Sportelli v Robinson[2014] QDC 76

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The plaintiffs, as purchasers, executed an unconditional undated Contract for the Sale of Commercial Land and Buildings (Exhibit 9). The Contract was, then, executed on 10 November 2008 on the first defendant’s part, as vendor. The plaintiffs claim to have been induced to enter into that Contract by misleading conduct, essentially through representations - primarily from the website - of the second defendant (“PRD Clayfield”), as authorised by the first defendant. The subject property, located at 458 Kingsford Smith Drive, Hamilton in the State of Queensland (“Property”), had been described on the website as being “with rear street access to own onsite car park”. The first defendant, as registered proprietor of the Property, did not have any legal right of access to any car park onsite at any material time. 

2. [2]
   The plaintiffs press for damages for fraudulent misrepresentation, negligent misrepresentation, misleading or deceptive conduct pursuant to the Trade Practices Act 1974 (Cth) (“TPA”), false or misleading representations in relation to the sale of an interest in land pursuant to the TPA and pursuant to the Fair Trading Act 1989 (“FTA”), orders pursuant to the FTA, and interest. Other claims are not pressed.

3. [3]
   For its part, the first defendant counterclaims for damages for breach of contract, and interest.

4. [4]
   No proportionate liability is sought, although originally raised in the pleadings. Contribution, if held to be relevant, is in issue.

Background

5. [5]
   Many matters were not controversial. A recitation of those within that category is contained in the written Outline of the first defendant. With relevant adjustments, they include that:

1. (a)
   the first defendant was the registered owner of the Property, described as Lot 53 on Registered Plan 33644, County of Stanley, Parish of Toombul;
2. (b)
   PRD Clayfield was a company carrying on business as a real estate agent;
3. (c)
   in about April 2008 PRD Clayfield was appointed by the first defendant as her real estate agent in respect of leasing the Property;
4. (d)
   from April 2008 PRD Clayfield listed the Property for lease;
5. (e)
   in April 2008 the male plaintiff attended and viewed the Property;
6. (f)
   on or about 17 April 2008 the plaintiffs made a written offer to the first defendant to purchase the Property for $1.2m – but that offer was not accepted;
7. (g)
   in about October 2008 PRD Clayfield was appointed by the first defendant as her real estate agent in respect of selling the Property;
8. (h)
   Mr King was, at all material times, an employee of PRD Clayfield;
9. (i)
   after the Property was listed for sale by PRD Clayfield, Mr King contacted the male plaintiff by telephone, informing him to the effect that the first defendant was interested in selling the Property;
10. (j)
    pursuant to an arrangement made with Mr King, in October 2008 the male plaintiff attended an inspection of the Property with Mr King (the female plaintiff giving evidence that she also attended);
11. (k)
    during that inspection, Mr King showed the car parking located on the Property at or near the gate at the rear of the building;
12. (l)
    also, during that inspection, Mr King stated words to the effect that the Property had “rear street access” from Allen Street;
13. (m)
    real property situated at 33 Racecourse Road, Hamilton in the State of Queensland included vacant land (“adjacent property”) between the Property and Allen Street;
14. (n)
    at the time of that inspection there was no fence, barrier or other physical object preventing rear street access from Allen Street to the Property through the adjacent property; and
15. (o)
    the Contract dated as made 10 November 2008 (which was the date inserted by the first defendant’s duly authorised agent, upon execution by that agent) required a deposit of $50,000.00 which was duly paid by the plaintiffs to PRD Clayfield, as stakeholder.

6. [6]
   Besides the website representation (“first representation”), the plaintiffs alleged three further representations, namely:

1. (a)
   the October 2008 oral representation by Mr King (“second representation”);
2. (b)
   an implied representation from Mr King, in October 2008, physically showing the male plaintiff (at least) the car parking on the Property (“third representation”); and
3. (c)
   an implied representation that the Property had the benefit of an easement over the adjacent property (“fourth representation”).

7. [7]
   What is in contention, beside the legal issues, are:

1. (a)
   whether, and with what effect, there were any disclaimers made by PRD Clayfield;
2. (b)
   what was said in the conversation, or conversations, between the male plaintiff and Mr King (admitted to have occurred on 6 November 2008) and what effect did that conversation, or those conversations, have.

Credibility

8. [8]
   Although there is not much by way of disputed conversations, as just outlined there are two that really do matter. Accordingly, it is necessary to make an assessment of credibility in order to determine the occurrence and, if so, the content of such conversations.

Nerina Sportelli

9. [9]
   The female plaintiff, although admitting that the male plaintiff was authorised to enter into the Contract for both of them, was not aware that the male plaintiff had made the written offer, executed in late October 2008 by him (Exhibit 12). Furthermore, although she could not remember whether it was October 2008 – conceding that “It could have been. Definitely” – she did give evidence that she inspected the property with the male plaintiff and with Mr King. She stated that Mr King showed them the car parking from inside the building on the Property, adding that she could definitely see the entrance to it, could see the driveway, and could see “very clearly” from “up the top”. But, when it was suggested to her that Mr King had said that she and the male plaintiff “should undertake your own investigations regarding access”, she was adamant in denying that, explaining that, if that had been said by Mr King to her, she would have asked him exactly what he meant and in relation to what and that, if it was about access, she would have asked him about what the problem was. She did concede that Mr King might have said such things, but only “in relation to extra car parks, certainly not the access”.

10. [10]
    As well, she stated that, if there was ever a question about anything at all on the property, that she always “put it as a special condition”. Earlier in her evidence, she had stated that she would have wanted a due diligence clause if she had been negotiating the contract, because she would have needed to research how many more car parks she could get on that land and such a clause would allow that to occur. She stated that she was “very concerned” about the need for more car parks.

11. [11]
    When it was put to her, in cross-examination, that she never thought to have somebody do a search for her of the title, she replied that it was because it never arose as a problem, because the access never became a problem and that, if any problems would have arisen, she could have solved them by that due diligence clause. It was also extremely clear from her evidence that the car parking was essential, stating that, if she had become aware of no access prior to the binding Contract of 10 November 2008, she would not have entered into the Contract since the property would have been “worth nothing” to them, noting that, if they could not get onto the property with their vehicles, “the property (was) worth nothing to a real estate agent” (in circumstances where they were buying the Property for the purposes of their real estate business).

12. [12]
    The female plaintiff was a licensed real estate agent, being the licensed holder for the business conducted by her and the male plaintiff, with the male plaintiff being a salesperson employed there. She had known Mr King since about 1986 when she had first started trading as a real estate agent with Ray White at Chermside and Mr King was the principal of Ray White at Clayfield.

13. [13]
    While the female plaintiff was assertive in her evidence, at times being required to answer the question asked rather than speculating, I found, in general, that she was a straightforward witness who, though quite adamant at times, was truly recalling her true recollection. She was much more the businessperson than the male plaintiff and was, unsurprisingly, more knowledgeable and careful about protecting her interests in any real estate investment, particularly involving the business she was conducting. Accordingly, where her evidence differs from that of Mr King with respect to the plaintiffs being advised to “make inquiries” of their own (concerning the access to the agreed existence of the car parking), I prefer her version of what occurred.

Giovanni Sportelli

14. [14]
    The male plaintiff was much less impressive than the female plaintiff. His evidence, as given, indicated, at least at times, an inability to engage with the question he was asked in any significantly responsive way.

15. [15]
    But, even so, I do accept that he did not understand, during the conversation that he admitted that he had with Mr King on 6 November 2008, that a fence had been erected blocking any physical access to the back of the Property from the adjacent property.  But that may well have been as a result of his own unwillingness to listen carefully to things which were being either asked of, or told to, him. 

16. [16]
    Even more importantly, though, is his evidence as to the effect – and there is no other evidence to gainsay it – that he never approached the owner of the adjacent property (whom he described as “a Greek gentleman”) other than for the purposes of renting the house in Allen Street owned by that person in order to obtain “more extra car park(ing)”, at least prior to 10 November 2008. After the Contract for the property became “unconditional”, he did concede that he had a further conversation with that owner in which he was told by the owner that he was going to be sued, because the adjacent property was “(his)”, there was “no access” and “you can’t go through there”. As for conversations other than that had on 6 November 2008, the male plaintiff admitted that Mr King might have said that he should make his own investigations, but stated that that was never “about access” but, rather, about “get(ting) more car park(ing)”. 

17. [17]
    When asked about whether he would “have gone ahead with the deal” if there was no legal right of access, he stated that he would not have gone ahead, stating, “why buy property (on) which you can’t even park your own car”.

18. [18]
    With respect to the proposition that it would have been a fairly simple and prudent question to ask Mr King what it meant by “rear street access”, the male plaintiff replied that it was something which did not come to his mind to ask about, because “the fact was there” being written as “entrance from the back, four car parks” and to him that was “good enough” because “I knew the guy”. 

19. [19]
    Finally, when asked, in re-examination, about his reliance “on the advertisement”, he responded by stating that he thought “that we bought the property with four car accommodation and – and – and an entrance to go to the – to park the cars, and without those cars, we wouldn’t bought the property”.

20. [20]
    In summary, in any conversation that the male plaintiff had with Mr King on 6 November 2008, I accept, given my remarks concerning this witness, that he may well have been have been told that a fence had been erected, although I accept that, in his own mind at least, it was not recognised as a statement to that effect (at least insofar as it was a fence obstructing access). I reject any assertion that there was some further negotiation on price, although that conclusion is more a general observation about Mr Sportelli’s state of confusion. Even so, I do not accept, particularly given the analysis that I will engage in later with respect to Mr King, that he stated in any way to Mr King to the effect that he (i.e. the male plaintiff) was “aware” that a fence had been erected (at least across the “access”) and that he had “spoken” to the Greek gentleman and that he was “not concerned” about those matters. Even though it was submitted that a Jones v Dunkel (1959) 101 CLR 298 inference should be drawn because the plaintiffs did not call this third party, ASIC v Hellicar (2012) 247 CLR 345 demonstrates that the principle is inapplicable when such an alleged “failure” does not affect the cogency of the proof which the castigated party advanced: at 414 [170]. Conversely, it might be asked why the defendants did not take that course; but it appears to be a case where I would find that no particular expectation existed that one party would be expected to do so, rather than the other: see Hellicar at 413-414 [169].

Mr King

21. [21]
    As already canvassed, Mr King’s evidence was that both the male and the female plaintiff attended at an inspection at the Property “somewhere around about October” and that Mr King “made it quite clear to them that they had to make their own inquiries regarding access to the car park”. Mr King freely acknowledged that his own belief was that the first defendant “didn’t own the driveway”, but stated that there was “access to” the Property. Additionally, Mr King never asked the first defendant whether there was any legal right to have access to that driveway. After acknowledging that to certain persons it might have been “a bit confusing” where the advertisement stated that there was “access from the rear street to one’s own onsite parking”, he reverted to stating that he would have explained, “exactly as I explained” to the male plaintiff, about making one’s “own inquiries regarding access” to the car park. In his evidence, Mr King conceded that if there was no access other than from Allen Street then “you don’t have a car park”. Concerning the conversation on 6 November 2008, Mr King indicated that he had two conversations on that day.  The first was a conversation where he informed the male plaintiff that a fence had been erected and that this was the conversation in which the male plaintiff stated that he had spoken “to the Greek gentleman”. The later conversation was after he drove to the Property, looked at the fence and then drove back to the office. On this occasion it was a “short phone conversation virtually just to say that I had been down there to see the fence”. 

22. [22]
    Under cross-examination, Mr King stated that:

• he did not know anything about the permanence of the physical access to the car parking at the rear of the Property;
• such access had been enjoyed with respect to the Property “for many, many years”;
• there was no mention by the first defendant of having a legal right of access over the Property;
• the plaintiffs had conveyed to him that they wished to use that driveway to access the car parking and he knew from his dealings with them and the nature of their business that the Property “would be useless to them if they weren’t able to use the car parks”;
• he knew, because the plaintiffs had indicated it, that the plaintiffs had a substantial business and that quite a large number of staff would need to use that driveway and the car parking, it being of “critical importance to them”;
• he agreed it was “totally at odds” with how the plaintiffs behaved beforehand, and what they had been telling Mr King about the car park being critical, that the male plaintiff would not only say that he was aware that the fence had been erected but also that “he wasn’t concerned”; and
• Mr King conceded that it “just doesn’t make sense” for the male plaintiff to have said to Mr King that “he wasn’t concerned about this problem with access” because it “totally flies in the face with what they have been saying before and their conduct”.

MsChristine Anne Talty

23. [23]
    This person, who was a two-thirds’ owner of PRD Clayfield at the material times in 2008, was called for the purposes of confirming that the date of the conversation between Mr King and the male plaintiff was 6 November 2008. In the end, that was not in dispute. To the further extent to which she stated that she overheard that phone call between Mr King and the male plaintiff, the only evidence that she gave about that first phone call was that a subject matter was the “fence”. 

24. [24]
    In the circumstances in question here, I think that adds little to the process of ascertaining the overall determination of what was said.

Statutory causes of action actually pleaded

25. [25]
    I do not intend to stray from what the parties have pleaded and not abandoned. It is abundantly clear from the plaintiffs’ Amended Statement of Claim (for which leave was given to amend on the first day of trial) that the claim against the first defendant is, relevantly, that the first defendant engaged in conduct in trade or commerce that was in contravention of s 40A(1)(b) of the FTA.  The amendment to paragraph 21 of that pleading does not change the nature of that claim, simply alleging “results” of, amongst other matters, contraventions. This is in contrast to the Outline of Submissions of the plaintiffs which now seeks to attach liability to the first defendant pursuant to s 52 of the Trade Practices Act 1974 (Cth) (“TPA”), asserting that such liability against the first defendant is bought into play by s 6(3)(a) and s 6(3)(b). No notice of s 6’s potential applicability was given to the defendants. Also, though those provisions might pick up the website representation [ACCC v Chen (2003) 132 FCR 309] or the telephone conversations of 6 November 2008 [Smolonogov v O'Brien (1982) 67 FLR 311], it, arguably, could not extend to conversations held at the actual Property.

26. [26]
    The written Outline of the first defendant does not directly address this discrepancy. It simply addresses the alleged breach of the FTA.

27. [27]
    But s 40A(1)(b) of the FTA is not the analogue of s 52 of the TPA.  Thus, the only allegations of misleading or deceptive conduct made by the plaintiffs on their pleading are against the second defendant, as appears from paragraph 20 of the Amended Statement of Claim. The second defendant is also alleged to be in breach of both s 40A(1)(b) and its TPA analogue, s 53A(1)(b).

28. [28]
    This is despite the first defendant in its Amended Defence (also amended pursuant to leave given on the first day of trial) having raised the TPA, although only with respect to the plaintiffs’ alleged responsibility for loss and damage, and concerning proportionate liability. The latter of those matters has been expressly conceded as inapplicable. The former of those matters has not been addressed at all in the Outline of the first defendant, although s 10 of the Law Reform Act 1995, concerning contributory negligence was addressed in considering negligent misrepresentation.

29. [29]
    As for the second defendant, its Amended Defence (for which leave was also given to amend on the first day of trial) does rely upon s 82(1B) of the TPA, contributory negligence, and the provisions dealing with proportionate liability. As already referred to, proportionate liability is not in issue; but it might be necessary to consider the plaintiffs’ share in the responsibility for loss and damage.  For its part, in its written Outline, PRD Clayfield does not specifically address any section of the FTA or TPA. 

Misleading or deceptive conduct

30. [30]
    Considering that the misleading or deceptive conduct concerns PRD Clayfield alone, Butcher & Anor v Lachlan Elder Realty P/L (2004) 218 CLR 592 is particularly instructive.  The majority decision, given by Gleeson CJ, Hayne and Heydon JJ, noted that two sets of proceedings bought by the purchasers, against, respectively, the vendor and the agent, were heard together, although the High Court, on appeal, was concerned with the real estate agent only: at 599 [20].  In analysing the relevant class addressed by the alleged representation constituting the conduct in question, the majority held that it was inevitable that the point of view to be adopted where (monetary) relief is sought by a plaintiff who alleges that a particular misrepresentation was made to identifiable persons of whom the plaintiff was one, is one that, since the plaintiff must establish a causal link between the impugned conduct and the loss that is claimed, depends “on analysing the conduct of the defendant in relation to that plaintiff alone”: at 604-605 [37].  The majority noted that it was, therefore, necessary to consider the character of the particular conduct of the particular agent in relation to the particular purchaser, bearing in mind what matters of fact each knew about the other as a result of their dealings and the conversations between them, or which each may be taken to have known: at 604 [37]. When Butcher was considered later in Campbell v Backoffice Investments P/L (2009) 238 CLR 304, the plurality, after observing that using tools of analysis drawn from the common law of deceit within the statutory framework of the New South Wales FTA may sometimes be helpful in identifying “contravening conduct” and deciding whether loss or damage was suffered “by” the contravention – where “conduct” under such a statutory regime is not confined to “representations” – highlighted the objective nature of the question to be determined and emphasised the point that the effect of any relevant statements or action or any silence or any inaction occurring in the context of a single course of conduct must be deduced from the whole course of conduct: at 341–342 [102], quoting McHugh J in Butcher (who was not in dissent on such questions of principle). They, later, pointed out that reliance is “not” a substitute for the essential question of causation, especially where the drawing of inferences of inducement is in operation: at 351 [143].

31. [31]
    When Butcher specifically addressed “disclaimers”, the majority held that it was important that the agent’s conduct be viewed as a whole; and, thus, it was not right to characterize the problem as one of analyzing the effect of its “conduct” divorced from “disclaimers” about that “conduct” and divorced from other circumstances which might qualify its character: at 605 [39].  As stated by the majority, everything relevant that the agent did up to the time when the purchasers contracted to buy the land must be taken into account, it also being important to remember that the relevant question must not be reduced to the crude enquiry: “Did the agent realise the purchasers were relying on the (document)?” - because to do that would be impermissibly to dilute the strict liability which s 52 of the TPA imposes: at 605 [39]. Since there are no “disclaimers” in Exhibit 8 (the brochure on the internet), the only relevant disclaimer can be that which Mr King asserts he stated to the plaintiffs when they came and inspected the Property in late October 2008. 

32. [32]
    My analysis conducted above of the evidence given by each witness has led me to the conclusion that I do not accept that Mr King made any statement to the plaintiffs at the time of their inspection of the Property to the effect that they should “make their own inquiries” concerning the represented access to car parking at the rear of the Property. Besides the issue of credibility in which I favour the female plaintiff over Mr King, one particular reason for reaching that conclusion is that it seems extraordinary that if that “disclaimer” was made at that time, Mr King would not make a similar disclaimer on 6 November 2008 when it ought then, in his mind at least, to be superabundantly clear that physical access at the very least was being impeded. If for no other reason, if he had truly made the earlier disclaimer, it would have been particularly important at this time to reinforce the warning that he had given on the previous occasion. The fact that neither side of the record sought a response to this omission does not diminish the role that inherent likelihood plays in determining “the apparent logic of events”: see Fox v Percy (2003) 214 CLR 118 at 129 [31]. Furthermore, Butcher expressly held that a corporation does not avoid liability because a person who has been the subject of misleading or deceptive conduct “could have discovered” such conduct “by proper inquiries”: at 625-626 [111]. As discussed (concerning credibility), I have found that the male plaintiff, on 6 November 2008, was, even to Mr King’s appreciation, responding with statements that made no sense (given the whole of the circumstances).   

33. [33]
    To the extent to which disclaimers might be held, elsewhere, to have been made, it is important that the majority in Butcher concluded that, apart from the specific facts of the case in question, there were circumstances in which the “conduct” of an agent would depend on different tests: at 608-609 [50].  Examples proffered were that those tests might turn on what the purchasers actually made of the agent’s behavior, whether they were acting reasonably or not, and whether it might also call for a consideration of how the agent perceived the purchaser (though tests of that latter kind “might be appropriate for plaintiffs of limited experience acting without professional advice in rushed circumstances”): at 608-609 [50].  With respect to one of the cases analysed in detail, the majority stated that it did not seem quite correct to describe an estate agent (which says that it has no reason to doubt the accuracy of information but says that it does no guarantee it, advises interested parties to make their own inquiries, and says interested parties have the responsibility of satisfying themselves in all respects) as making an “express assertion” of belief in the information: at 612 [67]. But, however considered, Mr King’s conduct here is not of that kind since he knew that there was no legal right of ongoing access. Finally, the majority examined the appropriate level of analysis which should be undertaken of the structure and language of a brochure. It stated that, while it was true that the level of analysis which was appropriate might vary from case to case and that a more impressionistic analysis, concentrating on the immediate impact of the conduct, might be sounder where the document was only briefly looked at before decision was made, in other cases, a more detailed examination might have been more appropriate: at 616 [76].

34. [34]
    On a case somewhat more factually similar to the present one, McMurdo J in Seirlis v Bengtson & Ors [2013] QSC 240 considered the circumstance where the real estate agents for the vendor advertised in their brochures, and upon the internet, the property as having three car parks belonging to the apartment in question.  By trial, it was clear that there were, and could be, only two car spaces which so belonged, although there was a storage area which was large enough for a third car space: at [2]. In particular, the plaintiff, as purchaser, although told by an employed real estate agent, in person, that the storage area “could be converted to a third car space”, was not told that the development approval for the building prevented the storage area “being used lawfully for parking”: at [2]. Somewhat interestingly, the plaintiff’s husband had extensive experience in property development and they both became interested in buying an apartment in that building: at [10]. As found by McMurdo J, each of the advertisements “was an unambiguous representation that the apartment had three car spaces of its own” while it “revealed nothing about the legal or indeed the physical impediment to the use of the storage space as a car park”: at [11]. The factual similarity is somewhat blurred by the real estate agent in person having agreed with the purchaser that the concern about the raised surface of the third car park would be “removed prior to settlement to create three car spaces”: at [19]–[21].

35. [35]
    In Seirlis McMurdo J discussed the applicable law governing the statutory contravention of misleading or deceptive conduct.  He stated the plaintiff’s case as conduct being misleading or deceptive, or likely to mislead or deceive, because there was a representation that there were, or would be, three car park spaces and that that had the necessary implication that those spaces “could be used lawfully”; and, hence, it was misleading to say that the use of the third space, although physically possible by the removal of the plinth, “would be illegal” at [34].  It was McMurdo J’s conclusion that each of the advertisements and the real estate person’s statement and promise about the plinth constituted conduct which was misleading or deceptive, or likely to mislead or deceive: at [37].

36. [36]
    In Seirlis McMurdo J also considered contributory negligence under s 82(1B) of the TPA. He noted that, although the vendors submitted that the purchaser was negligent, with one ground being that she went into the contract knowing the physical dimensions of the car parking site and that there were two car parking spaces and a storage slab, that argument misconceived the case for the plaintiff because she was “misled about the use to which (the area) could legally be put”. This was in circumstances where the corporate real estate agent had abandoned that line of argument in its ultimate submissions: at [104]–[107].

37. [37]
    Insofar as it is submitted that the failure on the part of PRD Clayfield to clarify what was meant by “access” was an aspect of “mere silence”, the Full Court of the Federal Court decision of Demagogue P/L v Ramensky & Anor (1992) 39 FCR 31 dealt directly with this question.  Black CJ, who agreed with Gummow J, held that, where s 52 of the TPA is relied upon, the determination can only be made having regard to all of the relevant circumstances and that silence is to be assessed as a circumstance like any other: at 32. He added that to say this is certainly not to impose any general duty of disclosure – the question is simply whether, having regard to all the of relevant circumstances, there has been conduct that is misleading or deceptive, or that is likely to mislead or deceive and to speak of “mere silence”, or the duty of disclosure, can divert attention from that primary question: at 32.  With respect to this issue, he stated, as well, because the significance of silence always falls to be considered in the context in which it occurs, that context may or may not include facts giving rise to a reasonable expectation, in the circumstances of the case, that if applicable matters exist they will be disclosed: at 32. For his part, Gummow J stated that, in any case where a failure to speak is relied upon, the question must be whether in applicable circumstances the silence constitutes or is part of misleading or deceptive conduct: at 40. As was in the case before him, Gummow J noted that Spender J, at first instance, had indicated that the case there concerned both a positive misrepresentation, as to the provision of vehicular access, and misleading conduct from the failure to say anything about the Road Licence, with the whole of the circumstances creating in the respondent’s a clear but erroneous impression that there was “nothing unusual concerning access” to the site: at 40.

38. [38]
    Although other cases were relied upon, none yields any better overall survey of the relevant principles, particularly with reference to a context where there is relatively substantial similarity in the facts. While, on its face, Clancy v Prince & Ors [2001] NSWSC 85 seems to be somewhat similar - there having been a failure to disclose either by the vendor or the vendor’s agent to an unaware purchaser that a laneway contiguous to a garage on the relevant property was not a public laneway - the facts were that the laneway appeared to be a public laneway whereas, in fact, it was privately owned. In particular, the lane was bituminized, there were public signs and it provided access to another substantial apartment block and to shops: at [47]. To the extent that it is instructive, the conclusions by Santow J (as he then was) are helpful to the extent that, after stating the argument that the representation in question was limited to representation as to the (practical) availability of access up until the time it was terminated, with the corollary that this meant that the representation was wholly fulfilled, he held that one only has to state such an argument to see that it is “utterly without merit”: at [70].

Conclusion on misleading or deceptive conduct

39. [39]
    Noting that this allegation insofar as it concerns s 52 of the TPA is against the second defendant only, but also noting that PRD Clayfield was the entity which made the website representation, was the entity (through Mr King) which made the inspection “representation”, and was the entity (through Mr King) which pointed out the existence of the actual car parking and the actual access way, it was the entity who was primarily responsible for the relevant conduct. 

40. [40]
    Since I have found that there was no statement by Mr King suggesting that the plaintiffs “make their own investigations”, there was no operative disclaimer. I conclude that misleading or deceptive conduct has occurred for the reasons which follow.

41. [41]
    In the second defendant’s Outline of Argument it is conceded that “rear street access” did not merely mean that it was possible to gain physical access to the property, since that phrase also connoted (i.e. it was implicit) that such access could be gained “lawfully”. Although that concession was used to lead into the argument that the fourth representation (namely, that the Property had the benefit of an easement) was unsustainable, it is unnecessary to examine that question because of the content of the other representations. Given that all of the circumstances are bought into account (including the plaintiffs’ background in real estate agency) in determining the content of the representations and considering that nothing was stated, in writing or verbally, about the first defendant’s legal right (of any kind) to have access to the adjoining property, the failure to clarify “access” is sufficient to make the overall conduct, even apart from any implied representations as to an easement, not only false but also misleading or deceptive conduct.

42. [42]
    Paraphrasing Santow J in Clancy, one only has to state the argument that car parking was accessible, in circumstances where there was no right of any legal kind which the vendor was capable of giving to a purchaser, to conclude that it is without merit, if not “utterly without merit”. If further demonstration be necessary, the following factors can, also, be identified. As to the whole of the “conduct”: there were 3 explicit representations; a more detailed examination of the internet “brochure” does not reveal any different interpretation than that formed by the plaintiffs; there was total silence on the matter of a “legal” right of access; there was no clarification of the confusion regarding what “fence” was being discussed; and there were, as I have found, no disclaimers. As to the whole of the relationship between the plaintiffs and Mr King: they knew him since 1986, such that, “as a friend”, he came straight into the female plaintiff’s own office; Mr King knew the plaintiffs wanted the Property for “business” and needed car parking; and the male and female plaintiffs, respectively, “knew the guy” or relied on his honesty (such that she was angry when she found out the truth, asking, “why did you not tell me?” and such that, if she had “any inkling the advert was incorrect”, she would have asked). Lastly, intention on Mr King’s part is irrelevant, since the test of misleading conduct is objective and yields strict liability. And all this occurred in circumstances where I conclude that there was a reasonable expectation, on the findings made, that if “legal” access was an issue – which it was – it would have been disclosed.

Fraudulent misrepresentation

43. [43]
    In Clancy, Santow J set out the relevant principles applicable to that case: at [61].  I do not intend to repeat them all here.

44. [44]
    What is important for present purposes is the principle that, while mere non-disclosure of facts, even facts material and important, is not of itself a misrepresentation, a misrepresentation is capable of being found not only in some positive statement but also in conduct intending to convey a particular impression which is false or, where a statement is literally true (but because it does not tell the whole truth) gives a false impression (exemplified by the finding of a fraudulent misrepresentation where units were described as flats without revealing that they were registered as a lodging house and governed by a requirement which precluded cooking on the premises): at [61]. Additionally, another important principle is that, for the representation to be fraudulent, it must be shown that a false representation has been made knowingly or without belief in its truth or recklessly, careless whether it be true or false: at [61], with reference to Derry v Peek (1889) 14 App Cas 337.  Lastly, fraud must be proved according to the civil standard of proof, with the standard of proof rising with the gravity of the imputation: at [61]. 

45. [45]
    There are, of course, other requirements, such as knowledge that the false representations would be relied upon. Furthermore, the sense in which the representator intended the representation to be understood is relevant to the question whether the representation was made fraudulently: see Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 577, per Brennan, Deane, Gaudron and McHugh JJ.

46. [46]
    In this case, the relevant actor for PRD Clayfield was Mr King. Although Mr King had knowledge that the first defendant, as registered proprietor, did not own the adjoining property, he clearly saw the statement of “rear street access” as one of factual practical truth rather than legal entitlement. I do find that he did not intend the representation to be understood as a representation of legal entitlement. Of course, that does not excuse his conduct so far as misleading or deceptive conduct is concerned; but it does have an effect upon what he intended the representation to be understood as, particularly in circumstances where it was not disputed that, so far as he knew, it was the state of affairs that existed for “many years”.

47. [47]
    Moreover, to rely upon Clancy to establish some similarity in circumstances such as to suggest there was fraud, also, here, misses the very important distinguishing feature that the vendor there had given instructions to the real estate agent, which were accepted, to “conceal” the difficulties attending upon such access: at [45]. 

48. [48]
    Finally, since I have accepted that Mr King did ring the male plaintiff on 6 November 2008 – prior to the Contract being formed – even though not in a way which was properly understood by the male plaintiff as being about the existence of a physical impediment to access, it also inclines me to the view that the misrepresentation here was not fraudulent on the part of PRD Clayfield.

49. [49]
    As for fraudulent misrepresentation raised against the first defendant, where the plaintiffs, who have the onus, led no evidence themselves as to the first defendant’s state of mind or knowledge on any aspect of fraud, it can only be that the evidence upon which I can rely is that given by Mr King as to the conversations that he said that he had with the first defendant. They, basically, go only to the fact that the first defendant informed Mr King that she had no legal right to the adjoining property. With respect to fraud, there is a distinct lack of evidence against the first defendant about what was the first defendant’s intention regarding what was contained in the website “brochure” of PRD Clayfield. Furthermore, concerning fraud, there is a complete absence of evidence that the first defendant had any intention concerning verbal statements made, or conduct engaged in by demonstration, by Mr King during the inspection of the property with the plaintiffs. And there is the standard of proof.

50. [50]
    Given, also, the factors that I have just mentioned with respect to the absence of deceit on the part of PRD Clayfield, overall, I find a similar difficulty in finding deceit on the first defendant’s part.

Negligent misrepresentation

51. [51]
    There is no specific allegation in the Amended Statement of Claim that anybody owed a duty of care to the plaintiffs. There is, also, no part of the Outline of Submissions of the plaintiffs which descends to a discussion of this cause of action.

52. [52]
    As canvassed by McMurdo J in Seirlis, the Queensland Court of Appeal has recognised that real estate agents can owe a duty of care to prospective purchasers, in some circumstances, citing Sweet v Mercantile Credits Ltd [1998] QCA 442: at [85]. Nevertheless, as demonstrated by McMurdo J by reference both to MacCormick v Nowland (1988) ATPR 40-852 and Norris v Sibberas [1990] VR 161, the existence or otherwise of a duty of care depends upon the particular circumstances of the particular case: at [84]–[87].  Those cases, of course, are only relevant to the cause of action between the plaintiffs and PRD Clayfield.

53. [53]
    But it is exceedingly difficult in this case, where no particular duty has been formulated in the relevant pleading and where no submissions have been made about such a cause of action, to determine from all the circumstances that this is an appropriate case that shows not only the existence of a duty of care but also a breach of that duty (e.g. to take reasonable care not to make material misstatements to prospective purchasers).

54. [54]
    Insofar as negligence might be sought, especially, to be sheeted home to the first defendant, there is, again, no particularity in the allegations, not even what was alleged in Seirlis (namely, that the vendors were vicariously liable for the conduct of the real estate agent): at [80].  If that is, truly, the nature of the allegation, then vicarious liability cannot flow if there is no liability in the real estate agency.

55. [55]
    Thus, I do not hold that there is any negligence in any “statement” established against either defendant.

Breach of Section 40A, or its analogue, Section 53A

56. [56]
    The Amended Statement of Claim is cautiously phrased with respect to these causes of action. As against the first defendant (namely, the vendor), the contravention alleged is against s 40A(1)(b) of the FTA. As against the second defendant, the allegation is the contravention both of that provision and of s 53A(1)(b) of the TPA.  No explanation was given as to why it was necessary to allege, as against the second defendant, both the FTA and the TPA, as it is clearly a corporation engaged in trade or commerce.

57. [57]
    In any event, the interpretation of those provisions must be identical and therefore it matters little, particularly in circumstances where neither the first defendant nor the second defendant has argued that the relevant Act, or relevant Acts, is or are inapplicable and where, in their own Outline of Submissions, the plaintiffs simply rely upon the TPA both against the first defendant and the second defendant.

58. [58]
    No authority has been expressly relied upon by the plaintiffs for this particular cause of action.

59. [59]
    In Krakowski s 53A of the TPA was alleged at first instance but it was unnecessary to canvas its extent on appeal. In Demagogue, Gummow J merely noted that nothing appeared to turn upon the addition of s 53A, the position being that, if there had been a contravention of s 52, the same result followed for s 53A: at 36. I detect no different approach here.

60. [60]
    The only real issue here is whether or not the relevant representations found concerned either the “characteristics of” the Property or the “existence or availability of facilities associated with” the Property.

61. [61]
    While I have some doubts about whether the term “characteristics of the land” applies here, the existence or availability of facilities associated with the land – acknowledging the absence of any argument being presented to me either way on the question - does appear to have application. In the general meaning of “facility”, it is not inapt to take it as a reference to car parking: see The Macquarie Dictionary (3^rd edition) in its reference to “toilet facilities”.

62. [62]
    On that conclusion, given that the requirement is simply that it be either “false” or “misleading”, and given all the circumstances canvassed with respect to the latter concerning s 52 of the TPA, liability does exist, at least in PRD Clayfield. 

63. [63]
    Were s 95(4) of the FTA held not to be effective for deeming PRD Clayfield’s conduct to have been engaged in by the first defendant, in circumstances where the Amended Defence of the first defendant did “not admit” that PRD Clayfield advertised the Property “as and where pleaded”, some concern then might exist if the only clear admission was that the first defendant appointed PRD Clayfield to sell her Property and that PRD Clayfield had her actual authority to act as agent for that purpose. But where the first defendant did not give evidence at all, and did not give or lead evidence to gainsay Mr King’s “disclosures” of her knowledge and imitations, it would be the more probable inference that she was a person who also “made” the canvassed representations, at least to the extent of the web “brochure” of PRD Clayfield. This is particularly so where Mr King’s uncontested evidence was that the first defendant was the source of the information for the internet use describing the Property as having “rear street access” and that Mr King relied on information from her agent (her son) about such access.

64. [64]
    Since s 53A of the TPA adds nothing in terms of contravention to conclusions I have reached on s 52 of the TPA concerning the second defendant, there is no further need to consider this issue concerning it.

Causation

65. [65]
    An important aspect of obtaining relief pursuant to the alleged causes of action that have substance here is whether the plaintiffs were induced thereby to enter into the Contract, insofar as that establishes, in all of the circumstances, the causative link between the whole course of the “conduct” (and the “misleading representations”) and the “loss and damage” (being, here, the Contract entered into).

66. [66]
    On the face of the evidence given by both plaintiffs, it is clear that they asserted that they were so induced, relying on the impugned conduct. There was nothing conceded in the cross-examination of both of the plaintiffs which would counter that as a demonstrated conclusion. The fact of the female plaintiff’s concern with the price not being GST inclusive was not shown to be such a decisive factor that any such inducement and reliance were negated. It was not shown to be her sole, or even major, concern, particularly where the plaintiffs, later, “rescinded” on the basis of the alleged contravening “conduct”. But it is important to review carefully assertions made after the event. Despite that, I remain satisfied to the requisite standard that the effect of the identified conduct was to lead to the Contract as executed.

67. [67]
    But what has been contended by both defendants is that the plaintiffs cannot, in fact, have been induced. This is based upon the contention that the male plaintiff (who was the active participant for the plaintiffs in making the written offer which, when “accepted”, became the Contract) knew of the existence of the fence as a physical impediment and that, despite that knowledge, did not withdraw the written offer that he had caused to be earlier made.

68. [68]
    In the various findings that I have made, I have accepted that Mr King did state to the male plaintiff that a fence had been erected. I have also found that the male plaintiff, while he may have had some inkling of what was being said to him, did not comprehend the significance of what was being conveyed to him. I have, also, found that the male plaintiff did not say to Mr King that he was “not concerned” about the existence of that physical impediment, stating, instead, to the effect that such lack of concern was directed towards negotiations as to the use of more car parking than that which existed on the Property itself. 

69. [69]
    The consequence of those various findings must be that the male plaintiff was not disabused of being misled about the first defendant’s legal ability, as vendor, to convey a legal right of permanent passage to the plaintiffs, as purchasers. Thus, on the whole of the evidence, I find that both plaintiffs have relevantly been induced to enter into the Contract by the canvassed reliance and that the necessary causative link has been established.

Damages under Section 82 of the TPA or Section 99 of the FTA?

70. [70]
    It is unnecessary, as McMurdo J did in Seirlis, to consider that the appropriate guide for the assessment of damages is that determined by the High Court in Kizbeau P/L v W G & B P/L (1995) 184 CLR 281: at [52].  As McMurdo J noted, the measure of loss or damage for a contravention of s 52 of the TPA is not “universal, inflexible or rigid”: at [52] referring to HTW Valuers (Central Qld) P/L v Astonland P/L (2004) 217 CLR 640 at 657.

71. [71]
    What, though, is sought by the plaintiffs is the return of the deposit sum of $50,000.00. That amount was paid under the Contract to the second defendant, as stakeholder. There is no authority referred to by the parties which deals with this circumstance, particularly where, as here, the Contract has been “terminated” – although there is a dispute as to who had the superior legal right to achieve that end. But it is difficult to characterise it as loss or damage if s 100 of the FTA were to be engaged, and utilised. 

Section 100 of the FTA

72. [72]
    If this Court is not persuaded to also make orders pursuant to s 100 of the FTA, then, as carefully analysed in Demagogue by Gummow J, since there was no defect in title, there may be no right to rescind – though, relying upon an oft cited text of Professor Butt, Gummow J concluded that, if a vendor has represented that the land possesses certain advantages which an undisclosed latent defect in quality falsifies, the vendor, at general law, will not be allowed to resist rescission by shielding behind the now false representation: at [39]–[40]. As Gummow J went on to consider, where a breach of s 52 [and, therefore, of s 53A (and its analogue)] of the TPA has occurred, the phrase “loss or damage”, at least in s 87 of the TPA or s 100 of the FTA, may be wider than “pecuniary” recovery as understood in the law of damages in tort: at [43]. Later in his judgment, Gummow J stated that he agreed with what was said on this aspect in the case by Cooper J (concerning not giving to narrow a meaning to the phrase “loss or damage”): at [44]. 

73. [73]
    For his part, Cooper J in Demagogue concluded, after a discussion of many matters involved in understanding the words “loss or damage”, that in s 87(1) it means no more than the disadvantage which is suffered by a person as a result of the act or default of another in the circumstances provided for in the provision; and, therefore, does not involve any concept of quantum or assessment of damages: at [47].  Additionally, he concluded that the courts are not restricted in granting a remedy under s 87 by the limitations under the general law of a party’s right to rescind for breach of contract or misrepresentation and that, likewise, those limitations under the general law as to the assessment of damages and the measure of damages ought not be imported into a definition of “loss or damage” in s 87 to limit the category of actionable loss or damage: at [48].  Finally, the result of whether the granting of a proper discretionary remedy necessarily means the setting aside of a contract, or a refusal to enforce the contract according to its terms, will always depend upon the particular circumstances which exist when the occasion calls for an exercise of the powers under s 87 of the TPA.

74. [74]
    To the extent to which Demagogue was doubted by McHugh, Hayne and Callinan JJ in Marks v GIO Aust Holdings (1998) 196 CLR 494, I have been assuaged by the Full Court of the Federal Court decision of Rafferty v Madgwicks (2012) 203 FCR 1. There, the joint judgment characterised Demagogue as holding that “loss and damage” arose “from entry into a contract as a result of reliance upon conduct contravening s 52 of the TPA”: at [227]. In addressing a submission based on Marks, it was held that they did “not consider” that it had the effect that there was “no proof of loss and damage” sufficient to engage s 87: at [228]. In the case under consideration there, they held that, therefore, it was “clearly open” to make an order “for the repayment of moneys paid pursuant to” the relevant agreements “or under the influence of (the) conduct in order to compensate” the affected parties, or “reduce their loss or damage”: at [229]. Incidentally, they remarked that, if the circumstances would give rise to a “reasonable expectation” that, if a fact existed, it would be disclosed, then the failure to disclose that fact may give rise to an inference that the fact does not exist; and that such a failure could constitute misleading and deceptive conduct: at [278]. Observing, as Rafferty did, that the proposition involves a consideration of the relationship between the participants (at [279]), it resonates with the facts of this case here. Additionally, even recognition that a fence existed does not inferentially lead to the legality of its erection. 

75. [75]
    The reason for such an extensive consideration of s 87 at the moment is that, where, as here, the “loss and damage” simply resolves to seeking the return of the deposit under a contract to which the purchasers do not want to be bound and that, in turn, depends upon a valid right to claim that deposit, the case seems not to be one of claiming damages pursuant to s 82 of the TPA, or s 99 of the FTA, but one involving the exercise of a discretionary judgment pursuant to statutory rights to terminate by declaring such a contract “to be avoided”, and giving such other statutory relief, as necessary. 

Statutory relief concerning the Contract

76. [76]
    From the analysis of sections that I have undertaken, I conclude that it is appropriate in this case to determine that the loss or damage for the purposes of s 100(1) of the FTA includes the detriment suffered by continuing to be bound to a contract induced by misleading or deceptive conduct in breach of s 52 of the TPA or a misleading representation in breach of s 53A of the TPA or s 40A of the FTA.

77. [77]
    As with Demagogue, had the plaintiffs, as purchasers, been aware of the true position with regard to access to the site, they would have not have entered into the contract at all and there will be serious consequences for such purchasers if the Contract is not set aside. There can be no concern about restoration of the status quo and, as discussed by Gummow J above, there may have been grounds anyway, in the general law, for considering rescission as an appropriate remedy.

78. [78]
    Hence, I will make an avoidance order to that relevant effect, including a refund of the deposit.

Contributory negligence

79. [79]
    From the findings that I have made in this case and in circumstances where I have concluded that the appropriate remedy, pursuant to statute, is not to award damages but is to give relief by declaring the Contract to be void, no consideration arises concerning “contributory negligence” under the TPA, or the FTA.

Conclusions

80. [80]
    From the findings and determinations that I have made in this case, the Court will make an order declaring that the agreement entered into between the plaintiffs and the first defendant dated as made 10 November 2008 is avoided.

81. [81]
    As a consequence of that declaration, it is necessary to order that the deposit is repayable in full from the stakeholder to the plaintiffs. I will seek submissions on the appropriate order to make with respect to the return of that deposit pursuant to the statutory provisions. With respect to the deposit, although it has not been ordered to be refunded pursuant to the terms of the Contract, an order for the payment from the stakeholder to the plaintiffs can take account of any accruals that have occurred as a result of such stakeholding: see Demagogue at 36. But, since s 58 of the Civil Proceedings Act 2011 refers simply to “the payment of money” and since “order” includes “judgment” under the Uniform Civil Procedure Rules 1999 (see the Dictionary and r 659), if both defendants agree that no accruing interest is in issue – where the giving of interest on interest is prohibited – I intend to order interest on the repayment amount. All parties have liberty to address me on this matter.

82. [82]
    Obviously, because of the conclusions that I have reached, the counterclaim of the first defendant has not been established. Accordingly, there will be judgment for the plaintiffs against the first defendant on the first defendant’s counterclaim.

83. [83]
    As for the causes of action in which the plaintiffs have succeeded against PRD Clayfield, since I have determined that there are no pecuniary damages payable but I will order that the Contract is avoided as a result, at least partly, of the conduct of the second defendant, I intend to declare that there has been a contravention by PRD Clayfield, the second defendant, of s 52 and s 53A of the TPA and s 40A of the FTA. There is no doubt that, since jurisdiction is not in issue, s 69(2)(a) of the District Court of Queensland Act 1967 gives power to grant relief by way of a declaration. An examination of the use of such a power was made by Greenwood J in ACCC v Cement Aust P/L [2014] FCA 148. As a discretionary power to be exercised according to settled principle, it must, as he held, be directed to the determination of a legal controversy (representing aspects of final relief) and the party to whom it is of utility must have a real interest to pursue: at [18]. By reference to Rural Press Ltd v ACCC (2003) 216 CLR 53 at 91 [90], Greenwood J stressed that the terms must be carefully formulated: at [21]. In this case, given the limited claim for relief in circumstances where the second defendant bears significant responsibility for the necessity for the orders to be made, a declaration is an appropriate remedy through which to record this Court’s disapproval of the contravening conduct. Thus, I will seek submissions on the appropriate form of that order.

84. [84]
    As for costs, since the orders under s 100 of the FTA are those that could have been sought only in this Court, or a higher court, the plaintiffs are entitled to their costs of the proceeding.  Since they have succeeded against both the first defendant and the second defendant, I will seek submissions on the appropriate orders that ought be made to effect that outcome.