CATCHWORDS Trade Practices ~ Consumer Protection - Misleading and deceptive conduct - Sale of Shopping Centre - Misrepresentations during negotiations - Whether inducement to purchase - Proper measure of damages and assessment thereof TRADE PRACTICES ACT 1974 ss.52, 53A(1)(b), 82. CONSTANTINE PAPPAS (by his next Vv SOULAC PTY. LIMITED and friend George Pappas) and L.d. HOOKER PTY. LIMITED PANAGIOTA PAPPAS Applicants Respondents No. G8 of 1981 Fisher J. Adelaide 14 October 1983. IN THE FEUBRAL COURT GE AUSTRALIA S.A. No. G8 of 1983 SUUTH AUSTRALIA DISTRICT REGISTRY wee GENERAL BIV1iS [ON Boe ot WE E ON: CONSTANT (INE PAPPAS (hy nis next friend George Pappas) and PANAGIOTA PAPPAS Applicants - and - SUULAC FLY. LinItQu and L.J. HOOKER PCY. LimTizu kespondents Okt ER JUUGE MAKING ORDER Justice Fisher Adelatde WHERE mADE AYE 14 January, 1983 THE COURT ORDERS THAT: 1. Thais application te diemissed, 2. The applicants Constantine Pappas and Fanaugioba Pappas do pay to the respondents Soaulsc Pty. Limited and L.J. Hooker Pty. Limited ineir cosls, tne same to be Laxed if not agreed. 6A. NO.GS OF 1983 wo IN THE PLUEFAL COURT OF AUSTRALIA) ) SOUTH AUSTRALIA DISTRICT REGISTRY) > GENERAL DIVISION > BETtWEEON ¢: CONSTANTIANE PAFPAS (by has next Lriend George Pappas) and FANAGIUTG FAPPAS Applicants = and SOULAC FTY LiMiTED and L.J._ HOOKER PITY LIMITED kespondents 14 October, 1983 ROASONS FOR IJUNGNENT FISHER 3,2 Thais action arises out of the sale by the regpondent Soulac Pty. Lld. ("*Soulac") to the applicants Constantine Pappas C*mr, Pappas") and Panagiota Pappas ("Mrs. Pappas") of 3 shopping centre at Chrislies Beach in South Australia. Essentaally the applicants contend that Soulac engaged in misleading or rleceptive Conducl which contravened 5.32 of the IRAVE PRACTICES ACT 1974 ("The Act") and oun consequence the applicants suffered lose. They seer to recover this loss pursuant to s.82 of the Act from Soulae and from its agent Lid. Hooker Limited ("Hookers"). 1t is allegrd that toorer's employee Kelvin James Spencer ("Mr. Spencer') made 4 mlinber of false representations during negotiations for the purchase, which misled the applicants who in consequence paid an @xc@ssive price for the shopping centre. The background of undisputed f3cts can be stated reasonably chortly, Early in 1981 Lhe applicants sold certain business premizes and were seckhing to invest the proceeds in an income producing property, Mr. Pappas bad sone years earlier suffered 3 stroke amd was umstle to 91Ve evidence during tihne proceedings. He took little part on the megotrations leading up to the purcnase of the shopping centre, which were substantially lert ain the nands of the applicants' son and daughter. In June 1981 Mr. Spencer tlold them of Soulac's shopping centre at Keach koad, Christies Beach which comprised 52: shops. This unformation was conveyed by telephone to Mrs. Paxinos, the dsugnter of the applicants, and she and her parents inspected the premises on the following day. They found that one af the shops was vacant and Mrs. Paxinos spore of this to .Mr. Spencer during the evening. On the following day the applicants and rs. Faxinos anspected the premises with .Mr. Spencer and in Lhe evening Mre. Paxaindas telepnoned Hr. Spencer to say her parents wished to make an offer. Wr. Spencer visited the applicants' home on the following day, 16 June 1981, and the latter signed a contract offering ta Purchase the shopping cenire For $100,000. Tois offer was then sccepted by Soulac, the contract being dated 17 June ("the tarst contract"). 3. Shortly prior to the expiration of the cooling off period under this contract the applicants' son George Fappas was informed at the purchase. Welh his mother and wife he visited the centre during the evening and they had a conversation with firs. Hajisava the tenant of shop numbered ], Sne made a number of derogslory conments eoncerning the shopping centre and andicauted that sne amlicipated vacating her premises. Later that Same evening Ororcge Pappas telephoned Mr. Spencer and said his parents wished to cool off and not proceed with lie purchase, This action was secepled ind the farst contract lapsed. Subsequently Mr, Spencer antraduced a Mr. Memmos to George Pappas 35 3 prospective tenant of tne vacant shop numbered 2 and Mrs. Hajisava's shop number 1. George Pappas accepted wr. Memmos as the mew tenant of these shops and obtained from Mr. Spencer the leases af the other four shops. firs. Paxinos spoke with the lessees of these shops concerning their businesses and generally. On 1 July 198] the applicants signed, in the presence of Uheir som, another contract agreeing to purchase amd to make settlement on Lhe succeeding 13° July. Frior to the vate of settlement George Pappas instructed a land broker to prepare a lease for Mr. Hemmos sand the latter was let aiunlo possession before settlement. However ne did mob sign a lease and left the centres for other premises some weels after settlement. The applicants suffered disappointments with other tenants and ancurred unexpected expense im cleaning up and repairing water damage. Noreover they found Lhat some of the tenants of the other shops had mot been, for one reason or another, regular in their payments of rent to Sonulac. Tn these circumstances they seer to be compensated by Soulac for their disappointments and although originally claiming rescission, agreed they had affirmed the purcnase. Their coubention was that they had siffered loss in that they paid more for tne shopping centre than 1ts true Value at the relevant time. Jt was ain these carcumstances that the applicants alleged that representations concerning Lhe shopping centre were nade by Mr. Spencer which contravened Lhe provisions of €.92 smd s.u3A of Lhe Act. Tt 1s sufficient to consider ¢.92 slone in the farsi anstance. Before proceeding to relate the darflering versions of what wae Said, it 3S unportank on a mumber of grounds te appreciate the characteristics of tne varicus persons with whom Mr.e Spencer spoke. That which 15 misleacing to one person may mot be misleading to a person with different characteristics. Liltewise persons with differing characteristics are unlikely to attach the same significance to the statements of another. Ari important factor an this matter aus thst, with the exceplion of Mrs. Fappas, each member of the family had had considerable commercial experience. tir. Pappas had, an his wife's wards, been a very clever businessman and had owned shops and Flats. Moreover he had S years experience with a land caleamun. His daughter Mrs. Puxinos who conducted all negotiations leading to the first contract, had had considerable business experience gsined whilst employed by land agents and land brorers. She had worked for a period as 32 land saleswoman and she and her husband had engaged ain some private buying and selling of properlies. Furthermore she had for 12 months prior to May 1981 condueled her own dress boutique business al Morpinett Vale, 4 Pow kilonelres from Christics Beach. Her brolher George Pappas had graduated with a Bachelor of Economies degree and had for lhe three yeurs prior to the hearing bean managing his owr Chicken Yaree-away tood shop business. both trother and siater were thus antedjigjent people, witn conmbidersble business expertise and experience. On many malters Io did mot rand their evirionee very satisfscblory or convincing, perhaps tecause of their very clos? aunvolyvement ain the decisiom to make the purchase. They were nob disinterested witnesses, £ gained the impression tit esch was inclined to attempt to shift to the other Lhe blame for the clisappointment their parents Lelt in the months after setllement. Mrs. Fappas had assisted her hushand an the management of his properties since his rliness tut had not otherwise had business experience. She gave her evidence through an aunlerpreter, though claimed to nave sufficient -Fnowledge of English to understand Mr. Spencer's statements. Tne other prancupsl witness, Mr. Spencer, was a Jam salecman, employed by Hookers and he mad had constderable experience both with that company snd the Taxation Department. L found him to be a conscientious amd careful witness and 3 person who was prepared to give truthful testumony wathoukt regard to 6. the consequences. in general 1 prefer his verston of tine conversations to that of the applicants and their children except where he 1s, if ever contradicted by corroborrated evidence, He wa5 prepared freely to admit having made certain statements which, canstrued am the manner im whieh the applicants or their children claimed they understood them, could have misled the applicants. The evidence of the two directors of Soulac, Mr. Little and Mr. Tippins, 15 mot, on Lhe view 1 take of Line matter, of mucn significance. However IT should state, shovld at subsequently become relevant, that [£ found Mr. Little a careful witness whose evidence generally 1 cam accept. I cannot say the same of Mr. Tippins. The megotrations took place over a number of weeks ard there were mumerous discussions (lelephone and otherwise) ane neelangs of the applicants and their children, or some of then, with Mr. Spencer. The crueial question for determination is the BProbatle slate of mind of the applicamls, to the extent anduced by Mr. Spencer, ab the time of signing of the contracts. The applicants musl establish, as 3 threshold consideration, that they held a mistaren belief 35 a result of something said ta them ty Mr. Spencer, They relied primarily on establishing a breach of 5.52 of the Act and at was conceded or nob an issue thal each of the respondents was a corporation engaged an trade or commerce. Hookers was acknowledged to be the agent of Soulsac im connection van with the ssle and Mr. Spencer was 3 servant or agent of Hoorers. In the light of conflicting evidence 2t is necesssury to determine wnat J fund Mr. Spencer did say to one or more of the applicants or their children om the topics of maisrepresentation pleaded. However first of all a few general comments musl be made. For the purpose of delermining whether any of the respondents enqaqged oan misleading conduct statements can nat be assessed in isolation bub om the oversll context of Lhe negoLiations. To adJopl with respect what was said an Parkdale Custom Built Furntture Fby. Ltd. vo Fuxu Fty. Ltd. (1982) 42 ful.k. 1 by Gibbs C.d. at page 7. "The ecanduch of a derendant must be viewed as 3 whole, Jt would te wrong to select some words or acts which, alone, would be Likely to mislead 1f those words or acts. when viewed an their context were mob capable of masteading. Lb 1% obviceus where the conducl complained of camsists of words, ait would not be right to select some words only and to 19n0re others whieh proviiled the context which gave meaning to the particular words. The same 18 true of facls." It as important to appreciate that Many of tne statements alleged or admittedly made by Mr. Spencer were wholly or ain Part statements of oapinian, not cupable of being objectively proved to be true or false, They were also eseentially the Lype of introductory comments, in the mature of puffery, made at the start of negotiations for the prrpose of attracting the aunberest of a possible purchaser. As such they became arrelevant or of lattle if any sigmifiacance when detailed information 1s subsequently given 3 fortiori, to a potential 8. Purchaser with commercial experrence. To the exLlentl that they are essentially puffery, it is proper to be reluctant to elevate them +0 the status of potentially misleading conduct. The comments of Holmes J. on this aspect, which he denotes 25 a rule of law, in Denning v Derling 20 N.E. 107 at 108-9, reterred to an Donald & Heydon Trade Practices Law vol.2 p.539 are on point. "The rile of law 16 nardly to be regretted, when it is considered how easily and ansensitbly words of hope or expectation sre converled by an interested memory anto slalements of qualily and value when the expectation has been disappointed." The statement of clatm identifies 9 topics on which misieading statements were alleged to have been made by Mr. Spencer, The eviddance supporling Lhe applicants' case diseloses these statements 36 having been made an various forms and various words and oan at least ome instance quite differently from Lhat as pleaded, Mrs. Fappas, Mrs. Faxines and George Pappas gave her or his version of what Nr. Spencer said on a munber of these topies und Mr. Spencer stated his sccount of what was said. Generally I prefer Lhe version of Mr. Spencer and I do not propose to recite what wus pleaded on each topie and what aif anything esch wilness fad to osy. This can af mecessary be gathered from the exlensive evidence taken at the hearing. The farst coantentious topic cuncerned tne amount of maintenance required to te performed on the shopping centre. It was comlended that Mr. Spencer said that there would or should not te uny mainlenance required to be performed om the premises . because they were new. There was however only Wre. Paxinos' uncorroborated evidence tao this effect and she has rot satisfied me that he made a statement im Lhese terms. He said, which I accept and which Mrs. Paxinos confirws, that she brought up the topic of maintenance and I acecepl his slalemenl that he murely u agreed with her when she said tnat there should be lattle Maintenance because tie premises were, as they indeed were, relatively now. Tnere 15 no gustificstion for a fairding of Misleading conduct on this topic. The next Lopic concerned the return and the income to be produced by the shopping centre. There 25s mo doubt Lohat early in the negotiations Mr. Sbencer said that the shopping centre had 1 g00d income, namely $36,000 snd am excelleanl return. This however was nok 3a statement of a fact but of opinion based on his Judgment. Furthermore ian the words of Gibbs Cid. 24 125 necessary to see the words in context. As negotiations progressed the applicants hecume aware of the elual rents the tenanis were obliged to pay and the fact that one shop was vacant. nae informatyon was in the first contract. The canversstican with Mrs. Hajisava cast doubt on some atsumpttons and alerlLed them to the fact that they ought to male their oun enquiries. They exercised their right to cool-off for this very purpose. Mrs. Paxinos slso said thal she was dJisappointed with Mr. Spencer, especially as she expected ham to be acting as thoir agent as well as for the vendor. Thereafter they were less inclined to accept or rely upon general statements and made their own te To. enquiries. Mrs. Paxinos however s3id that prior to signing the second contract she asked Mr. Spencer if her parents "would be gelting a good return". 2l as quite out of keeping tor a person of her experience and umn her tbLhen state of Fnowledge to ask such 2 simplistic question, Jet alone place any reliance on the angwer, Mr. Spencer's reply when this matter was pub toa mam an evidence 18 more an accord with reality "We wore pretty well advanced un nogolvutuans on Lobe snops. Ll think they were talking about specifically Lhe new tenants and supplying information. We had gone over 311 that tefore.?% At the time of $19namq the second contract tne applicants were well aware of the rents Lhe tenants were obliged to pay and the arrangements concerning Mr. Memmos. The walter of regularity of payment of rents is more appropriately dealt with in relation to Mr. Spencer's representation that they were good tenants. Thies contract and accompanying documents seb aut the Tents under 4 axisting leases and that ain respect of shups 1 and 3 a tenant had agreed to pay #160 per week. i1t was not the Lrault of either the vendor or Mr. Spencer that this tenant had not been committed to a lease before entering anto possession, {I do rat find any conmdueb which was, or was lively to be, misleading oan this aepect of the applicants' case. The next cantention was that Mr. Spencer represented both orally and oan Lhe contracts ard vandor's statements that shops 4 and 6 were leb at $120 per weer. It was not disputed that there was such a representation or that this was the rent dl. payable under the leases. However it was contended that the rent at the time paysble had been reduced by agreement between the parties. The applicants abandoned thas contention at trial in respect of shop 6 and I fand that they farted to establish such an agroement wilh ine temant of shop 4. Mr. Little, satisfied me that no such agreement had been made. lt ow i¢ then said that Mr. Spencer orally represented thaub there would be mo bLrouble am detbing shop 2. Again Lhis is a stalemenl of an opinion amd not a sertoug assertion of faet, whether present or future. The shop was shown 3s vacant at the time of Lhe firet contract but shortly thereafter a tenant wr. Hemmos was oantroduced. He wis checked by Mr. George Pappas who Tounel ham acceptable fut arranged for his Lanabroker to prepare the necessary documents. It was the applicants' fault Lhyst Mr. Menmose was mot committed to an enforceable written lesse. fo can mot secept that any stalemenl made by Mr. Spencer 35 to the prospects of obtaining a tenant could have encouraged the applicants cto believe that it would always be easy to £111 vacancies and Lo fall them at 4120 per weer. {L scecept Mr. Spencer's evidence, that Mis. Paxinos was aware of a number of vacancies an Beach Road at the commencement ot neguliations. George Pappas however for his part was wunsislent that his parents shovwld mot sign a second contrach unttl a tenant was obtained for shops lo and 2. This requtrement was sx#tisfied and 1t was on his instructions that Mr. Memmos was allowed inlo possession without a lease. Mr. Spencer was also alleged to have represented that the nearby Colonmades Shopping Centre had not any effect on the tenants' businesses and Lhat there would be mo problems from this source. Mrs. Paxinos' evidence was that on the first telephone call Mr. Spencer made thas stalemenl. She went Tfurlher to say that Mr. Spencer's view was toast rather Lian having a detrimental effect Calonmades had helped Beach koad. If can mob accept her evidence in this regard. Jito3s out of character for Mr. Spencer, as 1 assess nim, ta be sa dogmatic om matters of which he had no krowledge. To acespt his version of the conversations on this topic "eyes we wid. We had quate 3 lengthy discussion on Colonmnmades and ats wapact. 1 felt she, perhaps, knew as much - af not more than I did - having had previous business experience in the area. Sne was of the opinion that Colunnades had caused the mimber of vacancies snd perhaps 4 downturn ain the business an that ares and J agreed, I felt 1t had quite 3 seriols effect on beach Road trading, and my comment to her was that C felt that the worst of the impack was migh aver and = othsat we would prohably begin to see, in my opinion, 3 recovery down there; and 1 think she agreed." Then a1t was s3id Mr. Spencer represented all of the tenants as good tenants. fir. Spencer admitted he wsed these words and he dad not attempt to equivocate. This unequivocal zdmission of a matter unfavoursble to him confirms my view that 1 should accept his evidence in preference to that ot Mrs. Paxinos. He was fsr wore inclined to be objective, whereas Mrs. Paxinos was to same extent am advocate ain her own cause or that of her parents. In saying that they were good tenants Mir. Spencer was, 13. as he ¢aid, doubtless relying wupom what the observed of the general conduct of their businesses, mamely that they had stock on hand and customers im evidence and were trading and appesred generally to be operating iam a professional manner. However 1b 1s my view that the applicants were entitled to aselme that he was saying that the Lenants were paying their rent regularly, wore nab am arrears and were complying wilh their obligations wnder Lhezr leases.iln fact this was mot the ease and Soulac fiad experirenced daitficulties wath same of the tenants. Boh Mrs. Hajgisava and tir. Wart had teen from time lo tine am arrears wath tnear rent and meither of them could be said to fave been goud tenants. However the applicants' counsel conceded that they were aware of this position al the time of signing the second contract. Mr. Van Wyck, a tenant of shops 2 and 3, had Fallen very substantually in arrears with his rent, to the extent of approximately $5,000 und was making unreasonable demands upom the directors of Soulac ain respect of damage to his carpet. We certainly cannot be said to have been a good tenant and Line applicants were not made aware of this siluation when they signed the second contract. Tt was also contended that Mr. Spencer orally represented that the information given Ly Mrs. Hayisava, that the businesses ware not doing well, was misleading. This representation, 1b was said, was fulse in that the information 14. which Mrs. Haytsava gave was correct, In this anstance even if the contentions were each correct 1 cold mot find that any of them constituted misleading conduct under s.52, It 16 3m area an whaen vague amd general stalements, mm many instances based on gecond or thard hand antormation, were bandied about belween the parities. Mrs. Paxinos said she discussed with Mr. Spencer what she had been told by her muther or brolher of theirs conversation wilh Mrs. Hajisava. George Pappss' version was that he. Spencer told him that Mrs. Hajyisava wis "3 tad operator and mot to worry because at world he better for her to be out of the centre". Wr. Spencer agreed thal he told the applicants they showld not accept what firs. Hajgisava said, saying *.ow bEnat they ought to perhaps use 3s little care in interpreting what she had to say. f£ was merely pointing out that she had run a very bad business, she was leaving the centre and would probabiy be, like any human natured tenant leavang, she was going to have & lot of megative things to say.' Iooaceept Mr. Spencer's version of this matter and reject the allegation that whab he said concerning Mrs. Hajisava amounted to misleading conmduckh. The final contention was tmat Mr. Spencer orally represented that the shopping centre was 4 good investment Lor the applicants and that "at was 3 good shopping centre. On a mumber of grounds wt was alleged that this trepreseantstion was false. At best however 1t was again a slatement of opinion, the type of puffing which would mormally fatl from 4 selling agent and which was auncapable of being proved to be correct or incorrect, Mr. Gpencer did mot dispute that he made general stalements of this mature but bois ampossible to atsess then as material] reprecentations of fact. Likewise in the light ot the rejatively long period during which the parties were negotiating and the expersence ot the applicants and their children aut is nol possible to assess them as misleading conduct. The end result is that, leaving agide Lie representation that the tenants were good tenants, I sm not prepared to fini thal the variaus statements, whether slanding alone or taken ain context, amounted ta mislealoing comdiuek under $.523 or false or misleading statements undor ¢.53A¢]) (bh) of the Act. However I do find that the statement baat tie btenanis were good tenants meant to the applicants that Lie Lenanls were mot um arrears with their rent oand thus the statement was false. The applicants were Justified an their contention that they were lesd ante error on this score and thus they have established a contravention of s.O2, But mot af s.50ACL) Cb). The applicants will only be entitled to am sward of damages under 5.83 of the Act if they establish that they were induced by the representablion concerning the tenants to enter into tne second combtract. 'he situatson 1s the sane tinder 5.7 (1) of the Misrepresentsalion Act 1971 (South Australia) pirsuant to which a claim ain the alternative is mide. The question in each instanee 1s whether they acted upon the statements of tir. Spencer in the sense of placing reliance upon this conduct in entering 16. anmntoa tne contract. There must be 3 causal connection between the conduct and the loss for which they seek lo be compensated. In my opinion thas conduct was mot a material factor for the reasons which follow. All of tie circumstances ain which tne second contract wis nmegoliated make 1t, to say the least, extremely umlikely that tnis representation wae 32 determining Cactor. LT would Cand boat the peotabr litres are Lhat Lhe applicants, an their disappointment, maw attach far more significance to this statement concerning the tenants than tney did at the time, There was no positive evidence to tie effect that the applicants relied tipon Mr. Spencer and were motivated hy the slatement to sign the contract, and much evidence to the contrary. Hrs. Faxiunos Said that they were cisappointed an Mr. Spencer at the time of the first contract, believing it was his duty Lo loak after their interests and that he had let them down. Hr. Spencer agreed that there was thereafter a cooling off ain their r@lationsmip. There 15 ma doubt that they made their sun enquiries, Mrs. Paxinos of the lLenants and George Pappas ain perusing the leuses. Hrs. Faxinos said that she did not assume that Lhe tenants were good tenants and that she approached then, in some instances oan more than one occasion, to see if they had any problems either with their tueinesses or their rentals. She said her parents were prepsared to sign the second contract because Hrs. Hajigava was not to be a tenant. This coincides wilh the attitude of George Pappas whose particular anterest was 17. Mr. Menmos and his proposed tenancy of Mrs. Hajyisava's shop. The evidence as to what motivated the second contract establishes that the applicanls were primarily interested in obtaining 4a tenunt for shops 1 and 20 and that the appearances of Mr. Memmos and fas acceptance by George Pappas was the deciding factor. mr. Spencer said thal George Pappas told mim ss follows of fis parents' attitude "Sure they are aiterested but they are gning to inquire (sic) that the centre reslily meets their requirements. If you have a pew tenant camaing ain, we certainly want to make sure that he 15 worthy as a Lenmant." This stalementl by Mru Spencer was mot challenged in cross- esiminatiron and 1S 1m sceord with George Fuppas' attitude generally, it confirms that the applicants were making their own enquiries and that the worth of Mr. Memmos, the new tenant, was the crucial factor, His worth was established by George Pappas and he took over from Mr. Spencer and the respondents arrangements concerning the lease sqreement. {I do mot saecept the evidence of George Pappas that he Jeft at wath Mr. Spencer to have Lhis done. ft 1s clesr that the applicants did not sign the second contract an reliance pon tne representations of Mr. Spencer and in particular his statement concerning the quality of the tenants. It follows that unm my opinion, if the applicants suffered a loss, ait was not as a result of any contravention of the Act or any misrepresentation. Their claim for damages must fail. 1g. There was however much evidence before me an the question of damages and tt 16 appropriste I should iamdiscate my views gm case lt am found to he wrong oan my earlier conclusions. There was mo dispute that the proper measure of damages was the difference fetween the purchase price of the shopping centre, $200,000, and what would have been a fair price to have paid for the shopping centre at the time of the purehsase. This ent3iled an anvestigation 35 to the market vulue as at J] July 1981 of the shapping centre and each side called an expert valuer to exprezs his opinion. The applicants' valuer assessed the value as $100,000 aL the relevant time and the lowest value placed by the respondents' expert was $200,000. A relevant question 15 the extent of the ohligation which lies on tie applicants Lo support their contention that they had suffered a lose. A sulssidiary question 15 whether 1 am bonnd to conduct an investigation of the valuations to determine, 35 far 4s possible, the true market Value at the relevant time, or whether ITomerely assess what I conceive the possible amount of Joss, an Jike manner to 3 jury. In Polts v Miller (1940) G4 C,.L.&. 283 Yinon J.,¢a6 ne then was) considered the question of the obligation of plaintiffs in these circumstances. On page 299, after approving on page 297 the view that there was no difference in the measure of damiges for deceit depending upon the mature of the transaction, he said: "The burden lies upon tne plaintiff of proving thst the shares acquired were, at the time when they were sltlotted or purchased, of less value than the amount paid or payable for them by the plaintiff. For the plaintiff must establish his damage and show that the shares for which he subserisbed were not really worth what he paid for them (Stevens v Hoare (1904) 20 JT.L.R. per Joyee J. at p.409), You begin therefore With the seoiimplion that the shares subscribed for are work their par value... But oags the authorities stand, the plaintiff im 8 case of the present deseriaption must eslablish ihat the "Taar', 'real' or fantrains1e' 'value " of the shares he subscribed for was at Lhe date of allotment lees than tne face value for which he made himself responsible, arid Lhe amount recoverable 1s Line excess. if the diificultees of sloing so are insurmountable, then sppsrently has action must wraal. For here too the burden of prouf remains upon the plaintiff. Th 1s for him to show how low 1s the real valine of the shares and he can mov sustain am assessment of Jamage in bis favour based upon a greater reduction of value inan might positively be anferred by 3 reasonable man from all the circumstances appesring ain the evidence." I have added the emphasis, In the wltimate Io am of opinion that the evidence is rwnsnePicient to enable me to infer positively that the fair value of the shopping centre on 1 July 1980 was Less than $200,000. Esch of the valjuers made 3 careful assessment of what an his OPinton a willing But not anxioue purchaser vould pay for the shopping centre om the basis of a capitalisation of ientals. Each based nis calculation om a fair rental cansinderably lower than that paystle under the lesses and the different result each resched was the consequence af sdopting differing rates of capitalisation. After msking 3 number of assuiptions concerning likely occupancy of premises comprising comparable ssles, Nr. Taylor selected the capitalization rate which the nypothetical purehaser would use as 17%. it 1s my opinion that this rate is too high, being much higher than the actual capitalination rate disclosed by hus comparable sales prior to making adjustments for Increased occupancy. In addition <I am of opinion thst he incorrectly Look into account wher selecting this hagh Capitasisation rate "the disabilities suffered by thea subject premises un relation to dizposition, location snd condilion" when he tad previously taken these disiatiulities into wecount ain asseseing bthne Fair rental 35 $80 per weer per shop. In consequance of wy opinion on thease matters and gm Loe Light of Mr. Lenwick's valuation and criticism af Nr. Taylor's result, am not savistied thst $150,000 was the fair value of the shopping centre at the relevant tame. In the words used by Uixon J., Lf am nol prepared positively to infer that this reduction in value is justified. Tne evidence of the applicants was directed only to establishing hat $150,000 was ine fair value. Jt iollows as [ am nmol satisfied that they have established that this 15 the fair value, they have failed to discharge their burden of proof. Noa onus lies om tne respondents to establish the value of the land, but af I had to indicate my preference I would select the lowest Valuation of Mr. Fenwick as being closest to the fair market value. But Io do mot see 1b 35 park of my task to make what adjustments, af any, IT consider mecesssary to his valuation to 356055, 35 WOuld be vequired of a Court am ssseo51ng compensation for acquisition of land, the actual market value on the relevant dale. The applicants have failed to discharge the onus of positively eatiscfying we that at is $150,000 or any amount less +>? than $200,000. However the application fails Primarily on that the applicants loss in consequence of any respondents, bcerty tral U , tee are a true COP J s0gm Dated: i¥fio[s3 Their action must be dismissed with the ground have mol established that they have suffere 5 e lo pres ng ine . mse y of the Reas:~" sher } te ent of Mr Justice Fisher <j a ij Cet le poles Associate, mI¢leading conduck an the part of the costs,