Plummer v Osticat Pty Limited

[1988] HCATrans 295

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S93 of 1988

B e t w e e n -

WARREN DOUGLAS PLUMMER

Applicant

and

OSTICAT PTY LIMITED (formerly

THE SAINTS .. GALLERY PTY LIMITED)

Respondent

Application for special leave to

appeal

MASON CJ

BRENNAN J

GAUDRON J

Plummer

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 25 NOVEMBER 1988, AT 10.37 AM

Copyright in the High Court of Australia

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1:1R M.J. NEIL, QC:  May it please the Court, I appear with

my learned friend, 1:1R J.B. MASTON, for the applicant.

(instructed by Conway MacC~llum)

1:1R P.F. ESLER:  Your Honours, I appear for the respondent.

(instructed by Forshaws)

MASON CJ: Yes, Mr Neil.

1:1R NEIL:	Your Honours, might I seek leave to hand to the Court a short supplementary submission and a copy
of the Act and the judgment of this Court in
YORKE V LUCAS, 158 CLR.
MASON CJ:	When you refer to a "supplementary submission",

that is supplementary to what?

1:1R NEIL:	To the affidavit, Your Honour.
MASON CJ:	I see.
1:1R NEIL:	If it please Your Honours, the application involves
a matter of the construction of section 52 of the
TRADE PRACTICES ACT. Although the Full Court, at the
application book, stated the matter was - coIDII1encement of the judgment, at page 35 of the

factual, rather than one involving a

question of principle -

albeit a difficult question, the Full Court did,

at page 46, line 20, state that:

In the end, the question is whether, on

the proper construction of s.52, it has been

breached.

Your Honours, the problem is that in the decision of

this Court in YORKE V LUCAS, 158 CLR 660 -at page 666,

the Court raised the question of whether or not there

could be an express or implied disclaimer, but it is

our respectful submission the Full Court failed to

understand what had been dealt with in YORKE V LUCAS.

At page 666 at about point 3 - there is the relevant passage from point 3 to about point 7:

It should be observed at the outset that

the facts as found by the trial judge raise

the question whether the Lucas company itself

was guilty of any contravention of s. 52. It

is, of course, established that contravention

of that section doesrot require an intent to

mislead or deceive and even though a

corporation acts honestly and reasonably,

it may nonetheless engage in conduct that is

misleading or deceptive or is likely to
mislead or deceive. That does not, however,

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mean that a corporation which purports

to do no more than pass on information

supplied by another must nevertheless be

engaging in misleading or deceptive conduct

if the information turns out to be false.

If the circumstances are such as to make it apparent that the corporation is not the

source of the information and -

and I would emphasize the word "and", Your Honours -

that it expressly or impliedly disclaims

any belief in its truth or falsity,

merely passing it on for what it is worth,

we very much doubt that the corporation

can properly be said to be itself engaging

in conduct that is misleading or deceptive.

Then there is a reference to what might have happened

if the Lucas company had appealed:

it may have been necessary to form a concluded

view on that question. It has not, however,

done so and it is possible to resolve this

appeal against the judgment in favour of Lucas

upon the assumption that the finding of a

contravention of s. 52 on the part of the

Lucas company was correct.

Your Honours, the way in which the Full Court

dealt with this was at page 46 of the application

book. At the top of the page Their Honours says:

The reference in YORKE V LUCAS to an

express or implied disclaimer of belief in an

instruction conveyed by an agent does not

involve that an. agent who does believe his

client, and makes that fact apparent, may

not at the same time impliedly disclaim

personal responsibility for what he conveys.

lhen there is a reference• to the first instance
findings.	We would make two basic submissions:

one is really convered in the supplementary submission

I have just put forward, Your Honours, and that is

that if YORKE. V LUCAS is the law, it is setting up,

really, no more than a test by which one could see,

in certain circumstances, that the conduct had

not been, in fact, misleading or deceptive.

MASON CJ:  It may not even be setting out a proposition of

law or a criterion.

MR NEIL: Indeed, Your Honour.

MASON CJ:  But describing or stating a set of facts which do

not give rise to liability under section 52.

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MR NEIL: Yes, Your Honour, yes, because one does not reach

the level of misleading or deceptive -

MASON CJ: Yes, it is not as if you have a prima facie case

of liability under section 52 which is negatived by

some disclaimer, express or implied.

MR NEIL: Exactly, yes. Now, we are content, for the purposes here, to stop there and not go further as to whether

that passage is tentative or not. Let us assume it

represents a way in which the Court has said these

types of problems can be resolved by an approach

that enables one to say that the misleading or

deceptive conduct has not arisen. What the Full

Court has done, we respectfully submit, is misconstrue

the meaning of part of what was said,"disclaimer of a

belief", and gone on to say, "Well, you can in

circumstances -., even if you don't disclaim the belief,

you can, impliedly in some way by conduct, disclaim

responsibility." In other words, if you have breached

the Act, if you have been misleading or deceptive,

none the less, you can look at the total circumstances

and establish a defence to this prima facie case by

saying, "Well, you may still, at the same time,
impliedly disclaim personal responsibility". That is,
at the same time as you have done things which bring
you within the Act, you may, none the less, impliedly

disclaim responsibility.

That would be, Your Honours, taking a gap that is

not warranted in the Act. It is legislation designed

to assistthe consumer not to have a hole of that
proportion or a new concept or principle whereby

defendants could avoid responsibility by simply saying,

"Well, look at all the circumstances. We have breached

the Act. Look at all the circumstances. In fact, we

were impliedly disclaiming responsibility." We would

submit you could not or a real question arises whether

you can ever, in some way, express or implied, disclaim

your responsibility for a breach of section 52.

The other way in which the error may have arisen

in the mind of the Full Court was this: with respect

to Their Honours, they were confused about the position

of Mr Lucas in YORKE V LUCAS because whilst he, to be

found in breach of section 75B, had to have shown to

have had mens rea, none the less, a company could have

been found to be in breach of section 52 if he had

done something on a non-mens rea test. He would

avoid responsibility but the company would be liable

by virtue of his acts which do not need mens rea to

bind the company. And the whole reference to what the High

Court in YORKE V LUCAS and the learned judge at the	trial of YORKE V LUCAS was dealing with is really a
misconception of what happened and has taken their
learned Honours off the track.

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So that in the long run, Your Honours, we

respectfully submit that - and I do make the point,

at page 46, line 20, Their Honours do say:

In the end, the question is whether,

on the proper construction of s. 52 -

we submit they have totally misconceived the proper

construction in this case. And at the end of the

judgment, page 48:

The matter would raise quite a different

issue if Mr Flannery were shown to have

done, or purported to do, anything other

than explain what Mr Kehoe had claimed to

be the facts.

We submit, Your Honours, that when a man does not

disclaim a belief in the truth or falsity but says,

"Would you like to buy two lovely Lloyd Rees'" or

"I've got some Fairweathers' coming in" and he does

not disclaim, ex.pressly or impliedly, a belief in

the truth or falsity of their originality, he has done

something else.

MASON CJ: What do you say the engagement in misleading or

deceptive conduct was?

MR NEIL:	Your Honour, it was the statements to the purchaser upon which he relied and they are found .. aonveniently, as
the end result of the findings of Mr Justice Wilcox
in the Full Court,starting at page 39, line 25.

BRENNAN J: So, we are involved in misleading or deceptive,

not likely to mislead or deceive? Actual deception?

MR NEIL: Yes, Your Honour, but I suppose it would have been

likely to mislead and deceive as well. ·

BRENNAN J: The distinction between the two is reliance, is it

not?

MR NEIL:	Yes.	It is accepted that Mr Plunnner relied upon what he was told and he did rely, so we say it was, in fact,
misleading or deceptive.

BRENNAN J: Relied in the sense of believed them to be genuine

Rees or Fairweathers?

MR NEIL:	Indeed, Your Honour, and he said that if Mr Flannery,
the agent of the gallery - the gallery owner - had
expressed any doubts to him about originality he
would not have bought them. That was Mr Plunnner's
position. Line 25 on page 39:

About the end of July 1986, Mr Flannery

told Mr Plummer that he was "about to get two

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paintings in by Ian Fairweather" and

inquired whether he was interested.

There was a dispute -

on the facts that is not relevant for this.

Page 40, line 26:

To return to the narrative, Mr Plummer

responded to Mr _Flannery's inquiry by

indicating that he could be interested in

the Fairweather paintings, depending on the

price. Mr Flannery said he did not yet know

about price as he had to talk to the owner.

The intention was that the appellant would

retain a connnission on the sales which was,

in the event, a total of $3,000 ..... That

sum has been refunded, very properly .... .

The next day, by arrangement, Mr Plummer

went to the Carlton gallery of the appellant

and was shown the two supposed Fairweathers.

He then phoned Mr Flannery and again asked the

price. He was invited to make an offer.

He then said, "Do they have a good history?"

and Mr Flannery replied, "Yes, these two

Fairweathers came straight from Fairweather

direct to my client's legal firm in lieu of

payment of fees." Mr Plummer then offered

$7,000 for the pair and Mr Flannery said he

would find out if that was accepted. Later

Mr Flannery said, "I've spoken to my guy about

the Fairweathers and he'll sell for $7,000."

The next day Mr Plummer paid the price and

the paintings were delivered.

The "Rees" paintings.:were also sent by

Mr Kehoe to the appellant "on consignment"

although the full nature of the relationship between

Kehoe and the gallery was not determined -

and Mr Flannery offered them to Mr Plummer

as "two lovely blue paintings by Lloyd

Rees". After some further discussion,

Mr Plummer was invited to make an offer.

The following day he came to the appellant's

gallery and inspected them.	He spoke to
Mr Flannery;	Mr Plummer's evidence about

that was, in part, as follows:

"I said, 'Where di your client acquire

them, Peter?' He said 'They originally

came from an exhibition of Rees' work at

a gallery in Brisbane.	My guy is selling
them because of a divorce settlement.'	I

said, 'What exhibition and gallery did they

come from?' He said, 'It was one of three

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galleries that my client had dealt with

in Brisbane, but I'm not sure which one.'"

After some haggling, there was an agreement to sell the two of them for $6,250.

In that account of the matter there was no mention by Mr Plummer of having checked

the value of the paintings, but it appears

clear that he did.

He rang a gallery, got some comparative prices and then said he would buy them, and he bought them as

investment or on a speculative basis.

So, the real question, Your Honours, is if one

is to look at the type of guidance in YORKE V LUCAS,

that is one thing but can, in these circumstances,
the vendor avoid responsibility for what we submit

is,clearly,clear statements that implied at the very

least the genuine nature.	He said, "These· are
by Lloyd Rees."

MASON CJ:  But your client would not have accepted that the

vendor was actually warranting or representing that

they were Fairweathers' or Lloyd Rees' in his

professional judgment.

MR NEIL:	Your Honours, not necessarily that he was accepting
such a warranty but he was not given any notice or
indication that they were doubtful in any way,
and he was given a history that was substantial, was significant, referred to various galleries,
referred to a history of them upon which he relied.
Now, the question is can a vendor of goods simply
avoid responsibility under this Act by saying,
"Well, look, I will tell you what I know about the
history." ]: may be, for example, some goods that carry pure wool made in Iceland - fine goat wool.
How does the consumer, if that is false, recover
against the store if the manufacturer was in Iceland?
The Act is designed to enable a person who relies upon some information provided to him by the vendor company,
in the absence of some clear type of situation as~
arises in the YORKE V LUCAS' paragraph, to be able
to hold the vendor responsible. Now, we submit that
the vendor is not entitled to any doctrine of express or implied disclaimer of responsibility.

Even if he is saying to a person, Your Honours,

who accepts, "Well, I know that this gallery owner

perhaps is not personally warranting in the sense

of a legal warranty, he is none the less still telling

me that he is conveying to me what he believes, at

least impliedly, at least by adoption of his vendor" -

that is Kehoe's statements - "the gallery owner is

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expressly or impliedly telling me that these are", by
virtue of the information he has got from Kehoe, "genuine".

The purchaser is entitled to say to himself, "Well,

I wouldn't expect a gallery owner to be dealing·:·.with

people that he considered to be thieves and rogues

and forgers. I am entitled to expect that if he tells

me he believes that" - or he adopts the belief, even,

of his vendor - "I am entitled to rely upon that and

hold him responsible." ,Otherwise, Your Honours, we

would respectfully submit there would be the greatest

scope for defences that were never expected by the

Parliament and the greatest scope for avoiding the

real purpose, policy and provisions of section 52.

MASON CJ:  I can understand the force of what you are saying

in relation to goods generally but it seems to me

that there are particular difficulties that attend

the sale of works of art and particularly in a

relationship such as subsisted between this vendor and

this purchaser.

MR NEIL:	Your Honour, that may be a question for the appeal
but, with great respect, the Full Court's judgment,
if it is going to assert some form of principle of implied disclaimer of responsibility, will be capable
of being used in that way by defendants generally and we submit that raises the special leave aspect
at its starkest.

MASON CJ: But it is equally material on the grant or refusal

of special leave. What is the point of our picking
up a case that really arises out of this very special

context, one concerning artworks, and a particular

relationship between the vendor and the purchaser?

MR NEIL:	Your Honours, we would not concede by any means that
the applicant here ought not or would not succeed on appeal. He has been provided with information which, although he himself had some expertise in the area,
he was not an expert on Fairweathers' and Lloyd Rees'
as such.  He had some expertise generally. He had
been himself in a totally different field of endeavour
until about five years before he started to do some
artwork himself and he is entitled as much to
protection, we would submit, as another person. One would have to demonstrate that there was so great an
imbalance between his posit.ion and. that of the gallery that,
conduit and that he, Mr Plutmner, was a very, very well furnished expert in the whole field, including
in fact, Mr Flannery was some form of absolute bare case he might well have then gone and dealt with Kehoe or tried to find him. He relied upon Flannery.

MASON CJ:  But what was he really relying upon? He could not

have relied upon Flannery's judgment because Plurrnner

knew more about art than Flannery did.

MR NEIL: Generally, Your Honour.

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MASON CJ:_. Yes, although neither of them seemed to have been

experts in Fairweathers' or Lloyd Rees'.

MR NEIL: Quite so, Your Honour, yes.

MASON CJ: But it seems odd that you should say that Plummer

would have relied on Flannery's judgment that they

were genuine Lloyd Rees' and genuine Fairweathers',

having regard to the relationship that existed between

them.

MR NEIL:	Your Honour, he was not, as I recall - the evidence
is not all before Your Honours.  He was mt challenged
on the fact that he said that if Flannery had expressed
any doubts about the genuineness he would not have purchased.
MASON CJ:	I can understand that.

MR NEIL:  Yes. The problem is one takes things at face value.

BRENNAN J: That is the problem with this case though, is it

not, Mr Neil? Having regard to the nature of the

goods with which they were dealing and the relationship,

as the Chief Justice has mentioned, is not the burden

of what the Full Court has said this: that one party

says to the other, "What do you know about the

provenance of these paintings?", and the other has

said, "This is what I've been told" and he gave a

truthful answer, and on the basis of that information

the purchaser said, "Well, I, for myself, now conclude

that it is a genuine Rees'" or "Fairweather".

MR NEIL: Except, Your Honour, that before the questions of

provenance, there were the statements made, "I'm about
to get two paintings in by Ian Fairweather" and an
inquiry as to whether "you are interested?", and the
statement that, "Would you like two lovely blue

paintings by Lloyd Rees."

BRENNAN J: Yes, in some context those would be capable of

amounting to conduct which might activate section 52

but in the way in which the Full Court approached

the assessment of that evidence in the context of the

relationship of the parties, it seems to me that the

difficulty that you .face is that they have regarded

it as being no more than a statement of the knowledge

that one party had of the provenance of the works.

MR NEIL: Your Honours, perhaps I would answer that with two

arms: one, the Full Court has gone further than that,

with respect, and has imported this implied disclaimer

because they found that there had been a conveyance,

in fact, of a belief, albeit formed on Kehoe's

information, and we submit that if you convey a

belief, you are conveying a fact within that belief

and if that is misleading or deceptive, the section

applies and one does not look at the overall conduct.

Secondly, even though the particular circumstances may

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have given rise to this particular relationship,

it is not only the conveying of information. It

is conveying of it with an imprimatur. It is a gallery

that is selling it and it is conveying it in such a

way that the purchaser does not have any reason to

make his own separate inquiries. He accepts the

imprimatur. The face value is the problem, Your Honour.

He is told, "My client got these from an exhibition

of Rees' work at a gallery." People do not automatically

just believe other people. People tend to believe what

they are told by somebody, at least of a reasonable

person in an art gallery. He was told that "they

originally came from an exhibition." "~y guy is

selling them because of a divorce settlement." "One of

three galleries" and so on. It leaves it open to the

very real problem that if you cannot disprove the

story that the vendor tells you, and you have no

reason to doubt it, then vendors can, if need be,
even invent stories, pass them on, give them their
own apparent imprimatur, pass on an apparent belief

in the truth of them and say, "Well, sorry about

that, section 52 doesn't apply because in fact I've

told you all I know." Now, Your Honours, we would

submit that it is a matter - not only the particular

problem here but a general problem-.- and it is not to the
point that there was some knowledge on the part of
the person concerned. Otherwise, every time somebody

went, say, to a car dealer and he was already in the

car trade and knew something about it, this defence would

be raised. They would sa7,"Well, he knows something

about engines. We didn t tell him anything more than

we got it from somebody else." That is not the purpose

of the Act, the Act's purpose is, we would submit,

if you do not disclaim the belief, as in YORKE V LUCAS,

and if you pass on the information with an adoption of

it - see, in YORKE V LUCAS, itself, Mr Lucas, although

he had worked out some figures, told the purchases

that he had not verified them.	Now, here there wasro
such thing.

Mr Flannery did not say, "Look, I haven't

actually verified this. I have no belief in the truth

or falsity." He impliedly - more than impliedly,

passed on his belief and, Your Honours, that was the

basis of his appeal. At page 38, at the top of the

page:

The effect of the appellant's contentions

was that Mr Flannery was not taken by the

purchaser, Mr Plunnner, to have been conveying
anything more than that he believed the

paintings to have been executed by certain

artists and that their then owner had given

a certain account of their history; neither

Mr Flannery's affirmation of his own belief

in their authenticity, nor his statements as

to the story Mr Kehoe had told, so it was

contended, were misleading.

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Your Honour, if he conveyed the information

and if he had said, "Well, I, myself, don't adopt

them as genuine", that is different, but if he

conveys the information, Your Honour, and adds his

imprimatur and adds his own belief, it is our

respectful submission that both in this case, where

we submit there has been a regrettable injustice,

and in the case of general matters, the purchasers

are entitled to seek relief against the vendor

otherwise, Your Honurs, the purchaser pays his money;

it goes to the fraudulent person and it is a classic

case of which of two innocent people should have to

suffer, but it opens, we would submit, very, very

great potential for injustice because this is different from YORKE V LUCAS. In this case the

appellant's own case was an acceptance of the fact

that Flannery had picked up the belief of Kehoe

and conveyed it, and that belief would include a

representation of the fact, and my client relied on

it and he was not challenged as to his reliance on it.

BRENNAN J: What do you say about the sentence at the top of

page 47? That is:

A disclaimer of any personal knowledge of

the paintings' authenticity was deducible

from - - -?

MR NEIL:	Your Honour, yes, this is one of the crux points. Your Honour, the Full Court is saying there was
no disclaimer of belief.  We say that should be the
end of the matter. But they go further and say, "However, we can see a disclaimer of knowledge of
the paintings' authenticity from the total
circumstances." Now, it is our respectful submission
that that goes beyond the true construction of the
section and it goes beyond whatever is the rule or
the guidance in YORKE V LUCAS.
GAUDRON J:	But it cannot be the case, can it, that to avoid

any suggestion of misleading or deceptive conduct the

vendor had to express a doubt about the authenticity, in these circumstances?

MR NEIL: Your Honour, he does not have to but if he does,

on YORKE V LUCAS, he may avoid responsibility.

But if he does, in fact - - -

GAUDRON J:  Let me put it another way: do you go so far as

to say that in the circumstances of this case

conduct falling short of disclaiming any belief in

the authenticity of the paintings was false and

misleading?

MR NEIL: Yes, if I can put it - - -

GAUDRON J: Misleading and deceptive.

MR NEIL:	I am just trying to think if there is any difference
between conduct, disclaim any belief in the truth or

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falsity on the question of authenticity. It may

not make much difference but the answer to that
would be yes, Your Honour.

GAUDRON J: That cannot be right, can it? I mean, you have

said before, for example, that the uncontested evidence

is that if it had been said that there was any doubt

about the authenticity, that he would not have

purchased but that seems to me not to go at all to

the question of reliance upon what was said and it

seems to raise a quite different question.

MR NEIL:	Your Honour, we submit that what he relied upon
were the statements that these were - that the first statements were that these were by Fairweather,
that these were by Rees.  If it had stopped there
one would have thought there would be a totally
different result.  By raising himself some inquiries
and by getting some answers, it is said that this
dissolves the responsibility under section 52. We would respectfully submit that cannot be the case,
and for the Full Court to say:

A disclaimer of any personal knowledge of

the paintings' authenticity was deducible

from the parties' relationship -

is not strictly correct. The facts showed, and no one

would challenge, that Mr Flannery himself would not

have had a personal knowledge. But he did not actually

disclaim personal knowledge of authenticity; if anything,

he adopted and, by conveying his belief, said, "Well,

I'm adopting the belief, althou~h I am not saying it's

my own formed independent belief. I'm adopting it and

passing it on." So, the question arises - there must

be many, many circumstances where a vendor, such as a

retailer, will adopt - has no reason to think otherwise -

something that has been told by the manufacturer, will

form an adopted belief; will pass it on - where the

customer would not expect them to have a ·personal

knowledge but the customer would be entitled to expect

to have a remedy against the retailer notwithstanding

T4 and not to have to go and chase the manufacturer.

MASON CJ:  I would have thought you would have been better to

concentrate on the statements made by Mr Flannery

about the provenance of the paintings. After all,

there was nothing in the relationship between

Mr Flannery and Mr Plummer which would deny that
Mr Plummer relied on the statements respecting the

provenance of the paintings.

MR NEIL: Yes, Your Honour.

MASON CJ: And that seems to have been the basis on which

Mr Justice Wilcox found for the plaintiff at first

instance.

MR NEIL:	Yes, Your Honour. Why should Mr Plummer have to bother
himself with whether or not the man had been divorced

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and whether the pictures had been in such-and-such
a gallery and so on? He was entitled to rely upon

what he was told by Mr Flannery. He is in a supine

position of being ineffectively bound with no

relief otherwise. I think I have read all the parts

that are sufficiently uncontroversial by the time

Mr Justice Wilcox and the Full Court had dealt with

the facts. I do not want to go into matters that

may have been in dispute, but he was given a history;

he was given a provenance that sounded plausible

and reasonable but not such as would require the

purchaser to go beyond it to make inquiry, to ask

himself about Mr Kehoe's divorce and so on and

these were all matters that were put to him as
supportive of a good history of these paintings,

supportive of the genuineness of them, giving a

history that you would naturally believe. You would

believe the man. "All right, it is a little bit

unusual, there is something to do with legal fees.

All right, he is telling me this, and they have been

at this gallery and he's now got to sell them for

this reason" and one takes them.

I am not seeking, Your Honours, perhaps, to say

that we do not rely on those things as well, but

firstly, it is said, "These are Fairweather, these

are Lloyd Rees", then a history of provenance is

given that is plausible to the purchaser and

reasonable,which he relied on. Now, that was conveyed.

The gentleman, Flannery, did not have to convey all that,

perhaps, but he did and in so doing, we submit, he
misled, at least - deceiv~as well, but he would
mislead the ordinary person into thinking that these

were genuine by his passing on of this information.

And that is why we would seek to say that the appeal

is by no means a foregone conclusion and that the

general matter requires special leave and that we

would mount an argument that, ultimately, there is great

scope fur a potential abuse of the section and

also why should a person who purchases in good faith on these types of representations and pays thousands

of dollars, not have a remedy against the person he

paid the money to.

BRENNAN J:  He might well have a remedy. He might have a remedy

for mistake in contract, for example. But the problem

in tnis case is this, is it not, that if we were to

grant special leave, the first question that would have

to be decided would be what _is the true inference to be

drawn ft'om the facts of the case? Was there any

conduct whic~ can be properly described as likely to
deceive or mislead? And in order to answer that

question, one has to take into account, in this case,
though not in the ordinary case, the very special

relationship between the parties in the very field to

which the alleged deception or misleading conduct is

said to relate. Now, that really means that this case

could go off as, indeed, the distinction between

Mr Justice Wilcox and the Full Court seems, perhaps, to

SlTS/2/PLC	13	25/11/88
Plunnner

have gone off, on a difference in the inference to

be drawn from the facts of the case.

MR NEIL: Your Honour, that would require a full analysis of

all the facts but we would submit that because it is

a special case, if special leave is granted, this

Court should undertake that exercise, to right an

injustice if we are correct.

MASON CJ:  But if that is so we would be granting special

leave in every case which turned on the inference

to be drawn from facts.

MR NEIL:  No, with respect, Your Honour. We submit that the

broad question of the construction of section 52 is

the special leave point and a very important broad

general point.

BRENNAN J: But it may not arise if one takes a particular view

of the facts. If one takes a view of the facts

that having regard to the special relationship between

the parties what was done here by the vendor was not
misleading or deceptive and did not mislead or deceive,

then that is the end of the case, is it not?

MR NEIL:  With respect, no, Your Honours, because we would

first have to show that the Full Court erred in law

before this Court would exercise the special

circumstances of going into that inquiry, and we

would say they erred in law by this doctrine -

if it is the correct way to describe it - of an implied
disclaimer of responsibility which is the problem

for the public because, no doubt, cases will be run

from now on on the basis that there is - you can

argue an implied disclaimer of personal responsibility,

not just the YORKE V LUCAS guidance. If we overcome

that then there is a need to look at the factual

situation. Your Honour, we would, with.respect,

say it cannot be the other way around. And then

we would solve two problems; one, the public

interest problem and, secondly, hopefully, we might

be able to persuade the Court on the merits of the
matter.	If it please the Court.

MASON CJ: Yes, thank you, Mr Neil. Yes, Mr Esler?

MR ESLER:  Your Honours, I have prepared some short submissions

in reply to my learned friend.	I would seek to tender
those to Your Honours.

MASON CJ: Thank you.

MR ESLER:  Your Honour, I take it you do not wish me to go over

those matters that I have raised in tha.t.7

MASON CJ: No, there is no occasion to do that, Mr Esler.

MR ESLER:  Thank you, Your Honour. Your Honours, if I might

reply to some of the submissions made by my learned

SlT5/3/PLC	14	25/11/88
Plummer

friend. On a number of occasions he spoke about the

effect of the Full Court's decision as being one wherein they announced a doctrine of disclaiming responsibility for a breach under the Act.

Your Honours, that is not the effect of Their Honour's

decision below. They were only concerned with whether

or not section 52 had been breached in the first place.

They never found that a breach had occurred or a

prima facie breach had occurred which had been cured

by some disclaimer on the part of the respondent in

these proceedings. They were always directing their

mind to the question of whether section 52 had been

breached and in that context the use of the words

"implied disclaimer" tends to be somewhat confusing

because that is, in effect, merely a description of

one set of circumstances in which it will be held

that a representation has not been made.

Now, Your Honours, in this case the representation

alleged was that my client had represented that the

paintings were original paintings by the two artists.

That representation, with respect to all paintings,

was put in issue in the proceedings and there was
no implied disclaimer specifically pleaded nor, indeed,

was it held there needed to be.

Your Honours, if this appeal were to be allowed,

the resultant appeal in this Court could only be

one in which there was a lengthy examination of facts

such as occurred in the court below. Your Honours,

on the question of provenance, for example, if I

might swiftly rehearse some of the problems which

need to be considered there, it was put to Mr Plummer

in cross-examination and conceded by him that to

determine a provenance for a painting one needed to

be able to establish what might be regarded as its

good route of title. In other words, a point of

sale at a point where its authenticity would have

been accurately determined. In the case.of

Ian Fairweather, for example, the paintings were for

many years sold by the Macquarie Gallery in Sydney

and the proprietors of that gallery had become

expert in determining authenticity.

Your Honours, the questions which would have to

be determined - and there is a lot of evidence on

the point - is the extent to which the information

provided by Mr Flannery to the gallery conveyed

information on provenance which was in anyway

satisfactory to anyone who knew anything about the

art world and it was the respondent's submission below,

and it would need to be considered by this Court on

appeal, that the information that had been provided

was insufficient because there was no nominated place

of original sale which might be approached to check on

authenticity. Another factual issue would be the ease

with which the applicant could have checked on provenance

if he had been so minded.

SlT5/4/PLC	15	25/11/88
Plummer

Your Honours, on the question of Mr Flannery,

my client's b~lief, in authenticity, there is no

doubt that at all times he believed that the paintings
were authentic. Indeed, if he had not believed

at all times that the paintings were authentic, we

might have been met by a deceit claim but we were

not, Your Honours, and there was no doubt that both

the parties had been entirely innocent. The factual

question was concerned with their respective

familiarity with the value of these types of paintings.

The court below, having carefully considered what is

an entirely factual question of whether, in effect,

Mr Plummer was given any information from Mr Flannery which was satisfactory on the question of authenticity,

decided, in effect, that no representations along those

lines had been made.

Your Honours, that really is the question at

issue. It is, in our respectful submission, incorrect

for my learned friend to suggest that this case will

in any way, as it were, open the floodgates to

applicants pleading the same line. Your Honours, there

has been 14 years of history under the Act before

a case of this kind has emerged and that, we would

submit, is silent testimony to the unusualness of

the facts. It can rarely be a case that the vendor

of a work of art is so little familiar with its

value as the purchaser and, indeed, in this case -

and it is important in view of something that my

friend said to stress this - Mr Plummer actually

conceded in cross-examination, and it is referred to

by Their Honours in the court below, that he had no

reason whatsoever to think that Mr Flannery was in a

position to judge the authenticity of these paintings.

So, Your Honours, it is our submission, firstly,

that the decision below is entirely correct; secondly,

that the decision below is one which is a purely factual

one involving the application of section 52 to a very

unusual set of facts and thirdly, and lastly,

Your Honours, that the public interest would not be

the quantum in issue is so small. Those are our	served by allowing an appeal in a matter in which
submissions, Your Honours.

MASON CJ: Yes, thank you, Mr Esler. Yes, Mr Neil?

MR NEIL:	Your Honours, only in reply, I would.submit the
degree of money involved is not a real consideration
to this case. The principles far exceed that aspect.

MASON CJ: Yes, thank you.

In our view, the outcome of this case depended on inferences to be drawn from the established facts.

The difference of opinion between the primary judge

and the Full Court centred on what were the correct

SlT5/5/PLC	16	25/11/88
Plunnner

inferences to be drawn in the circumstances of the case. Consequently, the critical issue of fact is

not one which would ordinarily induce this Court to

grant special leave to appeal. And in this case we

should add that the.circumstances are special in the
sense of particular by reason of the unique

relationship that subsisted between the vendor and

the purchaser.

Accordingly, the application for special

leave to appeal is refused.

And you ask for costs, Mr Esler?

MR ESLER:  We do, Your Honour.

MASON CJ: You do not oppose, Mr Neil?

MR NEIL:  I have nothing to say on that, Your Honour.

MASON CJ: The application is refused with costs.

AT 11.27 AM THE MATTER WAS ADJOURNED SINE DIE

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Plummer