Spa Property & Investments Company Pty Ltd v Pembroke Antiques Pty Ltd

[1993] QCA 547

[1993] QCA 547

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 242 of 1992

Brisbane

Before The President
Mr Justice Pincus

[Spa Property v. Pembroke]

BETWEEN:

SPA PROPERTY AND INVESTMENTS COMPANY PTY. LTD.

(Plaintiff) Appellant

- and -

PEMBROKE ANTIQUES PTY. LTD.

(First Defendant) First Respondent

- and -

PAUL MICHAEL GEORGE and TRACEY FRANCES GEORGE

(Second Defendants) Second Respondents

REASONS FOR JUDGMENT - THE PRESIDENT

Judgment delivered 17/12/93

This is an appeal from a judgment delivered in the District Court at Southport on 23 October 1992. The appellant sued the respondents on a lease and guarantee, which the judge held were void, and he dismissed the appellant's action. On the first respondent's counterclaim, his Honour awarded it damages of $135,092.13 under section 82 of the Trade Practices Act, 1974 as amended (Commonwealth). According to the reasons for judgment, but not the formal order, the first respondent's claim against the appellant for damages for negligence (in the same amount) was also made out.

The foundation of the judgment below consists of findings that (i) misstatements concerning the premises leased and their locality and value, which were misleading, deceptive and negligent, were made to the respondents by one Chesser, an employee of a real estate agent Max Christmas Pty. Ltd., (ii) the misstatements induced the lease and guarantee, and (iii) for material purposes, Chesser (or his employer) was the appellant's agent. There was ample evidence to support findings (i) and (ii), but the

appellant challenges the finding of agency. It was not asserted that any distinction is to be drawn between Chesser and his employer in relation to agency, and it is more convenient to discuss the issue by reference to Chesser. Both parties accept that Chesser never had express authority to make the misleading, deceptive and negligent misstatements which he made and that the appellant was unaware throughout that he had done so.

Although there is no suggestion that the fact was ever disclosed to the respondents, Chesser was not even authorised to act as agent for the appellant when he first approached the respondents or when he made the misstatements. However, Chesser's agency was accepted by the appellant on or about 26 July 1989 and confirmed in writing on 27 July 1989. On that day, first the respondents and then the appellant signed an "Offer To Lease" the relevant premises.

The "Offer To Lease" provided for a deposit of the first month's rental and security bond "as guarantee for Lessee proceeding and subject to forfeiture at the option of the Lessor if Lessee does not proceed for any reason", and was subject to the following two "Special Conditions":

"A. Acceptance of this offer to Lease is subject to the
approval of the Lessor.
C. Subject to the Lessees' Solicitor's approval of this
offer to lease which will be given on Monday 31st July,
1989."

Further, the "Offer to Lease" concluded with the following paragraph:

"The Lessor hereby accepts this offer to lease and in so doing confirms the appointment of Max Christmas Pty. Ltd. as its Agent in this transaction and further agrees to payment of commission to Max Christmas Pty. Ltd. ...".

The deposit made payable by the "Offer To Lease" was payable to Max Christmas Pty. Ltd., which was later paid the commission to which it was entitled by the appellant.

Prior to the execution of the "Offer To Lease", a meeting had taken place on or about 26 July, 1989 between the appellant, the respondents and Chesser at the office of Max Christmas Pty. Ltd. Jeanes, a director of the appellant, gave evidence that the terms of the "Offer To Lease" were discussed at the meeting and that he expected that the document "accurately ... records what was agreed at the meeting". At this meeting, which was required by the appellant to satisfy itself that the first respondent was a suitable tenant, the appellant accepted Chesser as its agent. Chesser was, in any event, held out as the appellant's ostensible agent at and from the time of the meeting. As a result, from that point on, the appellant was estopped from denying Chesser's agency: Freeman and Lockyer v. Buckhurst Park Properties (Mangal) Ltd. (1964) 2 QB 480, approved in Crabtree-Vickers Pty. Ltd. v. Australian Direct Mail Advertising and Addressing Company Pty. Ltd. (1975) 133 CLR 72. See also R. v. Charles (1977) AC 177, 183.

The critical question which this finding raises is what was the nature and purpose of Chesser's agency; what, if anything, was he required or authorised to do upon his appointment as the appellant's agent? It is only by resolving this question that it can be determined whether he was under a duty, for breach of which the appellant is liable, to correct his earlier misstatements at or after the meeting.

Chesser had no express authority to make statements concerning the subject property at or after the meeting, but such authority might, in an appropriate case, be implied from an agent's function. For example, an agent appointed to find a suitable tenant for premises has implied authority to make statements with respect to the premises and their locality and value and the agent's principal is liable for the agent's misstatements: see, for example, Gardner v. Grigg (1938) 38 SR (NSW) 524, 530-531, citing Mullens v. Miller (1882) 22 Ch.D. 194 and Australasian Brokerage Ltd.

v. Australian and New Zealand Banking Corporation Ltd.

(1934) 52 CLR 430. See also Peterson v. Moloney (1951) 84 CLR 91, 94-95; Overbrooke Estates Ltd. v. Glencombe Properties Ltd. (1974) 1 WLR 1325, and Presser v. Caldwell Estates Pty. Ltd. (1971) 2 NSWLR 471.

Further, after such an agent is appointed for the purpose of future efforts on behalf of a principal to find a suitable tenant, the principal is responsible for the agent's failure to correct earlier misstatements: Briess v. Woolley (1954) AC 333, e.g. at p.349 per Lord Reid. See also Bosaid v. Andry (1963) VR 465; Kings North Trust Ltd. v. Bell (1986) 1 WLR 119; Conbulk Pty. Ltd. v. TNT Management Pty. Ltd. (1992) 37 FCR 45; and Alderton v. The Prudential Assurance Co. Ltd. (1993) ATPR 41-230. (Because of the conclusion otherwise arrived at, it is unnecessary in this case to consider questions of vicarious liability which might arise in connection with the first respondent's claim for damages for negligence: see Bowstead on Agency, 15th Ed., pp. 389, 392, 396; Presser v. Caldwell Estates at p. 485; Thompson v. Henderson & Partners (1989) 51 S.A.S.R. 431.)

A failure to correct misstatements may also constitute misleading or deceptive conduct for the purpose of section 52 of the Trade Practices Act: Tiplady v. Gold Coast Carlton Pty Ltd(1984) 54 ALR 337; Henjo Investments Pty Ltd v. Collins Marrickville Pty Ltd (1988) 79 ALR 83, 95; Commonwealth Bank of Australia v. Mehta (1991) 23 NSWLR 84; Demagogue v. Ramensky (1992) 110 ALR 608. The question has been stated to be whether, in the light of all relevant circumstances constituted by acts, omissions, statements or silence, there has been conduct which is or is likely to be misleading or deceptive: Demagogue v. Ramensky per Gummow J, with whose reasons Black CJ. and Cooper J. agreed, at 618; see also Black CJ at 609-610.

However, so far as can be told from such evidence as there is, Chesser had neither express nor implied authority, at the meeting or afterwards, to make statements to the respondents concerning the property or its attributes. His appointment as the appellant's agent, and its written confirmation of that appointment, concerned only Chesser's completed activity in introducing the parties. The appointment and the confirmation in writing were merely necessary formalities to ensure Chesser's entitlement to commission. His function was exhausted by or at the time when he was appointed. He had no authority or duty, as the appellant's agent, to correct what he had earlier said.

In these circumstances, in my opinion, there is no basis for holding the appellant liable for the misstatements made by Chesser prior to his appointment as the appellant's agent.

I would make the following orders:

1. Appeal allowed.

2.    Orders 2-7 made below set aside.

3. Counterclaim dismissed.

4.   Judgment for the appellant against the respondents in the sum of $172,232.50.

5.    Order that the respondents pay the appellant's costs of and incidental to the action and this appeal including any reserved costs.

6.   Any application for interest is to be made in writing and, if such an application is made, each party is to make written submissions with respect to the application.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 242 of 1992

Brisbane
[Spa Property v. Pembroke]

BETWEEN:

SPA PROPERTY AND INVESTMENTS COMPANY PTY. LTD.

(Plaintiff) Appellant

- and -

PEMBROKE ANTIQUES PTY. LTD.

(First Defendant) First Respondent

- and -

PAUL MICHAEL GEORGE and TRACEY FRANCES GEORGE

(Second Defendants) Second Respondents

The President

Mr Justice Pincus

Judgment delivered 17/12/93

Separate reasons for judgment by the President and Pincus JA, Pincus JA agreeing with the orders proposed by the President.

1. APPEAL ALLOWED.

2.    ORDERS 2-7 MADE BELOW SET ASIDE.

3. COUNTERCLAIM DISMISSED.

4.   JUDGMENT FOR THE APPELLANT AGAINST THE RESPONDENTS IN THE SUM OF $172,232.50.

5.    ORDER THAT THE RESPONDENTS PAY THE APPELLANT'S COSTS OF AND INCIDENTAL TO THE ACTION AND THIS APPEAL INCLUDING ANY RESERVED COSTS.

6.   ANY APPLICATION FOR INTEREST IS TO BE MADE IN WRITING AND, IF SUCH AN APPLICATION IS MADE, EACH PARTY IS TO MAKE WRITTEN SUBMISSIONS WITH RESPECT TO THE APPLICATION.

CATCHWORDS: AGENCY - Misleading and deceptive misstatements made in respect of a property by a person to respondents - lease entered later by respondents with appellant confirmed appointment of person as appellant's agent and agreed to pay commission - scope of implied authority - whether duty to correct misstatements made before appointment as agent - s.52 Trade Practices Act.

Briess v Woolley (1954) AC 333

Demagogue v Ramensky (1992) 110 ALR 608

Counsel:  R Chesterman QC, with him P Hack, for the
appellant
P R Dutney QC, with him K S Howe, for the
respondents

Solicitors: P T Purcell Chadwick & Skelly for the appellant

Murphy Podmore & Associates for the

respondents

Hearing dates: 6 - 7 May 1993
IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 242 of 1992.

Brisbane

Before The President
Pincus J.A.

[SPA Property v. Pembroke]

BETWEEN

S.P.A. PROPERTY AND INVESTMENT

COMPANY PTY LTD

(Plaintiff) Appellant

- and -

PEMBROKE ANTIQUES PTY LTD

(First Defendant) First
Respondent

- and -

PAUL MICHAEL GEORGE and

TRACEY FRANCES GEORGE

(Second Defendants) Second
Respondents

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 17/12/93

This is an appeal against a judgment for damages given in the District Court in a case concerning the letting of premises as an antique shop. The appellant ("S.P.A.") sued the first respondent ("Pembroke") for rent due under a lease agreement and sued the second respondents, Mr & Mrs George, as guarantors of Pembroke's obligations under that agreement. The defence and counterclaim has set up that one Chesser made representations to Mr George about the then proposed lease of the premises in question and an order was claimed under s. 87 of the Trade Practices Act 1974 that the lease be declared void ab initio; damages for breach of that act for negligence and for deceit were also claimed.

After a trial, the District Court judge dismissed S.P.A.'s action and gave Pembroke an award of damages for contravention of the Trade Practices Act 1974 ("the Act"). The judge also expressed himself to favour a claim which was made on the basis of negligence, but whether by oversight or otherwise, did not give any damages for negligence.

The appeal is based on three grounds: that the representations made by Chesser were not made with the authority of S.P.A.; that the judge breached the requirements of procedural fairness in that he discouraged discussion of the credibility of a witness, one Jeanes; and lastly, that the damages awarded were wrong. As will appear, I am of opinion that the appeal should be allowed on the first point and it is therefore unnecessary to discuss the second and third.

The premises which were the subject of the proceedings
were taken under lease by Pembroke as a result of
discussions between Mr George and Chesser, mentioned above.
Chesser described himself, in an affidavit which was
tendered in the proceeding, as being "previously in the
employ of Max Christmas Real Estate"; the case was
conducted on the assumption that Chesser was at all relevant
times an employee of a company, Max Christmas Pty Ltd, the
company which is mentioned in Exhibit 6, a document
discussed below. The judge held that representations made
by Chesser about the likely future development of the area
in which the premises in question were located were made by
Chesser without any reasonable grounds for making them.
Section 52 of the Act provides that:

"A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive".

Section 51A provides, in effect, that where a corporation makes a representation with respect to a future matter and does not have reasonable grounds for doing so, the representation shall be taken to be misleading. In short, the judge held that Chasser was guilty of misleading conduct under the Act; it was also held that S.P.A. had to answer for Chesser's misleading conduct as his principal, so as to be liable for damages under s. 82 of the Act.

It is necessary to make some reference to the evidence relating to the question of agency. The effect of it is fully set out in the reasons of the primary judge, but his Honour laboured under the difficulty that he had reservations with respect to the credibility of all the relevant witnesses: Mr & Mrs George, Chesser and Jeanes, the director of S.P.A. who dealt with the matter. His Honour did not make it clear to what extent he accepted the evidence of these witnesses, on points having to do with the matter under discussion, agency. His Honour's ultimate conclusions may be summarised as follows:

Exhibit 6 - an "offer to lease" made Max Christmas Pty Ltd the agent of S.P.A. Following Briess v. Woolley [1954] A.C. 333 S.P.A. must accept liability for Chesser's representations, it being "not to the point that the formal agency may not have existed at the time of the making of the representations...". S.P.A. should be bound by the representations made by Chesser in the course of letting the premises, those representations being made in the usual course of business of Chesser. Reference was made to s. 84 of the Act.

It must be said, with respect, that although the reasons may imply that Exhibit 6 was the critical element in the judge's conclusion on the question of agency, that is not absolutely clear. His Honour made no finding that, apart from Exhibit 6, agency was established.

The nature of the respondent's case on this point, as derived from the pleading, was simply that Chesser was at all material times the servant or agent of S.P.A. and acting within the scope of his actual or apparent authority. Counsel for the respondents in this Court sought to uphold the judge's conclusion with respect to agency principally on the authority of Briess v. Woolley to which the primary judge referred. Counsel contended that the judge had found for the respondents on that basis, saying that "even if Chesser wasn't the agent at the time the representations were made, he became the agent at a later time before the contract was concluded" -meaning that he did so under Exhibit 6. Secondly, counsel contended that it could be seen from the terms of Exhibit 6 and the evidence of Jeanes relating to it that Max Christmas Pty Ltd had been appointed as S.P.A.'s agent at some date before Exhibit 6 came into existence. Lastly, a point connected with the one just mentioned, counsel argued that the Court should infer that Max Christmas Pty Ltd was appointed as agent at a meeting at the office of that company.

As it appears to me, there was no substantial conflict
in the evidence, on the question of agency, between Jeanes
and Chesser, the two principal witnesses on that point.
Jeanes said that when the building which contains the leased
premises was in the course of construction, Chesser
approached Jeanes with Pembroke as a possible tenant and
wanted to know what space was available. He said that led
up to a meeting with "the prospective tenant in Max
Christmas's office with Murray Chesser...". It was
suggested to Jeanes in cross-examination that Jeanes asked
Chesser to look for a tenant for the place ultimately leased
by Pembroke; Jeanes said he did not believe that to be
correct. When asked whether agents who approached him were
told to go ahead and look for a tenant, he said, "We never
discourage agents and we, at that point in time, would have
been merely supplying information for people who were
seeking space for prospective tenants". He also said the
space was not listed with anybody.

Chesser's evidence was that he became aware of the availability of the premises for lease shortly after construction began, when colleagues at Max Christmas and Chesser himself approached Jeanes - "...and we, of course, wanted leasing rates -details of the opportunity to lease the building". Jeanes said, according to Chesser, that there was some interest in the building already "but there was a portion available next door to what now is Brashs that was available for lease". It may safely be inferred that the portion was the space ultimately leased by Pembroke.

Chesser said he had a "verbal indication" of what Jeanes was asking for the lettable area and "there was an indication of what the outgoings were and, you know, just outlining what the terms and conditions of a satisfactory lease would entail". When asked whether Jeanes said anything to him about getting a tenant, Chesser answered:

"Well, he didn't - quite honestly, he didn't seem that worried. Like, he wouldn't give us any money for advertising and he didn't want us to put up a sign, but he indicated if we had a strong tenant that he invited our participation".

Presumably, "invited our participation" meant "invited us to put an offer from a strong tenant". As I have pointed out, the judge made no finding that Max Christmas Pty Ltd or Chesser was engaged by S.P.A. to find a tenant, so as to become an agent with authority to make representations on behalf of S.P.A.. It was not submitted by counsel for the respondents that a finding should have been made or should now be made that the conversations mentioned above between Jeanes and Chesser or between Jeanes and some other unnamed representative of Max Christmas Pty Ltd amounted to an engagement of Max Christmas Pty Ltd as agent to find a tenant, so as to authorise Max Christmas Pty Ltd to make representations on behalf of S.P.A. of the kind which the judge held to have been made. It appears to me that the conversations reflected the common enough situation in which a property owner having property available, or about to become available for sale or lease, is subject to approaches by real estate agents for information of the kind which Chesser apparently obtained. Giving such information does not in itself, in my view, make each recipient of it the agent of the property owner for the purposes of finding a purchaser or tenant, with authority to represent the quality of the property in such a way as to bind the property owner:

see Mullens v. Miller [1882] 22 Ch. 194, 199. No doubt a person given such information as Chesser says he obtained - the principal terms and conditions which the property owner would require - was permitted to pass that information on to interested persons, but it would be going too far, as it appears to me, to hold that authority was also given of such a kind as to make the property owner responsible for any untruths the person receiving the information might tell about the nature and quality of what was available.

Mr George gave evidence that in mid-July he rang Max Christmas and said that he was looking for premises to start an antique shop. He was put through to Chesser, who raised with him the possibility of taking a lease of the subject premises, which were then about half built. Subsequently, there was a second meeting with Chesser at the relevant site and two or three weeks later Mr & Mrs George met Jeanes at Max Christmas' office, as a result of which meeting Mr George signed Exhibit 6. At the meeting with Jeanes, according to Mr George's recollection, there was no discussion of the matters the subject of the representations complained of. He said that the offer to lease Exhibit 6 was signed within a day or two of the meeting with Jeanes at Max Christmas' office. Mr George also said that Chesser never said he was acting for Jeanes, or for S.P.A., or that Chesser was the agent for Jeanes or for S.P.A. It was suggested to Jeanes that Exhibit 6 was signed the day after the meeting in Max Christmas' office and he said it "would be on or about that time".

The offer to lease is dated 27 July 1989 and is signed by Mr & Mrs George. The acceptance of that offer by Jeanes purports to have been signed on the same date. The lease itself, on which action was brought, was a much more elaborate document than the offer; it was executed by Mr & Mrs George as guarantors, as appears on its face, on 17 August 1989 and by S.P.A. on 5 October 1989. There is nothing in the evidence to suggest that Chesser or Max Christmas Pty Ltd took any part in the negotiations (which presumably took place) to finalise the terms of the full lease document, or that Chesser or Max Christmas Pty Ltd had any role in the matter after the coming into existence of Exhibit 6.

Exhibit 6, which as I have explained is the principal basis of the respondent's case on the question of agency constitutes an offer by a company, Muffin Borough Pty Ltd, to take a lease of 362 sq. metres at 17 Upton Street, Bundall (the location of the leased premises) for five years with an option of a further five years, from 9 August 1989.

The rent is stated in two ways, as a total and as a price per unit area. There is provision for rental review, stated as "9% or CPI (whichever is the greater)", for a deposit for the first month's rental and for the manner of treatment of outgoings. The offer contemplates that a lease would be prepared by "lessor's solicitors in lessor's usual form".

The matter was argued before us on the basis that the offer was so framed as to be capable, on acceptance, of producing a binding agreement and that assumption appears to me correct. The agreement, however, was one between Muffin Borough Pty Ltd and S.P.A., not between Pembroke and S.P.A.;

no point was taken about that before us, perhaps because Muffin Borough Pty Ltd changed its name. Immediately above the provision for signature by the lessor there appears the following:

"The Lessor hereby accepts this offer to lease and in so doing confirms the appointment of Max Christmas Pty Ltd as its Agent in this transaction and further agrees to payment of commission to Max Christmas Pty Ltd at the rate prescribed by REIQ and schedule of fees contained in the Regulations of AUCTIONEERS and AGENTS ACT."

It will be noted that there is a confirmation of appointment of an agent; this perhaps implies that there was an informal appointment at some earlier time. Counsel for the respondents contended that we should hold that the appointment of Max Christmas Pty Ltd must have been a matter agreed previously - specifically, at the time of the meeting between Mr & Mrs George, Jeanes and Chesser in Max Christmas Pty Ltd's office "either on that day or the day before".

The only basis put forward for that conclusion is a passage in the evidence of Jeanes, given after he was shown Exhibit 6:

"That document was produced following the meeting between yourself and Mr and Mrs George and Mr Chesser at Max Christmas's office?-- Right.

Can I suggest on the day after the meeting it was signed? Does that accord with your recollections?-- It would be on or about that time.

The terms that are typed in that document were discussed at the meeting?-- Yes.

And then you subsequently were given the typed
copy?-- Mm.

Either that day or the next day, but around about that time, I take it, already signed by Mr George?-- Yes.

And you signed it?-- That would be the normal procedure, yes.

And that document, then, accurately, so far as you are aware, records what was agreed at the meeting, whichever day it was held, at Max Christmas's office?-- I would expect so, yes."

The submission was, as I understood it, that by saying "I would expect so, yes", Jeanes agreed that there had been at the meeting a discussion in which Max Christmas Pty Ltd was appointed as agent.

We reject that contention. As counsel for the appellant pointed out, none of the witnesses who were called and who were present at that meeting was asked any questions designed to bring out conversation at the meeting relevant to this question - i.e. agency. Had it been any part of the case of the respondents that there was an oral appointment of Max Christmas Pty Ltd by Jeanes at the meeting, one would have expected that to have been elicited from Mr & Mrs George or from Chesser. Further, the answer given by Jeanes was tentative and general and could not reasonably be held to support any proposition about the appointment of an agent at the meeting.

Insofar as the word "confirms" in Exhibit 6 implies the occurrence of some earlier appointment of Max Christmas Pty Ltd as agent, it is, as it seems to me, merely evidentiary. Chesser and Jeanes were asked about conversations which might constitute an appointment of Max Christmas Pty Ltd as agent and it is on that evidence, not on the statement in the offer to sell, that one must concentrate to determine whether there was ever any appointment prior to Exhibit 6.

For the reasons I have explained, I am not prepared to hold that there was. In my opinion, insofar as Exhibit 6 contained an appointment of Max Christmas Pty Ltd as agent for S.P.A., it operated at the date of execution of that document on behalf of S.P.A. by Jeanes. That was, according to Exhibit 6, 27 July 1989 and according to other evidence, a day or two later. It was not argued for the respondents that the confirmation of the appointment of Max Christmas Pty Ltd had effect, as between the appellant and the respondents, by way of estoppel, so as to require that there be a finding in favour of the respondents that Max Christmas Pty Ltd was appointed agent before Jeanes signed Exhibit 6.

Such an estoppel would be of no use to the respondents because of the lack of certainty of the time of the appointment confirmed; the appointment might have been the instant before Jeanes signed. Similarly, no question as to ratification, by Exhibit 6, of any unauthorised representations arises: if Exhibit 6 makes S.P.A. responsible for things done by Max Christmas Pty Ltd as its agent before signature it is ineffective, because it does not say what those things were, or more importantly, how far back it relates. Exhibit 6 must be treated as an appointment of Max Christmas Pty Ltd as agent at the time of execution by Jeanes.

It was argued on behalf of the appellant that when the appointment was made the tenant was committed to the transaction and there was nothing further for the agent to do. The respondents' counsel disputed that proposition, but only on the basis that the offer contained a special condition C:

"Subject to the Lessees' Solicitor's Approval of this offer to lease which will be given on Monday 31st July, 1989."

The reason for the respondent's submission was that it was assumed on both sides, as I understood it, that if the appointment of Max Christmas Pty Ltd as agent occurred when the agent's functions were at an end, then the doctrine of Briess v. Woolley [1954] A.C. 333 would not apply. Some examination of that case is necessary. There, one Rosher negotiated, before a company meeting which occurred on 14 October 1948, with a view to selling shares in the company and in the course of doing so fraudulently misrepresented the company's financial position. At the meeting on 14 October 1948, Rosher obtained authority from owners of shares in the company to negotiate their sale and therefore those shareholders became responsible for representations Rosher made after the date of appointment, subject, no doubt, to the representations being within the scope of the ostensible authority of a person appointed to negotiate a sale of shares.

It was unclear whether Rosher made any representations after the meeting, but it was held that even if he had not done so the other shareholders were liable because Rosher, during the period of his appointment, did not tell the prospective purchasers the truth about the matter which he had previously misrepresented. It appears to me, as it apparently appeared to counsel before us in this case, that an important aspect of the facts in Briess v. Woolley was that Rosher had "been appointed agent with authority to make representations for the purpose of inducing a contract..." - per Lord Tucker at p. 354. Lord Cohen said that:

"Mr Rosher when he became the agent of the respondents was under the duty as between himself and the appellants to correct the false impression that his misrepresentations had made. He had become the agent of the respondents to complete the negotiations for the sale of their shares as well as his own shares to the appellants. His authority extended to giving the appellants information as to the business of the company. It cannot be denied that if he had made a new fraudulent statement as to that business the respondents would have been liable to the appellants in damages for that fraud. It seems to me necessarily to follow that they must be liable for his fraudulent failure to withdraw or modify the false statement he had already made". (359)

Thus, the important factual difference between this case and Briess v. Woolley is that here the appointment of Max Christmas Pty Ltd as agent took place at the same time as the transaction was agreed to. If the respondents are to hold the judgment it must be on the basis that there was a period after the appointment of Max Christmas Pty Ltd as agent in which it was in the position described by Lord Tucker - i.e. that of agent with authority to make representations for the purpose of inducing a contract.

It may be thought that a question arises whether special condition C is so framed as to produce the result that there was no contract between the parties before the lessee's solicitor gave approval to the offer; on one view of the matter, there was a contract which created obligations on both sides - for example, obliging the lessee to seek its solicitor's approval in good faith. But even if one considers the matter on the basis that for practical purposes the lessee was not bound to anything of consequence until 31 July 1989, four days after the offer was signed, it does not appear to me that that circumstance brings the case within the principle of Briess v. Woolley. To do so, one would have to read the confirmation of the appointment of Max Christmas Pty Ltd as agent as being an authority to that company to make representations for the purpose of concluding the transaction - i.e. to make representations, for example, to the solicitor or to Mr & Mrs George for transmission to the solicitor. That would be a very artificial reading of the confirmation of the appointment of the agent. Almost certainly, the only purpose of that confirmation was to bring into existence an engagement or appointment in writing for the purposes of s. 70(1)(c) of the Auctioneers and Agents Act 1971, which prevents recovery of commission in the absence of such an appointment. That the confirmation of appointment did not import any obligation on the part of Max Christmas Pty Ltd to take any further steps towards negotiation of the deal is consistent with the existence of the promise to pay commission in Exhibit 6; that was not expressly or implicitly conditional upon Max Christmas Pty Ltd taking any further step. It is also consistent with the fact that there is no suggestion in the evidence that Chesser or any other person from Max Christmas Pty Ltd engaged in discussions with Mr & Mrs George with a view to bringing about the contemplated transaction, after the offer was signed by Mr & Mrs George.

To some extent the rather exiguous character of the evidence concerning the point on which the case appears to have been decided appears to me to be due to the state of the pleadings: no case was made in the defence and counterclaim that S.P.A. was liable because of any failure on the part of Chesser to disclose information or to correct a mis-statement. We were not asked to decide the case on the pleading point, but the state of the pleading is such as to discourage this Court from making factual findings in favour of the respondents on allegations not made in their pleading and not touched on in the judge's reasons.

There would appear to be nothing odd about the result that the unauthorised, and as has been held, misleading representations made by Chesser, should not make the property owner liable on the ground that it executed an appointment of the agent when, at least for practical purposes, the agent's work was done.

For the purposes of deciding this case, it is unnecessary to determine comprehensively what was the precise legal effect of the execution by Jeanes of the confirmation of appointment of Max Christmas Pty Ltd as agent. It is enough to decide, as I do, that in the circumstances of the present case it did not make the lessor liable for misrepresentations made without its authority before Exhibit 6 was signed, nor did it give Max Christmas Pty Ltd authority to make representations in the future with a view to inducing Pembroke to enter into a lease.

The case was argued before us on the basis that the responsibility of S.P.A. for misleading statements was to be determined in accordance with the general law. As no reliance was placed upon s. 84 of the Trade Practices Act, to which the primary judge referred, I find it unnecessary to discuss the construction of that section in detail, but merely point out that it applies only to "conduct engaged in on behalf of a body corporate". In the present case, on the view I take of the matter, there was no such conduct.

Reference was made during the course of argument to the question whether the principle in Briess v. Woolley applies so as to make liable under the Trade Practices Act a corporation which would not otherwise be liable; I think it unnecessary to discuss that point. It should be pointed out again that although not reflected in the orders actually made, there was a holding by the primary judge that the respondents had established a claim (which was pleaded) for negligent misstatement, and the principle in Briess v. Woolley would undoubtedly be material in connection with that claim.

Although no reliance was placed on it before us, I have noted a line of authority which holds that in certain circumstances a failure to disclose information may create liability as for misleading conduct: see Rhone-Poulenc Agrochimie SA v. UIM Chemical Services Pty Ltd (1986) 12 F.C.R. at 477 and in Demagogue Pty Ltd v. Ramensky (1992) 110 A.L.R. 608. In my view, any reliance on that principle would be met by the same argument as under the general law: it was Max Christmas Pty Ltd which had the information which should have been revealed, but the failure to reveal it can be laid at the door of the innocent party, S.P.A., only if Max Christmas Pty Ltd was, for relevant purposes, an agent of S.P.A.. I have said that it was not.

I agree with the orders proposed by the President.