Australia: EK Nominees Pty Ltd v Woolworths Ltd Case Summary

Last Updated: 8 February 2007

In the recent decision in EK Nominees Pty Ltd v Woolworths Ltd [2006] NSWSC 1172, non-disclosure by Woolworths was held to amount to misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) (TPA). This case is a reminder of the importance of disclosure in commercial negotiations where there is a reasonable expectation that disclosure will be made and the risk of silence in these cases.

The facts

Woolworths was interested in establishing a supermarket in Auburn, New South Wales. Since at least 1995, it had engaged in negotiations with a third party regarding a preferred site in Queen Street, Auburn. Negotiations for this site subsequently failed.

In 1998, Woolworths commenced negotiations for a supermarket site with the plaintiff, EK Nominees, a developer and the owner of a site in Auburn Road, Auburn.

EK Nominees knew of Woolworths' negotiations on the Queen Street site and sought an assurance from Woolworths that its interest in the Auburn Road site was genuine. Woolworths provided this assurance in a letter dated April 1998, acknowledging the Queen Street negotiations but stating that Woolworths was 'genuinely pursuing' the Auburn Road site. In mid 1999, Woolworths informed EK Nominees that it would not proceed with the Queen Street site.

From about December 1999, for the following 12 months, there was extensive consultation between Woolworths, EK Nominees and their respective consultants with a view to preparing plans and drawings for a supermarket on the Auburn Road site.

On 5 December 2000, Woolworths made a formal offer to take a lease of a supermarket to be constructed on the Auburn Road site. The offer was subject to board approval, which was obtained and communicated on 18 July 2001. The approval was subject to entry into an agreement for lease and lease.

In the period that followed, EK Nominees, in anticipation of entry into a formal agreement for lease, expended significant moneys to prepare the land for development in accordance with Woolworths' specifications. Woolworths was aware of this expenditure and generally pressed for the earliest possible opening of the supermarket. The parties' solicitors also negotiated the agreement for lease and lease documentation.

On 10 January 2002, a third party approached Woolworths to see if it would be interested in leasing supermarket premises at the Queen Street site which was to be developed. Woolworths did not disclose this approach to EK Nominees but subsequently made a formal expression of interest in relation to the Queen Street site, which it again did not disclose to EK Nominees.

From 29 January 2002, Woolworths pressed ahead with the Auburn Road development and negotiation of the lease documentation, while concurrently engaged in negotiations for the Queen Street site.

On 6 May 2002, a representative from EK Nominees informed Woolworths that he had heard (from a contractor) that Woolworths was not proceeding with the Auburn Road site, but rather was proceeding with the Queen Street site. The Woolworths representative responded 'there is no decision made whether we go on your site, the Queen Street site, or both'. The trial judge found that this was the first EK Nominees knew that Woolworths was considering the Queen Street site as an alternative to or as an addition to the Auburn Road site.

On 7 May 2002, Woolworths decided to proceed with the development proposal at the Queen Street site. In June 2002, Woolworths resolved not to proceed with the agreement for lease of the Auburn Road site.

The claims

EK Nominees issued proceedings seeking, among other things, damages for misleading and deceptive conduct in contravention of s 52 of the TPA. EK Nominees claimed that:

  1. By issuing the approval letter of 18 July 2001, Woolworths represented that it intended to enter into an agreement for lease and a lease of the Auburn Road site on the terms contained in the lease offer (First Representation).
  2. The First Representation was a continuing representation. By no later than January 2002, Woolworths did not intend to enter into a lease with EK Nominees and, by failing to disclose this fact until 6 May 2002, Woolworths engaged in conduct which was misleading or deceptive. By not disclosing to EK Nominees that it intended to enter into negotiations for a lease of the Queen Street site until May 2002, Woolworths represented to EK Nominees in the period 29 January 2002 to May 2002 that there had been no material change to the likelihood of entry by Woolworths into a lease for the Auburn Road site (Second Representation). The Second Representation was conveyed by conduct and silence and was misleading.

The decision

The Court found that the First Representation was made on and from 18 July 2001. The Court held that Woolworths' subsequent conduct confirmed the representation, which remained until 7 May 2002. The Court noted that while there were outstanding issues to be resolved, they were 'commercial issues' only and there was no reason to doubt they would have been resolved and an agreement for lease and lease executed.

The Court also found that the Second Representation was made by Woolworths' failure to disclose its negotiations in relation to the Queen Street site. The Court considered this case an exception to 'usual commercial negotiations' where there is generally no obligation of full disclosure. The Court said:

'This is not merely a case in which the parties were negotiating with a view to entering into an agreement for lease. EK Nominees had spent, and was continuing to spend, substantial sums … in order to … move the development forward as quickly as possible, with a view to expediting the date on which Woolworths could open its supermarket. It was doing so with Woolworths' knowledge and encouragement.'

In this case, the Court found that EK Nominees could reasonably expect that if a new proposal for the Queen Street site arose, 'it would be told about it, or at least, it would be told that Woolworths may have to reconsider whether to proceed with the Auburn Road site.' Woolworths' frank and fulsome disclosure on 15 April 1998 was relevant to finding this expectation.

The Court held that EK Nominees was entitled to 'wasted expenditure' from 29 January 2002 less any retained benefit (in this case, the purchase price of a shovel) in the amount of $738,782.98 (excluding GST and interest).

The Court also found that Woolworths' representation that it would enter into an agreement for lease founded an estoppel entitling EK Nominees to compensation for expenditure in reliance.


This case illustrates the risk of allowing another party to proceed on a particular basis without correction of their expectations when circumstances change. While parties do not generally have an obligation of full disclosure in commercial transactions, the history and relationship between the parties may alter that situation.

If a change in plan does occur, it is important to consider the history between the parties and the actions that the other party may be taking and form a view on the need to inform the other party of the change or other possibility in order to avoid exposure to the 'wasted expenditure' incurred by the other party.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.