NOT CONSTDERED SUITABLE FOR DISTRIBUTION IN THE FEDERAL COURT OF AUSTRALT ) ) QUEENSLAND DISTRICT REGISTRY ) No. G.33 cf 1985 ) ) GENERAL DIVISION KEVIN ALBERT GALLOWAY Applicant MAPMAKERS PTY.LIMITED Respondent MINUTE OF ORDER OF THE COURT Judge Making Orders: Burchett J. Date of Orders: 5 September, 1985 Where made: Brisbane THE COURT DECLARES THAT: (1) (2) NOTE: The contract referred to in the Statement of Claim and Application is void ab initio AND ORDERS THAT: The respondent refund to the applicant the sum of $1295, together with interest in the sum of $60. The respondent pay the costs, including reserved costs. It is noted that costs, upon directions hearings other than the one where costs were reserved, were ordered to be costs in the proceedings, and accordingly will fall within this costs order. If the costs are not agreed, they are to he taxed. Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT RESTSTRY ' No. G.3? of 1985 GENERAL DIVISION BETWEEN : KEVIN ALBERT GALLOWAY Applicant AND: MAPMAKERS PTY. LIMITED Respondent REASONS FOR JUDGMENT BURCHETT J. The applicant, Mr. Galloway, signed a contract to purchase an area of 7.7 hectares of vacant land at Millmerran, which I am informed is some three hours drive from Brisbane out past Toowoomba. Subsequently, his solicitors asserted that the contract was rescinded, and he claims a declaration that the contract was void ab initio, and a return of his deposit of $1295 plus interest. It is agreed that, if I were to make these orders and to award interest, it would be appropriate to allow a sum of $60. The claim is made on the basis that the respondent, through its salesman, a Mr. Smart, made certain representations which are set out in paragraph 3 of the Statement of Claim. Of these, the first, relating to a telephone service, need e205 concern me further. having regard to evidence which suggests that, if it was made, it was not misleading. But further representations are alleged to have been made, to the effect that it was intended that an electricity service be connected to the land without cost "to a purchaser thereof, that the land abutted a declared road, and that the Millmerran Shire Council then intended to fix up the roadway to which the land abutted. There is an additional claim in respect of a finance clause, but primary reliance is placed on sections 52 and 53A of the Trade Practices Act, 1974 and furthermore it is said that the representations were fraudulent. There is a conflict of evidence between Mr. Galloway, supported to some extent by his wife and son, and the respondent's salesman, Mr. Smart. I should say at once that Mr. Smart appeared to me to display in the witness box an eagerness to justify himself, which seemed to me to outrun adherence to the facts. As against Mr. Galloway, it is apparent that his wife was opposed to the purchase from the start, and he may well have been looking for a way out. He said he understood, at the time he signed the documents, that he had a cooling-off period under the law, and he also said that he was suspicious of the salesman. I think Mr. Galloway head gocd reéacon to be susmcicicus,. even if he knew nothing about the power situation, since the i advertisement, which led to his interest in the land in the first ect of the ; place, was distinctly misleading, not only in res power situation, but also insofar as it is suggested that there was a house on the land being advertised, though it may ne said in its defence that it perhaps did not categoricaily assert this. Mr. Smart himself finally conceded that the advertisement did not tell the whole truth of the matter. The advertisement tends to confirm that a significant misrepresentation may have been involved in the conversations, since it was certainly involved in that part of the advertisement which said, "Power OK". In fact, there was no significant prospect of obtaining power, except at substantial expense, and even so, by persuading the supply authority to incur large sums in the exercise of discretionary powers. Iam affirmatively satisfied that the respondent, through its salesman, confirmed the representation already contained in its advertisement, to the effect that the land had electricity available, and that it would be connected to the land without cost, apart, as I understand it, from such normal costs of connection as any other ordinary customer might incur. I have also concluded, on the balance of probabilities, that generally the evidence of Mr. Galloway is to be preferred to that of Mr. Smart, and in reaching that view I am influenced both by what [I regard as the probabilities, having in mind particularly the terms of the advertisement, and also by my impression of those witnesses, and in addition, by the fact that the evidence of Mr. Galloway did receive some support from his wife and son, whom I found no reason at ali to disbelieve. I find the misrepresentations alleged, in respect of both power and the road, established on the evidence. Indeed, twice in his own evidence, Mr. Smart acknowledged giving some advice suggesting that power could or would be obtained at a very low or a cheap cost. But it is submitted on behalf of the respondent that there was no reliance on the misrepresentations, since Mr. Galloway himself says he was suspicious. It does not follow, in my opinion, from a degree of suspicion, that the representations had no effect. The fact is, after all, that he signed the documents, despite his suspicion; so clearly there were limits to it. Furthermore, the authorities indicate that a court is entitled to place some weight on the fact that the representations were calculated to influence the recipient of them. I think, as a matter of fact, that they did influence Mr.. Galloway's entry into the contract. Then reliance is placed on a documert acknewsleaging in writing that no representations nad been made. The document is signed in two piaces by Mr. Galloway. [It is addressed to the Board of Directors, Mapmakers Pty. Limited, and it says. omitting immaterial parts: "I the undersigned do hereby certify that neither the salesman nor any other person has made any representation to me in relation to the land, roads, or the availability of power, water or telephone to the land, or the agreement si¢ned by me" - I omit a further portion of the document which refers to finance - and it concludes: "And I request that you accept my offer to purchase the land in reliance upon this certificate." There follows the signature of Mr. Galloway, after which there isa line that reads: "I/We certify that we have read the above certificate", which is again followed by the signature of Mr. Galloway, and the date, 22 March 1985. Apart from the signatures, the date, and the name Mapmakers Pty. Limited, the document appears to be a_ roneoed document, with provision for the deletion of singular or plural pronouns, but no deletions at ali have in fact been made. This statement seems to me quite clearly to be false, since both sides agree that a number of representations in respect of the matters referred to in the documents were in fact made. I agree with Wilcox J. in a recent unreported judgment of 6. his, that such an acknowledgment cannot take a case of misleading conduct out of the Act, but in this particular case I accept Mr. Galloway's evidence that he did not read the document, having been told it merely related to finance. Upon ordinary principles of contract law, which I think should be applied, at least by analogy, to a document of this kind, he would then not be bound. The contract is expressed to be subject to finance. I do not find it necessary to reach a view on the effect of this, but I should state that I accept the evidence of Mr. Galloway that he did not read the application before he signed it. Having regard to the equivocal nature of the offer of finance, and the high rate of interest, I think it was in fact quite reasonable for him not to be satisfied with the offer in respect of finance. Having regard to the findings which I have made, I think it is appropriate that I make the orders sought, and I declare that the contract referred to in the Statement of Claim and Application is void ab initio, and I make an order directing the respondent to refund to the applicant the sum of $1295, together with interest in the sum of $60, and I order that the respondent pay the costs, including reserved costs. I note that costs, upon directions hearings other than the one where costs were reserved, were ordered to be costs in ost the proceedings, and accordingly will fail within this costs order. If the casts are not agreed, I order that they be taxed. I certify that this and the six (6) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Mr. Justice Burchett. CLASS _ Associate Dated: 5 September 1985.