FEDERAL COURT OF AUSTRALIA Australian Competition and Consumer Commission v Oceana Commercial Pty Ltd [2004] FCAFC 174 TRADE PRACTICES (CTH) – misleading and deceptive conduct – system of marketing used to sell residential units on Gold Coast – whether misrepresentation as to market value of units – bank lending to purchasers of units – whether purchasers in position of special disadvantage – whether Bank guilty of unconscionable conduct – declarations of misleading and deceptive conduct made by primary judge – injunctions refused – whether error in exercise of discretion TRADE PRACTICES (QLD) – misleading conduct in connection with marketing residential units on Gold Coast – Australian Competition and Consumer Commission – power of Commission to bring proceedings under State Fair Trading Act – standing VALUATION – residential units – market value at given date – valuation relying on sales four or more years later and ignoring contemporaneous sales – whether valid basis of valuation at given date – whether distinction between "market value" and "market price" valid COSTS – indemnity costs – unsuccessful appeal – whether appellant had no prospect of success Acts Interpretation Act 1901 (Cth) s 22 Administrative Appeals Tribunal Act 1975 (Cth) Corporations Act 2001 (Cth) ss 9, 57A, 124 Crimes Act 1914 (Cth) ss 4H, 13 Federal Court Act 1976 (Cth) s 21 Trade Practices Act 1974 (Cth) ss 2, 6A, 28, 51AA, 51AC, 52, 77, 80, 87, 87CA, 163 163A Constitution s 51 (xx) Fair Trading Act 1989 (Qld) ss 6, 38, 39, 92, 98, 99, 100, 103 Property Agents and Motor Dealers Act 2000 (Qld) ss 572B, 572C, 572D, 573A Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 considered Alphafarm Pty Ltd v SmithKline Beecham Australia Pty Ltd (1994) 49 FCR 250 considered Australian Apple and Pear Marketing Board v Tonking (1942) 66 CLR 77 cited Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2002) 117 FCR 310 applied Australian Conservation Foundation Incorporated v The Commonwealth (1980) 146 CLR 493 applied Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 considered Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412 cited Colgate‑Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 cited Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 applied Commissioner of Taxation v Executors of Rubin (1930) 44 CLR 132 applied De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 cited Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 considered Fountain Selected Meats (Sales) Pty Ltd v National Produce Merchants Limited (1988) 81 ALR 397 cited House v The King (1936) 55 CLR 499 cited Qantas Airways Ltd v Dillingham Corporation (unreported, Supreme Court of New South Wales, 14 May 1987) cited Re The Honey Pool of Western Australian (No 2) (1988) 14 ACLR 621 referred to Shop Distributive and Allied Employees Association v Minister for Industrial Affairs of the State of South Australia (1995) 183 CLR 552 referred to Spencer v The Commonwealth (1907) 5 CLR 418 applied Tisdall v Health Insurance Commission [2003] FCAFC 198 cited Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1988) 19 FCR 469 considered Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591 considered Halsbury's Laws of England (4th Ed) Meagher, Gummow & Lehane's Equity Doctrines and Remedies (4th Ed) AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v OCEANA COMMERCIAL PTY LTD, MARKFAIR PTY LTD, ADVANCED COMMERCIAL DEVELOPMENTS PTY LTD, COMMONWEALTH BANK OF AUSTRALIA, CHRISTOPHER RUSSELL BILBOROUGH, DUDLEY JAMES QUINLIVAN, GREGORY POINTON, DEAN CORNISH and JOHN GROUNDS Q20 OF 2004 HEEREY, SUNDBERG and DOWSETT JJ 5 JULY 2004 BRISBANE IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q20 OF 2004 On appeal from a single Judge of the Federal Court of Australia BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPELLANT AND: OCEANA COMMERCIAL PTY LTD (ACN 070 287 991) FIRST RESPONDENT MARKFAIR PTY LTD (ACN 065 542 761) SECOND RESPONDENT ADVANCED COMMERCIAL DEVELOPMENTS PTY LTD (ACN 076 810 672) THIRD RESPONDENT COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) FOURTH RESPONDENT CHRISTOPHER RUSSELL BILBOROUGH FIFTH RESPONDENT DUDLEY JAMES QUINLIVAN SIXTH RESPONDENT GREGORY POINTON SEVENTH RESPONDENT DEAN CORNISH EIGHTH RESPONDENT JOHN GROUNDS NINTH RESPONDENT JUDGES: HEEREY, SUNDBERG and DOWSETT JJ DATE OF ORDER: 5 JULY 2004 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. The appeal be dismissed. 2. The appellant pay the third to ninth respondents' costs of the appeal. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. TABLE OF CONTENTS BACKGROUND 1-8 PRIMARY JUDGE'S FINDINGS 9-31 Coral Reef and Investlend 17 Mr Bilborough 18 Mr Quinlivan 19 Mr Eggenhuizen 20 Mr Andrews 21 Redwind and its directors 22 Mr Pointon 23 Mr Johanson 24 The Bank 25-31 GROUNDS OF APPEAL 32-36 GROUND 2 – THE VALUATION QUESTION 37-102 Mr Brett's evidence 39-61 Cross examination 62-95 Difficulties with Mr Brett's evidence 96-102 The market and comparable sales 97 Uninformed purchasers 98-99 Information upon which Mr Brett's valuations were based 100 Other methods of valuation 101-102 The appeal 103-115 Comparable sales 104-105 Growth rate figures 106-108 Resales 109-110 Purchasers who were misled 111-113 Local purchasers 114-115 Conclusion 116-117 GROUNDS 3(A) AND 4(A) –BILBOROUGH AND QUINLIVAN 118 GROUNDS 3(B), 4(B), 5 AND 6 – BILBOROUGH, QUINLIVAN, REDWIND AND ITS DIRECTORS, POINTON 119 GROUND 7 – POINTON AND THE STATE ACT 120 The State Act 121-124 At first instance 125-127 Pleadings 128-132 The appeal 133-159 Power to enforce the State Act 135-143 Declaratory relief and s 38 of the State Act 144-149 The Commission's standing 150-158 Discretion 159 GROUND 8 – THE BANK 160-182 GROUND 9 – INJUNCTIONS 183-190 COSTS 191-200 CONCLUSION 201 IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY Q20 OF 2004 On appeal from a single Judge of the Federal Court of Australia BETWEEN: AUSTRALIAN COMPETITION AND CONSUMER COMMISSION APPELLANT AND: OCEANA COMMERCIAL PTY LTD (ACN 070 287 991) FIRST RESPONDENT MARKFAIR PTY LTD (ACN 065 542 761) SECOND RESPONDENT ADVANCED COMMERCIAL DEVELOPMENTS PTY LTD (ACN 076 810 672) THIRD RESPONDENT COMMONWEALTH BANK OF AUSTRALIA (ACN 123 123 124) FOURTH RESPONDENT CHRISTOPHER RUSSELL BILBOROUGH FIFTH RESPONDENT DUDLEY JAMES QUINLIVAN SIXTH RESPONDENT GREGORY POINTON SEVENTH RESPONDENT DEAN CORNISH EIGHTH RESPONDENT JOHN GROUNDS NINTH RESPONDENT JUDGES: HEEREY, SUNDBERG and DOWSETT JJ DATE: 5 JULY 2004 PLACE: BRISBANE REASONS FOR JUDGMENT THE COURT: BACKGROUND 1 This appeal arises out of the marketing and sale of residential units at the Gold Coast in 1997 and 1998. The appellant (the Commission) alleged that sales were effected using a system of marketing that contravened the Trade Practices Act 1974 (Cth) (the Trade Practices Act) and the Fair Trading Act 1989 (Qld) (the State Act). The fifth and sixth respondents, Mr Bilborough and Mr Quinlivan, and companies with which they were associated, Coral Reef Group Pty Limited (Coral Reef), National Asset Planning Corporation Pty Ltd (NAPC) and Investlend Pty Ltd (Investlend), were alleged to have implemented the system (the NAPC Scheme). 2 The Commission has not appealed from the primary judge's rejection of its claim that the implementation of the NAPC Scheme as a whole contravened s 52 of the Trade Practices Act. Nevertheless the elements of the NAPC Scheme must be understood in order to provide the context in which particular contraventions are alleged to have occurred in the course of its implementation. 3 The first step in the NAPC Scheme was telemarketing. This was followed by a seminar at which the benefits of investing in property at the Gold Coast using negative gearing were explained to prospective purchasers. Those who "qualified" for further involvement received an "in‑home consultation". Prospective purchasers were then invited to inspect properties at the Gold Coast. Those who accepted were allocated a "runner" whose task it was to show them selected properties and introduce them to a "financial advisor". The properties were chosen from those in respect of which Coral Reef had an agreement for marketing with a developer. The telemarketing, seminar, consultation and runner steps of the NAPC Scheme were undertaken by representatives of NAPC. The financial advisor was a representative of Investlend. The financial advice consisted primarily of a computer analysis showing projections of income and of the value of the unit at certain future dates. A prospective purchaser was then taken to a solicitor to whom NAPC and Investlend usually referred purchasers. 4 The specific misrepresentations in the carrying out of the NAPC Scheme relied on by the Commission included statements as to the present and future values of units, the latter involving the rate at which the unit would increase in value. Non‑disclosure of aspects of the NAPC Scheme, such as the existence of a marketing arrangement and a substantial fee to be paid by a developer pursuant to it, were also relied on. 5 The NAPC Scheme was alleged to have been applied to particular purchasers, Mr and Mrs Gleeson. No relief was sought on their behalf. In September 1998 they purchased a unit in a development called the Chevron Palms Units at Chevron Island, Surfers Paradise. Specific representations were alleged to have been made to them. Again the Commission relied on non‑disclosures as misleading and deceptive conduct. 6 A number of other parties were said to have been involved in the NAPC Scheme. Redwind Pty Ltd was a developer which entered into an agreement with Coral Reef for the marketing of the Chevron Palms Units. Redwind subsequently changed its name to Advanced Commercial Developments Pty Ltd. It is the third respondent to the appeal. It was sought to make its directors, Mr Cornish and Mr Grounds, liable. They are the eighth and ninth respondents to the appeal. Messrs Byrom and Eggenhuizen, NAPC representatives, were respectively a runner and an in‑house consultant. Mr Andrews acted for Investlend as an advisor. Messrs Byrom, Eggenhuizen and Andrews all dealt with Mr and Mrs Gleeson. None of them is involved in the appeal. Mr Pointon, the seventh respondent to the appeal, and Mr Johanson, a respondent below but not to the appeal, were on the panel of solicitors maintained by NAPC and Investlend. They dealt with purchasers of marketed properties. Mr Pointon acted for the Gleesons in the purchase of their unit and Mr Johanson acted for Redwind in the same transaction. 7 The Commonwealth Bank of Australia (the Bank), the fourth respondent to the appeal, provided funds to the Gleesons on the purchase of their unit. It held a valuation of the property. The Commission did not allege that the Bank took part in, or knew of, the NAPC Scheme. It was alleged that, by reason of the valuation, the Bank knew that a marketing scheme had been used in the sale to the Gleesons and that as a result the purchase price was well above the unit's market value. The Bank's liability was said to derive from its failure to tell the Gleesons of those matters. 8 Before recording the primary judge's findings, it is convenient to note some name changes and other matters affecting certain actors in the NAPC Scheme. NAPC was in voluntary liquidation at the commencement of the proceeding. It was not a party to the application. Mr Bilborough was NAPC's sole director and shareholder. On 22 December 1999 Coral Reef changed its name to Oceana Commercial Pty Ltd, the first respondent. Mr Bilborough was its sole director and shareholder. Investlend subsequently changed its name to Markfair Pty Ltd, the second respondent. Until 9 September 1998 Investlend's shares were held equally by Mr Quinlivan's wife and Mr Bilborough. Mr Quinlivan managed the company until 9 September 1998. Thereafter he had no role in its affairs. Coral Reef and Investlend were not represented and did not appear on the appeal. PRIMARY JUDGE'S FINDINGS 9 As we have said, the primary judge rejected the Commission's contention that the implementation of the NAPC Scheme as a whole contravened s 52 of the Trade Practices Act. Her Honour then dealt with particular representations that were alleged to have been made in the implementation of the NAPC Scheme. She found that the Investlend advisor used an 8 per cent capital growth rate in presentations to purchasers, and that this would be misleading and deceptive if the rate was not a reliable guide over the following ten years or if there was no basis for putting it forward as reliable. 10 The primary judge found that printed spreadsheets produced to purchasers clearly conveyed that the price at which a property was sold represented its value, and that if the figure did not represent its current value persons might be misled. Her Honour rejected a submission by Mr Bilborough that a notation on the spreadsheets was 'an express disclaimer of liability for use of the information in the document'. She said at [191]: 'Purchasers were encouraged to view the purchase price of a unit as its present market value. This was reinforced by the advice they were given by the runner that units were selling quickly, and impliedly at those prices. That such a belief was engendered, in people who would have little knowledge themselves of prevailing prices, is borne out to an extent by the lack of discussion about price by any purchaser. It is in this background that purchasers are told, by reference to the spreadsheets, that the listed price equates to its value, which they would reasonably take to mean its current market value. Nothing in the notation nor in what the headings conveyed would have detracted from that representation in my view.' 11 The primary judge concluded her examination of the particular representations in the course of the NAPC Scheme by saying at [194]: 'So far as concerns information provided in the carrying out of the scheme, purchasers may have been misled about the rates of capital growth which they might reasonably expect on the property and whether the price they were being asked to pay was its current market value. It remains necessary to consider whether the information provided and statements made were incorrect.' 12 The primary judge then rejected the Commission's case based on alleged non‑disclosures in the course of the implementation of the scheme: the existence of the marketing agreement, the marketing fee and its size, the relationship between those involved in the scheme, that their remuneration depended upon a sale, that they were acting in their own interests and not that of purchasers, and as to the market value of the units. 13 Her Honour then considered the representations made to the Gleesons. She found that Mr Eggenhuizen told them that 8 per cent was an appropriate rate of growth to apply to a Gold Coast unit, and that Mr Andrews said, in effect, that 8 per cent as a rate of annual capital growth was conservative, and implied that it was reliable by using it in the analysis. That conveyed to the Gleesons that they might reasonably expect the unit to increase in value by that rate over the next ten years. Her Honour also found that the Gleesons were advised, as were other purchasers, that the price they were asked to pay for the unit represented its market value. 14 The primary judge then considered whether the market value representation was misleading. The Gleesons paid $164,900 for unit 29. The valuation of Mr Rodney Brett, a valuer called by the Commission, was $120,000. Her Honour did not find his valuation methodology satisfactory. She gave detailed reasons for her concerns. It will be necessary to return to them later. It is sufficient at this stage to record her Honour's view that Mr Brett's opinion of market value was affected by certain assumptions he made about the effect of marketing or "marketeering" of units on the Gold Coast at the time, designed to secure the highest price by a large expenditure on marketing without which a sale at prices like that paid by the Gleesons could not be achieved. Her Honour said at [253]: 'Mr Brett was of the view that if a purchaser put their property back on the market they would not have been able to achieve the price paid. There is however no evidence of resales at a point close in time to that of purchase. The only evidence of comparable sales shows that prices were consistently of the order paid for Unit 29. Of some three hundred or more sales effected on Chevron Island in a relevant period, many were sales at $150,000 or more. Many were of units which could usually be described as inferior in some respects to those in Chevron Palms. Mr Brett agreed that if you were buying a unit on Chevron Island at the time, you would have to pay $150,000. This would seem to me to suggest there was a price set by the market. Mr Brett considered that it should not however be seen as market value. Indeed at one point in the cross‑examination he drew a distinction between the price paid in the market and market value.' Her Honour concluded that the evidence did not establish that the market value of Unit 29 and the other properties considered by Mr Brett was substantially less than the price paid for them. 15 The primary judge then turned to whether the average capital growth rate representation was misleading. Her Honour regarded the representation as one relating to a future matter for the purposes of s 51A of the Trade Practices Act. She did not accept Mr Bilborough's or Mr Quinlivan's claim that they had reasonable grounds for making the representation. She more readily drew the inference that they did not have a reasonable foundation for a belief the rate of 8 per cent or more could apply to units, given that they chose not to give evidence on an issue that was raised with them at an early point. 16 The primary judge then considered the liability of each respondent in turn. 17 Coral Reef and Investlend (a) These respondents had contravened s 52 of the Trade Practices Act in relation to purchasers generally by representing that the 8 per cent per annum rate was reliable in order to assess the value of a property over the ensuing ten years. (b) They had contravened s 52 in connection with the Gleesons by (i) putting forward Investlend as a financial advisor, and (ii) by confirming the reliability of the 8 per cent annually for future capital growth. 18 Mr Bilborough (a) He directed that Investlend be put forward as a financial advisor to the Gleesons. (b) He was aware of what was said about the rates of capital growth used by NAPC's and Investlend's representatives, and was not shown to have had any reasonable basis for believing the representation was true. 19 Mr Quinlivan He was fully aware of and approved the use of the 8 per cent capital growth rate, and was not shown to have had any reasonable basis for believing the representation was true. 20 Mr Eggenhuizen The case against him was not made out. There is no appeal in relation to this finding, and it is accordingly unnecessary to set out the basis for it. 21 Mr Andrews (a) He was knowingly concerned in Coral Reef's and Investlend's representation to purchasers generally about the 8 per cent rate of increase in capital value. (b) He was knowingly concerned in Coral Reef's and Investlend's representation to the Gleesons about the 8 per cent rate of increase in capital value. (c) He was knowingly concerned in Coral Reef's and Investlend's representation to the Gleesons that the latter was a qualified financial advisor who would act in their interests. 22 Redwind and its directors The case against them was not made out. In the absence of reliable evidence of the value of the units, the primary judge was unable to conclude, in connection with the application of the NAPC Scheme to purchasers generally, that Redwind and its directors knew that the units were to be marketed at a price well above market value and, moreover, that purchasers were to be advised that the price they were to pay was the true market value. The case against these respondents in relation to the market value representations to the Gleesons failed for want of proof as to the value of their unit. It would have failed in any event because it had not been shown that these respondents knew or had reason to believe that such a representation would be made. 23 Mr Pointon (a) Mr Pointon's failure to mention to the Gleeson's his connection with Investlend, which he knew had given them financial advice, and about collusion between Investlend and NAPC, was misleading. (b) However, the case against him was not made out because the s 38 of the State Act was not available to the Commission because it did not have an interest in the enforcement of the State Act. 24 Mr Johanson The case against him was not made out. There is no appeal in relation to this finding, and it is accordingly unnecessary to set out the basis for it. 25 The Bank The case against the Bank was not made out under either s 51AA or s 51AC of the Trade Practices Act. As to the former, the primary judge concluded that the Gleesons did not suffer from a special disadvantage for the purposes of Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447. Her Honour described the Gleesons as 'educated, intelligent people, well able to comprehend that the price sought for a property may not be the same as its market value'. She said at [330]‑[331]: 'the bank had been informed by its valuer that he considered that the Gleesons had probably contracted to pay substantially more for the unit than it was worth. It was also informed by the valuer that the reason for this would be their lack of knowledge of local market conditions…. The knowledge that the bank had without more, would not have required it to disclose its valuation or the advice it had received. The disadvantage that the Gleesons laboured under, which might be said to be evident to the bank, was not such as to seriously affect their ability to make a judgment as to their interests. They were able to form that judgment and protect their interests if they had obtained the necessary information. That they did not do so does not constitute the disability or weakness of which the cases speak.' 26 The primary judge noted the state of the Gleesons' knowledge about the value of the property at the time they entered into the loan transaction. She referred to their accountant's doubt about the correctness of the assumptions on the spreadsheet, Mrs Gleeson's second thoughts about the purchase, the Gleesons' unsatisfactory evidence about the enquiries they made after returning to Cairns, that Mr Gleeson had thought about getting out of the contract, and that he had spoken to real estate agents probably about the value of the property. Her Honour concluded on s 51AA at [334]: 'The Commission's case is that they were under a special disability. In my view the Commission is required to show that the Gleesons were unable to obtain the information which it says they needed. In truth Mr and Mrs Gleeson were not under any disability such as would prevent them from obtaining the very advice which it is now said the bank should provide to them. On the Commission's case all they had to do was seek advice from a valuer on the Gold Coast.' 27 The Commission's case under s 51AC also failed. The primary judge said at [339]‑[340]: 'I have discussed some of the difficulties which would arise for the bank were it to provide its valuation. In any event it could hardly be said to be acting contrary to good conscience in not doing so when it has told its customer that it would not be providing it and that they should draw no conclusion about a property's value because the bank is willing to advance the monies sought…. The Commission submitted that the bank might avoid a finding of unconscionable conduct by simply advising the Gleesons to seek advice. In reality Mr and Mrs Gleeson were always able to obtain that advice, if not before their entry into contract then afterwards. They may have done so. They were alerted to the possibility of it not being a good bargain and made some enquiries at or after this time. The only reasonable conclusion to be drawn from their continuing with the contract in my view was that Mr Gleeson wished to do so.' 28 The primary judge made the following declarations: (a) that Coral Reef and Investlend contravened s 52 of the Trade Practices Act between November 1997 and November 1998 by misleading purchasers as to the rate by which residential units at the Gold Coast would increase in value over the following ten years by applying a rate of annual growth of 8 per cent when they had no reasonable basis for so representing; (b) that Messrs Bilborough, Andrews and Byrom were knowingly concerned in such contraventions and that Mr Bilborough conspired with Coral Reef, Investlend, Mr Quinlivan and NAPC to effect them; (c) that in the period from November 1997 to 9 September 1998 Mr Quinlivan was knowingly concerned in such contraventions and conspired with Coral Reef, Investlend, Mr Bilborough and NAPC to effect them; (d) that in or about September 1998 Coral Reef and Investlend contravened s 52 by misleading Mr and Mrs Gleeson about the rate by which the unit they were to purchase would increase over the following years by applying an annual rate of 8 per cent per annum, when they had no reasonable basis for so representing, and by representing Investlend as a qualified financial advisor who would act in their interests; (e) that Messrs Bilborough, Andrews and Byrom were knowingly concerned in the contraventions in (d) and that Mr Bilborough conspired with Coral Reef, Investlend and NAPC to effect those contraventions. 29 The primary judge declined to grant injunctions in connection with possible future representations as to persons being qualified financial advisors when they were not, or injunctions requiring the disclosure of that person's role in selling and marketing or their connection with the marketeers. Her Honour said at [344]: 'Such injunctions might have been appropriate against [Coral Reef, Investlend and Mr Bilborough]. I would not have granted them against [Messrs Andrew and Byrom] who are not shown to have had a strong historical connexion to property or the carrying out of schemes such as the NAPC scheme. The essential vice in the conduct the subject of the declaration is, I consider, addressed by the more recent Queensland legislation and injunctions are therefore unnecessary. Any future contraventions can be adjudged in any event in light of the declarations made.' The Queensland legislation referred to is the Property Agents and Motor Dealers Act 2000 (Qld). 30 Her Honour at [345] also declined to grant an injunction concerning representations as to rates of capital growth on the ground that it would be difficult to fashion: 'It cannot contain, as a condition to any such future advice, that expert professional advice be obtained before the giving of the advice, since it is not apparent that experts would advise the use of rates as reliable. Such an injunction might be misconstrued as suggesting that such advice was possible and in order. It would not seem to me that an injunction requiring specific warnings would be of much utility and again might be misconstrued as a licence to so advise.' 31 On 3 February 2004 the primary judge ordered that the Commission pay (a) the costs of Redwind and Messrs Cornish and Grounds taxed on a party and party basis, including reserved costs; (b) the Bank's costs taxed on a party and party basis, including any reserved costs, save for appearances where a watching brief was involved; (c) any legal costs incurred by Mr Eggenhuizen; (d) Mr Pointon's costs, taxed on a party and party basis, including any reserved costs; (e) Mr Johanson's costs taxed on a party and party basis, including reserved costs up to 9 April 2003 but thereafter on an indemnity basis; (f) 60 per cent of the costs of Coral Reef, Investlend, Mr Quinlivan and Mr Bilborough. GROUNDS OF APPEAL 32 The Commission's grounds of appeal are numbered 2 to 10. Numbers 2 to 6 are that the primary judge erred 2. in rejecting the evidence of Mr Brett that the purchase price of marketed properties was substantially greater than their market value; 3. (a) in failing to find that Mr Bilborough knew that the purchase price of marketed properties was substantially greater than their market value; (b) in failing to find that Mr Bilborough knew that Coral Reef and Investlend made representations to purchasers of marketed properties that the purchase price represented their market value; 4. (a) in failing to find that Mr Quinlivan knew that the purchase price of marketed properties was substantially greater than their market value; (b) in failing to find that Mr Quinlivan knew that Coral Reef and Investlend made representations to purchasers of marketed properties that the purchase price represented their market value; 5. in finding that it could not be concluded that Redwind and Messrs Cornish and Grounds knew that purchasers were to be advised that the price they were to pay was the true market value; 6. in failing to find that Mr Pointon knew that purchasers were advised by Coral Reef and Investlend that the purchase price they were to pay was the true market value of the properties. We have separated these grounds from the remainder because grounds 3 to 6 are dependent on the Commission making out ground 2. 33 Ground 7 is that the primary judge erred (a) in finding that a declaration that Mr Pointon had contravened s 38 of the State Act could not be given in proceedings brought by the Commission; (b) in finding that the making of a declaration of contravention of s 38 of the State Act was inappropriate because of statutory limitations on the persons by whom proceedings for an injunction for contravention of that provision may be brought. 34 Ground 8 is that the primary judge erred (a) in holding that the Gleesons were not in a position of special disadvantage with respect to the Bank unless they were unable to obtain, or were prevented from obtaining, advice which would have revealed the true value of the property they had contracted to buy; (b) in finding that the conduct of the Bank was not unconscionable because Mr Gleeson wished to proceed with the purchase of the property, in circumstances where there was no evidence, and no finding was made that Mr Gleeson knew that the purchase price exceeded the true value of the property by an amount in the order of $64,900; (c) in finding that, with respect to s 51AC(3) of the Trade Practices Act, the conduct of the Bank did not expose the Gleesons to risks; (d) in finding that if the Bank had advised the Gleesons to seek their own valuation advice, the Bank would have exposed itself to liability and that this was a factor that was relevant in concluding that the Bank did not act unconscionably. 35 Ground 9 is that the primary judge erred in finding (a) that injunctions against Coral Reef, Investlend and Messrs Bilborough and Quinlivan were unnecessary because the Property Agents and Motor Dealers Act 2000 (Q) addressed the essential vice of the contravening conduct. (b) that such injunctions ought not be granted because they were difficult to formulate. 36 There is no ground of appeal in relation to the primary judge's orders as to costs. However, because the Notice of Appeal was amended to include an appeal against orders (a), (b), (d) and (f) in [31], we will treat the Commission as contending that her Honour erred in the exercise of her discretion in making them. gROUND 2 - The valuation question 37 The Commission claimed that in the course of marketing units pursuant to the NAPC scheme, misleading statements were made concerning the prices at which units were being offered for sale. In particular, it claimed that: · a "marketed price" for each unit was fixed by agreement between the developer and the marketer (as defined in the statement of claim); · such price made allowance for a substantial marketing fee in excess of that which would normally be charged by a real estate agent; · as a result, the marketed price was well above market value; · the marketed price was falsely represented to be market value; and · such representation was misleading and deceptive conduct contrary to s 52 of the Trade Practices Act. 38 To establish that case, the Commission sought to prove the market values of relevant units as at the time at which each was first sold, relying upon evidence from Mr Brett. No other valuer gave evidence at the trial. Nonetheless the primary judge rejected Mr Brett's evidence as to value. The Commission appeals against that rejection. Mr Brett's evidence 39 On 9 August 2002 the Commission instructed Mr Brett to value numerous units, apparently for the purposes of these proceedings. In a schedule to his affidavit filed on 19 November 2002, 31 units are identified (AB 462-467). Elsewhere in the material Mr Brett says that he was asked to value 30 units. Valuations of 20 units are in evidence. Each unit has been valued as at the date of first sale, generally in 1997 or 1998, and as at September 2002. The valuations are as follows: Chevron Palm Waters Owner Unit No Value at September 2002 Value at First Sale Benning 5 $110 000 $110 000 (Feb 98) Webber 6 $112 500 $112 500 (Dec 97) Hancock 7 $112 500 $112 500 (Nov 98) Foley 15 $120 000 $120 000 (Apr 98) Berger 22 $115 000 $115 000 (Feb 98) Gentle 23 $115 000 $115 000 (Dec 97) Fullagher 27 $120 000 $120 000 (Dec 97) Gleeson 29 $120 000 $120 000 (Sept 98) Ghata 38 $115 000 $115 000 (Feb 98) Scholars Cove Owner Lot No Value at September 2002 Value at First Sale Gentile 8 $127 000 $127 000 (Oct 98) Goodall 9 $127 000 $127 000 (Nov 98) Lennartsson 42 $128 000 $128 000 (Nov 98) Swan Lane Apartments Owner Lot No Value at September 2002 Value at First Sale Sawtell 4 $110 000 $110 000 (Jun 99) Maglaris 6 $110 000 $110 000 (Aug 98) Chapala Apartments Owner Lot No Value at September 2002 Value at First Sale Hansen 18 $115 000 $115 000 (Apr 99) Waverley Apartments Owner Lot No Value at September 2002 Value at First Sale Richmond 10 $170 000 $170 000 (Oct 99) Chapala Place Owner Lot No Value at September 2002 Value at First Sale Fletcher 5 $105 000 $105 000 (Feb 00) Park Breeze Owner Lot No Value at September 2002 Value at First Sale Willshire 19 $120 000 $120 000 (Feb 01) Kirra on the Beach Owner Lot No Value at September 2002 Value at First Sale Puo Ho Taua 11 $122 000 $122 000 (Feb 98) Stormbird Place Owner Lot No Value at September 2002 Value at First Sale Benning & Hayes 2 $105 000 $105 000 (Feb 98) Mr Brett may also have valued units located at Dunbarton Lane, Kinross Lane, 21 Monet Landing and Waverley Apartments and a second unit at Stormbird Place. However, as far as we can see, those valuations are not in evidence. 40 Mr Brett's approach to the task appears from a letter to the Commission dated 9 September 2002 and from the five valuation documents which are in evidence. In the letter of 9 September 2002, Mr Brett confirmed that he was: '... researching the following: · Prices paid and resales made in the residential developments containing the units the subject of this hearing which are listed in the attached schedule. · Prices paid and resales made in various other residential developments in the general vicinity of the subject units. · The prices which individual owners could reasonably expect if the units were appropriately and professionally marketed through local real estate agents. · Increases in values of residential units during the past 10 years, both on the Gold Coast generally and within individual unit developments.' 41 Mr Brett then presented an outline of his final report, commencing with the statement that: 'My assessments proceed on the basis of Spencer -v- The Commonwealth. In essence I presume voluntary bargaining between fully informed parties both willing to trade but neither so anxious as to overlook ordinary business considerations.' 42 In Spencer v The Commonwealth (1907) 5 CLR 418, Griffith CJ said, at 432: 'In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring "what would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?" It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.' 43 Isaacs J said at 441-442: 'In the first place the ultimate question is, what was the value of the land on 1st January 1905? All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on the day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property. ... Having mentally placed itself in the position of the bargaining parties as on the critical date, 1 January 1905, the question for the Tribunal is, what is the point at which the parties would meet; what is the sum the one would be willing to give and the other to take? That is practically the same as asking what is the highest sum such a purchaser would give, because we must assume the owner would be willing to take the best he can get. The best he can get in those circumstances is the test of what he loses, and it is his loss which must be replaced.' 44 Mr Brett noted that 'There are fourteen different residential developments in this matter', presumably a reference to the number of different unit blocks which were the subject of the marketing schemes involved in the litigation. He then observed that prices paid for units within these developments were generally in the range of $150 000 - $200 000, apparently a reference to the first sale prices of the units. He then observed that: 'An examination of sales and resales of units within these developments and within similar developments shows that resales are generally at prices 20 percent to 25 percent less than the initial purchase price. ... An examination of statistics for residential unit sales on the Gold Coast as a whole and in individual suburbs of the Gold Coast indicate that prices within the bracket relevant to this matter increased at a compounding rate in the order of 2 percent per annum to 3 percent per annum for the period 1991 to 2001 inclusive. These growth statistics include sales at the higher prices achieved by way of marketing campaigns directed to purchasers interstate or in other Queensland cities. An examination of sales and resales over the same period of individual units within various other residential developments not sold by way of marketing campaigns direct to purchasers interstate and in other Queensland cities show a lower rate of growth than the 2-3 percent stated above.' 45 The reference to "marketing schemes" introduces a theme which regularly recurs in Mr Brett's evidence. Broadly speaking, he seems to have been describing marketing techniques which he considered to have been prevalent in the sale of home units on the Gold Coast in 1997/98, and perhaps at earlier times. It also seems that he assumed that the techniques which are the subject of these proceedings were typical of such schemes. However it is clear from the evidence that Mr Brett did not investigate the techniques used in selling units other than those directly concerned in these proceedings; nor did he investigate the accuracy of his view that such schemes were prevalent at material times. 46 Mr Brett provided five separate valuation documents, one for each of the following units or groups of units: · nine units in Chevron Palm Waters; · three units in Scholars Cove; · various residential units in Southport; · one unit at "Kirra on the Beach"; and · one unit at "Stormbird Place". 47 As we have said, he provided a valuation as at the date of first sale and as at September 2002. All of the units, other than the 'various residential units in Southport', were first sold in 1997 or 1998. The various Southport units were sold between 1998 and 2001. It is convenient to base our consideration of Mr Brett's evidence on the valuation for the Chevron Palm Waters units. It is typical of his approach to all relevant valuations. 48 Having described the nature of the development and the units therein, Mr Brett observed, under the heading "Valuation Considerations", that he had considered three matters, namely: '1. Sales and resales of units within Chevron Palm Waters. 2. Sales and resales of units within other developments on Chevron Island. 3. Trends in residential unit prices.' 49 Attachment 5 to the valuation contains a schedule of all sales of units in the Chevron Palm Waters development, including 'the location and postcode of purchasers' together with resales made 'by a number of these purchasers'. Mr Brett observed that 'I understand at least the initial sales were secured by way of interstate marketing.' The reference to 'location and postcode' is, as we understand it, associated with the subsequent reference to 'interstate marketing'. At some stage it was part of the Commission's case that the NAPC scheme was directed at persons not resident on the Gold Coast and designed to extract higher prices from such persons than would be paid by local residents who would, presumably, have better knowledge of the market. 50 The following table, apparently based upon attachment 5, is included in the valuation. It sets out the first and subsequent sale prices of units which have been resold: UNIT DATE PRICE CHANGE (from 1st sale) Unit 7 Feb. ۥ98 $161,900 +6% Resold Nov. ۥ98 $171,900 -31% Resold Aug. ۥ02 $112,500 Unit 9 Dec. ۥ97 $161,900 - 39% Resold Jan. ۥ01 $ 99,000 Unit 10 Jan. ۥ98 $161,900 -8% Resold April ۥ01 $148,950 Unit 13 Feb. ۥ98 $161,900 -42% Resold Mar. ۥ01 $ 93,500 -23% Resold Aug. ۥ01 $124,000 Unit 18 Dec. ۥ97 $162,900 -32% Resold Jan. ۥ02 $110,000 Unit 19 Dec. ۥ97 $162,900 -8% Resold Feb. ۥ02 $150,000 Unit 31 Dec. ۥ97 $164,900 -36% Resold June ۥ00 $106,000 -20% Resold Aug. ۥ01 $132,500 Unit 40 ? ? ? Resold April ۥ02 $120,000 51 Resales of unit 1 have been excluded from the table. Managerial rights associated with that unit led Mr Brett to conclude that sales of it were not comparable for present purposes. The table demonstrates that only unit 7 has been resold for a higher price than that originally paid. It was resold in 1998. All other resales were in 2001 or 2002. We will return to the resale of unit 7 at a later stage. 52 Attachment 6 to the valuation '... lists sales and resales of units in other apartment buildings on Chevron Island developed at about the same time'. Mr Brett commented that: 'Localities and postcodes show that most initial purchasers lived interstate. Resales here demonstrate that the marked price drop at Chevron Palm Waters was not unique to that development.' 53 Attachment 7 to the valuation contains two schedules. Mr Brett described the first as: 'Table and trend line of average and median prices for residential units for the 10 years 1991 to 2001 inclusive: This is derived from building unit and group title sales in the price range of $75 000 - $250 000 for the suburb of Surfers Paradise. It is a range which spans the price bracket being considered here. Sales include both new and old units. The prices from which the results are derived include sales made through interstate marketing schemes.' 54 This schedule contains information for the years 1991 to 2001, including number of sales in each year, average sale price, the "moving median", percentage growth and high and low sale figures. The "moving median" is explained thus: 'All analysis is done using the Moving Median. The Moving Median is calculated by taking the monthly median and then averaging it over the previous 12 months.' 55 Mr Brett observed that: · the column containing the annual sales numbers indicated fluctuations in the market and demonstrated increased sales in 1994 and 1997, reflecting greater activity in those years; · 'climbing sales numbers for 2000 – 2001' reflected recent trends; · the rate of growth in unit values over any relevant period would vary, depending upon the chosen start and finish dates; and · the annual percentage increases in prices demonstrated by the schedule: '... bear out my general observations that as residential units in other than prime locations age their values usually stagnate notwithstanding that prices of new units, often incorporating different designs, fashions and fitout, continue to climb.' 56 He further observed: 'I understand various marketing schemes have suggested that it is reasonable to expect Gold Coast values to increase in the order of 8 percent per annum. Application of that increase to the 1991 median price of $139 583 calculates to a 2001 figure of $301 000. The 2001 median price was $148 962.' This reference presumably relates to the marketing schemes which are the subject of these proceedings. 57 The second schedule contained in attachment 7 is a list of sales and resales in a unit block at 68 Stanhill Drive, apparently also on Chevron Island. Of these figures, Mr Brett observed: 'The schedule illustrates the stagnation of unit values in older developments. The same trend is evident in sales of units in other developments on Chevron Island.' 58 Mr Brett also observed that statistical information concerning the movement in unit prices over the relevant period from 1991 to 2001 supported his view '... that as residential units in other than prime locations age their values usually stagnate notwithstanding that prices of new units, often incorporating different designs, fashions and fit-out, continue to climb.' 59 We should point out that annual movements in unit prices were relevant to another aspect of the case concerning alleged representations as to future price increases. That matter is not a subject of this appeal. However Mr Brett also used that information in valuing relevant units as at the dates of first sale. The method he adopted was to value each unit as at September 2002, and having done so, to consider the value as at the date of first sale, observing: 'These units were purchased during a 12 month period from late 1997. Subsequent sales show the prices to be excessive. It is evident from market data that the values of units such as these show little growth. Balancing the prospect of some growth against the fact that all are now several years old, their values in 1997-98 would have been largely the same as the current values.' 60 Thus he concluded that the market value of each unit, as at the date of first sale, was the same as at September 2002. That decision was based on sales occurring after 1997/98 and trends in purchase prices between 1991 and 2001, most of which information would not have been available in 1997/98. It is therefore difficult to see how Mr Brett's approach applies the prescription by Griffith CJ in Spencer that one should: '... put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.' 61 Similarly, his approach pays no regard to the observation by Isaacs J that circumstances arising after the relevant date are to be ignored. Cross-examination 62 Mr Brett was cross-examined at some length. He conceded that a very small part of his practice concerned the valuation of residential units at the Gold Coast and that the valuation exercises which he had performed were 'outside the mainstream' of what he normally did. He said, however, that he performed some work on the Gold Coast. He agreed that single bedroom apartments on Chevron Island tended to be purchased for investment purposes and that investors are normally attracted to new buildings. This is largely because of the structure of the tax system, lower maintenance costs in new buildings and the availability of statutory insurance against the cost of rectifying building defects. He accepted that units in Chevron Palm Waters had certain advantages over other developments which would favourably affect their market values. The following passage, at AB 1941-1943, sets out in some detail the attitude taken by Mr Brett to the valuation exercise. 'Yes. All right. Now, from your research, you would agree with the proposition, wouldn't you, that if you had been an investor in 1996, 1997, 1998, looking to buy a new one bedroom apartment on Chevron Island you could not have got such an apartment for less than $150,000?---I don't know whether you could get one for less than $150,000. I wasn't looking at the time --- No?--- - - -But certainly in the sale searches that I have done, they're all priced of that order or greater. Yes. So far as you know, not one such unit was available in 1995, 1996, 1997, 1998 for less than $150,000?---I simply don't know. Yes. Now - - -?---And sorry – with that – new units, you were saying? New units?---New – yes. New one bedroom units?---Yes. I don't know. Well, from the range that were available at 150,000 plus, on any view the Chevron Palm Waters units would have to be the most attractive, wouldn't they?---Well, that's a matter of judgment. It is attractive. It would be appealing to people who were interested in buying a one bedroom unit on Chevron Island. They would look at other units that were available. Whether this particular block wins out over the others is a matter of preference. Well - - -?---But look, I have no complaints about the presentation or the position of Chevron Palm Waters. Well, Mr Brett, its – I'm not really asking you whether you've got any complaints about it. We've established at this point that if you were an investor looking for a new one bedroom apartment during the relevant period, the minimum you would have to pay is $150,000. That's right, isn't it?---Based on my sales searches, that's correct, yes. All right. Then, of the range that were available, starting at a rock bottom of $150,000, Chevron Palm Waters would obviously be in the superior category, wouldn't it?---Within that category, yes. Yes. It wouldn't be down around the 150,000, it would be up around the 160 plus thousand?---Well, sorry. You're quantifying it or qualifying it by price. Yes?---I'm qualifying it by quality and if you're looking for that quality, yes, Chevron Palm Waters is fine for that quality. Now, if the only product available on the market is selling in that price range, you cannot seriously suggest, can you, that the market price is anything other than that price range?---You're not obliged to buy it at that price range. Of course not. Of course not. But if you're looking at a market price, if you've got someone who is willing to buy, not anxious, but someone who is willing to buy; an investor who wants a new apartment, a new one bedroom apartment on Chevron Island, then that was the market, wasn't it?---That's what was available. That doesn't mean that it's the market price and it also – because you mentioned there the issue of the not anxious purchaser but also the informed purchaser. And my contention is that the informed purchaser wasn't obliged to pay those prices and had no need to pay those prices. Well, let us - - -?---Sorry. You put in the context of price. Yes?---And the implication being value and that's where the difference lies. But let us approach it a slightly different way. Let us take my theoretical purchaser looking for an investment property. And I think you've already agreed with me that if you're looking for an investment property particularly with tax benefits, that means you're looking for a brand new apartment?---It doesn't mean you're only looking for a brand new apartment but there are the advantages you mentioned in relation to a new apartment. So you have that hypothetical purchaser looking for such an apartment, they would have to pay a minimum of 150,000?---They don't have to pay anything. If they're fully informed of the prospects of these units, not just in the immediate return, but in their growth in value, they're not obliged to pay it and they can choose to put their money in some other form of investment. Of course they can but someone buying on Chevron Island, someone who is willing to buy on Chevron Island, to get such a property would have to pay $150,000 to get such a property?---If there was an obligation to spend the money, if they were determined for some reason to spend the money, that's the only choice they had - - - Thank you?--- - - - it's a matter of being informed.' 63 Mr Brett's approach came close to the approach, eschewed by Griffith CJ in Spencer, of inquiring whether there was a willing purchaser on the relevant day. His Honour considered that such a purchaser should be assumed. 64 At this point it is also appropriate to refer to two further decisions of the High Court. In Commissioner of Taxation v Executors of Rubin (1930) 44 CLR 132 at 144, Isaacs ACJ said: 'In Belton v. London County Council the fair market price of land to which owners are entitled is described by Day J. thus: "They are to get the value of their property just as if they had brought it into the market and exposed it to public competition." The words "market price" in sec. 4, sub-sec. 5, of the amending Act of 1921 (12 Geo. V. No. 19) are used in a very comprehensive sense. They apply to all property other than live-stock that is transferred by one person to another inter vivos by way of gift or for a nominal consideration. And even those statements do not exhaust the application of the words. The property to which the words relate, therefore, includes inevitably property as to which there is no current price, and no usual traffic in the market. Applying the observations in the two cases just cited, it is plain that "the market price" in the sub-section under consideration means the price which the property would fetch if offered openly under competition in ordinary conditions and circumstances, where the seller is willing to accept and the purchaser is willing to give the fair value. Obviously, a mansion house, a valuable picture, a patent, a racehorse, a cattle station, apart from the live-stock, shares in a family company not on the Exchange, the goodwill of a business, and even money and choses in action, are all properties to which the Legislature must, by reason of the comprehensive words "estate" and "all such property", have intended the words "market price" to apply. And, if so, the broad signification I have stated is the proper one. It does not exclude the current price if there be one, but neither does it exclude the actual price that could be obtained in similar conditions if so far there be no current price.' 65 In Australian Apple and Pear Marketing Board v Tonking (1942) 66 CLR 77 at 102, Latham CJ said: 'Generally the determination of the value of goods depends upon an estimate of what the goods will bring in the market.' 66 We see no reason why these general statements of principle should not be applied to the valuation of land. Prices will vary from time to time, and so it is necessary to fix a relevant date as the date of valuation. Market value must be fixed having regard to considerations in the market on that day. This approach leads to the conclusion that Mr Brett's valuations do not reflect market values in 1997/98. He has conceded that at the relevant times, a purchaser would have had to pay substantially more than his valuations. 67 At AB 1944, Mr Brett was cross-examined as to comparable sales as follows: '370 people bought one bedroom apartments on Chevron Island, brand new one bedroom apartments on Chevron Island between 1994 and the present. Are you aware of - - -?---I don't have those figures, but I'd have no argument with you on figures of that order. 370 paid prices. Some before – and some as early as 1994 were in the 140,000s and since 1994 in the 150,000 up to 200,000 sort of bracket?---Yes. All right. You're saying that not one of those people met the criterion of being a willing but not anxious buyer?---It's not the volume that counts; it's the circumstances of the sales that counts or the circumstances of the transactions. So every one of those people is excluded from your analysis, are they?---No, because I haven't spoken with every one of those people, and it depends on their knowledge of the circumstances.' 68 Mr Brett was then cross-examined concerning the extent of knowledge of the informed buyer contemplated in Spencer. At AB 1945‑1947, the following passage appears: 'How then do you define your type of hypothetical purchaser? How do you define the level of knowledge or expertise which you would attribute to this hypothetical purchaser?---I think a purchaser who has of their own volition, of their own freedom, made inquiries generally to the market even if that is only by way of visiting a number of real estate agents. Of inquiring and looking at a considerable number of properties which are for sale at the time. And getting the feedback from a variety of people, and those different views, then distil those views and form an opinion. All right. Now, again, we go back to the fact that we have 370 purchasers on Chevron Island for new one bedroom apartments, and your approach is essentially to say, "We forget about all of them."?---No, you don't forget about all of those. You don't forget about any of those. I see?---But you look at all sales, and all transactions in the context of the inquiry that purchasers have made, and the general knowledge they have of the market. Well, I am sorry, Mr Brett, I must be losing something here. You said that this property; the best one bedroom apartment available on Chevron Island was worth $110,00 in September 2002. Unit 5, The Dennings, up to 120,000 for the Gleesons?---That's correct, yes. And yet 370 people were paying significantly more than that; 20, 30, 40, $50,000 more than that?---That goes – in the most substantial part, that goes to the expectations of those people, most particularly by way of return that they would be getting for that investment. And the return for residential units is made up of two components; one component of which is the rental income you hope to get by way of the holiday lettings, but quite often more substantial component is the capital gains expected out of them. And it is the sum total of those two components which is the total return, and my view is that if those purchasers either individually or groups of them, or whatever it might have been - - - All of them, Mr Brett, all of them, every one?---It goes to - it is not - I mentioned a while ago. It is not an issue of the volume of sales, it is an issue of the circumstances of the sales. You do need to consider whether or not, and to what extent those purchases, all or any of them, had expectations of the capital growth of that investment in addition to the rental return. But, Mr Brett, you have discounted every one of them?---You don't discount all or any of them. Yes. Yes, you have. You have ignored the fact that 370 people paid at least 25 per cent more, in many cases a third more or a half more, than what you say was the value of these units?---I can only repeat what I have said. It doesn't go to the volume of the sales, it goes to the circumstances. This issue - - - Okay, then - and you haven't looked at the circumstances of those 370 purchasers, have you?---No. I haven't.' 69 There was further cross-examination concerning this matter. At this stage, we point out that whatever the deficiencies of contemporaneous sales prices, they have the distinct advantage of being information which was available to potential purchasers at the relevant time. Mr Brett's exercise relied upon information which was not so available. We will return to the question of purchasers' knowledge at a later stage. 70 At AB 1948‑1949, the following passage appears: 'Well, let's look at the evidence of the sale prices during 1996 and 1997. Every price was over $160,000?---And, as I understand it, the representations made to those purchasers was that they could expect a growth in those values in the order of 8 per cent per annum. Mr Brett, we are really coming to the truth now, aren't we. You are assuming that it if what the ACCC is alleging in this case is true then people had been diddled. You are assuming that, if those allegations are made out, then people must have paid more than the units were worth?---That is part of it. Yes?---The other part of it is the resale prices at much lower figures than the original prices at the earlier dates. Mr Brett, that is the whole of it, isn't it? The reason you ignore every sale of every new unit on Chevron Island is because you have come here to tell the court that if the ACCC proves that people have been misrepresented to, then they must have paid too much for the units. That is your - - -?---Not at all. There are two - there are two components issue. The first component is the expectation of purchasers in relation to the growth of their units and, if this is presented in a manner which goes towards an investment return and you take away that growth, it undermines the expectation of return. Or it undermines the return, not just the expectation. The second thing is, for both this property and for the other properties on Chevron Island and elsewhere, the resales when these prices put them to the market through local agents at much lower prices. How many of these purchasers have you spoken to?---None.' 71 At AB 1954 et seq, Mr Brett was asked questions concerning sales of units in a building located at 9 Stanhill Drive. It was constructed in 1997. He agreed that the first sale prices for units in that development ranged from $156 000 to $162 900. The cross-examination proceeded at AB 1955‑1956 as follows: 'All right. And one would regard that in pure comparative - for purely comparative purposes as an inferior property to the subject property [Chevron Palm Waters]?---Correct. Yes. So if the prices at 9 Stanhill Drive are a reflection of the market, then your value of 110,000 - 120,000 for the subject property is plainly well below the mark?---It depends what you define as market. I use it as fair market value, and I see it as excessive, and above fair market value. All right. So the 12 people who bought units in 9 Stanhill Drive were all diddled as well, were they?---Look, I see it - there is two basic bodies of evidence; that the one body of evidence of the prices that have being achieved on the release of these units primarily through marketing schemes, where in my view the prices had been bought for marketing fees in the order of $30,000, and sold to people who have in the main visited the premises and had a limited knowledge of the market. The second body of evidence that I see are the resale prices, and they are the ones, from my point of view, establish the fair market value. It is a matter of weight to give to one or the other. Mr Brett, do you have any reason to suppose that what you describe as marketing schemes were used for 9 Stanhill Drive?---I don't know whether they were used for Stanhill – 9 Stanhill Drive, but where I have done all of the extensive searches that I have done, and the marketing schemes were prolific during that period of time, I see that the vast majority of purchases were interstate or overseas purchasers with a fewer number coming from around Queensland. And when I see a market - - My question was whether you have any reason to believe that the purchasers of 9 Stanhill Drive resulted from marketing scams?---I haven't looked specifically at 9 Stanhill. All right. So if your evidence about the values at Chevron Palms is correct then all of these 12 people you say were diddled into buying their units?---I am not going to say that they were all diddled into buying their units. Well what are you saying?---All I am looking to do is establish what I see as a fair market value, and what I am saying is that I give greater weight to the resale prices than I do to the original prices paid, and the majority of those original prices were from what I see achieved through marketing schemes.' 72 At AB 1962, Mr Brett was further cross-examined about the absence of any contemporaneous sales supporting his valuation. He was asked by her Honour and responded: 'But essentially, Mr Brett, you've discounted evidence of sales in the particular period, pretty well across the board, as being inherently unreliable, haven't you?---Correct.' 73 At AB 1964 ll 16-19, Mr Brett offered the view that: 'The marketing schemes were so prolific during that period, virtually all new units were being sold by that manner. I would presume that they were sold by the marketing schemes unless demonstrated otherwise.' 74 It seems that Mr Brett assumed that all contemporaneous sales were infected by techniques used in their marketing. Yet he had no concrete evidence of whether particular units were so marketed, or how effective such techniques may have been. He seems to have assumed that marketing techniques of a certain, but unidentified, type would generally produce inflated sale prices. He also seems to have assumed that purchasers were ignorant of sustainable price levels. We see no reason why purchasers of new units on the Gold Coast in 1997/98 should be assumed to have been any more or less ignorant than purchasers in any other market. The only justification for such assumption seems to have been that many of them did not live on the Gold Coast or in Queensland. We find it difficult to see any justification for this approach. It may reflect the Commission's case that inter-state purchasers were "pressured" into sales without proper information, rather than an objective approach to valuation. 75 An issue which inevitably arises as the result of any consideration of this matter is identification of the market about which Mr Brett gave evidence. It was suggested to him that the relevant market had peculiar limitations. The evidence (at AB 1982‑1984) was as follows: 'My suggestion to you is simply this: that during the period '96 to '98, there was a market in which the best and highest use was to sell to investors for whom there was an added benefit to purchasing such properties in that they obtained tax advantages and other investment benefits - but that was, therefore, the best and highest use on that point in time?---That was certainly the best and highest use as far as the developer and vendors concerned because he was getting more money out of it in that manner. That doesn't mean it's the best and highest use for the purchaser to do with their funds, for instance. Well, I'm suggesting that, in this market, that was also the ... highest use for the purchaser because the purchaser would not only be getting value for money for the unit, but would also have the tax benefits that go with making such an investment?---Well, that's an issue which goes to price and I disagree with you on contention because it - if they can pay a similar amount - sorry. If they can pay a lower amount for similar benefits or if they can invest their money elsewhere for a similar return - and that might be on the Sunshine Coast or in Brisbane or whatever it might be - there is no need then to go paying these prices here where their expectation is, in part, a capital gain which, in my view, wasn't going to come about. ... ... as I understand the concept of best and highest use in a valuation sense, it is for what type of purchaser one would expect to receive the highest price the for property?---That, again, is from the vendor's point of view. Yes. Yes, but isn't that the concept of best and highest use that valuers talk about all the time?---All right. Am I wrong about that?--- No, you're not wrong about that, but - - - Okay?--- - - - you've put – it needs to be put in the context of in whose hands. The highest and best use for these properties on Chevron Island and elsewhere on the Gold Coast was, without doubt, for the developer to get the vacant block of land, put up these units, market it through the scheme. That's why they did it. That maximised their profits, otherwise they wouldn't do it. That doesn't mean, and it certainly doesn't follow, that the highest and best use for the purchaser – the person who's buying that unit - is indeed the price they were paying. Well, you say that, but as I understand, when one talks about the highest and best use or best and highest use in a valuation context, what one is doing is examining a person who owns a piece of land or a building and one is asking: how can that person get the best sale price for that building? In other words, who do you target that sale at to get the highest and best price? Isn't that right?---Exactly, yes. Isn't that how that concept's used all the time amongst members of your profession?---It does. If we take an example right away from Chevron Island and the facts of this case – if I own a block of land at Pinkenba that I could sell for residential purposes or I could have rezoned and sold for industrial purposes, then what a valuer would do is look at that block and say, "Well, the cost of rezoning would be negligible compared with the enhancement that that would give to the value of the land, therefore the highest and best use is to sell it for industrial purposes rather residential purposes"?---Yes. All right. Well, exactly the same applies here – that when one is looking from a – the point of view of a traditional valuation methodology, what one says is that during this period of time, 1996 to 1998, the highest and best use for these properties would be to sell to people who are purchasing for investment, with income tax and other investment advantages flowing from that?---All right. It comes - we're not at cross purposes - - - Yes?--- - - -and I agree with you entirely when you look at it from the developer's point of view – that the highest and best use for the developer is indeed to sell it into that market and I say again that's why he did it. That doesn't though, and I'm just repeating myself, flow on to whether or not that is the highest and best use from the purchaser's point of view – the person who is buying that unit. It might well be a price that he is prepared to pay in the expectation of a total return and that total return includes the expectation of his resale price - - - ' 76 At AB 1999‑2000 the following passage appears: '... So what we've - the point we've reached now is that we've got – you're very welcome to count them up, if you like - but approximately 370 new units sold on Chevron Island between 1992 and 2003?---Right. Okay. All right, every one of them is either consistent with or at a price higher than consistent with the selling prices at Chevron Palms?---Yes, I am happy with the consistent with, yes. All right. Why is that not a market?---Well for the discussions that I had earlier the value which I would strike if asked at the time or asked now for any one of these units would be the price which an individual owner could get for that unit if he put it on the market in the normal way. It would be put to the market by listing it with either one or a number of local agents and then having him advertise it, and I just do not see for a moment that you would get the same price in those circumstances as you will get, and as has been achieved, through these marketing efforts. Mr Brett, are you able to point to any professional publications, any text books on valuation, any seminar papers or anything of that nature that supports this theory that when you've got a market demonstrated by a large volume of sales within a finite area with a specific type of property over a 10 year period, you can discount all of that or ignore all of that and simply say there is - that is – not the market. The market is what I think the market should have been?---No. Sorry, I shouldn't say "no," but I haven't looked. I hadn't gone looking on this occasion for those definitions and Spencer still is useful in that discussion that we're having in that it's not just the market it's the – sorry, it's not just the sales it's the circumstances of the sales and I say it again, the price that I've looked to is the price that one purchaser is likely to achieve by putting it on the market in the normal course of events as distinct from the price which can be achieved through an Australia-wide marketing scheme.' 77 The cross-examiner seems to have been suggesting that developers of new unit blocks and buyers looking for investments might comprise a market separate from that comprised of sellers and buyers of other units. From other parts of the evidence, it seems that the suggestion was that price levels in that special market were higher than in the market for other units because of factors which we have previously mentioned. 78 Mr Brett was then asked questions which suggested that marketing techniques were not unusual in the sale of new units, with which suggestion he seemed to agree. He was then asked and replied (at AB 2001): 'The likelihood is that when a person goes to resell a unit purchased new they won't be able to replicate whatever advertising or marketing techniques have been used by the original seller?---Correct. But that's no reason to treat the original sale price as something other than a reflection of a market for that sort of property?---Include in that comment marketed in that manner. I have no qualms about these prices being the prices that go with the whole package that we're talking about and the package is not just the unit, the package is the whole of the circumstances and self-evidently that's the price, those are the prices you can achieve through that kind of package. That doesn't say though that the purchasers were fully informed, that doesn't say that the purchasers could replicate that package and it certainly doesn't say that the purchasers had any hope of achieving a resale at the kinds of prices achieved through that package.' 79 Mr Brett was then asked questions concerning the use of 'a rate of return' approach to valuation, particularly with respect to residential units. He indicated that 'resales are likely to give a better indication' (at AB 2002) and at AB 2003, when pressed about this matter he said: '... The simplistic answer is there is no need in general terms for residential units to analyse sales to determine the return and then apply that rate of return to a property being valued because there is sufficient volumes of sales where you can go directly to the price. And the price paid reflects the expected return. So there's no need to go through the two steps. Just go to the price that's paid, apply it to your unit, because the prospects are you'll get a similar return for your unit. But when you examine any sale, commercial, industrial property rented out, and you look to the return you've got to weigh up the expectations of the purchaser because he may have had unreal returns. And if that purchaser is buying on unreal returns it becomes an unreliable sale. If this volume of sales on Chevron Island at the prices that we've been going through are predicated to any significant degree or any degree by an expectation of a capital gain which is not there it undermines the veracity of all of those sales. Mr Brett, I'm sure it's my stupidity that I'm not following any of this, but what you've just articulated sounds to me like a very good reason from your point of view in saying, "We discount the actual sales evidence. We don't put any weight on the sales evidence". That's the argument you're putting forward. What I'm suggesting to you is is that, okay, if you approach this on the footing that there is no reliable sales evidence then the only other way to arrive at a conclusion is the way that you use for every other form of investment and that is to look at the return on the investment?---No. That doesn't take away from you the application of some professional judgment as to what you might get simply on the basis of your knowledge of the residential market. But at the very least if you're going to consider the return the return needs to be considered in the context of achieving (1) the rental return with its taxation benefits and a realistic expectation of capital gain.' 80 We say nothing about the appropriateness of using the "rate of return" approach as a primary basis of valuation. We would have thought, however, that Mr Brett might have at least considered it as a method of checking his own approach, given that it involved the discounting of virtually all contemporaneous sales. 81 At AB 2008, Mr Brett was asked if it was coincidental that he had generally valued each unit as at the time of first sale and as at September 2002 at the same amounts. He replied: '... Look, I essentially did the value as at that recent date and then had to make a judgment as to the extent to which the value at the earlier date may have, or may not have, changed from that and the reason why I left it the same, and I'm quite happy to discuss whether there would be variations in some or all of those, the reason is essentially that the units are now five years old. Even if the market has gone up in the meantime what happens - and for the reasons you've spoken of – the value doesn't follow that up because the unit is now older or it's now less attractive, perhaps it's coming up for the those expenses that I'm talking about, the amortisation of the depreciation schedule is dropping off. So the value is going to be somewhat similar on those two occasion. Well, somewhat similar doesn't mean you get the exact same figure for every one of the properties - - -?---That's correct. And, in fact, what you've just told her Honour is precisely your methodology, isn't it, that you've really looked at what these are presently worth taking into account what has happened to them over the last five years, what's happened in resales and other things, fixed on a contemporary price and then tried to transpose that retrospectively as being the price at the time of purchase whether the time of purchase was 1997, 1998, whatever ---A qualified "yes." I'm sorry, Mr Morris. Yes, I have done the valuation as at the current time than that more recent date which is quoted in the reports and then transposed that backward. And the primary reason for that is I take as the best evidence of a value the resale prices as a fair market value as distinct from the original prices. But, of course, no evidence of what someone in your profession would have valued those units as being worth at the time of purchase because such a person would not have access to those resale prices?---No, but he would have at the time access to his own general knowledge of the market and he would make a professional judgment in the first instance as to whether the original prices were sustainable and if he judged that they weren't sustainable he would then make a professional judgment as to what was sustainable. Now, that might well vary from what I've got here. Well, in any event, Mr Brett, that's not what you've done, is it? You haven't looked at this from the viewpoint of a valuer looking at this property in 1996 or 1997 or 1998 with the information available to a valuer at that point in time. As you've told her Honour you've valued them today and just assumed that the same value applied five or six or seven years ago?---It's not an assumption that that understates it, but what you say is entirely correct. I've valued them today and then I've looked to see – to make – a judgment as to whether or not that value might have been more or less the same some years earlier. Now, I mentioned earlier, I don't see in the task of just simply trying to work out what was the market value – the proper market value at the time – I don't see myself or anyone else being constrained by the knowledge of those sales, or, sorry, the absence of other sales at the time, because a value at the time, if he first concluded that the level of prices being achieved was unsustainable or unreasonable, didn't property reflect Spencer he would then apply his judgment as to what would properly reflect Spencer. Based on what was available at that point in time?---Exactly. And if he is departing those princes, he would apply his judgment and he would come out, in my view, at a considerably lower value. But you didn't do that, did you?---No, I didn't do that.' 82 Mr Brett conceded that he had not sought to value the units, using methods which would have been adopted in 1997/98. He also conceded that he had started with the assumption that sales at that time were of no assistance as they 'didn't properly reflect Spencer'. 83 At AB 2014, counsel raised with Mr Brett the possibility of replacement cost as a basis for valuation. Mr Brett considered such an approach to be irrelevant because 'cost doesn't necessarily equate to value'. At AB 2015, the following passage occurs: 'Mr Brett, that's where we keep running into this brick wall. You know, when I suggest to you alternative methods of valuation, either by return on investment or by comparison with replacement costs, you keep coming back to saying, "Oh, but you test that by the market. Either it works with the market or it doesn't". But the problem here is that your market, on your analysis, is non-existent. There is no market, or no market with real-life people buying and selling units in it? --- Sure. Just this sort of virtual market that you've constructed out of nothing. And that's why I'm suggesting to you that if you're going to go down this path of constructing this virtual market, then at the very least what you would be doing is checking that against the usual sort of cross-referencing sources of what's the return on the investment, what is the cost of replacement; as a reality check on your own virtual market. Is there some flaw in that process? --- Yes, Mr Morris. Look, no sensible valuer is going to determine his market value by the reference to the cost of construction. He just - he's not going to do it. If there is a valuer who is doing that, he's making a fundamental error. The market value is tested by the prices people pay irrespective of cost. Now, we come back again to the circumstances of maybe having to pay a - sorry - maybe having to apply professional judgment at the time. And the first examination you make is of the veracity of the sales that were made and if you come to the conclusion that there is some fallacy, some problem with the expectations of the purchases when they pay those prices, and I think that there is a problem in their expectations of capital growth, then that volume – and it doesn't matter whether there's 10 or 370 of them - that volume of sales become suspect.' 84 Given Mr Brett's rejection of contemporaneous sales in 1997/98 as a basis for valuation, replacement value may have at least provided a method of checking his approach. 85 At AB 2024, it was suggested to Mr Brett that a unit at Stormbird Place had been purchased by the Queensland Housing Commission for $160 000. He agreed, saying that this sale was in February 2003. He also agreed that it did not support his valuation of a unit in the same area as at September 2002. It is not clear whether it was within the same development. He said that there had been other relevant purchases. It was suggested to him that between 1997 and 1998, there had been 37 sales within the same development, the prices ranging from $149 000 to $175 000. Mr Brett pointed out that this included first sales. He referred to a sale of another unit in that complex for $103 000 in November 2001. 86 At AB 2073 ll 22 et seq Mr Brett was questioned about the so-called "false market" as follows: '… When you answered her Honour's question about a false market, what you really meant is that a market price, in the sense of the price being paid by buyers to sellers, was not reflective of what you considered to be fair value for the properties? --- Not quite. If I put it this way. It wasn't a sustainable level. It wasn't a sustainable market in the absence of the marketing campaigns that were undertaken. It would fail in the absence of that marketing campaign and the subsequent values would be lower.' 87 In the same vein, at AB 2137, he was asked and replied: '... Now, what I want to suggest to you is that the activities of marketers were an integral part of the market for the sale and purchase of Gold Coast units at least in the 1990s, would you agree?---Yes.' 88 The following passage at AB 2138 was to similar effect: 'Yes. Thank you. And so far as you know, they were also a part of that market in the 1980s. Agreed?---They were part of that market - - - In the 1980s?--- - - - during periods, yes. And is this your evidence that – well, you start at 1995 but is there some reason you pick on 1995? I want to put to you from at least – let us be conservative but let us say at least from the very early 90s, this was the commonplace way of selling Gold Coast – new Gold Coast units?--- Well, I - - - From the early 1990s?---Okay. First of all, you mentioned 1995. I don't know that I specifically said 1995. I said through the mid-1990s in a generic form and I'm not clear as to the extent of it in the early 90s, in the very early 90s, but certainly it has been going on from that period.' 89 He subsequently said that he did not dispute that marketing techniques were being used in the early 1990s. At AB 2184, this passage appears: '... Well, let's approach it a slightly different way. If a purchaser had come to you at the relevant time and said, "What is the prevailing price for units of this nature on Chevron Island?" your answer would have been, "In the range of $150,000 to $160,000"?---No. And certainly, I had purchasers who would ring me from various places in Australia during this period, and my advice to them was that the prices which people are present paying for units such as these is the prices of the order you are talking about in this example, but the moment you turn round and try and sell that, you won't have the advantage of the marketing schemes which are achieving these prices. Your position will be one of endeavouring to sell through, in a normal manner, primarily local agents and you will not achieve those prices in that manner.' 90 After further questioning at AB 2185, he was asked and replied: 'If the question were simply this: "What was the prevailing market price at the time?", what was the answer?---In the circumstances of these marketing schemes, the $150,000 to $160,000. A buyer could not have obtained a similar new one-bedroom unit for less than that?---Not at that time, no.' In light of this answer, it is difficult to see how her Honour could have accepted Mr Brett's 1997/98 valuations. 91 At AB 2140‑2141 the following passage appears: '… I'm simply suggesting to you it's unusual in terms of applying a comparative sale methodology to discount all the obviously comparative sales for one reason or another, all of them: agree that's unusual?---If they are obviously comparative, it would be unusual, yes. Well, just bear with me for a moment? --- Yes. By the word "obviously", I really mean prima facie. Do you follow? --- Yes. You understand that term. --- I do. What you've done in approaching this valuation task is to discard entirely all of prima facie comparative sales; agree? --- Yes. Right and because you made a value judgment that none of those in all of those, the purchasers were for one reason or another not properly informed right? --- And that's not the whole of the judgment. Perhaps they're not properly informed, but part of the judgment in that is to consider whether or not that level of price can be achieved in the same manner as an individual purchaser would reasonably expect it to be achieved. I understand that. But in doing that, you don't even know in the case, for example, of any one or more of these, you don't even know whether any one or more of those purchasers bought one from a real estate agent? --- That's correct. You've assumed that in the case, for example - and I just pick a number, I think it was 370 – you've assumed that all 370 were bought by people who were flown up and cocooned and all the rest of it; is that right? --- No. You assumed that? --- No. And I qualified that to the extent that I readily expect the vast majority of that 370 to be in those circumstances. There may well be a number of others who have bought in the manner that you're suggesting; visitors to the coast. They see it in the window. They see this as the level and they go on price – the go and buy it at that price. My judgment is a little different from that. This is where I've gone to the resales of the units within Chevron Palms and elsewhere to try and make a judgment as to what price you would get if, indeed, you would just sell it in the normal course of – what is the reasonable price you could expect if you just sold it in the normal course of events?' 92 Her Honour then asked, and Mr Brett responded: 'Are you saying that market value is the price which could be achieved by reasonable methods of marketing and advertising? --- And those reasonable methods being those for the likes of – I might engage in if I go and list it with an agent. --- That's correct. But you're really saying that's how you derive market value, aren't you? --- That's correct, yes. And the other way that you put that is that market value is the price which the first purchaser could achieve if they went out in to the market place by usual methods and sold? --- That last bit, I'm sorry I didn't follow. - - - ...' 93 At AB 2142 he was asked and responded: '- - - you're using the same notion of reasonable methods of sale to say the market value is what the first purchaser from the developer would receive if they went into the marketplace using normal or usual methods - - -? --- Yes. ... And in those cases the key issue is that market value in your view can only derived by reference to reasonable methods of sale? --- Correct, yes. I don't deny that you can get higher prices by spending the additional money.' 94 In our view Mr Brett offered little real justification for effectively disregarding all sales of new units in 1997/98. We would have thought that if he, in fact, considered that marketing methods were relevant in assessing apparently comparable sales, he might at least have enquired as to which blocks of units were sold using such methods. One might also have expected some evidence of sales which were not so "tainted". A more fundamental issue is whether all sales techniques necessarily undermine the comparability of sale prices. A real estate agent is presumably permitted to promote his or her product in some way without inevitably being accused of effecting a sale at more than market value in the sense in which Mr Brett used that term. There is also the possibility that prevalent techniques may affect market value, at least in the short term. 95 Mr Brett's evidence was given both before and after a lengthy adjournment of the trial. In the course of the adjournment he provided a further affidavit which was filed on 14 May 2003. In that affidavit he indicated that the material contained in attachment 7 to each of his original valuations was derived from the Australian Business Research database. This in turn was derived from the Queensland Department of Natural Resources and Mines (DNR). The period referred to in those reports commenced in 1991 and concluded in 2001. He said that 1991 was the first year for which such information was available and that information for 2002 was not yet available. He observed that the data available from DNR related to the whole of the Surfers Paradise real estate market. It consisted of the total number of sales and the average prices for sales of all real property. No figures, broken down as between units and other properties, were available. Difficulties with Mr Brett's evidence 96 A number of themes emerge from a consideration of Mr Brett's evidence, her Honour's reasons and the appellant's criticisms of those reasons. We have already dealt with some of them, but we will summarize. The market and comparable sales 97 Mr Brett considered that a purchaser buying a unit as an investment at the relevant time was willing to pay a premium for acquiring a new, as opposed to a used unit. Logically we would have expected this to lead to one of two approaches to valuation of the relevant units. A valuer might look to comparable sales of new units, as opposed to used units. Alternatively, he or she might treat all sales of comparable units as being relevant but seek to assess the level of premiums being paid. Mr Brett appears not to have adopted either approach. He also considered that some of the sale prices derived in 1997/98 were inflated by marketing techniques, but he did not seek to identify the extent of such inflation by reference to sales that were not so tainted. He preferred simply to disregard a substantial body of sales without ever ascertaining whether any of them was necessarily "tainted". A further difficulty with his evidence is that he seems not to have considered whether market value might be forced up where marketing techniques and strong demand co-exist. Mr Brett did not really explain how the resale of unit 7 in Pacific Palm Waters in November 1998 reflected his valuations as at 1997/98 or why it may not have been comparable for the purposes of such valuations. Uninformed purchasers 98 Mr Brett took no step to demonstrate in any objective way the accuracy of his perception as to the widespread adoption of marketing techniques or of his assumption that such techniques had artificially inflated prices. He rather assumed that many purchasers were "misled" as a result of such techniques. Whilst some of the witnesses in this case suggested that they had been misled, that could not, by any stretch of the imagination, be taken as proof of deception on a scale which could have caused the disruption of market value assumed by Mr Brett. He was particularly concerned that buyers were led to believe that asking prices represented market values when, in truth, such prices would not be realized on resale. Quite apart from anything else, we would have thought that most purchasers are at least aware of the possibility that vendors may ask for more than they expect to get. Even if some of the purchasers were misled by marketing techniques, it is unlikely that they assumed that vendors would not be seeking to extract the best possible prices. As we have said there is no contemporaneous sales evidence to support Mr Brett's valuations at any point close in time to the sales in 1997/98, although there is evidence of a substantial decline in prices in later years, particularly in 2000 and 2001. As a matter of judgment, Mr Brett may well have held the view in 1997 and 1998, that existing price levels could not be maintained. That does not lead to the conclusion that such view was widely shared by those in the market at that time. It is more likely that most purchasers did not have that view. 99 No doubt the possibility that a unit may be resold at a price lower than that at which it was purchased is a fact which a purchaser should take into account in deciding how much he or she will pay for a property. There is no reason to assume that the relevant purchasers did not do so. Indeed Mr Brett's proposition that purchasers for investment purposes pay premiums for new units, as opposed to used units, suggests the contrary. If they buy new units at premium prices because they are new, when they could buy used units without paying such premiums, they must know that prices on resale will reflect this situation. In any event, the possibility of fluctuations in real estate values is a matter of common knowledge. Mr Brett, himself, does not claim to have particular expertise in the area of Gold Coast unit prices. He may well have thought that prices paid in 1997/98 were abnormally high and likely to be unmaintainable in the long run, but that does not mean that the prices at which units were changing hands were not reflective of market values at that time. Mr Brett may be critical of the judgment shown by purchasers, but poor judgment is not the same as ignorance. Information upon which Mr Brett's valuations were based 100 Mr Brett's valuations were based upon information presently available but not available in 1997/98. He valued the properties as at September 2002, having regard to contemporaneous sales. Obviously, purchasers in 1997/98 did not have the benefit of that information. He also relied upon statistical figures as to movements in unit prices between 1991 and 2001. Information as to trends since 1997/98 was not available to purchasers in those years. As we have observed, it is difficult to see how a valuation based upon such information can fit within the approach adopted in Spencer. Mr Brett has said nothing about how he would have gone about valuing a new unit on behalf of a potential purchaser in 1997/98, given his unwillingness to rely upon contemporaneous sales. Obviously, he could not have performed the exercise which he has performed for the purposes of this case, using "after acquired" information. As her Honour pointed out, he conceded in the course of his evidence that a person seeking to buy a new unit in the marketplace in 1997/98 would probably have had to pay a price comparable to those actually paid for the subject units. In those circumstances we find it difficult to understand how Mr Brett can deny that those prices reflected market value. Other methods of valuation 101 It was suggested to Mr Brett in the course of cross-examination that he might have considered at least two other methods of valuation, namely: · valuation based upon return on capital investment; and · replacement cost. 102 He discounted both approaches as inappropriate in the circumstances, suggesting that his own approach was preferable. Whilst that may be so, he did not offer any real explanation as to why it was so. Given his reluctance to use contemporaneous sales evidence and the fact that the material which he used was not available to people in the market in 1997/98, we would have thought that either of the alternative approaches would have been at least a useful way of checking the appropriateness of his approach. The appeal 103 As we have demonstrated, there were substantial reasons for questioning the underlying assumptions, consistency and logic of Mr Brett's valuations. However the appellant submits that many of her Honour's criticisms were ill-founded. Comparable sales 104 The first criticism made of her Honour's reasons for rejecting Mr Brett's evidence concerned his rejection of contemporaneous sales as a basis for his valuation as at 1997/98. It was submitted that her Honour had proceeded on the incorrect assumption that Mr Brett's evidence 'was confined to a consideration of Chevron Palm Waters units and that the sample size was therefore too small to support the conclusion.' This was a reference to [226] of the reasons, where her Honour said: 'The resale figures in the Chevron Palms Units development used by Mr Brett showed a decrease of about 30 per cent or more in the resale prices of five of the units, but at different points of time. Indeed there seemed to be some improvement overall in the period from late 1997 to August 2001 and 2002. It was difficult to see just what Mr Brett derived with certainty from the figures. They involved a very small number of comparative sales. He also conceded that new units sold at a premium and later sales could therefore be expected to return a lower figure, although I do not understand him to say that it would account for a difference of $44,900 which he found in the value of the unit four years after the Gleesons' purchase of it. He also conceded that the real estate market for units was quite volatile in the shorter term. In all, it would seem to me that the exercise was hardly a sufficient foundation for an assessment of market value four years before. It does not explain why the prices paid in 1997 and 1998 are to be completely ignored.' 105 As we read this passage, it was directed at the valuation of the relevant units which were in the Chevron Palm Waters development. The difficulty with the Commission's criticism of her Honour's decision is that it reflects precisely what Mr Brett said he had done. At AB 473, he set out a table identifying eight units which had been resold and then, at AB 475, he offered his values of the relevant units, saying that such valuations were 'Based on sales of various units in Chevron Palm Waters'. It was also submitted that her Honour observed that Mr Brett had not explained why prices paid in 1997/98 were to be completely ignored. The Commission submitted that Mr Brett had explained his reasons. He was certainly given every opportunity to do so. However her Honour clearly considered that he had completely ignored those prices and had not justified his so doing. That view was fairly open. Growth rate figures 106 It was submitted that her Honour misrepresented or misdescribed the use which Mr Brett made of growth rate figures. In [227] her Honour said that, in effect, Mr Brett's exercise would produce different results, depending upon the period over which he chose to assess the movement in prices. The Commission suggested, at par 11 of the outline, that Mr Brett had used these figures merely to discount the possibility that the decline in prices between 1997/98 and 2002 was attributable to a collapse in the market. However that is not strictly correct. At AB 475, Mr Brett made it clear that he considered that 'It is evident from market data that the values of units such as these show little growth'. 107 That the primary judge understood that Mr Brett had used the figures for this purpose appears from [225] of her reasons. Her Honour correctly observed that had "recent" (ie 2002) figures been included, there would have been an apparent upward trend in prices. This trend may have led Mr Brett to conclude that the units should have been valued, as at 1997/98, at lower figures than those adopted for 2002. However it is likely that her Honour's comments were directed towards that part of the case, not a subject of this appeal, which concerned predictions as to future movements in prices. We see no merit in this criticism. 108 It was submitted that her Honour erred in concluding at [230] that Mr Brett's opinion of market value depended upon his assumption that "marketeering" of units was 'endemic at the time'. It was submitted that this was not an assumption, but expert evidence based on Mr Brett's experience and knowledge of the Gold Coast market and marketing practices, and that his view was supported by the large number of units which were marketed by the first and second respondents in the years 1997/98. We have already demonstrated that Mr Brett made such an assumption and took virtually no steps designed to ascertain its correctness. We consider that it was a fair comment upon Mr Brett's method. We note also that Mr Brett did not claim to have detailed knowledge of the Gold Coast unit market at the relevant time. Resales 109 It was submitted that in [233], her Honour observed that there was no evidence of resales at a point close in time to the first purchases and that her Honour used this absence of sales as a basis for discounting Mr Brett's evidence. The Commission asserted that sales need not be near in time in order to be comparable. We consider that her Honour was simply stating the problem which inevitably flowed from Mr Brett's rejection of first sale prices in 1997/98 as not being indicative of market value at the relevant time. He was left with resales of which there were very few, if any. Her Honour did not say that a resale at a point remote in time from the relevant date might not be of assistance. However such sales will obviously not be of as much assistance as are sales closer to the relevant time. In fact, her Honour was merely pointing out that in 1997/98, units were being bought at prices which approximated to that of unit 29, a unit relevant to the proceedings. There is nothing in this criticism. 110 In the same vein, it was submitted that at [233] that her Honour 'appears to accept that sales on Chevron Island set a price fixed by the market and equate that price to market value. With respect, to treat an accumulation of inflated prices as establishing market value involves disregarding the test in Spencer.' Her Honour was, however, referring to Mr Brett's acceptance that a buyer in 1997/98 would have had to offer a price comparable with those paid for relevant units at that time. This criticism simply restates the problem raised by Mr Brett's method of valuation. It should be kept in mind that her Honour did not purport to fix the values of relevant units as at 1997/98. She simply rejected the approach taken by Mr Brett. There is nothing in this criticism. Purchasers who were misled 111 It was submitted that at [234] her Honour 'appears to accept the proposition that a purchaser who is misled about the likely future capital growth of a property may nonetheless be a purchaser who is fully informed for the purpose of the Spencer test.' In [234] her Honour observed: 'One may accept that a purchase price which is calculated by a purchaser who has been misinformed about an important characteristic of the property and places reliance on that information may not be reliable as an example of market value. If these matters were known to a valuer it would be appropriate to ignore that price for the purpose of comparisons. ...' 112 Her Honour then went on: 'I would not however accept that predictions as to how the property might increase in value necessarily falls into the category of which his Honour spoke in Spencer's case.' 113 We understand her Honour to have meant that predictions are matters for judgment and that Spencer does not necessarily contemplate a purchaser knowing of, and accepting predictions as matters of fact affecting the relevant market. We have discussed this matter elsewhere in these reasons. Local purchasers 114 It was submitted that at [235] of the reasons, her Honour 'points to the fact that no sale of a new unit was shown to be at a substantially lesser price than the sale price of marketed units'. It was said that her Honour regarded this as undermining Mr Brett's approach. It was then said that this statement was based on an assumption that there were local purchasers at the relevant time and that such assumption was contradicted by Mr Brett's evidence at AB 1990-1992. We consider that her Honour was merely pointing out that there was no evidence of sales to local purchasers, which sales might prove or disprove the theory that purchasers who were unaware of local conditions had been buying at inflated prices. 115 Clearly, there is nothing in any of these criticisms. Her Honour appears to have formed the view that: · there were unreliable or unproven assumptions underlying Mr Brett's evidence; · his logic was faulty; and · there were internal inconsistencies in his evidence, particularly as between his purported adoption of the approach in Spencer and the way in which he tackled the valuation exercises. Conclusion 116 Valuation is not a legal question, but valuations are often performed for forensic use. For that reason, judicial pronouncements concerning valuation are often cited and adopted by valuers. Mr Brett adopted what was said in Spencer but failed to understand it. As a result he: · failed to have regard to what a willing buyer would have had to offer in order to acquire a new unit in the market place at the relevant time; · adopted a system of valuation which relied upon information not available in the market place at the relevant time; · assumed, without justification, that purchasers were unaware of information which he claimed to possess or were otherwise misled; and · discounted comparable sales upon the basis of this assumption without investigation. 117 It is no small thing for a tribunal of fact to reject the evidence of an expert where that evidence is uncontradicted by other expert evidence. However parties are permitted to cross-examine expert witnesses with a view to undermining their evidence even where they do not lead evidence to the contrary. A tribunal of fact is not obliged to accept uncontradicted evidence when it has been so challenged. If facts and assumptions upon which an expert opinion is based are all proven, and no error of logic or inconsistency appears, it may be that a tribunal of fact ought not reject the opinion. In the present case, there were good reasons for doubting the reliability of Mr Brett's evidence. We detect no error in her Honour's rejection of that evidence. GROUNDS 3(a) AND 4(a) – BILBOROUGH AND QUINLIVAN 118 Grounds 3(a) and 4(a) are that the primary judge erred in finding that it could not be concluded that Messrs Bilborough and Quinlivan respectively knew that purchasers were to be advised that the price they were to be paying for units was the true market value. Because the primary judge's rejection of Mr Brett's evidence is to be upheld, her Honour's finding that the purchase price was not substantially greater than market value is undisturbed. Accordingly, if Messrs Bilborough and Quinlivan knew that purchasers were to be advised that the price they were to pay was the true market value, that involved no contravention of s 52 by the advisers and thus no involvement by Messrs Bilborough and Quinlivan in any unlawful conduct. GROUNDS 3(b), 4(b), 5 AND 6 ‑ BILBOROUGH, QUINLIVAN, REDWIND AND ITS DIRECTORS, POINTON 119 Each of these grounds assumes that purchasers were to be advised by Coral Reef and Investlend that the purchase price of the marketed property was its true market value. Having regard to what is said in the preceding paragraph, if the assumption is made out, that involves no contravention of s 52 by the advisers and thus no involvement by the relevant respondents in any unlawful conduct. GROUND 7 – POINTON AND THE STATE ACT 120 This ground reflects the Commission's alternative case against Mr Pointon, namely that his silence about Investlend which he knew had given financial advice and about collusion between Investlend and NAPC was misleading. The primary judge's conclusion on these matters is not entirely clear. In her Honour's reasons at [300] there is an apparently clear finding that this silence on Mr Pointon's part 'can in these circumstances be described as misleading'. At [301] however, speaking of the same matters, her Honour said Mr Pointon 'may well be taken to have contravened s 38 of the Queensland Act'. At [302] her Honour expressed the view that had s 38 applied, he 'may have been held liable for a failure to alert clients to the relationship between NAPC and Investlend'. Despite the use of "may well" and "may have been", we think the primary judge did make the finding at [300], and that the more cautious verbiage in the later paragraphs is to be attributed to the fact that her Honour was of the view that s 38 was not available to the Commission. Thus ground 7 squarely raises the question whether she was correct in that view. The State Act 121 Section 38, in Part 3 of the State Act, under the heading "Trade Practices", provides: '(1) A person shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in this division shall be taken as limiting by implication the generality of subsection (1).' 122 Division 2 of Part 5 deals with "Offences, court enforcement and remedies". Pursuant to s 92, it is an offence to contravene a provision of the State Act 'for which a penalty is provided'. As no penalty is prescribed in connection with s 38, breach of that section is not a criminal offence. 123 Section 98 provides: '(1) An injunction under this section may be granted by the court – (a) against a person in the course of proceedings against that person for an offence against this Act; or (b) at any other time. (2) If the court is satisfied, on the application of the Minister, the commissioner or any other person that a person has engaged, or is proposing to engage, in conduct that constitutes or would constitute – (a) a contravention of a provision of this Act or a code of practice or a term of an undertaking given under section 91H; ... the court may grant an injunction in such terms as the court determines to be appropriate. (3) The power of the court conferred by subsection (2) to grant an injunction restraining a person from engaging in conduct – (a) ... (b) does not include the power to grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention solely of section 38 or 39 or a code of practice unless – (i) the application is made by the Minister or the commissioner on the grounds that a consumer is, or consumers generally are, or would be, adversely affected by the conduct; or (ii) the application is made by a person who is, or would be, adversely affected by the conduct as a consumer. (4) ... (4A) ... (5) The power of the court to grant an injunction restraining a person from engaging in conduct may be exercised – (a) whether or not it appears to the court that the person intends to engage again, or to continue to engage, in conduct of that kind; and (b) whether or not the person has previously engaged in conduct of that kind; and (c) whether or not there is an imminent danger of substantial damage to any person if the first person engages in conduct of that kind. ...' 124 Pursuant to s 99 a person may recover damages for loss or damage resulting from an act or omission which contravenes Part 3 (excluding ss 38 and 39), Part 4 or an injunction granted under s 98. Only a consumer (as defined in s 6) may recover damages for breach of ss 38 or 39. Section 100 provides that in proceedings under the State Act or for an offence against that Act, a court may make orders designed to compensate for loss, or to prevent or minimize loss. However such an order can only be made in connection with a breach of ss 38 or 39 if the person suffering or likely to suffer loss is a consumer. Section 103 confers jurisdiction on various state courts to determine matters arising under the State Act. No other provision deals with or contemplates proceedings to enforce s 38. At first instance 125 The primary judge discussed s 38 at [263] of her reasons as follows: 'Section 38 applies to individuals, but it is limited in its application to 'consumer transactions' which are defined, by s 6 of that Act, relevantly as where a consumer acquires an interest in land for a price of not more than $40,000 and acquires it otherwise than for a business carried on by the person. The sales referred to in these proceedings would not have come within that definition on the first basis and perhaps not the second. Moreover, s 98(3)(b) of the Queensland Act does not provide power in a Court to grant injunctions for contraventions solely of s 38 unless the application for it is made by the Minister or the State Commissioner for Consumer Affairs. It is not obvious to me that the Commission has an interest in the enforcement of state legislation such as this, but I should add that this matter and the following question of its standing even in declaratory proceedings was not taken up in argument. In any event in light of the statutory limitation upon whom might bring proceedings for injunctions with respect to conduct contravening the Act, I would not have thought it appropriate for a Court to grant a declaration on the application of some other party.' 126 As to the application of s 38 to Mr Pointon's case, her Honour said at [301] and [302]: '301. Mr Pointon may well be taken to have contravened s 38 of the Queensland Act. The section itself would apply, because the relevant 'consumer services' are those provided by him and are within the amount referred to in the section. Neither an injunction nor a declaration could however be given in proceedings brought by the Commission for the reasons I have earlier given. 302. Had s 38 applied Mr Pointon may have been held liable for a failure to alert clients to the relationship between NAPC and Investlend, as alleged in par 20(c) had s 38 provided a basis for Court orders. The only other reference to s 38 in connexion with Mr Pointon, apart from par 65 of the amended statement of claim, appears in par 78. In closing submissions the Commission confined its case to par 65.' 127 It seems that at first instance, the parties said little concerning s 38. Pleadings 128 In its argument on appeal the Commission did not particularize the precise case which it claims to have established against Mr Pointon in reliance upon s 38. At least three different contraventions are pleaded in the amended statement of claim. The first is alleged in par 51(b) and particularized in par 51(c). It relies upon Mr Pointon's involvement in the NAPC scheme. That case failed and is not relevant to this appeal. In par 78 of the amended statement of claim, the Commission alleges a further infringement of s 38 by Mr Pointon. At [302] in the primary judge's reasons, her Honour observed that the Commission had not relied upon that paragraph in its submissions. We assume that it is irrelevant to this appeal. The appeal must therefore arise out of the third alleged infringement which is pleaded in par 65 of the amended statement of claim as follows: '... Pointon ..., by failing to disclose any of the matters pleaded in paragraph 20(c), by reason of the matters pleaded in paragraphs 16 to 20: (a) has contravened section 38 of the Qld Act; (b) was knowingly concerned in or party to the contravention by Coral Reef, NAPC and Investlend of [s 38 of the State Act]; and (c) further or alternatively conspired with Coral Reef, NAPC and/or Investlend to contravene [s 38].' 129 We do not understand the Commission presently to rely upon par 65(b) or 65(c). 130 Paragraph 16 of the amended statement of claim alleges implementation by various parties (not including Mr Pointon) of the NAPC scheme which is described in detail in pars 17 and 18. In par 19 it is alleged that various parties (not including Mr Pointon) participated in the sale of approximately 900 to 1000 marketed properties per year in 1997 and 1998 using the NAPC scheme. Paragraph 20 is as follows : '... Pointon ... : (a) knew of the NAPC Scheme, the part other respondents played in it, and agreed to participate in it; (b) knew that the purpose of the NAPC Scheme was to identify prospects and induce them to purchase marketed properties at the marketed prices in the belief that those prices were fair market value; (c) believed, and acted on the belief, that prospects would be unlikely to purchase marketed properties if they knew of: (i) the existence of the marketing arrangement; (ii) the nature, existence or magnitude of the marketing fee; (iii) the fair market value of the marketed properties; (iv) the fact that the marketer was not acting in their interest; (v) the relationship between NAPC, Investlend, Coral Reef and the developer; (vi) the fact that the income or remuneration of NAPC, Investlend, the telemarketers, the in-home consultants, the runners and the financial advisers depended on persuading prospects to buy marketed properties; and (d) at no time disclosed any of the matters pleaded in subparagraph (c) hereof to prospects or purchasers of marketed properties; (e) believed, and acted upon the belief that no other marketing participant would disclose any of the matters pleaded in subparagraph (c) hereof to prospects or purchasers.' 131 The Commission's case is that Mr Pointon, by failing to disclose any of the matters pleaded in par 20(c), and having regard to the matters pleaded in pars 16 to 20, contravened s 38 of the State Act. We do not understand her Honour to have held that Mr Pointon had knowledge of all of the matters pleaded in pars 16 to 20. She appears to have been satisfied only as to part of the matter alleged in par 20(c)(v). The Commission's case must be that the relationship of solicitor and client between Mr Pointon and certain purchasers, in the circumstances of the case, created an environment in which his failure to disclose the relevant information was misleading or deceptive, or likely to be so. There is no finding that any purchaser was misled by this conduct, nor is there a finding that any purchaser suffered loss as a result thereof. 132 The Commission claims that there should be a declaration as to Mr Pointon's alleged breach of s 38 of the State Act. The prayers for declaratory relief against Mr Pointon appear in pars 1, 13, 16, 17 and 18 of the application. The relief claimed in par 1 depends upon his alleged involvement in the NAPC scheme. The Commission failed in that case. It is not presently relevant. In par 13 the Commission seeks a declaration that Mr Pointon was knowingly concerned in, or party to contraventions by named corporations of the Trade Practices Act and the State Act, or conspired with those corporations to contravene those Acts. We do not understand those matters to be relevant to the present appeal. The relief claimed in pars 16 and 17 concerns alleged breaches of duty as a solicitor rather than any alleged breach of s 38. In par 18 the Commission seeks a declaration that Mr Pointon breached s 38 by failing to disclose to the Gleesons the existence of a marketing fee and that the fair market value of the relevant unit was substantially less than the purchase price. At [288] the primary judge found that Mr Pointon knew of the marketing fee but concluded that such knowledge was of little significance unless he also knew that the true market value of the unit was substantially less than the sale price, a matter which the Commission failed to establish. In any event neither of these matters bears any relationship to her Honour's findings at [301] ‑ [302]. This suggests that the relief sought in the application does not correspond with any case pleaded in the amended statement of claim or with the primary judge's findings. Nonetheless we assume for present purposes that the Commission seeks a declaration as to the contravention identified by her Honour at [301] ‑ [302]. It has not been suggested on Mr Pointon's behalf that such relief should be declined because of any irregularity in the pleadings. The appeal 133 The primary judge dismissed the Commission's claim concerning s 38 of the State Act upon the basis that it did not have standing to seek relief in connection with that Act. The Commission appeals against such dismissal. We should point out that her Honour treated the various purchasers for whom Mr Pointon acted as satisfying the definition of "consumer" in the State Act. This view was based upon their status as acquirers of legal services from Mr Pointon. However it is at least arguable that if any of them has suffered loss, it was not suffered in that capacity but as a purchaser of a unit. It is not necessary for us to address this difficult issue. We note also that the Commission submits that the question of its standing was not ventilated at first instance. As we have observed, it seems that the claims pursuant to s 38 received little attention at the trial. In our view, any consideration of s 38 must inevitably raise the question of standing, given that the State Act so clearly identifies the available relief in connection with breaches of its provisions and the persons who may seek such relief. In any event the Commission asks that we declare that Mr Pointon breached s 38. We would be unwilling to do so unless satisfied as to the question of standing. That question also raises the issue of the Commission's power to enforce provisions of the State Act. 134 It is somewhat unusual for a corporation established under Commonwealth law to seek to enforce state legislation. We understand that the Commission has, from time to time, obtained such relief in other cases. It may be that in most, if not all of those cases, orders were made by consent. The Commission has not referred us to any decision in which its power to seek such relief has been considered. In the course of oral submissions, the question of the Commission's power was raised, as was the question of the availability of declaratory relief. The Commission submitted that there had been no challenge at first instance to its power to seek orders in connection with breaches of the State Act. In our view, the question of power is the inevitable starting point in considering the question of standing. Power to enforce the State Act 135 Section 2 of the Trade Practices Act provides: 'The object of this Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection.' 136 The Commission, as established by s 6A of the Trade Practices Act, is a body corporate with perpetual succession, able to acquire, hold and dispose of real and personal property and to sue or be sued in its corporate name. The Trade Practices Act contains no general statement as to the Commission's functions. There is no suggestion that it is to be responsible for achieving the object of the Trade Practices Act or that it is primarily responsible for the effective administration of that Act. As is well-known, the principal (but not the only) source of power for the Trade Practices Act is placitum 51(xx) of the Constitution which permits the Parliament to make laws for the peace, order and good government of the Commonwealth with respect to foreign corporations and trading or financial corporations formed within the limits of the Commonwealth. It is, as we understand it, for this reason that s 52, amongst other sections, addresses the conduct of corporations, although the section has extended operation in certain circumstances. 137 Section 28 of the Trade Practices Act confers upon the Commission numerous functions concerning the dissemination of information, law reform and research. The section expressly provides that many such functions are limited to matters 'with respect to which the Parliament has power to make laws ...'. The Act confers numerous other specific functions upon the Commission. It has not been suggested that any of them, expressly or by necessary implication, includes the enforcement of state legislation. Section 38 of the State Act applies the prohibition contained in s 52 of the Trade Practices Act to all persons, corporate or otherwise. It would be curious if the Commonwealth Parliament were able to create a body capable of enforcing state laws in areas in which the Commonwealth could not itself legislate, at least in the absence of a referral of power from a state or states. The express limitation upon those functions conferred upon the Commission by s 28 highlights this incongruity. 138 The Commission, in effect, submits that, given the object of the Trade Practices Act as specified in s 2 and the power to sue conferred upon it by s 6A, it is competent to take proceedings in any matter, provided that to do so will contribute to the achievement of that object; or at least that is how we understand the submission. The Commission then implies, rather than asserts, that enforcement of the State Act will have that effect. 139 A statutory corporation generally has the powers conferred upon it by the relevant legislation. See Re The Honey Pool of Western Australian (No 2) (1988) 14 ACLR 621 per Nicholson J, and the cases therein discussed. His Honour cites the following passage from Halsbury's Laws of England (4th ed) p 779, par 1333: 'The powers of a corporation created by statute are limited and circumscribed by the statutes which regulate it, and extend no further than is expressly stated therein, or is necessarily and properly required for carrying into effect the purposes of its incorporation, or may be fairly regarded as incidental to, or consequential upon, those things which the legislature has authorised. What the statute does not expressly or impliedly authorise is to be taken to be prohibited.' 140 The Commission is a "corporation" for the purposes of the Corporations Act 2001 (Cth) (the "Corporations Act") (see s 57A), but it is not a "company" for the purposes of that Act (see s 9). It therefore does not have the powers conferred upon "companies" by s 124 of the Corporations Act. 141 Section 163(4) of the Trade Practices Act contemplates prosecutions by the Commission for alleged offences against that Act, although the Trade Practices Act does not expressly confer power to prosecute. However s 13 of the Crimes Act 1914 (Cth) (the Crimes Act) authorizes "any person" to institute a prosecution for an alleged offence against a law of the Commonwealth which is punishable summarily. See also s 4H of the Crimes Act (summary offences) and s 22 of the Acts Interpretation Act 1901 (Cth) ("person" includes a corporation). Obviously, s 13 of the Crimes Act does not apply to offences against state law. As is demonstrated by the decision in Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (2000) 200 CLR 591, at common law a private citizen has the right to commence criminal proceedings. Even if the Commission shares that power, breach of s 38 of the State Act is not a criminal offence. In any event, it has not purported to commence criminal proceedings. 142 Other provisions of the Trade Practices Act which expressly confer power upon the Commission to commence proceedings include: · Section 77 (to recover pecuniary penalties on behalf of the Commonwealth); · Section 80 (to apply for injunctions); · Section 87 (to apply for various other orders and to seek relief on behalf of injured parties); · Section 87CA (to intervene in proceedings instituted under the Trade Practices Act); and · Section 163A (to apply for declarations in connection with the operation or effect of the Trade Practices Act and certain other matters). 143 Nothing in the Trade Practices Act suggests a legislative intention that the Commission be authorized to enforce state legislation. Such a provision would, as we have previously observed, be unusual and might raise serious constitutional issues. As much is suggested by the limitations upon the ambit of the functions conferred by s 28. In our view, the power to sue conferred by s 6A(2)(d) is to be exercised only in connection with functions conferred upon the Commission by the Commonwealth Parliament. Those functions do not include the enforcement of state legislation. The Commission has no power to enforce such legislation. Declaratory relief and s 38 of the State Act 144 Like s 52 of the Trade Practices Act, s 38 of the State Act prescribes a "norm of conduct". See Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (1988) 19 FCR 469 at 473. The consequences of any failure to comply with that norm are found elsewhere in the Trade Practices Act. The Commission does not seek to enforce any private right arising under the State Act, but to vindicate the legislation by demonstrating that Mr Pointon has breached it. We assume for present purposes that this Court has jurisdiction to make such a declaration in an appropriate case, presumably pursuant to s 21 of the Federal Court Act 1976 (Cth). Nonetheless it is possible that the State Act excludes the availability of such relief. The learned authors of Meagher, Gummow & Lehane's Equity Doctrines and Remedies (4th Ed), observe at [19-105]: 'It is submitted that the only real limitation on the court's jurisdiction to make declarations arises where a statute expressly, or by necessary implication, ousts the court's jurisdiction.' 145 As Gibbs J observed, in Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 435‑6: 'The jurisdiction to make a declaration is a very wide one. Indeed, it has been said that, "under O. XXV, r. 5, the power of the Court to make a declaration, where it is a question of defining the rights of two parties, is almost unlimited ; I might say only limited by its own discretion" … . However, the jurisdiction may be ousted by statute, although the right of a subject to apply to the court for a determination of his rights will not be held to be excluded except by clear words … .' 146 The Commission may not, in connection with a breach of s 38, seek any of the relief identified in Part 5 of the State Act and in those circumstances, seeks declaratory relief. Superficially, such relief is of the kind described by Gummow J in Truth About Motorways at [125], involving 'the "prevention" and "redress" if not the punishment "of some act inhibited by law" '. However, in that case, the High Court was concerned with an express statutory provision conferring a power to seek declaratory relief, such power being conferred upon any person. The real point in issue was whether the conferment of that power was beyond constitutional power. In this case, it is at least arguable that Part 5 of the State Act creates a comprehensive code for enforcement of the legislation, dealing both with available relief and questions of standing. 147 As Gummow J observed in Truth About Motorways at [97], the history of the development of declaratory relief demonstrates that such relief will be granted where other relief is inadequate. That is not the present case. The State Act prescribes remedies for breaches of its provisions. In so doing, it distinguishes clearly between breaches of ss 38 and 39 and breaches of other provisions. The legislation does not expressly explain the reason for this distinction. Reference to the second reading speech is of no assistance. As far as we have been able to discover, there is no explanatory memorandum. Fairly clearly, however, the state legislature chose to treat conduct contrary to ss 38 and 39 as being less serious or blameworthy than contraventions of other provisions. It did not impose criminal sanctions upon such breaches. Other remedies (injunctions, damages and compensation) are available only where there is damage or apprehended damage to a limited class of persons, namely consumers. Only consumers and/or the Minister and/or the commissioner for fair trading may seek the relief prescribed in Part 5 for breaches of ss 38 and 39. 148 In Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-2, Mason CJ, Dawson, Toohey and Gaudron JJ observed: 'It is now accepted that superior courts have inherent power to grant declaratory relief. It is a discretionary power which "[i]t is neither possible nor desirable to fetter ... by laying down rules as to the manner of its exercise". However, it is confined by the considerations which mark out the boundaries of judicial power. Hence, declaratory relief must be directed to the determination of legal controversies and not to answering abstract or hypothetical questions. The person seeking relief must have "a real interest" and relief will not be granted if the question "is purely hypothetical", if relief is "claimed in relation to circumstances that [have] not occurred and might never happen"or if "the Court's declaration will produce no foreseeable consequences for the parties".' 149 Part 5 provides adequately for compensation or damages where members of the protected class of persons (consumers) have been, or may be injured by conduct contrary to s 38. The limited injunctive relief prescribed in Part 5 was apparently deemed sufficient to enable the relevant state authorities to deal with any breach of that section. There is no inadequacy in the available remedies, save perhaps for the fact that the Commission cannot seek them. To grant declaratory relief at the suit of a party who cannot take advantage of prescribed statutory remedies might well extend the operation of s 38 beyond the limits intended by the legislature. Further, it is difficult to imagine a clearer example than the present case of declaratory relief having 'no foreseeable consequences for the parties' However it is not necessary that we finally determine whether declaratory relief could ever be available in connection with a breach of s 38. The Commission's standing 150 Although the Commission asserts that it has standing to seek declaratory relief in connection with the alleged breach of s 38, the precise nature of its interest has not been clearly identified. It seems to depend upon the Commission's incorporation under the Trade Practices Act and the object of that Act, again raising the question of the Commission's role and powers. We will return to those matters at a later stage. 151 The circumstances in which a party other than the Attorney-General may enforce public rights and duties appear from the decision of the High Court in Australian Conservation Foundation Incorporated v The Commonwealth (1980) 146 CLR 493 at 526-527, where Gibbs J said: 'It is quite clear that an ordinary member of the public, who has no interest other than that which any member of the public has in upholding the law, has no standing to sue to prevent the violation of a public right or to enforce the performance of a public duty. There is no difference, in this respect, between the making of a declaration and the grant of an injunction. The assertion of public rights and the prevention of public wrongs by means of those remedies is the responsibility of the Attorney‑General, who may proceed either ex officio or on the relation of a private individual. A private citizen who has no special interest is incapable of bringing proceedings for that purpose, unless, of course, he is permitted by statute to do so. The rules as to standing are the same whether the plaintiff seeks a declaration or an injunction. In Boyce v Paddington Borough Council, Buckley J. stated the effect of the earlier authorities as follows: "A plaintiff can sue without joining the Attorney-General in two cases: first, where the interference with the public right is such as that some private right of his is at the same time interfered with ...; and, secondly, where no private right is interfered with, but the plaintiff, in respect of his public right, suffers special damage peculiar to himself from the interference with the public right." ... In Gouriet v Union of Post Office Workers the House of Lords disapproved of [an earlier dictum of Lord Denning MR] and, after a full consideration of the authorities, rejected the notion that the question of standing is one that lies within the discretion of the court, and reaffirmed that a private individual has standing to seek a declaration or an injunction to enforce a public right or prevent a public wrong only in the cases mentioned in Boyce v Paddington Borough Council ... . The general principles stated in Gouriet v Union of Post Office Workers, that a private person, who is in the same situation as any other member of the public, has no standing to claim either an injunction or a declaration to enforce a public right or duty, has been consistently applied in this Court. Although the general rule is clear, the formulation of the exceptions to it which Buckley J. made in Boyce v Paddington Borough Council is not altogether satisfactory. Indeed the words which he used are apt to be misleading. His reference to "special damage" cannot be limited to actual pecuniary loss, and the words "peculiar to himself" do not mean that the plaintiff, and no one else, must have suffered damage. However, the expression "special damage peculiar to himself" in my opinion should be regarded as equivalent in meaning to "having a special interest in the subject matter of the action".' 152 At 530‑531, his Honour continued: 'I would not deny that a person might have a special interest in the preservation of a particular environment. However, an interest, for present purposes, does not mean a mere intellectual or emotional concern. A person is not interested within the meaning of the rule, unless he is likely to gain some advantage, other than the satisfaction of righting a wrong, upholding a principle or winning a contest, if his action succeeds or to suffer some disadvantage, other than a sense of grievance or a debt for costs, if his action fails. A belief, however strongly felt, that the law generally, or a particular law, should be observed, or that conduct of a particular kind should be prevented, does not suffice to give its possessor locus standi. If that were not so, the rule requiring special interest would be meaningless. Any plaintiff who felt strongly enough to bring an action could maintain it. ... A natural person does not acquire standing simply by reason of the fact that he holds certain beliefs and wishes to translate them into action, and a body corporate formed to advance the same beliefs is in no stronger position.' 153 The propositions advanced by Gibbs J have been adopted in numerous subsequent decisions of the High Court, including Shop Distributive and Allied Employees Association v Minister for Industrial Affairs of the State of South Australia (1995) 183 CLR 552; Bateman's Bay Local Aboriginal Land Council v The Aboriginal Community Benefit Fund Pty Ltd (1998) 194 CLR 247 and Truth About Motorways. The separate judgments of Gaudron and Gummow JJ in the latter case describe the development of the notion of standing. 154 The Attorney-General for present purposes is the Attorney-General of Queensland. Whatever the position of the Commission for the purposes of federal law, we see no basis for treating it as other than a private person where the enforcement of state law is in issue. In this regard, the following remarks by McHugh J in Bateman's Bay are of particular significance: '82. Under the doctrine of the separation of powers, whether it is formally enshrined in a Constitution or not, the Attorney‑General of the relevant jurisdiction is regarded as the appropriate person to determine whether civil proceedings should be commenced to enforce the public law of the community. When the Attorney‑General thinks that it is proper to enforce the public law in those courts, he or she may decide to proceed ex officio or on the relation of a private individual. If the Attorney‑General declines to exercise his or her prerogative to commence proceedings "to prevent the violation of a public right or to enforce the performance of a public duty", a private individual is unable to challenge the Attorney‑General's decision. As Jacobs J said in Helicopter Utilities: "The court has no jurisdiction to interfere with the discretion of the Attorney‑General in [consenting] or refusing to put the law in motion in such a case." 83. The enforcement of the public law of a community is part of the political process; it is one of the chief responsibilities of the executive government. In most cases, it is for the executive government and not for the civil courts acting at the behest of disinterested private individuals to enforce the law. There are sometimes very good reasons why the public interest of a society is best served by not attempting to enforce a particular law. To enforce a law at a particular time or in particular circumstances may result in the undermining of the authority of the executive government or the courts of justice. In extreme cases, to enforce it may lead to civil unrest and bloodshed. 84. Moreover, any realistic analysis of law, politics and society must recognise that not every law on the statute books continues to have the support of the majority of members of the community or always serves the public interest. Laws that once had almost universal support in a community may now be supported only by a vocal and powerful minority. Yet to attempt to repeal them may be more socially divisive than to allow them to lie unenforced. Moreover, the interests of a society arguably are often furthered by not enforcing particular laws. 85. ... 86. The decision when and in what circumstances to enforce public law frequently calls for a fine judgment as to what the public interest truly requires. It is a decision that is arguably best made by the Attorney‑General who must answer to the people, rather than by unelected judges expanding the doctrine of standing to overcome what they see as a failure of the political process to ensure that the law is enforced.' 155 In the present case, the Queensland Parliament has seen fit to confer responsibility for enforcement of the State Act upon authorities other than the Attorney General of that state, but that does not undermine the general principle. 156 In Alphapharm Pty Ltd v SmithKline Beecham (Australia) Pty Ltd (1994) 49 FCR 250, the Full Court considered a provision of the Administrative Appeals Tribunal Act 1975 (Cth) which provided: 'Where this Act or any other enactment provides that an application may be made to the Tribunal for a review of a decision, the application may be made by or on behalf of any person or persons (including the Commonwealth or an authority of the Commonwealth) whose interests are affected by the decision.' 157 Gummow J observed at 272: 'Like the expression "a person aggrieved", the phrase "a person whose interests are affected by the decision" and cognate terms, appear in a variety of statutes as the identification of the persons who are given standing to seek administrative or judicial review. The day is long gone when there was any general presumption that in such statutes the "interests" concerned must be proprietary or even legal or equitable in nature, or that the affectation be of a nature as understood in private law. However, it is important not to draw from what was said in any particular decision by way of identification of that which did or did not amount to a sufficient affectation of an interest any general proposition which may be translated to the instant dispute. In each case, the content of the terms "affect" and "interest" are to be seen in the light of the scope and purpose of the particular statute in issue. For example, in my view, there is no "general principle" that a decision under an enactment which favours one corporation cannot relevantly affect the interests of a competitor ... . In his reasons for judgment, Davies J refers to decisions under legislation dealing with anti-dumping and commercial tariff concession orders. Another example is provided by the involvement of competitors in a tendering process ... . It is vital to approach the issues on the present appeal upon a review of the scope and purpose of the Act ... .' 158 Although the State Act does not expressly exclude the Commission from seeking orders in connection with breaches of s 38, there is nothing to suggest that the legislature intended that it have any role in enforcing that provision. It is clear that relevant state office holders and injured parties are to perform that function. Nothing in the Trade Practices Act suggests that the Commission should have any role in the enforcement of state legislation. In those circumstances, and taking account of the policy considerations explained by McHugh J in Bateman's Bay, we conclude that the Commission lacks standing to seek declaratory relief concerning alleged breaches of s 38. Discretion 159 Declaratory relief is, in any event, discretionary. Most of the considerations to which we have referred would, in our view, also militate against a favourable exercise of the relevant discretion. However it is not necessary that we deal in detail with that question. GROUND 8 ‑ THE BANK 160 A number of preliminary points should be noted. At trial the Commission contended that the Bank's non-disclosure of the matters in its valuer's report and/or its failure to volunteer a warning concerning the commercial prudence of the purchase amounted to misleading and deceptive conduct in contravention of s 52 of the Act. This case was not pursued upon appeal. Also, on the unconscionable conduct claims, the Commission's original contention was that the Bank "knew or had reason to believe" that the Gleesons had been subject to misleading conduct in agreeing to purchase the property. Again, argument on this point was not raised before us. The case on appeal therefore becomes one of alleged unconscionable conduct contrary to either s 51AA or s 51AC on the basis of the alleged asymmetry of knowledge as between the Gleesons and the Bank. 161 All allegations against the Bank depend on the proposition that the market value of the property purchased by the Gleesons was substantially less than the price they paid for it. This in turn depends on acceptance of Mr Brett's evidence. If her Honour was correct, as we think she was, for reasons elsewhere explained, in not accepting Mr Brett's valuation, then there is nothing left at all of the case against the Bank. However, an allegation of unconscionable conduct is a serious matter and was attended with some publicity. In fairness to the Bank, we think it is right that we should deal with the merits of the case made against it on appeal. 162 As has been mentioned, the Gleesons entered into the contract for the purchase of unit 29 on 24 September 1998. Consistently with Queensland conveyancing practice, the contract was immediately legally binding. A finance clause made the contract conditional upon the buyers obtaining 'written approval of our loan for the Finance Amount by the Finance Date on the security of a registered mortgage over the lot and any lots of the buyer upon and subject to the terms and conditions currently being imposed by the financier in respect of loans of a similar nature.' The clause also provided that the buyers 'must apply for finance as soon as reasonably possible and comply with the financier's application procedures and requirements.' Elsewhere in the contract the "Finance Amount" was stated to be "amount sufficient to complete". The financier was "as arranged by Investlend". The "Finance Date" was to be on or before twenty-eight days from the date of the contract. 163 Settlement of the purchase did not take place until 21 December 1998, ie almost three months later. Mr and Mrs Gleeson returned to Cairns immediately after signing the contract. What they did in the ensuing three months in relation to the purchase basically only emerged in cross-examination. Their evidence was described by her Honour as "unsatisfactory" and in her Honour's view the Gleesons were not "entirely forthright" about the enquiries made, information received and the consideration that they gave to the question as to what to do about the settlement of the purchase. 164 Within a few weeks after signing the contract Mrs Gleeson had a conversation with her brother, an engineer who resides in Brisbane. He expressed concern 'that they had paid too much for it' and that 'he did not think the Gold Coast was a good place to invest'. Mrs Gleeson said she did not seek any further advice as a result of the conversation but did tell her husband about it. Mr Gleeson did not recall being told of this conversation. Her Honour found that 'it would seem to me most unlikely Mrs Gleeson would not have done so'. Mr Gleeson asked for a copy of the contract and also made 'some enquiries of persons including real estate agents. He appears to have been concerned to discover whether they could get out of the contract.' 165 Her Honour said at [334]: 'Because of Mrs Gleeson's unhappiness with the purchase, Mr Gleeson made enquiries of persons about it and he went so far as to say that this was because he was thinking about getting out of the contract. Neither Mr nor Mrs Gleeson explained what their concerns were with respect to the purchase. They had however been alerted to the prospect that it was not a good investment and therefore [not] likely to prove to their benefit. Mrs Gleeson, I apprehend, was concerned about that after she left the solicitors' office on the day of the purchase. Mr Gleeson said that he spoke to real estate agents about it although he did not say what they told him. It is difficult to avoid the conclusion that it was about the value of the investment property. He also spoke to his accountant in that period. It is hard to imagine that Mr and Mrs Gleeson did not have discussions prior to and consequent upon the advice received. They do not appear to have sought legal advice, although it is possible they did.' 166 Mr Gleeson's accountant, a Mr Campbell, was not called as a witness. Mr Gleeson's evidence was that he spoke with Mr Campbell some time between purchase and settlement and may have seen him more than once. He discussed the purchase of the property with him. 167 The loan agreement with the Bank was entered into two months after the contract. A number of extensions of the contract period had been organised. Mrs Gleeson received letters from the Bank, had telephone communications with officers concerning the transaction, and discussed it with an officer of the Bank. A letter from the Bank dated 23 November 1998 enclosed the Bank's usual terms and conditions. Mrs Gleeson agreed that a Bank officer enquired as to whether she had read and understood them and she advised that she had. Mr Gleeson did not bother to read them as he regarded any conditions as non-negotiable. The Bank's conditions included the following: '11.5 If any of our officers, or any person engaged by us, carries out any inspection or valuation of the property offered or taken as security, they do so for our purposes only and not on your behalf. This is the case even if the Contract says you must pay us a valuation fee. Any reports made as a result of the inspection or valuation are our exclusive property. When we inspect or value a property, or do anything as a result of the inspection or valuation, or pay any Loan drawn under clause HL3, we are not responsible for and make no representation to you about the condition of the land, the construction of any building or the standard or value of any building on the property or the uses to which the property may be put. 11.6 We take no responsibility for any decision you make; (a) to enter into the Contract; (b) to obtain the Loan; or (c) about the kind of interest rate (for example, fixed or variable interest rate) you want under the Contract Our employees and agents do not have any power or authority to; (aa)make any predictions about what might happen to our or anyone else's interest rates; (bb)tell you what kind of interest rate would best suit you; or (cc) make any other representation, prediction or statement of opinion about any other matter or thing affecting the Contract or the security. If you have any doubt at all about any of these matters, you should seek help from a financial counsellor or obtain legal advice or do both.' 168 Section 51AA provides: '(1) A corporation must not, in trade or commerce, engage in conduct that is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories. (2) This section does not apply to conduct that is prohibited by s 51AB or 51AC.' 169 The Commission contended that, in their dealing with the Bank, the Gleesons were persons at a "special disadvantage" and that the Bank took unconscientious advantage of them. 170 The Bank had a valuation undertaken on 11 November 1998 which assessed the value of the unit being purchased by the Gleesons at $100,000. The valuation referred to three comparable sales in Surfers Paradise. The valuer was not called as a witness and her Honour treated it only as information available to the Bank which, in accordance with its policy, it did not pass on to the Gleesons. The valuation included the following: 'Demand for property of this class is currently subdued with purchasers very discerning with large amounts of available stock. The property was sold by investment seminar techniques where purchasers are generally not well informed as to local market conditions. Selling costs are well in excess of standard REIQ rates which are then passed on to the purchaser by way of an inflated purchase price and cannot be recouped upon further resale. These methods are well known for achieving selling prices well in excess of local market value.' 171 It is said that the Gleesons' special disadvantage arose from the fact that the Bank knew they were paying $164,900 for a property, the value of which was in the order of $100,000, and that the Bank did not inform them of the content of that valuation or advise them to seek their own valuation or decline to approve the loan. Rather it entered into the transaction by which it advanced the Gleesons the sum of $200,000 secured by mortgages over the investment property and over their previously unencumbered family home. 172 As senior counsel for the Bank pointed out with some force, it is difficult to conceive of persons less likely to fall within the categories of persons able to invoke Amadio type principles than the Gleesons. Her Honour noted that they were intelligent, educated persons. Mr Gleeson had practised for twenty years as an architect and was a registered builder. Her Honour stated at [216] that the fact that the Chevron Palms was operating as holiday rentals interested Mr Gleeson because he had recently done an analysis for a strata title hotel in Cairns and had 'some understanding about what were reasonable occupancy levels and room rates'. 173 Quite apart from their personal stock of knowledge and experience, it is plain the Gleesons sought and received advice prior to making the application for the loan. The full extent of the advice obtained was not disclosed to the trial judge. 174 Senior counsel for the Commission criticised her Honour's reasoning on the basis that it amounted to saying 'that if the weaker party had the capacity to ascertain the knowledge which they lacked at the time of entering into the impugned transaction, then the weaker party is not being regarded as being under a special disadvantage'. 175 The problem with this argument is that, as far as the Bank is concerned, the "impugned transaction" is the loan, which did not take place until several months after the purchase. The Bank can hardly be responsible for the Gleesons entering into a contract of sale under which they were obliged to make bona fide applications to a financier for a loan in accordance with the financier's ordinary terms and conditions. There was no suggestion that the Bank's terms and conditions were in any relevant respect different from those which might have been obtainable from any other financial institution, or that the Gleesons could not have borrowed from another lender. Even if the Bank had disclosed its valuation to the Gleesons, or declined their loan application, it by no means follows that they would have been able to avoid the contract of sale. 176 In relation to the proposed loan from the Bank, there was no asymmetry of information. The Gleesons were able to get information as to the market value of the property they purchased and, to some extent at least, in fact did so. A disadvantage that arises from a mistaken commercial judgment is not "special disadvantage" in the Amadio sense: Australian Competition and Consumer Commission v Samton Holdings Pty Ltd (2002) 117 FCR 310 at [64]-[65]. 177 The Bank did not stand in a fiduciary position to the Gleesons. It did not hold itself out as an adviser, either for the purchase of real estate or generally in relation to their personal financial planning. On their invitation the Bank gave them the opportunity to apply for a loan and accepted that application. It was not suggested there was anything unfair as to the loan in terms of interest, obligations or otherwise. It would be unfair and unreasonable, both for banks and their customers as well, to impose, as the Commission urged, declarations which would involve some kind of general obligation on banks to warn customers whenever the bank holds a valuation which is less than the price paid for the purchase of a property offered as security for a loan. Amongst other things, customers might be dissuaded from making a purchase which subsequently turns out to be a missed opportunity. 178 In our opinion her Honour was correct in rejecting the claim under s 51AA. 179 Section 51AC(1) provides that a corporation must not in trade or commerce in connection with the supply or possible supply of services to a person, engage in conduct that is in all the circumstances unconscionable. Sub-section (3) provides: 'Without in any way limiting the matters to which the Court may have regard for the purpose of determining whether a corporation or a person (the supplier) has contravened subsection (1) or (2) in connection with the supply or possible supply of goods or services to a person or a corporation (the business consumer), the Court may have regard to: (a) the relative strengths of the bargaining positions of the supplier and the business consumer; and (b) whether, as a result of conduct engaged in by the supplier, the business consumer was required to comply with conditions that were not reasonably necessary for the protection of the legitimate interests of the supplier; and (c) whether the business consumer was able to understand any documents relating to the supply or possible supply of the goods or services; and (d) whether any undue influence or pressure was exerted on, or any unfair tactics were used against, the business consumer or a person acting on behalf of the business consumer by the supplier or a person acting on behalf of the supplier in relation to the supply or possible supply of the goods or services; and (e) the amount for which, and the circumstances under which, the business consumer could have acquired identical or equivalent goods or services from a person other than the supplier; and (f) the extent to which the supplier's conduct towards the business consumer was consistent with the supplier's conduct in similar transactions between the supplier and other like business consumers; and (g) the requirements of any applicable industry code; and (h) the requirements of any other industry code, if the business consumer acted on the reasonable belief that the supplier would comply with that code; and (i) the extent to which the supplier unreasonably failed to disclose to the business consumer: (i) any intended conduct of the supplier that might affect the interests of the business consumer; and (ii) any risks to the business consumer arising from the supplier's intended conduct (being risks that the supplier should have foreseen would not be apparent to the business consumer); and (j) the extent to which the supplier was willing to negotiate the terms and conditions of any contract for supply of the goods or services with the business consumer; and (k) the extent to which the supplier and the business consumer acted in good faith.' 180 The Commission here relied on subs (3)(i)(ii). We fail to see how the Bank could be said to have "unreasonably" failed to disclose to the Gleesons the valuation it had when it plainly informed them that it did not propose to do so. If they did not like that condition, they could have sought finance elsewhere. 181 More fundamentally, it distorts the proper operation of s 51AC to search through the twelve criteria set out in subs (3), find one that seems to fit the case in hand, and then move to a conclusion of unconscionable conduct. Quite apart from the fact that Parliament has expressly stipulated that the twelve criteria do not limit the matters to which the court may have regard, many of the stipulated criteria, when applied in the present case, would tell against a finding of unconscionable conduct. Some examples are (c) (whether the consumer was able to understand any documents relating to the supply of the services) or (f) (the extent to which the supplier's conduct was consistent with the conduct in similar transactions between the supplier and like business customers). 182 In our opinion her Honour was correct in rejecting this part of the Commission's case. GROUND 9 ‑ INJUNCTIONS 183 The primary judge's reasons for not granting injunctions against Coral Reef, Investlend and Mr Bilborough are set out at [29]‑[30]. The injunctions were refused in the exercise of her Honour's discretion. In order to justify appellate interference with such a refusal, it is not sufficient that the members of the court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must be shown that some error has been made in the exercise of the discretion. See House v The King (1936) 55 CLR 499 at 504‑505. 184 The Commission advanced two criticisms of the primary judge's statement that 'the essential vice in the conduct the subject of the declarations is … addressed by the more recent Queensland legislation and injunctions are therefore unnecessary'. The first was that it is not a proper basis on which to decline to grant an injunction that the conduct, if repeated, might attract a penalty under other legislation. Section 573A of the Property Agents and Motor Dealers Act 2000 (Qld) (the Queensland Act) provides: 'A marketeer must not, in connection with the sale, or for promoting the sale, or for providing a service in connection with the sale, of residential property in Queensland, engage in conduct that is misleading or is likely to mislead.' The word "marketeer" '(a) means a person directly or indirectly involved in any way in the sale, or promotion of the sale, or provision of a service in connection with the sale, of residential property, alone, or with others under a formal or informal arrangement, and whether or not – (i) the person derives a direct or indirect benefit from the sale, or promotion of the sale, or provision of a service in connection with the sale, of the property; or (ii) the way the property is marketed includes offering potential buyers of the property inducements intended to encourage them to purchase the property; or (iii) any of the persons is licensed or is a registered employee; or (iv) the sale, or promotion of the sale, or provision of a service in connection with the sale, of property is, or is part of, a business the person ordinarily conducts; and (b) includes a person who ‑ (i) causes or arranges for the sale, or promotion of the sale, or provision of a service in connection with the sale, of residential property, or (ii) provides advisory, management, legal, accounting, administrative or other services in connection with the sale, or for promoting the sale, or for providing a service in connection with the sale, of residential property.' Section 572C empowers the chief executive to apply to the District Court for an order requiring a contravener of s 573A to pay to the State a money penalty or pay to a person who suffered financial loss because of the contravention an amount as compensation. Section 572D(1) empowers the court to order a contravener of s 573A to pay to the State, as a money penalty, an amount up to the limit of the court's civil jurisdiction for each contravention. Sub‑section (3) provides that 'If satisfied another person has suffered financial loss because of the contravention, the court may order the person to pay to the other person, as compensation, an amount, decided by the court, up to the limit of the court's civil jurisdiction.' 185 These provisions were plainly designed to deal with fact situations such as those raised in the present case. The existence of the legislation was, in our view, a relevant consideration for the primary judge to take into account in determining whether to grant injunctive relief. As her Honour pointed out, any future contraventions of the provisions 'can be adjudged in any event in the light of the declarations made'. By this we understand her to have meant that her findings and the declarations based on them may be relevant as exacerbating circumstances in connection with any future contravention. 186 The Commission's second criticism of the primary judge's reliance on the misleading conduct provisions of the Queensland Act was that the exposure to the risk of a civil penalty is confined to conduct by the relevant respondents in Queensland, and is therefore 'a non‑existent deterrent with respect to conduct elsewhere'. It may be doubted whether s 573A is limited to conduct in Queensland. It is the residential property that must be in Queensland, not the misleading conduct. But even if it is correct that the conduct must be in Queensland, there was no evidence that any contravening conduct had occurred anywhere but in Queensland. 187 Although the primary judge did not expressly mention the matter, it would have been in her mind that the contravening conduct occurred in 1997 and 1998, some five years before the decision at first instance. There was no evidence that any of the relevant respondents was still engaging in contravening conduct or was threatening or intending to do so. While under s 80(4) of the Trade Practices Act the Court may grant an injunction whether or not it appears that a respondent intends to engage again, or continue to engage, in contravening conduct, the fact that there is no continuing or threatened contravention is relevant to the discretion whether to grant relief. 188 The primary judge does not expressly mention Mr Quinlivan in that part of her reasons declining to grant injunctions. Elsewhere she records that his involvement in the affairs of Coral Reef, NAPC and Investlend ceased on 9 September 1998. Doubtless this was in her Honour's mind when she excluded Mr Quinlivan from the sentence – 'such injunctions might have been appropriate against [Coral Reef, Investlend and Mr Bilborough]'. 189 The primary judge's statement that an injunction concerning representations as to rates of capital growth is difficult to fashion is supported by the reasons her Honour gave. The Commission's submission that there was 'sound justification for an order simply restraining the respondents from making any predictions as to capital growth rates' does not identify any error in the exercise of her Honour's discretion. It merely points out that the discretionary judgment could have gone the other way. 190 The Commission has not satisfied us that there is any error in the primary judge's refusal of injunctions in the exercise of her discretion. COSTS 191 All respondents intimated that, in the event of the appeals being dismissed, they would seek an order for indemnity costs. 192 Senior counsel for the Redwind respondents went into some detail on the issue, no doubt because at the end of the Commission's argument he was told that he would not be called upon. He contended that, properly advised, the Commission should have known the appeal against his clients had no prospects of success and that it could not in the circumstances be concluded 'that Redwind and its directors knew that the property was to be marketed at a price well above market value'. 193 Further, he said the Commission should have been aware that it had no real prospects of successfully overturning her Honour's finding that the Redwind respondents were not aware that representations were to be made to purchasers that the price they were to pay was the true market value. Her Honour's findings on this point, it was said, substantially involved an assessment of the credibility of Mr Cornish and Mr Grounds. 194 The only other argument of any detail advanced in support of indemnity costs was that on behalf of the Bank. Senior counsel contended that on the findings and "non-findings" about the Gleesons (which we take to be a reference to the incomplete evidence as to the Gleesons' enquiries after the purchase), none of which was challenged on appeal, there was no reasonable prospect of success. 195 Authorities on the discretion to award indemnity costs are well known: Fountain Selected Meats (Sales) Pty Ltd v National Produce Merchants Limited (1988) 81 ALR 397 at 400-401, Botany Municipal Council v Secretary, Department of the Arts, Sport, the Environment, Tourism and Territories (1992) 34 FCR 412 at 415, Colgate‑Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 230-234. 196 Consideration of this question at an appellate level (ie whether indemnity costs should be awarded to a successful respondent in an appeal) is not common. However recently Full Courts of this Court have refused (Tisdall v Health Insurance Commission [2003] FCAFC 198) and awarded (De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 at [6]-[8]) indemnity costs. In neither case did their Honours suggest that any different principles were applicable. 197 Looked at broadly, we do not think this is an appropriate case for the award of indemnity costs. At trial the Commission failed against a number of respondents and, in respect of the claims on which it did succeed, the degree of success is reflected in the reduced order her Honour made for costs of the trial. However it must not be forgotten that there was at the heart of this litigation what were found to be repeated and organised contraventions of the Trade Practices Act which warranted the commencement of litigation by the Commission in the discharge of its statutory responsibilities. Looking at the costs of the appeal, it is to the credit of the Commission that it did not pursue every claim which had failed at trial. The hearing of the appeal was conducted in an efficient and expeditious manner. Although listed for five days, the hearing was concluded in less than a day and a half. 198 If one were designing a cost recovery regime completely afresh, there would be much to be said for not making any distinction between party and party costs on the one hand and solicitor and client or indemnity costs on the other. If a party is forced to litigation in order to assert a claim found to be rightful or defend an unjustified claim, why should not the unsuccessful party bear all the costs of the successful party, save only for extravagant and unreasonably incurred costs? This point was made by Rogers J in Qantas Airways Ltd v Dillingham Corporation (unreported, Supreme Court of New South Wales, 14 May 1987), cited in Colgate-Palmolive at 227. But however attractive that may be as a matter of principle, it is too late in the day. We have to recognise that the general rule is that unsuccessful litigants pay only party and party costs. To depart from that rule it is not sufficient that the victory of the successful party is a clear one. In the present case, while we have reached our conclusion on the merits of the appeals with little hesitation, we do not think the Commission's case was unarguable. 199 For example, to deal with the specific points made by the Redwind respondents, the Commission argued in its written submissions that there was evidence that Mr Cornish knew that Coral Reef telemarketed both locally and interstate and brought potential purchasers from all over Australia to the Gold Coast to persuade them to invest in real estate. He accepted that it was obvious that the persuasion must have consisted of convincing people that they were offered a good deal. He also accepted that it was obvious that investors would look to see that they were purchasing at the right price. Therefore 'as a matter of common sense' it was argued 'if the persuasion that there was a good deal and that the purchasers were purchasing at the right price, this necessarily involved representation that the selling prices of the units were their market value.' Likewise Mr Grounds made similar admissions and also admitted that it was obvious to him that interstate purchasers would want to be assured that they were paying the market value for the property that they were being asked to buy. Although these arguments are not persuasive, it cannot be said that they were totally irrational, still less that they were advanced in anything like bad faith. 200 We think that in prosecuting this appeal the conduct of the Commission did not fall sufficiently outside what Madgwick and Finkelstein JJ termed in Tisdall (at [3]) as 'the normal hazards of litigation'. CONCLUSION 201 All grounds of appeal having failed, the appeal must be dismissed with costs. I certify that the preceding two hundred and one (201) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Heerey, Sundberg and Dowsett. Associate: Dated: 2 July 2004 Counsel for the Appellant: S Couper QC and KN Wilson SC Solicitor for the Appellant: Australian Government Solicitor Counsel for the Third, Eighth and Ninth Respondents: DJS Jackson QC and DP O'Brien Solicitors for the Third, Eighth and Ninth Respondents: Hopwood Ganim Lawyers Counsel for the Fourth Respondent: J Hilton SC and C Wilson Solicitor for the Fourth Respondent: A J Mullumby Counsel for the Fifth Respondent: TJ Bradley Solicitors for the Fifth Respondent: Blake Dawson Waldron Counsel for the Sixth Respondent: AJH Morris QC, D Atkinson and L Jurth Solicitors for the Sixth Respondent Quinn Box & Muller Counsel for the Seventh Respondent: CK Hampson QC and NJ Thompson Solicitors for the Seventh Respondent: Grays Lawyers Date of Hearing: 20-21 May 2004 Date of Judgment: 5 July 2004