McKENZIE v Warwick Entertainment Centre Pty Ltd - [2001] WASCA 210

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE FULL COURT (WA)

CITATION: McKENZIE & ANOR -v- WARWICK ENTERTAINMENT CENTRE PTY LTD [2001] WASCA 210

CORAM: MALCOLM CJ
KENNEDY J
WALLWORK J

HEARD: 9 MARCH 2001

DELIVERED : 20 JULY 2001

FILE NO/S: FUL 107 of 2000

BETWEEN: CAROLINE McKENZIE
PETER ROBERT DOVE
Appellants (Defendants)
AND
WARWICK ENTERTAINMENT CENTRE PTY LTD (ACN 054 246 918)
Respondent (Plaintiff)

Catchwords:

Summary judgment - Appeal - Whether sufficient particulars given to reveal arguable defence - Sufficient facts must be given to show an arguable defence

Legislation:

Nil

Result:

Appeal allowed
Judgment set aside
Leave granted to defend by way of counterclaim for damages but not to include the issues concerning the increases for rent and outgoings discussed in reasons for judgment

Representation:

Counsel:

Appellants (Defendants) : Mr P S Bates
Respondent (Plaintiff) : Mr M J Buss QC & Ms K R Poynton

Solicitors:

Appellants (Defendants) : D'Angelo & Partners
Respondent (Plaintiff) : Freehills

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

Hunt v Knabe (1992) 8 WAR 96
Immer No 145 Pty Ltd v Uniting Church in Australia Property Trust New South Wales (1993) 182 CLR 26
Khoury v Government Insurance Office New South Wales (1984) 165 CLR 622
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109
Project Blue Sky Inc v ABA (1998) 72 ALJR 841
Tropical Traders Ltd v Guernan (1964) 111 CLR 55
Wallingford v Mutual Society (1880) 5 App Cas 685

Case(s) also cited:

Australian Guarantee Corporation Ltd v De Jager & Anor [1984] VR 483
Casella v Costin Pty Ltd, unreported; SCt of WA; Library No 5416; 22 June 198
Central Estates (Belgravia) Ltd v Woolgar (No ) [1972] 1 WLR 1048
Citibank Pty Ltd v Simon Fredericks Pty Ltd (1993) 2 VR 168
Clifton Securities Ltd v Huntley & Ors [1948] 2 KBD 283
Coca-Cola Financial Corporation v Finsat Internation Ltd [1998] QB 43
Commonwealth v Verwayen (1990) 170 CLR 394
Daewoo Australia Pty Ltd v Porter Crane Imports Pty Ltd, unreported; SCt of Qld; Library No BC200000992
David Syme & Co Ltd v Lloyd (1985) 1 NSWLR 416
Fancourt v Mercantile Credits Ltd [1983] 57 ALJR 621
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd & Ors (1998) 81 ALR 397
Grundt v Great Boulder Gold Mines Ltd (1937) 59 CLR 641
Haynes v Hirst (1927) 27 SR (NSW) 480
Hurst v Bryk & Ors [1999] Ch D 1
In Re Gyhon. Allen v Taylor [1885] Ch D Vol XXIX 834
J & S Holdings Pty Ltd v NRMA Insurance Limited (1982) 41 ALR 539
Levi & Anor v Stirling Brass Founders Pty Ltd & Ors (1997) 36 ATR 290
Mirvac Hotels Pty Ltd v 333 Collins Street Pty Ltd, unreported; SCt of Vic; Library No BC9401396
Parkinson v Hanbury & Ors [1867] LR Vol II
Pollack v Commissioner of Taxation (1991) 32 FCR 40
Re Hughes; Ex parte Westpac Banking Corporation, unreported; Fed Ct of Aust, Vic District; VG 7279 of 1997
Re Partnership Pacific Securities Ltd (1994) 1 Qd R 410
Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 66 FCR 511
Rev v Ray; Ex parte Chapman [1936] SASR 241
Selwyn v Garfit (1888) 38 ChD 273
Smith v Gale & Anor [1974] 1 All ER 401
Stobbart v Mocnaj & Ors [1999] WASC 252
Tasker v Fullwood [1978] 1 NSWLR 20
The "Fedora" [1986] 2 Lloyd's Rep 441
Thompson v Palmer (1933) 49 CLR 507
T M Burke Estates Pty Ltd v P J Constructions (Vic) Pty Ltd (In Liq) [1991] 1 VR 610
Whitehall Holdings Pty Ltd v Custom Credit Corporation Limited, unreported; FCt SCt of WA; Library No 9189; 13 December 1991

MALCOLM CJ: In my opinion this appeal should be allowed, the judgment in favour of the respondent set aside and leave to defend by way of counterclaim for damages to the extent stated by Wallwork J in his reasons for judgment with which I agree.
KENNEDY J: I have had the advantage of reading in draft the reasons to be published by Wallwork J. I am in agreement with those reasons and with the orders his Honour proposes.
WALLWORK J: On 16 June 2000, the respondent obtained summary judgment against the appellants in the District Court in the sum of $71,484.17 for money owing by the appellants under a lease with the respondent. The appellants now appeal against the summary judgment on a number of grounds.

Background

In the second half of 1993, the appellants had entered into occupation of premises in a food hall. An agreement for a lease was signed on 22 July 1993. Despite two protests which they made in late 1993 concerning the sum asked by the respondent for rent and outgoings, the appellants executed the lease in August 1994. They paid rent and outgoings to the respondent pursuant to the lease for approximately four years, which payments were calculated on the basis that the appellants occupied an area of 37 square metres in the food hall.
The appellants remained in possession of the premises until 17 October 1998. They then left the premises without the consent of the respondent. For approximately a year prior to their departure they did not pay the rent or outgoings as required by the lease.
The respondent then sued the appellants for rent and outgoings owed from 15 September 1997. The appellants claimed that they were not liable to pay the rent or the outgoings claimed.
The particulars of the claim by the respondent for the arrears of rent appear in the re‑amended statement of claim dated 9 February 2000 and cover the period from 15 September 1997 to 1 June 1998. Details of other moneys alleged to be owing were also pleaded in the statement of claim and amounted to the sum of $57,079. The summary judgment against which this appeal is brought was for the total sum alleged to be owing under the lease.

The Appeal

On the hearing of this appeal, it was contended for the respondent that it was accurate to state, as a general proposition, that it was not until approximately four years after the lease had commenced that the appellants had ceased to pay the rent and variable outgoings. Until that time, the appellants had made those payments on the basis of an area occupied by them of 37 square metres.
Pursuant to the lease, the premises occupied by the appellants were described as an area "coloured red on the plan annexed to this document and having a floor area of approximately 30 square metres (30m²)".
It had been provided in cl 9.2 of the agreement for the lease dated 22 July 1993 (the lease was dated 10 August 1994) that the lessor should prior to the commencement of "the fitting out stage" appoint a licensed surveyor to measure the actual floor area of the premises in accord with an agreed method of measurement. It was submitted for the respondent that the effect of cl 9.2 was that although the lessor had to appoint a licensed surveyor prior to the commencement of the fitting out stage, there had been no fixed date by which the measurement had to be completed. The relevant measurement was carried out on 27 July 1993.
Prior to the agreement for the lease which was signed on 22 July 1993, the commencement of the fitting out stage had been fixed by correspondence between the parties at 5 July 1993 . There is no evidence as to when the licensed surveyor was appointed, but when the premises were measured on 27 July 1993, the relevant area was calculated to be 37 square metres.
Clause 9.3 of the agreement for the lease provided that if the actual floor area was more than 3 per cent greater or smaller than that set out in the schedule to the proposed lease (being approximately 30 square metres), the floor area would be taken to be the figure measured by the licensed surveyor. The rent and variable outgoings would be fixed accordingly. That is what was done. It was submitted for the respondent that cl 9.3 had embodied the contractual agreement between the parties in the events which had occurred because the difference in the floor area had been greater than the relevant 3 per cent.
It was pointed out that, pursuant to cl 5.2 of the agreement for the lease, it was provided that if the floor area of the premises was increased or deceased by more than 10 per cent, the lessee had a right to terminate the lease. It was submitted that that was implied in cl 5.2, although not expressly stated. Although the stated area of the premises had increased by more than 10 per cent, the lessee had not exercised any right to terminate pursuant to cl 5.2, or by any other method.
It was submitted for the respondent that the appellants had elected to continue with the lease and had executed it on 10 August 1994 and that in those events, the sum for rent was governed by the contractual agreement under cl 9.3 which has been referred to above.
The respondent claimed that the reason that the premises had been referred to in the proposed lease as having a floor area of approximately 30 square metres was that, pursuant to the agreement for the lease, the lease had been defined as "a lease in the form annexed to this document". Clauses 7.5 and 7.6 of the agreement for the lease had required the parties to execute the lease annexed. They had done that in August 1994. It was claimed that there had been no suggestion from the appellants that the premises they had occupied had not accorded with the description in the lease as "that part of the lower ground floor level of the Centre coloured red on the plan ….". It was contended for the respondent that the floor area had been determined in accordance with cl 9 of the agreement for the lease.
The respondent also asserted that there had been no remedy exercised by the appellants pursuant to the Commercial Tenancy (Retail Shops) Agreements Act 1985 with respect to a termination of the lease and that there had been no evidence as to whether a disclosure statement had been made pursuant to that Act.
A further point made by the respondent was that cl 9 of the agreement for the lease had not imposed upon the respondent an obligation to give notice to the appellants of the result of the measurement by the licensed surveyor within a specified period, or at all. It was said that although the appellants had protested when the rent and other expenses had been increased after the area had been measured, there had been no application made by them for relief either in a court or pursuant to the Commercial Tenancy (Retail Shops) Agreement Act of 1985.
The respondent agreed that the appellants had not been notified of the relevant measurement until late November 1993 . However, it was submitted that although the appellants had protested concerning the increase in the rent and outgoings, they had continued to pay the relevant amounts and had not taken any action pursuant to the lease or otherwise. They had therefore made an election to continue with the lease and had executed it later, in August of the following year.
The respondent contended that the appellants were contractually obliged to pay the agreed rent and other outgoings for the 37 square metres, and had done that until they had chosen, before they left the premises, not to make any further payments. They had occupied the premises, carried on their business and paid the rent and variable outgoings claimed from them for a period of approximately four years.
It was also submitted for the respondent that there was no reasonable evidence establishing that any action by the respondent had caused the appellants any loss. There were allegations of loss in the affidavits filed on behalf of the appellants, but they had not contained sufficient particularity. It was contended for the respondent that the appellants had relied on claims of fraud and negligence without adequate evidence to justify those allegations.
Although it contended that it did not need to do so, the respondent also relied on cl 9.4 of the lease, which provided that the lessee was to pay "without any deduction or right of set-off whatever, on account of the lessee's contribution to variable outgoings, the lessee's contribution to complex outgoings and the lessee's contribution to specialty shop outgoings, the reasonable estimate provided for in cl 9.2, by equal monthly instalments in advance on the first day of each month, commencing on the date of commencement". It was submitted that, at least in relation to the claim for variable outgoings, that clause was sufficient to exclude any equitable set-off.
In answer to that proposition, counsel for the appellants submitted that cl 9.4 could only relate to outgoings which were contractually due pursuant to the agreement. It was also contended for the appellants that they were two individuals against a corporate lessor which had drawn up the agreements and that there had been very much an inequality of bargaining power.

Measurement of the Leased Premises

Clause 9.2 of the agreement for the lease provided that the lessor "prior to the commencement of the fitting out stage" would appoint a licensed surveyor to measure the actual floor area. The respondent contended that because the agreement was not executed until 22 July 1993, the obligation of the respondent to appoint a licensed surveyor had arisen upon the date of the execution of the agreement.
The "Fitting Out Stage" was defined in the agreement for the lease as meaning the period from the date of availability for fit out to the date of commencement. The "Date of Availability for Fit Out" was defined as meaning the date of issue of written notice to the lessee by the lessor, the project manager, or an authorised agent of the lessor, advising that the premises were available for fit out.
The relevant notice was given on 21 June 1993 in a letter addressed to the appellants. It stated: "In accordance with the provisions of the lease you are hereby notified that the date of availability in respect of your tenancy will be 5 July 1993 ….". Neither the agreement for the lease nor the lease itself had been executed at the date of that letter.
It is contended for the respondent that the onus was on the appellants to establish that the appointment of the licensed surveyor was not made in accord with cl 9.2 properly construed. However, it is said that in any event the parties obviously had not intended that a minor delay in appointing a licensed valuer under cl 9.2, if there had been such delay, would discharge the respondent from its obligation under that clause. Clause 9.2 did not require the respondent to give notice to the appellants of the measurement within a specified time. It relied upon similar reasoning to that of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v ABA (1998) 72 ALJR 841, at 860.
Further, the respondent contended that the appellants could not be said to have suffered any damage from any late notice to them. They had received the notice concerning the measurement on 29 November 1993, after the measurement had been carried out on 27 July 1993.

Election by Appellants

No legal action was taken by the appellants to set aside or alter the terms of the lease of the premises after they knew of the increased area of the premises.
In Tropical Traders Ltd v Guernan (1964) 111 CLR 55, Kitto J said:
"Time being of the essence the appellant became entitled, as soon as 6 January 1963 had passed, to elect for or against rescinding the contract. Any act done by it and consistent only with the continuance of the contract on foot, the law would hold to constitute an election against rescinding; and an election once made could not be retracted. But the appellant was not bound to elect at once. It might keep the question open, so long as it did nothing to affirm the contract and so long as the respondent's position was not prejudiced in consequence of the delay …."
In Immer No 145 Pty Ltd v Uniting Church in Australia Property Trust New South Wales (1993) 182 CLR 26, at 40, Deane, Toohey, Gaudron and McHugh JJ referred to the appellant's submission which had relied on the reasoning of Mason, Brennan, Deane and Dawson JJ in Khoury v Government Insurance Office New South Wales (1984) 165 CLR 622, at 633, where their Honours had said:
"It would seem however that, at least where the alternative rights arise under the terms of the one contract, a party may be held to have elected to affirm it notwithstanding that he was unaware of the actual right to avoid it .… Even in such a case however, the party alleged to have elected to affirm the contract must be at least aware of the facts giving rise to the right to avoid the contract."
In Immer, at 41, their Honours said:
"The true nature of election is brought out in this sentence from the seminal work of Spencer, Bower and Turner, The Law Relating to Estoppel by Representation, 3rd edn 1997, page 313:
'It is of the essence of election that the party electing shall be "confronted" with two mutually exclusive causes of action between which he must, in fairness to the other party, make his choice.' "
At 42, their Honours said:
"In Tropical Traders v Goonan (1964) 111 CLR at 55, Kitto J commented:
'Not that election is a matter of intention. It is an effect which the law annexes to conduct which would be justifiable only if an election had been made one way or the other.' "
In my view, in accord with the above authorities, the fact that the appellants had protested orally concerning the increases in the rent and outgoings, and had then been served with notices of default, does not entitle them to rely on an alleged breach by the respondent of the agreement for the lease and the lease when, for approximately four years thereafter, they continued to make the requested payments and took no action concerning the alleged breaches until after they had left the premises in 1998 and been sued for arrears commencing in September 1997.

Waiver

The question of waiver was argued before the learned Judge on the application for summary judgment. His Honour held that because the rent was paid from late 1993 without apparent objection on the basis that the premises were 37m², any failure on the part of the respondent to strictly comply with the terms of the agreement to lease was clearly waived.
His Honour further held that nothing had been put forward by the appellants which would suggest that a failure to strictly comply with the requirement for appointment of the surveyor would disentitle the respondent to increase the rent. His Honour held that the evidence was that the survey had been carried out in accord with the prescribed method of measurement and that there was no evidence to the contrary.

Grounds of Appeal

In my view, the first ground of appeal of the appellants (numbered 3), which alleges in 3.1 an error by the learned Judge concerning waiver, has not been established. The appellants elected to continue with the contract after they knew of the facts giving rise to the alleged breaches.
Ground 3.2 is that the learned Judge erred in law in finding that the appellants were not able to rely on a set-off created by a judgment of the Commercial Tribunal by reason of that judgment having been stayed pending appeal. The appeal referred to was later determined in favour of the appellants. However, the parties have now reached agreement on this matter and it is no longer an issue in this appeal - appeal transcript at 17, cls 3 and 4. This ground is not sustained.
Ground 3.3 of the appeal is that the learned Judge erred in law in finding that there was a failure on the part of the appellants to condescend to particulars and that therefore a triable issue had not been raised by them in relation to the damages claimed in respect of alleged misrepresentations and breaches of contract.
The alleged misrepresentations arise from what the appellants say they were told before they entered into the relevant agreements. They allege that they were told that the Centre was "the biggest, best and most successful complex of its type" in Western Australia and that the demand for tenancies was so great that an ingoing payment of $65,000 was required. The appellants allege that they had been advised by the respondent's agents that all tenancies in the food hall had been let. There are other allegations concerning a "grand opening" of the complex and signage which was to be erected, and alleged misrepresentations as to the sales which would be achieved by the cinema complex within the Centre.

It is claimed by the appellants that the alleged representations were false because the capacity of the food hall centre was less than had been represented, there were vacant premises at the time of the opening of the Centre and there was no grand opening advertised as had been promised. There are also complaints concerning the signage which was erected and the cinema sales. It is alleged that, as a result of the alleged misrepresentations, the appellants' business ran at a significant loss.
His Honour said in his reasons for judgment that the alleged losses were simply asserted without any attempt to "condescend upon particulars" and that nothing had been said as to the relationship between the alleged damage suffered and the claim to trading losses, beyond a general assertion. His Honour held that the circumstances plainly required the defendants to "condescend upon particulars" in relation to the particulars of alleged loss - Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd [1976] WAR 109 - and that there had been a failure to do that. He held that the appellants had failed to provide sufficient particulars of any loss. For that reason he did not consider a triable issue had been raised by them in relation to the alleged of misrepresentations and breaches of contract.
The expression "condescend upon particulars" comes from the judgment of Lord Blackburn in Wallingford v Mutual Society (1880) 5 App Cas 685, at 704, where his Lordship said:
"I think that when the affidavits are brought forward to raise that defence they must, if I may use the expression, condescend upon particulars. It is not enough to swear, "I say I owe the man nothing". Doubtless if it was true that you owed the man nothing, as you swear, that would be a good defence. But that is not enough. You must satisfy the Judge that there is reasonable ground for saying so. So again, if you swear that there was fraud, that will not do. It is difficult to define it, but you must give such an extent of definite facts pointing to the fraud as to satisfy the Judge that those are facts which make it reasonable that you should be allowed to raise that defence. And in like manner as to illegality and every other defence that might be mentioned."
In his reasons for judgment, the learned Judge in this case said:
"Plainly some of the claimed representations such as that in relation to the "grand opening" would appear to be of no significance. Others however plainly are of potentially more significance."
His Honour said that the claimed damages both in relation to the alleged difference between the amount used to set up the business and the value of the fittings on the vacation of the premises and the claimed trading losses were simply asserted without any attempt at condescension to particulars. Nothing at all was said as to the relationship between the alleged damage suffered and the claimed trading losses beyond a general assertion. His Honour noted that detailed books of accounts had not been referred to. He said that the defendants had failed to provide sufficient particulars of any loss. For that reason he did not consider a triable issue had been raised.
In Hunt v Knabe (1992) 8 WAR 96, at 103, it was said by Malcolm CJ, Murray and White JJ that:
"… as is pointed out in P L Seaman, Civil Procedure in Western Australia, par 14.4.1, the requirement is for a condescension to the particulars of an arguable defence, not the defence in its complete form, and for a statement of the facts which go to show that it is arguable and not the facts that will be necessary to establish it at trial: see Whitehall Holdings Pty Ltd v Custom Credit Corp Ltd (unreported, SCt of WA; Library No 9189). Summary disposal of an action when facts are in dispute, was never intended: see White v Johnston (1886) 8 ALT 53."
At 104, their Honours said:
"The defendant must depose to the existence of facts from which the inference can be drawn that the representations were made fraudulently: see Wallingford v Mutual Society (1880) 5 App Cas 685. It is clear that the affidavit evidence does not provide material from which it can be said that the defendants rely on fraud. Nonetheless, in our opinion, the allegations of misrepresentation are made with sufficient particularity for the purposes of O 14. Accordingly were it not for the issue to which we now turn, we would be of the opinion that the grounds of appeal have been made out and that the appropriate order in relation to the application for a summary judgment would have been the grant of unconditional leave to defend."
In this case, the male appellant deposed that, before entering into the agreements, the appellants had been induced by various representations made by the plaintiff through its agents, Steele and McCubbing. He deposed that those representations, which he sets out in his affidavit, were false and were clearly made with intent to induce the appellants to enter into the agreements. He deposes that as a consequence of the misrepresentations and the breaches, the appellants have suffered loss and damage.
In its submissions, the respondent does not comment on par 4 of Mr Dove's affidavit, which asserts that he was told by Messrs Steele and McCubbing that the Centre would be the biggest, best and most successful complex of its type in Western Australia and that the demand for tenancies in the food court was so great that an ingoing payment of $65,000 was required. Mr Dove also deposed that either at the first meeting, or a further one held shortly thereafter, he was advised that all tenancies in the food hall had been let. Those allegations, so far as I am aware, have not been denied by the respondent.
In the next paragraph of Mr Dove's affidavit he asserts that he was provided with glossy layouts of the proposed food hall complex showing that it would be an upmarket development seating 420 persons. He deposed that upon completion of it, it had a capacity of only 302 persons. It is contended for the respondent that the alleged representation was the expression of an opinion. However, it seems to me that it could be a representation as to the food hall's capacity - see Cheshire (5th Aust Edition) par 715.
Mr Dove has deposed that he was also advised that there would be a "monstrous" grand opening of the complex which would be widely and frequently advertised, including television coverage, so as to ensure widespread awareness of the complex, including the food hall in the prospective catchment area. He has deposed that there was no grand opening or advertising as promised.
It is said for the respondent that those alleged representations are with respect to future matters. However, in my view, that would not end the matter, depending upon the findings of fact made by the learned trial Judge - Cheshire and Fifoot's Law of Contract, (7th Aust ed), pp 383 ‑ 384.
In par 7 of his affidavit, Mr Dove has deposed as to a promise that there would be significant signage on the premises so as to attract the attention of people and to advise patrons of the food hall area. In his affidavit sworn 18 March 1999, Mr Dove, in par 4, also deposes as to who made the alleged representations as to the signage and where they were made. It is alleged in par 9 of his affidavit that the representations were false and that there is no, and never has been, any adequate signage, or any large sign on the front of the building, nor any adequate signage within the Centre advising of the food hall. Concerning par 9(f) of Mr Dove's affidavit, which alleges that there has never been any adequate signage and/or a large sign in front of, or at the side of the building, or any adequate signage within the Centre advertising patrons of the food hall or directing them there, it is said by the respondent that there are inadequate particulars to establish a reasonably arguable case that the alleged representations were false. That would depend on findings of fact.
It is said for the respondent that many of the alleged representations were predictions or expressions of opinion. However, again depending on findings of fact, that does not necessarily end the matter.
It is said for the respondent that par 9(d) of Mr Dove's affidavit, which alleges that there were two vacant tenancies in the food hall out of a total of eight, even if correct, does not mean that the alleged representation was false. Again, that depends on a finding if there is a trial.
Paragraph 9(e) of Mr Dove'sn affidavit, which alleged that there was no grand opening or advertising as promised, is said by the respondent to contain a conclusion or inadmissible expression of opinion with inadequate particulars. That again, in my view, does not end the matter.
In par 10 of his affidavit, Mr Dove deposed that, as a result of the alleged misrepresentation, the appellants' business had run at a significant loss. It is said in the respondent's submissions that that allegation contains a conclusion or an inadmissible expression of opinion.
In par 7 of his affidavit, Mr Dove deposed that the appellants expended not less than $130,000 to set up the business and received a net price for the sale of the plant and equipment of $4,967. He deposed that trading losses for the first year of trading, being the tax year ended 30 June 1994, were $23,348 as contained in the 1994 partnership income tax return. He deposed that the respondent has seen that document. In par 8 he deposed that, since that time, the appellants have not filed any partnership returns because the business traded at a loss. He says that, at the end of the day, his trading losses exceeded $100,000.
It is contended for the respondent that there is no evidence as to whether any trading losses were causally related to the alleged misrepresentation. However, in par 9 of his affidavit, Mr Dove deposed that the patronage of the food hall was far less than it would have been had the representations to which he has referred, been true. The consequence was that the turnover of the business was far less than had been budgeted for.
The respondent's amended notice of contention dated 8 March 2001 alleges that there was no evidence, or alternatively no adequate admissible evidence, of fraud and/or negligence on the part of the respondent in relation to the representations allegedly made by the respondent to the appellants. The ground is particularised in the notice and attacks the evidence which was advanced by the appellants in support of the alleged misrepresentations. It is contended that there was no evidence that the respondent did not believe some of the representations or made them recklessly and without caring whether they were true or false, or had no reasonable basis for making them, or that they were false as to existing facts. Ground 2 of the notice of contention alleges that there was no evidence, or no adequate admissible evidence, that the damages alleged to have been suffered by the appellants were caused by the alleged misrepresentations of the respondent.
I note that some of the alleged misrepresentations have not been denied by the respondent.
Paragraph 3 of the amended notice of contention deals with the allegation that the appellants could set-off some of the variable outgoings; but, as I have stated, I do not consider that there is any claim which could be substantiated by the appellants in that regard.
Finally, in the amended notice of contention it is asserted that if it is held that there is a triable issue, only conditional leave to defend should be granted. It is contended in the submissions that, if contrary to the respondent's submissions, leave to defend should have been given, such leave should be conditional upon the appellants providing appropriate security for the amount of the respondent's claim.
There is no authority quoted for the proposition that leave should be conditional upon the appellants providing appropriate security for the amount of the respondent's claim and I would not uphold that contention.
In my view, for the reasons I have given, the appellants have disclosed a triable issue in relation to the claimed damages for the alleged pre‑contractual misrepresentations pleaded in pars 54 and following of the amended counterclaim, but excluding the issues concerning the increases for rent and outgoings as discussed earlier in these reasons. The appeal should be allowed, the judgment set aside and leave to defend by way of counterclaim granted.