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Elan Boulevard Pty Ltd v Fnyn Investments Pty Ltd


[2016] QSC 123





Elan Boulevard Pty Ltd v Fnyn Investments Pty Ltd & Ors [2016] QSC 123






(first defendant)
(second defendant)
(third defendant)


Brisbane No 1539 of 2012


Trial Division


Civil Trial


Supreme Court of Queensland at Brisbane


9 June 2016




3 & 4 May 2016


Boddice J


I will hear the parties as to the form of the orders and costs. 


TRADE AND COMMERCE – COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION – CONSUMER PROTECTION – MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS – PARTICULAR CASES – REAL ESTATE TRANSACTIONS – where the first defendants contracted with the plaintiff for the purchase of two apartments – where the first defendant terminated the contracts prior to settlement – where the defendants allege that the plaintiff, through its agent, made statements to a third party – where the defendants allege those statements were subsequently communicated to the second defendant by that third party – where the defendants allege the statements were about the expected profit on the apartments and the availability and terms of finance for the purchase – where the defendants allege those statements were false and concerned future matters – whether the plaintiff’s agent made the alleged statements – whether the statements were relied upon by the defendants – whether the plaintiff’s agent knew or ought to have known the alleged statements would be communicated to the second defendant

CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCEALLANEOUS CONTRACTS AND OTHER MATTERS – where the plaintiff claims interest on the purchase price of the apartments at the contractual interest rate of 15%, from the date of settlement to the date of judgment – where the plaintiff is entitled to the contractual interest rate on any judgment sum obtained against a purchaser – whether the plaintiff is entitled to interest at the contractual interest rate up until the date of judgment, or only until the termination of the contracts

Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Limited (2015) 89 ALJR 990; [2015] HCA 37, applied

Juniper Property Holdings No 15 Pty Ltd v Caltabiano (No 2) [2016] QSC 5, approved


G Handran for the plaintiff

A Greinke for the defendants


Hickey Lawyers for the plaintiff

Rostron Carlyle Solicitors for the defendants

  1. The plaintiff was the developer and vendor of apartments in the Hilton development at Surfers Paradise in the State of Queensland.  The first defendant purchased two “off-the-plan” apartments in the Hilton development.  The second and third defendants are directors of the first defendant.  Each guaranteed the first defendant’s obligations. 
  2. The plaintiff claims damages against the first defendant, for breach of contract, and against the second and third defendants for recovery of the outstanding monies pursuant to guarantees given by each of them.  The claim arises out of the two written contracts of sale for apartments “off the plan” and the two furniture contracts entered into in relation to the apartments (four contracts in total). 
  3. By counterclaim, the defendants claim relief under s 87 of the Trade Practices Act 1974 (Cth) (the “Act”) on the ground of misleading and deceptive conduct by the plaintiff through its sales consultant, Jamie Ogilvy.  It is alleged Ogilvy made misleading and deceptive representations to a third party, Yunus Omar, who passed on those misrepresentations to the second defendant, as a consequence of which the defendants entered into the contracts.  The defendants plead they should be compensated for: losses suffered as a result of having entered into the contracts; and the deposit sums paid by them in respect of each of the four contracts. 
  4. Subject to determination of their counterclaim, the defendants admit the plaintiff’s claim.  At issue in the trial is whether Ogilvy made the alleged misleading and deceptive statements, whether the defendants relied upon those statements in entering into the contracts and whether at law representations made to Omar can sustain the defendants’ claim for relief. 


  1. In their defence and counterclaim to the third further amended statement of claim, filed on 3 May 2016, the defendants allege:
  2. Ogilvy was a real estate salesperson employed by (or on behalf of) the plaintiff to act as a sales consultant in relation to the sale of lots within the Hilton development;
  3. Ogilvy acted with the plaintiff’s authority, with respect to the sale of lots within the Hilton development;

(c)Ogilvy met with Omar and his wife at a sales office in early 2008;

(d)at this meeting made one or more of the following oral representations to Omar, as a potential purchaser of a lot in the development:

(i)finance (including for foreign purchasers) was available for 80% of the purchase price of an apartment;

(ii)such a loan would be fully funded by rental income from the apartment;

(iii)within 12 months the value of an apartment would increase by at least 10%;

(iv)a buyer would be able to sell an apartment before settling and make a profit;

(v)the deposit monies for an apartment would be recouped with a profit.

(e)following this meeting, Omar repeated the representations made by Ogilvy to the second defendant;

(f)the representations were representations with respect to future matters, within the meaning of s 51A of the Act;

(g)the plaintiff, whether by itself, its agents or Ogilvy, did not have reasonable grounds to make the representations;

(h)the representations are taken to be misleading by operation of s 51A(1) of the Act;

(i)Ogilvy’s conduct in making the representations was in trade or commerce;

(j)by operation of s 84(2) of the Act, and because Ogilvy acted with the plaintiff’s authority, Ogilvy’s conduct in making the representations is to be taken as conduct also engaged in by the plaintiff;

(k)the conduct of the plaintiff in making the representations was conduct in trade or commerce and misleading and deceptive and therefore contravened s 52 of the Act;

(l)in reliance upon or caused by one or more of the representations, the defendants entered into the apartment and furniture contracts and the guarantees;

(m)by reason of the plaintiff’s conduct the defendants have suffered and are likely to suffer loss and damage in that but for the representations they would not have entered into the contracts and would not have paid the deposit monies.

  1. By way of reply filed 3 May 2016, the plaintiff:

(a)denied Ogilvy made the representations;

(b)denied Ogilvy had authority to make any such representations;

(c)said that before entering into the contracts each of the defendants knew of limitations contained within those contracts such that any representations made could not be operative;

(d)said that even if Ogilvy made the alleged representations, those representations were made to Omar only as a potential purchaser of lots in the development on his own behalf and were not made to Omar for use by him in the promotion or sale of other lots in the development, or for communication to other prospective purchasers;

(e)denied any representations were made in trade or commerce and were in respect of future matters;

(g)denied that the defendants relied on the said representations because the defendants acknowledged there had been no such representations in the contracts themselves.


  1. In November 2007, the plaintiff was marketing the sale of apartments in a proposed development at Surfers Paradise known as the Hilton Development.  One of its marketing agents was James Ogilvy.  The marketing included large advertising in media publications in Queensland and elsewhere in Australia.  The development attracted widespread interest and apartments sold quickly. 
  2. In late December 2007, the second and third defendants travelled to the Gold Coast from South Africa to attend a family wedding.  Among the guests was a friend, Yunis Omar.  Omar said a relative of his wife mentioned the Hilton Development shortly after the wedding.  That person recommended they consider purchasing one of the apartments as they would be a good investment. 
  3. Omar went to the Gold Coast with his wife the next day.  He spoke to Ogilvy at the Hilton sales centre.  Ogilvy showed him a model of the development and gave him details of the apartments that were available for sale.  Omar and his wife chose a particular apartment and paid a deposit of 1%.  They viewed a video of the appearance of the apartments upon completion.  In the ensuing days, Omar and Ogilvy had a number of conversations.  Ogilvy provided Omar with contract information sheets for a number of apartments in the development. 
  4. Omar said during his discussion Ogilvy told him the apartments were good value apartments.  They would be the only five star apartments in Surfers Paradise.  The development was going to be managed by the Hilton company.  There were lots of buyers for the apartments, especially Russian buyers.  The prices were going up rapidly, and had gone up by $10,000 to $15,000.  They were a good investment and the returns would be good.  The occupancy rate on the Gold Coast was 80% to 90%.  As a result, a purchaser would be able to pay the mortgage off very comfortably.  Ogilvy also said a purchaser would make at least 10% profit on the purchase price upon completion of the apartments. 
  5. Omar said Ogilvy asked him if he knew of any other buyers from South Africa who would be interested in purchasing an apartment.  Omar replied there were quite a few visitors in Queensland.  He said he would talk to them about the apartments to see if they were interested in any apartment.  Omar went and spoke to other wedding guests.  Those guests included two close friends, the second defendant and Zac Osman.  That discussion took place a day or two after Omar’s discussion with Ogilvy, when the second defendant and his wife came to visit Omar at his home.  Osman was also present at that discussion. 
  6. Omar told the second defendant and Osman that he had purchased one of the apartments.  He said it was a good investment.  Omar said they would make their money after its completion and should look at purchasing apartments in the development.  Omar said Ogilvy had told him when the apartments were completed you would be able to sell them and you would make money out of the apartment.  He also told them that Ogilvy said there were quite a few Russian buyers, that there were lots of buyers and that Ogilvy could organise 80% finance from a finance broker for foreign buyers. 
  7. Omar gave the second defendant and Osman details of the available apartments.  Each of the available apartments were north east facing, on high levels and were situated quite well.  The second defendant and Osman each agreed to buy apartments.  Omar said after this discussion he spoke to Ogilvy about the apartments.  He was also in regular contact with the second defendant and Osman in relation to the purchase of the two apartments.  Omar arranged for a solicitor, Rafic Sabdia, to act on behalf of the defendants.  He knew Sabdia and suggested the defendants use him as their attorney. 
  8. Omar gave all necessary instructions to Sabdia in relation to settlement of the contracts.  Sabdia sent the contractual documentation to the second defendant in South Africa for signature.  Omar said at one point there appeared to be a delay in the return of the contracts back from South Africa.  Ogilvy told Omar he had other buyers for the apartments and he needed the documents back.  Omar spoke to the second defendant and Osman to expedite the return of the finalised contracts. 
  9. Omar said Ogilvy subsequently introduced him to other agents involved in selling the Hilton Development, including Angela Petropoulos from Global Prestige Realty.  Ogilvy asked Omar to travel to South Africa to market the remaining apartments.  Ogilvy suggested Petropoulos go with Omar.  A promotional trip to South Africa was organised by Omar and Petropoulos.  Omar at one point raised with Ogilvy the prospect of a commission being paid to Omar.  Ogilvy refused to pay any commission. 
  10. Omar denied he had met Petropoulos as early as 4 January 2008.  Omar also denied approaching her for the payment of a commission for introductions he made in respect of the development.  He agreed he introduced a number of South African purchasers of apartments in the Hilton Development.  He denied he reached an agreement with Petropoulos that he would receive substantial commissions for introducing South African buyers to the Hilton Development.  He denied ever receiving any commissions or other monies from her real estate firm, Global Prestige, either by cheque payable to him or any other company. 
  11. Omar denied receiving commissions from Global Presitage well in excess of $200,000.[1]  He also denied receiving commissions in excess of $40,000 for the two apartments purchased by the first defendant.  He assisted others in arranging the contracts because they were his friends.  He did it “out of love”.[2]  He denied he saw it as an opportunity to make money out of his friends and associates.  He denied sacrificing some of his commission in order to achieve a sale.  He denied discounting prices in order to achieve contracts. 
  12. Omar agreed that shortly prior to the commencement of the trial he telephoned Ogilvy seeking the contact details of Petropoulos.  Omar said it had nothing to do with the trial.  Omar said he learned late last year that Angela had commenced a cleaning business.  He did not know the name of the cleaning business.  He telephoned her to give her cleaning work for his apartments in the Hilton Development and to put her onto other Gold Coast accommodation services. 
  13. Omar initially said he left a message but did not speak to Petropoulos.  In cross-examination, Omar accepted Petropoulos had telephoned him on 24 April 2016 in response to his message.  They had a conversation about her cleaning business and he gave her contact details.  Omar denied giving deliberately false evidence.  He said he was under the impression he was being asked about the matters the subject of the Court proceeding.  He was “not covering my tracks”.[3]  He denied asking Petropoulos anything about Hickey Lawyers (the plaintiff’s lawyers) during that telephone conversation. 
  14. Omar said during this telephone conversation Petropoulos raised the South African apartments and in that context said Hickey Lawyers were calling her.  She did not tell him anything else about it.  He denied that in that conversation he had a general conversation asking what she was doing for business. He denied she told him about her cleaning business in that conversation.   He said he already knew she had a cleaning business.  Omar said he spoke to her about his Hilton apartments and gave her the name of a colleague with an accommodation business. 
  15. Omar agreed he continued to have a friendly relationship with Ogilvy.  He agreed he continued to refer friends or associates to Ogilvy.  He agreed he had never raised a complaint, orally or by email, with Ogilvy that he had misled him in respect of the Hilton Development.  Omar said he did not consider Ogilvy had misled him.  He had given him information in good faith, in circumstances where shortly thereafter the global financial crisis had caused the market to crash. 
  16. Omar accepted there was no written documentation containing the representations he said were made by Ogilvy.  Omar said Ogilvy had sent him emails, in which he had recorded the proposition of capital growth of 10% and finance.  Omar could not produce those emails.  Omar said due to a computer problem in 2012, all of the emails were lost.  He agreed that prior to settlement he had received information that the values of the apartments in the Hilton Development were 30% below the contract price.[4]  He did not raise with Ogilvy in any email that he had told them the prices would be increased by 10%.  Omar said the global financial crisis had hit and everything “was knocked down 30%”.[5]  Omar said nobody knew what was going to happen in the world.  If he had known the value of the apartments would drop by 30% he would not have bought the apartments and would not have told his friends to buy the apartments. 
  17. Omar accepted he had received documentation setting out the risks and returns of his investment in the Hilton development.  He knew there was no guarantee as to the return on his investment as “nobody knew what’s going to happen”.[6]  He also knew the rent that would be achieved was nowhere near enough to fund any finance for the purchase of the apartments.  He agreed that when it came to settlement of his apartment he sought a discount on the purchase price in order to complete his contact.  Omar agreed he had been involved in helping others in respect of litigation against the plaintiff.  He had introduced his sister-in-law to the development and assisted her when the plaintiff sued her for failing to complete that contract.  That contract was defended on the basis her signature was a forgery. 
  18. The second defendant, who at the commencement of his evidence referred to himself as a retired businessman, accepted in cross-examination he had considerable experience in business before January 2008, including experience in property investment and development.  He was still engaged in property investment and development.  He was not working full-time in that field as he was a parliamentarian in the National Council of Provinces in South Africa.  He had a number of positions in Parliament consistent with his business experience.
  19. The second defendant gave evidence that he travelled to Australia with his wife in late December 2007 to attend a family wedding.  Prior to returning to South Africa in early 2008, he had a discussion with Omar, who was a good friend.  The second defendant’s brother-in-law, Osman, was present for this conversation.  Omar told them about the Hilton development in Surfers Paradise.  He was adamant it was a very good investment.  Omar said he had purchased a unit and had sold a few to other South African friends.  Omar thought they should not miss out on the opportunity.
  20. The second defendant said Omar told him the units were selling very, very fast, that it would be a great return on his investment as the Hilton Group was involved, that the prices were going up and that he could not hold the prices any longer.[7]  Further, the rental income would exceed the repayments of the loan and there was a pre-approved loan for 80%-90% of the purchase price.  Omar said if they purchased two units, they could sell one unit before taking transfer.  According to Omar “the price was already going to go up by $20,000 immediately and … the units would increase by a minimum of 10% within 12 months.”[8]  The profit could be off-set against the purchase price for the second unit if the first unit was sold by them.  The second defendant, who was not shown any documents or brochures (although he recalls a brochure being in the house that evening), decided to buy into the development.  It sounded like a very attractive investment and he could sell them without having to settle on them. 
  21. The second defendant said Omar introduced him to a solicitor, Sabdia, who took care of the legal aspects of the purchase.  The second defendant never met or spoke to Sabdia.  Contract documents were couriered to him in South Africa.  The documentation was bulky and had tag stickers where he was to sign.  There was huge pressure to return the contracts.  The huge volume of documents were all tagged and he assumed they had been taken care of so he did not read or peruse the documents in detail.  He also did not read the accompanying letter from Sabdia.  He signed various parts of the documentation where there were tagged. 
  22. The second defendant accepted he and his wife had initialled a clause to the effect that they had not relied on any statements or representations made by anyone prior to entering into the contract other than that contained in the product disclosure statement.  The second defendant said he did not read the clause prior to initialling beside it.[9] 
  23. The second defendant said he definitely intended to dispose of one unit so the profit could be used to offset against the price of the second unit.  He understood there was 80% pre-approved finance available to purchase the second unit.  The second defendant said if he had not been told the price of the units would go up by 10%, he would not have purchased the apartment.  Similarly, if he had not been told the rental income from the units would cover the loan repayments, he would not have purchased the apartment. 
  24. The second defendant said he spoke to Omar about the apartments prior to the date for settlement.  He felt Omar had misled him.  He wanted to understand why the apartments were not worth their purchase price.  Omar said the market had changed, the value had dropped and there was not much he could now do about it.  Omar suggested they secure the two apartments and wait for the market to return.  The defendants did not have the monies to settle.  The second defendant did not take any steps to seek to access finance in order to settle on the apartments.  He also did not seek to sell the apartments prior to settlement. 
  25. The second defendant agreed he had never made a written record of his discussions with Omar.  He described the discussion as a “sales pitch”.[10]  The second defendant said if he had had to complete in respect of either property before he had sold the property he would have required finance.  Omar never gave him any details about the pre-approved finance.  There was no discussion about who, how or what.  The second defendant did not have much understanding about what would have been the rental return.  He had not seen any documents or marketing material in relation to rental return, and he did not ask for any such documentation.  The rental income was not important to him because he intended to sell the apartments prior to settlement. 
  26. The second defendant accepted the original defences filed on his behalf asserted that he and his wife signed as directors, not as guarantors.  The original defences also listed representations different to those in the defence relied on at trial.  The representations in the original defence contained matters such as the high standard of development and quality and did not mention representations of the kind now sought to be relied upon by the defendants.  The second defendant said the defences were filed without having an opportunity to consider them and that instructions were given by Osman to Omar.  The second defendant was never in touch with Omar personally. 
  27. Razak Osman, a company director living in South Africa, also attended the family wedding in late December 2007.  He was a family friend of Omar.  Osman became aware of the Hilton Development a few nights before he was due to depart back to South Africa when Omar mentioned it very casually.  Omar said he had influence with “Jamie”, one of the people in sales and marketing.  Omar said he had secured only a number of apartments so he was offering them only to close friends and family. 
  28. Osman said shortly before he was due to leave Brisbane he called into Omar’s home to bid farewell.  The second defendant and others were present at that time.  Omar discussed the Hilton Development.  He said it was an excellent investment from a financial point of view.  The apartments would definitely increase in value at least 10% in the first year.  Other South Africans had reserved apartments in the development.  Omar made no written record of the conversation which took place over 15 to 20 minutes. 
  29. Osman said during this conversation, Omar suggested the second defendant and Osman purchase two apartments.  Omar said there was such a high demand from Chinese and Russian investors that the development would be totally sold out within 12 months and they would be able to easily sell their apartment at a higher price.  He explained they would be putting down $200,000.  Within the first 12 months, they could sell one apartment and he could guarantee they would make 10% on the sale of that apartment.  Once they sold the first apartment they could have their deposit on that apartment returned plus the profit of $100,000 so that the $200,000 they were investing was only for 12 months.  The income from the second apartment would more than cover the repayments on the mortgage.  Omar and Jamie would take responsibility for selling the apartment on their behalf. 
  30. Osman said Omar also said finance was pre-approved so the risk was negligible.  Omar said that he had done a pre-approval with a financial bank for all buyers to qualify for the finance.  The finance was to be for 80% or 90% of the purchase price.  It would be a prime interest rate.  Omar said the occupancy levels were very high, like 70% to 80%.  Omar said there was a percentage charge payable to Hilton for their management of letting the rooms out but even after payment of expenses there would be sufficient income to cover the repayments on the mortgage.  Osman made no enquiries about the finance terms or the financier.  He accepted Omar’s word that the return would cover the mortgage. 
  31. Osman decided to proceed with the transaction.  One of the units purchased by the first defendant was to be his unit.  Omar arranged an attorney, Sabdia, to take care of everyone’s transactions.  Osman received a number of telephone calls from Omar in relation to the development.  At one point Osman was sent contractual documentation.  Omar told him the price of the apartments was increasing very rapidly, with prices up to $20,000 more for the same apartment, and that unless they moved very quickly they would lose the transaction.  Omar sent him an email on 10 March 2008 which said “Jamie from Hilton is putting pressure on us to have those contracts signed and backed to him.”[11]  On that same day, Omar forwarded to Osman two emails from Ogilvy.  Those emails provided that unless signed contracts were received from the defendants, the apartments would be put back on the market. 
  32. Rafic Sabdia undertook the legal aspects of the purchase of the apartments by the first defendant at Omar’s request.  Omar had been a good family friend.  He acted for other South Africans introduced by Omar.  He did not have any direct dealings with the second or third defendants in relation to the contractual documentation.  He took instructions from an accountant, Yusuf Hussein.  Sabdia forwarded the contractual documentation to South Africa for signature by the second and third defendants.  The contracts were returned to him signed, through Hussein’s office. 
  33. Sabdia said at one point he received instructions from Omar in relation to other contracts for South Africans asking for an extension of the date for settlement.  Sabdia was also involved in seeking an accountant’s advice as to the prospects of negotiating a price reduction on behalf of the buyers to assist with settlement.  That negotiation did not proceed having regard to the large costs associated with obtaining that advice.  He understood Omar was having discussions with the developers behind the scenes.  Omar did not ever mention to him representations made by the developers. 
  34. Jamie Ogilvy, an experienced real estate agent, was working for the developer marketing the Hilton project.  He had been involved in sales of other off-the-plan projects.  The Hilton Development was launched in or about November 2007.  The launch involved extensive public relations locally and nationally.  There were cocktail parties.  The development was well received with the sales office being exceptionally busy. 
  35. Ogilvy said initially the sales team were paid a retainer and a fairly small commission of around half a percent of the total value of the sale.  The commissions were split equally amongst the sales people in the office to ensure the sales people were not buried in agents asking for information and questions on the project.  Ogilvy said prior to the official launch of the development there was some general training.  However, agents were only briefed on the product itself shortly before the launch so as to keep it secret. 
  36. Ogilvy said the first few months of the Hilton development release was “an insane time”.[12]  Five hundred to one thousand people would come through the door.  As a consequence, the sales team were not in a position to even set targets.  Sales staff did not receive bonuses in relation to the sales, apart from the 0.5% commission equally split between the eight sales staff.  Ogilvy also was receiving a retainer of $1,000 per week. 
  37. Ogilvy said outside agents were also engaged to promote the product.  They received a commission for any sales undertaken by that agent.  One such agent was Global Prestige Realty.  The principal of that agency was Angela Petropoulos.  Outside agents, including Global Prestige Realty, were paid a 2% commission and a marketing fee of 1%, with half being paid initially and half when they actually settled. 
  38. Ogilvy prepared guidelines for outside agents in relation to the presentation of the project.  Hilton Hotel Group was strict in the way the project was to be marketed having regard to the Hilton name being attached to the project.  There was to be no discussion as to certain terms.  The guidelines were developed to ensure outside agents knew that Hilton did not want returns being discussed with potential purchasers.  Ogilvy considered it easier to have written guidelines to hand them to an outside agent.  The guidelines were drafted only a day or two after the release of the project.  Ogilvy said that he did not discuss capital growth with potential purchasers on any project he worked on.  He did not make predictions.  However, in the case of the Hilton development it was specifically written into the contract not to make predictions on terms or as to capital growth and resale value.  This was in the form of special condition 1.2 of the contracts of sale. 
  39. Ogilvy agreed two things an investor would be most interested in finding out from an agent were likely capital gains and likely return in terms of income.  Those were two things that would most interest a purchaser.  He agreed there was a high demand for apartments in the development.  Purchasers needed to act quickly.  The advertising emphasised the five star nature of the development.  Ogilvy denied the Hilton was an investor opportunity.  It was sold very much as an owner occupier opportunity.  Even overseas buyers were buying to use themselves. 
  40. Ogilvy said he met Omar in late 2007, early 2008 at the sales office.  Omar came into the sales office on frequent occasions thereafter.  Ogilvy also communicated with Omar by email.  He had various discussions with Omar in relation to different apartments in the Hilton project.  Omar had a liking for a particular row of apartments.  Many of Omar’s South African friends purchased apartments in that row.  Ogilvy could not recall what he had discussed with Omar on each occasion. 
  41. Ogilvy said the standard sales presentation was to show potential purchasers the model and a video.  He would discuss the design and placement of the apartments.   Ogilvy categorically did not discuss with Omar things such as capital growth or predictive growth.  Hilton was very stringent not to discuss returns, capital growth or resale value of apartments.  He also did not discuss letting returns or the availability of finance.  There was no pre-approved financier for the development in January 2008. 
  42. Ogilvy said Omar introduced other people to the development.  At some stage, Omar asked Ogilvy whether he could bring people into the development and get paid a referral fee.  Ogilvy would not offer any significant sum.  After that discussion, Ogilvy introduced Omar to Petropoulos.  This was after Omar had purchased his initial unit and Omar had introduced at least one other purchaser.  Ogilvy understood an agreement was subsequently reached between Omar and Petropoulos, although he did not know the details.  The forms indicating contractual details noted on them when Omar had introduced a purchaser through Global Prestige Realty. 
  43. Ogilvy said in or about September 2010, they were advised that a favourable lender had been arranged by the developer.  They were to tell purchasers of the service.  Details were sent to Omar as well as any other purchaser interested in obtaining finance at that stage.  It was sent at the time purchasers were being contacted regarding settlement.  Ogilvy said there was a later email on 29 November 2010 which dealt with a finance special package.  It had a higher LVR (Loan to Value Ratio) than other financiers.  Further, the financiers understood the management process within the Hilton. 
  44. Ogilvy said he was last contacted by Omar “a couple of weeks ago”.[13]  Omar asked for Petropoulos’ telephone number.  Omar briefly mentioned the litigation and the fact that some offer had been made but not accepted.  The last time he had heard from Omar before that date was six to 12 months ago, in relation to sending Ogilvy people interested in buying apartments in Surfers Paradise.  Omar has never made any complaint to Ogilvy that Ogilvy misled him in relation to the Hilton Development, either in writing or in person. 
  45. Ogilvy agreed he may have told interested buyers there were Russian and Chinese buyers who were interested and that because of the high demand there would be an increase in price.  However, he denied saying to purchasers that if they bought off the plan they would be able to buy at a lower price.  He denied ever discussing returns or occupancy rates.  If a buyer asked about occupancy rates, he told buyers to go next door to Circle on Cavill who had finished building and buy somewhere where they could see finished figures.  He told buyers they were not able to give occupancy rates. 
  46. Ogilvy denied that part of his sale pitch was to say the price would increase by 10% within 12 months and before settlement.  He did not believe that to be true, despite the high demand, and would not have made it part of the sale pitch.  He had no real projections in his own head.  At the time he could not figure out where everyone was getting the money to buy the apartments.  Ogilvy also denied that part of his sales pitch was that the buyer could not lose because they would get at least $100,000 back to cover the deposit.  He also denied that part of the sales pitch was that the rental income would cover the loan repayments needed in order to finance the purchase.  He agreed all of his sales people had been involved in litigation subsequently to the development.  He was unaware of a judgment in which one of his sales people was found to have included in her sales pitch that the rental income would fully fund repayments. 
  47. Ogilvy agreed he knew that when a buyer came into a sales office and was given information they may take that information away and pass it on to other people, such as family.  He understood anything he told a potential buyer may be passed on to other potential buyers.  He accepted that what he told Omar may be passed on to other buyers, including other South African buyers. 
  48. Angela Goh (formerly Petropoulos), was the principal of Global Prestige Realty in 2008.  She met Omar in 2008 at the Hilton display centre.  They later reached an arrangement whereby if Omar introduced South African purchasers to the Hilton development she gave Omar all but $2,000 of her commission on that sale.  She believed the percentage commission received by Global for each apartment sale was 2% or 2.5%.  Omar was paid this sum because he did the running around in relation to the South African purchasers.
  49. The arrangement with Omar was that Global received the whole of the commission payable for the purchase of a unit.  Omar was paid monies out of those commission monies.  Omar was not appointed as an agent.  Omar was not a licensed real estate agent.  Angela denied keeping most of the commission monies for herself.  She kept only $2,000.  She paid Omar for every sale he brought into her agency.  Omar introduced 10 or 11 purchasers to her in respect of the Hilton development.  At one point she travelled to South Africa with Omar to promote some properties, including the Hilton development.  This trip occurred after Omar had introduced purchasers to her.  They did not sell anything in the South African promotional trip. 
  50. Goh said she left Australia to live in Malaysia after 2008 and did not hear from Omar for some time.  She most recently heard from him after receiving an email on 23 April 2016.  She responded saying she would call him tomorrow.  Omar provided his mobile number.  When she called Omar the next day, Omar asked if the lawyer had called her.  She confirmed Hickey Lawyers had contacted her but did not discuss anything further.  During the conversation they had a general discussion about how she was now running a cleaning business cleaning hotel rooms and domestic homes.  Omar said he would introduce her to some people he knew on the Gold Coast.  She sent him the website of the company.  She has not received any referrals from Omar.  Omar rang her again on 29 April 2016.  She missed the call and did not call him back. 


  1. The defendants submit the evidence supported a finding that Ogilvy made the pleaded representations to Omar.  The second defendant, Omar and Osman were honest and straight forward witnesses.  Their evidence was consistent and in accord with the pleaded case.  It should be preferred to Ogilvy’s evidence.   Ogilvy admitted to having no recollection at all of his conversations with Omar.  Ogilvy’s denials as to making of the representations were inconsistent with aspects of his evidence, namely that capital gains and returns would be important matters for investors. 
  2. The defendants submit that once it is accepted Ogilvy made the representations, a finding should be made that it was reasonably foreseeable those representations would be passed on by Omar to other potential buyers, including the second defendant.  The conduct was conduct engaged in by the plaintiff in trade or commerce.  The representations were directed to a potential purchaser. 
  3. The defendants submit that once it is accepted the representations were made and were passed on by Omar to the second defendant, the Court would find the defendants relied upon those representations in entering into the contractual documents and the guarantees.  The clauses in the contracts of sale purporting to acknowledge that the buyer has not relied upon any representations did not prevent the operation of the Act.  In any event, the second defendant did not read those clauses. 
  4. The plaintiff submits the Court should not accept Ogilvy made any of the alleged representations.  The second defendant, Osman and Omar each lacked credit.  Their evidence was inconsistent with their conduct at the time and the initial pleadings.  Those witnesses ought not to be accepted unless supported by independent evidence. 
  5. The plaintiff submits the Court would accept Ogilvy’s evidence as reliable and credible.  His reasons for not making the representations were consistent with the contractual terms and his own guidelines.  Further, there was no need for him to make such representations.  The development sold quickly.  There was no pressure to complete sales of the development. 
  6. The plaintiff submits there was also no evidence the defendants relied on any such representation when entering into contracts.  The second defendant was commercially and financially sophisticated and made no enquiries about occupancy rates, rental returns or finance terms prior to entering into the contracts. 


Were the representations made?

  1. Central to the determination of this issue is an acceptance of Omar’s evidence as reliable and credible.  This conclusion follows from the fact that there is no contemporaneous documentation supportive of the representations Omar said were made to him by Ogilvy.  Omar also did not make any contemporaneous record of the conversations. 
  2. Omar did not impress me as a reliable witness.  His evidence was strongly suggestive of reconstruction rather than recollection.  The fact that the defendants’ initial defence, prepared on the instructions of Omar, contained no reference to the alleged representations now sought to be relied upon was strongly supportive of the conclusion that Omar’s evidence is reconstruction. 
  3. The defendants submit that Omar is unlikely to have been mistaken about the contents of his conversation with Ogilvy because his conversation with the second defendant and Osman occurred soon after.  The defendants also point to the fact that Omar bought a unit immediately after his discussion with Ogilvy.  However, these factors are far from compelling reasons to accept the reliability of Omar’s account.  It was apparent from Omar’s evidence that he personally strongly believed in the Hilton development being a good investment. 
  4. It is also striking that Omar at no stage complained, either orally or in writing, to Ogilvy in relation to the alleged misrepresentations.  Omar’s continued referral of friends to Ogilvy for real estate purchases is also inconsistent with a finding Ogilvy made the representations.  Omar’s explanation that he accepted that Ogilvy had spoken in good faith sits ill with a contention that the misrepresentations made by Ogilvy were the basis for many of his friends entering into these contracts, at considerable financial cost. 
  5. In coming to this conclusion, I have had particular regard to the evidence in relation to Omar’s attempts to obtain payment for the introduction of purchasers to the development.  I found Goh a reliable and credible witness.  I do not accept Omar’s evidence that he received no such payments.  Omar had actively sought payment of a fee from Ogilvy.  I accept when that approach was unsuccessful, Omar sought and obtained payments from Global Prestige Realty for the introduction of South African purchasers. 
  6. I accept Omar received substantial payments in respect of each of the referrals made by him to Global Prestige Realty, which resulted in a sale of an apartment in the Hilton development.  There is no substance in the criticism that such an arrangement is inherently unlikely as it was contrary to the relevant legislation.  Global Prestige Realty received the entire commission in accordance with the legislation.  The payment of monies to Omar for his referrals was not on the basis he was a licensed real estate agent.  It was a private arrangement between Global Prestige Realty and Omar. 
  7. Omar’s false denial of the receipt of substantial sums for having referred family and friends significantly adversely impacted on my assessment of Omar’s evidence.  Having regard to the large financial rewards he had received, there was good reason why he would maintain a false story in relation to misrepresentations being made by Ogilvy.  He had caused family and friends to enter into contractual arrangements which led to significant losses.  He personally financially benefited from those arrangements.  That financial benefit was never disclosed to those purchasers. 
  8. If Omar made statements to the second defendant and Osman as to the likely return on any investment in the Hilton development, as to the availability of finance and as to capital growth, it is more probable than not that those statements were Omar’s attempts to encourage his friends to acquire apartments in the development.  Omar personally believed the development was a good investment.  He had, very early in his discussions with Ogilvy, formed the intention to attempt to make money for himself by way of referral of friends and associates.  Omar sought payment of a referral fee from Ogilvy.  When Ogilvy was not able to provide a fee acceptable to Omar, Omar reached an agreement with Global Prestige Realty for the payment of monies for referrals of friends and associates. 
  9. In rejecting Omar’s evidence as neither reliable nor credible, I have given careful consideration to the evidence of the second defendant and of Osman.  That evidence was in large measure consistent with Omar’s account.  However, I found the evidence of the second defendant and of Osman neither persuasive nor cogent.  I did not find the second defendant’s evidence credible or reliable.  His initial description of his occupation was, at best, disingenuous.  His suggestion that he did not read the contracts prior to signing or initialling in various places lacked credibility.  The second defendant struck me as a commercially savvy businessman who was unlikely to have entered into a substantial financial transaction without consideration of the relevant documentation. 
  10. The second defendant’s account of the conversations with Omar was also inconsistent with the contents of the initial pleadings.  The second defendant’s explanation for the substantial inconsistencies between the original pleading and that ultimately relied upon at trial lacked substance.  I do not accept that the legal representatives prepared the document without specific instructions.  Further, if it be accepted those instructions were provided by Omar, the contents of those initial pleadings are extraordinary.  Ogilvy was alleged to have made the representations to Omar and Omar should have known the contents of those representations.  The representations contained in the original pleading are, however, completely inconsistent with the defendants’ case at trial. 
  11. Osman also did not impress me as a reliable witness.  He accepted he had had discussions with the second defendant about their conversation with Omar in the days prior to trial.  There were striking similarities in his evidence and in the evidence of the second defendant in relation to Omar claiming Ogilvy had said there was pre-approved finance for 80% or 90% of the purchase price.  These similarities suggest that these discussions, either consciously or subconsciously, had pervaded the reliability of Osman’s recollection.  I am satisfied Osman’s evidence was at best an attempt at reconstruction based on recent conversations with the second defendant and was given in an effort to provide evidence favourable to the  defendants’ interests. 
  12. By contrast, I found Ogilvy’s evidence reliable and credible.  His frank concession that he could not recall his conversations with Omar were consistent with what you would expect for a busy agent dealing in real estate with many purchasers several years before the trial.  Whilst the defendants contend his evidence ought not to be accepted because he had no recollection of his conversations with Omar, I have no hesitation in accepting his evidence that he does recall what he did not discuss with Omar. 
  13. The defendants contend the fact purchasers were given details of a favourable lender by Ogilvy supports Omar’s evidence that Ogilvy made misrepresentations about the existence of pre-approved finance.  However, a consideration of the correspondence referring to the favourable lender supports the accuracy of Ogilvy’s evidence that details of a favourable lender only arose near settlement.  That correspondence was over two years after the misrepresentations were allegedly made by Ogilvy. 
  14. In accepting Ogilvy’s evidence, I have also had regard to the nature of the Hilton Development and the speed with which it sold.  There was no reason for an agent to make predictions of this nature in order to effect a sale.  Against that background, there is no logical coherent reason why Ogilvy would engage in conduct expressly contrary to his own written guidelines when it was unnecessary to ensure sales within the development. 
  15. The Hilton development was a specific project with strict protocols having regard to the Hilton’s involvement in the project.  Ogilvy had prepared specific written guidelines for use in the project.[14]   Those guidelines specifically prohibited discussion about occupancy or room rates, and that there would be no projections of returns.  Those guidelines are consistent with Ogilvy’s evidence that they were topics he never discussed with any purchaser.  I accept that evidence.  I do not accept that Ogilvy made any of the representations alleged by Omar and relied upon by the defendants in support of their counterclaim. 


  1. In view of my conclusions that the pleaded representations were not made by Ogilvy to Omar, it is unnecessary to determine this issue.  Had it been necessary, I would not have been satisfied the second defendant entered into the contracts on the basis of reliance upon any of the representations. 
  2. The second defendant’s evidence that these representations were the basis upon which the defendants entered into the contracts and the guarantees was inconsistent with his actions at the time.  He made no enquiries as to the likely return of investment from rental of the apartments.  He made no enquiries as to the terms of the alleged pre-approved finance.  His explanation that that was because he intended to keep neither unit, intending to sell both prior to settlement, was inconsistent with the discussions he had with Omar as to the sale of one unit in order to fund the purchase of the other.  It was also inconsistent with Osman’s evidence. 


  1. The defendants have not established the plaintiff, through Ogilvy, made any of the alleged misrepresentations.  The counterclaim is dismissed. 
  2. The defendants accept that if they fail in their counterclaim they are liable for damages for breach of contract and pursuant to the guarantees.  They admit the quantum of the plaintiff’s claim for damages on resale.  The only dispute is as to the plaintiff’s entitlement to interest on the amount of the purchase price, from the date of settlement to the date of judgment. 
  3. The plaintiff submits clause 15.6 of the relevant contracts entitles them to interest on the amounts outstanding, at 15%.  That entitlement includes any judgment sum obtained against a purchaser. 
  4. The defendants contend the entitlement to interest pursuant to clause 15.6 of the unit contract came to an end when the plaintiff terminated the contracts of sale and the agreements for the furniture packages.  Clause 15.6 only applied to monies payable under the contract, not damages payable for breach. 
  5. Construction of clause 15.6 requires an objective determination by reference to its text, context and purpose.[15]  Here, the clause arises in the context of a commercial contract for the sale of real property “off the plan”.  Those sales contemplate purchasers for commercial purposes.  Clause 15.6 does not merely deal with the payment of interest in the event of a failure to pay by the due date.  It also applies to the amount of any judgment obtained against the purchaser. 
  6. A consideration of the terms of clause 15.6, in the context of the contract and purpose supports an interpretation of clause 15.6 whereby the plaintiff is entitled to interest at 15% on the amount due under the contract of sale but not otherwise.  Such a construction is consistent with the approach adopted by Jackson J in Juniper Property Holdings No 15 Pty Ltd v Caltabiano (No 2).[16] 
  7. The plaintiff is entitled to interest at 15% on the amount due under the contract of sale, from the original date of settlement until its termination.  The plaintiff is thereafter entitled to interest at the rate payable on pre-judgment money orders on that debt from the time it accrued and, from resale, on the resale deficiency. 
  8. I shall hear the parties as to the form of orders and costs.



[1] T2-9/36.

[2] T2-10/10.

[3] T2-5/43.

[4] T2-15/17.

[5] T2-15/25.

[6] T2-20/37.

[7] T1-12/1.

[8] T1-12/21. 

[9] T1-39/23.

[10] T1-20/1.

[11] Exhibit 16. 

[12] T2-79/30.

[13] T2-77/20.

[14] Exhibit 20.

[15] Mt Bruce Mining Pty Ltd v Wright Prospecting Pty Limited (2015) 89 ALJR 990 at 998 [46]-[48].

[16] [2016] QSC 5.


Editorial Notes

  • Published Case Name:

    Elan Boulevard Pty Ltd v Fnyn Investments Pty Ltd & Ors

  • Shortened Case Name:

    Elan Boulevard Pty Ltd v Fnyn Investments Pty Ltd

  • MNC:

    [2016] QSC 123

  • Court:


  • Judge(s):

    Boddice J

  • Date:

    09 Jun 2016

Litigation History

No Litigation History

Appeal Status

No Status