Loading...
Queensland Judgments

beta

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
Makings Custodian Pty Ltd & Anor v Orchid Avenue Realty Pty Ltd; Orchid Avenue Realty Pty Ltd v Makings Custodian Pty Ltd & Ors  
Unreported Citation: [2018] QCA 33
EDITOR'S NOTE

This matter arose out of the purchase of a shopping centre.  The purchasers were successful at first instance in a claim that the vendor had engaged in misleading and deceptive conduct.  At first instance and on appeal the real estate agent which acted for the vendor sought to rely on the proportionate liability provisions in s 87CB(3) of the Trade Practices Act 1974 (Cth). That argument depended on the real estate agent and the vendor being concurrent wrongdoers.  In finding that they were, the court explains that the decision in Hadgelias Holdings and Waight v Seirlis [2014] QCA 177 did not mean every act of a real estate agent and that of its principal in a sales transaction is characterised as a single set of acts.

Gotterson and Morrison JJA and Henry J

9 March 2018

These two matters arose out of the purchase of a shopping centre, named the Piazza, by Makings Custodian Pty Ltd and Makings Pty Ltd. [1]. The vendor was Market Square No 1 Pty Ltd. [1]. CBRE (C) Pty Ltd, was the property manager which kept the financial records of the Piazza prior to sale. Orchid Avenue Realty Pty Ltd, trading under the name “Ray White Commercial”, was the real estate agent which acted for the vendor.

In 2014, Makings Custodian and Makings commenced proceedings against CBRE and Orchid Avenue Realty. The primary judge found that by making certain false statements, Orchid Avenue Realty had engaged in false and misleading conduct in contravention of s 52 and s 53A of the Trade Practices Act 1974 (Cth). [21]. Her Honour also found that the false representations caused the plaintiffs to purchase the Piazza and that, as a result, the plaintiffs had sustained financial loss. [21]. Among other things, her Honour also rejected a defence pleaded by Orchid Avenue Realty which was based on the proportionate liability provisions in s 87CB(3) of the Trade Practices Act and s 28(1)(a) of the Civil Liability Act 2003. [23].

Orchid Avenue Realty Pty Ltd raised various grounds of appeal (which were dealt with, for convenience, as topics) but only succeeded in challenging the decision at first instance on one of the topics raised on appeal; namely, whether it could rely on the proportionate liability provisions outlined above. [65], [87].

Orchid Avenue Realty had pleaded that CBRE and Market Square were concurrent wrongdoers. [65]–[66]. Its claim against CBRE failed because of the primary judge’s finding that CBRE was not a wrongdoer. [65]. The claim against Market Square required consideration of the effect of Orchid Avenue Realty being an agent of Market Square.

The primary judge held that she was bound by the decision in Hadgelias Holdings and Waight v Seirlis [2015] 1 Qd R 337. [67]. In that case, the Court of Appeal held that where “agents and vendors … performed a single set of acts which caused loss … [t]hey were not ‘concurrent wrongdoers’ so as to attract the application of s 87CB” of the Trade Practices Act. [67]. Holmes JA (as the Chief Justice then was) said that s 87CB was concerned with:

“distinct acts (or omissions) or sets of acts (or omissions) by different actors, combining or working independently to cause loss or damage, and consequently inapplicable where there is but a single act or set of acts causing loss, attributable to more than one person.”

The primary judge noted that the New South Wales Court of Appeal had reached the opposite conclusion in Williams v Pisano [2015] NSWCA 177. [68]. Her Honour expressed the view that were Orchid Avenue Realty and Market Square concurrent wrongdoers, she would have limited Orchid Avenue Realty’s liability to 80 per cent of the plaintiffs’ loss. [68].

Gotterson JA, with whom Morrison JA and Henry J agreed, said:

“I do not consider the decision in Hadgelias to be one that requires characterisation of every act of a real estate agent and that of its principal in a sales transaction as constituting a single set of acts. … [W]here a principal has itself contravened s 52 of the TPA by acts or omissions which have no direct counterparts in conduct on the part of the agent, it is, I think, inappropriate to characterise those acts or omissions and the agent’s conduct as all within a single set of acts or omissions which caused the purchaser’s loss.” [75].

His Honour held that the conduct on the part of Market Square, which the primary judge considered would have, independently of Orchid Avenue Realty’s conduct, infringed s 52, was not part of a single set of acts in which Orchid Avenue Realty participated. [76]. Accordingly, Orchid Avenue Realty and Market Square were, by virtue of their respective acts and omissions, concurrent wrongdoers. [76].

The appeal was allowed on this topic, and the amount of damages reduced to 80 per cent of the damages as assessed. [77]. His Honour also allowed an appeal by the plaintiffs with respect to quantum of damages. [88]–[97].

J English