case as pleaded was based on the allegation of the four implied terms previously mentioned and breach of them causing damage. The first implied term was that Gorokan would properly promote the exhibition village and would encourage visitors to visit all exhibition homes within the village. The second was that Gorokan would obtain approval of a development application in respect of the village and would comply with all conditions of such approval. The third was that Gorokan would subdivide and maintain the village in accordance with the plan in the Promotion Agreement. The fourth one was that there would be no people living in the village for at least two years from the date of the Promotion Agreement. BHA was bound to be in difficulty in regard to the second and third alleged implied terms. Gorokan was the promoter of the exhibition village and not the developer. It was not within Gorokan's power to obtain the development consent referred to in the second implied condition or to do the subdivision and maintenance referred to in the third. As the evidence emerged it also appeared that the only person living at the exhibition village was a caretaker, which made it very difficult if not impossible to sustain the allegation of breach of the fourth of the alleged implied conditions even if it were accepted that it should be implied. BHA was on stronger ground in regard to the implication of the first alleged implied condition but, in regard to breach, it emerged in the course of the hearing that Gorokan had expended large sums in promoting the exhibition village. Until the third day of the hearing not a word had been said about the Trade Practices Act, nor was there in the pleadings in the Judge's file any reference to it. In his opening statement to the presiding Judge, Acting District Court Judge McDonell, counsel for BHA mentioned misrepresentation once. I will set out the material parts of his statement, because as well as demonstrating the lack of reference to the Trade Practices Act, they give a better idea than I have so far given of what BHA's grievance against Gorokan was: "This matter concerns a display village at a place called Gorokan, off the Pacific Highway this side of Newcastle. My client is a project home builder and he was displaying at this particular village. Now the substance of the dispute is a claim by my client that the village or the road and the entrance of the designed 4 UNREPORTED JUDGMENTS traffic flow of the village was altered after he had acquired or purchased his lots and in fact started to build at the particular village. The consequence being, to use a term, that he was shut out of the village so that the traffic flow missed his particular lots and the net result of which after some three years he has not sold any or made any sales at all. It is a builder of some experience who has displayed at several display villages before with some considerable success so this experience is unique... Being a member of the village means that. You are liable to pay a contribution to the rates, taxes, ongoings and expenses and whatever associated with the promotion and maintenance of the particular village... ... there was a subdivision, it is registered and two lots were purchased for purposes of construction and display. They constructed on one of them then the alteration to the road system changed whereby they say they were effectively locked out of the village. Notwithstanding that the liability or rather the village still continues to exact or demand the levies from them and there is a cross-claim filed in the proceedings in which those levies are being sued for." Counsel then explained the street layout and said that one of the streets "was represented to be a cul-de-sac", that at one intersection a roundabout had been constructed and signs put up diverting the traffic in a way discouraging visitors from going to BHA's exhibition home, that the cul-de-sac was opened, that on the other side of the road bounding the village residential properties were constructed and occupied. Counsel then continued: "So the dispute then will be whether or not, firstly I suppose the effect that those alterations had, whether we knew about them before we entered into the contract, and if we didn't then the legal effect on the contractual relationship and the damages we say flowing from it. So they'd be issues that you will need to determine." A little later the Judge asked: "So do I understand the case then, the plaintiff is saying that material information was not made known to it which would have brought about a decision not to purchase or am I — CAMERON: Yes that's right. These facts were known to the proprietors of the village before we entered into the contract. They withheld the information from us. In fact they represented the position to be different entirely. They made positive representations about the closure of Walker Avenue, the cul-de-sac and various other things too about the length of the duration of the village. HIS HONOUR: I haven't as yet, appreciate having very little time, had an opportunity to go through the statement but I assume that at least some of these representations will be alleged to have been oral. CAMERON: Yes. And then, apart from that, once the contract was made and these alterations were proceeded with, the allegation there is that they were breaches of implied terms of the contract." The Judge then asked counsel how the allegedly unforeseen changes from the position Gorokan was alleged to have represented to BHA could have affected the number of visitors to BHA's exhibition home in the way asserted by BHA. Counsel endeavoured to explain. I mention here that the explanation does not read particularly persuasively, nor when the same question was asked of counsel in the appeal were the answers any more persuasive. UBRIA INDUSTRIES PTY LTD tas FORRESTER HOMES v GOROKAN DISPLAY VILLAGE PTY LTD (Priestley JA) Counsel went on to refer to the implied terms alleged in the statement of claim, specifically referring to the breach of the first implied term set out in para5. After some further explanation of the documents and the tendering of some of them, counsel called the first witness, this being noted by the court reporter as having happened at 12.20pm. The first witness was Mr G Forrester, an accountant, and a director of BHA. The cross-examination of this first witness was continuing when at the end of the day the case was adjourned until the following day. Mr G Forrester's evidence took up most of the next day, being completed at 3.45pm. Mr B Forrester, the first witness's brother, and also a director of BHA was then called. He was still being examined in chief when the end of the day was reached. When proceedings got going again on the third day, BHA's counsel applied to amend its statement of claim saying "... when I'd opened and I was referring to the breaches of the contract and also the misrepresentation before then, which have already been canvassed in the evidence, this matter had started off in the local court, and it was transferred from there to here on the basis that we wished to raise a claim of misrepresentation specifically under the s51A and s52 of the Trade Practices Act, and a pleading or an amended pleading I think was done and the transferring orders were duly made. HIS HONOUR: I am sorry I am somewhat confused. Is it suggested that that amended Statement of Claim was filed? CAMERON: Well no that's what I've been trying to find out what happened to it, because the Statement of Claim I have and the Statement of Claim that your Honour has no mention at all of any claim under the Trade Practices Act. HIS HONOUR: I can certainly assure that's the case. CAMERON: That is the case yes. So in consequence of that I have had to amend it and I have to make application now to, or leave to file an amended Statement of Claim, if I can just hand this to you, this will be opposed I believe, or I am on notice that it was given, as far back ago as when the proceedings were in the local court. HIS HONOUR: And a copy of this document has been furnished to your friend? WALSH: Yes I've had this for five minutes your Honour. HIS HONOUR: Did you wish to address me any further Mr Cameron? CAMERON: No your Honour." To the fourteen paragraphs in the filed, statement of claim, the proffered amended one added paral5 to para25 alleging causes of action under s51A and s52 of the Trade Practices Act. WALSH: Your Honour these are not proceedings transferred from the local court. There are entirely separate proceedings in the local court which have concluded on terms favourable to my client and judgment stayed pending the claim of the plaintiff in this court. Totally separate matter. Now in those local court proceedings, true it is there was mention of a cross-claim for misrepresentations. Because of that, my instructing solicitors took the step in August of last year of writing to Mr Bell the plaintiffs solicitor and saying, 'Do you want to make amendments to your Statement of Claim, in effect to deal with the matters that you have raised in the local court'. If I could tender a copy of that letter. It was sent both by facsimile and there is a confirmation that it was received. There was no reply whatsoever from Mr Bell's firm of solicitors, that 6 UNREPORTED JUDGMENTS was a matter that concerned my instructing solicitor and me as we prepared for this case. And immediately prior to the commencement of this case, I specifically asked Mr Bell in the clearest of terms did he wish to make any amendments alleging misrepresentations of the sort mentioned in the local court. He told me in unequivocal terms he did not. I have since framed my case accordingly. If the case had been amended earlier it would have been defended in an entirely different way because it raised entirely new issues. Amongst other things, and I have only had a quick read it says that my client now is an agent or sorry Yeramba Estates is an agent of my client, and so my client is responsible for anything Yeramba Estates has said. That's the first we've ever heard of that. I would of course have had to go and get evidence relating to that. There are suggestions that Mr Hokin made certain representations, the case would have been prepared on the basis that those representations were not admitted as having been made, but in the alternative had they been made, nonetheless there would have been a reasonable basis for making the representations about the road closure and the things across the road. Your Honour heard Mr Brad Forrester yesterday say that Mr Ledson had made enquiries of Yeramba and they told him certain things about the road closure but he had fears. Well we would have made enquiries of Yeramba to see what its then intention was. We would also have made enquiries of the local council to see what development applications and building applications were in so that if it were found that Mr Hokin had said those things, it could be found in any event that there was a reasonable basis for making those predictions. We have simply [have] not had any opportunity at all to prepare a case on that basis. I haven't looked closely at the pleadings there may be other matters that we would have made enquiries of. I suppose we would have made for example if this is a case that says well look the Plaintiff wouldn't have entered into the contracts with us but for the representations that are said to have been made, then we would have sought discovery of the plaintiff's internal memos, minutes of meetings and the like to show what matters the plaintiff did take into account when it made its decision to purchase, and in an attempt to show that there was no causal relationship between any representation that might be found, and the decision made by the plaintiff. They are just a number of matters that occur to me off the top of my head, and my instructing solicitor says it might well then have been a case for interrogatories as well. In any event the case would clearly have been presented in a different way. This is an entirely new cause of action that is claimed. It just continues on in effect as a separate statement of claim from paral6 onwards. We would be greatly prejudiced by an amendment at this stage on the third day of a trial, when one of the plaintiff's main witnesses has already finished his evidence in chief. We would not be able to continue the trial at present. That would necessitate an adjournment with consequent costs and disruption to the court timetable we would prefer not to have an adjournment and to simply proceed with the case as pleaded as was indicates to us by the plaintiff's solicitors at 10 o'clock on the morning of the day the trial started. CAMERON: Yes the evidence that we rely upon already has been adduced there is no further evidence from either [of] those two witnesses and that was evidence of reliance. It had already been particularised, and was admitted without any objection I presume, I assumed because they had notice of it, in the earlier document in the local court, but it was an oversight that it wasn't translated into the Statement of Claim in these proceedings, but [what] or sic it does is leave the plaintiff in a position of, if the representations are found to have occurred and the UBRIA INDUSTRIES PTY LTD tas FORRESTER HOMES v GOROKAN DISPLAY VILLAGE PTY LTD (Priestley JA) breaches are found not to have been fundamental so that the contract is and remains on foot as the defendant contends, then the plaintiff will have no remedy for those misrepresentations otherwise than through the proposed amendments. Now I have heard the objection about prejudice on account of pre-trial procedures that could have occurred that didn't occur, and in particular diary notes and whatever to establish reliance and so on, and interrogatories perhaps, but interrogatories would not be appropriate where the hearing has already commenced and evidence has been given and cross-examination has occurred on those particular representations are relied upon. Mr Bradley Forrester the current witness gave evidence of them yesterday and he is yet to be cross-examined so the interrogatories may be delivered to him there. The purpose of interrogatories in any event is not to cross-examine but to obtain admissions, authenticity documents and whatever, but from the point of view of Yeramba Estate or rather the defendant is [sic] an agent of Yeramba Estate there is no dispute that the owner of the property or rather than the defendant is a manager of the property, manages it on behalf of the owner, we mentioned this yesterday that there is a contract that we will be putting in evidence through Mr Hokin through the defendant, so that it is in that context that the provisions of the s51A are raised, the connection between the representations and the defendant was given yesterday by Mr Forrester and in fact the representations were made according to his evidence in fact by Mr Hokin. Now Mr Hokin can give evidence that he had some reasonable basis for making those statements and that is [a] matter for him, but there is no prejudice, he has been alerted to it ever since yesterday and he can give his evidence in the course of today. HIS HONOUR: Sorry Mr Cameron to what was Mr Hokin alerted? CAMERON: The statutory offence under the Trade Practices Act is that he had reasonable cause for making the statement, that in effect reasonable grounds for believing that it was substantially true. He is the one that has to give that evidence and having made the statement of course it has got nothing to do with us as to what those grounds must be. It is purely a matter for him, he is here he knows what the allegation is, he knows that he is alleged to have made the statement. Either he denies that he made it or he takes the statutory defence and tries to explain it one or the other. There is no, in my respectful submission no apparent ground of prejudice [which] would require the proceedings to be stood over or adjourned, it is regrettable that it didn't happen, I don't know why it didn't happen, I still don't, all I know is it didn't and in my client's interest it would seem to indicate that the application would have to be made. WALSH: Can I just say one brief thing your Honour, I had assumed that all of this stuff about representations and the like, the evidence might in some way be said to [be] relevant to the arising of an implied term in some fashion, but the issues on the effect of a breach of an implied term and a misrepresentation that induces a contract are entirely different. I framed my cross-examination to deal with a contract claim, not to deal with a misrepresentation claims. I would for example have dealt at quite some length on causation. I didn't touch on that at all I don't think. So there is the first difficulty I face, it is not fair to say look the plaintiff's witnesses have said all of this, therefore you've heard it and you've questioned them. I have asked questions for a particular purpose not all possible purposes at large that Mr Cameron's clients might dream up at a later date. So that has caused me real prejudice I would need some time to consider the matter and then further the cross-examination of Mr Greg Forrester, as I said I would 8 UNREPORTED JUDGMENTS ideally like a chance to make enquiries to find out what it was that did cause the contract to be entered into if this amendment were allowed. That would require having access to the plaintiff's records. These are just matters that occur to me off the cuff as I read this, I still haven't had this claim for more than 25 minutes. To say also that Mr Hokin had heard the evidence of the representations he's said to have made and he can answer them is with respect not to the point. It is not a question of whether Mr Hokin actually believed, if he is said to have made these representations up to the point that he believed or didn't believe them. The test is whether, the test is an objective test. Were there objectively reasonable basis for making such a representation. Not to know that one has to have the objective evidence what was Yeramba telling people around about the place at the time, we would have to make enquiries of Yeramba. Mr Brad Forrester says that Yeramba was making certain representations in any event. That would need investigation. The suggestion is that my clients are, sorry Yeramba is an agent of my client. It is said on the pleadings and I am told — HIS HONOUR: Principal or agent? WALSH: The pleadings tell me, para18, 'from the defendant's agent Yeramba Estate Pty Ltd'. Mr Cameron has in his submissions put it the other way around, but doubtless he will probably wish to amend further and put it in the alternative. But I mean I just don't know what the relationship is. They tell me there's a management agreement. I can say in all truth I've never read it because it is not a document to which the plaintiffs are a party, I have not considered it relevant to this case. I really do not know what the legal relationship between Yeramba and my client is. So again I would be quite prejudiced if these amendments were allowed. My submission is that the case should continue on the present pleadings because that's how the case was opened, that's the way the plaintiff's solicitors chose to conduct it at 10 o'clock on the day the case started. When invited to tell us whether they had an amendment." The trial Judge refused to grant leave to amend. He said that he had heard addresses from counsel for both parties and that it was now the third day of the hearing. He said the issues raised in the amended statement of claim were substantial and quite separate from the causes of action in the filed statement of claim. "On that basis", he said, "considerable prejudice would be offered to the defendant in the preparation of the case". He directed that the hearing proceed forthwith. The case then proceeded on the basis of the statement of claim that had been filed. On the fourth day of the hearing, the matter of the amendment by Gorokan of its cross-claim was raised. As agreed in the terms of settlement of the Local Court proceedings, Gorokan added to its cross-claim the amounts of levies etc that had fallen due under the Promotion Agreement up to the date of the hearing. Because of the agreement the addition of the further amounts claimed was not opposed by BHA. However, BHA sought to file an amended defence to the cross-claim intended, if permitted, to enable BHA to raise the Trade Practices Act issues which it had unsuccessfully attempted to bring into the litigation the previous day. The trial Judge refused to allow such an amendment, basically for the same reasons as he had indicated the previous day. A further matter was sought to be raised by BHA in its proposed defence to Gorokan's claim for the levies up to date; this was a defence of fraud said to be justified by some answers given by Mr John Hokin in Gorokan's case the UBRIA INDUSTRIES PTY LTD tas FORRESTER HOMES v GOROKAN DISPLAY VILLAGE PTY LTD (Priestley JA) previous day. These answers appear at p166 and p167 of the white appeal book and do not appear to me t o be inconsistent with what Mr Hokin had previously said in his written and oral evidence to an extent which would justify the proposed defence. The trial Judge refused to allow this proposed additional defence to the cross-claim to be raised either. His reason was the lateness of the raising of the claim, particularly in view of the efforts that had been made by Gorokan's legal representatives, both over a lengthy period leading up to the trial, and at the beginning of the trial itself, to ensure that the issues to be dealt with at the trial were identified. The trial then went to its end on the pleadings as they had been at the beginning, subject to the addition of the claim by Gorokan for the further levies that had fallen due up to the date of the trial. The trial Judge reserved his decision in March 1998 and in April 1998 he published his reasons for his decisions; these were that BHA failed in its claim and Gorokan succeeded in its cross-claim. In his reasons, the trial Judge dealt with the question whether in the circumstances of the case any of the four implied terms alleged by BHA should be accepted. He found that BHA had not established that the second, third or fourth of the alleged terms ought to be implied into the Promotion Agreement. In my view, the trial Judge was plainly right in regard to the second and third of the alleged implied terms, for the reasons I briefly mentioned earlier. Each of these alleged terms assumed a power or ability of Gorokan to do things in regard to the development of the subdivision which only the developer had the power or ability to do. In regard to the fourth alleged implied term the trial Judge referred to the criteria set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 and said they were not satisfied. He also mentioned further factual reasons why in his opinion BHA could not in any event succeed on this term. I need mention only one of these, namely, that in the trial Judge's words, "The Plaintiff was unable to substantiate residential occupation". This finding is in my view a correct one on the evidence that was before him. This alone is enough to defeat any claim by BHA based on the fourth alleged implied term. The trial Judge found that the first of the alleged implied terms was properly to be implied as a condition of the contract. In his opinion BHA had not however established that Gorokan was in breach of it. In regard to Gorokan's cross-claim the trial Judge noted that the terms of the Promotion Agreement did impose the obligations on BHA in respect of money payments for which the cross-claim was made. He further noted that BHA had argued that Gorokan's alleged breaches of the Promotion Agreement had unilaterally terminated the Promotion Agreement and thus discharged BHA from its obligations to pay levies. In view of his findings on BHA's claim against Gorokan, which entailed the conclusion that Gorokan was not in breach of the Promotion Agreement, BHA's defence to the cross-claim necessarily failed. Counsel for BHA in both his written submissions in support of the appeal and in oral argument, sought to show that the Judge should have found in favour of BHA in regard to the three alleged implied terms which he rejected. I think the reasons I have already indicated why the second and third of the terms should not have been implied are sufficient to answer BHA's submissions in regard to them. 10 UNREPORTED JUDGMENTS In regard to the fourth alleged implied term, in my view, BHA was bound to fail on this aspect of its claim in any event, because of its inability to prove any breach of the term even if it were found in its favour that it existed. There is therefore no need to discuss this term further. In regard to the first alleged term, which the trial Judge found should be implied into the Promotion Agreement, the trial Judge noted that the alleged breach was failure to promote the exhibition village properly, this allegation being based principally on the inadequacy of signage. This also involved what BHA claimed was the way traffic flow was affected by signage and traffic arrangements generally to its detriment. The trial Judge recorded that there was voluminous documentation of the activities of the advertising committee of Gorokan. Also, Gorokan had given uncontested evidence that more than $2 million had been spent in promoting the exhibition village by way of advertising. There was also evidence of the extensive deliberations of a committee of Gorokan concerning installation of signage and flags and the further evidence that BHA did not seek to participate in the promotion activities and rejected an invitation to advertise with Gorokan's advertising agent. The trial Judge also noted, what in my opinion appeared clearly from the evidence, that what principally concerned BHA were the construction of the roundabout and the shortened period of the temporary turning circle (the cul-de-sac) near BHA's two lots. In regard to these, the trial Judge indicated he had not been satisfied that the making of the roundabout contributed to any loss BHA may have suffered, nor did he understand how the early removal of the turning circle and the opening up of the cul-de-sac had acted to its disadvantage. He then summarised BHA's argument as being that the benefit of participation in the Village did not come about because of actions or omissions of Gorokan but said that evidence of BHA's own omissions was equally plausible in explaining the lack of sales coming from its participation in the Village. In support of this view he listed the following concessions by BHA in the course of the trial: BHA's staff had spent considerable time researching the Village for its suitability; a number of site inspections were made by BHA's representatives; BHA was a late entrant into the Village (it was mentioned in argument in this court that the two lots it bought were the last available in the Village); the cul-de-sac position was not regarded as a prime site; the Promotion Agreement was offered on a "take it or leave it" basis; due to a new material used in building the one exhibition home built by BHA its completion was delayed for some months; one of BHA's lots remained unbuilt on and vacant next to the exhibition home; BHA did not man the display home adequately and failed to open it after several months; BHA declined to participate in the Village advertising campaign; it also declined to participate in planning of advertising campaigns through the promoter's committee; BHA's exhibition home failed to produce a single contract despite its being advertised in a magazine. These were the principal considerations which led the trial Judge to say that BHA had not established that Gorokan was in breach of the implied term the existence of which he had found in favour of BHA. Having heard the earnest argument of appellant's counsel seeking to overturn the trial Judge's view, and having looked at the whole of the evidence, it seems to me that the trial Judge was amply justified in arriving at the conclusion that he did, for the reasons he gave. UBRIA INDUSTRIES PTY LTD tas FORRESTER HOMES v GOROKAN DISPLAY VILLAGE PTY LTD (Priestley JA) It therefore seems to me that BHA's appeal against the trial Judge's rejection of the case that was litigated before him, fails. It follows that any appeal against the trial Judge's conclusions on the cross-claim must also fail, unless BHA should succeed on the remaining ground of appeal. The remaining ground of appeal is the one on which most attention was concentrated in the oral argument. The court was asked to set aside the trial Judge's exercise of discretion in refusing to allow the amended statement of claim to be filed on the third day of the hearing. I have earlier set out in full the argument that was put to the Judge for and against the application for leave to amend, for two reasons. First, it makes it much easier to understand the trial Judge's rather brief reasons for refusing the application. Fuller reasons were not, in my opinion, then required of him, in light of the full argument he had heard, and in view of his evident adoption of the substance of the arguments put for Gorokan. The second reason is that the argument against allowing the amendment seems to me to be factually correct, legally sound and to have provided the trial Judge with ample material for deciding to exercise his discretion in the way that he did. That is not to say that I think he was bound to reach the conclusion that he did. Different judicial minds might reasonably have exercised discretion differently. However the discretion of a trial Judge in such circumstances is well recognised and will not ordinarily be interfered with on appeal unless the Judge has shown some misunderstanding of the relevant law or the facts or has, by the way discretion was exercised, produced a clearly unjust result. It was this last point in particular which was pressed upon us by counsel for BHA. It was submitted that the trial Judge had paid insufficient attention to the prejudice caused to BHA by the refusal to allow its Trade Practices Act case to be litigated. It was submitted that there had been a misunderstanding on the part of BHA's legal representatives in that they had understood that an amended statement of claim including the Trade Practices Act claims had been filed and that it was because of this assumption that they had not sought any amendment at the beginning of the trial. Assuming that this mistake was made by BHA's legal representatives, (although it is rather difficult to understand) there can nevertheless be no doubt that Gorokan's representatives were not aware of any such mistake prior to the application for amendment being made on the third day, nor can there be any doubt that Gorokan's case had been conducted on the basis outlined by counsel in the passages set out above and that had the application for amendment been granted an adjournment and delay in the completion of the hearing would have been inevitable. The trial Judge was, in my opinion, certainly entitled to give full weight in deciding how he would exercise his discretion to what had been put to him by counsel for Gorokan. Turning to the prejudice claimed on the part of BHA, two factors need to be mentioned. The first is that it was open to BHA to commence proceedings, as soon as it chose after the adverse ruling by the trial Judge, asserting its Trade Practices Act causes of action. Possibly it would risk the raising against it of an estoppel type defence based on Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589, but it seems to me most unlikely that such a defence would in the circumstances succeed, cf Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd (1996) 40 NSWLR 543. Thus, one way of looking at the amendment application was that it presented to the Judge a choice between disrupting and adjourning a trial that had reached the third day of hearing so that BHA could add its Trade Practices Act causes of action, or refusing to do that, 12 UNREPORTED JUDGMENTS and leaving BHA to pursue those causes of action in separate proceedings which it was open to it to institute immediately. This seems to me to answer any assertion that a substantial injustice was caused to BHA by the way in which the Judge exercised discretion. A second consideration, which does not seem to have been mentioned at the trial but which was raised in this court, and is material, is that there must have been a real question whether the Trade Practices Act causes of action on which BHA wished to rely had become statute barred. Without having heard the matter argued fully I am not prepared to express a final opinion on that question in this case, although it seems to me it is quite likely that indeed time had run. If so, it would have been futile to permit the amendment in any event. However, it is sufficient for me to say that I do not think that BHA has been successful in showing that the Judge made any error in the exercise of his discretion. A submission was also made for BHA that the trial Judge's exercise of discretion miscarried on the fourth day of the trial when he refused to allow the defence to the amended cross-claim to raise the Trade Practices Act claims. The additional sums claimed in Gorokan's amended cross-claim raised no new issues; they had been contemplated by both parties when the terms of settlement of the Local Court proceedings were agreed. The proposed defence raised the new claims which the trial Judge had not allowed to be raised the day before. For the same reasons why I would not disturb his Honour's decision of the third day of the trial, I would not disturb what was essentially the same decision on the third day, either. In my view, therefore, none of BHA's grounds of appeal should be upheld and its appeal should be dismissed with costs. Handley JA I have had the benefit of reading the reasons of Priestley JA in draft form. I agree that the appeal should be dismissed with costs and I agree generally with his reasons. Sheller JA I agree with Priestley JA. Appeal dismissed with costs. Counsel for the appellant: S W Cameron Solicitors for the appellant: Stewart Bell Parramatta by city agents Connery & Partners Counsel for the respondent: P B Walsh Solicitors for the respondent: Vaughan Barnes Castle Hill