Cummins Generator Technologies Germany GMBH v Johnson Controls Australia Pty Ltd

[2015] NSWCA 264

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:

Cummins Generator Technologies Germany GmbH v Johnson Controls Australia Pty Limited [2015] NSWCA 264

Hearing dates:

14 and 15 October 2014

Decision date:

03 September 2015

Before:

Beazley P at [1];
Gleeson JA at [176];
Leeming JA at [177]

Decision:

Appeal dismissed with costs.

Catchwords:

TRADE PRACTICES – misleading and deceptive conduct under Trade Practices Act 1974 (Cth) – whether misrepresentations made in quotation for supply of an alternator as to compatibility with existing equipment – where quotation not accepted – technical information provided in respect of machinery subject of quotation – misrepresentations to be assessed in context of dealings between parties

 

TRADE PRACTICES – misleading and deceptive conduct under Trade Practices Act 1974 (Cth) – causation – whether legal causation established – dependent on purpose of statute as related to the circumstances of the particular case

 

DAMAGE – misleading and deceptive conduct – no strict requirement to prove a “no transaction” or “different transaction” case

EVIDENCE – expert evidence – UCPR, r 31.28 – party seeking to rely on another party’s expert report – report must be “served back” – exceptional circumstances required for the grant of leave if party has not “served back” – UCPR, r 31.28(4)(a)

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) [2006] NSWCA 282; 67 NSWLR 341
Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568
Azzi v Volvo Car Australia Pty Ltd [2007] NSWSC 319
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304
Downs v Chappell [1997] 1 WLR 426
Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; 160 CLR 1
Henville v Walker [2001] HCA 52; 206 CLR 459
Hicks v Aboriginal & Torres Strait Islander Commission [2001] FCA 586; 110 FCR 582
House v The King [1936] HCA 40; 55 CLR 499
Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206; (2009) 73 NSWLR 653
Leadenhall Australia Limited v Peptech Ltd [2001] NSWCA 272
Marks v GIO Australia Holdings Ltd [1998] HCA 69; 196 CLR 494
Nikac v Minister for Immigration and Ethnic Affairs [1988] FCA 400; 20 FCR 65
Port Stephens Council v Samson [2007] NSWCA 299 Community Association DP270253 v Woollahra Municipal Council (No 2) [2014] NSWLEC 8
PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446
Singer v Berghouse [1994] HCA 40; 181 CLR 201
Street v Luna Park Sydney Pty Ltd [2009] NSWSC 1; 223 FLR 245
Travel Compensation Fund v Robert Tambree [2005] HCA 69; 224 CLR 627
Warren v Coombes [1979] HCA 9; 142 CLR 531
Westpac Banking Corporation v Jamieson [2015] QCA 50
Williams v Pisano [2015] NSWCA 177
Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290

Texts Cited:

Heydon, Trade Practices Law: Competition and Consumer Law
Lockhart, The Law of Misleading and Deceptive Conduct (3rd ed, 2011)

Category:

Principal judgment

Parties:

Cummins Generator Technologies Germany GmbH (Appellant)
Johnson Controls Australia Pty Limited (First Respondent)
Energy Power Systems Australia Pty Limited (Second Respondent)

Representation:

Counsel:
M Christie SC; H Pintos-Lopez (Appellant)
A J McInerney SC; O Jones (First Respondent)
D T Miller SC; J A Hogan-Doran (Second Respondent)

  Solicitors:
Harris & Company Solicitors (Appellant)
Carneys Lawyers (First Respondent)
Winter Hilditch & Fotheringham Lawyers (Second Respondent)

File Number(s):

2013/384955

 Decision under appeal 

Court or tribunal:

Supreme Court

Citation:

[2013] NSWSC 1511

Date of Decision:

19 October 2013

Before:

McDougall J

File Number(s):

2009/298865

HEADNOTE

[This headnote is not to be read as part of the judgment]

These proceedings relate to the supply of an additional generator set to augment the existing emergency power supply of a Data Processing Centre (DPC) operated by IBM Australia (IBM). A generator set comprises a diesel engine, an alternator, a cooling system and a control system. IBM’s DPC was already equipped with two generator sets. For the additional generator set to work in parallel with the existing generator sets, the “winding pitch ratio” of all three alternators had to be the same.

The appellant, Cummins Generator Technologies Germany GmbH (Cummins) is the successor to and responsible for the acts, omissions and liabilities of AVK Deutschland GmbH & Co (AVK). AVK was the manufacturer and supplier of the alternators in the existing generator sets at the DPC. These alternators had a winding pitch ratio of 13/15.

IBM contracted the first respondent, Johnson Controls Australia Pty Limited (Johnson Controls) as the project manager and head contractor for the supply of the additional generator set. The second respondent, Energy Power Systems Australia Pty Limited (EPSA), was the successful tenderer for the project. EPSA obtained a quotation from AVK for the supply of an alternator for the additional generator set. The technical information provided by AVK to EPSA was in respect of an alternator with a winding pitch ratio of 2/3.

EPSA submitted two tenders to Johnson Controls, one based upon the supply of an alternator manufactured and supplied by AVK (the conforming tender) and one by Caterpillar Inc (Caterpillar) (the non-conforming tender). Both tenders were for alternators with winding pitch ratios of 2/3.

EPSA’s non-conforming tender was accepted and an additional generator was installed at the DPC. The additional alternator was not capable of working in parallel with the existing alternator. Rectification work was carried out at a cost of approximately $988,000. The central question in issue was who was liable to bear this cost.

At trial, Justice McDougall held in favour of Johnson Controls. It was held that AVK had made three representations which were misleading and deceptive:

(1)   that the winding pitch ratio required to match the existing alternators was 2/3;

(2)   the winding pitch ratio of the existing alternators was 2/3; and

(3)   the alternator that AVK offered to supply to EPSA was “suitable for parallel operation with” the existing alternators.

His Honour further held that Johnson Controls had suffered loss by the misleading or deceptive representations and assessed damages accordingly.

Four principal issues arose for determination on appeal:

(1)   Whether his Honour erred in finding that AVK had made the first and second representations as to the winding pitch of the existing alternators and thereby engaged in misleading and deceptive conduct;

(2)   Whether Johnson Control’s loss was caused by AVK’s conduct;

(3)   Whether his Honour erred in determining that Johnson Controls had suffered loss and damage;

(4)   Whether his Honour erred in rejecting certain of the expert evidence including part of the joint expert reports.

Cummins did not appeal against the quantification of damages. Although included in the grounds of appeal, questions of indirect or third party reliance and apportionment were not seriously agitated.

Held by the Court, in dismissing the appeal:

(1)   Misleading and deceptive conduct should be assessed in the context of the dealings between the relevant parties. However, a contextual approach does not detract from the ultimate undertaking required by the court: to look to what statements were made and to then ask, stated in terms of the statute, whether the conduct was misleading and deceptive. [68]

Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304.

(2)   The dealings between EPSA and AVK were not as purposeful or directed as Cummins contended. There was an underlying common fact that the alternator to be supplied was to have the same winding pitch ratio as the existing alternator. His Honour therefore did not err in finding that the first and second representations were made. [69]-[71]

(3)   Whether legal causation has been established depends on the purpose of the statute as related to the circumstances of a particular case. The purpose of the consumer protection provisions of the Trade Practices Act 1974 (Cth) are “to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection.” [101]

Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; Azzi v Volvo Car Australia Pty Ltd [2007] NSWSC 319; 221 CLR 568; Henville v Walker [2001] HCA 52; 206 CLR 459; Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206; (2009) 73 NSWLR 653; Street v Luna Park Sydney Pty Ltd [2009] NSWSC 1; 223 FLR 245; Travel Compensation Fund v Robert Tambree [2005] HCA 69; 224 CLR 627; Williams v Pisano [2015] NSWCA 177; Trade Practices Act, s 2.

(4)   Based on the unchallenged findings of fact, it was open to his Honour to conclude that AVK must have understood that one of the purposes of EPSA’s inquiry was to ascertain the winding pitch ratio of the existing alternators and that parties other that EPSA would rely on the information AVK provided in response to that inquiry. In so finding, his Honour correctly appreciated the circumstances of the case and the purpose of the Trade Practices Act. It was also open to his Honour to conclude that Johnson Controls relied on the information in accepting a tender for an alternator with a winding pitch ratio of 2/3. [102]-[107]

(5)   In making a claim for misleading and deceptive conduct, it is necessary for a party to prove that in reliance on the misrepresentation it acted in a particular way that caused it loss and to then prove the quantum of that loss. There is no strict requirement to prove a “no transaction” or “different transaction” case. It is sufficient for Johnson Controls to prove that it has suffered a loss as a result of its reliance on the wrong information provided by AVK. [131]-[136]

Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) [2006] NSWCA 282; 67 NSWLR 341; Gates v City Mutual Life Assurance Society Ltd [1986] HCA 3; 160 CLR 1; Henville v Walker [2001] HCA 52; 206 CLR 459; Leadenhall Australia Limited v Peptech Ltd [2001] NSWCA 272; Marks v GIO Australia Holdings Ltd [1998] HCA 69; 196 CLR 494; PT Ltd v Spuds Surf Chatswood Pty Ltd [2013] NSWCA 446; Westpac Banking Corporation v Jamieson [2015] QCA 50

(6) Uniform Civil Procedure Rules (UCPR), r 31.28 requires each party to comply with the practices of the court when seeking to rely on expert reports. If a party intends to rely on another party’s expert report, it must “serve it back” on the other parties to the proceedings unless the court grants leave: UCPR, rr 31.28(3) and (4). [160]-[163]

(7) Accordingly, subject to the reports being relevant, Cummins was reliant pursuant to UCPR, r 31.28(3) on the grant of leave to tender the expert report and was thus required to demonstrate “exceptional circumstances”: UCPR, r 31.28(4)(a). No House v The King error was established in his Honour failing to find exceptional circumstances in favour of Cummins. [164]-[166]

Community Association DP270253 v Woollahra Municipal Council (No 2) [2014] NSWLEC 8; House v The King [1936] HCA 40; 55 CLR 499; Singer v Berghouse [1994] HCA 40; 181 CLR 201; Port Stephens Council v Samson [2007] NSWCA 299; Yacoub v Pilkington (Australia) Ltd [2007] NSWCA 290; Warren v Coombes [1979] HCA 9; 142 CLR 531; UCPR, r 31.28.

Judgment

1. BEAZLEY P:

Introduction

2. These proceedings relate to the supply and installation of a generator set (the additional generator set) to augment the existing emergency power supply of a Data Processing Centre (DPC) operated by IBM Australia (IBM) at Baulkham Hills. A generator set comprises a diesel engine, an alternator, a cooling system and a control system. The additional generator set was unsuitable for its purpose as the alternator was not capable of working safely in parallel with the existing generators. The fault was rectified at a cost, net of GST, of approximately $988,000. The central question in issue is who is liable to bear that cost.

3. The appellant, Cummins Generator Technologies Germany GmbH (Cummins), is a German company which, under German law, is the successor to and responsible for the acts, omissions and liabilities of AVK Deutschland GmbH & Co, a company referred to in the proceedings below as “AVK”. AVK was the manufacturer and supplier of the alternators in the existing emergency power supply standby generators at the Baulkham Hills DPC. It provided a quotation for an alternator to the second respondent, Energy Power Systems Australia Pty Limited (EPSA). In doing so, AVK was alleged to have made representations as to the compatibility of the alternator in the additional generator set with the alternator for which it quoted and, specifically, as to the winding pitch ratio of the alternator in the existing generator.

4. The first respondent, Johnson Controls Australia Pty Limited (Johnson Controls) was the project manager and head contractor for the supply to IBM of the additional generator set and for its installation. Its obligation was to deliver the completed project to IBM. Johnson Controls engaged Webb Australia Group (NSW) Pty Limited (Webb), the first defendant in the proceedings below, as a consultant to prepare a specification for the works and to advise Johnson Controls on the tenders submitted for the work. Webb is not a party to this appeal.

5. The second respondent, EPSA, was the successful tenderer for the project. EPSA was a licenced dealer for Caterpillar Inc (Caterpillar), a competitor of AVK in the market for the supply of alternators, although the evidence did not disclose whether AVK was aware of that.

6. EPSA obtained a quotation from AVK for the supply of an alternator for the additional generator set. On or about 28 February 2006, AVK provided to EPSA a quotation for the alternator, together with technical specifications. On 14 March 2006, AVK provided a Technical Data Sheet for the alternator. The technical information provided by AVK to EPSA was in respect of, inter alia, an alternator with a specified “winding pitch ratio” of 2/3. The existing alternators had winding pitch ratios of 13/15. EPSA forwarded the technical specifications and the Technical Data Sheet documents provided by Cummins to each of IBM, Johnson and Webb on or about 31 March 2006.

7. EPSA submitted two tenders to Johnson Controls, one based upon the supply of an additional generator set manufactured and supplied predominantly by Caterpillar but incorporating an alternator manufactured and supplied by AVK (the conforming tender) and one based upon the supply of a generator set fully manufactured and supplied by Caterpillar (the non-conforming tender).

8. The conforming tender price was $1,494,220 plus 10 per cent GST, making a total tender price of $1,643,642. The conforming tender was based on delivery estimated at 56 working weeks for the entire generator set and 46 weeks for the alternator. The conforming tender included the AVK alternator. AVK’s quotation and technical data sheet for the alternator were attached to the conforming tender.

9. The non-conforming tender was for a Caterpillar 2000 KVA rated diesel generator and associated equipment. An accompanying data sheet to this tender specified the winding pitch ratio of the alternator as 0.6667, or 2/3. The non-conforming tender stated that “the components of this offer are fully compatible with the existing system”. The non-conforming tender price was $1,454,950 plus 10 per cent GST, making a total tender price of $1,600,445. Delivery for the generator set was estimated at 32 weeks.

10. EPSA’s non-conforming tender was accepted and it supplied and installed a generator set that included an alternator with a winding pitch ratio of 2/3. The existing alternators had winding pitch ratios of 13/15. It was common ground that, for additional alternators to work in parallel with existing alternators in the way required by the DPC, their winding pitch ratios had to be the same.

11. As the winding pitch of the new alternator in the additional generator set did not match that of the existing alternators, the additional generator set required significant rectification to work safely. Temporary generators were hired to provide the necessary backup power supply. However, due to the substantial hiring cost of approximately $80,000 per month, and being unable to quickly source a new generator with an alternator with the winding pitch of 13/15, EPSA opted to purchase two new alternators with a winding pitch of 2/3 which would operate in parallel with the additional generator set supplied by EPSA pursuant to the tender process. The hiring arrangement was then terminated. The old alternators with the 13/15 winding pitch were redeployed.

The proceedings below

12. Johnson Controls brought proceedings against Webb and EPSA for breach of contract and misleading and deceptive conduct, and against Cummins, as the successor of AVK, for misleading and deceptive conduct. As against AVK, Johnson Controls pleaded that AVK had made three representations which were misleading and deceptive:

(1)   that the winding pitch required to match the existing alternators was 2/3;

(2)   the winding pitch of the existing alternators was 2/3; and

(3)   the alternator that AVK offered to supply to EPSA was “suitable for parallel operation with” the existing alternators.

13. Johnson Controls’ claims against EPSA and Cummins (AVK) were successful. EPSA cross-claimed against Cummins (AVK) for misleading and deceptive conduct. That claim also succeeded. McDougall J gave judgment in favour of Johnson Controls in the sum of $1,427,753.83 against each of AVK and EPSA, together with interest and costs. His Honour also ordered judgment in favour of EPSA against Cummins (AVK) on EPSA’s cross-claim against Cummins (AVK) in the same sum as awarded to Johnson Controls and ordered that Cummins (AVK) indemnify EPSA in respect of its liability to pay IBM’s costs of the proceedings.

The appeal

14. Cummins appealed against the judgment in favour of Johnson Controls and against the judgment on the cross-claim in favour of EPSA. The issues raised on the appeal were as follows:

(a)   Whether his Honour erred in finding that AVK had made representations as to the winding pitch of the existing alternators and thereby engaged in misleading and deceptive conduct: grounds 10 and 11;

(b)   Whether Johnson Control’s loss was caused by AVK’s conduct: grounds 1-5;

(c)   Whether his Honour erred in determining that Johnson Controls had suffered loss and damage: grounds 6 and 7;

(d)   Whether his Honour erred in rejecting certain of the expert evidence including part of the joint expert reports: grounds 8 and 9;

(d)   Whether his Honour erred in his finding of apportionment: ground 12.

Cummins did not appeal against the quantification of damages.

15. By notice of contention, Johnson Controls contended that the primary judge ought to have held that it had established its case of third party reliance or indirect causation against AVK and was entitled to judgment in the sum of $1,427,753.83 against Cummins as successor to and responsible for the acts, omissions and liabilities of AVK. The trial judge did not decide this issue on the basis that, as Johnson Controls had established a case of direct reliance, the question was moot.

16. Cummins initially identified causation as the principal issue on the appeal, but in its oral submissions indicated that the “first main issue in this appeal … is whether AVK engaged in misleading or deceptive conduct”. Cummins conceded that AVK made the third representation above at [12](3), that the alternator that it offered to supply to EPSA was “suitable for parallel operation with” the existing alternators. It contended that this misrepresentation was “immaterial”, as it never sold the alternator to EPSA. It remained in issue whether it made the first and second representations. Cummins contended that if the first and second representations were not made, the other issues fall away.

15. Johnson Controls based its case on both direct and third party reliance. The direct reliance case was that AVK should have known that EPSA would pass the representations on, as they did by supplying the Technical Data Sheet to Johnson Controls. Johnson Controls contended that the relevant representations which they relied on in deciding to accept the non-conforming tender were contained in the Technical Data Sheet.

16. Johnson Controls’ third party reliance case, pleaded in the alternative, was that it was entitled to succeed because AVK’s misleading or deceptive conduct, directed to EPSA, caused EPSA to tender to supply an alternator which purportedly could, but in fact could not, operate in parallel with existing alternators. Johnson Controls thus contended that it suffered loss as a result of EPSA’s reliance on the representations made by AVK.

17. The trial judge held in Johnson Controls’ favour that the case was one of direct reliance. His Honour, at [294], chose not to speculate on the outcome of an indirect reliance case as the question was “entirely moot”.

The evidence

20. Apart from the expert evidence, the evidence before his Honour was mostly documentary. There were certain matters which were uncontroversial. These were identified in the submissions of Johnson Controls (and not challenged by Cummins) as follows:

“(a)   AVK was the manufacturer of the two existing standby, or emergency backup, [alternators] at the DPC;

(b)   Continuity of electrical power supply was essential to the DPC;

(c)   The two existing standby generators operated in parallel;

(d)   Each standby generator contained an alternator;

(e)   IBM wanted to increase the capacity of the emergency power supply at the DPC by adding a third generator set to the two existing standby generator sets;

(f)   It was common ground at trial that:

(i)   Alternators have been required to work in parallel for over one hundred years;

(ii)   To operate in parallel the winding pitch ratio for each alternator had to be the same – a fact described by the primary judge as ‘notorious among electrical engineers and suppliers of electrical generating equipment’;

(iii)   Manufacturers of generating sets, such as AVK, retain records that would enable the technical characteristics of generating sets they had manufactured to be identified (including the winding pitch ratio of alternators);

(iv)   It was common and good practice to refer to the manufacturer of generating sets if technical details were required; and

(v)   A common and appropriate way for a contractor to ascertain the winding pitch of an existing alternator was to ask the manufacturer;

(g)   AVK:

(i)   As the manufacturer, was the ultimate reliable source of information as to the technical characteristics of the alternators, including their winding pitch ratio, in the two existing standby generators;

(ii)   Was requested to provide a quotation for the supply of the third standby generator set to operate in parallel with the two existing standby generator sets;

(iii)   Was provided with the declared manufacturing serial number, 68 17 182 A004, for one of the existing standby generator sets;

(iv)   Asked whether the new standby generator should be the same as the existing alternator with the declared manufacturing serial number;

(v)   Was provided with the draft specification for the supply and installation of the [additional alternator] to operate in parallel with the two existing standby generators;

(vi)   Made an offer for the supply of the [additional alternator] on 28 February 2006 (quotation no: P-06.20259/AUS) which:

•   referred to the declared manufacturing serial number of the existing standby generator of 68 17 182 A004;

•   attached a detailed technical specification which stated ‘Parallel operation: Alternator suitable for parallel operation with other alternators’; and

(vii)   Provided a Technical Data Sheet on [14] March 2006 (which referred to quotation no: P-06.20259/AUS) and which stated, among other things, that the alternator proposed to be supplied had a ‘[w]inding pitch: 2/3’;

…

(i)   Following installation of the [additional generator set] in December 2006, testing of the three standby generators operating in parallel on 18 December 2006 identified dangerously high temperatures being generated inside the control panel, and that the winding pitch of the [additional alternator] must be different to the two existing standby generators;

(j)   Within a day of that discovery, and upon further enquiry being made, on 19 December 2006 AVK advised that the winding pitch of the two existing standby generators was 13/15 and not 2/3;

(k)   The two existing standby generator sets at Side 1 at DPC each included an alternator with a 13/15 winding pitch; and

(l)   The additional generator set that was installed was completely unsuitable for its task, because the alternator was not capable of working safely in parallel with the existing generators.”

21. Dr Grantham, Johnson Controls’ electrical engineering expert gave evidence, which was not challenged, that there were three ways the necessary technical information as to the winding pitch of the alternator in the existing generator sets could be obtained: (1) from the technical data supplied by the manufacturer at the time of the original purchase; (2) from the manufacturer directly; or (3) by visual inspection, although this last option was often not feasible, as the end windings were usually covered with insulating tape. In the present case, the technical data could not be found and the winding pitch could not be ascertained on visual inspection. That left AVK as the only feasible source of the technical information required to ensure that the additional generator set could work in parallel with the existing machines. There was no dispute about these matters, although Cummins pointed out that there was no evidence that it was aware that that the technical data in respect of the existing generator sets could not be found.

22. His Honour held, at [277](1), that as the manufacturer of the original alternators, AVK was the “ultimate and reliable source of information as to the technical characteristics of those alternators, including their winding pitch ratios”. His Honour also found that anyone who wanted to access that information was likely to contact AVK for that purpose. AVK did not challenge the correctness of these findings.

The email correspondence

23. There were a number of critical email exchanges between EPSA and AVK. The first was on 23 January 2006 from Derek Morley, an EPSA Sales Representative, stating:

“I need an updated cost on a unit to run in parallel with existing units … existing serial number 6817182A004 ETAL REFERS … THESE WERE 1875 KVA UNITS I THINK

Looking for unit to be here in August this year … any problem”

24. Mr Morley’s email was answered by Maja Spies, an AVK Sales Engineer, on 24 January 2006, as follows:

“… many thanks for your inquiry.

should the new unit be the same as existing alternator with d.m. series number?”

The “d.m. series number” referred to in this email was the declared manufacturer’s serial number on the existing generator sets at IBM’s DPC.

25. Mr Morley responded to Ms Spies on 25 January 2006, stating:

“[They] want to stay with AVK.

What are the options

The important point is the new unit will run in parallel with two of the existing ones …

Do we need to match pitch

Here is a scan or the draft spec for the job: webb brief spec.pdf.”

26. At the time that EPSA sought this information from AVK and provided it with a copy of the draft specifications, it did not inform AVK that it was proposing to put in two tenders for the additional generator set, one using the AVK alternator and one using Caterpillar’s alternator.

27. EPSA sent two more emails to AVK before receiving a response. In the second of these, on 27 February 2006, Mr Morley asked AVK what the problem was in obtaining the information he was seeking and informed AVK that “[t]he consultant is about to issue the spec and we need to know what the options are and what you suggest is the best approach”.

28. Ms Spies replied to Mr Morley on 28 February 2006 attaching AVK’s offer. The subject line of the email stated “Repeat of our previous order-no. 68 17 182 A004”. The body of the email referred to “offer-no. P-06.20259/AUS” and stated that the offer was attached.

29. The attached offer was headed “Project: Repeat of our previous order-no. 68 17 182 A004 Quotation P-06.20259/AUS” and contained a quote for the supply of “1 each ‘AvK’-synchronous threephase alternators, acc. to detailed technical specification attached”. A unit price of €44,500 was quoted, with delivery in “week 13, 2007”, provided AVK received “techn. and commercially clear order latest till 13.3.06”. A document headed “Technical Specification” was attached to the email. In that document under the sub-heading “Electrical data and characteristics”, the following appeared: “Alternator suitable for parallel operation with other alternators”.

30. On 9 March 2006, Mr Morley emailed Ms Spies requesting that she send “the tech data sheet with pitch/reactances etc and times etc for the schedules we need to complete”. The reference to “schedules” was to the schedules in EPSA’s tender documents.

31. On 14 March 2006, Ms Spies responded by email as follows:

“Repeat of our previous order-no.668 17 182 A004

Our offer-no. P-06.20259/AUS

…

pls find attached the requested technical data sheet.”

32. The winding pitch specified in the attached Technical Data Sheet was 2/3.

33. On 6 April 2006, following the submission of the two tenders, Mr Murphy, EPSA’s sales manager, again communicated with AVK, informing it that the proposed client was insistent on “having three alternators from the same manufacturer” (that is, that the alternator in the additional generator set was to be an AVK alternator) and asked whether there could be an “improvement in the delivery time of a technically identical machine”. Mr Murphy advised that “our client is wishing to make a decision in the very near future” and requested that the inquiry be treated as promptly as possible.

34. Mr Morley also emailed AVK on 6 April 2006, emphasising that EPSA needed an answer overnight “if at all possible”, or alternatively, advice as to when they could “supply an answer”. Theo Dragonas, AVK’s representative in Australia and who worked out of AVK’s Singapore office, replied on 7 April 2006, stating that he did not know the exact requirements and asked whether it was possible to quote a “Stamford equivalent or AVK K model” out of Singapore. Mr Morley responded on 9 April 2006 advising that EPSA’s “definite preference” was for “another AVK unit, not a Stamford or a Cat or a LS ETC”. The email continued:

“IF YOU CAN ASSURE US THE ‘K’ will operated in aparallel and share KVARS WITH [THE] OLD UNITS WHO KNOWS?

But you never know unless you try so if you have something that will run in parallel send me the details and the offer.

Hopefully from the AVK offer you can get the tech details but from memory its 2/3 pitch and X”D LESS THAN 12 …

WILL A ‘K’ RUN IN PARALLEL WITH THE OLD UNITS

I have an engine, subject to prior sale, available here about Oct if I move fast.”

35. On 12 April 2006, Mr Morley forwarded another email to AVK asking what the options were for machines that would be guaranteed to run in parallel with the existing generator sets.

36. On 13 April 2006, Mr Dragonas advised that there was a machine in Singapore that might be suitable. He attached the technical data for DSG86K1-4. However, he cautioned that he did “not know the exact specs for this job … so careful analyses must be conducted to see if this unit is capable”.

37. On 20 April 2006, Mr Morley, in response to an email from AVK asking whether EPSA still wanted the alternator in Singapore, as another customer had shown interest, informed AVK that the client was still asking questions to which they hoped to respond the following day. He said, “If [the alternator in Singapore] goes to someone else it goes and that is all there is to it”. He said that they would advise the client that someone else was interested in the machine and pointed out that they still had no reply from Germany as to the available options.

Mr Morley’s evidence

38. In his affidavit evidence, Mr Morley stated that in December 2005 he was approached by Rod Hoddinett of Webb in relation to the IBM DPC project. Mr Hoddinett emphasised to Mr Morley that Webb wished “to stay with CAT/AVK package”. Mr Hoddinett informed Mr Morley that they were checking the pitch with AVK. Some time later, Mr Hoddinett informed Mr Morley that the pitch was 2/3.

39. Mr Morley gave evidence that an alternator’s pitch is not discoverable on inspection. He said that in a project such as the IBM project, where an additional machine was to be run in parallel with existing machines, his first action would be to obtain a quote from the original manufacturer. AVK’s offer did not state the pitch. Mr Morley said “that [was] not unusual as manufacturers want to keep that confidential at the quoting stage for commercial reasons”. He said that after he received the quotation from AVK, which clearly referred to a repeat of the previous order, he sought technical data schedules from AVK. He stated that the inclusion of the previous order number meant that AVK was offering a suitable machine as it was a repeat of the previous machine.

40. Mr Morley also gave evidence that in his experience:

“… it was not unusual that the new machinery was to be matched with existing machinery. As the winding pitch was not nominated in the Webb specifications my approach was to seek this information from the manufacturer. In my view, this was the most reliable means of obtaining this information as well as being the only source open to me. [Webb] may well have that data [on the pre-existing generator sets] but had decided not to nominate it in the tender documents. This was my usual practice and one I had adopted previously on other jobs where new equipment was to run in parallel with existing.”

41. Mr Morley explained that the reason for submitting the non-conforming tender was due to the long lead time in obtaining delivery of the AVK alternator both from AVK and elsewhere. He commented that “[a]t that time, there was a upsurge of business in China and it was buying just about all generators available worldwide”.

42. Mr Morley explained in his affidavit evidence that as the information he had obtained from AVK indicated that the winding pitch of the existing machines was 2/3 either he or John Murphy, EPSA’s sales engineer, obtained quotes and technical data from CAT for an alternator with a pitch of 2/3.

43. In cross-examination, Mr Morley said that in his email communications with AVK, he was seeking a quotation for a new piece of equipment to run in parallel with the existing generator sets. Mr Morley said that it was his responsibility to find out from the original alternator manufacturer the pitch of the existing alternators and to obtain suitable machinery to match. He said, however, that he would not order a new alternator without undertaking an independent check as to the specifications of the existing alternators. When asked if he thought that Webb were undertaking the task of an independent check of the specifications, Mr Morley respondent, “No … I was undertaking my task of checking, of seeking from the original alternator manufacturer what the pitch was”. This would appear to be a reference to having requested and obtained the technical data sheet from AVK which identified the pitch to be 2/3. He also gave the following evidence in cross-examination:

“Q. Do you accept the proposition that it would be necessary to clearly express the question, ‘Could you please inform us of the winding pitch of this specific genset?’?’

…

A. No.

HIS HONOUR

Q. And that, you say, is because you were asking for a price for an additional machine to run in parallel with it?

A. An identical machine.

Q. Which of necessity, being identical, would have the same winding pitch ratio?

A. Correct.”

Mr Coles’ evidence

44. Mr Coles, EPSA’s regional manager, gave evidence that as a licensed Caterpillar dealer, EPSA had access to two computer systems through which it was able to source Caterpillar engines, including alternators, by reference to customer specifications and technical information. Having sourced the matching Caterpillar machinery, it was then able to produce a technical data sheet. On this occasion, EPSA, having obtained the specifications for the alternator from AVK, used its computer system to source a Caterpillar alternator and produce a technical data sheet which it submitted as part of its non-conforming tender.

The tender specification documentation

45. Webb, in the tender invitation, included a draft specification. A final specification in, relevantly, identical terms, was provided later. Mr Morley forwarded the draft specification to Ms Spies under cover of his email of 25 January 2006. The draft specification contained the statement:

“Tenderers are encouraged to offer other manufacturers equipment providing it complies with specification and performance of the existing equipment.”

46. Schedule 1 of the draft specifications set out the “Specified Equipment” with the following notation under that heading, in bolded type: “Tenderers should offer equipment identical in performance and characteristics to the existing equipment”. For the item “Generators”, the “Make and Type” specified were “Stamford (Newage), Caterpillar (Kato). AVK”.

Did AVK make the first and second representations?

Trial judge’s reasons

47. The trial judge found that, having regard to the pre-contractual dealings between EPSA and AVK and the context in which those dealings occurred, AVK made the first and second representations either expressly or impliedly. His Honour’s reasons for so finding were as follows:

(1)   Everyone in the industry, including AVK, knew that for an alternator to work in parallel with another alternator each had to have the same winding pitch ratio. This finding was not challenged.

(2)   As to the first representation, AVK knew that the new alternator was required to operate in parallel with the existing alternators supplied by it some years previously. It offered to supply a new alternator with a 2/3 winding pitch ratio. His Honour found that inherent in that offer was the proposition that the winding pitch ratio of the new alternator was that which was required to match the existing alternators.

(3)   As to the second representation, it was also inherent in AVK’s offer that the winding pitch ratio of the existing alternators was 2/3. Otherwise, there was no point in offering to supply a new alternator having a 2/3 winding pitch ratio to operate in parallel with the existing alternators.

48. His Honour, at [241], stated that:

“… [Johnson Controls] must show that AVK made its representations knowing, intending or expecting that they would be passed [on to] a third party principal; or in circumstances where, objectively, a reasonable person in its position and with its knowledge must have understood that this was likely.”

49. His Honour, at [242], identified the information available to AVK at the time it made the offer to EPSA to supply the alternator as follows:

“(1)   it knew that a consultant, Webb, was preparing a specification on behalf of an unnamed principal for the supply and installation of an additional generator set to be operated as part of an end user's emergency power supply system for a [DPC] (all that comes from the draft specification which was provided to AVK, but assumes - I think reasonably - that the draft specification was substantially in the form of the final version);

(2)   EPSA wanted to submit a tender, or tenders, for supply of the new generator set;

(3)   the new generator set would be required to work in parallel with the existing generator sets;

(4)   AVK had supplied the existing alternators (and, it is clear, had kept records of that supply); and

(5)   EPSA needed to ensure that what it offered would operate in parallel with the existing generator sets; thus, EPSA needed to know, among other things, that the winding pitch ratios of the existing and new alternators would be the same.”

50. The trial judge found, at [249], that having regard to industry practice, AVK “must have understood that one of the purposes of EPSA’s inquiry was to ascertain the winding pitch of the existing alternators”. His Honour considered that this was so because it was the unanimous view of the experts that a common and appropriate way for a contractor to ascertain the winding pitch of an existing alternator was to ask the supplier.

51. His Honour considered, at [250], that AVK could not have been so naïve as to think that its quotation might not be beaten by a competitor on either or both of price or delivery time, even though EPSA’s preference was for an AVK alternator.

52. His Honour accordingly, at [251], inferred that AVK should reasonably have understood, if it did not in fact understand, that EPSA required information as to the winding pitch, not only for the purpose of deciding whether to purchase from AVK but, more generally for the purpose of deciding how to structure its tender. However, his Honour observed, at [252], that that observation was “something of a diversion”, although not “entirely beside the point”, reiterating what he had said at [252], namely, that the “question is, in effect, how far should AVK have understood the information provided by it to EPSA was likely to go”.

53. His Honour answered that question at [253], in the following terms:

“… if AVK did not expressly know or understand it, nonetheless it ought reasonably to have expected that the information would be relied upon by EPSA for the purpose of preparing a tender, and that this reliance might extend to preparing a tender that did not specify equipment supplied by AVK.”

54. His Honour then concluded, at [258], that it was probable that AVK in fact understood that the information supplied by it and the representations made by it would be passed by EPSA to the consultant and on to the principal. His Honour also held, at [259], that even if AVK did not have that actual understanding, had it turned its mind to the question it must have understood or appreciated that the information provided and the representations made relevant to EPSA’s tender would be passed on up the line to Webb and the principal.

55. His Honour considered, at [264], that the inescapable inference from the information provided by AVK was that the existing alternators had a winding pitch ratio of 2/3. His Honour concluded, at [266], that EPSA prepared and Webb and Mr Johnson assessed, the non-conforming tender on their understanding gained from the information supplied and representations made by AVK that the new alternator must have a winding pitch ratio of 2/3.

56. His Honour held, at [268], that the representations were incorrect. The winding pitch ratio required to match the existing alternators was 13/15, not 2/3. It followed, his Honour observed at [269], that the representations were misleading or deceptive.

Submissions

57. Cummins accepted that if the first and second representations were made, the test as articulated by his Honour at [241] (set out above at [48]), would be made out. Its contention however, was that the representations contained in its quotation had been taken out of context and that in determining whether there was misleading and deceptive conduct it was necessary “to examine the relevant course of conduct as a whole”: Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; 238 CLR 304 at [102]. Cummins sought to rely on the proposition cited in Campbell v Backoffice Investments that it is to:

“… [invite] error to look at isolated parts of the … conduct … where the alleged contravention of s 52 relates primarily to a document, the effect of the document must be examined in the context of the evidence as a whole”: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; 218 CLR 592 at [109] per McHugh J.”

58. Cummins accepted that the statement in the quotation that the alternator would run in parallel with the existing alternators was misleading and deceptive and for that reason, it had conceded that the third representation had been made. Nonetheless, Cummins submitted that his Honour’s reasoning at [238] (see above at [47]) involved an artificial characterisation of what AVK had stated in its quotation as to what it proposed to sell. It submitted that the effect of its quotation to EPSA was a representation that it would supply goods, which would be compatible with the existing equipment, at the price quoted. The misleading statement was that the equipment to be supplied was compatible. It was not a representation about the existing equipment being operated by IBM.

59. EPSA submitted that it was clear from Mr Morley’s evidence that in requesting the Technical Data Sheet he was seeking the winding pitch of the existing IBM alternators. EPSA also submitted that AVK understood that in responding to that request, the information it provided would “go up the line”, that is, that the information would be available to the persons involved in the tender approval process. EPSA contended, therefore, that it was open to them, as a licensed dealer of Caterpillar, to use the information to internally source an alternative Caterpillar alternator. They submitted that, having requested information from AVK for the purposes of completing the tender documents, there was no limitation upon the use that EPSA could make of that information. They pointed out that AVK did not enquire into or seek to impose limitations on the uses to which the information would be put.

60. Although Johnson Controls accepted that Mr Morley had given evidence that the technical data was usually kept confidential by the manufacturer at the point in time when a quotation was provided, it contended that any confidentiality was lost when, responding to its request, AVK provided it with the Technical Data Sheet on 14 March 2006 and placed no limitation upon its use.

61. Integral to this argument was the fact that AVK had been provided with the draft specifications prior to forwarding the Technical Data Sheet to EPSA, which expressly stated that tenderers were encouraged to offer other manufacturers’ equipment, as quoted above at [45]. In addition, the draft specification nominated different brands of equipment that were suitable. There were then the added factors submitted by Johnson Controls as significant: that the manufacturer was a reliable source of technical information; that EPSA was a licensed Caterpillar dealer; that it was apparent from the specification that any information in a tender would be seen and considered by a variety of personnel, including the head contractor, the project manager, and contractor for the supply of the generator set; that, as conceded by Cummins, AVK at all times knew that the information would be communicated “up the line” to Johnson Controls and others as part of the tender process; and finally, that AVK placed no restriction on the use of the information when it provided the Technical Data Sheet to EPSA.

62. Johnson Controls also submitted that it was apparent from the email communications, particularly in April, that AVK knew that other manufacturers were being approached to provide the alternator. Johnson also pointed out that his Honour’s finding at [258], that AVK knew that the information supplied by it would be passed on by EPSA, was not the subject of challenge.

63. EPSA’s submissions were to like effect. It pointed out additionally that Cummins had not challenged his Honour’s observations at [250] as to the likelihood that AVK would have understood that competitive quotes might be sought.

Consideration

64. In my opinion, Cummins has not established that his Honour erred in finding that the first and second representations were made. In the first place, there are the findings made by his Honour at [238] (set out above at [47]) that are not the subject of an express challenge by Cummins.

65. Secondly, Cummins’ submission that his Honour’s characterisation of the AVK quotation was “artificial” and that the quotation was “prospective” only, failed to grapple with the evidence relating to the information that was provided to AVK. Almost at the outset of the communications between EPSA and AVK, Mr Morley was concerned to know whether it was necessary “to match pitch” (see 25 January 2006 email at [25] above). When AVK then provided its quotation on 28 February 2006, it stated that the alternator to be supplied was “suitable for parallel operation with other alternators”. Subsequently, on 9 March 2006, Mr Morley asked “for the tech data sheet with pitch/reactances”. He also asked for “times etc for the schedules we need to complete”.

66. In response to that email, AVK forwarded the Technical Data Sheet to EPSA on 14 March 2006. Leaving aside the question as to whether AVK was, or ought to have been, aware that this information would be used by others, it had expressly represented in the Technical Data Sheet that the winding pitch ratio of the alternator for which it had quoted in the 28 February 2006 offer was 2/3.

67. The misleading representations for which Johnson Controls contended were contained in various statements made by AVK. AVK relevantly made two statements to EPSA in the course of their communications. One statement was that it would supply an alternator with the characteristic that it would operate in parallel with the alternators in the existing generator set. Another statement made was that the alternator for which it had quoted had a winding pitch ratio of 2/3.

68. Cummins sought to confine its argument to the former statement and the fact that this statement was a representation made about the product it was offering to, but did not in fact, supply. Cummins submitted that AVK’s conduct was to be assessed in the context of the dealings between the parties: Campbell v Backoffice Investments: see above at [57]. Although Campbell v Backoffice Investments supports this submission, the contextual approach espoused by Cummins does not detract from the ultimate undertaking required of this Court: to look to what statements were made and to then ask, stated in terms of the statute, whether the conduct, that is, in this case, the statements made, was misleading and deceptive.

69. The dealings between EPSA and AVK were not as purposeful or directed as Cummins contended. Although in its email of 25 January 2006 (above at [25]), EPSA stated that the ultimate client wanted to stay with AVK, it also asked what the options were, whether it was necessary to match the winding pitch ratio and included the draft specification for AVK’s consideration. This correspondence did not convey that AVK was to be the supplier as opposed to the preferred supplier. This was stated expressly in the email of 9 April 2006 (above at [34]).

70. It was also apparent from the communication between EPSA and AVK that different brand alternators were being canvassed, even from within AVK. That was proved in evidence and was not at any time in dispute. There was then the underlying common fact that the alternator to be supplied was to have the same winding pitch ratio as that in the existing generator set.

71. Given these factors, his Honour correctly reasoned that it was inherent, or it might be said, implicit, that the first and second representations had been made. Indeed, it is unarguable that the first representation was made: Cummins had offered to supply an alternator, that was a repeat of its previous order, with a winding pitch ratio of 2/3, and which AVK said would operate in parallel with the existing equipment. That had to mean, on AVK’s own documents, that was the winding pitch ratio required to match the existing alternators. The engineering evidence made this indisputable. On the engineering evidence, the second representation was the flip side of the first. If the winding pitch ratio required to match the existing alternators was 2/3, the winding pitch of the existing alternators was 2/3.

72. In my opinion, it was apparent by the end of the argument on this question that the real matter in contention was causation, as Cummins had signalled in its written submissions.

Causation

73. The trial judge, at [262], held that the information supplied and representations made by AVK were relied upon: by EPSA for the preparation of what it said was a conforming tender; by Webb when it assessed the tender as conforming, including because it contained a proposal to supply an alternator with a winding pitch ratio of 2/3; and ultimately by Johnson Controls when it assessed the tenders.

74. At trial, Cummins’ case on causation was that to the extent that AVK had supplied information or made representations, it had done so only for the purpose of inducing EPSA to purchase the alternator that AVK offered to supply. It had not supplied the information for EPSA to rely on in deciding to purchase an alternator supplied by a competitor of AVK: see Henville v Walker [2001] HCA 52; 206 CLR 459 at [98]-[100] per McHugh J; Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568 at [96], [99] and [100] per Gummow, Hayne and Heydon JJ.

75. In seeking to make that case, Cummins accepted, as did Johnson Controls, that for the direct reliance case to succeed, Johnson Controls had to establish that the representations were made in circumstances calculated to lead to them being transmitted through EPSA, to others, including Johnson Controls, even though AVK never dealt with Johnson Controls: see Azzi v Volvo Car Australia Pty Ltd [2007] NSWSC 319.

76. The trial judge rejected Cummins’ submission that Johnson had not established a causal connection between AVK’s representations and the loss it claimed it had suffered. His Honour found, at [277], that :

“… AVK either knew in fact, or must have understood had it turned its mind to the question, that:

(1)   as the manufacturer of the original alternators, it was the ultimate and reliable source of information as to the technical characteristics of those alternators, including their winding pitch ratio;

(2)   anyone who wanted access to that information was likely to contact AVK for that purpose;

(3)   EPSA wanted a quotation for a new alternator to work in parallel with the existing ones;

(4)   it was important that the new alternator have the same winding pitch ratio as the existing ones, and that it be compatible (for want of a better word) in all other material respects;

(5)   by offering to supply a new alternator with a winding pitch ratio of 2/3, AVK was effectively representing (because it was required to work in parallel with the existing ones) that the existing alternators had the same winding pitch ratio;

(6)   EPSA would be likely to rely on this and other information supplied, and other representations made, by AVK, for the purpose of formulating its tender;

(7)   in the event that, for whatever reason, AVK's offer was unacceptable, it was likely that EPSA would look to a competitor;

(8)   in doing so, it was likely (indeed, I would have thought, inevitable) that EPSA would continue to rely on the information supplied, and representations made, by AVK.”

77. His Honour, at [278], rejected AVK’s argument that it had only supplied the information to EPSA for the purposes of inducing it to purchase the alternator from it. His Honour commented that the circumstances went far beyond the simple example of limited advice postulated by McHugh J in Henville v Walker. His Honour had found earlier, at [48], that everyone involved in the project, including the AVK representatives who dealt with the matter, knew that if the additional generator set was to operate in parallel with the existing sets it was essential to “match the pitch” of the alternators. His Honour had also observed, at [150], in relation to the claim against Webb, that Webb could have made a formal inquiry of AVK as to the winding pitch ratio of the existing alternators.

78. His Honour concluded, at [280], that AVK was liable for the consequences of its misleading or deceptive conduct. His Honour reiterated, at [329], that EPSA made plain to AVK in Mr Morley’s emails and in sending the draft specifications, both its purpose in seeking the quotation and the performance requirements that the new alternator had to meet. His Honour considered that it was too late for AVK to complain that EPSA could have made things clearer to enable it to respond more accurately.

Legal principles

79. In Henville v Walker at [103], McHugh J, in considering the situation in which “a person has acted to his or her detriment by reason of or following some conduct of the defendant”, stated:

“[The conduct] will not be regarded as causally connected with the detriment if it provides no more than the reason why the person acted to his or her detriment. If the defendant intended the person suffering a detriment to act in the general way that he or she did, the common law will invariably hold that a causal connection existed between the conduct and the detriment. But if the conduct merely provides the reason why the person acted, it will not be sufficient to establish a causal connection unless the purpose of the legal norm that the defendant has breached is to prevent persons suffering detriment in circumstances of the kind that occurred.

80. McHugh J went on, at [103], to provide the following example of the principle:

“If a broker negligently advises a client to retain shares because they are a good investment, the broker will be liable for the loss sustained in retaining those shares. But if, having received that advice, the client decides to buy more shares, the broker will not be liable for the further losses unless the terms of the original retainer imposed a duty on the broker to advise in respect of further purchases.”

81. The decision of Brereton J in Street v Luna Park Sydney Pty Ltd [2009] NSWSC 1; 223 FLR 245 provides a further illustration. That case involved, relevantly, a claim by owners of premises nearby to Luna Park that, by the lodgment of two development applications, which were subsequently displayed to the public, the developers of Luna Park had engaged in misleading and deceptive conduct contrary to the Trade Practices Act 1974 (Cth), s 52. At [226], Brereton J considered the submission that:

“[Section 52 was] directed at providing a remedy only in respect of conduct directed at individuals or a section of the public, including the plaintiffs, intended to be acted on by them, in a manner consistent with the purpose for which the representations were made to them, and that the statements in the 2001 DA and the 2002 DA were not directed at the plaintiffs. This is sometimes referred to as legal – as distinct from factual – causation.” (original emphasis)

82. In applying that principle, Brereton J held, at [231] that:

“The purpose of the development applications was to obtain permission for the conduct of certain activity at the Luna Park site. Insofar as it was foreseeable that the DAs would be placed on public exhibition and might be read by members of the public, the purpose of such public exhibition was to inform neighbours of the proposed development, so that if they wished they might exercise their rights under the planning legislation to object. It was not to inform potential purchasers and developers of future uses of the subject land … Any loss suffered by the plaintiffs as potential purchasers, investors or developers was unrelated to the capacity in which they were intended to receive – if at all – the information contained in or conveyed by the DAs ... No plaintiff communicated to [the developer of Luna Park] his, her or its intention to purchase or redevelop property based on the contents of the 2001 DA or the 2002 DA, nor that they intended to use the information contained in those DAs not just for the purposes for which it was lodged with the consent authority (to obtain planning approval), but for the wider purpose of informing their decisions to purchase or redevelop properties ...”

83. That statement was quoted by Giles JA in Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206; (2009) 73 NSWLR 653, in a passage considering the misleading and deceptive conduct provisions of the Corporations Law 1991 (Cth). Giles JA observed, at [19], that “[c]onduct which merely provides the opportunity for the plaintiff to enter into the transaction will not suffice”.

Decision last updated: 09 September 2015