Cornell v Kennett; Harrison v Kennett
[2000] VSC 273
•30 June 2000
| SUPREME COURT OF VICTORIA |
| Not Restricted |
No.7699 of 1999
| Stanley Bruce Cornell | Appellant |
| v | |
| Sidney Kennett | Respondent |
| No. 7698 of 1999 | |
| Vincent John Harrison | Appellant |
| v | |
| Sidney Kennett | Respondent |
---
JUDGE: | Smith, J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 2 and 5 June, 2000 | |
DATE OF JUDGMENT: | June 30 2000 | |
CASE MAY BE CITED AS: | Stanley Bruce Cornell v Sidney Kennett Vincent John Harrison v Sidney Kennett | |
MEDIUM NEUTRAL CITATION: | [2000] VSC 273 | |
---
Contract – representations – false and misleading statements and conduct – liability of employee.
Appeal – Magistrates Court – error of law.
---
APPEARANCES: | Counsel | Solicitors |
For Mr. Cornell | Mr. M. McNamara | Septimus Jones & Lee |
| For Mr.Kennett | Mr. G. J. Fitzgerald | Corrs Chambers Westgarth |
| For Mr. Harrison | Mr. S. Stuckey | Philip G Spark & Assoc. |
HIS HONOUR:
Background to Appeals
By summons dated 29 January 1999, Sydney Kennett (the respondent) sued Deisbrood Pty Ltd, Kathleen Ethel Aplin, Stanley Bruce Cornell and Vincent John Harrison for damages for losses suffered as a result of misrepresentation, misleading and deceptive conduct and breach of contract. Kennett alleged, inter alia, that he entered into an agreement on 12 June 1998 with Deisbrood Pty Ltd (Deisbrood) under which it appointed Kennett its sole sub-contractor to carry out pressure cleaning of concrete in the region defined in the agreement. By a further agreement of the same date Deisbrood agreed to sell Kennett certain plant and equipment. He alleged that prior to entering the agreements, Deisbrood, Aplin, Cornell and Harrison made a number of representations to him, in particular, that:
(a) he would be guaranteed an income of between $1,000 and $1,500 per week, alternatively $1,500 and $2,000 per week
(b)the records of existing sub-contractors of Deisbrood showed that they earned income in excess of $1,000 to $1,500 per week
(c)Deisbrood had secured contracts with all (alternatively most) councils within the Melbourne metropolitan area for concrete cleaning which provided some contractors with a guaranteed minimum income and income in excess of the guaranteed income would be available to sub-contractors from work for private clients.
(d)the concrete cleaning business was performing well as a result of the council contracts.
He alleged that the representations were false and untrue. He alleged that they were made fraudulently or alternatively negligently. He alleged that he relied upon the representations and acted upon them in entering into the two agreements and in paying Deisbrood the sum of $15,000 under the sub-contractor agreement and a similar amount pursuant to the sale of assets agreement and that he also purchased a van for the price of $7,000 to carry out the concrete cleaning. He also relied upon s 51A of the Trade Practices Act 1974 and s 10A of the Fair Trading Act 1985 (Vic) alleging that the representations were false, misleading or deceptive. He also alleged that Deisbrood as a result of the above conduct was in contravention of sections 52 and 59 of the Trade Practices Act and each of Aplin, Cornell and Harrison were in contravention of sections 11 and 21 of the Fair Trading Act. He also alleged breach of s 75B and 82 of the Trade Practices Act on the basis that Aplin, Cornell and Harrison induced, were knowingly concerned in and party to, and conspired with others to effect the contraventions by Deisbrood. In the alternative, it was alleged that Cornell and Harrison induced, were knowingly concerned in and party to and conspired with others to effect the contravention by Aplin with the result that Cornell and Harrison were each persons involved with the contravention within the meaning of ss. 31 & 37 of the Fair Trading Act. He alleged that on discovery that the representations were untrue, he rescinded the sub-contractor agreement and the sale of assets agreement and requested repayment of monies paid but that Deisbrood had refused to repay the monies. He also alleged that he had suffered loss and damage comprising the monies paid to Deisbrood, a loss on the resale of the van of $3,500 and $2,235 for work performed but not paid for by Deisbrood.
An additional and alternative claim was made on the basis of the term of the sub-contractor agreement that Kennett would earn a guaranteed income of between $1,000 and $1,500 per week. An implied term was also alleged that if Kennett performed the sub-contract agreement there would be sufficient work available to enable him to earn an amount of $30,000 within 20 – 30 weeks. He alleged breach of these terms resulting loss and damage totalling $20,626.
In an additional and alternative claim, he alleged that on about 4 September 1998 Deisbrood appointed him its office manager at a weekly salary of $1,000 per week. He alleged that he performed that agreement for 13 weeks but received only one weeks salary. He claimed wages of $6,000 in respect of six weeks employment. In addition and in the alternative he alleged a loan agreement under which he advanced $5,500 to Aplin or, alternatively, Deisbrood on the terms that the money would be repaid to Kennett by Aplin or by Deisbrood within a reasonable time and that the monies had not been repaid.
On the final day of the proceedings the plaintiff, Kennett, was given leave to amend his statement of claim to include an allegation that prior to entering the employment agreement, Deisbrood and Aplin represented to him that he would be paid $1,000 per week by Deisbrood if he became its manager and that they warranted the truth of that representation. He alleged that the representations were false and untrue and were made negligently. He alleged that he acted on the faith of those representations in or about late August and became and acted as the manager of Deisbrood. In respect of those representations he also relied upon s 51A of the Trade Practices Act and s 10A of the Fair Trading Act as against Aplin, together with ss 11 and 21 of the Fair Trading Act and ss 75B and 82 of the Trade Practices Act and ss31 and 37 of the Fair Trading Act alleging a loss of $5,000. The claim was also amended to add Cornell as a defendant to the claim in respect of the loan of $5,500. Cornell was said to be involved because Aplin was acting as his agent and it was also alleged that Deisbrood said that Cornell would repay the monies later that day. These claims are not the subject of any appeal.
In their joint defence, the defendants admitted the incorporation and trading nature of Deisbrood and that at relevant times it carried on a business of pressure cleaning concrete in the Melbourne metropolitan region. They denied the allegation that Aplin is and was at all relevant times an officer of Deisbrood. They admitted that Cornell was at all relevant times a director of Deisbrood but denied that Harrison was an officer or employee of Deisbrood at any relevant time. They admitted that Kennett and Deisbrood entered into an agreement for Kennett to act as a sub-contractor to carry out pressure cleaning but denied the other terms alleged. They also admitted that he entered into an agreement with Deisbrood for the sale of plant and equipment but otherwise denied the allegations.
They denied the allegations relating to representations, warranties and the like. They alleged further that on or about 12 August 1998 Kennett spoke to Cornell and requested that he be re-employed as an office manager at Deisbrood and cease to be a cleaner. They denied any loss and alleged that, between 12 June 1998 and 30 August 1998, Kennett, as a sub-contractor of Deisbrood, received $13,987 and a further $2,000 while attending the Home Show on its behalf between 30 August 1998 and 23 August 1998 – a total of $15,987. They denied the allegations relating to the office manager agreement and generally denied any losses.
On 28 October 1999 the learned Magistrate handed down her decision which was in favour of Kennett. She provided reasons for her decision and made orders, inter alia, against the appellant Cornell that he pay the respondent $37,235 (including the loan money) together with interest in an amount of $3,634 and costs of $7,156. Orders were made against the appellant Harrison in the sum of $32,235 together with interest of $3,634 and costs of $7,156. The appellants Cornell and Harrison appeal from these orders.
The questions of law
In the Cornell appeal the Master's order identifies the following questions of law:
(a)Whether her Worship erred by admitting into evidence, as similar fact evidence, the evidence of Mr Bean, Mrs Bean and Mr Young.
(b)Whether her Worship erred in finding that the applicant was liable under s 82 of the Trade Practices Act 1974 without determining whether there had been some and if so what contravention of s 52 by the first named defendant Deisbrood Pty Ltd or any other person.
(c)Whether for the purpose of s 75B of the Trade Practices Act 1974 there was evidence from which the Magistrate could infer that the applicant had actual knowledge of the essential matters necessary to establish the intentional participation in the contravention of s 52 of the Trade Practices Act 1974.
(d)Whether the learned Magistrate erred in holding on the whole of the evidence that silence constituted misleading and deceptive conduct in determining the applicant's liability under s 75B of the Trade Practices Act 1975.
(e)Whether her Worship erred in applying the test as set out in the decision of Lord Nicholls in Royal Brunei Airlines v Ming [1995] 2AC 378 . . . to considerations under ss 75B, 82 of the Trade Practices Act 1974 (Commonwealth).
Questions of law in the appeal of Harrison
In the Master's order the following questions of law are identified in Harrison's appeal.
(a)Whether her Worship erred in applying the test as set out in the decision of Lord Nicholls in Royal Brunei Airline v Ming (above) to considerations under ss 77B, 82 of the Trade Practices Act 1974.
(b)Whether her Worship erred in finding that the appellant was liable under s 82 of the Trade Practices Act without determining whether there had been some and if so what contravention of s 52 by the first named defendant Deisbrood Pty Ltd or any other person.
(c)Whether there was any evidence upon which a reasonable magistrate might find that the appellant had actual knowledge that any of the representations were false.
(d)Whether there was evidence upon which a reasonable magistrate might find that the appellant had sufficient knowledge of the true facts to make his silence at the time of the making of any of the representations misleading and deceptive within the meaning of s 11 of the Fair Trading Act 1985.
(e)Whether her Worship erred in finding that the appellant owed a duty of care to the respondent in making any of the representations pleaded.
(f)Whether her Worship erred in finding that the appellant had himself made any of the representations pleaded 'in trade or commerce' within the meaning of s 11 of the Fair Trading Act 1985.
(g)Whether her Worship gave adequate reasons for her decision.
I will consider first the questions common to both appeals.
Question in both appeals – the Royal Brunei Airline case issue
Cornell (question (e)) and Harrison (question (a)) alleged that the learned Magistrate applied the test set out in Royal Brunei Airlines v Ming (above) to considerations under ss 75B and 82 of the Trade Practices Act 1974 and in doing so erred. The relevant passage in the learned magistrate's reasons for judgment is as follows (at p 8):
"In Compaq Computers Australia Pty Ltd v Merry [(1998) 157ALR 1 (at p.5)]it was held that:
'Where there is a combination of suspicious circumstances and a failure to make an enquiry it may be possible to infer knowledge of the relevant consensual matters.'
It is worth also quoting from the decision of Finklestein J who at p 5 quotes from Lord Nicholls in Royal Brunei Airlines v Ming at p 389. Lord Nicholls discusses the meaning of honesty, saying:
'Unless there is very good and compelling reason, an honest person does not participate in the transaction if he knows that it involves a misapplication of trust assets to the detriment of the beneficiaries. Nor does an honest person in such a case deliberately close his eyes and ears or deliberately not ask questions, lest he learns something that he would rather not know, and then proceed regardless.'
When this test is applied to Cornell and Harrison may fail the test of honesty.
They chose to participate in an interview with sub-contractors lending weight and affirmation variously by their presence, their answers, their enthusiasm and their silence.
Harrison was present at Kennett's interview and Cornell at Arthur Bean's as well as briefly at Kennetts."
In her reasons for judgment the learned Magistrate referred to the above when discussing the issue of silence constituting misleading and deceptive conduct commenting that silence must be considered in the context in which it occurs.
For the appellants it was submitted that the comments of Lord Nicholls concerned the situation of an alleged breach of fiduciary duty or breach of trust and had no application to s 75B and s 82 of the Trade Practices Act and did not support any of the causes of action relied upon by Kennett. They argued that the learned Magistrate mistook her task and fell into error.
Views may differ perhaps, but it seems to me that the learned Magistrate did not mis-direct herself. Rather, having been referred to and considered the authority of Compaq Computers Australia Pty Ltd v Merry and read the extract in Royal Brunei Airlines v Ming, she chose to use that extract to indicate that she had concluded that Cornell and Harrison had acted dishonestly - either because they knew that Kennett was being mislead or because they shut their eyes and ears not wishing to know. She went on to find, however, that they in fact had the requisite knowledge being actual knowledge not constructive knowledge. I am not persuaded that the reference to this quotation in any way affected the ultimate decision in such a way to render it erroneous.
Questions in both appeals – failure to determine whether there had been a contravention by Deisbrood or any other person
Cornell's and Harrison's questions (b) raise the issue of whether the learned Magistrate found that there had been contravention of s 52 of the Trade Practices Act. Their counsel argued that as hard as one might search through the reasons for judgment, there is no finding of a breach of that section by Deisbrood or anyone else.
It is true that the reasons for judgment do not contain an express conclusion –
"In light of the foregoing I find that Deisbrood breached s 52 of the Trade Practices Act."
A fair reading of the reasons for judgment, however, make it clear that the learned Magistrate did so find and in fact had no difficulty in doing so. The learned Magistrate (at p 4) stated that she accepted "the evidence of the plaintiff as to what Ms Aplin told him at the first meeting." It was not in dispute that what Ms Aplin told Mr Kennett was false and misleading thus it may be said that the learned Magistrate found that Deisbrood had made each of the representations listed in the particulars of demand and that they were false and misleading.
I turn then to the remaining questions raised in the Cornell appeal.
Cornell appeal – question (a)
It has been argued for Cornell that the learned Magistrate erred in admitting into evidence against Cornell evidence of representations made to Mr and Mrs Bean by Ms Aplin and Mr Harrison or Mr Cornell. Counsel for Cornell submitted that the evidence should not have been admitted in that it was not relevant or not sufficiently relevant and that fair notice had not been given. He relied on the judgment of Heerey J in Jaldiver Pty Ltd & Ors v Nelumbo Pty Ltd [1]
[1] (1993) ATPR Idigest) 46-097
The meeting involving Mr and Mrs Bean occurred in May of 1998, that involving Mr Cornell in June and that involving Mr Young in July. It is true as counsel pointed out that there were differences of detail in the representations made. It was open to the learned Magistrate, however, to find that there was a pattern of behaviour which would support the conclusion of a business practice employed by the company and Aplin, Cornell and Harrison. Counsel sought to distinguish Taldiver's case on the basis that the other persons concerned were also parties to the litigation. That, however, does not detract from the fact that Heerey, J. was called upon to determine whether the evidence of representations made to each of the parties was admissible in respect of the case of any other party. The learned Magistrate after referring to the authorities and applying Heerey, J.'s reasoning stated that she was satisfied that "the similar fact evidence should be admitted". It seems to me that it was plainly relevant and therefore admissible unless there was a rule to exclude it. It was relevant to the issue of what Kennett was told. It was relevant to the issue of the knowledge of Cornell and Harrison of the making of representations by Ms Aplin and their content. It was also relevant to the issue of the knowledge of Cornell and Harrison as to whether the representations were true. It was open to the learned Magistrate to reach the conclusion that, considered together, the conduct pointed to a practice being engaged in with the agreement of the three individuals to advertise for and bring in potential sub-contractors and to meet with them and make false statements to them of the kind and substance alleged with a view to inducing them to enter into contracts. In my view the evidence was plainly relevant.
Assuming that there is a common law requirement of fair notice, I am satisfied that in the circumstances of this case there was fair notice. The Beans and Young had their own proceedings on foot against the defendants in the present case. Kennett's case ran for some four days before the learned Magistrate. If the defendants were in some way disadvantaged by lack of notice they had the simple remedy of seeking time on the basis that they were taken by surprise by this evidence and that a notice should have been given to them. This they did not do.
Cornell appeal – question (c)
On behalf of Cornell it was submitted that the learned Magistrate erred in that it was not open to her to find that Cornell had knowledge of the essential matters necessary to establish the intentional participation in the contravention of s 52 of the Trade Practices Act 1974. The learned Magistrate's reasons deal with this issue in more than one place. I refer firstly to her analysis of Cornell's own evidence which was as follows (at p 5).
"I agree with the submission on behalf of the plaintiff as to the evasiveness and selective memory of the third named defendant, Mr Cornell.
It was clear from his evidence that he had no appreciation of his role as director of Deisbrood and appeared to see his only responsibility as that of providing funds to an ailing business. The evidence demonstrated that it was in his interests that new contractors were found to invest in the business.
He had sufficient knowledge of the financial difficulties of the business to understand this and yet he did not tell the plaintiff the truth about the business.
The evidence is that he made a brief appearance at the meeting between the plaintiff and Ms Aplin, long enough to have engaged in some conversation. Arthur Bean also gave evidence about Cornell's involvement.
Cornell was present at the meeting Bean had with Ms Aplin.
Bean said he asked about the guaranteed income in Cornell's presence and Cornell did not offer any information about the financial health of the business but indeed said that the council contracts were major one.
It is significant to note that under cross-examination, Cornell was asked how many council contracts the business had in 1998 and he replied that he did not know. He thought Camberwell, Glen Iris and Springvale.
This is quantitatively different from the answer he gave Bean that the counsel contracts were major.
I can reasonably draw the inference that even though he may have believed that council contracts were major, he only had knowledge or belief that there were three which does not constitute an amount which could be described as major. Accordingly, I can conclude that Cornell actively encouraged Bean to enter the contract despite what he knew and therefore it is clear that he knew what Ms Aplin was telling Kennett in that interview.
Cornell took no steps to disabuse Kennett of that information."
The learned Magistrate then stated her conclusion as follows:
"Cornell had knowledge of the essential matters that make up contravention referred to in s 75B of the Trade Practices Act.
At the very least he was 'knowingly concerned in or party to the contraventions'. That is a requirement of s 75B(c)."
The learned Magistrate then referred to Cornell's position and compared that with the defendant in the case of Yorke v Ross Lucas Pty Ltd[2].and Maisey v Mudgeeraba Village Estate Pty Ltd[3] and Crocodile Marketing Ltd v Griffith Vintner[4] stating that both of those cases confirmed the need for actual knowledge rather than constructive knowledge. She then stated:
"But the cases allow for the drawing of inferences. In this case, Cornell had knowledge of the company and what the sub-contractors would pay.
I can infer that he had knowledge of what Kennett and others were told and that it did not actually represent the true situation, in fact, far from it."
She then went on to consider the issue of silence.
[2] 45 ALR 299
[3] (1985) ATPR40 – 569
[4] (1989) 91 ALR 273
Counsel for Cornell drew my attention to aspects of the evidence which he submitted pointed to the conclusion that Cornell either would not have known or may not have known the essential features of the representations and the falsity of those representations. Counsel for the respondent drew my attention to aspects of the evidence pointing in favour of the Magistrate's decision. I have come to the conclusion that the issue was a classical factual question for the determination of the Magistrate, an issue to be determined in part on the basis of the views she formed about the individuals concerned, their relationships and the roles they were likely to play. I note for example, that there was evidence which gave rise to the inference of a modus operandi involving Cornell. The issue can no doubt be debated this way and that but it cannot be demonstrated that it was not open to the learned Magistrate to reach the conclusion that she did.
The learned Magistrate deals with the matter in her reasons as if the case was an open and shut one in her mind and it was plainly open to her to come to that conclusion.
In the course of his argument, counsel for Cornell submitted that the learned Magistrate erred because she should have applied the tests to be applied to circumstantial cases as set out in the case of Periera v DPP[5] It was submitted that Finkelstein, J. referred to that case (at p 5) in his reasons in the Compaq matter. Counsel submitted that the test described in Periera is whether the inference of the possession of knowledge was the only rational inference available. If it was not, then the learned Magistrate, he submitted, should have found in favour of Mr Cornell. That authority, however, concerns criminal matters and the test articulated there reflected the higher criminal standard of proof – beyond reasonable doubt. In my view it was not applicable in the present proceedings.
[5] 82ALR 217,219-220
Appeal of Cornell – question (d)
It was submitted on behalf of Cornell that the learned Magistrate erred in holding that his silence constituted misleading and deceptive conduct in determining Cornell's liability under s 75B of the Trade Practices Act 1975.
The issue of silence was raised on behalf of Kennett in the submissions put in writing and exchanged by the parties after the conclusion of the evidence. It was put as a basis upon which the learned Magistrate could find that Cornell had himself breached the Fair Trading Act provisions.
In the learned Magistrate's reasons she took up the issue of silence having concluded that Cornell had knowledge of what Kennett and others were told and that it did not actually represent the true situation She stated (at p 7):
"It is also submitted that mere silence may be sufficient to constitute[d] misleading and deceptive conduct.
Cornell knew the purpose of the meetings between Kennett, Aplin and Harrison and knew what would have been said.
He appeared at the door of the room, was introduced and listened to some of the conversation briefly.
He said he was not present when any representations were made and had no time to say much.
The plaintiff's version was only slightly different.
His appearance and introduction means that he had the opportunity to tell Kennett the truth about the business given that he knew what Aplin would be saying.
By choosing not to, it could be said that his silence constituted misleading and deceptive conduct.
In Demagogue Pty Ltd v Ramensky [[1992] 39 FCR 31] it was held that all relevant facts and circumstances constituted by acts, omissions to statements or silence can amount to conduct likely to be misleading or deceptive.
Silence must be considered in the context in which it occurs."
The learned Magistrate then referred to Compaq Computers Australia Pty Ltd v Merry (above) and the passage from Royal Brunei Airlines (above). Later, after considering the evidence against Harrison, she concluded that Cornell, and Harrison, were "responsible for the loss of $32,235".
As I read the learned Magistrate's reasons she was saying that Cornell was personally liable because his silence constituted misleading and deceptive conduct. In those circumstances the learned Magistrate was presumably concluding that he was in breach of the provisions of ss 11 and 21 of the Fair Trading Act. That conclusion was plainly open.
The further submission was made for the appellant that it was not open to Kennett to mount his case in this way because it was not pleaded.
It is true that there is no express reference to silence in the pleadings but the relevant events are referred to in the pleadings together with relevant meetings and representations. Paragraph 16 of the Particulars of Demand was in the following form:
"16.The making of the representations in the circumstances referred to above was conduct that was . . . in the case of . . Cornell . . in contravention of ss 11, 21 of the Fair Trading Act, false, misleading or deceptive or likely to mislead or deceive."
In my view that pleading was sufficient to encompass an argument based on silence. That conclusion is strengthened I suggest by the fact that those representing Cornell had the opportunity to make this submission about the pleadings to the learned Magistrate after receiving the final submissions filed on behalf of Kennett in which the issue of silence was expressly raised. They did not do so.
I turn to the remaining questions raised in the appeal lodged by Mr Harrison.
Harrison appeal – question (c)
Counsel for Harrison submitted that there was no evidence upon which a Magistrate could find that Harrison had actual knowledge that any of the representations made were false.
Her Worship found that Harrison was present at the interview of Kennett. Like Cornell, Harrison was viewed by the learned Magistrate as a witness who was evasive and had selective memory. In considering Harrison's evidence in more detail, the learned Magistrate stated the following:
"Particularly difficult to accept upon the evidence was Mr Harrison's claim that he 'tuned out' in the meetings when Ms Aplin discussed financial matter.
He is a retired bank manager with many years experience who by his own admission went to the meetings to find out what was going on.
He also acted as witness to the signing of important business documents.
During the interview with Kennett and afterwards when Aplin had left, Harrison confirmed what Aplin said and added positive comments.
Harrison conceded he may have told Kennett he had been a bank manager but he told Kennett he was measuring up more council areas and that the business was getting more council work on that basis.
He said they were busy and going well.
He conceded that he had no real basis on which to make such statements other than appearances and his feelings.
He conceded that he knew as a bank manager not to put forward propositions involving large sums of money without knowing the facts and that he had been careless in this regard.
He agreed that the people he told these things to trusted him and specifically he was careless in what he told Kennett.
He even agreed that he realised he would be paid money owed to them by Deisbrood by the sub-contractor's investments."
A little later the learned magistrate said that Harrison (together with Cornell) was responsible for the loss of $32,235. Immediately prior to the passage above quoted, I note that the learned Magistrate said that Harrison chose to participate in an interview with sub-contractors lending weight and affirmation variously be his presence, his answers, his enthusiasm and his silence.
As with Cornell, counsel have drawn my attention to various features of the evidence which point to Harrison having relevant knowledge or which raise doubts as to whether he would have had such knowledge. The highest it can be put for the appellant Harrison, however, is that the issue was arguable. If that be the case, it cannot be demonstrated it was not open to the learned Magistrate to conclude that Harrison had the knowledge required that the representations were false. In saying that I am indicating my view that the learned Magistrate concluded that Harrison knew that each of the representations made in his presence were false.
Harrison appeal – question (d)
It was submitted for Harrison that the learned Magistrate erred in that it was not open to her to find that the appellant Harrison had sufficient knowledge of the true facts to make his silence misleading and deceptive under s 11 of the Fair Trading Act 1985. I refer to my discussion of the previous question. The argument advanced for Harrison must, for similar reasons, fail.
Harrison appeal – question (e)
It was submitted on behalf of Harrison that the learned Magistrate erred in finding that a duty of care arose as between Mr Harrison and Mr Kennett so far as the representations were concerned.
The only reference to the possible claim in negligence appears in the reasons for judgment in the context of an analysis of the evidence of Harrison and comments on it. In the course of that reference was made to his carelessness in certain areas and how certain people trusted him. A claim in negligent misstatement was made in the pleading.
It is unnecessary, however, to reach any concluded view on whether the learned Magistrate did find a duty of care and find that it had been breached. Even if the learned Magistrate did so conclude and those conclusions were in error, it would not affect the outcome of the litigation. The other bases upon which the decision can be seen to have been made were sound and cannot be successfully challenged by the appellants. The outcome of the proceedings would not be altered.
Harrison appeal – question (f)
Counsel for Harrison submitted that it was not open to the learned Magistrate to find that the representations pleaded were made "in trade or commerce" within the meaning of s 11 of the Fair Trading Act 1985. He submitted that such a finding was not open because anything that was said to have been said by Harrison was not said in the course of his employment, it did not constitute a professional opinion, he was not attempting to persuade Kennett to enter into a transaction in trade or commerce and he, Harrison, stood to gain nothing.
It was in my view, plainly open to the learned Magistrate to find that Harrison did say what he did while attempting to persuade Kennett to enter into a commercial arrangement with Deisbrood and did so in the course of his employment. In all the circumstances, it seems to me that it was plainly open to the learned Magistrate to find that the representations were made in "trade or commerce" That conclusion is strengthened, I suggest, by the fact that the issue was not raised in the course of the proceedings before the learned Magistrate. It is reasonable to infer from that that the parties were proceeding on the basis of common ground that the issue was not debatable. Nothing was raised by way of specific defence in the pleadings. Nothing was raised in the final submissions filed on behalf of the then defendants.
Harrison's appeal – question (g)
This question sought to raise the issue of the adequacy of the learned Magistrate's reasons. Counsel for Mr Harrison advised that that issue was abandoned.
Conclusion
For the foregoing reasons the appellants have not made out their cases and the appeals should be dismissed.
1
0
0