Case: Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193
Outcome: applied
I would also note, because of their present relevance, the observations of Gummow J in Elders Trustee and Executor Co Ltd v E G Reeves Pty Ltd (1987) 78 ALR 193 at 241: "It is, of course, fundamental that s 52 is not designed for the benefit of persons who fail, in the circumstances of the case, to take reasonable care of their own interests ..." 213 To anticipate what I will say, while the nature of the representations made by Bell and Sladojevic were likely to induce reliance, any inference that the applicants acted on those representations is negatived in the circumstances of this case. I am satisfied that those representations played no part in their decision to invest. I regard the evidence given to the contrary by Parker, Lee and Murabito as unreliable. In each of their cases it reflected at best reconstruction and rationalisation resulting in the creation of a collective memory. Their decision was one in which Parker was influential. They backed their own judgment as to the prospects for the Tiltform technology and Tiltform Australia. In so doing they assumed a risk that adequate working capital would be secured and the short term cash flow problem overcome. They did not rely upon Bell or Sladojevic. They knew, or ought to have known, through Parker, that Bell's "$2 million" had not been raised. Their investment decision was not relevantly influenced by Sladojevic' s 7 August letter. 214 I have, in outlining the evidence for the misleading or deceptive conduct claims, referred not only to the context in which those representations were to be evaluated for the purpose of determining their falsity or otherwise but also to the context in which their causative significance is to be judged. The following are my reasons for the conclusion I have foreshadowed. 215 There are five matters of general significance to which reference should be made at the outset as they bear in various ways on the resolution of the present question. First, the relevant events occurred over a relatively short period, i.e. from 2 June to 9 August, and at a time when both Tiltform Australia was in its infancy and the national licence system had not been established. Secondly, the contact between Parker and Lee on the one hand and Bell and Sladojevic on the other in this period was quite limited. Less so the contact between Lee, though not Parker, and Benson. Thirdly, all of the above persons, it can be inferred, were aware that in order to succeed Tiltform Australia would have to have sufficient working capital to address both licence fees and investment in formwork. The licence agreements and the disclosure documents made this clear. Thirdly, there was at the above time a considerable level of enthusiasm being demonstrated for the Tiltform technology, its use in the construction industry and in its profit making potential. Bell and Sladojevic and the WA investors exhibited that enthusiasm. Fourthly, the clear inference to be drawn from the evidence is that the climate in which the negotiations occurred for the WA investment in Tiltform Australia was one in which buoyant expectations were entertained that working capital would be forthcoming. Dawkins advent as "chairman" of Tiltform Australia in late July clearly provided some stimulus to this. Fifthly, the WA investment was made in Tiltform Australia which at the time was, and was known by the WA investors to be, Benson's and his joint venture partner Dr Abraham's company. No investment was being made in Tiltform Licensing. Neither Bell nor Sladojevic held offices in, or were shareholders of, Tiltform Australia although as I will later indicate a claim is brought against them as promoters of that company. 216 It is clear that, from the outset, the directors of the Icon Group Murabito, Palmiero and Lee made their own highly positive business judgment of the virtue and attractions of the Tiltform technology, of its profit making potential and of the advantage of acquiring a licence of it. When Parker was offered participation in the investment opportunity Tiltform WA, he in turn came to share the same positive attitude to the Tiltform "opportunity" after his initial meeting in Adelaide on 2 June with Sladojevic and Bell an attitude contributed to significantly by Sladojevic's explanations etc of the technology. I need not repeat here my findings on that meeting other than to say I do not consider that Parker's projections were discussed in detail with Bell at that meeting, though there was discussion of them. The collective decision of the WA investors to accept the offer of shares in Tiltform WA within ten days of Parker's return from the 2 June meeting provides some evidence, in my view, of their faith in the Tiltform technology.