Jacfun Pty Ltd v Sydney Harbour Foreshore Authority - [2012] NSWCA 218

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Jacfun Pty Limited v Sydney Harbour Foreshore Authority [2012] NSWCA 218
Hearing dates: 14 and 15 May 2012
Decision date: 25 July 2012
Before: Allsop P at [1]
Macfarlan JA at [71]
Barrett JA at [72]
Decision:
1. Appeal allowed.
2. Set aside the orders of the Supreme Court made 8 March 2011 and, in lieu thereof, order:
a) judgment for the plaintiff for $1.25m; and
b) the defendant pay the plaintiff's costs.
3. The respondent pay the appellant's costs of the appeal.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords: TRADE PRACTICES - misleading or deceptive conduct - proposed redevelopment of Darling Walk site - negotiations between appellant tenant and respondent landlord over possible surrender of lease - discussions about types of redevelopment to be allowed and possibility of rezoning - landlord's negotiator tasked with lowering expectations - representation by landlord that it did not foresee office development being permitted and that best possible future development would be a low-rise hotel - effect of representation on decision to surrender lease and price of surrender - lowering of expectations and loss of chance to negotiate higher price for surrender of lease
Legislation Cited: Evidence Act 1995 (NSW)
Fair Trading Act 1987 (NSW)
Cases Cited: Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200
Barnes v Hay (1988) 12 NSWLR 337
Chappel v Hart [1998] HCA 55; 195 CLR 232
Environmental Agency v Empress Car Co (Abertillery) Ltd [1999] 2 AC 22
Gould v Vaggelas [1985] HCA 85; 157 CLR 215
Henville v Walker [2001] HCA 52; 206 CLR 459
I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; 210 CLR 109
Marks v GIO Australia Holdings Ltd [1998] HCA 69; 196 CLR 494
Milner v Delita Pty Ltd (1985) 61 ALR 557
Parramatta City Council v Hale (1982) 47 LGRA 319
Ricochet Pty Ltd v Equity Trustees Executors & Agency Co Ltd (1993) 41 FCR 229
Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332
Tefbao Pty Ltd v Stannic Securities Pty Ltd (1993) 118 ALR 565
Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514
Category: Principal judgment
Parties: Jacfun Pty Limited (Appellant)
Sydney Harbour Foreshore Authority (Respondent)
Representation: Counsel:
Mr B Walker SC, Mr M A Jones SC (Appellant)
Mr C R C Newlinds SC, Mr J Baird (Respondent)
Solicitors:
Landerer & Company (Appellant)
Clayton Utz (Respondent)

File Number(s): 2009/298650
Decision under appeal

Citation:

Jacfun Pty Limited v Sydney Harbour Foreshore Authority [2011] NSWSC 119

Date of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2012] NSWCA 218
Decision Date: 25 July 2012

CaseChat Overview and Summary

Jacfun Pty Ltd (the appellant) appealed to the Court of Appeal of New South Wales against a decision of the Supreme Court which had dismissed its claim against the Sydney Harbour Foreshore Authority (the respondent). The dispute concerned negotiations for the surrender of a lease held by the appellant over premises at Darling Walk. The appellant alleged that representations made by the respondent during these negotiations, regarding the potential for future development of the site, induced the appellant to surrender its lease and accept a lower price than it otherwise would have.

The central legal issues before the Court of Appeal were whether the respondent had engaged in misleading or deceptive conduct in contravention of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) and, if so, what damages were recoverable. Specifically, the court had to determine whether the respondent's negotiator made representations about the unlikelihood of office development and the prospect of a low-rise hotel being the best possible future development, and whether these representations were misleading or deceptive in the circumstances. The court also considered the causal link between any misleading conduct and the appellant's decision to surrender the lease and the price it accepted.

The Court of Appeal found that the respondent's negotiator had made representations that were misleading or deceptive. The court reasoned that the negotiator's statements, intended to lower the appellant's expectations regarding the value of its lease, conveyed a false impression about the future development prospects of the site. The court applied the principles of misleading or deceptive conduct, focusing on the effect of the representations on a reasonable person in the position of the appellant. The court concluded that the appellant had suffered a loss of a chance to negotiate a higher price for the surrender of its lease due to the misleading conduct.

The Court of Appeal allowed the appeal, set aside the orders of the Supreme Court, and entered judgment for the appellant for $1.25 million, with the respondent ordered to pay the appellant's costs in both the Supreme Court and the appeal.

Orders

Orders of the court

1. Appeal allowed.

2. Set aside the orders of the Supreme Court made 8 March 2011 and, in lieu thereof, order:

a) judgment for the plaintiff for $1.25m; and

b) the defendant pay the plaintiff's costs.

3. The respondent pay the appellant's costs of the appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Jacfun Pty Limited v Sydney Harbour Foreshore Authority [2012] NSWCA 218
Hearing dates:	14 and 15 May 2012
Decision date:	25 July 2012
Before:	Allsop P at [1] Macfarlan JA at [71] Barrett JA at [72]
Decision:	1. Appeal allowed. 2. Set aside the orders of the Supreme Court made 8 March 2011 and, in lieu thereof, order: a) judgment for the plaintiff for $1.25m; and b) the defendant pay the plaintiff's costs. 3. The respondent pay the appellant's costs of the appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	TRADE PRACTICES - misleading or deceptive conduct - proposed redevelopment of Darling Walk site - negotiations between appellant tenant and respondent landlord over possible surrender of lease - discussions about types of redevelopment to be allowed and possibility of rezoning - landlord's negotiator tasked with lowering expectations - representation by landlord that it did not foresee office development being permitted and that best possible future development would be a low-rise hotel - effect of representation on decision to surrender lease and price of surrender - lowering of expectations and loss of chance to negotiate higher price for surrender of lease
Legislation Cited:	Evidence Act 1995 (NSW) Fair Trading Act 1987 (NSW)
Cases Cited:	Awad v Twin Creeks Properties Pty Ltd [2012] NSWCA 200 Barnes v Hay (1988) 12 NSWLR 337 Chappel v Hart [1998] HCA 55; 195 CLR 232 Environmental Agency v Empress Car Co (Abertillery) Ltd [1999] 2 AC 22 Gould v Vaggelas [1985] HCA 85; 157 CLR 215 Henville v Walker [2001] HCA 52; 206 CLR 459 I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd [2002] HCA 41; 210 CLR 109 Marks v GIO Australia Holdings Ltd [1998] HCA 69; 196 CLR 494 Milner v Delita Pty Ltd (1985) 61 ALR 557 Parramatta City Council v Hale (1982) 47 LGRA 319 Ricochet Pty Ltd v Equity Trustees Executors & Agency Co Ltd (1993) 41 FCR 229 Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 Tefbao Pty Ltd v Stannic Securities Pty Ltd (1993) 118 ALR 565 Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514
Category:	Principal judgment
Parties:	Jacfun Pty Limited (Appellant) Sydney Harbour Foreshore Authority (Respondent)
Representation:	Counsel: Mr B Walker SC, Mr M A Jones SC (Appellant) Mr C R C Newlinds SC, Mr J Baird (Respondent) Solicitors: Landerer & Company (Appellant) Clayton Utz (Respondent)
File Number(s):	2009/298650
Decision under appeal	Citation: Jacfun Pty Limited v Sydney Harbour Foreshore Authority [2011] NSWSC 119 Date of…