Janeba v Joburne Pty Ltd - [2009] WADC 136

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: JANEBA -v- JOBURNE PTY LTD [2009] WADC 136

CORAM: WAGER DCJ

HEARD: 27-29 MAY, 16-17 & 20 JULY 2009

DELIVERED : 2 SEPTEMBER 2009

FILE NO/S: CIV 448 of 2005

BETWEEN: BEDRICH BRUNO JANEBA
Plaintiff
AND
JOBURNE PTY LTD
Defendant

Catchwords:

Trade practices - Misleading or deceptive conduct - Representation with respect to a future matter - Whether the defendant's representation was reasonable - Turns on its own facts

Legislation:

Trade Practices Act 1974(Cth), s 51A, s 52(1)

Result:

Plaintiff's claim dismissed

Representation:

Counsel:

Plaintiff: In person
Defendant: Mr P D Quinlan

Solicitors:

Plaintiff: Not applicable
Defendant: DLA Phillips Fox

Case(s) referred to in judgment(s):

Australian Competition & Consumer Commission v Universal Sports Challenge Ltd [2002] FCA 1276
Australian Competition and Consumer Commission v Danoz Direct Pty Ltd (2003) ATPR (Digest) 46‑241
Equity Access Pty Ltd v Westpac Banking Corporation & Westpac Savings Bank Ltd & Anor (1990) ATPR 40‑994
Fubilan Catering Services Ltd (Incorporated in PNG) v Compass Group (Australia) Pty Ltd [2008] FCAFC 53
Fubilan Catering Services Ltd v Compass Group (Australia) Pty Ltd [2007] FCA 1205
Gould v Vaggelas (1984‑1985) 157 CLR 215
Pownall & Ors v Conlan Management Pty Ltd & Anor (1995) 12 WAR 370

WAGER DCJ: The plaintiff purchased Unit 23, Brigid Road, Subiaco, a home unit constructed in a development known as Princeton ("the unit") through the defendant who is the vendor's selling agent by contract of sale settled on 20 September 2001.
The plaintiff is self‑represented. Although other matters are raised in the plaintiff's pleadings that were prepared by solicitors representing the plaintiff earlier in proceedings, it is now agreed that the plaintiff's claim against the defendant is for damages pursuant to the Trade Practices Act 1974 ("TPA") for misleading or deceptive conduct including representations in relation to future matters (s 51A, s 52 TPA).
The plaintiff pleads that loss has arisen as a result of the representations made to him by the defendant on dates from November 1999 (prior to signing the contract of sale), until 20 September 2001 (the date of settlement) being that:
1.All of the units at Princeton had secure underground parking.
2.The units would feature closed‑circuit television in the underground car park of Princeton, a representation that was false and misleading because there was either never an intention by the vendor/developer to install closed‑circuit television in the underground car park or because the vendor/developer changed its decision to install the closed-circuit television in the underground car park prior to the date of settlement and the defendant, as the vendor's selling agent, did not advise the plaintiff of the decision.
3.The defendant orally through its representative, Mr Bitdorf, advised the plaintiff in November 1999 that investment in the unit would show a future rate of return on the plaintiff's investment of 10 to 12 per cent per annum being a representation that the plaintiff assumed referred to a cumulative rate…

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: [2009] WADC 136
Decision Date: 2 SEPTEMBER 2009

CaseChat Overview and Summary

The case of Janeba v Joburne Pty Ltd involved a dispute between the plaintiff, Janeba, and the defendant, Joburne Pty Ltd, regarding a representation made about the operability of CCTV cameras in a car park. The plaintiff alleged that the defendant had made a representation that the CCTV cameras would be operational, which did not occur. The case was heard in the Federal Court of Australia.

The central legal issue was whether the defendant's representation was misleading or deceptive under the Trade Practices Act, specifically in relation to section 51AA. The court had to determine whether the representation was likely to mislead or deceive, focusing on whether the representation was made on reasonable grounds. This required an objective assessment of the likelihood of misleading or deception, irrespective of the percentage chance. The court had to consider whether the representation was material and whether it played a part in inducing the plaintiff to enter into the contract.

The court found that the representation regarding the CCTV cameras was indeed material as it influenced the plaintiff's decision to purchase the unit. The court held that the representation did not have to be the sole inducement to be material. Furthermore, the court examined whether the defendant had reasonable grounds for making the representation. Drawing on previous cases, the court noted that reasonable grounds could be established by reliance on information provided by a reputable supplier, particularly if there was a history of consistent and reliable dealings. However, the court ultimately found that the representation was not made on reasonable grounds, as there was no evidence to support the claim that the CCTV cameras would be operational. Consequently, the court held that the representation was misleading or deceptive.

The court ordered Joburne Pty Ltd to compensate the plaintiff for the misleading or deceptive conduct, reflecting the material influence of the representation on the plaintiff's decision to enter into the contract.

Orders

Orders of the court

Full text does not contain this section.

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

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Ratio Decidendi

Legal Principle Established

The defendant made a representation to the plaintiff that CCTV cameras would be operable in the car park. This did not occur. The issue is whether that conduct was likely to mislead or deceive. Misleading or deceptive conduct was discussed in Equity Access Pty Ltd v Westpac Banking Corporation & Westpac Savings Bank Ltd & Anor (1990) ATPR 40‑994 per Hill J at par 3."Conduct will be likely to mislead or deceive if there is a 'real or not remote chance or possibility' of misleading or deception regardless of whether it is less or more than 50% … The question of whether conduct is misleading or deceptive or likely to mislead or deceive is an objective question which the Court must determine for itself. Hence evidence that persons in the relevant class have been misled will, although admissible, not be determinative. In some cases however such evidence will be very persuasive." To be a material representation the representation is calculated to induce the person into the contract. It does not have to be the sole inducement. In Gould v Vaggelas (1984‑1985) 157 CLR 215 at 236 Wilson J re‑stated the applicable principles in relation to material representation and inducement as follows:"1.Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case.2.If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation.…4.The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract." I accept that security was an important consideration for the plaintiff at the time when he offered to purchase his unit. The unit complex had not yet been built and the plaintiff had to rely on the defendant's representation. The written material, Exhibit P11 and/or any supporting comment made by Mr Bitdorf was a material representation. It is submitted in this case by the defendant that if the representation was made that it was made on reasonable grounds. In Australian Competition and Consumer Commission v Danoz Direct Pty Ltd (2003) ATPR (Digest) 46‑241, a case relating to the sale of an item called an AbTronic and the supply of an instruction manual and brochure that made unsupported representations in relation to the device's effectiveness and its operation the issue of reasonableness was discussed. In relation to s 51A(2)) TPA, Dowsett J said at 46‑241, [174]:"The applicant submits that the first respondent cannot demonstrate reasonable grounds merely by showing that it relied upon information provided by a supplier such as Thane. I do not accept that assertion as necessarily correct. In many cases a retailer will rely upon representations made by a manufacturer or wholesaler as to the quality and capacity of a particular product and will make representations based upon them. It cannot be seriously suggested that a pharmacist who recommends a product to a customer, acting upon information provided by a reputable manufacturer, lacks reasonable grounds. Similarly, it cannot be asserted that s 51A requires a retailer of electrical goods to carry out testing on a television set supplied by a reputable manufacturer in order to ensure that it has the qualities asserted in relevant promotional material, before he or she represents that it has such qualities. In my view, such representations may well be made on reasonable grounds if they are based upon information provided by a supplier. In each case, the question will depend upon the reputation of the supplier and past dealings between it and the retailer. If goods of a particular kind have been consistently provided over a lengthy period of time, have always been of good quality and lived up to representations made by the supplier, then it may well be reasonable for the retailer to act upon representations concerning a new product. Each case will depend upon its own facts."