Case: Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217
Outcome: followed
The interaction between the TPA and the law of contract is interesting and has been the subject of previous consideration: see by way of example Concrete Constructions Group v Litevale Pty Ltd (2002) 170 FLR 290; Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217; Mander Forklift Pty Ltd v Dairy Farmers Co-operative (1990) ATPR (Digest) 46-061. 68 In Futuretronics at 239, Ormiston J "expressed [his] doubts whether a contractual promise of itself carries with it any representation as to fact or conduct" actionable by reason of s 51A. His Honour explained the issue (at 238-39) in the following terms: It is hard to believe that normally any promisee with ordinary contractual rights would ... describe himself as having been deceived or misled [based on the mere acceptance of a promise] . It is only when it becomes apparent that the promise cannot be enforced, because, for example, it is either unenforceable or the promisee's rights are valueless or diminished, that one may return to the original promise to inquire whether that promise was of so little substance that it can be concluded that the promisee was indeed misled or deceived in the first place, at the time of his acceptance of the promise. Thus it may then be seen that the promisor originally had no intention to perform his promise or that he originally had no capacity or ability to perform it. ... It would seem on the authorities that, at the least, a contractual promise would amount to an implied representation that the promisor then had an intention to carry out that promise. If it can be shown that he had no such intention, he would be guilty of misleading or deceptive conduct. Likewise it would seem that such a representation connotes a present ability to fulfil that promise which, if shown to be untrue at the time of making, would likewise characterise the implied representation as misleading or deceptive. 69 As this passage reveals, an express contractual promise or representation will constitute an actionable implied representation under s 52 of the TPA only if the party making the promise or representation had no intention or capability of carrying it out at the time it was made (ie the promisor had no reasonable grounds for making the promise). The questions which then arise are (1) what is the contractual promise in this case and (2) did the respondents have the intention and ability to carry it out at the time it was made? 70 In the present case, the specific promise relied on by Coles is the promise to grant a lease. It cannot be doubted that, on the evidence before the Court, the respondents had both the ability and intent to fulfil that promise at the time it was made. More broadly, the respondents admit that they impliedly represented to Coles that they would perform all obligations under the Offer Letter including an obligation to execute an AFL. Despite extensive cross-examination of the respondents' witnesses, Coles failed to establish that the respondents did not have such an intention or capability at the time the representations were made and at all times prior to 26 February 2008 when Lifestyle commenced negotiations with Woolworths to lease part of the Tarneit property to Woolworths. In my view, the evidence establishes that the respondents had reasonable grounds for making representations and promises of the kind contained in the Offer Letter and thus those representations and promises were not misleading or deceptive within the meaning of ss 51A and 52 of the TPA. 71 The question which then arises is whether the respondents' conduct in the period from 27 February 2008 to 27 March 2008, said to constitute representations by silence and implication, was misleading or deceptive or likely to mislead or deceive Coles? The answer to that question is no as well.