Brambles Holdings Ltd v Caldalo Pty Ltd

Re: BRAMBLES HOLDINGS LIMITED and CUSTOM CREDIT CORPORATION LIMITED
And: CALDALO PTY LIMITED and MACDOW PROPERTIES PTY LIMITED
Nos. G196 and G197 of 1990
FED No. 491
Trade Practices - Estoppel

COURT

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Davies J.(1)

CATCHWORDS

Trade Practices - misleading or deceptive conduct - parties negotiating for commercial leases - undisclosed concurrent negotiations for sale of the premises to a third party free of tenancies - substantial agreement on terms of leases - premises sold to third party - whether conduct misleading or deceptive - relevance of other fields of law for determination of what is misleading or deceptive - whether a misrepresentation by silence.

Estoppel - whether respondent estopped from relying on its legal rights - whether a representation as to existing fact or future conduct entitling the applicants to rely to their detriment.

Trade Practices Act 1974 (Cth) - s.52(1)

HEARING

SYDNEY

#DATE 21:8:1991

Counsel for the applicant: Mr C.J. Stevens

Solicitors for the appellant: Mallesons Stephen Jaques Counsel for the respondent: Mr D.A.Cowdroy QC and Mr

N.G. Rein

Solicitors for the respondent: Westgarth Middletons

ORDER

The application be dismissed.

The Applicant pay the Respondents' costs of the application.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

These two proceedings, brought separately by Brambles Holdings Pty Limited ("Brambles"), G196 of 1990, and Custom Credit Corporation Limited ("Custom Credit"), G197 of 1990, against Macdow Properties Pty Limited and its subsidiary, Caldalo Pty Limited (to both of which I shall refer as "Macdow"), were heard together as they raise generally similar issues and as much of the evidence adduced was common to both.

Macdow was a property developer and the building being constructed for it, "Northcourt" in St. Leonards, was close to completion in late 1989. At an early stage of development, Macdow employed a real estate agent to seek tenants for Northcourt. Ultimately, Brambles and Custom Credit entered separately into negotiations for leases, Brambles with respect to the 4th and 6th levels and Custom Credit as to the 5th level. The negotiations in each case resolved all the major issues as to the leases. However, formal leases had not been signed when, on 24 January 1990, Macdow sold the property with vacant possession to Westpac Banking Corporation Limited ("Westpac").
In these proceedings, Custom Credit alleges that its negotiations with Macdow had reached a stage where there was a contract between Custom Credit and Macdow and, accordingly, Custom Credit seeks damages for breach of the agreement to lease. Custom Credit also seek damages from Macdow Properties for alleged breaches of s.52 of the Trade Practices Act 1974 (Cth). The crux of the allegations is that Macdow, by its actions, represented falsely that the building was available for lease and that it had no intent to sell the building with vacant possession. Brambles has a similar but separate claim, though Brambles does not allege that its negotiations culminated in a contract which was binding on the parties. Essential to the claims based on s.52 of the Trade Practices Act is the allegation that Macdow should not have negotiated to lease the building to tenants without disclosing that it was, at the same time, negotiating with or desirous of selling the building with vacant possession to a prospective purchaser. Brambles and Custom Credit rely upon principles of estoppel and upon the Fair Trading Act 1987 (NSW). However, that Act adds nothing to the claim made under the Trade Practices Act. The applicants also rely upon sub-s.53A(1) of the Trade Practices Act. However, I see no aspect of the facts which would constitute a breach of paragraphs (a), (b) or (c) of that sub-section.
The parties agreed to deal separately with the question of liability and to leave the issue of damages for a later hearing should liability be established. In any such separation of issues, questions of causation must be kept in mind. See e.g., National Australia Bank Ltd v Cunningham (1990) ATPR 41-047. Without determining any questions of causation that might be raised in a claim for damages if that should be pursued, I have kept causation in mind so as to concentrate upon those matters and events from which a claim for damages, not merely trivial, might flow.
Counsel for Brambles and Custom Credit, Mr C.J. Stevens, handed up lengthy particulars as to the facts and circumstances said to be relied upon as misleading or deceptive conduct. Those particulars were, in Brambles' case, 4 pages in length and in the case of Custom Credit, 6 pages in length. I have not found them particularly helpful as they give many illustrations of a course of conduct without emphasising, e.g., by headings, the main points relied upon.
The case under s.52 seems to come down to the following allegations:-

(i) whether Macdow was genuine when it offered leases to Brambles and Custom Credit.

(ii) whether Macdow misrepresented that it had no intention other than to lease Northcourt or, alternatively, to sell Northcourt after it had been substantially leased.

(iii) whether Macdow misrepresented that it was not interested in selling, or alternatively seeking to sell, Northcourt with vacant possession.

(iv) whether Macdow had a duty, in the circumstances of the case, to disclose to Brambles and Custom Credit that it was interested in selling Northcourt with vacant possession and was negotiating to that end.

Mr Stevens did not put the claim quite in that way; but those points raise the crux of the allegations. Mr Stevens relied upon each element of the conduct particularised, which covered the period from 12 March 1989 to January 1990, both as a positive representation and as giving rise to an obligation on the part of Macdow to disclose matters which it did not disclose.
Although I have given consideration to all the conduct particularised, I have come to the view that the case turns ultimately upon the broad facts and not upon individual incidents. Moreover, this is not a case where subtle questions of credit are influential. Allowing for the fact that the witnesses on both sides tended to overstate their case, the evidence turned out after cross-examination more or less to accord with the general course of the events as disclosed by the documents in evidence.
Northcourt, which was ultimately sold for $45m, was an office block development, having 6 levels of office space and several levels of car parking space. The project commenced in 1988 and was expected to be completed about September 1989; the completion date was not achieved. Macdow undertook the development for profit and at all times intended to sell the project as soon as it could profitably do so. A sale by December 1989 was its intended goal.
Macdow put the sale in the hands of real estate agents, Elsom, who later amalgamated with and became known as Colliers International. I shall refer to them both as "Elsom". Elsom did not advertise the property for sale but contacted the major institutional investors and banking, finance and commercial organisations which might be interested in the development. In addition, as the construction went ahead, Macdow and Elsom were contacted by organisations which wished to have details about Northcourt.
Westpac was one of the organisations with whom Macdow had discussions as to sale. In November 1988, Macdow proposed that Westpac purchase the land and fund the construction of the building through to completion. The officer of Westpac who was particularly interested in Northcourt, Mr R.J. Sweetman, the Senior Property Manager of Westpac, was not then able to obtain instructions to negotiate for the purchase of Northcourt. Mr Sweetman remained in communication with Elsom and Macdow but it was understood that, though he was interested, any decision to purchase would be made by others in Westpac. It was not until late December 1989 that Mr Sweetman obtained the support of a user area of Westpac, the Information Systems Department, for the purchase. Throughout the discussions with Mr Sweetman, it was understood by Macdow that should Westpac acquire Northcourt, it would require vacant possession of the whole building.
A sale with vacant possession was Macdow's preferred option, but it was in mind that it might be necessary to let the building, at least to 50%, to satisfactory tenants and on satisfactory terms, before an investor would be sufficiently interested to purchase the development. An investor would want to know the quality of the tenants that could be attracted to the building and the rate of return that would be achieved.
Accordingly, although sale with vacant possession was sought from an early time, discussions were also held with prospective tenants. As the months went by, it appeared to Macdow and Elsom that a sale of Northcourt with vacant possession would not be achieved and that it would be necessary to lease the building, preferably to 50%, before a sale could be effected. From about the middle of 1989, increasing emphasis was placed on obtaining suitable tenants. Brambles and Custom Credit were prestige tenants, the very type of tenant that would interest an institution seeking to acquire Northcourt to hold as an investment.
Baillieu Knight Frank ("BKF"), not Elsom, were the leasing agents. It was submitted by Mr D.A. Cowdroy QC, with whom Mr N.G. Rein appeared for Macdow, that this step was taken because Elsom had expertise in sales while BKF had more expertise in leasing. I draw the inference, however, from the appointment of a separate agent, from the failure to advertise the building as "for sale or lease" and from the subsequent failure to keep BKF fully informed as to what was occurring with respect to the selling of the building, that Macdow thought it preferable not to make it public that it continued to be interested in selling the building with vacant possession. Indeed, Mr Stephen Meier, Manager for New South Wales of Macdow gave evidence that the bar applied only to BKF, for Elsom was kept fully informed of the progress of the leasing negotiations.
BKF had written to Custom Credit on 13 March 1989 enclosing leasing details. Various proposals were put by BKF to Custom Credit in the following months, at first with respect to level 4 and later as to level 5.
By August 1989, Elsom's attempts to market the building for sale with vacant possession appeared to have been unsuccessful. Elsom reduced its activity in this respect. However, any prospects for the sale of the building with vacant possession continued to be pursued. Thus, on 12 September 1989, Elsom wrote to Mr Sweetman of Westpac that "at this point in time there are no leasing pre-commitments in place in the building and it is still available for purchase". There is a letter from Elsom to Mr Meier dated 18 September 1989 which appears to set out Macdow's general understanding at the time. The letter states:-

"I believe that within the next 1-2 weeks we should be working towards finalising a formal Agency Agreement to cover the sale of the building to an investor as well as an owner occupier. I anticipate leasing activity will increase markedly over the next 2-3 months and we must be in a position to move quickly into the institutional market if substantial leasing commitments are secured."

During August and September 1989, much of the leasing activity was devoted to negotiations with the Department of Minerals and Energy which showed an interest in leasing 88% of the building. This lease did not ultimately eventuate. It is worth noting that, during the conduct of these leasing negotiations, the Department was kept informed that "this project is being marketed for both sale and lease to other parties and time may become of the essence".
In early October 1989, FAI Insurances Limited made an offer for the property with vacant possession. This was accepted subject to contract. However, in late October FAI decided not to proceed. FAI also was kept informed of the general state of the leasing negotiations, as was Westpac.
Negotiations with Brambles commenced in about the middle of October 1989 and a letter of 10 October 1989 from BKF to Mr Meier refers to a meeting held with Mr J. Fletcher, Director for Australia of Brambles, in which Mr Fletcher in-dicated that Brambles had an interest in purchasing the buil-ding and occupying a portion thereof. Mr Fletcher, in his evidence, denied that Brambles had any real interest in purchasing Northcourt but conceded that the question of purchase had been considered.
On 23 October 1989, Mr Sweetman of Westpac wrote again to Elsom. Macdow replied on 23 October stating that, "We are in the final stages of an agreement to sell to another party." On the following day, FAI's solicitors wrote to say their client would not be proceeding. On 25 October, Macdow had further discussions with Mr Sweetman of Westpac. Elsom wrote to Mr Meier on 2 November a letter which appears to set out the then state of affairs, stating:-

"St Leonards (Northcourt) is being viewed as a possible home for Westpac's Information Systems Department. ...

This matter will receive further consideration at Executive Committee meetings on both the 7th and 14th November and if the committees are still recommending the purchase it will go to a Board meeting on 24th November. Ray (Sweetman) says it is unlikely they would inspect or carry out further investigation of the building before 24th November. In the meantime we cannot do anything other than proceed with our full endeavours to lease the building. I shall regularly monitor the situation with Westpac prior to 24th November and do everything I can to activate them into a course of positive action on Northcourt."

Mr Sweetman's expectations were again disappointed for he did not during November receive approval from the Information Systems Department or the Executive Committee.

In early November, signboards were placed on Northcourt advertising its availability for lease. This step was merely part of the general course of conduct. It is not suggested that the signboards had any particular impact upon Brambles and Custom Credit. Both those companies had commenced negotiating at a prior time, Custom Credit as early as March 1989.
On 2 November 1989, BKF wrote to Brambles giving leasing details for the 4th and 6th levels. It was proposed that there be an agreement to lease executed with an effective date of 1 December 1989, and a formal lease entered into upon practical completion which was anticipated during the first week of December 1989.
On 6 November 1989, Mr F.E. Large, a property consultant, wrote on behalf of Custom Credit to other real estate agents advising that, "subject to Board approval", Custom Credit was prepared to lease level 8 of the property in Sussex Street, Sydney known as Pannell Kerr Forster House. On the same day, Mr W.P. McCarthy of Custom Credit wrote to BKF stating that Custom Credit was interested in leasing the 5th level of Northcourt. The letter set out the terms proposed including a commencement date of 1 January 1990. Both letters were settled by Mr Large and Mr McCarthy of Custom Credit.
On 6 November, Elsom wrote to Macdow giving details of major financial institutions which Elsom proposed to contact with respect to leasing or an owner/occupier sale. The letter advised again that it was not in Macdow's best interests actively to promote the building to the institutional investment market without a substantial tenancy pre-commitment.
On 9 November 1989, BKF wrote requesting Mr Meier to:-

"confirm our acceptance of your instruction in respect of the sale of this building. ... Baillieu Knight Frank will be in conjunction with Elsoms on a basis of a 60/40 success incentive."

However, I accept Mr Meier's evidence that BKF was never appointed as agent for sale and that this letter was seeking appointment rather than confirming it.

During this period, both Brambles and Custom Credit understood that Macdow was a developer and would wish to sell the building rather than to hold it as an investment. Indeed, Mr Fletcher on behalf of Brambles had fleetingly discussed the possibility that Brambles might purchase the building. Accordingly, Brambles and Custom Credit were aware in general terms that the building was for sale. However, when ultimately they indicated their acceptances in principle to the leasing terms offered, Brambles and Custom Credit were not aware that the building was being actively marketed for sale with vacant possession.
Contrary to Mr Meier's evidence, Macdow at no time withdrew the property from sale with vacant possession if such a sale could be achieved, though Elsom limited its selling activities after the middle of 1989. Elsom and Macdow continued to permit any possible purchasers, indeed any organisations which showed an interest in the building whether to purchase or to lease, to inspect the building and Elsom and Macdow, particularly Elsom, maintained contact with Mr Sweetman. From Macdow's point of view, a sale was the best option, for Macdow had not provided in its estimates for any substantial holding costs. Had the leases gone ahead, Macdow would have had to find an institutional investor prepared to take the building as an investment. In late 1989, Macdow was not negotiating with any such institution, for Elsom did not wish to contact the investment institutions until such time as leases for 30-50% of the building had been finalised.
On 13 November 1989, BKF wrote to Brambles setting out the details of a proposed lease and requesting confirmation of Brambles' agreement to those terms and Brambles' payment of the first month's net rental as a holding deposit. On 14 November 1989, Brambles wrote to BKF stating inter alia:-

"This letter confirms Brambles acceptance of the proposal outlined in your fax dated 13 November, subject to a mutually acceptable agreement and lease document."

Brambles did not, however, pay the deposit requested.

On 15 November 1989, Mr R.J. Harman, General Counsel of Brambles, met with Mr Meier and Mr David Harvey of Macdow to discuss the terms of a draft lease which Brambles had received early in November 1989. At that meeting, there seemed to be general accord as to the points which Mr Harman raised, save that Mr Meier said that he wanted further time to consider points raised with respect to insurance, future structural alterations and the replacement of carpets.
In an affidavit, Mr Harman gave evidence as follows:-

"10. I also recall that during this meeting I said to Stephen Meier:

What are you intending to do with the building? Are you planning to develop and lease the building and then sell the property?' Stephen Meier replied: `Yes. That's what we're planning to do.'"

This statement by Mr Meier was alleged by Mr Stevens to be a specific representation that Macdow had it in mind only to develop and lease the building and then to sell it and had no intention to sell with vacant possession. However, Mr Meier's answer should be understood in the context of the then discussion which was a discussion as to the granting of a lease of two levels of Northcourt to Brambles. The remark was made in the apparent context that Brambles wished to know what would happen to the building if it took a lease. Mr Meier answered that point.

On 23 November 1989, Mr Harman sent to Mr Meier notes of the meeting of 15 November. The notes were marked "Draft". Mr Meier subsequently telephoned Mr Harman to say "I am passing your comments on to our solicitors to incorporate in the lease."
Macdow maintained a monthly report as to its affairs. The report with respect to Northcourt for October 1989, which was in fact signed on 23 November 1989, seems to set out accurately the position when it states:-

"Conditional agreement has been reached with Brambles Holdings Limited for the lease of levels 4 and 6 (2,431 Sq.M.).

...

Custom Credit Corporation Limited has narrowed its choice to level 5 (1,216 Sq.M.) of Northcourt and a CBD Western Corridor building. We are advised that Northcourt is preferred and that a final decision is imminent."

and, under the heading of "Marketing for Sale":-

"Brambles' interest in purchasing the building has been superseded by its decision to lease. Westpac has not resolved the internal politics with its proposed acquisition of a building (of which Northcourt/Charter was one option) and we now regard this as a negligible

possibility. ... Our Marketing for Sale strategy is now moving firmly in the direction of lease-then-sell. Commitments by Brambles and Custom Credit would result in the building being 33% leased, sufficient to begin active marketing as an investment. However, we need to lease one of the remaining large levels (2 or 3) to take the leasing to 50% (before investors will get serious)."

Prior to 21 November 1989, Mr Large, the consultant to Custom Credit, received a draft lease from BKF. On 22 November 1989, Mr Large and Mr W.P. McCarthy, Group Administrative Service Manager of Custom Credit, met with Mr N. Kerr of BKF and Mr Meier and Mr Harvey of Macdow. Numerous matters relating to the lease were discussed. There were subsequent telephone discussions in the days following.
On 29 November 1989, BKF wrote to Custom Credit stating, inter alia:-

"We confirm your agreement to lease space in the above mentioned premises subject to a satisfactory lease."

On the same day, Mr Large wrote to the agents of the Pannell Kerr Forster House advising that:-

"Custom Credit, therefore, will not be taking up the offer of level 8 at 234 Sussex Street, Sydney."

On 5 December 1989, Mr Large met with Mr Meier and Mr Harvey to discuss a further draft. The meeting lasted 4 hours and accord was reached in principle on the terms of the agreement for lease and the lease, though not on all details. Custom Credit was prepared to proceed, subject to the execution of the final documentation, as from that date. It was understood that the documents, when re-engrossed, would be considered by Custom Credit's in-house solicitor, Mr Meacham. By 5 December 1989, Mr Meier had already spoken with Macdow's solicitors, Westgarth Middletons about the Custom Credit lease.
Having regard to the general consensus reached at the meeting of 5 December 1989, I assume that, had Macdow been anxious to sign up Custom Credit, it would have produced the final agreement for the lease, the lease itself and a car parking licence before Christmas 1989. However, two matters made it unlikely that this would occur. In the first place, Mr Sweetman continued to display interest in Northcourt and, notwithstanding that Mr Sweetman had failed to obtain a decision from the Information Systems Department of Westpac during November as he had hoped, Elsom and Macdow knew that Westpac was still a possibility. Another factor was that the negotiations with Brambles were not at the same completed stage, partly because the in-house solicitor for Brambles, Mr R.J. Harman, was heavily involved in a takeover and was unable to give the agreement for lease and the lease his full attention. Macdow would not have wished to sign up Custom Credit without, at the same time, binding Brambles to take tenancies of the 4th and 6th levels.
It is contended that the main terms of the Brambles' lease were agreed on 14 November 1989 and that the fine details were concluded on 15 November. It is contended that agreement was reached between Custom Credit and Macdow on 5 December 1989. However, although Brambles and Custom Credit had each reached a general understanding with Macdow by that stage, no party understood itself to have, in legal terms, a binding agreement with the other.
Both Brambles and Custom Credit understood, indeed insisted, that any agreement with Macdow would be effected by the execution of three documents, an agreement for lease, a lease and a car parking licence. I do not accept that any party was bound or considered itself to be bound prior thereto. Neither Brambles nor Custom Credit forwarded a cheque for the first month's deposit as required by the agreement for the lease.
Nor were all the terms finally agreed. The question of the car parking licence was never resolved, nor were other details. For example, on 20 November 1989, it was noted that the builders had begun to cover certain balconies with large river pebbles which would have made these areas unsuitable for entertaining. Mr Fletcher of Brambles contacted Mr Meier to say that the stones were unacceptable. Mr Meier asked for plans as to what Brambles wished, but the matter was still outstanding when the property was sold. The timing and form of the $600,000 incentive payment to be made by Macdow to Brambles was not agreed. Three possibilities remained: the payment of a lump sum, a rent holiday or a contribution to the fit-out. These are but examples.
By December 1989, both Brambles and Custom Credit thought that they had arrived at a commercial understanding with Macdow and that all further issues between them would be worked out. Of course Brambles and Custom Credit, acting on the understanding that the premises were for lease and believing themselves to be prestige tenants, thought that there was no risk that the final details would not be worked out. But a deal in commercial terms is not necessarily a binding contract in law, a point which all parties understood.
Brambles received from Westgarth Middletons a further agreement for lease and a lease, both in draft, by letter dated 11 December 1989. Mr Harman, the general counsel, perused the documents and noted that they did not contain a number of the points which he had raised with Mr Meier and which he understood to be agreed. However, Mr Harman was engaged at the time in takeover activities and made no response to the letter until late January 1990.
There were further communications between Custom Credit and Macdow during December 1989 and by 18 December, nothing of significance appeared to remain between them. On 18 December 1989, after the draft agreement to lease and the draft lease had been considered by Mr Peter Meacham, the in-house solicitor for Custom Credit, Mr McCarthy informed Mr Harvey of Macdow that the documents could be engrossed.
Nevertheless, final drafts of the agreement for lease and the lease were not produced to Custom Credit during December 1989. On 21 December, Mr Harvey informed Mr Large that Mr Meier expected to receive the documents that day but wished to peruse them and that they would be available by 3 January 1990.
One document which was regarded by both Custom Credit and Brambles as vital, namely a licence to use the car park at Northcourt, including the reservation of spaces for executive vehicles, was not produced to Custom Credit or to Brambles even in draft form during December 1989.
Mr Meier left for Queensland for his Christmas holidays on 22 December 1989. He did not return until 3 January 1990. It appears that, during December, Elsom kept in touch with Mr Sweetman. I assume that Elsom was hopeful that an offer would be received from Westpac. There is no clear evidence that and I do not conclude that, at the time he left for his holidays, Mr Meier did not expect that the leases would proceed. However, a sale to Westpac still remained his preferred option if it could be achieved.
On 28 December 1989, a member of Elsom rang Mr Sweetman in the morning to inquire whether there had been any movement. Mr Sweetman replied no. Within hours, Mr Sweetman was informed by the Information Systems Department of Westpac that it wished to move to Northcourt, if that could be arranged. Mr Sweetman immediately rang Elsom and passed on the information. That was on the afternoon of 28 December. Elsom phoned Mr Meier and advised him. On 29 December, Mr Sweetman sent the following letter to Elsom:-

"I confirm that we have now achieved acceptance by our user area of moving to St. Leonards subject to suitable premises becoming available. We now propose recommending to the Bank the purchase of Northcourt. However, as discussed there are a number of problems

1. Northcourt must be vacant possession.

2. It will be contingent upon us successfully negotiating the purchase of Stage II Charter Grove.

3. Purchase price: Northcourt is offered at $47M. At this level it does not meet the Banks internal hurdle rate which normally would bring about Board rejection. We strongly recommend owners consider a price of $45M to ensure more likely acceptance by the Bank Board. Our timing here is critical therefore agreements on both Northcourt and Charter Grove must be in place by 4th January 1990 so that we can achieve the 19th January, 1990 Board meeting. If we fail to meet the 4th January deadline for whatever reason, the owners of Northcourt would need to advise whether or not they are prepared to hold leasing up until the February Board meeting. If it becomes clear that we cannot obtain agreement with Chase on the purchase of Charter Grove Stage II we will immediately advise you so that Northcourt can be `freed'."

A copy fax was sent to Mr Meier. That notification was certainly not a firm offer. Nevertheless, the efforts of Macdow and Mr Sweetman were thereafter directed towards bringing about the sale.

Further inspections were made of Northcourt on behalf of Westpac. Technical experts were called to report on the building and its suitability for Westpac's use. It is not clear when this occurred but it seems probable that the experts were called in shortly after 28 December 1989. It seems probable that there were inspections by members of the Information Systems Department of Westpac in December prior to 28 December though there is no clear evidence as to this. I do not conclude from the evidence that these inspections came to the knowledge of Mr Meier for, throughout December, any person seeking to inspect the building would have been authorised to do so by Macdow or by one of the agents, Elsom or BKF.
On 3 January 1990, Mr Harvey of Macdow wrote to Elsom giving details of the proposed leases with Brambles and Custom Credit. On 4 January 1990, Elsom wrote to Mr Sweetman:-

"MacDow advise that in all probability they will be executing leases in respect to the top three levels of Northcourt by mid January 1990. Obviously to delay this, would mean running the very real risk of losing these tenants; something which they could not contemplate unless they were certain a sale to Westpac was to occur. I feel that if Westpac cannot expedite its decision making process then it must consider whether it is prepared to acquire Northcourt with tenants in place over the top three levels."

Shortly thereafter, Mr Sweetman, who was a qualified valuer, wrote a report to the Executive Committee of Westpac stating his view of the value of the property and recommending its acquisition. Prior to the meeting of the Executive Committee on 8 January 1990, Mr Sweetman arranged with Macdow that the sale price would be $45m. Even then, the purchase did not meet what Mr Sweetman described as Westpac's "hurdle rate" for property purchases but Mr Sweetman expected that, in the particular circumstances, the purchase would be approved.
On or about 8 January 1990, the Executive Committee of Westpac resolved that Northcourt be acquired for $45m. Macdow understood that it was unlikely that the Board of Directors would not approve the purchase when it met on 19 January 1990. Between 8 January 1990 and the Board meeting, the terms of the purchase and all outstanding matters were agreed. It was arranged that, if the Board approved the acquisition at its meeting on 19 January, the contract would be exchanged on 24 January.
On or about 12 January 1990, Westgarth Middletons, the solicitors for Macdow, forwarded an agreement for lease, a lease and a car parking licence to Custom Credit. The letter from Westgarth Middletons included the note:-

"Kindly note that neither the submission of the enclosed draft documents, nor any negotiations between the parties is to be taken as an offer or an acceptance of an offer to lease the subject premises."

Custom Credit did not respond to that letter. It seems unlikely that, between the receipt of the drafts and the notification on 24 January that the building had been sold, the drafts were examined to check that they met Custom Credit's requirements.

I have not thought it my task to compare the drafts with the documents discussed above or to examine the car parking licence. Mr Large gave evidence that he believed that he examined the documents in January 1990 and thought them to be acceptable. However, I find his evidence on this point to be unreliable. His records for January 1990 do not contain any specific reference to the drafts and he made no charge for examining them. Nor did he have a specific recollection of discussing them with Mr McCarthy.
In any event, the drafts forwarded by Westgarth Middletons were forwarded as drafts, not as documents for execution and no response was made to Westgarth Middletons or to Macdow. Indeed, there was very little communication between persons acting for Brambles and Custom Credit and persons acting for Macdow during January 1990.
On 18 January 1990, Mr Fletcher of Brambles wrote to Mr Meier stating, inter alia:-

"With the festive season now behind us I would like to finalise the outstanding matters on the Northcourt Building. Still to be concluded are: * Lease Signing; * Car Parking Agreement; * Incentive Payment; * Balcony Surfacing. Our Corporate Counsel, Ian Harman, will be contacting you shortly to conclude the lease and the car parking agreement."

On the following day, Mr Harman wrote to Westgarth Middletons setting out three pages of comments on the draft agreement for lease and on the draft lease. Mr Harman reserved his comments on the car parking licence which he had received by that stage but not examined.

On 24 January, officers of Brambles inspected the car park with a view to selecting the executive car spaces which they desired.
By letter dated 19 January 1990, Macdow was advised that the Board of Directors of Westpac had approved the purchase of Northcourt for $45m subject to satisfactory documentation. The contract for sale was exchanged between Macdow and Westpac on 24 January 1990. Exchange having been effected, Brambles and Custom Credit were immediately informed that the development had been sold to Westpac with vacant possession.
In a monthly report for December 1989, prepared by Mr Meier for a director of Macdow, Mr John Kerrigan, and dated 23 January 1990, Mr Meier noted that:-

"Whilst terms have been agreed with both Brambles and Custom Credit, we have been deliberately delaying the conclusion of the deal pending the purchase of Westpac's proposed purchase. Similarly, discussions with other prospects continue as a fallback in the event of the Westpac deal not proceeding. Westpac require vacant possession of the building and thus no leases can be signed without jeopardising the Westpac deal." (emphasis added).

In his oral evidence, Mr Meier explained that, though this was the December monthly report, the report was not signed until 23 January 1990 and, in fact, brought the matter up to date so far as Northcourt was concerned. Certainly the report did so insofar as it stated:-

"a. Sale to Westpac has been agreed and contracts should be exchanged today."

I do not read this report as an admission that Macdow was deliberately delaying completion of the leases during December 1989.

It is certainly clear that Macdow dragged its feet throughout January 1990 and dissembled to the extent that, in the intermittent communications which were held with Brambles and Custom Credit prior to 24 January 1990, Macdow and its agent BKF did not make it known that it was unlikely that the leases would proceed. Of course, however, it was not until about 8 January 1990 that it became highly likely that Westpac would proceed with the purchase, and it was not until 24 January that the contract was signed. But, from late December 1989, the prospects of a sale to Westpac with vacant possession had increasingly improved.
One matter which allegedly slowed the completion of the leases was that Macdow had not finalised its arrangements with a car parking operator. In the middle of 1989, Macdow called tenders for the operation of the Northcourt car parking spaces. By September 1989, it was apparent that Wilsons Parking Pty Limited ("Wilsons") was the most likely operator of the car park. But Macdow was not entirely happy with the terms which Wilsons offered. In any event, Macdow was not prepared to sign with Wilsons or Wilsons to sign with Macdow until the occupation of the building was known. Thus, while the Department of Minerals and Energy was interested in occupying the building as lessee, Wilsons was not interested in leasing the car parking areas. Later on, when it appeared that Brambles and Custom Credit would be the principal tenants of the building, Wilsons was interested in taking a lease of the car park; but Macdow did not wish to sign a lease of the car parking areas until such time as Macdow had entered into binding arrangements as to occupancy.
Macdow offered to both Brambles and Custom Credit a letter guaranteeing rights to car parking. But both Brambles and Custom Credit separately took the view that car parking was essential and that they would not sign a lease without, at the same time, signing a car park licence. Mr Meier said in his evidence that, had it not been for the problems of the car park, the leases could have been signed during December 1989 and letters could have been given guaranteeing entitlements to the car park. However, the car park was only one of the problems with which Macdow had to deal. Had Macdow really wished to proceed with Brambles and Custom Credit, Macdow could have produced car parking licences as it did to Brambles and Custom Credit in January 1990, at a time when it did not expect the leases to proceed.
The car park complicated the position, for Macdow was juggling a number of inconsistent objectives. Custom Credit and Brambles required an agreement as to car parking and their tenancies would have necessitated the grant of a lease of the car park to an organisation such as Wilsons. But Westpac required vacant possession of the totality if it purchased. At some stage, Macdow had to decide what to do about the matter.

I doubt that, at any stage, car parking would have interfered with the grant of a lease to Brambles or Custom Credit, notwithstanding that Macdow may not by then have signed a formal lease to Wilsons of the car parking space. Wilsons' interest in leasing the car park, provided that there were tenants such as Brambles and Custom Credit, and the terms upon which it would lease the car park, were known to Macdow and substantially resolved, at least by 20 December 1989.
None of the parties appeared to consider the execution of formal agreements to be an urgent matter. The leases were to commence effectively on 1 April 1990. In each case, there was to be a fit-out period. The lease to Wilsons was not to commence immediately for Wilsons needed occupants in the building before the commencement of its car park operations.
Another factor which may have influenced the course of events was that the only tenants who had been attracted to the building were Brambles and Custom Credit and they were to occupy only 30% of the total office space. Macdow preferred to have up to 50% tenancy commitment before approaching the institutional investors. The two tenancies on their own were barely sufficient for Macdow's purposes.
In the light of the fact that Mr Harman, the general counsel of Brambles, did not until 19 January 1990 respond to the draft documents which he had received by letter of 11 December 1989, I cannot conclude that any action by Macdow positively delayed the execution of the formal documents. That is not to say that, had Macdow been anxious to complete the execution of the two leases at an earlier stage, it could not have arranged that this be done. Certainly, although Mr Harman delayed Brambles' consideration of the documents, Custom Credit would have been prepared at an earlier time to execute documents which implemented the principles agreed upon on 5 December 1989. But Custom Credit could not have expected that Macdow would commit itself to the lease of one floor only.
As the final drafts of the three documents, the lease, the agreement for lease and the licence agreement were never finally agreed or executed, the negotiations to lease Northcourt were not concluded. Nevertheless, all major issues had been resolved. After the parties were agreed in principle, Custom Credit and Brambles expected the leases to proceed. Both companies knew that they were prestige tenants and, having agreed on the principles to be incorporated into the formal documentation, they did not consider the tenancies to be at risk.
Evidence was given by Mr Brennan of Brambles and Mr McCarthy of Custom Credit that they would not have negotiated for a lease had they been aware that there was a possibility that Macdow might sell Northcourt with vacant possession. However, this evidence cannot be accepted without question. When Custom Credit commenced its negotiations in 1989, it must have been aware that many possibilities were open to Macdow. And when Mr Fletcher of Brambles commenced discussions in October 1989, the question of sale was mentioned to him. So he was aware that this was one option. As time went on, the obtaining of the leases at Northcourt became critical to Brambles and Custom Credit, because of their accommodation requirements. Had Brambles and Custom Credit known in December 1989 that the tenancies were at risk, they would both actively have sought tenancies elsewhere, a possibility which Mr Meier recognised and sought to avoid. But there was no significant discussion about their circumstances with persons acting for Macdow.
The first question is whether Macdow infringed s.52(1) of the Trade Practices Act 1974 (Cth) which reads:-

"A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

The general allegation is that Macdow so conducted itself as to lead Brambles and Custom Credit to the view that Macdow was genuinely offering Northcourt for lease and was not offering Northcourt for sale with vacant possession. Apart from the one conversation between Mr Meier and Mr Harman with which I have already dealt, no express representation is relied upon. It is the course of conduct, the advertising of the building for lease, the negotiations for lease and the failure to disclose the negotiations with Westpac which are said to constitute the breach of s.52.

There is no evidence before the Court that the course of conduct would have been understood in the trade as amounting to a representation that the only possibility that Macdow had in mind for the building was leasing. Not even Mr Large, who was a property consultant and experienced in such matters, offered such evidence. Indeed, the evidence suggests that it was generally understood that a developer such as Macdow would wish to sell the project on its completion. In this light, organisations which had a potential interest in the building sought out Macdow and its agents with a view to obtaining information relevant to that organisation's interest. It was understood that there were, in general, two ways of achieving such a sale, either by selling Northcourt with vacant possession to an owner/occupier or an owner which was prepared to take the risk of letting Northcourt, or by selling Northcourt when the rental potential had been established by tenancy commitments.
I accept that, when it entered into serious negotiations with Brambles and Custom Credit, Macdow was genuinely seeking tenants for the building. At that time, Macdow considered that the obtaining of suitable tenants for 30-50% of the building would probably be necessary before the sale of the building would be achieved. I also accept the case put for Macdow that, even when a sale with Westpac seemed likely, Macdow was still genuinely interested in Brambles and Custom Credit as tenants of the building, in the sense that Macdow did not wish to lose them as tenants should the sale to Westpac not eventuate. And I accept that all the parties were negotiating in the context that it was understood that the parties would not be bound either as to the giving and taking of a lease unless and until the formal documentation was executed.
Brambles and Custom Credit did not regard Macdow as legally bound to give a lease or themselves legally bound to take a lease unless and until the agreement to lease and the car parking licence were executed. Both Brambles and Custom Credit made it clear that they would not execute the agreement to lease and the lease without at the same time executing a car parking licence. They were not prepared to accept Macdow's written undertaking as to the terms on which they would be entitled to car parking.
Accordingly, we are considering the issue whether the non-disclosure of the behind-the-scenes negotiations, which occurred between Macdow and Westpac and which surprised and shocked Brambles and Custom Credit when they were informed of the result, constituted a breach of s.52.
In Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477, Bowen C.J. said at p 489:-

"In the case of conduct complained of it is insufficient to show a breach of s.52 to prove that it may result in confusion in the minds of consumers (McWilliams Wines Pty Ltd v McDonald's System of Australia Pty Ltd (1980) 49 FLR 455), it will usually only amount to conduct which is misleading or deceptive, if it contains or conveys, in all the circumstances of the case, a misrepresentation: Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 2 TPR 48 at 72;

(1982) 42 ALR 177 at 202."

In making these remarks, his Honour was emphasising the objective nature of s.52 and the need to have regard to what in business or commercial life would be looked upon as a misrepresentation.

In Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1977-1978) 140 CLR 216, Stephen J. at p 227 likewise pointed out that, in determining a question of this type, the experience of courts in other fields of the law, such as passing off, should not be dis-regarded and that the principles which have been developed for the regulation of commercial life may be relevant to a determination of what is misleading and deceptive conduct for the purposes of s.52.
The section uses the words "likely to mislead or deceive". The word "likely" is not here to be read in the sense of "may possibly". It is not sufficient that the conduct challenged could possibly mislead or deceive or confuse. It must be conduct which objectively, in the light of commercial practice and of the ordinary laws governing the relationship of persons in the relevant field, would constitute a misrepresentation. The need to ensure that there is deception in this sense has been emphasised in cases such as Brock v Terrace Times Pty Ltd (1982) 40 ALR 97; McWilliam v McWilliams Wines Pty Ltd (1963-1964) 114 CLR 656; Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 and Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1981-1982) 149 CLR 191.
In Rhone-Poulenc at pp 489-90, Bowen C.J. went on to say:-

"Where silence is relied on in order to show a breach of s.52 it will depend upon the circumstances whether the silence constitutes conduct which is misleading or deceptive. As in the case of other sections of the Trade Practices Act 1974 the court may gain assistance from consideration of cases at common law and in equity dealing with related types of situations. However, the court is not confined by such cases because it is concerned with the interpretation and application of the words of the particular statute. Dealing with the question of misrepresentation constituted by silence, there are cases which show, for example, that an omission to mention a qualification, in the absence of which some absolute statement made is rendered misleading, is conduct which should be regarded as misleading. So too is the omission to mention a subsequent change which has occurred after some statement which is correct at the time has been made where the result of the change is to render the statement incorrect so that thereafter it becomes misleading. This also may be regarded as constituting misleading conduct. However, the general position between contracting parties has been expressed in the following way: `The general rule, both of law and equity, in respect to concealment, is that mere silence with regard to a material fact, which there is no legal obligation to divulge, will not avoid a contract, although it operates as an injury to the party from whom it is concealed.' (Smith v Hughes (1871) LR 6 QB 597 at 604; and see Ward v Hobbs (1878) 4 App Cas 13; W Scott, Fell and Co Ltd v Lloyd (1906) 4 CLR 572; cf Chadwick v Manning

(1896) AC 231 at 238.) Under the general law, it is important to consider whether there is a legal obligation to divulge. ... Where an obligation to disclose arises an omission to inform the person to whom the obligation is owed may, perhaps on the basis that that person is entitled to assume some fact or circumstance which does not exist, constitute or be an ingredient in misleading conduct. The notion of relationships giving rise to an obligation to make disclosure is one which may well prove useful in determining some of the cases which may arise under s.52 of the Trade Practices Act

1974. However, the court will not be restricted to cases where such a relationship has already been held to exist at common law or in equity. The court is likely to be faced with situations under s.52 between particular parties, where it will feel bound to hold that such an obligation to disclose arises from the circumstances.

Vendors and purchasers have not generally been regarded as being, without more, in this type of relationship."

An important aspect of his Honour's remarks is his Honour's reference to "the notion of relationships giving rise to an obligation to make disclosure", a reference to other aspects of the law. Section 52 is to be applied according to the words which it uses and is not to be read down by reference to principles of common law or equity; but that is not to say that a judgment of what is and what is not misleading or deceptive conduct is to be made without regard to the relationships established by other principles of law applying in commercial transactions. The cases of Brock v Terrace Times Pty Ltd, McWilliam v McWilliams Wines Pty Ltd, Taco Company of Australia v Taco Bell Pty Ltd, Parkdale Custom Built Furniture v Puxu Pty Ltd and Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd were all cases where the court refused to apply s.52 so as effectively to create a monopoly where the law relating to the area of monopoly did not do so.
Thus, although many persons would regard and would have good grounds for regarding the practice of and the actions lying behind the practice of "gazumping" as deceitful, the mere act of a vendor in agreeing to sell real estate to one person for a higher price when he has already orally agreed to sell the property to another for a lesser price would not be a breach of s.52. The section does not make an oral "deal" as to real estate the equivalent of a written instrument or of part performance. As Bowen C.J. pointed out, the relationship of vendor and purchaser is not a relationship which, in the ordinary course of events, gives rise to a duty to make full disclosure.
It is useful at this stage to consider the principles of equitable estoppel, which, in addition to being relied upon as a basis for the claims in the present cases, cast some light upon the circumstances in which disclosure is required. In Waltons Stores (Interstate) Ltd v Maher (1987-1988) 164 CLR 387, there was held to be an estoppel in the circumstance where an owner of land had orally agreed to grant a lease. The lease had been drawn up by the owner's solicitors. The lessee had sought amendments. Knowing that time was important from the lessee's point of view, the owner's solicitors had incorporated the amendments in the lease proposed and had forwarded the leases to the lessee's solicitors with the note "We shall let you tomorrow if any amendments are not agreed to." No such notification was given. The lessee had executed the lease and it was forwarded to the owner's solicitors. The lessee had then commenced work on the land. Mason C.J., Wilson, Brennan and Deane JJ. held that the owner was estopped from resiling from its implied promise to complete the contract for it was unconscionable for the owner to adopt a course of action which encouraged the lessee to act to his detriment on the false assumption that the lease would be completed. Deane and Gaudron JJ. found an estoppel based upon the assumption that exchange had taken place.
At p 406, Mason C.J. and Wilson J. expressed the law as follows:-

"The foregoing review of the doctrine of promissory estoppel indicates that the doctrine extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must be unconscionable. As failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his position or suffering detriment, does not bring promissory estoppel into play. Something more would be required. Humphreys Estate (Attorney-General (Hong Kong) v Humphreys Estate Ltd (1987) 1 AC 114) suggests that this may be found, if at all, in the creation or encouragement by the party estopped in the other party of an assumption that a contract will come into existence or a promise will be performed and that the other party relied on that assumption to his detriment to the knowledge of the first party. Humphreys Estate referred in terms to an assumption that the plaintiff would not exercise an existing legal right or liberty, the right or liberty to withdraw from the negotiations, but as a matter of substance such an assumption is indistinguishable from an assumption that a binding contract would eventuate. On the other hand the United States experience, distilled in the Restatement (Restatement on Contracts) (2d, section 90) suggests that the principle is to be expressed in terms of a reasonable expectation on the part of the promisor that his promise will induce action or forbearance by the promisee, the promise inducing such action or forbearance in circumstances where injustice arising from unconscionable conduct can only be avoided by holding the promisor to his promise."

At pp 407-8, their Honours, after having reviewed the facts, concluded:-

"It seems to us, in the light of these considerations, that the appellant was under an obligation to communicate with the respondents within a reasonable time after receiving the executed counterpart deed and certainly when it learnt on 10 December that demolition was proceeding. It had to choose whether to complete the contract or to warn the respondents that it had not yet decided upon the course it would take. ... It was unconscionable for it, knowing that the respondents were exposing themselves to detriment by acting on the basis of a false assumption, to adopt a course of inaction which encouraged them in the course they had adopted. To express the point in the language of promissory estoppel the appellant is estopped in all the circumstances from retreating from its implied promise to complete the contract."

Brennan J. expressed the matter in this way at pp 428-9:-

"In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal arrangement would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs."

Subsequently, in Foran v Wight (1989) 168 CLR 385, Mason C.J. said at 412:-

"In Waltons Stores (1988) 164 CLR, at p 404 Wilson J. and I referred to and applied the underlying principle that the court will grant relief to `a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has "played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it"': Grundt v Great Boulder Pty. Gold Mines Ltd. (1937) 59 CLR 641, at p 675; see also Thompson v Palmer (1933) 49 CLR 507, at p 547."

Deane J. expressed a like view when he said, in Foran v Wight at 436:-

"In Thompson v Palmer (1933) 49 CLR at p 547, Dixon J. identified the object and operation of estoppel by conduct as being `to prevent an unjust departure by one person from an assumption adopted by another as the basis of some act or omission which, unless the assumption be adhered to, would operate to that other's detriment'. His Honour went on to stress that the party who has induced the assumption is not bound to adhere to it `unless, as a result of adopting it as the basis of action or inaction, the other party will have placed himself in a position of material disadvantage if departure from the assumption be permitted'."

I need not discuss all the judgments which further examined this question in Commonwealth of Australia v Verwayen (1990) 170 CLR 394, save to cite the remarks of McHugh J. at pp 500-501, where his Honour said:-

"One important difference between the common law doctrine of estoppel in pais and the equitable doctrines of promissory and proprietary estoppel is that the common law doctrine is concerned with the rules of evidence, notwithstanding that a common law claim of estoppel must be pleaded, while the equitable doctrines are concerned with the creation of new rights between the parties. The common law will not permit `an unjust departure by a party from an assumption of fact which he has caused another party to adopt or accept for the purpose of their legal relations': Grundt v Great Boulder Pty. Gold Mines Ltd. (1937) 59 CLR 641, at p 674. In so far as the assumed fact gives rise to a cause of action or alters the legal relationship between the parties, it does so because of the operation of the general law on the assumed fact either alone or in conjunction with other facts. Equity, like the common law, also will not permit an unjust departure from an assumption of fact which one person has caused another to adopt or accept for the purpose of their legal relations: Thompson v Palmer (1933) 49 CLR 507, at p 547. But the equitable doctrines of estoppel create rights. They give rise to equities which are enforceable against the party estopped. The equitable doctrines result in new rights between the parties when it is unconscionable for a party to insist on his or her strict legal rights if that party has induced the other party to assume that a different legal relationship exists or will exist between them, if he or she knew that the other party would act or refrain from acting on that assumption and if, as a result, the other party will suffer detriment unless the assumption is maintained. Hence, to avoid detriment to the party who has been induced to act or refrain from acting on that assumption, equity will require the parties to act on the basis of the relationship assumed by the innocent party until the detriment is removed or the innocent party otherwise compensated. The equitable right of the innocent party will take precedence over the strict legal rights of the party estopped."

In the present case, I cannot conclude that Macdow made any representation as to an existing fact or as to future conduct such as entitled Brambles or Custom Credit to rely on the representation to its detriment. Although its conduct would be regarded by many as deceitful, because Macdow was acting in its own interests without disclosing the full facts to Brambles and Custom Credit, its position was not unjust or unconscionable. So far as Brambles was concerned, the final terms of its agreement to lease, lease and licence has not been resolved. Its position was described by Mr Harman in this evidence:-

"As at 15 November 1989?---As at 15 November I told him (Mr Fletcher of Brambles) that we had reached agreement on most issues and it was clear that we were able to conclude the deal. ...

So, that was what you conveyed to him at a time when you knew that there were matters which were still to be resolved between Brambles and Northcourt?---Yes, because the matters still to be resolved were quite clearly matters that would be resolved. Given that Brambles is one of the most financially sound companies in Australia and a blue chip quality tenant and that there was a lessor who was looking to put blue chip tenants in the buildings so that they could lease it out to an investor, secure in the knowledge that the investor would have his rent paid, there was absolutely no doubt that we had a deal."

The position of Custom Credit had been resolved to a much greater degree. But Custom Credit did not receive the final drafts until 12 January 1990 and had not responded thereto by 24 January 1990. In both cases, the parties had a "deal" but not a contract.

If Macdow had stood back whilst knowing that either Brambles or Custom Credit was to its detriment significantly changing its position or incurring significant unnecessary expenditure, then a duty of disclosure may well have arisen for its conduct or lack of disclosure may have been unconscionable. But in the present circumstances, it seems to me that there was no such circumstance from 28 December 1989 until 24 January 1989 as imposed an obligation upon Macdow to make disclosure of its true position. Certainly, there was some expenditure by Brambles in having fit-out plans prepared during January 1990. However, this matter seems not to be of sufficient significance to have imposed upon Macdow an obligation of disclosure during January 1991.
Brambles had engaged Lend Lease Interiors to advise it as to the suitability of premises and as to the fit-out required. Lend Lease Interiors had engaged an architect. It was claimed by Brambles that the fees payable to Lend Lease Interiors and the architect for work which was rendered abortive by the failure of the lease was $28,450. However, Lend Lease Interiors had been engaged on or about 9 October 1989, well before there had been any commitment by Brambles to a lease, and indeed fees totalling $17,500 had been incurred before any draft lease had been received from Macdow. Although some fees were incurred during January 1990, the magnitude of the work done in this period is not established. Nor was it made known to Macdow that there was such significant expenditure being incurred during January 1990 as required it to speak out if the lease was not going ahead. On the evidence, it seems to me that the involvement of Lend Lease Interiors and of the architect did not introduce an element which imposed upon Macdow an obligation to disclose its negotiations with Westpac.
Both Brambles and Custom Credit contend that they suffered considerable financial and other detriment because, by relying upon obtaining a lease of Northcourt, each had refrained from seeking other accommodation which each required because of its existing tenancy arrangements. The extent of this detriment has not yet been established for it is a matter encompassed by the issue of damages, but for present purposes, I assume that it was substantial. Yet neither Brambles nor Custom Credit explained its position to Macdow so as to show that it was relying upon obtaining a lease of Northcourt. Macdow did not have the knowledge which would have made its silence unjust or unconscionable.
In brief, I am of the view that there was no unjust or unconscionable conduct on the part of Macdow. Certainly, the facts of this case are well distant from those in Waltons Stores, in which promissory estoppel was applied in the context that contractual rights were proposed but had not come into being. In Waltons Stores, the lease as drawn by the lessor's solicitors had been executed by the lessee and returned to the lessor's solicitors, the lessor and its solicitors were aware of the urgency of the matter so far as the lessee was concerned and the lessee had actually entered upon and commenced work on the land to be leased. Perhaps of most significance was the point that the mistaken assumption that the lease engrossed by the lessor's solicitors had been or was to be executed operated conformably with the law which required that the lease be in writing. In the present case, no document was ever agreed between the parties or engrossed as the final document or executed by any party. In my opinion, Macdow is not estopped from relying upon its legal rights.
Thus, there was nothing done by Macdow which gives rise to a claim for breach of contract or for the application of principles of estoppel or for the grant of relief for fraudulent or negligent misrepresentation. Moreover, the relationship between the parties was analogous to that of vendor and purchaser. Each of the parties was negotiating an arrangement in its own interests and each of the parties took the view that, until the documentation was executed, it was not bound to proceed.
The evidence given as to the withdrawal by FAI from its purported agreement to purchase is an example of what occurs in the selling of real estate. That such an attitude also persists in the leasing market is exemplified by the two letters written on behalf of Custom Credit on 6 November 1989, the one by Mr Large accepting the offer of a lease of the Pannell Kerr Forster House and the second by Mr McCarthy making an offer to lease Northcourt.
No evidence was given to the Court, certainly no evidence from any person experienced in the real estate in-dustry, that it was misleading or deceptive of Macdow to engage Elsom for the purpose of sale and BKF for the purpose of leasing or not to disclose to potential lessees that the building was also being offered for sale with vacant possession.
On the evidence, I cannot draw the conclusion that there was a misrepresentation as explained in Rhone-Poulenc and in the other cases both in the High Court of Australia and in this Court to which I have referred. I am not satisfied that any breach of s.52 of the Trade Practices Act occurred. The case has similarities with Commonwealth Bank of Australia v Mehta (1991) ATPR 41-103. In the absence of circumstances giving rise to an obligation of disclosure, Macdow's conduct was not misleading or deceptive and did not amount to a misrepresentation. Brambles and Custom Credit were both aware that Macdow was legally entitled, that is to say free, to negotiate elsewhere.
I do not propose to discuss each of the particulars relied upon by Mr Stevens, each of which I have considered. I have noted particularly that the closer one comes to the meeting of the Board of Directors of Westpac on 19 January 1991, the more likely it was that the building would be sold with vacant possession and not leased. I have considered individually each of the steps that was taken in January 1990. It does not seem to me that Macdow knew of any such expenditure on behalf of Brambles or Custom Credit or of any such change of position at that time that Macdow was called upon to speak out and to explain that Macdow was in negotiations with Westpac. Certainly, Brambles was having plans drawn up by Lend Lease Interiors and its architect. However, in the communications between Brambles and Macdow in January 1990, very little occurred with respect to this.
In considering the evidence, I have considered the claims of Brambles and of Custom Credit separately, notwithstanding my recitation of the facts as they occurred in both cases. Thus, when considering the position of Brambles, I have ignored the evidence which related solely to Custom Credit, of which Brambles would not have been aware. In considering the position of Custom Credit, I have ignored the evidence as to Brambles of which Custom Credit would not have been aware. Both were aware in general terms of the other's interest in the building. Thus, Custom Credit knew that Brambles was negotiating for levels 4 and 6 and that there had been a sufficient agreement reached that only level 5 was available for its purposes. And Brambles was aware that Custom Credit was to take level 5. I assume that each of Brambles and Custom Credit was kept aware of what was happening in general terms with respect to the other. But save as to that, I have, in considering the evidence with respect to each, taken into account only that evidence as related to each of the applicants. Much of the evidence of Macdow was general to both cases. But insofar as it dealt specifically with one of the cases and not the other, I have taken that evidence into account only so far as it related to the specific case.
On the evidence, I am not satisfied that there was any conduct including silence on Macdow's part as establishes in either case a basis for a claim for damages. In these circumstances, both the applications must be dismissed with costs.

[1991] FCA 491

21 AUGUST 1991