Abigroup Contractors Pty Ltd v Peninsula Balmain Pty Ltd

[2003] HCATrans 688

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S250 of 2002

B e t w e e n -

ABIGROUP CONTRACTORS PTY LIMITED

Applicant

and

PENINSULA BALMAIN PTY LIMITED

Respondent

Application for special leave to appeal

GLEESON CJ
HAYNE J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 9 MAY 2003, AT 9.52 AM

Copyright in the High Court of Australia

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR I.D. FAULKNER, SC, for the applicant.  (instructed by Clayton Utz)

MR F.M. DOUGLAS, QC:   May it please the Court, I appear with my learned friend, MR M. CHRISTIE, for the respondent.  (instructed by Deacons)

GLEESON CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, the question of the significance of silence or omission to speak, if there be a difference, in all negotiations but particularly arms‑length commercial negotiations, has been dominated since its enactment by the Trade Practices Act.  What has not happened, however, in this Court is a consideration in particular of the defining or confining role of the definition in section 4(2) of the Trade Practices Act of what conduct is to be taken as meaning in section 52.

GLEESON CJ:   Mr Walker, I would like to understand just a little better than I do at the moment the practical significance of the relationships between these parties.

MR WALKER:   The practical significance can be described as follows.  To use just some of the possible words used in the trade, there are three or four personages involved.  There is what might be called a builder, there is what might be called an owner or developer, there is what might be called a superintendent or certifier and there is what might be called an agent or clerk of works.  In this case, as is not uncommon and is quite commonly provided for expressly on the face of the document, the certifier was in fact the same person who is also what I will call the clerk of works or general agent on site for the developer.  Unusually - or at least that was the case that was run and accepted by the referee and the first instance judge - that the fact of that coincidence of roles in the one person of impartial certifier and of faithful agent, that is faithful mouthpiece, was not disclosed in the precontract negotiations between the owner and the builder.

HAYNE J:   The builder knew, did it not, that the certifier was a related corporation of the owner?

MR WALKER:   Yes, it did.  What it did not know was the superadded matter of the authorisation to act generally as agent in all matters.

GLEESON CJ:   Now, what does that mean?  I know what an agent is, I think, but what is the practical significance of being authorised to act?

MR WALKER:   The practical significance is that the same person, to use the most concrete example of physical presence and intellectual work on site, looks at the same piece of work from two points of view:  One, as agent for the owner, “Is this something that I the owner am happy with?  Is it something that I contend should have been done differently?”

HAYNE J:   That is always so when the architect or engineer is certifier, as is so often the case.

MR WALKER:   Quite so, the difference of course being that if one knows before one enters into a contractual engagement of that matter, it is a risk which has been made explicit and which is accepted.  That was the point of our misleading and deceptive conduct case which succeeded, relevantly, on the factual matter until Justice Hodgson performed the legal analysis, to which of course I have to turn.

But to finish off my answer to the Chief Justice, one person looks at a piece of work and says, “On behalf of the owner I want it to be a bit better.”  That “bit better” contention may be itself highly contentious as to whether or not the contract and the specifications call for any more work, labour or expense by the builder to achieve the contractual standard.  Exactly the same person will be the person to whom impartial determination, for example, of the builder’s claim for a variation for being directed by the same person as agent to perform extra work falls to be measured.  Was it a variation and, if it was a variation, how much was it worth?

HAYNE J:   Was there any successful challenge to the certifying task?

MR WALKER:   There was throughout at all levels in this litigation a number of successes and failures in challenges to the certifying function, yes, there was.  Now, the key difference therefore between the common case where the combination in the same person or corporation of a certifying impartial role and an agency partisan role, or loyal role, was missing in this case by reason of what was not said.  As to the misleading and deceptive conduct which resulted from that, it was held by the referee that it was not the product of intention which, in our submission, could only ever mean that, as one would expect in a mere section 52 case, just as there was no submission of fraud, neither was there any finding of fraud.

What this Court has not considered is something which has been touched on, never the subject on our researches of a contest requiring determination of the issues which have been determined in the Court of Appeal, namely what is the relation between the exhaustive definition of section 4(2) of “conduct” and the substantive prohibition in section 52, namely “misleading or deceptive conduct”.  By way of example of one of the classic passages, Justice Gummow as long ago as 1992 noted the role of section 4(2) without entering in upon let alone determining any of these matters.

The same thing can be said to a slightly lesser degree even longer ago.  Chief Justice Bowen in Rhone‑Poulenc, one of the cases discussed by Justice Gummow in Demagogue v Ramensky, again referred to section 4(2) without having to resolve the problem.  The problem can be shown by the statutory text which is conveniently set out in Justice Hodgson’s reasons at 110 of the application book, because of section 4(2)(a) starts not by simply expanding the meaning of ordinary words, a conclusion one might have reached if one were simply quickly to have read the way Justice Gummow referred to it as “an expansive definition”, it starts by an exhaustive or stipulating definition of what the word “conduct” means because it says:

a reference to engaging in conduct shall be read as a reference to doing or refusing to do any act ‑

et cetera.  It is from that compulsory and exhaustive phrase read into section 52 so that one applies section 52 as follows:

A corporation shall not, in trade or commerce ‑

“do or refuse to do any act” et cetera.  One then comes down to paragraph (c) at line 40 on page 110, which then is, at least briefly, expansive:

a reference to refusing to do an act includes a reference to ‑

a familiar device which means that, apart from the ordinary English read contextually and purposively, one also has the following whether or not it would follow from ordinary English.  When your Honours contemplate what the word “refuse” normally means, it would not include, could not possibly include, the whole universe of omissions or failure to act.

It is the first of those which was the critical one in this case, not the subject of a decision in a contest on this point in the Full Court and certainly, until this case, not the subject of a decision at an intermediate appellate level and of course not the subject of a decision in this Court.

GLEESON CJ:   That issue would only arise in a case in which it is found that there is causation and damage that flowed.

MR WALKER:   Yes, it is a bit more desperate for us than that.  There is also the question whether it was misleading or deceptive.  May I come to that because, unless it was misleading and deceptive, causation does not matter, damage does not matter.

GLEESON CJ:   That is the question addressed on page 120 in paragraph 51.

MR WALKER:   It is indeed.  If I can simply complete what I wanted to say about the nature of the issue of general public importance before, as we have to, grappling with whether or not that is ever anything other than an interesting moot point in this case, the point about section 4(2)(c)(i) is that the words in parentheses, that is “(i) refraining (otherwise than inadvertently)”, the question is:  what have those words done to the word “refraining” and how does it get applied to cases of silence in negotiation where at arms length people are jockeying in relation to risk allocation under a proposed contract, a fact is well known, is material to the subject in hand, the contract with its agent was plainly important to the respondent, and is not revealed.  Do the parliamentary phrases, that is “refraining (otherwise than inadvertently)” mean that in order for something other than an ordinary English refusal that the silence or omission to speak cannot be actionable unless the applicant can prove the conscious state of mind that accompanied an uncommunicated thought, which would be of course a remarkably high hurdle, particularly when one considers the professional and statutory inhibitions on pleading on the punting approach.

In our submission, where one comes to interpret that phrase “(otherwise than inadvertently)” one comes, with respect, to the ordinary questions which have hitherto dominated debate about omitting to speak or silence in commercial negotiations, namely the general question raised by the general ambit of section 52:  is the failure to speak in the context of relations between these parties in pleading the effect of what has been said and the effect of reasonable expectations as to what might be said if it were true, engendered by the context between the parties, does that render the conduct misleading or deceptive - an analysis which has served to conceal rather than to reveal the way in which, if at all, the exhaustive definition in section 4(2) of the Act of “conduct” is engaged in such an analysis.

That is the issue of general importance which, in our submission, would warrant a grant of special leave but your Honours would not be interested in that unless it turns out that what was omitted to be revealed, that is that which was the subject of the refraining, as we would put it, was misleading or deceptive.  As your Honour the Chief Justice has pointed out, Justice Hodgson in the passage at 120 in paragraph 51 and following analysed the position so that that which had been pleaded and admitted - a point we have made in our written submissions which really made this point when dealt with in argument before the Court of Appeal new, not in an illegitimate sense but new in the forensic sense - was that the agent had been appointed to act in all matters as the agent of the respondent.  That was the way in which the parties chose to conduct their dispute both factually and legally concerning the nature of that contract which was at the heart of the particular contention between the parties and the Court of Appeal.

What his Honour did for the first time in the case, in paragraph 51 and for the reasons leading up to and elaborated thereafter, was to note the simultaneous but different nature of the obligations owed by the agent, the impartiality certifying obligation, the loyalty obligation otherwise in all matters to do with the project as agent, and to reconcile such repugnancy as would have appeared in particular situations by, for reasons which are themselves unexceptionable as a matter of contract law, either interpreting or implying relevant matters so that the requirement to be impartial would be paramount over the requirement to be loyal where there was a conflict.

I repeat that as a matter of contract law, had that been an issue raised on the pleadings, had that been inherent in the express admission to which we have referred in our written submissions in the pleadings, then there may have been exploration of matters of commercial perception of a kind which his Honour Justice Hodgson does not, with respect, completely deal with.  This was not a matter of what equity commercial lawyers might have thought at the time of the risk allocation considerations leading up to the making of the contract.  This was not a matter of having, as it were, the avatar of Justice Hodgson to advise the parties, “Do not worry about this appointment of an agent for all matters in the contract.  The fact is the law of contract means that though they be loyal 23 hours out of 24, for that one hour in 24 when they are certifying there are no loyalties.  It is an impartial matter.  Your risk is zero.  It is no different from if the personages were two separate personages.”

In our respectful submission, that always was, and remains, a highly artificial approach to the question asked by section 52 as to whether the silence about the matter so as to allow risk appreciation, measurement of risk, a decision as to the acceptance of risk between commercial people about a commercial contract.  Those matters, conjured up by the notion of conduct which is misleading or deceptive, cannot, with respect, as a matter of principle or rule of law, as Justice Hodgson has held it to be effectively, be confined to the cut and dried legal analysis that one would have if there were, for example, a putative cause of action being pleaded against the agent by one or other of the parties in this case for breach of its contract.

HAYNE J:   What is the additional matter that can be taken into account?  Somebody’s misconstruction of the obligations?

MR WALKER:   If it were as simple as that, then that cannot be taken into account.  However ‑ ‑ ‑

HAYNE J:   Well, what is it?

MR WALKER:   It is the risk that the agency will in fact - that is, contrary to the requirements of the contract - present a threat to impartiality.  That is distinctly different ‑ ‑ ‑

HAYNE J:   So the possibility of breach.

MR WALKER:   Yes.  The possibility of breach is precisely what commercial people weigh up.  It is the possibility of breach which makes consideration of whether an impartial certifier will be impartial meaningful in a commercial assessment of risk.

HAYNE J:   All this through the blinkers of somehow ignoring the relationship between the two entities, but there we are.

MR WALKER:   No.  That had been the subject of factual exploration and is well covered by findings of fact.  A highly experienced referee did not find that to be an objection because in his assessment, which deserves the greatest of respect and it was not actually departed from in the Court of Appeal but treated, as it were, as beside the point on a legal analysis, on his assessment it really mattered; the difference between on the one hand the corporate relation and on the other hand the creation of an express ad hoc contractual obligation of loyalty in all matters as agent.

HAYNE J:   Assuming we were to go down the path as far as this, what consequence then would follow?  What is the causation?

MR WALKER:   The consequence then would follow that there was evidence accepted, concurrent findings of fact by reason of the adoption of the report relevantly, that had that been revealed there would have been steps taken by my client which, on the probabilities and particularly in light of evidence not called on behalf of the respondent, we having discharged the prima facie burden of proof on the matter, there would not have been a contract entered into with the result of the loss that we have suffered.

GLEESON CJ:   Now, on page 122 paragraph 57 there is a finding in relation to causation.

MR WALKER:   That is a finding which is at odds with the findings below by the referee adopted by the first instance judge.

HAYNE J:   Where do I find those most conveniently?

MR WALKER:   At 112 in the course of paragraph 35 setting out the referee’s findings, his Honour sets out what Justice Barrett, the primary judge, called two crucial findings.  At line 41:

“Consequently I find as a fact that, had the existence of this particular agency agreement been disclosed prior to contract ‑ ‑ ‑“

HAYNE J:   It would have done either/or.

MR WALKER:   Yes.

HAYNE J:   Where do we get a finding, or do we get a finding, that one of those choices, namely not enter the contract, would have occurred?

MR WALKER:   Above that on the same page, in the evidence of Mr Abbott set out by the referee, line 20:

17.  Had I known of the Agreement, I would have sought one or more of the following changes . . . 

Failing agreement to one or more of these matters, I would not have recommended that Abigroup enter into the Contract and it would not have done so.”

GLEESON CJ:   It was paragraph (c) that was in point, was it not, having regard to the finding?

MR WALKER:   Yes, that is what Justice Hodgson has picked up, and there was no evidence - and, in our submission, plainly the respondent bore this evidentiary burden - responding to that contingency raised upon which causation depended by the respondent, no evidence that they would have been prepared to deal with such a matter at all, leaving the default position plainly sworn to by a witness whose evidence was accepted, Mr Abbott, that there would not have been the agreement.  That is why, in our submission, the point of general public importance is not of moot in this case.  The case is a fit vehicle to attend to a matter which, in our submission, is important for the following reason.

The body of case law in the Full Court of the Federal Court and in the various courts of appeal on section 52 in the context of silence in commercial negotiations omitting to state something which you know and which is objectively material to the risk allocation being proposed, that is a matter which has not yet been analysed in satisfactory terms according to the statutory command in section 4(2) of the Act that “conduct” shall be read as meaning certain things and not others.  May it please your Honours.

GLEESON CJ:   Thank you, Mr Walker.  Yes, Mr Douglas.

MR DOUGLAS:   If it please the Court, what this case really amounts to is saying that if they had seen the agreement which was allegedly not disclosed, they would have misunderstood it and not done something which they otherwise would have done.

Before one gets to the silence point, firstly one has to deal with the matter of construction of the two agreements which was raised in the Court of Appeal, that is the question as to whether there was relevantly any conflict between the two agreements.  That is a matter that was dealt with by Justice Hodgson at page 121.  As to the suggestion that that was not pleaded, the pleadings in the Court of Appeal were not regarded as controlling that issue and I can refer to the transcript if necessary of argument, but there was no suggestion made by my learned friend in the case in the Court of Appeal that the court could not deal with the matter on the basis that it did, namely that it was merely an authorisation to act and not enacting itself.

My learned friend has to get beyond that point, however, because there were arguments which were raised in the Court of Appeal, namely that the superintendent was in any event the agent of a contractor, was an associated company of a contractor and, moreover, and to answer one of the questions which the Chief Justice put before as to the relationship between the parties, it is not uninstructive to have regard to the definition of “superintendent” under the building contract which is cited at the top of page 97 of the application book, because it is defined as meaning:

the person stated in the Annexure as the Superintendent or other person from time to time appointed in writing by the Principal to be the Superintendent and notified as such in writing to the Contractor by the Principal and, so far as concerns the functions exercisable by a Superintendent’s Representative, includes a Superintendent’s Representative.

So effectively any person could at any time have been appointed as a superintendent, and yet it is of a person who at the time, that is at the time of the contract, occupied this position and relevantly that person’s contractual relations with the principal which are said to be critical.  So that point has to be gotten over, and also the point arises as to whether the superintendent is in any event the agent of the principal in the same way as we would say an architect or an engineer or anyone else appointed under the contract is the agent of the principal for the purpose of seeing that the contractor gets on with the job.

So that point of construction does not arise just in a vacuum.  There are a number of layers to the argument as to the position which the superintendent occupied and whether it was in any relevant sense misleading or deceptive for the project management agreement not to be referred to.  There were also arguments raised which are recorded in the Court of Appeal, which no doubt your Honours have read, that in any event there was relevantly no conflict between the obligations assumed by the superintendent under the building contract and by it under the project management agreement in that its obligations as the superintendent under the building contract and its obligations under the project management agreement likely would have coalesced in such a way that they would not, for example, have found themselves in that position while having to obey an instruction from the principal, for example, to deliberately interfere with the progress of works because there were provisions both in the building contract and in the project management agreement which obliged the superintendent and the project manager in the dual roles which it had to actually perform its obligations under both contracts in a professional manner.

Clause 23 was a provision under the building contract and that is cited at page 97 and under the project management agreement.  You will find that at page 95 in paragraph 5, clauses 2.1, 2.2 and also 2.5 and 5.  So that is that point.

GLEESON CJ:   Am I right in thinking ‑ and it may be just a trick of my recollection ‑ that in public works contracts in which one of the parties is commonly a government authority, it is typical for the certifier to be an officer of the government authority?

MR DOUGLAS:   Yes, your Honour, that is so and, indeed, a number of those authorities are referred to in the judgment.  You will see them collected in paragraph 39 of Justice Hodgson’s judgment on page 116 where, amongst other cases, the decisions which will be well known to your Honour are referred to, including Perini and the decision of this case in South Australian Railways Commissioner v Egan.

GLEESON CJ:   Indeed, it used to be typical for appeals against decisions of the certifier to be made with the certifier’s boss.

MR DOUGLAS:   That is so.  When you had a situation in which you have an associated company of the principal which has been appointed and that is known to the contractor; secondly ‑ ‑ ‑

HAYNE J:   The difficulty you face is there are some very inconvenient findings of fact for you made by the referee, are there not?

MR DOUGLAS:   Some very convenient ones too there, your Honour.

HAYNE J:   I understand that.

MR DOUGLAS:   There were some findings of fact in relation to that matter made by the referee, but as a matter of law, as we would see it, the position which was taken by the Court of Appeal on this matter is entirely appropriate.  That, I think, deals with the situation of the ‑ so one really has to get through all of that before one actually gets then to the question of silence.

Now, the question of silence - and it is a matter, we would not dispute, of some significance that has been dealt with in Rhone‑Poulenc - the question of the interrelationship between section 4(2) and the so-called duty to speak which has arisen in cases like Demagogue could in some circumstances be a matter of some interest to this Court, but it is not a case which would be interesting to this Court in these particular circumstances because of the way in which the matter has developed below and the findings which have been made.

So far as the question of causation is concerned ‑ and this is the reasonably useful finding of fact which is made by the referee which I was referring to before, Justice Hayne, but my learned friend took you to what was in the Court of Appeal ‑ the referee’s findings on the question of causation are to be found in Justice Barrett’s judgment, that is his first judgment at page 35, where he says:

“Consequently I find as a fact that, had the existence of this particular agency agreement been disclosed prior to contract, Abigroup would either not have entered into the contract or would have done so only after it had been amended on some mutually agreed basis.

Further, I find that not to disclose the existence of this agency agreement was misleading and deceptive, though not necessarily intentionally.”

The other matter I just wanted in passing to deal with, your Honours, a question you asked of Mr Walker to the effect as to whether there had been any disputes in the proceedings below as to the handling of the matter by the superintendent and what effect that had had.  Relevantly, so far as this matter is concerned, that finding is to be found in paragraph 74 of Justice Barrett’s judgment on page 36 where he says:

“It is difficult, though, to say what the effect on the ultimate outcome would have been if the contract had proceeded on the basis of a truly independent third person as Superintendent.  Abigroup would have received better consideration of, and earlier payment for, some of its variation claims.  However the evidence of Mr Walker, as noted previously, is that it was able to fund the project without that (though undoubtedly less comfortably).

It would also have received some relief on time, though not enough to get it off the hook.”

So, therefore, there followed the findings which the referee made that Abigroup was in default under the building contract and pursuant to the provisions of the building contract, we were entitled to terminate the contract and the effect of our termination was that we were entitled to liquidated damages and the cost to complete.  The effect of Justice Barrett’s judgment was that, as a result of this alleged non-disclosure, we lost both the liquidated damages and the cost to complete and they got a quantum meruit which was substantially more than that which they would have got pursuant to the contract.

GLEESON CJ:   But on the basis that if disclosure had been made, that they would not have entered into the contract?

MR DOUGLAS:   Yes, that is the way it was approached, your Honour, because that finding was then looked at by Justice Barrett at page 39.  You will have noted that the finding of referee was that they would have done one of two different things, but not what it would have been.

GLEESON CJ:   Yes, that was what prompted my question.

MR DOUGLAS:   But Justice Barrett seems to have characterised that as a finding that they would not have gone into the contract.  So he says at the top of page 39 that:

I therefore accept those findings of fact.  In particular, I accept the crucial finding that had Abigroup been aware of the agency, it would “not have entered into the contract or would have done so only after it had been amended on some mutually agreed basis”.

HAYNE J:   Now, did the primary judge at any point indicate which of those courses would have been followed?

MR DOUGLAS:   He accepted the findings of the referee, so there is no independent finding of his own ‑ ‑ ‑

HAYNE J:   No.

MR DOUGLAS:    ‑ ‑ ‑ and he treated the case both there and at page 49, I think, in paragraph 96 where he said:

It was in relation to this agreement that the referee made his crucial finding that, had the existence of the agreement been disclosed beforehand, Abigroup would either not have entered into the contract or would have done so only after it had been amended on some mutually agreed basis.

HAYNE J:   But there is still (a) or (b).

MR DOUGLAS:   There is still (a) or (b).  Justice Barrett then went on to deal with the matter on the basis that they would not have entered into the contract, and it was on that basis he gave relief under section 87, notwithstanding that rescission was not sought.  That reasoning I think follows from paragraph 102 and following.

HAYNE J:   On what basis was it open to the primary judge to say that (a) rather than (b) would have occurred?

MR DOUGLAS:   It was not, your Honour.

GLEESON CJ:   As I understand Justice Hodgson’s reasoning, he said there would have been no problem about (c) because the mutually agreed basis on which the contract would have been amended would have produced no different legal consequence from what the contract already provided.

MR DOUGLAS:   Yes, your Honour, so he was not prepared to accede to (a) and (b) but he effectively said that Abigroup had not satisfied the onus of proof of establishing that (c) would not have been acceptable to Peninsula.  Now, so far as that is concerned, our witnesses were not cross‑examined to the effect that it would or would not have been acceptable to them, that is was their onus of proof, as Marks’ Case points out.  So, effectively, Justice Hodgson was quite entitled to come to the conclusion which he did.

So this is just not a case which is an appropriate vehicle for special leave because it really is seeking, in essence, and one does not discern this from the actual application for special leave, but more from some submissions which are made and the submissions in reply.  They are really seeking to upset the factual finding which was made by Justice Hodgson in paragraph 57 of his judgment on page 122 and that was a finding which he was entitled to come to and obviously had to come to because the matter up until then had been unresolved and had proceeded on the basis of alternative findings as to what Abigroup would have done.  For all of those reasons,

your Honours, our submission is that this is not an appropriate vehicle for the grant of special leave.

GLEESON CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, paragraph 57 at page 122, which is the passage upon which my friend must depend to show that as a matter of causation the point we urge does not truly arise or the case is an unsuitable vehicle, depends in turn on discriminating by his Honour between two of the cases, (a) and (b), where he accepts the evidentiary burden shifted, and the third case, (c), where he says it did not shift.  There is no reason given by his Honour for that discrimination.

Our evidence was called as to what would have been attempted.  We cannot call evidence, it is clearly not within our power as to what the controlling minds on the other side would have done in a hypothetical position.  For those reasons the evidentiary burden is shifted.  That essential factor, that essential aspect of each of the three possibilities sworn to by our senior executive as to what would have been attempted in other negotiation, was true of all three, (a), (b) and (c).  For the same reasons that his Honour Justice Hodgson says, “Well, in (a) and (b) I’m satisfied you shifted the evidentiary burden”, they did nothing about it; whereby the “no contract” possibility emerges, that also applies to (c) and no reason appears in that passage for the discrimination.  For those reasons his Honour’s finding at page 122 line 40 or thereabouts that he did not think that my client had shown “any basis for drawing an inference” is one which, in our submission, does not withstand scrutiny.  It certainly is entirely contrary to the approach taken by a vastly experienced referee and also by the trial judge on the question of the acceptance of the report.

As to your Honour Justice Hayne’s question concerning when and how did the primary judge choose between the renegotiated or “no contract” scenario, it emerges in the following fashion.  One finds even in the Court of Appeal the acceptance of the two possibilities as being correctly found by his Honour on the basis of the report at 119, paragraph 47, that is:

the primary judge was correct to accept this finding.

In particular, we rely upon the fact that:

failing Peninsula’s agreement to one or more of these matters, they would not have recommended that Abigroup enter into the building contract and it would not have done so ‑

So that that left the question upon which we submit the evidentiary burden had clearly shifted, namely, what would the respondent have done by way

of a response to a renegotiation?  That has not been dealt with adequately in the Court of Appeal and we, in our submission, present a more than adequate vehicle by the strong findings of commercial fact by both referee and, more to the point, the first instance judge on that point.

At page 68 paragraph 13 in the second judgment by Justice Barrett, it is clear, to adopt the language at line 40, that his Honour adopted a “no contract” position and when one goes to pages 53 and 54, the way in which that emerged was, at the foot of page 53:

The reality, in such a situation, is that the party misled would not have entered into the contract which was in fact made ‑

that appears to be accepted in this case.  The top of 54:

put very much to one side, in terms of relevance, the referee’s finding that, had Abigroup been aware of the existence . . . it would have insisted on revisions . . . The relevant reality is reflected by the primary finding that Abigroup would not have committed to the particular contract into which it in fact entered.

In our submission, that is the footing upon which section 87, with its flexibility which certainly does not require an anterior common law or equitable rescission, was properly invoked in this case, leaving this case as an ideal vehicle to ventilate the matter upon which we opened.  May it please your Honours.

GLEESON CJ:   The Court is of the view that, having regard to the reasoning of the Court of Appeal on the issues of causation and damages, the case is not a suitable vehicle for resolution of the question of general principle which the applicant seeks to agitate and, further, that there are insufficient prospects of success to warrant a grant of special leave to appeal.  The application is dismissed with costs.

AT 10.31 AM THE MATTER WAS CONCLUDED