Commonwealth of Australia v Phillip & Anton Homes Pty Limited

[1988] HCATrans 41

b

IN THE HIGH COURT OF AUSTRALIA

Registry No Cl6 of 1987

B e t w e e n -

THE COMMONWEALTH OF AUSTRALIA

Applicant

and

PHILLIP & ANTON HOMES PTY LIMITED

Respondent

Application for special

leave to appeal

MASON CJ
WILSON J

GAUDRON J

Phillip

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 18 MARCH 1988, AT 3.15 PM

Copyright in the High Court of Australia

MlT 10/1/SDL 1 18/3/88

MR D.M.J. BENNETT, QC:  May it please the Court, I appear with

my learned friend, MR J.F. BOULTBEE, for the applicant.

(instructed by the Australian Government Solicitor)

MR T.J. HIGGINS, QC: If the Court pleases, I appear with

my learned friend, MR D. TRAPNELL, for the respondent.

(instructed by O'Ne1lls)

MASON CJ:	Yes, Mr Bennett.
MR BENNETT:	I seek leave to file in Court a supplementary

affidavit in support providing some more recent

calculations of possible amounts involved in other

claims and I also hand up an outline of argument.

GAUDRON J:  Does it deal with the question of how many other

blocks of land there are in the same condition?

MR BENNETT: Indirecly, Your Honour, yes. It says that it

estimates about 10 per cent.

MASON CJ:  The application for leave to file this document

in Court seems to attract great mirth from your

opponent, Mr Bennett.

MR BENNETT:  Yes, I am not sure if he owns land in Canberra

or not, Your Honour.

WILSON J: It sounds as if there must have been a volcano

at some stage that deposited fill everywhere.

MR BENNETT:  Yes, maybe it came from Lake Burley Griffin,

Your Honour.

MASON CJ:  Do you rely on this affidavit for converting what

is essentially a district court case into an

High Court case?

MR BENNETT:  Yes, Your Honour, that is the general purpose.

Your Honours, there are three ways in which disclaime1

or exclusion clauses have to be applied today.

The first is in contract claims where, of course,

the law since DARLINGTON, and indeed before, is

that one looks at the contract as a whole and sees

if liability has being excluded. There is HEDLEY

BYRNE tort claims where one sees whether the clause

prevents a duty of care arising.

The third area which is becoming a growth

area for disclaimers is the way in which they operate

in relation to statutory provisions, such as the

TRADE PRACTICES ACT, relating to misleading conduct

or misleading statements and, of course, the question

there is: is the disclaimer or exclusion such

that the overall conduct of the defendant was not

misleading?

MITl0/2/SDL	2	18/3/88
Phillip

In the present case we know that there was

a plan put out which said, "There is some fill
on the land", and showed exactly where it was and
how deep it was. That was misleading because there
was a lot more fill in other parts of the land

which was not known to the Commonwealth, on the

facts found.

The Commonwealth took three steps to direct

to the attention of parties that risk: there is

a general statement in the contract - Your Honours

have read them, I will not go through them; there

is the statement about the fill in the contract

and there is the statement made at the beginning

of the auction. The evidence says that the respondent

heard that statement and understood it.

In the face of that we would submit that the

test applied by Mr Justice Pincus raises a totally

novel hazard for those to seek to rely on exemption

clauses or disclaimers because what His Honour

said was that the disclaimers - the person reading

it would tend to assume that the auctioneer's statement

was routine, part of a standard procedure, and

that disclaimers are so common in commercial documents
that a reader is not likely to take their presence

as a particular indication that the information

supplied is not thought to be reliable.

The special leave point is that that simply

puts the test far too highly and makes it impossible
except in the most extreme circumstances to rely
on this sort of clause, or any sort of clause,
to convert what would otherwise be a misleading

statement into a non-misleading statement.

When one bears in mind that these sections

operate, as they did in this case, regardless of

knowledge, that puts, we would respectfully submit,

an impossible burden upon vendors or persons making

statements which are intended to be helpful in

precontractual situations because if the statement

is wrong they are guilty of misleading conduct;

if they disclaim or explain that the document is

not intended to be relied on or say that it is

not a warranty and we do not warrant this and you

should make xour own inquiries - all that will

be said is, 'People will assume that is a standard

clause, disclaimers are so common nobody takes

any notice of them", and we would submit that is

a novel proposition.

The other member of the majority, Mr Justice Fox,

failed to deal at all with the major part of the
case for the present applicant because he did not

deal at all in his reasoning with the statement

made at the auction. The statement at the auction,

which appears at the bottom of page 7, was that:

MITl0/3/SDL	3	18/3/88
Phillip

"Intending purchasers should note,

however, that the Commonwealth does not

warrant the correctness of the plans and the
information shown thereon. It is a condition
of sale that a purchaser shall not be entitled

to raise any objection ..... in respect of the

existence of regrading, fill or any other

disability on the land."

Now, that statement which was on the evidence

heard and understood, Mr Justice Fox did not deal

with at all.	He dealt solely with the other two
matters.

The other two judges both found for the

Commonwealth: the judge below, Mr Justice Neaves,

and the dissenting judge, Mr Justice Marling.

We would iubmit in that situation, bearing in mind

the amount involved, this is a case where the interests

of justice require the grant of special leave.

It is a matter of importance to the Commonwealth

involving substantial issues; it is a matter of

general importance for the use that can be made

of exemption clauses and disclaimers in relation

to the various misleading conduct sections of the

TRADE PRACTICES ACT, and we respectfully submit

that special leave should be granted.	May it please
the Court.

MASON CJ:  Thank you, Mr Bennett. We do not need to trouble

you, Mr Higgins.

The question here is whether a particular

statement was a misleading statement within the

meaning of section 53A(l) of the TRADE PRACTICES

ACT. The answer to that question, in the

circumstances of this case, turns largely on questions

of fact. For that reason the case is not an

appropriate vehicle for the grant of special leave

and the application is refused.

MR HIGGINS:	I make application for costs.
MASON CJ:	You do not resist that, do you, Mr Bennett?
MR BENNETT:	No, Your Honour.
MASON CJ:	The application is refused with costs.

AT 3.23 PM THE MATTER ADJOURNED SINE DIE

MITlO/4/SDL	4	18/3/88
Phillip