Specialised Livestock Imports Limited v Philip Bendall

IN THE COURT OF APPEAL OF NEW ZEALAND

CA72/01

BETWEEN	SPECIALISED LIVESTOCK IMPORTS LIMITED
First Appellant

AND	PHILIP BENDALL
Second Appellant

AND	GORDON CLIFTON BENDALL
Third Appellant

AND	DOREEN LOUISA BENDALL
Fourth Appellant

AND	OSTRICH IMPORT AND QUARANTINE (1996) LIMITED
Fifth Appellant

AND	EO EXPORTS LIMITED
Sixth Appellant

AND	DARREN DONALD BORRIE, MICHELE CHRISTINE BORRIE, GARY HEMMINGSON AND CAROL HEMMINGSON (TRADING AS PARK ESTATE PARTNERSHIP)
First Respondents

AND	DARREN DONALD BORRIE AND MICHELE CHRISTINE BORRIE
Second Respondents

AND	PETER ARMSTRONG AND JENNY ARMSTRONG
Third Respondents

AND	TERRY CAMERON AND KAY CAMERON
Fourth Respondents

AND	JOHN DE VRIES
Fifth Respondent

AND	SHANE DICK AND DONNA DICK
Sixth Respondents
AND	PAUL DOUGLAS EKDAHL AND KAURI HOLDINGS LTD
Seventh Respondents

AND	RUSSELL HAWKINS
Eighth Respondent

AND	COLIN JUDD
Ninth Respondent

AND	DAVID JUDGE AND KERRY JUDGE
Tenth Respondents

AND	DENIS RICKABY AND ALICE RICKABY
Eleventh Respondents

AND	SHANTALLA ENTERPRISE LIMITED
Twelfth Respondent

AND	BAY OF PLENTY OSTRICHES LIMITED
Thirteenth Respondent

AND	ROBERT BAIN, DAVID TURNBULL AND RON VAN DER HORST
Fourteenth Respondents

AND	JAMES ROSS, IAN ROSS AND SELWYN ROBERTSON
Fifteenth Respondent

Hearing:	15 May 2002
Coram:	McGrath J Robertson J Randerson J
Appearances:	T C Weston QC and G D Jones for Appellants G J Kohler for Respondents
Judgment:	20 September 2002

JUDGMENT OF THE COURT DELIVERED BY MCGRATH J

Table of Contents
Paragraph Number

Introduction..................................................................................

i) Background......................................................................... [1]

ii) The interim judgment............................................................ [4]

iii) Structure of this judgment..................................................... [8]
iv) Summary of this judgment................................................... [11]
Pleadings........................................................................................ [15]
Representations as to quality.......................................................
    i) Judge’s findings.................................................................. [19]
   ii) Appellant’s submissions....................................................... [21]
iii) Respondent’s submissions.................................................... [24]
iv) The evidence.......................................................................... [26]
   v) Decision on the quality representations issue..................... [28]
Representations as to Insurance................................................. [40]
Representations as to capacity to import
    i) Judge’s findings.................................................................. [42]
   ii) Appellants’ submissions....................................................... [50]
iii) Respondents’ submissions.................................................... [57]
   iv) The underlying factual situation........................................ [61]
    v) Discussion of evidence of certainty of importation
             1. Park Estate Partnership )
             2. D D and M C Borrie     ).................................. [63]
             3. P and J Armstrong................................................ [70]
             4. T and K Cameron............................................... [77]
             5. J de Vries.............................................................. [82]
             6. S and D Dick....................................................... [89]
             7. P D Ekdahl and Kauri Holdings Limited............. [93]
             8. R Hawkins.......................................................... [99]
             9. C Judd................................................................ [104]
            10. D and K Judge.................................................... [111]
            11. D and A Rickaby................................................ [118]
            12. Shantalla Enterprises Limited (Shantalla)........... [124]
            13. Bay of Plenty Ostriches Limited (BOPOL)........... [129]
            14. R Bain, D Turnbull and R Van der Horst............ [137]
            15. J Ross, I Ross and S Robertson........................... [143]
   vi) Summary of conclusions on capacity to import................. [148]
vii) Bendall parents: accessory liability................................... [150]

Cross-appeal: Egg importation contracts................................ [158]

Damages and Interest................................................................... [166]
Costs............................................................................................... [174]

Introduction

Background

On 28 March 2002 this Court, as presently constituted, delivered an interim judgment in this appeal. The appeal concerns a dispute over contracts to buy live ostriches (the ostrich contracts) and other contracts to buy ostrich eggs (the ostrich egg contracts). The ostriches were to be supplied in Australia and delivered to New Zealand where they would initially be held in quarantine. Fifteen purchasers entered into ostrich contracts. The supplier they contracted with was Specialised Livestock Imports Limited, previously called Ostrich & Import Quarantine Limited, which is the first appellant. It is referred to in this judgment and the interim judgment as “OIQL”. Seven respondents also entered into separate contracts to buy ostrich eggs with the sixth appellant E O Exports Limited (EOE) which is an associate of OIQL. The shareholding in OIQL at all relevant times has been held in approximately equal shares by Mr Gordon and Mrs Doreen Bendall and their son Mr Philip Bendall.
A number of difficulties arose in performance of both the ostrich contracts. They included closure of the New Zealand border to imports of live ostriches from Australia and a high mortality rate of ostriches allocated to the purchasers while the ostriches were being held in Australia pending export. No live ostriches were ever delivered to the purchasers. Eventually they all cancelled their contracts and sued for recovery of payments they had made of the purchase prices. At the trial of these proceedings 15 purchasers were plaintiffs and OIQL and associated companies were defendants, along with each of the Bendalls. The causes of action against the companies were breach of contract and misleading and deceptive conduct in breach of the Fair Trading Act 1986 (the Act). The latter was also pleaded against each of the Bendalls in respect of their activities in the conduct of the ostrich supplying business activities of OIQL and its associates. Five of the seven respondents who entered into ostrich egg contracts also claimed for losses they sustained under these contracts on similar grounds.
In the High Court Cartwright J held each of the defendants jointly liable for the amounts paid by the respondents under the ostrich contracts and entered judgment against them for those sums. She dismissed the claims for monies paid under ostrich egg contracts. OIQL, one of the associate companies and each of the Bendalls appealed to this Court where the 15 purchasers are respondents. The respondents who had unsuccessfully claimed for repayment of monies paid under the ostrich egg contracts cross-appealed. We were advised at the first hearing on 20 February 2002 that the appeal was being pursued only by the three Bendalls. This judgment has been prepared on that basis.

ii) The interim judgment

In the interim judgment, under the heading “Background Facts”, we set out a summary of the circumstances in which the respondents came to enter into contracts with OIQL and the nature of those contracts. We do not repeat what we then said which should be taken to be incorporated in this judgment. So should the passage which follows it under the heading: ‘The High Court Judgment’. It is sufficient at this point to summarise in this judgment what we said about the critical findings made by the High Court.
In relation to the findings against the Bendall parents and Philip Bendall Cartwright J found, first, that in the context of the business run by their family company OIQL Philip Bendall had held himself out as an expert in matters concerning importation of ostriches. He and his parents also represented that the family, through its company, had the ability successfully to import ostriches. The High Court also found that representations had been made as to the quality of ostriches to be supplied. They would be selected from the top 10% of stock available in Australia by reference to verifiable bloodstock records and chicks would be handpicked for the respondents.
There were representations also that the ostriches would be fully insured by OIQL once property in them had passed to the respondents while the ostriches remained in Australia. Importantly the High Court Judge also held that:
At the time of making each representation listed above, with the exception of that relating to insurance, the defendants had no proper basis for making the representations. Their knowledge of the industry, of the mortality rate of the Ostriches, the border closures and the deliberate policy of purchasing birds which were not demonstrably from the premier bloodstock promised all point to a conclusion that the defendants had no intention of fulfilling the representations made in writing or orally. Therefore the defendants fail in their submission that the representations became incorrect or misleading only because they were not performed.
In the interim judgment this Court went on to address submissions advanced to us by Mr Weston QC on behalf of the Bendalls that on the Judge’s findings it could not be said the Bendalls, as opposed to their companies, were ‘in trade’ at the time they made the representations said to be in breach of ss9 and 13 of the Act. We found against those submissions. Mr Weston then advanced an argument attacking the findings of fact as to breaches of the Fair Trading Act by the Bendalls. For reasons we set out in the interim judgment we indicated that the line of argument advanced for the appellants required us to review the findings and reasoning of the Judge in relation to the claims of each respondent. To do that we would require reference to the evidence relevant to each claim found to be established on the facts but now challenged. That material was not before us at the hearing on 20 February 2002. Accordingly in the interim judgment we adjourned the appeal and gave directions as to the matters which we wished to have addressed in submissions. A fixture was allocated for the resumed hearing on 15 May 2002 and further argument presented.

iii) Structure of this judgment

In this judgment we first address the appellants’ challenge to the Judge’s findings of misrepresentation by them concerning the quality of the ostriches to be supplied including their verifiable bloodlines. We are able to determine this part of the appeal by considering Mr Weston’s submission that the evidence did not establish breaches of these representations along with Mr Kohler’s argument in response; it is not necessary for us to consider the detail of the evidence of what was said to each respondent on these matters. We next turn to the appellants’ arguments concerning the findings of misrepresentation as to OIQL’s obligations and announced intention to insure the ostriches. We are able to determine that aspect of the appeal on the basis that even accepting the Judge was right in her findings of misrepresentation no losses to the respondents resulted. Again it is unnecessary for us to discuss the evidence in detail.
We next address the much more difficult issue of whether the Judge was wrong to make the finding she did that each of the Bendalls made representations to each of the respondents about OIQL’s capacity to successfully import the ostriches, linked to which were representations that there was no doubt that OIQL would be able to deliver them. The greater part of this judgment is concerned with this question. The principal theme of Mr Weston’s submissions was that Cartwright J failed to address the evidence of misleading conduct in relation to what each of the Bendalls individually had said or done in communications with each of the respondents. As a result it is necessary to look at that evidence and what it established in some detail. In instances where we conclude the evidence does not establish representations were made to particular respondents by one or both of the Bendall parents, we go on to consider whether the evidence established secondary liability by them as accessories.
We next address the submissions of Mr Kohler on the cross-appeal which concerned the ostrich egg contracts. Finally we address arguments advanced by the appellants concerning the amounts which they, and in particular the Bendalls, were ordered to pay in respect of losses suffered as a result of misrepresentations.

iv) Summary of this judgment

The outcome of the appeal is as follows. The appeal against the High Court Judge’s finding that OIQL and Philip Bendall induced each of the respondents to enter ostrich contracts by misleading conduct is dismissed. The appeal against the finding of such misrepresentations by the Bendall parents is allowed in respect of the 3rd, 5th, 7th, 9th and 15th respondents and, with one qualification, dismissed in respect of the 1st, 2nd, 4th, 6th, 8th, 10th, 11th, 12th, 13th and 14th respondents. The qualification is that Mrs Bendall has no liability to the 12th respondent. The appeal against the amount of damages that the three Bendalls must pay to those respondents, where findings of their liability are upheld, is dismissed.
The appeal against the findings of liability for representations that stock supplied would be of top quality, that it would be supplied with verifiable bloodlines and that the ostriches would be fully insured at all times is allowed. These findings against all appellants are set aside. There is however no impact on the amount of damages awarded which is as set out above.
The cross-appeal concerning misrepresentations inducing the 3rd, 4th, 5th, 7th and 10th respondents to enter ostrich egg contracts is allowed. OIQL, EOE and Philip Bendall (but not Gordon and Mrs Bendall) are ordered to pay the amounts of losses suffered by those respondents. Leave to apply to the Court for variation of precise amounts payable is reserved for reasons given.
The appeal against the award of interest on the judgment sum at 10% from 1 April 1996 is allowed and a rate of 8% substituted. Interest will run on the judgment on the cross-appeal from 1 April 1997. All questions of costs are reserved for written submissions.

Pleadings

In paragraphs 12 to 14 of their second amended statement of claim the respondents pleaded their causes of action against the Bendalls for pre‑contractual misrepresentation on the basis that each of the Bendalls, on behalf of OIQL or its associated company, had represented:
(i)that there was no doubt that OIQL [subsequently OIQL(1996)] would be able to successfully import the respondents’ ostriches within a reasonable time;
(ii)that the ostriches supplied were from the top 10% of breeding stock in Australia or were top Australian breeding stock;
(iii)that the ostriches had and would be supplied with verifiable bloodlines records going back 2 to 3 generations;
(iv)that the ostrich market was entering a breeder phase of 6-8 years where prices were destined to rise;
(v)that the ostriches were fully insured at all times.
These misrepresentations were incorporated in and elaborated on in paragraphs 15 to 18 which alleged that the Bendalls had each breached ss9, 13(1) and 22 of the Fair Trading Act.
The Judge found for the appellants on the misrepresentation pleaded in para (iv) above, which concerned the timing of imports, and dismissed that claim. That finding was not in issue on the appeal which was concerned with the liability of the Bendalls, and in particular the Bendall parents, for misrepresentation of their capacity to successfully import the ostriches (para [15](i) above), the quality of the ostriches selected and appropriated to the respondent purchasers including their bloodlines (paras [15](ii) and (iii)) and as to insurance cover (para [15](v)).
The statement of claim gave particulars of the misrepresentations by reference to distributed documents and oral discussions between the Bendalls and the respondents or their representatives. The Bendall parents were alleged to have participated in the preparation of the documents with Philip Bendall. The pleadings of course set the parameters of the claim. They incorporated specific passages from ten documents said to have been circulated to respondents which were relied on as particulars of the representations set out in para 12. The ten documents and passages in them concerned are set out in Schedule 5 to the claim as follows:
SCHEDULE 5
Particulars of Literature
Documents
1.    Information Sheet undated
“-    we are pleased to announce the availability this summer of quality imported ostrich chicks guaranteed option to purchase
-     pending changes [to Regulations] will allow OIQ to bring in live young ostriches from Australia
-     We will be hand-selecting in Australia the ostriches we import, and we will be paying special attention to bloodlines
…the ostriches will be from parents with complete long-term records of excellent fertility, high egg laying ability and strong chick growth
-     your ostriches will be strong healthy 4 month old juveniles when they come out of quarantine
-     our first import is due out of quarantine mid-January 1995
-     balance payable when your ostriches are ready in mid-January 1995
-     importing ostriches is part of our professional enterprise
-     you will know exactly when you can expect your ostriches to be available allowing you to make firm plans.”
2.Undated Newsletter forwarded -/9/94
“I have sourced exceptional bloodlines … the top 10% of Australian stock.
Our ostriches will be provided with verifiable bloodstock records illustrating their excellent parentage over two or three generations. Knowing the background of your ostriches is very important and an essential factor in your purchase decisions.”
3.31/10/94 Circular Letter
“Ostriches are coming…
-     MAF are proceeding well with new Regulations to allow the import of live ostriches from Australia. A draft protocol will be released for public comment in a few days, and permit may be issued as soon as December 16.
-     By starting with premium quality ostriches…
-     For those expecting their ostriches in our first import a part payment will be required in late November or early December (depending on expected arrival date).
4.Flow Chart supplied to clients at various times
Shows start 3 mth old birds – “your home 7 mths”.
5.23/11/94 Circular Letter
-     “MAF believe that the Regulations may be in place by Christmas but say there is the possibility that they could be delayed until early next year….
-     Your ostriches will be about 6 months old when they depart Australia and 7+ months old when they exit our Quarantine facility.
-     They will be due to exit quarantine at the end of the first week of June.
-     … they will be some of the oldest and highest quality ostriches available this season.
-     Your specially selected ostriches will be purchased on your behalf…
-     Your ostriches will be about 6 months old when they depart Australia…
-     You are received a … ostrich from premium bloodlines.
-     Your ostriches are fully insured for all risks while in Australia.
-     We are offering you a secure purchase option delivering quality ostriches at an extremely robust age.”
6.27/12/94 Letter
“Ostriches are coming
-     Each ostrich (aged approximately 7 months on delivery during July 1995)
-     To supply you with premium quality ostriches, we are paying in excess of $A1000 more than projected”
7.3/4/95 Letter
“At this point in time our live ostrich importation programme is unaffected by this suspension. This is because our first shipment is still some weeks away from being ready for import. If the situation persists then some delay may arise until the health status of our ostriches destined for export can be assured. This would simply mean that your ostriches will be older when they arrive.
It is business as usual at this time and presently there are no delays to our current schedule.
8.Letter 22 October 1996
“We have been advised that it is in your best interests that we divide up our business operations into three separate entities… There are several important reasons why it is in your best interest for making such assignment, and we are advised to recommend that you do so.
9.Undated
“Our Ostrich Sales Agreement is Enclosed.
What Is It All About and How Does it Work?
-     … your ostriches are coming from what is recognised as one of the top farms in Australia, owned and…
-     So by now you own your ostriches in Australia. They are presently increasing in value at more than $3000 per pair per month and the market is continuing to strengthen. This is excellent security for you.
-     Of course, we are committed to importing your ostriches…
-     Of course we haven’t been able to deliver your ostriches by a certain date then you can cancel this contract if you wish. Since by then your ostriches will be worth so much more on the market…
-     Section 8
This explains Insurance. From the time you take title to your ostriches (3 months of age) until after they leave quarantine your ostriches are fully insured for ALL RISKS (except of course of Nuclear Radiation (War), Civil Unrest, etc).”

10.Undated
“Goodmorning!
Thank you for your enquiry…
-     A high-value breeder’s market is expected here for many years…
-     Exceptional returns are possible from small areas of land.
-     Ostriches appreciate rapidly in value.
-     There is no doubt that New Zealand will experience exactly the same success as elsewhere-…
-     Importing ostriches is part of our professional expertise…
-     We have strong healthy ostriches from exceptional bloodlines available now. These will be ready for delivery to you at a robust 7 months of age in mid-1995. With excellent verifiable parentage…”
11.The various Ostrich Agreements themselves.

Representations as to quality

Judge’s findings

Her Honour found there had been representations throughout the period in which contracts were entered into in OIQL’s promotional material as to the high quality of the ostriches that would be supplied, including the provision of verifiable records of their parentage, and that the birds concerned would be hand-picked and certified by specialist veterinarians. The Judge also found that the promised generational history of the ostriches was not in fact provided to any of the plaintiffs. She was not satisfied that the veterinary certificates, which she accepted had been supplied, were given by specialised veterinarians. Nor had there been any other independent confirmation of the quality of the birds concerned, as implicitly it had been represented there would be.
The Judge went on to find that the stock had been purchased from a variety of farms in bulk through a broker and at less than market rates. She inferred from this it had neither been handpicked nor had come from top farms. She then said of the representations as to the quality of the stock:
They were representations which the Defendants had no intention of fulfilling. Although Philip Bendall deposed to visiting farms and hand selecting stock, his evidence on this point was confused and unreliable. I am satisfied that the stock acquired was bulk purchased with little attempt made to ensure that the representations made to the Plaintiffs would be fulfilled. For those reasons the representations made were misleading and deceptive, and in most instances formed part of the inducement to enter contracts with the defendants.

ii) Appellants’ submissions

Mr Weston accepted on behalf of the appellants that OIQL had represented it would be purchasing and importing high quality ostrich stock. His contention, however, was that there was no adequate evidence to support the Judge’s finding that the ostriches that were purchased and allocated to each of the respondents were not of the represented quality. Mr Weston said that the respondents had not called any affirmative evidence which indicated that the birds were of poor quality and that the Judge had relied on evidence given by Philip Bendall to make the factual findings on which she drew inferences adverse to the appellants on the quality of ostriches purchased. It was solely on the basis of that evidence that the Judge had found OIQL had purchased stock in bulk, through a broker, at lower than market rates. Mr Weston argued that these factual findings were not a sound basis for the Judge to draw the inferences she did that the stock had neither been handpicked nor come from the top farms. The Judge had accepted that the high mortality rate of purchased ostriches did not enable an inference to be drawn that selection had been other than from best available bloodlines. Mr Weston submitted Her Honour should likewise have held that the respondents had failed to prove that OIQL did not select and allocate to purchasers high quality ostrich stock in compliance with its representations. Nor he argued was there evidence to support the finding that stock purchased to replace the ostriches which died was other than of equal quality to that originally purchased. He made similar submissions in respect of the Judge’s finding that she was not satisfied that specialised veterinarians had certified the ostriches were sound. Mr Weston’s argument here was that the Judge had wrongly reversed the onus of proof of failure to meet the terms of the representations.
Mr Weston also took issue with whether there was adequate evidence to support the Judge’s finding that the Bendall parents had made the alleged representations as to quality. We put aside that submission for the present along with the argument that in any event no representations causative of loss were made by any of the Bendalls to particular respondents.
Finally, Mr Weston argued that there was also no basis in the evidence for the Judge to find an absence of intent by OIQL or the Bendalls (and in particular the Bendall parents) to fulfil the representations they made concerning the quality of the ostriches that would be supplied. He argued that in this area the Judge had once again effectively reversed the onus of proof to make findings adverse to the appellants.

iii) Respondents’ submissions

In responding to these submissions Mr Kohler, for the respondents, urged that we have particular regard to the context in which the respondents, individually, were dealing with the appellants. The respondents lacked expertise in this area and the appellants had professed that they had it. The ostriches they were to select were to be the foundation breeding stock in New Zealand. The evidence of the representations concerning hand selection of birds, provision of their generational breeding records and certification by specialist veterinarians was to be assessed in that context. In the case of all respondents, Mr Kohler submitted, the situation was one in which the respondents had put their trust in the Bendalls. Mr Kohler took us through the responses given by Philip Bendall to questions asked of him in the course of cross-examination at the trial. Philip Bendall had acknowledged that he could point to nothing which indicated the birds he had purchased were in the top 10% of Australian stock. He agreed that the purchases were, generally, in bulk and that they had been made at discounted prices. He accepted he had not provided the complete breeding history of purchased ostriches. He also agreed that in April 1995 when a bird died, he allocated another to the respondent who owned it without informing the respondent he had done so. He also agreed that OIQL had not itself retained a veterinarian to examine the ostriches prior to sale. That role was undertaken by a veterinarian retained by the vendors as part of the sale conditions.
Mr Kohler finally submitted there had been a failure to comply with an assurance a top vet would be engaged and top farms alone be sources of stock. The purchase through a broker in bulk at a discount proved this had not happened.

iv) The evidence

In Philip Bendall’s briefed evidence he said that in October 1994 he met with the broker who had listed on his books the vast majority of ostriches available for sale in Australia. He said he did so to confirm that the broker could supply the quality of ostriches OLQL was seeking. OIQL entered into a contract for supply of 26 ostriches with the broker. The price was discounted for what was a purchase in bulk but, according to Philip Bendall, that did not indicate low quality of the stock. The suppliers included the highly regarded Karoo Veldt ostrich farm.
Philip Bendall also referred to selecting ostriches for purchase in early 1995. Only those assessed as “very good” by a veterinarian were considered. At that time ostriches were being selected almost exclusively from Karoo Veldt. Philip Bendall was cross-examined at the trial on his compliance with representations relevant to the quality of the ostriches including whether he had in fact hand-selected them. He gave lengthy and general answers to the questions put to him referring to instances of farm visits he had made, sometimes with the broker, and subsequent checking of the birds supplied. He was questioned about whether he had in fact engaged “one of the very best ostrich vets in Australia” as he had represented he would and after some prevarication eventually acknowledged that OIQL did not itself retain a veterinarian to examine ostriches being purchased but rather relied in each case on a local veterinarian engaged by the vendors, under the conditions of sale, to provide the certificate. Counsel for the respondents also questioned Philip Bendall concerning the practice of substituting similar birds for birds which died. His evidence was that this was always intended. He had ceased to refer to the top 10% of Australian stock in September 1994. He agreed however that he had told all plaintiffs they were getting top birds and said that was his view of their quality. This was not contradicted by the discounted prices which simply reflected forward contractual commitments and bulk prices. He strongly asserted he had never bought an ostrich which was not in good health and pointed to the veterinarian’s certificates in support. While nearly half had died after purchase that was to be attributed to causes that did not point to lack of quality such as accidents, or subsequent illness linked to viruses.

v) Decision on the quality representations issue

The High Court Judge rightly recognised the great importance of the representations made on behalf of OIQL of the high quality of the ostriches that would be purchased and allocated to their contracts. The context in which these representations were made was that the respondents were acquiring the birds as foundation stock for an ostrich breeding industry in New Zealand in which they would participate.
The representations about the quality of the ostriches which formed the pleaded basis of the respondents’ claims concerned first, the general quality of the stock to be supplied and, secondly, with the bloodlines of the ostriches. As to the general quality, like the Judge, we see no particular significance in the different way the representation was made. Initially the promotional material represented that the ostriches would be “representative of the top 10% of Australian stock” whereas later this was changed to say that they would be sourced from “top Australian breeding stock”. Whatever precise language was used the representations, together with statements that the ostriches would be of “premium quality” or “highest quality,” all conveyed the clear message that the quality of the ostriches that were supplied would be very high indeed. It was a message conveyed to all respondents.
It is also clear, as the Judge found, that it was represented to all respondents that the stock that was supplied would have verifiable bloodlines. At various times this representation was expressed in differing terms. In document 2 it was said that “verifiable bloodstock records illustrating their excellent parentage over two or three generations” would be provided. By the time document 10 was sent out this had been altered in document 10 simply to “exceptional bloodlines”. This representation also went to the quality of the stock.
The evidence that especially led the Judge to the conclusion that the representation of high quality had been breached was that of the purchasers by Philip Bendall on behalf of OIQL of birds in bulk, through a broker, at a discounted price. The Judge discounted the certificates of veterinarians that the ostriches at time of purchase were of “very good” quality because, contrary to other assertions made those veterinarians were not the independent experts which OIQL had said would be engaged.
We have closely considered the evidence concerned, principally given by Philip Bendall. We are particularly conscious that, as a witness, he made a very poor impression on the Judge, who clearly did not believe him when what he said was contradicted by the direct testimony of the respondents. It was however for the respondents to prove there had been misrepresentations concerning the quality of the ostriches and we have concluded that the evidence overall fell short of doing that.
The evidence of the terms of the transactions which the Judge relied on did not take the respondents far in proving the lack of quality of the birds supplied. That Philip Bendall obtained a lower price for the large number of ostriches OIQL ordered does not of itself indicate their quality was less than that he promised the respondents. It is a normal commercial practice to discount a standard price for a high volume sale. Nor do we see that the engagement of a broker was necessarily inconsistent with Philip Bendall’s evidence that he made individual selections, after personal inspection of the ostriches that were purchased. OIQL was engaged in what all recognised was the foundation of a new breeding industry for New Zealand and no doubt needed a variety of services to assist Philip Bendall with its ostrich purchases. Engaging a broker was probably also one way of assisting OIQL’s management of the risks of the venture.
It was suggested that purchase prices of $A6,000 for young chicks, compared with prices in the region of $NZ20,000 paid by the respondents, of itself indicated the stock was of inferior quality. We have concluded however that to draw such an inference from those facts would be an entirely speculative exercise. There is no indication the Judge undertook it. Moreover there were others in the market to supply ostriches to persons in the position of the respondents and there is nothing to indicate the prices sought by OIQL for the birds they sourced were other than market prices.
We realise the Judge was highly sceptical of Philip Bendall’s evidence of his assiduous efforts to hand select chicks, but even ignoring that evidence, we are left with a glaring absence of any evidential material on which the Judge could have founded her conclusions that the birds were of a lower quality than that promised to the respondents. As we have already mentioned the Judge found that the high mortality rate of the ostriches purchased was not probative of poor quality.
That leaves the evidence concerning the bloodlines of the ostriches. The position here was that at the time he notified respondents of the purchase and allocation of an ostrich to their contract Philip Bendall also sent information concerning the breeding history and an invoice. A veterinarian’s certificate of the good health of the bird was also sent. These supported an invoice for 60% of the price payable to OIQL.
The breeding history provided appears to be in general of only one generation rather than two but the time to take such points was prior to payment of the invoice. There was no evidence we were pointed to that indicated any purchaser protested over this point. We are also satisfied it does not have any significant bearing on the question of the quality of the birds supplied. Nor was there any loss caused by the limited information of generational history.
Her Honour’s criticism of the failure of OIQL to provide the services of specialist veterinarians or other independent confirmation of the quality of the birds at the time of purchase is not in our view in point. The respondents did not in their claim plead deceptive or misleading conduct or misrepresentation in relation to the independence or lack of specialist standing of the veterinarians that certified as to the quality of ostriches acquired on the respondents’ behalf. Nor was there any evidence that the certificates actually given were deficient.
On the other hand Philip Bendall was able to demonstrate that veterinarians, albeit with links to the vendors, had certified as “very good” the ostriches that were supplied. While he was not considered by the Judge to be a credible witness, when what he said was in conflict with the respondents, those certificates carry some weight with us. In the absence of any challenge to them and the absence of other evidence there was in our view no basis to find ostriches supplied were of less than top quality that the respondents were promised. For these reasons we find that no breach of the representations of quality were proved against the appellants. It is accordingly not necessary for us to go on to consider whether the Bendall parents made those representations. We set aside the findings of the Judge on breach of representations as to quality.

Representations as to Insurance

The respondents claimed that pre-contractual misrepresentations that the ostriches would be insured were misleading in light of actual failure to maintain insurance cover. Mr Kohler argued and the Judge found the misrepresentations concerned went to the security of the commercial arrangements. Mr Kohler also submitted they were part of OIQL’s inducements to enter into contracts.
The Judge found that the appellants having advised that the respondents’ birds would be insured during the quarantine period engaged in misleading conduct by failing to purchase commercial insurance cover. This appears to concern the period after 1 April 1995. After considering counsel’s submissions we are satisfied that the Judge’s reliance on misrepresentations as to the insurance position as part of the basis for finding the Bendalls contravened the Act was misconceived. Insurance of the birds was promised and was a requirement in each of the respondents’ contracts. It does not however follow that breaches of this obligation caused losses to the respondents. We are persuaded by Mr Weston’s argument that because the scheme of the contracts was that birds which died would be replaced by OIQL it was entitled to retain the proceeds of insurance for birds which were replaced. Mr Kohler argued that the respondents were entitled to receive the benefit of insurance proceeds when birds died as an alternative to replacement but we do not read the representations or contractual provisions in that way. The respondents were not entitled to the proceeds of insurance. There was no evidence they suffered losses from a breach of any insurance obligations. There was therefore no basis for the orders made under s43 of the Act. This ground of appeal succeeds. Accordingly we set aside the Judge’s findings on breach of representations as to insurance cover.

Representations as to capacity to import

Judge’s findings:

The Judge’s conclusion that the appellants had misrepresented their ability to import ostriches successfully was influenced in part by her findings on what she saw as the closely associated allegation that the Bendalls had represented themselves and OIQL to be experts in ostrich importation. Her Honour observed that when, in the course of trade, persons hold themselves out as experts in a field, the reasonableness of their doing so forms an integral part of an inquiry into whether their conduct is misleading or deceptive under the Act. The Judge found that Philip Bendall had developed his expertise in matters relating to ostriches and become well known in the fledging industry by 1994. He had held himself out to be an expert, was generally considered to have a high degree of expertise in live bird importation and, in fact did have the broadest expertise in all aspects of the business. None of these findings was seriously put in issue in the appeal.
During 1994 Philip Bendall developed a business plan to import live ostriches from Australia. The Judge found, rejecting their evidence to the contrary, that the involvement of the Bendall parents in the resulting business operations was not merely by way of supporting and assisting Philip Bendall. She found that like their son the Bendall parents were equipped to give and offered advice as experts on a range of matters concerning ostrich importation. Their farm was used to raise and demonstrate ostriches to intending purchasers and both Bendall parents showed potential customers around their farm. Gordon Bendall had advised his son on farming of the birds while they were in quarantine in Australia. Mrs Bendall had many discussions with potential customers particularly concerning health issues. The Judge held that the representation that each of the Bendalls had held themselves out as an expert in ostrich importation was also proved.

The respondent plaintiffs had each alleged they were told by the Bendalls that OIQL would be able to import into New Zealand ostriches they purchased successfully and within a reasonable time. The Judge said that to succeed in showing this statement was a breach of s9 of the Act the respondents had to show that one or more of the appellants had no reasonable basis for giving the assurances or that they were misleadingly only part of their opinion. Here Her Honour held that relative lack of relevant business expertise of the plaintiffs was such that they had no responsibility themselves to inquire into the assurances they were given, or into the particular risks involved in the importation scheme which were covered by the assurances. The gravamen of the alleged misrepresentation was that the Bendalls knew of the risks of long, ongoing or intermittent border closures and of a very high mortality rate amongst the purchased birds. These potential impediments to OIQL’s capacity to import the ostriches they sold made the assurances that there was no doubt the ostriches could be imported, misleading.
The Judge held that the particular risks of border closure and high mortality among ostriches should have been made known to each respondent prior to purchase. Philip Bendall had accepted in cross-examination that there was always a real risk of border closure by the Ministry of Agriculture and Fisheries (MAF) preventing importation. He had also agreed that to meet standards expected of an expert adviser required that he warn purchasers of the risk of market collapse and border closure. The Bendalls nevertheless, up till the first suspension of imports, had represented there was no question they would be able to import the birds and thereafter had said any delay would be temporary.
MAF suspended the import of ostriches on 1 April 1995, lifted that suspension on 1 September 1995 and reinstated it on 20 February 1996. For the five and a half months period prior to 26 February 1996, there was an opportunity for OIQL to import ostriches but no birds were imported during this time. Various reasons were suggested for this. A number of birds had died and the Judge found that OIQL did not acquire replacement stock until after the border reopened. Quarantine requirements created a further delay in importing this new stock. The Judge recorded a suggestion by the respondents that some live birds could still have been imported but that the quarantine facilities on the Bendall’s farm property were fully occupied being used for other purposes. The Judge found that, in this context, the assurances given to each respondent concerning the certainty of OIQL being able to import their ostriches were misleading and deceptive. Indeed knowledge of the risks of mortality rates and border closures required a warning be given to potential purchasers.
The Judge found that the appellants knew but failed to disclose that border closures posed a risk to successful importation. Another important finding of the Judge, not challenged on appeal, was that Philip Bendall knew of the real risk of a high mortality rate from the time of his preliminary research into the venture. She appears to have found this knowledge was shared by the other two Bendalls. Her Honour indeed went so far as to hold that there was no intention to import the ostriches.
By the time the respondents’ cancelled their ostrich contracts, bird losses were in the vicinity of 40% to 50%. The Judge found Philip Bendall did not acknowledge the ostrich deaths to the respondents until October 1996. Newsletters gave an impression that while borders were closed birds would be older and thus better able to breed on arrival.
The Judge observed that when making a statement of opinion a person implies that at the time, he or she had the state of mind reflected in the opinion, and also had a basis for having that state of mind. Such an implication, Her Honour said, is more readily drawn if the maker of the statement has special expertise in relation to the opinion given. This approach was not challenged on appeal. In the instant case the Judge found that the appellants, who had all the expertise, had misrepresented to the respondents, who had none, the ability of their company to import successfully. The crucial question was whether at the time they did not intend to perform their assumed obligations, were aware at the time of facts making such performance impossible or were recklessly indifferent to whether they could perform. The Court had to decide this.

ii) Appellant’s submissions

In his submissions on behalf of the Bendalls Mr Weston accepted that Philip Bendall had made representations that OIQL would be able to successfully import the ostriches. The nature and extent of such representations, he argued, varied with different respondents. In the case of the Bendall parents, however, he took issue with what he called the apparent translation by the Judge of the Bendall parents participation in OIQL’s business into a finding that they personally had made representations, including those of OIQL’s capacity to import, to all respondents. His submissions emphasised the lesser role of the Bendall parents in the importation scheme and their limited and in some instances lack of any contact with respondents. He argued that in any cases where the Bendall parents gave assurances themselves they were plainly relying on their son’s expertise. They lacked themselves personal knowledge of risks of impediments to importation or of high mortality rates. He submitted that on the analysis of the evidence provided in his submissions they had not personally made any actionable misrepresentations.
In keeping with the theme of his argument, which invited us to focus on the adequacy of the evidence as it related to findings in favour of each respondent, Mr Weston submitted that the evidence of making of oral representations by the Bendall parents fell into 3 categories. In the first category he placed those respondents with whom, he said, the Bendall parents had no discussions at all prior to contracting with OIQL. He argued that no credibility issues arose in relation to the evidence of the Bendall parents in those cases as there simply was no evidential basis for the finding that they had made representations for which they were held liable. Mr Weston said the respondents in this category were the 5th, 7th and 15th respondents (Mr de Vries, Mr Ekdahl and Kauri Holdings Ltd, and Messrs Ross, Ross and Robertson).
Mr Weston's second category of respondents were those whom he said had incidental discussions with the Bendall parents but, Mr Weston argued, there was no evidence of discussions concerning importation. He placed in this category the 3rd, 4th, 6th, 9th, 10th, 11th and 14th respondents (Mr and Mrs Armstrong, Mr and Mrs Cameron, Mr and Mrs Dick, Mr Judd, Mr and Mrs Judge, Mr and Mrs Rickaby and Messrs Bain, Turnbull and Van der Horst). Mr Weston submitted that credibility issues were relatively minor with these claims and in some instances there were none. He argued there was no basis for the Judge to find that the Bendall parents were liable for alleged oral misrepresentations especially concerning successful importation.
Mr Weston accepted there had been “limited representations” to those in his third and final category of respondents. They were the 1st, 2nd, 8th, 12th and 13th respondents. They are the Park Estate Partnership, Mr and Mrs Borrie, Mr Hawkins, Shantalla Enterprise Ltd, and Bay of Plenty Ostriches Ltd. Here he accepted there was some scope for credibility disputes in relation to the evidence of the Bendalls although not he said in respect of that concerning the 13th respondent. Mr Weston also contended no communications made following entry into contracts were causative of loss other than, perhaps in two instances involving Mr and Mrs Dick and Mr Hawkins.
Insofar as findings of written representations by the Bendalls were concerned Mr Weston argued that, as the Bendall parents did not write, or sign, and indeed are scarcely mentioned in written materials sent out to respondents, there are no written representations for which the Bendall parents are liable.
While it was accepted that Philip Bendall wrote and signed out the documents set out in Schedule 5 he had had no dealings, prior to contracts, with the 5th, 7th, 8th and 15th respondents and could be liable to them only for representations in written materials. Mr Weston argued that other than perhaps for the 6th and 8th respondents it had not been shown that post contractual conduct by him was causation of any loss.
In the event that any of the Bendalls are held liable in this Court to any respondent there are issues concerning the amount of the losses awarded by the Judge. This Court is also asked to make separate awards against each of the Bendalls reflecting the fair contribution to the loss for which each is liable. No such apportionment was made by Cartwright J.

iii) Respondents’ submissions

In his submissions for the respondents Mr Kohler placed emphasis on the general involvement of the Bendall parents in the OIQL business and their particular involvement with individual respondents. He argued that the Bendall parents had fully participated in a joint enterprise with Philip Bendall and could not be described as merely providing superficial support and assistance to him.
Mr Kohler also emphasised the following finding by the Judge:
Although it will be necessary to make specific findings of fact which are dependent on findings on the credibility or reliability of individual witnesses, overall I formed a clear view that the evidence of each of the plaintiffs was to be preferred to that of Gordon, Doreen or Philip Bendall. Gordon and Doreen Bendall were at pains to distance themselves from the activities of their son in relation to the contracts entered into by the plaintiffs, professing to have little knowledge or understanding of the importation businesses operated by their son. Both claimed to have undertaken little or no work for the relevant companies although together holding 66% of the shareholding and drawing or having credited in the accounts, significant sums as shareholders. I do not accept that their evidence was credible and reliable.
Mr Kohler also pointed to evidence that the Bendall parents each owned 33% of the share capital of OIQL and had benefited from heavy drawings of profits especially in the 31 March 1995 year. They had charged rent to OIQL for the quarantine facility which they owned. OIQL’s office was in their house and office facilities including fax machines and phone numbers were shared by them with OIQL and another company owned by the Bendall parents.
Mr Kohler also pointed to work done by the Bendall parents for OIQL. Mrs Bendall had kept in considerable detail a hand-written phone log book recording discussions, including those with potential customers about the company’s business. She had signed and sent out receipts. OIQL’s publicity referred to itself as “a 100% Kiwi family based business” and stated “our team includes Doreen and Gordon Bendall (and) Philip Bendall, Operations and Marketing Director…”. Mrs Bendall also acknowledged posting out written material to respondents. Mr Kohler also referred us in detail to evidence from individual respondents of what was said to them in their discussions with the Bendall parents while emphasising that he relied on evidence of a general course of conduct by the Bendall parents to support the findings of their liability under these causes of action to all respondents for misleading conduct.

(iv) The underlying factual situation

Before turning to what was said to each of the respondents and by whom, we outline the underlying factual situation clearly established by the evidence. During 1994 and 1995 OIQL promoted its ostrich importation scheme to the public as a means of entering a new ostrich breeding industry in New Zealand. There was an expectation that the new industry would be highly profitable for a limited period. Delivery in New Zealand within a reasonable time of the Australian born birds was accordingly of importance to all purchasers. It was commercially necessary for OIQL to give potential customers confidence in its ability to import successfully and all the more so because there was no prior history of importing Australian ostriches to New Zealand. In this situation it was obvious that the attitude of MAF as the border regulatory authority would be crucial to the success of the timely delivery of the birds. We are satisfied that, viewed objectively, at the times discussions with respondents were taking place, there was throughout a real risk of regulatory intervention preventing or substantially delaying delivery of the ostriches. Whether MAF could do so would of course depend on whether there were developments seen as warranting intervention and the possibility of there being such developments was part of the risk. Linked to it was the risk of a high mortality rate among the birds while held in Australia pending importation. We are satisfied that unless OIQL was able to satisfy each purchaser of ostriches that there was no need to have concern over these risks none of them would have purchased ostriches on terms whereby they carried the risk of failure to import in a reasonable time.
None of the respondents was in a position to critically evaluate any assurances that they were given concerning the ability of OIQL to import ostriches. In this situation what was said on behalf of OIQL concerning its expertise in importation and its inside knowledge of the thinking of officials in MAF was inherently going to be of great importance in the individual decisions taken by respondents to purchase from OIQL. A positive and unqualified assurance that OIQL would be able to import and thus deliver ostriches, objectively, was a prediction that the respondents could reasonably rely on. This was the underlying factual situation in the context of which what was said might be assessed.

v) Discussion of evidence of certainty of importation:

1. Park Estate Partnership
2. D D and M C Borrie

Mr and Mrs Borrie, along with Mr and Mrs Hemmingson, were members of the Park Estate Partnership. The Borries made a separate purchase in relation to which they are the second respondents. Mrs Borrie’s evidence covered the position of both. The Judge found that these respondents received a full range of documentary information which included representations concerning the expertise of Philip Bendall and OIQL in the importation of live ostriches. The Park Estate Partnership contracted to purchase 2 ostriches for $47,250 on 4 December 1994 and 1 ostrich for $24,750 on 27 December 1994. The total paid on account of the purchase price was $51,075. The Borries contracted to purchase 1 ostrich for $49,500 on 28 January 1995. They paid on account $34,650.
The evidence in chief of Mrs Borrie was that “the Bendalls”, in their discussions with her, both prior to and after the contracts were entered into, had emphasised their expertise, experience and contacts, and the advantages of them. Right up until the first suspension there was no doubt they would be able to import the birds. Mrs Bendall, in particular, had told Mrs Borrie of Philip Bendall’s expertise, his contacts with MAF and that the ostriches would definitely be coming.
During the course of cross-examination Mrs Borrie said that she had discussions with all three Bendalls during a visit she made, with one of the other partners, to the Bendall’s farm in August 1995. This took place prior to these respondents entering into any contracts. Mrs Borrie was challenged over whether she in fact had any discussions with Mrs Bendall and responded that Mrs Bendall had told her the ostriches would definitely be coming. She said that Mrs Bendall had also referred to Philip knowing the people at MAF and having direct communication with them. As well Mrs Borrie specifically rejected counsel’s further suggestion that Mrs Bendall did not discuss the importation scheme with her.
Mrs Borrie was not challenged in such detail over what Gordon Bendall had said to her, but she did say that he had spoken with her about ostriches during the farm visit and that he had also spoken about the homework done by and knowledge of Philip Bendall. The Judge found that while Gordon Bendall had a lesser involvement than Mrs Bendall in his dealings with Mrs Borrie all three had made oral representations that there was no doubt that OIQL would be able to import the ostriches.
We do not accept Mr Weston’s submission that during her discussions with Mrs Borrie Mrs Bendall sufficiently indicated she was relying on Philip Bendall’s expertise in assuring the respondents her son’s expertise, his good contacts and that the ostriches would be coming. The evidence of Mrs Borrie indicated Mrs Bendall was not merely a conduit for her son's views and that Mrs Bendall was herself vouching for what she said. Nor do we accept the submission that Gordon Bendall’s representations only came after the respondents had entered into their contracts. While the Judge may not have specifically addressed that issue evidence from Mrs Borrie which the Judge clearly accepted satisfies us on the point.
We have earlier set out Schedule 5 of the amended statement of claim which comprises extracts from promotional and other material sent out to respondents. The evidence satisfied us that prior to contracting these respondents received documents 1 to 7 and 9. This is what the Judge was referring to in her finding that they received “a full range of information”. The tenor of documents 1, 3, 4 (the flow chart) and 5, in the context of oral representations of OIQL’s expertise provides strong evidentiary support for the Judge’s finding that there were representations as to importation. So does document 9 which was sent out with the principal contract document. Philip Bendall is directly responsible for all these written misrepresentations. There was however no evidence that the Bendall parents were in direct written communication with these respondents nor indeed with any of the others.
The whole of the evidence of Mrs Borrie, however, provided a more than adequate basis for the findings of the Judge that each of the three Bendalls had made oral representations which misled the first and second respondents on the capacity of OIQL to import ostriches. The findings of the Judge concerning the credibility of the Bendalls precluded the giving of their evidence to the contrary any weight. The conduct of all three was misleading and deceptive as to the likelihood of importation. In the underlying factual situation we have referred to the representations concerned caused these respondents to enter contracts with OIQL.
3. P and J Armstrong
The Judge found that Mr and Mrs Armstrong responded to a newspaper advertisement and entered into discussions with Philip Bendall when they visited the Bendalls’ farm in July or August 1995. These discussions took place at a time when the border was closed. Other discussions were held with both Philip and Doreen Bendall prior to entry into a contract by the Armstrongs on 20 September 1995. The Judge held that assurances were given at this time of the ability to import the birds and there was no indication of risk. The Armstrongs entered into a contract to buy two birds for $45,000. They paid $31,500 on account.
Cartwright J held that ongoing representations were made concerning OIQL’s ability to import in the response to concerns expressed by the Armstrongs about reports of disease in Australia. Their worry about the limited prospect of a re-opening of the border was minimised. Eventually Mr Armstrong cancelled the contract and sought a refund which was refused.
The Judge held that misrepresentations, particularly by Philip and Doreen Bendall, made orally and in promotional material, had induced the Armstrongs to enter into the contract. The Armstrongs were entitled to judgment for $31,500.

We have, however, had difficulty in reconciling these amounts with the evidence in each case. Although they were not challenged at the hearing we consider the safest course is to give judgment against Philip Bendall, OIQL and EOE for these sums reserving leave to, either party to within 14 days of delivery of this judgment submit written submissions supporting different amounts. Counsel for the other party will have leave to reply within 14 days thereafter.

Damages and Interest

The Bendalls take issue with the failure of the Judge to consider whether to make what Mr Weston called “an appropriate assessment of quantum to do justice to the parties”. He said the Judge had moved directly without considering this factor, from finding there had been actionable misrepresentations affecting each respondent, to award them the full amounts they had paid for the ostriches. Amongst the considerations which, Mr Weston said, warranted a reduction in compensation were extraneous factors contributing to the losses the most notable of which was the collapse in the ostrich market in 1997. Mr Kohler argued that remedies are discretionary under s42(2) of the Act including that of monetary awards. He said that the Court should not interfere with the trial Judge’s exercise of a discretionary power.
Under s43(2)(a) of the Act the Court has power to direct a person who engaged in contravening conduct within s43(1) “to pay to the person who suffered the loss or damage the amount of the loss or damage”. The power is expressed in discretionary terms which enables the Court to award a lesser sum than the amount of the loss, as was indicated in Goldsboro v Walker [1993] 1 NZLR 393, 399 per Cooke P.
The purpose of the Act is consumer protection, in the present context by requiring that those in trade give accurate information to consumers to avoid them suffering losses from misleading conduct. Given this purpose the discretionary nature of the remedy does not indicate it should be fashioned and applied other than on a principled basis. In Cox & Coxon v Leipst [1999] 2 NZLR 15, 27 the judgment of Henry and Blanchard JJ said:
Section 9 creates a duty not to mislead. If the duty has been breached money may be awarded to make good, or compensate for, loss or damage which has been caused by the breach. Where there has been an actionable wrong, it is a general and basic principle of law that the remedy by way of monetary award is to put the wronged party in the same position as he or she would have been but for the wrong. Where the wrong is misrepresentation leading to a contract for purchase of property, the position to be restored is that which would have enured had the misrepresentation not been made.
In relation to losses suffered on the ostrich contracts what was lost was the sum each respondent paid. An order that those sums be repaid is the remedy which will restore the respondents to their position before the wrongful conduct. There is no reason in principle why the order to pay these sums should be discounted in light of the subsequent collapse in the market value of ostriches. Nor do we accept there are special circumstances indicating that the justice of the case requires that something less than the full loss sustained should be visited on the respondents or any of them. Philip Bendall played the leading role in misleading. There is certainty nothing in respect of his conduct that would allow the Court to reduce the amount of his liability. The Bendall parents have of course been found liable only in respect of their own acts of misleading conduct or where they directly associated themselves with representations made in the written materials. Whilst much of what they did was of an endorsing nature only, their personal participation in making the representations was crucial to inducing respondents to enter contracts and accordingly a major cause of the losses suffered.
This is not a case where gross carelessness of the consumers, the culpability of outsiders or the minor nature of the contraventions of any of the Bendalls makes imposition on them of meeting the full losses sustained other than just. They may not have anticipated the actions of MAF in closing the border but the risk that it might do so and disrupt in this fledgling import industry was plain and they each proceeded to act in the way they did regardless of it. We accordingly uphold the awards against them.
For completeness we record that we see nothing in the circumstances of our findings of liability of Philip Bendall for misrepresentations in connection with the ostrich egg contracts which warrant a different approach from that indicated above to the amount of damages Philip Bendall should pay for those contraventions.
In a separate judgement delivered on 14 June 2000 Her Honour awarded interest at 10% from 1 April 1996 on the sums for which she gave judgment. The appellants had put to her that in April 1996 current deposit rates at call and for 6 month terms were at an average level of 5%-6%. Her Honour pointed out that higher rates were available for long term deposits at the time. That was the basis for her decision.
Interest rates under s87 of the Judicature Act should broadly reflect commercial rates during the relevant period. The rate decided on by the Judge, however, exceeded that level and in our view was also out of line with the prevailing practice in the High Court covering the period concerned. We take the view that the appropriate interest rate in this case could not have been more than the 8% argued for by the appellants before us and substitute that for the 10% rate fixed by the Judge. That rate will apply to the judgment sums on both the appeal and cross-appeal In respect of the judgment under the cross-appeal interest will run from 1 April 1997.

Costs

We reserve all questions of costs. Submissions in writing may be made within 14 days of delivery of this judgment by Mr Kohler with those of counsel for the appellants to be filed within 14 days thereafter. Mr Kohler must file any reply within 7 days of receiving the appellants’ submissions.

Solicitors

Lane Neave, Christchurch, for Appellants
Friedlander & Co, Auckland, for Respondents

[2002] NZCA 279

20 September 2002