FEDERAL COURT OF AUSTRALIA

Robinson v 470 St Kilda Road Pty Ltd [2018] FCAFC 84

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondent’s costs, to be assessed if not agreed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MCKERRACHER AND MARKOVIC JJ:

APPEAL GROUNDS 3 TO 6 – LOSS SUFFERED BY NOT WITHHOLDING PAYMENT

1    We have had the benefit of reading the draft reasons of Justice Rangiah on Grounds 3 to 6 of this appeal. We gratefully adopt his Honour’s summary of the facts and the primary judgment and his Honour’s definitions.

2    In our respectful view, having particular regard to the way in which the case was pleaded and conducted, the primary judge reached the correct conclusion and for the right reasons.

3    Shortly put, Mr Robinson’s primary position at trial and on appeal was that St Kilda Road was not entitled to claim in damages any portion at all of the amount paid pursuant to payment claim no. 15. The parties below, and on appeal, ran this as an “all or nothing” case.

4    With one exception, there was no pleading to the effect that the amount due to St Kilda Road, if liability were established, should be reduced because full reimbursement would over compensate the actual loss, nor was the trial conducted that way. The witnesses for St Kilda Road were not cross-examined to that effect and there may well have been answers had such issues been raised. The exception to which we refer is a pleading in the further amended defence filed in the first instance proceedings, which was to the effect that payment for payment claim no. 15 had to be fully made, or alternatively, had to be made at least to the value of amounts paid to the subcontractors. In our view, that is not so for the reasons identified by the primary judge, to which we refer below.

5    The relevant parts of the pleading which set out the exception are in para 19 of the amended statement of claim filed by St Kilda Road and the further amended defence filed by Mr Robinson. Paragraph 19 of the amended statement of claim relevantly provides as follows:

19.    Because of [Mr] Robinson's contraventions, [St Kilda Road] has suffered loss and damage within the meaning of s.236 of schedule 2 of the CCA.

Particulars

(a)    …

(b)    [St Kilda Road] made the payment of $1,426,641.70 for Payment Claim 15 as referred to in paragraph 9 above, which payment it was not obliged to pay to Reed under the Contract, or at all, and it would not have paid but for the Representations.

6    Mr Robinson pleaded in his further amended defence:

19.    As to paragraph 19:

(a)    he denies the allegations in the paragraph;

…

(c)    as to the claim for $1,426,641.70:

(i)    he refers to and repeats the matters alleged in paragraphs 8(b)-(d), 9(a)(b), 11 (a)-(c) and 15(d) above;

(ii)    he says that [St Kilda Road] has taken the benefit of, and must give credit for, the work done by Reed in December 2011 the subject of Reed's payment claim 15 and valued by RLB Rider Levett Bucknall, Quantity Surveyors in the sum of $1,426,641.70;

(iii)    he repeats paragraphs 9 13 (a) and (b) hereof and says further that if [St Kilda Road] had withheld payment of the sum of $1,426,641.70 it would have been required to pay such sum to Reed in accordance with the Building and Construction Industry Security of Payment Act; and

he otherwise denies paragraph 19.

(d)    Alternatively, if any of the representations alleged at paragraph 8(a)-(c) and (e) of the amended statement of claim was false and Robinson contravened section 18 of Schedule 2 of the CCA (which is denied), then by reason of the term of the contract referred to at paragraph 4(ji) hereof, the principal's representative was only entitled to reject in its payment schedule 15 so much of Reed's progress claim 15 that equated to moneys due and payable to subcontractors in respect of works the subject of payment claim 15the potential claims of workers of Reed and of the subcontractors and their respective workers until Reed complied with clause 38.1.

(e)    As a result of the matters referred to in the preceding sub-paragraph at paragraph 21 hereof, the principal's representative was required under GCC clause 38.2 to certify payment of $1,426,641.70 less any sum that equated to moneys due and payable to subcontractors in respect of works the subject of payment claim 15 the potential claims of workers of Reed and of subcontractors and their respective workers and [St Kilda Road] was obliged to pay Reed such adjusted sum until such sums potential claims were paid.

(f)    If at 12 December 2011 when Robinson made his statutory declaration, there were moneys due and payable to subcontractors in respect of works the subject of payment claim 15 (which is denied) potential claims of workers of Reed and of subcontractors and their respective workers the subject of Reed’s payment claim 15, then such claims were subsequently paid.

(g)    Accordingly, [St Kilda Road] was contractually obliged to pay Reed the sum of $1,426,641.70 in full and [St Kilda Road] has not suffered any loss or damage.

(h)    Further and alternatively, if [St Kilda Road] is entitled to an order for payment by Robinson of loss and damage, such loss or damage is limited to the moneys due and payable to subcontractors as at 12 December 2011 in respect of works the subject of payment claim 15. potential claims of workers of Reed and of the subcontractors and their respective workers, alternatively the potential claims of workers of Reed and of Reed’s subcontractors and suppliers in respect of the works the subject of Reed’s payment claim 15.

7    Further and relevantly to these issues, para 3 of the amended reply was in these terms:

3.    As to paragraph 5 thereof, [St Kilda Road] says that:

…

(c)    If, which [St Kilda Road] expressly denies, [Mr Robinson’s] conduct in preparing and signing the Statutory Declaration for the purpose of verifying or supporting Reed's Payment Claim 15 for WUC [i.e. 'work under contract'] complete to 22 December 2011, as submitted in the email referred to in paragraph 3(a) above, merely conveyed a representation as at 12 December 2011 and not 22 or 28 December 2011 as [St Kilda Road] alleges, then [Mr Robinson’s] said conduct was still misleading and deceptive contrary to s.18 of the Australian Consumer Law in that:

(1)    As at 6 December 2011, Reed's internal record entitled “CHEQUES DRAWN (Cheques printed but not released) December 2011” [emphasis in original], being an internal record to which [Mr Robinson] as Reed's Chief Operating Officer had full access, listed in respect of the Leopold Project alone:

(a)    $39,845.54 in respect of cheques drawn but not released by Reed for subcontractor and supplier invoices rendered in August 2011, which invoices according to [Mr Robinson’s] defence herein ought to have been paid by Reed on or before 15 October 2011, but as at 12.44pm on 6 December 2011 Reed had not paid such subcontractors and suppliers;

(b)    $756,253.81 in respect of cheques drawn but not released by Reed for subcontractor and supplier invoices rendered in September 2011, which invoices according to [Mr Robinson’s] defence herein ought to have been paid by Reed on or before 15 November 2011, but as at 12.44pm on 6 December 2011 Reed had not paid such subcontractors and suppliers; and

(c)    $3,384,034.86 in respect of cheques drawn but not released by Reed for subcontractor and supplier invoices rendered in October 2011, which invoices according to [Mr Robinson’s] defence herein had to be paid by Reed on or before 15 December 2011.

Particulars

A copy of a printout of Reed's internal record entitled “CHEQUES DRAWN (Cheques printed but not released) December 2011[“] [emphasis in original] as at 12.44pm on 6 December 2011 may be inspected by appointment at the office of [St Kilda Road’s] solicitor.

(2)    As at 15 December 2011, Reed's internal record entitled “CHEQUES DRAWN (Cheques printed but not released) December 2011” [emphasis in original], being an internal record to which [Mr Robinson] as Reed's Chief Operating Officer had full access, listed in respect of the Leopold Project alone:

(a)    $9,552.40 in respect of cheques drawn but not released by Reed for subcontractor and supplier invoices rendered in August 2011, which invoices according to [Mr Robinson’s] defence herein ought to have been paid by Reed on or before 15 October 2011, but as at 9.11am on 15 December 2011 Reed had not paid such subcontractors and suppliers; and

(b)    $326,801.57 in respect of cheques drawn but not released by Reed for subcontractor and supplier invoices rendered in September 2011, which invoices according to [Mr Robinson’s] defence herein ought to have been paid by Reed on or before 15 November 2011, but as at 9.11am on 15 December 2011 Reed had not paid such subcontractors and suppliers; and

(c)    $2,852,956.75 in respect of cheques drawn but not released by Reed for subcontractor and supplier invoices rendered in October 2011, which invoices according to [Mr Robinson’s] defence herein had to be paid by Reed on or before close of business that day.

Particulars

A copy of a printout of Reed's internal record entitled “CHEQUES DRAWN (Cheques printed but not released) December 2011[“] [emphasis in original] as at 9.11am on 15 December 2011 may be inspected by appointment .at the office of [St Kilda Road’s] solicitor.

(3)    As at 16 January 2012, Reed's internal record entitled “CHEQUES DRAWN (Cheques printed but not released) January 2012” [emphasis in original], being an internal record to which [Mr Robinson] as Reed's Chief Operating Officer had full access, listed in respect of the Leopold Project alone:

(a)    $304,949.47 in respect of cheques drawn but not released by Reed for subcontractor and supplier invoices rendered in September 2011, which invoices according to [Mr Robinson’s] defence herein ought to have been paid by Reed on or before 15 November 2011, but as at 8.08am on 16 January 2012 Reed had not paid such subcontractors and suppliers; and

(b)    $364,123.39 in respect of cheques drawn but not released by Reed for subcontractor and supplier invoices rendered in October 2011, which invoices according to [Mr Robinson’s] defence herein ought to have been paid by Reed on or before 15 December 2011, but as at 8. 08am on 16 January 2012 Reed had not paid such subcontractors and suppliers[.]

Particulars

A copy of a printout of Reed's internal record entitled “CHEQUES DRAWN (Cheques printed but not released) January 2012” [emphasis in original] as at 8.08am on 16 January 2012 maybe inspected by appointment at the office of [St Kilda Road’s] solicitor.

So that as at 12 December 2011 [Mr Robinson]:

A.    could not have accurately deposed to the matters recorded in the Statutory Declaration, or have otherwise engaged in the conduct that he did in making the Representations in support of Payment Claim 15 served by Reed under the Contract, without misleading or deceiving [St Kilda Road];

B.    did not conduct and could not have conducted any, let alone all, “reasonable inquiries” as deposed to in the Statutory Declaration;

C.    did not then have, and could not then have had, any reasonable belief that Reed would effect payment in full by 15 or 22 or 28 December 2011 of all subcontractor and supplier invoices rendered in or before October 2011 in respect of the Leopold Project.

(d)    Further, by reason of the matters set out above, as at 22 December 2011 [Mr Robinson] as Chief Operating Officer of Reed knew, or ought reasonably to have known, that:

D.    a significant portion of payments due by Reed for subcontractor and supplier invoices rendered in August to October 2011 in respect of the works for the Leopold Project had not been paid by Reed by either 15 December 2011 or by 22 December 2011;

E.    Reed had not distributed cheques to all subcontractors and suppliers for their invoices rendered in or before October 2011 in respect of the Leopold Project, so that such cheques could be received and banked by such subcontractors and suppliers by either 15 December 2011 or 22 December 2011;

F.    He had not disclosed to [St Kilda Road] any of the matters referred to in paragraphs A to E above either in the Statutory Declaration, the materials submitted by Reed in support of Payment Claim 15 or by any subsequent communication by him or staff of Reed under his instruction or supervision prior to [St Kilda Road] processing Payment Claim 15 by Matthew Reszka of Reshape Development, [St Kilda Road’s] Representative under the Contract, issuing a Payment Schedule to Nick Bufẻ of Reed on 21 December 2011 and Reed then issuing a tax invoice dated 22 December 2011 in the sum of $1,426,641.70 to [St Kilda Road], by email sent from Aaron Tranter to Matthew Rezska;

G.    his continuing silence as to Reed's failure to pay all subcontractor and supplier invoices rendered in or before October 2011 in respect of the Leopold Project, and his failure to correct, qualify or withdraw the contents of the Statutory Declaration in any communication with [St Kilda Road], was in all of the circumstances misleading or deceptive conduct in the nature of contextual silence by reason of the matters set out in paragraphs A to F above; and

H.    Had he disclosed any of the matters set out in paragraphs A to G above to [St Kilda Road], then [St Kilda Road] would:

(i)    have immediately exercised its contractual rights to make payments direct to Reed's subcontractors and suppliers for their invoices rendered for WUC in respect of the Leopold Project in respect of Payment Claim 15 or any subsequent Payment Claims by Reed, thereby entirely avoiding or substantially mitigating the large restart payments required of [St Kilda Road] to be made Reed's subcontractors and suppliers to enable completion of the Leopold Project; and

(ii)    have immediately served a Show Cause notice on Reed so as to terminate the Contract in due course at the earliest date if, as ultimately transpired, Reed failed to remedy its breaches of the Contract.

8    Each of paras 19(c)-19(e) and 19(g) of the amended statement of claim rely on the contractual argument, that is, that an obligation was imposed under the Contract to pay the subcontractors, which we consider, for reasons indicated below, was correctly rejected by the primary judge. Paragraph “19(h)” can also only be referrable to the Contract and appears to be based on the same incorrect construction of the contractual terms.

9    The point run at trial and on the appeal by Mr Robinson was that, because there was an obligation to pay subcontractors, it cannot be said that the totality of payment claim no. 15 would not have been made. Because that was so, and the case was run on an “all or nothing” basis, it was said that nothing was due to St Kilda Road.

10    The essence of what the primary judge said (at [77]-[85]), in effect, was that there was no reason to think that the withholding which happened in conjunction with payment claim no. 16 would not have happened with payment claim no. 15, had St Kilda Road known of the falsity of the statutory declaration and had knowledge of the true position of Reed. But once he had rejected the contractually based arguments arising on the amended statement of claim and the further amended defence, it was unnecessary to go into the further detail in relation to the amended reply on these arguments.

11    Even if the contractual construction by the primary judge were wrong, there was ample evidence from which his Honour was entitled to infer that if the payment had been withheld for payment claim no. 15, events would have followed in precisely the same manner as in relation to payment claim no. 16. Reed was hopelessly insolvent and the liquidator had no capacity to pursue claims, especially in circumstances where the claims from St Kilda Road vastly exceeded any claim that may be due to the liquidator.

12    But in our view, for the following reasons, an obligation under the Contract to pay the subcontractors did not arise.

The obligation to pay subcontractors

13    Clause 38 of the Contract provided as follows:

38.1    WORKERS AND SUBCONTRACTORS

If requested by the Principal or the Principal’s Representative, the Contractor shall give in respect of a payment claim, documentary evidence of the payment of moneys due and payable to:

(a)    workers of the Contractor and the subcontractors; and

(b)    subcontractors,

In respect of WUC the subject of that payment claim.

If the Contractor is unable to give such documentary evidence, the Contractor shall give other documentary evidence of the moneys so due and payable to workers and subcontractors.

Documentary evidence, except where the Contract otherwise provides, shall be to the Principal’s Representative’s satisfaction.

The Contractor will indemnify and keep the Principal indemnified in relation to any claim made by workers of the Contractor or workers employed by subcontractors of the Contractor engaged on the WUC for any amounts due and payable to them in respect of their employment.

38.2    WITHHOLDING PAYMENT

Subject to the next paragraph and to law, the Principal’s Representative may reject in a payment schedule so much of a Payment Claim that equates to the potential claims of workers of the Contractor and of the subcontractors and their respective workers the subject of clause 38.1 until the Contractor complies with clause 38.1.

The Principal shall not reject in a payment schedule such moneys in excess of the moneys evidenced pursuant to clause 38.1 as due and payable to workers and subcontractors.

(Emphasis added.)

14    In relation to these clauses, the primary judge said (at [87]-[91]):

87    Senior Counsel for Mr Robinson also submitted that the applicant did not have a contractual “right” to withhold payment of the payment claim, or at least that part of that payment claim that represented amounts that had been paid to subcontractors or suppliers. He relied on cll 38.1 (set out above at [54]) and 38.2 of the contract, which provided as follows:

…

88    Senior counsel for Mr Robinson submitted, and I understand the applicant to have accepted, that by the terms of cl 38.2, the applicant was only entitled to “reject in a payment schedule so much of a Payment Claim that equates to the potential claims of workers of the Contractor and of the subcontractors...until the Contractor complies with clause 38.1”. But that is not the point.

89    As the applicant submitted, this is an “all or nothing” case. The applicant’s case does not depend upon needing to prove that, as at 12 or 22 December 2011, the applicant could have proved a case that nil amount, or any particular or precise amount, was owing.

90    The applicant’s pleaded case is that the statutory declaration, a critical part of the “documentary evidence” referred to in cl 38.1, was materially false. As the applicant submitted, it had no obligation to pay any moneys to Reed until Reed first properly complied with its obligations under cl 38.1 and provided the required proof of payment. On the evidence, not only did Reed not properly comply with cl 38.1 in respect of WUC up to 12 or 22 December 2011, as senior counsel for the applicant put it “by December 2011 it could never properly comply with cl 38.1 and it never again did.”

91    For the foregoing reasons, the applicant has made good its case under the ACL.

15    In our view, this conclusion is correct. Pursuant to cl 38.1, the contractor was to give documentary evidence of the payment of moneys due and payable to Reed’s workers and subcontractors. What was “requested”, as already noted, was for Reed to provide statutory declarations as the “documentary evidence of the payment of moneys due and payable”. While documentation was given (the false statutory declaration), it did not satisfy the requirements of being an accurate statutory declaration. At no stage did the contractor give any other accurate documentary evidence to St Kilda Road’s satisfaction. Liability to meet a payment under cl 38.1 did not arise.

16    Alternatively, if there was other documentary evidence provided, it was not documentary evidence which could be to St Kilda Road’s satisfaction. Such satisfaction would have to be reasonable satisfaction and, in the financial circumstances as they became evident by payment claim no. 16 or as outlined, for example, in the reply set out above, that reasonable satisfaction could never be reached. St Kilda Road was entitled to withhold payments. There had been a “requested” form of documentation stipulated under the Contract. That documentation was not forthcoming. In those circumstances, St Kilda Road was to be protected from the obligation to pay even if “other documentary evidence” was forthcoming. Given such other documentary evidence was not that “requested” under cl 38.1 of the Contract or documentation which could be to St Kilda Road’s satisfaction, St Kilda Road was not bound to accept it.

17    Any obligation under cl 38.2 was similarly confined to “documentation” “evidenced pursuant to cl 38.1”. There was and could be none. Were it otherwise, Reed could have said anything at all about payments due to sub-contractors and St Kilda Road would have had no choice other than to make such payments.

18    However, even if this contractual construction were wrong, the primary judge was entitled to conclude (as St Kilda Road asserted and was substantively unchallenged in cross-examination), that as with payment claim no. 16, had it known the true position it would not have made payment. As to possible action by the liquidator, there was ample evidence from which it could be inferred that such claims could not be pursued (as in fact they were not pursued) due to the hopeless insolvency of Reed and the much larger off-setting claim of St Kilda Road.

The first ground of the notice of contention on the appeal

19    These possibilities are also fleshed out a little further at Ground 1 of St Kilda Road’s notice of contention, set out by Rangiah J (at [96]). It asserts that the Court should also have found that any entitlement that arose to Reed in respect of payment claim no. 15, pursuant to the Security of Payment Act would not have affected St Kilda Road’s loss or damages because Reed was insolvent as at December 2011 and St Kilda Road could have, and would have, obtained a stay on execution of any judgment that Reed may have obtained under the Security of Payment Act for payment claim no. 15, which claim was interim only and would be eclipsed by the significant potential offsetting claim greatly exceeding the amount of Reed’s interim entitlement in respect of payment claim no. 15. It notes that the liquidator, in fact, settled Reed’s unpaid payment claim no. 16 and payment claim no. 17 for $100,000, having no resources to pursue (as he did not) any claim against St Kilda Road.

20    In our view, an enquiry into these matters was not necessitated, given the way the case was pleaded. But if that be wrong, or if the contractual construction we have explained is wrong, there is no proper basis to doubt the primary judge’s conclusion that the events which occurred in reality when St Kilda Road refused to meet payment claim no. 16 would also have occurred had it refused to meet payment claim no. 15.

21    As the pleadings between the parties did not require a detailed enquiry into these matters, the primary judge was correct not to explore all these hypothetical possibilities, but to determine the issue put into dispute on the pleadings. We mention, however, the notice of contention only to illustrate the reference to “common sense” by his Honour (at [85]) in concluding that had St Kilda Road known the true position, as at the time of meeting payment claim no. 15, it would have done exactly the same as it did in relation to payment claim no. 16 with the relevant consequential events being the same.

22    St Kilda Road did put into evidence before the primary judge the books of the liquidator from which it was apparent that Reed was in such “catastrophic” insolvency that, after addressing obligations to secured creditors and employees, to the extent they could be met, there was no possibility of any recovery action against St Kilda Road. In a report by administrators, pursuant to s 439A(4)(a) of the Corporations Act 2001 (Cth), Ferrier Hodgson estimated Reed having a deficiency of between approximately $130 million and $196 million as at 15 June 2012. The liquidator identified that there were no funds from which to declare a dividend. There were clearly no resources for the liquidator to pursue recovery. One can speculate as to possibilities of litigation funding, but of course, such matters were, quite properly, not advanced in evidence or cross-examination by Mr Robinson. Put another way, while it was argued on the appeal that St Kilda Road had received the benefit of the work of Reed and some subcontractors, it was also established that it had off-setting claims against Reed vastly exceeding the sum paid under payment claim no. 15 and it would be entitled contractually to set off the respective sums. The fact that St Kilda Road did choose to pay some subcontractors to get them back on the job to finish the building, proved a desire to finish the building, but it did not prove that its true loss should have been reduced by $161,401 or any other sum on the basis that it had to pay those subcontractors under the Contract. It does not prove anything about contractual obligations.

23    The payments were made pursuant to entirely new contractual obligations, that is, not the obligations imposed by cl 38.1 and cl 38.2 of the Contract, as accepted by senior counsel for Mr Robinson on appeal.

Conclusion on appeal Grounds 3 to 6

24    It may be accepted that the reasoning on this point was not expansive, but in our view that is more to do with the manner in which the case was conducted – that is on which issues the parties chose to argue. The primary judge was, of course, required to resolve many other issues over and above the point now ventilated on the appeal. He was not required on the pleaded case, or the case as conducted at trial, to set out a detailed analysis of what might have happened hypothetically had payment claim no. 15 been withheld.

25    For all those reasons, on the pleaded (and further re-pleaded) case, we consider the primary judge’s reasons and conclusions were correct.

26    In passing, we note that St Kilda Road refers to the decision of the Victorian Court of Appeal in Façade Treatment Engineering Pty Ltd (In Liq) v Brookfield Multiplex Constructions Pty Ltd (2016) 116 ACSR 493 in support of its first ground of the notice of contention on appeal. That decision has been recently questioned in a decision of the NSW Supreme Court: Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) [2018] NSWSC 412 (at [30] and [127]). While we note this divergence taken in Seymour Whyte in relation to the Building and Construction Industry Security of Payment Act 1999 (NSW), it is unnecessary to refer to any difference in approach as the primary judge was able, correctly, to reach a decision which did not require exploration of the matters raised in the notice of contention.

27    In our view, appeal Grounds 3 to 6 cannot succeed.

APPORTIONMENT

28    We turn to the second aspect of Mr Robinson’s argument. He contends the primary judge erred in holding that no part of St Kilda Road’s claims should be apportioned. Rather, he contends that the primary judge should have held that Reed was directly and jointly liable for the damage the subject of the claim and that Mr Robinson’s liability was limited to 50% of the damages claimed. For reasons that follow, we accept that Reed was also directly liable, but it does not follow that Mr Robinson’s liability should be reduced by 50%. Reed was not a “concurrent wrongdoer”.

The reasoning of the primary judge

29    Although the argument advanced on appeal is slightly different from that before the primary judge, the contention was still made before his Honour that 50% of the responsibility rested with Reed. At trial, the issue was dealt with briefly. Although written submissions were made, they were not elaborated upon in oral submissions.

30    The contention advanced and now maintained was that all of the claims made by Mr Robinson were apportionable. It was submitted that the misleading or deceptive conduct claim was apportionable under the provisions of Pt VIA of the Competition and Consumer Act 2018 (Cth) (CCA) and the negligent misstatement claim was apportionable under Pt IVAA of the Wrongs Act 1958 (Vic). There is no relevant distinction between those separate pieces of legislation for Mr Robinson’s argument.

31    It was contended before the primary judge, that Reed and Mr Robinson, as its Chief Operating Officer, were both jointly liable for the making of Mr Robinson’s statutory declaration because (at [95]):

(1)    it was made for, and on behalf of, Reed – the declaration itself referred to Mr Robinson as “authorised employee of the contractor”;

(2)    it was made pursuant to a contractual requirement to which Reed (not Mr Robinson) was a party and which, in terms, imposed the obligation on Reed;

(3)    RLB [Rider Levett Bucknall] had back in December 2010 [2011] asked for a declaration by the builder;

(4)    it was made in the course of Reed’s business;

(5)    it was made for the benefit of Reed; and

(6)    Mr Robinson was a senior employee of Reed – Chief Operating Officer – and so was, relevantly, “the mind and the will” of the company.

32    The primary judge had no difficulty in rejecting the apportionment contention on the basis that, first, there was no evidence remotely suggesting that Reed (and/or anyone on behalf of the company) had mislead Mr Robinson or caused him to make the statutory declaration. Secondly, the declaration on its face made clear that it was Mr Robinson who made the enquiries and it was his own personal knowledge and belief in respect of which he made the declaration. His Honour noted that, further, to the extent that the reasons advanced in support of the apportionment relied simply on Mr Robinson’s status as an employee of Reed, that alone could not justify apportioning liability.

Mr Robinson’s contentions

33    Mr Robinson relies on Williams v Pisano (2015) 90 NSWLR 342 (at [55]-[93]) for the contention that where two persons are jointly and directly liable for a single representation, the claim is an apportionable claim. Mr Robinson acknowledges that this is an unsettled area of the law, noting the observations of Bathurst CJ (at [4]) and McColl JA (at [6]) in Williams, but contends that the obiter reasoning and analysis of Emmett JA should be followed. It was unnecessary for the other members of the Court in Williams to express a view on this point.

34    Mr Robinson also relies on the fact that in the particular circumstances of this case, Mr Robinson was the directing mind and will of the company, thus, for the purposes of the statement that was made, he and Reed bear joint and direct liability for the statement. The factors that establish that he was the directing mind and will of Reed were referred to in the primary judge’s reasons (at [95] and detailed above) and are not disputed. Mr Robinson says it is also relevant that the primary judge held (at [55]) that “the sole function and commercial purpose of the statutory declaration was to provide evidence of the due payment for the work”. Mr Robinson states that his was a function and purpose serving only the needs and the objectives of Reed. Mr Robinson refers particularly to Tesco Supermarkets Ltd v Nattrass [1972] AC 153; Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500; Australian Competition & Consumer Commission v Australian Safeway Stores Pty Ltd (2003) 129 FCR 339 and Nationwide News Pty Ltd v Naidu (2007) 71 NSWLR 471.

35    “Tesco liability” stems from the widely recognised and followed statement of Lord Reid who said (at 170):

A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company.

(Emphasis added.)

36    Mr Robinson contends, correctly, that the liability of Reed under Tesco is not vicarious liability, but liability of Reed itself. That doctrine is aimed at direct liability for a top level officer who is effectively acting for the company and is acting independently and within his or her own discretion: see, for example, Hamilton v Whitehead (1988) 155 CLR 121 per Mason CJ, Wilson and Toohey JJ (at 127). Vicarious liability on the other hand (usually, but certainly not always) relates to negligence, and imposes liability for the conduct of directors, servants or agents acting within the scope of their authority.

37    Mr Robinson says it is not clear from the reasoning of the primary judge as to whether his Honour accepted Reed was jointly liable for the statement, but declined to apportion any liability to it, or whether he did not accept that Reed was jointly liable for the statement. The former, Mr Robinson argues, would be quite an extreme position, failing to recognise the commercial circumstances in which the declaration was made. The latter position, it is contended, would be wrong at law where Mr Robinson is the directing mind and will of Reed. For Mr Robinson, it is said that once it is accepted that Reed was a concurrent wrongdoer, then both Reed and Mr Robinson were equally responsible for the declaration and are both equally responsible for the loss and damage suffered in the sense discussed by Emmett JA in Williams (at [92]-[93]). There was no question of vicarious liability. Reed is directly and fully liable as Mr Robinson was its acting mind and will.

Statutory considerations

38    Part VIA of the CCA relevantly provides:

Part VIA - Proportionate liability for misleading and deceptive conduct

87CB    Application of Part

(1)    This Part applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 236 of the Australian Consumer Law for:

(a)    economic loss; or

(b)    damage to property;

caused by conduct that was done in a contravention of section 18 of the Australian Consumer Law.

(2)    For the purposes of this Part, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).

(3)    In this Part, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.

(4)    For the purposes of this Part, apportionable claims are limited to those claims specified in subsection (1).

(5)    For the purposes of this Part, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.

87CC    Certain concurrent wrongdoers not to have benefit of apportionment

(1)    Nothing in this Part operates to exclude the liability of a concurrent wrongdoer (an excluded concurrent wrongdoer) in proceedings involving an apportionable claim if:

(a)    the concurrent wrongdoer intended to cause the economic loss or damage to property that is the subject of the claim; or

(b)    the concurrent wrongdoer fraudulently caused the economic loss or damage to property that is the subject of the claim.

(2)    The liability of an excluded concurrent wrongdoer is to be determined in accordance with the legal rules (if any) that (apart from this Part) are relevant.

(3)    The liability of any other concurrent wrongdoer who is not an excluded concurrent wrongdoer is to be determined in accordance with the provisions of this Part.

87CD    Proportionate liability for apportionable claims

(1)    In any proceedings involving an apportionable claim:

(a)    the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant’s responsibility for the damage or loss; and

(b)    the court may give judgment against the defendant for not more than that amount.

…

(3)    In apportioning responsibility between defendants in the proceedings:

(a)    the court is to exclude that proportion of the damage or loss in relation to which the plaintiff is contributorily negligent under any relevant law; and

(b)    the court may have regard to the comparative responsibility of any concurrent wrongdoer who is not a party to the proceedings.

(4)    This section applies in proceedings involving an apportionable claim whether or not all concurrent wrongdoers are parties to the proceedings.

(5)    A reference in this Part to a defendant in proceedings includes any person joined as a defendant or other party in the proceedings (except as a plaintiff) whether joined under this Part, under rules of court or otherwise.

…

87CF    Contribution not recoverable from defendant

A defendant against whom judgment is given under this Part as a concurrent wrongdoer in relation to an apportionable claim:

(a)    cannot be required to contribute to any damages or contribution recovered from another concurrent wrongdoer in respect of the apportionable claim (whether or not the damages or contribution are recovered in the same proceedings in which judgment is given against the defendant); and

(b)    cannot be required to indemnify any such wrongdoer.

87CG    Subsequent actions

(1)    In relation to an apportionable claim, nothing in this Part or any other law prevents a plaintiff who has previously recovered judgment against a concurrent wrongdoer for an apportionable part of any damage or loss from bringing another action against any other concurrent wrongdoer for that damage or loss.

(2)    However, in any proceedings in respect of any such action, the plaintiff cannot recover an amount of damages that, having regard to any damages previously recovered by the plaintiff in respect of the damage or loss, would result in the plaintiff receiving compensation for damage or loss that is greater than the damage or loss actually sustained by the plaintiff.

…

(Emphasis added.)

Consideration

39    The Williams decision, on which Mr Robinson relies, involved the sale of a house. Vendors of a residential property undertook renovation works as owner/builders before selling the property. The purchasers commenced proceedings against them, seeking damages, first, under breach of statutory warranties under the Home Building Act 1989 (NSW) by one of the vendors; secondly, under s 18 and s 30 of the ACL for misleading conduct and, thirdly, negligence on the part of one of the vendors. The first two claims succeeded.

40    The relevant representations were made with the authority of both vendors and consisted of statements made in a web page advertisement and in a brochure which was provided to the purchasers during their first inspection of the property. The vendors denied the ACL claims were in “trade or commerce” as provided for under s 18 and s 30 of the ACL. At first instance, it was held that the sale was in trade and commerce because, in all of the circumstances in which it occurred, it disclosed a commercial or business character. A central question on appeal related to trade and commerce. The appeal was upheld on the basis that a person selling his or her residential property, whether by private treaty or by auction, is not ordinarily said to be engaging in trade or commerce, whether or not a real estate agent is used.

41    In considering the apportionment question, Emmett JA noted (at [49]) that the reform effected by the insertion of Pt VIA of the CCA (into what was then the TPA was intended to replace the system of joint and several liability for most economic loss and property damage claims with proportionate liability. As his Honour said (at [50]), the reform was prompted by concerns that litigation against well-insured professionals (particularly auditors) was driving up professional liability insurance premiums. Plaintiffs who had suffered loss caused by several wrongdoers were seen to be taking advantage of the system of joint and several liability by targeting only the well-insured wrongdoer (whose contribution to the plaintiff’s loss may have been minimal) and obtaining 100% of the damages award from that wrongdoer.

42    On considering the concept of concurrent wrongdoers, his Honour identified (at [67]) that a question of construction which arose on appeal was whether s 87CB(3) applies to a situation where a single act that causes damage that is the subject of a claim under the CCA is committed by two or more persons jointly. His Honour held that it did apply for the following reasons (at [68]-[72]):

68    Three elements of s 87CB(3) are relevant to the consideration of the question of construction: first, the word “whose”; second, the parenthetic phrase “(or act or omission)”; and, third, the adverbial phrase “independently of each other or jointly”.

69    The first question is whether the relative pronoun “whose” qualifies “a person” or “2 or more persons”. If it qualifies “a person”, then the “acts or omissions (or act or omission)” are those or that of the individual person, and not of the group of persons. The consequence would be that the subsection could not be read as including a reference to an “act or omission” of “2 or more persons”, being a joint act such as that in the present case. If, however, the word “whose” qualifies “2 or more persons”, then the subsection would cover a loss caused by an “act or omission” of “2 or more persons”. That is to say, it would cover the situation in the present case.

70    A relative pronoun is most naturally read as qualifying its immediate antecedent. Further, if the word “whose” were construed as qualifying “a person”, then there would be nothing in the words of the subsection to link the “2 or more persons” to the act or acts that caused the loss the subject of the claim. The only relevance of the words “2 or more persons” would be that the putative concurrent wrongdoer would have to be “one of” them. Therefore, the word “whose” should be read as qualifying the phrase “2 or more persons”.

71    The second question is whether the parenthetic phrase “(or act or omission)” indicates that the provision does not require that there be more than one distinct act or omission that caused the loss the subject of the claim. However, that question assumes that it is the “act or omission” of the “2 or more persons” that is being contemplated, and not the “act or omission” of “a person”. If the latter construction were adopted, then the parenthetic words would only apply in a situation in which the concurrent wrongdoers each committed a single act or omission, such that there was in total more than one act. Therefore, the words “(or act or omission)” do not by themselves resolve the question of construction posed in the present case.

72    The third question is the meaning of the phrase “independently of each other or jointly”, which qualifies the word “caused” and refers to the “acts or omissions (or act or omission)” of the “2 or more persons”. That is to say, the act or omission of the wrongdoers, or the acts or omissions of the wrongdoers, may independently cause the same loss to the plaintiff or they may combine to cause that loss. One consequence of the above construction of “whose” would be that, in a case in which there is a single act joined in by two or more persons, the words “independently of each other or jointly” would be otiose, because there would be no need to qualify the manner in which the single act caused the loss the subject of the claim. That would be a reason for preferring a construction of s 87CB(3) that did not cover the situation of a single act or omission, on the basis of the principle of construction that all words of a provision must prima facie be given some meaning and effect. On the other hand, that principle is of limited application, particularly where there are good reasons for adopting a construction that involves superfluity.

(Citations omitted. Added emphasis in [72], but original emphasis in [69] and [71].)

43    His Honour referred to recent decisions, including Tomasetti v Brailey (2012) 91 ATR 531 and Hadgelias Holdings Pty Ltd v Seirlis [2015] 1 Qd R 337, noting that in Hadgelias, a member of the Queensland Court of Appeal (with whom two other members of the Court of Appeal concurred) said (at [21]):

… I would construe the definition in s 87CB as concerned with distinct acts (or omissions) or sets of acts (or omissions) by different actors, combining or working independently to cause loss or damage, and consequently inapplicable where there is but a single act or set of acts causing loss, attributable to more than one person.

(Emphasis added.)

44    Emmett JA disagreed with that conclusion. Addressing the situation in Tomasetti, Emmett JA said (at [79]-[80]):

79    This Court has also recently considered the equivalent provisions of the Civil Liability Act [2002 (NSW)] in a case in which a director of a company engaged in misleading and deceptive conduct while providing financial advice on behalf of the company to clients. The advice was relied on by the clients who suffered loss as a consequence. Accordingly, either the company was vicariously liable for the director’s conduct or the company was directly liable, on the basis that the director’s conduct was not simply that of an agent of the company but that of the company itself. On either basis, the director and the company would be jointly liable. Macfarlan JA said:

“[154] … The acts and omissions of [the director] in advising the [clients] were the corporate acts of [the company]. Accordingly, they were both responsible for the [clients’] losses, their acts and minds being the same. I find nothing in the terms of s 35(1) [the equivalent of s 87CD(1)] that requires responsibility for a loss to be apportioned between concurrent wrongdoers of this type so that the total of the percentages for which they are liable is 100 per cent. The section simply limits the liability of the defendant to the proportion of the loss that the court considers just having regard to the defendant’s responsibility for the damage or loss. Here [the director] and [the company] were each fully responsible for the losses and it is just that each be liable for 100 per cent of the losses.”

80    In that case, the Court did not consider in detail whether the director and the company fell within the definition of concurrent wrongdoer in s 34(2) of the Civil Liability Act. In any event, the facts of that case are not analogous to those in the present case, because, in this case, there is no issue of vicarious liability as between the alleged concurrent wrongdoers.

(Citations omitted and emphasis added.)

45    Dealing with the agency situation his Honour was addressing, Emmett JA referred to s 87CI of the CCA, which includes:

87CI    Application of Part

Nothing in this Part:

(a)    prevents a person being held vicariously liable for a proportion of an apportionable claim for which another person is liable; or

(b    prevents a partner from being held severally liable with another partner for that proportion of an apportionable claim for which the other partner is liable; or

(c)    affects the operation of any other Act to the extent that it imposes several liability on any person in respect of what would otherwise be an apportionable claim.

(Emphasis added.)

46    His Honour noted (at [77]):

Thus, the provisions in Pt VIA do not prevent a principal from being held vicariously liable for the wrongful actions of an agent within the scope of the agent’s authority. That is to say, there need not be apportionment of liability as between principal and agent in such a situation. Had it been contended in the present case that the Agent was a concurrent wrongdoer with [the vendors], then it may have been that there should be no apportionment of liability as between the Agent, on the one hand, and [the vendors], on the other. That difference must qualify the otherwise broad language used by the Queensland Court of Appeal in its construction of s 87CB(3) to the effect that, in any case where there is a single act attributable to more than one person (as in the present case), those actors would not be concurrent wrongdoers.

47    The difficulty, as a proper analysis of the facts in this case shows, is that, unlike the joint conduct of the vendors in Williams, there was no action whatsoever on the part of Reed which could be regarded as concurrent wrongdoing. Reed would simply be directly liable by reference to the conduct of Mr Robinson through Tesco liability.

48    More recently, Mossop J in Dunn v Hanson Australasia Pty Ltd (2017) 12 ACTLR 138, considered such a situation. Once again, the plaintiff purchaser had brought proceedings for damages for defective construction of a residential building. The vendor was the third defendant, the building contract was with the first defendant company, the second defendant being the sole director of the first defendant. The fourth defendant was the building certifier. Mr Dunn’s case was based on breach of statutory warranties under s 88 of the Building Act 2004 (ACT) and misleading conduct against Hanson Australasia Pty Ltd (the first defendant), contrary to the TPA. Mossop J considered the discussion by Emmett JA in Williams, but considered that the facts in Dunn were most similar to the facts in Tomasetti (as they are), in which the conduct engaged in by an individual was the same conduct which rendered the company liable, with apportionment being declined for the reasons explained by MacFarlan JA in the New South Wales Court of Appeal in Tomasetti (at [154]) and set out above (at [44]).

49    As observed above, Mossop J also noted that in Williams it was clear that the two vendors of the property had jointly participated in the single act by both making a representation causing the loss (at [58]).

50    In considering s 87CB(3) of the TPA, his Honour (at [61]) noted that in cases where the acts of the director are the acts of the company and hence there is only the act of a single person, it cannot be said that the act or acts caused “independently of each other or jointly” (the express words used in s 87CB(3) of the TPA), the damage or loss the subject of the claim.

51    His Honour opined, and we agree, that, first, it cannot be said that the acts are independent because there is a single act carried out by the person which is also the act of the company. Secondly, it cannot be said that the acts “jointly” caused the damage or loss. There is no capacity for joint conduct because there is only a single act, which makes it artificial to say that there are two acts of persons, one of the company and one of the director. The company, on the facts of Dunn, did nothing, but was directly liable only by reason of the acts of its senior officer. In those circumstances, there cannot be any concurrent wrongdoing within the definition of s 87CB(3) of the TPA or in any common use of the expression “concurrent wrongdoer”.

52    In the present circumstances also, and for those reasons, there could be no apportionment of the wrongdoing to Reed, represented by Mr Robinson. This construction also appears more harmonious with the view of the Queensland Court of Appeal in Hadgelias (at [21]).

53    The reason why s 87CB(3) of the CCA could not apply may be put another way. The provision requires that the concurrent wrongdoer be a person who is one of two or more persons whose individual acts or omissions would, independently of each other, have caused the damage or loss. In the present instance, there is no independent act at all of Reed which could fall for consideration. While the company would have been 100% liable if sued for the acts of Mr Robinson, the acts were not acts which were independent of the acts of Mr Robinson. To the contrary, they were directly dependent upon his conduct in that they are regarded at law as one and the same act.

54    As a consequence, it would be impossible to form any view that Reed, by virtue of conduct of some other employee or officer, should contribute any percentage, let alone 50% by way of apportionment. The very concept of apportionment requires an assessment of the degree of wrongdoing of the contributory wrongdoer. There is no evidence of any wrongdoing on the part of Reed, but for the actions of Mr Robinson himself.

55    We respectfully agree with the views of Mossop J in Dunn and of McFarlan JA in Tomasetti. Had Reed been joined in this case, each of Reed and Mr Robinson would be 100% liable. There would be no basis for apportionment. The purpose of the statute is to limit the liability of the defendant to that proportion of the loss the Court considers just, having regard to the defendant’s responsibility for the damage or loss. As McFarlan JA said in Tomasetti, each would be fully liable, as would be the case here. But, in any event, in this instance, there is no doubt in the finding that 100% of the liability rests with Mr Robinson.

56    In arriving at this conclusion, it is unnecessary to comment on the correctness or otherwise of the helpful obiter analysis in Williams as the facts and basis of liability in this instance are quite different.

The notice of contention

57    It is unnecessary, in these circumstances, to consider the notice of contention on the apportionment issue.

CONCLUSION

58    In our view, this ground of appeal must also be dismissed. We would dismiss the appeal with costs.

Associate:

Dated:    1 June 2018

REASONS FOR JUDGMENT

RANGIAH J:

59    This is an appeal against a judgment of a single judge of this Court delivered on 30 May 2017.

60    The proceeding before the primary judge was for damages for breach of s 18 of the Australian Consumer Law (ACL), contained in Sch 2 to the Competition and Consumer Act 2010 (Cth), and negligent misstatement. His Honour held that the respondent had made a representation that was both misleading or deceptive and negligent and gave judgment for the applicant in the sum of $1,426,641.70, plus interest.

61    In the appeal, the appellant (Robinson) does not challenge the primary judge’s conclusion that it contravened s 18 of the ACL, but challenges his Honour’s findings on the issues of causation, damages and apportionment. The respondent (St Kilda Road) has filed a notice of contention seeking to uphold those findings on other grounds.

62    It is necessary to describe the primary judge’s reasons in some detail before considering the parties’ submissions.

BACKGROUND

63    The following summary of the uncontroversial facts is taken largely from the reasons of the primary judge.

64    In October 2010, Reed Constructions Australia Pty Ltd (Reed) as contractor, entered into a design and construct contract with St Kilda Road, as principal, for the redevelopment of a building at 470 St Kilda Road, Melbourne. The contract works involved converting an office building into a 14 story residential apartment building.

65    Clause 37.1 of the contract provided for Reed to make payment claims on the 28th day of each month for “work under contract” (WUC) undertaken in that month. The parties adopted a standard practice for dealing with the monthly payment claims, which involved Reed providing the payment claim to St Kilda Road’s representative, together with a statutory declaration as to the payment of Reed’s subcontractors and suppliers. The statutory declaration was provided pursuant to cl 38.1 of the contract, which provided, relevantly:

38.1    WORKERS AND SUBCONTRACTORS

If requested by the Principal or the Principal’s Representative, the Contractor shall give in respect of a payment claim, documentary evidence of the payment of moneys due and payable to:

(a)    workers of the Contractor and of the subcontractors; and

(b)    subcontractors,

in respect of WUC the subject of that payment claim.

If the Contractor is unable to give such documentary evidence, the Contractor shall give other documentary evidence of the moneys so due and payable to workers and subcontractors.

Documentary evidence, except where the Contract otherwise provides, shall be to the Principal’s Representative’s satisfaction.

…

66    In November 2011, Reed proposed that it be permitted to make early payment claims over the Christmas period and up to February 2012, covering payment claims no. 14 (November 2011), no. 15 (December 2011), no. 16 (January 2012), and no. 17 (February 2012). The proposal was accepted by St Kilda Road.

67    In respect of payment claim no. 15, the new arrangement was that Reed would submit its claim on 12 December 2011 for works completed up to 22 December 2011. On 12 December 2011, Reed sent payment claim no. 15 to St Kilda Road’s representative, accompanied by a statutory declaration made by Robinson. Robinson was the chief operating officer of Reed. He declared, relevantly:

That to the best of my knowledge and belief having made all reasonable enquiries, at this date –

...

all sub-contractors or suppliers of material who are or at any time have been engaged on the work under the Contract have been paid in full all monies which have become payable to the sub-contractor under the terms of the sub-contract or to the supplier of materials under the terms of the agreement for supply.

68    Reed issued a tax invoice dated 22 December 2011 in the sum of $1,426,641.70, and the applicant paid it on 11 January 2011.

69    On 31 January 2012, Reed served payment claim no. 16, supported by another statutory declaration of Robinson which was dated 31 January 2012, but was otherwise in the same terms.

70    By early February 2012, all of Reed’s subcontractors had abandoned the site. Reed provided a “creditors’ list” to St Kilda Road’s representative showing that payments of $175,242.61 were overdue to subcontractors and suppliers in respect of the St Kilda Road project from October 2011, and payments of $2,585,512.60 were overdue from November 2011.

71    On 6 February 2012, St Kilda Road issued a show cause notice under cl 39.2 of the contract, relying on Robinson’s statutory declaration of 31 January 2012 as grounds for terminating the contract. The notice stated that Reed had committed a substantial breach of the contract because it “knowingly provided a Statutory Declaration containing an untrue statement, namely that all subcontractors or suppliers of materials who are or at any time have been engaged on the work under the contract have been paid in full all monies which have become payable”. On 1 March 2012, the applicant terminated the contract pursuant to cl 30.4 on the ground contained in the show cause notice. Reed did not contest the termination.

72    On 29 February 2012, Reed issued payment claim no. 17 in the amount of $929,388.76. Unsurprisingly, the payment claim was not accompanied by any statutory declaration. The claim was not accepted by St Kilda Road.

73    By February 2012, the contract works were a little over 90% complete. St Kilda Road was required to make “restart” payments totalling about $2.8 million to subcontractors to get them back to finish the works. The primary judge noted that no claim was made by St Kilda Road in the proceeding in respect of those payments.

74    On 20 March 2012, Reed sought adjudication of payment claim no. 16 pursuant to the Building and Construction Industry Security of Payment Act 2002 (Vic) (Security of Payment Act). The adjudicator delivered a determination favourable to Reed, namely that St Kilda Road pay the full amount of the claim of $760,698.84.

75    On 16 April 2012, St Kilda Road issued proceedings in the Supreme Court of Victoria against Reed claiming damages of approximately $5.63 million arising out of the termination of the contract.

76    On 17 April 2012, St Kilda Road sought judicial review in the Supreme Court of Victoria of the determination in respect of payment claim no. 16. St Kilda Road provided security by way of bank guarantee for the amount of $760,698.84. The proceeding was dismissed by Vickery J on 7 June 2012: 470 St Kilda Road Pty Ltd v Reed Constructions Australia Pty Ltd [2012] VSC 235.

77    Reed sought adjudication of payment claim no. 17. On 18 May 2012, the adjudicator delivered a determination that St Kilda Road pay to Reed an amount of $661,127.50. On 22 June 2012, St Kilda Road filed an application for judicial review in respect of that determination. St Kilda Road provided security by way of bank guarantee for the adjudicated amount

78    On 9 July 2012, a liquidator was appointed to Reed. Upon that happening, Reed’s rights under the Security of Payment Act were at an end: see Façade Treatment Engineering Pty Ltd (in liq) v Brookfield Multiplex Constructions Pty Ltd (2016) 116 ACSR 493 (at [76]-[90]).

79    On 12 October 2012, the applicant was granted leave to appeal to the Court of Appeal from the judgment of Vickery J, but no steps were taken to progress the appeal.

80    Eventually, the liquidator reported that Reed had unsecured creditors totalling $132 million, none (including the applicant) of whom received any dividend.

81    In March 2013, St Kilda Road settled all claims by and against the liquidator on terms requiring St Kilda Road to pay $100,000, while recovering in full its bank guarantees.

THE PRIMARY JUDGE’S FINDINGS ON CONTROVERSIAL ISSUES

82    Section 18 of the ACL provides:

A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead to deceive.

83    In support of payment claim no. 15, Robinson had declared that to the best of his knowledge and belief, having made all reasonable enquiries, all relevant subcontractors and suppliers had been paid in full. The primary judge held at [70] that the limited enquiries Robinson had made could on no view be said to be reasonable for the purposes of his statutory declaration. His Honour held (at [75] and [77]) that, accordingly, the declaration was materially untrue and misleading or deceptive.

84    The primary judge indicated (at [78]) that the next issue was whether St Kilda Road had suffered loss and damage “by” Robinson’s misleading or deceptive conduct. Two witnesses for St Kilda Road gave evidence to the effect that if Robinson had not signed the statutory declaration, or had disclosed the true position, payment claim no. 15 would not have been approved or paid to Reed on 11 January 2012 or at all. They gave evidence that St Kilda Road would have issued a show cause notice and terminated the contract, as it had following the receipt of payment claim no. 16.

85    The primary judge found:

[85] ...I have no hesitation in accepting their evidence that had [the appellant] disclosed the true position, either at 12 or 22 December 2011, the [respondent] would have triggered the show cause process in mid-January [2012], not in February [2012]. It follows as a matter of common sense that the consequence of doing so would have been that it would not have paid the sum of $1,426,641.70, or any sum, in respect of payment claim no. 15.

86    His Honour then (at [87]) considered a submission by Robinson that St Kilda Road did not have any contractual right to withhold payment of payment claim no. 15, or at least the part of the payment claim that represented amounts that had in fact been paid to subcontractors. Robinson relied on cl 38.2 of the contract, which provided:

38.2    WITHHOLDING PAYMENT

Subject to the next paragraph and to law, the Principal’s Representative may reject in a payment schedule so much of Payment Claim that equates to the potential claims of workers of the Contractor and of the subcontractors and their respective workers the subject of clause 38.1 until the Contractor complies with clause 38. 1.

The Principal shall not reject in a payment schedule such moneys in excess of the moneys evidenced pursuant to clause 38.l as due and payable to workers and subcontractors.

87    His Honour noted (at [88]) that Robinson submitted, and St Kilda Road accepted, that by cl 38.2, St Kilda Road was only entitled to reject in a payment schedule “so much of a Payment Claim that equates to the potential claims of the...subcontractors...until the Contractor complies with cl 38.1”.

88    His Honour went on to say:

88    …But that is not the point.

89    As the applicant submitted, this is an “all or nothing” case. The applicant’s case does not depend upon needing to prove that, as at 12 or 22 December 2011, the applicant could have proved a case that nil amount, or any particular or precise amount, was owing.

90    The applicant’s pleaded case is that the statutory declaration, a critical part of the “documentary evidence” referred to in cl 38.1, was materially false. As the applicant submitted, it had no obligation to pay any moneys to Reed until Reed first properly complied with its obligations under cl 38.1 and provided the required proof of payment. On the evidence, not only did Reed not properly comply with cl 38.1 in respect of WUC up to 12 or 22 December 2011, as senior counsel for the applicant put it “by December 2011 it could never properly comply with cl 38.1 and it never again did.”

91    For the foregoing reasons, the applicant has made good its case under the ACL.

89    His Honour (at [92]–[97]) then considered Robinson’s submission that the misleading or deceptive conduct claim was apportionable under Pt IVA of the ACL. Robinson had submitted that 50% of the responsibility lay with Reed, on whose behalf Robinson made the statutory declaration. The primary judge rejected that submission, firstly, because there was no evidence that suggested that Reed misled Robinson or caused him to make the statutory declaration and, secondly, because the declaration on its face made it clear that it was Robinson who made the enquiries and that it was his own knowledge and belief in respect of which he made the declaration. Further, his Honour held that Robinson’s status as an employee of Reed could not by itself justify apportioning liability.

90    The primary judge then considered St Kilda Road’s claim of negligent misrepresentation (at [98]–[100]), noting that little was said about it during the trial. His Honour held that Robinson owed St Kilda Road a duty to exercise reasonable care in making each of the statements contained in the statutory declaration, and that Robinson had breached that duty. His Honour held that St Kilda Road had suffered damage represented by the sum it paid in respect of payment claim no. 15 for the same reasons given with respect to the misleading or deceptive conduct claim.

91    His Honour concluded (at [101]) that there would be judgment for the applicant in the sum of $1,426,641.70, plus interest.

THE NOTICE OF APPEAL AND THE NOTICE OF CONTENTION

92    Robinson abandoned the first two grounds of his notice of appeal. The remaining grounds are:

Causation

3.     The Court erred in holding that the consequence of the Appellant’s failure to disclose the true position about the overdue accounts to subcontractors and suppliers was that the Respondent “would not have paid the sum of $1,426,641.70, or any sum, in respect of payment claim 15” (Reasons at [85]).

4.     The Court should have held that the Respondent had not established:

a.     that it could and would have withheld payment to Reed Constructions Australia Pty Ltd (Reed) of the whole of the sum paid for payment claim 15; and

b.     that it could and would have retained the whole of the sum paid for payment claim 15, including that it would not have paid any sum to subcontractors and suppliers (where such sum had not previously been paid by Reed), and/or to the liquidators of Reed, in respect of the works the subject of payment claim 15.

Loss or damage

5.    The Court erred in holding, on the basis of the counterfactual identified in ground 3 above, that the loss or damage suffered by the Respondent was the full amount of the amount paid for payment claim 15.

6.     The Court should have held, for the reasons identified in ground 4 above, that the Respondent would have had to pay some amounts to subcontractors and/or suppliers and/or to the liquidators of Reed, in respect of the works the subject of payment claim 15, and that because the Respondent presented its damages claim as an “all or nothing” case (Reasons at [89]), the Respondent had failed to establish that the loss or damage suffered by the Respondent was the full amount of the amount paid pursuant to payment claim 15.

Proportionate liability

7.     The Court erred in holding that no part of the Respondent’s claim should be apportioned (Reasons at [96]).

8.     The Court should have held that Reed Constructions Australia Pty Ltd was directly and jointly liable for the damage the subject of the claim and that the Respondent’s liability was limited to 50% of the damages claimed.

93    St Kilda Road complains, with some justification, about the generality of the grounds of appeal. The grounds do no more than assert that the primary judge erred in holding as he did and failing to hold differently. The grounds do not identify with particularity the errors asserted to have been made by the primary judge.

94    In Robinson’s written submissions concerning the first four grounds, it became apparent that his principal allegation is that the primary judge erred by failing to consider several submissions advanced by him concerning whether loss and damage had been sustained and the quantum of damages. Robinson’s argument is, in substance, that if the primary judge had considered those submissions, his Honour would not have made the findings described in Grounds 3 and 5 and would instead have made the findings described in Grounds 4 and 6.

95    St Kilda Road complains, again with some justification, that Robinson should have specified in the notice of appeal the ground that the primary judge failed to deal with all of its submissions, and not merely raised it in their written and oral submissions. However, the ground can be considered to be encompassed within the broad pleaded grounds. The submissions can be regarded as providing particulars of the grounds. St Kilda Road has had an adequate opportunity to deal with Robinson’s submissions. The ground should be considered by the Court.

96    Robinson has filed a notice of contention containing the following grounds:

1.     In reaching the conclusion at [85] of its Reasons that the Respondent “would not have paid the sum of $1,426,641.70, or any sum, in respect of payment claim no. 15”, the Court should also have found that any entitlement that arose to Reed Constructions Australia Pty Ltd (“Reed”) in respect of Payment Claim 15 pursuant to the Building and Construction Industry Security of Payment Act 2002 (Vic) (“the Act”) would not have affected the Respondent's loss and damage in circumstances where:

(a)     the evidence adduced at trial established that, by December 2011, Reed was not able to pay its debts as and when they fell due and the Respondent could have and would have obtained a stay on execution of any judgment that Reed may have obtained pursuant to the Act in respect of Payment Claim 15;

(b)    pursuant to s 47 of the Act, any entitlement by Reed in respect of Payment Claim 15 was, at best, interim only, and the evidence adduced at trial established that the Respondent had a significant potential offsetting claim that greatly exceeded the amount of Reed's interim entitlement in respect of Payment Claim 15; and

(c)     the Liquidator of Reed settled Reed's unpaid Payment Claims 16 and 17 for a sum of $100,000, and the evidence adduced at trial established that the Liquidator of Reed did not have the resources to pursue, and would not on balance have in fact pursued, any claim against the Respondent for Payment Claim 15 had that claim not been paid.

2.     The Court ought to have found that the conclusion at [97] of its Reasons that “no part of the claim should be apportioned” was supported by further matters, namely that:

(a)     the Appellant had not pleaded or established at all the existence of any apportionable claim by the Respondent against Reed that gave rise to an apportionment;

(b)    if (which is denied) such an apportionable claim against Reed was made out by the Appellant, then the relative causal potency of the conduct of the Appellant and the conduct of Reed in causing the Respondent's loss and damage militated against any apportionment of the loss to Reed; and/or

(c)     if (which is denied) such an apportionable claim against Reed was made out by the Appellant, then the relative causal potency was such that 100% of any apportionment ought to fall to the Appellant for the Respondent's loss, as it was he, and not Reed, who bore the causative responsibility as the true cause of the said loss.

97    From Ground 1 of the notice of contention, it can be inferred that St Kilda Road anticipated the complaint ultimately made by Robinson about the primary judge’s failure to deal with all of its submissions.

CONSIDERATION

Causation and damages

98    As has been noted, the principal allegation of error concerning causation and damages made by Robinson is that the primary judge failed to consider several of Robinson’s submissions. That makes it necessary to identify the competing submissions in respect of causation and damages and then to consider his Honour’s reasons. In order to put those submissions into context, it is also necessary to examine the relevant provisions of the ACL and some of the principles concerning causation and damages.

99    The appropriate starting point is s 236 of the ACL, which provides:

236    Actions for damages

(1)    If:

(a)    a person (the claimant) suffers loss or damage because of the conduct of another person; and

(b)    the conduct contravened a provision of Chapter 2 or 3;

the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.

...

100    Section 237 of the ACL provides:

237    Compensation orders etc. on application by an injured person or the regulator

(1)    A court may:

(a)    on application of a person (the injured person) who has suffered, or is likely to suffer, loss or damage because of the conduct of another person that:

(i)    was engaged in a contravention of a provision of Chapter 2, 3 or 4; or

...

        ...

make such order or orders as the court thinks appropriate against the person who engaged in the conduct, or a person involved in that conduct.

…

(2)    The order must be an order that the court considers will:

(a)    compensate the injured person, or any such injured persons, in whole or in part for the loss or damage; or

...

101    Section 243 of the ACL provides:

243    Kinds of orders that may be made

Without limiting section 237(1), 238(1) or 239(1), the orders that a court may make under any of those sections against a person (the respondent) include all or any of the following:

...

(e)    ... an order directing the respondent to pay the injured person the amount of the loss or damage;

...

102    Having found that Robinson had engaged in misleading and deceptive conduct, the primary judge stated (at [78]) that the next issue was whether St Kilda Road had suffered loss and damage “by” that conduct, referring to Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 (at [34], [38] and [95]). In Marks, the High Court was concerned with ss 82 and 87 of the Trade Practices Act 1974 (Cth) (TPA), which provided, in effect, that the loss or damage that may be recovered is the amount of the loss or damage suffered “by” the conduct of another person that was done in contravention of Pt IV or Pt V. In contrast, ss 236, 237 and 243 of the ACL are concerned with loss or damage that may be recovered “because of” the conduct of another person that was done in contravention Ch 2. The difference in expression does not affect this case.

103    The jurisprudence concerning ss 82 and 87 of the TPA remains relevant to the construction and application of s 236, 237 and 243 of the ACL. In Marks, the plurality considered the issues of causation and damages, saying (at [38]):

[The] inquiry is one that seeks to identify a causal connection between the loss or damage that it is alleged has been or is likely to be suffered and the contravening conduct. But once that causal connection is established, there is nothing in s 82 or s 87 (or elsewhere in the Act) which suggests either that the amount that may be recovered under s 82(1), or that the orders that may be made under s 87, should be limited by drawing some analogy with the law of contract, tort or equitable remedies.

104    However, the principles of assessment in contract or tort, particularly concerning assessment of damages for deceit, may be of great assistance: Marks (at [17], [38], [103], [152]); Henville v Walker (2001) 206 CLR 459 (at [18]–[19], [130]); Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 (at 14–15).

105    In Marks, the plurality went on to consider how it is to be determined whether there is a causal connection between the loss and damage and the contravening conduct (at [42]):

It follows, then, that a comparison must be made between the position in which the party that allegedly has suffered loss or damage is and the position in which that party would have been but for the contravening conduct. And even this inquiry may not conclude the question. Analysing the question of causation only by reference to what is, in essence, a “but for” test has been found wanting in other contexts and it may well be that it is not an exclusive test of causation in this area either.

(Citations omitted.)

106    Their Honours continued (at [48]):

A party that is misled suffers no prejudice or disadvantage unless it is shown that that party could have acted in some other way (or refrained from acting in some way) which would have been of greater benefit or less detriment to it than the course in fact adopted.

107    In Henville, Gleeson CJ considered how damages are to be measured (at [18]):

Section 82 of the Act is the statutory source of the appellants’ entitlement to damages. The only express guidance given as to the measure of those damages is to be found in the concept of causation in the word “by”. The task is to select a measure of damages which conforms to the remedial purpose of the statute and to the justice and equity of the case. The purpose of the statute, so far as presently relevant, is to establish a standard of behaviour in business by proscribing misleading and deceptive conduct, whether or not the misleading or deception is deliberate, and by providing a remedy in damages.

108    McHugh J added (at [131]):

Indeed, general principles for assessing damages may have to give way altogether in particular cases to solutions best adapted to give the injured claimant an amount which will most fairly compensate for the wrong suffered.

(Citation omitted.)

109    An applicant is required to prove on the balance of probabilities that he or she has relied on a misleading or deceptive representation and has sustained some loss or damage: Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 (at 351); Gates (at 7, 14). It is also necessary for the applicant to prove the quantum of his or her loss or damage: Cummins Generator Technologies Germany GMBH v Johnson Controls Australia Pty Ltd (2015) 326 ALR 556 (at [133]).

110    While the applicant carries the onus of proving some loss or damage, there remains some uncertainty as to whether it is then for the contravener to establish that particular aspects or items of the loss claimed are not attributable to the contravening conduct: see Henville (at [148], [166], cf [70]). In Protec Pacific Pty Ltd v Steuler Services GmbH & Co KG [2014] VSCA 338, the Victorian Court of Appeal, referring to the onus of proof, said (at [733]) that “much will depend upon the circumstances of the case”. Where the contravenor’s conduct has made the quantification of damages difficult, a court is entitled to draw inferences in favour of the applicant: Murphy v Overton Investments Pty Limited (2004) 216 CLR 388 (at [74]).

111    In this case, once Robinson’s contravention of s 18 of the ACL was established, St Kilda Road’s contention that Robinson should be ordered to pay damages required proof of three matters. Firstly, St Kilda Road was required to prove that it had relied upon the misrepresentation. Secondly, St Kilda Road had to prove that it had suffered at least some loss or damage as a consequence of that reliance. Thirdly, St Kilda Road had to lead evidence as to the extent of the loss or damage it suffered; although there was an issue as to whether the onus was then on Robinson to show that the loss and damage was not of that extent. The first of these matters was found by the primary judge to be proven and is not in issue in the appeal. The second and third matters remain controversial.

112    Before the primary judge, St Kilda Road submitted that it had suffered loss and damage of $1,426,641.70. It described the case it was running as an “all or nothing” case. This seems to have been a concession that if its loss or damage was not that full amount, it was entitled to nothing. Even though St Kilda Road asserted that it had been “deprived of the opportunity to end the Contract a month earlier”, it did not attempt to make out a case that it had suffered a loss of an opportunity to avoid payment of payment claim no. 15, the value of which would be measured on the possibilities or probabilities of the case: cf Sellars at [355]; Barnes v Forty Two International Pty Ltd (2014) 316 ALR 408 (at [190]).

113    Before the primary judge, St Kilda Road was required to demonstrate, at least as a starting point, the position it would have been in but for Robinson’s misleading or deceptive conduct. It was also required to demonstrate the position it had been left in as a result of its reliance upon the conduct. In this way, a comparison of the positions could be made, and the loss or damage quantified. St Kilda Road developed its submissions upon these issues in the following manner.

114    St Kilda Road submitted that in reliance upon the misleading or deceptive declaration of Robinson, it paid $1,426,641.70 to Reed for payment claim no. 15. If a truthful declaration, or no declaration, had been provided, it would not have paid any amount for payment claim no. 15. It was entitled to withhold payment under cl 38.2 of the contract until Reed complied with cl 38.1. The submission continued that “not only did Reed not properly comply with cl 38.1 in respect of WUC up to 22 December 2011, by December 2011 it could never properly comply with cl 38.1, and it never did again.” St Kilda Road did not explain or develop that part of its submission.

115    St Kilda Road submitted that if a truthful declaration or no declaration had been provided, it would have triggered the show cause process in mid-January 2012 and would have terminated the contract, as it had in March 2012. The argument continued that St Kilda Road would then have commenced proceedings for damages arising from the termination of the contract, as it had in April 2012. The claim of $5.56 million would have been reduced to take into account the non-payment of payment claim no. 15, but would still have been for over $4 million. Reed was hopelessly insolvent by 31 January 2012. Reed’s liquidator never had the funds to pursue payment claims no. 16 or no. 17, and there was no sensible reason to suspect that this would have changed if he also had to pursue payment claim no. 15. The liquidator settled payment claim nos. 16 and 17 and Robinson’s counter-balancing claim by accepting payment of $100,000. There was no evidentiary foundation for a submission that the addition of payment claim no. 15 into that mix would have led to a different outcome.

116    St Kilda Road submitted that it would have obtained a stay of execution of any adjudication in respect of payment claim no. 15. Once Reed went into liquidation, consistently with Façade (at [76]–[90]), all Reed’s rights under the Security of Payments Act ceased.

117    St Kilda Road argued that, thus, it would never have paid $1,426,641.70 or any sum for payment claim no. 15 if St Kilda Road had provided a truthful declaration or no declaration. However, as Reed had paid payment claim no. 15 in full and recovered nothing in the liquidation, it was $1,426,641.70 worse off as a result of Robinson’s misleading or deceptive conduct.

118    St Kilda Road’s position that this was an “all or nothing claim” resulted in Robinson seeking to demonstrate that St Kilda Road’s loss was something less than $1,426,641.70, which would mean that the proceeding should be dismissed. Robinson’s submissions upon causation and damages, so far as are relevant to the appeal, were developed as follows before the primary judge.

119    Robinson argued that under the contract, St Kilda Road had no right to withhold payment of payment claim no. 15. The only right to withhold was conferred by cl 38.2 of the contract, but that right was only in respect of “monies due and payable to…subcontractors…in respect of WUC the subject of that payment claim”. That phrase applied to only the work for which progress claim no. 15 was rendered, namely work done in December 2011. But St Kilda Road had not alleged that any invoices from subcontractors or suppliers for work done in December 2011 were unpaid and due and payable. Therefore, there was no right to withhold payment. Even if the clause contained a broader right to withhold, it did not extend beyond the unpaid amounts that would have been revealed by an accurate statutory declaration, which Robinson claimed totalled $161,401 at 12 December 2011 and $609,342.72 at 22 December 2011. If St Kilda Road had purported to withhold payment, Reed would have proceeded to adjudication and would have succeeded, as it did in respect of progress claim no. 16. At that point, Robinson would either have had to pay the amount of progress claim no. 15 to Reed, or pay it into court (as was the adjudicated amount for progress claim no. 16). St Kilda Road’s claim that it would have obtained a stay of execution of the adjudicated determination was speculative and unproved.

120    Robinson argued that St Kilda Road’s claim that it would ultimately have been able to retain the benefit of the whole of the $1,426,641.70 in any hypothetical, alternative negotiations with the liquidator was unproven. There was no evidence before the Court about what would or might have been the result of the hypothetical, alternative negotiations. The circumstances of the negotiations would have been different because the additional amount for progress claim no. 15 would have had to be paid into Court and would have been sought by the liquidator. Robinson submitted that in order for St Kilda Road, which it claimed bore the onus of proving its loss, to demonstrate this aspect of its case, it was necessary for the Court to hear evidence from the liquidator, but St Kilda Road had not called the liquidator.

121    Robinson argued further that St Kilda Road’s claim that it would have been $1,426,641.70 better off if the representation had not been made, depended upon the proposition that it would never have had to pay anyone anything for the work that was the subject of progress claim no. 15. That work had in fact been performed in December 2011 by Reed and its subcontractors. St Kilda Road was always going to have to pay someone for the work; it could not sensibly be said that St Kilda Road could have taken the value of the work and not paid for it. St Kilda Road had to make the “restart” payments to subcontractors and suppliers including for work and materials invoiced in December 2011. St Kilda Road’s case as run required it to prove that it would never have had to pay anyone anything for the work done – whether Reed, its liquidator, or the subcontractors and suppliers. As St Kilda Road would have had to pay something for the work done, its “all or nothing case” must fail.

122    In response, St Kilda Road submitted that while it later made the “restart” payments to the unpaid subcontractors and suppliers, it did so voluntarily and was under no legal obligation to do so. St Kilda Road submitted that Robinson had the onus of adducing evidence to demonstrate that St Kilda Road would have paid some part of the $1,426,641.70 in any event, but had failed to do so. Further, St Kilda Road had failed to put that issue to St Kilda Road’s witnesses. St Kilda Road argued that Robinson’s construction of cl 38.1 was misconceived. It submitted that unless and until Reed properly provided evidence of moneys due and payable to subcontractors to St Kilda Road’s satisfaction, St Kilda Road was entitled to withhold a sum equating to all potential claims by subcontractors.

123    This is not, by any means, a comprehensive recitation of the parties’ submissions, which were more nuanced, elaborate and detailed, but it serves to show that there were a number of substantial factual and legal issues which might have fallen to be considered by the primary judge. The primary judge’s reasons demonstrate that his Honour did not decide upon many of these issues, although that approach does not necessarily reveal error. Whether there was error depends upon whether determination of these issues was necessary in order for his Honour to resolve the case.

124    The primary judge’s reasoning upon whether St Kilda Road had suffered loss and damage and the quantification of damages is contained in only a few short paragraphs. Those paragraphs reveal what may be a single stream, or possibly two streams, of reasoning.

125    First, (at [85]) his Honour found that if not for the misleading or deceptive conduct, St Kilda Road would have terminated the contract and that it followed, as a matter of common sense, that the consequence would have been that St Kilda Road would not have paid the sum of $1,426,641.70, or any sum, in respect of payment claim no. 15.

126    Second, his Honour (at [90]) accepted the applicant’s submission that it had no obligation to pay any moneys to Reed under the contract until Reed first properly complied with its obligations under cl 38.1 and provided the required proof of payment; but Reed had not and could never properly comply with cl 38.1.

127    In the appeal, St Kilda Road submits that (at [85]) the primary judge inferentially accepted its argument that if it had terminated the contract earlier and had not paid $1,426,641.70 for payment claim no. 15, the liquidator would still have settled on the same terms, so that St Kilda Road would never have paid, or had to pay, any part of that amount. However, that is not reflected in what his Honour said. His Honour should be understood (at [85]) merely to have accepted the evidence of St Kilda Road’s witnesses that if Robinson had disclosed the true position, it would not have paid payment claim no. 15. In my opinion, his Honour did not consider (at [85]) Robinson’s argument that St Kilda Road’s damages were less than $1,426,641.70 and that, because St Kilda Road had presented its case as an “all or nothing case”, the proceeding should be dismissed. Accordingly, his Honour did not consider the issues involved in that argument, including whether the liquidator would have settled for only $100,000 if payment claim no. 15 had not been paid and whether St Kilda Road would have had to pay restart payments to subcontractors in any event.

128    The primary judge did not consider these issues because his Honour decided the case on a different, overarching point. In its written submissions, St Kilda Road had correctly submitted that Reed had not complied with cl 38.1 of the contract. It also asserted that by December 2011, Reed “could never properly comply with cl 38.1”, but did not explain the basis of that assertion in its written or oral submissions. At [90], his Honour held, as a matter of construction, that St Kilda Road had no obligation to pay any amount until Reed properly complied with its obligation under cl 38.1 of the contract. His Honour also held that Reed had not, and could never, properly comply and, therefore, no obligation to pay payment claim no. 15 could ever have arisen. The primary judge did not explain why St Kilda Road’s submission was accepted.

129    It may be surmised that the primary judge concluded that Reed could never comply with cl 38.1 of the contract because that clause required that “Documentary evidence, except where the Contract otherwise provides, shall be to the Principal’s Representative’s satisfaction”. His Honour may have concluded that Robinson could never provide documentary evidence to St Kilda Road’s representative’s satisfaction in circumstances where the subcontractors had not been paid. Against this, it might be argued that the representative’s satisfaction was only required as to the form of the documentary evidence, and not its content; and that Reed could have complied with cl 38.1 by providing a statutory declaration setting out the amounts in fact due and payable to the subcontractors.

130    However, Robinson did not advance any such argument in the appeal. In fact, Robinson made no challenge at all to the primary judge’s findings (at [90]) in his notice of appeal or in his written and oral submissions. Therefore, his Honour’s conclusion that under the terms of the contract St Kilda Road would never have been obliged to pay the $1,426,641.70, or any sum, in respect of payment claim no. 15 must stand.

131    The primary judge’s conclusion (at [90]) disposed of Robinson’s argument that under cl 38.2, St Kilda Road was not entitled to withhold payment of payment claim no. 15, or was only entitled to withhold part of the amount. That conclusion also disposed of Robinson’s submission that St Kilda Road’s “all or nothing case” should be dismissed because damages should be assessed at less than $1,426,641.70. It was unnecessary for his Honour to determine Robinson’s arguments concerning whether the liquidator would have settled for only $100,000 and whether St Kilda Road would have had to pay Reed the restart payments in any event. That is because no obligation had arisen, or could ever arise, requiring St Kilda Road to pay anything under the contract in respect of payment claim no. 15. As St Kilda Road had been induced by the misleading statutory declaration to pay Reed the $1,426,641.70, and it had not recovered anything, that amount represented the extent of its loss.

132    As I have said, Robinson did not challenge the primary judge’s conclusion (at [90]). The primary judge did not consider and decide upon all of Robinson’s submissions because, on his Honour’s reasoning, doing so would have made no difference to the outcome of the case. Robinson has not demonstrated the error he asserts. That makes it unnecessary to deal with Ground 1 of St Kilda Road’s notice of contention.

APPORTIONMENT

133    I respectfully agree with the views expressed by McKerracher and Markovic JJ for rejecting Ground 2 of the notice of appeal, dealing with apportionment.

134    The appeal should be dismissed.

Associate:

Dated:    1 June 2018