ORAKA PTY LIMITED & ANOR V. LEDA HOLDINGS LIMITED (1997) ATPR 41-558
Federal Court of Australia – 4 April 1997
Woolworths grocery chain wished to establish marketplace shopping centres; one proposed site was near Rosemeadow. This site was subsequently sold to Leda Holdings. The person responsible for leasing the centre was confident of the successful leasing of the majority of shops due to the favourable response that was elicited when Woolworths intended to construct. The person responsible for leasing contacted Oraka Pty Ltd who was the master NSW franchises for ‘Wendys’ ice cream shops.
Wendys’ shops required substantial passing crowds of shoppers for their success and Leda was prepared to give Wendys exclusivity for the sale of ice-cream and doughnuts at the centre.
Oraka was allegedly told on several occasions that things were going to plan, and was subsequently told that the premises would be full when it opened, however this was not the case. A Letter of Intent, indicating interest to take a lease was subsequently signed. Leda and Oraka attended a meeting where terms of the lease were to be discussed, and Oraka gained the view that there was nothing to worry about even though if the true position was known it would have been unlikely that the lease would have been entered into.
Had Leda Pty Limited contravened s52 of the Trade Practices Act ‘misleading and deceptive conduct’ by failing to correct the erroneous views of Oraka Pty Limited?