CLB No 2 Pty Ltd & Anor v Maximum Business Pty Ltd [2008] VSC 383 (29 September 2008) – Appeal from Magistrates Court

September 30, 2008 |

This decision, on an appeal from a Magistrate’s Court decision, provides a useful analysis on reliance in a Trade Practices claim under section 52 (and 82)  and the adequacy of decisions below.  The plaintiff is a real estate agent chasing commission.  It seems to be a grim sub specialty of Magistrate’s Court work. From experience, in the Magistrate’s court it is a tough case to defend if the plaintiff can show there was a sale, notwithstanding complicating issues of agency and whether the agent actually did the work.

The key lesson here is that a plaintiff has to take care in formulating its case at the outset.  Put another way, pleadings matter.  On appeal the respondent had to concede the case was misconceived as pleaded.  The other issue is that in a misrepresentation case just proving some form of misrepresetation is not enough (though even that was not achieved here). Reliance and causation are equally important.  Simple enough one would think.  Surprisingly common to see.    

Features of the decision.    

  • Pleading the case properly & proving reliance and causation of loss.  Reliance  – “I did X based on the representation or I wouldn’t have done X if I had known Y & Z is all too often ignored.  Judd J makes that point when he said:

16 It is critical in most trials, as it was in this case, to carefully define conduct alleged to constitute misleading or deceptive conduct for the purpose of a claim made under the Trade Practices Act. The pleading of misleading or deceptive conduct not only defines the evidence concerning the conduct relied upon but is crucial to the issues of reliance and causation. In this case the Magistrate does not appear to have considered reliance or causation. Nor is it apparent that evidence was directed to those issues. While I accept that evidence of reliance is often formulaic and may be unhelpful, or even contrived, there are cases in which there is a real issue of reliance and causation, where evidence must be weighed and a decision made as to whether or not the conduct was relied upon (in this case to enter into the agency agreement) and caused the loss claimed. This is one such case.

  • Obligations in giving reasons for decision.  In this case Judd J critisized the Magistrate’s finding of fact and law, that the lease was incapable of being assigned (it was) but also the inadequacy of the reasons for decision.  Judd referred to Fletcher Constructions Australia Ltd v Lions McFarlane & Marshall Pty Ltd (No2)  (extracted in green below) on the three elements required in a statement of reasons.  They are, at [24} :
  • The judge needs to refer to the relevant evidence in his decision.  If it isn’t referred to the appellate court may (read will) infer that it was overlooked or didn’t consider it. 

First, a judge should refer to relevant evidence. There is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered. However, where certain evidence is important or critical to the proper determination of the matter and is not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it … Where conflicting evidence of a significant nature is given, the existence of both sets of evidence should be referred to.

  • Set out the material findings of fact and the conclusions & where there is conflicting evidence why one is preferred over the other.

Secondly, a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached. … [W]here findings of fact are not referred to, an appellate court may infer that the trial judge considered that finding to be immaterial. Where one set of evidence is accepted over a conflicting set of significant evidence, the trial judge should set out his findings as to how he comes to accept the one over the other. … Further, it may not be necessary to make findings on every argument or destroy every submission, particularly where the arguments advanced are numerous and of varying significance …

  • The court needs to provide reasons for making hte findings of fact and the application of the law to those facts in an understandable way.

Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found. Those reasons or the process of reasoning should be understandable and preferably logical as well.

What Judd J did not say in detail but hinted at at [29]  & [30}when he said:

29 In my opinion, the lack of commerciality of the transaction also interrupts the causal connection between the alleged conduct, as reformulated, and any loss and damage.

30 It is in the interests of justice that this litigation be brought to an end. I dismiss the claim made by Maximum. I will hear the parties on costs.

was that the costs would have been hidieous in this case.  For a claim of $7,500 it is hard to imagine the professional costs and disbursements being less than $30,000 (probably a lot more).  It is little wonder that he brought a halt to it at the appellate level and did not remit it for rehearing.   


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