| ' _ SUDGMENT No. SIL..7.372.. 4 ? CATCHWORDS TRADE PRACTICES - Consumer protection - Misleading or deceptive conduct - Contract for the sale of land - Whether representations made to purchaser concerning approval by local authority of town house development on land - Whether contract effectively rescinded - Measure of damages - Interest up to judgment. Trade Practices Act 1974 (Cth), ss.52, 82, 87 Federal Court of Australia Act 1976 (Cth), s.51A KETILLION PI¥Y. LTD. v. TABAH HOLDINGS PTY LTD & ANOR m™ No. G 196 of 1986 Neaves J. 18 September 1987 Canberra , GQUAT OF FEDER ISTRALIA PRINCIPAL noes Top ee a . ae cep ee ee eee oor 2 et ene tee epee reer nee = ae 8 IN THE FEDERAL COURT OF AUSTRALTA ) ) QUEENSLAND DISTRICT REGISTRY ) No. G 196 of 1986 ) ) GENERAL DIVISION BETWEEN: KETILLION PTY. LTD. Applicant AND: TABAH HOLDINGS PTY. LTD. First Respondent XATON NOMINEES PTY. LTD. trading as QUEENSLAND FINANCE & LAND Second Respondent MINUTE OF ORDER JUDGE MAKING ORDER : Neaves J. DATE OF ORDER WHERE MADE THE COURT: 1. Ni ° 18 September 1987 Canberra Declares that the contract made between the applicant and the first respondent on 26 June 1986 was rescinded by the applicant at the time of the receipt by the solicitors for the first respondent of the letter dated 8 December 1986 addressed to them by the solicitors for the applicant. Orders that there be judgment for the applicant against the respondents in the sum of $27,012. Orders that the respondents pay the applicant's costs of the application. ote: Settlement and entry of orders is dealt with in Order 36 f the Federal Court Rules. Pane ee Soe pes eee wes omey + ay é IN THE FEDERAL COURT OF AUSTRALIA ) ) QUEENSLAND DISTRICT REGISTRY ) No. G 196 of 1986 ) ) GENERAL DIVISION BETWEEN : KETILLION Pry. LTD. Applicant AND: TABAH HOLDINGS PTY. LTD. First Respondent XATON NOMINEES PTY. LTD. trading as QUEENSLAND FINANCE & LAND Second Respondent CORAM: WNeaves J. DATE: 18 September 1987 REASONS FOR JUDGMENT On 26 June 1986 a contract was made between Tabah Holdings Pty Ltd ("Tabah") as vendor and Ketallion Pty Ltd ("the applicant") as purchaser for the sale, for the consideration of $180,000, of certain vacant land, being Lot 6 on Registered Plan No.109918, County of Stanley, Parish of Bulimba, City of Brisbane also known as 236 Wishart Road, Wishart and 236 Wishart Road, Mansfield. The contract was never completed, the applicant purporting, by letter dated 8 December 1986 from its solicitors to the solicitors for Tabah, to terminate the contract on the ground that certain misrepresentations had been made by Tabah or its agent, Xaton Nominees Pty Ltd trading as Queensland Finance & Land ("0.FP.& Le"). ree ? * Lome ote7 ma, > By a proceeding commenced in this Court on 18 December 1986 against Tabah and Q.F. & L. as respondents, the applicant secks The (a) damages against both respondents pursuant to s.82 of the Trade Practices Act 1974 (Cth) ("the Trade Practices Act") for contraventions of Part V of that Act; (b) an order against Tabah under s.87 of the Trade Practices Act declaring the contract to be void; {c) an order against both respondents under s.87 of the Trade Practices Act directing the respondents to refund to the applicant the deposit of $9,000 paid under the contract by the applicant to QO.F.& L. together with accretions thereon; and (d) damages against both respondents for fraud and deceit, for negligent mistatement and for breach of collateral warranties. claims for damages for negligent mistatement and for breach of collateral warranties were not pursued at the hearing. In the issue of "The Courier-Mail" newspaper published on Saturday, 3 May 1986 the land was advertised for sale in the following terms: "UNIT SITE - 40 x 2 BEDROOM - $210,000 Located in the Upper Mt Gravatt area, this site is ideally situated handy to all sporting facilities, express bus service to city, walk to shops. Phone 2097299 ah 2872997 QFL Marketing." eas Seen enews oe oe The land, as appears from the plan reproduced below, is basically rectangular in shape with a frontage of approximately 16.725 metres to Wishart Road which has an east-west orientation. The western boundary of the land is approximately 343.5 metres in length. The land is approximately 50.5 metres wide except that, at the Wishart Road frontage, the width is much less because two residential blocks, each approximately 16.8 metres by 40.25 metres, have been excised. The eastern boundary of the subject land is thus approximately 40.25 metres shorter than the western boundary. The area of the land is 15977 square metres. Three streets, Glasford Street, Banning Street and Alberon Street, each having an east-west orientation, abut the eastern boundary of the land. The large blocks of land adjoining the western boundary of the subject land, being Lot 3 on Registered Plan No.109869 and Lot 3 on Registered Plan No.113535, are and were, at all relevant times, vacant land. The zoning of the subject land under the town plan promulgated under The City of Brisbane Town Planning Act 1964-1985 was, at all relevant times, "Residential 'A'". The large blocks adjoining the western boundary were zoned as "Future Urban". The plan to which.reference has been made is as follows: _—-—. a on wee pee OAD BROADWATER Qsrooe ' aroer Pi tr a4 VO UOT od & WASHART. LW ELT AS AAT Pol ROAD 23728 * e. There 1s evidence before the Court that in May 1981 an application by a company called F and M Investments Pty Ltd for consideration in principle of a proposed attached housing development on the land in question was made to the Brisbane City Council and that in June 1981 the company was informed that the proposal was opposed by the planning policy advisory committee of the Council. The evidence also discloses that in September 1981 an application had been made to the Council on behalf of a company called Stay Enterprises Pty Ltd for approval to subdivide the subject land into sixteen residential blocks. That proposal was approved by the Council in August 1984, the approved plan of subdivision providing for the extension of Glasford, Banning and Alberon Streets to the western boundary of the subject land. Before proceeding further 121t should be mentioned that, in the~ case of land zoned as "Residential 'A'", a proposal to build town houses or home units, referred to in the relevant town planning provisions as attached housing, would require formal consent approval of the Brisbane City Council. However, a developer, before making a formal application for such approval, could apply in a less formal fashion, though usually in writing, for what is referred to as "consideration in principle" of the proposal. A much larger fee is payable to the Council in respect of a formal application. It appears that a response to an application for consideration in principle might be expected in 6. approximately four weeks while a response to a formal application for consent approval would normally take at least eight weeks and, in some cases, considerably longer. A favourable response to an application for consideration in principle would not bind the Council. It would amount only to an expression of view by the Planning Policy Advisory Committee of the Council as to the recommendation it might make if a formal application for consent approval of the development were made. On 22 April 1986 (that is to say, before the land was advertised for sale on 3 May 1986) the Council received from Keilor Fox & McGhie Pty Ltd, acting on behalf of Tabah, a letter dated 14 April 1986 reading as follows: "We are the surveyors for Tabah Holdings Pty Ltd, the registered proprietor of land described as Lot 6 on R.P. 109918. There currently exists an approval to subdivide this land into 17 EsicJ residential allotments, as per the enclosed copy of the approved proposal plan. However, our client wants to investigate the possibility of developing the site as an attached housing devélopment. We note that the site is of sufficient area for group title development with Residential Buildings Type Tl. However, we also note that if the whole site was developed it would effectively 'land lock' Lot 3 on R.P. 113535 and Lot 3 on R.P. 109869. It would be our proposal that Alberon, Banning and Glasford Streets still be extended through our client's land so that it will still be possible to subdivide these lots to the west. However, by dedicating these roads, we would be creating undersized lots for Tl type development. However, discussions with a member of your planning staff indicated that the Board did have the power to relax this area requirement in special circumstances. v yee st cine ee ee ee ee he On behalf of Tabah Holdings Pty Ltd, we seek your Comment in Principle on the likelihood of success of a Consent Use Application to develop Lot 6 on R.P. 109918 as an attached housing development. Please find enciosed our client's cheque for $80 being the required fee." It appears that the Council required the consent of the registered proprietor of the land before taking action upon the letter dated 14 April 1986. That consent was given by Tabah by letter dated 8 May addressed to the Council. There was no formal response to the letter dated 14 April 1986 until 29 July 1986 when the Council, by letter of that date, replied to Keilar Fox & McGhie Pty Ltd. Although out of chronological sequence, it is convenient to set out the text of the reply at this point. It reads: "T vefer to your letter dated 14th April, 1986, wherein you requested consideration in principle in relation to a proposal to use the land and erect a_building on the land at 236 Wishart Road, Wishart, described as Lot 6 on Registered Plan No. 109918, Parish of Bulimba, containing an area of 1.5977 Hectares, for the purpose of attached housing. The site was located ina Residential 'A' Zone. Please note that the Planning Policy Advisory Committee carefully considered this matter on 23rd duly, 1986, and, I regret to advise, formed the opinion that it would oppose such a proposal if a formal application were lodged seeking approval as the site would be divided into allotments which would be far less than the minimum requirement of 10,000 square metres for such a development. The proposal was considered to constitute Attached Housing." wae ne oe ow een ae hee 8. Gary Michael Bell, the managing director of the applicant, gave evidence that, having seen the advertisement for the land on 3 May 1986, he telephoned one of the numbers there given and spoke to a person who identified himself as Bruce Moore. He arranged, he said, to meet Mr Moore on the following day at a garage on the corner of Newnham Road and Wishart Road, Mansfield, a short distance from the subject land. He said he met Mr Moore as arranged. Mr Moore introduced himself as a real estate salesman with 0.F.& L. Marketing and said that the owner of the land was Q.F.& L. Mr Moore took him to the site. They walked a short distance on to the land which was overgrown with vegetation. From where they were standing the boundaries of the land could be discerned and Mr Moore pointed these out. Mr Bell said he asked Mr Moore about the three streets abutting the eastern boundary of the land. According to Mr Bell, Mr Moore said that enquiries had been made of the Brisbane City Council in respect of those streets. Mr Moore referred to the approved "Residential "A'" development under which the streets were to be extended across the land. Asked what would happen to the streets in a town house development, Mr Moore is said to have replied that enquiries concerning the streets had been made of the Council and the Council did not require that they be extended on to the property: that in a town house development the roads could terminate at the eastern boundary of the land. According to Mr Bell, Mr Moore also said that a previous purchaser of the land had been in the process of we ep ee obtaining the approval of the Council for a town house development on the site but that the purchase had not proceeded because the purchaser's company encountered 9. financial problems. Mr Bell said in evidence: Mr proposal was for forty town houses. what precisely was "IT cannot remember whether he said he or Q.F. & L. - he or his company in other words - made enquiries to Council as to that previous development and Council had no objection to giving full formal approval to that application if the previous applicant had continued with it. And I asked for a letter to that effect - a Council letter to that effect - and he said only the previous - that he had been told by Council that only the applicant was able to be given such a letter and, in fact, since the applicant had not continued with the purchase, the letter never eventuated. " Bell also said that Mr Moore had told him that the Bell replied: The reference to a "verbal" approval having been given is no doubt to be taken to refer to an approval given orally "For a-town house development - exactly that. And in fact he said that - well, after commenting that his company, or whatever, was associated with ownership of the land, that they had made inquiries of the Brisbane City Council and had been given verbal approval in principle fora town house development ...." rather than in writing. the price of the land. Mr Bell said there was a discussion concerning Asked did Mr Moore say the previous purchaser's application, Mr Speaking of Mr Moore, Mr Bell said: woes y en en koe - ek PET en ne en sere ste cores owas 10. "He was not totally au fait with the price; there was a price listed in the paper; he knew there was a second much higher price relating to full formal approval but he was not aware of it, which led us directly to the documentation which he said did have the information involved, which he would send." Mr Bell further said that Mr Moore had informed him that he had only recently received documentation about the property, that he did not have it at home, that it was at the office and that he would send it to him (Mr Bell) by post on the following day. Mr Bell said he received certain material through the post on the following Wednesday, 7 May 1986. One of the documents received (Exhibit C) is headed in bold type "Queensland Finance and Land". After setting out some details of the property, it continues: "COMMENTS : NEARLY 4 ACRES FULLY APPROVED SUBDIVISION FOR 16 LOTS. LOCATED IN THE HEART OF MANSFIELD WITHIN EASY WALKING DISTANCE TO SHOPS, HOTELS, PUBLIC TRANSPORT, 'AND ONLY MINUTES FROM GRIFFITH UNIVERSITY AND CHANDLER SPORTING COMPLEX. WITH THE GREAT SHORTAGE OF RESIDENTIAL LOTS WITHIN MINUTES FROM BRISBANE CENTRAL, AND WITH EASY ACCESS TO ALL FACILITIES, THIS ACREAGE OFFERS GREAT INVESTMENT POTENTIAL. RESIDENTIAL LOTS OF THIS QUALITY AND LOCATION ARE SELLING FROM $32,000.00 A LOT, UP TO $45,000.00. {1) FULLY ZONED RESIDENTIAL "A" (2) 50% OF SURVEY COMPLETED AND PAID (3) ENGINEERING DRAWING COMPLETED AND PAID FOR. (4) TENDER FOR CONSTRUCTION CAN BE CALLED NOW. a a . - ena aan weeryeee « NYT ENE DE pee oe mee: re 7 il. FUTURE 40 X_2BR TOWN HOUSE SITE THE VENDOR HAS MADE INQUIRIES TO THE BRISBANE CITY COUNCIL TOWN PLANNING SECTION FOR THE CONSENT USAGE OF THE LAND FOR TOWN HOUSES. IT WAS INDICATED BY COUNCIL THAT THERE WOULD BE NO OBJECTION IN GIVING CONSENT FOR TOWN HOUSES (40 X 2 BR), HOWEVER, SUCH CONSENT COULD TAKE UP TO 12 WEEKS FOR THE NECESSARY DOCUMENTATION AND COMPLETION OF THE COUNCIL PROCEDURES. ON RESEARCH INTO WHAT TOWN HOUSE SITES ARE AVAILABLE AND WHAT PRICES WERE OBTAINED FOR SUCH SITES, IT WAS FOUND THAT DEPENDING ON LOCATION AND CONVENIENCES FROM $9,500.00 UP TO $11,500.00 PER UNIT WAS THE VALUE. THE VENDOR HAS PRICED THIS INVESTMENT PROPERTY AS FOLLOWS. $210,000 90 days unconditional $350,000 120 days subject to council approval" The other documents were a plan of the area showing the subject land as vacant anda plan showing the approved subdivision of the land into 16 residential lots. According to Mr Beli, on Monday, 5 May 1986, he spoke with George Tipping who is a qualified quantity surveyor and a registered builder and carries on business as a development consultant under the name Capital Projects. He said he told Mr Tipping, who was to be engaged by the applicant as the project manager for the proposed development of the land, of the conversation he had had with Mr Moore. He subsequently sent to Mr Tipping the documents he had received through the post. Mr Tipping said in evidence that Mr Bell telephoned him on the afternoon of Sunday, 4 May 1986, after he had pee pee oe eee arene ee eet wes - 12. been to the land and asked him, Mr Tipping, to have a look at the site. On the following day Mr Tipping went to see the land and subsequently again spoke to Mr Bell, saying that the land "looked rather interesting". A day or two later Mr Bell gave him copies of the documents he had received from Q.F.& L. Mr Tipping said that Mr Bell told him of his, Mr Bell's, conversation with Mr Moore. Mr Bell said that Mr Moore had told him there was a "verbal" approval for the development of the land by the erection of 40 x 2 bedroom town houses and that the three streets abutting the eastern boundary of the land "did not have to come into the development of the property unless the applicant wanted them to come into the development of the property". Mr Bell also said that Mr Moore had spoken of an earlier application for approval for 40 x 2 bedroom town houses that had been made by a company intending to purchase the land but that the purchase had not proceeded. Mr Tipping suggested to Mr Bell that there should be a check of the zoning of the land and of the records relating to the land held by the Valuer-General and the land titles office. Mr Tipping said that during May 1986 he carried out those checks as well as a rates search at the Brisbane City Council. He also consulted the Brisbane City Town Plan and read the appropriate section concerning the circumstances in which approval might be given for the development for attached housing of land zoned "Residential 'A'". Mr Tipping also enquired whether approval had been given for town house development on the site but was informed, as he ae é 13. had expected, that only the applicant for such approval would be given that information. Mr Tipping advised Mr Bell that, although his experience was that, if approval in principle had been given, formal approval would follow, the applicant should not sign an unconditional contract as Council approval to the development in contemplation might not be given. As has already been mentioned the contract was entered into on 26 June 1986. In accordance with its terms a deposit of $9,000 was paid by the applicant to Q.F.& L. as stakeholder. The contract (cl1.30) provided for the deposit to be paid into an interest bearing trust account in the name of the stakeholder with a bank. Clause 30 also provided: "The parties hereto hereby further direct the stakeholder to pay as soon as is permissable Csicld by law:- (i) the deposit to the vendor; and (ii) the interest accrued thereon to the purchaser. Provided however that should the sale and purchase hereunder not be completed by reason of the default of the vendor all deposit moneys and all interest accrued thereon shall be paid to the purchaser and should the sale and purchase hereunder not be completed by reason of the default of the purchaser all deposit moneys and all interest accrued thereon shall be paid to the vendor. In the event that this contract is terminated for any reason not occasioned by the default of either the vendor or the purchaser all deposit moneys and all interest accrued thereon shall be paid to the purchaser." cee yom aco me ' 14. On 9 July 1986 Capital Projects, acting on behalf of the applicant, lodged with the Brisbane City Council an application for consent approval to the development of the land for forty-five attached one and two storey houses. Mr Tipping gave evidence that a decision was taken in discussion with Mr Bell that a formal application for consent approval should be made rather than an application for consideration in principle. Mr Tipping said one of the factors contributing to this decision was that, on the information given to Mr Bell by Mr Moore, an approval in principle to a similar development had already been given. The fee paid on that application was $3,240. Mr Tipping was informed orally on 30 August 1986 that the application had been refused and this was confirmed by letter addressed by the Council to Capital Projects. Although it bore date 25 August 1986, the letter was, according to Mr Tipping's evidence, received sometime after 30 August 1986. The letter read: "Reference is made to your application for permission to use the land at 236 Wishart Road, Wishart, described as lot 6o0n registered plan No.109918, parish of Bulimba, and to erect and use buildings thereon, for the purpose of attached housing. In reply thereto, I regret to inform you that the Council Registration Board, after carefully considering all relevant aspects, has decided not to grant its consent to the application, as it is considered that the development as proposed would prejudice the orderly development of adjoining land in the Future Urban Zone; the provision of roads necessary to provide access to those lands would reduce the site area to less than 10,000 square metres; and it is considered that a relaxation of the minimum area requirement could not be supported in the circumstances. open rae mere es Gee is. In compliance with the provisions of Section 21 of the City of Brisbane Town Planning Act, copies of the relevant Sections of that Act accompany this letter of notification. In pursuance of Section 21A of the Act, the names and addresses of the objectors are attached hereto." Following a discussion between Mr Bell and Mr Tipping and a consultation with a town planner, Mr V. Feros, and his assistant, Mr C. Higginson, Tabah lodged an appeal against the Council's decision. That appeal was ultimately abandoned. An amended application was lodged for approval to erect thirty-two town houses on the site but that, too, was rejected. Notice of that rejection was given to Mr Tipping orally by an officer of the Council on 4 December 1986. According to Mr Tipping the officer stated that the Traffic Department of the Council would not allow access to the site from Wishart Road and insisted that Glasford, Banning and Alberon Streets traverse the subject land so as to service the land adjoining its western boundary. Mr Tipping reminded the officer of the Council that an approval in principle had already been given to a similar development to which the reply was given: "There cannot be an approval in principle: there could never have been an approval in principle given." It should be mentioned that the date for completion, as set out in the contract dated 26 June 1986, was three calendar months from the date of the contract. That date was, by consent and subject to certain conditions, 16. extended from time to time. The date finally agreed for completion was 19 November 1986. Completion did not then take place and on 2 December 1986 Tabah commenced proceedings in the Supreme Court of Queensland against the applicant for specific performance of the contract. By agreement between Tabah and the applicant, Tabah has not proceeded with that action pending the hearing and determination of the present proceeding in this Court. By letter dated 8 December 1986 from the applicant's solicitors to the solicitors for Tabah, the applicant purported to rescind the contract. That letter is in the following terms: "We refer to previous correspondence and to our recent telephone conversations and especially to our letter of the 19th September, 1986 to your client. We advise that our client has now been advised verbally by the Brisbane City Council, with written confirmation to follow, that it is not possible to erect units or town houses on the site and that any development of the property will be conditional upon the three side streets being continued through the relevant property. We confirm our previous advices to your client that we had been instructed by our client that prior to our client entering into the Contract of Sale our client had been led to believe by your client or its agent that approval in principal Csic] had been obtained in respect to the property for the erection of forty (40) units/town houses and that subsequent development would not necessarily involve the three side streets unless the developer so required. We confirm that our client has at all times been negotiating with the Brisbane City Council to allow it to develop the property by the erection of town houses and you and your client were well aware of this. wt ge rep re a rt oe 17. Our client terminates the contract on the grounds of misrepresentation and requires a refund of the deposit paid together with all interest accrued on the deposit up to the 30th September, 1986." Mr David Newby, a town planner in the employ of the Brisbane City Council, gave evidence that he had searched the records of the Council and was unable to find any record of an approval in principle, either oral or in writing, for the development of the subject land for attached housing having ever been given. He agreed that an officer of the Council could express a personal opinion to an applicant for consideration in principle of a development proposal and that the giving of the opinion would not necessarily be recorded on the Council's records. He said that his searches had revealed that the only applications made to the Council for approval of town house development on _ the subject land were the application of F and M Investments Pty Ltd in May 1981, the application on behalf of Tabah on 22 April 1986 and the application by Capital Projects on behalf of the applicant on 9 July 1986. Mr Newby also said that he had been unable to find anything in the Council's records to indicate that the Council or an officer of the Council had said that development of the subject land need not involve the extension across the land of Glasford, Banning and Alberon Streets or that the Council or an officer of the Council had ever stated that approval to a town house development on the site would be granted. Mr Moore gave evidence on behalf of the respondent. He said that Mr Bell telephoned him on Sunday, 4 May 1986, sey eo 18. saying that he wished to look at the land which had been advertised. Mr Moore said he arranged to meet Mr Beil at the site later that morning and that he did so. According to Mr Moore, Mr Bell asked whether any application had been made for town houses for the site to which Mr Moore replied: "A purchaser before had made application but, you know, it never went through with the contract." He said he told Mr Bell that "he would have to make application himself to find out". In his evidence in chief, Mr Moore said that, at the time of his conversation with Mr Bell, he believed that a purchaser had made application for approval for a town house development. He said that the basis for that belief was that a brokerage office at Beenleigh (Beenleigh First National Real Estate) had submitted to Q.F.& L. through him a contract for the purchase of the land and that the manager of that office, who had been dealing with the purchaser, had said that such an application had been made. In cross-examination, Mr Moore identified the source of his knowledge as Mr Brian Flegler. He said that Mr Flegler told him that the purchaser "was applying to Council" for approval. Mr Moore agreed that, based solely on that information, he had told Mr Bell that a previous purchaser had applied to the Council for approval of a town house development. ase ene me ao oe oe or eyes ¢ 19. In his cross-examination, Mr Moore reiterated what he had said in his evidence in chief, namely that he did not say anything to Mr Bell about the outcome of the previous purchaser's application to Council. His attention was directed to the answer given to one of the interrogatories (No.10) administered to the respondents. That answer stated that on or about 4 May 1986 Mr Moore believed that, if a previous purchaser had pursued an application for approval of a town house development on the land, such approval would have been granted by the Brisbane City Council and that the basis for that belief was information given to Mr Moore by another real estate agent not in the employ of either of the respondents. Mr Moore was unable to explain the contradiction between that answer and his evidence except to say that he had been asked the question to which that answer was given and that he had said that he had no such belief. Mr Moore was also asked to explain why, in relation to Interrogatory No.11 administered to the respondents, the answer was given that on or about 4 May 1986 Mr Moore believed that a previous prospective purchaser could have obtained written confirmation from the Brisbane City Council that it consented to approval of a town house development on the land and that the basis for that belief was information given to Mr Moore by another real estate agent not in the employ of either of the respondents. Mr Moore denied that he had any such belief at the time and was unable to say how the answer came to be given. hee = eee ete weer 20. Mr Moore denied that, at the time of the discussion with Mr Bell, he had any knowledge whether the Brisbane City Council had given approval in principle to the development of the property by the erection of town houses or whether the Council required any development to involve the extension of the three streets abutting the eastern boundary of the land. He said that at the time he had no belief one way or the other as to those matters. In relation to the three streets abutting the eastern boundary of the land, Mr Moore said Mr Bell asked whether they ran through to which Mr Moore replied: "Well, as far as I know, that is where they went to", meaning that they stopped at the boundary. Mr Moore's evidence was that he had with him at the time the listing document a copy of which he subsequently sent by post to Mr Bell. He said he did not give Mr Bell a copy at the time and, when asked why not, he said: "Oh, we just - we never give out plans on the day until you sort of find out a bit about a person and it was the only one I had." In cross-examination he said that he showed the document to Mr Bell on the site and Mr Bell read it briefly, mainly looking at the prices and the plan at the back. He denied that he told Mr Bell anything different to what was on the listing document or that he qualified in any way what was there recorded. rr re eee Se Gr oper ' 21. Mr Moore also said, contrary to Mr Bell's evidence, that he did mention to Mr Bell the two prices set out at the foot of the listing document. In cross-examination, Mr Moore agreed that he had been asked by Mr Bell whether he had any further information relating to the property to which he replied that "We could supply further information if he wanted it." He also said that he told Mr Belli that he had further documentation from Q.F.& L. concerning the land which he could provide to him. Later, he denied that he had said he could provide further documentation and said that he had informed Mr Bell that he, Mr Bell, could obtain further information concerning the land by speaking to an officer of 9.F.& L. He agreed that the only documents sent to Mr Bell were the listing documents (Exhibit C). Reference has already been made to this document. Mr Moore's evidence concluded with a statement that the meeting on the site lasted for 10 to 15 minutes. He summarised what had occurred at the meeting between himself and Mr Bell by saying that they introduced themselves and shook hands and they stood on the top section of the land near Wishart Road and had a look where the boundaries of the land were. He continued: "You could see most of the site from that high area. It was fairly overgrown at the time. That is probably why he did not want to walk it, and just talked about - he had a look at the listing, wanted a copy of the listing, which I could not give him at the time because 1t was the only one ~e 22. I had; went - with the listing where we stood you could see the boundaries, where the streets run into it, and just talked a little bit about it; that it was originally a subdivision beforehand, went through the prices, and then just wanted that information sent up to him on the listing. And I said if you want any more information on it at all I can get it through the company." Mr Domenico D'Alessandro, a registered professional engineer, also gave evidence on behalf of the respondents. He said that in late 1985 or early 1986 he had been engaged by Tabah to undertake the design works, including the preparation of working drawings, for the roads, water supply, storm water, sewerage and drainage on the land appropriate to the approved subdivision of the land into 16 residential lots and the obtaining of the approval of the Brisbane City Council thereto. In the course of doing this work, Mr D'Alessandro said it occurred to him that the land was suitable for town house development. With the approval of Mr John Michael Haseler, the managing director of the Q.F.& L. group of companies, he investigated the possibility of obtaining approval to such a development. He said he approached a plarining officer of the Brisbane City Council with whom he had had previous dealings, but whom he could not name, and discussed the proposal that the land be developed as a site for town houses. He did not, however, nominate any particular number of town houses. According to the witness, the officer said that because of the nature of the land "he could see that it would be possible that the Council would grant its consent to that type of development". The witness said he suggested to the officer of the Council that the three existing streets that led into 23. the property on its eastern boundary "would be better off cut off there and if required they could be cul-de-sacs". The officer said that the streets would need to go through the subject land to give access to the blocks to the west but that the position might be different if those blocks were also to be developed for town houses. Mr D'Alessandro said he reported to Mr Haseler that there was "a good possibility" that a town house development could go ahead. He told him that he had spoken to a planning officer of the Council and that "it would be possible to get approval for the town houses" and that he had "an indication from a planning officer of the Council" to that effect. His evidence was that he would not have said that there would be no objection from the Council to giving consent to town houses - that he would have said "that the reaction of the planning officer was favourable". He said he also told Mr Haseler that the possibility of obtaining consent would be increased if "we could combine the subject land with the blocks adjoining to the west". Mr Haseler gave evidence that late in 1985 or early in 1986 Mr D'Alessandro told him that, as a result of a discussion he had had with an officer of the Council, "we would stand a very good chance of getting consent usage on the land for approval to use for town houses". According to Mr Haseler, Mr D'Alessandro indicated approximately 40 x 2 bedroom town houses. In cross-examination, he agreed that he had been told by Mr D'Alessandro that an officer of the — ey ree ae Council had unformed him that there 24. the Council would 'approve town houses. He added: "As a matter of fact he told me that he had been speaking to an officer, a planning officer, of the Council and he did, when he discussed it with me, indicate the opinion of Council." He also gave the following evidence concerning discussion with Mr D'Alessandro: "Oo, Mr Haseler He did not say that there would be no objection from the Council to giving consent to the development by erection of 40 town houses, did he? In his discussion with me he was very positive about Council giving us such a consent, such an approval. seas He did not say to you that there would be no objection in the Council giving consent to the development by erection of 40 two-bedroomed town houses? My recall of that - I believed he did. I suggest to you that all he said was that there was a possibility - perhaps a good possibility - that the Council could give consent to town houses. Is not that a truer statement of what he said? I think that somewhere between the two, but I have to answer the question - I would have thought that that does not sum it up. I would have believed, on my recall of the matter, it was substantially more positive than-that."" was a possibility that his also said that he had been personally involved in the preparation of the listing document (Exhibit C) and that the reference therein to town houses and what ae cn pene ee cee oe re rae 25. had been indicated in regard to them was based on the information given to him by Mr D'Alessandro. He _ said he believed that information to be true. Mr Haseler said that he had discussed with Mr Tipping the terms of the contract for the sale of the land to Tabah. He agreed that he had not disclosed to Mr Tipping or to anyone else on behalf of the applicant that Tabah had applied to the Brisbane City Council for approval in principle to a town house development on the land. He said, however, that he did not know whether the applicant had been unformed that the application had been refused at the end of July 1986 but said he had been told that it had been so informed. Although the statement of claim filed on behalf of the applicant alleges that the advertisement published in "The Courier-Mail" newspaper on 3 May 1986 contained representations which were false, no reliance was placed on that allegation during the course of the hearing. The applicant, however, relies on false representations said to have been made by Mr Moore during his conversation with Mr Bell on 4 May 1986 and by Q.F.& L. in the document (Exhibit C) forwarded to Mr Bell by Mr Moore a day or so later. There is a conflict between Mr Bell and Mr Moore as to what was said on the occasion of their meeting on 4 May -- poe 5 Hy pemeres 26. 1986. On Mr Moore's version they were on the site for 10 to 15 minutes with Mr Moore doing no more as a salesman than pointing out the boundaries and allowing Mr Bell to read the listing document (Exhibit C). Apart from that, there was some desultory conversation concerning the three streets which abutted the eastern boundary of the land and a reference to an application for approval to erect town houses on the land having been made by a previous purchaser. To accept Mr Moore's evidence also involves the conclusion that the answers given by the respondents to interrogatories numbered 10 and 11 were false. It is inconceivable that, if Mr Moore in fact held the beliefs ascribed to him in the answers to interrogatories, he would not have passed on those beliefs in answer to Mr Bell's specific question whether any application had been made for approval to a town house development. Mr Moore's evidence on the aspect of providing further documentation to Mr Bell was contradictory and, in my view, quite unsatisfactory. ae I found Mr Moore's evidence generally unconvincing. I prefer Mr Bell's version as being more probable, supported as it is by Mr Tipping's evidence (which I accept) as to what Mr Bell conveyed to him and by the evidence of the steps that were subsequently taken to obtain formal approval of the proposed development. I find that Mr Moore made statements to Mr Bell to the following effect: ee ea ae ' Sener 27. (a) that inquiries had been made of the Brisbane City Council and the Council did not require that the three streets abutting the eastern boundary of the land be extended on to it; (b) that a previous purchaser had applied to the Council for approval for a town house development on the site and that the Council had no objection to the giving of formal approval to such a development; and (c) that enquiries made of the Council by the respondents had indicated that "verbal" approval in principle had been given for town house development on the site. The above statements were made by Mr Moore in his capacity as an employee of the second respondent and within the scope of his employment. They were made on behalf of the second respondent in its role as agent for the sale of the property for the first respondent. Each of the statements which I have found Mr Moore made to Mr Bell was demonstrably untrue. The making of them amounted to conduct that was misleading or deceptive within the meaning of d.52 of the Trade Practices Act. It was conduct for which the first and second respondents are responsible. The applicant also relies on the statements contained in the listing document (Exhibit C) that the vendor had made enquiries of the Brisbane City Council Town Planning Section for the consent usage of the land for town houses and that "it was indicated by Council" that there would be no objection in giving consent for 40 x 2 bedroom we ores a ee aa a ee 28. town houses. Those statements were clearly made by the second respondent on behalf of the first respondent. I accept the evidence given by Mr D'Alessandro of his conversation with a planning officer of the Brisbane City Council concerning the possibility of a town house development on the site. I also accept Mr D'Alessandro's evidence of his subsequent conversation with Mr Haseler. In so far as Mr Haseler's evidence is inconsistent with that of Mr D''Alessandro, I prefer the evidence of the latter. Accepting Mr D'Alessandro's evidence, as I do, the statements contained in the listing document (Exhibit C) were misleading and deceptive within the meaning of s.52 of the Trade Practices Act. To say that it was indicated by the Council that there would be no objection in giving consent for 40 x 2 bedroom town houses was untrue. It was inconsistent with what Mr D'Alessandro had been told and what he had passed on to Mr Haseler and it was entirely inconsistent with the tenor of the request to the Council contained in the letter dated 22 April 1986 (that is to say, before the land was advertised for sale on 3 May 1986) addressed to the Council by Keilor Fox & McGhie Pty Ltd on behalf of Tabah. Although Mr Bell had had some experience as a developer and might have been expected not to rely on what had been said by Mr Moore or what was stated in the listing document (Exhibit C) but to make his own enguiries in regard pe ee . ar rte eee : wt. ween ee coe eres 29. to the granting of approval to a town house development on the land, I am satisfied, on the evidence, that the applicant, through Mr Bell, did in fact rely on the representations which I have found were made and that those representations were a factor in inducing the applicant to enter into the contract dated 26 June 1986. In the light of the conclusions to which I have come, the applicant was clearly entitled to rescind the contract made on 26 dune 1986 for the purchase of the land. I am satisfied that the letter dated 8 December 1986 from the applicant's solicitors to the solicitors for Tabah was appropriate to effect a rescission. I propose formally to declare that the contract was effectively rescinded upon the receipt by the solicitors for Tabah of that letter. Section 82 of the Trade Practices Act entitles the applicant to recover the amount of the loss or damage suffered by it _by reason of the misleading or deceptive conduct which I have found was engaged in by the first and second respondents. The applicant claims the sum of $24,557 particularised as follows: The return of the deposit paid under the contract $9,000.00 Fee paid to Brisbane City Council on initial building application 3,240.00 Fee paid to Brisbane City Council on application for display home 87.00 Amounts paid for public notice of development application and for signs and advertisement 228.52 eyes wow te sane ' 30. Architect's fees for layout and drainage required for site development application 2,580.00 Fee paid to Mr Peter Sands for preparation of models of proposed development 2,376.00 Amount paid to Capital Projects for work done in connection with the proposed development 4,000.00 Fees paid to Mr V. Ferros, town planning consultant 309.00 Proposed mortgagee's solicitors' costs 501.98 Applicant's solicitor's professional fees on conveyancing 2,234.50 $24,557.00 In the application by which this proceeding was commenced the applicant claims, inter alia, a refund of the deposit of $9,000 paid under the contract "together with accretions thereon". The claim for accretions is presumably based on cl1.30 of the contract the effect of which is referred to above. Reference might also be made to the letter of rescission dated 8 December 1986 in which the Claim was made for a refund of the deposit paid "together with all interest accrued on the deposit up to the 30th September 1986". Although the claim was not abandoned, the applicant adduced no evidence to show that the deposit moneys had been dealt with in accordance with cl1.30 or, if so, the amount of interest that had accrued thereon. In any event, it must be doubtful whether the applicant, having rescinded the a ~ Ve nn ens 31. contract, can rely on its provisions. In all the circumstances I propose to disallow the claim for accretions. As will appear, I propose to allow interest on the amount of the deposit under s.51A of the Federal Court of Australia Act 1976 (Cth). Except in relation to the sum of $2,000 being part of the amount of $4,000 claimed by the applicant as the amount paid to Capital Projects for work done in connection with the proposed development, the respondents do not dispute the appropriateness of the above heads of damage or the quantum claimed under each head. The disputed sum of $2,000 was, on the evidence, paid by the applicant to Capital Projects on 23 May 1986. The applicant contends that it was a payment by way of advance in respect of work to be done. For the respondents it was submitted that I should not accept that the amount of $2,000 paid on 23 May 1986 was an amount referable to the project for the development of the subject land. Attention was directed to the circumstance that there were dealings between the applicant and Capital Projects in relation to other unrelated matters and to the fact that the amount was paid more than a month before the contract of purchase was signed. Reference was also made to the final paragraph of a letter dated 30 June 1986 which Mr Tipping on behalf of Capital Projects wrote to the applicant reading as follows: by ae 32. "1. Further to previous discussions, we confirm the hourly rate of $60.00 per hour for our services in connection with the above project. 2. We also confirm that additional to this rate are 'out of pocket' expenses such as Photocopying, printing and application fees, etc. 3. As discussed, we will be submitting interim fee accounts on a quarterly basis at the rate of 50% of the above hourly rate as a commercial courtesy which will assist in reducing cash flow in the early stages of the project." It was submitted that there was an inconsistency between on the one hand making an arrangement in June 1986 to defer payment of the fees properly payable for work done in order to assist the applicant's cash flow problems and the making of a payment in advance in respect of such fees in the proceding month. Although the evidence is not entirely satisfactory, a circumstance accentuated by the fact that the applicant failed to disclose on discovery the existence of the cheque dated 23 May 1986 or the letter dated 30 June 1986, I accept the evidence given by Mr Bell and Mr Tipping that the amount of $2,000 paid on 23 May 1986 was, in fact, referable to work to be done in respect of the development of the subject land. The applicant also claims interest up to judgment under s.51A of the Federal Court of Australia Act 1976 (Cth) on the amount of $24,557. The claim made is for interest at the rate of 12 per centum per annum for a period of approximately 12 months. eae mee vee eyeepe ee = ~f wee, on 33. The applicant's evidence is again deficient in giving details of the dates upon which each of the payments comprising the amount of $24,557 was paid. It may be inferred that the deposit of $9,000 was paid on the date of the contract, viz. 26 June 1986. Similarly, it may be inferred that the amount of $3,240, being the fees paid on the initial building application, were paid on or about 9 July 1986, the date of lodging the application. The two sums of $2,000 paid to Capital Projects were paid on 23 May 1986 and 8 September 1986 respectively. In respect of each of the other payments it is only possible to make a very broad estimate of the date on which payment was effected. In my opinion, it would be just to allow to the applicant interest on the amount of $24,557 at the rate of 12 per centum per annum for a period of 10 months. That amounts to §2,455. There will, therefore, be judgment for the applicant in the sum of $27,012. The respondents must pay the applicant's costs of the application. I certify that this and the preceding 32 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves. Daiww Aroxrt— * -Associate Dated: 18 September 1987 a nee ee a ree ee Counsel for the applicant Solicitors for the applicant Counsel for the respondents Solicitor for the respondents Dates of hearing 34. Mr I.R. Molloy Richard Ebbott & Co. Mr P.D. McMurdo Clarke and Kann 18 and 19 August 1987 we em yee ore ee wee ee om ee mene ee one te