P-Value Pty Ltd v Wellara Holdings Pty Ltd & Ors; P-Value Pty Ltd v Nucara & Ors

[2017] HCATrans 78

[2017] HCATrans 078

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne       No M140 of 2016

B e t w e e n -

P-VALUE PTY LTD (ACN 134 544 451)

Applicant

and

WELLARA HOLDINGS PTY LTD (ACN 127 799 928)

First Respondent

FRED NUCARA

Second Respondent

WILLIAM DEREK MCNEE

Third Respondent

VICLAND PROPERTY GROUP NO. 1 PTY LTD (ACN 120 079 227)

Fourth Respondent

Office of the Registry
  Melbourne  No M141 of 2016

B e t w e e n -

P-VALUE PTY LTD (ACN 134 544 451)

Applicant

and

FRED NUCARA

First Respondent

WELLARA HOLDINGS PTY LTD (ACN 127 799 928)

Second Respondent

WILLIAM DEREK MCNEE

Third Respondent

VICLAND PROPERTY GROUP NO. 1 PTY LTD (ACN 120 079 227)

Fourth Respondent

Applications for special leave to appeal

NETTLE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 7 APRIL 2017, AT 10.03 AM

Copyright in the High Court of Australia

MR N.J. O’BRYAN, SC:   If the Court pleases, I appear with my learned friend, MR C.R. NORTHROP, for the applicant.  (instructed by Scammell Black Mileo Solicitors)

MR D.G. COLLINS, QC:   If the Court pleases, I appear with my learned friend, MS S. GORY, for the first and second respondents in both applications.  (instructed by Barry Nilsson Lawyers)

NETTLE J:   Yes, Mr O’Bryan.

MR O’BRYAN:   Thank you.  Your Honours, the nub of ground 1 will be found at page 260 of the application book.  On that page your Honours will see the Court of Appeal set out the terms of section 13 of the Sale of Land Act and then addressed the argument which had been put to the Court, as it was put to Justice Digby below, that the effect of that provision, given the facts and circumstances of this case and the findings made, was that a finding of fraud had been made because the burden of proof which was imposed upon the respondents by that section had not been discharged and, indeed, no attempt had been made to discharge it at the trial.

Your Honours will find, if it is convenient, the provisions set out at page 276 of the application book, the relevant provisions being section 13 which are set out first, and of course section 24AM of the Wrongs Act 1958 (Vic) on the next page, and we have also inserted section 1041M of the Corporations Act because that is the provision which the Court of Appeal referred to in the next paragraph.  Now, in the next paragraph of the judgment, having set out the terms of section 13, the Court goes on to say this in paragraph 168 on page 260 of the application book:

Section 13 . . . is a deeming provision.

We accept that, of course, your Honours, but it is much more, we submit, than a mere deeming provision, and the court describes it as:

deems a person making a representation to have knowledge of falsity in certain circumstances.

We agree with that.  The court then draws an analogy with section 1041M of the Corporations Act and says that it is:

designed to exclude conduct involving particular moral culpability.

That picks up verbatim a short passage from the massive judgment of the Full Federal Court in the ABN AMRO Case and we do not disagree with that short passage, your Honours, but we submit it does not really advance the discussion any further, and it is important to note, of course, that section 1041M is in different language to section 13 of the Sale of Land Act.

As your Honours will see on page 277 of the application book, section 1041M follows the model of the apportionment legislation in the corporations context, also in the trade practices context at the Commonwealth level by using the language of an intention to cause the economic loss or fraudulently causing the economic loss.  In other words, it focuses upon essentially a causation principle and connects the fraud to the causing of the loss.

By contrast, the effect of section 13 is to deem there to have been a fraud in circumstances which will then enliven section 24AM, whether or not there is any causation question arising, because section 24AM simply requires that there is a finding of fraud made; nothing more.  It says nothing about any causation requirement and therefore the analogy drawn, which appears to be drawn in the reasons of the Court of Appeal at this point, we submit is an inappropriate one.

EDELMAN J:   The case was run on the basis of deemed fraud, not fraud that was proved in the ordinary way, was it not?

MR O’BRYAN:   No, it was run below on both bases, your Honour, but the former basis failed, so the only basis that survived after the end of all of this exercise is the section 13 basis.  We accept that.

GORDON J:   What do we do about the finding by the trial judge which in a sense seems to be directed at the exclusion of section 13, that is, “otherwise . . . acted innocently”?  In a sense, that is what the trial judge finds, especially at paragraph 554.

MR O’BRYAN:   No, we submit that is not what the trial judge has found there, your Honour, because paragraph 554 of the judgment – this is page 170 of the application book – is, we submit, an unsatisfactory paragraph of the judgment.  His Honour says this:

for reasons I have also dealt with separately elsewhere, in respect of the representations at [21(b) and (c)] –

Now, those are the representations relating only to the quality of the tenant, so whether or not there would be rent, not the representations relating to the other offer.

GORDON J:   No, this is the rental reps.

MR O’BRYAN:   The rental reps, that is right:

I am satisfied that Nucara and Beller had no reason to suspect that those particular representations were false and I therefore consider that they acted innocently in respect of those representations.

Now, there is in fact nothing in the judgment whatsoever which explains the finding that there is no reason to suspect.  If your Honours go back to ‑ ‑ ‑

GORDON J:   Is that right?  I must say, I went through it and found at least four paragraphs where there was lack of knowledge.

MR O’BRYAN:   That is a different matter.  We accept that.

GORDON J:   Well, it may be, but there seems to be no evidence adduced that he knew – not a sufficient evidentiary basis to conclude that he knew.

MR O’BRYAN:   Yes, we accept that his Honour has found in a number of places that there was not knowledge of the fact that the rental abatement agreement had been entered into and therefore the representations about the good tenant and the payment were false and misleading.

That is a very different question, we submit, to the question, “Did you have any reason to suspect that that was the case?”, particularly when you bear in mind that most of the interaction that happened between these people happened on a very brief occasion on one day, and the evidence of the major witness for the applicant was, of course, “I was told a number of things on this occasion.  I was told the auction has been cancelled.  The reason it has been cancelled is because they have received a written offer for $5.92 million and therefore they want to pick up that offer and not proceed with the auction and, in any event, we have got a good tenant, they are all paying their rent”, et cetera, et cetera.

A series of representations is made on the day.  So, we submit in circumstances in which his Honour finds categorically that a number of those representations were plainly false and in particular that no one could possibly have represented honestly that there was any offer for $5.92 million because it never existed ‑ ‑ ‑

GORDON J:   We are not dealing with the offer reps though, are we; we are just dealing with the rental representations.

MR O’BRYAN:   But, your Honour, you cannot, with respect, separate these things because we are dealing with a question whether someone who is in the room where all of these false representations are being made might have a reason to suspect that one of them is not true.  There were reasons to suspect in respect of the rental because the others were all false as well.  So it is no answer, we submit, for his Honour to simply say there is no evidence that they knew these particular representations were false when there was a great deal of direct and circumstantial evidence giving rise to a reasonable basis for a suspicion that they might be.

GORDON J:   I am a bit lost, Mr O’Bryan.  I think there is a distinction to be drawn between the offer reps and the rental representation reps and it is clear that the trial judge at pages 171 to 172 went through them and dealt with them separately.  For example, in relation to the offer representation, he concludes that the relevant respondent made it without having any honest belief in its truth.  He made no similar finding in respect of the one about which you now complain.

MR O’BRYAN:   But, your Honour, we submit ‑ ‑ ‑

GORDON J:   On the contrary, he finds he was innocent.

MR O’BRYAN:   He does, but we submit that that finding is actually devoid of any reasoning because there is nothing in the judgment which would provide a factual basis for a conclusion that there was not any reason to suspect that that representation might be false, and that is all that is required for the purposes of section 13 because the burden of proof was upon these people to prove those things.  They had to prove in relation to knowledge that they had reasonable ground to believe, and did believe, the representation was true – never even attempted to do that ‑ or they had no reason to suspect that it was false ‑ never attempted to do that.

It is not an answer, we submit, for his Honour simply to say they did not know it was false.  There was every reason, we submit, to suspect that it might not be true.  In that regard, the conclusion that they acted innocently, which of course is also only one element of the two‑limbed test that they had to satisfy under section 13, so it does not in fact disengage the effect of section 13, there is in fact not a proper factual foundation for that conclusion at all.  In effect, it is a piece of judicial reasoning which misunderstands what the section is actually requiring be proven.

NETTLE J:   Why do you concentrate so much on the rental representations rather than the sale representation, which the judge did find to be made dishonestly?

MR O’BRYAN:   Because, your Honour, as you will recall in the Court of Appeal the circumstances in which the sale representation had come to be successfully prosecuted below were overturned and therefore ‑ ‑ ‑

NETTLE J:   You accept in effect that the Court of Appeal was correct about that at least?

GORDON J:   You are stuck with it.

MR O’BRYAN:   We are stuck with it and we accept they do not give rise to any questions of general importance.  This is a question of general importance, we submit.  The others are not, although ‑ ‑ ‑

GORDON J:   So is the question a question of, on the way in which you put it, a construction of whether or not whatever those findings are ‑ and there seems to be a debate about what the effect of the trial judge’s findings are ‑ are sufficient for the purposes of section 13 ‑ ‑ ‑

MR O’BRYAN:   Yes.

GORDON J:   ‑ ‑ ‑ or is it a second question, and that is whether or not they are, even if they are on your view of them, sufficient, amounting to a finding of fraud for the purposes of 24AM?  You seem to have two issues.

MR O’BRYAN:   There are two issues; no doubt about it.

GORDON J:   One is fact—specific, which we are having a fight about in terms of what actually the trial judge does, and then second, having assumed you have resolved that question, whether or not they are sufficient for 24AM.

MR O’BRYAN:   Well, your Honour, we would submit that the reasoning insofar as section 13 is engaged – and we accept section 13 is the only means to the end which we seek to avail ourselves of section 24AM – insofar as there was any finding made about those things, it is only that paragraph that your Honour has drawn attention to, there is no reasoning to support it and the only conclusions of fact which could support it are conclusions which his Honour states in a number of paragraphs, “I find they did not know about the rental abatement agreement”.

NETTLE J:   Is it fair to say you have got to overturn the trial judge’s finding that they acted honestly if you are to succeed in your argument under section 13’s application to 24AM?

MR O’BRYAN:   No, your Honour, we would not, because that would only satisfy part (b) of the test in section 13.  They still have not satisfied part (a) of that test.

NETTLE J:   So you can win, you say, even if the trial judge’s finding of honesty remains?

MR O’BRYAN:   Of acting innocently remains, that is right, we can.

GORDON J:   Can I ask another question the other way round?  If one goes through the paragraphs of the trial judge’s where he talks about no positive finding that Nucara knew, “not aware of those matters” in paragraph 192, not a sufficient evidentiary basis to conclude that he knew – you say they are not directed at subparagraph (a) of 13(1) of the Sale of Land Act?

MR O’BRYAN:   Absolutely not, that is right, your Honour.

GORDON J:   And they do not go anywhere towards it?

MR O’BRYAN:   They do not, and that probably has to do with the rather curious manner in which this judgment was prepared and delivered, the story of which your Honours know no doubt, because his Honour came to section 13 right at the heel of the hunt, in the same way that the Court of Appeal did, right at the heel of the hunt and, we submit with respect, without properly addressing the integers and the elements that needed to be proven by the respondents in order to protect themselves from its automatic effect.

Now, what has happened in this case, we submit, is that the Court of Appeal has placed a gloss on section 13 which is not in the words of the statute and, indeed, is contrary to the legislative intention of section 13, and if that gloss is allowed to remain that does give rise, we submit, to a most important question of public importance in connection with all of the apportionment legislation in the country because, as your Honours are well aware, there are many, many statutory provisions which in effect create a statutory form of fraud in respect of misleading or deceptive conduct or false or misleading representations where the representor does not have a reasonable basis for making them.

An example of that was the decision of the Court of Appeal in the Wieland v Texxcon matter a couple of years ago which your Honour Justice Nettle presided on.  These provisions are right across the apportionment legislation.

EDELMAN J:   The starting point would be 24AM, not 13, would it not?

MR O’BRYAN:   Yes, we accept that, your Honour.

EDELMAN J:   So, the starting point would really be what is meant by fraud in 24AM.

MR O’BRYAN:   Yes.  But whatever fraud means in 24AM, it has to be satisfied by the statutory deeming in section 13, we submit.  That is the clearest ‑ ‑ ‑

GORDON J:   But that is the question.  The question is whether a phrase “whom a finding of fraud is made” encompasses the way in which you interpret section 13, having regard to the findings made here.

MR O’BRYAN:   We accept that is true but, your Honours, a more powerful legislative description of fraud, we submit, could not be given in the language of section 13.  The person making the representation made it with knowledge of its falsity.  So we are not talking about, we submit, marginal cases in which the deeming of a representation to be misleading or deceptive in a context in which there are no reasonable grounds for it, which was the Wieland example, and which of course was found to be sufficient to deny ‑ this was obiter dicta in that decision of course, but it was concluded by the Court of Appeal that would be sufficient to engage the fraud exception.

This language, section 13, we submit is much more powerful.  The person making the representation made it with knowledge of its falsity.  There are all sorts of species of fraud known to the law, but that one is smack bang in the middle of the most traditional common law definition of it.  So, if section 13 is engaged in a sale of land in the State of Victoria, which it was in this case ‑ there is no dispute about that ‑ the burden of proof in this case had plainly shifted and it was, with great respect, not addressed properly either by the trial judge or by the Court of Appeal, and that paragraph of the judgment, which is the only paragraph in which the matter is addressed is, we submit, infected plainly with error.

On ground 2, your Honours, we accept of course it would not by itself justify a grant of special leave.  It does not give rise to questions of public importance.  But in the event that leave is granted in respect of ground 1, we submit that ground 2 should be permitted to go forward on the basis that the trial was in fact conducted somewhat differently to the pleadings, which is not unusual, and the reasons given by the Court of Appeal for holding the applicants strictly to the pleadings which are in paragraph 15 of the judgment, we submit are harsh in the circumstances.  There was clear evidence given that Mr Nucara, the relevant respondent for these purposes, did inform Ms Nguyen about the $5.92 million offer made on that day.

Therefore, there was simultaneously with the representations about the rental and the good paying tenant, and so forth, also a materially false and misleading statement made in respect of the amount of this offer and because, as I submitted earlier, it is important in considering whether people

did or did not have a reasonable basis for a suspicion to know all of the misleading things that Mr Nucara said on that day.  His Honour’s findings in respect of what Nucara said are not disputed.  Our learned friends do not dispute them in their submissions.

What happened, of course, is that because the Court of Appeal held the applicant strictly to the pleading in relation to the whole of the representation that was made, the auction has been cancelled, et cetera, et cetera.  All of that representation fell away in one hit and we submit that that is harsh in the circumstances and, because that representation supports the others, we submit if a grant of leave is made in respect of ground 1, ground 2 should be granted leave also.  Those are the submissions for the applicant, your Honours.

NETTLE J:   Thank you, Mr O’Bryan.  Yes, Mr Collins.

MR COLLINS:   If the Court pleases.  The contention that there are no findings of fact which established that section 13 was not engaged unless they are overturned is plainly wrong.  The section is at application book page 276 and section 13(1)(a) can be satisfied by either one of two alternative facts that the defendant proves, either:

that he had reasonable ground to believe and did believe that the representation was true or that he had no reason to suspect that the representation was false ‑

At paragraph 554 of the trial judge’s judgment he made a positive finding that Mr Nucara “had no reason to suspect” that the representation was false.  Section 13(1)(b) provides that the defendant otherwise provides that he “otherwise . . . had acted innocently”.  At paragraph 554 of the trial judge’s reasons he makes a positive finding that he was satisfied as to that, and they are the findings at application book 170 that Mr O’Bryan took the Court to.

NETTLE J:   Which he accepts that he cannot turn over.

MR COLLINS:   Then the question does not arise.

NETTLE J:   Cadit quaestio you say?

MR COLLINS:   Yes.  That finding of fact was not subject to consideration by the Court of Appeal, nor is it the subject of challenge in any of the proposed grounds of appeal which the Court will find at application book 268.  The grounds of appeal are set out in paragraph 1 which include grounds in addition to those in respect of which special leave is sought, but there is no proposed ground challenging the Court of Appeal – the ground would have to be the Court of Appeal ought to have found that the trial judge erred in making the findings made at paragraph 554.

This is not an appropriate vehicle because this Court would have to permit a ground of appeal challenging the trial judge’s finding and would have to not only examine the reasons, the path of reasoning and the findings in the reasons, but then have to go to the evidence to make its own assessment of whether those two findings of fact ought to be overturned.  For those reasons, we submit this is not an appropriate vehicle.

The other reason is that on a number of levels this is a fact‑intensive case, including on the question of causation.  The applicant, P‑Value, had no contractual obligations whatsoever, and that is a finding of the trial judge because at paragraph 104 of the Court of Appeal’s reasons at application book 243 the court rejected the trial judge’s finding that P‑Value, accepting nomination as purchaser and concluding the purchaser as nominee was the subject in contractual obligation.  At paragraph 104 the Court of Appeal held:

With respect, his Honour was in error in this analysis.  The nomination of P‑Value as substitute purchaser did not have the effect of making P‑Value a joint obligor under the contract, let alone constitute a novation of the obligations of Nguyen to P‑Value.

So that, if leave was granted, it would be our intention to file a notice of contention which would contend that the Court of Appeal erred in finding and in failing to overturn the trial judge’s finding that P‑Value’s loss was caused by the misleading and deceptive conduct.  It is essentially the argument that the Court of Appeal identifies in paragraphs 104 to 108 of the judgment because it was clear from the evidence that a valuation had been obtained prior to settlement as a result of Mrs Nguyen, and Mrs Nguyen being effectively the controlling mind of P‑Value, knew that it was a disadvantageous transaction.

The reason that P‑Value nevertheless accepted nomination as purchaser and concluded the settlement was because there would be less land tax payable and there would be other taxation advantages if a corporate entity discrete from Mrs Nguyen purchased it.  It therefore was not concluding the transaction in the belief that it was advantageous; it did so knowing that it was disadvantageous.  So that would be another issue which is fact‑intensive and involves difficult questions of principle that this Court would have to consider.  So, they are the reasons that we submit it is not an appropriate vehicle.

We also submit for the reasons set out by the Court of Appeal that in any event the Court of Appeal’s decision is not attended by sufficient doubt to justify the grant of special leave.  The reference to the purpose of the provision ‑ section 24AM – and reliance on AB AMRO is rely upon the significance of the purpose of the legislation in its construction, notwithstanding the differences in language between provisions which are all part of a national scheme.

The language of the provisions is nevertheless important to their construction, but the language of section 24AM which refers to “a finding of fraud” and makes the argument stronger in respect of 24AM than it would be in respect of section 1041M.  So that the argument of Mr O’Bryan has to go so far as to say a deemed fact in respect of which there has been no finding of fact or examination of evidence constitutes a finding of fraud for the purposes of section 24AM, and we rely upon the purpose of the proportionate liability scheme as well, as referred to in the report of Mr Horan which we provided to the Court, which was to address the burden of the cost and difficulty in obtaining professional indemnity insurance and the desirability of a corresponding scope of the proportionate liability regime and the scope of cover provided by most professional indemnity policies.

EDELMAN J:   Do you accept that the effect of the conditions in 13(1)(a) and (b), putting aside the deeming effect of 13, is to create a statutory finding or statutory provision for fraud in the same terms as common law fraud?

MR COLLINS:   I will not say yes to ‑ ‑ ‑

EDELMAN J:   In other words, that reason for suspicion that a representation was false could amount to common law fraud.

MR COLLINS:   No, that in itself would not, but what is deemed is a deemed fact, which is knowledge of the falsity of the representation which goes a long way further.

EDELMAN J:   Yes, but what is deemed is fraud, but the elements that have to be proved for the purposes of the deeming are not the same, you say, as the elements of common law fraud?

MR COLLINS:   No, with respect, nothing – nothing has to be proved for the deeming, nothing at all.  That is the whole purpose of section 13.  It is correct, as the applicants contend, that its obvious purpose is to relieve purchasers of land in actions where an element that they need establish to succeed in the cause of action is the knowledge of the falsity of the representation to relieve them of the burden of establishing it and proving it, and the way the section does that is deeming it to be a fact, irrespective of whether or not in truth it is the fact.

EDELMAN J:   Yes, but the conditions in (a) and (b) to effectively mitigate or relieve from the deeming ‑ ‑ ‑

MR COLLINS:   That is true, yes.

EDELMAN J:   The question is whether you say that those conditions amount to common law fraud or whether they are something short of that.

MR COLLINS:   No, they are something short of that ‑ ‑ ‑

EDELMAN J:   Yes.

MR COLLINS:   ‑ ‑ ‑ which would be sufficient to mean that the section is not engaged, and we say that is the effect of the findings of fact of the trial judge and for those reasons we say its purpose is clear enough, but that is a very different purpose from the purpose of section 24AM, and we rely upon the authorities we have referred to as the way in which section 24AM should – I am sorry, deeming provisions such as section 13 should be applied, having careful regard to the purpose of them, and this is quite a different nature.

This is not facilitating proof of a cause of action by a party who might be at a disadvantage in proving it.  This applies, for example, to a cause of action, an element of which involves no element of fraud, for the purposes of limiting the operation of the proportionate liability scheme and we say for those reasons the Court of Appeal’s decision is not attended by sufficient doubt to justify the grant of leave and particularly not in this case where it would involve examination of all the evidence to overturn findings of fact of the trial judge not considered by the Court of Appeal and not the subject of a ground of appeal in the application.

In respect of the second ground of appeal, our learned friend correctly concedes there is no question of public importance.  It would again involve an examination of the facts, but what our learned friend did not draw attention to is the trial judge’s finding was clearly wrong.  It was not a question of confining to the pleadings.  He found that the pleaded representation which had three elements in a single statement by Mr Nucara ‑ the auction had been cancelled ‑ the evidence was that that was a statement made by Mr Thomas before Mr Nucara entered the room.

It had a second element in the one statement; the auction had been cancelled because they had an offer of $5,920,000, so it had the causal statement.  And the third, which was the only one of the three elements of which there was a finding that it was correct, that they had an offer of $5,920,000.

Now, the statement in its entirely had significance in terms of what was alleged and what was proved because of the causal element, both in terms of the content of the representation and the causation of the loss, because as alleged and proved it very much relied upon a representation that had the causal step meant if you did not buy immediately the property would be sold for $5,920,000.

So, in our submission, the Court of Appeal was correct.  It involved the application of well‑established principles.  Even if it was established that there was sufficient basis to reconsider, as if this were a rehearing, whether the Court of Appeal was correct and whether the reasons were adequate, it still does not get anywhere near a special leave question.  Unless there are matters I have not addressed that the Court wishes me to, they are our submissions.

NETTLE J:   Thank you, Mr Collins.  Mr O’Bryan.

MR O’BRYAN:   Thank you, your Honours.  The characterisation of section 13 by my learned friend and the implicit threat that there will be some complication arising out of some hitherto to be filed notice of contention we submit is completely misplaced for this reason.  When your Honours look at section 13, again on page 276, you will see that it addresses itself in effect to the word at large, so there is no privative contract issue in connection with it.  It simply says:

In any action commenced in respect of the sale of any land if it is proved that any representation made on such sale was false –

it does not say to whom; whether that person was or was not in direct contractual relations.  The nomination point that my friend refers to is simply, we submit, irrelevant.  It is a red herring.  Going on:

and that any party to such action was induced –

Well, there is no doubt about the fact that Ms Nguyen who was a party – or the company which was a party to the action was induced, and then it goes on.  The latter part of the section, of course, because the section imposes a burden of proof upon the defendant in relevant circumstances, obviously requires the defendant to call evidence to support those conclusions.

Coming to that issue, your Honours, it is not true to say that a great deal of the facts below will need to be rehearsed in this matter.  Indeed, the only findings which could conceivably support the conclusion which Justice Digby stated baldly in paragraph 554 that he had acted innocently could be the findings – if your Honours go back to pages 46 and following of the application book, his Honour addresses in great detail the evidence given by Nucara under cross‑examination and your Honours will see, for example, at the top of page 47 ‑ his Honour says generally, I do not accept much that Nucara said to me and I prefer Nguyen’s evidence.  On page 47 at the end of that first paragraph on the page at about line 11:

I also accept Nguyen’s evidence that Nucara stated at the critical meeting that he was in possession of an offer –

for the 5.92.

GORDON J:   That is the offer representation.

MR O’BRYAN:   Yes, it is.

GORDON J:   We are dealing with the rental representation.

MR O’BRYAN:   Well, your Honour, we are but ‑ ‑ ‑

GORDON J:   That is the only finding – at 554 it is only dealing with the rental representation.  It is not dealing with the offer.  It is particularly referrable to 21(b) and (c) of the statement of claim.

MR O’BRYAN:   Well, your Honour, that is true but if that is the case, then it is inconceivable that his Honour could be referring to anything that he has dealt with separately elsewhere.  There is simply nothing said about the rental representation which could possibly lead to the conclusion other than perhaps what his Honour concluded in paragraph 154.  At application book 49, which is paragraph 148, his Honour deals with both representations in that lengthy paragraph 149 commencing on page 49, so your Honours will see in the middle of that paragraph at about line 14 his Honour finds that Nucara:

would be very likely to tell Nguyen that another buyer had offered a specific substantial sum of money for the Property and seek to reassure [her] as to the value of the potential purchase by having her believe that the rental stream . . . was high and dependable –

Then in 154 his Honour says – this is the bottom of page 50:

Notwithstanding the above, Nucara claims he formed the view that rent was being paid ‑

Then there is an interesting exchange from the evidence.  He gives evidence:

The view I formed is that they were paying in accordance with the lease.

Then he was asked:

But that view was formed without making any enquiries of McNee; is that right?‑‑‑No, that’s right.

That would have put an end to his section 13 defence, that answer.  His Honour goes on to say at 155:

I do not accept Nucara’s evidence as likely or credible on this aspect . . . I also consider that I am not in a position, on the evidence adduced, to make any positive finding about what Nucara and Beller actually knew in relation to 255’s payment of rent.

His Honour makes clear that he has not got evidence to make a conclusion about what they knew, and that is why his Honour repeatedly says ‑ and 221 and 229 are examples of this – 221 is on page 69:

I do not consider that I have a sufficient evidentiary basis upon which to conclude that –

they knew that 255 had not paid rent, and 229 which is on page 72:

I consider however that the evidence adduced . . . does not provide a basis for me to find [they] knew about the rent abatement –

That is the sum total of the evidence which the Court will be taken to in the event that we obtain special leave on ground 1; that is it.  Now, none of that, we submit, none of that could possibly support his Honour’s conclusion in 554 with no other analysis of evidence that there was no reason to suspect, especially having regard to the admission that he had not even bothered to ask McNee, the vendor, who plainly knew about the rental abatement agreement.  That meant section 13 could never have been satisfied by this gentlemen, that he was well and truly within the deemed fraud of that provision.  Those are our submissions in reply, your Honours.

NETTLE J:   Although the Court is not to be taken as necessarily expressing agreement with the whole of the reasons for judgment of the Court of Appeal, the Court is not persuaded that this matter is an appropriate vehicle for the grant of special leave.  Accordingly, the application is refused.  Do you seek costs, Mr Collins?

MR COLLINS:   I do, your Honour.

NETTLE J:   Mr O’Bryan?

MR O’BRYAN:   No dispute, your Honour.

NETTLE J:   The application is dismissed with costs.

AT 10.42 AM THE MATTER WAS CONCLUDED