Robinson v Kenny

Case [2014] FCA 988

FEDERAL COURT OF AUSTRALIA

Robinson v Kenny [2014] FCA 988

Citation: Robinson v Kenny [2014] FCA 988
Parties: GRAHAM BRUCE ROBINSON v BRIAN KENNY and ABK AUSTRALIA PTY LIMITED (ACN 111 306 999)
File number: NSD 238 of 2010
Judge: FARRELL J
Date of judgment: 26 September 2014
Catchwords:

TRADE PRACTICES – misleading or deceptive conduct – architect engaged to design house – architect initiated tender process – builder made oral qualification concerning cost of works – whether failure to convey qualification misleading or deceptive conduct – whether representations were estimates – whether architect “innocent conduit” of any representations made – proportionate liability – liability of builder

TRADE PRACTICES – misleading or deceptive conduct – conduct of tender process – whether tender process unorthodox – whether misleading or deceptive representations made concerning conduct of tender process – involvement of architect in preparation of quote – whether tender process fair to all participants

DAMAGES – proportionate liability – whether builder concurrent wrongdoer – whether builder engaged in misleading or deceptive conduct – apportionment of liability
Legislation: Civil Liability Act 2002 (NSW)
Fair Trading Act 1987 (NSW)
Trade Practices Act 1974 (Cth)
Cases cited:

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 304 ALR 186
Butcher v Lachlan Elder RealtyPty Ltd (2004) 218 CLR 592
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304
Cassidy v Saatchi & Saatchi Australia Pty Ltd (2004) 134 FCR 585
Director, Office of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCAFC 8
Gardam v George Wills & Co Ltd (1988) 82 ALR 415
Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435
Henville v Walker (2001) 206 CLR 459
Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Limited (2013) 247 CLR 656
John G Glass Real Estate Pty Ltd v Karawi Constructions Pty Ltd [1995] ATPR 41-249
Jones v Dunkel (1959) 101 CLR 298
Payne v Parker [1976] 1 NSWLR 191
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514
Warner v Elders Rural Finance Limited (1993) 41 FCR 399
Yorke v Lucas (1985) 158 CLR 661
Date of hearing: 11-14 March 2013, 10 May 2013, 20 June 2013
Date of last submissions: 17 September 2014
Place: Sydney
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 323
Counsel for the Applicant: Mr MBJ Lee SC and Mr A Crossland
Solicitor for the Applicant: Attwood Marshall Lawyers
Counsel for the Respondents: Mr J Sheller
Solicitor for the Respondents: Gilchrist Connell

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

GENERAL DIVISION

NSD 238 of 2010
BETWEEN:

GRAHAM BRUCE ROBINSON
Applicant
AND:

BRIAN KENNY
First Respondent

ABK AUSTRALIA PTY LIMITED (ACN 111 306 999)
Second Respondent

JUDGE:

FARRELL J

DATE OF ORDER:

26 SEPTEMBER 2014

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

1.The parties are to agree final orders which give effect to these reasons, including as to costs, on or before 20 October 2014.

Note:Entry of orders is…

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AGLC
Robinson v Kenny [2014] FCA 988
Case
[2014] FCA 988
Decision Date

CaseChat Overview and Summary

In Robinson v Kenny, the plaintiff, Mr Robinson, brought an action against Mr Kenny, the architect, and ABK, the builder, for misleading and deceptive conduct under section 18 of the Australian Consumer Law. The dispute arose from the process of tendering for the construction of a house. Mr Robinson alleged that the conduct of the tender process was misleading and deceptive, particularly in the failure to convey a qualification concerning the cost of the works. The legal issues before the court involved whether the conduct of the tender process was misleading or deceptive, and if so, whether Mr Kenny and ABK were liable for the losses incurred by Mr Robinson. The court also had to consider the apportionment of liability and whether Mr Simpson, the builder, was a concurrent wrongdoer.

The court found that the conduct of the tender process was not misleading or deceptive. It held that the failure to convey the qualification concerning the cost of the works was within Mr Kenny's responsibility and control. There was no evidence that Mr Simpson knew or had reason to know that Mr Kenny would not disclose this qualification to Mr Robinson. The court rejected the claim that Mr Simpson was a concurrent wrongdoer, holding that Mr Kenny and ABK were liable for Mr Robinson’s loss. The court directed the parties to agree on final orders reflecting these findings.

The court ordered that the parties agree on final orders, including those regarding costs, by 20 October 2014. It noted that the respondent was entitled to costs thrown away in relation to claims abandoned by the applicant. The court emphasised that the findings were based on the evidence presented, particularly the contemporaneous written communications, which were preferred over conflicting oral evidence due to the passage of time since the events in question.

Orders

Orders of the court

1. The parties are to agree final orders which give effect to these reasons, including as to costs, on or before 20 October 2014.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

The following affidavits were read:a. Affidavits of Mr Robinson sworn on 20 July 2011 (but not [34]-[63]), 22 December 2011, 26 March 2012 (excluding [89(ix)] and [88] was admitted as a statement of belief), 4 January 2013 and 13 March 2013;b. Affidavits of Ms Kelli Edwards (Mr Robinson’s solicitor) sworn on 2 April 2012 and 28 February 2013;c. Affidavits of Mr Kenny sworn on 26 October 2011 (excluding [11], [27], [104]-[106], and [108]-[147] and [167]), 13 August 2012 (but not [5]) and 6 May 2013 (but not [14]); d. Affidavits of Mr Simpson sworn on 21 October 2011 (but not [43]-[64]), 15 August 2012 and 16 April 2013; ande. An affidavit of Mr Gavin Beardsell sworn on 13 March 2013. Assessment of witnesses and nature of evidence Oral evidence was given by three witnesses. The memory of all three witnesses suffered from the effluxion of time between the events which occurred in 2006/07 and the times they gave affidavit and oral evidence in 2011-13. As Mr Robinson was overseas between December 2006 and May 2007 (except for the periods 17-23 December 2006 and 9-12 May 2007), there is an extensive written record of communications between Mr and Mrs Robinson and Mr Kenny. I have generally preferred this evidence to conflicting oral evidence, because it is contemporaneous and not as open to reconstruction. There is no similar record of emails between Mr Kenny and Mr Simpson, which is unexplained. It appears from Mr Kenny’s telephone records for November-December 2006 that they were in extensive telephone contact and Mr Kenny’s emails to Mr Robinson indicate that they also met on several occasions.Mr Robinson Mr Robinson’s experience, as at 2007, was in oversight and management of existing gas-producing assets. From 2010, Mr Robinson had the role of Head of Project Execution, Asia-Pacific based in Shanghai. In that role, he oversaw “all aspects of the commercialisation of gas-producing assets across the Asia-Pacific”; that is, oversight of obtaining government permits and approvals, organising finance (usually in multiple currencies), customer liaison, liaising with the procurement and construction subsidiary of the Linde Group (for which he never worked), recruitment, dealing with customs for imported components and procurement of locally sourced parts for the gas production facility. Mr Robinson presented as a brusque and experienced man of business, accustomed to carrying authority and of some sophistication. He appeared proud of his capacity to make judgements, perhaps overly so. He was clearly impatient and irritated at being required to participate in the process of giving evidence, notwithstanding that he was the applicant. He presented as methodical, if impatient of detail. I do not think Mr Robinson would deliberately lie, however, his evidence of events was curiously lacking in detail. It was more fulsome concerning things he said or thought than of the things said to him. Mr Robinson was guarded and not always responsive in giving his evidence. Both his affidavit and oral evidence was often reconstructed from assumptions about how he would have behaved which detracted from its evidentiary value. To that extent it appeared to be self-serving.

Decision

Reasons for decision

This claim should be rejected. As Mr Robinson submitted, the Simcorp Quote was a response to Mr Kenny, it was not a representation to Mr Robinson. There is no evidence that Mr Simpson knew or had reason to know that Mr Kenny would not tell Mr Robinson how the Simcorp Quote had been generated or of the Qualification. That was a circumstance entirely within Mr Kenny’s responsibility and control, and Mr Simpson was entitled to assume that Mr Kenny would do his job in a professional manner and consistent with professional standards. Cooperation between Mr Kenny and Mr Simpson to ensure that the Quote was generated on 19 December 2006 does not imply or necessitate a finding that they colluded to mislead Mr Robinson about how the Quote was generated.CONCLUSION Mr Kenny has failed to establish a basis on which Mr Simpson or Simcorp is a concurrent wrongdoer. Accordingly, I find that Mr Kenny and ABK are liable for Mr Robinson’s loss calculated as set out at [301]. I will direct the parties to agree final orders which give effect to these reasons on or before a date to be determined following delivery of these reasons. As currently informed, I consider that costs should follow the usual course, including that the respondent is entitled to costs thrown away in relation to the claims abandoned by the applicant. The parties will have the opportunity to address this issue in accordance with the direction.

Ratio Decidendi

Legal Principle Established

Mr Kenny’s second claim is that Mr Simpson/Simcorp engaged in misleading or deceptive conduct by failing to make “any representation to [Mr] Robinson or [Mr Kenny] prior to 10 May 2007 to the effect that the Reward Chart was not appropriate”: [41] of the Defence. The particulars to this claim are that having regard to the Simpson Cost Representation and the nature of the Reward Chart there was a reasonable expectation that if the Reward Chart was inappropriate because of what Simcorp/Mr Simpson estimated to be the total cost of the Works, Mr Simpson/Simcorp would disclose that to Mr Robinson before Mr Robinson entered into the Building Contract.Consideration of Simpson Cost Representation and Simpson Reward Chart Representation claims Mr Kenny claims that Mr Robinson entered into the Building Contract in reliance on the Simpson Cost Representation and the Simpson Reward Chart Representation. The Simpson Cost Representation as pleaded was made to Mr Kenny/ABK and Mr Kenny’s evidence is that Mr Simpson told him of the Qualification. Even if, as conceded by Mr Simpson at T 224.6-28, without the Qualification the Simcorp Quote was a “misleading document” there can be no argument that Mr Kenny was misled. Mr Kenny led no evidence about Mr Simpson’s cost management procedures. Accordingly, as pleaded, the Simpson Cost Representation could only relevantly mislead Mr Robinson if Mr Kenny can make out the Simpson Reward Chart Representation, which is essentially a claim that Mr Robinson was misled by Mr Simpson’s silence in circumstances where there was a reasonable expectation that Mr Simpson would not remain silent. Mr Kenny argued that it is Mr Simpson’s evidence that he knew that the Simcorp Quote had gone out without qualification. Mr Simpson likewise did not believe that the exercise of specification and design change which occurred between December 2006 and April 2007 would change the cost significantly so that the building works could be built for $1.35 million or less: T 242.17. Mr Robinson did not know this. It is a reasonable inference from Mr Simpson’s evidence that he knew that the Simcorp Quote had gone to Mr Kenny without the Qualification. However, Mr Simpson also accepted that he was “quite content” not to send a follow-up letter because he had made the position “perfectly clear” to Mr Kenny in the conversation on 19 December 2006 and he was satisfied that Mr Kenny understood Mr Simpson’s view: T 224.30-33. There is no reason to doubt this evidence; it is corroborated by Mr Kenny. It is undoubtedly bad practice for Mr Simpson to allow the Simcorp Quote to be incomplete on its face. However, Mr Kenny acted for Mr Robinson in running the tender: he was the person through whom all communications passed and Mr Simpson told him of the Qualification. There is no evidence that Mr Simpson knew whether Mr Kenny would give a copy of the document embodying the Simcorp Quote (which was addressed to Mr Kenny) to Mr Robinson or whether he would make a verbal report; there is no evidence that Mr Simpson ever knew what Mr Kenny did. Mr Lee went to some lengths in cross-examining Mr Kenny to establish that a reasonably competent architect would pass on information of that kind. There is no evidence that Mr Simpson had reason to suspect that Mr Kenny did not or would not pass on the Qualification: that question was never asked of Mr Simpson. There is no basis for finding that Mr Simpson was aware that Mr Robinson did not know of the Qualification.