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Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd

Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd

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Case Copied 18 March 1993 18 min read

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Re: RICOCHET PTY. LTD.; IAN BARRON and MORWEST INVESTMENTS PTY. LTD AS TRUSTEE
FOR THE MORWEST TRADING TRUST
And: EQUITY TRUSTEES EXECUTOR AND AGENCY COMPANY LIMITED; AUSTORE LIMITED and
AZELIA PTY. LTD.
No. WG221 of 1992
FED No. 192
Number of pages - 20
Trade Practices
(1993) 113 ALR 30
(1993) ATPR 41-236
(1993) 41 FCR 229

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Lockhart(1), Gummow(1) and French(1) JJ

CATCHWORDS

Trade Practices - misleading or deceptive conduct - lease of shopping centre premises - representations as to number of persons entering centre - whether any reliance on representations - credibility and reliability of witnesses - ss 52, 82 Trade Practices Act 1974 - whether mere possibility that misrepresentation might have induced a course of action may be sufficient to attract liability under s 82.

Gould v. Vaggelas (1985) 157 CLR 215

National Australia Bank Limited v. Cunningham (1990) ATPR 41-047 discussed

HEARING

PERTH, 15 March 1993

#DATE 18:3:1993

Counsel for the Appellants : Mr M. McPhee

Solicitors for the Appellants: : Michell Sillar McPhee Meyer

Counsel for the Respondents : Mr M. McCusker QC with Mr D. Martino

Solicitors for the Respondents : Clayton Utz

Counsel for the Cross-Respondent: Mr I.R. Freeman

Solicitors for the Respondents : Phillips Fox

ORDER

The Court orders that:

1. The appeal be dismissed.

2. The cross-appeal be dismissed.

3. The appellants pay the costs of the respondents of the appeal.

4. There be no order as to the costs of any party to the cross-appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

LOCKHART, GUMMOW AND FRENCH JJ This is an appeal and cross-appeal from the judgment of a Judge of the Court (Lee J) on a claim by the appellants for damages arising out of the leasing by the first respondent, Equity Trustees Executors and Agency Company Limited ("Equity Trustees"), to the first appellant, Ricochet Pty Ltd ("Ricochet"), of a shop in the Maddington Plaza Shopping Centre, situated in a suburb of Perth. The appellants claimed damages under s.82 of the Trade Practices Act 1974 ("the Act") alleged to have been incurred from conduct of the respondents in contravention of s.52 of the Act. The appellants also claimed damages for negligent misrepresentation and fraud arising out of the same circumstances.

Two representations are alleged to have been made to the appellants. The representation which is the primary basis of the appellants' case was that the average number of people attending the shopping centre each week was 55,000 to 60,000. The other representation was that there would be a 40% increase in the "average weekly customer traffic".
It is helpful to a proper understanding of the case if some of the key findings of fact by the learned primary Judge are recited. In 1977, the second appellant, Ian Barron ("Mr Barron"), and Mr J.M. Large became associated in a business conducted through a network of corporations…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1993] FCA 192
Decision Date: 18 MARCH 1993

CaseChat Overview and Summary

The case of Ricochet Pty Ltd v Equity Trustees Executor & Agency Co Ltd involved a dispute over the misleading or deceptive conduct by a leasing agent in relation to the representation of foot traffic at a shopping centre. The Federal Court was tasked with determining whether the leasing agent's conduct breached the Trade Practices Act 1974. The appellants, Ricochet, sought to establish that they had relied on the leasing agent's representations and that such reliance led to financial loss, thereby justifying their claim for damages under section 82 of the Act. The respondents, Equity Trustees, denied liability and argued that there was no reliance on the representations, or if there was, it was not sufficient to establish misleading or deceptive conduct.

The primary legal issue before the court was whether the mere possibility that the misleading or deceptive representation might have induced Ricochet to enter into the lease agreement was sufficient to establish reliance for the purposes of section 82 of the Trade Practices Act. The court also had to consider the credibility and reliability of the witnesses presented by both parties. The appellants argued that the leasing agent's representations regarding foot traffic were material and that there was a real possibility that these representations influenced their decision to lease the premises. The respondents, on the other hand, contended that Ricochet had not provided sufficient evidence of actual reliance on the misleading representations.

The court found that the appellants had not demonstrated that they relied on the leasing agent's representations. It held that for a party to be liable under section 82, the misleading or deceptive conduct must have induced, or been likely to induce, the conduct that led to the loss. The court found that the appellants had not established that they were induced by the representations to enter into the lease agreement. The court also found that the possibility of reliance was not sufficient to establish liability under section 82. The court dismissed both the appeal and the cross-appeal, holding that the appellants were not entitled to damages and that the respondents were not liable for misleading or deceptive conduct.

The court ordered that the appeal be dismissed, the cross-appeal be dismissed, and that the appellants pay the costs of the respondents of the appeal. There was no order as to the costs of any party to the cross-appeal. The court's decision emphasised the importance of establishing actual reliance on misleading representations to justify liability under the Trade Practices Act.

Orders

Orders of the court

The Court orders that:

1. The appeal be dismissed.

2. The cross-appeal be dismissed.

3. The appellants pay the costs of the respondents of the appeal.

4. There be no order as to the costs of any party to the cross-appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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