JUDGMENT. No. 202... /SB.-cee AUS T No. ACT G 78 of 1987 weww www BETWEEN : GREGORY MORGAN LORKIN and JOHN TER SKI WALTER REDEMSKI Applicants AND: COLLIERS INTERNATIONAL PROPERTY CONSULTANTS PTY LIMITED Respondent OF 0) JUDGE MAKING ORDER =: Neaves J. DATE OF ORDER : 18 May 1988 WHERE MADE : Canberra THE COURT - 1. Declares that the respondent is entitled to the following particulars, namely - (a) Particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation in par.2 of the amended statement of claim that the respondent knew or ought to have known that the applicants were proposing to finance the sub-division of the Ridgeview Estate. Particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation in par.5 of the amended statement of claim that the respondent intended the various matters set out in that paragraph and the further allegation therein that the respondent knew or ought to have known of those matters. (c) Particulars of the purchase by the applicants of shares in Jaifilm Pty Limited as alleged in par.7 of the amended statement of claim, including the usual particulars of any agreement pursuant to which the purchase was effected. (d) Particulars of the terms, including interest, on which the sums totalling $210,000 referred to in par.7 of the amended statement of claim were lent to Jaifilm Pty Limited. (e) Particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation in par.8 of the amended statement of clain that the respondent was in breach of the duty alleged in par.6 thereof. (f) Particulars, substantially in accordance with pars 53-65 inclusive of the letter dated 14 January 1988 addressed by the respondent's solicitors to the applicants' solicitors, of the matters set out in par.9 of the amended statement of claim. (g) Particulars of the nature of each head of loss or damage claimed and, where the amount claimed under any head is capable of substantially exact calculation, particulars of the amount claimed and the manner of its calculation. Directs that the respondent within 7 days from the date of this order deliver to the applicants' solicitors an amended request for particulars giving effect to the declaration made herein. Directs that the applicants furnish the particulars requested within 21 days after receipt of the amended request for particulars. Reserves to each party liberty to apply on 24 hours' notice to resolve any dispute arising in relation to the amended request for particulars. Directs that the respondent file and serve a defence to the amended statement of claim within 14 days after the receipt of the particulars requested. Directs that the matter be listed for further directions on 1 July 1988. Orders that the costs of the motion notice of which is dated 12 April 1988 be costs in the cause. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. N COURT OF AUSTRALIA AU: IT. RY No. ACT G 78 of 1987 STRICT 4 DIVISION we wwe www BETWEEN: GREGORY MORGAN LORKIN and JOHN WALTER REDEMSKI Applicants AND: COLLIERS INTERNATIONAL PROPERTY CONS 3 LIMITED Respondent CORAM: Neaves J. DATE: 18 May 1988 REASONS FOR JUDGMENT By motion on notice the respondent, Colliers International Property Consultants Pty Limited, has sought an order that the applicants, Gregory Morgan Lorkin and John Walter Redemski, provide further and better answers to a request made by letter dated 14 January 1988 for particulars of matters alleged in the statement of claim filed in this proceeding on behalf of the applicants. The applicants' claim against the respondent is for unspecified damages and interest. It is alleged that the respondent, being a corporation within the meaning of the Trade Practices Act 1974 (Cth) ("the Act"), engaged in conduct that was misleading or deceptive or was likely to mislead or deceive contrary to the provisions of 3.52 of the Act. The conduct relied upon is the furnishing by the respondent in or about September 1985 of what is referred to as "a written valuation report" in respect of a proposed sub-division by a company known as Jaifilm Pty Limited of certain land in New South Wales described as "the Ridgeview Estate" (pars 2 and 3 of the amended statement of claim). The report is alleged to have been prepared by the respondent upon instructions from a company known as Finance Corporation of Australia Limited "on account of Jaifilm Pty Limited" (par.3). It is further alleged that the valuation report "represented" various matters identified in the statement of claim (par.4) and that "In truth and in fact, the said representations were false, untrue and inaccurate" (par.9). The applicants say that, acting on the faith of the representations and in reasonable reliance upon them, they were induced to purchase shares in Jaifilm Pty Limited and to lend certain moneys totalling $210,000 to that company (par.7). In the alternative, the applicants sue the respondent in negligence. It is alleged (par.5) that the respondent intended and knew or ought to have known that the contents of the valuation report would be communicated to the applicants; that, in conformity with normal commercial practice, the applicants would be responsible for the payment of the respondent's fee for the valuation report; and that the applicants would rely or were reasonably entitled to rely upon the report and its contents and would, or would more probably than not, be induced thereby to advance and to pay and outlay moneys of their own to or for Jaifilm Pty Limited for the purpose of facilitating the purchase of Ridgeview Estate and the subsequent sub-division, development and sale thereof. The respondent is alleged (par.6) to have been under a duty to the applicants to take care in the making of the representations and, in particular, to take reasonable care to avoid the imparting thereby to the applicants of information and/or advice which was incorrect. The respondent is alleged to have been guilty of negligence in making the representations (par.8). The above summary of the applicants' claim is taken from the amended statement of claim which was filed, by leave, on 11 March 1988. As the letter dated 14 January 1988 was based upon the statement of claim prior to its amendment, the language in which some of the requests are cast is not apt to refer to what is alleged in the document as amended. The particulars sought are set out in 73 numbered paragraphs. The applicants have furnished particulars which the respondent regards as sufficient in respect of three of those paragraphs. It is convenient to deal with the issues raised by reference to the various paragraphs of the amended statement of claim in relation to which an order for further and better answers is sought. As to par.l of the amended statement of claim, which alleges that the respondent is and was at all material times a corporation within the meaning of the Act and a valuer carrying on business in the Australian Capital Territory, I do think the respondent is entitled to the further particulars requested. As to par.2, the respondent requested to be informed of the acts facts matters and circumstances on which the allegation was based that the respondent knew or ought to have known that the applicants were proposing to finance the sub-division of the Ridgeview Estate. The applicants' answer was in these terms: "Direct communication between the Applicants and the Respondent further particulars of which are a matter of evidence". In my opinion, the answer is inadequate. The respondent is entitled to have particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation that the respondent knew or ought to have known of what the applicants proposed. The respondent also sought precise details of what the applicants proposed but, in my opinion, the respondent is not entitled to have the applicants furnish such details. Paragraph 3 relates to the preparation of the valuation report and the circumstances in which it came to be prepared. In my opinion, the respondent is not entitled, at this stage, that is to say before the respondent has delivered a defence, to the particulars requested. However, if, upon the delivery by the respondent of its defence, an issue arises between the parties whether the valuation report was prepared "upon instructions from Finance Corporation of Australia Limited on account of Jaifilm Pty Limited" as alleged in this paragraph, the respondent will be entitled to be informed whether those instructions were oral or in writing and to receive the usual particulars in relation thereto. It must be borne in mind that the circumstances in which the respondent received instructions to prepare the report are within its own knowledge. Further, the allegation is that the instructions were received froma third party having, so far as appears, no association with the applicants so that it would seen appropriate that, if the applicants become obliged to deliver such particulars, they should not be required to do so until after discovery. As to par.5, the substance of which has already been set out, I am of opinion that the respondent is entitled to have particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation that the respondent intended the various matters set out in the paragraph and of the further allegation that the respondent knew or ought to have known of those matters. However, the language of the relevant requests needs some amendment to accord with the language of the amended statement of clain. As to par.6, which sets out the duty which it is alleged the respondent owed to the applicants, I am of opinion that the amended statement of claim sets out with sufficient particularity the facts and circumstances which are alleged to give rise to the duty. I therefore, do not propose to direct the applicants to provide further particulars. As to par.7, the respondent is entitled, in ny view, to have particulars of the purchase by the applicants of shares in Jaifilm Pty Limited including the usual particulars of any agreement pursuant to which the purchase was effected. The respondent is also entitled, I think, to have particulars of the terms, including interest, on which the sums totalling §210,000 were lent to that company. However, in my opinion, the respondent is not entitled to have an answer to its request to be informed precisely of the profit the applicants were expecting to make. Paragraph 8 alleges that the respondent, in breach of its duty as set out in par.6, was guilty of negligence in making the representations set out in par.4. In my opinion, sufficient particularity has been given of the facts and circumstances in which the duty alleged is said to have arisen. However, the respondent is, I think, entitled to be informed of the acts facts matters and circumstances on which the applicants rely to establish that there was a breach of that duty. In other words, the respondent is entitled to be informed of the respects in which it is said to have been negligent. Paragraph 9 alleges that the representations set out in par.4 were false, untrue and inaccurate and purports to give particulars of that allegation. In the course of argument, counsel for the applicants disclosed that the applicants do not assert that the opinions expressed in the report were not held but allege that there was no basis upon which an expert valuer, acting properly, could have arrived at the conclusions set out in the valuation report. I understood counsel to be foreshadowing that the case for the applicants would be that the "representations" contained in the valuation report were made without any foundation and with reckless indifference as to their accuracy. Some further amendment of the statement of claim to make clear the basis of the claim may he desirable. The difficulties of bringing a case such as this within the scope of 5.52 of the Act have recently been adverted to by a Full Court of this Court in Anvita Pty Limited v. 3 Properties Pt Limited (15 April 1988 - unreported). For the most part, par.9 merely states the negative of what is alleged in par.4 even though much of what is alleged in par.4 is clearly matter of judgment, opinion or estimate. It is unnecessary to set out the whole of the particulars contained in par.4 - it is sufficient to refer to some examples. That paragraph alleges, inter alia, that the valuation report represented that: "(2) Stage 1 would ona =*more_ conservative estimate realise $451,000; (4) The advertising and promotion of Stage 1 would be $7,500; (5) The margin for the developer, that is the profit expectation on Stage 1, was $85,000; (7) The land value of the undeveloped Stage 1 was $158,000; (18) The Manly sub-division to the south-east of the Ridgeview Estate was comparable for the purposes of valuation." The applicants have, in answer to the respondent's request for particulars, identified the paragraphs of the valuation report in which each of the representations is alleged to be found. The particulars given in par.9 in relation to the sample sub-paragraphs of par.4 set out above are as follcws: "(2) Stage 1 was not capable of realising as much as $451,000, but an estimated sum of less than $361,000. (4) The advertising and promotion of Stage 1 would not have been $7,500, but an estimated sum of $10,000. (5S) The margin for the developer, that is the profit expectation on Stage 1, would not have been $85,000, but in fact would have been a loss. (7) The land value of Stage 1 was not $158,000 but an estimated sum of $68,000 or less. (18) The Manly sub-division to the south-east was not comparable for the purposes of valuation." The respondent, in relation to the particulars given in par.9 and set out above, requested to be informed how the sums of $361,000 (particular (2)), $10,000 (particular (4)) and $68,000 (particular (7)) were arrived at or calculated and, in relation to particular (5), how it was alleged that the margin for the developer would have been a loss. In relation to particular (18), the applicants were asked to state "every respect in which it is alleged that the Manly subdivision to the south east was not comparable for the purposes of valuation". Similar particularity was sought in respect of the allegations made in the other parts of par.9. The applicants' only reply was that the matters raised were matters of evidence. In my opinion, the respondent is entitled to have further particulars of the matters set out in the particulars given in par.9. These are the particulars sought in pars 53-65 inclusive of the letter dated 14 January 1988, though the language in which some of those paragraphs are cast appears to require amendment. Paragraph 10, in my view, gives sufficient particulars of the conduct alleged to be misleading or deceptive or likely to mislead or deceive. I propose to make no order in respect of that paragraph. 10. Paragraphs 11 and 12 go to damages and are in the following terms: "ll. The value of the land was insufficient to permit the proposed sub-division to be made and the Applicants did not make the expected profit and were unable fully to recover the loan to Jaifilm Pty Limited with interest. 12. In consequence of the foregoing, the Applicants have suffered loss and damage." The respondents requested the following particulars as to par.1l: "71. State precisely all steps taken by the applicants to make the expected profit. 72. State precisely all steps taken by the applicants to recover fully the ivan tv Jaifilm Pty Limited with interest saying when each step was taken." As to par.12, the applicants were asked to state precisely each item of loss or damage claimed, setting out precisely the amount claimed. To these requests, the applicants answered, as to par.1l, that the matters raised were matters of evidence and, as to par.12, that the claim was for general loss and damage and that, at the time of answering the request for particulars, no special damages were claimed. In my opinion, the answers given are inadequate having regard to the nature of the claim which the 11. applicants seek to establish. If the applicants succeed in establishing that the conduct of the respondent was misleading or deceptive or likely to mislead or deceive in contravention of s.52 of the Act, they will be entitled to recover, not damages at large, but the amount of the loss or damage shown to have been suffered as a result of the offending conduct (see s.82 of the Act). In the course of argument upon the motion, counsel for the applicants indicated that the damages which the applicants seek to recover are to be measured by the difference between the profit which the valuation report furnished by the respondent stated would be realized from the sub-division, development and sale of the Ridgeview Estate and the profit which would have been disclosed by a valuation report properly prepared. The amended statement of claim fails to disclose this as being the case which the respondent has to meet and is, in consequence, deficient in that respect. The answers made to the particulars sought clearly do not remedy the deficiency. The applicants are obliged, in my view, to inform the respondent of the nature of each head of loss or damage claimed and, where the amount claimed under any head is capable of substantially exact calculation, particulars of the amount claimed and the manner of its calculation. I have already indicated my view that, at this stage, that is prior to delivery of defence, the respondent is not entitled to the particulars sought under par.3 of the 12. amended statement of claim. Counsel for the applicants submitted that the Court should not order that any of the other particulars be provided before defence although it is to be noted that this was not a ground relied upon by the applicants in replying to the letter dated 14 January 1988 which requested the particulars. In support of his submission, counsel drew attention to the provisions of Order 12, rule 5(3) of the Federal Court Rules. In all the circumstances I am not prepared to accept that submission. The claim which the applicants seek to make exhibits some unusual features and the particulars which, in my view, the applicants should furnish at this stage are reasonably necessary to enable the respondent to know what case it has to meet. The interests of justice will, in my view, best be served by requiring those particulars to be furnished before the respondent is required to deliver a defence and I propose so to order. In the result, I am of opinion that the respondent is entitled to the following: (a) Particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation in par.2 of the amended statement of claim that the respondent knew or ought to have known that the applicants were proposing to finance the sub-division of the Ridgeview Estate. (b) Particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation in par.5 of the amended statement of claim that the respondent 13. intended the various matters set out in that paragraph and the further allegation therein that the respondent knew or ought to have known of those matters. (c) Particulars of the purchase by the applicants of shares in Jaifilm Pty Limited as alleged in par.7 of the amended statement of claim, including the usual particulars of any agreement pursuant to which the purchase was effected. (d) Particulars of the terms, including interest, on which the sums totalling §210,000 referred to in par.7 of the amended statement of claim were lent to Jaifilm Pty Limited. (e) Particulars of the acts facts matters and circumstances on which the applicants rely in support of the allegation in par.8 of the amended statement of claim that the respondent was in breach of the duty alleged in par.6 thereof. (f) Particulars, substantially in accordance with pars $3-65 inclusive of the letter dated 14 January 1988 addressed by the respondent 's solicitors to the applicants' solicitors, of the matters set out in par.9 of the amended statement of clain. (g) Particulars of the nature of each head of loss or damage claimed and, where the amount claimed under any head is capable of substantially exact calculation, particulars of the amount claimed and the manner of its calculation. I direct that the respondent within 7 days from the date of this order deliver to the applicants' solicitors an amended request for particulars giving effect to the views expressed herein. I also direct that the applicants furnish the particulars requested within 21 days after receipt of the amended request. In case any dispute should arise in relation to the amended request, I reserve to each party 14. liberty to apply on 24 hours' notice. I further direct that the respondent file and serve a defence to the amended statement of claim within 14 days after the receipt of the particulars requested and that the matter be listed for further directions on 1 July 1988. As each party has had some success upon the motion, the appropriate order as_ to costs is that the costs of the motion be costs in the cause. I certify that this and the preceding 13 pages are a true copy of the Reasons for Judgment herein of the Honourable Mr Justice Neaves. < Dated: 18 May 1988 Associate Counsel for the applicants : Mr T.M. Johnstone Solicitors for the applicants : John Harris & Co. Counsel for the respondent : Mr S.L. Walmsley Solicitors for the respondent : Mallesons Stephen Jaques Date of hearing : 12 May 1988