tome CATCHWORDS TRADE PRACTICES - misleading and deceptive representation in advertisement as to area of respective responsibilities of vendor and agent. Trade Practices Act 1974 3.52 and s.53A LAURENCE WILFRED JOHNSON and NINETTE CROY JOHNSON v PETER EVANS PTY LID and PAUL VINCENT DEWSNAP No. VG 271 of 1985 Woodward J 19 November 1986 Melbourne conduct land sold IN THE FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. VG 271 of 1985 ) ) GENERAL DIVISION BETWEEN : LAURENCE WILFRED JOHNSON and NINETTE CROY JOHNSON Applicants and PETER EVANS PTY LTD and PAUL VINCENT DEWSNAP Respondents MINUTES OF ORDER COURT: Woodward J. DATE: 19 November 1986 PLACE: Melbourne THE COURT ORDERS THAT: There be judgment for the applicants against both respondents in the sum of $9250 with costs. The second respondent's cross-claim against the applicants be dismissed. 3. As between the respondents the applicants' damages and costs are apportioned as to three quarters against the second respondent and as to one quarter against the first respondent. Each is entitled to contribution from the other accordingly. (Note: Settlement and entry of orders are dealt with in Order 36 of the Federal Court Rules.) IN THE, FEDERAL COURT OF AUSTRALIA ) ) VICTORIA DISTRICT REGISTRY ) No. VG 271 of 1985 ) GENERAL DIVISION ) BETWEEN : LAURENCE WILFRED JOHNSON and NINETTE CROY JOHNSON Applicants and PETER EVANS PTY LTD and PAUL VINCENT DEWSNAP Respondents COURT: Woodward J. DATE: 19 November 1986 PLACE: Melbourne REASONS FOR JUDGMENT In this matter the applicants seek relief for an allegedly false and misleading statement made by the respondents in relation to the sale of real property at Kallista in May 1985. They say that they agreed to purchase the property from the second-named respondent on the basis of a statement contained in a newspaper advertisement placed by the first-named respondent ('Evans'') and authorised by Mr Dewsnap. The advertisement stated in bold type that the area of the property to be sold was "ONE ACRE". They claim that, after they had entered into a contract to purchase the property and paid a deposit, they measured the land and, after making calculations, discovered that its area wags significantly less than one acre ~- perhaps a little less than three-quarters of an acre. The applicants then purported to rescind the contract and now seek, among other relief, damages to the extent of the deposit they paid. QUTLINE OF UNDISPUTED FACTS Before the disputed transaction, the applicants owned two adjacent properties in Kilsyth, Victoria, comprising approximately half an acre in total ('the Kilsyth properties'). They lived ina residence which was situated upon one of the properties and conducted a small cat-boarding business upon the other. Some time early in 1985, Mr and Mrs Johnson decided to sell the Kilsyth properties and purchase a larger property upon which they could live and continue their cat-boarding business. Mrs Johnson also wanted to be able to breed poodle dogs. Accordingly they were looking for a property which possessed the necessary permits from the local council or was situated in a locality in which such permits were fairly easily obtainable. They inspected several properties in the Cranbourne area, none of which was suitable. They saw an advertisement in 'The Age' newspaper of 11 May 1985 which read, in part, as follows: " BREEDERS $94,500 ONE ACRE KENNELS DANDENONG RANGES A unique opportunity to obtain a property designed for dog breeding, property has a current breeding permit for 6 dogs, consists of a 16.5 square solid brick split level home .... -.» this property is truly unique in the Dandenongs as this type of permit is almost impossible to obtain. For further information and appointment to inspect phone Des Crowle at PETER EVANS KALLISTA ..." The advertised property was situated at Lot 38 Kallista-Emerald Road, The Patch and was owned by Mr Dewsnap. The advertisement was placed in the newspaper by Evans on behalf of Mr Dewsnap. On 14 May 1985, at about 5.00 p.m., Mr and Mrs Johnson inspected the property together with Messrs Crowle and Forsaith, two real estate agents from Evans. Mrs Dewsnap guided the party through the premises and around the garden including the dog-pens and kennels, in which, of course, Mr and Mrs Johnson were particularly interested. Mr Dewsnap arrived later and was present only during the last stages of the inspection. At approximately 6.00 p.m., Mr and Mrs Johnson and the two estate agents left the property and returned to Evans' Kallista office. The Johnsons were favourably impressed by the property and, on reaching the office, they discussed Mr Dewsnap's terms with Messrs Crowle and Forsaith. They were informed of Mr Dewsnap's insistence upon an unconditional contract (he was already committed to purchase a property at Benalla) and understood the nature and effect of such an agreement. Mr and Mrs Johnson considered the property overnight and on the following day, 15 May 1985, paid $500 to Evans by way of a holding deposit. On 21 May 1985 both Mr and Mrs Johnson executed a Contract Note to purchase the property for $92,500 and paid a further deposit of $8750. The Contract Note was of a_ standard form, having no special conditions, and provided for completion of the contract on or before 29 July 1985. Also on 21 May 1985, the Johnsons signed a Vendors' Statement pursuant to s.32 of the Victorian Sale of Land Act 1962. That document had been executed by Mr Dewsnap on the same day and annexed to it was a copy of the relevant Certificate of Title. A diagram of the property appeared upon the Certificate of Title and, as is often the case, showed all measurements in links. A document authorising the release of the deposit moneys to Mr Dewsnap was executed by Mr and Mrs Johnson on 31 May 1985. Mr and Mrs Johnson received a letter from their solicitors dated 11 June 1985 which, amongst other' things, suggested that they measure the property. After several attempts to arrange an appointment for such a measurement Mr and Mrs Johnson arrived at the property on 14 June 1986 in the late afternoon. It is convenient at this point to describe the property briefly. The block of land is triangular in shape and is bounded on two sides by roadways. Upon the land is a house, 30me dog-pens or 'runs' and dog kennels. Apparently the property is cleared, however the boundary fences are inside the surveyed boundartfes, and immediately beyond the fence separating the block from the adjoining property there are a number of trees. Evidence was given that, upon arriving at the property on the evening of 14 June 1986, Mr Johnson spoke briefly with Mr Dewsnap, who pointed out at least two of the survey pegs delineating the boundaries of the land. The Dewsnaps then left and Mr and Mrs Johnson began to measure the land. The measurements were made with a surveyor's tape-measure and, according to Mr and Mrs Johnson, under extremely difficult circumstances, due to the heavy overgrowth of blackberry bushes along two of the boundary lines. Later that evening Mr Johnson attempted to calculate the area of the property. He did that first by converting the measurements which he had made from feet and inches into links, the measurements given on the Certificate of Title. Upon doing so, and finding that his measurements differed significantly from those stated on the Certificate of Title, he went on to calculate the area on the basis of the dimensions on the Title. Mr Johnson calculated the area to be just under three-quarters of one acre. The following day, or the next working day, Mr Johnson advised his solicitor of his discovery and informed him that, if it was correct, neither he nor his wife wanted to continue with the contract. Shortly afterwards, Mr Johnson's solicitor informed him that he had had the area of the property calculated and found it to be even less than the area at which Mr Johnson had arrived. At that time Mr Johnson informed him that he and his wife would not proceed with the contract. In a letter dated 26 June 1986 Mr Johnson's solicitors informed Mr Dewsnap's solicitors that the area of the property had been calculated at less than three-quarters of one acre and accordingly Mr and Mrs Johnson were - not prepared to purchase the property as it has been materially misrepresented to them". THE APPLICANTS' EVIDENCE Due to restrictions upon the number of cats and dogs which could be housed under their then current permit, Mr and Mrs Johnson had decided to sell the Kilsyth properties. They gave evidence that they were looking for a property which was, first, of one acre in area. This was important both to give them enough space and to enhance the re-sale prospects, since they were not young and did not expect to retain the property indefinitely. Secondly, they wanted a property which possessed the relevant permits, in order that they could continue to board cats and start to breed dogs. During the course of giving evidence, both Mr and Mrs Johnson stated that, whilst any property they considered must have both attributes, the former, the area, was their prime consideration. I was left with the impression that later developments may have caused their views on this point to become more entrenched, but that it had always been an important consideration for them. Mr and Mrs Johnson stated that 'The Age' newspaper advertisement was brought to their attention by Mrs Fry, their dog 'clipper'. They both said that they had not heard of -the property before that time nor seen the advertisement. The date and time when the advertisement was shown to the Johnson's was unclear for some time, since various pieces of evidence did not fit together. However I was finally satisfied that the advertisement appeared in 'The Age' newspaper on Saturday 11 May and was brought to the Johnsons' attention by Mrs Fry on the following Monday 13 May. Mr Johnson said that he rang Evans' Kallista office on that Monday and arranged to inspect the property one evening shortly thereafter. It may be that Mr Forsaith from Evans' rang the Johnsons first, in circumstances which will be mentioned later, but nothing turns on this point. I am satisfied the advertisement played a vital part in interesting the Johnsons in the property. Before inspecting the property, Mr and Mrs Johnson met Mr Crowle at Evans' Kallista office and then continued to the property in Mr Crowle's car. Also in the car was Mr Forsaith, from Evans' Cranbourne office, who intended inspecting the property for his own prospective purchasers. Mr Forsaith had previously spoken to Mrs Johnson on the telephone about a property in Tooradin which he had advertised. Whilst Mr and Mrs Johnson could not recall Mr Forsaith's name they did agree that he had accompanied them to inspect the property. Mrs Johnson said that no-one discussed the area of the property with them at that time, and this was not contradicted. Upon arriving at the property the party was met by Mrs Dewsnap, who guided them thorough the house and the grounds, in particular the dog 'runs' and kennels. Mr Dewsnap arrived late and the parties broke into separate groups: Mrs Dewsnap with Mr Crowle and Mrs Johnson; Mr Dewsnap with Messrs Johnson and Forsaith. Mr and Mrs Johnson were both adamant that they did not raise the size of the block during the inspection nor did anyone seek to discuss the topic with then. At the completion of the inspection, Mr and Mrs' Johnson and Messrs Crowle and Forsaith returned to their Kallista office in Mr Crowle's car. As mentioned above, Mr Dewsnap's requirement of an unconditional contract was discussed at that time. In addition Mr and Mrs Johnson told Messrs Crowle and Forsaith that they would sell their present property and, if necessary would obtain bridging finance. No discussion of the area of the property occurred at that time. Later, Mr and Mrs Johnson spoke to Mr Crowle by telephone, and Mr Crowle visited the Johnsons at their home on 21 May 1985 for execution of the Contract Note and s.32 Vendor's Statement. It is agreed that nothing was mentioned about the area of the land on either of these occasions. In these proceedings the Johnsons' seek declarations, first, that the conduct of Evans and Mr Dewsnap was in breach of $3.52(1) and 53A(1) of the Trade Practices Act 1974 and, secondly, that the contract has been rescinded or is void. In addition, orders for repayment of the deposit moneys and damages are sought. THE DEWSNAPS'_ EVIDENCE Mr Dewsnap was the registered proprietor of the property, having owned 1t for some ten or eleven years before 1985. Evidence was given by Mr Dewsnap that when he originally purchased the property it had been represented to him as being of one acre. It was not until he decided to build a house upon the land a year or so later that it was surveyed and found to be only approximately three-quarters of an acre. Mr Dewsnap said that he was not overly worried by this discovery, but he felt a bit disappointed. He did not consider it significant as he had decided upon the property after inspecting it, and after discussing the possibility of a kennel permit with the neighbours, and not because of its specific area (or what had been represented as its area). At this point I should say that no evidence was led as to the exact area of the land. It was, however, generally agreed that the area was a good deal less than one acre and perhaps slightly less than three-quarters of an acre. Mr Dewsnap could not find the survey report, nor could he recall the precise result other than to say it was "0.7... acres" (he could not remember the last three figures). Some time in April 1985 Mr and Mrs Dewsnap decided to sell their properties at The Patch (Mr Dewsnap owned a second block of land nearby) and move to the country. After looking at other properties they decided upon a small farm at Benalla. A - 10 - Contract or Contract Note was signed on or about 4 June 1985 with a settlement date of 29 July 1986. Mr and Mrs Dewsnap began to set in motion the sale of their properties at The Patch and accordingly visited Evans' Kallista office on 9 May 1985. They discussed the sale of the property with Mr Crowle, and arranged for him to inspect it the following day. Mr Dewsnap said that he could not recall mentioning the area of the land to Mr Crowle, nor being asked about it by Mr Crowle during the course of their discussion on that day. Mr Dewsnap did recall discussing the need to sell the property quickly and his desire for it to be advertised that weekend. Mr Crowle replied that it was too late to meet Evans' usual advertising deadline for that weekend. Mr Dewsnap suggested that it may be possible if the advertisement were to be placed in the 'Kennels' section of 'The Age', to which Mr Crowle said he would speak to his principals. Mrs Dewsnap was present when Mr Crowle inspected the property on 10 May 1986 and gave evidence that she informed him, at that time, that the property was approximately three-quarters of an acre in area. It is an indication of the haste with which the property was placed on the market that Mr and Mrs Dewsnap did not see the text of the advertisement until they read it for the first time in the newspaper, and did not sign the agency agreement, a form from the Multiple Listing Bureau of Victoria, until after the advertisement had been published. The advertisement was published in 'The Age' on 11 May 1985. Mrs Dewsnap said that she and her husband read it that afternoon and were surprised to note that the land was advertised as one acre. Mr Dewsnap also said that he was upset to read the advertisement stating the property to be of one acre as he had understood it would be advertised as 'approximately' one acre. He discussed the matter with his wife and they decided that they ought to make it clear to any prospective purchasers that it was less than one acre. Mrs Dewsnap said she telephoned Mr Crowle later that afternoon and pointed out the error; Mr Crowle agreed with her that the error should be pointed out to all prospective purchasers. On 12 May 1985 both Mr and Mrs Dewsnap executed a document authorising Evans to act as their agents. The document contains many spaces in which are inserted details of the property. When presented to Mr Dewsnap for execution the form had been fully completed and in the space headed 'Land (Approx.)' the description '1 ACRE' had been inserted. Mr Dewsnap stated that he did not complete any portion of the document, but did sign it. Evidence was also given by Mr Dewsnap that he read the form and discussed the area with Mr Crowle. Mr Dewsnap said that he informed Mr Crowle that he had initially purchased the property as one acre but that it had subsequently been surveyed as "0.7... acres". Mr Dewsnap said that Mr Crowle replied, "We will put it down as approximately an acre because we always advertise property as approximately" or words to that effect. Mr Dewsnap was 'dubious' about this course of action but decided to sign the document nonetheless. The conversation is said by Mr Dewsnap. to -~12- have taken place in Mr Crowle's office. Mr Dewsnap said that he did not discuss the previous day's advertisement with Mr Crowle as he believed that his wife had already raised the matter with Mr Crowle on the telephone. He went on to say that he took it that, if the property was re-advertised, Mr Crowle would correct the error by describing the area as 'approximate'. The document was then taken outside by both men and executed by Mrs Dewsnap who was waiting in their car with the children. Mrs Dewsnap said that when she signed the agency agreement she again mentioned to Mr Crowle that the property was approximately three-quarters of an acre. Mr Crowle agreed once again that it should be so specified to all prospective purchasers. When Mrs Dewsnap pointed out that the agency agreement described the property as '1 acre' Mr Crowle replied that that was approximate only. At the appointed time on 14 May 1985 Messrs Crowle and Forsaith together with Mr and Mrs Johnson arrived to inspect the Property. Mrs Dewsnap conducted the party through the house and then, once outside, discussed the area of the land with Mrs Johnson. Mrs Dewsnap said that she informed Mrs Johnson that the advertisement was incorrect and that the land was only three- quarters of an acre. Mrs Dewsnap could not recall if Mrs Johnson made a specific reply. Messrs Crowle and Forsaith were, according to Mrs Dewsnap, 'nearby' during the course of this conversation but did not take part in it. - 13 - At approximately 5.30 p.m. on that evening, Mr Dewsnap arrived home to find his wife conducting the visitors over the property. Mr Dewsnap was introduced and stayed outside with the others whilst Mr Crowle, Mrs Dewsnap and Mrs Johnson returned inside. Messrs Forsaith and Johnson discussed the kennels with Mr Dewsnap before, according to Mr Dewsnap, the conversation turned to the area and the position of the boundary fences. Mr Dewsnap gave evidence that Mr Forsaith inquired as to the area of the property, saying that 1t appeared smaller than one acre. Mr Dewsnap replied that the land was approximately three-quarters of an acre, but that it looked even smaller as the fences were inside the boundaries. Mr Dewsnap said that Mr Johnson was present during that exchange and within easy earshot. Mrs Dewsnap gave evidence that she mentioned the area of the land to Mrs Johnson again when they returned inside the house. She believed both estate agents were present at that time but could not recall if they overheard the conversation. The inspection concluded shortly after that. Mr and Mrs Johnson decided to purchase the property and on 31 May the deposit moneys were released to the Dewsnaps. Shortly after the release of the deposit moneys, Mr and Mrs Johnson arrived at the property one evening to take measurements. Mr and Mrs Dewsnap were on their way out when the Johnsons arrived. Mr Dewsnap said that he showed Mr Johnson the' survey pegs, which he had cleared of undergrowth that morning, and provided him with a copy of an old sketch plan showing the approximate position of the house andthe dimensions of the - 14 - property in feet and inches. Mr and Mrs Dewsnap then left the property and the Johnsons went about their measurements. Some time after 26 June 1985 the Dewsnaps were advised by their solicitor that Mr and Mrs Johnson had decided not to proceed with the purchase as they had believed the property to be of one acre but had now calculated it to be only approximately three-quarters of an acre. Mr Dewsnap said he was extremely surprised to hear of this development as the Johnsons had been informed by both him and his wife that the property was less than one acre. It is said by Mr Dewsnap that, at about this stage, the Johnsons made an offer to purchase the property for $10,000 less than previously agreed. Mr Dewsnap said he would accept only $500 less than the agreed price. It is not clear from the evidence when these negotiations took place, but it seems likely to have been early in July. EVANS' EVIDENCE Mr Crowle gave evidence that Mr and Mrs Dewsnap came to the Evans' Kallista office late on 9 May 1985. Mr Dewsnap informed him that he wanted to sell his property ina hurry as he had contracted to purchase another. Mr Crowle was told that the house was built of solid brick and that there was a current permit to keep six dogs. Mr Dewsnap also informed Mr Crowle that the area of the land was one acre. Mr Crowle said that he did not ask Mr Dewsnap the dimensions of the property. - 15 - Mr Crowle was adamant that nothing was said to him at that time about the area of the property being less than one acre and probably closer to three-quarters of an acre. In addition, Mr Crowle said that he did not tell Mr Dewsnap that it was the usual practice to advertise properties as being of an approximate area. However he admitted in cross-examination that it was normal practice to advertise in that fashion. The following day Mr Crowle inspected the property. Nothing was said to him about the area of the property and he saw no reason to question the area of 1 acre which had been stated. Mr Hildebrand, the proprietor of Evans' Kallista business said that, on Friday 10 May, Mr Crowle asked him to authorise an advertisement for placement in the following day's 'Age' newspaper. The advertisement was for Mr Dewsnap's property at The Patch. It was not normally Evans' policy to place an advertisement without written instructions from the vendor as_ to the details of the property; however Mr Crowle assured Mr Hildebrand that he had inspected the property himself and had arranged for the authority, the Multiple Listing Bureau form, to be executed by Mr Dewsnap on Sunday. The draft advertisement was approved and duly appeared on 11 May 1986 in the 'Dogs' section of the 'Age' newspaper. Mr Hildebrand gave some other interesting evidence. Concerning his firm's advertising policy he said, "Uniess we are told that a property is a precise area we would always advertise it as 'approximately' ." - 16 - He also said that he would not regard 'approximately one acre' as an accurate enough description of three-quarters of an acre. He would expect his employee agents to be able to estimate roughly the area of land when they saw it. Mr Crowle says that he completed the agency agreement (the Multiple Listing Bureau of Victoria form) by filling in the details of the property and then showed it to Mr Dewsnap on 12 May 1985. He went through the form with Mr Dewsnap and asked him if all the descriptions were correct. Mr Dewsnap made no comment about the statement on the form regarding the area. Mr Forsaith gave evidence that Mrs Johnson had telephoned him to inquire about the suitability of a property advertised in the Tooradin area by his office. Mr Forsaith was therefore aware of the Johnson's requirements and telephoned her on Monday 13 May to draw her attention to the advertisement for the Kallista property in the previous Saturday's edition of 'The Age'. Mrs Johnson said that she had noticed it and would be interested in inspecting it. Mr Forsaith duly rang Mr Crowle and arranged for the Johnsons to meet at Mr Crowle's office at 4.45 p.m. on the following day, 14 May. The group met as arranged and travelled to the property in Mr Crowle's car. Once at the property Mr Forsaith did not take an active role in conducting the inspection as it was unfamiliar to him. Rather he was content to follow the group and assess the property for himself. -17- Mr Forsaith gave evidence that he did not inquire as to the area of the land during the course of the inspection and that the subject was not mentioned to him or in his hearing. Moreover, Mr Forsaith said that at no stage did it occur to him that the property may have been anything other than one acre, as stated in the newspaper. Mr Crowle, however, gave evidence that during the course of the inspection of the external areas Mrs Dewsnap referred to the fences being inside the actual boundaries and that the land was closer to three-quarters of an acre than one acre. Mrs Johnson was present when that remark was made, and made no comment. It was the first time that Mr Crowle was aware that the property was not one acre in area. Mr Crowle said that he was surprised to hear Mrs Dewsnap''s comment, but it did not occur to him to repeat the comment to Mr or Mrs Johnson or later amend the details on the agency agreement. Mr Crowle says that he did not make any subsequent comment to the Dewsnaps about the apparent contradiction. At the conclusion of the inspection the group returned to Mr Crowle's office and then discussed the property, including the requirement of an unconditional contract. On 15 May 1985 a $500 holding deposit was paid by the Johnsons and, shortly after that, Mr Crowle went to their home, where they signed the Contract Note and the 3.32 Vendor's - 18 - Statement. Mr Crowle says that, on that occasion, no comment was made either by Mr or Mrs Johnson in relation to the area of the property. Between that time and 31 May, when the authority for release of deposit moneys was executed, Mr Crowle had several telephone conversations with either Mr or Mrs Johnson. Those conversations were about some complaints by them regarding the way another firm of estate agents was conducting the sale of the Kilsyth properties. The area of the property at The Patch was not mentioned. After 31 May the only other contacts between Mr Crowle and the Johnsons were several attempts to arrange a convenient time for measurement of the property. Mr Crowle said that at no stage did the Johnsons complain about the area of the land. THE CROSS-CLAIMS Evans has cross-claimed against Mr Dewsnap, stating that the advertisement was placed on the basis of particulars supplied by him and confirmed in the Multiple Listing Bureau of Victoria form, the agency agreement, which was executed by Mr and Mrs Dewsnap on 12 May 1985. In its cross-claim, Evans seeks an indemnity against the Johnsons' claim and contribution to the extent of that part of the applicants' claim and costs that may be ordered against it. - 19 - Mr Dewsnap has cross-claimed against Evans, stating that Evans was informed before publication of the advertisement that the area of the property was approximately three-quarters of an acre. Mr Dewsnap has also cross-claimed against the Johnsons, alleging that they breached their contract by not paying the balance of the purchase price. The amount of Mr Dewsnap's damages, claimed from the Johnsons, had been agreed at $9891.05. FINDINGS I have not found it easy to resolve the obvious conflicts in the evidence of the various witnesses. I did not find any of them, from their demeanour in the witness box, to be unworthy of belief or, for that matter, to be incapable of error or of exaggerating their confidence in their recollections. I must therefore decide this case very largely on the inherent probabilities of the various accounts and the extent to which they corroborate each other. IT accept, for example, that the difference between one acre and three-quarters of an acre would have been important both to the Johnsons and to Mr Hildebrand and his agents. I can understand it seeming less important to Mr Dewsnap because 'one acre' was the description given to him at the time of his purchase and the difference, when he discovered it, did not concern him greatly. I find that Mr Dewsnap did tell Mr Crowle, on9 May 1985, at the Kallista office, that the area of the property was 1 - 20 - acre. I also find that Mrs Dewsnap did not tell Mr Crowle on 10 May that the property was about three-quarters of an acre in area. There was no reason for Mr Crowle to insert an inaccurate figure in the advertisement, and the draft agency agreement, if he had been told the truth. The difference in the figures was clearly significant. For the same reason, and because it does not march well with later events, I am unable to accept the Dewsnaps' evidence that they were concerned when they saw the advertisement, resolved to make the position clear to all potential purchasers, and rang Mr Crowle about it. This evidence is contradicted by Mr Crowle and is not consistent with the signing the following day of the agency agreement which repeated the error. I cannot believe that Mr Crowle would have persisted in leaving the description in that document as "approx ONE ACRE" when, according to them, both Mr and Mrs Dewsnap were at pains to point out to him that this was not accurate. The first point at which Mr Crowle does corroborate Mrs Dewsnap's evidence is when he says that she did mention the true area of the land in the course of the inspection on Tuesday 14 May. However it is noticeable that in his evidence-in-chief he said, "Mrs Dewsnap said quite clearly in my hearing, and I would have thought Mrs Johnson's hearing, because she was standing relatively close to me, only a matter of a couple of feet, that she pointed out the fences and said, 'The fences are actually inside the boundary and they were built inside the boundary because of trees being on the boundary' and they saw no reason to knock down the trees and -.-. she said, 'The block is actually closer to three quarters of an acre than an acre." - 21 - Having observed her in the witness box, I find it hard to believe that, 1f Mrs Johnson had heard and correctly understood what was being said, she would not have made some comment or asked for more details. But Mr Crowle and Mrs Dewsnap agreed that they could recall no reaction from Mrs Johnson. Mrs Dewsnap said that she mentioned the area of the land to Mrs Johnson again, in the presence of the two estate agents, after they went Dack into the house. She received no corroboration from either agent. Mr Dewsnap said that, after he came home, he discussed the area with Mr Forsaith in the hearing of Mr Johnson. Mr Forsaith says that he heard no reference to the area of the land at any time on that day. This of course provides some corroboration for the Johnsons' denial of any reference to the subject, although it seems that the five or six persons at the house were not in one close group at any stage of the discussions. It is significant that, after the Johnsons complained formally about the area of the land, the Dewsnaps' solicitors took instructions from their clients and wrote that Mrs Dewsnap had said the property "would be closer to three quarters of an acre as she understood it. This conversation took place in the presence of Mrs Johnson and two agents...". There was no reference to a second statement by Mrs Dewsnap or any statement by Mr Dewsnap. Iam satisfied that if anything was said in Mr or Mrs Johnson's presence on that day, concerning the area of the land, they either did not hear it or, perhaps, in Mrs Johnson's case, were confused by a reference to the boundaries and did not realize - 22 - that the area on the title (as distinct from the area within the fences) was being spoken of as 'closer to three-quarters of an acre'. Certainly there was no deliberate attempt by the Dewsnaps or their agents to correct the misleading advertisement. If this In fact I find it hard to reconcile Mr Crowle's evidence of hearing Mrs Dewsnap's statement with his failure to follow it up in any way either with the Dewsnaps or the Johnsons. For this reason, and given the evidence of Mr Forsaith and the Johnsons, I am not satisfied that anything at all was said, during the course of the inspections, about the area of the land. It was not suggested that anything was said to the Johnsons after that inspection, and before they signed the contract and paid the deposit, about the land area. The Johnsons did not seem to me to be the type of people who would, having sold their house, cancel the purchase of an attractive property which suited them, and go to live in a caravan (as they have done) without a very good reason. Still less would they be likely to cancel their purchase on the basis of a fabricated account of the information given to then. Everything in their behaviour has been consistent with a genuine intention to complete the purchase until they found that the area of land was some 25% less than they had been led to believe. - 23 - The only suggestion as to why they might have gone back to the advertisement error as an unmeritorious excuse to escape from the contract, was that they were getting worried about their failure to sell their Kilsyth properties. However it 1s clear that they were always prepared to contemplate bridging finance, they agreed on 31 May to release the deposit moneys, and they signed contracts for sale of their Kilsyth house and land block on 24 June and 2 July respectively. Their intention to rescind the contract was set out in a solicitor's letter dated 26 June, and it was not until 30 July that the Dewsnaps' solicitors finally accepted that the contract was at an end. Iam satisfied that the applicants were misled and deceived by the conduct of the second respondent in informing the first respondent that the area of land involved in the sale was one acre, and by the conduct of the first respondent in advertising the land as one acre without making proper inquiries of the vendor or checking the estimate after seeing the land. In view of the triangular shape of the land, and the fact that the fencing reduced its apparent area to well under three-quarters of an acre, I think a careful agent should have queried the round figure of one acre which the vendor had given. The first respondent was not a mere conduit for the information in this case {see Yorke v Lucas (1985) 61 ALR 307 at 309). The applicants are therefore entitled to judgment against both respondents in the sum of $9250 with costs. No other relief was finally sought. The second respondent's cross-claim against the applicants is dismissed. So far as the cross-claims - 24 - between the respondents are concerned, I think that Mr Dewsnap's knowledge of the true facts has to be weighed against a degree of professional carelessness shown by Mr Crowle, the servant and agent of Evans. I am confident that, had he questioned the dimensions of the land as he should have done, at least after seeing it, he would have been told the true position and the misleading advertisement would not have appeared in the form it did. In my view, justice would be done if the respondents were each to bear their own costs and to contribute to the applicants' damages and costs in the proportion of three quarters from the second respondent and one quarter from the first respondent. I certify that this and the twenty-three (23) preceding pages are a true and accurate copy of the Reasons for Judgment herein of The Hon Mr Justice Woodward i Associate Dated: 19 November 1986 a ~ 25 - Date of hearing: 1-3 October 1986 Counsel for the applicants: Mr J.A. Riordan Solicitors for the applicants: Messrs Norman, Shankly & Hamilton Counsel for the first-named respondent: Mr J.J. Hockley Solicitors for the first-named respondent: Messrs Norris, Coates and Hearie Counsel for the second-named respondent: Dr J.F. Bleechmore Solicitors for the second-named respondent: Messrs Hicks & Oakley