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  • Unreported Judgment

Orchid Avenue Pty Ltd v Hingston

 

[2015] QSC 42

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Orchid Avenue Pty Ltd v Hingston & Anor [2015] QSC 42

PARTIES:

ORCHID AVENUE PTY LIMITED
ACN 118 752 346

(plaintiff)

v

GREGORY RAYMOND HINGSTON

(first defendant)

NOLA JUNE HINGSTON

(second defendant)

FILE NO/S:

SC No 4900 of 2012

DIVISION:

Trial Division

PROCEEDING:

Hearing

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

6 March 2015

DELIVERED AT:

Brisbane

HEARING DATE:

23 September 2014; 25 September 2014; 5 December 2014

JUDGE:

Philip McMurdo J

ORDER:

  1. The defendants are ordered to pay to the plaintiff the sum of $1,420,159.23. 
  2. The counterclaim is dismissed.

CATCHWORDS:

CONTRACTS – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE – where the plaintiff and defendant entered into a contract for the sale of an apartment “off the plan” and an additional contract for sale of furniture for the apartment – completion to be after registration of the relevant plan and creation of separate title for the apartment –– where the plaintiffs registered the plan, created a separate title and settlement became due – where the defendant refused to complete the contract, having purported to terminate – where the plaintiff claimed damages for breach of contract

CONVEYANCING – BREACH OF CONTRACT FOR SALE AND REMEDIES – VENDOR’S REMEDIES – DAMAGES – where the parties entered into a contract for the sale of an apartment “off the plan” and a contract for sale of furniture for the apartment – completion after registration of the relevant plan and creation of separate title for the apartment – where the plan was registered and settlement became due – where the defendant refused to complete the contract, having purported to terminate – where the plaintiff claimed damages for breach of contract – where the plaintiff agreed to contribute $23,350 towards the total cost of furniture and their claim was reduced by this amount to reflect the net value of the contract for the apartment – nominal damages claimed for non-performance of the furniture contract

CONVEYANCING – STATUTORY OBLIGATIONS OR RESTRICTIONS RELATING TO CONTRACT FOR SALE – PROTECTION OF PURCHASERS – OBLIGATIONS ON VENDOR: DISCLOSURE, WARNINGS AND LIKE MATTERS – where the parties entered into a contract for the sale of an apartment “off the plan” – proposed apartment identified on a plan – where the plaintiff was required to provide to the defendants prior to purchase, a written statement clearly identifying the lot to be purchased under s 21 of the Land Sales Act 1984 (Qld) (‘LSA’) – where the plaintiff was required to provide a s 22 statement rectifying information that subsequently became inaccurate contained within the s 21 statement – where the defendants pleaded a defence under s 25(1) of the LSA allowing a purchaser to avoid a contract if “materially prejudiced” by the inaccuracy of a statement provided under s 21 – defence not pursued at trial and no evidence tendered to prove the defendants were materially prejudiced

TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS – where the parties entered into a contract for the sale of an apartment “off the plan” – where the defendants alleged that the plaintiff engaged in conduct which contravened s 52 of the Trade Practices Act 1974 (Cth) ‘TPA’– where the defendants claimed they were induced to enter the contract and relied on misrepresentations made by the plaintiff that the views from the apartment would be unobstructed by any other building – where the defendants claimed relief under s 87 of the TPA

Building Units and Group Titles Act 1980 (Qld)

Land Sales Act 1984 (Qld), s 21, s 22, s 25(1)

Trade Practices Act 1974 (Cth), s 51A, s 52, s 53A(1), s 87

Uniform Civil Procedure Rules 1999 (Qld), r 189

Jones v Dunkel (1959) 101 CLR 298, cited

COUNSEL:

G Handran for the plaintiff

No appearance for the first or second defendants

SOLICITORS:

Hickey Lawyers for the plaintiff

The first defendant appeared on his own behalf

No appearance for the second defendant

  1. The plaintiff’s claim is for damages for the defendants’ non-performance of a contract for their purchase of an apartment in Surfers Paradise.  It was a contract for the sale of an apartment “off the plan” in a development described as Hilton Surfers Paradise Hotel and Residences.  The contract was to be completed after registration of the relevant plan and the creation of a separate title for the apartment.  The agreed price was $3,150,000.
  2. In August 2011, the plan was registered and a separate lot was created.  Settlement became due on 8 September 2011.  The defendants refused to complete the contract, having purported to terminate it on 12 July 2011. 
  3. There was also a contract between the parties for the sale of certain furniture for the apartment.  It became due for completion also on 8 September 2011.  The plaintiff claims nominal damages for the non-performance of that contract, suggesting that an award of $100 would be appropriate. 
  4. The claim for damages for breach of the contract of sale of the apartment is quantified as follows:
Contract price $3,150,000
Market value of the apartment on termination of the contract $1,650,000
  $1,500,000
Less deposit $    315,000
  $1,185,000
Less commission saved $      67,650
Amount claimed $1,117,350
  1. The defendants’ pleaded case raised essentially two defences.  The first was in reliance upon the then terms of s 25(1) of the Land Sales Act 1984 (Qld).  That defence was not pursued at the trial.  The second defence alleged that there was conduct which contravened the then provisions of s 52 of the Trade Practices Act 1974 (Cth) and by which the defendants were induced to enter into the contract.  By their counterclaim, the defendants pleaded that they should have such relief under s 87 of that Act as would avoid their loss from having entered into the contract. 
  2. When their case was pleaded, the defendants were legally represented.  But at the trial they were without representation.  Mr Hingston appeared at the trial, giving evidence and arguing his case.  Mrs Hingston did not appear at the trial.  The defendants have the same address for service.  The only explanation for her absence came from Mr Hingston who said that Mrs Hingston “couldn’t make it today”.[1]  At a time when the defendants were legally represented, the case was set down to be tried on 3 June 2014.  Mr Hingston unsuccessfully applied for an adjournment on 30 May 2014.  But on his application on 3 June 2014, I adjourned the trial to 16 September 2014.  There was then no appearance by Mrs Hingston.  On 16 September, the trial was adjourned to 23 September 2014.  Again there was then no appearance by Mrs Hingston. 

The plaintiff’s case

  1. At a time when the defendants were legally represented, the plaintiff served a Notice to Admit Facts on 11 March 2013, asking them to admit that the market value of the apartment as at September 2011 was $1,650,000 and that its value as at August 2012 was $1,450,000.  On 25 March 2013, the defendants’ solicitor replied, enclosing a notice which disputed those facts.  But later that day, the defendants’ solicitor wrote again, withdrawing that notice disputing facts which he explained by saying that he was mistaken as to his instructions.  The fact that the apartment was worth $1,650,000 as at September 2011 was thereby admitted.[2]
  2. The amount of the contract price and the deposit paid are not disputed.  The deposit was paid by an initial payment of $31,500 with the balance being provided by a bank guarantee.  The amount guaranteed was paid to the plaintiff’s solicitors on 28 September 2011.[3] 
  3. The defendants did not admit the component of the plaintiff’s claim which was the reduction in their favour for agents’ commission.  There is in evidence an invoice from Elfbest Pty Ltd, the agent which introduced the defendants for this contract, dated 1 August 2011.  When the contract was terminated in September 2011, the plaintiff had other agents, charging a lower rate of commission.  The plaintiff’s claim allows the defendants a reduction for the difference between the commission which was to be paid to Elfbest Pty Ltd and that which would have been payable to the other agents and on a sale price at the property’s then value of $1,650,000.  There was no case pleaded by the defendants which was to the effect that some reduction should be made in this respect but in a greater amount.  And at the trial Mr Hingston made no submission in that respect.  The plaintiff has conceded this reduction from its claim although, according to its written submissions, Elfbest Pty Ltd was paid.[4] 
  4. One other matter should be considered about the quantum of the plaintiff’s claim.  The contract for the sale of the apartment provided, by special condition 5, that the plaintiff agreed to contribute $23,350 towards the total cost ($46,700) of the furniture to be supplied under the furniture contract between the parties.  It was agreed that that sum would be paid by the plaintiff at settlement of the two contracts.  Therefore had the two contracts been completed, the defendants would have paid effectively $23,350 for the furniture.  That furniture was placed in the apartment before the contract was terminated.  But because there was no valuation evidence, I do not know whether the furniture has affected the value of the apartment according to the valuation upon which the plaintiff’s claim was formulated.  I must assume that the amount of $1,650,000 was the value of the apartment without that furniture.  Therefore, the comparison between the plaintiff’s position under the subject contract (for the sale of the apartment) had that contract been performed and its position upon termination of the contract requires the plaintiff’s claim to be reduced by $23,350, in order to represent the net value of the contract for the sale of the apartment. 
  5. As I have noted, there is no claim for substantial damages for breach of the furniture contract.  There is no evidence as to the value of the furniture. 
  6. Therefore, the claimed amount of the plaintiff’s damages is proved by a combination of admissions and evidence, except that there should be a reduction for that sum of $23,350.

Land Sales Act

  1. Before discussing the s 52 case for the defendants, something should be said of the defence which was pleaded in reliance upon the Land Sales Act.  Section 21 of the Act required the plaintiff to give to the defendants, before entering upon their purchase of a proposed lot, a written statement which, amongst other things, clearly identified the lot to be purchased.  Section 21(4) provided that where a prospective vendor was also required under s 49 of the Building Units and Group Titles Act 1980 (Qld) to give a statement in accordance with that section, it would be sufficient compliance with s 21(1) if the particulars were included in the s 49 statement.  Prior to the defendants entering into the subject contract, the plaintiff gave them a statement for the purposes of those two provisions.  It described the proposed lot by reference to a plan within the statement, which depicted the boundaries of the lots on the subject floor of the building.  The plan represented that the subject apartment would have an internal area of 166 square metres and two balconies of 19 square metres and 7 square metres respectively. 
  2. Section 22 of the Land Sales Act then provided that if a statement of particulars referred to in s 21(1) contained information that subsequently became inaccurate, it was the duty of the vendor to give a further statement as soon as was reasonably practicable after the proposed lot became a registered lot.  Section 25 then provided that where such a statement was given under s 22, the purchaser could avoid the contract if “materially prejudiced” by the inaccuracy of the original statement. 
  3. On 8 July 2011, the lot was registered.  Four days later, the plaintiff through its solicitors gave a statement pursuant to s 22.  It disclosed that the internal area had become 163 square metres, a reduction of three square metres, and that the area of the smaller balcony had been increased from seven square metres to eight square metres.  The locations of the balconies and of the apartment itself within this floor of the building remain unchanged. 
  4. The defendants pleaded that they were materially prejudiced by that suggested inaccuracy in the original disclosure statement.  They alleged that the “amenity of the Property” was “less desirable” and that its value was less for these changes.  They alleged that had the lot been described in the s 21 statement as it was in the s 22 statement, they would not have contracted to buy it.  They therefore claimed to be entitled to avoid the contract under s 25(1) of the Land Sales Act.  It is unsurprising that this defence was not pursued at the trial and that there was no evidence which was tendered in an attempt to prove that the defendants were materially prejudiced as they had alleged. 

The misrepresentation case as pleaded

  1. The case pleaded by the defendants is that there were several representations made to them by the plaintiff’s agents on the same day which they cannot identify but which was “on a weekend in early March 2008”.[5]  Their case is that there were representations made to them by Candice McGregor at the offices of Elfbest Pty Ltd on Orchid Avenue, Surfers Paradise.  They were then escorted by Ms McGregor to a nearby sales office or display centre which was being operated by the developer where there were representations made by unidentified “sales staff of the plaintiff”.[6]  In each case, the alleged representation was about the view which they could expect from the subject apartment. 
  2. The proposed building was to be known as “Orchid Tower”.  It was one of two buildings which were to be developed for the occupation, in part, of a Hilton Hotel.  The other building was immediately to the west of the Orchid Tower.  The proposed apartment was to be on the 52nd floor, where there would be three apartments.  This apartment was on the eastern side of the building. 
  3. The defendants pleaded that at the offices of Elfbest, they asked Ms McGregor about this proposed development, in the course of which she represented to them:

“18.2… that the views of the ocean from the Property facing East:

(a)would, when the Property was constructed, be unobstructed by any other building (First Representation);

(b)would be protected from being obstructed because the local council would not approve another building in front of the Project of such a height that it would obstruct the said views (Second Representation).”

  1. They pleaded that they were then shown a model of the project, “in which the views referred to in paragraph 18.2 above were not obstructed by any other building”.[7]  By that conduct, they pleaded, Ms McGregor represented to them “that the views of the ocean from the Property facing East would, when the Property was constructed, be unobstructed by any other building”.[8]
  2. They pleaded that on the same day, they were taken by Ms Gregor to a nearby sales office operated by the plaintiff where sales staff of the plaintiff showed them another model of the project “in which the views referred to in paragraph 18.2 above were not obstructed by any other building”.[9]  They allege that those staff represented to them “that the views of the ocean from the Property facing East could not be ‘built out’ (Fourth Representation)” and that these staff gave to them “brochures and concept drawings which showed that the views referred to in paragraph 18.2 above would, when the Property was constructed, not be obstructed by any other building”.[10] 
  3. They alleged that by that conduct of the plaintiff’s sales staff, the plaintiff represented to them “that the views of the ocean from the Property facing East would, when the Property was constructed, be unobstructed by any other building (Fifth Representation)”.[11] 
  4. They pleaded that they entered into the contract induced by those representations, which were misleading because they were representations as to future matters for which the plaintiff did not have reasonable grounds.[12]  They allege that the conduct involved in each of the five representations was in contravention of s 52 and that each representation was a false and misleading representation concerning the characteristics of the property, contrary to s 53A(1) of the Trade Practices Act
  5. They did not specifically allege that they suffered or were likely to suffer loss from those contraventions.  But they sought relief under s 87(1) of the Act, by which the contract would be declared to be void and the deposit refunded to them.  Having regard to the fall in the value of the apartment, which is proved by the plaintiff, it is clear that if the effect of the contract is not displaced, the defendants will suffer a loss to the extent of their liability to the plaintiff for damages for breach of that contract. 
  6. Each of those representations is denied by the plaintiff.  But as I will discuss, the plaintiff agrees that at least Mr Hingston had dealings with Ms McGregor about this contract and that Mr and Mrs Hingston also went to the plaintiff’s sales office at some stage where they spoke to the plaintiff’s representative, Ms Panagakos. 

The evidence

  1. The construction of the Orchid Tower was delayed by the appointment of administrators of the plaintiff in January 2009.  Work resumed in May 2009 and was completed in mid 2011.  The view from the subject apartment towards the east is obstructed by another apartment building, which is called “Soul”.  It is more than 70 floors in height and is about 100 metres to the east of the Orchid Tower with a frontage to The Esplanade.  The defendants’ case is that they would not have agreed to purchase this apartment had they thought that there would be such an obstruction to the view. 
  2. In evidence, there are photographs of the current views to the north, east and south from this apartment.  The views to the north and south are unobstructed.  Undoubtedly, the Soul building obstructs the view to the east.  I accept that the overall outlook from this apartment would be better without the Soul building and that probably the apartment would be more valuable with that entirely unobstructed view of the ocean. 
  3. The only evidence in the defendants’ case was from Mr Hingston.  His evidence in chief was given by a three page statement.  He was extensively cross-examined.  The plaintiff’s oral evidence was from Ms McGregor and Ms Panagakos.  Subsequently, I permitted the plaintiff to reopen its case to lead further evidence from Ms Panagakos, this time by affidavit, as I will discuss. 
  4. Mr Hingston’s evidence in chief as to the alleged representations was substantially in accord with his pleading.  He said that one weekend in March 2008, he said that the defendants entered the office where Ms McGregor worked and talked to her about the proposed Hilton development.  He referred to a model at that office which was “not just of the building, but also of the surrounds to the east showing the ocean”.  He says that the model showed “no buildings shown as obstructing the view of the ocean from the building”.  There was some discussion with Ms McGregor about the prices for the units, in the course of which Mr Hingston decided that the penthouses and sub-penthouses were outside his price range.  He then asked Ms McGregor:

“What are the best units still available, facing east with unobstructed views.”

adding:

“There’s not much use buying in this development if you lose your views.”

According to this statement, Ms McGregor replied:

“If you want unobstructed views, the best one remaining in unit 25202.  It is on the level below the penthouses and sub-penthouses.  If you get one that high in the building, your views will be safe.  The Council won’t approve another building in front of it at that height.”

  1. The defendants were then taken by Ms McGregor to a nearby office of the developer.  At that place, there were photographs as well as displays of rooms and, in particular, “photographs of the views which would be available from the rooms”, none of which showed “any obstruction of the views”.  At this office, Mr Hingston talked to the staff about the apartment which Ms McGregor had suggested and he was shown by them its location on a model of the Orchid Tower.  He said that this apartment “faced east and provided 180 degree views of the ocean”.  At that point, Mr Hingston says that he asked “[s]o is it correct that the views for this unit can’t be built out?” to which one of the sales staff present responded “[y]es, the views from this level can’t be built out”. 
  2. In his statement, he added that he was “given glossy brochures, concept drawings and links to internet sites to show what the views would be”, none of which showed any obstruction of the views from the building. 
  3. At that point, according to Mr Hingston’s statement, the defendants signed a document which was “effectively an offer to purchase” and provided a cheque for $5,000 as a “holding deposit”.
  4. Subsequently, contract documents were sent to the defendants’ solicitor.  The defendants signed the documents, paid the initial deposit and later provided the balance of the deposit by a bank guarantee.  Mr Hingston said that had it not been for the representations in relation to the views from the unit, he would not have agreed to buy it. 
  5. He said that at the time the contract was signed, there was no large building in front of the proposed Hilton building. 
  6. Again according to his statement, about a year or a year and a half later, the defendants were again at the Gold Coast and noticed that there was a building being constructed on what became the Soul site.  Mr Hingston said in his statement that this building was “then about 10 stor[eys] high”.  This prompted them to go again to the plaintiff’s display office where they asked one of the staff how high this other building was going to be and whether it would “impact on our views?”  They were told that it would not do so and that “[y]ou will be able to see the beach and the ocean over the top of it”. 
  7. Subsequently, according to Mr Hingston, the defendants visited the Orchid Tower building when they were invited as purchasers to inspect their apartment.  On that inspection, they found that the view of the ocean was “badly obstructed” by the Soul building and that they were looking into apartments within that building. 
  8. Although Mr Hingston’s statement referred to brochures and other material which he had received at the sales office, he did not tender such documents.  As the plaintiff’s case was conducted to the completion of addresses on the second day of the trial, no such brochure was tendered by the plaintiff.  I was then informed that the plaintiff had been unable to locate an example of the brochures which were used in February and March 2008.  However, subsequently the plaintiff applied to reopen its case to tender, by an affidavit of Ms Panagakos, examples of the brochures which had been used then.  The plaintiff does not seek to draw any assistance from the content of those brochures.  It emerged that the plaintiff was seeking to tender these brochures only to correct the record where it had been said that they were no longer available.  The further evidence was admitted, there being no apparent prejudice to the defendants. 
  9. There were two brochures which were then used.  There was one of about 10 pages and a more extensive brochure containing about 50 pages.  Both were available at the plaintiff’s sales centre in 2008.  Ms Panagakos said that it was her practice to give the shorter document to anyone who came to the display centre and to give the longer document only to people who were interested in apartments above the 49th floor or who had already purchased apartments.  It is likely that the defendants were given both documents. 
  10. Mr Hingston did not make any submission which was directed to the content of these two brochures.  But they are consistent with his evidence that the brochures which were given to the defendants did not show any obstruction of views from the building, at least from the height at which the defendants’ apartment would be situated.  The brochures contained images of the proposed two towers in the development superimposed upon photographs of this part of Surfers Paradise.  They showed no building between the Orchid Tower and the sea which would obstruct the views from the subject apartment.  These images clearly represented that if the built environment between the Orchid tower and the ocean remained as it was in these photographs, there would be no obstruction of the view from the subject apartment.  However, there was no text within these brochures which suggested that the locality would remain the same as depicted in those photographs and that, for example, there was some impediment to the development of that locality from the relevant planning laws.  On the defendants’ case, the representations to that effect were made orally, by Ms McGregor and by someone at the plaintiff’s sales office. 
  11. A number of documents which were tendered by the plaintiff showed that the relevant dealings with the defendants occurred over several days rather than upon the one day as Mr Hingston said in his evidence.  The first of those documents is a form described as a “Client Registration Sheet” which was completed by Ms McGregor.  It shows Mr Hingston (only) as the “client”, consistently with Ms McGregor’s recollection that it was Mr Hingston alone who came to her office and discussed with her the proposed development.  On this document, Ms McGregor recorded Mr Hingston’s contact details and that she had provided these details to “Michelle” (who was Ms Panagakos).  She recorded that Ms Panagakos was “calling re:  $5,000 deposit”, meaning that it was Ms Panagakos who was to contact Mr Hingston about the deposit.  Ms McGregor subsequently recorded that this $5,000 deposit had been paid on 11 March 2008.  This was prior to the contract being signed.  The so called deposit was to secure some priority over other prospective purchasers in the negotiations. 
  12. On the same document, on 13 March 2008 Ms McGregor noted that she had spoken to Mr Hingston saying that she had sent to him the “E pack”, which was some material about the development.  On 19 March 2008, she made a further note on this form, recording her conversation with Ms Panagakos about Mr Hingston’s proposed purchase. 
  13. On 19 March 2008, Ms McGregor faxed to Mr Hingston a copy of the floor plan for the proposed apartment.  That appears from the fax imprint on the copy of that plan.[13]
  14. A further document records that both defendants went to the plaintiff’s display centre on 22 March 2008.  Ms McGregor and Ms Panagakos recalled that Ms McGregor then introduced them to Ms Panagakos at the display centre. 
  15. There is a further document, headed “Client Follow Up Procedure”, on which Ms McGregor made a series of notes from 25 March 2008 to 4 June 2008.  They are consistent with her evidence that she had a number of conversations with Mr Hingston prior to the contracts being signed of a kind to be expected between a vendor’s agent and a purchaser.  There is no reference in them to any discussion about views.  The discussions after the contracts were signed, as there noted by Ms McGregor, were for the most part in relation to the payment of the deposit required by the contract.
  16. It therefore appears that Mr Hingston is mistaken in his recollection about his first meeting with Ms McGregor.  He was alone when he first spoke to her at her office and that occasion was in February and some weeks prior to both defendants being in the display office.  These inaccuracies are of some significance in the assessment of his evidence.
  17. Ms McGregor described the model which was at her office.  She said that it was “pretty much the same” as that which was at the plaintiff’s display centre (except that it was bigger than that in her office).  There are photographs of the model at the centre.[14]  Contrary to Mr Hingston’s evidence, that model at the display centre did not depict the built environment between the Orchid Tower and the ocean.  It was a model of the two towers of the development on effectively only its own site.  There is no real likelihood that, contrary to Ms McGregor’s evidence, the model at her office showed more of the surrounding locality than that at the display centre.  Therefore, I find that the models at both offices did not suggest that the views would be unobstructed. 
  18. When cross-examined, at one point Ms McGregor appeared to concede that she had been asked by Mr Hingston in her office to identify units which had unobstructed views.  That was the answer she gave in the highlighted part of this passage:[15]

“So if someone comes in and they want a unit with unobstructed views, which ones would you have suggested to them?---I wouldn’t have.  I would’ve taken them to the Raptis display centre.

Did you know which ones had unobstructed views?---No.

You didn’t.  So you hadn’t been around the Soul building and looked at their display to see that that building was going to be 77 stories high and therefore anything built behind it wouldn’t have obstructed views?---Sorry, what was the question?

You said you didn’t know whether the views would be obstructed or not.  So - but you did know that there was a building going up in front of it?---I - I believe you asked me which units had unobstructed views so - and I didn’t know that information.  As for Soul, yes, I had been into their display centre.

So you knew that any building - any apartment facing east to the water would have an obstructed view?---Well, Soul was going up in front of the Hilton.

That’s right?---Yes.

So you knew it would have an obstructed view?---Well, Soul was going up in front of the Hilton, so, yeah.

Okay.  Well, I put it to you that you - - -?---Youd be able to see Soul in front of the Hilton.

I put it to you that you did know that any units facing the ocean would have obstructed view because the Soul building was going up in front of it.  Did you convey that message to any of your buyers or me?---I was never asked that question.”

In context, particularly when read with the final answer in that passage, Ms McGregor was not conceding that she had been asked that question in her office.  Rather, the highlighted answer was a reference to the question she had been asked a few lines earlier in that passage.

  1. Ms Panagakos recalled speaking to Mr Hingston by telephone and meeting Mr and Mrs Hingston at the display centre.  She was asked whether on any of those occasions, she spoke about “uninterrupted views”, to which she answered:

“No.  He wanted to know that he could see the coastline, basically, the coastline of the - from east - sorry - from north to south.  And that’s exactly the case; this apartment faces direct east and you can look north to south.”

She said that he did not ask at any stage whether the views of the coastline “could not be built out”.[16]

  1. In cross-examination, Ms Panagakos described the views from the apartment today as “[a]bsolutely stunning” and that apart from the Soul building, “[i]t’s all unobstructed”.[17]  Her evidence tended to confirm what would be expected, which is that she would not have been reluctant to promote the merits of this apartment by her descriptions of the likely views from it.  Still the question is whether either she or Ms McGregor said something to the effect that nothing would be built which would obstruct those views to any extent.
  2. One circumstance which affected the likelihood of the alleged representations was that construction of the Soul building had begun by February/March 2008.  In evidence are photographs of the Soul site as at 5 February 2008, some of which show signage on the boarding facing The Esplanade which informed passers-by that this was the site of a building, to be completed in 2010, and which would be “rising 77 levels above Cavill Avenue and The Esplanade”.[18]  The signage directed those interested to a display centre for this development in Cavill Avenue.  Mr Hingston admitted that he saw that boarding.[19]  He said that “[t]hey were demolishing the shops that had been there for years as far as I could see but it was all boarded off and I didn’t take much notice of it because there’s always things going on around the country.  I just didn’t take much notice of what was happening … You couldn’t see into the site and you couldn’t - it didn’t tell you what it was.  It was just construction work”.[20]
  3. Mr Hingston denied that he read an article in The Australian, published 1 March 2008, which described the Soul development as having 77 storeys. 
  4. It is not inherently probable that he read that newspaper article.  But it is surprising that when he was attracted as a passer-by to the office of Ms McGregor and its promotion of the Hilton development, he apparently overlooked the Soul development.  It would be remarkable if, as he appears to suggest, he decided to purchase an apartment off the plan at the price of more than $3 million without giving any consideration to what was otherwise available in the same market.  According to his evidence, this was not his first investment in real estate, which again suggests the likelihood that he would have conducted some research of the market.  But most importantly, he recalls walking past the boarding on the Soul construction site but offered no credible explanation for how he could have overlooked the potential impact of that development upon the apartment which he proposed to purchase. 
  5. The obviousness of the Soul development with its proposed height is significant here in two ways.  The first is that it affects the likelihood that the defendants were in truth misled by the representations which are alleged by them, if those representations were made.  The second is that it affects the likelihood that the representations were made.  Of course it is not unknown for representations to be made, in the promotion of real estate, which would be obviously false to an alert prospective purchaser.  But the obviousness of the circumstances of the Soul development tend to make it less probable that either Ms McGregor or Ms Panagakos made the alleged representations. 
  6. The absence of Mrs Hingston as a witness was not satisfactorily explained.  Her absence is the more remarkable for the fact that she is a defendant and a counterclaimant.  On the defendants’ pleaded case, Mrs Hingston was a participant in each of the critical conversations.  The evidence of Mr Hingston was always going to be strongly challenged.  In these circumstances, it should be inferred that Mrs Hingston’s evidence would not have assisted the defendants’ case.[21]
  7. The brochures which must have been given to the defendants did not depict the Soul development.  But it is another thing to say that they represented that there could not be a development in the locality which could affect the defendants’ views. 
  8. It is inherently likely that none of the three witnesses has a precise recollection of what was said in any of the relevant conversations.  The imprecision of Mr Hingston’s evidence is demonstrated by its inconsistency with the contemporaneous documents.  And it would be unrealistic to expect either Ms McGregor or Ms Panagakos to precisely recall the words of their conversations in circumstances where this was one of many sales or potential sales within this development.  Most probably each of the agents made statements which promoted the apartment by reference to its views.  Ms McGregor suggested that her role was not that of a seller’s agent acting in the normal way and that instead, her task was to simply direct interested persons to the display centre.  That is difficult to accept.  In her office there was material, including a model, which depicted and promoted this development.  And importantly her employer was entitled to a commission of three per cent of the sale price under its agreement with the plaintiff.[22] 
  9. But the defendants must go further than proving that the views were represented as something such as exceptional or “stunning”.  The essence of their case is that they were told that there could be no development in the locality which would obstruct the views of the ocean from their apartment.  Ultimately, I am not satisfied that such a representation was made.  In particular, I am not satisfied that it was represented that there was some legal impediment to the construction of a building which would have that effect. 
  10. The agents knew or believed that Mr Hingston was an experienced property investor.  This makes it even less likely that either of them would have provided the alleged assurances about views when there was such a small prospect that those assurances would be accepted as credible.  After all, the locality was central Surfers Paradise with very many high rise buildings.  There is nothing suggested by the evidence which might have caused a buyer to think that there had been some recent change in the planning laws, such that a nearby building could not be constructed to the height of that which was to be constructed to include their apartment.  And as I have already noted, the obviousness of the Soul development makes it more unlikely that the alleged representations were made. 
  11. A further circumstance which is adverse to the defendants’ case is that no complaint was made by them until close to the due date for settlement of the contract, when the height or likely height of the Soul building, as it emerged from the ground, must have become obvious at least by 2010. 

Conclusion

  1. The outcome is that the plaintiff’s claim succeeds and the counterclaim fails.  According to my reasoning above at paragraph 10, damages should be assessed in the amount of $1,094,000. 
  2. Clause 15.6 of the contract provided that the defendants should pay interest at the rate of 15.6 per cent on “any money payable by [them] under the contract”.  The plaintiff claims interest at that rate on the amount which should have been paid at settlement (which the defendants do not dispute was $3,146,095.90[23]) from the date of settlement until the contract was terminated by the plaintiff on 22 September 2008 (a total of 14 days).  That interest amounts to $18,100.83.  The plaintiff claims interest from 23 September 2011 until the date of judgment at the prescribed rates for default judgments, on the amount of the assessed damages.  I am persuaded to award interest on that basis from the termination of the contract (as well as the interest under the contract in the sum of $18,100.83).  The interest at the prescribed rates on that sum of $1,094,000 from 23 September 2011 to the date of this judgment amounts to $308,058.40. 
  3. Therefore, the defendants will be ordered to pay to the plaintiff the sum of $1,420,159.23.  The counterclaim will be dismissed.

Footnotes

[1] Transcript 1 - 2.

[2] Uniform Civil Procedure Rules 1999 (Qld), r 189.

[3] Exhibit 3, tab 35.

[4] Written Submissions, para 91, footnote 72.

[5] Counterclaim, para 18.

[6] Counterclaim, para 22.

[7] Counterclaim, para 19.

[8] Counterclaim, para 20.

[9] Counterclaim, para 22.1.

[10] Counterclaim, paras 22.2, 22.3.

[11] Counterclaim, para 22.

[12] In reliance upon s 51A of the Trade Practices Act 1974 (Cth).

[13] Exhibit 3, tab 5.

[14] Exhibit 3, tabs 36 and 37.

[15] Transcript 1 - 75.

[16] Transcript 2 - 7.

[17] Transcript 2 - 30.

[18] Exhibit 2.

[19] Transcript 1 - 26.

[20] Transcript 1 - 26-27.

[21] Jones v Dunkel (1959) 101 CLR 298.

[22] Exhibit 3, tab 26.

[23] Exhibit 3, tab 25.

Close

Editorial Notes

  • Published Case Name:

    Orchid Avenue Pty Ltd v Hingston & Anor

  • Shortened Case Name:

    Orchid Avenue Pty Ltd v Hingston

  • MNC:

    [2015] QSC 42

  • Court:

    QSC

  • Judge(s):

    McMurdo J

  • Date:

    06 Mar 2015

Litigation History

No Litigation History

Appeal Status

No Status