Sonance Ltd v Healy and Carnegie

[1995] QCA 512

IN THE COURT OF APPEAL	[1995] QCA 512
SUPREME COURT OF QUEENSLAND

Appeal No. 67 of 1995.

Brisbane
[Sonance v. Healy & Anor.]

BETWEEN:

SONANCE LIMITED

(Plaintiff) Appellant

AND:

WILLIAM CHARLES HEALY

and IAN JOHN CARNEGIE

(Defendants) Respondents

___________________________________________________________________________

Pincus J.A. Williams J. Mackenzie J.

___________________________________________________________________________

Judgment delivered 17/11/1995

Separate concurring reasons for judgment of each member of the Court
___________________________________________________________________________

1.         APPEAL ALLOWED WITH COSTS.

2.         IN EACH CASE:

(A)	ORDERS MADE BELOW SET ASIDE;
(B)	THE MATTER TO BE REMITTED TO THE PRIMARY JUDGE FOR FURTHER CONSIDERATION;
(C)	COSTS OF PROCEEDINGS BELOW, TO DATE, RESERVED FOR DISPOSITION BY THE PRIMARY JUDGE.

3.         THE APPELLANT IS TO MAKE FURTHER SUBMISSIONS WITH RESPECT TO THE APPLICATION FOR AN INDEMNITY CERTIFICATE UNDER THE APPEAL COSTS FUND ACT 1973 WITHIN A REASONABLE TIME.

___________________________________________________________________________

CATCHWORDS: TRADE PRACTICES ACT 1974 (Cth) - representations relating
to value of shares - whether misleading and deceptive or likely
to mislead or deceive - reliance.
AGENCY - whether within authority of company secretary to
make representations as to value of shares.
PROCEDURE - reasons for judgment - whether trial judge
failed to explain his reasons for decision adequately or at all -
whether right to relief due to inadequacy of reasons even
where there is evidence to support the judge’s conclusions.

Counsel:	Mr J Sullivan for the appellant. Mr S Doyle SC with him Mr G Mullins for the respondents.
Solicitors:	Crouch and Lyndon for the appellant. Damien Bourke and Associates for the respondents.
Hearing date:	21, 26 September 1995.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 67 of 1995.

Brisbane

Before Pincus J.A. Williams J. Mackenzie J.

[Sonance v. Healy & Anor.]

BETWEEN:

SONANCE LIMITED

(Plaintiff) Appellant

AND:

WILLIAM CHARLES HEALY

and IAN JOHN CARNEGIE

(Defendants) Respondents

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 17/11/1995

This is an appeal from what the Notice of Appeal describes as the judgment of a District Court judge given on 20 March 1995. Reference to the record shows that on that date two judgments were given, each in a separate action, and it is clear from the notice of appeal that the proceedings in this Court are intended to attack both those judgments. No point is taken by the respondents as to the regularity of the Notice of Appeal.

The record is of such a size that special care was necessary to ensure that, with as little difficulty as practicable, the Court would be able to find the passages in the evidence which are particularly relied on; the obvious way to do this was first to ensure that the transcript was indexed and, secondly, to include in the outline of argument reference to the relevant parts of the record; that the appellant plaintiff failed to do. Ultimately, these problems were overcome when the parties co-operated to produce a document in which, conveniently, a single set of references to record was prepared with each side’s references being collected in the one document; the references to the record were assembled by topics so that it became easy to see which were the principal parts of the record relied on, on each side, with respect to each topic. That did not relieve the Court of the necessity of reading substantial parts of the transcript, but made the preparation of reasons for judgment substantially easier than it would otherwise have been.

In each case the plaintiff (appellant here) sued a defendant to recover moneys said to be owing "pursuant to a share sale agreement and mortgage of shares" with interest. In each case the defendant set up by way of defence and counter-claim that the plaintiff (defendant by counterclaim) made representations in trade or commerce which were misleading and deceptive or likely to mislead or deceive, contrary to the provisions of the Trade Practices Act 1974 (Commonwealth). In each case the judge dismissed the plaintiff’s claim and declared, under that Act, that the share sale agreement and mortgage entered into by the defendant "are and were void ab initio".

In his reasons for judgment, the learned primary judge found in effect that three sets of representations were made on behalf of the plaintiff by one Cassidy, and two by one Sobels, that the defendant in each case relied on the representations in entering into the contracts of sale and mortgage, that such reliance was reasonable, that the representations were misleading or deceptive or likely to mislead or deceive, and that the defendants by reason of those matters were likely to suffer loss. The plaintiff’s principal complaint about these findings is that, so its counsel says, the judge did not explain his reasons for decision of some of the issues adequately, or indeed at all. The nature of the issues which were seriously contested at the hearing is ascertainable, for the written and oral submissions which were made to the judge are in the record.

The trial was a long one and the factual questions explored were complex. It was not necessary for the learned primary judge to treat as significant all the questions which counsel before him dealt with in their submissions. Nevertheless, it seems clear enough that the reasons are unsatisfactory. His Honour explained the commercial setting of the dispute and broadly outlined the facts. His Honour also made comments as to the credibility of some of the principal witnesses; but as to most of the questions his Honour had to decide, he gave no further explanation of his views other than to say in effect that he accepted, apparently in full, the submissions made by counsel for the defendant.

Mr Doyle, who led Mr Mullins for the defendant in this Court, did not seek to argue that the learned primary judge’s reasons were adequate. He contended in effect that, with respect to the issues not dealt with in any detail in the primary judge’s reasons, there was sufficient evidence to justify his Honour’s ultimate conclusions. As will appear, I do not think that is so as to one question, namely the agency of Mr Sobels to make representations on behalf of the plaintiff. As to the other issues in the case not dealt with in detail by the judge, there was in my opinion evidence to support the judge’s conclusions; but that does not necessarily mean that, with respect to those issues, the appellant plaintiff has no right to relief in this Court, on the ground that the reasons are insufficient.

It is necessary to discuss the facts, and the reasons, in some detail, but I think it desirable first to make some general observations about the reasons. I understand that in some jurisdictions pressure of work has led to alterations in practice, to permit reasons to be given in abbreviated form in certain cases; that has not occurred here. Although this case was one of some complexity, raising a considerable number of issues or potential issues, it would have been possible to deal with it in relatively concise reasons. Mere length of reasons is not always a good indication of the extent to which a trial judge has given detailed consideration to the issues. It is always possible, although not always desirable, to expand reasons by lengthy quotations or extensive recitation of the parties’ submissions, and the like. But what the parties and in particular the losing party should have, at least as to each of the principal issues, is an explanation of the reasons for the judge’s conclusion on that issue; for example, if as here there is a serious question whether one person acted as agent of another, it can hardly ever be good enough simply to say that there was or was not agency, without any indication of the ground of that conclusion. Reasons of that kind have a number of disadvantages: they may give rise to a suspicion that not all the issues in the case have been properly considered; they may make it difficult or impossible for an appellate court to determine whether the judge’s conclusions are soundly based; they may, as in the present case, give rise to the necessity for further expensive proceedings in order that the litigation may be properly disposed of. It is hardly necessary to add that it will seldom be satisfactory to give reasons for decision by simply saying that the submissions of the successful party have been accepted in full.

On 6 December 1989, each defendant entered into a share sale agreement with the plaintiff, under which each agreed to buy 100,000 shares in an unlisted company, Queensland Radio Limited. When the agreement was made the principal asset of Queensland Radio Limited (which had formerly been Vonstead Limited) was the business of radio station 4BH Brisbane, an AM station. At the time of the share sale agreement there was thought to be a possibility that Queensland Radio Limited would be granted an FM license and that this would substantially increase the value of the shares in the company; there was a proposal to float Queensland Radio Limited, if an FM licence were granted.

Each of the defendants became, pursuant to his agreement with the plaintiff, the owner of 100,000 shares in Queensland Radio Limited, and the vendor, the plaintiff, agreed to give time to pay the price; the terms of payment, including interest, were set out in a mortgage. Each defendant defaulted and the plaintiff sold each parcel of shares as mortgagee for 14 cents

a share, a substantial drop in the price of $1 per share which the defendants had agreed to pay a little over three years earlier. It was suggested both here and below that an explanation for the low price obtained by the plaintiff when it sold the defendant’s shares in Queensland Radio Limited was that the sale was by a mortgagee. But if the shares were in truth worth a dollar each when sold and there was no catastrophic change in the health of the business of Queensland Radio Limited, the price must be regarded as puzzling.

Each defendant’s case was that he had been induced to enter into the share sale agreement under which he bought 100,000 shares by representations made on behalf of the plaintiff. The trial judge held that five groups of representations had been made to one or both of the defendants, that these representations were relied on by the defendants in entering into the contracts of sale of shares and mortgages, that they were misleading or deceptive and that the defendants had as a result suffered loss.

Three of the five groups of representations were found to have been made by one Cassidy on behalf of the plaintiff and the other two by one Sobels. There is no question about Cassidy’s authority, but the plaintiff argues, as it argued below, that it is not shown that Sobels had any authority, actual or ostensible, to make the representations he is found to have made.

Some of the representations found against the plaintiff related to the likely outcome of the float mentioned above; for example, the judge found that on 10 November 1990 Cassidy represented that the shares offered to the plaintiff would when floated be worth $3 and that the float would take place early in 1990. During the course of discussion of the matter in this Court, counsel for the defendants suggested that it is unnecessary for us to consider in detail whether the judgment can be supported on the basis of representations other than as to the current value of the shares. That was said - sensibly, as it seems to me - on the basis that, if the judgments in favour of the defendants could not be upheld on the ground of the representations of the current value of the shares, the representations as to a possible future value of $3 could not assist the defendants.

According to the judge’s findings, there were representations to the effect that the shares were never going to be worth less than $1. It would, as it seems to me, be a little fanciful to treat that as any more than a puff, insofar as it referred to the future, because no-one could take seriously a guarantee of future minimum value without limit in time. Insofar as the representation that the shares would never be worth less than a dollar implied that their present value was at least of that order, the representation as to $1 is perhaps of some use; but in substance the defendant’s case relies on representations of current value at three levels, namely between $1.50 and $2, $1.50, and $1 to $2. All of these representations were found to have been made by Cassidy, except for the last which was made, the judge found, by Sobels, on 5 December 1989.

In view of the importance of the Sobels representation to the plaintiff’s argument before us, it is desirable to go into some detail about the evidence relating to it.

The defendant Healy said that he spoke to Sobels in the car park of the radio station at which they both worked and had, it appears, a number of conversations, during which Sobels asked him why he had not signed yet, meaning why he had not agreed to take the shares.

Healy said of Sobels:

"He said the shares were worth $1. We were getting them for $1 and they were
worth one to two . . ."

The importance of this in Healy’s case is that, according to the submissions for the plaintiff, Healy did not place any faith in earlier representations made to him, by Cassidy; if he relied on any of the representations it was the one just referred to, made by Sobels.

Healy said that "we decided on that week-end we weren’t going to purchase them" meaning by "them" the shares, and the context shows that "that week-end ‘was’ the week-end of around 10 November " 1989. That date was a Friday, so presumably the week-end in question was that of 11, 12 November 1989. After that date there were further relevant representations as to the value of the shares, made by Cassidy to Carnegie and Healy and then to Carnegie alone. So the implication of Healy’s evidence just referred to was must be that he decided to buy on the basis of what was said, or his thoughts about the matter, after the week- end of 11-12 November 1989. Healy later gave evidence about a meeting on 13 November 1989 when Cassidy made relevant representations, according to the findings. He said that after that meeting he still "decided not to buy". The judge found that there were further representations (the nature of which is discussed below) made by Cassidy to Carnegie as agent for Healy on 21 November, but as I understand Healy’s evidence he said that after that date he had still decided not to buy.

In discussion of what Sobels said to him, Healy seemed to say that he changed his mind after talking to Sobels, weighed up what he had been told and "decided at that stage to believe them and sign the document".

There was argument before us as to whether on this evidence it could be held that anything which Cassidy said, as opposed to what Sobels said, caused or helped to cause Healy to decide to buy. Mr Doyle relied heavily on the piece of evidence from Healy last mentioned as showing that, although prior to speaking to Sobels Healy had decided not to buy, his conversation with Sobels changed his mind, producing the result that he was influenced not only by what Sobels said but by what Carnegie had previously said.

The argument has some force, but also has its difficulties; in view of the conclusion at which I have arrived, that the case must be further considered, it is undesirable to say any more about this problem, the solution to which may depend upon the impression created by witnesses seen and heard. For present purposes it is enough to note that if Sobels had no authority to make representations then there was, on Healy’s evidence, room for argument as to whether misleading statements made by Cassidy had any relevant causative effect.

What the judge thought about this question of reliance by Healy on what Cassidy said is unknown, although the point was taken by the plaintiff and it was an issue of some and perhaps crucial importance, so far as Healy’s case was concerned. This is so because the evidence in support of the allegation that what Sobels said had the authority of the plaintiff was, in my view, very weak. Mr Doyle explained that it was not contended that Sobels had been held out to the defendants by the plaintiff as having authority to make representations; the defendants’ case on the point was that Sobels had actual authority, not in the sense of having been explicitly authorised to say anything about the shares, but because that was a function which fell within the scope of Sobels’ duties as an employee of the plaintiff. The difficulty about the argument is that Sobels’ duties were described only in a very general way. He said (521) that from July 1989 he was employed by the plaintiff as "Group Financial Accounts Controller", and within a couple of months became "Company Secretary" in which capacity he was responsible for the statutory records, for attending all Board meetings and keeping the minutes. As "Financial Controller" he had the final responsibility for financial information presented at board meetings and arranging with the auditors to do the audit; he also was ultimately responsible for making up budgets, preparing board papers and collating papers for distribution to the board.

In short, his job was that of company secretary including responsibility for presentation of the financial information at board meetings. It seems clear and was not I think disputed that the role of company secretary would not ordinarily encompass giving opinions, binding on the company, about the value of unlisted shares the company had for sale, Donato v. Legion Cabs (Trading) Co-operative Society Ltd [1966] 2 N.S.W.R. 588; the circumstance that Sobels had the responsibility for presenting financial information to the board at board meetings does not in my view alter that position. On that evidence, it should not in my opinion have been held that what Sobels said about the shares was said, not on his own behalf, but on behalf of his employer. The conclusion that Sobels was not speaking to Healy as agent for the company is appealing, when one considers that it appears from Healy’s evidence that the conversation with Sobels came about not because of any formal approach by one to the other, but casually, when the two happened to meet in the station car park.

It should be added that Mr Doyle did not contend that in these circumstances he could get help from s. 84(2) of the Trade Practices Act; that attitude was no doubt engendered by the fact that, to take advantage of s. 84(2), it was necessary to show that what Sobels did was conduct "engaged in on behalf of" the plaintiff "within the scope of [Sobels’] actual or apparent authority . . . ", so that the question remained whether under the general law Sobels had authority.

Again, it is necessary to point out that the judge simply did not deal with the question of Sobels’ agency; it is my view that on the evidence to which we have been referred there was no sufficient basis for holding that the scope of Sobels’ employment was such as to encompass the giving of opinions, on behalf of the company, as to the value of the shares proposed to be sold to Healy.

To sum up this aspect of the case, one can identify two critical issues which should have been dealt with, in order to determine the fate of Healy’s claim against the plaintiff. One is the question of Sobels’ authority and the other the question whether, if Sobels was not authorised to make the relevant representations what was said by Cassidy should nevertheless be held to have been, in the end, a cause of Healy’s deciding to buy the shares. The judge dealt with neither issue. Further, it is my opinion that on the evidence to which we have been referred Sobels had no such authority as the judge found to have existed.

The result is, as it seems to me, that the judgment in favour of Healy should be set aside. In the circumstances it is unnecessary to express opinions about other aspects of Healy’s claim which were debated before us; the whole claim made by Healy needs to be reconsidered in the District Court and the proper means of achieving that is discussed below.

There is left for consideration the claim made by Carnegie. To dispose of this part of the case it is not necessary to discuss in detail all the submissions made by Mr Sullivan on behalf of the plaintiff; for example, Mr Sullivan complains of the absence of detailed findings with respect to discrepancies between the evidence of Healy and that of Carnegie in conversations between the two relating to what was said by Cassidy to Carnegie on 10 November 1989. Those discrepancies do not, as it seems to me, loom very large. The judge took an unfavourable view of Cassidy’s credit; the question whether Cassidy, on the one hand, or Carnegie on the other, was to be believed where they conflicted about representations allegedly made on 10 November 1989 was not one with respect to which detailed analysis in the judge’s reasons was essential. Again, it does not appear to me that it was essential for the judge to discuss a submission, made by the plaintiff, that it was unreasonable for the defendant to rely on any of the representations found to have been made.

But the defendants are in more difficulty as to the judge’s treatment of representations of 13 November 1989. It is true that these were not necessarily vital to Carnegie’s case, because it would have been enough for him to obtain findings that representations were made by Cassidy on the other two dates pleaded and that such representations influenced him to buy the shares. The problem is that, as Mr Sullivan pointed out for the plaintiff, the only representations attributed to Cassidy which were made on an occasion when persons other than the alleged representor and the alleged representees were present were those of 13 November 1989. Among other things the judge found, as I have mentioned, that Cassidy said to Carnegie and Healy that the shares were worth between $1.50 and $2. A Ms Brown, a solicitor then acting for the plaintiff in relation to the share sale, went to the 4BH office to talk about the transaction and in particular documents which had been prepared to give effect to it. When asked about the subject Ms Brown said in evidence that she did not recall any specific discussion about the value of the shares and when the representations alleged by the defendants were put to her she said she did not recall them.

A fifth person present at the meeting was Mr E J Seymour, then general manager of 4BH. Seymour said in chief, in effect, that Cassidy came to the meeting, introduced Ms Brown, "told us that she was there to explain the share documents, and my memory is that he left shortly after that". He did not recall whether Cassidy said anything at the meeting about the value of the shares, but said that Cassidy "certainly mentioned it on many occasions that the shares were worth $1 and would never be worth any less".

When cross-examined this question was put:

"Mr Seymour, we are agreed, are we not, that at the meeting with Gillian

Brown, Cassidy made no representations at that meeting about value?"

The answer was: "My recollection is that he didn’t, that is correct".
It was pointed out for the defendant that the question which has been quoted seemed to assume
that Seymour had previously agreed with the proposition, whereas he had merely said that he
did not remember.

However, the fact that neither Ms Brown nor Seymour had any recollection of any statement having been made about value and that Seymour was inclined to say that nothing of that sort occurred would, one would think, have assisted the plaintiff, if either Ms Brown or Seymour appealed to the judge as a witness of credit. One might say that the explanation is simply that the event alleged took place in 1989 and memories are fallible; but of course the same may be said of the memories of Carnegie and Healy, who had a financial interest in recalling that something of the sort alleged was said. The judge said of Seymour (as well as Healy) that they impressed his Honour as "comparatively truthful and accurate as least on critical matters". His Honour added that Seymour appeared to have nothing of a financial kind at stake in the proceedings. But his Honour made no reference to Seymour’s evidence about the meeting with Ms Brown, nor did he mention Ms Brown at all. It must also be said that there was reason to doubt whether Healy had a particularly good memory of the meeting as he claimed to recall little about Ms Brown’s explanations, but asserted a detailed recollection of representations made by Cassidy.

To recapitulate with respect to the representations of 13 November 1989, there was special reason for the trial judge to explain his approach; but his Honour gave no indication of what he thought of the evidence of the two witnesses other than the representor and representees, which evidence gave no support to his Honour’s conclusion about the representations in question.

The third set of representations allegedly made by Cassidy, those of 21 November 1989, were according to the defendant’s case made to Carnegie and communicated by him to Healy. A complaint was made by Mr Sullivan of the adequacy of the evidence that Cassidy knew or understood that Carnegie was representing Healy at that stage; that evidence is of no consequence because the circumstances proved it was quite foreseeable - assuming foreseeability was necessary - that Healy would come to know of and rely on what Cassidy had said to Carnegie.

But the problem is whether Carnegie in truth told Healy what Cassidy had said on this occasion. According to Carnegie, Cassidy said of the shares, "They’re worth $1.50, they’re going to be worth $3 when we float the company". Carnegie said he passed onto Healy exactly what Cassidy said, but when asked about this, Healy spoke of Cassidy having talked about deductibility of interest payments, a subject not mentioned by Carnegie. The judge’s finding is that on this occasion the representation attributed to Cassidy by Carnegie was made and that Healy relied upon it; he could hardly have done so if he did not know about it, and on that question Healy’s evidence conflicted with that of Carnegie. Presumably, the judge has accepted Carnegie on the point and rejected Healy, but the reasons contain nothing relating to this issue.

A further question which, according to the argument presented by Mr Sullivan, should have been and was not dealt with by the primary judge was that of reliance. His Honour found reliance on the representation, but gave no explanation of the reasons for the finding. It does not appear to me that this is a point of much substance. The complaint made by Mr Sullivan is in essence that Carnegie did not say that if he had been told the shares were not worth $1.50 to $2.00 he would not have bought. The argument assumes that questions of that kind, which admittedly are often enough asked in these cases, are admissible; presumably the basis of admissibility is that the witness is entitled to give non-expert opinion on the topic: see Cross on Evidence (Australian Edition) s. 29085 et seq. There is a distinction between saying "I was influenced by what I was told", which is evidence about one’s mental state at a relevant time, and saying "in my opinion had I not been told that, I would not have bought". A statement of the latter kind, if admissible, is not essential to justify a finding of reliance. It was not in my opinion of any real consequence that the judge, insofar as he found reliance on statements about the present value of the shares did not set out the basis of that finding; that basis was evident enough. The same does not apply to the more difficult issue of reliance on statements as to future matters; but it is unnecessary in order to determine this appeal to go into that subject. That is so because the defendants invite us not to go into the topic of representations as to the future, if the judgments cannot be upheld on the other representations.

The only other question on which it was in my view essential, rather than merely desirable, that some findings be made, is the issue of the value of the shares at the relevant time. There was a sharp conflict between the two values. It was pointed out by Mr Doyle, correctly as it seems to me, that there were obvious reasons for preferring Mr Calabro’s opinion; one reason was that the opposing opinion appears to have been got together at short notice and was not fully researched. Further, the price actually realised for the shares in issue in this case when sold by the plaintiff as mortgagee seems to me impossible to reconcile with their value being $1.50 or more in November 1989. Nevertheless, although one would not have expected the matter to cause the trial judge great difficulty the issue of value is one which should have been dealt with.

Conclusion

I have concluded that it is clear that in Mr Healy’s case the reasons were inadequate; there was no satisfactory evidence that Sobels had authority to make representations to Healy and, as to the other representations, there was a real question as to whether it could be held that they were inducing. As to Carnegie’s case, while there were no issues which so urgently called for discussion as those I have mentioned in relation to Healy, still it must be concluded that the reasons given for finding in favour of Carnegie are inadequate. This Court will not necessarily order a new trial because one of a number of issues raised in a case has simply been decided without reasons; the reasons may be evident enough, given the conclusion. But in the present case there are issues which, to produce a satisfactory outcome to the litigation from the point of view of the administration of justice, require some analysis.

It follows that the judgment in favour of Mr Carnegie as well as that in favour of Mr Healy must be set aside. There was debate before us as to whether the case should be retried ab initio before a District Court judge other than the trial judge. After considering that matter at length I have concluded that the case should go back to the same judge for further consideration. The reasons in favour of that course have principally to do with expense and to a lesser extent delay; these seem to me to outweigh the advantage, at least from the point of view of the plaintiff, of having the cases re-tried before a different judge who might take a favourable view of Cassidy’s credit.

The mode of reconsideration is a matter which should in my view be left to the discretion of the judge; no doubt his Honour might desire further submissions as to the findings of fact and conclusions of law for which each side contends. One would not expect that further evidence would be necessary, but that should be left to the judge’s discretion.

The orders I propose are as follows:

1.          Appeal allowed with costs.

2.          In each case:

(a)	Orders made below set aside;
(b	The matter to be remitted to the primary judge for further consideration;
(c)	Costs of proceedings below, to date, reserved for disposition by the primary judge.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 67 of 1995

Brisbane

Before Pincus JA Williams J Mackenzie J

[Sonance v. Healy and Anor]

BETWEEN:

SONANCE LIMITED

(Plaintiff) Appellant

AND:

WILLIAM CHARLES HEALY

and IAN JOHN CARNEGIE

(Defendants) Respondents

REASONS FOR JUDGMENT - GN WILLIAMS J

Judgment delivered 17/11/1995

The relevant facts are set out in the judgment of Pincus JA which I have had the

advantage of reading. I agree with the orders he proposes, and substantially with his reasons.

So far as the case involving the respondent Healy is concerned the learned trial Judge

did not make adequate findings with respect to the agency of Sobels, nor did he make

adequate findings on the question whether Healy relied on any representation Sobels was

authorised to make as to the value of the shares in question. In addition he did not specifically

address the issue whether Healy relied on representations made by Cassidy in deciding to

enter into the transaction. In my view it may well have been possible for the learned trial Judge

to arrive at a conclusion on each of those issues favourable to the respondent Healy, but it would have required a careful analysis of the evidence and the making of some specific

findings before such a conclusion could be justified. The reasons in fact given were totally

inadequate in that regard. Because of that there has to be further consideration at the trial level

of Healy's case.

As Pincus JA has pointed out there were five groups of representations made dealing

with the value of the shares in question, and different values were ascribed on a number of

those occasions to the shares. Given the discrepancies in the evidence (most of which have

been referred to by Pincus JA) it was, in my view, incumbent upon the learned trial Judge to

make a precise finding as to which of the representations were relied on by Carnegie when

he decided to enter into the arrangement. Given the range of possibilities it was not sufficient

for the learned trial Judge to leave his findings as vague as he did. It was certainly not a case

where one could simply say that the submissions made by counsel for Carnegie and Healy

were accepted. In consequence Carnegie's case must also be remitted for further

consideration.

Regrettably the judgments appealed from cannot stand and the matter must be remitted,

as indicated by Pincus JA, for further consideration.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane	Appeal No. 67 of 1995
Before	Pincus JA Williams J Mackenzie J

[Sonance v. Healy & Anor.]

BETWEEN:  SONANCE LIMITED

(Plaintiff) Appellant

AND:

WILLIAM CHARLES HEALY and
IAN JOHN CARNEGIE

(Defendants) Respondents

REASONS FOR JUDGMENT - MACKENZIE J

Judgment Delivered 17 November, 1995

I agree with the orders proposed by Pincus JA, and substantially with his reasons.

The orders proposed and the reasons give a measure of discretion to the trial judge as

to the future course of proceedings. I agree with Williams J's summary of the issues which

need to be addressed upon further consideration of the matter.
IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 67 of 1995.

Brisbane
[Sonance v. Healy & Anor.]

BETWEEN:

SONANCE LIMITED

(Plaintiff) Appellant

AND:

WILLIAM CHARLES HEALY

and IAN JOHN CARNEGIE

(Defendants) Respondents

___________________________________________________________________________

Pincus J.A. Williams J. Mackenzie J.

___________________________________________________________________________

Judgment delivered 17/11/1995

Further Order delivered 19/12/1995

Further Order of the Court

___________________________________________________________________________

IT IS FURTHER ORDERED THAT AN INDEMNITY CERTIFICATE BE
GRANTED TO THE RESPONDENTS IN RESPECT OF THE APPEAL UNDER S. 15
OF THE APPEAL COSTS FUND ACT 1973.

___________________________________________________________________________

Counsel:	Mr J Sullivan for the appellant. Mr S Doyle SC with him Mr G Mullins for the respondents.
Solicitors:	Crouch and Lyndon for the appellant. Damien Bourke and Associates for the respondents.
Hearing date:	21, 26 September 1995.