Jaldiver Pty Ltd v Nelumbo Pty Ltd

[1992] FCA 906

Re: JALDIVER PTY LTD; NORMAN HARPER SERVICES PTY LTD; GILLIES BROS PTY LTD;
PETER LEWIN MILLIKAN; MARIA CASIMIR MILLIKAN; CRAIG J DAVEY; JENNIFER J
MARSHALL; JOHN VALPIED RAINBOW TOWER PTY LTD; CON GEORGIOU; GARRY ANGUS;
JENNIFER ANGUS and JORDACHE PTY LTD;
And: NELUMBO PTY LTD; NORMAN HARPER SERVICES PTY LTD and OTHERS
No. V G51 of 1991
FED No. 906
Number of pages - 116
Trade Practices - Damages

COURT

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY
GENERAL DIVISION
Heerey J.(1)

CATCHWORDS

Trade Practices - consumer protection - misleading and deceptive conduct - representations prior to lease of shops in shopping centre - reliance upon conduct - whether damages recoverable for losses after affirmation of lease - Trade Practices Act 1974 ss.52, 82, 87.

Trade Practices - misleading and deceptive conduct - representations as to future matters - onus of proof - Trade Practices Act 1974 s.51A.

Damages - causation - "but for" test - affirmation of leases - trading losses - tax losses - labour wasted - interest accrued - Trade Practices Act 1974 ss.52, 82, 87.

Evidence - similar fact evidence - representations in similar terms to other applicants.

Limitation of Actions - leases of shops in shopping centre induced by misleading and deceptive conduct - when cause of action accrues - Trade Practices Act 1974 s.81(2).

Trade Practices Act 1974 (Cth) ss.51A, 52, 81(2), 82, 87.

Town and Country Planning Act 1961 (Vic) s.52A.

Arontsidis v Illawarra Nominees Pty Ltd (1990) 21 FCR 500

Bateman v Slatyer (1987) 71 ALR 553

Benlist Pty Ltd v Olivetti Australia Pty Ltd (1990) ATPR 51,583

Black v City of South Melbourne (1964) 38 ALJR 309

Boyce v Cafred Pty Ltd (1984) 4 FCR 367

Burns v M.A.N. Automotive (Aust) Pty Ltd (1986) 161 CLR 653

China and South Sea Bank Ltd v Tan Soon Gin (1990) AC 536

Commonwealth Bank of Australia v Smith (1991) 102 ALR 453

Corbidge v Bakery Fun Factory Fun Shop Pty Ltd (1984) 6 ATPR 45,677

D F Lyons Pty Ltd v Commonwealth Bank of Australia (1991) 100 ALR 468

Dominelli Ford (Hurstville) Pty Ltd v Karmot Auto Spares Pty Ltd (Full Court of the Federal Court, unreported, 17 November 1992)

Doyle v Olby (Ironmongers) Ltd (1969) 2 QB 158

Gates v City Mutual Life Assurances Society Ltd (1982) 43 ALR 313

Gould v Vaggelas (1985) 157 CLR 215

H W Thompson Pty Ltd v Allen Property Services Pty Ltd (1983) 48 ALR 667

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1989) 89 ALR 539

Hoch v The Queen (1988) 165 CLR 292

Hungerfords v Walker (1990) 171 CLR 125

Karmot Auto Spares Pty Limited v Dominelli Ford (Hurstville) Pty Ltd (1992) ATPR 40,383

Marsh v Stramare (E and M H) Pty Ltd (1991) 171 CLR 506

Martin v Osborne (1936) 55 CLR 367

Milner v Delita Pty Ltd (1985) 61 ALR 557

Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23

Mood Music Publishing Co Ltd v De Wolfe Ltd (1976) Ch 119

Munchies Management Pty Ltd v Belperio (1988) 84 ALR 700

Musca v Astle Corporation Pty Ltd (1988) 80 ALR 251

Neilsen v Hempston Holdings Pty Ltd (1986) 65 ALR 302

Netaf Pty Ltd v Bikane Pty Ltd (1990) 92 ALR 490

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191

Peet and Co Ltd v Rocci (1985) WAR 164

Sheldon v Sun Alliance Limited (1988) 50 SASR 236, (1989) 53 SASR 97

Shepherd v The Queen (1990) 170 CLR 573

Simpson Ltd v Hubbards Pty Ltd (1982) 44 ALR 695

Stohl Aviation v Electrum Finance Pty Ltd (1984) 56 ALR 716

T N Lucas Pty Ltd v Centrepoint Freeholds Pty Ltd (1984) 52 ALR 467

Tai Hing Cotton Mill v Lui Chong Hing Bank Ltd and Ors (1986) AC 80

Turner v Jenolan Investments Pty Ltd (1985) ATPR 40-571

Van Gervan v Fenton (28 October 1992, not yet reported)

Wardley Australia Limited v State of Western Australia (28 October 1992, not yet reported)

Weldon v Neal (1887) 19 QBD 394

Yorke v Ross Lucas Pty Ltd (1982) 45 ALR 299

HEARING

MELBOURNE

#DATE 2:12:1992

Counsel for the Applicants: Mr E.N. Magee and Mr M. Colbra n

Solicitors for the Applicants: Minter Ellison Morris Fletcher

Counsel for the Respondent: Mr A.G. Southall and Mr L. Rowlands

Solicitors for the Respondent: Blake Dawson Waldron

ORDER

1. Judgment for the second applicant, Norman Harper Services Pty Ltd, against the respondent for $396,193.

2. Declare that:

(a) the lease dated 7 December 1989 between the respondent and the second applicant; and

(b) the guarantee of even date between Peter William Harper and Janet Helen Harper of the one part and the respondent of the other part;

are void ab initio.

3. Judgment for the fourth and fifth applicants, Peter Lewin Millikan and Maria Casimir Millikan, against the respondent for $580,076.

4. Declare that the lease dated 10 October 1989 between the respondent of the one part and the fourth and fifth applicants of the other part is void ab initio.

5. Judgment for the sixth and seventh applicants, Craig Davey and Jennifer Marshall, against the respondent for $105,018.

6. Declare that the lease dated 9 July 1989 between the respondent of the one part and the sixth and seventh applicants of the other part is void ab initio.

7. Judgment for the ninth applicant, Rainbow Tower Pty Ltd, against the respondent for $182,969.

6. Declare that:

(a) the lease dated 17 July 1990 between the respondent and the ninth applicant; and

(b) the guarantee of even date between Christopher Allan Hutchinson and Joanne Elizabeth Hutchinson of the one part and the respondent of the other part, are void ab initio.

9. Judgment for the tenth applicant, Con Georgiou, against the respondent for $138,145.

10. Declare that the lease dated 19 June 1990 between the respondent and the tenth applicant is void ab initio.

11. Judgment for the eleventh and twelfth applicants, Garry Angus and Jennifer Angus, against the respondent for $182,945.

12. Declare that the lease dated 17 August 1989 between the respondent of the one part and the eleventh and twelfth applicants of the other part is void ab initio.

13. Judgment for the thirteenth applicant, Jordache Pty Ltd, against the respondent for $269,341.

14. Declare that:

(a) the lease dated 5 June 1989 between the respondent and the thirteenth applicant; and

(b) the guarantee of even date between the respondent of the one part and Peter Francis O'Donnell and Jillian Cheryl O'Donnell of the other part;

are void ab initio.

15. Judgment for the cross-respondents against the cross-claimant on the cross-claim.

16. Order that question of costs be adjourned for argument on a date to be fixed.

JUDGE1

I Introduction

HEEREY J. In April 1989 the Central Square Shopping Centre in Ballarat (the Centre) opened for business. It was not a success. Some tenants traded for a while at a loss and then simply abandoned their shops. The present case is concerned with tenants who claim they were led by the owner of the Centre and its agents into taking up leases by conduct that was misleading and deceptive and thus in contravention of s.52 and other provisions of Part V of the Trade Practices Act 1974 (the Act).

1. Some of the applicants who joined in these proceedings have withdrawn their claims. Those with which the trial has been concerned are as follows:
   

Second Applicant Norman Harper Services "House and Garden" Pty Ltd (Mr Peter Harper (furniture and and Mrs Janet Harper) furnishings, manchester, glassware, kitchenware, gifts etc) Fourth and Fifth Mr Peter Millikan and Pharmacy Applicants Mrs Maria Millikan Sixth and Seventh Mr Craig Davey and Florist Applicants Ms Jennifer Marshall Ninth Applicant Rainbow Tower Pty Ltd Lingerie (Mrs Joanne Hutchinson) Tenth Applicant Mr Con Georgiou "Major D's Hot Dog Shop" Eleventh and Twelfth Mr Garry Angus and Newsagency Applicants Mrs Jennifer Angus Thirteenth Applicant Jordache Pty Ltd (Mr Liquor Shop Peter O'Donnell)

1. I shall, where the context is appropriate, use the term "applicants" as meaning, or including, the individuals who controlled the respective corporate applicants.

2. The respondent owner has cross-claimed against the applicants and, in some cases, guarantors of their leases, for arrears of rent and other amounts due under those leases.

II The Central Square Shopping Centre
5. Ballarat, the third city of Victoria, has a population of some 70,000. For about 60 years there has been a Myer department store in Ballarat on the corner of Armstrong Street and Sturt Street, the main street of the city. In more recent times, a Target store was added. Target is part of the Coles Myer Group and sells clothing at the cheaper end of the market, together with other household items. Adjacent to the Myer store was a car park owned and operated by the City of Ballaarat (the official name of the local government body retains the old spelling). The car park contained a number of levels over three floors.

1. The essential elements of the Centre involved:
   

- doubling the size of the Target store

- introducing a Bi-Lo Supermarket (another member of the Coles Myer Group)

- increasing the existing car park by the construction of another floor containing two extra levels and providing further car parking on the roof of the expanded Target store - some 50 specialty shops extending over two floors in an enclosed air conditioned environment

- a third floor for offices

- closing Armstrong Street by agreement with the City of Ballaarat and converting it into a pedestrian mall.

1. On paper the project had some attractive features. It would be the only enclosed centre in Ballarat and would offer one-stop shopping integrated with under cover parking. The Ballarat climate can be bleak.

2. The main existing rival centres were the Bridge Street Mall, two blocks to the east in the city itself, and the Wendouree Village Shopping Centre, about four kilometres away adjoining a Housing Commission estate. There were also individual shops in the vicinity of the Centre.

3. The usual sequence adopted by the developer of a shopping centre is to obtain major tenants, such as Myer, Target and Bi-Lo in the present case, which will operate as a drawcard. Then tenancies are sought from national or statewide retailers such as Roger David, Edments and Just Jeans for some of the specialty shops. Finally local traders are recruited. The tenant mix, in the sense of the identity of the various retailers, and the range and quality of the goods and services they provide, is of vital importance. At each stage of the letting process, a potential tenant will be concerned to know what other tenants are committed to the centre.

4. The respondent Nelumbo Pty Ltd, the owner of the Centre, was controlled by the Dayton Group of companies. Nelumbo was a joint venture vehicle, but the other proprietor played no visible part in the events with which this case is concerned. The Victorian Manager of Dayton was Mr Peter Cahill.

5. In about May 1988 Dayton appointed Raine and Horne Pty Ltd as sole leasing agent for the Centre. The employee of Raine and Horne who had most of the direct dealings with the applicants was Mr Donald Scott. He worked from an office on the third floor of the Centre. His immediate superiors were Mr Ted Parker and Ms Alexandra Forrester who were both based in Melbourne. By about September 1988 some 28 of the 50 shops in the Centre were leased to national chain retailers and the agent turned its attention to local traders.

6. The rents being sought for specialty shops in the Centre were considerably higher than existing rentals in the Bridge Street Mall and elsewhere in Ballarat. Initial lettings were disappointing. By early 1989 Raine and Horne were under pressure from Dayton to improve their performance. On 17 January 1989 Mr Scott reported to his superior Mr Parker following a meeting with Mr Cahill. Mr Scott wrote that Mr Cahill "was not very impressed with the long delays in following up prospective tenants". It was noted that Mr Cahill had called a meeting for 26 January "where it is expected that if there is not a big improvement in the leasing position, he (Cahill) would at that meeting consider calling in an additional agent to assist" and that "if the Centre is not 80 per cent leased by March, Target have written into their lease a clause which would affect Dayton monetary wise". Later during the year another firm, Snow Simpson (Aust) Pty Ltd, was engaged as an additional selling agent. Snow Simpson subsequently merged with Jones Lang Wootton who in mid 1989 were appointed managing agents for the Centre.

7. Thus by the time the respondent's agents, and particularly Mr Scott, were dealing with the applicants, shops in the Centre were not letting particularly well, although the applicants themselves were not to know that; indeed some of the representations complained of involved positive assertions to the contrary by the respondent's agents.

8. Each applicant was looking not at an existing business with established and demonstrable turnover derived from an existing clientele but at a new and untried venture. A critical element for all applicants was the extent of the custom which was going to be attracted to the Centre. From the applicants' point of view, any prediction as to this depended largely on matters within the knowledge of the respondent and its agents. It was they, and not the applicants, who might be expected to know about matters such as the tenant mix and level of promotional expenditure which would be critical to the success of the Centre.

9. Another background feature of some importance is that from an early stage the respondent was contemplating selling the Centre. This provided an added incentive for the respondent and its agent to obtain tenants for the Centre. At the same time there was a disincentive for the respondent to spend money on works which would not be reflected in a price received on sale. Thus on 20 May 1988 Raine and Horne wrote to Mr Cahill discussing the realisable value of the Centre and pointing out in relation to the proposed reinstatement of the verandah around the Myer store that such work would not affect the end value of the property. Likely buyers would, Raine and Horne said, act on criteria relating "strictly to the immediate investment return and perceived long term growth of the Centre. The maximum price or value will reflect the strength of the tenancy mix and rental levels achieved. Therefore the outlay on unnecessary items such as the verandah, tiles etc would not be warranted".

III The Applicants at Central Square
16. I shall say something about the background of the applicants and how they came to be involved with the Centre and the fate of their respective ventures. The alleged representations which are said to constitute misleading and deceptive conduct will be considered in a subsequent section.

1. Harper 17. Mr Harper's business background is in accounting and administration. He has held posts as Secretary/Chief Executive of the Master Plumbers Association of Victoria and Assistant and Acting Registrar of the Law Institute. His last employment before embarking on the business at the Centre was as Industrial Relations Manager and later Personnel Services Manager for the Port of Geelong Authority. While living in Geelong he and his wife became friendly with a Mr and Mrs John White who were the proprietors of a successful House and Garden shop in that city. House and Garden shops were well known franchised operations. Mr and Mrs White also knew Mr Scott who had formerly been the Manager of the Market Square Shopping Centre in Geelong. Scott approached the Whites because he was anxious to have a House and Garden shop at the Centre. The Whites told Mr Harper that there had previously been a House and Garden shop in Ballarat which had failed, not because of the business itself, but because of some property investment failures of the proprietor. The Whites were enthusiastic about the prospects of a House and Garden shop in the Centre at Ballarat. Mr Harper arranged for his company Norman Harper Services Pty Ltd to retain the Whites and also another House and Garden shop proprietor, Mr Duncan Ansell, as consultants for a fee of $50,000 to advise in the setting up and conduct of a House and Garden business at Ballarat.

2. Mr Harper and his wife first went to Ballarat on 25 March 1989 and met Mr Scott. Mr Scott gave the Harpers a copy of the promotional brochure for the Centre prepared by Raine and Horne. There followed negotiations with Mr Scott and Mr Johnson of Dayton, including a meeting with Mr Johnson and others on 19 April. On 5 May Mr Harper's company executed an offer to lease. They commenced their tenancy on 8 June and after the necessary fit out opened for business on 30 June. Mr Harper's company did not execute the lease until 7 December, there being a series of protracted negotiations as to its terms with the respondent's agent. He was finally compelled to do so by the agent re-entering and changing the locks, an action which seems to have been bereft of any legal justification since it was not suggested rent was then in arrears.

3. Mr Harper was the leader in forming a tenants committee which commenced to meet from about September 1989 onwards. By May 1990, 24 tenants of the Centre had agreed to engage Messrs Minter Ellison to represent them in negotiations with the respondent to resolve various disputes. At a meeting of the tenants held on 8 April 1991 the Centre Manager advised that a survey had been conducted by Brian Sweeney and Associates which showed that the Centre had achieved market penetration of only 7 per cent of Ballarat shoppers and even less in respect of regional shoppers.

4. On 29 June 1991 Bi-Lo closed its store at the Centre. At a general meeting of tenants held on 31 July 1991 Mr Snow of Jones Lang Wootton stated that for a centre to be regarded as being successful it was necessary to achieve market penetration of 18 to 21 per cent. As a result of continuing problems, personal stress and financial losses associated with the business Mr Harper ceased operations on 22 September 1991.

5. Millikan
   21. Mr Millikan has been a registered pharmacist since 1974 and has had extensive experience as a pharmacist both in Victoria and Great Britain and in more recent times in country Victoria. Since 1978 he has conducted a pharmacy in Maryborough, about 70 kilometres from Ballarat, and has continued to operate this pharmacy in partnership with his wife who is also a registered pharmacist. Since the early 1980s he has been involved with the Amcal group of pharmacists.

6. On 31 March 1989 the area manager for Amcal spoke to Mr Millikan and asked whether he was interested in establishing an Amcal Pharmacy at the Centre. She suggested that if he was interested he should contact Mr Robinson of Snow Simpson.

7. Mr Millikan and his wife met with Mr Robinson at the site on 2 April and on the following day at Mr Robinson's office in South Melbourne. Mr Robinson provided them with a copy of the brochure and went through it in detail. Later Mr Millikan spoke with Mr Scott. On 26 April 1989 he signed an offer to lease conditional on the approval of Amcal which was subsequently granted in June. He opened for business in late May. The lease was finally executed on 10 October 1989.

1. Mr Millikan and his wife, who have three sons, had always intended to move from Maryborough to a larger centre when their children were old enough to go to secondary school. Their strategy was to break even in the first year of the pharmacy at Central Square with a salaried manager and then to sell their Maryborough pharmacy and move to Ballarat.

2. On 13 February 1991 Mr Millikan submitted to Jones Lang Wootton a detailed submission arguing a case for rent relief. The submission enclosed profit and loss statements and noted that he was absorbing losses in excess of $100,000. The submission was rejected by Jones Lang Wootton. Finally Mr and Mrs Millikan walked out of their business on 23 August 1991.

3. Davey
   26. Mr Davey and his wife Ms Marshall operated two businesses at Wendouree Village, a florist shop and a novelty gift shop called "A Frivolous Affair". In 1988 Mr Davey read in the local newspaper about the development of the Centre and obtained a copy of the brochure from Raine and Horne. He then contacted Mr Scott and had many conversations with him between the end of 1988 and March 1989. He and his wife signed an offer to lease on 31 January 1989 and commenced business in about April. They conducted the businesses at a loss in the 1990 and 1991 financial years. Due to the constant financial drain upon their other businesses and physical hardship of seeking to maintain the business, Mr Davey and his wife tried to sell the business. They engaged an agent but received no offers of interest. They closed their shop on 13 May 1991.

4. Hutchinson
   27. Mrs Hutchinson has conducted a lingerie business in the Bridge Street Mall for approximately five years. Her husband has had limited involvement in this business as he has been primarily responsible for a drilling and water boring business which he conducts. Mrs Hutchinson was approached by Mr Edward Lindsay of Raine and Horne on 16 February 1989 about the Centre and subsequently negotiated with him. He sent her a copy of the brochure. Based on the information obtained from Mr Lindsay and the brochure, she had her accountant prepare cost projections and cash flows. Mrs Hutchinson's company Rainbow Tower Pty Ltd executed an offer to lease on 30 March 1989 and she commenced business on 28 April. They had a good trading period at Christmas 1989. But the turnover started to drop in 1990 and by September it was "really getting bad" compared to her shop in the Bridge Street Mall which was still doing quite well. She and her husband decided to close the business. The shop was closed on 23 August 1991.

5. Georgiou
   28. Mr Georgiou had for many years worked in his family's fruit and vegetable business at the Footscray Market. He then commenced operation as a carrier and also bought a hot dog and ice cream business in Sandringham in 1983. He conducted that business successfully for about two years and sold it in 1985. He then commenced to look into the possibility of establishing a hot dog food outlet and continued this investigation off and on over a 12 month period.

6. In February 1989 he established a business called Major D's at a shop in the Highpoint City Shopping Centre in Maribyrnong. His objective was to establish this as a franchised business in major shopping centres. In March 1989 he was told of the development at the Centre and met with Mr Robinson of Snow Simpson in Melbourne. Mr Robinson went through the brochure page by page making additional comments and highlighting passages in the document. After inspecting the site and having further discussions with Mr Scott he signed an offer to lease on 11 April 1989 and commenced business on about 22 June. After some months of trading he slowly commenced to establish repeat business with staff at the Centre and regular shoppers. But he received many complaints regarding the lack of seating in the food court and lack of pleasant atmosphere, difficulties with the car park, the state of the Armstrong Street Mall, the number of empty shops and the fact that the office level was still vacant. During 1990 he decided to sell the business and cut his losses but found no local agents were prepared to receive instructions to sell the business at any price. He even offered to pay a fee himself but was informed that he was wasting his time trying to sell a business at the Centre as half the businesses had been up for sale for some time. Finally Elders indicated that they would try to sell but no enquiry was received by them. The only enquiry he received was from a Mr Fisher but that was merely to comment that the shop next door to Mr Georgiou's was available for nothing but he (Fisher) preferred Mr Georgious's business and location.

7. Finally, he heard that the Centre management had allowed a company to occupy the shop next door to his free for the Christmas period and longer if they wished. He felt there was little he could do so he closed the business and left on 14 January 1991. 6. Angus
   

8. From 1986 Mr Angus occupied a mixed business and sub-newsagency in Mair Street Ballarat in partnership with his mother. Prior to this venture he had worked as an assistant manager in a licensed grocery business for about four years and before that about ten years in newsagencies commencing as a paper boy and working up to full time management.

9. As a result of publicity in the local paper he contacted Mr Scott and met with him at the Centre in February 1989. Mr Scott gave him a copy of the brochure. After discussions with Mr Scott he signed an offer to lease on 15 March 1989. Prior to finally determining to establish a business at the Centre he spoke with Mr Graham McBain, an authorised newsagent in Ballarat. Apparently Mr Angus needed Mr McBain's approval to establish a sub-newsagency. He also spoke to his accountant and his former employer Mr Berkeley, who conducted a newsagency at East Bentleigh, as well as to Mr Kelly, the Magazine Circulation Manager for Gordon and Gotch.

10. Mr Angus commenced business on 27 April. The business has made little profit and he and his wife have continued to work in the shop without pay to reduce overheads in an attempt to sustain the business. As at the end of 1989 he realised that much of what he had been told had turned out to be untrue, but he thought there was little he could do. As he said in evidence "I had a lease, I had no choice, I tried to get out. I went to my solicitors and asked them to find me a way out and they told me there was no way out of the lease". The business made a profit of approximately $9,952 in the 1990 financial year but that was without any wages for Mr and Mrs Angus. They lived in a caravan at the home of Mr Angus' mother and just "kept on running the business, ... trying to make it work because we were committed to a lease ... and the owners were putting a lot of pressure on us, threatening all types of legal action ...". Mr and Mrs Angus are the only applicants who remain in their business at the Centre. However, they also, along with other applicants, seek cancellation of their lease.

11. O'Donnell
    34. Mr O'Donnell has had over 20 years experience in the liquor industry including work as a relieving manager for the Carlyon Group, managing four licensed supermarkets in Geelong and leasing and managing the Western Hotel in Ballarat successfully for a period of seven years. In 1985 his company Jordache Pty Ltd purchased the Golden City Hotel in Ballarat.

12. Towards the end of 1988 Mr Scott called on Mr O'Donnell at the Golden City Hotel and introduced himself. The initial subject of discussions was a proposal for the leasing of the old Town Hall Hotel and refurbishing it as part of development of the Centre. However this project did not proceed and later discussions turned to the possibility of Mr O'Donnell establishing a packaged liquor outlet. Mr Scott gave him a copy of the brochure. Mr O'Donnell's company executed an offer to lease on 9 January 1989 subject to the grant of a liquor licence. This was subsequently approved and Mr O'Donnell commenced trading under the name "Square Deal Liquor" on 5 June 1989. The business made substantial losses because the Centre did not generate sufficient customers. Because of the financial drain that the business was placing upon the Golden City Hotel Mr O'Donnell closed the business down on 19 January 1991. Prior to the closure he made attempts with a firm of hotel brokers to sell the business but received no enquiries whatsoever despite advertisements. In the middle of the previous year Mr O'Donnell's solicitors wrote to Dayton a letter dated 17 July 1990 which included the following:
    

"We understand that you have had previous discussions with Mr O'Donnell about the difficulties that his Liquor Shop Business has been faced with since its establishment twelve months ago. Our client is appreciative of the breathing space that he has been afforded so far as rent is concerned to date however despite this assistance the business continues to be a financial disaster and our client now sees no alternative but to close it down. Strenuous efforts over the last six months to sell the business have proved fruitless and it is now apparent that the business is not saleable at any price and our client's Bank is not prepared to back it any more.

The purpose of this letter is emphasise to you the impossible situation that confronts our client due to the failure of the Central Square development to become a viable shopping complex and as a last resort to offer the Liquor Licence to the Lessor or its nominee in preference to our client simply surrendering it. If the Lessor is interested in a proposition along these lines then we would be pleased if negotiations could be commenced as soon as possible as the current state of affairs cannot continue."

1. Jones Lang Wootton on behalf of the respondent did offer the shop to a prospective tenant at a rental of $6000 per annum plus 3 per cent of sales over $200,000 (in contrast with the rent of approximately $45,000 per annum for which Mr O'Donnell was liable). Even at this rental the agent could not find a tenant for the shop.

IV The Representations and their Truth or Falsity
37. The cases of the various applicants are based on representations alleged to have been made to them prior to their entering into leases. Some of the alleged representations deal with future matters and thus attract the operation of s.51A of the Act which provides as follows:

"51A. (1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.

(2) For the purposes of the application of sub-section (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.

(3) Sub-section (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead."

1. Many of the alleged representations are common to most of the applicants' cases. In this section I shall deal with the issues whether the various representations alleged were made and, if so, whether they were false. In some instances it is common ground that the particular topic was raised in the course of negotiations with however a small, but vital, difference in the versions of the two sides as to what was said. Typically the respondent says that something was mentioned as an estimate, prediction, probability or possibility while applicants say there was an unqualified promise or assurance. In other cases it is flatly denied that the representation was made. In the case of some representations as to future matters, the respondent admits the representation was made and that the future event or circumstance did not occur but says there were reasonable grounds for making the representation at the time.

2. Similar Facts
   39. In considering whether a representation was made to a particular applicant, should I treat as relevant and probative the fact that, or the allegation that, essentially the same representation was made to other applicants? The answer to these questions requires a brief examination of the much litigated issue of "similar fact" evidence in civil cases.

3. The starting point to any discussion is the famous case of Martin v Osborne (1936) 55 CLR 367. The respondent had been charged under the Transport Regulation Act 1933 (Vic) with operating a commercial passenger vehicle (defined in that Act as one used for carrying passengers for reward) on a public highway without a licence. The offence was alleged to have occurred on 1 November 1935 when the respondent drove his Hupmobile, with several passengers, from Melbourne to Ballarat. There was no evidence that those passengers were carried for reward on that day. However, the prosecution proved that on the two preceding days the respondent drove the same car, with passengers, between Ballarat and Melbourne and back again. The journeys were commenced from Ballarat "at a point in Sturt Street outside a tea-room or sweet-shop" (55 CLR at 371). The precise location in Sturt Street of that tea-room or sweet shop is lost in the mists of time, but perhaps the base from which Mr Osborne's Hupmobile plied its illicit trade may have been not far from what was to become, half a century later, the Central Square Shopping Centre.

4. The High Court held that the evidence of what happened on the two previous days was admissible to show that the respondent was operating the car regularly for the carriage of passengers between the two cities and that such evidence was sufficient to make it improbable that the passengers were not carried for reward on 1 November. Dixon J (with whom Latham C.J. agreed) said (at 376):
   

"The frequency with which a set of circumstances recurs or the regularity with which a course of conduct is pursued may exclude, as unreasonable, any other explanation or hypothesis than the truth of the fact to be proved."

1. Where this kind of issue arises in criminal trials the courts have long been concerned to protect accused persons from the dangerous unfairness of juries convicting on the basis of propensity. The most recent authoritative restatement of principle is in Hoch v The Queen (1988) 165 CLR 292. Mason C.J., Wilson and Gaudron JJ. said (at 294, citations omitted):
   

"The basis for the admission of similar fact evidence lies in its possessing a particular probative value or cogency by reason that it reveals a pattern of activity such that, if accepted, it bears no reasonable explanation other than the inculpation of the accused person in the offence charged: see Dixon J.'s discussion in Martin v. Osborne. In that same case Evatt J. pointed out that it bears that probative value or cogency not as a matter of deductive logic but by reason that it allows for 'admeasuring the probability or improbability of the fact or event in issue, if we are given the fact or facts sought to be adduced in evidence'. Assuming similar fact evidence to be relevant to some issue in the trial, the criterion of its admissibility is the strength of its probative force: see Perry v. The Queen; Sutton v. The Queen; Reg. v. Boardman. That strength lies in the fact that the evidence reveals 'striking similarities', 'unusual features', 'underlying unity', 'system' or 'pattern' such that it raises, as a matter of common sense and experience, the objective improbability of some event having occurred other than as alleged by the prosecution.

Where the happening of the matters said to constitute similar facts is not in dispute and there is evidence to connect the accused person with one or more of the happenings evidence of those similar facts may render it objectively improbable that a person other than the accused committed the act in question, that the relevant act was unintended, or that it occurred innocently or fortuitously. The similar fact evidence is then admissible as evidence relevant to that issue.

Where, as here, an accused person disputes the happenings which are said to bear a sufficient similarity to each other as to make evidence on one happening admissible in proof of the others, similar fact evidence bears a different complexion for the issue is whether the acts which are said to be similar occurred at all. In such a case the evidence has variously been said to be relevant to negative innocent association (R. v. Sims) or as corroboration (Reg. v Kilbourne) but the better view would seem to be that it is relevant to prove the commission of the disputed acts: see Boardman, per Lord Hailsham and Lord Cross; Sutton, per Deane J. Certainly that is the thrust of its probative value. That value lies in the improbability of the witnesses giving accounts of happenings having the requisite degree of similarity unless the happenings occurred. So much is clear from the well-known passage in the speech of Lord Wilberforce in Boardman:

'This probabitive force is derived, if at all, from the circumstance that the facts testified to by the several witnesses bear to each other such a striking similarity that they must, when judged by experience and common sense, either all be true, or have arisen from a cause common to the witnesses or from pure coincidence.'

Similar fact evidence which does not raise a question of improbability lacks the requisite probative value that renders is admissible. When the happenings which are said to bear to each other the requisite degree of similarly are themselves in issue the central question is that of the improbability of similar lies."

1. In civil cases, there is some conflict of authority as to whether the court's approach should be the same. Lord Denning MR in Mood Music Publishing Co Ltd v De Wolfe Ltd (1976) Ch 119 at 127 said:
   

"In civil cases the courts have followed a similar line but have not been so chary of admitting (evidence of 'similar facts'). In civil cases the courts will admit evidence of similar facts if it is logically probative, that is, if it is logically relevant in determining the matter which is in issue: provided that it is not oppressive or unfair to the other side: and also that the other side has fair notice of it and is able to deal with it."

1. The question was extensively discussed at first instance and on appeal in Sheldon v Sun Alliance Limited (1988) 50 SASR 236, (1989) 53 SASR 97, a case concerning an arson defence to a claim on a fire policy. The disputed evidence was of earlier fires, followed by insurance claims, in various premises owned and/or occupied by the plaintiff's husband and family. The trial judge, Von Doussa J, concluded that he should only receive the evidence in question where it "passes the test of admissibility which applies in criminal proceedings": 50 SASR at 246-7. On appeal Bollen J (with whom Prior J agreed on this point: 53 SASR at 155) took a different view. After referring to Martin v Osborne and the 3rd Australian edition of Cross on Evidence par 11.55, Bollen J said of evidence of this kind (at 145):
   

"It is circumstantial evidence. It should be admitted where it is logically probative of a fact in issue. The safeguards required in criminal proceedings are not required in civil proceedings."

1. I would respectfully agree with Bollen J's view and also the comment in the subsequent edition of Cross (4th Australian edition par 21,280) that while "a firm hand should be imposed upon enquiry into similar facts" in non-jury civil trials, this control can be exercised by "containing the parties to the matters in issue raised in the pleadings and by a sensible application of the rules of relevance". I might note here that the practical problems of fair notice mentioned in Mood Music and also discussed in Cross (4th Australian edition par 21,285) do not arise in the present case. The evidence in question is all evidence of the various applicants themselves and the respondent was well appraised of its content by pleadings, particulars, answers to interrogatories and affidavits filed and served before trial.

2. More specifically, there are now a number of reported cases where applicants complaining of misrepresentations in contravention of Part V of the Act have sought to lead evidence of similar statements made by or on behalf of the respondent to other persons. In Mister Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23 and Gates v City Mutual Life Assurances Society Ltd (1982) 43 ALR 313 such evidence was admitted. In H.W. Thompson Pty Ltd v Allen Property Services Pty Ltd (1983) 48 ALR 667, Boyce v Cafred Pty Ltd (1984) 4 FCR 367, Turner v Jenolan Investments Pty Ltd (1985) ATPR 40-571, Peet and Co Ltd v Rocci (1985) WAR 164, Arontsidis v Illawarra Nominees Pty Ltd (1990) 21 FCR 500 and D.F. Lyons Pty Ltd v Commonwealth Bank of Australia (1991) 100 ALR 468 the evidence was rejected.

3. I do not think a detailed review of these cases would be helpful. On each occasion the trial judge had to determine whether, in the particular circumstances of the case before him, the proffered evidence was logically relevant to the fact in issue. In the present case it seems to me there are circumstances which tip the balance in favour of admissibility.

4. The Centre was a new project. Mr Scott was for a period of some months based at the Centre and his working days were solely concerned with the task of securing tenants for the shops. The evidence as to how he went about his work seems to me to be a case of a business practice or system or pattern: cf Arontsidis at 509. What he told prospective tenants was an integral and essential part of his work. Further, it was to be expected that there would be information which prospective tenants would be anxious to know and which would be within the knowledge of Mr Scott. And in this respect, the tenants would, to the knowledge of Mr Scott, all be on the same footing. Irrespective of their own individual financial circumstances or the character of their particular proposed businesses, they would each be concerned to know about, for example, outgoings and the tenant mix. So if Mr Scott said something about this subject matter to one, there is a likelihood to my mind that he would have said the same thing to another. Thus Mr Scott stood in a different position to the various prospective tenants than did the bank manager to the customers in D.F. Lyons, where each customer's circumstances would be individual to him or herself: cf 100 ALR at 478. And the fact that other salesmen besides Mr Scott such as Mr Lindsay, Mr Robinson and Mr Johnson are alleged to have made the same representations points to a business practice or system being adopted by those who worked on behalf of the respondent going beyond individual flourishes.

5. Moreover, one cannot ignore the quantitive element. If only one or two persons out of a potentially large number could be found to give similar fact evidence then that in itself weakens the logical probative force of the evidence: Arontsidis at 509. But, in the words of Dawson J in Shepherd v The Queen (1990) 170 CLR 573 at 580
   

"... the probative force of a mass of evidence may be cumulative, making it pointless to consider the degree of probability of each item of evidence separately."

1. The "improbability of similar lies" (cf Hoch, supra) increases in direct proportion to the number of occasions produced to the court on which the same story is told. In the present case there is, in relation to many of the representations complained of, an experience that they were encountered by most applicants in virtually identical form.

2. The present case has the feature that the similar fact evidence is not evidence proffered of an allegedly similar experience encountered by a stranger to the litigation in dealings with the respondent. The evidence in question is directly admissible in support of the case of each applicant who gives it. Therefore the question is not so much one of admissibility as whether evidence of applicant A, undoubtedly admissible in respect of his case against the respondent, can be relied on in deciding whether I should accept the evidence of applicant B as to a similar allegation. Thus there is no risk of a "cobweb of subsidiary factual disputes ... and further issues of credit" of which Gummow J spoke in D.F. Lyons (at 478).

3. It seems to me therefore that I should treat the evidence of similar representations as logically probative.

4. Credibility
   53. I found the evidence of the applicants persuasive on the issue of the alleged representations and indeed generally throughout the case. They were all subjected to thorough and skilful cross-examination. They struck me, by and large, as intelligent, truthful and hardworking. I recognise the fact that their close proximity to each other while they were at the Centre meant that they would naturally discuss their complaints with each other. But I did not detect any signs of individual applicants' accounts being the result, consciously or otherwise, of shared and combined communal recollection. As one might have expected, some of the applicants were more impressive than others. There was valid criticism of some of them as witnesses. But there is no applicant of whom, at the end of the case, I was left with the impression that I could not accept his or her evidence without corroboration.

5. Another general point on credibility was the emphasis which the respondent's counsel put on the delay of most applicants in making complaint to the respondent or its agents or solicitors about the alleged representations. An example is the case of Mrs Hutchinson whose solicitors had correspondence in 1989 with the respondent's managing agent Jones Lang Wootton (who had by this stage replaced Raine and Horne) about water damage but made no complaint about the matters raised in this case, even though by that stage a number of the alleged representations had been revealed to be untrue. Similarly the respondent's counsel pointed to the fact that many allegations of misrepresentation were only raised by way of amendment to the statement of claim long after the proceedings were instituted. All this is legitimate criticism, but it does not in my view lead to the conclusion that the representations were not in fact made, that I should disbelieve the evidence of witnesses whom I find to be truthful, whose accounts are not inherently improbable and whose evidence is made the more believable by the fact that the same thing was said to four, five or six others. And, as will be seen especially in the case of the representation about outgoings, there is some convincing documentary corroboration.

6. Mr Scott deposed in his affidavit that although he could not recall "exact details of dates and places of conversations with particular tenants", he had "a clear recollection of the nature and substance of discussions, and the information ... conveyed to tenants prior to leasing". In cross-examination however he was much less confident and on numerous occasions was ready to concede the fallibility of his memory.

7. Mr Scott of course dealt not only with the applicants but with many other prospective tenants. He seems to have kept little or no notes of such conversations (a failure frequently raised by the respondent's counsel as a criticism of the applicants). It seems inherently more likely that an individual applicant, dealing with a conversation which involved a major personal decision for him or herself, would have a better recollection than Mr Scott, to whom such conversations were a routine day to day event. At best, the evidence of a person in the position of Mr Scott must inevitably involve a degree of reconstruction. Because a particular event, such as the letting of a shop to Fletcher Jones, was only a reasonable possibility and not an established fact, then, as his reasoning typically went, he would not have told tenants it was. I think much of Mr Scott's evidence suffered from this defect. I have to say that in general he was not a convincing witness. That conclusion I base both on observed demeanour and on some contemporary documents which were inconsistent with his evidence. Where his evidence, especially that as to conversations in 1989, conflicts with that of the applicants, I prefer the latter.

8. I now turn to the representations alleged. The words appearing in quotation marks are the representations as alleged in par 6 of the further amended statement of claim.
   3. Outgoings
   

"That outgoings chargeable in respect of each lease would not exceed $8 per square foot per annum".

1. The representation is said to have covered both statutory outgoings such as Council and Water Rates and Land Tax and variable outgoings such as cleaning, security and insurance for the Centre. It is admitted that the figure of $8 per square foot was mentioned in the course of negotiations with all applicants. However the respondent's case is that it was made clear that the figure was only an estimate. It is also said that the $8 included a share of statutory outgoings on common areas of the Centre but not rates in respect of individual shops and that this was expressly mentioned to at least some of the applicants.

2. The following evidence was given by applicants.

3. Mr Harper swore that on 25 March 1989 he and his wife met Mr Scott at the Centre. After looking at three available sites which Mr Scott said were still available for leasing, they went to his office. In the course of discussion Mr Scott stated that outgoings would not exceed $8 per square foot. Mr Harper swore that Mr Scott "stressed that $8 would more than cover all outgoings". A further meeting took place on 19 April attended by Dayton's Development Manager Mr Tony Johnson, Mr Scott, two officers from the State Bank of Victoria and Messrs John White and Duncan Ansell. Mr Harper says that in the course of the meeting Mr Johnson (after checking with Mr Scott) said that outgoings would not exceed $8 per square foot. In response to specific questions from Mr Harper, Johnson and Scott advised that the $8 "would cover all outgoings including rates, taxes, water rates, air conditioning, land tax, rubbish, cleaning and security".

4. Mr and Mrs Millikan's initial contact was with Mr Ian Robinson of Snow Simpson. On 2 April 1989 Mr and Mrs Millikan met Mr Robinson at the Centre. Mr Robinson, in answer to a question from Mr Millikan, said that "the outgoings would not exceed $8 per square foot per year on the basis that $4 would run the Centre and $4 would go to the local government authority." Robinson said that this figure "was a maximum and should in fact be less than the figure so stated."

5. Mr Davey says that he and his wife Ms Jennifer Marshall had conversations with Scott at the Centre between about December 1988 and March 1989. In the course of those conversations Mr Scott said to them in substance that the outgoings applicable to the Centre would not exceed $8 per square foot and that "this figure included Council rates as well as the usual expenses required for the day to day running of the centre". However he agreed in cross-examination that the discussion about rates took place in March, which was after he signed the offer to lease.

6. Mrs Hutchinson was contacted on 16 February 1989 by Mr Edward Lindsay from Raine and Horne. At the time she had been conducting a lingerie shop in the Bridge Street Mall for over four years. Mr Lindsay told her that he was very keen to have her operate at the Centre and had "the ideal shop" for her. He described the size and location of this shop (which was Shop No. 1 situated next to Myer) and gave her a rental figure per square foot. Mrs Hutchinson says that she asked about the cost of outgoings as she was particularly aware of this exposure from her business in Bridge Street. Mr Lindsay told her that "under no circumstances would they be greater than $8 per square foot inclusive of Council and Water rates". Mrs Hutchinson says that he "later confirmed this on several occasions by telephone".

7. Mr Georgiou was introduced to Mr Ian Robinson of Snow Simpson in March 1989. At a meeting in Melbourne Mr Robinson, in the course of discussing rent, stated that the amount to be charged for outgoings would be $8 per square foot.

8. Mr Garry Angus contacted Mr Scott in early February 1989 as a result of reading an article about the Centre in the Ballarat Courier. After an inspection of the Centre the two men had a long discussion in Mr Scott's office. Mr Scott told Mr Angus that the base rental for the shop he was looking at was $40 per square foot but was negotiable. He said that outgoings would be $8 per square foot. A short time later there was another meeting at the Centre for the purpose of showing Mr Angus' wife and parents the Centre. Mr Angus says his wife and his father asked the same question about, amongst other things, outgoings and Mr Scott provided the same answer.

9. Mr Peter O'Donnell, the licensee of the Golden City Hotel in Ballarat, was approached by Mr Scott in late 1988. The two men had a number of meetings. At one of the meetings Mr Scott told him that outgoings would not exceed $8 per square foot inclusive of water and Council rates.

10. When the first rate notices were received by tenants in about September of 1989 it became clear that the figure for outgoings would be much in excess of $8 per square foot because of the level of Council rates. Most of the applicants say that from what they were told by the respondent's agents they believed that they would not be rated separately and that the $8 per square foot would include the rates on their shops as well as their individual share of rates levied on the Centre as a whole.

11. The applicants' case is corroborated by a number of documents. One was a note in Mr Scott's handwriting which he gave to a prospective tenant of shop 33 (not an applicant). It was in these terms:
    

"Shop 33

625 sq ft

$40 p s f basic rental

$8 p s f outgoings inc rates

5% of Basic Rent per annum - Promotion

1.5% of Basic Rent - Opening Promotion"

1. The natural meaning of the reference to rates is that it refers to all rates applicable to the shop. It is included in a document which encapsulates all the commitments the tenant faces.

2. I have already made findings as to the respective credibility of the applicants and Mr Scott. The other gentlemen said to have made representations about rates - Mr Lindsay of Raine and Horne and Mr Robinson of Snow Simpson - were not called as witnesses by the respondent. There was no evidence to explain their non appearance.

3. Another relevant document is a memorandum which Mr Scott sent to Mr Parker on 27 June 1989. It is in these terms:
   

" 27/6/89 TED

Attached is the Variable/Outgoings Budget. At the bottom of the third page are the items which are additional to this budget. In total, it represents approximately $60,243 per annum extra, which to the specialty stores, would be an additional $1.19 per square foot per annum on top of the $5.20 per square foot they are paying on the original Variables Budget.

In addition, if we are also to charge the management fee which is now increased to $122,575, this would add a further $1.61 per square foot per annum.

Therefore Variables would be as follows:- Existing Budget - 5.20 (incl. land tax) Additional Equipment - $1.19 Management Fee

Not paid by Majors - 1.61 Total: $8.00 per square foot per annum In addition, the stores still have Council Rates and Water Rates to pay.

Keep in mind, we were quoting approximately $8.00 P.S.F. including rates.

DON"

1. The reference to "including rates" in the last sentence can hardly mean something different from "Council Rates and Water Rates" in the second last sentence. That latter expression, in its natural and ordinary meaning, can only mean all the rate liability of the shopkeeper.

2. Yet another document which bears on this issue is a letter dated 9 October 1989 which was written by Raine and Horne to Dayton for the purpose of showing to tenants, although apparently this was not done until a meeting of the tenants committee in early 1990. The letter was in fact drafted by Dayton. It read as follows:
   

"RE: VARIABLE OUTGOINGS

CENTRAL SQUARE SHOPPING CENTRE

We confirm that in the course of discussions held with tenants and prospective tenants, the variable outgoings payable was estimated at around $8.00 per square foot inclusive of all statutory outgoings.

Based on information supplied to us and our experience with other similar shopping centre developments, we believed the budgetted outgoings, based on data provided by Dayton, were reasonable.

At no stage had or have we ever quoted the above figure as an actual or maximum level. All such communications were expressed as a forecast only and were done so in good faith based solely upon information supplied to us."

1. The letter was prepared and used in the context of an attempt to persuade tenants that the $8 per square foot had only been an estimate. But it provides the clearest admission that what was said to tenants about rates included all rates. There is no attempt (at a time when there was a lively dispute on the issue of rates) to say that tenants were told, or even that they should have expected, that council rates on the individual shops would be charged separately and would be additional to the $8.

2. As a result of subsequent negotiations with the City of Ballaarat rates at the Centre were reduced, but nevertheless to a level still in excess of $8 - in fact about $9.15.

3. I find that the alleged representation was made to the applicants mentioned. It was a representation relating to a "future matter" within the meaning of s.51A. I find that the respondent has not satisfied the s.51A(2) onus of adducing evidence to show that it had reasonable grounds for making the representation. The respondent's evidence on this issue was designed to show that it had taken reasonable steps to estimate and calculate what the rates would be. But the representation that I find was in fact made was something different. It was not an estimate, but a promise or assurance. The very fact that the respondent in evidence now says that all it could possibly do was to make an estimate or prediction necessarily shows that it could not have had reasonable grounds for giving to the applicants a figure as a promise or assurance.

4. Promotion - Contribution by Major Tenants
   "That all tenants including the major tenants Myer, Bi-Lo and Target would be required to contribute 5 per cent of their respective rental for the purposes of promotion of the Centre to be expended by the promotions committee."
   77. It was recognised by all concerned that a new shopping centre needs to spend substantial sums on advertising in the media and in other forms of promotion to attract shoppers. The leases provided for each tenant to pay five per cent on top of net rental for this purpose. Most of the applicants say that they were told in negotiations that the three major tenants mentioned would also contribute five per cent and that this was seen as a powerful inducement to them since it would mean large sums going into promotion to attract shoppers who might otherwise have gone to different centres. The respondent denies that any such representations were made. It is said that the invariable practice in shopping centres of this kind is that since the major tenants are seen as a drawcard in themselves, any contribution they make to promotion of the centre is a matter for direct negotiation with the owner.

1. Interest 26 August to 2 December is $1921 making the total Award $138,145.
   6. Angus
   255. Claim (as at 26 August 1992)
   

A. CASH CONTRIBUTIONS TO OPERATIONS

- Proprietors Cash Contributions 36,000 - Less Proprietors Cash Withdrawals (58,837) - Less Legal Fees re Action 0 - Plus Proprietors Cash Equivalents 0 Sub-Total (22,837) B. NON-CASH CONTRIBUTIONS

- Wasted Labour 184,000 - Other Benefits Foregone 39,505 Sub-Total 223,505 C. CONSEQUENTIAL LOSSES

- Interest Penalties (Suppliers) 0 - Interest Penalties (Financiers) 0 - Loss of Supplier Discounts 0 Sub-Total 0 D. OUTSTANDING NET LIABILITIES/(ASSETS) AT 26/08/92 (53,479) TOTAL LOSSES 147,189 INTEREST 33,213 180,402

1. Interest 26 August to 2 December is $2,543 making the total Award $182,945.
   

2. O'Donnell
   257. Claim (as at 26 August 1992)
   

A. CASH CONTRIBUTIONS TO OPERATIONS

- Proprietors Cash Contributions 118,460 - Less Proprietors Cash Withdrawals (16,300) - Less Legal Fees re Action 0 - Plus Proprietors Cash Equivalents 97,729 Sub-Total 199,889 B. NON-CASH CONTRIBUTIONS

- Wasted Labour 47,269 - Other Benefits Forego 7,708 Sub-Total 54,977 C. CONSEQUENTIAL LOSSES

- Interest Penalties (Suppliers) 0 - Interest Penalties (Financiers) 0 - Loss of Supplier Discounts 0 Sub-Total 0 D. OUTSTANDING NET LIABILITIES/(ASSETS) AT 26/08/92 (1,000) TOTAL LOSSES 253,866 INTEREST 11,730 265,596

1. Interest 26 August to 2 December is $3,745 making the total award $269,341.

X Other Relief
259. It was not seriously disputed that if the applicants were to succeed on all other issues, it would be appropriate to make orders under s.87 declaring the losses and any guarantees thereof to be void. I shall make orders declaring the leases and guarantees void ab initio; cf Musca v Astle Corporation Pty Ltd (1988) 80 ALR 251 at 262.

XI Costs
260. I shall adjourn the question of costs for further argument.