Sapphire Investments Pty Ltd v Burns Philp Trustee Co. Ltd

[1988] FCA 288

J

CATCWORDS

TRADE PRACTICES - misleading or deceptive conduct -	false or misleading representations as to conditions
of contract - alleged breaches of contract and of
findings of trial judge open on evidence - appeal fiduciary duty - not established at trial - appeal -
dismissed
SAPPHIRE INVESTMENTS PTY. LIMITED, ALFRED SAVER and LfNDA ELIZABETR SAVER v. BURNS PHILP TRUSTEE COMPANY LIMITED AND OTHERS No. G 753 of 1987
Davies, Morling and Foster JJ.
8 June 1988
Sydney

IN THE FEDERAL COURT OF AUSTRALIA	)
1
NEW SOUTH WALES DISTRICT REGISTRY	1 No. G 753 of 1987
1

DIVISION GENERAL )

BETWEEN:  SAPPHIRE INVESTMENTS PTY.

LIMITED, ALFRED SAUER,

ELIZABETH SAUER

Appellants

AND :  BURNS PHILP TRUSTEE COMPANY
LIMITED

First Respondent

ESTATE MORTGAGE FINANCIAL

SERVICES LIMITED

Second Respondent

ESTATE MORTGAGE MANAGERS LIMITED

Third Respondent

RICHARD LEW	Fourth	Respondent
REUBEN LEW	Fifth	Respondent

MINUTE OF ORDER

JUDGES MAKING ORDER	:	Davies, Morling and Foster	JJ.
DATE OF ORDER	:	8 June 1988

WHERE MADE	: Sydney
THE COURT ORDERS AS FOLLOWS:

1.	The	appeal	is dismissed.
2.	The	appellants	are to pay the respondents'

costs.

- NOTE: settlement and entry of orders is dealt with in

Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA	1 1
NEW SOUTH WALES DISTRICT REGISTRY	NO. G 153 Of 1901

1

DIVISION GENERAL 1

BETWEEN:  SAPPHIRE INVESTMENTS PTY.

LIMITED, ALFRED SAUER, LINDA

ELIZABETH SAUER

Appellants

AND :  BURNS PHILP TRUSTEE COMPANY
LIMITED

First Respondent

ESTATE MORTGAGE FINANCIAL

SERVICES LIMITED

ESTATE MORTGAGE MANAGERS LIMITED

Third Respondent

RICHARD LEW

Fourth Respondent

REUBEN LEW

Fifth Respondent

CORM:	DAVIES, MORLING and FOSTER JJ.
DATE :	8  June 1900

PLACE: SYDNEY

RMSONS FOR JUDGMENT

TAE COURT: This is an appeal from a decision	f a judge of the
Court diSBi88ing an application	i which the appellants sought

damages against tho respondents for alleged breaches of the

Trade Practices Act 1974 (Cth) and for other alleged causes of

action. There was no dispute bofore the learned trial judge,

nor on appeal, that the Court had jurisdiction to entertain all

the claims made. All the claims arose out of the one matter

and the	Court's accrued jurisdiction extends to authorize	t to
determine all of	them:	Philip Morris Inc. v Adam P. Brown Male

Fashionr Pty. Ltd. (1981) 148 C.L.R.	457 and Fencott v Muller
(1983) 152 C.L.R.	570.

The appellants' claims arose out of the construction

of a retirement village	at Herimbula on the South Coast	of New
South Wales. Substantial moneys were borrowed	by	the first

appellant from the first respondent to enable the construction

of the r tirement village to be undertaken. It is

unnecessary, for the purposes of disposing of the appeal, to

refer to the somewhat complicated facts surrounding the loans
made by the first respondent and to the way in which the other
parties to this appeal became involved in the transactions.

They are set out in considerable detail in the judgment under

appeal and no good purpose would be served by their repetition

One of the principal matters debated in the appeal was

whether the extent of the respondents' liability to provide

finance for tho construction of Stage 1 of the retirement

villago was that set out in the executed agreements or whe her,

on tho othor hand, the respondents or one or more of them

orally agreed to provide or made promissory representations
that they would provide all the finance necessary to complete

that construction.

At the time the loan transactions were entered into,

all the partier had competent legal advice. From time to time
contractual document8 were brought into existence on the advice
of solicitors. The causes of action which the appellants

sought o make out before his Honour depended almost

exclusively for their proof upon the context	of conversations
between representatives of the parties.	As the trial judge
said:-

"The case turns almost entirely on questions of

fact and to a considerable degree on the

credibility or the reliability of witnesses."

The trial judge preferred to accept the respondents'

witnesses to those called by the appellants. Many, if not

most, of his findings were based upon his views as to the

credibility of witnesses. This is not a case in which an

appellate court is in as goad a position as a trial judge	to
determine the questions of fact that arose at the trial:	cf
Warren v Coombes (1979) 142	C.L.R. 531. His Honour's findings
were not reached	by drawing inferences from documents and
undisputed facts.	In these circumstances the task of showing
error in the trial judge's	findings is very difficult indeed.

In Uraners (Aust) Pty Ltd v - Hale (1980) 30 A.L.R. 193,

Gibbs, Stephen, Mason, nurphy and Wilson JJ. explained the

function of an appellate court when considering findings	of
fact made by the court below or a tribunal. At	p. 197, their
Honours said: -

"It is of course well established that an

appellate court which ears an appeal on

documents and not on oral evidence will generally dofer to the conclurion which the trial judge has

formed upon the question which of the witnesses,

whom he has seen and heard, are credible."

At p.199, their Honours held:-

"(the Judge) was not entitled to reverse the

finding of the Tribunal which was based on its

view of the Credibility of the witnesses unless

it was seen clearly to be wrong on grounds which

did not depend merely on credibility - for

example, on the ground that the evidence which was accepted was inconsistent with established facts, or was so improbable that no reasonable

person could accept it, or that the judgment of

the Tribunal disclosed that its conclusion was

affected by some error of law or fact."

We have carefully considered his HonourPS reasons and

the full submissions which have been put to us by Mr Sauer,

whom permitted we appear to for the ppellants.

Notwithstanding all that has been put to us, we do not think that any error has been demonstrated in his Honour's judgment.

There was ample evidence before him to justify the findings he

made. Indeed, we would go further and say that the case for

the respondents at the trial was strong and it would have been

surprising if his Eonour had found that any of the appellants'

claims had been established.

There warn compelling evidence at the trial that it was

known to the appellants that the first respondent's lending

powers did not extend to advancing more than two-thirds of the

value of the security given for a loan.	His Honour was well
entitled to accept this evidence.	It was destructive of the
claim.	which were themselve6 inconsistent with the documents

executed by the parties.

.

. 5 .

We mention these particular matters only by way of

illustration. The reasons advanced by his Honour in his

judgment for rejecting the various claims put forward at the trial are persuasive, and it is sufficient that we say that we agree with them.

The appellants have suffered great financial loss

arising out of the building of the retirement centre. Sadly,

Mr and Mrr Sauer have lost their home in the financial debacle

which occurred. Their predicament excites our sympathy,	but we
are quite unable to say that	it is due to any conduct for which

the respondents are responsible. M C Sauer put to the Court an

eloquent submission to the effect that he would not have

proceeded with the' venture or committed his home thereto

unless he had believed and relied upon the oral representations

and agreements which he claimed had been	made. Notwithstanding
the force of Mr Sauer's	argument, which we well appreciate,

thir ir jurt one of the matters which the trial judge had to

weigh in the balance and does not provide a sufficient ground

for rejecting his conclusions reached as they were on the whole

of the evidence.

Mr Sauer a160 submitted that he and his counsel had

come to the trial ill prepared and that, had the facts been

adequately Mrrhalled and the full story been put to the trial

judge in a proper manner, the trial judge would have come to a

different conclusion. However, his Honourvs judgment is

lengthy and detailed. He gave to the matter very close and

careful conrideration. There	is no ground for setting aside
his Honour's conclusions.

It is unnecessary for us to deal separately with all

the many matters which were the subject of submissions in the

course of the appeal. With respect to all of them, the

crucial issue was one of act. In respect of all issues there

was evidence going both ways and his	Honour's findings of fact,
which depended in part upon his view as to the credibility	of

the witnesses, must be accepted by this Court, there being no

ground to disturb them.

Because the appellants were without legal represent-

ation on the hearing of the appeal we have taken especial care
to examine the judgment under appeal to see whether there is

any ground for setting aside his Honour's findings, whether in

whole or in part. However, we can find no error in it.

Accordingly, the appeal must be dismissed with costs.

I certify that this and the five (5)

preceding pages are a true copy of the

ROaaOn8 for, JudgmenLof the Court.

Mr Sauer appeared in person

and, by leave, for the other
appellants.

Counsel	for	1st	respondent:	Mr R.P. Meagher Q.C.
with Mr. J.C. Campbell

instructed by:  Bell Cadogan Couston 6 Gengos

Counael for 2nd, 3rd, 4th and

respondents:	th	Mr J.C. Kelly
with Mr G. Charnev

instructed by:  Abadee Dr sdner 6-F eeman

1988 Jun Hearing: 1 of Date