BRISBANE CATCHWORODS CONTRACT - application by purchaser to court seeking declaration as to contract's validity and relief pursuant to the Trade Practices Act 1974 - whether application constituted repudiation of contract - vendor purports to rescind contract - purchaser treats vendor's purported rescission as a repudiation and purports to rescind - purchaser fails to obtain declaration sought or relief under Trade Practices Act 1974 - whether purchaser disentitled from rescinding - abandonment of contract - right to return of deposit and instalments. Trade Practices Act 1974 Spettabile Consorzio Veneziano di Armamento e Navigazione v. Northumberland Shipbuilding Co., Ltd, £1918-197 All E.R. Rep. 963 (1919) 121 L.T. 628. D.T.R. Nominees Pty.Ltd. v. Mona Homes (1978) 138 C.L.R. 423. Summers v. The Commonwealth (1918) 25 C.L.R. 144. McDonald v. Dennys Lascelles Limited (1933) 48 C.L.R. 457. 7 ~ SUPETINA PTY.LTD. & ANOR. v. LOMBOK PTY.LTD. & ORS. (A a No. Gl of 1984 "3 SPENDER J. 6 JUNE 1986. ee Be tote! = oaaine ae neaaaae a weve apmerrenge IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ~ QLD Gi of 1984 GENERAL DIVISION ) BETWEEN ; SUPETINA PTY LTD First Applicant AVIONNE JOY VINCENT Second Applicant LOMBOK PTY LTD First Respondent AND: KENNETH CYRIL GUY Second Respondent AND: JOHN RONALD BRYANT Third Respondent DATE JUDGMENT DELIVERED: 6 JUNE 1986 APPEARANCES : Applicants: Mr. J.D.M. Muir instructed by Messrs. McCullough & Robertson First Respondent: Mr. Glen Martin instructed by Messrs. Skinner & Smith Second Respondent: Mr. V.F.P. Green instructed by Messrs. F.K. Brown & Brown Third Respondent: Mr. D.R. Cooper instructed by Messrs. Morris Fletcher & Cross 6 JUNE, 1986 Peter Applegarth Associate to Spender J. ae a en eee een rt ey ee wee meee nme IN THE FEDERAL COURT OF' AUSTRALTA } QUEENSLAND DISTRICT REGISTRY ) QLD Gl of 1984 GENERAL DIVISTON ) BETWEEN: SUPETINA PTY LTD First Applicant AND: AVIONNE JOY VINCENT Second Applicant AND: LOMBOK PTY LTD First Respondent AND: KENNETH CYRIL GUY Second Respondent AND: JOHN RONALD BRYANT Third Respondent MINUTE OF ORDER JUDGE MAKING ORDER: SPENDER J. DATE OF QRDER: 6 JUNE 1986 WHERE MADE: BRISBANE THE COURT DECLARES: that the two contracts entered into between the first applicant as purchaser and the first respondent as vendor on 6 August 1981 in respect of resubdivision 307 and resubdivision 310 respectively of subdivision 203 of portion 110 of the County of Canning, Parish of Mooloolah are at an end. 22-42 wep eye pepe wen = a pte Seleirien a -™ THE COURT ORDERS: (i) (ii) (iii) (iv) (v) (vi) (vii) that the applicants' claim and the first respondent's cross-claim be dismissed; that the first respondent pay to the first applicant the sum of $221,563.37, being the sum made up of the deposits paid under those contracts and the interest payments made thereunder, such payment to be subject to the conditions later referred to in these orders; that the applicants pay to the second respondent the second respondent's costs, including reserved costs and the costs of this application, to be taxed; that the applicants pay to the third respondent the third respondent's costs, including reserved costs and the costs of this application, to be taxed; that the applicants pay to the first respondent one half of the first respondent's costs, including reserved costs and the costs of this application, to be taxed; pending taxation of the various respondents' costs, that the first respondent pay into court the sum of $221,563.37, that sum to be invested by the Registrar in an interest bearing deposit in a bank or building socrety of his choosing; that, on taxation of the first respondent's, the second respondent's and the third respondent's costs, the first respondent's costs be first paid out of the sum to be paid into court, and then the costs of the second respondent and the third respondent, which costs are to rank equally as against the balance, and the remaining sum after payment of those costs, be paid out to the solicitors for the first applicant. Note:- Settlement and entry of orders is dealt with by Order 36 of the Federal Court Rules wey eee cere lls IN THE FEDERAL COURT OF AUSTRALIA ) QUEENSLAND DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN : AND: AND: AND: AND: SPENDER J. 6 JUNE 1986 SUPETINA PTY LTD AVIONNE JOY VINCENT LOMBOK PTY LTD KENNETH CYRIL GUY JOHN RONALD BRYANT REASONS FOR JUDGMENT QLD Gi of 1984 First Applicant Second Applicant First Respondent Second Respondent Third Respondent Qo eer ee tee ow ' = hor, 4 L paren. Ares peer ee te oer weer eee te ee ee, My a ioauenesintanaea haiaecaaier stieieen cnamnaientiinteeten pemeamer eked , OR, te koe d slot af This application concerns the sale of industrial land at Maroochydore on the Sunshine Coast. The applicants, seeking relief under the Trade Practices Act 1974 ("the Act"), claim a declaration that two contracts for purchase each dated 6 August 1981 entered into between the first applicant, Supetina Pty Ltd {"Supetina"), as purchaser and the first respondent, Lombok Pty Ltd ("Lombok"), as vendor are void and/or voidable, at the instance of Supetina. The second applicant, Avionne Joy Vincent, seeks against Lombok a declaration that two deeds of guarantee executed by her in favour of Lombok on or about the same date are void or voidable at her instance. The applicants also seek repayment by Lombok of all monies paid under the contracts or, alternatively, damages pursuant to the provisions of the Act. Alternatively, the applicants seek an order against Supetina that the contracts and guarantees be declared void or be rescinded. The third respondent, Mr. Bryant, at all relevant times was a real estate salesman, employed by the second respondent, Mr. Guy, who carried on business as a real estate agent in Maroochydore under the name Ken Guy Real Estate. The Statement of Claim alleges, in the alternative, that Mr. Bryant was the agent of Lombok and of Mr. Guy. The Statement of Claim alleges that Mr. Guy was engaged by Lombok to sell two parcels of land (which will be referred to as resub. 307 and resub. 310), that he was expressly or impliedly authorised by Lombok to make representations in relation to the opt ep tee er ee . worl a, nee a oe eee ger . we 7 rays cerens cen ee ee cae oe wre Me eee + . athe . t. sry a0 cthoatey et, ee ee i and » f Py ' sale of the land, and that Mr. Bryant was expressly or impliedly authorised by Lombok and/or Mr. Guy to make representations covering the land. The applicants' claim against Mr. Guy and Mr. Bryant is for damages under the Trade Practices Act, and/or misrepresentation and/or negligence. The claim that Mr. Guy was engaged by Lombok to sell the land, and that Mr. Guy and Mr. Bryant were authorised in any way by it is denied by Lombok, which says that it gave the sole right to sell the land to another real estate agency, East O'Brien and Associates. It says that it gave no authority, express or implied to either Mr. Bryant or Mr. Guy to act on its behalf with respect to the land. Mr. Guy says the same. Lombok, in paragraph 7 of its cross-claim, says that Supetina "has wrongly failed to comply with its obligations to meet interest payments under the contracts and, by its action in bringing this application, repudiated both contracts". Lombok, by its solicitors, on 2 March 1984 wrote to the solicitors for Supetina:- "We refer to your client's application dated 13 January 1984, and in particular the relief sought in paragraphs (a) to (g) thereof. Your client has, by its action, repudiated the contracts dated 6 August 1981 between the first applicant and the first respondent and we hereby give you notice that the first respondent has rescinded both contracts." - aw a ee ae rs Lombok claims it was entitled so to rescind, and "became and is entitled to forfeit the said deposits and interest payments under both contracts". Lombok claims a declaration that the said contracts have been duly rescinded or, alternatively, rescission of the said contracts, and a declaration that the said deposits and interest payments are forfeited to the first respondent. Supetina, by its solicitors, wrote to Lombok's solicitors on 28 May 1984:- "Your clients by your letter of 2nd March, 1984 unlawfully repudiated the above contracts. Since that date your client has continued to assert that it has lawfully terminated the contacts (sic) and has made it clear that it would not perform in accordance with their terms if it should be called upon to do so. Our client hereby accepts your client's repudiation and rescinds the contracts." In its Further Amended Statement of Claim, Supetina says it rescinded the contracts on the ground of the alleged unlawful repudiation by Lombok and claims that "1t became entitled toa refund of all monies paid by it under the said contracts", or alternatively "it would be unjust and inequitable for the First Repondent (sic) to retain the whole or alternatively part of the moneys paid under the said contracts and the First Applicant seeks relief against forfeiture or all or part of such moneys." Supetina entered into contracts for the purchase of two parcels of land, resub. 307 having an area of 1.243 hectares and resub 310 having an area of 1.238 hectares, both parcels being "battleaxe" shaped blocks and both situated on Sugar Road, ym pe eer ee you + ge wy weer ps ees att tor Te a oes ~ - we wart ee Sema 9 rte: Nene - pee ry Maroochydore. Each contract is dated 6 August 1981 and shows a purchase price of $375,000 making a total purchase price of $750,000. The vendor of both parcels was the first respondent, Lombok. Mr. & Mrs. Parry were and are directors and shareholders of Lombok. The second applicant, Miss Vincent, is the controlling force behind the first applicant and the person to whom it is alleged certain representations were made concerning the land. All negotiations for the purchase of the land were conducted by her alone. There is a substantial issue as to Miss Vincent's interest in the purchasing company at the relevant time. The matters of complaint are particularised in the applicants' Further Amended Statement of Claim filed during the course of the trial. Because of the number of times the Statement of Claim has heen amended, the numbering is not completely consistent. The matters of complaint are:- "4A. At and about Marcochydore the said Bryant orally represented to the Applicants and advised that: {a) the First Applicant should invest in the said Sunshine Coast in the acquisition of land the construction thereon of home units or industrial sheds rather than in the purchase of a motel; (b) that the asking price of the said land referred to in paragraph 3(d)(i) and 3(d) (ii) hereof, namely THREE HUNDRED AND SEVENTY FIVE THOUSAND DOLLARS ($375,000.00) for each of the said subdivisions 307 and 310 was a good price; i) Pr te . . omy ary ame eee oe Lew sare Ls ore pop erence ta ct res ae ee a en en bol mae ee eerie ar mee went : _ sb raw, (Cc) that there existed approved development plans and conditions in respect of the said land which were exceptionally good; (d) that the asking price for both parcels of the said land was a good price from the purchaser's point of view; (e) that the purchase of one or both parcels of the said land by the first applicant and its or their development in accordance with approved plans would provide the first applicant with a sound investment and a good return on moneys invested; (f£) construction of buildings on the said land in accordance with the said approved plans (or substantially in accordance therewith by changing the materials to be comprised in the buildings contemplated thereby to portal steel frame or some other cheaper building medium) could proceed forthwith without any earth works or investigations. 4B. The representation and/or advice referred to in paragraph (a) was made or given in or about the months of March and May 1981. All other representations or advice were made or given between mid-July 1981 and 6 August 1981. 5. The representations in sub-paragraphs (e} and (f) ef paragraph 4 hereof and in paragraph 6 hereof were further made by the showing to the first applicant of various building plans in respect of the said land. Particulars: Plan dated 5 August 1981 Drawings Numbered 80/1285/1 to 17 inclusive. 6. At Maroochydore on or about the third day of August 1981 the said Parry represented to the applicant that the construction of buildings on the said land in accordance with the said approved plans and conditions could proceed forthwith without any earthworks or investigations other than the levelling of some mounds of "fill" deposited on the said land. 6A. Further or alternatively, if, contrary to the applicant's (sic) contentions, at the time and place referred to in paragraph 6 —-— cer : Lae ' So eo. hereof the said Parry represented to the second applicant that some or a little further fill might be required or words to such effect, such representation - (a) was false, misleading or deceptive, (b) was relied on by the applicants as set out in paragraphs 10 and 11 hereof, (c) was said without a belief in its truth or recklessly not caring whether it was true or false. 6B. Further or alternatively, if contrary to the applicants' contentions the third respondent in and about late July early August 1981 represented to the second applicant and advised that some or a little further fill was required at the back of the said land or words to such effect, such representation and advice - (a) was false, misleading or deceptive, (b) was relied on by the applicants as set out in paragraphs 10 and 11 hereof." There is no allegation in para. 6B similar to 6A(c). The reference to the First Applicant in 4A(a) is clearly enough an error, because Supetina did not appear on the scene until after 3 August 1981. The same might or might not be said of the reference in 4A(e). At the outset, concerning the allegations in 6A and 6B, it is to be noted that the applicants assert, in the alternative, that something which the second applicant denies having been said induced her to sign the contracts. Paragraph 12 of the Further Amended Statement of Claim is to be read as alleging the representations, earlier set out in paragraph 4A, were false in that:- eee (COD rE Pe es erry to *(a) (b) (c) the market value of both parcels of the said land at the time of the said representations as to value and as at 6 August 1981 was no more than TWO HUNDRED AND SEVENTY THOUSAND DOLLARS ($270,000.00); the approved development conditions in respect of the said land were no more than what was normally contained in and provided for by such conditions; the purchase of the said land and its development in accordance with the said approved plans and conditions was a poor investment and could provide only a poor return on the moneys invested therein by the First Applicant." ctisner e It is further alleged in paragraph 13. that the representations referred to in paragraphs 4A(f) and 6 = set out above were false in that construction of buildings on the land in accordance with the approved plans could not proceed without:- "(a) (b) (c) The claim against the first respondent is pleaded in the depositing placing and compaction of some 17,000 cubic metres of fill; the carrying out of soil tests; the revision of the said plans to take into account the swampy nature of the said land and the amount of fill placed or to be placed on it." paragraph 18 in this way:- "The conduct of the First Respondent in and about making the representations referred to in paragraphs 4 and 6 hereof by its said agents was: rons wmrenee pee em wen ee prey cee "= Meee (a) false misleading or deceptive or likely to mislead or deceive; and (b) engaged in by the First Respondent in trade or commerce; and the representations referred to in paragraphs 4 and 6 hereof were made by the third respondent on behalf of the first respondent and/or second respondent knowing them to be false or recklessly not caring whether they be true or false. Particulars of allegations in sub-paragraph (a): The matters set out in paragraphs 12 and 13 hereof." In the light of the allegations in para.12, nothing turns on the advice referred to in 4A(a). Insofar as paras. 4A(b) to (e) involve assertions concerning expressions of opinion (or involve predictions), to succeed on these allegations as constituting misleading or deceptive conduct, the applicants have to establish in respect of one or more of those opinions that Bryant expressed that opinion, that it was not honestly entertained by Bryant when it was made and that it induced the first applicant to enter into the contracts: Global Sportsman Pty.~itd. v. Mirror Newspapers Pty.Ltd. (1984) 55 A.L.R. 25; Bill Acceptance Corporation Ltd. v. G.W.A.Ltd. (1983) 50 A.L.R. 242; Australian Ocean Line Pty.Ltd. v. West Australian Newspapers Ltd. (1985) 58 A.L.R. 549. Mr. Bryant admits in his pleading that he told Miss Vincent that the asking price for each parcel was a good price. He denies the other allegations. The other basis of the applicants' case is the alleged representation by Mr. Parry on Lombok's behalf that no fill was needed and a representation by Mr. Bryant that construction in we po eee sae te eee sree cere 10. accordance with the plans could proceed forthwith without any earth works or investigations. The claim against the second and third respondents under the Act, in paragraph 19 of the Further Amended Statement of Claim, asserts that the second and third respondent were "directly or indirectly knowingly concerned" in the matters alleged to be in breach of s.52. The claim for negligent mis-statement is pleaded as follows:- "14. The second respondent and the third respondent knew or ought to have known that they and each of them were being trusted by the applicants to give the advice referred to in paragraph 4 and/or 6A and 6B hereof as a basis for action on the part of the Applicants. Particulars The respondents were aware through having been orally advised of the fact by the second applicant and/or through. their own observations that - (a) she had no particular knowledge of the conditions prevailing in the real property market on the Sunshine Coast; (b) she had no other source of independent and/or expert advice; (c) the third respondent's detailed advice was such as to induce an acceptance of his expertise; (d) the second applicant was ready and willing to invest moneys as soon as a property suitable for investment could be found for her by the second and third respondents; and the conduct particularised in paragraph 3(h) hereof ought to have led the second and third respondents to conclude that their advice would or could be relied upon. Fete ne ee rot POSE pets, oan re . > 2.fohlUw , ore rr err ~e- oa ¢ var 11. 15. The applicants relied on such advice in entering into and executing the said contracts and the said deeds of guarantee. 16. In the premises, the Second and Third Respondents had a duty to the Applicants to exercise reasonable care and skill in and about the giving of the said advice. 17. The Second Respondent and the Third Respondent failed to exercise reasonable care and skill in the giving of the said advice in that they: (a) failed to have due regard to then existing market values; (b) failed to give any or any proper consideration to the requirement for industrial sheds on the North Coast; (c) failed to given (sic) any or any proper consideration to the real rate of return to be reasonably expected from the investment contemplated by their said advice; (d) failed to have any or any proper regard to the cost of the said development; (e) failed to have any or any proper regard to the market for industrial land on the North Coast of Queensland. Paragraph 3(h) of the Applicants' pleading sets out: (h) The Third Respondent held himself and the Second Respondent out as being in the business of and skilled in the giving or advice concerning the valuation, purchase and development of land in the area known as the "Sunshine Coast". The holding out took place through the Third Respondent in or about the months of March and May 1981 and in and about mid-July to early August 1981:- (i) orally offering advice to the second applicant as to avenues for investment on the Sunshine Coast of Queensland; cog +e 12. (ii) orally counselling against investments by the first applicant or the second applicant in motel properties and advising that the purchase and/or development of unit sites, industrial sites or mini storage sheds was desirable; (iii) performing calculations as to the prospective rates of return on investments; (iv) expressing opinions as to the value of various parcels of land including the subject land; (v) offering advice as to how land could be suitably developed; (vi) pointing out to the second applicant properties with the Third Respondent identified as having been sold by him both as agent and on his own account. The common law liability of the second respondent, Mr. Guy, 1f any, is purely vicarious. Miss Vincent, who is a New Zealander by birth, visited Australia for two weeks 1n March 1981 and, through her brother who lived on the Sunshine Coast in Queensland, she met the third respondent, John Bryant. Mr Bryant is also a New Zealander. Miss Vincent expressed to Mr Bryant, whom she says she understood to be a builder and developer as well as a real estate agent, an interest in investing in real estate property on the Sunshine Coast. The possibility of investing in a motel business was canvassed, Miss Vincent having in fact owned a motel in California in 1978/79, and though Miss Vincent was shown a motel, the Dolphin Motel at Caloundra, that avenue of investment was not yy corset oe Nee ern ee ea, : cara . 13. pursued. Mr Bryant told Miss Vincent that a better investment could be made in unit development or in industrial storage property and he both explained the market movement at that time and showed her the area generally, including properties which he proposed to develop. Miss Vincent returned to Australia in mid-May of 1981, again for a two week period. She saw Mr Bryant who showed her and her brother, amongst other properties, an industrial block on Kayleigh Drive in much the same area as the subject properties. Miss Vincent and her brother purchased the Kayleigh Drive property during her May visit. The property was purchased through the vehicle of her brother's company and Miss Vincent contributed one half of the acquisition cost of $65,000. The land was developed at a cost of approximately $60,000 and sold less than 12 months later for $170,000. Miss Vincent in this venture recouped her original investment and received a profit of $13,000. On Miss Vincent's next visit to Australia in July 1981, she again saw Mr Bryant who told her about a large light industrial block for sale situated om Sugar Road that had been mentioned to him by Bob Richardson, a real estate agent employed by East O'Brien and Associates, ("East O'Brien"). East O'Brien was the vendor's agent. Miss Vincent inspected the Sugar Road site, but there is a conflict in the evidence on significant aspects of her inspection. On 31 July 1981 Miss Vincent paid a part deposit on resub. 310. On 3 August 1981 she paid a part deposit on resub. 307. On 3 August 1981 Miss Vincent saw Mr. parsy saa pee . eee i <* r wy 14. Parry and Mrs. Parry. Mr. Richardson and Mr. Bryant were present, as was the solicitor for the Parrys, Mr. Hickman, and the solicitor for Miss Vincent, Mr. Wight. That meeting on the night of 3 August 1981 at the offices of East O'Brien has considerable importance, but suffice at this stage to say that Miss Vincent met and talked with Mr Parry and was shown aroll of 17 plans prepared by Mr Ken Crocker, a consulting engineer on the coast ("the Crocker plans") which detailed the Parrys' proposed development of the site. The applicant company subsequently signed the two contracts for purchase. Miss Vincent left for the U.S. on 1 September 1981. She returned on occasional visits thereafter. She says that she was not aware until about May 1983 when she spoke to Mr Crocker that she had been misled as to the value of the land, amongst other things. Before dealing with disputed matters of fact arising out of the events between Miss Vincent's arrival in Australia on 17 July 1981 and the execution of the contracts on 6 August 1981, and matters immediately thereafter, there are some aspects concerning the credibility of witnesses which can appropriately be dealt with. fe eye try ——— rs t 2 . 15. Of central significance to the factual matters is the evidence of Miss Vincent. Her evidence in many major respects is unreliable. She gave evidence before me over a long period. A sustained attack was made on her credit and, in a number of very serious respects, her account altered completely during the course of her evidence. Her original account, for instance, was that she did not see a site plan showing proposed buildings on the two subject blocks until the evening of 3 August 1981. Later in her evidence she resiled from that position and acknowledged that, on her first inspection of the subject property, that plan was available and inspected by her. I accept that Miss Vincent was under the strain of giving evidence for a lengthy period and was subjected to searching and quite vigorous cross-examination but, at the end of the day, I am generally not prepared to accept her as a reliable witness. Apart from making a general assessment of her and her evidence, there were many significant details leading to the unfavourable view I formed as to her reliability. I do not accept her assertion that she purchased the properties for investment, intending to develop them and to enjoy the income that they produced. She denied she was a speculative buyer who became financially burdened because of the downturn in what had been a boom market. Her conduct after entering into the contract is inconsistent with her claim. Her role as a developer/investor is put very much in question by her financial capacity to engage in such a development. Her evidence concerning her financial capacity was vague in the extreme. She made no attempt to explore what avenues of finance, if any, were available to her. She said that her intention after purchase was to obtain a tenant before building, yet she did nothing except in Sg temo meer roes pasa wens mp oF ora 16. a general way leave the property in the hands of Mr. Bryant. She left for the United States on 1 September 1981, leaving Mr. Bryant in control of this project. She was asked:- "Pursuant to what retainer did you retain him to he your man on the spot? A. He was acting as my agent. 0. To do what? A. To lease the property, to do whatever. It was a matter of whatever came up, whatever he was able to locate. Q. He had carte blanche to do whatever he liked? A. Yes. Her efforts in the months and years after that are hardly consistent with her stated intention. She did in fact cause a sign to be put on the property indicating that the land was for sale or lease and, in my view, she never had any serious intention of developing the property. Her reliance on questions of fill, which loomed very large 1n the trial, seems at odds with her conduct concerning that matter. She says in about mid-1983 she learned that the value of the property was considerably less than she had paid for it and that there were substantial questions involving the amount and quality of fill on the land. Subsequent to that and prior to this application in 1984, there was no demand or complaint made to Mr. Parry or to Mr. Bryant and, indeed, after learning, in her words, that she had been "ripped off", she went to see Mr. Bryant seeking his advice in respect of her intention of pursuing employment in real estate. In fact, on any view of the evidence, verde me ee oe Foe Mk op ee wee 16. a general way leave the property in the hands of Mr. Bryant. She left for the United States on 1 September 1981, leaving Mr. Bryant in control of this project. She was asked:- "Pursuant to what retainer did you retain him to be your man on the spot? A. He was acting as my agent. Q. To do what? A. To lease the property, to do whatever. It was a matter of whatever came up, whatever he was able to locate. Q. He had carte blanche to do whatever he liked? A. Yes. Her efforts in the months and years after that are hardly consistent with her stated intention. She did in fact cause a sign to be put on the property indicating that the land was for sale or lease and, in my view, she never had any serious intention of developing the property. Her reliance on questions of fill, which loomed very large in the trial, seems at odds with her conduct concerning that matter. She says in about mid-1983 she learned that the value of the property was considerably less than she had paid for it and that there were substantial questions involving the amount and quality of fill on the land. Subsequent to that and prior to this application in 1984, there was no demand or complaint made to Mr. Parry or to Mr. Bryant and, indeed, after learning, in her words, that she had been "ripped off", she went to see Mr. Bryant seeking his advice in respect of her intention of pursuing employment in real estate. In fact, on any view of the evidence, —a~- > -r= mL 17. Miss Vincent, shortly after signing the contract, if not before, was aware that there was a considerable quantity of fill required to reach the level indicated on Plan 93 of the Crocker plans. She performed her own calculations which revealed, she says, that some 8000/9000 cub.m. of loose fill would be needed to reach that level, yet no complaint immediately on making those calculations was made to either Mr. Parry or Mr. Bryant. She says at that time the question of fill was of no concern to her. This evidence is to be contrasted with her claim that she first became aware of the lack of fill in respect of resub. 307 and resub. 310 in late May to early June 1983. Her aboutface concerning the site plan is such that little confidence can be placed on the accuracy of her recollections of what occurred in the period, involving the inspection of the site at Sugar Road, the various conversations with Mr. Bryant and with Mr. Richardson, the events of the evening of 3 August 1981 and in subsequent days with her solicitor, Mr. Wight, and with others including Mr. Richardson, and the arrangements involving Supetina. Another very significant matter was that she claimed to have made a number of calculations concerning the viability or feasibility of a project in 1981 at about the time of these transactions, and these calculations were in a manilla folder and she says that in the weekend prior to the commencement of the trial, she threw out these documents. There can be no doubt that Miss Vincent is intelligent and astute with not inconsiderable commercial experience. She inherited an interest in a large industrial property on her mee Nee me oS wt ¥ nee wera, ome Foe ee me ke . Laeger. are p Sorat reece ee 18. father's death. Prior to coming to Australia she was a partner in a motel business in California in the United States and was also involved in construction of a residential property in Hawaii and had purchased a number of units in the United States for her residence, As an example of her business capacity, on the evening of 3 August when there were negotiations primarily directed to the term during which interest only payments were to be made, initially each party was in separate rooms, with the solicitors being the conduit of communications between each party. When an impasse seemed to have been reached, Miss Vincent confronted Mr. Parry, (in fact it was the first meeting between Miss Vincent and Mr. Parry) and cut the Gordion knot and quickly secured Mr. Parry's agreement to extending the period from two years to three years. This approach, accompanied by her statement ""Let's stop mucking about" bespeaks a confident and competent businesswoman. I do not accept her claim that she was totally dependent on Mr. Bryant for information in respect of the market value of the property, rentals, and the viability of the project. She said of her solicitor, Mr. Wight, that he had advised her on the purchase and "the advice that he gave her went some way towards making her confident in her own mind that the development was a good one." The general enthusiasm of Mr. Bryant for the project was shared by Mr. Richardson, who had been appointed sole agent in writing by the vendor, Lombok. MYDD ee re apres: eo eee as 19. Miss Vincenl in her evidence says that she decided on the weekend prior to 3 August 1981 to purchase both properties. In my view, this decision was not based on any reliance in the correctness of Mr. Bryant's opinions concerning the property and its future development and the investment climate on the North Coast at that time. Miss Vincent saw the purchase with favourable vendor's terms at a rate of interest which I find was significantly below the then prevailing rate as an opportunity to make substantial profits in the short term, on a resale basis. As for Mr. Parry, his credibility also did not escape unscathed ina number of respects. His explanations of some matters were less than satisfactory. One particular aspect concerns his answering of interrogatories concerning fill. His answer to interrogatories as to whether there was any discussion concerning Council approval, plans and fill prior to the 6 August 1981, to the effect that there were no such discussions, 15s Clearly wrong. Mr. Parry's explanation is that all he could go on was the contract which was dated 6 August. His attempts to explain these answers were not convincing. Similarly, his amended answers to interrogatories included the answer that the building could be completed with a minimum amount of levelling of the fill on site and that a minimum amount of further fill might be required. Before his attention was directed to this answer, he agreed in cross-examination that to say that a minimum amount of fill was required would be silly. Mr. Parry was told in about July 1981 by Mr. Crocker, who had prepared the plans and had taken some site levels for ye . elena ae a ' sane pee - mg era are ae oe 20. him, thal there was a shortfall of some 15,000 cub.m. of fill. However, accepting that there were serious deficiencies in aspects of his evidence, I nonetheless prefer his account of the conversation on 3 August 1981 to Miss Vincent's. On the question of what was said at the meeting of 3 August concerning fill, Miss Vincent's evidence was that Mr. Parry told her that the building could commence immediately and that, apart from the levelling of "many many mounds of fill that were at the very rear of the site", the site was complete. Her case is that the representation that no fill was required before building could commence induced her to sign the contracts. In cross-examination she denied that Mr. Parry had told her that some fill and levelling would be required. In chief she had said that Mr. Bryant had discussed fill with her following the meeting of 3 August. She said that she believed that that discussion occurred after the signing of the contracts and at a time when she had received the Crocker plans. She said that in those discussions Bryant told her that she would have to put a bit more fill at the rear. She was asked:- "Was it then a matter of any concern to you? Were you then concerned about the fi11°?" She answered, "No, not at all." She then made an assessment of her own. She calculated from Plan 9 of the Crocker plans that some 8,000/9,000 cub.m. of loose fill would be needed. On doing this calculation, she made no complaint to Mr. Parry or, it seems, to anyone else. en re re wee ene eee ys Soar os ETS ren en 21. As to events leading up to and including 3 August, I am prepared to accept the account of Mr. Richardson, which account sheds considerable light on the factual conflicts. Mr. Richardson was the agent for the vendor, Mr. Parry having signed a 60 day sole agency agreement in writing with East O'Brien and Associates. He approached Mr. John Bryant as a_ prospective purchaser and told him of the price and conditions of sale. The price was $375,000 per block. He thought the conditions of sale, 10% deposit, with the balance on interest-only payments at 16%, were "very, very good". After leaving a set of draft plans with him overnight, Mr. Bryant advised him that he could not proceed with the purchase. He asked whether East O'Brien and Associates would be interested in selling the property on a conjunctional basis and, after some discussions, Mr. Bryant was told that East O'Brien were prepared to proceed ona conjunctional basis that "Ken Guy would be 50-50 on one block". Mr. Rachardson says that, some time later, after arrangements-with Mr.Bryant, he met Miss Vincent and Mr. Bryant at the Sugar Road site. They walked down on to the site. There were some "stacks of fill" on the block which Mr.Richardson told Miss Vincent would need to be pushed to continue the levelling of the property. He indicated to Miss Vincent the Council easement for drainage, the proposed Main Roads resumption of land on the rear of both blocks by reference to a draft site plan. The three people discussed what was indicated on that plan. He said that where they stood on the site at Sugar Road, there was a bus depot, Sunshine Coast Bus Services, adjoining. co ram - tart ere ee stay pm: 22. As to what could be observed from that position, he said, "You've got Sunshine Coast Bus Services next door which was fully filled and you can use the two levels as an example of what has to be done". He told Miss Vincent "There is soil there to be spread" and, if there was any further fill to be needed, all she had to do was to put a sign up the front, as had been done elsewhere, asking for clean fill. It was put to him in cross-examination by counsel for Miss Vincent that there was no conversation on the site about fill. This was flatly denied by Mr. Richardson and I accept that there was the conversation to which he deposed. I accept further, contrary to the suggestion similarly put by counsel for Miss Vincent, that Miss Vincent did in fact go on to the land with Mr. Richardson on the first occasion that she went there, and I accept that there was a discussion concerning the site plan on that site on that occasion. I accept that in the course of those conversations on that day Mr. Bryant suggested that it was preferable for Miss Vincent to purchase and pay for one of the blocks than struggling with two of them. Mr. Richardson said of his conversation with Miss Vincent on that day, "The essence of the conversation was that she would look at onseliing the property". Miss Vincent, he said, did not mention a time frame in that regard. On 31 July 1981, Miss Vincent paid $3,750.00 as deposit, which was described as part deposit on Lot 310 and received a Trust Account receipt from Messrs. East O'Brien and Associates, signed by Mr. Richardson. Mr. Richardson says that when Miss Vincent gave him the cheque for that amount, she said that she Lt .y See, Ree oe geese, ~ Te a wy " iad ert cytes nr 23. had reached the decision that she wanted to purchase the property. The Trust Account receipt acknowledges receipt from "Avionne Joy Vincent and/or nominee". On 3 August 1981, at a time which I am satisfied occurred before the evening meeting with Mr. and Mrs, Parry and the respective solicitors, Miss Vincent paida further $3,750.00, being described as part deposit on Lot 307 and received a Trust Account receipt signed by Mr. Richardson on behalf of East O'Brien and Associates dated 3rd August 1981 for that amount, the receipt being made out again to "Avionne Joy Vincent and/or nominee". Mr. Richardson was asked:- "Did you ever use the words to Miss Vincent that, because the property was available at builders' terms, it was fantastic?" To which he answered:- "T do not use the word 'fantastic' as a description. I would consider it was a good investment because it was on builders' terms. I considered it was a good investment and I told her, yes." He does not recall telling Miss Vincent that it was a "particularly good deai" and she should "keep quiet about it". Miss Vincent's evidence was that this is how Mr. Richardson described the deal to her. I am satisfied that, from the first visit by Miss Vincent on the site, the question of fill had been referred to. a _—ee 24. On the evening of 3 August, approximately half an hour was spent perusing the Crocker plans, and those plans, particularly Plan 9, show that fill would be needed. I accept Mr. Parry's account that he told Miss Vincent there was fill at the back, it would havé to be levelled, and that there would be further fill required. Mr. Parry said he told Miss Vincent:- "If you put the buildings that I suggested to her across the front, there would not be very much fill required there at all ... because of the fact that there were footings and there was a lot of meterage in footings, tremendously big footings in that plan, there would be a lot of fi11 from that that you could spread out over the site." Concerning the discussion of the plans, Mr. Parry's account, which I accept, is:- "I went through the plans with her, each one. I did most of the talking. She did not do a lot of talking. We did come to one plan which did show it ata whole lot of levels, alot of figures written on it, and she asked me what that was and I said 'That is the existing level of the land as it stands now'. I told her that the levels that were there in order to get it up to the floor level that were stated on the plans, there would be more fill required. Q. And was an amount mentioned? A. I did not mention any amount because I did not know exactly what amount that would be required." I do not accept Miss Vincent's account that she was told that all was needed would be to level the fill that was there. This view is consistent with what can be observed on Plan 9, with what she says occurred later in discussions with Mr. John Bryant, and with the calculations that she said she made from Plan 9 we ee eed pre re ne eee weer ee 2 eee catieai ed sey 25. concerning the quantity of fill that those plans indicated, and with the absence of any complaint by her to anybody on making those calculations. A significant issue raised on the pleadings is whether Mr. Guy or Mr. Bryant was the agent of Lombok. The evidence shows that Lombok engaged East O'Brien and Associates as its sole agent in respect of the land. By an arrangement between East O'Brien and Associates and Mr. Bryant, East O'Brien and Associates agreed to pay to Ken Guy Real Estate 50% of the commission on one block on a conjunctional basis in respect of the sale. It is clear that Lombok knew nothing of this arrangement prior to any signing of the contracts by Miss Vincent. The evidence is that neither Mr. Parry nor Mrs. Parry was aware of Mr. Bryant's existence before the evening of 3 August 1981. The only basis on which it can be suggested that Mr. Guy or Mr. Bryant were agents of Lombok arises out of this conjunctional arrangement between East O'Brien and Associates and Ken Guy Real Estate. There is not the slightest suggestion that anything said by Mr. Bryant to Miss Vincent was known by Mr. or Mrs. Parry at any time or, indeed, it was not known by them whether Mr. Bryant had had any dealings or any conversation with Miss Vincent about the land. Miss Vincent's evidence concerning people at the August 3 meeting was:- "OQ. You regard Richardson as being the vendor's agent, do you not? A. Yes, I believe he was acting ... (she was cut off). . meee Toa aT - serene The printed by Mr. Bryant on the typed contract concerning Lot 307. 26. Q. You did not regard Bryant as the vendor's agent? A. No, he was acting on my behalf." Mr. Richardson in his evidence was asked:- "Q. Did you mention the conjunctional arrangement to Mr. Parry or Mrs. Parry? A. I mentioned the fact that there would bea conjunctional sale when Ken Guy was involved - or, Ken Guy Real Estate was involved. As to what the percentage was, no. Q. When did you mention that, and to whom? Was it to Mr. Parry? A. I think it was to Mrs. Parry, and I think it was the - when I went up with the contracts of sale, and it had been written in in biro as per here before, and it had been initialled by Mrs. Parry. QO. Mr. Bryant met with Mr. Parry in your office on 3 August, did he not? A. Yes. Q. And you introduced him then, did you not, as the person who assisted in introducing Miss Vincent to the property? A. Yes. Q. And he was anagent, you no doubt told him, from Ken Guy Real Estate? A. That is right. Q. And that he had assisted you in arranging the sale? A. That is correct." words "in conjunction with Ken Guy Real Estate" are hand aed aman 7 . soa od more ree) 27. The arrangements made by East O'Brien and Associates concerning the distribution of the commission to which it was entitled pursuant to its sole agency agreement, in my opinion, cannot make Ken Guy Real Estate the agent of Lombok in respect of the sale. East O'Brien was appointed Lombok's agent to sell the land. Its authority from Lombok did not extend to appointing other agents to act on Lombok's behalf in selling the land. It could share its commission as it chose, but that choice was not effective to constitute the recipient the agent of Lombok. It follows, in my opinion, that Ken Guy Real Estate was not an agent for Lombok in respect of the sale. Nor, in my opinion, was there any ratification by Lombok in respect of anything done or said by Mr. Bryant, either in his capacity as an employee of Ken Guy Real Estate or in any other capacity. The initialling by Mrs. Parry of the hand printed words does not in the circumstances in which it occurred constitute a ratification of any conduct by Bryant by Lombok. It is necessary to look at the issues raised by the pleadings in the light of the conclusion that neither Mr. Bryant nor Mr. Guy was the agent of Lombok. Section 52 of the Trade Practices Act provides:- "A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive." rere pe won en ws sae ar a are oe yr peer arerc geass a TI TO 28. The only possible corporation in the factual circumstances which could infringe s.52 is Lombok, and Mr. Bryant or Mr. Guy, being natural persons, could only be liable under the Trade Practices Act by the operation of s.75B of that Act as being persons knowingly concerned directly or indirectly in a contravention by the corporation, Lombok. Mr. Bryant not being Lombok's agent, Lombok is not liable under the Trade Practices Act for any of Mr. Bryant's acts or misrepresentations. The only possible basis of liability for Lombok is the representation said to have been made by Mr. Parry and referred to in paragraph 6 or 6A of the Further Amended Statement of Clain. In Yorke v. Lucas (1985) 61 A.L.R. 307, the High Court held that, before a person can be said to have been, in any way directly or indirectly knowingly concerned in, or a party to, a contravention, he must have knowledge of the essential facts constituting the contravention. Neither Mr. Guy nor Mr. Bryant on this material was knowingly concerned directly or indirectly in any such representation by Mr. Parry as is alleged in paragraph 6 or 6A of the Act. It follows that neither Mr. Guy nor Mr. Bryant are exposed to any liability under the Trade Practices Act as being a s.75B party to any contravention of the Act by Lombok. The liability of each of them, if any, 1s to be found in the allegations of negligent misstatement or deceit at common law. I have already indicated that I do not accept that Mr. Parry represented, as alleged in paragraph 6. I am satisfied that the representation alleged in paragraph 6 of the Further ten ee nee seep eae tee ey pee ee am, apes peewee oe 7. te tate von Tren reece oo ean — , 29. Amended Statement of Claim was not made. I am satisfied that Mr. Parry represented that some further fill would be required, and indicated that there would not be very much at ail required at the front if development was in accordance with the plans, in the light of the fill available from footings. I am satisfied that no such statement induced Miss Vincent to enter into the contract. I am satisfied that she had decided to enter into the contracts prior to the meeting of 3 August 1981, that its purpose from her point of view was in respect of seeking more favourable vendor's terms, and that what was said by Mr. Parry on that evening concerning fill was not a cause of her signing the contracts on 6 August 1981. It follows that Lombok 1s not liable to either applicant under the Trade Practices Act or as otherwise alleged in the Further Amended Statement of Claim. It was submitted that any representation made cannot be regarded as having been made to Supetina, because Miss Vincent had no connection with Supetina until after the evening of 3 August 1981. I think it was within the contemplation of Mr. Parry, Mr. Bryant, Mr. Richardson and Miss Vincent on 3 August that a company with which Miss Vincent was associated might in 'fact be the purchaser. Each of the part-deposits signed by Mr. Richardson on behalf of East O'Brien is issued to "Miss Vincent or nominee". The draft contract signed by Miss Vincent on 4 fen ere eee te oe f) we eer peepee eee eget oe ore whe we the ob ni an Foran wre pergen ne seers ces emer rei nat roe Be NS re eee ae eee ae or : 1 7 ' mew prey a ere tema r wot. a 27 a sorts 30. August 1984 and witnessed by Mr. Richardson similarly speaks of the purchaser as "Avionne Joy Vincent or nominee", even though that contract was supplanted by the two contracts signed on 6 August 1981. There are unsatisfactory features about the evidence of Supetina's involvement with this land, which reflect adversely on Miss Vincent or on her professional advisers. It is admitted by Miss Vincent that some company minutes are a sham. The evidence shows that two trusts came into existence in respect of the purchase of the subject properties. The trust instruments are in evidence and each is dated 4 August 1981: the Maroochy Trust and the Kedding Trust. Mr. Richardson 1s the settlor of the Kedding Trust and Mr. Bryant is the settlor of the Maroochy Trust. The trustee of both trusts is the applicant company. On behalf of Supetina on both documents appear the words:- "Given under the Common Seai of Supetina Pty.Ltd. by resolution of the Board in the presence of Peter Raymond Vincent, a director, and Avionne Joy Vincent, a director." . It is clear that Peter Raymond Vincent was never a director of the applicant company. It is also clear that Mr. Vincent was not in Australia on 4 August but signed at some subsequent date. It was likely that a company vehicle would be formed to purchase the properties concerning which representations had been made to Miss Vincent. In my opinion, the suggestion that the representations cannot be regarded as having been made to Supetina so as to entitle Supetina to sue in respect of them, is ar Sin ' . se ent ee -- 4 arr tee pe ee ee eet Fare oe pra ote reas . ay ~~ SRI RE te ey res ee ee een 31. not made out: see Halsbury's Laws of England, 4th Ed., Vol.31, paras. 1037 and 1039; Spencer Bower and Turner on Actionable Misrepresentations 3rd Ed. at 189. I turn now to the liability of Mr. Guy and Mr. Bryant, other than under the Trade Practices Act. In the light of Miss Vincent's statements that discussions with Mr. Bryant concerning fill occurred after the signing of the contracts, counsel for Miss Vincent indicated that liability against either Mr. Guy or Mr. Bryant in this respect primarily is to be found in the consideration of the representations in 4A(d) and (e). I have already discussed the representation referred to in paragraph 4A(a). The representation in 4A(b) is of the same character as that in 4A(d). So far as 4A(c) is concerned, the evidence of Miss Vincent was to this effect:- "Mr. Bryant pointed out to me that because of the Council approved plans, these were definite considerations in the purchase but, because of the time factor in getting plans through Council, they were not to be overlooked. They would definitely have consideration in the purchase and that the fact that they were being offered placed some value on them." There is simply no evidence to support the representations pleaded. It was accepted on all sides that the existence of plans capable of approval by the Council, (a matter to which a special condition 27 of the contracts is directed), was a matter for consideration as enhancing the attractiveness of the ee ogy artery - 7 el ee ee tee ee ee pe ge ee . , mse . eo pen eee mee epee eee Se p Z mh Male a a ee ac enna: Se Tim 32. purchase. This allegation was not the subject of any submission by counsel for Miss Vincent. Ultimately the position is that the applicants say that there was a representation by Mr. Bryant to the effect that the asking price for both parcels of the said land was a good price from the purchaser's point of view, and there was a representation by Mr. Bryant that the purchase of one or both parcels of the land would constitute a sound investment anda good return on monies invested. I am satisfied that the opinions and views expressed by Mr. Bryant were honestly entertained. These representations were said to involve two considerations, first:- "Was the market value of the two parcels $750,000.00 or thereabouts?" And the second being - "Could the proposed development or a similar one have taken place having regard to building costs, interest rates, and market rentals at the time?" On what was infact the market value as at 6 August 1981, extensive valuation evidence was called by various parties, the effect of which was to obfuscate rather than illuminate the question of what in fact was the market value of the properties as at 6 August 1981. Mr. Kortlang, a valuer called by the wee ee pee ee eee ee eee eaeren cn on eae ee nee ree Leh yey eae ee, ero LD —~ wry ser wp pepe ore eer te ' ee ee re a oe Lan omen = eyo ny eee eee we cree, ee ene enn > 33. applicants, was opened being of the view that a value of $250,000 was the market value of the property as at the relevant date, 6 August 1981. In his evidence the figure $280,000 was given. Mr. Hobbs, also called by the applicants, gave evidence that in his opinion, at the relevant date, the market value was $400,000. Mr. Casagrande, who was called by Lombok, gave evidence that in his opinion, at the relevant date, the market value was $602,000 and Mr. Brett, called by Mr. Guy, gave evidence that $750.000 (the purchase price) was the relevant market value. In my opinion, the evidence of Mr. Kortlang can be put to one side. His evidence manifested a partisan approach and was directed more to vindicating a position than to a dispassionate determination of the market value of the property at the relevant date. At the other end of the numerical scale, Mr. Brett's valuation is subject to a number of flaws. His enquiries led him to conclude that the subject sale was the best evidence of value but, in reaching that conclusion, it appears that his approach was affected by an erroneous view as to the zoning of resub. 316, a neighbouring biock, and by failing to give proper weight to the significant differences between the subject property and a neighbouring property on which a large McEwen's store was erected, The range of valuation evidence in this case is extraordinary. Four qualified valuers assess the market value between $280,000 and $750,000. It reflects the inexact nature of valuation, whether it be regarded as an art or a science. Watkins J. said in Singer & Friedlander Limited v. John D. Wood & Co. (1977) E.G. Digest of Cases 569 at 574-576:- we a >. eo Me TA bated raat Be mee we eee oe eee = ' . 34. "The valuation of land by trained, competent and careful professional men is a task which rarely, if ever, admits of precise calculation. Often beyond certain well-founded facts many imponderables confront the valuer that he is obliged to proceed on the basis of assumptions. Therefore, he cannot be faulted for achieving a result which does not admit of some degree of error. Thus two able and experienced men, each confronted with the same task, might come to different conclusions without anyone being justified in saying that either of them lacked competence and reasonable care, still less integrity, in doing his work... Pinpoint accuracy in the result is not, therefore, to be expected by he who requests the valuation. There is, as I have said, a permissible margin of error, the 'bracket' as I have called it. What can properly be expected from a competent valuer using reasonable care and skill is that his valuation falls within this bracket." Regard should also be had to the Valuer~General's unimproved value of $528,000, recognising that the unimproved value takes no account of the value of clearing or fill and the like. My assessment is that the market value at 6 August 1981 was of the order of $600,000. Where there are favourable vendor's terms, the selling price would be expected to be greater than the market value which reflects a cash transaction. Moreover, the market value is properly to be determined on the principles expressed in Spencer v. Commonwealth (1908) 5 C.L.R. 418, which may bear little relationship to prices asked and paid in a volatile boom market, where a significant component of the players operate on the "bigger fool" theory. aces Ay snare oe a Mase meh Ot nytt Tae tet merit a ey 4 Uys . sree 35. It has to be acknowledged that no representation precisely in the terms alleged in the Further Amended Statement of Claim was said by Miss Vincent in her evidence to have been made to her. I do not regard that that is a fatal objection. In my opinion it is sufficient if what he said and didwas a representation to the same effect as that alleged. Mr. Bryant admits in his Defence that he said that the asking price was a "good price". The evidence shows that on many occasions Mr. O'Brien referred to the asking price as "the correct price". Miss Vincent said:- "Did you have some discussions with Mr. Bryant about that plan? --- Yes I did and he provided me with estimates of buildings costs, of borrowing costs for a portion of it and for the anticipated rentals; and in my conversation he mentioned to me that I could obtain rental of 4.85 a square foot for the sheds on the site; and for those sheds constructed toward the Sugar Road front, or toward the front - toward the roadway access, I could obtain possibly 5 or 5.50 a square foot; that if the sheds were constructed on the road site, or in other words if I had direct road access or direct road frontage, I could obtain $6 a square a foot. He went ahead and he did calculations for me that showed the building cost and the anticipated rentals; he provided the estimates at 4.85 a square foot which was the minimum rental that he had quoted me for the site as being obtainable." Did you, yourself, do any calculations prior to entering into the contract, in relation to the financial viability or otherwise of the venture? --~ I did calculations with Mr. Bryant based upon those figures, yes. (Those figures are the figures or calculations which appear on the single sheet site plan). After your discussions with Mr. Bryant and after your calculations, did you decide to go ahead with the project, with the purchase? --- Yes, I did, because in doing those calculations, I arrived at a reasonable - or more than reasonable rate of return for the amount I was going to invest." ~ ----— - eee ae ete nee eee 36. A full answer to these allegations, in my view, is that the evidence establishes that Miss Vincent was determined to purchase these two blocks of land prior to the calculations made by Mr. Bryant as to building costs, borrowing costs, rentals and the like which were performed by Mr. Bryant and Miss Vincent between the meeting of 3 August and the signing of the contracts on 6 August 1981, and Mr. Bryant's view of the appropriateness of the asking price, equally, was not an inducement for Miss Vincent to sign the contracts. Her state of mind when giving the part-deposits appears from her evidence:- "T advised Mr. Bryant that I would proceed with one of the properties, but he in turn must have advised Mr. Richardson because it was Mr. Richardson who called round and collected the deposit and issued a Trust Account receipt." and later in respect of the second block, she said:- "By Monday, I had decided to proceed with the second block." This was before the evening meeting on 3 August. She was asked:- "dQ. The first time you met the Parrys was on the evening of 3 August 1981? A. Yes. ee ST OT eT eo 37. Q. And before you met Mr. Parry, you decided to buy both blocks? A. Yes." Counsel for Lombok asked Miss Vincent:- "0. But you decided on the weekend preceding 3 August to buy both properties? A. Yes. ... Q. Well, have you not given evidence that you had decided to buy both blocks then. A. Yes, I have, yes. Q. So that your mind was made up. A. Yes, but we still had to go on with negotiations to finalise in my mind the purchase of that property. Q. Were not those negotiations only with respect to the vendor's terms? A. Yes. The allegation is that Mr. Bryant, in indicating to Miss Vincent that the asking price was a good price from the purchaser's point of view, was in breach of his duty to Miss Vincent. The basis of the liability here alleged was expressed by Barwick C.J. in The Mutual Life & Citizens Assurance Company Ltd. v. Evatt (1968) 122 C.L.R. 556 at pp. 572-3. This passage was summarised by Mason J. (with whom Aickin J. agreed) in L. Shaddock & Associates Pty.Ltd. v. Parramatta City Council (1981) 150 C.L.R. 225 at p.250 as follows:- IA - vate eo. ceasenenenier tat aeiee eae aaa an poceeeee "1 seen oe 38. " ...whenever a person gives information or advice to another upon a serious matter in circumstances where the speaker realizes, or ought to realize, that he is being trusted to give the best of his information or advice as a basis for action on the part of the other party and it is reasonable in the circumstances for the other party to act on that information or advice, the speaker comes under a duty to exercise reasonable care in the provision of the information or advice he chooses to give." In my opinion, however, mone of the elements of liability is established in this case. The nature of the relationship was not such as to impose the duty of reasonable care. On the nature of the relationship between Miss Vincent and Mr. Bryant and her reliance on his advice, Miss Vincent says that she never told Mr. Bryant that she was relying on his expertise. She was asked:- "OQ. How frequently did you meet him? A. It would have been - I knew John quite well as he was regarded as a friend. Q. What did you know about his expertise in valuations and the like? A. TIT did not know about his expertise in valuations but I relied upon his advice." Mr. Bryant formed the view that this was a good opportunity on favourable terms. He was not alone in that view, Richardson being of the same opinion. It is not inconsistent with some at least of the valuation evidence. reine 39. If there was in the circumstances a duty on Mr. Bryant owed to Miss Vincent, it is no higher than the care and skill of a real estate salesman of ordinary competence familiar with properties the nature of the subject properties, It was not a duty to advise Miss Vincent as to value in the same way as a registered valuer and with the expertise expected of a registered valuer; Luciano v. D.G. Pty. Ltd. (1980) 25 S.A.S5.R. 568 at p.582. I donot accept that his role is properly to be approached on the basis that he was an investment adviser or a valuer in respect of his discussions with Miss Vincent. If, contrary to my opinion, the relationship between Miss Vincent and Mr. Bryant was such as to require him to exercise reasonable care, in my view the want of reasonable care has not been made out. As earlier indicated, I conclude that in any event there was no reliance. On the evidence, I am not satisfied that there is any common law liability in either Mr. Guy or Mr. Bryant to either applicant. The final matter concerns the question of repudiation and rescission. This aspect of the matter has caused me great difficulty. By clause 24 of each contract, Supetina agreed to pay the balance of the deposit monies by 5 October 1981. Further, it ae er te t web las SEA ERS We ain —- cnet "a y Deer oe ae oe ve eo sto ' we t eee " va net i 40. undertook to pay interest only on the unpaid settlement monies at the rate of 16% per annum, payable by equal quarterly payments of $13,500 in the case of each contract, until 5 January 1984, whereupon the whole of the principal sum, together with interest, became payable in full. As a_ result of the intention of the Main Roads Department to acquire part of the subject land, Supetina and Lombok entered into a deed in respect of each property, dated 4 May 1983. These deeds were the result of an agreement reached concerning the investment of compensation monies. They provided, inter alia, that the date by which Supetina was to pay Lombok the balance of purchase monies and any interest thereon was extended to 5 January 1986, and that interest in arrears was to be calculated on quarterly rests at the rate of 10% per annum. Supetina failed to make some of these payments. On 17 September 1982, Lombok issued a Notice of Default in respect of an instalment due on 6 July 1982. Supetina subsequently made a payment, and this was accepted by Lombok. Other payments were not made. However, in these cases, no Notice of Default was given. Supetina argues that the failure to make these further payments is explicable because it had a cross-claim or set-off in respect of these amounts. The applicants correctly submit that each contract is an "instalment contract" as defined by s.71(2)(b) of the Property Law Act, 1974, since it is "an executory contract for the sale of land in terms of which the purchaser is bound to make a SR oi ee ptr Tt trea mals ae eer 1 . nme et aw aT 41. payment or payments (other than a deposit) without becoming entitled to receive a conveyance in exchange therefor". This contention is in accordance with the decision in Wacal Developments Pty. Ltd. v. Realty Developments Pty. Ltd. (1978) 140 C.L.R. 503. Section 72 of the Property Law Act restricts a vendor's right to terminate a contract "by reason of default on the part of the purchaser in payment of any instalment or sum of money (other than a deposit or any part thereof) due and payable under the contract" until 30 days after service of a notice in the prescribed form. But that statutory restriction on the vendor's right to terminate has no application in the present case, since Lombok did not purport to determine the contract by reason of Supetina's non-payment. It purported to rescind the contract because Supetina's action in bringing its application in this Court was said to repudiate the contracts. This ground for purported rescission appears in a letter dated 2 March 1984 from the solicitors for Lombok, which I again set out:- "We refer to your client's application dated 13 January 1984, and in particular the relief sought in paragraphs (a) to (g) thereof. Your client has, by its action, repudiated the contracts dated 6 August 1981 between the first applicant and the first respondent and we hereby give you notice that the first respondent has rescinded both contracts." That letter elicited the following letter, dated 28 May 1984, from Supetina's solicitors:-— qin pees ar ale sygee epee pon soe all a A So ore ve soem. a) , oe wen ere eek ay of. 42. "Your client by your letter of 2nd March 1984, unlawfully repudiated the above contracts. Since that date your client has continued to assert that it has lawfully terminated the contracts and has made it clear that it would not perform in accordance with their terms if it should be called upon to do so. Our client hereby accepts your client's repudiation and rescinds the contracts." Supetina sought the following relief in its application to this Court:- (a) Against the First Respondent a declaration that contracts in writing dated 6th August, 1981 entered into between the First Applicant as purchaser and the First Respondent as vendor are void and/or voidable at the instance of the First Applicant: (b) Against the First Respondents a declaration that deeds of guarantee executed by the Second Applicant in favour of the First Respondent on or about 6th August, 1981 are void or voidable at the instance of the Second Respondent; (c) Repayment by the First Respondent to the First Applicant of all moneys paid by the First Applicant to the First Respondent under the said contract; (d} Further or alternatively against all respondents damages pursuant to the provisions of the Trade Practices Act 1974; (e) Further or alternatively against the First Respondent an order that the said contracts and the said deeds of guarantee be declared void or be rescinded; (£) Further or other relief pursuant to Section 87 of the Trade Practices Act 1974; (g) Further or alternatively against the Second and Third Respondents damages for breach of duty and/or nisrepresentation and/or negligence." mas a SS as aaa 43. The first issue, then, is whether Lombok was justified in treating Supetina's application to the Court as constituting a repudiation of the contracts. An influential decision concerning this issue is the English Court of Appeal decision in Spettabile Consorzio Veneziano di Armamento e Navigazione Vv. Northumberland Shipbuilding Co., Ltd. £1918-193 All E.R. Rep. 963, (1919) 121 L.T. 628. In the light of submissions by counsel for Lombok, it is necessary to refer to the facts of that case. An Italian company entered into six contracts for the building of ships by the defendants. The ships were to be constructed "as soon as practicable" after the builders obtained permission from the government to do so. The builders obtained approval in respect of one ship, whereupon the buyers intimated that they regarded the contracts as at an end and would commence action to establish their position. A writ was issued against the builders. Duke L.J., at p.967, describes the writ as being in "an exceedingly ambiguous form". Further, the report of the case does not make clear the basis upon which the buyers regarded the contracts as at an end. It appears that the writ sought rescission of the six contracts and, alternatively, a declaration that the contracts were null and void, or had been frustrated, and were at an end. The writ further claimed damages for misrepresentation in connection with the contracts, suggesting the ground for rescission was founded on fraud or misrepresentation. The writ also claimed the return of certain monies. warren eee ce soem We &e =f Le . TH oT er = wire y 44. After receipt of the letter intimating legal action, and the writ itself, the builders wrote to the buyers stating that, since the buyers persisted in treating the contracts as at an end, the builders would not proceed further with the construction of the ship and proposed to "counterclaim in this action for damages for repudiation of the contracts". The action on the first writ was discontinued but, ten days later, a new action was commenced. The Court of Appeal held that the letter intimating the commencement of legal proceedings and the issuing of the writ in the first action did not constitute a repudiation of the contracts and, accordingly, the builders' letter, to which I have referred, was ineffective to constitute acceptance of a repudiation. The importance of the case lies in the general observations of the members of the Court of Appeal about whether the issue of a writ should be understood to evince an intention not to be bound by ai contract. At p.966, Warrington L.J. stated:- ',..Where one party to a contract conceives that he is no longer bound by the contract or has a right to have it rescinded or declared null and void, and issues a writ for the purpose of obtaining that which he believes to be his right, he does not by that mean to repudiate the performance of the contract in any event. It seems to me that he submits to perform it if the court, as the result of the action, comes to the conclusion that he is bound to perform it, and it cannot be taken to be an absolute repudiation." arts - oO; — we eer ! rr ee ork hae ee ——— os ay 45. Duke L.d. stated at p. 967 that he could conceive of cases in which the commencing of proceedings would be held to evidence repudiation of a contract but that, in the case at hand, the writ was of "an exceedingly ambiguous form" and was not of "the explicit character which is required to establish an unconditional proffer of repudiation of a contract". His Lordship adopted the remarks of Channell J. in Societe Maritime et Commerciale v. Venus Steam Shipping Co., Ltd. (1904), 9 Com. Cas. 289 that parties should be entitled to seek a declaration whether or not a contract is binding. Duke L.J., in adopting those remarks, stated that parties were entitled "to assume that they may come to court in a properly framed action and obtain the decision of the court as to what their rights are in respect of a matter in dispute". Atkin L.J. regarded the writ as seeking in substance a declaration whether or not the plaintiffs were any longer bound by the contracts. He observed at p.968:- "It appears to me that that is an entirely different thang from an intimation by the plaintiffs that they in any event are not going to perform the contracts. It is something quite different from a repudiation. So far from expressing the intention of the parties not to perform the contracts, it appears to me to leave it to the court to say whether or not the contract is to be performed, and if the court says it is, then it impliedly states that it will be performed." The decision in Spettabile establishes that the fact that a party issues a writ seeking a determination of whether it is bound to perform a contract does not, by that conduct, ein ar . Pi iaalestnanienaercememaanl ar ey re em ee ee "Ht 2 le te ene 2 ee ee toys, 46. evidence a repudiation of the contract. writ. The case establishes that, at least in the area of long term supply contracts and building contracts, parties should be entitled "in a properly framed action" to obtain a prompt decision from the court concerning their rights. Duke and Atkin L.JJ. each stated that they conceived of cases in which a writ may be issued in circumstances which make it plain that the plaintiff does not propose to perform the contract in any event. In such a case, the court would infer a repudiation by the plaintiff which might be accepted by the defendant. Counsel for Lombok contended that Spettabile is distinguishable from the present case since it involved a dispute about the construction of certain contracts, whereas this is not such a dispute. While the report in Spettabile 1s far from clear about what the substance of the dispute was between the parties, I am unable to accept counsel's submission that the case concerned only a dispute as to the terms of the contract. it appears in the judgment of Warrington L.J. that the plaantiff sought rescission of the contracts and a declaration that the contracts were null and void on the grounds of fraud and misrepresentation. Therefore, there is no basis to distinguish Spettabile on the basis that it was simply an action seeking the court's construction of a contract. Spettabile has been cited in various texts and later cases, the most authoritative recent case being the House of Lords decision in Woodar Investment Development Ltd. v. Wimpey Construction U.K. Ltd. £19803 1 All E.R. 571. ae —¥ Sane ae ae es a ara er poe oe wee oe Pe ee re we ee ee yo 47. Much of the case law on what constitutes "repudiation" involves disputes over the proper construction of contracts, in which a party advances an erroneous view of the effect of a contract and the issue arises whether the erroneous assertion amounts to a repudiation of the contract, as properly construed. Two recent leading Australian cases in this area are D.T.R. Nominees Pty. Ltd. v. Mona Homes (1978) 138 C.L.R. 423, Green v. Sommerville (1979) 141 C.L.R. 594, This case does not involve any dispute about the construction of the contracts. Instead, the dispute concerns whether the action of the respondents entitles Supetina to orders for rescission and damages. However, there seems no reason why the general principles which apply in cases of erroneous assertions of the construction of a contract do not apply generally to disputes about the rights of parties to a contract. There is no sensible point of distinction between an assertion by a party that it is not bound to perform a contract because the terms of the contract do not require it, and an assertion by a party that it is not bound to perform a contract for some other reason, such as factors affecting the formation of the contract or its continuing validity. In both cases it remains to be decided whether the assertion evinces an intention not to be bound "in any event", that is, whether or not its assertion is justified. The fact that a party's assertion that it is not bound to perform takes the form of legal proceedings does not necessarily evince such an intention. For the commencement of proceedings to constitute a -7— - ow 7 ey te ie rial Te rote wae oe eee —o ' . ae) Se coer rhs woe" repudiation, the nature of the action, the conduct of the party or other circumstances would need to evidence an intention by the party not to perform the contract, irrespective of the court's decision. Some of the observations of the members of the House of Lords in Woodar Investment Development Ltd. v. Wimpey Construction U.K. Ltd. may be thought to be restricted to cases of termination in reliance upon the terms of the contract itself. Lord Denning M.R. in Paal Wilson & Co. v. Partenreederei [£1983] A.C. 854 at p.877 stated in obiter that Woodar Investment Development Ltd. was decided "on the ground that the vendors were entitled to rely simply on the terms of the contract". However, it 1s notable that the House of Lords in Woodar Investment Development Ltd. referred to Spettabile with approval. In particular, Lord Keith of Kinkel at p.586, before citing various passages from Spettabile stated:- "There is a tract of authority which vouches the proposition that the assertion by one party to the other of a genuinely held but erroneous view as to the validity or effect of a contract does not constitute repudiation. (my emphasis). I conclude that there is no sound distinction in principle between an assertion by a party that it is not obliged to perform a contract because the terms of the contract do not oblige it, and an assertion by a party that it is not obliged to performa contract because the contract ought to be declared by the court to be rescinded. —— ree ewe pee ee ——— : In the light of my conclusion that the principle in Spettabile applies to this case, I now turn to consider whether this case falls within the general rule so that the commencement of proceedings cannot be taken to be an absolute repudiation, or whether this is a case: "where a writ may be issued in such cicumstances, possibly combined with other declarations of the rights of the parties, as to make it plain that the party issuing the writ, in any event and notwithstanding the decision of the court of law, does not propose to perform the contract. (Atkin L.J. at 969). The circumstances which would place this case within the latter category may be briefly mentioned. It may be suggested that the financial difficulties of Supetina were such that it was not in a position to perform the contracts in any event, and the commencement of proceedings may be regarded as a speculative attempt to escape from contracts which it was not able to perform. The suggestion that Supetina would not perform "in any event and notwithstanding the decision of the court", is bolstered by the fact that the basis upon which it sought to escape the contracts may be viewed as opportunistic, and that its failure to make instalment payments of interest may have occurred not because it had a genuine set-off or counterclaim, but because it was financially unable to do so. These factors, it may be argued, take this case outside the ordinary rule in which the court cannot draw the inference from the issue of proceedings that the party does not intend to perform the contract. However, having carefully considered these factors, I am of the opinion 3-4 etaaenentrd eos Se . 8 we ee me on lon 7 ee Pm er eee 7 ere eee i eee 50. that the issuing of proceedings in this case should be governed by the normal rule. There is nothing in the application, including the alternative claims for damages, which evinces an intention not to perform if the application is unsuccessful. In deciding the issue of repudiation, the principles enunciated in the oft cited passage of the judgment of Lord Coleridge C.J. in Freeth v. Burr (1874) L.R. 9 C.P. 208 at p.213 need to be observed:- ',..in cases of this sort, where the question is whether the one party is set free by the action of the other, the real matter for consideration is whether the acts or conduct of the one do or do not amount to an intimation of an intention to abandon and altogether to refuse performance of the contract." In Spettabile, Atkin L.J., at p.968, after reviewing a number of authorities, stated:- "They all come to the same thing, and they all amount at any rate to this, that it must be shown that the party to the contract made quite plain his own intention not to perform the contract." In all the circumstances, I am unable to draw the inference that, in any event and regardless of an adverse decision of the court, Supetina intended not to perform the contracts. Accordingly, Lombok was not justified in its solicitor's letter of 2 March 1984 in treating the application to the court as a repudiation of the contract. a4 a seo 51. The question then arises whether Supetina was entitled to rely upon Lombok's ineffective rescission of the contracts as itself a repudiation of the contracts, and thereupon to rescind, as it purported to do by its letter of 28 May 1984. A similar question was considered by the High Court in D.T.R. Nominees Pty. Ltd. v. Mona Homes Pty.Ltd. (1978) 138 C.L.R. 423. That case concerned an ineffective rescission, based upon a purported repudiation by the appellant in asserting an erroneous interpretation of a contract. At p.433, Stephen, Mason and Jacobs Jd. stated:- "The respondents purported to rescind only upon the basis that the appellant would not complete the contract as correctly interpreted. They were in error in regarding themselves as entitled to rescind at the stage when they purported to do so but they were not in error in their interpretation of the contract. The actions of the parties must now be considered in the light of the true anterpretation of the contract. The purported rescission of 19 July did not evince an intention not to proceed with the contract correctly interpreted; it did no more than evince an intention not to proceed with the contract on the basis of the incorrect interpretation then being advanced by the appellant. That cannot be regarded as a repudiation which would entitle the appellant to rescind when it was itself a party in error." The Covrt held that the appellant, by insisting on its incorrect interpretation of the contract, was not at the time willing to perform the contract on its proper interpretation and, accordingly, was not entitled to rescind the contract. Although that case concerned assertions and counter-assertions by the parties about the construction of the SOIT ee ene TON ee ote an pe ee TO 52. contract, its governing principles appear to me to apply to the present case of assertions about whether the contracts were binding. Supetina, by its application to the Court, made an assertion, which I have found to be erroneous that, for the reasons stated in its Statement of Claim, the contracts were void and/or voidable at its instance and that the Court should order their rescission. For the reasons which I have given, Lombok was not entitled to view Supetina's application to the Court asa repudiation of the contracts, because the application did not evince an intention not to perform the contract if the Court found against it. But Lombok's letter of rescission of 2 March 1984, together with its conduct and statements made by Mr. Parry make it clear that from that date Lombok did not regard itself as bound by the contracts. Its conduct manifested a repudiation of the contracts. The question is whether Supetina is entitled to rescind based on Lombok's repudiation. In D.T.R. Nominees (supra), the majority said at p.433:- "A party in order to be entitled to rescind for anticipatory breach must at the time of rescission himself be willing to perform the contract on its proper interpretation." eee Te 53. As at 28 May 1984, at the time Supetina purported to rescind for wrongful repudiation, Supetina was in breach of some of its obligations under the contracts. As I have found, the only bases claimed for not being bound by those obligations were not available to it. The payments for July 1983, October 1983 and January 1984 had not been paid. Supetina was in breach, but asserted that it was not because the contracts were not binding on it. Supetina's position was similar to the vendor in D.T.R. Nominees (supra). The vendor was in breach of contract. At the time it purported to rescind, the vendor was insisting on an incorrect interpretation of the contract. The majority held, at p.432, that this did not permit the attribution to it of the intention to repudiate the contract. However, the majority did hold, at p.433, that the vendor:-~ "by that stage showed that 'definite resolve or decision against doing in the future what the contract' Crequired] which is referred to by Dixon C.J. in Rawson v. Hobbs (1961) 107 C.L.R. 466 at p.481." . It was held that this disentitled the vendor from rescinding. It was not, at that time, willing to perform the contract on its proper interpretation, although the majority was of the view that the vendor might fall into that category of parties who "may be willing to recognise his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation." Saar eee ae . nn a eee - . A 54. This is contrasted with the purchaser's position in Lennon v. Scarlett and Co. (1921) 29 C.L.R. 499. The defendant had wrongly purported to rescind. At a time when the plaintiff was willing to complete the contract according to its true terms, the defendant declined. It was held that the plaintiff could accept the defendant's repudiation and rescind. Supetina, when it purported to rescind, unlike the plaintiff in Lennon v. Scarlett and Co., was not willing to perform the contracts according to their true terms. The time for performance of some of its obligations under the contracts had passed without performance. At the highest for Supetina at that time was the possibility that, on being told that the contract was binding on it, it would then act as it should have been acting. Supetina's application to Court was without a proper basis. Its attempt to avoid the contracts stands in the same category as the insistence ona wrong interpretation by the appellant in D.T.R. Nominees Pty. Ltd. v. Mona Homes Pty. Ltd. (supra). Supetina was seeking to avoid having to perform the contracts according to their terms, although I have found that it cannot be concluded that it intended not to perform if its contentions were rejected by the Court and the contracts were held to be binding. In my opinion, Supetina was not entitled to rescind. "4 aS Send tite Grr store m Se ee een ath owt tae ' ae ons 55. The conduct of the parties shows that, by the time the matter came to trial, neither party intended that the contracts should be performed. In particular, the evidence at trial of Mr. Parry in respect of the Main Roads Department compensation and the efforts of Lombok to regain possession of the title deeds show that Lombok no longer regards the contracts as binding on it. Given that neither party had effectively rescinded the contracts, but that at trial neither contended that the contract should be further performed, the position falls to be resolved in accordance with Summers v. The Commonwealth (1918) 25 C.L.R. 144, In that case, the parties were found to have "so acted in relation to each other as to abandon or abrogate the contract" (at p.152). The consequence of the abandonment and abrogation was that the deposit monies were returnable. A similar position obtained in D.T.R. Nominees Pty. Ltd. v. Mona Homes Pty.Ltd. (supra) where, although no claim was made for the return of the deposit upon the basis that the contract had been abandoned, the High Court was of the view that, since the contract had been abandoned and abrogated by the time of trial, the deposit was returnable. There was no order for payment of interest. In respect of the instalments of interest which have been paid, it seems to me that the same principles apply. The contract has been terminated, not by the action of either party in rescinding it, but by virtue of "tacit mutual abandonment" Summers v. The Commonwealth (supra). I am content to follow the course adopted in D.T.R. Nominees and simply to order the return FT Ae ae ee: pre iJ ween eee ne 56. of those monies, as sought by Supetina. I make no order for interest thereon. No basis was outlined in argument upon which any award of interest on these sums should be made. The application by Supetina merely sought "the return of all moneys paid by the First Applicant to the First Respondent", as did paragraph 22(h) of the Further Amended Statement of Claim, though this was based on the claim that Supetina was entitled to rescind. As the learned author, Dr.Carter, correctly states in para.827 of Breach of Contract, 1984, Law Book Company Limited, "Wrongful terminations sometimes give rise to quite complex situations so far as the question of readiness and willingness is concerned" Should I be wrong in my conclusion that Supetina was disentitled to rescind the contracts, then the contracts came to an end at the time of the rescission by Supetina by the letter of 28 May 1984. On that holding, in my opinion, Supetina would be entitled to the same order as I propose to make on the basis that the parties have abandoned the contracts. Each contract recites:- "if this sale shall not be completed for any reason other than the default of the purchaser the said deposit shall be refunded to the purchaser." And if, contrary to my findings, Supetina had repudiated the contracts and Lombok had thereupon rescinded the contracts, Supetina would have been entitled to a return of the instalments paid, subject, of course to any claim for damages by Lombok: rae heen ne + 57. McDonald v. Dennys Lascelles Limited (1933) 48 GC.L.R. 457 at p.477-8. <A fortiori, Supetina would be entitled to them if it had not repudiated the contract, but the contracts had terminated for-'some reason other than its default. I will hear the parties as to the form of the orders I should make, and om costs. cuvtly that this er se Sb preceding N2oges ero a trus copy cf the reasons for * Iymnt herein of His Honour rir. Justice Spender oT M <a salle Dated & (LU Wel