Case: Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217
Outcome: cited
My conclusion on the contract claim makes it strictly unnecessary to consider directly the misleading or deceptive conduct claim against Farmlink or to discuss (inevitably at some length: see Cheshire and Fifoot at [11.118]) the interaction of s 51A and s 52 of the TP Act and contractual promises: see eg Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217. It is necessary, though, to deal with the claims as they relate to each of the natural person respondents, Ms Churchill, Mr Plummer and Mr Koh. Though claims are made against all three under the TP Act (via s 75B), the Fair Trading Act 1987 (SA) s 54 and the Misrepresentation Act 1971 (SA) s 7, I will as a matter of convenience deal only with the TP Act claims given the view I take of the actual allegations made against the respondents individually. I would add that the TP Act claims against Ms Churchill provide in substance the foundation of the claims against Farmlink on whose behalf she was acting at all relevant times: see TP Act s 84(2). 248 It needs to be said at the outset that the claims, understandably, have been formulated against the contingency of fact findings quite different from those I have made. While it is necessary for the reason I gave above briefly to consider them, I recognise that those findings have rendered these claims superfluous. 249 There are three categories of representation alleged to have been made by Ms Churchill to Mr Hannaford and on which he is said to have relied, which constituted misleading or deceptive conduct. These were as follows: (i) In representing that Farmlink could sell TVO's cherries into Hong Kong and Singapore such that TVO would receive the agreed prices, Ms Churchill impliedly represented that Farmlink had reasonable grounds to make that representation: FASC paras 14-16, ("the negotiations representations"); (ii) In a sequence of telephone conversations with Mr Hannaford after cherry consignments had commenced, she misled him in the following four respects (FASC paras 13.7.3 13.7.6, 17 and 18): (a) from about 23 December 2003, Mr Hannaford and Ms Churchill had daily telephone conversations in relation to the ordering, delivery and sale of TVO's cherries. In those conversations Ms Churchill said words to the effect that everything was going "all right", when she had no reasonable basis to make such a representation; (b) on about 4 January 2004, Mr Hannaford, in one such telephone conversation said to Ms Churchill words to the effect that he had heard from China that he was going to lose significantly and get nothing from dealing in the Hong Kong market. Ms Churchill said words to the effect that as far as she knew everything was all right, when she had no or no reasonable basis to make such a representation; (c) on about 6 January 2004 Mr Hannaford in a telephone conversation asked Churchill words to the effect whether the Chinese market had crashed. Churchill said words to the effect that it had not but it was "a bit weak", with a "bit of oversupply" which should clear quickly when she had no or no reasonable basis to say the market was only "a bit weak" or only "bit over supplied" and would clear quickly but should have said that there was no or no reasonable prospect of TVO obtaining the Agreed Prices; (d) after 6 January 2004, Mr Hannaford continued to have regular telephone conversations with Ms Churchill. Ms Churchill did not advise Mr Hannaford in those conversations of any difficulties with selling TVO cherries in the Hong Kong market, save and except for saying there were allegedly problems with the quality of cherries in one shipment. It is alleged that in making the representations in (a) to (d) above, Ms Churchill impliedly represented that TVO would receive the agreed prices but she knew or should have known from and after 29 December 2003 that Farmlink was unable to sell TVO's cherries into the Hong Kong market and from and after 8 January 2004 that it was unable to sell TVO's cherries into the Singapore market at prices such that it could pay or TVO would receive the Agreed Prices and should have known at least from and after the last-mentioned dates that the market for cherries in Hong Kong and Singapore had crashed or become very poor or grim: ("the market representations"). (iii) Finally, it is pleaded that (FASC para 19) Farmlink was, by Ms Churchill and its directors Mr Koh and Mr Plummer, silent as to the difficulties in fact being experienced in selling TVO's cherries in Hong Kong and Singapore markets at prices such that it could pay to TVO the Agreed Prices or at all. That silence, in the context of the relationship between TVO and Farmlink and the representations in (i) above made during negotiations constituted misleading and deceptive conduct or conduct which was likely to mislead or deceive": ("silence"). 254 Thirdly, by virtue of s 51A(2) where a corporation makes a representation as to a future matter and does not have reasonable grounds for making it, the representation is taken to be misleading: CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd (2005) ATPR 40-042. The onus is on the representor to adduce evidence of reasonable grounds: Futuretronics International Pty Ltd.